Microsoft drops bid for Yahoo! (!)

Industry analysts and watchers have been in a frenzy for months over Microsoft’s much publicised take-over bid for Yahoo! As with all global mega-deals of this sort there was much talk, much posturing, much backstabbing and lots of ego stroking. When you’re both lumbered with a zillion shareholders any potential deal is fraught with problems – sort of like two politicians in a synchronised swimming contest. They need to execute the moves to a high standard, wow the crowds, act tough, look fit, kiss babies and avoid sinking even further at the same time.

So – it shouldn’t really come as a big shock that Microsoft got out of the pool, readjusted it’s trunks and left the building. Because if you can’t win then at least pull in your stomach, straighten your back and exit gracefully with your 47.5 billion dollars still in your pocket. "I am disappointed that Yahoo has not moved towards accepting our offer," says Microsoft chief executive Steve Ballmer. Yahoo co founder and chief executive Jerry Yang says: “We did not say it was a take-it-or-leave-it number in the sense that we would never negotiate any more. We were totally willing to do a transaction, and they walked away.” Ummmm. Just goes to show you that reality depends on where you’re standing.

It would have been the largest transaction of its type in history and, despite reports, insiders still think it could be. Is the walk-out part of the game? Who knows? What is for sure is that Yahoo still have their sights on doing a partnership deal with Google. And Microsoft still need to make up ground against Google. So until Google stops being the dominant force in the market place – don’t hold your breath – then both Microsoft and Yahoo could be heading down this road again quite soon.