Monday, May 5, 2008

Microsoft's bid Failed: Yahoo! Rejects Offer

Microsoft's bid Failed:

Microsoft Corp.'s decision to drop its pursuit of Yahoo! Inc. increases the pressure on

Chief Executive Officer Steve Ballmer to make his money-losing Internet business succeed

against Google Inc.

Ballmer and Kevin Johnson, president of Microsoft's Internet unit, met two days ago in

Seattle with Yahoo co-founders Jerry Yang and David Filo, two people familiar with the

negotiations said. Redmond, Washington-based Microsoft, the largest software maker,

offered to raise its $44.6 billion bid by about $5 billion, to $33 a share. Yang and Filo

refused to accept less than $37 a share, the people said.

Google gained 10 percentage points of market share in Internet queries since June,

providing 59.8 percent of the searches done in March, according to researcher ComScore

Inc. in Reston, Virginia.


Microsoft has spent $7.5 billion on its Internet unit over the past 2 1/2 years,

estimates Matt Rosoff, an analyst at Kirkland, Washington-based Directions on Microsoft.

The online services business lost $745 million last fiscal year as Google outsold

Microsoft in Internet ads by a 7-to-1 margin.

The company released its AdCenter Internet-advertising service two years ago to challenge

Google with a program that targets ads by age, gender and location. Microsoft also bought

Seattle-based AQuantive Inc. in August for $6 billion to gain tools that help advertisers

track the success of their marketing efforts.


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