Software giant Microsoft has dropped its three-month-old bid to buy internet firm Yahoo because the two sides cannot agree Microsoft and Yahoo 'seek allies' ...
Yahoo lukewarm on Microsoft bid ...
Microsoft gives Yahoo three weeks ... on an acceptable sale price.
Microsoft chief executive Steve Ballmer formally withdrew the offer in a letter to Yahoo chief executive Jerry Yang.
Mr Ballmer said Microsoft had been willing to pay $47.5bn (Ј24.1bn) - $33 per share.
But he added that Yahoo had insisted on at least $53bn. Microsoft's original offer was $44.6bn.
The software giant had wanted to do a deal to be able to compete with Google, which dominates the lucrative market for internet advertising.
This market was worth $40bn in 2007 and is predicted to double to $80bn by 2010.
When Microsoft announced its offer in February it said "together Microsoft and Yahoo can offer a competitive choice while better fulfilling the needs of customers and partners".
Microsoft's shares closed on Friday virtually unchanged at $29.24. Yahoo's shares were $1.85 higher at $28.67 amid expectations of a higher Microsoft offer.
(BBC)
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