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2ND LD: Microsoft gives up bid to acquire Yahoo+(Japan Economic Newswire Via Acquire Media NewsEdge) NEW YORK, May 4_(Kyodo) _ (EDS: ADDING INFO) U.S. software giant Microsoft Corp. said Saturday it has given up its bid to acquire major Internet portal Yahoo Inc. as the two sides failed to agree on the value of the acquisition. "After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," said Steve Ballmer, chief executive officer of Microsoft, in a statement. In addition to the difference over the sale price, Microsoft has apparently judged that going through with the hostile bid would lead to an outflow of Yahoo personnel and limited acquisition effects, analysts said. Microsoft made an unsolicited offer to buy Yahoo in early February, proposing to buy all outstanding common shares in the search engine operator for $44.6 billion, or $31 per share. Yahoo rejected it, saying the proposal substantially undervalues the company. Microsoft later raised the bid to $33 a share, but Yahoo demanded at least $37 a share, meaning an increase of $6 a share from Microsoft's original proposal. For Microsoft, hiking the bid by $1 a share costs an additional $1.4 billion. Microsoft, the third-largest player in the U.S. search engine market, attempted to better vie with market leader Google Inc. by putting Yahoo, the second largest, under its wing. After ditching the buyout plan, Microsoft will try to expand its business by investing the fund that would have been spent to buy Yahoo in Net-related operations and seeking to form alliances with other companies, the analysts said. Yahoo, meanwhile, is expected to push for a tie-up with Google or an integration with the Internet division of U.S. entertainment and media giant Time Warner after successfully fending off the unsolicited offer from Microsoft. "From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view," Yahoo said in a statement. Copyright ? 2008 Kyodo News International, Inc. |