Microsoft Withdraws Bid for Yahoo

Microsoft Corp. has withdrawn its $42.3 billion bid to buy Yahoo Inc., scrapping an attempt to snap up the tarnished Internet icon in hopes of toppling online search and advertising leader Google Inc. The decision to walk away from the deal came Saturday after a last ditch effort to negotiate a mutually acceptable sale price proved unsuccessful. Microsoft was willing to pay $47.5 billion or $33 per share, up from the bid's current value of $29.40 per share. But Yahoo's board demanded at least $53 billion, or $37 per share.

Yahoo CEO on The Hot Seat

Yahoo's Chairman, Terry Semel,had assured securities analysts and money managers that his company would remain the internet's brightest star. That was just before Google Inc. went public nearly three years ago. Since then Google has so nearly eclipsed its rival, that a growing number of Yahoo shareholders believes the company would be better off without Semel. There are about 80 Yahoo stockholders who own a combined 2 million shares in the company. Semel could very well face a chorus of discontent when he takes the stage at Yahoo's annual shareholders meeting today.