In a statement issued late Saturday, Microsoft announced it has withdrawn its proposal to acquire Yahoo. Speculation surrounding the status of the $50 billion deal has escalated since Microsoft CFO Chris Liddell's deadline of last weekend passed.
"We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees," said Microsoft CEO Steve Ballmer in the statement.
"Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. 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," Ballmer continued.
"We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo! would have accelerated our strategy, I am confident that we can continue to move forward toward our goals," he said.
Kevin Johnson, Microsoft's head of platform and services who manages Web strategy, reiterated the company's progress. "We are investing heavily in new tools and Web experiences, we have dramatically improved our search performance and advertiser satisfaction, and we will continue to build our scale through organic growth and partnerships," he said.
Yahoo Chairman Roy Bostock issued the following statement in response: "We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. 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! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market."
Yahoo CEO Jerry Yang added that he was pleased Microsoft's unsolicited proposal was behind him.
"I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position," Yang said in a statement. "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."