CNET News reports that Microsoft Corp. (NASDAQ: MSFT) has officially withdrawn its offer to acquire Yahoo! (NASDAQ: YHOO). Reportedly the two sides could not agree on price -- Microsoft was willing to go up to $33 a share but Yahoo! wanted $37 -- $5 billion more than Microsoft was prepared to spend.
Steve Ballmer also decided against a proxy fight for Yahoo! shareholder support -- suggesting that it would be a time consuming and costly process that would give Yahoo! more time to make itself a less desirable acquisition for Microsoft.
Is this really the end of it? I expect Yahoo!'s stock to tumble and Microsoft's to rise. Yahoo! stock was trading up to $29.70 in the after hours market as of 8pm last night. But I expect the stock to plummet to where it was before Microsoft made its offer -- $19 a share.