Even though Microsoft Corp. (NASDAQ: MSFT) could have upped its offer for Yahoo, Inc. (NASDAQ: YHOO) this past weekend, it did not. Microsoft CEO Steve Ballmer walked away from the deal after Yahoo held out for more money. At this time, Microsoft was wise to walk away from Jerry Yang's ego. The reason? No company should spend over $40 billion for a bunch of unmonetized eyeballs. But then again, Microsoft needs to up its game in the consumer space; not so much in the enterprise business space.

Yahoo! has one of the most lucrative audiences on the web, if not the most lucrative. The company, to save its life, can't figure out how to continuously grow revenue with that huge audience it has. I won't beat a dead horse here, but if Yahoo! thinks it's really worth $37 per share, some reality needs to be put in its pipe and smoked. Microsoft would have purchased the rights to combine its ailing Internet properties with a huge audience that Yahoo! can't seem to squeeze money out of with any kind of strategy. Customers want everything for free, but Yahoo! doesn't have the advertising strategy down to allow that. We can thank former CEO Terry Semel for that.

And the kicker is this: If Google, Inc. (NASDAQ: GOOG) will soon be providing Yahoo! with its search infrastructure (after a successful test), just what was Microsoft buying, anyway? Engineering talent? Employees with a combative culture? We all know Microsoft wanted Yahoo! badly, but the mixing of oil and water here would not have instantly made a neat company or anything. And Yahoo!? It's not worth what it thinks it is. Period. Get over it, find out how to more effectively compete and monetize those eyeballs -- then come back to the table if anyone will sit there with you then.