Microsoft Withdraws Its Bid for Yahoo

The about-face followed a meeting on Saturday morning in Seattle between Microsoft’s chief executive, Steven A. Ballmer, and Yahoo’s chief and co-founder, Jerry Yang, according to a person familiar with the talks.

At the meeting, which also included Yahoo’s other founder, David Filo, and a Microsoft president who oversees its online unit, Kevin Johnson, Mr. Ballmer increased Microsoft’s offer to $33 a share, or a total of about $47.5 billion, from $29.40 a share. Mr. Yang told Mr. Ballmer that Yahoo would not accept an offer below $37 a share, this person said.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Mr. Ballmer said in a statement. “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.”

by Miguel Helf