Microsoft Retreats From Yahoo Deal

It was the merger that would reshape the Web, and now it seems the deal has fallen flat: Microsoft today announced that it has withdrawn its proposal to acquire Yahoo.

Microsoft CEO Steve Ballmer notified Yahoo of the withdrawal in a letter addressed to “Chief Yahoo” and CEO Jerry Yang. According to Kevin Johnson, Microsoft president for platforms and services, this would not be the end of Microsoft's continuing attempt to reinvent itself. “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.” Ballmer agreed: “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.”