Microsoft statement withdrawing offer for Yahoo!

Microsoft CEO Steve Ballmer: "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," said Ballmer."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."

Yahoo! statement responding to Microsoft's withdrawal of its offer

Yahoo! chairman Roy Bostock: "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. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making."

Leaked email from Ballmer to Microsoft employees, from TechCrunch

Ballmer: "Although the acquisition of Yahoo would have accelerated our ability to deliver on our strategy in advertising and online services, I remain confident that we can achieve our goals without Yahoo. We have a strategy in place to do so and we will continue to expand on this strategy and accelerate our progress."

For analysis of the situation see paidContent, Tech Trader Daily, Search Engine Land, Scobleizer, CNet News.com, Microsoft News, Forbes, BloggingStocks, Between the Lines, Matthew Ingram, Dealbook and The Register 

 For links to our recent coverage of the Microsoft-Yahoo! deal see:

Microsoft, Yahoo! discuss higher offer (May 2)

Decision time for Microsoft (May 1)

Microsoft mulling purchase of Czech Internet company (April 28)

Microsoft's earnings expose crack in touch stance on Yahoo! (April 25)

Jerry Yang: The man who put the "!" in Yahoo! on eve of potential proxy fight (April 25)

Microsoft poised to make direct appeal to Yahoo! shareholders (April 24)