Microsoft said Saturday that it was abandoning its blockbuster bid to acquire Yahoo after the two companies could not agree on a price.
The breakdown in the talks 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 briefed on the discussions.
At the meeting, which also included Yahoo's other co-founder, David Filo, and Kevin Johnson of Microsoft, Mr. Ballmer increased Microsoft's offer to $33 a share, but Mr. Yang said Yahoo would not sell for less than $37 a share, this person said.
Microsoft's decision to walk away is the latest chapter in a three-month-old standoff that began when Microsoft made an unsolicited offer to acquire Yahoo in an effort to compete more effectively with Google in Web search, advertising and services.
Yahoo rejected Microsoft's offer repeatedly, saying it undervalued the company. Microsoft at times threatened to lower its offer, originally valued at $44.6 billion, or $31 a share.
Full text of Microsoft CEO Steve Ballmer's withdrawal letter to Yahoo here: http://www.msnbc.msn.com/id/24446149>1=43001