Microsoft announced that they will no longer seek to acquire Yahoo whether it be a friendly acquisition or a proxy battle. Microsoft CEO Steve Ballmer made the announcement Saturday and the reason was that the economics demanded by Yahoo did not make sense. He also made a pass at the recent partnership with Google, and that the partnership would make an acquisition undesirable for several reasons.
The question now is, will Google come out further ahead now that Microsoft has passed. Google has already shown success with Yahoo on the small test of search results in the past few months. Google can now deal with Yahoo knowing that Microsoft is not going to be in the near future, and look to expand their display capabilities.
Microsoft states that web advertising is still their goal, and that they will just go about it on their own. Stay tuned, sure someone in the big three will be in a M&A mood.
