Yahoo Inc said on Thursday that Microsoft had made it clear in a meeting on June 8 that it was no longer interested in buying the search engine company, even at the price of $33 per share.
The decision may upset Yahoo shareholders, including Carl Icahn, who have publically pressured Yahoo to reach a deal with Microsoft. Icahn has called for Chief Executive Jerry Yang to be ousted from the search engine company.
Icahn, who has waged a battle to dismiss Yahoo’s board at its August 1 annual meeting, had urged Yahoo to guarantee a higher price from Microsoft. Icahn has said a partnership with Google should only be a second choice.
Microsoft said it was not interested in ” rebidding” for all of Yahoo, sending its shares up more than 4 percent as investors showed relief that the company would not be paying too high a price for a deal they considered risky.
However, Yahoo is close to a search advertising deal with Google Inc and said that an alternative Microsoft proposal to buy only its search business did not fit into its company’s plan to grow search and display advertising.
Yahoo shares sank as low as $22.50 on news of the talks failing and the potential Google deal.
The software maker had sought a deal with Yahoo for more than a year. By early May. Microsoft had offered up to $47.5 billion to buy the Internet company.
Analysts strongly believe that Microsoft is expected to soon be on the prowl for other acquisition targets since it has not given up its goal for online advertising.