The software giant Microsoft has finally dropped the three month bid it held to buy the search giant and internet company Yahoo – in what has essentially comes down to the cost of the sale. The current chief executive of Microsoft (a certain Mr Steve Ballmer) rejected the offer with a formal letter to Yahoo CE Jerry Yang.

Apparently, Microsoft had raised the original share price offer from $44.6 billion US to $47.5 billion, about $33 per share and certainly enough to give the company the controlling stake required. However, this was not enough for Yahoo who were looking for more – perhaps it was a case of Microsoft trying to play given that the US is almost in recession, but Yahoo’s shares remain boyant and so they didn’t choose to sell.

Microsoft was hoping to cut a deal to be able to compete with Google, who currently holds the dominant position both for search and market share revenue from advertising (that naturally comes with the increased number of users) along with their exceptional Google Adword and Adsense programs, something that Yahoo has actually been recently experimenting with. This led some to believe that there may even be more integration of technologies in the future, for a market that is currently worth more than $42 billion.

For those of us who are regular web users, we’re no doubt sure of what Yahoo and Google’s technologies offer both in terms of benefits and limitations. Whether the features of Yahoo would have changed if Microsoft had of succeeded in the purchase remains to be seen, but I’m sure that Yahoo is going to continue to offer a viable alternative to Google without becoming a Microsoft company.

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