Can anyone hear that? The sound of furious backpedalling?
Microsoft chief executive Steve Ballmer told a tech conference in Russia on Friday that "Yahoo was never the strategy we were pursuing, it was a way to accelerate our online advertising business", reported Reuters.
Now the $47.5bn offer has been dropped, Microsoft can go back to looking at other acquisitions, he said. "We will spend money on some acquisitions. You can do a whole lot of things with 50 billion dollars."
He hinted that those deal could be in the healthcare space, saying some of those businesses had been "under-appreciated by the market" and said "the aging population is one of the biggest-growing parts of the world economy."
Photo by memekode on Flickr. Some rights reserved.
(Google obviously noted the same, unveiling Google Health recently - a password-protected system to store basic health information online. Sinister, anyone? Yahoo already had a health section but with a focus on editorial, it should be noted.)
The Wall Street Journal's Kara Swisher, who has a consistently rational perspective on such things, says the two sides are negotiating but pushing for two types of deal, Yahoo favouring a takeover at a better price and Microsoft preferring to buy Yahoo's search and search advertising business.
"Shareholders hope for some resolution, but it might take longer than this weekend. Of course, discussions between Yahoo and Google for a search-ad outsourcing deal are also still on the back burner.
"But, despite the it'll-pass-regulatory-muster noise from Google's honchos last week, many inside the company are on the fence about the deal, mostly because of its impact on Google's burgeoning image as a too-powerful company in Washington DC.
"Not that that'll stop the Googlers, who would dearly like to stick it to Microsoft at any opportunity. No matter what, everyone will be watching for some sort of resolution in the coming week."
