Investors still hoping that Yahoo will be sold to Microsoft at a premium may be in for a disappointment.
Microsoft Chairman Bill Gates, on Wednesday in Tokyo, insisted that his company will pursue "an independent path" in building its Internet strategy now that talks with Yahoo have broken off, according to wire reports.
"Now at this point, Microsoft is focused on its independent strategy," Gates also said.
Gates made similar remarks in Seoul, South Korea, a day earlier. Quoting a pool report, the Associated Press reported that Gates said Microsoft CEO Steve Ballmer "took a look at Yahoo and decided that on our own he likes the stuff we're doing."
Gates' remarks are consistent with Ballmer's statement Saturday that Microsoft is now looking beyond Yahoo. "We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners," Ballmer said in a letter to Yahoo CEO Jerry Yang that was released by Microsoft.
Despite firm statements by Microsoft's top two leaders that it's no longer interested in acquiring Yahoo, some investors appear confident that a deal will still happen. Yahoo's stock fell .31% to $25.64 in trading Wednesday -- a level that's still well above where the stock stood prior to Microsoft's Feb. 1 announcement that it wanted to buy the company for $31 per share.
There's speculation that some large Yahoo shareholders, including Capital Research and Management and Legg Mason, may be increasing their positions in the company with an eye to forcing a proxy fight at Yahoo's general shareholder meeting on July 3.
The thinking is that the shareholders may attempt to elect a board that would be willing to re-enter negotiations with Microsoft.
Microsoft abruptly broke off the merger talks Saturday after upping its bid to $33 per share. Microsoft claims the move was a response to Yahoo management's insistence that the company not be sold for less than $37 per share.