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Following three months of "Will they or won't they?" Microsoft has withdrawn its multimillion-dollar bid to acquire Yahoo."I am disappointed that Yahoo! has not moved towards accepting our offer...In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share...Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer," wrote Microsoft chief Steve Ballmer in a letter sent late Saturday to Yahoo chief Jerry Yang.

Ballmer also dropped the notion of going straight to Yahoo's shareholders. "Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft," he wrote.

Yang's response? "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history," he said in a statement.

All that said, some analysts now speculate that Microsoft's decision to call off talks could depress Yahoo's stock to the point where Microsoft might reopen the bidding.InformationWeek, Los Angeles Times