As you probably know Microsoft has officially withdrawn their offer for Yahoo.  I had a look at the letter Steve Ballmer sent to Jerry Yang officially withdrawing the offer and offering his reasons why. Must say that it is rare that a document like this is made public.  I must also say that if I were a Yahoo shareholder, it would be a key piece of evidence when I sued Jerry Yang and the rest of the Yahoo board and management for not accepting Microsoft's generous offer.

What I found particularly disturbing (as did Ballmer and Microsoft evidently) was Yahoo's threat to basically outsource their search advertising to Google if Microsoft pursued proxy fight takeover.  Talk about cutting off your nose to spite your face!  That would be suicidal for Yahoo, but just goes to show you that Yang and gang had a no Microsoft at any cost strategy.

With the passage of time I think this will be looked on as a terrible mistake by Yahoo and at some point in the next 24 to 36 months they are going to be acquired for a lot less money.  They cannot compete with Google alone, they have not executed well for years and this will force Microsoft to do something else to become more competitive in search.