2008 year in review: US tech industry

Corporate mergers and the presidential elections dominated the US tech landscape in 2008

Conflicts over corporate mergers, presidential elections and even the use of old television spectrum dominated US headlines during a rollercoaster year for many in Silicon Valley and throughout the nation.

Microsoft started the year off with a bang, announcing in late January that it was placing a bid for Yahoo. The $44bn offer reflected a per-share price of roughly $33.

After a short deliberation, Yahoo's board of directors rejected the bid, suggesting that the company could create a higher share price on its own. Analysts said that corporate culture also played a part in the decision, as many Yahoo veterans did not wish to adopt Microsoft's more formal style.

As the year progressed, the deal soured. Both companies publically traded barbs before Microsoft finally withdrew its offer in May.

For Yahoo, things went from bad to worse. Shareholder Carl Icahn launched a public rebellion against the directors, threatening to take control of the board and dismiss chief executive Jerry Yang. Eventually, the two sides reached an agreement which gave Icahn a seat on the board.

But the deal came too late for Yang. As an alternative search deal with Google fell through, Yahoo's stock price fell below $12 a share and stockholder confidence plummeted. Yang was forced to resign as chief executive.

Yahoo was not the only company to feel the pinch in 2008. As Autumn descended on Silicon Valley, a tanking economy brought with it a brutal stretch in which tens of thousands lost their jobs.

As the credit market staggered, venture capital dried up and many startups were forced to make major job cuts or close their doors. New funding and IPOs came to a virtual halt over the year.

Larger firms were hit just as hard by the downturn. Companies such as Yahoo, Xerox, AT &T, Circuit City and AMD shed tens of thousands of jobs between them in October and November.