Yahoo deal is off, says Microsoft

Microsoft has described the chances of a takeover as 'negligible'

The long running saga of Microsoft's attempts to acquire Yahoo continued yesterday as the Redmond giant described the chances of a takeover as " negligible" but then refused to rule it out altogether.

Microsoft chief financial officer Chris Liddell told investors yesterday that the possibility of a takeover was "so small as to be essentially negligible", blaming the inability of both parties to agree on Yahoo's value.

According to Liddell, Yahoo is now prepared to sell for the $33 per share that Microsoft offered in early May, but its declining value since then means that Microsoft is no longer prepared to pay that price.

Liddell conceded that Microsoft's online progress might not advance as fast without Yahoo, but asked investors: "Does that mean that we should pay anything for it? There has to be some economic justification."

However, Microsoft chief executive Steve Ballmer later appeared to leave the door slightly ajar, leading to speculation that talks may resume at some point.

"It didn't work out, fine, we're done, we can move on," he said. "Does that mean nobody will ever talk to anybody again? I suspect the answer to that is also 'no'. It's a long time and a big world, but we are moving on."

Microsoft first attempted to snap up Yahoo in February but was given the cold shoulder. Since then the companies have locked horns over a number of deals, including an effort by Microsoft to buy Yahoo's search business.

More recently Microsoft has held discussions with Carl Icahn, a major Yahoo investor, in a bid to replace Yahoo's board.