A proposed deal for Microsoft to purchase Yahoo! for $50 billion has been halted, largely because of disinterest from Yahoo!, the Wall Street Journal reported Friday.
After losing Internet advertising company DoubleClick to Google in January, Microsoft furthered its pursuit of Yahoo! by asking the company to engage in formal negotiations. The new pursuit was said to be a move made out of urgency on Microsoft's part.
Yahoo! reportedly spurned the advances of the software giant a few months ago.
"They're getting tired of being left at the altar," said a banking source who recently had talks with Microsoft. "They now seem more willing to extend themselves via a transaction to get into the game."
Since Google develops Internet-based software that directly competes with Microsoft Office, sources have said, Microsoft has no choice but to go on the offensive.
In addition, sources noted, Google keeps trumping Microsoft on the deal front, having edged out Microsoft for DoubleClick in January and a renewed search advertising pact with AOL in 2005.
"The minute you hear Microsoft start arguing against something on antitrust grounds, you know they are desperate and need to do something big," said one source.
The deal between Microsoft and Yahoo! would have upped the companies' combined share of the search advertising market to 27 percent, compared to Google's 65 percent. It also would have narrowed the gap between the companies and Google in overall online ads to 13 percent.
The deal would have created a "dominant force on the Internet," in terms of advertising, one source said, and would have created opportunities to use Yahoo! content on Microsoft devices, such as making music provided exclusively to Yahoo! Music available on Microsoft's Xbox game console and Zune music player.
