Microsoft said in its statement that it was offering Yahoo a deal which is even worth more than the original $33 per share for the whole company. In addition to offering to buy search business of Yahoo, Microsoft was ready to acquire a 16% stake in Yahoo at $35 a share, according to a source familiar with the company’s offer. This time, though, it appeared it was Yahoo which wanted Microsoft to get the whole company, an option that the company refused to revisit, according to a separate source. Microsoft and Yahoo executives met at Mineta San Jose International Airport, at which time Yahoo says it was told unequivocally that Microsoft would not resume its buyout bid, though it was interested in a deal for Yahoo’s search business.

Yahoo decided its search business was very strategic, even though later it agreed to allow Google to serve up a good chunk of the company’s search related advertising. “With respect to an acquisition of Yahoo’s search business alone that Microsoft had proposed, Yahoo’s board of directors has determined, after careful evaluation, that such a transaction would not be consistent with the company’s view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future, and would not be in the best interests of Yahoo stockholders,” Yahoo said in its statement saying talks with Microsoft has come to an end.

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