BLOOMBERG - Yahoo! Inc. fell the most in almost two years on the Nasdaq after Microsoft Corp. walked away from its $44.6 billion bid of the Internet search company because executives couldn’t agree on a price. Its stock dropped as much as 20 percent.
Microsoft CEO Steve Ballmer said on May 3 that he wasn’t prepared to pay the $37 a share Yahoo executives demanded. Microsoft, the world’s biggest software maker, offered $33.
The move puts Yahoo CEO Jerry Yang under pressure to bring the share price near the $31 Microsoft first offered. Sunnyvale, California-based Yahoo, owner of the No. 2 search engine, fell 32 percent in the year before Microsoft’s offer. Bigger rival Google Inc. expanded revenue more than three times faster than Yahoo last quarter.
Yahoo fell $3.89 to $24.78 at 1:10 p.m. New York time on the Nasdaq Stock Market. Earlier the shares dropped as low as $22.97, the most since July 2006. That price is still 20 percent higher than Yahoo’s stock close of $19.18 before the offer.
Yahoo also is in discussions with Time Warner Inc. over a merger with its AOL unit. The proposed deal would see Time Warner keep a stake of less than 20 percent of the combined company, the people said.
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