Search Engine Optimization Placement News

Microsoft will focus on growing its own online advertising and internet search business, including MSN, after it withdrew its takeover offer for Yahoo.

Just two months ago, Google’s stock was down 45% percent, and Yahoo and MSN appeared ready to combine forces, but as it stands today Google’s stock is hot and Microsoft has decided to stop trying to purchase Yahoo.

Yahoo Inc., resisting a $44.6 billion takeover by Microsoft Corp., which runs MSN.com, may wring a higher offer out of the software maker after finding an alternate suitor in Time Warner Inc.’s AOL unit.

A new partner may help CEO Jerry Yang turn around investor confidence in Yahoo. Less than a week ago, his options appeared limited after Microsoft CEO Steve Ballmer threatened to cut his bid if the board refused to give in. With AOL in the fray, a better price is possible, and The New York Times said Thursday that News Corp. may join Microsoft’s offer.

“Microsoft, if it wants to stay in the game, is going to have to increase its bid,” Larry Haverty, associate portfolio manager at Gamco Investors Inc., said in an interview with Bloomberg Television. “Yahoo is a strategic necessity for Microsoft.”

Haverty said $35 a share is a fair value for Yahoo. His firm managed about $31 billion in assets as of Dec. 31, including shares of Microsoft and Yahoo.

If Microsoft teams with Rupert Murdoch’s News Corp., the transaction would unite Microsoft’s MSN, Yahoo and News Corp.’s MySpace, the Times said. Microsoft’s original bid is $31 a share.