Page last updated at 23:25 GMT, Tuesday, 6 May 2008 00:25 UK

Microsoft 'moves on' from Yahoo

Yahoo workers
Yahoo boss Jerry Yang is to brief staff on Tuesday

Microsoft's international president has said it is "the end of the story" with Yahoo after the internet firm refused its higher offer at the weekend.

Jean-Philippe Courtois said Microsoft would be concentrating on boosting its online services business.

Both Microsoft and its takeover target Yahoo are under pressure from some shareholders to do a deal or find other partners to compete with rival Google.

Microsoft withdrew from talks after it failed to agree a price with Yahoo.

I wouldn't rule out some partnerships, but we don't have anything imminent there
Bill Gates, Microsoft chairman

Asked if that was the end of the story with Yahoo, Mr Courtois replied: "Absolutely, that's the end of the story. We are moving on because our strategy is very clear."

Yahoo felt that Microsoft's second offer of $33 per share undervalued the firm. It is believed to have wanted nearer to $37 per share.

"We decided to move on and basically withdraw our offer and continue [executing] our strategy to become and evolve as a leading provider of Internet services in the online advertising world, media, social networking etc," Mr Courtois said.

"So that is what the company is going to focus on," he added.

'Competitive space'

Yahoo chief executive Jerry Yang is expected to meet staff on Tuesday to update them on the weekend's events.

He has suggested he would be open to another, higher offer for the internet firm.

Mr Yang said he would listen "should somebody else come back someday and want to buy the company".

Meanwhile an unconfirmed report suggested Microsoft was in talks with media giant Time Warner about buying its internet arm, AOL.

Microsoft chairman Bill Gates was asked about his company's future plans while on a visit to South Korea.

"We need to show the innovation and it's a very competitive space," Mr Gates said.

"I wouldn't rule out some partnerships, but we don't have anything imminent there," he added.

Yahoo's share price recovered slightly in Tuesday trading in New York after falling 15% on Monday.

Its shares were up 5.54% at $25.81. Microsoft's shares closed up 2.13% at $29.68.

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