Well, that's that! Microsoft has officially pulled its bid for Yahoo! -- inflated for good measure this weekend by another $5 billion -- after the company did "not move toward accepting [the] offer", asking again for even more, another $4 bil (totaling $9b more than the original offer). In a letter from Ballmer to Yang, he states that Microsoft also won't be looking at its option for a hostile takeover, stating that Yahoo! likely "would take steps that would make [it] undesirable as an acquisition"; Ballmer then goes on to make a few backhanded criticisms of Yahoo's possible new partnerships with Google (which is no surprise). Good night, Microhoo, the monstrous, hamstrung, lumbering mega-merger that might have been.
Update: Yahoo! makes its public response here. Yang sums it up: "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus..." etc. Alright then.