Rush of Microsoft and Yahoo talks preceded end

By Anupreeta Das

SAN FRANCISCO (Reuters) - After three months of waiting, the end of Microsoft Corp's pursuit of Yahoo Inc ended in a rush.

A flurry of last-minute talks between the heads of the software and Internet giants preceded Saturday's decision by Microsoft to end its effort to buy Yahoo, said three people familiar with the talks, who were not authorized to speak publicly about them.

Yahoo co-founders Jerry Yang and David Filo flew to Seattle to meet Microsoft Chief Executive Steve Ballmer and his lieutenant Kevin Johnson on Saturday morning, where they indicated Yahoo could do a deal at $37 a share, sources said.

That was the last face-to-face meeting of a busy week.

Microsoft's deadline to Yahoo to reach a deal or prepare to face a hostile takeover passed without incident a week ago on Saturday.

But the following Tuesday, Yang and Roy Bostock, the chairman of Yahoo's board, called Ballmer twice, urging the Microsoft CEO not to make good on his threat to go hostile or walk away, a person familiar with Microsoft's thinking said.

The next day, Wednesday Apr 30, Ballmer flew to Palo Alto, Calif., for a meeting with Yang near Yahoo's Sunnyvale headquarters, the sources said.

Yang had long said that Microsoft's cash-and-stock offer, originally worth $31, was not enough. On Wednesday he informally told Ballmer that Yahoo could go for less than $40 a share, a price previously tossed out as a possibility -- but never formally quoted -- in meetings between advisers on both sides, sources said.