The time period given to Yahoo by Microsoft expired without any outcome even after a fresh takeover bid of almost $50 billion was proposed. The final rejection decision was taken at a Yahoo - Microsoft meeting on Saturday, which stated that the amount was too low. Steve Ballmer had initially offered $44.6 billion, which was later revised. Microsoft had earlier said that it sees at least $1 billion in cost savings generated by the combination and it also intended to offer significant retention packages to Yahoo engineers, key leaders and employees.

Amidst the hype of this deal Google had earlier stepped in wanting a partnership in search advertising with Yahoo. With that on its cards already, Yahoo had also discussed a possible merger with the AOL unit of Time Warner and the MySpace unit of News Corp. Microsoft's decision to pull back has cast a cloud of uncertainty over Yahoo! and its shareholders. The deal going stale might have a much deeper effect on Yahoo as right now all the options pose a challenge to its strategic position.

A Google partnership will definitely attract scrutiny from regulators because of its dominance over online search and advertising, while AOL and Yahoo! have many overlapping businesses and technologies. It still is unclear what Yahoo will do, will 'the war' become dirtier with Yahoo joining the AOL camp, or will Google try and beat the offer and finally take over Yahoo itself? The future of Yahoo! yet remains to be shaped.