Microsoft has closed the door, says Yahoo

A statement issued by Yahoo this afternoon says that all talks with Microsoft over any possible combination of their businesses has effectively concluded, and that it wants to maintain its own search business.

One final meeting between both companies' executives apparently took place on Sunday. "At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo, even at the price range it had previously suggested," the statement reads.

With that result, Yahoo board members determined that any business deal with Microsoft that would constitute less than a merger, would leave Yahoo without an independent search business that the company says is "critical to its strategic future and would not be in the best interests of Yahoo stockholders." This flies in the face of rumors circulating as late as an hour ago, stating Yahoo may have been ready to cede its search business or search capability to Google.

Some sources are expecting a possible joint statement from Yahoo and Google this afternoon, though that expectation may have been triggered by heads-up comments to the media about this Yahoo statement.

4:42 pm ET June 12, 2008 - Immediately after Yahoo's statement was issued, Microsoft followed up with its own corporate response, which seemed to indicate the door wasn't entirely closed from its vantage point.

"In the weeks since Microsoft withdrew its offer to acquire Yahoo, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo shareholders," reads the Microsoft statement this afternoon. "This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers. As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo. Our alternative transaction remains available for discussion."

4:45 pm ET June 12, 2008 - This news comes amid word that one of Yahoo's long-time engineers, Jeremy Zawodny, is leaving the company.

"In the next few weeks, I'll walk the halls at Yahoo as an employee one last time and turn in my purple badge," Zawodny wrote for his personal blog early this morning. "After 8.5 years of service and a better experience than I could have possibly imaged back in 1999, the time for me to move on has arrived."

Zawodny was a developer on the company's search team and a popular "technical evangelist" who last month, on his personal blog, asked readers to send in their resumes for anyone who'd like to be a technical evangelist. If anyone put two and two together to ascertain he was talking about his own job, it wasn't shared with the rest of the world.

Back in December 2005, Zawodny was embroiled in a minor scandal over his decision to sell textual advertising links on his personal Web site -- text links that provided browser data to the source being linked to. Colleagues advised that he should have instead have included attributes in his text links that provide no browser data to advertisers -- attributes that have been dubbed "link condoms." Yahoo had apparently advised its bloggers to use such attributes, but in a celebrated case, Zawodny refused.

Observers had been expecting the departure of a high-level executive from Yahoo today, and arguably Zawodny is not a high-level executive.