Microsoft has backed down and walked away from its Yahoo takeover plans. Not prepared to part with the sort of cash Yahoo were after, Steve Balmer is quoted as saying, “Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer.”

This really surprises me - I thought that the offer would either be accepted, or Microsoft were going to go hostile - walking away was never on the cards for me. So after months of anticipation, lots of discussion (both with the companies themselves, and globally on blogs, podcasts, even mainstream news) the deal has fallen through, and both parties are going their separate ways. A question still remains though - What sort of damage has this whole situation down to the stability of Yahoo? Read the Microsoft press release here.