When rumours regarding Microsoft's acquisition of Yahoo first surfaced in 2006, they were dismissed as simple gossip. However, Microsoft was deadly serious about the takeover bid. We chart the highs and lows of this battle which rocked the IT world.

No-one really expected the rumours regarding Microsoft's acquisition of Yahoo to ever come to fruition when they first surfaced in 2006.

However as the past five months has shown, Microsoft was deadly serious about the idea, if only to strengthen its competition against Google.

We first realised that Microsoft was serious about the acquisition on February 1 this year, when it announced its $44.6bn offer for Yahoo. A highly emotional exchange of accusations, veiled insults and threats followed and we all thought the partnership was over when Microsoft withdrew its offer on May 3.

That wasn't the end, however. The companies engaged in a fresh round of conflicting accounts as to why the talks collapsed, and Yahoo's CEO Jerry Yang found his actions being publicly second-guessed by vocal shareholders and financial and industry analysts. Now in the latest twist, the billionaire investor Carl Icahn has reportedly bought 50 million shares of Yahoo stock and is considering a proxy fight to replace its board members and rekindle the talks with Microsoft.

Here is a timeline of the major milestones of Microsoft's pursuit of Yahoo:

May 2006

Some of the earliest rumours that Microsoft is considering an offer to buy Yahoo appear in the New York Post and The Wall Street Journal; at the time such a deal is considered far-fetched and the rumours are dismissed fairly quickly.

October 2006

Rumours begin to swirl that Yahoo has approached Time Warner about purchasing AOL, a notion somewhat more believable than a Microsoft-Yahoo deal.


Microsoft-Yahoo rumours surface from time to time but disappear soon after, as there is nothing to substantiate them.

February 1, 2008

In the shot heard round the internet, Microsoft makes a formal purchase offer of $44.6bn (£22.3bn) based on Yahoo's stock price of $19.18 (£9.09); Yahoo's stock price starts rising.

February 11

Yahoo rejects Microsoft's offer as too low; Yahoo's stock price closes at $29.87 (£14.93). According to the rumour mill, Yahoo is now looking for closer to $40 (£20) a share because the value of the company has risen since the offer.

February 12

Microsoft for the first time publicly hints in a letter to Yahoo that it is willing to get hostile in its takeover, saying it "reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realise the value inherent in our proposal".

March 5

Reports emerge that Yahoo is stepping up negotiations with Time Warner for some kind of tie-up with AOL. Meanwhile, reports make the rounds that Microsoft will mount a proxy fight if Yahoo won't play ball.

NEXT PAGE: News Corp says it won't join the fight

  1. The shot heard around the internet
  2. News Corp says it won't join the fight
  3. Microsoft withdraws its bid

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