Microsoft gave up its attempt to take over web giant Yahoo, Steve Ballmer said during Microsoft's annual meeting with Wall Street analysts. The whole business started in February, when Microsoft made an unsolicited proposal to acquire the outstanding shares of Yahoo common stock for 31 dollars per share consideration.

Yahoo rejected the offer and any other take-over attempts. Earlier this month, Yahoo decided to reject Microsoft’s latest proposal of acquiring the company’s search advertising business. The offer, which would have split Yahoo between Microsoft and Carl Icahn, made the company’s board of directors angry because of the manner in which Microsoft treated Yahoo.

The new deal that Microsoft proposed to Yahoo implied the latter selling its search business for $1 billion. Microsoft would have also paid $2.3 billion a year for the following five years. What is more, Microsoft would have also bought 3.9 billion worth of Yahoo shares and would have also paid $2.8 billion of the company’s debts.

Yahoo also rejected a previous deal coming from Microsoft that would have paid $9 billion for the company’s search business and would have brought Yahoo a guaranteed $1 billion a year.However, Yahoo’s board of directors decided that the company has a better chance of increasing its annual revenue from its deal with Google. Although Google guarantees Yahoo a minimum of only $800 million a year in revenue, Yahoo can also close similar deals with other companies, something that wouldn’t have been possible with Microsoft.

Steve Ballmer confirmed that Microsoft will not make any further attempts to acquire Yahoo."There's nothing under discussion between the two of us," Ballmer told investors. "We had a set of principles, we talked about them, it didn't work out," he said. "Fine, we're done. We can move on."

Last month, in an interview with Financial Times, Steve Ballmer also indirectly ruled out rumors that Microsoft will try to somehow "make up" for the market share it could have snatched by taking over Yahoo by grabbing up smaller rivals.

Microsoft's head said buying up Yahoo would have indeed accelerated the company's growth in the search market. He said Microsoft is at fault for moving too slowly into the business, praising at the same time Google's intuition which led to the latter's dominance.

However, during the meeting with the analysts, Steve Ballmer said that the company has post-Yahoo plan to turn around its online services division and a strategy to take advantage of future opportunities, even as its Internet chief departs.

"There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity," Ballmer said.On Wednesday, Microsoft announced that Kevin Johnson (47), the man in charge with the entire Yahoo Inc. acquisition operation, was to leave the company and start his new job as chief executive at Juniper.

Basically at the same time with Kevin Johnson’s departure, Microsoft decided to reorganize the Platform Services division, formerly run by Mr. Johnson; the division is to be divided into two departments: Windows / Windows Live and Online Services.