"We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole," Ballmer said in a statement posted on the Microsoft website.
"Despite our best efforts, including raising our bid by roughly $US5 billion ($A5.37 billion), Yahoo! has not moved toward accepting our offer.
"After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," said Ballmer."
CurlyG writes: Apple's much-touted new operating system, OS X Leopard, is in some ways worse that Windows Vista, says the founder of the Linux open source project, Linus Torvalds.
Torvalds was in Melbourne last week for the linux.conf.au conference and was invited to pass judgement on OS X versus Windows Vista in a wide-ranging interview.
"I don't think they're equally flawed — I think Leopard is a much better system," he said. "(But) OS X in some ways is actually worse than Windows to program for. Their file system is complete and utter crap, which is scary."