SAN FRANCISCO — Facing a legal battle that would have illuminated its widening market power, Google turned its back on its struggling rival Yahoo and pulled the plug on an Internet-advertising partnership that had been conceived to keep Yahoo out of Microsoft’s clutches. The retreat announced Wednesday represented another setback for Yahoo, which had been counting on the Google deal to boost its finances and placate shareholders still incensed by management’s decision to reject a $47.5 billion takeover bid from Microsoft six months ago.
Without Google’s help, Yahoo now might feel more pressure to renew talks with Microsoft and sell itself for less than the $33 per share that Microsoft offered in May. Yahoo closed Wednesday afternoon at $13.92 per share, gaining more than 4 percent in a move reflecting investor hopes that Microsoft might renew its pursuit.
“I believe the best thing for Microsoft to do is to buy Yahoo,” Yahoo chief executive Jerry Yang, right, said at the Web 2.0 Summit. The Associated Press; AP photo
