Microsoft has withdrawn its takeover bid for rival search engine Yahoo! after failing to agree on a fair price. While Microsoft upped its initial bid by around $2.5 billion, Yahoo! were holding out for at least $2 more per share. Microsoft are now expected to concentrate on smaller buys to up their share of pay per click advertising revenue and search market share. Read More

It’s also possible that they will revamp their web offerings to bring their suite of services more closely inline with the Google experience. While Google has successfully tied up its numerous web applications into a seamless user experience, Microsoft have yet to do the same with their extensive arsenal of programs.

While the draw for Microsoft was to pick up some much needed web traffic and pay per click dollars, Yahoo! have said they will focus on strategic execution of goals including pressing ahead with their latest trial – a pay per click linkup with Google.

Although the Yahoo! share price is expected to drop, CEO Jerry Yang has indicated the next few months will see something of an overhaul at the California search HQ and hinted that the whole Yahoo! internet experience will be transformed. He told the company’s corporate blog that the mission is to make the internet experience as open, personal, social and relevant as possible.