Microsoft has withdrawn its offer to buy the Internet company Yahoo.
Talks between the two companies broke down after they failed to agree on a price.
Microsoft set out to buy Yahoo three months ago so it could compete with Google, which dominates the lucrative market for internet advertising.
Microsoft had been willing to pay the equivalent of €31bn or €21 a share.
Yahoo had insisted on €34bn or €24 a share.
Following lengthy talks Microsoft refused to raise its bid by €3bn and so the deal fell through.
Analysts say Yahoo has overplayed its hand. They believe the breakdown in talks may have an adverse affect on Yahoo shares and generate uncertainty among investors about the company's management.
Some observers say they expect Yahoo's shares to fall by as much as 30% when Nasdaq trading resumes tomorrow.
