In recent months, Microsoft (MSFT) executives dismissed the prospect of a tieup with Yahoo (YHOO) even as rumors swirled that a deal was in the works. Microsoft, they explained, was strong enough on its own to compete with Google (GOOG).
As it happens, Microsoft CEO Steven Ballmer had been talking with executives at Yahoo on and off since late 2006 about working together, possibly through a merger. After more than a year of spurned overtures, Redmond (Wash.)-based Microsoft went public on Feb. 1 with an unsolicited $44.6 billion offer. Sunnyvale (Calif.)-based Yahoo said in a statement it would "evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."