I haven't yet read anything about this new development, so I'm just speculating on my own here... Yahoo's stock will drop significantly on Monday, and then maybe Microsoft will try to restart the deal soon after (in a few months maybe?). They will then say "see, we were right, your company is not worth that much...", and propose to buy Yahoo for the same or less than they were offering now.

I think its Yahoo's loss. With Microsoft on board, they might have had a chance competing with Google. But anyway, I think this frees up other opportunities for MS, say in the gaming world! :) Go devour Epic and Valve. If MS takes over Unreal licensing and Steam....

Buy Sega and make money from mario and sonic sales on the wii and DS lol :P

Yahoo's stock was under 20 bucks before MS offered their unsolicited bid. The stock will probably return close to that target on Monday since nothing of any real importance has happened since then. MS's offer -- as much as people may hate them -- was more than generous. They valued the company at $31/share in their original offer when Yahoo was around 19.50/share or so. That was already a premium. To insist that MS pay twice what the company was trading for was a bit greedy and VERY irresponsible in terms of the shareholders. At 33.00 a share, I suspect a lot of shareholders would have been pleased. Stand back and watch the shareholder suits fly...

My guess is that in 6 months or a year the deal will be back on at the current value MS was willing to pay. I don't see Yahoo living much longer into the future at its current level. Either MS buys them out or they lose online search/ads to Google and become a Google outsourced front end.

maybe just microsoft playing hardball. seeing if yahoo will come to them.

If the stock drops back down to pre-buyout levels, MS may state another offer. Wait to see what happens Monday; this story hasn't fully played out just yet.