Yahoo rejected Microsoft's $44.6B buyout — then sold for a fraction of that

By 2008, Yahoo was a struggling internet pioneer that had already let one generational opportunity slip — it had passed on buying Google in 1998 and again in 2002. In February 2008, Microsoft made an unsolicited offer to acquire Yahoo outright for $44.6 billion, a substantial premium over Yahoo's then-depressed share price, as Microsoft sought to catch up in search and online advertising.

Yahoo's board rejected the bid, saying it 'substantially undervalued' the company and was not in shareholders' interests. Microsoft raised its offer to $47 billion, but Yahoo held out for at least another 10% more. In May 2008, Microsoft walked away. Yahoo had bet that it could do better on its own or find a richer suitor; no such offer materialized.

The decision aged badly. Yahoo continued to lose ground to Google and Facebook, cycled through CEOs, and in 2016 sold its core internet business to Verizon for about $4.5 billion — roughly a tenth of what Microsoft had offered eight years earlier. (The remnants later passed to Apollo Global Management in 2021.) Yahoo's rejection of Microsoft is remembered, alongside its passes on Google, as one of the great strategic blunders of the internet era.