- 4 May 08, 08:11 GMT
How mistaken was I?
I thought too much was at stake for Steve Ballmer, for Microsoft to walk away from Yahoo.
But he was speaking the truth to staff when he said on Thursday he wasn't afraid to ditch his pursuit of Yahoo.
So what does this mean?
For Microsoft it means it has to "go it alone" in the web landscape. It has to find a way to compete with Google - on search, on services, on advertising.
No-one doubts that Microsoft has the engineering talent to match any firm in the world - but can it be nimble enough? Can it turn good ideas into compelling products?
The $44bn it would have spent on Yahoo is now available to plough into products and ideas. With initiatives like Live Mesh on the horizon the company is beginning a process of trying to make itself relevant to 21st Century web users.
But this is Microsoft's last chance. It failed once to adapt to the web age. It cannot afford to fail again.
For Yahoo this brings relief all round. In the last few weeks Yahoo had done everything in its power to make the firm as unattractive to MS as it possibly could - including hopping into bed with Google to trial its rival's ad search technology.
Yahoo boss Jerry Yang, in a letter to staff today, talks of the firm's "important transition". He knows that Yahoo has to make itself relevant to users once again.
Somewhere in the last few years Yahoo went from being the most important firm on the web to an also ran.
The company has already begun a process of "re-wiring" itself - bringing together all of its services into one coherent whole.
I also think it would have been a painful process to integrate Yahoo, its staff and mindset, into Microsoft.
Yahoo is a much more open company than Microsoft; open in the sense of standards.
Mark Shuttleworth, the Ubuntu promoter, told me a few weeks ago that a combined MS/Yahoo would have been "healthy" for Microsoft.
"Talking to Microsoft employees I get the sense they realise they can't transform that company into a Windows-based company without killing it," he told me.
That change won't now happen. So perhaps Microsoft has missed an opportunity here to re-invent itself.
For Google it means jubilation: delight that they are now facing two firms with a smaller web footprint rather than a genuine single competitor.
The Mountain View company, I'm sure, will also say it is pleased that a firm with a poor track record with regards openness has not swallowed a major competitor.
No-one can ever say the world of the web is dull.
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