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Microsoft announced it will abandon its attempt to acquire Yahoo after negotiations failed to hammer out an agreeable price per share.

For now, the biggest Internet deal ever is the biggest washout ever. Despite fervent negotiations and a threat to launch a hostile takeover of Yahoo, Microsoft CEO Steve Ballmer decided against further efforts to bring about a Yahoo acquisition.

"Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer," Ballmer said on Friday in a letter to his Yahoo counterpart, Jerry Yang.

"After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal."

Pundits around the Internet predicted a severe drop in Yahoo's shares once Wall Street opens today. In after hours trading following the Microsoft announcement, Yahoo's stock price fell by more than 20 percent, leaving it set for a rough open this morning.

Yang said on Yahoo's corporate blog everything's going to be alright.

"With Microsoft’s withdrawal, we’ll be better able to focus our energy on growing our industry leadership and maximizing value for stockholders," he said. "We’ve emerged a stronger, more focused company with an even greater sense of purpose."

Yang also dismissed the negativity over Microsoft's withdrawal as "a lot of nonsense and misinformation in what’s being reported." We wonder what he will call a wave of shareholder lawsuits if investors respond with less than joyful enthusiasm over the situation.

One Microsoft provocateur hailed the end of the pursuit. The anonymous blogger behind Mini-Microsoft, an advocate of slimming down the massive tech company for its own good, called Ballmer's choice a "wise decision."

But even that choice had a downside, in Mini-Microsoft's opinion. "The only not-so-good thing out of not blowing all of our cash at once is that we'll continue to live in an era of cash-cow abundance, preventing us from making profit-minded decisions," said the blogger.

"The lack of the money cushion would have, I presume, actually caused new projects to expect to bring in cash vs. becoming strategic money pits."