Microsoft's failed courtship of Yahoo leaves the software giant with limited options for achieving its strategic goal of expanding its presence online, while Yahoo now hopes to seal a broader search-ad pact with Google. The

Microsoft Corp. today announced that it has withdrawn its proposal to acquire Yahoo! Inc.

“We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,” said Steve Ballmer, chief executive officer of Microsoft

Below is the text of the letter from Microsoft CEO Steve Ballmer to Yahoo! CEO Jerry Yang.