After a private and intimate meeting between the two company CEOs, Microsoft says ‘No way, too rich for my blood. You guys are crazy.’

As many had hoped on Friday, the Microsoft-Yahoo deal was on it’s way to handshake town on the news of a higher bid from Microsoft. They had offered $33 a share for Yahoo which was in the crapper, and only pulling in decent ($25-$28) highs because of all the deal buzz. Otherwise, Yahoo was depressing the hell out of its shareholders, despite once being the kings of the online search world.

Jerry Yang, the founder, creator, CEO, and queen nerd of Yahoo, for some reason thinks Yahoo is worth at least $37 a share, and had the balls to fly out to Microsoft CEO Steve Ballmer’s house in Seattle to tell him exactly that on Saturday night. Didn’t go over well and the deal is now basically crushed.

All the pressure is on Jerry Yang now. This dude needs to step up his game and make Yahoo look like the a prize peach over the next couple of months. Kind of like when your girl breaks up with you and then you get a haircut, start liftin’ some weights, use a new deodorant, etc. so that she’ll be all jealous and see what a stud you can be.

The only difference is that not many people have faith that Jerry ‘Yin’ Yang can actually do that. Expect him to be on the unemployment line soon if Yahoo doesn’t have a major turnaround.

Bill Miller, a major Yahoo shareholder, is one of Yang’s few supporters and thinks it’s Microsoft that are making a huge mistake. He had this to say about ‘Soft in a New York Times article today:

“They didn’t have a prayer of competing with Google without Yahoo,” he said. The difference between Microsoft’s offer of $33 a share and Yahoo’s demand for $37 a share was a few billion dollars, an amount of cash that Microsoft generates in just a few months, he said. For Microsoft, the downside of not buying Yahoo is far greater than the risk of overpaying for Yahoo by a small margin, he said.

That’s where we all stand now. So what are Microsoft and Yahoo’s post-break up plans? Looks like they’re trying to see other people.

Many people on Wall Street are proposing that Microsoft will step up it’s interest in some other internet business with the money it would have spent on the Yahoo deal. Increasing its 1.6% share of Facebook would be a good option. Delving into MySpace, LinkedIn, or even AOL might be a good rebound move. Look out for those.

As for Yahoo? They’re gambling on a big roll of the dice with a Google advertising partnership. This is kind of embarrassing for Yahoo to team up with Google, after having spent $2 billion on advertising technology to directly compete and rival them. But hey, this is really all they can do now. Another snag in that plan: possible anti-trust charges? Google and Yahoo combined have an 80% stranglehold on the internet search market.

Is anyone else surprised Microsoft and Yahoo continue to bumble around like asexual pandas when both companies need a deal or face possible extinction?

AP: Yahoo Share Fall 17% After Microsoft Withdraws Bid, May 5, 2008

New York Times: A Yahoo Shareholder on What Might Have Been, May 5, 2008