Over the weekend, Microsoft withdrew its bid to acquire Yahoo!, after the software giant increased its original offer by almost $5 billion. On Feb. 1, Microsoft made the unsolicited offer to acquire Yahoo! for $31 per share, or $44.6 billion. Yahoo! declined, saying the bid “undervalued” the company. In a last ditch effort, Microsoft raised its offer to $33 per share, but Yahoo! refused, saying it wanted $37 a share.

Analysts expect this fallout to have major implications for both companies: It puts Microsoft back to square one on its strategy to compete with Internet search and advertising giant Google, and for Yahoo!’s CEO Jerry Yang, the pressure is now on to prove that the company is worth what he says it is.