Microsoft was try to buy market share in the search engine. This is when they were making a play for Bing to be a market contender in Search. We don’t know what would have happened if Bing had 20% market share out the gate, as well as access to Yahoo expertise/tech. A significant share of Search today would be worth significantly l more than $44B, and this deal would have been a fair gambit for Microsoft to make.

It was a very good offer, but it wasn’t enough for Yahoo to sell. Perhaps a larger offer would have helped, but I think Yahoo had an inflated opinion of their own worth.