Looks like my earlier prediction was right. Microsoft Corp. has pulled its bid to purchase Yahoo! Inc. for $33 a share. The deal is dead.

The market, to no surprise, doesn’t like the news and shares for Yahoo have plunged 21% in pre-market trading. Bloomberg reports that Citigroup Inc. has downgraded the stock to a “sell” after the news came out.

Yahoo’s future is not as bleak as some apparently want to believe. It is still  arguably the #1 or at worst #2 brand on the Internet. They are currently rumored to be in talks with with Google to iron out an advertising deal, and there are also rumors of a possible deal with AOL Time Warner.

I’m sure this is not the last time we’ll be discussing Yahoo! mergers this year.