Since MS did not try to buy shares from the shareholders - I guess that the shareholders would have kept their shares, right?
So how would MS afterwards have "owned" Yahoo, without owning shares?
YHOO is currently around $28-$29/share. Microsoft was willing to pay a premium of almost $10/share on top of that.
There is a lot involved, but the process generally goes like this:
Buying company (MS in this case) meets with Buyee (Yahoo) and negotiates some price.
Buyee board accepts buyers price.
Press releases and such go out. Much rejoicing.
EVERY shareholder gets a chance to vote, but things are rarely voted down. Common shareholders generally end up voted the recommended way (in favor of the buyout), and large shareholders generally control enough of the stock that this isn't a big issue.
Sale is approved, and Buyee stock shares are exchanged for Buyer stock shares, at the ratio of their current prices. If you held 100 shares of YAHOO, you'd end up with about 125 shares of MSFT in this case. (Yahoo being supposedly worth about $35/share, MSFT being worth about $28/share).
In some cases, these buyouts can be "hostile" where the Buyee can attempt to buy enough of the shares on the market to effectively control the voting.
These points are over-simplified, but it gives you the general idea.
Also, I would've thought an infallible deity such as yourself would know correct syntax: "where would the money have gone to" ;)