Page last updated at 09:08 GMT, Thursday, 6 November 2008

Yahoo tells Microsoft: 'Buy us'

by Maggie Shiels
Technology Reporter, BBC News, Silicon Valley

Sign at Yahoo headquarters
Yahoo said the company is for sale at the right price

Yahoo said the "For Sale" sign is still on its front lawn and that Microsoft should buy the company.

The internet portal's co-founder and CEO Jerry Yang made the comment despite the fact Yahoo rejected a $33 (£21) a share offer from Microsoft back in May.

Mr Yang's suggestion also came hours after Google pulled out of an internet advertising partnership with Yahoo.

"To this day the best thing for Microsoft to do is buy Yahoo," said Mr Yang.

"I don't think that is a bad idea at all, at the right price whatever that price is. We're willing to sell the company," he told a packed ballroom at the Web 2.0 summit in San Francisco.

During the on stage conversation in front of a standing-room only crowd, Mr Yang was asked why the company did not take the $33 a share offered back in the summer. The company's share price closed Wednesday below $14 (£8.80) a share.

"They walked away from a public offering and we were ready to negotiate. We wanted to negotiate a deal. We felt we weren't that far apart.

"At the end of the day, they withdrew and they have since been clear about not wanting to buy the company," explained Mr Yang in a rare public appearance.

Microsoft did however come back and offer to buy the search part of Yahoo, but a deal was never struck.

Again Mr Yang said the offer then was not good enough but he still remained open to persuasion.

"As far as a search deal goes, we are open-minded about it. The last time we felt the deal was not a good one for the company but that doesn't mean we won't do one."

When asked if any negotiations were pending with the software giant, Mr Yang said "There is no new news."

Microsoft declined to comment.

And when quizzed about a possible deal with AOL, Mr Yang played coy with his host John Battelle.

"Buying AOL? I can't talk about that, John. If I told you I would have to kill you."


While Yahoo is still holding the door open to Microsoft, Google closed one earlier in the day on a deal the two companies had struck up over search advertising.

After four months of scrutiny from the Department of Justice, Google decided to back out of the agreement it had made to provide advertising around the internet portal's search results.

jerry yang
Mr Yang told the summit "I am passionate about Yahoo"

It had been estimated that the venture would have been worth around $800m (£500m) a year to Yahoo.

"Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners," said Google's chief counsel David Drummond.

Mr Yang said he was "disappointed that they [Google] didn't want to defend this deal."

But he felt that in his mind, the government scuppered it.

"I really thought the government in this case does not understand our industry. They have a market definition that I think is too narrow and I think things like this tend to have unintended consequences for our entire industry.

"So I clearly don't agree with what the viewpoint is, but they are the government and they can decide on these things."

Mr Yang pointed out that the Google partnership was not crucial to its bottom line and that it was "incremental" to its overall growth plans.

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