Jerry Yang, Yahoo CEO and co-founder, speaks
during a keynote address at the Consumer Electronics
Show (CES) in Las Vegas, Nevada, Jan. 7, 2008
Yang said he was open to selling Yahoo to Microsoft all along, but that Steven A. Ballmer, Microsoft’s chief executive, and his dealmakers ultimately declined to negotiate and withdrew their proposal on Saturday with little explanation.
"They chose to walk away after we put a price on the table, and they didn't want to negotiate," Yang said. "From my perspective, we were open all along to selling to Microsoft. We just feel Yahoo, either standalone or with Microsoft, is worth more than what they put on the table."
Yang's account conflicts with that of Microsoft's advisors and executives. They have said that they received no counteroffer from Yahoo for three months, after Microsoft's deadline to consummate the deal had expired. They also said that Yang and his board offered various prices of 37 U.S. dollars a share or above and ultimately refused to budge on those numbers.
Microsoft had raised its initial bid to 33 U.S. dollars a share when Yang and his co-founder, David Filo, met with Ballmer and other Microsoft executives at the Seattle airport on Saturday. The Yahoo founders said their board had authorized an acquisition at 37 U.S. dollars a share.
After that meeting, Ballmer made public a letter to Yang withdrawing the offer and expressing disappointment that Yahoo did not move toward accepting it.
In the interview Monday, Yang and Roy Bostock, Yahoo's chairman, said they were negotiating in good faith and that throughout the process they were open and receptive to a merger with Microsoft. Yang also said he spent personal time alone with Ballmer but that they were ultimately unable to bridge their differences.
Yang also looked ahead to the daunting task of guiding Yahoo’s growth as an independent company.
"I feel like we now have the task to continue to build shareholder value," he said. "This is just creating another set of challenges we have to overcome as a company. We have to show the world the opportunity that we have been talking about for the last three months."
Yang, who took control of the company he co-founded last June after the departure of the prior chief, Terry Semel, is now under enormous pressure to raise Yahoo's stock price. In reaction to the deal falling through, Yahoo's stock fell almost 15 percent on Monday to 24.47 U.S. dollars.
Yang argued that the Microsoft's bid had opened up new doors for Yahoo. "We feel Microsoft approaching us has created an opportunity for us talk to just about anybody and everybody in the industry," he said. He said the company would do new deals "in a way that ensures that it's the right thing to do for Yahoo, and not because of some time pressure."
"Anything we might do with Google would allow us to maintain the ability to compete in what is important to us," Yang said.
Yang declined to say whether such a deal with Google was imminent.
Yahoo might also consider possible tie-ups with AOL, a division of Time Warner, and MySpace, a division of News Corp., though shareholders and analysts seem unenthusiastic about those options. Yang would not address speculation about those deals.
He did want to address what he said was a misconception: that Yahoo executives celebrated the news of Microsoft's withdrawal and viewed it as a victory. "I was not witness to any celebration and we do not consider it a victory. I would have been personally very happy to do a deal with Microsoft," he said.
At least, Yang has impressed some in the industry with his gumption in rejecting the most highly capitalized technology company on the planet.
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