Minus Succor from Google, Yahoo Is Still Open to a Deal with Microsoft

When Battelle asked Yang about what happened with Google, Yang confirmed that Google walked away from the companies' proposed search ad deal, but told Battelle he'd have to ask Google why.

"Google clearly decided that they did not want to stay with [the deal]," Yang said.

Yang also said the DOJ did not understand "our industry" and that the agency's definition of the search advertising market was too narrow. “Things like this have unintended consequences on the ... industry,” he said.   

Now Yahoo is back at square one. Yang said the company is not in negotiations with Microsoft but declined to comment on any dealings with AOL. The company's stock price is $13.93, nearly $20 less than what Microsoft was willing to pay.

Despite this, Yang declined having regrets over the last 15 years. He characterized what Yahoo has been through in 2008, including the failed acquisition bid, the mass employee exodus and the plummeting stock price, as "extraordinary."

This is a characterization that should interest Yahoo investors, who lost millions of dollars on the company. GigaOM's Om Malik provides a guilt trip post here.

The embattled chief also rebuffed Battelle's suggestion that Yang's ego kept the Microsoft bid from succeeding, noting that he is not adamant about Yahoo remaining independent. Again, this is contrary to media reports that Yang wanted to turn Yahoo around internally instead of aligning with Microsoft.

Whether this has always been the case or not, we may never know. What is clear is that Yang's cooperative stance is easy to take now that both Microsoft and Google have left Yahoo without a suitor.

The question now becomes: Can Yahoo turn itself around with Yahoo Open Strategy, the company's plan to rewire Yahoo and effectively open up its cores search and other Web services to the distributed intelligence of outside programmers?