SAN FRANCISCO -- Web 2.0 Summit -- Despite being one of the most scrutinized CEOs in the country, Yahoo's Jerry Yang bravely took the stage yesterday afternoon to answer questions about Google (Nasdaq: GOOG), Microsoft Corp. (Nasdaq: MSFT), Yahoo Inc. (Nasdaq: YHOO), and where it all went wrong.
Yang is carrying the weight of two failures: a potential acquisition by Microsoft and an advertising deal with Google, commonly thought to be its only saving grace. He was yesterday described by The Wall Street Journal as "digging himself into an ever-deeper hole."
Not exactly good times.
And, on stage yesterday at the Web 2.0 Summit, in the midst of being peppered with understandably unforgiving questions by John Battelle, founder of Federated Media, Yang expressed disappointment mixed with some desperate hopes that a deal will still come through from somewhere (anywhere).
On Microsoft, Yang said both sides were to blame for not coming together. "To this day, I'd say the best thing for Microsoft is to buy Yahoo. I don't think it's a bad idea at all at the right price... whatever the price is," said Yang.
"We were willing to sell the company... They walked away from a public offer. 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 were through and since have been very clear that they don't want to buy the company."
Yang claims Yahoo went back to Microsoft, willing to take its offer, but at that point the company had lost interest. "We said, look, even at the price you were suggesting, do you want to do the deal? They said no."
And as far as a potential search deal goes, whereby Yahoo would sell its search business to Microsoft (something it once opposed), Yahoo is now "open-minded" -- but Microsoft remains, for the time being, aloof.
Microsoft isn't alone in leaving Yahoo at the altar. Yesterday, Google called off a search advertising deal which had been under scrutiny by the Department of Justice. Discussing the destruction of that deal, a somewhat numb Yang heaped the blame on Google for changing its mind, and the government for not understanding the market.
"Google clearly decided they didn't want to stay in the deal," said Yang. "Why did Google pull out? I think you have to ask them. It's certainly disappointing they didn't want to defend the deal."
So where is Yahoo now? With no acquisition and no search deal, Yang still managed to muster up some high hopes for its launch of an open platform for developers, which he calls the "core identification" of what Yahoo wanted to accomplish as a company. Furthermore, he says, despite the fallout of a Google deal, Yahoo is "doing better at search than before this whole thing started."
But overall, Yang, crouched low in his chair, expressed a meek change of tune and a desire to rekindle some talks: "There's nothing we'll say, 'No, we absolutely won't do.' "
— Nicole Ferraro, Site Editor, Internet Evolution