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Yahoo CEO: MS Ruled Out Merger (For Now)

By Reuters  |  Posted 05-29-2008 Print

In the Wednesday interview conducted by Wall Street Journal technology columnist Walt Mossberg, Yang said a merger with Microsoft would involve a variety of issues beyond price. He said discussions between the two had never thoroughly explored such non-price hurdles, including regulatory issues.

Yahoo President Susan Decker, appearing alongside Yang on stage, said price had always been the biggest barrier to reaching agreement on a deal with Microsoft.

"We never got through the price door ... once we could have gone through it, then other issues could have been discussed."

Yang argued a competing deal between Yahoo and Google made sense but no deal had been reached. Last month, the companies conducted a two-week test where Yahoo hired Google to run advertising sales alongside Yahoo search results.

"It makes a lot of sense, but if we do something, we will talk about it," Yang said, adding the "level at which Yahoo can fully partner with Google has not been fully appreciated by the marketplace."

In the wake of the breakdown of the Microsoft takeover talks, Yang defended his one year on the job as CEO and said he believed he was the right person to lead Yahoo into a new era of growth, even if the company must invest heavily to do so.

"I do think I am the best person to lead Yahoo," Yang said.

He compared conflicting media reports about who was responsible for the failure to reach a deal to a romance gone bad: "It's like you break up with your girlfriend in high school ... it pretty quickly becomes 'he said, she said'."

Yang reiterated what the company has been saying over the past year: that it "has a lot of work to do" and needs to make investments to reach management's vision of a new Yahoo.

Its strategy involves tapping the underlying social connections of its roughly 500 million monthly visitors to become a "must buy" for advertisers.

One audience member complained to Yang she was having a hard time finding Yahoo mobile services on U.S. smartphones. She was apologetic for drifting off the topic of Microsoft.

Yang was only too happy to answer: "Of all the questions I have been getting for the past four months, I am glad to get a technical question."

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