San Francisco — Karl Marx once said “History repeats itself, first as tragedy, second as farce.” Certainly that quotation befits cash-strapped Yahoo, in the aftermath of shattered hopes for a search advertising agreement with Google. Yahoo Chief Executive Officer Jerry Yang on Wednesday said that a takeover would be “the best thing for Microsoft.” Although Microsoft CEO Steve Ballmer showed no interest in buying Yahoo, a near-60 percent stock drop makes Yahoo a bargain.
A vaguely possible marriage between Microsoft and Yahoo could soon be on the cards as CEO Jerry Yang is all but opening up to catch the eye of Microsoft Steve Ballmer, Yahoo wants Microsoft to rescue it from its financial woes, on Wednesday said he was ready to return to the bargaining table.
Yang is now more than willing and even impatient to restart negotiations to sell his company to Microsoft.
“To this day, I would say the best thing for Microsoft to do is to buy Yahoo,” Yang said Wednesday evening during an on-stage chat with journalist John Battelle at the Web 2.0 summit in San Francisco on Internet Age companies and their business strategies. “I do not think that is a bad proposition at all, at the right price whatever that price is. We are willing to sell the company.”
Though Yang said Microsoft and Yahoo have not been speaking since unfriendly takeover negotiations ceased earlier this year, he and the board “remain open to everything.”
Google on Wednesday abruptly terminated its search ad deal with Yahoo in accordance to an indication that the Department of Justice would seek to block it. Yahoo was relying on the agreement to accelerate investments in its top business priorities through an infusion of cash.
Microsoft General Counsel Brad Smith manifested against the Google-Yahoo ad deal before Congress on Oct. 1. Microsoft has not yet responded to Yahoo’s off-the-cuff invitation to bid again for the company.
Yahoo rejected Microsoft’s $44.6 billion takeover bid — twice.
Yang’s remarks came after an essential advertising partnership between Yahoo and Google was discarded due to a looming legal battle with the US government’s department of justice.
Yang emphasized that he and the rest of Yahoo Inc.’s board “remain open to everything” for a buyout agreement with Microsoft. But Yang said there are not any talks between the two sides.
Yahoo rejected a hefty acquisition bid from Microsoft six months ago, a move that annoyed Yahoo investors. To pacify the investors, Yahoo had been wooing Google’s alliance to boost its sagging profits and stock.
Microsoft has again and again said that it is no longer interested in buying the floundering Northern California firm.
“Our position has not changed,” Microsoft said in a statement released in October. “Microsoft is no longer interested in acquiring Yahoo. There are no discussions between the companies.”
The Redmond, Washington-based company had issued the statement after Microsoft’s Ballmer remarked that the business reasons for a Yahoo acquisition still make sense.
Microsoft eagerly wanted to buy Yahoo to better battle Google, which claims the lion’s share of the multibillion-dollar Internet search and advertising market.
Greg Sterling, principal analyst at Sterling Market Intelligence, was astonished by Yang’s comments and somewhat “revisionist” characterization of the earlier Microsoft-Yahoo dealings. It seems now that Yahoo’s management feels it may have made a mistake in so vigorously resisting a Microsoft takeover, he said.
“We believed we were doing the right thing every step of the way,” Yang said. “Both sides are to blame.”
Repeating his earlier public remarks, Yang said he believes a compromise on the sales price could have been reached if Microsoft had not ended the talks so abruptly.
“Did we want to do a deal with Microsoft? Yes,” Yang said. “Had we been able to do that, we would have been very happy but it was not meant to be.”
“Earlier this year, it could be said that at best Yahoo was unsure about an acquisition by Microsoft. But it sure appeared like Yahoo was doing everything it could to avoid being taken over,” Sterling observed. “In that view of things, the company was successful. However, now the mood has changed, it would appear, because of the loss of the Google deal and the accelerating downturn in the economy.”
Yahoo’s shares closed at $13.92 Wednesday, nearly 60 percent below Microsoft’s last offer. Industry watchers say Microsoft is in a prime position to purchase Yahoo at a bargain price and leverage its huge audience. Despite its dwindling share value, Yahoo remains the No. 2 search engine and still has a huge audience, making it a choice for Microsoft, and could be Microsoft’s best opportunity to compete with Google.