Yahoo CEO calls for Microsoft deal

Jerry Yang says Microsoft should buy Yahoo! after Google abandons search ad deal

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By  Mark Sutton Published  November 6, 2008

Yahoo! CEO Jerry Yang has told a conference in San Francisco that Microsoft should buy the company, just hours after it was announced that Google has abandoned an advertising deal with Yahoo! to avoid a legal battle with regulators.

Speaking at the Web 2.0 summit, Yang said: "To this day the best thing for Microsoft to do is buy Yahoo. I don't think that is a bad idea at all, at the right price whatever that price is. We're willing to sell the company."

Microsoft made a $44 billion takeover bid for Yahoo! at the start of the year, but abandoned negotiations after Yahoo! did an advertising deal with rival Google, and amid accusations that the Yahoo! board, headed by Yang, were obstructing any deal.

The deal between Google and Yahoo! would have given Yahoo! up to $800 million per year, although the US Department of Justice had raised objections, leading to Google backing out of the deal.

In a statement on Google’s website David Drummond, Senior VP and chief legal officer said: “It’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.”

Yahoo! said it was disappointed that Google has elected to withdraw from the agreement rather than defend it in court

While Yahoo! had placated its biggest critic, investor Carl Icahn, by giving him a seat on the board and a say in any future buy out decisions, the loss of the Google deal raised the prospect of a renewed boardroom battles with Yang.

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