Yang to Ballmer: Baby come back

IDG News Service - Yahoo CEO Jerry Yang has a message for his Microsoft counterpart Steve Ballmer: Microsoft should buy Yahoo, and Ballmer only has to say the word and Yang will be sitting at the negotiating table.

"To this day, I would say that the best thing for Microsoft to do is to buy Yahoo," Yang said during a keynote appearance at the Web 2.0 Summit in San Francisco on Wednesday.

Asked by conference chairman John Battelle whether Yahoo's asking price would be in the range it was in May, Yang said: "Oh no. At the right price, whatever the price is."

If those sound like desperate words, well, these are desperate times for Yahoo. It's embarking on its second round of layoffs of the year, this time looking to slash 10% of its staff. It is playing catch-up in the social media revolution, belatedly trying to adapt its sites and services to be more like Facebook and MySpace.

A year ago, its stock price closed at close to $27 per share; today it closed below $14 per share, no doubt making that final offer from Microsoft of $33 per share a very attractive one in hindsight.

Yet, for three months, between February and May this year, Ballmer pursued Yahoo and got rebuffed, while Yang, in the eyes of his critics, seemingly tried to do his best to repel Microsoft.

He talked to News Corp. about possibly fusing with MySpace. He met with Time Warner about an AOL merger. He created an employee severance package that critics described as a poison pill. He sought a partnership with Google.

It was the possibility of a deal with Google that Ballmer cited as the straw that broke the camel's back and soured Microsoft on acquiring Yahoo.

Later, in June, Yahoo did end up striking a deal to run Google search ads and split the revenue, but intense scrutiny by the U.S. Department of Justice over antitrust concerns prompted Google to back out this week.

Except for recent rumors that Yahoo might acquire AOL -- rumors that have again lost steam -- Yang finds himself without many options for a quick solution to Yahoo's woes. Microsoft is now no longer interested in acquiring Yahoo, and the Google partnership has collapsed.

As he has maintained since May, Yang told Battelle that the perception that he tried to sabotage the Microsoft bid to keep Yahoo independent is incorrect. At the time Microsoft walked away, Yahoo was still willing to negotiate and felt they were getting closer to an agreement.

Yang also said he's disappointed that the DOJ adopted such a negative attitude toward the Google deal, saying the government failed to properly understand the implications of the agreement. He also expressed disappointment that Google opted to give up.