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Yang! tells! MS! to! buy! Yahoo!

Er, didn't you stop that happening just three months ago?

Jerry Yang believes Microsoft should buy Yahoo!, despite being blamed by many for apparently rejecting a $33-a-share offer from the software giant just a few months ago.

Yang told the audience at the Web2.0 love-in in San Francisco that he and the board remained open to possible talks with Microsoft, but that nothing was going on at the moment. Minority shareholder and Yahoo! board member Carl Icahn has also appeared to try and resurrect the deal - he is again suggesting selling Yahoo!'s search business to Microsoft.

For its part Microsoft, in the form of Steve Ballmer, has remained quiet - although earlier this month he did allow for the possibility of a deal.

Yang also said he was disappointed that Google was not prepared to fight to defend their advertising pact, which was abandoned yesterday because of worries from regulators and advertisers.

The collapse of the agreement with Google does leave Yahoo! with a problem. But going back to a deal, rejected in July, at either $33 or $37 a share when Yahoo shares are now less than $14 will be difficult. Throughout the long-running takeover battle Yang insisted that Microsoft was undervaluing Yahoo!.

But Google's slice of the advertising pie shows no sign of narrowing - revenues for the last quarter grew 31 per cent to $5.54bn. Meanwhile Yahoo profits fell 64 per cent in the last quarter and it announced 1,400 layoffs - one in ten workers.

Asked if Yahoo! was in talks to buy AOL, Yang said he could not talk about it. ®

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