Yahoo’s co-founder and chief executive, Jerry Yang yesterday revealed what went awry between Yahoo and the Redmond, Washington based software giant, Microsoft.
In an interview on Monday, Yang said he was open to selling Yahoo to Microsoft all along, but Microsoft’s chief executive, Steven A. Ballmer and his deal makers ultimately declined to negotiate and withdrew their proposal on Saturday with little explanation.
Mr. Yang said, “They chose to walk away after we put a price on the table, and they didn’t want to negotiate. From my perspective, we were open all along to selling to Microsoft. We just feel Yahoo, either standalone or with Microsoft, is worth more than what they put on the table.”
Mr. Yang and Roy Bostock, Yahoo’s chairman, said that throughout the process they were open and receptive to a merger with Microsoft. Mr. Yang said he spent personal time alone with Mr. Ballmer but that they were ultimately unable to bridge their differences.
On the other side, Microsoft’s advisers and executives say that they received no counteroffer from Yahoo for three months, after Microsoft’s deadline to consummate the deal had expired. They say that Mr. Yang and his board settled on a price of $37 a share and ultimately refused to budge.
Microsoft says that it had raised its initial bid to $33 a share when Mr. Yang and his co-founder, David Filo, met with Mr. Ballmer and other Microsoft executives at the Seattle airport on Saturday. After that meeting, Mr. Ballmer made public a letter to Mr. Yang withdrawing the offer. “I am disappointed that Yahoo has not moved towards accepting our offer,” he wrote.
Mr. Yang now has daunting task of guiding Yahoo’s growth as an independent company. One of the most serious challenges is frustration among shareholders; in reaction to the deal’s collapse, Yahoo’s stock fell almost 15 percent on Monday, to $24.47. Mr. Yang however argues that the Microsoft bid had opened up new doors for Yahoo. One of these new doors could be a tie-up with its chief rival, Google. Yahoo might also consider tie-ups with AOL, a division of Time Warner, and MySpace, a division of News Corporation.