May 28 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Jerry Yang said Microsoft Corp. is still discussing potential partnerships with his company after walking away from a $47.5 billion takeover bid this month.
``They are discussing various other ideas and partnerships with us and we're listening,'' Yang said today at the D: All Things Digital conference in Carlsbad, California. ``They clearly have some interest in Yahoo in some shape or form.''
Microsoft, the world's biggest software maker, had sought a Yahoo acquisition to bolster its Internet unit, which trails Google Inc. in the $41-billion-a-year market for online ads. Google has the dominant Internet search engine, while Yahoo and Microsoft rank second and third. Microsoft dropped its bid on May 3 after Yahoo demanded a higher price.
``We did not walk away from that proposal. Microsoft did,'' Yang said. ``I've always said we're willing to do a deal at the right terms.''
Yahoo, based in Sunnyvale, California, rose 16 cents to $27.16 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have climbed 17 percent this year. Redmond, Washington- based Microsoft, down 21 percent this year, dropped 26 cents to $28.18.
`Best Person'
Yang, who co-founded Yahoo in 1994, took the reins as CEO for the first time last year. Until then, he had served as ``Chief Yahoo,'' advising the company on its strategy.
``I know I don't have all the experience,'' he said today. ``I do think I'm the best person to lead Yahoo.''
Yahoo faces a proxy fight for control of its board from billionaire investor Carl Icahn. He proposed his own slate of directors this month and won support from John Paulson's Paulson & Co., BP Capital LLC Chairman T. Boone Pickens and investor Daniel Loeb, who have taken stakes in Yahoo.
All of Yahoo's directors are up for re-election at its next shareholder meeting. Last week the company delayed that meeting from July 3 until the end of the month.
Microsoft, whose online division was its only unprofitable unit last quarter, began pursuing a takeover of Yahoo on Jan. 31. It ended discussions after offering as much as $33 a share. Yahoo demanded $37.
The situation hasn't hurt the company, Yang said.
``The perception of us being a company in decline isn't accurate,'' he said. ``The process has pulled Yahoo together as a company. This is a real-life exercise of crisis management.''
Employee turnover hasn't changed, President Susan Decker said.
Google Deal
Yahoo also is in talks with Google to allow that company to sell ads alongside some of its Internet search results. The companies could arrange an outsourcing agreement that would pass U.S. Justice Department antitrust scrutiny, Stanford Group Co. analyst Paul Gallant said this month.
Google charges advertisers about 70 percent more per Internet search than Yahoo, according to Yahoo, citing data from last year. Google outsold Microsoft in Internet ads by a margin of 7-to-1 in Microsoft's latest fiscal year.
The online advertising market may almost double by 2010, Microsoft has said. The company announced a plan last week to give users cash back when they shop online with its Live.com search engine.
Google handled 61.6 percent of U.S. Web searches last month, more than Yahoo and Microsoft combined, according to research firm ComScore Inc.
To contact the reporter on this story: Peter J. Brennan in Carlsbad at pbrennan3@bloomberg.net
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