Yang 'disappointed' after Google deal collapses
Yahoo chief executive Jerry Yang says he felt let down by Google's decision to pull out of a controversial advertising agreement between the two internet rivals.
The $800m deal - which would have enabled Google to sell advertising on some parts of Yahoo's search engine listings - had been subject to a formal investigation by the US Department of Justice over potential antitrust concerns.
However, despite recently renegotiating some of the terms to allay fears, Google decided on Wednesday that it would pull the plug on the agreement.
"We were disappointed," said Yang, speaking at the Web 2.0 Summit in San Francisco. "It was disappointing to us that they didn't want to defend this deal."
"We were going through a process with the Department of Justice to get them to understand how this was a good deal [and] Google clearly felt they didn't want to stay in."
Yang insisted that the deal - if it had gone through - would have allowed both companies to benefit from exploiting each other's weaknesses, rather than further increase Google's dominance in the search engine market. He also added that he believed the US government's interpretation was inaccurate and damaging.
"It's incredibly important to participate and compete for the search marketplace… in fact, we are doing better in search today than when this whole thing started," he said. "I really thought that the government, in this case, does not understand our industry and has a market definition that is too narrow."
Google had announced its surprise decision by saying that it did not want to take part in a drawn-out and complicated fight.
"After four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement," said Google's chief legal officer David Drummond in a statement. "Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners."
The pact had been widely seen as an attempt to ward off Microsoft's $44bn attempt to buy Yahoo, which ended in acrimony after the two companies failed to come to an agreement.
But Yang rejected that characterisation of the deal, saying there was no "poison pill approach" taken by Yahoo executives. Instead, he accused Microsoft of going cold on the deal at a crucial point in the negotiations.
"Everybody's replayed that in their minds - I'm no exception," he said. "To this day I'd say that the best thing for Microsoft to do is to buy Yahoo… at the right price. They walked away from a public offer. We were ready to negotiate, and we felt that we weren't that far apart."
"I don't know what else we could have done," he added.
Yang - who started the company in 1995 with his co-founder David Filo - has come under a series of attacks since taking over the helm after the departure of former CEO Terry Semel in 2007.
The criticism became increasingly extreme after Microsoft tabled its bid in February, resulting in an attempted boardroom coup by dissident investor Carl Icahn, and a number of vocal attacks from smaller shareholders.
But talking to an audience of internet entrepreneurs and investors, Yang said the collapse of takeover talks was "not personal" and that he harboured no ill will towards Microsoft chief executive Steve Ballmer.
"People who know me will know that I don't have an ego about remaining independent," he said. "I have a lot of respect for Steve and we'd had a lot of good conversations. From my perspective, it's not personal."
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