Yahoo still open to Microsoft talks

Yahoo Inc. chief Jerry Yang yesterday signalled a more open stance towards a takeover by Microsoft Corp.

Mr Yang told Reuters in an interview on Monday that he had "mixed feelings" about events at the weekend, when talks broke down. Investors showed their disappointment over the breakup of negotiations by sending Yahoo shares down 15 per cent on Monday. Asked if Yahoo would still leave a door open for Microsoft to return, Mr Yang said: "If they have anything new to say, we would be open. ... I am more than willing to listen."

Mr Yang said it had been Microsoft that ended the discussions.

"We were negotiating a way to find common ground and then on Saturday they chose to walk away," said the 39-year-old co-founder of the pioneering Internet company. "They started it and they walked away."

Some analysts said Yahoo shares, which dropped $4.30 to end at $24.37 on Monday, could have fallen 30 per cent to closer to $19.18, its price before Microsoft made its bid public on February 1. But the descent was cushioned by investors who are betting Microsoft will eventually come back to the table.

Microsoft courted Yahoo to capitalise on the rapidly growing market for internet advertising, one that has long been served by Yahoo's search, e-mail and web communities.

It is also trying to fend off the expansion of Google, which has made inroads into Microsoft's home turf with a portfolio of web-based applications, e-mail and messaging.