Jerry Yang’s Advice To Microsoft — Buy Yahoo

Now that quasi-white knight Google (NSDQ: GOOG) is out of the picture, Yahoo (NSDQ: YHOO) co-founder and CEO Jerry Yang has some advice for Microsoft: “To this day, I believe the best thing for Microsoft (NSDQ: MSFT) to do is to buy Yahoo.” Yang was the evening headliner for Web 2.0 in San Francisco, interviewed by John Battelle. Earlier, Google made its decision to step away from the search deal used like a wreath of garlic cloves to ward off evil Microsoft, rather than face the DOJ. AP reports that Yang also said there are no talks going on but that he and Yahoo’s board “remain open to everything.” You may recall that Yang and Microsoft CEO Steve Ballmer still disagree about how their talks fell apart the last time, with Ballmer saying he withdrew at $33 when Yahoo and Yang said they wanted $37 per share. Both numbers seem incredibly remote given today’s close of $13.92.

Yang’s appearance also came a few hours after a fake memo had him resigning. Not so fast: “If you are not in the game to win, you shouldn’t be in the game. That is how I encourage the whole company to think about it,” he said at Web 2.0.

He contends that the Justice Department’s market definition is too narrow: “I really thought the government in this case does not understand our industry.”

Cnet News: Yang: “Google clearly decided that they did not want to stay in the deal, and we’re disappointed with that.”

Yang on new publishing platform APT: “I think that advertising is still fairly early in its development on the Internet, and I know it’s a $40 billion industry and everyone talks about it as a large mature industry. But our view has been that the real sort of endpoint for advertising, the real vision for advertising, is being able to really take advertisers and advertising offers and being able to map them against consumer needs, consumer desires in a way that is seamless, sort of one big marketplace.”