Yahoo Inc. Chief Executive Jerry Yang on Wednesday predicted great things to come for the Internet mainstay, saying that the possibility of Microsoft Corp. buying the company had convinced his troops that they needed to show what Yahoo could accomplish on its own.
Yang was one of several moguls from new- and old-media to talk at Dow Jones & Co.'s D: All Things Digital conference in Carlsbad, Calif. Topic one on their minds: The on-again-off-again negotiations between Yahoo and Microsoft to reach a takeover or other alliance.
Yang said he had "mixed feelings" about the collapse of those negotiations May 3, when Microsoft withdrew its $47.5-billion bid for the Sunnyvale, Calif., company.
Although Microsoft's pursuit dragged on for three months -- and although that baton has been passed to Carl Icahn and other investors agitating for a deal -- Yang said the outside view that his company is in chaos was unfair.
"The perception of us as a company under siege is not accurate," Yang said.
After experiencing some stumbles before he retook the CEO job last year, Yang said, Yahoo had refocused on serving as a great home page for users and providing great search, e-mail and mobile functions.
Microsoft's top brass used their appearance late Tuesday to reiterate their recent stance: They are exploring a smaller partnership with Yahoo, they aren't bidding for the whole caboodle and yet they might at some point.
But Chairman Bill Gates and CEO Steve Ballmer, in a rare joint appearance, gave an air of finality to the situation that surprised some in the audience. They had seen the standoff as a tactical ploy.
"I'm not frustrated at all," Ballmer said. "We couldn't agree on price, basically."
Yang said investors weren't giving Yahoo enough credit for a plan to make buying highly targeted display advertisements covering large segments of the Web as easy as buying ads tied to search terms. He said that opportunity was the largest the Internet has seen to date.
Yahoo shares gained 16 cents to $27.16. Microsoft shares fell 26 cents to $28.18.
As for Redmond, Wash.-based Microsoft, Yang said Yahoo was still listening to its various ideas for a smaller deal.
Others at the conference found that puzzling. Barry Diller, head of IAC/InteractiveCorp, said on stage that he found the end of the original takeover talks "incomprehensible" and that he doubted Yahoo would stay independent.
In the back of the audience, tapping away on his BlackBerry, stood eminent media deal maker Herb Allen of Allen & Co. When asked whether he thought any deals were being negotiated at the conference, he said curtly: "No comment."
During Microsoft's bid to buy Yahoo, some of the deal-making permutations involved Rupert Murdoch's News Corp. The company, one of the biggest media giants, owns top social networking site MySpace.
Among the possibilities under discussion was Microsoft getting Yahoo's search operation and Murdoch getting the rest. MySpace might have changed hands as well.
In an interview with The Times at the conference Wednesday, Murdoch suggested that he was strongly disinclined to get back into the hunt if Microsoft made a new offer for Yahoo.
"It's not being discussed," he said. "It would depend on price. If it's paying part of $45 billion, it seems way out. It may not be much money to them, but it's a lot to me."