After Google pulled out of the advertising deal with Yahoo! yesterday because of seemingly unresolvable conflicts with the U.S. Department of Justice, Yahoo! CEO Jerry Yang announced today at the Web 2.0 summit in San Francisco that the company will now consider future offers of a Microsoft buyout.

Yang's move was to some extent predictable, since the estimated $665 to $800 mln of yearly income that the advertising deal with Google would have brought in Yahoo!'s balance have evaporated when the Mountain View-based company posted on a blog yesterday that it has no intention to keep pushing for a deal that is so clearly being opposed by many online advertisers because of its antitrust implications. It is now clear that Yahoo! was counting on that source of income to give new life to the company, and that their current financial situation offers no easy way out of the tunnel.

In an interview at the Web 2.0 summit in San Francisco, Yahoo! talked about the last eight months in the company and about the reasons behind the refusal of Microsoft acquisition back in February, as well as the current state of the company and its future, which doesn't appear to be bright at all at this point — TechCrunch said the CEO "painted a picture of a Yahoo that was spinning in circles with no clear future", which well describes the gist of the entire conversation that can be watched in its entirety on InformationWeek.

Yang said that the initial refusal of the initial Microsoft offer of $33 a share was motivated by their will to remain independent, but that later talks with the Redmond-based company were quite fruitful despite Ballmer eventually pulled out of the deal as, Yang said, the two companies were getting closer to a definite agreement: for this reason, the Yahoo! CEO partly blamed the failure of the company on Microsoft itself, but also said that the company is open to a buyout offer, partly confirming the

rumors that made the YHOO stock price climb yesterday morning.

The central question in the interview was, however, how a company that was founded fifteen years ago and has been a synonym for the World Wide Web for the greatest part of them can now find itself in such a bad situation. Google, now clearly at the first spot in the search engine market, took Yahoo's place long ago and seems to be improving every day, which leaves the company in doubt as to what the company mission should be. "It's become increasingly clear to me that Yahoo! is a consumer brand", Yang said, "It's a consumer brand that lets people get what they want on the Internet [...] Yahoo! is the consumer's starting point".

When inquired about the mission and direction the company has taken, Yang stated that, because of the speed at which the Internet changes, it was necessary to follow many directions at once and develop products at the fastest speed possible: it may have been the multitude of scattered directions and, to some extent, the lack of a clear vision for the company that brought the company to where it is today.

"To this day, I believe the best thing for Microsoft to do is to buy Yahoo", he also said, pointing out that him and the rest of the Yahoo board is open to offers. But Microsoft has manifested no intention towards the acquisition this far, after the Redmond-based software giant has been chasing the acquisition for several years indirectly. While this could be a market strategy, the declaration of Microsoft spokesmen might well be the simple truth: after getting dangerously close to buying for $33 a share and lose billions of dollars in the lapse of three months: Ballmer and the rest of the board might decide to wait for the Yahoo stock to stabilize before making another offer.

After all, there doesn't seem to be other potential buyers on the market, which means there should be no rush on Microsoft's side: the massive layoffs, top managers leaving the company and, last but not least, the fact that this time it is Yahoo! to ask for Microsoft's offer are factors that all play to Ballmer's advantage at this time, should he and the board eventually decide for a Yahoo! acquisition.