Yahoo CEO Jerry Yang has said his company would be open to further discussions should Microsoft decide to return to the negotiating table.

Over the weekend Microsoft withdrew an improved offer worth around $47.5 billion after another rejection from the Yahoo board.

“We were negotiating a way to find common ground and then on Saturday they chose to walk away,” said Yang, who co-founded Yahoo in 1994.

“If they have anything new to say, we would be open. I am more than willing to listen.” he continued.

However, Microsoft appear to have lost patience with the negotiations, after the rejection of Microsoft CEO Steve Ballmer’s improved offer of $33 per share - up from an initial bid of $31 per share - leaving Yang’s options looking rather more limited.

According to reports, Yang, who holds a 4 percent holding in Yahoo, was holding out for $37 per share, believing the Microsoft bid undervalued Yahoo’s lucrative search advertising market share.

Shareholder Anger

With the apparent breakdown of the Microsoft deal, the continuing job security of Yahoo’s board could now come under threat from disillusioned shareholders. Yahoo’s two largest shareholders are reported to have told the NY Times that they would have settled for $34 per share.

“I am extremely angry at Jerry Yang and at the so-called independent board,” said Gordon Crawford, portfolio manager at Capital Research Global Investors - who, with a 16 percent stake in the company, own the largest single holding in Yahoo.

Financial analysts are expecting several lawsuits to be filed by shareholders against Yahoo over its management of the negotiations.

Falling Share Price

The news of the collapse of the deal saw Yahoo’s share price drop $4.30 to $24.37; seemingly only avoiding a drop to its pre-bid price of $19.18 on the gamble by several investors that Microsoft’s withdrawal from negotiations is only temporary and a tactic to force Yahoo’s hand.

While partnerships with AOL Time Warner or Google are still possibilities for Yahoo, a Microsoft tie-up was seen by many as a more practical arrangement.

The likelihood of a future Microsoft takeover of Yahoo is open to speculation. On the face of it, Microsoft appears to have turned its attention elsewhere.

Speaking to reporters at a news conference in Tokyo, Microsoft Chairman Bill Gates said that his company was now committed to going it alone.

“At this point Microsoft is focused on its independent strategy,” adding that it would concentrate on improving its own search technology.

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