The Internet portal of the co-founder and CEO Jerry Yang made the remark despite the fact Yahoo rejected a $ 33 (£ 21) a share offer from Microsoft in May.Mr Yang's suggestion also came hours after Google pulled out of an Internet advertising partnership with Yahoo.
"To this day the best thing for Microsoft to do is buy Yahoo," said Mr Yang.
"I do not think is a bad idea at all, at the right price, whatever the price. We are prepared to sell the company," he told a packed ballroom at the Web 2.0 Summit in San Francisco.
During the conversation on stage in front of a standing-room only crowd, Mr Yang was asked why the company did not have the $ 33 a share offering in the summer. The company's share price closed Wednesday below $ 14 (£ 8.80) a share.
"They walked away from a public offering and were ready to negotiate. We wanted to negotiate an agreement. We believe that we are not far apart.
"At the end of the day, were withdrawn and have since been clear about not wanting to buy the company," said Mr Yang in a rare public appearance.
Microsoft, however, come back and offer to buy part of Yahoo search, but an agreement was never beaten.
Once again Mr Yang said the bid then it was not good enough, but that still remained open to persuasion.
"As far as dealing with a search goes, we are open minded about it. The last time he felt the agreement was not a good year for the company, but that does not mean that we are not going to make one."
When asked if negotiations were pending with the software giant, Mr Yang said: "No new news."
Microsoft declined to comment.
And when quizzes about a possible deal with AOL, Mr. Yang played coy with his host John Battelle.
"AOL purchase? I can not talk about that, John. If I told you have to kill you."
"Disappointed"
Although Yahoo remains the door open for Microsoft, Google closed one earlier in the day an agreement the two companies have beaten along the search-based advertising.After four months of control of the Justice Department, Google decided to back out of that agreement had been formulated to provide advertising across the Internet portal's search results.
It has been estimated that the company would have been worth about $ 800m (£ 500m) a year for Yahoo.
"Pressing ahead not only run the risk of a prolonged legal battle, but also the damage to relations with valued partners," said Google chief counsel David Drummond.
Mr Yang said he was "disappointed that they [Google] do not want to defend this agreement."
However, he felt that in his mind, the government failed.
"I really thought that the government in this case do not understand our industry. They have a market definition that I think is too narrow and I think things like this tend to have unintended consequences for our entire industry.
"So clearly does not agree with what the point of view, that is, but they are the government and can decide on these things."
Mr Yang said that the alliance Google is not crucial to their bottom line and that is "incremental" to its global growth plans.
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