Yahoo. chief playing for survival

Playing poker was a regular escape for Yahoo! CEO Jerry Yang, before family life intervened.Now he's playing for survival in a much higher-stakes version of the game, in the wake of Microsoft Corp.'s unsolicited $44.6 billion takeover bid for his beloved Sunnyvale, Calif., Web portal.More than a month after the proposal, Yang is trying to bolster his hand by finding an alternative to merging with the Redmond, Wash., technology titan. But he may also be bluffing to get Microsoft to sweeten the pot or fold.Yang's abilities as a dealmaker could weigh heavily in determining Yahoo!'s fate. Either decision -- to stay independent or join forces with another company -- will require intense bargaining.People who have seen Yang, 39, at the negotiating table say he's passionate, a master of details and someone who has built personal relationships across the technology industry that help him close a deal. Although affable and self-deprecating in public, he's tenacious, competitive and unafraid to challenge managers he disagrees with, those who have seen him in action say."He really has an excellent memory for important points," said Jim Brock, a former Yahoo! senior vice president who helped Yang forge broadband Internet partnerships with AT&T, and who now leads Attributor, a Redwood City, Calif., startup. "He always wanted to get the best deal for the company."Yahoo!'s board unanimously rejected Microsoft's marriage proposal, saying that it substantially undervalued their company. Unbowed, Microsoft vowed to press ahead and nominate a slate of more merger-friendly Yahoo! board members.Last week, Yang tried to buy himself some time. Reaching into its bag of tricks, Yahoo! extended a March 14 deadline for nominating board members in hopes of delaying Microsoft's proposal of the new slate of directors.It's just the latest maneuver from Yang. A former Yahoo! manager, who spoke only on the condition of anonymity, said Yang, despite his harmless image, was more than willing to muscle in on competitors or turn the tables on an incumbent."He was very calculating about when to flex and when to give," he said of Yang's negotiating strategy. "At times, he was pretty pragmatic about folding on particular points for the greater good, and at other times was willing to face off on a major point -- or to threaten that Yahoo! would walk away."Yang declined an interview through a Yahoo! spokeswoman. So far, he has held no formal talks with Microsoft.Yang's rise is a classic Silicon Valley success story. He emigrated from Taiwan as a 10-year-old, unable to speak English, and went on to become an academic superstar who earned electrical-engineering degrees from Stanford University.While seeking a Ph.D., Yang and his partner, David Filo, started an online directory, Jerry's Guide to the World Wide Web, which they ran as a hobby from a university trailer. They eventually renamed the Web site Yahoo!, for Yet Another Hierarchical Officious Oracle, and put their studies on hold to turn their hobby into a business.Except for a few weeks at the helm early on, Yang let others run the company's day-to-day operations. However, he remained highly involved, particularly with Yahoo!'s operations in Asia and issues involving employee culture.That changed last year when Yang became chief executive as his company's finances slumped. He was warmly greeted by veteran staff members, who saw him as a tech-savvy savior, in contrast to predecessor Terry Semel, a former Hollywood studio boss who had limited Internet experience before coming on board.Many industry insiders said they expected Yang to start a major overhaul after he promised a review that would leave no sacred cows. Instead, there were few tangible changes to Yahoo! other than the jettisoning of some minor products. Many blame that lack of change for making Yahoo! vulnerable to a takeover."Choosing him as CEO was one of the worst things Yahoo! could do," said Jeffrey Lindsay, an analyst with Sanford Bernstein & Co. "Given that he is one of the owner-founders, he was very reluctant to make far-reaching strategic moves that would be particularly painful, like downsizing and doing deals with other Internet players."In the wake of the Microsoft merger offer, Yahoo!'s board is evaluating its options, with Goldman Sachs, Lehman Brothers and Moelis & Co. serving as advisers. Talks about various partnerships with Google Inc., Rupert Murdoch's News Corp. and Time Warner Inc.'s AOL division have so far yielded no deals.(E-mail Verne Kopytoff at vkopytoff(at)sfchronicle.com.)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)