Yahoo chief executive Jerry Yang said Wednesday that Microsoft should buy his pioneering Internet firm despite failed takeover talks between the companies earlier this year.

`To this day, I would say the best thing for Microsoft is to buy Yahoo,` Yang said during an on-stage chat with journalist John Battelle at a Web 2.0 summit on Internet Age companies and their business strategies.

`Did we want to do the deal? Yes.`

Microsoft has said repeatedly that it is no longer interested in buying the floundering Northern California firm.

`Our position hasn`t changed,` Microsoft said in a statement released in October. `Microsoft has no interest in acquiring Yahoo. There are no discussions between the companies.`

The Redmond, Washington-based company issued the statement after Microsoft CEO Steve Ballmer commented that the business reasons for a Yahoo acquisition still make sense.

Microsoft on January 31 offered to buy Yahoo for 44.6 billion dollars in a half-cash, half-stock deal.

Microsoft walked away from negotiations May 3 after Yahoo rejected an offer it raised from 31 dollars to 33 dollars per share, which amounted to 47.5 billion dollars.

`We believed we were doing the right thing every step of the way,` Yang said. `Both sides are to blame.`

Yahoo stock was priced at 13.90 per share in after-hours trading Wednesday.

Microsoft wanted to buy Yahoo to better battle Google, which claims the lion`s share of the multibillion-dollar Internet search and advertising market.

After ending talks with Microsoft, Yahoo announced an alliance with Google to put the Internet search king`s expertise to work pumping money from its floundering rival`s online advertising.

Google said Wednesday it is ending its bid for a joint search advertising partnership with Yahoo to avert `a protracted legal battle` with regulators.

The US Justice Department vowed to file a lawsuit to block the alliance on the grounds it would stifle competition in Internet search advertising by controlling up to 90 percent of the market.

`The government, in this case, does not understand our industry,` Yang said.

The proposed Yahoo-Google ad alliance would have benefitted Internet users and advertisers, Yang maintained.

Yang declined to discuss unconfirmed reports that Yahoo is in tie-up talks with faded Internet portal America Online.

`I could tell you, but I`d have to kill you,` Yang told the on-stage interviewer when asked if Yahoo is going to buy AOL.