So Google just announced they’re walking away from a proposed deal with Yahoo worth hundreds of millions of dollars (USD, of course). It was pretty obvious that Yahoo was hankering for the deal, simply because the money would have been huge, even after deducting off Google’s share of the loot, potentially increasing Yahoo’s revenue by up to 25% in the first year of the deal. Eventually, Google decided the deal wasn’t worth it, what with antitrust fears and regulators breathing down their necks throughout.

It’s widely presumed that the deal was initially cooked up as part of efforts to block Microsoft’s offer to acquire Yahoo, with Yahoo CEO Jerry Yang holding out for more than the US$33 a share offered by Ballmer and gang. Microsoft eventually backed off.

Now, Yahoo’s taking another beating in the face of their breakup with Google, their share prices in a continuous tumble. Not unexpectedly, Yang’s singing a different tune now. Speaking at the recent Web 2.0 Summit in San Francisco, he openly indicated his willingness to sell Yahoo to Microsoft.

To this day, I have to say that the best thing for Microsoft to do is to buy Yahoo. I don’t think that is a bad idea at all…at the right price, whatever the price is, we are willing to sell the company.

In the wake these developments, would Microsoft be keen to restart negotiations to buy Yahoo’s search business? It certainly looks like Yang might be willing to accept a price less than the US$33 initially offered. Who says you can’t find great bargains in tech anymore?