With Google taking a step back from its initial partnership plans, Yahoo seems to be lacking a sense of direction. Because of the warning made by the Department of Justice about filing a lawsuit to block the deal, Google concluded that there were too many implications and that the best way of handling the situation is to sit this one out. In the statement released to announce the cancelling of the deal, Google explained that it did not want to "damage [the] relationships with valued partners".

The team-up between the two was believed to create a far too powerful partnership in the Internet search advertising space and many companies immediately announced their firm opposition.

As soon as the announcement was made, Yahoo’s founder and chief executive Jerry Yang did not waste any time and came out with a statement to let everyone know that the new turn of events will not put the company down and that it is already considering a new direction, which is actually an older reexamined direction.

"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," he explained. "We were ready to negotiate, we wanted to negotiate a deal, and we felt that we weren't that far apart. But at the end of the day, they withdrew and they since have been very clear about not wanting to buy the company."

He also commented on the Department of Justice’s decision to block the partnership: "I really thought that the government in this case does not understand our industry. They have a market view that is too narrow. I clearly don't agree with what the viewpoint is," he said, adding that Google’s decision to leave the discussions’ board is also considered a great dissapointment.

Earlier this year, Mr. Yang and his company's board rejected a juicy takeover bid from Microsoft, as they believed that it was far from the company’s true value. The software giant was willing to pay $33 a share. These days Yahoo’s shares trade closer to $14. At the time, shareholders were assured that a deal with Google will deliver much greater rewards and that they must be patient and wait for the alliance to be completed.

Even though Yahoo’s Web sites are extremely popular and its Internet presence is bigger than ever, the company fails to generate enough revenue, creating a great discomfort for its shareholders.

Mr. Yang also addressed the possibility of carrying on without a powerful partner and finding a successful game plan for Yahoo with fewer financial resources than its competitors. "We've looked at the search business and decided we are well capitalized. Search is largely innovation-based rather than capital. We think we are spending per search share about the right amount of capital," he stated.

For now, Yahoo will have to settle for its lower profile market position and try and find another way to make it in the front row.