Yang, however, said Microsoft and Yahoo are exploring possible partnerships. "We are talking about other things," Yang said, according to news agency Reuters. "We definitely have to understand what they're proposing ... they clearly have an interest in Yahoo, and we need to understand more," Yang said.
Microsoft earlier this month revealed in a public statement that it had approached Yahoo "with an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo." The company has since declined to elaborate.
The betting is that Microsoft wants a deal that would combine Yahoo's search operations with its own, while allowing Yahoo's portal and display advertising units to remain independent. Yahoo might also spin off its Asian operations, including its stake in Chinese portal Alibaba, under such a scenario.
Together, Microsoft and Yahoo would control less than 30% of the search market, compared to Google's 61.6% share, according to the most current data from comScore.
Yahoo last week said it would delay its annual meeting, originally scheduled for July 3, until an unspecified date later in the month, and advised shareholders to vote down a slate of board candidates fielded by investor Carl Icahn, who wants the company to revive merger talks with Microsoft.
Yahoo said the delay would give securities regulators additional time to sign off on its proxy statement. It also gives the company a bigger window within which to develop alternatives to a Microsoft merger to present to shareholders.
Corporate raider Icahn is pushing Yahoo to rekindle merger negotiations with Microsoft and has nominated an alternate slate of directors to stand for election at Yahoo's annual meeting.
In proxy papers filed last week with the Securities and Exchange Commission, Yahoo urged its shareholders to vote against Icahn's candidates. "We urge you do disregard any proxy card sent to you by the Icahn Entities or any person other than Yahoo," the company said in its filing.
Yahoo's current board rejected outright Microsoft's $33 per share takeover offer. In response, Microsoft broke off acquisition talks earlier this month.