Yang told the paper he was willing to negotiate but Microsoft pulled its bid for Yahoo after talk turned to raising it above 33 dollars per share.
Microsoft CEO Steve Ballmer said Yang refused to accept less than 37 dollars per share, a five-billion-dollar bump in purchase price.
"We did not say it was a take-it-or-leave-it number in the sense that we would never negotiate any more," Yang told the Financial Times.
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"We were totally willing to do a transaction, and they walked away."
Yahoo stockholders will be furious and litigious, putting tremendous pressure on the firm to quickly come up with an impressive business plan or go crawling back to Microsoft, analysts believe.
Yahoo shareholders are expected to take Yahoo executives to task during an annual meeting July 3.
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The ten members of Yahoo's board of directors are up for re-election and ousting the panel is one way shareholders can express furor about not accepting a Microsoft offer that totaled nearly 50 billion dollars