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Yahoo Chief Executive Jerry Yang said on Wednesday that a deal with Microsoft has plenty of power but that the software company is not considering a full merger.

Yang said Yahoo is open to a possible deal but added that Microsoft was not considering a merger fro now. Earlier this month Microsoft ended its bid to acquire Yahoo for $47.5 billion, or $33 per share, after Yahoo turned down its offer saying it would only sell for $37 a share.

"We did not walk away from that proposal. Microsoft did," Yang said during an on-stage interview at the D: All Things Digital conference. In mid-May the two companies were in talks about an unspecified deal but not a full merger.

"Microsoft is no longer interested in buying the company, and we are talking about other things. We definitely have to understand what they're proposing...they clearly have an interest in Yahoo, and we need to understand more," Yang said.

Last week, a source close to the talks said Microsoft has considered buying Yahoo's search business and taking a minority stake in the company but that a complete merger was not on the table.

If such a deal happened Yahoo would sell its Asian assets including minority stakes in Yahoo Japan and China's Alibaba Group, and Microsoft would buy a stake of what remains of the company.

Yang defended his position as CEO and said he believed he was the right person to lead Yahoo and help the company grow. "I do think I am the best person to lead Yahoo," Yang said.