Eight months ago, Yahoo! CEO Jerry Yang had a chance to sell his company to Microsoft for $43 billion. He refused. Now Yahoo’s (YHOO) market value stands at $18 billion. This raises a question: Why is Jerry Yang still running this company? “Nobody knows this company better than Jerry Yang,” Yahoo Chairman Roy Bostock says. “He put in place a strategic plan in 2007 and under extraordinary circumstances has been executing well against it. Jerry is the right person to continue to lead Yahoo.” Bostock says the company’s board has no regrets about the way Yang handled the Microsoft (MSFT) offer. “We analyzed the offer eight ways to Sunday, with advisers from Goldman Sachs and Lehman, and we determined that the initial offer of $31 per share significantly undervalued the company,” he says. “Not one of our investors encouraged us or suggested we should sell the company at $31 per share. Not a single investor.” He adds that Yahoo was willing to sell at a higher price, and that Microsoft, not Yahoo, walked away from the deal (as you’d expect, Microsoft blames Yahoo).

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