Updated with video clips, after the jump, courtesy of AllThingsD:

The most anticipated keynote interview is on now: Jerry Yang and Sue Decker, and Walt dives right in asking about the big issue:

Yang: “It has been a very interesting process..we read more about it than we should. It seems Journal seems to know more about what we’re doing than we know. Microsoft (NSDQ: MSFT) 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 (NSDQ: YHOO), and we need to understand more.”

“The price issue was the most public issue, but there were other issues in a deal of this size, including regulatory. We certainly didn’t have discussion on other issues we should have had if we could agree on price. It is like you break up with your girlfriend in high school…it always devolves into he said, she said.”

Decker: “We never got through the price door..once we could have gone through it, then other issues could have been discussed.” Walt mentions that Microsoft said otherwise last night, that the only disagreement was price.

On Google (NSDQ: GOOG) and a possible deal: Yang: “It makes a lot of sense, but if we do something, we will talk about it.” The flip side: “Until we get to something we can talk about, it’s all speculation.” Lots more after the jump…

Disruptions and how to retain people: Decker: “We have had turnover over the years…the right athletes change their positions all the time. Our attrition rate hasn’t changed during this process. It has been a little hard to hire, but we have hired more than 600 people in the first quarter.

Decker on mistakes: Pressed by Kara Swisher to talk about mistakes and leadership, Decker replies: “I think as a company we have made a few mistakes. We were really close in those early years to the users, over time we started organizing around the products.” Later, following a question from a former premium user upset with Yahoo customer service, Decker added: “If we can’t have kick-ass products, we shouldn’t be in them.”

YHOO: While we’ve been in this session, Yahoo shares are up after hours based largely on rumors from D that a deal is in the works. Something may yet happen today but no announcements here.

Video clip: Part one:

Video clip: Part two: