Microsoft still keen on slice of Yahoo: Ballmer

20 March 2009

In spite of last year's rebuff, Microsoft Corp hasn't given up its quest for a stake in Yahoo, if not a complete takeover of the Internet service provider. Microsoft co-founder and chief executive officer Steve Ballmer said during a media industry conference in New York today that a search partnership with Yahoo! Inc remains a compelling prospect.

Ballmer told the McGraw-Hill Media Summit that the only talk he has had with Yahoo's new chief executive officer Carol Bartz is a single phone call, but added, "I'm sure when it's appropriate, we will have a chance to sit down and talk.''

In a TV interview with BusinessWeek during the summit, Ballmer said, "There is a fairly compelling set of economics that underpin a search partnership. When [Bartz] is ready, we will have a discussion. Unless I'm fooling myself, over time I would expect a there's a good opportunity for a deal."

He added that what makes Yahoo attractive is not necessarily its technology, but its scale-"there are returns to scale''.

Bartz took the reins of Yahoo in January, succeeding co-founder Jerry Yang, who last year had beaten off Microsoft's effort to buy Yahoo for $47.5 billion. Bartz has recently said that every business in Yahoo is up for examination as the company seeks to revive growth and compete with Internet search advertising leader Google Inc.

Bartz has also opened the door to negotiations with Microsoft about a search partnership. But if the two companies do discuss a deal, "we're going to negotiate as companies negotiate, privately'' Bartz said at a recent conference in San Francisco.