Wednesday, 19 November 2008

Microsoft rules out buying Yahoo, likes search

NEW YORK (Reuters) - Microsoft Corp Chief Executive Steve Ballmer on Wednesday ruled out an acquisition of Yahoo Inc but said his company was very interested in resuming talks on a Web search partnership.

Shares of Yahoo fell 13 percent on the remarks, after gaining this week on renewed investor hopes that Microsoft may refresh its bid for the Internet company after Yahoo Chief Executive Jerry Yang announced that he would step down.

"Let me be as clear as I think I've tried to be publicly. We are done with all acquisition discussions with Yahoo," Ballmer told Microsoft's annual shareholders meeting, in response to a question on what was happening with Yahoo.

"I've said that a bunch of times. Somehow some people have gotten confused nonetheless," Ballmer added. "We thought we had something that made sense. (It) didn't make sense to them. We've moved on."

Microsoft withdrew its $47.5 billion buyout offer for Yahoo in May after Yang and his board rejected the bid as too low. The software company then offered to buy Yahoo's search business, but Yahoo decided instead to sign a search advertising deal with Google Inc.

The Google deal has since fallen apart, after opposition from U.S. antitrust regulators who were concerned about an alliance between the Web's two biggest search companies.

Microsoft has said that it was still interested in pursuing a search deal with Yahoo, and Ballmer reiterated that on Wednesday.

"There's no active discussion on that front. But we'd be very open to it. But acquisition discussions are finished," he said.

Shares of Yahoo fell 13 percent to $10.04, while Microsoft shares were down 3.5 percent at $18.93.

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