Microsoft to Yahoo: We're Not Buying

"We made an offer, we made another offer ... we moved on," Microsoft chief executive Steve Ballmer told a business luncheon in Sydney on Friday when asked for the firm's plans after a partnership between Yahoo and Google (Nasdaq: GOOG) fell through this week.

"We tried at one point to do a partnership around search ... and that didn't work either, and we moved on and they moved on. We are not interested in going back and relooking at an acquisition. I don't know why they would be either, frankly," Ballmer said.

He added that he thought there were still opportunities for some kind of partnership around search.

Disavowed Rumors

Ballmer's comments came two days after Yahoo's shares surged on a rumor posted on a blog that said Yahoo and Microsoft were in advanced talks to sell Yahoo for between US$17 and $19 a share. The blog also reported that Yahoo's chief executive, Jerry Yang, would step down.

Yahoo officials later said the report was untrue.

Microsoft abandoned an unsolicited $47.5 billion bid for Yahoo in May. The software company had been looking to fill a hole in its repertoire by acquiring an Internet search engine as it battles with market leader Google.

In June, Google and Yahoo, Nos. 1 and 2 in the Internet search market respectively, announced their planned partnership, which Yahoo had struck as a way of fending off Microsoft.

The two delayed implementation to allow the Justice Department to review it, but Google later said it pulled out of the deal rather than face a protracted legal fight after regulators had concerns.

Weaker and Stronger

Yang told the Web 2.0 Summit in San Francisco on Wednesday that he believed a deal between Microsoft and Yahoo was still the best option for Microsoft.

Yahoo shares ended Thursday at $13.96, far below the $31 a share Microsoft originally offered, and Yahoo has come under severe criticism from investors for turning down the offer.

Microsoft posted stronger-than-expected quarterly results last month and cut its outlook by less than investors had feared amid the economic slump.