Dec 6, 2008

Business - Microsoft still interested in Yahoo search: CEO

NEW YORK: Microsoft chief executive Steve Ballmer said Friday the US software giant remained interested in acquiring Yahoo's search business and
would rather do a deal "sooner than later."

"I think a search deal makes great sense for Microsoft, and Yahoo," Ballmer said in an interview published in the online edition of The Wall Street Journal. "I think I've been very open about that."

"I think good ideas are usually better done quickly than slowly, so it would probably be better for both us, and certainly for Yahoo, if we were to do it sooner than later," he said.

"But at the end of the day, that would have be something Yahoo would be as interested in as I have expressed our interest."

Asked by the newspaper whether the Redmond, Washington-based Microsoft and Sunnyvale, California-based Yahoo were in talks, Ballmer replied: "The answer is no, but I wouldn't tell you if there were."

Ballmer, who hired former Yahoo executive Qi Lu this week to be Microsoft's online services chief, said if Microsoft and Yahoo tied up on search, market leader Google "would have perhaps a real credible competitor sooner."

But, he added, Microsoft is "fully prepared to compete without any partnership with Yahoo."

Google dominates online search with more than 60 percent of the market. Yahoo has around 20 percent of the market while Microsoft is a distant third with under 10 percent.

Microsoft has been trying to boost its online clout and Ballmer said the company was ready to put up the money needed.

"We are prepared to invest significant amounts of money in our online business, five to 10 percent of operating income if we had to, for the next five years," he said, repeating remarks made to shareholders.

Yahoo co-founder and chief executive Jerry Yang earlier this year rejected a 47.5-billion-dollar bid by Microsoft for his company, earning the disapproval of many shareholders.

Yang announced last month that he was stepping down as chief executive.

It appears unlikely that any deal between Microsoft and Yahoo would go ahead until his replacement as CEO has been found.

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