Ballmer: Deal with Yahoo Still 'Fairly Compelling'

Steve Ballmer is glad that Microsoft didn't manage to acquire Yahoo last year, but he'd still like to see it happen.

At the McGraw-Hill Media Summit this morning, the Microsoft CEO told BusinessWeek editor Steven Adler that he got "bailed out" by Yahoo's rejection of his $31-a-share takeover offer, tendered in February 2008. Yahoo shares are now trading around $14.

But he said he'd still like to do a deal of some sort if he can find a willing partner in new Yahoo CEO Carol Bartz.

"I think there are a lot of things that are fairly compelling economically in trying to put together our two search efforts in some kind of a partnership," he said. "It's not about Yahoo's technology. It's really about getting the pooled volume, because you actually can improve your product faster if you have more users."

Of Bartz, who is fast developing a reputation as a take-no-prisoners, my-way-or-the-highway boss, Ballmer said, "I've known Carol for years. Carol's very straightforward, no question about it. She's very friendly. She makes up her mind quickly about what she wants to do."

Ballmer also talked about Microsoft's next-generation search effort, Kumo -- or at least about the logic of trying to stay competitive in a market segment most of the world already seems to think Google has locked up permanently.

The notion that there's a lot of innovation -- that most of the innovation is still to come in search -- that idea is right," he said. "No, whether we manage to benefit from that or whether Google or someone else does, I don't know. But search hasn't changed much in last five years."

And when asked about increasing sales of Mac computers, he defended PCs while taking a swipe at Apple and the people who buy them. "The economy's helpful [to PCs]," he said. "The same piece of hardware -- paying another $500 to get a logo on it -- that's a challenging proposition for any person in this environment."