Microsoft, Yahoo Deal Still Possible

    May 7, 2009

Microsoft CEO Steve Ballmer said there are still possibilities to work with Yahoo to "create a better search product."

Ballmer was speaking to students at Standford University, which has led to speculation he may be meeting with Yahoo CEO Carol Bartz to discuss a potential deal.

Steve Ballmer
Steve Ballmer

When asked about Microsoft’s failed bid to buy Yahoo last year, he said a partnership would have been "valuable." "I’m glad we went down the road," Ballmer said. He repeated earlier comments about the potential opportunities of a search deal with Yahoo, which would likely attract more customers and advertisers.

He said not being the leading search engine had some advantages. "Because we’re not the market leader we can experiment with new business models like cashback, we don’t have to stay locked into the current user interface, and we have the luxury like a startup to try new things."

Touching on the economy Ballmer said funding may be scarce, but there was money still available for startups with good ideas. " I don’t think the contraction will be strong enough that really big ideas aren’t going to get funding," Ballmer said.

Earlier this week Microsoft announced 3,000 layoffs, which is part of its announced plan to cut its workforce by 5,000 jobs over an 18-month period.