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Last July, Microsoft's iconic figure didn't think buying Yahoo would be such a great deal.

Microsoft and Yahoo have talked before about a possible takeover. In February 2007, Yahoo turned down the idea, choosing to concentrate on making initiatives like its new search marketing program the key to turning around the company's fortunes.

Steve Ballmer wryly noted in this year's takeover try that Yahoo's plans haven't borne fruit. But only a few months ago, Gates held a different view than he and Ballmer have today of a Microsoft acquisition.

Todd Bishop blogged about the tune sung by Gates the evening of the company's annual meet and greet with financial analysts:

An excerpt from Parakh's July 27 note:

Off-the-stage comments included (Gates') view that longer-term the company sees only two strong companies in the online advertising business in addition to clearly indicating that they did not see any value add in buying Yahoo, Inc.

"In the time that has gone by, Google has really surged ahead," Parakh said today when asked about his earlier report. "While Microsoft was trying to put resources into internal efforts, they weren't necessarily paying off, as is evident from the market share numbers, and that may have prompted them to revisit whether they should buy Yahoo or not."

On July 27, 2007, Yahoo traded at $23.49. The stock stayed in a lull through the summer, spiked to the $34 per share range in October after issuing their Q4 2007 and full year numbers, then spent the remainder of 2007 and the beginning of 2008 in a decline.

By waiting a few months, Microsoft pounced at a significant low in Yahoo's price, nearly $5 per share lower than at the time of the July meeting. In February 2007, the time when the two companies talked previously, Yahoo's stock averaged $30.34 at close.