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
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.
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Synergy: 2+2=1
As Microsoft’s search engine share sunk to its lowest level yet in February, with approximately 8 to 9 queries total worldwide, Steve Ballmer has reiterated his willingness to hook up with Yahoo! and its 21 queries worldwide.
The press conference was held on a street corner in San Francisco as Mr Ballmer and Jerry Yang sat with their hats on the sidewalk and playing harmonicas with a “WILL WEBSEARCH FOR FOOD” sign behind them.
“Understandably, we expect less activity in the Great Recession,” said Mr Ballmer. “Nobody knows what value assets should be … say, you aren’t finished with that cigarette, are you?”
Press attendees included a schizophrenic local resident in a tinfoil hat (“to keep Google out”), two teenagers drunk on malt liquor and a policeman keeping an eye on things from a distance. The teenagers taunted, confused and upset Mr Ballmer by suggesting he attempt to locate his own posterior.
“My new search technology is unstoppable! Just look at this netbook!” shouted Mr Ballmer, waving an Etch-a-Sketch in a threatening manner. “IT’S MAUVE! IT RUNS WINDOWS SEVEN! LINUX PUT A RADIO IN MY HEAD! I’LL SHOW ’EM ALL! BASTARDS!”
“Some love stories are eternal,” said Mr Yang. “Romeo and Juliet. Heloise and Abelard. Leopold and Loeb. Microsoft and Yahoo.”
Blog rant: http://is.gd/xzad