Peter Kafka

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Microsoft CEO Steve Ballmer on Yahoo Talks: We’re Still Waiting for Carol

ballmerMicrosoft CEO (MSFT) Steve Ballmer on a potential Yahoo (YHOO) search deal last month: “Blah, blah, blah.” Steve Ballmer on a potential Yahoo search deal this morning: Pretty much the same thing.

Ballmer was a little more expansive today, during his Q&A with BusinessWeek editor Stephen Adler at the McGraw-Hill media conference. But it’s pretty much what he’s been saying for several months: We’d like to combine our search business with Yahoo’s, but we can live without it. And when new Yahoo CEO Carol Bartz is ready to talk to us about it, she knows where to find us.

Here are the relevant bits from my liveblog of the chat, which just ended. Anything that isn’t in quotes is a paraphrase:

Adler: What’s up with Yahoo talks?

Ballmer: Principles first: “Whether or not there’s a partnership to be had with Yahoo, we think our own innovation… 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.” If you have more advertisers, you can improve the product as well. “There are returns to scale. And putting the scale together is valuable.”

“With that as context, we’re largely on the same strategy, with or without a partnership with Yahoo.” I’ve talked with Carol briefly, over the phone. “I’m sure when it’s appropriate, we’ll have a chance to sit down and talk.” I’ve known her for years. She’s straightforward and friendly “and when she’s ready, we’ll have that type of discussion. Whether a deal gets done or not, who knows.” People at our two companies talk all the time.

Adler: Will there be a deal?

Ballmer: “There are a lot of things that are fairly compelling economically in trying to put our two search efforts together in a partnership.” I thought that last year, and “I got bailed out of this economy by Yahoo on that”. [Laughs].

Other highlights: Ballmer reiterated that neither he nor nor anyone in his family owns anything made by Apple (AAPL), but he conceded that Steve Jobs and company have done pretty well with their iPod/iTunes products. He still insists, however, that Microsoft is better positioned than Apple in the smartphone market.

And while Ballmer also acknowledged that Google (GOOG) has run away with the search market so far, he seemed less worried about its attempts to undermine Microsoft’s Office franchise with its free and low-cost Web-based software.

And Ballmer professed to be largely disinterested in the proposed IBM (IBM) and Sun (JAVA) tie-up, except to argue that he would be glad to see a competitor bogged down with post-merger headaches: ““I think it gives me a year or two where they’re digesting it. I relish that year.”

Here are excerpts from the event, and here’s my on-the-fly transcript.


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