Ballmer Says Yahoo Deal Should Happen 'Sooner Than Later'

IDG News Service — Microsoft CEO Steve Ballmer again voiced support for purchasing Yahoo or its search business, hinting in a published report that a deal between the two companies may be reached before the end of the year.

In an interview with The Wall Street Journal after the appointment of former Yahoo executive Qi Lu to run its online services group (OSG), Ballmer said that a search deal "makes great sense" for Microsoft and Yahoo, but would be more advantageous for both companies if struck soon.

"I think good ideas are usually better done quickly than slowly, so it would probably be better for both us, and certainly for Yahoo, if we were to do it sooner than later," he said. "But at the end of the day, that would have be something Yahoo would be as interested in as I have expressed our interest."

However, Ballmer also told the Journal that Microsoft and Yahoo are not currently in talks about a deal, but also said he would not admit publicly even if they were.

It's already too late for Ballmer's wish that the deal be done quickly to come true, as the two companies have been tussling over the terms of a possible deal since Microsoft first approached Yahoo on Feb. 1 with an offer to buy the company for $44.6 billion.

But Ballmer's comments hint that 2008 could end with a deal finally being made after a nearly year-long back-and-forth over the price, among other things -- an ordeal that cost Yahoo co-founder and CEO Jerry Yang his job last month. Yang will retain the title of "chief Yahoo" once a successor is found, but will not participate in day-to-day activities at the company. He was widely criticized by shareholders for not taking Microsoft's initial offer when he had the chance and then back-pedaling later on his decision to hold out for a higher price.

Microsoft executives also changed their minds several times about whether the company wanted to buy Yahoo, walking away from the deal officially in May and stating the company's determination to compete on its own against Google in online advertising.

In the interview, Ballmer reiterated the stance that Microsoft is willing to go it alone against Google without Yahoo, something the company has been doing all year long, with little success.

"We're fully prepared to compete without any partnership with Yahoo," he said. "We don't need to act."

Appointing Lu to run its struggling OSG, which oversees the search and online advertising business, is yet another move Microsoft has made to spur growth in that division, which has remained flat or shown only modest gains despite an enormous amount of investment the company has poured into the business.

Microsoft said Thursday that Lu would take over OSG on Jan. 5. Lu, formerly Yahoo's vice president of engineering for the search and advertising technology group, left Yahoo in August after 10 years at the company. Prior to his last role at Yahoo, Lu was vice president of engineering responsible for the technology development of Yahoo's search and marketplace business unit, which includes the company's search, e-commerce and local listings of businesses and products.