Ballmer: No Yahoo acquisition, but Microsoft still open to search deal

Steve Ballmer today

Microsoft remains uninterested in a full Yahoo acquisition, but a search agreement would be an "interesting possibility," said Chief Executive Steve Ballmer in response to a shareholder question this morning at the company's annual meeting in Bellevue.

There are no discussions with Yahoo currently about a search partnership, but Microsoft is open to it, Ballmer said. At the same time, he added, Microsoft is "done with all acquisition discussions" with Yahoo. That declaration promped a shareholder toward the front of the room to break into applause, reflecting the lack of popularity of Microsoft's original bid among some of investors.

The possibility of renewed discussions with Yahoo has been a subject of speculation since Google's search deal with Yahoo unraveled, and Yahoo's CEO Jerry Yang announced plans to step down from the role earlier this week. The Yahoo question was the first one raised during the shareholder Q&A following the business portion of the annual meeting.

During his earlier remarks, Ballmer said Microsoft will have "much, much slower growth" in headcount for the remainder of this fiscal year and probably into next fiscal year. Ballmer didn't disclose specific numbers, but his comments were consistent with previous indications of belt-tightening from the company. However, he said he believes Microsoft is uniquely positioned to weather financial turmoil.

"Our strong financial position allows us to reinforce our competitive advantage by continuing to invest in R&D by continuing to make carefully targeted acquisitions, and by continuing to take a long-term view of the investment required for future growth," Ballmer said.

Separately, shareholders approved the Microsoft directors up for re-election, and rejected three shareholder approvals.