Ballmer: Yahoo search deal 'makes great sense'

Perhaps Jerry Yang's impending departure will spur a new partnership between Microsoft and Yahoo. According to PC World, Microsoft CEO Steve Ballmer told the Wall Street Journal in an interview that a search deal "makes great sense," and he added, "It would probably be better for both us, and certainly for Yahoo, if we were to do it sooner than later."

Ballmer told the Journal that his company and Yahoo aren't currently in talks, although he said he wouldn't admit it even if they were. He also noted, "We're fully prepared to compete without any partnership with Yahoo. . . . We don't need to act." According to PC World, the WSJ interview nonetheless suggests a deal may happen before the end of the year.

Last month, Ballmer stated that he was no longer interested in a buyout of Yahoo. Since then, however, Yahoo CEO Jerry Yang has decided to step down, likely because Yahoo shareholders frowned on the way he handled buyout negotiations with Microsoft and failed to see an alternative deal through. The next CEO might be more favorable to both a search partnership and a potential full-scale merger with Microsoft.

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