Microsoft says no to Yahoo! acquisition but open to search deal

WASHINGTON - Microsoft chief executive Steve Ballmer sent Yahoo!'s share price plummeting yesterday after reiterating to investors at the software giant's annual meeting that he was not interested in an outright acquisition of the internet firm.

Ballmer told shareholders that Microsoft had no plans to acquire Yahoo!

He said: "Let me be as clear as I think I've tried to be publicly -- we are done with all acquisition discussions with Yahoo!. We have moved on."

In May, Microsoft abandoned a $44.6bn (£29.6bn) bid for Yahoo! after the internet firm blocked the acquisition. 

Jerry Yang, Yahoo!'s former chief executive, who stepped down to resume his previous role as chief Yahoo! on Monday, was unreceptive to the bid and held out for a higher offer. 

Despite his departure, Ballmer dismissed any suggestion of an acquisition again yesterday and Yahoo!'s share price dropped down to $9.07, its lowest level in more than five years.

It increased slightly to close yesterday at $9.14, down 20% on the day before. 

Ballmer also said at the annual meeting that Microsoft remained open to a potential online search deal with Yahoo!

After talks over the offer for the entirety of Yahoo! broke down, Microsoft went on to make an offer for Yahoo!'s search business which was also rebuffed. 

Yahoo! has previously been reluctant to split its search ad business from its graphical display ad business, however Yang said earlier this month that he too remained "open minded" about a possible search-only deal with Microsoft. 

Yang's comments came after Google walked away from its proposed search partnership with Yahoo! due to opposition from the US Department of Justice.