Yahoo buy not a strategy in itself: Microsoft CEO

Microsoft Corp Chief Executive Steve Ballmer said on Friday that buying Yahoo was not a strategy in itself, and dropping the bid meant it now had $50 billion to spend on other acquisitions.

• “Yahoo was never the strategy we were pursuing, it was a way to accelerate our online advertising business,” he told a packed hall at a technology conference in Moscow.
• “We will spend money on some acquisitions. You can do a whole lot of things with 50 billion dollars,” he said.
• Ballmer was responding to questions about what he planned to do with Microsoft’s huge cash pile after it walked away from a proposal to buy Internet media company Yahoo for $47.5 billion, or $33 a share earlier this month. Yahoo had rebuffed the offer, saying it would only settle for $37 per share.
• Microsoft’s top executive was echoing a refrain heard from him in recent weeks: At a May 1 employee meeting, he said Yahoo was valuable as part of a strategy to beat Microsoft arch-rival Google, but there were limits on the price it would pay.
• “Yahoo’s not a strategy, it’s a part of a strategy,” Ballmer had said three weeks ago in Redmond, Washington.
• “We’re interested to pay for it (Yahoo) at some level and beyond that level we’re not willing to pay for it.”
• Talks broke down May 3 and Microsoft said it had “moved on.”
• Early this week, the two companies said new talks were underway on a more limited deal but neither side disclosed the terms. A source familiar with the discussions said Microsoft had proposed buying Yahoo’s search business and taking a stake in Yahoo after Yahoo sheds its substantial Asian assets.
• In Israel this week, Ballmer said Microsoft was now not in talks to acquire Yahoo, but was looking at other types of deals with Yahoo, the world’s No. 2 Web search service after Google.
• The Internet start-ups sector, which has recently seen a new class of instant-messaging tools, is not being used to its full potential, Ballmer added.
• “There are many businesses that are in some senses under-appreciated by the market,” he said, noting particularly healthcare start-ups.
• “There’s an aging population — it’s one of the biggest-growing parts of the world economy.”