Yahoo! shares boosted by Microsoft chief's comments

by Staff, Brand Republic 17-Oct-08, 10:40

SAN FRANCISCO - Comments made by Microsoft chief executive Steve Ballmer regarding the possibility of re-examining a search advertising agreement with Yahoo! sent the internet company's share price up as much as 17% yesterday.

Investors hoped Ballmer's comments would lead both sides to review the deal, which has been off the table since Microsoft pulled out of negotiations in July prompting Yahoo! shares to sink.

However, speaking at a conference in Orlando, Florida yesterday, Ballmer said: "Perhaps there will continue to remain opportunities to partner around search.

"We are not in any discussions with them. We'll see. They want to remain independent. There are probably still opportunities around search.

"I think it would still make sense economically for their shareholders and ours."

Last week, a venture capital investor with a small stake in Yahoo! attempted to revive interest from Microsoft, claiming it could purchase Yahoo!'s search division for £2bn less than the sum it offered in July.

The proposal involves Microsoft selling on Yahoo!'s Asian assets and non-search business to shore up cost savings and tax benefits.

Yahoo! is currently involved in a advertising agreement with Google, which is under antitrust review by the US Justice Department after the deal received criticism by a number of advertising and publishing bodies.

It has also been in talks with Time Warner about a possible deal involving AOL.

Today Google released its third quarter results, showing a profits increase of more than 25%.