Microsoft CEO Steve Ballmer has said the company is no longer considering purchasing search competitor, Yahoo!. The news emerges following comment from Yahoo! boss, Jerry Yang who said the company would be wide open to a takeover big from the Redmond company.

Yahoo said yoohoo to Microsoft earlier this week when Yang told journalists at Web 2.0 that the best thing for Microsoft to do would be purchase Yahoo!. While many wondered what the company would do following the collapse of its advertising deal with Google, the company was clearly hoping there would still be an offer from Microsoft on the company. According to Reuters, Microsoft CEO, Steve Ballmer, said in Sydney yesterday that the company made two offers to Yahoo! and had since moved on.

"We tried at one point to do a partnership around search ... and that didn’t work either, and we moved on and they moved on,” Ballmer said. “We are not interested in going back and re-looking at an acquisition. I don’t know why they would be either, frankly," he added.

While it seems like bad news for Yahoo! at first glance, Reuters reports Steve went on to say that he thought there were still opportunities for some kind of partnership around search.

Microsoft’s attempt to acquire Yahoo! lasted many months and eventually fizzled out in May of this year. Just one month later Yahoo! announced the advertising deal with Google, which would earn the company €800 million per year. The deal raised anti-trust issues with the U.S. Department of Justice as well as the European Commission. While Yahoo! no doubt needed the deal to stay afloat, Yang’s comments about a possible sale to Microsoft raises a few eyebrows.

Last month, Executive VP of Yahoo!, Hilary Schneider, attempted to put those fearing a monopoly at ease. The Association of National Advertisers sent a letter to Yahoo! voicing concerns that the deal would diminish the competition. Schneider replied to the letter assuring them the deal was going to do no such thing and Yahoo!’s intention was to use the deal to invest more in its own business.

"This is exactly the opposite of our business goals in pursuing this agreement," Schneider said. "The sponsored search connection to Google should ultimately shrink, not grow, over time — because we are focused on growing our own business, NOT Google’s,” she added.

We wonder if the company isn’t panicking just a little. Last month the executive VP was adamant Yahoo! was focused on growing its own business. Now it seems as though Yang is ready to sell.

Source : Tom's Hardware