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Microsoft would trim overlap with Yahoo

"We made an offer and it's out there, baby."

Steve Ballmer, Microsoft chief executive officer

Microsoft Corp would either combine or shut down duplicate Internet services after purchasing Yahoo Inc, Microsoft CEO Steve Ballmer said.

"We shouldn't have two of everything," Ballmer said at a Microsoft conference in Las Vegas today. "It won't make sense."

Microsoft and Yahoo own competing search engines, advertising programs and e-mail and instant-messaging services.

Microsoft, the world's largest software maker, announced a US$44.6 billion offer last month for Yahoo, owner of the No. 2 Web search engine. Yahoo rejected the deal, saying it undervalued the company, and yesterday extended the deadline for nominating candidates for its board in an effort to avoid a proxy fight.

Microsoft wants to buy Yahoo because the Internet ad market will be "super big" and Microsoft hasn't built that business fast enough on its own, Ballmer said.

Internet search is the "killer application" of advertising, he said.

"Advertising on the Internet is a big thing and will be the next super big thing," Ballmer said. "We probably could have gotten going a lot sooner. We remain committed."

Asked about the status of the bid by moderator Guy Kawasaki, a venture capitalist, the Microsoft executive responded: "We made an offer and it's out there, baby."

Ballmer also said Microsoft would support Sony Corp's Blu- ray high-definition video format in "ways that make sense."

Toshiba Corp, the leading promoter of the rival technology HD DVD, conceded defeat to Sony last month. Microsoft was part of a group that backed the HD DVD standard.

Microsoft is in talks with Sony about developing a Blu-ray drive for the Xbox 360 video-game machine, the Financial Times reported on Thursday.

Ballmer also poked fun at Kawasaki's Apple Inc MacBook Air ultra-thin notebook, saying it is heavier than his Toshiba laptop and lacks features such as a DVD drive. Kawasaki is a former marketing executive at Cupertino, California-based Apple.

"Let's have a bake-off with my Tosh and that thing backstage," Ballmer suggested.

Kawasaki also asked Ballmer not to repeat a conference performance from several years ago, when he jumped up and down while shouting "developers, developers, developers, developers."

Still, an audience member requested a repeat performance today. Ballmer cheered for Web developers, the main attendees at the show.

"If your buddy behind you just gave you a buck, I want 50 cents," Ballmer told the attendee who had requested the cheer.

Microsoft fell US$0.55 to US$27.57 at 4pm New York time in NASDAQ Stock Market trading. The shares have declined 23 percent this year. Yahoo, up 23 percent this year, rose 3 cents to US$28.70.
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