Yahoo!'s Low-Priced Share Grabs Microsoft CEO Ballmer's Attention

October 16, 2008 5:54 p.m. EST

San Francisco, CA (AHN) - Yahoo! Inc.'s low-priced shares have finally attracted Microsoft Corp.'s attention after Chief Executive Officer Steve Ballmer said on Thursday that the deal may still be valuable one, according to the reports.

Speaking at a Gartner Inc. conference in Orlando, Florida, Ballmer said the deal between the two companies would "make sense economically," for stockholders in both the companies.

However, immediately after Ballmer's comment, the world's largest software maker posted a statement saying, "Our position hasn't changed. Microsoft has no interest in acquiring Yahoo!; there are no discussions between the companies."

Yahoo and Microsoft have been in the news for the last few weeks following a proposal by Yahoo's investor that the search engine giant should make a deal with Microsoft.

Private equity fund Mithras Capital, which holds 1.9 million shares or around 0.14 percent of Yahoo's total stake, has proposed that Microsoft could purchase Yahoo's search engine business.

In the month of May this year, Microsoft had made a complete takeover offer of $47.5 billion, but Yahoo declined the bid. In July 2008, Microsoft decided not to proceed with higher bid after Yahoo rebuffed the software giant's $9 billion offer to purchase its search business.

Following Ballmer's remarks, shares of Yahoo soared in afternoon trading to more than 15 percent and hit a high of $13.73 so far in the day. At 2:21pm ET, the stock was trading higher by $1.21 or 10.30 percent at $12.96.

Shares of Yahoo have plunged by 61 percent through yesterday, after the stock hit a high at $34.08 in February. The Sunnyvale, California-based company's market value is around $18.6 billion at present.

Some of the market analyst have considered the deal helpful for Yahoo as its stock value has declined more than 36 percent since the beginning of August.

The stock of Redmond, Washington-based Microsoft where trading down by $0.03 or 0.13 percent to $22.63 at 2:40pm ET on NASDAQ market trading.