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Ballmer tries to breathe life into Yahoo! deal

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Steve Ballmer is still trying to resurrect a possible search deal with Yahoo!.

Ballmer told the FT that he thought a search deal was still possible - and that it would most likely happen when Yahoo! got its new CEO, and while Microsoft's new search boss Qi Lu, pinched from Yahoo!, was still new to his job.

Yahoo!'s search for a boss to replace Jerry Yang is rumoured to be drawing to a close, with various names on the shortlist including Yahoo! president Sue Decker and Autodesk CEO Carol Bartz.

So in Ballmer-world a deal must be close. When Yahoo! rejected Microsoft's offer back in February its shares were near $30 each - they are now just over $13 each, but Microsoft shares are also down about a third over the same period.

The other problem of course is that even with Yahoo! bundled into Microsoft's search it would still be far below Google's market share. ComScore figures for October showed Google with 63.1 per cent of the search market, Yahoo! with 20.5 per cent and Microsoft, despite its massive spending, with just 8.5 per cent. Without adding compelling technology Microsoft is in danger of paying big money for an audience it has no guarantee of keeping.

Yesterday did see Microsoft trumpet a mobile search deal with Verizon. But otherwise Ballmer, in the pink paper and on stage at CES, focussed on Windows 7 and the good old PC world.

There is also increasing talk that Microsoft is set to rebrand its Live Search service. The company registered several domains relating to "Kumo" late last year.

A spokeswoman for Microsoft admitted Live Search remained a weak proposition because "we haven't made it stand for something that consumers have connected to".

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