Speaking at a Gartner technology conference in Florida, Ballmer reportedly said an acquisition of Yahoo! could still "make sense economically" for shareholders of both companies, according to Marketwatch.
Yet Ballmer indicated pessimism that Yahoo! would accept a realistic offer based on its current share price. Along with the broader market, Yahoo! shares have fallen 55% to close at $11.75 Wednesday since rebuffing Ballmer's offer of $33 a share in June.
Following Ballmer's comments, Microsoft sought to quell speculation that it will make a move on Yahoo!. The company issued a statement, saying "Our position hasn't changed. Microsoft has no interest in acquiring Yahoo!; there are no discussions between the companies."
Yahoo! stock has been trading at 27 times 2008 earnings, compared with a P/E of 17.5 for search giant
But Yahoo! shares shot up $1.61, or 13.7%, to $13.36 on news of the Ballmer comment. Microsoft rose 6 cents, or 0.3%, to $22.72.
Yahoo! "probably thinks it's still worth at least as much today" as it did in June, Ballmer reportedly said.
But if Microsoft is intent on acquiring Yahoo! to bolster its share of online search and advertising to better compete against Google, it now has friends on Yahoo!'s board. In August, activist investor Carl Icahn won board seats for himself and alliesFrank Biondi, former CEO of
, and John Chapple, former CEO of Nextel, which is now
Icahn has continued to advocate a Microsoft-Yahoo! merger, even after Ballmer said a full acquisition of the Internet company was no longer on the table.
Yahoo! representatives declined to comment for this story.