Ballmer Sidesteps AOL Acquisition Questions

REDMOND, WASH. Microsoft chief executive officer Steve Ballmer today declined to comment on industry speculation that the software giant was considering buying Time Warner’s America Online unit during a morning session at the MSN Strategic Account Summit here.

Time Warner is said to be mulling options for the troubled Dulles, Va.-based Internet subsidiary, including a sale, spin-off or major restructuring.

“I think it’s always inappropriate to comment on that type of rumor,” answered Ballmer when pressed by an audience member about recent press reports placing Microsoft in talks with Time Warner about possibly buying AOL. The question resulted in rumbling from the auditorium of some 500 agency, media and marketing executives at the fifth annual conference held of the Microsoft campus.

“We do have a good relationship with Time Warner,” he said, adding that MSN has a “friendly, healthy competition with AOL.”

He concluded: “What I would advise to you is don’t read too much into [rumors] and some of them will actually come true.”

Ballmer also expressed regret over not having developed an in-house search product for MSN. Outsourcing search capabilities is “probably the thing I feel worse about,” he said. MSN recently renewed a multi-year deal with Yahoo!-owned Overture for the latter to provide the former with sponsored search results.

“Everybody says Microsoft wants to do it all. This is a case where we didn’t do it all,” Ballmer said. “Shoot, I wish we had done it all.” MSN is in the midst of heavy research and development in the search realm, he said, projecting the debut of an algorithmic product within the next 12 months.