Ballmer parries discussion of Yahoo buy

Try as he might, not even veteran U.S. television interviewer Charlie Rose could get Microsoft CEO Steve Ballmer to disclose whether the company continues to mull an acquisition of Yahoo.

[ Video: MS, Cisco on collaboration, competition ]

"If we were I wouldn't tell you, if I weren't I wouldn't tell you," Ballmer said Monday when asked point-blank by Rose in a joint interview with Cisco CEO and Chairman John Chambers if Microsoft was currently in negotiations with Yahoo to merge. The two industry heavyweights appeared together in New York to discuss the collaboration between Microsoft and Cisco, which have begun to encroach on each other's territory in the areas of unified communications and network security infrastructure as well as products for the digital home.

There was widespread speculation that Microsoft and Yahoo were talking about a possible deal earlier this year, speculation that was quieted by Microsoft's announcement it would buy digital media and marketing services firm aQuantive in May in a $6 billion deal to boost its online advertising strategy. The deal, Microsoft's biggest to date, closed last week, and the possibility of the company purchasing Yahoo seemed a moot point.

Ballmer initially appeared to reignite Yahoo acquisition suspicions during Rose's line of questioning about Yahoo -- he corrected Rose by saying "Why don't we buy Yahoo?" when asked by his interviewer why Microsoft "didn't" purchase the company.

However, in an interview following his joint public appearance with Chambers, Ballmer said Microsoft has no plans to do another massive deal like the aQuantive one to build out its advertising strategy. Instead, the company will focus on a combination of making smaller acquisitions and building new infrastructure where it is necessary to help Microsoft compete with advertising and search giant Google.

"We're going to buy more stuff and build more stuff ... but we don't have a major conquest [in the works]," he said. "Sometimes we'll have to decide what's better -- to buy or to build."

One thing Ballmer said was certain Monday was that the top executives of Cisco and Microsoft were not sharing the stage to announce a mega-merger between the two technology powerhouses. A combination of collaboration and competition was the order of the day, as the two companies identified areas where they have refocused their efforts on working together to promote the vision both companies have of the convergence of voice, data, video, and other forms of media over IP networks.

Cisco and Microsoft have been partners for 10 years, but that alliance has become tighter in the last seven months, with the two CEOs regularly checking in with each other to discuss progress and ways to collaborate. This new spirit of friendliness was not by the companies' choice but because customers demand it, both executives said.

"Companies don't want the issue of competition to cause them to interoperate ineffectively," Chambers said.