| SANTA CLARA, California
SANTA CLARA, California Microsoft Corp. sees mergers as a way to fill gaps or enter new markets, mostly via small deals, but larger deals are also "conceivable," Chief Executive Steve Ballmer said on Wednesday.
"We have not, by default, opted for acquisitions as part of our strategy ... but we don't count them out either," he said. "In general, though (we focus on) smaller deals, we are open to large acquisitions.
Speaking at the Software 2007 conference in Silicon Valley, Microsoft Corp.'s (MSFT.O) leader said the world's biggest software company remains focused on organic growth and sees acquisitions typically as a way to fill holes in its business strategy.
In an onstage interview with Software 2007 conference organizer M.R. Rangaswami, Ballmer declined to comment directly on whether he was interested in acquisitions in the $40 billion to $50 billion range -- a reference to a possible deal to acquire Yahoo Inc. (YHOO.O).
The question was a backhanded reference to news reports last Friday that Microsoft has once again approached Yahoo for a potential merger or partnership deal to help the companies better compete with rival Google Inc. (GOOG.O).
"Anything is conceivable," Ballmer replied, noting that he would decline to comment specifically on any potential deal-making as a matter of policy.
"Typically we do not do large (deals) relative to our overall size," Ballmer said. (We do deals) to fit into what we are doing or as platforms to us into whole new businesses."
In the last 12 months, the Redmond, Washington-based company acquired 15 to 20 companies, Ballmer told an audience of several hundred business software executives. He pointed to the 2000 acquisition of Great Plains Software, which propelled Microsoft into the business planning software market, as an example of using a merger to thrust itself into a new market.
"I don't think you should expect that most of our growth should come from buying large companies and taking costs out," Ballmer said, adding that such cost-reduction strategies are useful in slow-growing, more mature industries, but not software.