Microsoft Corporations Chief Executive Steve Ballmer on Wednesday ruled out acquiring Yahoo Inc but later maintained that the company was interested in resuming talks on a Web search partnership. Yahoo shares fell 19 per cent on the remarks, after Yahoo Chief Executive Jerry Yang announced that he would step down.

Steve Ballmer, while addressing in the annual shareholders meeting of Microsoft, said that the company had done with all acquisition discussions with Yahoo. Ballmer reiterated that on Wednesday that Microsoft was still interested in pursuing a search deal with Yahoo.

In May 2008, Microsoft withdrew its $47.5 billion buyout offer for Yahoo after the bid was rejected for being too low. The software company then offered to buy Yahoo's search business, but Yahoo decided instead to sign a search advertising deal with Google Inc.

At the meeting, Ballmer told shareholders that while the world's biggest software maker is seeing growth in all of its business groups, it is "not immune" to the tough economic climate. However, investment in research and development would continue, Ballmer informed.

Microsoft, the world's largest software maker with more than 91,000 employees worldwide, has hired more than 20,000 employees in the last two years. Shares of Yahoo fell 19 per cent to $9.38, while Microsoft shares were down 3 per cent at $18.99.