Since the ouster of Bartz, there have been unconfirmed rumors that Yahoo's board has been entertaining discussions about selling the company to AOL or Microsoft, and that Yahoo co-founder Jerry Yang has tried to round up investors to acquire the company and take it private.

Ballmer also expressed satisfaction with the progress of Microsoft's Bing search engine in the past three years both in terms of usage and of technical improvement in areas like result ranking and relevance, as well as user interface.

Although Google remains dominant in search, Bing's progress "sets the stage for reinventing the category," Ballmer said, indicating that Microsoft harbors hopes of eventually making a run at Google's leadership position.

Asked whether Microsoft plans to launch a social networking site in the style of Facebook and Google+, Ballmer said Microsoft views online social interactions as varied in nature, with different tools for different uses.

For example, Microsoft has products that play in the social space, including recently-acquired Skype, which he views as tailored for interacting with the people one is closest to, and its XBox gaming console, which allows for people to play over the Internet.