Microsofts Ballmer Plays Defense Over Yahoo! Deal

Microsoft Corp. (MSFT) and Yahoo! Inc. (YHOO) execs still are defending their search deal announced this week, as investors continue to express doubt about the strength of the agreement.

Yesterday was Microsoft CEO Steve Ballmer’s turn to talk up the merits of the deal, which will give Yahoo! 88 percent of search revenue it generates over the next 10 years, although no up-front money. On Thursday, Ballmer met with investment analysts and told them the transaction is solid because Yahoo! has no cost-of-goods-sold expenses, no R&D costs and no ongoing capital spending.

But investors still don’t seem convinced. On Friday, a little after 1 p.m., Microsoft’s shares were down 6 cents at $23.76.

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