Nov. 19 (Bloomberg) -- Yahoo! Inc. shares dropped below $10 for the first time in more than five years after Microsoft Corp. Chief Executive Officer Steve Ballmer squelched speculation that he would revive takeover talks.

``We've moved on,'' Ballmer, 52, said today at a shareholder meeting in Bellevue, Washington. He reiterated that a partnership between Microsoft and Yahoo in the Internet-search market is an ``an interesting possibility.'' There are currently no talks about such an agreement, he said.

Ballmer's stance may force Yahoo's next CEO to find another way to revive the company's profit, which declined in 10 of the past 11 quarters as sales growth stalled. Yahoo CEO Jerry Yang, who spurned Microsoft bids of as much as $47.5 billion this year, announced plans two days ago to step down.

Yahoo tumbled $2.41, or 21 percent, to $9.14 at 4 p.m. New York time on the Nasdaq Stock Market. The shares, down 61 percent this year, are trading at their lowest price since February 2003. Yang's decision to quit sent the shares up 12 percent yesterday as investors bet that Microsoft would reopen talks.

Microsoft had offered as much as $33 a share for Yahoo, an effort to boost its share of Internet searches and close the gap with Google Inc. in online advertising. While Microsoft may return to discussions, there's no urgency now, said Martin Pyykkonen, an analyst with Wunderlich Securities in Denver.

No Hurry

``If you look at it from Microsoft's standpoint, what's the rush?'' said Pyykkonen, who advises selling Yahoo shares. ``Microsoft probably high-fived itself to say, `Good thing we didn't buy them.'''

Microsoft, based in Redmond, Washington, declined $1.33, or 6.8 percent, to $18.29. The shares have dropped 49 percent this year.

Yang, who will step down when his replacement is found, has said he is open to new talks. Microsoft walked away from takeover discussions earlier this year after Yang rejected the $47.5 billion offer. Sunnyvale, California-based Yahoo also spurned Microsoft's proposal to buy just its search unit in June.

Even if Microsoft did buy Yahoo, it would have less than half of Google's share of Internet searches. Mountain View, California-based Google handled almost two-thirds of U.S. queries in September, according to ComScore Inc., a research firm in Reston, Virginia. Yahoo had 20.2 percent, while Microsoft had 8.5 percent.

Ad Spending

U.S. online advertising spending may grow 20 percent this year to $25.5 billion, according to Collins Stewart Plc. The firm revised its forecast last month from an earlier projection of 23 percent growth, citing economic conditions.

After rejecting Microsoft's earlier offers, Yahoo entered an agreement with Google that would have put some of that company's ads on Yahoo's Web pages. Google backed away from the deal this month after the Justice Department threatened to block it. Yahoo expected the partnership to bring in as much as $450 million in operating cash flow in the first year.

Yahoo also has held talks with Time Warner Inc.'s AOL since April about a combination. An acquisition of AOL would bring more so-called display ads, such as banners, which are less lucrative than search ads.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Crayton Harrison in Dallas at tharrison5@bloomberg.net

Last Updated: November 19, 2008 16:08 EST