Microsoft Steve Ballmer CEO Steve Ballmer said at a media conference in New York today that he still think there is an opportunity to make a deal with Yahoo, likely to acquire Yahoo’s search engine business that remains a significant business for Yahoo.

Ballmer expects to discuss possible deals with new Yahoo CEO Carol Bartz.

Microsoft first offered Yahoo $47 billion (about $30 per share) in an unsolicited bid that later broke down with then CEO Jerry Yang after failed talks. Jerry Yang was later heavily criticized for not taking the deal and later resigned. The Yahoo stock is now trading at $13.75 (1:23pm) and is up about 2.53%

Microsoft CEO Steve Ballmer participated yesterday in the “Microsoft Strategic Update” conference call and revealed some interesting information that hinted Windows 7 will in fact arrive in 2010.

We’ve made a nice release announcement last week of Windows Mobile 6.5. We’ve got Windows Mobile 7 coming next year.

When referencing if Microsoft would build its own mobile phone, he replied

[It is] not our strategy to build our own phone. It’s our strategy to sell software that we can use and support across a wide range of device manufacturers,

Ballmer also recently told analysts “Office 14 will not be this year,” It should, however, launch around the same time frame as Windows 7 in 2010.

Microsoft is warning users of the new Windows 7 Beta of a flaw that can permanently impair your MP3 files, including purchased MP3 tracks. Microsoft said, “every time that metadata is edited in an MP3 file that already contains lots of metadata in the file header, some audio at the beginning of the track may be lost permanently,” Microsoft is urging users to download a simple fix for Windows Media Center and Windows Media Player for Windows 7 to avoid compromising your music collection. Microsoft just recently uncapped downloads for Windows 7 until Jan 24 2008. You can download it here. At CES, Microsoft CEO Steve Ballmer said, “we are on track to deliver the best version of Windows ever…and working hard to get it right.” Windows 7 should hit shelves by late 2009 at the earliest, or early 2010.

Microsoft CEO Steve Ballmer said Wednesday that he is still open to a strategic partnership with Yahoo only on a search engine deal. He went on to say that Microsoft is no longer interested in a full acquisition of Yahoo and a search partnership is now an only option. Ballmer’s comments sent the Yahoo stock price up about 12% and it is now trading at about $9.88 just one hour before the closing bell. Jerry Yang recently stepped down from his post as CEO after intense pressure as he was the one responsible for foregoing a $47.5 billion (about $33 per share) Microsoft take over. In addition, Google recently pulled out of a Yahoo ad partnership after government scrutiny. A search partnership between Microsoft and Yahoo will likely have opposition, including from Google, but it shouldn’t have any problems with the Fed.

It is being reported that Windows 7 will be released in mid 2009, and it is expected this time frame will not deviate much at all. Windows 7 will be the next generation Windows OS from Microsoft, replacing Vista with many better features including a much improved user interface with improved window switching, 20% faster loading, an extensive upgrade to the built in calculator application, and a whole lot more. You can find previews of the features in Windows 7 here. It is also being reported that Windows 7 is circulating on BitTorrent networks.

In other news, Steve Ballmer just confirmed Windows Mobile 6.5 is coming early 2009 and said it would feature an improved UI and more features. Hopefully, these new features don’t cause more stability issues as most Windows Mobile today have.

Jerry Yang spoke in front of more than 1,000 people at the Web 2.0 Summit in San Fransisco where he provided his commentary about the last year and also expressed he and the Yahoo board of directors never at any point had any regrets concerning the failed acquisition with Microsoft. Yang also says that he went back to Steve Ballmer (CEO of Microsoft) to re-interest MS though to no avail. Yang has confirmed Yahoo is not in any direct acquisition talks with Microsoft and he notably refused to comment about a possible acquisition with AOL. We can expect Microsoft’s interest to re-open assuming serious talks develop with AOL. Most importantly, Yang went on to say “to this day, I’d say the best thing for Microsoft to do is buy Yahoo,” and he added: “We’re willing to sell the company.” Very interesting. Yang has been very heavily criticized (probably rightfully so) for not accepting the Microsoft acquisition bid for about $33 per share, considering Yahoo stock is now trading at about $12 and it isn’t expect to recover to $33 anytime soon. In more recent news, Yang also expressed disappointment towards Google who recently dropped the Yahoo ad partnership after antitrust concerns from the US Justice Department and strong critisism from various corporate opponents including Microsoft. Complete information from the Web 2.0 Summit can be found here.