Continuing with the Microsoft-Yahoo melodrama, Steve Ballmer has dismissed Yahoo CEO Jerry Yang’s suggestion earlier this week that it would be in their “best interests” to look at acquiring Yahoo. The Microsoft executive put an end to all speculation, while at a business lunch in Sydney, by saying it is not interested in making another offer for the failing Yahoo.

Of course, Yahoo stock surged in price earlier this week when it was rumored that a new deal may be on the cards, so whether Ballmer is truly saying no or simply waiting to see if Yahoo’s stock drops even more remains to be seen. In any case, he didn’t completely shut the door on a search partnership, something Yahoo will have to consider if it wants to stay alive following the demise of its much-needed search partnership with Google. The full video of Ballmer’s speech to developers in Sydney is available here.