Microsoft chief Steve Ballmer today categorically ruled out another bid for all of internet company Yahoo but admitted he is pursuing a new tack with the company.

"We are not bidding to buy Yahoo," Ballmer said at the launch of Microsoft's new research and development centre in Israel.

"Yet, we are trying to have discussions about deals with Yahoo that might create value, but not a whole acquisition of the company," he said.

Earlier this month, Microsoft walked away from a proposal to acquire Yahoo for $47.5 billion (£24.1 billion), after Yahoo rebuffed the offer as too low.

Microsoft is now believed to be pushing an alternative offer, proposing to buy Yahoo's search business and take a minority stake in the firm.

Buy Yahoo is also in talks about an alliance with arch-rival Google, to which it turned when looking for an alternative to the Microsoft bid.

Yahoo has said it was considering a "number of value-maximising strategic alternatives" and would evaluate any proposal made by Microsoft.

To complicate matters, investor Carl Icahn last week launched a proxy battle to pressure Yahoo to agree to be sold to Microsoft.