Software giant Microsoft Corp is discussing ideas for partnerships with Internet portal Yahoo but it is not interested in an acquisition, Yahoo's chief executive said.

They are discussing various other ideas and partnerships with us and we're listening, Yang said Wednesday at the All Things Digital conference in Carlsbad, California. We're listening and trying to understand and trying to see if there is something to do there.

Microsoft gave up its $47.5 billion takeover bid for Yahoo early this month when both companies would could not agree on a price. Microsoft initially bid $31 for Yahoo in late January and later raised it to $33.

Since then, the companies have begun discussions regarding a deal which falls short of a merger.

They've chosen not to pursue the acquisition but they have come back with some other suggestions and we all felt and understood that a combination like that done right has tremendous amount of power and leverage, Yang said.

Yahoo is also working on a possible deal with Google. In April, the companies made a limited test of Google text ads alongside Yahoo search results.

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