With shares of Yahoo Inc. plunging on Friday, Steve Ballmer, CEO Microsoft Corp. said at a business lunch in Sydney that Microsoft is no longer interested in “revisiting a possible acquisition” of the struggling Yahoo. Still, he did suggest a partnership in the search engine market is possible.

Ballmer’s latest remarks follow Yahoo CEO Jerry Yang’s statement earlier this week that he remained “very open minded” about a full or partial merger with Microsoft.

Citing the reason for Microsoft’s waned interest in renewing the bid, Ballmer said: “We made an offer, we made another offer, and it was clear that Yahoo didn’t want to sell the business to us and we moved on. We are not interested in going back and re-looking at an acquisition. I don’t know why they would be either, frankly. They turned us down at $33 a share.”

According to analyst Roger Kay of Endpoint Technologies Associates, Microsoft’s reluctance to negotiate is not surprising. Kay said that Yahoo is a damaged property by now, and its value is much less than what Microsoft offered before.

Amid the uncertainty of the proceedings, Yahoo shares fell $1.76 to close Friday at $12.20.

Analyst Sandeep Aggarwal of Collins Stewart said he thinks the market “is overreacting to Steve Ballmer’s comments,” while noting that Ballmer also mentioned that some sort of combination with Yahoo’s search business remains possible.