WASHINGTON -(Dow Jones)- Microsoft Corp. (MSFT) Chief Executive

Steve Ballmer said Tuesday his company’s interest in Yahoo Inc. (YHOO) hinges on developments in online advertising.”The fundamental driver for us is we’re looking to accelerate our moves to get scale in online advertising,” Ballmer said.

“We do think software technology and the scale of user interactions will be an important part of the way the media and the advertising business shakes out in the future,” he added.

Ballmer predicted that the $550 billion annual advertising industry is “going to get turned on its head, basically, in the next 10 years” as media moves almost exclusively online.

Last month, Microsoft withdrew an offer to purchase Yahoo but the two companies are continuing to talk about possible partnerships.

Microsoft’s initial offer for Yahoo was $31 a share, or $44.6 billion. It boosted the bid to $33 a share before walking away when Yahoo’s co-founders

Jerry Yang and

David Filo said they wanted $37.
Ballmer spoke at the annual AeA Technology for Government Dinner.

-By

Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com