Microsoft (NSDQ: MSFT) continues its campaign for Yahoo with a conference call to make its case and answer questions. Calling the bid for Yahoo the next major step for Microsoft, CEO Steve Ballmer said his company is committed to it and spoke of a call he made to Yahoo CEO Jerry Yang last night: “We’ve been engaged in conversations with Yahoo management off and on for the last 18 months. Last night I called Jerry Yang to discuss our proposal. This is a proposal we believe is a very good deal for Yahoo shareholders, an offer we want them to think about seriously, be excited about, in particular, to have the Yahoo employees be very excited about.” He said they went public today to give the shareholders and employees a chance to hear the details and think about it. (Subtext: They weren’t sure the Yahoo board would go public and avoided the leak-the-news route.) Other Microsoft execs on the call, which took place at 5:30 a.m. Redmond time, included Chris Liddell, CFO; Kevin Johnson, president, Platforms & Services Division; and chief software architect Ray Ozzie.  (Powerpoint here; not MSFT’s best ad for the software)

Kevin Johnson: It’s his role to sell it to the ad community and publishers—and could well be his job to manage the integration. “Today the market is increasingly dominated by one player”—the industry will be better served, publishers and advertisers will be better served. By combining the two companies’ search and non-search advertising into one platform, everyone will benefit.

Ray Ozzie: He’s making a pitch to Yahoo and Microsoft employees as much as shareholders, stressing Yahoo’s work in communities, its open source movement. Combination will enable us to deliver a broad range of experiences neither could do completely on their own.

Q&A: Microsoft’s acquisition of aQuantive would seem to have reduced need for Yahoo (NSDQ: YHOO). Not so ... it went part of the way but more to be done across all three areas—consumers, publishers, advertisers.

—How fast margin could ramp back to corporate average? Ballmer: “I don’t think that’s a good way to look at it.” The economics will be different from Windows, entertainment, etc.. ... “Our plan here would be to not lose money in the future.”

—Final offer price?: (You were expecting a number?) Your basic response.

—Reaction: Johnson: Been getting unsolicited feedback from publishers this morning that this is something they like… Google (NSDQ: GOOG) is clearly prevented from anti-trust laws from buying Yahoo or buying this business from Yahoo.

—What can Microsoft do that Yahoo couldn’t?:  Johnson: Today, we’ve got two engineering forces focused on the same problems - we can be more efficient ...”

—China & Japan: Ballmer on the JVs and assets in those countries—“The default would be not to make any change.”

Overarching themes: (My sum-up, not theirs.) We’re really committed, really excited, really think we can make this work, really appreciate what Yahoo has accomplished even if we don’t respect the financial results and are really sure we can do better.

Transcript (via SeekingAlpha)