"We trust the Yahoo board and the Yahoo shareholders will join with us quickly in deciding to move down an integrated path," Ballmer said.

Ballmer's comments seem to run contrary to Yahoo's statement that it may take "quite a bit of time" to weigh its strategic options including keeping the company independent.

According to a source familiar with Yahoo's strategy, the company is mulling a business alliance with Google Inc to rebuff Microsoft's proposal. It has also received preliminary contacts from media, technology, telecommunications and financial companies, another source close to Yahoo said.

Microsoft said combining with Yahoo would speed up the process of building a company capable of capturing 40 percent of the digital advertising market. Ballmer noted, however, that if the company was successful in its bid, it would continue to invest in building the business.

Redmond, Washington-based Microsoft emphasized that it expects to see strong growth from most of its business units. Liddell said he expects Microsoft's revenue to grow at a double-digit percentage in the coming fiscal year starting in July despite a potential U.S. economic slowdown.

Analysts, on average, forecast Microsoft's revenue to grow 10 percent to $66.4 billion in fiscal 2009 from an estimated $60.2 billion in the current year, according to Reuters Estimates.

Microsoft also said its first major update to Windows Vista was released to manufacturing. Usually, large organizations wait for the first major update before deploying a new operating system.

(Additional reporting by Michele Gershberg in New York)