Microsoft looking at Webkit?

During a tour of Australia, Microsoft CEO Steve Ballmer has made some news, rejecting a new bid for Yahoo, and dismissing Google's Android phone project.

Now, an apparent throwaway remark regarding WebKit, an open-source browser rendering project, has caused yet another stir. Webkit is used by Google's Chrome browser and Apple's Safari browser.

Speaking at a developer event, Ballmer was asked whether Microsoft's Internet Explorer browser was in danger of being bypassed by open-source development.

In response, Ballmer said that open source is "interesting" and that Microsoft "may need to have a rendering service." He added that Apple has embraced Webkit and Microsoft "may look into it."

While that may not seem like a ringing endorsement, it's been enough to get the blogosphere buzzing. (The "news" was the top story on Techmeme Friday morning.)

However, ZDNet's Larry Dignan explains why this is unlikely to be anything more than a tempest in a teapot.

Check out the full video of Ballmer's speech to developers in Sydney on Thursday here.