Reuters - Yahoo CEO says talking to Microsoft "little bit"

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Yahoo CEO says talking to Microsoft "little bit"

Wednesday, May 27, 2009 9:11PM UTC

CARLSBAD, California (Reuters) - Yahoo Inc CEO Carol Bartz said any deal to spin off or combine its Internet search assets will require a partner with "boatloads of money," and her company is talking "a little bit" with Microsoft Corp about a potential partnership.

Speaking at the All Things Digital conference on Wednesday, Bartz said the company's array of popular Web products, including Yahoo mail and its home page, remain the key assets that will return Yahoo to growth.

Since taking the CEO job, Bartz has moved swiftly to revamp the company, cutting jobs, shuttering certain products and reorganizing the management structure.

Bartz said the company would like to hold on and even increase its roughly 20 percent share of the U.S. Internet search market, but it was not necessary for Yahoo's success.

"We are positioned as a place where people come to be informed; not just informed through a search, but informed through great content, with great editorial and great integration and a very local feel," Bartz said at the conference taking place north of San Diego.

Yahoo is the No.2 player in the search market, behind Google Inc, which had a roughly 64 percent share of the U.S. search market in April, according to comScore.

Bartz, 60, took the reins at Yahoo in January, replacing co-founder Jerry Yang in the wake of Yahoo's rejection of a $47.5 billion acquisition bid from software giant Microsoft.

Yahoo and Microsoft have recently talked about various partnerships, possibly with Microsoft managing Yahoo's search advertising business and Yahoo handling display ads across Microsoft's websites, according to a source familiar with the situation.

Asked if the talks between Yahoo and Microsoft about an Internet search deal continue, Bartz replied "a little bit."

Bartz said any deal combining its search efforts with another company would have to meet a specific set of criteria for Yahoo.

"There's two parties in all this. The other party has to have a boatload of money and the right technology, and give us the right data and so forth. It's that simple," said Bartz.

Microsoft, the No.3 player in the U.S. Internet search market, is expected to provide details about improvements to its search engine at the conference on Thursday when CEO Steve Ballmer takes the stage.

Yahoo earned $118 million in the first quarter, while its sales declined 13 percent year-over-year to $1.58 billion.

Given the challenging economic conditions, Bartz said she believes the company is performing strongly.

Bartz said on Wednesday that the new organizational structure, which she said makes the management and reporting hierarchies more clear within the company, will help Yahoo infuse its products with personalization and social media features.

Yahoo is adding social networking features such as status updates to its various properties. Last week, CEO Ari Blalogh said the company was also interested in acquiring outside companies to bolster its social efforts.

Yahoo is facing increased competition from social networking sites such as Twitter and Facebook. On Tuesday, Facebook, which has 200 million active users, announced it had received $200 million in funding from a Russian Internet investment firm.

Bartz said the company's core online properties can provide an Internet experience for Web surfers that Facebook cannot match, by providing a one-stop shop for people to read the news, check their stock portfolio and take care of other online tasks.

And she stressed Yahoo's various online products remain some of the most popular on the Web.

Yahoo has a 76 percent reach among U.S. Internet users, said Bartz.

(Reporting by Alexei Oreskovic; Editing by Andre Grenon)