Thursday, June 4, 2009

Yahoo! Did Not Need To Make Any Deal With Microsoft: Carol Bartz

. Thursday, June 4, 2009

By stockOzone team

Yahoo! chief executive Carol Bartz played down speculation of an Internet search tie-up with Microsoft saying the Web pioneer did not need to make a deal with the software giant.

"Yahoo! doesn't have to do anything with Microsoft about anything," Bartz said at a conference here of technology analysts.

"Yahoo! actually has a bright, bright future, probably cleaner and simpler future without thinking there's any Microsoft connection," she said. "We'd be better off if we'd never heard the word Microsoft.

"Forget about the Microsoft stuff, it's honestly not that relevant," she said.

Microsoft tried last year to buy Yahoo! for 47.5 billion dollars in a vain effort to merge online resources to better battle Google, which rules more than 60 percent of the lucrative US online search market.

Yahoo!'s share of the market is about 20 percent and Microsoft trails with slightly more than eight percent, according to April figures from industry tracking firms.

Microsoft chief executive Steve Ballmer has repeatedly expressed interest in a deal with Yahoo! but Bartz said Wednesday that too much attention was being paid to the issue and Yahoo! was doing fine on its own.

"The whole fanatical look at this one area of our business is just overdone," she said. "Our 20 percent share (of search) is statistically relevant.

"What's really necessary is that we continue to grow our audience."

Bartz, who replaced Yahoo! co-founder Jerry Yang as chief executive in January, also said she was open to buying "small innovative" companies "for technology or good content."

Bartz's comments came just days after Microsoft launched a new search engine, Bing, in a bid to carve out a larger share of the search market.

Bartz said that combining Yahoo's search technology with Microsoft could provide important benefits of scale, which could improve the company's monetization of its service. And she said a partnership could save Yahoo up to $700 million in costs -- a more conservative figure than some investors had in mind.

The speech was the second recent comment by Bartz regarding a potential deal. Bartz told the audience at the All Things Digital conference last week that any deal for its search assets would require a partner with a "boatload" of money and the right technology.

The comments also come as Yahoo continues to lose ground to Google Inc (GOOG.O), which has more than 64 percent share of the U.S. search market, and as Microsoft releases a new version of its search engine, dubbed Bing.

Bartz said Bing will give Microsoft some "uplift" in the search market but will not fundamentally change the competitive dynamics there.

"They're not going to get scale through Bing. They're going to get some temporary interest," said Bartz

Yahoo!'s share price lost 1.93 percent in New York on Wednesday to 16.30 dollars while Microsoft gained 1.54 percent to close at 21.73 dollars.

Disclosure: Author does not own any of the stocks discussed here.

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