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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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February 25, 2009 2:51 PM

What Ballmer said about Yahoo and what others are saying about search deals

Posted by Benjamin J. Romano

After a fairly quiet few weeks following the one-year anniversary of Microsoft's bid to buy the Internet giant, a couple of reports in the past day or so, plus an utterance from Microsoft CEO Steve Ballmer, have stirred the Microsoft-Yahoo pot. Let's start with facts and move on to speculation and unnamed sources.

Ballmer, during a strategic update meeting with Wall Street analysts, discussed the broader Internet search market, the tall order his company faces against Google and his continuing hope of joining forces in some manner with Yahoo:

"They [Google] have share, we don't have share. They have a huge team; we've got a much smaller team. You all know that I would like to figure out how to pool somehow Microsoft and Yahoo. I'm not talking about doing an acquisition, blah, blah, blah, back to search deals, blah, blah, blah, I don't know if anything is going to happen. I'll short-circuit the whole conversation, but the fact of the matter is, these two guys [Microsoft and Yahoo] should somehow figure out how to get together and create more competition for this guy [Google]. And I'm hoping perhaps that that's a reasonable conversation to have with new management at Yahoo as Carol comes onboard."

Following the strategic update Tuesday morning, CNBC's Jim Goldman, citing "execs I'm talking to this morning," reported: "Since Carol Bartz has taken over as Yahoo's CEO, there has been absolutely no meaningful, substantive discussion with Microsoft. And even though Microsoft execs have been scurrying behind the scenes to reignite deal negotiations, they've either been 'rebuffed' or 'ignored,' ... [and] they're stunned that, once again, it seems that Yahoo isn't interested in a partnership on Search that could create a stronger competitor to Google."

And then today, Blake Jorgensen, Yahoo CFO, gave some insight into his company's stance toward a search outsourcing deal during a presentation at a Goldman Sachs technology conference in San Francisco. Any search deal would have to leave Yahoo with access to important search data.

"Key to any deal we might do would be full access to the data for intent," he said, according to this MarketWatch report. He also said, "We're not opposed to doing a deal that would maximize the business one way or the other, be it a partnership or a sale."

Also worth noting from Ballmer's comments on Microsoft's commitment to gaining ground in search is this zinger:

"I don't want to wind up being known as the Jerry Yang of this market in a different way, the guy who invested forever and got no --- and I'm not trying to be rude to Jerry, but that whole episode left me understanding how shareholders can get frustrated with managements who aren't serious about performance. I'm serious about investment, but I'm also serious about performance in this business."

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