Yahoo CEO says talking to Microsoft 'a little bit'

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, Ms 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, Ms Bartz has moved swiftly to revamp the company, cutting jobs, shuttering certain products and reorganizing the management structure.

She said the company would like to hold on and even increase its roughly 20 per cent share of the US 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," Ms 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 per cent share of the US search market in April, according to comScore.

Ms Bartz, 60, took the reins at Yahoo in January, replacing co-founder Jerry Yang in the wake of Yahoo's rejection of a €34 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, Ms Bartz replied "a little bit."

She 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 Ms Bartz.

Yahoo earned €85 million in the first quarter, while its sales declined 13 per cent year-over-year to €1 billion.

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