San Francisco — Internet pioneer Yahoo! Inc., which declined a Microsoft Corp. buyout offer last year, but on Wednesday an avid reports of a search deal between the duo surfaced once again, when Yahoo’s Chief Financial Officer Blake Jorgensen expressed openness, said the Sunnyvale company was not opposed to striking a deal with Microsoft if the price was right, and noting that an ability to retain data about users’ online intentions would be essential to any transaction.
“The foundation of any deal we might do would be full access to the data for intent,” Yahoo Chief Financial Officer Blake Jorgensen said during the Goldman Sachs Technology and Internet Conference held in San Francisco.
“We want to do it for the right reasons and the right economics,” Jorgensen said.
“We are not opposed to striking a deal that would maximize the value of the business in one way or another,” Jorgensen said. He noted that the search business is deeply knitted with Yahoo’s other online products and properties, and so any deal, whether it ba a partnership or a sale, would be done for the right reasons and the right economics.
He added that it would be a herculean task to separate Yahoo’s search business from the rest of the company, though not impossible. Under a partnership, Yahoo should continue to have full access to the search-engine data, which the company uses to make its display advertising more effective, he said.
“We are very much interested though on building our business and doing that in a way which we can benefit all from the search side,” he added during a Goldman Sachs technology conference here.
Microsoft Corp. has repeatedly asserted that it is interested in gaining control over Yahoo’s search business — a move that many analysts and investors have encouraged to better mount competition against market leader Google Inc.
Collins Stewart analyst Sandeep Aggarwal said these indications are signs the language between Yahoo and Microsoft is becoming softer, suggesting the companies could be entering a “more polite negotiation phase.”
“The refined behavior indicates more and more likelihood of a Microsoft, Yahoo deal,” said Aggarwal, who rates Yahoo a “buy” and whose firm makes a market in Yahoo shares.
Yahoo, last year had rejected a $47.5 billion buyout offer from Microsoft, and saw a deal to form a search advertising partnership with Google fall apart amid antitrust concerns.
On Tuesday, Microsoft Chief Executive Steve Ballmer has expressed interest in Yahoo!’s search business and reiterated that the company is open to fresh discussions with Yahoo about working out a search deal, but Jorgensen did not mention the US software giant as a potential partner.
Still, no one anticipates a deal to be announced so soon. Yahoo Chief Executive Carol Bartz, who was appointed in January, has yet to assemble her team. She is in the midst of charting a major reorganization, likely to be announced in the next few days, that will create more centralized management for the freewheeling Internet icon.
“These things go in steps,” said Jason Helfstein, an analyst at Oppenheimer. In addition to working out the future of Yahoo’s search business, Helfstein noted, Bartz must find a way to increase the value of display advertising, the banners and graphical boxes that appear on Web pages.
Bartz is charting a more disciplined approach to how Yahoo operates, Jorgensen said during the presentation.
“She is very determined,” he said. “She can manage with a gut instinct. She is very interested in simplifying the company and focusing Yahoo on some of its core strengths.”
“She is intolerant of anyone that is late to a meeting, and that is very different than the Yahoo way,” he said. “That will change the behavior of the company over time.”
Jorgensen appeared with Yahoo’s U.S. Executive Vice President Hilary Schneider at the Goldman conference. They did not provide any update to Yahoo’s financial outlook.
Yahoo has enjoyed a recent stabilization of its U.S. search market share, according to Jorgensen. Recent figures from comScore Inc. showed Yahoo held 21% of the U.S. search market in January, compared with Google’s 63% and Microsoft’s 8.5% share.
“We will see market shares move over time, not monopolistically to the 100% level,” Jorgensen commented. “We think it will go the other way.”
Indeed, Yahoo’s performance last quarter shows that the company may have finally found some solid ground. While IDC estimated that display advertising fell 7 percent across the board, Yahoo’s display sales were off only 2 percent.
Yahoo, based in Sunnyvale, California, climbed 24 cents, or 1.9 percent, to $12.75 in extended trading today. Redmond, Washington-based Microsoft, little changed in late trading, closed at $16.96 on the Nasdaq Stock Market.
Meanwhile, Helfstein said he anticipate a number of resignations as Bartz, organizes her team. In recent weeks, former Yahoo president Sue Decker and her head of communications Jill Nash both resigned. Neeraj Khemlani, the vice president in charge of Yahoo News, resigned Monday to become special assistant to Hearst Chief Executive Frank A. Bennack Jr.