Bartz: Yahoo, Microsoft Still Talking Search

But, says Yahoo’s CEO at the AllThingsD conference, it will take “big boatloads of money.”

A year after a deal for its search business with Microsoft fell apart, Yahoo is still conducting talks with Microsoft, CEO Carol Bartz said during an interview on Wednesday at the AllThingsD conference.


Asked by AllThingsD editor Kara Swisher whether Yahoo was still talking to Microsoft, Bartz — who took over as CEO in January — said “a little bit.”


Would she sell the company? “It would have to be big boatloads of money,” she said.

Bartz was grilled on a number of changes going on at the media Internet giant, including managerial streamlining and her prioritizing of content — the front page, news, search and email services — over technological innovation.


She said advertising is down 12 percent, adding that, in the current economy, that’s noteworthy. “’Down relatively’ is the new flat,” she said, with characteristic humor. “I think we’re doing great."


She focused on the user experience — and the need for getting mobile: "We have to make the small screen as interesting as the big screen."


Many observers of the interview said they thought her answers about the direction of Yahoo were vague, and they questioned whether Bartz — who is new to the Internet business but known for her hard-charging managerial style and aggressive wit (she recently used the f-word in an earnings call) — had a firm grasp on the ins and outs of the behemoth.


But asked why she has no second-in-command, she said, “I don’t need a number two, because I don’t want to be removed from the business."


Bartz said she took the job because the company had a “Dilbert”-style management structure that needed streamlining. "A lot of that is being fixed in this organization,” she said. “Part of it is people didn’t know who got to make a decision. Yahoo is on its way to being a lot simpler.”


Some analysts believe that Yahoo is preparing to finally make the deal that fell through last year in a much-bruited soap opera that ended with the departure of CEO Jerry Yang, who rejected Microsoft’s efforts to buy its advertising search business for $47.5 billion. The rejection led to a fallout between the two companies. 


But that was then. The chief executives of Yahoo and Microsoft met this month to discuss various business opportunities. Rumors have been strong that a renewed search deal is in the works, and Microsoft’s Steve Ballmer has made clear in public statements that he is still interested.


In the meantime, she said, the company was not going to stand still. Innovation, she said, will flow from doing a good job.


"We’re not competing with Facebook, or Twitter," she added. "We have to be maniacal about our product."


But changes won’t come quickly. “I can’t take nine women and make a baby in a month," she said. "It will take some time.”