• Financial Times, Friday, January 9, 2009 11:31 AM

In an interview with the Financial Times, Microsoft Chief Executive Officer Steve Ballmer upped the pressure on Yahoo to sell its search business to the software giant. Ballmer hinted that the best time to reach a search pact was now, during the management transition currently taking place at both companies. "We now have someone in place running our online business, and Yahoo's out looking for a CEO," the Microsoft CEO said. "If a search deal is to be made, it's probably to be made in the interim period for new leaders in both places."

Late last year, Microsoft brought in Qi Lu, Yahoo's former search chief, to head its online operations--a move that indicates Microsoft's intent to concentrate more on search in the near future. Lu's hiring was also seen as a way to smooth over any potential search deal between the companies. Yahoo, meanwhile, is still in the midst of finding a replacement for outgoing CEO Jerry Yang. According to The Wall Street Journal, the Web giant is zeroing in on former Autodesk Chief Carol Bartz.

Microsoft first proposed a search pact last year after dropping its $45 billion takeover bid. That move would have seen Yahoo hand over its search business in return for an up-front payment and a share in future ad revenues. Wall Street analysts estimated that deal as adding more than $12 billion to Yahoo value. Said Ballmer: "We had a deal on the table that they didn't choose to take, but I still think that makes sense. For us, the value to the customer, the value to the advertiser, all gets created around the search partnership."

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