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'Gut' Tells Bartz Not To Do Microsoft Search Deal

Contrary to earlier reports, sources tell The Wall Street Journal that a Yahoo-Microsoft search deal is unlikely to be imminent. In a company-wide meeting yesterday, new CEO Carol Bartz told staff that she planned to spend a lot of time investigating whether or not to sell the business to Microsoft, but that her "gut" tells her not to. She added that she and Microsoft CEO Steve Ballmer have already held informal talks.

During the meeting, Bartz also revealed that she wasn't planning on replacing outgoing President Sue Decker, who along with former CEO Jerry Yang had been opposed to a sale of all or parts of the company to Microsoft. Many in the press and the blogosphere speculated that Bartz would bring in a No. 2 person who had more Internet media and advertising experience.

Meanwhile, Ballmer has repeatedly said in recent months that he still wishes to do a search deal with Yahoo. Under the terms of an offer made in July, Yahoo would have handed over its search business to Microsoft in exchange for $1 billion plus a guaranteed annual payment to Yahoo of $2.3 billion over five years. However, Yahoo sources tell the Journal they don't feel "any pressure at all" to do a deal with Microsoft. They said the decision to do so or not falls squarely on Bartz's shoulders. In a call with analysts Tuesday, the new Yahoo CEO said: "More than anything, let's give this company some frickin' breathing room. It's been too crazy -- everybody on the outside deciding what Yahoo should do, shouldn't do, what's best for them. That's going to stop."

Read the whole story at The Wall Street Journal »

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