Yahoo!: "We are a damned big, important site"

Yahoo! CEO Carol Bartz elaborated on her views on a potential internet search partnership with Microsoft, even as she stressed that Yahoo! was not under any pressure to do a deal and downplayed Microsoft's newly released search engine.

"Yahoo! doesn't have to do anything with Microsoft about anything," Bartz said at an investor conference.

"We are a damned big, important site," she added later speaking at the Bank of America US Technology conference.

Bartz said combining Yahoo!'s search technology with Microsoft could provide important benefits of scale, which could improve the company's monetisation of its service. And she said a partnership could save Yahoo! up to $700m in costs - a more conservative figure than some investors had in mind.

The speech was the second recent comment by Bartz regarding a potential deal. Bartz told the audience at the All Things Digital conference last week that any deal for its search assets would require a partner with a "boatload" of money and the right technology.

The comments also come as Yahoo! continues to lose ground to Google, which has more than 64 per cent share of the US search market, and as Microsoft releases a new version of its search engine, dubbed Bing.

Bartz said Bing will give Microsoft some "uplift" in the search market but will not fundamentally change the competitive dynamics there.

"They're not going to get scale through Bing. They're going to get some temporary interest," said Bartz.

A priority for Yahoo! will be reducing the infrastructure, Bartz said, citing inefficiencies in the development of its various websites and unnecessary hoops that advertisers must jump through to buy ads on its sites.

Asked about how much money Yahoo! could save through a deal combining its search assets with Microsoft's, Bartz said the potential savings were "not much more" than $500m to $700m.

That's less than some of the previous figures that have been cited. A 2008 Microsoft deal proposal, brokered by activist investor Carl Icahn - who now sits on Yahoo!'s board of directors - and separate from the Microsoft acquisition offer for Yahoo!, had pegged the annual cost savings of a search partnership at between $1.1bn and $1.6bn.

Yahoo! responded at the time that no more than $750m of direct cash costs would be achievable from a sale of Yahoo!'s search assets.

"People in the past have thrown around big numbers, but they didn't know what they were talking about. And by the way, there's been many cuts since then," Bartz said on Wednesday.

She also noted that any deal with Microsoft would be akin to Yahoo! buying Microsoft's Office software, and noted, in response to a question, that she believed it might make sense for Yahoo! to purchase Microsoft's money-losing internet assets, instead of the other way around.

Bartz also said the company's top priority in the search business on mobile phones is to attract users, rather than to make money.

"Right now to be honest, monetisation is the last thing on my mind," Bartz said. "I want the audience."

And she said that Yahoo! is not interested in acquiring a large company but small, "tuck-in" acquisitions of technology or content would represent a good use of Yahoo!'s cash.