Yesterday we heard that shares of Yahoo (YHOO) still had a call option on the possibility of Microsoft (MSFT) takeout in them.
Well, if you’re buying Yahoo, don’t do it because of some fantasy about a seach deal, if you believe the company’s new, outspoken CEO, Carol Bartz
According to headlines crossing the wires from MarketWatch, Bartz told a group in New York that a Microsoft merger would not save on costs (Correction: It appears that particular headline was wrong, and that in fact such a deal would save $500-$700 million, according to Bartz), and that it wouldn’t even get DoJ approval (we’re not sure about that). She added that Bing wouldn’t get anywhere in the search game, except perhaps a small bump. If there are going to be deals, they’ll be with Yahoo as the buyer and they’ll be small.
We’ll update when a full report from Bartz’ speech comes in. Shares of Yahoo are off 4.5%.
Update: Dow Jones has a fuller writeup of the presentation at the Bank of America conference
Bartz set a slightly different tone from her comments last week, when she said at the All Thing Digital conference that she would be open to striking a search deal with Microsoft if it offered “boatloads of money.”
The Yahoo CEO also dismissed Microsoft’s newly revamped search engine, dubbed Bing, as an improvement that will spur temporary interest among users, but do little to alter their long-term search habits.
“It’s interesting but not over-the-top interesting,” she said. “People will keep the same habits.”
That’s actually a great point, and one that Microsoft (for all its me-toos) can’t hear enough. The search game won’t be solved by a competitor making marginal improvements. It can’t just be interesting, because inertia is a powerful. A Google killer has to be radically interesting to break people of their habits, which is why there’s so much more non-manufactured excitement about Twitter’s real-time search (or even Wolfram Alpha, go ahead, laugh) than Bing.