Will Yahoo CEO move pave way for Microhoo?

Reported plan to name Carol Bartz as CEO removes a key hurdle to any sort of search deal with Microsoft.

Updated 10:10 p.m., with additional comments from a source.

While it's not certain that the appointment of Carol Bartz will ensure a Yahoo-Microsoft deal happens, one thing is clear: nothing was going to happen until Yahoo picked its new chief executive.

With reports that Yahoo is going to name the former Autodesk chief to fill Jerry Yang's spot , discussion logically shifts to whether the long-anticipated Microsoft-Yahoo search deal will now come to fruition.

Microsoft CEO Steve Ballmer has repeatedly said that he remains interested in a search partnership, but noted in an interview last week that it was hard to gauge where things were at with Yahoo amid its CEO search.

"No way to handicap it," he said, when asked how likely a search deal was. "I think at this stage, it's probably fair to say I'm not even sure Yahoo would handicap it."

Although it is always tough to gauge where Yahoo's board is, clearly in Bartz, Yahoo would be getting someone who knows what it is like to partner with Microsoft. (To see Bartz talking about Microsoft and other topics, check out this CNET video package.)

Some analysts have suggested that perhaps the biggest upside to Bartz's appointment would be that it makes a Microsoft deal more likely.

"Yahoo needed a CEO who buys a likely search deal with Microsoft at a philosophical level," Collins Stewart analyst Sandeep Aggarwal said in an interview with CNET News. "Carol likely fits that requirement."

All Things D's Kara Swisher reports that Microsoft has a search deal proposal practically ready to hand over to Yahoo. Swisher said a deal could even be ready in time for Yahoo's earnings report on January 27.

I'm still trying to get confirmation on that front.

Update: No word from Microsoft, but Yahoo's board is apparently aiming to keep its door open.

"It depends on their offer," said a source familiar with the board's thinking. "If they were to come to (Yahoo) with an offer of $33 a share, (the company) would be stupid if to say 'no' now."

CNET News' Dawn Kawamoto contributed to this report.

 

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