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Bartz: A Microsoft Deal Would Save Yahoo About $500 Million

This story was written by Rory Maher.
No foul language this time, but at the Bank of America/Merrill Lynch U.S. Technology Conference in New York, Yahoo (NSDQ: YHOO) CEO Carol Bartz addressed head-on a possible partnership with Microsoft (NSDQ: MSFT). Bartz said such a deal would yield $500 million to $700 million in savings for Yahoo, mostly from cutting data centers and employees. But she reiterated her view that Yahoo doesn't need a Microsoft deal and would only pursue one if the benefits were clear, adding that Yahoo "has a bright future" and would be "cleaner and simpler without a Microsoft connection." Of course, this could just be posturing (what CEO would openly show his/her cards while in talks about a potential partnership?). Other highlights from the session:

Improving revenue-per-user over the next five years: Bartz said she is focused on increasing user engagement and offering ad products that better compete with TV or print ads. In particular, she said Yahoo needs to do a better job being a first stop/gateway on the web (the new homepage aims to address that with more third-party applications), and said Yahoo needs to make the ads it serves to users more relevant. She said Yahoo's ad-serving technology would improve significantly over the next two years.
Product cuts: Bartz said most of the cuts at the company were aimed at creating a better consumer experience rather than slashing costs. For example, she said many Yahoo properties had been launched but then not given much attention; some of those will be discontinued, she said. But she did add that beyond improving its products, Yahoo could make its operations more efficient, saying "everything you can do in three steps Yahoo does in 20."

By Rory Maher