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Steven A. Ballmer, Microsoft’s chief executive, met in New York earlier this week with Roy J. Bostock, Yahoo’s chairman, according to a person briefed on the meeting.
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] and Yahoo [YHOO
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] to come to light this week, and suggests that negotiations over a Web search deal between the two companies could be restarting. On Wednesday, Carol Bartz, Yahoo’s new chief executive, told employees she had had an informal conversation with Mr. Ballmer since she was selected by the board to lead Yahoo.Details of the conversations could not be learned, and spokesmen for Yahoo and Microsoft declined to comment.
In recent weeks, Mr. Ballmer has said repeatedly that Microsoft remains interested in doing a deal with Yahoo involving its Web search and advertising business, and that he favored coming to an agreement sooner rather than later.
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The appointment of Ms. Bartz on Tuesday renewed speculation that Yahoo might be more willing to consider a deal to hand over its search business to Microsoft. Last year, after merger talks between the two companies collapsed, Microsoft and Yahoo discussed various ways to combine their search assets, including an outsourcing agreement or an outright sale of Yahoo’s search business to Microsoft, but the negotiations did not bear fruit.
Some on Yahoo’s board and the company’s top brass, including Jerry Yang, then the chief executive, and Susan L. Decker, who was then president, were cool to the idea of giving up control over the search business. They said that advertisers increasingly wanted to buy search-related ads and display ads together, and that separating the two would not be in Yahoo’s long-term interest.
After the appointment of Ms. Bartz, Mr. Yang returned to his role of “chief Yahoo” and Ms. Decker resigned, though she remains with the company during a transition period.
But many Yahoo shareholders say they believe that short of an outright merger, a search deal would be the best outcome for Yahoo, and have pressed the company to pursue one.
On Tuesday, Ms. Bartz acknowledged that deciding whether a search deal made sense was one of the big strategic questions she faced, but she declined to give her opinion about it. During the employee meeting the next day, she said her “gut” suggested that it was not a good idea, but she added that she would spend time studying the matter. News reports of her remarks caused Yahoo shares to drop more than 6 percent on Thursday. They fell another 2 cents Friday, to close at $11.59.
Word of a meeting between Mr. Ballmer and Mr. Bostock was first discussed by Valleywag, a Silicon Valley gossip blog.
If any negotiations or discussions between the two companies are restarting, they are likely to be preliminary. Two people close to the companies said that currently no investment bankers were involved in any discussions.
Yahoo has also been in on-and-off discussions about a possible merger with the AOL Internet unit of Time Warner [TWX
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], which that company has been trying to sell. The conversations are continuing, according to people close to the companies.
A Time Warner spokesman declined to comment.
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