Ballmer rebuffs talks of revisiting Yahoo acquisition

Computerworld - Microsoft Corp. has no interest in reopening negotiations to buy Yahoo Inc., despite Jerry Yang's decision last month to resign as CEO of the troubled Internet pioneer. "Acquisition discussions are finished," Microsoft CEO Steve Ballmer said at his company's annual meeting on Nov. 19 in Bellevue, Wash.

Ballmer did say that he is interested in negotiating a search collaboration agreement with Sunnyvale, Calif.-based Yahoo.

Yang early in November sought in vain to restart talks with Microsoft. It was his last attempt as CEO to turn around his company.

In May, Yang rejected Microsoft's $45 billion offer to buy Yahoo. Then, early last month, he failed to consummate a planned search advertising partnership with Google Inc.

In between, Yang held futile talks with News Corp. about a venture with its MySpace business, and with Time Warner Inc. about merging with its AOL unit.

Analysts said that whoever takes Yang's place must pare Yahoo's product lines to effectively compete in a market that is under siege by Google, Microsoft and a slew of social media companies competing for online advertising.

Yang does not appear to have the "boldness or decisiveness" that someone needs in order to lead a company competing in today's Web landscape, said Andrew Frank, an analyst at Gartner Inc. "[Yang's departure is] a sign that Yahoo needs to really find leadership that can restore confidence in the company."

Yahoo's product line is "a somewhat fragmented portfolio of services and innovations," Frank said. "Rationalizing that portfolio with or without some kind of new partner or merger is going to be very important."

David Card, an analyst at Forrester Research Inc., added that Yahoo's new CEO must decide whether to remain in the search business.

Yang has long maintained that Yahoo must retain its search business because of its potential advertising revenue, Card noted. To date, Yahoo has not been successful in search, so "the new CEO has to make a tough call on whether that is reality or not," he said.

Yahoo Chairman Roy Bostock is leading the search for a new CEO, working with Yahoo's independent directors, Yang and executive search firm Heidrick & Struggles International Inc.

Yang will reassume his former title of "chief Yahoo" once a successor is named.

This version of this story originally appeared in Computerworld's print edition.