Internet pioneer Yahoo! is open to selling its Web search business or entering into a partnership with another company, but doing a deal would be hard.
Microsoft has expressed interest in Yahoo!’s search business and made a bid for the Sunnyvale, California-based firm last year but Jorgensen did not mention the US sofware giant as a potential partner.
He stressed the difficulties of doing a deal.
“What people don’t quite appreciate is the complexity of the business, and how these businesses are intertwined,” he said. “For example at a data center, we don’t parse between search or non-search.
“It’s extremely difficult to draw a line down the middle of the organisation and split it in two pieces,” Jorgensen said. “It doesn’t say we couldn’t do it, we certainly could, but we want to do it for the right reasons and the right economics.”
Yahoo! rejected a takeover bid by Microsoft last year but Microsoft chief executive Steve Ballmer has said the software giant remains interested in a search partnership with Yahoo!
Speculation of such a deal has been revived with the departure of Yahoo! chief executive Jerry Yang, who opposed the Microsoft bid, and his replacement by new CEO Carol Bartz.
Hilary Schneider, another Yahoo! executive, said that with Bartz’ arrival “it’s really clear there’s a new sheriff in town, and it’s a sheriff with a consumer outlook.”
Google is the overwhelming market leader for Internet search with a market share of more than 63% in January according to research firm comScore, followed by Yahoo! with 21% and Microsoft with 8.5%
The search business is deeply intertwined with Yahoo's other online products and properties, and so any deal, whether a partnership or a sale, would be done for the right reasons and the right economics.
"It's extremely difficult to draw a line down the middle of the organization and split it into two pieces," Jorgensen told the Goldman Sachs Technology and Internet conference.
He did not mention specifically Microsoft Corp. (MSFT, Fortune 500), which has repeatedly said it was interested in doing a search deal with Yahoo to compete against market leader Google Inc. (GOOG, Fortune 500)
The comments come as Yahoo is rumored to be on the brink of undertaking a major corporate reorganization under Chief Executive Carol Bartz, who took the reins in January.
Yahoo rebuffed a $47.5 billion acquisition bid from Microsoft last year, and saw a deal to form a search advertising partnership with Google fall apart amid antitrust concerns.
Bartz has said she did not join the company to sell it, nor did she have a preconceived notion of doing a search deal, but that "everything is on the table."
Yahoo's stock (YHOO, Fortune 500) was up 2% or 27 cents, at $12.75 in after-market trade, after closing down 27 cents in the Nasdaq session.
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