Kara Swisher

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Bartz Uses Typical Tough Talk to Pressure Microsoft, Even as Bing Shows Some Early Zing

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Well, what else is Yahoo CEO Carol Bartz going to do but talk smack?

Not at BoomTown–that was so two weeks ago!

About potential partner Microsoft, of course!

And, especially about its new Bing search engine.

And, most especially of all, since new stats from comScore (SCOR) yesterday showed that the new look and marketing push for Bing are showing promising initial signs.

According to a post by Digital Daily’s John Paczkowski, “Microsoft’s new search engine boosted its share of the search market to 11.1 percent from 9.1 percent in the last week. And it bolstered the software giant’s search penetration to 15.5 percent from 13.8 percent.”

Those results track on some other early surveys that indicate that Bing has been a good effort for the software giant, which is spending $100 million on marketing it alone.

That’s why, no surprise, No-Holds-Barred Bartz has been out on some kind of speaking tour recently, chatting up a storm about Yahoo (YHOO) and its sunny prospects.

In doing so, she has also thrown water on potential deals with Microsoft (MSFT), Bing and a few other errant issues like a possible hook-up with Time Warner (TWX) online unit AOL.

(Ixnay onway AOLWAY, by the way, say Bartz).

It is all, as anyone not just tuning in knows by now, part of the Internet company’s push-me-pull-you relationship with Microsoft, one that Bartz is taking to new levels.

At the seventh D: All Things Digital conference–exactly two weeks ago today, in fact–Bartz veered into more-positive waters about a Microsoft deal, in a lively onstage interview with me, saying that if Yahoo got a giant pile of money and good data that she was not against the sale of its search business.

And Bartz and Microsoft CEO Steve Ballmer also met while at D7, continuing ongoing partnership discussions.

Then, at an investor conference last week, she tacked negative and said she thought the prospects for the Silicon Valley icon would be “cleaner” without a Microsoft search and advertising deal.

Even better–or worse: “I personally think we would be better off if we never heard the word ‘Microsoft.’”

Those comments cleanly knocked five percent off of Yahoo shares.

Then, yesterday in an interview on Fox Business Network, while dinging any AOL merger deal–which had been discussed by her predecessor, Jerry Yang–as not happening “anytime in the forever future,” Bartz said Yahoo search was strong enough to fight for share with both Google (GOOG) and Microsoft.

And of the Bing gains in early surveys, she noted: “One day is one day…it does not a trend make.”

Well, Bartz hopes not!

That’s why she also carefully–and in an unusually modulated tone for her–kept the door open to Microsoft: “If you talk about search in general, you could partner with somebody.”

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I don’t know about anyone else, but my head is spinning from all the public zig-zagging by Bartz (pictured here).

But, at the heart of it is one fact: When it comes to search, Yahoo has no true strategic alternative–except to spend on marketing and innovation, as much as Google and Microsoft can, to keep up.

Because, with Bing, Microsoft has finally presented a definite challenger to Yahoo’s search product that will likely improve with time.

With the intense marketing, Microsoft is betting it can make Bing stick with consumers for more than just one try.

The jury is still out on that, of course, but combined with the various search distribution deals both Microsoft and Google have grabbed away from Yahoo, it is more than quite possible that Yahoo could lose market share.

And, if that turns out to be more than one or two points, that could mean trouble–from investors, Wall Street, noisy media, to name a few of the most annoying–for Yahoo.

Thus, it is a dicey game of chicken that Bartz is playing, as one person close to the companies said quite succinctly: “She can ride it down or make the deal.”

My prediction: Bartz will keep up the tough talk, but–in the end–make a deal.

[T-shirt photo from Zazzle.com.]


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Values aren’t just for idealists — they matter. If a company’s practices make you uncomfortable, pay attention to your instincts and be true to them.

— Shay Pierce, an OMGPOP employee who says he was the only one not to join Zynga when that company acquired the Draw Something game maker last week