While Sunnyvale, California-based Yahoo prepared for the Tuesday release of quarterly earnings that are expected  to show continued poor financial performance, the Web pioneer faced uncertainty caused by persistent public statements from Microsoft surrounding a search advertising deal, reinforced Thursday by Microsoft chief executive Steve Ballmer. After the close of the stock market on Tuesday Yahoo will deliver financial accounting for the fourth quarter of a year that saw the company's share prices cut nearly in half, with 29 percent of the losses coming during the quarter. Ballmer Could Make Deal With New Yahoo Chief Executive Carol Bartz Yahoo's quarterly results will be the last of the financial releases from the big three search engine firms, following earnings announced Thursday by Microsoft and Google. Microsoft reported poor financial results and the layoffs of 5,000 employees, about 5 percent of its workforce, while Google fared better with results topping forecasts despite profit that fell 68 percent. With Yahoo now under the reigns of new chief executive Carol Bartz, who last week replaced company co-founder Jerry Yang, Microsoft's Ballmer -- a long-time acquaintance of Bartz -- would like to forge a partnership with Yahoo that he says would help both firms to better compete with Google. "I know Carol Bartz well from the Autodesk days and am glad to see her at the helm of Yahoo," Ballmer said Thursday during a conference call with analysts and reporters that saw him answer the question that has been bandied about since Microsoft withdrew its offer to purchase Yahoo outright: will a search deal take place? "We would like to do one," Ballmer answered. Microsoft has no plans to pursue another attempt to acquire Yahoo outright, it has said, however Ballmer has said he sees advantages to building a search partnership with the company behind the second most used search engine. "I've been quite public about the fact that there are advantages for advertisers and consumers, for Microsoft and for Yahoo through a search partnership," Ballmer said Thursday. Microsoft To Continue Search Investment Despite Layoffs Yahoo shareholders have persisted in voicing concerns over what they view as a missed opportunity stemming from the Web pioneer's refusal to accept a purchase offer worth $47.5 billion, concerns that have increased as Yahoo share prices have fallen to around $11 a share, or about a third of the $33 per share the Microsoft offer represented. Yahoo and Microsoft will discuss a mutually beneficial search advertising deal if it is appropriate, Ballmer said. "If it's appropriate I'm sure we'll have the right  discussions," Ballmer said during the Thursday conference call. Last month Ballmer said that Microsoft would rather see such a deal completed "sooner than later." If a search deal cannot be implemented with Yahoo, either because of anti-trust regulators or through an unwillingness to compromise on the part of either firm, Ballmer has said that Microsoft will continue to invest in efforts to compete with rival Google. "Even as we take out 5,000 jobs, we will also add a few thousands jobs back into areas like search where we continue to see incredible opportunity to do good work," Ballmer said Thursday after Microsoft announced quarterly advertising revenue that rose by 7 percent from the same quarter a year earlier, and profit that fell 11 percent. Yahoo Prepares Earnings Release As Microsoft Reaffirms Desire For Search Deal Yahoo and Bartz will choose whether to pursue a search deal with Microsoft that would likely see the world's largest software maker buying that portion of Yahoo's business outright, although the task of turning around Yahoo's financial troubles will likely involve other options. Some analysts expect Bartz to begin her first year at Yahoo by implementing lowered earnings goals for the company in order to more easily beat the relaxed expectations, and she has all but ruled out major moves until she familiarizes herself with operations at Yahoo. The biggest change Bartz has made since becoming chief executive was the imposition of a pay freeze for the remainder of 2009, however analysts have said that Yahoo may trim more jobs from its workforce during the year. Ballmer meanwhile has also spoken to other Yahoo executives about matters including a possible search deal, including Yahoo chairman Roy Bostock who he spoke with at a meeting last week. Related Links:
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