Yahoo search deal better sooner than later

Microsoft CEO Steve Ballmer said a search deal with Yahoo would be better if done sooner than later, but noted it wasn't a factor in the hiring of former Yahoo search executive Qi Lu, according to a report in The Wall Street Journal.

Microsoft announced Thursday that it had hired Lu as president of its online services business. Lu was formerly the vice president of Yahoo's e-commerce and search business. Microsoft has repeatedly expressed interest in acquiring the latter.

In responding to the Journal's question on whether Lu's hiring will make any potential integration of Yahoo's search assets easier for Microsoft, should a deal be done, Ballmer said:

I think a search deal makes great sense for Microsoft, and Yahoo, and I think I've been very open about that. That's as true with Qi joining us as it was before Qi joined us. Obviously, the logistics of any such integration...can only be simpler by having somebody who will know both sides. But that was not a factor in hiring Qi. Our focus on portal and search is super-strong, and even if we never do a Yahoo deal or anything else, I wanted to have Qi come on board. It is kind of a bonus that if something happened with Yahoo I'm sure it's somewhat simpler.

Ballmer noted the two companies are not currently in any talks about a search deal and Microsoft is under no pressure to act on such a transaction.

He added, however, it would be "advantageous" for the two companies to team up on search:

Look, the fundamental basis for doing the search deal with Yahoo has to do with critical mass in the advertising marketplace. It doesn't have to do with technology, or any of these other things, it really is a market phenomenon. Together we would have more advertisers...which means we'd have more relevant ads on our page. We'd have higher monetization levels possible in front of us because there would be more people bidding on more key words. Most importantly, Google would have perhaps a real credible competitor sooner. I think good ideas are usually better done quickly than slowly, so it would probably be better for both of us, and certainly for Yahoo, if we were to do it sooner than later. But at the end of the day, that would have (to) be something Yahoo would be interested in as I have expressed our interest.

Lu, who begins his Microsoft job on January 5, said he plans to zero in on such areas as "talent, core infrastructures, and basic processes," that will improve the quality of the company's products and user experience.