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With Bartz On Board, Next Wave Of Speculation Rolls In

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Carol Bartz was on board as CEO of Yahoo for all of 15 seconds before the assumptions and speculation began — particularly when it comes to making a deal with Microsoft (NSDQ: MSFT). The initial assumption: Bartz was selected, in part, because she can make a deal with Microsoft CEO Steve Ballmer for Yahoo’s search business. She spoke informally with Ballmer the day she became CEO, then followed that with a staff meeting where, by all reports, she made it quite clear that she wasn’t going to jump right into a deal. In fact, according to the Wall Street Journal, she said her “gut” instinct is to keep the search business. The inevitable news leaks sent Yahoo’s stock down. Then another leak revived hopes: a Valleywag report that Ballmer had been spotted talking with Yahoo Chairman Roy Bostock at the Time Warner (NYSE: TWX) Center in Manhattan. (Meeting at Time Warner headquarters, of course, also raises another specter — that of the much-discussed deal with AOL that couldn’t get anywhere late last year.)

What does it mean? The suggestions range from a talk about possibilities now that former CEO Jerry Yang is out of the driver’s seat to the idea — gasp — that Bostock might be trying to cut a deal without Bartz, which strikes me as the least likely possibility 48 hours after hiring a new CEO. What it really means is the speculation circus has moved on from the CEO search back to Microsoft. If Bartz can keep it there, she may actually get some work done on the rest of Yahoo (NSDQ: YHOO).

BoomTown: “Bartz did what she thought best as an opening gambit, showing that she will neither bite nor reject too early, in order to get the best deal she can for Yahoo.”

Update: Kara reports that Bostock and Ballmer indeed met with Time Warner CEO Jeff Bewkes during their field trip to the Time Warner Center.