Social networks on Yahoo radar

Social networks are the way forward for Yahoo, its chief executive Carol Bartz has admitted.

Bartz was speaking at the Morgan Stanley Technology Conference in San Francisco, where she suggested that Yahoo might look to partner with social networking companies rather than build its own products in this area.

"It is very clear we have to do that," she said in response to a question about her thoughts on the tremendous growth of social networks like privately held Facebook and Twitter.

However, Bartz also admitted said, "I do not believe we can invent the next Facebook,"

Bartz repeated her philosophy that every business in Yahoo is up for examination as the company seeks to revive growth and better compete with Google.

While she opened the door to negotiations with Microsoft about a search partnership, she stressed the importance of search data to Yahoo's advertising customers.

"So, regardless of whether we manage it or somebody else manages it, that's important," said Bartz in some of her most significant comments about Yahoo's strategy since she replaced co-founder Jerry Yang in January.

If Yahoo and Microsoft decided to talk about a search deal, "We're going to negotiate as companies negotiate, privately." Bartz said.

The comments come a week after Bartz unveiled a major management reorganisation. Investors are waiting to see if the new chief executive can restart deal talks with Microsoft.

Last year, Microsoft made an unsuccessful bid to acquire Yahoo. The software company has said it is no longer interested in buying all of Yahoo but remains open to a search deal.

Bartz indicated that Yahoo is considering various strategies to strengthen its position in important markets, including mergers and acquisitions. She said the company could pursue acquisitions or partnerships to grow its footprint in Europe.