UPDATE 1-Yahoo CEO interested in social networks, search

* CEO says social network sites are of key interest

* Any talks with Microsoft on search would be private

* Considering mergers & acquisitions in important markets

SAN FRANCISCO, March 3 (Reuters) - Yahoo Inc (YHOO.O) Chief Executive Carol Bartz said social network sites are a key area of interest for the Internet media company, even as it tries to figure out how to boost its Web search business.

Speaking at the Morgan Stanley Technology Conference in San Francisco on Tuesday, Bartz suggested Yahoo might seek to partner with social networking companies rather than build its own products in this area.

"I do not believe we can invent the next Facebook," Bartz said.

"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.

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 Inc (GOOG.O).

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