UPDATE 2-Yahoo CFO says not opposed to search sale

(Adds more comments from presentation and analyst reaction)

By Alexei Oreskovic

SAN FRANCISCO, Feb 25 (Reuters) - U.S. Internet firm Yahoo Inc (YHOO.O) is "not opposed" to doing a deal that would potentially sell its search business, Chief Financial Officer Blake Jorgensen said on Wednesday.

But he said the search business is deeply intertwined with Yahoo's other online products and properties, and so any deal, whether a partnership or a sale, would be done for the right reasons and the right economics.

"It's extremely difficult to draw a line down the middle of the organization and split it into two pieces," Jorgensen told the Goldman Sachs Technology and Internet conference.

He did not mention specifically Microsoft Corp (MSFT.O), which has repeatedly said it was interested in doing a search deal with Yahoo to compete against market leader Google Inc. (GOOG.O) [ID:nN24398389]

Collins Stewart analyst Sandeep Aggarwal said these comments are signs the language between Yahoo and Microsoft is becoming softer, suggesting the companies could be entering a "more polite negotiation phase."

"The posturing is suggesting more and more likelihood of a Microsoft, Yahoo deal," said Aggarwal, who rates Yahoo a "buy" and whose firm makes a market in Yahoo shares.

Yahoo had rebuffed a $47.5 billion acquisition bid from Microsoft last year, and saw a deal to form a search advertising partnership with Google fall apart amid antitrust concerns.