Update 10:58 a.m. PST: Added latest stock price and detail from a Wall Street Journal article.
Yahoo's new chief executive, Carol Bartz, has told employees her first inclination is to hold onto Yahoo's search business, but said she needs to delve further into the subject, according to a Reuters report citing an anonymous source.
Yahoo shares dropped as much as 9.6 percent to $11.22 a share in morning trading Thursday.
Bartz, who addressed employees during a companywide meeting Wednesday, reportedly indicated she has already had an informal conversation with Microsoft CEO Steve Ballmer since accepting the Yahoo CEO post, according to a report in The Wall Street Journal.
Ballmer has repeatedly said he believes the best thing for Yahoo and Microsoft is for the Internet search pioneer to transfer its search business to the software giant.
Bartz's comments regarding her initial thoughts about retaining Yahoo's search business is a case of "common sense," a source familiar with Yahoo's thinking told CNET News.
"It's the right thing to say to keep people happy, while you figure things out," said the source, noting it's too premature to determine how Bartz will come out with her final assessment on Yahoo's search business.
Meanwhile, people familiar with Bartz's companywide meeting noted her presentation was straight-forward, charismatic, with a touch of humor, and well received by employees.
While Bartz provided Yahoo employees with some insight into her thinking, she was less willing to go down that path Tuesday, when the company introduced her as its new CEO.