July 22, 2008 5:51 PM PDT

Posted by Stephen Shankland

Yahoo may have had some bumps in its second quarter, but it's not backing down from forecast for the rest of the year.

The Internet pioneer edged below analyst expectations for its second quarter for both revenue and earnings per share. Specifically, revenue excluding commissions increased 8 percent to $1.346 billion, shy of the $1.37 billion analysts had expected, and net income was 10 cents per share excluding various items, compared with 11 cents expected by analysts surveyed by Thomson Reuters.

Nothing major went wrong, but the company's performance ended up on the low end of a number of financial measurements. One big factor was economic troubles, which Chief Financial Officer Blake Jorgensen said resulted in "softness" for ads in the finance, travel, and retail sectors.

With that in mind, and given that even Google is starting to sound worried about the economy, it's notable that Yahoo wasn't more cautious with its forecast.

Yahoo narrowed its expected full-year revenue from the range of $7.2 billion to $8 billion it issued three months ago to $7.35 billion to $7.85 billion.

Apparently, Wall Street was willing to hear the overtones of optimism in Chief Executive Jerry Yang's words Thursday. Yahoo stock rose 59 cents, or nearly 3 percent, to $21.99 in after-hours trading.

Don't read too much into that, though. The trouble with measuring Yahoo by stock performance is that it's in a foaming sea of possibilities right now with Microsoft's attempt to acquire Yahoo, a deal under which top rival Google will supply search ads and as much as $800 million in new revenue, a major reorganization and executive exodus, and the company settling its differences with activist investor Carl Icahn. Watching the stock is enough to make you seasick, and who can say how many expectations and counter-expectations have been baked into the price?

Frankly, it's remarkable given the number and scale of distractions that Yahoo managed to make an earnings announcement at all. Such complications take a toll on employees, but Yahoo quantified the challenge, too: it spent $22 million on advisers and legal defense costs dealing with Microsoft and Icahn.

One reason that President Sue Decker sounded optimistic is that the company believes it's narrowing the gap with Google in how much money it makes off each search ad.

There are two basic varieties of online ads, the text ads that appear next to search results and the more traditional graphical "display" ads that mirror what you'd see on TV or in a magazine. With the former, advertisers pay only when a user clicks on the ad, but with the latter, the advertiser generally pays when it's shown. Yahoo's hope is to bring the two realms together with unified tools for advertisers and to make it easier to control the complexities of display-ad campaigns.

Yahoo does better than Google in display ads, so it's natural for the company to try to press its advantage there. But even if Yahoo does manage to fire up the display-ad market with better tools, don't expect Google to be left in the dust.

For one thing, Google has fired up its own display-ad work with the DoubleClick acquisition. For another, the search-ad market is twice as big, according to analysis firm eMarketer, which projects U.S. spending on online ads will increase from $25.9 billion this year to $41 billion in 2011. But display ads are a relatively small part of that, increasing from $5.5 billion to $7.9 billion over the same period while search ads--the market Google dominates--rises from $10.4 billion to $16 billion.

One interesting note on the call came with the discussion of the Google advertising partnership. It doesn't look like Yahoo is counting on money from that partnership this year.

To recap its expected effects, Yahoo expects up to $800 million in revenue and $250 million to $450 million in operating cash flow from the Google deal, it said when it announced the deal. Yang said Tuesday that the money will be used to "enhance financial results and be reinvested in the company."

But the Google deal is under antitrust scrutiny right now from the Justice Department, Congress, and the states, and Yang also used a conspicuously cautious term--"if" not "when"--to describe the expected schedule for the deal's going into effect.

"If we implement (it), it would be some time in the fourth quarter, it looks like," he said. That contrasts with the company's earlier statements that it needs nobody's permission to go ahead with the deal and that its three-and-a-half-month delay for antitrust review is purely voluntary.

Carl Icahn doreste sa-si numeasca proprii oameni in conducerea companiei in urma alegerilor ce se vor face pe data de 1 august. Miza este mare, intrucat Carl Icahn sustine ca doar aceasta mutare ar face ca fuziunea cu Microsoft sa se efectueze, Steve Ballmer neavand incredere in actuala conducere.

UPDATE: Icahn primeste din partea lui Yang un loc in consiliul de administratie si inca doua pentru oamenii sai, daca inceteaza razboiul impotriva actualului board (declaratia sa la sfarsitul scrisorii)

Pentru ca apele sa fie si mai involburate, Yahoo a incheiat un acord cu Google asupra publicitatii online, iar in momentul de fata este cercetata de o comisie federala in urma unei plangeri antitrust venite din partea Microsoft.

In noua scrisoare trimisa de Icahn celorlalti actionari, acesta se plange de actuala conducere, ce a refuzat ofertele Microsoft fara a spune actionarilor toate detaliile ofertei. Mai exact, Mirosoft a oferit diverse sume pentru a se asigura ca actionarii Yahoo vor castiga o multime de bani indiferent de ceea ce se va intampla in urma tranzactiei. Dar iata continutul scrisorii:
"Dear Fellow Yahoo! Shareholders:

Over the years I have attempted to make changes at many companies but I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo! has done in their press release issued Saturday night, July 12th.

During the last week, Goldman Sachs called me a number of times asking me to relate to them any transaction that Microsoft might be interested in transacting with Yahoo! I discussed with them the possibility of doing a "Search only" deal wherein Microsoft would purchase "Search" from Yahoo! and pay Yahoo! for any searches that would originate from a Yahoo! content page. Yahoo! felt that a deal of this nature would be very interesting, but only if Microsoft would guarantee the revenue that Yahoo! now received. This would obviously be a great deal for Yahoo! because Yahoo! would, for five years, receive a minimum of the $2.3 billion they are currently receiving as long as they continued to supply the page views and affiliate traffic they now had. Heretofore, Microsoft had been unwilling to even come close to making this guarantee. However, after I negotiated with Steve Ballmer for the better part of a week, he agreed to the guarantee. He also agreed to commit $7.7 billion dollars to the transaction (consisting of a $1 billion payment for "Search", a $2.8 billion loan and a $3.9 billion tender offer to Yahoo! shareholders). Under the transaction, Yahoo! shareholders would receive $16.25 per share in distributions (consisting of cash and securities) and be left with a content company which would have a minimum guarantee of $2.3 billion per year of "Search" revenue from Microsoft and cost saving synergies from exiting the "Search" business that Yahoo! has publicly stated would be $750 million per year (excluding the benefits from reduction of stock compensation and other non-cash items). However, Microsoft believes the synergies from Yahoo! exiting "Search" would be far superior and that Yahoo!'s 2009 GAAP operating income would exceed $2 billion. Microsoft would be making a substantial equity investment in the remaining company at a valuation of $19.50 per share. Furthermore, Yahoo! would be spared the great expense of maintaining "Search" as well as having to spend billions in developing new technology to compete with Google and Microsoft - which it is highly doubtful they would be able to do successfully. Additionally, Yahoo! would be able to avoid the great risk of seeing "Search" continue to lose market share and eventually melt away.

I spoke to Goldman Sachs and Roy Bostock on Thursday concerning the breakthrough with Microsoft. A call to discuss the details of the transaction was then set up among Microsoft, Yahoo! and me on Friday afternoon, July 11th. However to my surprise and consternation, on the Friday call Yahoo!, instead of being interested in the Microsoft offer, seemed to me to be focused on who would be running Yahoo!. Finally, Steve Ballmer suggested that we not spend the rest of Friday afternoon on corporate governance. "First tell us if you like the deal," he said.

The Yahoo! Press Release

a. Yahoo! in their Saturday night press release makes much of the fact that they were only given 24 hours to decide on the Microsoft offer because of the time constraints relating to the proxy fight, but neglects to mention that they were offered more time if they would be willing to postpone the annual meeting for a short period.

b. Yahoo! conveniently neglects in its press release to tell you about the extremely important above mentioned guarantees that Microsoft was willing to make;

c. Yahoo! tells you in their press release that a condition of the deal was the immediate replacement of the current board and removal of top management. Yahoo! neglected to mention we were willing to discuss keeping a number of the current board members and Jerry Yang as Chief Yahoo!

d. Yahoo tells you the Microsoft proposal precludes the potential sale of all Yahoo! however, they neglect to tell you that that train has left the station in that Microsoft is no longer willing to buy all of Yahoo! with the current board overseeing the company.

e. Yahoo!'s press release states that "this odd and opportunistic alliance of Microsoft and Mr. Icahn has anything but the interest of Yahoo stockholders in mind", raising the innuendo that I am on Microsoft's side in this manner. That is patently ridiculous. Since Yahoo! failed to consummate a transaction with Microsoft this year, I have spent hours and hours attempting to get the parties together because I believe that it is beneficial to Yahoo! shareholders to have a deal with Microsoft and I have worked hard trying to make it happen. It is important to note that my funds and affiliates own 70 million shares of Yahoo and own no shares of Microsoft or Google while the current board outside of Jerry Yang owns only the shares they have received from Yahoo for being directors. My interests are aligned with yours and not Microsoft and I think it is in our interest to have this transaction consummated so that we can get value much in excess of the recent and current market for Yahoo! shares.

In June, Microsoft apparently made a $33 per share offer for all of Yahoo! which was met with Yahoo countering at $37, thereby rejecting the $33 offer. Amazingly, before Microsoft decided that it would not buy all of Yahoo! with this board in place, it offered $33 and was turned down. The Yahoo! press release indicates that Yahoo!, in rejecting the current Microsoft proposal, stated that it would do a deal in which the entire company was sold to Microsoft for $33 per share. It is hard to understand why it turned down $33 and is now willing to accept it. It is the same obfuscation that is so prevalent in the rest of the press release. DON'T BE FOOLED.

I believe that, just like the $33 per share offer that was refused by Yahoo! in early June, refusing the Microsoft offer for the Yahoo! search business is also another grave mistake that will be deeply regretted. Our company is on a precipice and our Board seems ready to take the risk of seeing it topple - ARE YOU, THE REAL OWNERS OF YAHOO!, WILLING TO TAKE THE SAME RISK?

The following are the details of the offer that was presented by Microsoft to Yahoo! on Friday.

$/share should:
Value to Yahoo! Shareholders No Shares Tender All Shares Tender

1. Yahoo! distributes $12.5B in
Asian Assets $9.00 $9.00

2. Yahoo! distributes $3.5B in
cash to shareholders comprised of
$1B from Microsoft for search,
$2.5B of cash on hand $2.50 $2.50

3. Microsoft offers $2.8B in
preferred debt at 5% $2.00 $2.00

4. Microsoft tenders $3.9B for
Yahoo! shares at $19.50 - $2.77

5. Remaining Shares
$16.73 = effective value of shares
after tender (86% x $19.50) $19.50 $16.73

Total Value To Yahoo! Shareholders $33.00 $33.00

Search Deal Would Increase Yahoo! EBIT to over $2B in CY09 - remaining share valuation represents 14.5 x GAAP pre-tax income

- Microsoft acquires Yahoo! search assets for $1B in cash

- Microsoft is the exclusive provider to Yahoo! and its partners of paid search, contextual search and algo search for the term of the deal

- Microsoft guarantees Yahoo! the greater of:

(a) 85% net revenues for the first three years, and 70% of net revenues thereafter,

or

(b) $2.3B per year of after-TAC revenues scaled down in event of underperformance of Yahoo! US Homepage views and affiliate rev.

- At the end of 5 years, the agreement expires unless Microsoft or Yahoo! exercise one of the following:

- Microsoft may extend the agreement for 5 years should Microsoft guarantee $3B net revenues per year

- Yahoo! may extend the agreement for 5 years with Microsoft bound to guarantee $1.6B per year

- Yahoo! no longer needs to support the costs of employees or infrastructure of the search business.

- Microsoft will cooperate with Yahoo! to allow Yahoo! to collect data from its web search to support its display advertising business.

- Microsoft will provide Yahoo! with a limited, non-exclusive IP license for use of search IP in support of its display advertising platform.

- Yahoo! will guarantee that Microsoft's search will retain equal or greater prominence throughout the Yahoo! site as Yahoo! search does today.

Steve Ballmer has made it clear to me that if a new board consisting of my nominees were to be elected, Microsoft would be willing to enter into discussions immediately regarding a transaction along the lines described above. If and when elected, I strongly believe that in very short order the new board would, subject to its fiduciary duties, be approving an offer along these lines for its shareholders.

PLEASE VOTE THE GOLD PROXY CARD

Your vote is important. Please act at your earliest convenience.

If you've already signed and returned Yahoo's WHITE proxy card, you can revoke that vote and cast a new vote by completing, signing, dating and mailing the GOLD proxy card today.

If your shares of Yahoo Common Stock are held for you by a broker or bank, only your broker or banker can vote your shares and only after receiving your specific instructions. In that case, you are asked to complete, sign, date and mail the voting instruction form today. Please do so for each account you maintain.

If you need assistance in voting your shares, please call D. F. King & Co., Inc., which is assisting us, toll-free at 800-859-8509.

Thank you for your patience, cooperation and support.

Sincerely,

CARL C. ICAHN"

Update, declaratia lui Icahn dupa anuntul lui Yang:

“I am very pleased that this settlement will allow me to work in partnership with Yahoo!’s Board and management team to help the Company achieve its full potential. While I continue to believe that the sale of the whole Company or the sale of its Search business in the right transaction must be given full consideration, I share the view that Yahoo!’s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders. I believe this is a good outcome and that we will have a strong working relationship going forward.”

For starters, the software giant's search-only proposal "did not include changes to Yahoo's governance."

In other words, it was Icahn, the other half of Microsoft's joint proposal, who was asking for all Yahoo board members and top management to resign immediately. But even Icahn, in his letter to shareholders Monday, noted he was willing to discuss keeping some of the Yahoo directors around, and even founder Jerry Yang as "Chief Yahoo."

Microsoft also contends its sweetened offer has been incorrectly portrayed as a "take it or leave it ultimatum," rather than a "timetable" to push negotiations forward. Yahoo, in its investor presentation, notes that Microsoft gave the company only 24 hours to consider its proposal.

Here is the text of Microsoft's statement:

On the evening of July 12, Yahoo Inc. released a statement relating to recent discussions involving Yahoo, Microsoft Corp., and Carl Icahn. Microsoft believes the statement contains inaccuracies that need to be corrected. Among other things, the enhanced proposal for an alternate search transaction that we submitted late Friday was submitted at the request of Yahoo Chairman Roy Bostock as a result of apparent attempts by Mr. Icahn to have Microsoft and Yahoo engage on a search transaction on terms Mr. Icahn believed Microsoft would be willing to accept and which Microsoft understands Mr. Icahn had discussed with Yahoo.

Specifically, on Thursday afternoon, July 10, Mr. Bostock called Steve Ballmer's office to arrange a call. On that subsequent call, Mr. Bostock told Mr. Ballmer that "with substantial guarantees on the table and an increase in the TAC (traffic acquisition cost) rate, there are the pillars of a search only deal to be done." Mr. Bostock encouraged Mr. Ballmer to submit a new proposal to Yahoo! for a search-only deal reflecting these terms.

After considering Yahoo's request and taking into account Yahoo's previous feedback about our prior search proposal, Microsoft determined late Friday to propose an enhanced search transaction. This proposal included significant revenue guarantees, higher TAC rates, an equity investment and an option for Yahoo to extend the agreement over a 10-year period.

Microsoft's proposal did not include changes to Yahoo's governance.

At the time Microsoft submitted its enhanced proposal, Microsoft asked that Yahoo confirm whether it would agree that the enhancements were sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets. This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations. Yahoo informed Microsoft on Saturday that it had rejected the proposal.

Yahoo announced Saturday night that it rejected a joint-buyout proposal that Microsoft and investor activist Carl Icahn offered the night before, which called for a "complex restructuring" and sale of Yahoo's search business to Microsoft.

The joint proposal, issued Friday night, gave Yahoo a 24-hour turnaround to accept or reject the renewed offer. It called for Microsoft to buy the search business and Yahoo to swap out its board members for Icahn's dissident slate, who would then have control in running the remainder of Yahoo's businesses.

Microsoft did not have an immediate comment Sunday morning.

Yahoo's board, after consulting with its legal and financial advisers, rejected the offer Saturday night based on a number of factors, including:

Yahoo's existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.

The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo for a full and fair price, including a control premium.

The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo's remaining non-search businesses which would be overseen by Mr. Icahn's slate of directors, which has virtually no working knowledge of Yahoo's businesses.

The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo. The Yahoo Board believes these moves would destabilize Yahoo for the up to the one year it would take to gain regulatory approval for this deal.

Yahoo said in rejecting the offer it told Microsoft it was willing to sell the entire company for at least $33 a share and its board believed such a deal could be negotiated and executed before its annual shareholders meeting on August 1. Yahoo said it also informed the software giant it remained willing to negotiate an "improved search only transaction."

Microsoft, however, rejected both offers, Yahoo stated.

Yahoo did not disclose the financial terms that Microsoft and Icahn were willing to offer in the proposal.

Icahn, which is running a proxy fight against the Internet search pioneer to unseat its board at its annual shareholders meeting, delivered the proposal to the search pioneer.

And although Yahoo's board "acknowledges that the current proposal contains a number of improvements over Microsoft's earlier proposal," the Yahoo board's believed this latest proposal is not in its shareholders best interests. It cited these issues:

The revenue guarantees suggested, which are conditional and subject to reduction, are well below the search revenue that the company is expected to generate on its own and in association with its announced commercial agreement with Google. That agreement alone is estimated to generate $250 to $450 million of incremental cash flow for the first twelve months following implementation, while allowing Yahoo to remain a principal in paid search.

The success of the remaining company is critically dependent on Microsoft's ability to effectively monetize search.

Microsoft/Icahn's proposed Traffic Acquisition Costs rates are below market.

The proposal calls for Yahoo to sell its industry-leading algorithmic search business and its related strategic and valuable intellectual property portfolio for no incremental consideration.

Many of the components of the headline value that Mr. Icahn and Microsoft put forward, such as the spin-off of the Yahoo's Asian assets and the return of cash to stockholders, are steps that could be taken by Yahoo on its own and the board continues to evaluate these options.

Yahoo Chairman Roy Bostock characterized the efforts by Microsoft and Icahn as "erratic and unpredictable" and said that it would be "absurd and irresponsible" for the Internet search company to engage in a complex deal that would remove half of its business and do it without Microsoft dealing directly with the company's management.

"Microsoft and Mr. Icahn are trying to dismantle the company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo stockholders. We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming (shareholders) vote," Bostock said.

According to a report in The Wall Street Journal, Microsoft initiated discussions with Yahoo:

The proposal came together in recent days. Microsoft's general counsel Brad Smith initiated the talks with a phone call to Ron Olson, the lawyer for Yahoo's independent directors a few days ago, according to a person familiar with the matter. Subsequently, Microsoft CEO Steve Ballmer, Mr. Icahn and Roy Bostock, Yahoo's chairman, discussed the proposal over several phone calls, this person said.

That move apparently came despite a statement by Microsoft on Monday that it "concluded" it could not reach agreement with Yahoo's board and it would be interested in discussing either a search only acquisition, or purchase of all of Yahoo, with a new board.

And on Friday evening, according to a report in The New York Times, Icahn and Ballmer made their proposal. The Times further notes Yahoo's board and advisers discussed it in a meeting that lasted between four to five hours.

Microsoft's sweetened search buyout offer, a concept CNET News first reported on three weeks ago that the software giant was considering, showed improvements over its initial search offer to Yahoo that was worth $9 billion.

One improvement, according the Wall Street Journal, included revenue guarantees that would span five years, compared with its previous offer of three years.

Posted by Dawn Kawamoto
CNET NEWS.com

And while Googlers can't claim that their shit don't stink, they can say that their butts don't. Forget about the Google Bot, we're talking Google Butt. Yes, Google employees' butts are smiling because they're getting some pretty hot toilet seats. Check out the the Washlette.

Check out HateThePlayer's Others Pimpass Blog Posts here.

John Song blogs about how Competition Drives Performance.  Based upon John's competitive experiences, he illustrates how the thrill of competing on the golf course can drive performance...even if it's for only $2.

Tamara Dull finally gets a moment to blow the dust of her blog...and gets her own domain name http://www.tamaradull.com. 

Michael Arrington talks to Yahoo's CTO about moving beyond the Microsoft deal.  I blogged about the risks and strategic nature of a potential Microhoo back in February.

I've been doing a lot of interviewing and hiring lately and my friend Robert Hacker provides some practical advice on interviewing.  Coincidentally, Robert and I are both celebrating our one year anniversary of blogging.  Robert does a much better job of describing the makeup of his audience.  Perhaps that is a function of Robert using Typepad vs. Wordpress.  Though I like Google as a platform, their Blogger platform is not as robust in this area as Wordpress. 

Bill Gates bids farewell to his full-time duties at Microsoft.  Watch Tom Brokaw's full interview with Bill.  I was particularly impressed with Bill's ideas on trying to motivate corporations to use their strength for helping poor people in the world.  The entire interview is very inspiring. 

The new structure leaves Chief Executive Jerry Yang and President Susan Decker at the top of the org chart. As expected, Ash Patel and Hilary Schneider will report to Decker, with Patel leading a new audience products division, and Schneider in charge of go-to-market operations for the United States region.

In addition, a third, as-yet-undetermined executive will report to Decker. That executive will run an "insights strategy team," with responsibilities for centralizing and running a Yahoo-wide strategy regarding use of data and analysis. The new executive will be named in coming weeks, Yahoo said Thursday.

Ash Patel will now report to Yahoo President Susan Decker.

(Credit: Stephen Shankland/CNET News.com)

The company also is forming some new groups. One, an audience technology group, will be led by Venkat Panchapakesan. Another group will focus on cloud computing and data infrastructure.

Yahoo underwent an executive exodus in the last two weeks, losing three executive vice presidents, two senior vice presidents, and others. It's not clear to what extent those departures were the cause or the result of the reorganization plan, but Decker indicated in a statement that the reorganization has been under way for months.

"The changes we're making today will help deliver superior global products for users and enable faster and better decision-making," Decker said in a statement. "This is a logical next step in light of our success last year in moving to a more centralized approach to developing world-class marketing products.

"We have planned these changes deliberately over the past several months to clarify responsibilities and to capitalize on the scale advantages while allowing for fine tuning to meet local market needs."

Apparently at least some of the executive changes were involuntary.

"Some of the attrition we had was voluntary, and others were deicsions we made because we wanted to take the company in a new direction with leadership," said Scott Dietzen in an interview. He joined Yahoo through its 2007 acquisition of online e-mail provider Zimbra and now also runs Yahoo Mail and Yahoo Messenger.

Yahoo has been suffering punishing pressure. In addition to steady business pressure from Google, it's been trying to fend off an unwelcome Microsoft takeover attempt, hammer out a narrower Microsoft partnership, fight a proxy battle with investor Carl Icahn, and begin a deal under which rival Google will supply Yahoo with search ads.

So it's no surprise there's major change. In fact, it's a safe bet there will be more major changes soon.

In the new order, Patel will oversee several consumer products available worldwide. Among those reporting directly to him Dietzen, now also runs Yahoo Mail and Yahoo Messenger. Another is Tapan Bhat, who ran Yahoo properties including Buzz, My Yahoo, and the main Yahoo.com page, and who under the new structure also runs Flickr and Yahoo Groups.

Patel's work had been overseen by Jeff Weiner. Brad Garlinghouse, who's leaving this summer, had run the new work moving to Dietzen and Bhat.

Hilary Schneider

(Credit: Stephen Shankland/CNET News.com)

Schneider and her peers will have the profit-and-loss responsibilities, though.

Yahoo already had executives in charge of other regions: Toby Coppel for Europe, Rose Tsou for Asia, and Keith Nilsson for emerging markets. They and Schneider are in charge of signing up advertisers, cutting business deals, and working with Yahoo partners.

Meanwhile, Chief Technology Officer Ari Balogh, who still reports to Yang, is in charge of building and running the Yahoo's technology.

Balogh's Audience Technology Group supports Patel's consumer products, with tight ties to corresponding product managers within Patel's group. And his cloud computing group initially will focus on providing internal services to the company--though that could change over time, he said in an interview.

"The primary focus is internal. But much like Amazon and Google, when you have something at scale and integrated, there are opportunities to offer services," Balogh said. "Based on some innovations, we may be able to leapfrog."

Reporting to Balogh in the search domain are David Ku, leading the advertising technology group, Prabhakar Raghavan leading search strategy, and Tuoc Luong, leading search products on an interim basis, Yahoo said.

Commentators are speculating whether Ballmer is playing a game and wondering if he will be back to the table, the answer is yes - after Yang & Co have twisted in the wind for a while.

I've said it many times before but Microsoft must be crazy. Even if they got Yahoo for free it would be a waste of money. TC says:

Another source at Microsoft reiterates to us that they’re a buyer at the right price, but isn’t saying what that price is.

I predict that price is - ding - $31 per share.

One line stood out for me in the DCK article:

• No More Uncertainty for Dupont Fabros: Leases with Microsoft and Yahoo account for nearly 70 percent of the revenue for Dupont Fabros, one of the major data center REITs. We don't think there was ever a great deal of risk to Dupont Fabros or its investors from a Microsoft-Yahoo deal. During the merger talks, Hossein Fateh, President and CEO of DuPont Fabros, told analysts that that "discussions with Microsoft and Yahoo have not yielded any concerns about the current leases or potential expansion." Still, it's better to have your two largest customers in expansion mode than merging with one another.

I decided to dig a bit deeper and take a look at the DFT Stock price since the announcement to walk away, and I was a bit surprised and had to ask myself, 'Whats wrong with DFT investors?'  Or perhaps the question is, what do they know that the rest of us dont?

Since the decision to continue on their on way, Yahoo has taken additional space from DFT and also from Digital Realty Trust.   In fact, of the Big 3, Yahoo is the most likely to take down leases.   Yet we have seen absolutely no movement (other than down in their stock price).  Is it because the Data Center Industry is too complicated for investors to figure out?  One thing is for sure, its something we should be watching closely.

Answer – they've all launched an 'open' platform for developers in the hope of stimulating or rejuvenating their core business. It seems that in the web world, once a company hits a certain size/maturity level that throttles and chokes the development of new ideas, the trend is to throw out an element to the developer space in the hope that something better will come from it. But is that always necessarily the case? They could just sell stuff.

Let's compare that notion to Amazon who launched S3 and their suite of web services with an immediate openness so that it would be embraced from the word 'go' by developers as a strong yet flexible tool. Granted it's in a different arena, but is there something to be said here about having an open strategy from the beginning of a business' operations?

As well as opening up another chunk of their site, Ebay have partnered with a Vietnamese startup. This type of behaviour is not new from Ebay who, quite sensibly, have in the past collaborated or acquired national/local level auction sites in Asia to gain the specialisation of language and culture. One wonders if they'd adapt their structure in the future to take the trading down to a much more local level in Craigslist style, or if they'd look to go social by pushing their own messaging systems and allow greater in-site sharing on top of their current activities loading Ebay widgets into every other social network on the web.

When putting my face on the Zuckspace, my concerns lie primarily in what the media and authorities tell me about privacy, and then my experience as a consumer begins to become tiresome with the constant nagging of a thousand different invitations to join up to some virally marketed application with zero useful functionality. Imagine a parallel world where from day 1, Mark had opened doors on thefacebook to the developer community and attracted business through being 100% public about changes to services, rather than the 'by-the-way we added this' approach. Myspace wouldn't have stood a chance, and maybe we'd have a half decent set of apps that are useful for our daily routines. It sickens me how much VC money goes into widgets and such, with no real revenue coming back out.

I think openness is something that business analysts should start to use to gauge the level of maturity or desperation of a company. Perhaps in some instances it's just something of a gimmick in which case the company in question should be exposed as a surfer of the trend wave. Opening a developer platform or a part of your product is a huge move, and any company taking steps down that path should learn to walk before they start to run. I look forward to a time when VCs and angels see in potential investments the strength of an idea that embraces community, social and open concepts in a sensible and straight-forward blend. As the last couple of years have seen the web turn social, it is certain that the immediate future holds for someone the opportunity to make a big win by finding the perfect business model and in my opinion that will find its roots in the beekeeper open source example.

Openness for the purpose of having some hope to clutch on to as your firm levels off isn't something anyone should push for, so instead we should ask these maturing companies to get smart and openly talk to each other. The future lies in good communication and the portability of services. EA Maxis have released their new game Spore which is the perfect example for what I'm trying to illustrate – there's a real market out there for products that make sharing information simple and that blur the boundaries between our online and offline experience. The ability to make YouTube videos of game play and add them in-game is incredible, and I hope that GameVee take note of where games like Spore are going, and try to get some good partnerships in motion with game makers.

The directions that companies in the general tech but especially web2.0 fields need to be looking at are vertical (online and offline - helped already by Google Gears and Yahoo! Browser Plus), horizontal (desktop, laptop, giant plasma screen, UMPC or cell/mobile/smart phone – lets have a seamless experience wherever) and everything else in between which I'm naming 'diagonally' for want of a better word (integrating and cooperating with services provided by others that could make for sensible partnering and sharing). We're all still waiting on total perfection in the 'horizontal' direction: I'm talking about mobile browsing and the recognised unfulfilled potential.

The latest developer craze is surely all about Apple's shiny new iPhone (or not). VC activity is bound to go off the scale as startups show the world how you really make use of a platform. I'm praying that mobile platforms generally, whether Android or LiMo or iPhone, find productive and helpful apps housed, and that they don't spin out of control like social network platforms have all seemed to. I'd love to be able to take 'digital nomad' really mobile... or rather, on my mobile. Currently that project is, for me, simply limited to getting all my operations inside a browser.

Firefox 3 has been officially released today, and hopefully now that's out of the way Mozilla can take a step back and analyse their next moves on mobile platforms. Being a browser maker, they certainly sit in a favourable position, one in which they could stand to soak up an even greater number of users should they adapt products for 'touchy' devices.

Unsurprisingly RIM's Blackberry line up contains a touch phone, and the phrase 'line up' is the exact reason that they're going to keep making money despite just how great the new iPhone might be – there's so much more choice for consumers. Besides, let's not forget the business users that swear by them and their hardcore functionality.

Now that Windows 7 is in motion and we have days of staring at our grubby finger prints to look forward to, I think it's high time that Windows Mobile caught up with Apple's shiny software. I make no apology for using the word 'shiny' twice next to 'Apple' - I'm no Mac Fanboy, I just think they deserve credit for making flashy (even though, laughably, Adobe Flash STILL isn't on the iPhone) gizmos that everyone else can copy and make more practical. Microsoft need to push and push their speed at rolling out products and services because I don't think it'll be long now before their competitors gain enough market share and publicity to make everyone locked into their brand able to see the shiny stuff and lust after it.

Talking about the Big 3 (and AOL) is unavoidable in this blog post, and I'm not sorry about that. I've been avidly following this drama for months and have watched Microsoft's obsession with joining the online advertising business grow. I strongly agree with Henry Blodget's latest comment that this isn't what Microsoft needs, it should focus on corporate business and make its core products so strong that they keep hold of their oligopoly.

I ca(h)n't take this (bad pun? I don't care) obnoxious muscling in on affairs and trying to force a sale just as much as I can't believe how resilient (perhaps arrogant) Jerry has proven to be. He's frozen the hiring, offered up a package to his quitting employees, and signed the deal with Google. Most incredible of all is just how severed any ties are with Microsoft and how badly this is reflecting on stock, as raised by NYT's Joe Nocera. So what's next?

I was so convinced at one stage that Microhoo would happen, and now it hasn't I'm keeping my lips sealed. Others have not, and think that whilst Yahoo! would do well from acquiring AOL, it's not going to happen because Microsoft will continually inject an offer that's higher than Jerry's, both out of spite for that poison pill and to feed the ad obsession.

One thing is certain however; with Yahoo! out of the game; the only real competitor to Google is Microsoft.   Regardless of the quality of their product at this point in time, they are the only real player that can challenge Google's Dominance in Search.  What strange here for me is that Microsoft is the clear underdog, and Google is the monopolistic giant.   I really liked what a combined Yahoo Microsoft could potentially do for the industry. But it was not to be.  Alas, poor Microhoo, I knew him well.

Esto Está Más Aburrido Que Ver A Dos Ordenadores Copiando Archivos. Según Se Ha Informado, Yahoo! Y Microsoft Han Concluido Sus Conversaciones, Sin Llegar A Ningún Acuerdo. Microsoft Ya No Pagará 33 Dólares Por La Acciones De La Y!, Las Acciones Están Cayendo En La Bolsa, Los Accionistas Están Enojadísimos... Y En Unos Minutos Yahoo! Estaría Por Anunciar Algún Tipo De Acuerdo Con Google.

Fuente

]]> http://enzofabioarcangeli.wordpress.com/?p=168 Thu, 12 Jun 2008 22:28:23 +0000 enzofabioarcangeli http://enzofabioarcangeli.wordpress.com/?p=168 BREAKING NEWS

MICROHOO TELENOVELA AT A NEW TURNING POINT?

YANG CONFIRMS HIS OWN (ALMOST SUICIDAL) CHOICE:

BETTER A GOOGLE SATELLITE THAN EATEN BY MICROSOFT.

HE'S RIGHT OF COURSE,  PROBLEM IS: IS HE STILL IN COMMAND OF YAHOO? PROBABLY YES, HE IS. BECAUSE ICAHN's ASSAULT IS FULL OF CONTRADICTIONS: by such a  mono-mania of selling to Ballman, the stupid Icahn undervalues Yahoo (against the  shareholders' interests, he pretends to represent), he has no alternative and  - by definition - no strategic menu,  view of technolgy nor any idea of how to shape an industrial, a development plan for Yahoo. THESE IDIOT FINANCIAL MEN don't know anything about anything.  Had this to be the last stage of the M.HOO telenovela (who knows?), all the pressing by Microsoft along 2007-08 had just the result to cut out Yahoo's independence space, and push it into Google's   area, withuot Google having to spend a single cent. WE WAIT FOR ICAHN TO ASSAULT MICROSOFT, AND ASK FOR STEVE BALLMAN'S HEAD ...

YHOO shares (see graph below) lost 10% today, Thursday, closing at $23.52 (30% down from $33 MSFT offer).

WSJ

Yahoo Inks Google Deal        Yahoo reached a search-ad pact with rival Google, uniting the systems of two industry giants and dealing a blow to Microsoft. Yahoo said acquisition talks with Microsoft have ended, sending Yahoo shares tumbling.  7:02 p.m. • Deal Journal: Who Played It Worse -- Microsoft or Yahoo? Yahoo destroyed itself to save itself. Microsoft tried to get stronger, but only ended up exposing its own weakness. Somehow Google emerged triumphant, effectively neutralizing its two biggest competitors. That is what makes the Yahoo-Microsoft nonmerger such a spectacular failure. Never have so few failed so many for so much at stake. Associated Press Consider the state of Yahoo now: Thrust into the arms of Google, it now is forced to admit it can’t develop the technology to compete head-on with the Googleplex. It is as if IBM were to admit it could no longer build a big server, or Toyota were to give up on the Corolla and start selling Honda Civics.

      Yahoo Ends Talks With Microsoft, Nears Search-Ad Deal with Google By MATTHEW KARNITSCHNIG

Microsoft Corp. has definitively abandoned its pursuit of a deal with Yahoo Inc., people familiar the matter said, opening the way for Yahoo to complete a search advertising pact with rival Google Inc. Microsoft told Yahoo it was no longer interested in a pursuing a takeover, even at the $33 per share price it offered for the Internet company last month. Shares of Yahoo plunged on the news, dropping 11%, or $2.88, to $23.27 on the Nasdaq Stock Market. The decision likely spells the end of Microsoft's five-month pursuit of Yahoo, a deal it characterized at the time as essential to its strategy of countering rival Google. In retrospect, Microsoft's unsolicited approach appears to have badly backfired. Instead of winning Yahoo's huge audience and online search capabilities Microsoft has driven its quarry into the arms of its arch enemy -- Google. The deal unraveled last weekend, at a meeting between Yahoo directors and Microsoft representatives. At the meeting, Microsoft made it clear that it was no longer wanted to pursue a larger deal, the people said. The two companies have been in discussions in recent weeks over an alternative transaction that would have involved Microsoft acquiring Yahoo's search business but Yahoo concluded that such an arrangement was unworkable. The company now plans to pursue a search advertising pact with Google, a deal that could be announced as early as today. Details of the plan weren't immediately clear but the two companies have been discussing a deal under which Yahoo would outsource its search advertising to Google. Analysts believe such a deal would significantly increase Yahoo's cash flow because Google's system generates significantly more revenue for each search query than Yahoo's does. Write to Matthew Karnitschnig at matthew.karnitschnig@wsj.com  

update of this article: 

http://online.wsj.com/article/SB121329534659368693.html?mod=hps_us_whats_news

"When 'Take my ball and go home' meets 'hard ball', hard ball always prevails." - TechHermit

l Like most of you I have been following the day time drama known as 'Microhoo' for some time.  As I read the constant back and forth between the Microsoft <-> Yahoo <-> Icahn craziness (the latest of which can be found here), only one thought pervades my mind.  That thought is "Jerry Yang, you have already lost."  Regardless of the outcome Jerry Yang's reputation is certainly shot and his ability to lead the failing portal engine will decline unless some kind of miracle materializes very quickly.  

Don't get me wrong, I think Jerry Yang is a genius.  One of the true technological visionaries who have had a dramatic effect on every human who uses the Internet.  In fact, without Yahoo, there would be no Internet Search business to think off in my opinion.   The problem of course is that he is a technology genius and not a business genius.  One of the biggest and most important distinctions between himself and Microsoft's Ballmer. 

For all his crazy on-stage antics, Ballmer is a classically trained Harvard business grad who has brought his business acumen to the technology sector.  Like him or hate him, the man has been successful in running the world's largest technology business with increasing revenues year over year even after the transition form Bill Gates showing he has the chops for the job.   In recent weeks, through the disclosure process, it has come to light that Yang has snubbed Microsoft's advances a couple of times and that his approach has been less than customary in terms of dealing with his shareholders.  It seems Mr. Yang has fallen prey to that long held problem we all have, pride.  This time however pride may prove to be his undone.

In effect, Yang's persistent "Tale my ball and go home" attitude has back-fired.   While I am not a conspiracy theorist, I can just picture what happened next. Ballmer, tiring of the little know-it-all snot pulled out his hard ball. 

First he made his private offer public, doing two things, first artificially raising Yahoo's stock to an untenable position. Secondly, he did the one thing that Yang refused to do, inform his shareholders directly.    The offer was astounding, any business person would take that kind of deal if they were in it solely for the shareholders.  But remember, Yahoo! is Yang's baby.   Hubris setting in Yang once again rebuffs Ballmer. 

Ballmer announces that Microsoft is pulling its offer from the table.   This causes a drop in the Yahoo share price.  Not as much as Ballmer wanted I believe, but a drop nonetheless.   As Ballmer and Microsoft have a lot more experience in actually running a business on the stock market, they know a lot more players.  One could imagine a conversation between Carl Icahn and Ballmer extolling the lost opportunities.   Of course this is hypothetical, but out of nowhere Icahn comes rushing in threatening all out revolt and Yang's head on a stick.   Microsoft now stands as an observer  as Yahoo! begins to cannibalize from within.   Yang reaches out to Microsoft once more, knowing he is in deep trouble.  This time for a portion of the business.  At the same time he begins experimenting with Google Search.  The revolt continues to roil, again Microsoft outside the fray watches intently.  

July will be an interesting month.  I firmly believe that Icahn will prevail.   He has an incredible record for this kind of thing.   Yang will forever be damaged goods in terms of running a company (not that a guy with that much money really cares, mind you).  Microsoft can then swoop in and get a great deal.  The market is already turning and huge amounts of shareholder value are being lost to timing.   

Lets pretend that through some miracle Yang makes it through.  His track record to date, combined with a sagging economy will ensure his victory is short-lived.  Perhaps another year but no more.   In the end, the Microsoft 'hardball' will have neutralized Yahoo! as a long term player.   While Yahoo! continues to aggressively go after data center capacity, it lacks the strong leadership in operations that Microsoft or Google have.  I have written previously on the comparisons between the players in this space.  While Microsoft and Google are changing the game in Data Centers and Operations, Yahoo is beginning to look like a sad and distant third in the infrastructure race.  Taking down leased capacity from Digital Realty Trust and Dupont Fabros, the same infrastructure providers you or I might use.   How is that preparing for 'cloud services'.   Ballmer had it dead on when he mentioned that the combined infrastructure, products, and services of a Microsoft+Yahoo! merger would be formidable.   With recent developments, Yahoo! is proving it does not have the stomach for real infrastructure.  It's ultimately too bad, as Yahoo Services are heads and shoulders over Microsoft's, and Microsoft's infrastructure is head and shoulders above Yahoo.  

The one thing I really don't get about Yang is this retention package.  He has always claimed that his people were what made them unique.   Microsoft believes that too, which is why they desperately want to get their hands on the Yahoo search development teams.   Instead Yang begins doing piloted testing of Google Search, thus eliminating the Yahoo! Search developer core teams.  Guess that's why I run the bowels of a data center and not a couple of billion dollar company.

The more I read about this dude the more I like him. Eschewing the usual corporate bromides he writes:

Until now I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board.

What a card! I also reverse my view that MS is wasting its money, we have had at least $45bn of entertainment. Cheers Jerry!

Pic: Boston Globe

Microsoft are behaving like a kid who has seen a new toy. They have a perfectly good business making operating systems and enterprise software. Instead of focusing on this area of expertise they are tossing out half baked rubbish like Sharepoint to chase after a company they will never be able to integrate and will end up selling for half of what they bought it for, if they are lucky. Yes there is a lot of money in online advertising, Google may eventually be given serious competition from somewhere but certainly not from Microhoo, if it ever happens.

Buying Yahoo is the obvious but wrong move. They should be picking up companies like PBwiki, Connectbeam and Trampoline Systems to build the next generation of enterprise apps which will ultimately replace Office. Instead they are going to blow their entire pile on Yahoo for the privilege of managing its decline more efficiently.

It now turns out that the Terry Semel turned down $40 per share which has shareholders reaching for the smelling salts and lawyers. To cap it all the lawsuit had unearthed a memo from Jerry Yang arguing that doing the search deal he subsequently brokered with Google would create an effective monopoly in search.

What will Ballmer actually do if he ever gets Yahoo? All he will end up with is an even bigger, slower company when what he should be doing is making MS smaller and nimbler.

There has been lots of talk about such things as shareholder value - Yahoo's would go up, Microsoft's would go down according to some market analysts. Workplace cultures are different at each company so there would be clashes. The value to Microsoft would be a billion dollar online advertising platform. Microsoft would be buying themselves a seat (or lots of them) on the Web 2.0 bus. Yahoo would receive benefit of senior management direction and vision from Microsoft . . . and the list goes on. But nowhere (that I could find in any case and certainly not in the daily news) was there any mention of what value MicroHoo would deliver to their customers.

Businesses exist because of their customers. They thrive by giving customers what they want and whither and die by not delivering what their customers need in the way of goods and services. As a customer of both companies (I've been a Yahooligan for longer than I can remember!) I ask a simple question - what's in it for me?

Maybe it's a good thing they didn't merge since they both seemed to be focused on things other than their customer base.

Dean

Essa semana foi bem fraca na Tecnologia.. Pelo menos nos blogs.. Parece que os autores foram tudo para a Parada Gay! huahuahuahuahua! Desde sábado não vi posts no TechGuru e Digital Drops! hehe Ontem eu não postei porque foi o tal casamento da minha prima :) Casamento massinha.

O diretor-executivo da Microsoft, Steve Ballmer, declarou nesta sexta-feira (23) que sua empresa jamais viu a aquisição do Yahoo como estratégica. Além disso, afirmou que abandonar a oferta significa que agora o grupo tem US$ 50 bilhões em caixa para despender em outras aquisições.

"O Yahoo jamais foi a estratégia que estávamos seguindo", disse em uma conferência de tecnologia em Moscou. “Nós gastaremos dinheiro em algumas aquisições. Há muito que se pode fazer com US$ 50 bilhões", acrescentou.

A Microsoft decidiu retirar uma proposta de aquisição do grupo de Internet Yahoo por US$ 47,5 bilhões, ou US$ 33 por ação, depois que a empresa rejeitou a oferta no começo do mês, afirmando que não aceitaria menos de US$ 37 por ação.

Ballmer afirmou nesta semana em Israel que a Microsoft não estava mais negociando para adquirir o Yahoo, mas que estava interessada em outros tipos de acordo com o segundo maior serviço de buscas on-line dos Estados Unidos.

A Microsoft já apresentou uma oferta de aquisição do serviço de busca no Yahoo e de compra de uma participação minoritária na empresa, disse à Reuters uma fonte familiarizada com as conversações recentes.

Ballmer também descartou sugestões de que a tecnologia Silverlight, da Microsoft, seria combinada à tecnologia Flash, da rival Adobe System, a fim de combater a concorrência que poderia surgir de uma fusão entre a Adobe e a Apple, uma das mais antigas rivais da Microsoft. "Nós concorremos com a tecnologia Flash. Estou aberto a opções, mas não houve discussão de uma fusão com a Adobe. Os desenvolvedores de software deveriam aprender a usar a Silverlight", disse.

Questionado sobre o tipo de companhia que a Microsoft avalia para uma possível aquisição, Ballmer afirmou que "há muitas empresas que, de certa maneira, são subestimadas pelo mercado", disse ele, especialmente no setor de tecnologia da informação para a saúde. "Temos uma população que está envelhecendo e ela é uma das partes que mais cresce na economia mundial", acrescentou.

Redação G1

Já falei tudo o que tinha que falar no começo do Post.. Só falta falar que pelo jeito, a Novela está acabando.. Final chatoooooo!