In its second deal in as many weeks, China’s largest e-commerce company will pay $294 million for a 28 percent stake in Internet mapping company AutoNavi Holdings Ltd., AutoNavi said in a statement Friday. The two companies will also cooperate and combine their data to develop e-commerce products that make use of the actual location of smartphone users.

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Alibaba closed the loan deal on April 30, the person said. The nine banks providing the loan are Australia & New Zealand Banking Group Ltd., Credit Suisse Group AG, Citigroup Inc., Deutsche Bank AG, DBS Group Holdings Ltd., HSBC Holdings PLC, J.P. Morgan Chase, Morgan Stanley MS and Mizuho Corporate Bank Ltd., the person said.

The financing comprises three tranches: a $2.5 billion three-year term loan, a $4 billion five-year term loan and a $1.5 billion three-year revolving credit facility, the person said.

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Alibaba, which operates online shopping sites Taobao and Tmall, has invested $586 million to take a stake of about 18 percent in the Twitter-like Weibo service, Sina said. Sina also has granted Alibaba an option to raise its stake in the unit to 30 percent.

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The announcement came less than a year after Google Inc. accused the Chinese company of creating its mobile OS by modifying the U.S. company’s Android software.

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In comments at the Intel Developer Forum in Beijing overnight, Diane Bryant, senior vice president and head of the Datacenter and Connected Systems Group, described a rethink of how data centers might be designed. Currently, individual servers, each with its own computing and storage, are being packed tightly together in a rack, and in turn packed into a room with other similar racks.

Intel sees a world where all the computing and storage portions are separated. CPUs would be grouped together so they could be cooled together. They would in turn be linked to storage infrastructure by screaming-fast optical connections running as fast as 100 gigabits per second.

Eventually, Intel sees everything being separated into its own section of the rack: CPU, memory, storage and power. The point is that you’ll be able to upgrade one — swap out older memory modules for newer ones, or upgrade the CPUs, or replace a bad hard drive — without interfering with the operation of any of the other parts.

Intel’s play, Bryant said, is to offer a reference design — essentially a basic recipe for building the concept — to the big server manufacturers. And at least some portions of this concept are already operating in China. Intel has been working with Web commerce giant Alibaba, Web search concern Baidu, Chinese Internet company Tencent and China Telecom on something they call Project Scorpio. The idea is to centralize all the cooling and fans within the rack, and to demonstrate that you can save on operating costs.

There were new Intel chips disclosed, too. A chip code-named Avoton is due in the second half of this year. It’s a version of Intel’s lightweight Atom processor, aimed at small servers — not unlike HP’s Project Moonshot — that will be built on Intel’s latest 22-nanometer manufacturing process, and with a new design. In Intel’s recent “tick-tock” parlance, where it delivers a new design — a tick — then shrinks it with an new smaller manufacturing technology — a tock — this is effectively both.

Another chip, code-named Rangeley and also due in the second half of the year, is a 22-nanometer variant of Atom that will be aimed at networking devices, routers, switches and whatnot.

There were also three versions of the Xeon chip discussed. The next E3 will get some new tricks to support video analytics workloads. The next Xeon E5 will move to the 22-nanometer manufacturing process (that’s a tock), and will be available in the fall. Finally, a new Xeon E7 will be available in the fourth quarter. Its newest trick is that it can address three times the memory of its predecessor — up to 12 terabytes.

That’s a gain of 55 percent since CEO Marissa Mayer took over in July.

Major drivers of the Yahoo gains have been hopes for a Mayer-led turnaround, stock buybacks, and Alibaba’s growing value. Yahoo owns a 20 percent share of the Chinese e-commerce giant, where a new CEO is expected to take the company public in the next year.

At the same time, our own Kara Swisher’s reliable fodder of Yahoo executive departures hasn’t slowed in recent months. Some of the bigger ones include the head of Yahoo News, the global platform head, the head of Yahoo Mail, the head of Yahoo Connections and the chief information security officer. Meanwhile, there’s been widespread yelling about Mayer’s crackdown on employees working from home.

The bigger question, which remains unanswered, is whether Mayer can actually fix Yahoo’s core.

In a statement Tuesday on its website, the company said Mr. Ma will set “strategic direction” after his resignation as chief executive. The statement also said a successor, to be named May 10, will likely come from within the company.

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In a report released late Thursday, the U.S. Trade Representative said Taobao, China’s No. 1 e-commerce site by transactions, had been removed from the site “because it has undertaken notable efforts over the past year to work with rightholders directly or through their industry associations to clean up its site.”

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They like her, they really like her.

Wall Street, that is, in regards to new Yahoo CEO Marissa Mayer, assigning the former Google exec a clear premium.

And whether it is deserved or not yet from a pure performance perspective — we actually won’t know for several quarters ahead — the shares of the Silicon Valley Internet giant over the past three months have gone up 22 percent. The rise has taken place pretty much on the promise that she will finally be the one to deliver what no other Yahoo leader has done.

And that is, besides making the company relevant and innovative again: Getting Yahoo’s stock past $20 a share again.

That’s within striking distance now. Shares are at $18.40 today, close to an all-time high for the year. The recent rise certainly isn’t taking into account the results of the recent lackluster third quarter, which continued to show the worrisome downward trends — even though partial asset sales of the company’s Chinese Alibaba stake successfully masked the problems — in growth, engagement and overall profitability.

But Mayer’s confident I’ve-got-this tones on the earnings call itself — especially in pushing a mobile strategy that has not been put in place as yet in any substantive way — won over Wall Street investors, who apparently like how she sounds and, thus, are intrigued with what she might do.

While this kind of perceptual game will only get Yahoo so far, moving out of the teens in share price would be an important benchmark for the company.

The stock was last at that level in August of 2008. At the time, in fact, $20 a share was considered very disappointing, taking place after Microsoft dropped its $44.6 billion hostile bid for Yahoo a few months earlier. Indeed, $20 was a big comedown from when Yahoo shares were above $43 in 2006.

The lowest price Yahoo shares got in recent years were $9.39 in November of 2008, just before then CEO and co-founder Jerry Yang stepped down.

Now the stock is close to double that sad trough, fueled in part by some cosmetic moves to improve culture by Mayer — including free food, smartphones and a promise to end the slow-moving decision-making at Yahoo.

There has also been a start of the promised multi-billion-dollar stock buybacks by the company, although Yahoo has been cagey about how and when it is purchasing. Also helping, more recently, is that several big hedge funds are buying into the story of hope.

Following in the footsteps of successful activist shareholder Dan Loeb of Third Point, who is now on the board and is a major Yahoo investor, others like him have now joined in the party in a bigger way. That includes David Einhorn of Greenlight Capital and Chase Coleman of Tiger Global Management.

The thoughtful Einhorn, who is a friend of Loeb’s, has been in and out of the stock before, buying it on hopes that now ousted CEO Carol Bartz would be Yahoo’s savior and selling it soon after it was clear she might not be. He came back in February with three million shares, sold them in May, but now has upped his stake to just over five million more under Mayer’s regime.

More substantively, Tiger’s Coleman has grabbed 25 million shares (interestingly, he’s also upped his stakes in Groupon and Facebook).

Obviously, they must believe Yahoo is set to move upward, which all depends on Mayer. She’s made one critical stock misstep early in her tenure, by announcing that she was considering keeping the huge cash windfall from its sale of Alibaba stock and not giving it back to shareholders in some form.

That dropped Yahoo’s shares to under $15, but Mayer walked back that mistake and the stock has been climbing since.

For the year to date, it’s up almost 14 percent — a nice rise — although that pales in comparison to Apple’s 39 percent rise, Amazon’s 37 percent rise and, most of all, AOL’s 136 percent leap.

The comparison to the massive stock run that AOL has had, after CEO Tim Armstrong — also a former Googler — cut costs, focused units, sold patents and bought back stock, is often made. It’s perhaps apt, but arguably Yahoo has much better and fixable assets than AOL.

More to the point, Yahoo’s price-to-earnings ratio remains unusually low — it’s 5.6, compared to the S&P’s 14.2 average — which means that the entire business is severely undervalued by Wall Street.

It is if Mayer can create real value by actually staging the comeback she is already getting credit for accomplishing. She certainly has a lot of levers to improve results, from the stock buyback to finally making a deal to sell its multi-billion-dollar stake in Yahoo! Japan to making expense cuts to buying some innovative small start-ups to creating products that aren’t, well, lame.

Most importantly, Mayer has to stop the decimation of Yahoo’s once mighty advertising business, which makes up the bulk of its revenue, as well as improve its search monetization by rejiggering its heretofore dysfunctional partnership with Microsoft. (But, as I wrote earlier this week, she will not be making new search engines with Facebook.)

A gander at this chart of Yahoo’s declining quarterly revenue should give you a good visual of the problem with the core business:

YHOO Revenue Quarterly data by YCharts

And, indeed, Yahoo’s sales have dropped 29 percent since 2007, with typically flat display revenue and declining search revenue, which was once Yahoo’s crown jewel. While operating margins have risen over the years, very few point to the company as an exciting growth story.

And it still isn’t, although investors are starting to consider it a possibility. We’ll see as Mayer makes more significant changes in 2013, hopefully underpinning the stock’s recent rise with a true story of financial strides.

But, for now, giddy shareholders probably should not get too far ahead of themselves. Not that you can stop them: Mayer fan Eric Jackson is calling for Yahoo’s stock to be over $40 again by end of 2013.

Whether the Mayer premium can do pull off that particular investor miracle or not remains to be seen.

Yahoo could announce in the coming week what it plans to do with the billions of dollars it recently garnered after closing the sale of a portion of its stake in China’s Alibaba, according to sources close to the situation.

As AllThingsD has previously reported, the company is most likely to do a share buyback with the $3.65 billion, a move that could boost its still-lackluster stock.

That’s what happened when AOL did one in late June after it got a pile of cash from hawking its patent assets. Its shares are up more than 25 percent for those last three months, while Yahoo’s have gone up less than one percent in the same time frame.

When it announced the completion of the deal in mid-September, Yahoo said that it would hand over 85 percent of the after-tax proceeds to shareholders. (The Silicon Valley Internet giant will keep about $650 million for its own use.)

At the time of the transaction, a Yahoo spokeswoman said that the company declined to give any specifics around the form of return. The company could also, for example, decide to give investors a dividend, too, although Yahoo has long explicitly favored stock buybacks.

“The form and timing of returning proceeds will be determined by the board and management, taking into consideration the best interests of the company and its shareholders,” said the Yahoo flack.

Speaking of flak, new CEO Marissa Mayer tried to give some to tech journalists, some of whom have been giving her a bit of a hard time of late for showing signs of potentially being too spendy.

In a memo to staff announcing the date of its employee holiday party — it’ll be on December 1 on Pier 48 in San Francisco — Mayer took issue with a particular report from Business Insider about how she tussled over costs with departing CFO Tim Morse, whom she ousted last week.

Business Insider claimed that included her taking the price of the holiday shindig from $100,000 to $3 million, due in part to a change in venue location.

Mayer begged to differ, noting in the internal memo that the event would not bust the bank and still be tons of fun:

“Building on the theme of tech reporters not being great with math or numbers, rumors of this year’s party budget have been greatly exaggerated.”

(Is there actual time for tech reporters being math-impaired to become a theme that’s being built upon at Yahoo? I thought Mayer said the company would be building innovative products.)

But since we in the media are apparently dunces, I suppose we’ll just have to rely on Yahoo’s own numbers from its last quarter — which I embedded below — to tell the tale of continuous troubling declines in search queries and page views, declines in minutes spent on its media properties, declines in growth of unique visitors and flat-as-a-sugar-cookie growth in revenue.

Or, as Mae West famously said in the most delightful math quote ever: “A man has one hundred dollars and you leave him with two dollars. That’s subtraction.”

So is this Q2 financial performance at Yahoo — which is certainly not Mayer’s fault since she just arrived, but will be her responsibility to fix going forward:

YHOO_Q212EarningsPresentation

The Yahoo “act of radical transparency” meeting by new CEO Marissa Mayer — in which she will unveil to employees her plans to turn the Silicon Valley company around — is starting now.

Sources said it will be streamed instead of being Webcast, as usual, in order to avoid possible downloading (and, presumably, leaks). It’s also unlikely that she’ll hand out the deck of the strategy she presented to the board last week to everyone, for the same leak-avoiding reasons.

(Hey, Yahoos, those new smartphones Mayer just handed out to all have great cameras these days and Instagram can make dull photos pretty via filters — just sayin’!)

But, according to numerous sources, she’ll show off plans for a radically designed home page, with fewer ads and more open to apps and sharing; better email and search; and a doubling down on Yahoo’s most powerful properties.

What she will not talk about are any possible layoffs, said sources. Instead, Mayer will focus on squeezing more money from its businesses, including generating much higher CPMs, or cost per thousand ad impressions.

That’s easier said than done, but Mayer apparently believes that Yahoo’s weakness on its ad platforms can be turned around. (It is an idea that has long been pushed by Yahoo techies Scott Burke and Shashi Seth, said sources.)

We’ll see about that, as well as if Mayer will tell investors how Yahoo will distribute its cash windfall from the recent sale of its lucrative Alibaba assets. Mayer said last week that she will return billions to shareholders, scotching a plan to keep it all for the company. The likely vehicle for the return of money will be via stock buybacks.

One interesting note: Sources said Mayer involved very few senior staff in crafting the plan, which she is about to unveil.

More to come, obvi.

In an announcement issued moments ago detailing the Alibaba agreement, Yahoo said it will return approximately $3.65 billion in after-tax proceeds to shareholders. That’s about 85 percent of what it made on the deal. It will keep the remainder, about $650 million.

“This outcome is terrific for Yahoo,” Yahoo CEO Marissa Mayer said in an all-hands memo to employees. “It generates liquidity to create substantial value for our shareholders, while retaining a meaningful amount in the company to invest in our future. Also, because we still own 23 percent of Alibaba’s common stock, we have the opportunity to benefit from future upside when Alibaba IPOs.”

Yahoo has been considering returning money to its shareholders for some time now, so this news isn’t exactly a surprise — though the dollar figure is quite high. The big question now is just how this will all play out. Will Yahoo return $3.65 billion to shareholders through buybacks or dividends? The company has talked about buybacks in the past. CFO Tim Morse even hinted at one on Yahoo’s last earnings call. A buyback, of course, would likely increase the value of Yahoo’s stock.

But Yahoo is not ready to disclose its decision on the form of the buyback.

“We haven’t announced specifics around the form of return of proceeds,” a Yahoo spokesperson told AllThingsD. “The form and timing of returning proceeds will be determined by the board and management, taking into consideration the best interests of the company and its shareholders.”

Alibaba said Tuesday that it has completed the initial repurchase of shares from Yahoo and restructured its relationship with the Silicon Valley company in a deal valued at $7.6 billion. AllThingsD reported that the transaction’s official completion was in the works last week.

According to Alibaba VP John W. Spelich, the company handled $12 billion in transactions in the past 12 months and now carries a valuation of $40 billion. This deal represents the largest private non-LBO financing ever for a technology company, he said, and the company still has $3 billion in cash and the strategic flexibility that comes with it.

After taxes, the deal will net Yahoo around $4.5 billion — a very nice return on the $1 billion Jerry Yang put into Alibaba seven years ago. Until recently, the plan was to return much of that cash to shareholders. But new CEO Marissa Mayer has told Wall Street that she has other plans for the money, and there are many bankers, investors and entrepreneurs trying to convince her to spend some of it on a wide range of acquisitions. Stay tuned!

Alibaba Closes US$7.6 Billion Share Repurchase and Restructuring of Yahoo! Relationship

Alibaba Completed More Than US$12 Billion in Transactions Over Past 12 Months;
Financings Provided by Global Banks and Institutional Investors

HANGZHOU, China, Sept. 18, 2012 – Alibaba Group Holding Limited, China’s largest e-commerce company, announced today it has completed the initial repurchase of shares from Yahoo! and restructured its relationship with the Silicon Valley company in transactions valued at approximately US$7.6 billion. The closing follows the May 20, 2012 announcement by Alibaba Group and Yahoo! of a comprehensive plan for Yahoo! to reduce its stake in Alibaba Group in stages over time and a series of agreements to implement the restructuring of the ongoing relationship between the two companies.

The initial repurchase of shares, which represented one-half of Yahoo!’s 40% stake in Alibaba Group on a fully diluted basis, was valued at approximately US$7.1 billion. Of this, Yahoo! received approximately US$6.3 billion in cash and US$800 million in preference shares in Alibaba Group. Concurrent with the initial repurchase, Alibaba Group paid Yahoo! a one-time cash payment of US$550 million in connection with the amendment of their existing technology and intellectual property license agreement. Under the terms of the agreement with Yahoo!, Alibaba Group has the right to repurchase one-half of Yahoo!’s remaining stake upon a qualifying initial public offering in the future. Yahoo! originally acquired its stake in Alibaba Group in 2005 in exchange for US$1 billion and sale of its Yahoo! China business to Alibaba Group.

“The completion of this transaction begins a new chapter in our relationship with Yahoo!,” said Jack Ma, Chairman and Chief Executive Officer of Alibaba Group. “We are grateful for Yahoo!’s support of our growth over the past seven years, and we are pleased to be able to deliver meaningful returns to our shareholders including Yahoo!. I look forward to working with Marissa Mayer and her team in our continued partnership.”

Alibaba Group financed the transaction with a mixture of cash on hand, senior debt and the issuance of convertible preference and ordinary shares. The financing package is the largest ever private financing for a private sector Chinese company, and the largest non-LBO private financing for a technology company globally. The new equity financing was completed at a valuation of approximately US$40 billion.

“Over the past several months we have witnessed significant dislocations in the financial markets driven by global macro events and developments specific to China and the Internet industry. Our ability to raise financing in these difficult market conditions speaks to the strength of our business, our market leadership position and the confidence our investors and financial partners have in the future of Alibaba,” said Joe Tsai, Chief Financial Officer of Alibaba Group.

Eight international banks – Australia and New Zealand Banking Group, Barclays Bank, Citi, Credit Suisse, DBS Bank, Deutsche Bank, Mizuho Corporate Bank and Morgan Stanley – provided US$1 billion of senior debt financing for the transaction, while China Development Bank was the sole Chinese bank that provided a parallel senior debt facility of US$1 billion.

The issuance of ordinary shares was subscribed by lead investors CIC International Co., Ltd. and two of China’s leading private equity firms, Boyu Capital and CITIC Capital, as well as CDB Capital, the equity investment arm of China Development Bank. In addition, existing shareholders including Silver Lake, DST Global and Temasek participated by increasing their investment in the company. The convertible preference shares were successfully placed with global institutional investors from Asia, Europe and the United States.

The completion of this US$7.6 billion transaction caps off a total of more than US$12 billion in M&A and financings undertaken by Alibaba Group in the past 12 months. One year ago, investors led by Silver Lake, DST Global, Temasek and Yunfeng Fund invested US$2 billion in Alibaba Group to provide liquidity to the company’s early investors and employees. In June 2012, the company completed the privatization of Alibaba.com Limited, the B2B e-commerce subsidiary then-listed on the Hong Kong Stock Exchange, through a public offer and cash purchase of the 27% in Alibaba.com that it did not already own in a transaction that valued the minority stake in the subsidiary at US$2.5 billion.

Acer postponed the launch of the phone, which runs the Aliyun mobile operating system made by China-based Alibaba Group Holding Ltd.

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The delay of the release comes as Alibaba Group Holding Ltd., which developed the Aliyun mobile operating system that powers the new Acer smartphone, is looking to expand in China by working with more handset makers. It highlights the difficulties companies like Alibaba face when they try to take on Google’s Android operating system.

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Yahoo just filed a regulatory document noting that it might not give back the bulk of the $4 billion-plus that it is expecting to get from its sale of a chunk of its Alibaba stake to shareholders, as it had previously said it would, either via a stock buyback or dividend.

Instead, CEO Marissa Mayer looks like she wants all that dough to buy some tasty companies.

The filing noted that Mayer’s recent look-see review of Yahoo, “may lead to a reevaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase.”

Yahoo’s stock is down about five percent on the news, in after-hours trading, to $15.28. It had been moving up slowly in recent weeks.

That’s because, for investors, this is a drastic reversal of previous Yahoo statements on what it was going to do with the windfall. At the time of the deal and then later in several statements by its top execs, Yahoo said it would return the most of the money to shareholders.

“We look forward to delivering the proceeds of the near-term transaction to our shareholders,” said CFO Tim Morse at the time of the deal’s announcement in May, which he later reiterated on an earnings call.

Related to the deal, the Yahoo board had also recently authorized its execs to conduct a larger stock buyback, although the company was under no legal obligation to do so.

In addition, in a recent letter to his investors, Third Point’s Dan Loeb — now a Yahoo director and in charge of a six percent stake — said the company “has indicated that it will return substantially all of the expected $5B of cash it will receive from this transaction to shareholders.”

No longer — at least for most of the incoming pile of moolah from China.

Still, the move probably should come as no surprise, given Mayer is already on the prowl for innovative companies to buy and talent to “acqhire.”

She’ll certainly need a bigger war chest, since Yahoo only has just above $2 billion in cash now, not all of which is available (long accounting reason I will go into later).

The big slug of Alibaba money, from selling half of Yahoo’s stake in the Chinese company, will obviously give her more heft.

So, too, would any money she might get from a deal around Yahoo’s Japanese assets. The company has been in protracted talks with SoftBank, its partner there, about such a sale. While sources said it was close to completion, there appears to still be some roadblocks to its final settlement.

Depending on how such a transaction is completed — tax-free or not — Yahoo could get about $3 billion in cash and perhaps another asset worth $1.5 billion.

That would certainly give Mayer a bigger kitty to do acquisitions — and presumably make lots of friends in Silicon Valley in the process.

Here is the pertinent section of the filing:

New Chief Executive Officer and Review of Business Strategy

On July 17, 2012, Marissa Mayer became the Chief Executive Officer and a member of the Board of Directors of Yahoo! Inc. (the “Company”). As reported in our Form 10-Q for the quarter ended June 30, 2012 filed today with the Securities and Exchange Commission, Ms. Mayer is engaging in a review of the Company’s business strategy to enhance long term shareholder value. As part of that review, Ms. Mayer intends to review with the Board of Directors, among other things, the Company’s growth and acquisition strategy, the restructuring plan we began implementing in the second quarter of 2012, and the Company’s cash position and planned capital allocation strategy. This review process may lead to a reevaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase under the Share Repurchase and Preference Share Sale Agreement we entered into on May 20, 2012 with Alibaba Group Holding Limited.

And here is the whole filing:

YHOO-20120809-8K-20120809

Today, Yahoo reported fair to middling — although still predictably unspectacular — second-quarter earnings earlier today.

Now it’s time for its financial call with Wall Street analysts, which most notably will not include its spanking new CEO Marissa Mayer.

Giant, prolonged sigh, but not entirely unexpected, since she just got to the Silicon Valley Internet giant today. Of course, that did not stop former CEO Carol Bartz from hopping on right after she was hired and cussing up a storm.

That did not end so well for Bartz, so perhaps Mayer has already made one good decision. Minimize, minimize, minimize expectations!

Here we go:

2:04 pm: The call starts off with the tireless CFO Tim Morse, telling people that he was very excited about the new CEO, but that he could not talk about it much.

Bummer!

But there was a message from Marissa Mayer, though: She cares about investors and you will be hearing from her soon!

2:06 pm: Morse, the numbers guy goes right into the script reciting the meh numbers, which boil down to the fact that earnings were better than expected on lackluster revenue growth.

Getting that up will be Job #1 for the missing Mayer — you just know she is sitting at the table right now — who will have to pull some major rabbits out of the hat to get Yahoo back into the conversation.

That would be the good conversation — about how it is innovative — and not about the bad conversation about what a management goat rodeo it has been for far too long.

2:09 pm: Morse is still repeating what you could read in the press release.

But ho! Morse notes that the problems with Microsoft and its search partnership still has not gotten better and thank goodness for that guarantee. This one’s on the software giant, but it is still not good.

2:13 pm: Morse notes there will be no guidance until Mayer gets up to speed on the situation at Yahoo.

Let me give you the Cliff Notes version, Marissa: Revenue growth flat. Employee morale weak. Product innovation non-existent. Mobile — don’t make me cry. But you do have a video deal with Tom Hanks called “Electric City” that is launching today!

Yay! Except you are now not a media company now that former interim CEO Ross Levinsohn has gotten jacked.

But the Olympics are coming, as are the U.S. elections, so you might want to hold onto that media excellence at Yahoo for a little while longer.

2:17 pm: Morse finishes up the non-news script and we move into the Q&A.

He warns: No Marissa queries!

The Wall Street analysts behave on cue — they never fail me on not asking the tough questions — and ask about the weakness in advertising pricing rates.

Morse talks about weakness in Europe, but gives a non-answer.

2:18 pm: Next a question about the stock buyback that Yahoo announced to get its shares back up to speed, using money from its partial sale of its Alibaba assets.

It’s not working yet, given the stock has remained flat since forever.

A question on the advertising softness and comments on revenue per search. Good one!

Headwinds from broadband advertising! “We’ll have to live through it,” says Morse, which means when crappy comparisons will return to make the revenue fall-off seem less worse.

Onto declining engagement and declining search revenue. And a good query about what to do about Microsoft?

Perhaps another partner, like Google, to replace it? Actually, until Mayer was appointed yesterday, Yahoo execs were in talks with the search giant about various partnerships.

That’s presumably on hold for now, but we’ll see.

Yahoo has about nine months until the Microsoft guarantee falls off the cliff and Morse notes there is an out.

Tasty!

2:25 pm: I’ll be honest — I am getting hugely bored hearing non-news about yet another unremarkable performance from Yahoo.

I needs me some Mayer ASAP — since she is, without a doubt, a fantastic character for Yahoo’s next chapter. As has been reported, it’s correct that she is not talking to me so far, but I am sure there will be plenty of material for me to work with going forward.

The next question is on mobile, which is a “big priority” for Yahoo, says Morse. Actually, it has hardly be a priority at all, despite the fact that the kids seem to love their smartphones.

Another Alibaba question, which is in all the filings. Let me break it down: Yahoo owns less, but it’s still a good investment for the future.

2:33 pm: Did I tell you I am bored. I am at the offices of Vanity Fair magazine blogging this and I am now reading a very good book they have on the shelf here titled “Vanity Fair’s Hollywood.” Does Sophia Loren ever take a bad photo? No, she does not!

Back to Yahoo! A question if Mayer will be talking before the next earnings call.

“I honestly just don’t know,” says Morse. But she is “mindful” of how much investors want to get a good gander at her.

A question on Yahoo Japan, another endless asset sale that the company has not yet completed. “There really is no update,” says Morse, blaming a valuation gap.

What a shock!

Morse is being very polite today and I like it. He’s been through the wringer at Yahoo since he got there, including a short stint as a temporary CEO.

I hope you have been taking notes, Tim!

2:39 pm: A question on Facebook and, thankfully, on the choice of Mayer. I love when someone asks a question they have been asked not to ask.

“I don’t have a whole lot of color,” says Morse, noting her “resume speaks for itself.” It is apparently safe to say, adds Morse, that Yahoo has to be good at both tech and content.

You’re kidding! I had no idea! Thanks, polite Tim!

He also said Yahoo feels good about being on a steady footing with Facebook. Last call, the comments were about how much Yahoo was going to get Facebook to pay.

Bygones!

I am back to the shelf at Vanity Fair, which is as delightfully entertaining as this call is not. Now, I am perusing the book, “Vanity Fair’s Proust Questionaire.”

Did you know Sandra Bernhardt’s motto is: “Kiss ‘em, slap ‘em, send ‘em home.”

I am considering stealing that one as my new operating policy.

I missed the question about Yahoo’s ad consortium with AOL and Microsoft. “We’re making progress,” says Morse.

Aaaaagh. But did you also know that Katie Couric’s motto is: “Nobody puts Baby in the corner.”

That is definitely my motto too if Yahoo PR does not get back to me on my 26 questions from this morning (you would think I would have gotten used to this by now!).

How I wish Mayer was not in the corner right now and we were listening to her. She talks really quickly, like a supernova, so I would love to see how analysts react to it. Not today!

Did you know Keith Richards’ motto is: “I told you I was sick.”

Now that is funny.

There are no more questions, which is unusual, and Tim politely says his goodbyes and says to be in touch any old time.

Thus, I have to have a better ending for this and it comes via Donald Trump, whose motto is: “Think big and get the job done.”

And it’s a pretty good tip for Yahoo and Mayer going forward.

“We don’t have any experience. We don’t know how to organize,” Jack Ma said in an interview.

The pace of growth threatens to overwhelm Alibaba, which Mr. Ma, a former English teacher, started in his apartment 13 years ago. Today, Hangzhou-based Alibaba has more than 23,000 employees. Taobao and Tmall, the company’s shopping Web sites, are expected to host a trillion yuan ($157 billion) in transactions this year, up 150 percent from 400 billion yuan in 2010. Taobao and Tmall are each less than 10 years old.

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The deal marks the unraveling of one of the most celebrated tie-ups between Western and Chinese Internet companies, which gave a boost to Alibaba Chairman Jack Ma in the partnership’s early days but became strained in recent years.

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There’s no question that every venture capitalist within 100 miles of Silicon Valley wanted to squeeze their khaki-clad selves into what had become tech’s hottest deal of late.

That would be to get a piece of the new round of funding for start-up phenom Pinterest.

But while piles of VCs and other investors tried to work every angle possible to noodge into the action, the iconoclastic CEO and co-founder Ben Silbermann decided to go big and go global by hooking up with a Tokyo-based Internet giant.

Japan’s Rakuten will invest upwards of $50 million in a $100 million round that values the social bookmarking site at $1.5 billion.

Rakuten is one of the largest online commerce companies in the world, with a flagship site Rakuten Ichiba, among others. It was founded in 1997 and had revenue of $4.7 billion in 2011.

Most important in Pinterest’s calculation was apparently the link with its CEO Hiroshi Mikitani, whose nickname is Mickey. One the richest men in Japan, Mikitani is one of the best known entrepreneurs there where he’s been described as “Richard Branson meets Jeff Bezos.”

I briefly chatted with Mikitani last night about why he decided on the Pinterest deal, in a conversation where he focused a bit on Rakuten’s famed “omotenashi” or “empowerment” philosophy. Simply put, the concept is that — unlike an Amazon — Rakuten is a facilitator of commerce, much like its shopping mall metaphor beginnings. The approach is to aid merchants rather than compete with them.

It’s a little eBay, a little Alibaba, some Etsy and even a little Amazon Web Services mixed in. It’s also a place that can move retail globally, which is presumably the attraction to it by Pinterest.

ATD: Why did Pinterest pick you?

Mikitani: We are not a venture capitalist. We got together and talked about our story and our history.

We agreed that we shared a vision of the future of Internet e-commerce.

ATD: Why make an investment?

Mikitani: When we started to talk about being involved in the round of investment, we wanted to invest as much as possible.

We were very impressed by their business model and also the management style.

ATD: What made Pinterest so attractive in comparsion to other similar companies?

Everyone is talking about social commerce and best solution to social commerce, but Pinterest really was the first to use graphics that well to connect with people.

Rarely have we seen such a powerful media and we were seeing huge traffic coming from Pinterest [to Rakuten sites]. It was much higher than anyone else.

ATD: What do you bring to the table?

Mikitani: I think there are some things we think we can do with our expertise. Ben and his team have an extremely strong commitment to make their products as attractive as possible.

But we have 40,000 stores in Japan and we can give them access to our customers and do aggregation to engage in everything. And we have sites in many other countries too.

ATD: How are you going to work together?

Mikitani: We are not going to stop them from doing dealings with other e-commerce companies. But we can have more constructive input on how to make their site more effective from e-commerce point of view.

This is a long-term arrangement and we have a strong committment and attachment to this business. We truly understand their business and respect their management.

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Yahoo turned in better-than-expected earnings today in its first quarter, and — as usual — I will be liveblogging the call with CEO Scott Thompson.

Yahoo beat Wall Street estimates in its first-quarter earnings report earlier today, with revenues of $1.08 billion and earnings of 23 cents. That’s a gain of 28 percent from a year ago in net earnings and 38 percent per diluted shares.

Earlier:
2:03 pm: We begin with a new investor relations dude, who has replaced Marta Nichols. She is now CEO Scott Thompson’s new chief of staff.

His name is Joon and he seems much more festive than Marta, who was very, very serious.

I could not be more thrilled.

Thompson comes on quickly enough and he is also pretty jaunty.

Yahoo has been “moving very fast” on a range of things. And how — this guy seems to eat Ritalin for breakfast.

But there is still a long way to go, he notes.

“I am not satisfied with the pace of top-line growth,” said Thompson, who added he would not be until Yahoo was keeping up with others like Google, which turned in a much stronger report last week.

He can’t get no satisfaction — but he will!

Thompson said one problem was still its ongoing search and advertising partnership with Microsoft. It’s still rocky in terms of monetization and more.

2:09 pm: But first, it is CFO Tim Morse’s turn to re-read the results that were just released.

I am not actually listening until he gets to the part about Thompson giving more deets soon.

Morse is teeing this up by noting that Yahoo is adding more to its bag of tricks beyond search and display, such as commerce.

This will take investments, which are core to success.

Thompson is back: “This business can and will grow going forward.”

I am holding him to that one!

He starts first by talking about Yahoo’s content business, which remains strong, but he points out the obvious: Engagement is off.

In other words, the kids love Facebook. Also Instagram. Also Tumblr.

That’s why Thompson says he told the staff of Yahoo to rethink it all when he arrived in January.

The conclusion:

“Yahoo has been doing way too much for too long and has only been doing a few thing well.”

As in, jack of all trades, master of none.

“We have to be clearer going forward about what we won’t do,” said Thompson.

2:22 pm: He goes over some specifics.

Shutting down 50 properties — Thompson does not say which, though.

Consolidating platforms.

Dedicating key teams to innovation.

Something else about being nimbler.

Data. Also data. Did I say data?

Research and development only for Yahoo-owned and -operated properties.

That is six points, which will be underscored by better execution.

Thompson has been talking about the “complex processes” that was once called peanut butter by one former exec.

Peanut butter is sticky and that’s the point.

2:26 pm: Oops, when talking about layoffs, Thompson says “PayPal” and not “people.” He used to run the eBay payments unit.

Thompson moves to the board changes — five new members and the jacking of five from previous year.

He then defends his decision to sue Facebook over patent infringement. “Facebook must do the same or change its practices,” he sad.

Thompson adds the company is in “active” talks with its Asian partners, Softbank of Japan and Alibaba of China.

And some news! Talks related to its Japanese assets have a gap in valuation, so Yahoo is focusing on the Chinese ones.

And in summation:

“We don’t have to reinvent who we are, but we do need to reinvent our experiences … We have to move and think like a growth company.”

That would be nice.

2:32 pm: Time for Q&A, in which I like to see exactly how wimpy Wall Street analysts can be in asking tough questions.

The first is asking about some strategery specifics, including whether it can get the cool $1 billion AOL just got from Microsoft.

Thompson talks about the new commerce unit, which will be co-led by someone who worked with him at PayPal. It’s not really new, since Yahoo is in that arena already.

Morse answers on intellectual property issues, noting Yahoo is happy to license its family jewels. Most tech companies use these patents as a defense, but no longer.

The next question is on morale of sales force. I can answer that! Not good!

But Morse says there is progress.

Bygones.

Morse also notes that Yahoo still has search revenue per share guarantee from Microsoft, but that he hopes it will get better before that deal runs out.

Back to Thompson. He wants better results to advertising customers.

He keeps saying “at or above the market rate.” Yahoo’s growth has been lackluster, so this would be a key victory if Thompson could pull it off.

2:39 pm: A question about mobile, which has been one of Yahoo’s most embarrassing holes of all.

Besides Facebook, the kids love those smartphones. You would not know it from Yahoo’s shoddy products.

“We need to get good real fast in mobile … and we’re not there today,” said Thompson. Actually, Yahoo was not there yesterday, either.

Note to Scott: Real fast is a good idea.

There is a question about its advertising platforms, a back-handed way of asking if it is for sale. It is.

Thompson notes that there has been a lot of evaluating, but that “we have not come to a conclusion.”

2:42 pm: A question about its revenues from its Asian assets. China’s Alibaba — which is not run by Yahoo — is doing great.

It’s kind of like being the dude who bought Apple some years ago and is now rich through no effort of his own.

Thompson addresses a question about dividends, which Apple just gave out. Yahoo will be sticking with stock buybacks, so everyone can put away those Porsche catalogs.

I am briefly distracted during some accounting questions by the new Apple ads with Zooey Deschanel. She is so adorkable, it makes me slightly queasy.

Back to Thompson, who is non-answering a question about possible acquisitions. He’s not talking, but I am sure he will be buying if he gets a transaction with Alibaba done finally.

Given the long and convoluted and always aborted deals over the years, this would be cause for much celebration if Thompson pulls it off.

(And, if he does, I pledge to buy him dinner in Boston at the restaurant of his choice!)

2:52 pm: A question of what the heck Thompson actually means when is he talking about using Yahoo’s data.

There are apparently three main places.

Personalization, which is uniquely related content, which gives him a chance to egregiously tout Boston sports teams.

Contextual advertising, which means ads you want.

And data and analysis to advertisers that will help them do a better targeting job. Oh, joy.

A search question, which I have decided to ignore, since I feel search is simply not Yahoo’s business any longer and should be sold off.

But what do I know?

Morse keeps yammering away on “better experiences for our users” by its search team.

Hey, it’s called Google. Then, Bing. And only then, Yahoo.

2:58 pm: Last question, which I missed while I was focusing on search ranting.

And with that, it’s back to the future for Yahoo. Hopefully.

Or so it would appear. In his coming quarterly investor letter, the head of Third Point lays out “The Case for Alibaba,” according to extracts reviewed by The Wall Street Journal. Alibaba Group Holding is China’s dominant e-commerce company, in which Yahoo owns roughly a 40 percent stake. Mr. Loeb waxes enthusiastic about Alibaba’s ever-growing valuation, citing a Boston Consulting Group study that the Chinese e-commerce market is likely to overtake that of the U.S. by 2015.

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The Chinese company, which currently owns 73% of Alibaba.com, said Tuesday that the move would free it from “the pressures” of having a listed company.

The deal appears unrelated to a possible move to buy back Alibaba Group shares owned by Yahoo Inc.

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It’s hard not to like the brainy David Einhorn, who runs Greenlight Capital, the New York hedge fund that often dips into tech investing.

That has included stakes in Microsoft and — for a short time last year — in Yahoo. But Einhorn, after initially seeing promise in CEO Carol Bartz and the Silicon Valley Internet giant’s assets in Asia, dumped his shares last July.

At the time, he noted he was unhappy with the noisy public fight Yahoo had gotten into with China’s Alibaba Group over its Alipay unit.

“The Partnership bought Yahoo! (YHOO) earlier this year based on a sum of the parts analysis, which included putting substantial value on its Chinese assets. Shortly after the purchase, the value of the Chinese assets came into doubt as the CEO of the Chinese unit hived-off a valuable subsidiary into a corporation that he personally controls. From there, the finger pointing started in every direction. This wasn’t what we signed up for. We exited with a modest loss.”

Last March, Einhorn had bought less than .65 percent of Yahoo, or about 8.5 million shares, which he said was due to his feeling that the company was undervalued with regard to its Asian assets.

Now it appears he has jumped back in a bit, holding just over three million shares of Sunnyvale, Calif.-based Yahoo at the end of the fourth quarter.

It’s not clear if he is still in or not — or if he might unite with another fellow hedgie, Third Point’s Daniel Loeb, who finally began his much-anticipated proxy fight for control of Yahoo today.

More to come, for sure.