In the midst of last week’s earnings call, after the company had released strong results, Demand Media CEO and co-founder Richard Rosenblatt made an unusual declaration about its once-tight affiliation with now-disgraced professional racing cyclist Lance Armstrong.

Said Rosenblatt about the Santa Monica, Calif., social content company to Wall Street analysts about the status of the relationship in the wake of Armstrong being stripped of his many Tour de France titles:

“Our relationship is with the Livestrong Foundation, not with Lance, and we are aligned in empowering people to live healthier lives, and we support the important work of the foundation. We have built a powerful destination, popular applications and a very engaged community. None of this has changed and we have seen no material impact on the consumer traffic or metrics.”

In reality, the once-close relationship between Demand and Armstrong ended a while ago, even though the athlete’s cancer-fighting charity has been a high-profile shareholder since early 2008. At the time, Demand struck a four-year exclusive deal with Livestrong to create a health and wellness site, and also got a perpetual license to the Livestrong.com domain name.

But Armstrong — despite appearing at the Web 2.0 conference in 2008 with Rosenblatt — eventually had little to do with the Demand brand.

And it is down to zero involvement now, after he recently stepped down as chairman of Livestrong, due to the doping controversy. That mess has caused a lot of the brands he was tied up with, such as Nike, to disassociate themselves from Armstrong himself, although not from the Livestrong Foundation.

That has also been Demand’s direction, especially given that the commercial Web site, which has become the No. 3 health property in the U.S., is one of the company’s strongest ones. That adds up to about 26 million monthly unique visitors, a gain of 97 percent since last year.

But with that success, why did Demand make the statement at earnings — as well as putting up a blog post recently clarifying that it had “no direct relationship” with Armstrong?

Apparently, according to several sources, Demand had to move to be as explicit has possible, not because of consumers, but because of advertisers.

“The advertisers did care about the affiliation,” said one source. “So it was time to say in no uncertain terms to them and shareholders that Lance Armstrong has nothing to do with Demand.”

Or, as the blog post in late October noted rather strongly:

“We don’t believe the struggles of one individual should detract from the millions of real people who have benefited from work that’s been done to prevent cancer and improve the lives of those unfortunate enough to have it.”

Or, as they say in bike racing, Armstrong had simply become too much of a wheel sucker.

Marissa Mayer — the typically press-loving Silicon Valley exec who has avoided much media interaction since she took over as CEO of Yahoo — will be doing her first sit-down interview at the end of the month at a Fortune magazine event.

In the chat, according to an invite for a November 27 Silicon Valley dinner for its Most Powerful Women franchise, “she plans to talk about where she is taking Yahoo and what excites her about the future of technology.”

Pull up your chairs, people!

Actually, Mayer has recently spoken most specifically about her plans for the long-troubled company, but it was more formally during Yahoo’s third-quarter earnings call, in which she outlined a mobile-heavy strategy and also a plan to make smaller acquisitions.

“Yahoo will have to be a predominantly mobile company,” she said then to Wall Street analysts, soon after which she bought a tiny mobile start-up called Stamped.

But Mayer has yet to sit down live with a journalist — she had agreed to appear for a sit-down stage interview at a recent TechCrunch Disrupt event, but she opted instead to be a demo judge, where the former Google exec said nothing about her new job at Yahoo.

Mayer will presumably be doing just that with Fortune editor-at-large Pattie Sellers, who helms the high-profile annual Most Powerful Women conference and also the magazine’s list that featured Mayer on the cover this year (see above). Sellers has also just written a profile of Mayer titled “Ready to Rumble at Yahoo,” which did not include her participation but did have quotes from one of her recent hires — Patricia Moll Kriese — at Yahoo.

But Sellers appears to be the only reporter that Mayer has spoken to on the record since she got the job, although her comments in one piece just after she got the job were mostly limited to the topic to her pregnancy. Sellers also announced the name of Mayer’s baby — Macallister — in another recent post.

Presumably, Mayer will talk about her new son with Sellers, but it will be interesting to see what she says about Yahoo, as well as on the future of technology. At an annual Churchill Club gadget event the techie did with Walt Mossberg and me in 2007, Mayer showed off a keyboard whose keys had embedded LCD screens, a wireless rabbit, an alarm clock that can jump off your nightstand and a T-shirt with a wireless signal locator in it.

Here is a video of her in full geek mode talking about that way back when:

Demand Media, the social media and content company, strongly bested Wall Street expectations for the third quarter.

Revenue for the quarter was $98.1 million, up 20 percent from the same period a year ago, and well above the $91.4 million expected. Earnings per share were four cents, compared to a net loss of five cents last year.

This is the fifth straight revenue increase for the Santa Monica, Calif.-based Demand, which had struggled last year as Google changed its algorithms and impacted many publishers across the Web.

Shares of Demand, which rose just above six percent today, were up another 6.4 percent in after-hours trading to $9.30 on the news.

Still, here are some interesting stats to note:

Page views on its owned-and-operated sites, such as eHow, were up 33 percent, although revenue per thousand page views was down 11 percent. It’s due to lower revenue from mobile growth.

Demand’s domain registrar business was also up 11 percent, although revenue was down 2 percent.

Here’s the whole release to peruse before the company’s 2 pm PT call with analysts — I will add more if Demand execs say something juicy:

DMD 9 30 2012 EX 99 1 Earnings ReleaseFINALBUSINESSWIRE.pdf

Citi terminated Mahaney today for allegedly trying to cover up a disclosure violation tied to Citigroup’s coverage of Google. The move came after Massachusetts’ securities regulator fined Citigroup $2 million for failing to supervise Mahaney and a junior analyst he oversaw.

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Mr. Mahaney, a top-ranked Internet analyst, was terminated Friday morning, according to a person familiar with the matter. The junior analyst was fired on Sept. 27, the state said.

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Yahoo is nothing if not consistent, turning in yet another weak quarter that met weak expectations from investors.

The 98-pound weakling is still weak!

In the third quarter, the Silicon Valley Internet giant had $1.089 billion in revenue, a hair above expectations and just two percent higher than a year ago. (Please note that competitors, such as Google and even Facebook, are growing revenue like gangbusters.)

Profits were also weak, despite an apparent pop from a gain from its sale of some of the shares it holds in China’s Alibaba Group. But let’s focus on operations, people, which are the real numbers to gauge. As Yahoo noted: “On a GAAP basis, income from operations decreased 14 percent to $152 million in the third quarter of 2012, compared to $177 million in the third quarter of 2011.”

Minus traffic acquisition costs, display revenue was down to $451.6 million, compared to consensus estimates of $484 million; search revenue was up only a tiny bit to $414.1 million (consensus was $411 million).

Interestingly, Yahoo left out detailed information it has usually provides about engagement and other user metrics. Let me take a big guess: The numbers are simply not impressive, or else they would have been touted.

Also left out was any guidance going forward — new CFO Ken Goldman just came on today, so that’s no surprise. Guess it’s time to throw out the trash, as they say in politics!

But here’s an interesting factoid in the press release: “In October 2012, Yahoo! entered into a 364-day, $750 million unsecured revolving credit facility. The facility is currently undrawn and is expected to be used for general corporate purposes.”

More available cash to go with the pile of cash that Yahoo has already piled up for purposes unclear right now.

To be clear, this meh quarter does not matter at all — with Yahoo getting a financial equivalent of a hall pass for these results — as investors look to hear from new CEO Marissa Mayer about her plans to make all the bad go away. Until she charts a course and sets out on it, it is likely that no one is going to blame her for Yahoo’s past woes.

As Mayer said in a statement today: “Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue. We’re taking important steps to position Yahoo! for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders.”

Everyone is looking forward to hearing how, which the former Google exec will presumably explain in more detail on a conference call with Wall Street analysts — her first as a public company CEO — at 2 pm PT. Tune in for my live blog.

Until then, here are Yahoo’s Q3 slides to peruse:

YHOO_Q312EarningsPresentation_FINAL

One of the main things that Wall Street analysts had been watching for in the first-quarter earnings for Microsoft today was how its current flagship Windows software business was doing in the lead-up to the release of Windows 8 on October 26.

A little cracked, as it turns out.

Investors had expected that the Redmond, Wash., software giant’s first-quarter earnings would be $16.4 billion, compared to $17.4 billion last year, and that earnings would drop to 56 cents from 68 cents.

Instead, Microsoft turned in quarterly revenue of $16.01 billion and earnings of 53 cents a share.

One big culprit was a decline in sales of Windows, which was impacted by the company’s deferral of revenue related to Windows 8.

Microsoft is making a big bet that the new operating system — a drastic change from previous versions — will boost sales of PC and other mobile devices, especially tablets. The once-dominant company is seeing big challenges from consumer interest in products that do not use Windows, especially from Apple and Google.

Thus, it is now wait and see, which made investors nervous. Microsoft’s stock was down over 3 percent in after-hours trading, to $28.58.

That’s no surprise given the news.

Said Microsoft:

“The Windows & Windows Live Division posted revenue of $3.24 billion, a 33% decrease from the prior year period. Adjusting for the impact of the Windows Upgrade Offer and pre-sales of Windows 8 to OEMs prior to general availability, Windows division non-GAAP revenue declined 9% for the first quarter.”

Windows had already seen a decline in sales of the key product, which was down nearly 13 percent in the last quarter.

Other divisions had mixed revenue results: Servers & Tools was up eight percent, the Business division had a two percent decline, the Online Services unit saw a nine percent rise and the Entertainment and Devices division was down one percent.

Here’s the full Q1 press release, as well as Microsoft’s financial statement and pretty slides (and I threw in the 10-Q for good measure). The company will have an earnings call at 2:30 pm PT about the results:

PressReleaseFY13Q1

FinancialStatementFY13Q1

SlidesFY13Q1

MSFT_FY13Q1_10Q

New York magazine just published what will doubtlessly be the first of many larger-scale profile pieces on new Yahoo CEO Marissa Mayer (Fortune’s at work on one, too).

Titled “Can Marissa Mayer Really Have It All?” New York’s version is a very solid and fair effort that raises a lot of pertinent questions about the Silicon Valley Internet giant’s latest leader.

That, of course, includes pondering the high-profile issues around her coping with a newborn (really new) and work; her carefully crafted public glamour-geek-girl persona that is at odds with her sometimes more tetchy private one; Mayer’s mostly-up-and-then-down-at-the-end career at Google as a key exec; and the myriad challenges she faces in turning around the long-troubled Yahoo.

Writes Lisa Miller quite astutely: “This newest version of Marissa, the mom-geek-CEO, will surely test Mayer’s iterative powers, for she’s playing to a tougher crowd, one that won’t be placated by tweets, Manolos, and rapturous praise for pineapple malts.”

Indeed not, which is why sources said Mayer is likely to begin to make postpartum appearances back at Yahoo as early as this week. She delivered her first child with husband Zach Bogue, whom she dubbed “Big Baby Boy Bogue,” on Sept. 30.

Among the initiatives she has been working on up to and after her son’s birth, said numerous sources, is the redo of Yahoo’s powerful home page, a reorganization of top management duties, and an announcement about whether it will buy back shares or give a dividend from its recent multibillion-dollar sale of part of its lucrative stake in China’s Alibaba Group.

In addition, said sources, Mayer is also putting into place her new methodology of keeping track of employee performance and rewards. There is an all-hands meeting scheduled today, in fact, apparently to go over the system, which Mayer spoke about in her last all-hands meeting.

The home page redo is also in the late-stage works for unveiling soon, said sources. Those who have seen it said it has a starker and simpler design ethos, and will stress user personalization, customization and more social elements. It will also have ample opportunity for third-party developers to offer a variety of services on it (maybe Mayer can save Zynga by copying a little bit from Facebook!).

The reorg will also be interesting. Mayer has made a number of top exec appointments, including adding a new CFO and head of HR. She will also be rejiggering other roles of existing management.

For example, expect tech and operations EVP David Dibble — who got a mess of new responsibilities right before Mayer was appointed — to have some of that dialed back.

The disposition of all $3.6 billion of Alibaba cash is perhaps the most immediate issue, especially for investors, who are largely hoping for a buyback of stock. Such a move will likely cause Yahoo shares to rise, as happened at AOL.

That would be nice, since Yahoo stock has stayed pretty flat since Mayer got to the company in July. (That compares, ironically, to a 31 percent rise at Google since she left.)

But Wall Street analysts and others have been making bullish calls on Yahoo recently, including CNBC’s screamy stock guru Jim Cramer of “Mad Money.”

Boosted by the growing value of its Asian assets — in China, as well as in Japan, which Yahoo is trying to sell — and also anticipating some kind of magic mojo from Mayer, price targets for Yahoo shares have been as high as $22.

That was from Goldman Sachs, which reinstated coverage of Yahoo with a “buy” rating recently. Analyst Heath Terry noted that “while user engagement continues to decline, the company lacks a mobile strategy and significant talent has left the company, Yahoo still has hundreds of millions of users, valuable Web properties, and the financial resources to fuel a potential turn around over time.”

Translated: Yahoo kinda stinks, but it still might be able to buy itself out of this mess with a $10.6 billion pile of dough from Asia.

All eyes will be on the actual business Yahoo operates itself in two weeks on Oct. 22, when the company announces third-quarter results. Sources said the quarter will come in as expected, but will still tell a story of lackluster growth in advertising, engagement and, well, every key part of its native offerings.

That said, Mayer is expected to be on the call — her first at Yahoo — to outline her grand vision in more detail, as a spokeswoman has noted.

That’s good, since shiny profiles of her can only do so much. It’ll be nice to finally hear her say something definitive in public about how she’s going to fix the company that has given the mediagenic exec even more press.

(And, let’s hope, without the tweets, Manolos and pineapple malts.)

Santa Monica, Calif.-base Demand Media beat earnings expectations today, with a strong revenue performance up 17 percent in the second quarter and a small profit.

The social content company also said it had added Michael Blend as its new president and COO, noting he would be “expanding his current responsibilities overseeing content and media to include leading the company’s domain registration services.”

Blend — who came to Demand via an acquisition — will continue to report to CEO Richard Rosenblatt. But other major execs will also continue to do so despite the title addition for Blend.

Demand had a profit of $94,000, essentially break even on a diluted share basis, but it is its first quarter of positive net income as a company. That is up from a loss of three cents last year in the same period. But its adjusted earnings per share was nine cents, compared to an expected three cents.

Revenue was $93.1 million, a nice bump from the $89 million that Wall Street analysts had expected Demand to report.

Cash flow from operations was also up 30 percent.

“In addition to accelerating revenue growth, expanding our EBITDA margin and growing our cash flow from operations, we delivered our first quarter of positive net income as a public company in Q2,” said incoming CFO Mel Tang in a statement. “Based on our strong first half performance and outlook for the remainder of 2012, we are increasing guidance for fiscal year 2012.”

Demand’s stock, which has been on an upward swing recently, was up more than 3 percent in after-hours trading, to $12.

Here’s the full press release, and I will be listening in on its call at 2 pm PT to see if there is any more news:

PDF.Q2

Let’s begin by saying it is not new Yahoo CEO Marissa Mayer’s fault that the stock of the company has done a whole lot of nothing since the announcement of her appointment Monday.

After all, she just arrived.

But despite a lot of huzzahs from Wall Street over the solid choice of the high-profile former Google exec — which was being hailed by some as the answer to all of the Silicon Valley Internet giant’s woes — Yahoo shares still closed down yesterday slightly, and continued to fizz in after-hours trading.

Message from investors: Exciting choice, but you still need to prove that there is some light at the end of what has been a very, very long and pitch-dark tunnel for Yahoo.

It’s easy to see why, if you take a serious gander at the second-quarter results Yahoo released – in living color below — yesterday. They show a company that faces very serious and perhaps overwhelming problems that even a superhero CEO choice will find difficult to overcome.

Year-over-year growth of its global properties nearly flat, compared to an 13 to 15 percent rise a year ago; U.S. core search queries down 17 percent; minutes spent on its media properties down 10 percent; flat revenue touted as a good thing, since it was not down, at least.

Not down is the new up? In the land of Yahoo, it is indeed.

As Doug Anmuth of J.P. Morgan noted perfectly in a post-earnings note about the challenges the new CEO faces:

“This will be Marissa Mayer’s task going forward with her strong focus on product innovation and the user experience, but we continue to believe it will be difficult to turn Yahoo! around given mostly deteriorating engagement metrics, structural headwinds in the display space, shrinking search share, and limited mobile traction in the U.S.”

One bright spot is the $2.4 billion in cash that Yahoo has salted away, money that Mayer can presumably go hog wild with to bring in a spate of potentially invigorating start-ups and entrepreneurs, making Yahoo fast friends all over tech.

There is nothing like spreading around a lot of dough to make yourself popular again! And VCs become your BFFs!

That’ll come soon enough, but Mayer started just yesterday at Yahoo, and wisely bowed out of its analyst earnings call, with the company’s CFO Tim Morse noting that she needed to get up to speed on the state of the company before speaking out.

She needs to move fast, since sources said the signs for the third quarter are not promising, either, with Yahoo declining to provide guidance until Mayer can get a handle on the overall trends.

A handle that will take, it seems from the numbers below, a decidedly kung-fu grip:

YHOO_Q212EarningsPresentation

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.

But bankruptcy is not likely one of them.

At the end of trading today, Groupon was down 6.5 percent, or 54 cents, to finish at an all-time low close of $7.77 a share. The Chicago company is now valued at roughly $5 billion, or about a third of what it was worth on its first day as a public company.

However, a complete financial meltdown is far from feasible at this point. At the end of the first quarter, the daily deals giant reported that it had $1.2 billion in cash and was cash-flow positive.

Additionally, the biggest liability it has on its books is “merchant payables,” which is running at less than $600 million, or about half the company’s cash balance. Groupon currently owes that money to retailers that are in the process of running deals with the company.

A bankruptcy would also imply that the company was not able to raise more capital. While it wouldn’t want to at these depressed prices, and it would likely be difficult, Groupon has plenty of equity left to sell.

But none of these factors kept people from speculating that a meltdown was on the horizon.

In a post today on TheStreet.com, which included a rant about a car-washing deal from Groupon, the author concluded in his final paragraph that “it would be a huge surprise if there is not a bankruptcy filing by this time next year from Groupon.” The bankruptcy rumor, which is not even a new one, gained a bit more credence after being mentioned live on CNBC.

However, if you take a closer look, there are more near-term concerns that are likely at the root of the stock collapse.

In a note issued late Tuesday, Citi analyst Mark Mahaney reiterated his “buy” rating on Groupon’s stock, but lowered his price target from $22 to $19 a share. So far, Mahaney said, the company’s growth has been extremely impressive, but there are at least three ongoing debates that must be settled to determine whether it can continue to be a success. He wrote:

1.  Could GRPN’s growth be sustained? 33% Q/Q North America revenue growth in Q1 — due in part to personalization & new products & Mobile — suggests Yes.
2. Could GRPN’s model really scale to the company’s 30% l-t Operating Margin goal? Two consecutive quarters of 50%+ incremental margins, with a similar outlook for Q2, strongly suggest Yes.
3. Could GRPN address its accounting issues? Beefing up its finance staff and Board (CFO of Amex and Vice Chair of Deloitte) suggests Yes.

As the stock continued to slide, a Reuters report suggested the collapse had to do with economic weakness in Europe, where Groupon gets about a quarter of its revenue. Sameet Sinha, an analyst at B. Riley & Co., told the wire service, “Europe is a concern, obviously.” But Mahaney was less concerned about Europe, saying that there’s not much evidence it will cause a material risk to estimates. Rather, he tweaked his price target because of lower 2013 estimates.

Additionally, the stock has not yet stabilized since last week when Eric Lefkofsky, Groupon’s executive chairman and co-founder, said he had stepped back from day-to-day work with the company so he could devote more attention to his venture capital firm, comfortable with that step given the recent additions to Groupon’s executive team.

Groupon is expected to report second-quarter results in late July or early August.

The Nexus 7 tablet costs $199 handheld computer and features a 7-inch screen. The research firm UBM TechInsights has come up with a $184 preliminary estimate for the costs of components in the Google tablet. That compares with its $153 estimate in November for the components inside Amazon.com’s identically priced Kindle Fire.

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For those AOL shareholders waiting for a juicy dividend after the Internet company’s billion-dollar sale of its patent portfolio to Microsoft, it appears you’ll have to get your gains via a stock buyback that will be announced by the end of this week.

According to sources close to the situation, after evaluating tax considerations and talking to major shareholders, New York-based AOL has decided that share repurchase is the best way to realize its gains from the $1.056 billion sale of its lucrative intellectual property of about 800 patents and nonexclusive licensing rights to those the company continues to hold.

The patent sale undoubtedly helped AOL CEO Tim Armstrong in the company’s victory in defeating an activist shareholder assault from the hedge fund Starboard Value and re-electing its eight directors 10 days ago, as well as giving its stock a boost of almost 80 percent since the beginning of the year.

Even without a dividend, the impact on AOL shares from a large buyback could be significant. Various Wall Street analysts have pegged the value of the patent payout at about $11 per share, but that is not exact.

The sale of AOL patents to Microsoft officially closed on June 15.

At the time, AOL said, as it had previously:

“AOL is committed to returning 100% of the patent proceeds to shareholders. AOL’s Board and management team are currently working on determining the most efficient and expedient method to return the proceeds of the patent transaction.”

Of concern, of course, is the possible impact if Starboard decides to sell its 5.3 percent stake in the company. That could presumably be assuaged if AOL includes one of Starboard’s nominees from its alternate slate in a current hunt for two new board members.

But sources said that was unlikely and that AOL expects the disgruntled — and defeated — hedge fund to shed its stake.