In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

According to sources close to the situation, Yahoo’s massive round of layoffs — which is likely to impact up to 2,000 employees — is just the tip of the proverbial iceberg that will hit the storied Silicon Valley Internet giant in the months to come.

Sources said Yahoo is currently planning to announce the cuts in staff in the early morning, just as the markets open. That could change, of course, but the cuts will definitely occur within the next two days.

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions. While still sustaining losses, its media units will not be as badly impacted. And it’s not clear how many employee terminations will be aimed at the company’s general and administrative staff.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be “doubling down” in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

But not tomorrow, which will be one of the tougher days in Yahoo’s long history of periodic layoffs. Newly installed CEO Scott Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

That is indeed the case, which is causing massive strain throughout the company, which now employs over 14,000 and has many thousands more hired as contractors.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counter-claim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week, which will create several major, soup-to-nuts units at the company. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

Let’s hope that Yahoos who will be let go tomorrow find themselves with many new employment choices after the ax falls.

In an effort to minimize the impact of massive layoffs that Yahoo’s top management has been planning, according to sources close to the situation, one of the latest ideas to save costs and presumably jobs by new CEO Scott Thompson is to sell off much of its advertising technology platform, including Right Media.

And among the possible buyers Thompson has been targeting in recent visits: Google and Microsoft, as well as Silver Lake, the private equity firm that had once been talking to the Silicon Valley Internet giant about making a large investment in the company.

(That particular deal has gone south, but there is always yet another scheme on the horizon at Yahoo!)

The concept behind such a sale, according to several sources inside and outside the company, is to turn a cost center into a revenue source, with Yahoo essentially outsourcing a business that was a cornerstone of its strategy. A negotiable number of employees affiliated with those units would then move over to the new owner.

The most ideal plan, said sources, would be to sell Yahoo’s whole advertising technology “stack,” including the Right Media Exchange, a marketplace for advertisers, publishers and ad networks to trade online ads. Yahoo bought it for $700 million in 2007.

According to info on the company’s site, it has “300,000 active global buyers and sellers and more than 11 billion daily transactions.”

Also part of the possible package is APT, a system Yahoo has built to make buying and selling online advertising easier. In addition, Yahoo’s technologies for display-ad serving have been mentioned as a possibility for sale.

It’s unclear what the potential sale means for the new ad strategy that U.S. boss Ross Levinsohn and his lieutenant Jim Heckman have been pursuing since last summer. That plan included its own acquisition of ad network Interclick and an attempt to sync up with rivals AOL and Microsoft in an effort to fend off Google and some third-party players, like ad networks.

But the reason for contemplating much a major move — which has been considered before, but never has been seriously offered — are obvious: While Yahoo once dominated this arena, it has steadily lost ground, especially to Google. The search giant has made almost all of its money in search-related ads, but has been moving aggressively via its DoubleClick and other ad-serving entities into higher-level ads.

Microsoft has also been trying to compete, as has AOL, but it’s getting to be an expensive race, and one where Yahoo would have to make major investments to once again gain momentum. Building up this business again had been the aim of co-founder Jerry Yang, who wanted to go big in the arena in a number of ways before he left the company earlier this year.

But those days seem to be over at Yahoo.

“A lot of what has happened so far under Scott [Thompson] has been trying to find more revenue anywhere it can be generated, and get out of businesses that are not growing,” said one person. “Right now, it’s a lot about what we shouldn’t do rather than what we should.”

That has meant visits to see both Google and Microsoft about possible deals by Thompson, with the involvement of CFO Tim Morse and Chief Product Officer Blake Irving.

Thompson (pictured here) has also recently been talking to Silver Lake about the ad-platform sale, in a deal that might include the Andreessen Horowitz venture fund. This would be a different kind of transaction, said sources, in which a separate company would be formed, with Yahoo owning a piece and contracting with the new entity to provide ad technology.

All this activity is related to the layoffs in the works of perhaps thousands of employees, which were to have been communicated to the company this week.

Sources said those have been delayed for some weeks for several reasons, including whether to consider more deeply if certain larger business units can be spun off, sold or somehow transformed. (To be clear: Major layoffs are still being planned, but now might take place in two parts, said sources, in what is a quickly changing and volatile atmosphere at Yahoo.)

Another area being looked at, said sources, is Yahoo’s search advertising partnership with Microsoft, which has not been as successful as had been expected. While Yahoo has been working with the software giant about improving the results, Thompson has apparently been contemplating other possibilities, including working with Google (calling all regulators!) and/or laying off up to 900 employees who work on the company’s search offering.

Any of these moves could, of course, cause a firestorm of controversy, which Thompson appears to not worry much about. He was the driving force in Yahoo’s patent lawsuit against Facebook earlier this week, which is largely attracting a negative reaction across the tech landscape.

A number of prominent voices have spoken out against the legal action, including well-known VC Fred Wilson, who yesterday penned a poisonous blog post, titled “Yahoo Crosses the Line.”

It ends thusly: “I am not writing this in defense of Facebook. They can and will defend themselves. I am writing this in outrage at Yahoo! I used to care about that company for some reason. No more. They are dead to me. Dead and gone. I hate them now.”

Ouch!

Also weighing in publicly via Twitter was former Yahoo director Eric Hippeau, who was one of the company’s first investors, which is embedded below:

Pathetic and heartbreaking last stand for Yahoo bit.ly/yirCcj It’s all over. I loved you very much.

— Eric Hippeau (@erichippeau) March 13, 2012

Double ouch!

All I can say is that Thompson certainly has a lot of gumption. That has actually been his M.O. from the start, said several sources, with the former president of eBay’s PayPal payments unit and dark horse cold-emailing his way into the Yahoo CEO job.

True story: He had not been among its list of possible candidates — largely because he had been placed in his job at eBay many moons ago by Heidrick & Struggles, which was conducting the Yahoo CEO search, and that’s a talent acquisition no-no to poach someone you placed.

That did not stop Thompson, who thought he might be good for the job and reached out directly to board members at the end of the selection effort, which then led to the search committee and soon enough to the job in what was a very quick vetting and secretive (although not secretive enough!) hiring process.

Since then, Thompson has been on a tear, from working on a restructuring to trying to assuage activist shareholder Dan Loeb to helping put the kibosh on its Asian stake sale talks to suing Facebook. And now this sale effort, too.

If the peripatetic Thompson — who might need a dose of Ritalin before this thing is over — wanted to get noticed by the tech powers that be: Mission accomplished!

“He’s definitely someone who appears to have decided on shooting the moon with a lot of these actions,” said one person close to the situation, referring to the move in the card game of Hearts, which is a risky gambit to capture every penalty card worth 26 points in order to win. “I just hope no one loses an eye in the process.”

(That would be triple ouch, by the way.)

No comments all around, but everyone was certainly cordial on this rainy morning.

If there’s an earnings call at Yahoo, you know BoomTown is going to liveblog it!

Will Yahoo (YHOO) CEO Carol Bartz say something naughty? (Nope!) What is new CFO Tim Morse like? (Nice!) Will they say anything about the talks with Microsoft (MSFT) about a search and online advertising partnership? (No!)

Oh, it might be a corker!

The earnings results for the second quarter certainly were not.

As I wrote in a previous post:

Yahoo reported so-so second-quarter earnings results today, with a decline in revenues, but with a slightly stronger-than-expected improvement in net income.

For the three months ended June 30, the Internet giant said it had revenues of $1.14 billion, excluding traffic acquisition costs, down from $1.35 billion in the same period a year ago.

That profit was up eight percent, due to cost-cutting. Yahoo said it earned $141.4 million, or 10 cents a share, in the quarter, compared to $131.2 million, or nine cents.

That’s not really saying much, since Wall Street analysts had such low expectations, estimating Yahoo would earn eight cents. But, with a weak advertising market, it is also not that bad.”

Here’s the conference call, updated as it happened:

2:02 pm PST: Music followed by investor relations lady, who had a very nice voice.

She was quick and to the point, and soon enough Bartz was on.

First, she welcomed Morse as CFO, noting he was strong in “efficiency and process.”

Then she pointed out that the new home page for Yahoo–pictured here and you can read about it here–was “available…starting…today.”

Bartz dragged out the words, with a small dramatic flourish.

Then, it was right to the results, which Bartz was bullish on: “Considering the economy, I am pleased with the results.”

Bartz noted that “overall, we are seeing less fear in the marketplace,” although she added that she had no idea when the econalypse would be over.

“It’s easy to see it bumping along the bottom, but it’s too early to call…so, we’ll leave economic predictions to others,” she said.

She moved onto her being happy about all the new execs she had hired, noting that Yahoo was “closing in” on picking an international head (note to myself, get a Yahoo to leak the news to me asap).

2:07 PST: Morse (pictured here) came on and introduced himself. He looks like a CFO and also sounded like one too–calm, cool and collected, as it should be.

After a short talk about his background, he moved onto all the particulars of the quarter–results that had already been released, but Morse repeated them with verve.

I try to listen carefully in these explanations, but I confess that I actually don’t, unless something new happens. It didn’t.

Then Morse was looking forward, including talking some more about marketing spend coming up, as well as explaining what kind of CFO he was going to be.

2:18 PST: Back to Bartz, who started talking about well the long-troubled Silicon Valley icon was doing, even in the weak economy.

She kept calling Yahoo the “world’s biggest Internet media company,” and then said that Yahoo was an “Internet kingmaker” for other Web sites.

Well, it’s kind of true on both counts, so we’ll overlook the bragging.

Bartz then quickly moved through all the various arenas at Yahoo–from advertising to the home page to mobile–where Yahoo was trying to improve and increase its business.

She apparently is aiming to make online ads less annoying–if successful, I propose that Bartz should be awarded some medal of honor.

“We have a clear simple vision to be the center of people lives online,” said Bartz in conclusion, throwing in “kingmaker” again. “At the end of the day, we know who we are and know what we need to do to win.”

2:33 pm PST: Question time!

The first was about what Bartz thinks about Bing, the new Microsoft search engine, because it might take a while for these Wall Street analysts–reporters don’t get to ask questions–to screw up the courage to ask her outright about any Microsoft deal.

Bartz was unusually cordial, which is how someone about to be hitched needs to be.

“I think Bing is a good product…I think Microsoft should be given kudos for Bing,” she said. Hmmmm….

The next question was about the intent of Yahoo to invest in search, as opposed to display advertising. Another veiled Microsoft search deal question.

Bartz noted that Yahoo was investing in the user. Nice way not to answer the question!

2:38 pm PST: A question about spending and if there was going to be more.

Bartz noted that Yahoo was restructuring costs, rather than cutting and burning. She noted, for example, that more marketing spend was part of the plan.

Morse used a bucket analogy, and talked about draining costs back and forth, which was apt.

The next question was about advertising revenues, and whether they would grow. Also, more questions about costs.

Morse noted good strength in a lot of areas in the premium sector. As to cost structure: “We’re repositioning the business.”

2:48 pm PST:

Another cost question. I am officially ignoring it.

The next question was about how Yahoo was going to keep fixing APT, its newest advertising platform, which some think is too hard to use.

Bartz, who has insulted it in the past, was now kind of nice about it, noting that they were working on making it better.

A question about owned-and-operated search and its relationship with Yahoo’s affiliate search, which had been stronger. Not a trend, said Bartz flatly.

More about search and whether scale matters in search (another sneaky way to ask about Microsoft). “Of course scale matters,” said Bartz, who joked she would be happy to switch share positions with Google (GOOG).

A question about the new home page and its monetization and why it was announced today, as opposed to the fall, as planned.

Bartz did not really explain why or about revenue, but she sounded good.

The last question was about improvements in search share and monetization (translation: I want to ask about Microsoft, but I am too much of a wimp).

Bartz talked about better targeting, improved experience, driving relevancy and the prominent position of search on the front page. That will lead to more money, she noted.

Again, it’s not exactly an answer, but it sounded good.

Then it was over, although Bartz ended by urging everyone to “go look at the new home page.”

How much does BoomTown love the Friday weekly memos that Yahoo CEO Carol Bartz sends out to the troops?

Very, very much since they are so full of significant news–a slowdown of Yahoo’s homepage redesign and a major limiting of the global rollout of its new advertising platform, APT, to name a few.

But they also have a weird but compelling kind of energy that nearly jumps off the page, giving clear insight into how Bartz thinks and operates.

Like the Energizer Bunny, I would say.

Here are two memos Bartz sent out to Yahoo (YHOO) staff, one from today and one from last week on Feb. 13, both of which discuss just how busy she is keeping herself.

This past week, for example, Bartz spent the weekend with advertisers and partners at the AT&T golf tournament in Pebble Beach, after which she threw some serious love in the direction of U.S. sales head Joanne Bradford and gave the advertising minions under her an A+.

Bartz also cheerily admits with a “whatever” that a “Brand Pride Memo,” which a Yahoo marketing exec asked her to rename in case it leaked–oops!–from last week (see below), was still a list of Yahoo embarrassments.

And she is headed to Europe in April, followed by Asia TBD, although this weekend, a husband-free Bartz is catching up on chick flicks–might I suggest, “He’s Just Not That Into You”–and resting up for the “big week” ahead.

That’s Bartz’s coy term for her massive reorganization of management, which is slated, many sources tell me, to be announced Wednesday. (See my post on that here.)

Last week, was much more newsworthy, as Bartz did a lot of business unit and product reviews–reportedly scaring the bejeesus out of staff who had to present–because, she said, they had not been done in a dog’s age at Yahoo.

Stressing a “need for speed” in the decision-making process at Yahoo and a “WOW” experience for users, Bartz seems to be whirling through Yahoo like Mr. Clean’s white tornado.

As BoomTown reported this week (correctly, Tapan!), for example, Metro–the Yahoo homepage redo–was delayed by her “until we feel it will be a great product for our users.”

Bartz then said she had decreed that ads were to be taken out of mail products in emerging markets, which will mean a drop in revenue (probably minuscule), but make for a better customer experience.

Most significantly, she also limited the global rollout of APT, Yahoo’s new advertising system, which was much touted by previous Yahoo management, to just the U.S. and one other country in order to “perfect” it.

This is a polite way of saying it is buggier than an Amazon jungle.

And, my favorite and hers: Bartz wrote that “we are assembling a list of products that we are embarrassed about for various reasons so we can make the important decision as to whether we fix them or discontinue them.”

Speaking of curdling, and to keep up the kooky quotient, Bartz also thanked Texas Yahoos for something called “Purple Cowboy wine,” as well as employees in Oshkosh, Wis., for cheese curds.

Then, it was off to make Valentines with her ubiquitous assistant, Judy Flores, after which she was set to do some major kissing up to ad customers at that golf tournament (not her strong suit, apparently, as it had been former Yahoo CEO and co-founder Jerry Yang’s).

But, experience the full-Carol yourself in the two entire memos below:

February 20:

My week started last Friday down at the AT&T golf tournament where we hosted many of our important U.S. customers and partners. I thought I’d use this week’s note to give you some impressions:

First, I really want to congratulate Joanne Bradford’s team for hosting and running a first-class event. I know many of you in the company have absolutely no idea what happens in our regions or what salespeople do for a living (in fact, my past history has shown me that the way most engineers perceive salespeople is as lightweight, backslapping meeters and greeters). In fact, I’m delighted to report that Yahoo! has an A+ sales team. I watched them in action with customers such as Pepsi–it was clear they had the respect and trust of the customer and represented all of us Yahoos very well. It was very interesting to learn how creative our salespeople are in helping our clients devise interesting and profitable campaigns. I received a lot of compliments about how well-supported these customers and partners felt. Likewise, it was very clear to me that they support Yahoo! in return and very much want us to succeed.

Hey, that doesn’t mean they think we’re perfect! They had several ideas about our products and how we could do better, especially in this tough economic environment. This plays right into our focus on excellence and great products.

Last week I told you we were going to have our first pass at deciding which products embarrass us as a company. Kudos to Allen Olivo and his team for worrying that one of you might leak my email, so instead he called it the “Brand Pride List.” Whatever, the point is still important and we had a great discussion on which products to stop and which to make a lot better. More to follow…

I realize this is a very U.S.-centric message but that’s because I spent three days with U.S. customers. Just wait until I blow through Europe in April–I’ll be sharing all sorts of European goodies with you! And yes, I am going to Asia as well–we just haven’t settled on the date yet.

My husband is out of town this weekend, so I’m looking forward to watching all the “chick flicks” that he refuses to watch with me. I hope you all have a fun weekend. Get well-rested, because next week’s a biggie. :)

Carol

February 13:

A great illustration of my need for speed.

Had a big staff meeting this week. We spent all day Monday and Tuesday reviewing our strategies and major products on both the audience and advertising sides. It was a great introduction for me and even an eye-opener for the entire team when they realized that many of these strategies and products hadn’t been delved into in a long time (a big thanks to all the presenters who worked so hard):

· We talked a lot about the importance of having a WOW experience for all of our users around the world. As an example, we are delaying the launch of Metro until we feel it will be a great product for our users.

· Similarly, we discovered that we are losing mail share to the competition in many slower-bandwidth, emerging markets so we have made a decision to remove mail ads in those countries to improve the user experience. This will mean a drop in revenue for us but it’s the right thing to do strategically.

· We have also decided to “perfect” APT! in the US and only one international market before we roll it out globally.

· And finally, my favorite–we are assembling a list of products that we are embarrassed about for various reasons so we can make the important decision as to whether we fix them or discontinue them.

What does this have to do with the need for speed? Many of the things I just talked about could have and should have been decided earlier but we haven’t been an organization that has embraced the need for speedy decisions, even when they are the tough ones. We can all be part of changing this and getting back to an organization that is fast on its feet.

On a personal note, thanks to Team Texas Sales for the Purple Cowboy wine and the Care Center Service Desk in Oshkosh for the Wisconsin bag of goodies–my favorite were the cheese curds!

Judy and I went to URLs today and made Valentine’s for our sweeties–everybody remember yours so we can all have a big Yahoo! Valentine’s Day. I’m off to Pebble Beach tomorrow to meet, entertain and play golf with some of our biggest customers. Actually, it’s a great strategy because normally you have to “let” the customer win–fortunately, this is not a problem for me!

Carol

It is not so apt, if you think about it, that Yahoo has finally put up the details of its new system to let customers buy and sell display advertising–now called APT–right smack in the middle of the most serious financial meltdown of the modern era.

That’s because the economic crisis is likely to become a whirlpool that will be hard for any ad business to avoid, even the often recession-proof digital sector.

But it is Advertising Week in New York and, BoomTown supposes, the show must go on (it’s not as if they could suspend it, like a critically important Presidential debate or anything).

Actually, “ironic,” I suppose, is a better word than “apt,” because the existence of such a system–as a kind of Google-like way to deliver graphical advertising–is extremely vital to the next phase of the online ad game.

In Yahoo’s case, APT would service its sites, as well as big sites like eBay (EBAY) and several hundred newspaper sites, in what one can only hope is a cohesive manner rather than the patchwork way it is done now.

In order to reach many places across the country, for example, a national advertiser now has to potentially make hundreds of buys, which can be highly inefficient.

The other option is to use one of the too-many ad networks. But they often don’t let an advertiser know exactly where an ad is being placed, and it can sometimes create something called “channel conflict” between a publisher and an ad network.

This chaos has long been a problem in the online display business, which has been growing, although not with the same force or overall impact as the search ad business dominated by Google (GOOG).

Thus, the situation begs for clarity and for getting scale built into the system, which can only be imposed by big players like Yahoo (YHOO)–or Google or Microsoft (MSFT), both of which are working on their own systems.

Unfortunately, while the search ad market has a better chance to weather the current economic crisis, the online display market is a horse of a different color.

Many speakers at Ad Week underscored the obvious.

Former Yahoo ad head Wenda Millard, now co-CEO of Martha Stewart Living Omnimedia, said in a panel that the Wall Street crisis will have “pretty severe implications for medium-sized and smaller businesses and consumers.”

It was an opinion expressed by many others in the online space who attended the event, most of whom also tried to note in some fashion that the digital sector has a better chance to weather the expected slowdown than other media like magazines.

That might be so. But as one top digital exec correctly noted to me after the events of this week, which have deeply impacted banks and Wall Street firms, it will be hard to escape the suction-like pull of sinking ships:

“Like it or not, we’re all financial stocks now.”