One of Yahoo’s senior international execs and longtime entrepreneur Ahmed Nassef is leaving the company to create a new startup called Telfez, which will be a social television effort aimed at emerging markets.

Nassef, who was until now the head of Yahoo’s efforts in the Middle East and Africa, is co-founding the new company with Tamer Rashad, a top Merrill Lynch in the same region. Telfez will be based in Palo Alto, Calif.

“Today the Middle East and Africa region represents an inflection point for television viewership, skyrocketing growth in the penetration of smartphones and connected devices, and heavy social engagement,” said Nassef in a press release. “Increasingly, the millions of TV viewers in places from Capetown and Casablanca to Dubai and Istanbul are watching TV while holding a mobile phone or tablet and connecting with friends on their favorite social platforms.

Nassef has been at the Silicon Valley Internet giant for four years, in which he has doubled its audience and improved revenue growth. He came to Yahoo after the company acquired Maktoob.com, an Arabic language site, in 2009.

According to numerous sources close to the situation, the Tumblr brand will continue on in the wake of its $1.1 billion acquisition by Yahoo.

That includes definitive promises by Yahoo CEO Marissa Mayer to once-sale-shy Tumblr CEO David Karp to allow him to shepherd the fast-growing blogging product, with no forced integration with Yahoo’s many other content properties.

That said, sources added, there will be more back-end changes to marry infrastructure, such as undergirding Tumblr’s nascent advertising business and giving it more distribution opportunities.

“At the beginning, at least, it’ll be hands-off,” said one person close to the situation. “It has to be.”

While that is probably no surprise, it’s still good news for Tumblr employees as well as its very opinionated user base, which is not likely to greet a takeover by a corporate giant of the social, iconoclastic user-generated content service.

That said, Yahoo execs discussed and are aware of issues around porn published on the site, although they believe it to be fixable over time.

As Peter Kafka noted:

To spell that out: Tumblr’s advertisers don’t have to worry about their stuff showing up on blogs like We Want Porn. At worst, it’s possible that they’ll end up advertising to a user whose dashboard includes posts from We Want Porn. But in general, they ought to be pretty well insulated from that stuff.

By the same token, if Yahoo wanted to, it could end up scrubbing Tumblr of porn, and losing a lot of users and views — but it probably wouldn’t lose much in the way of monetizable users. Unless it turns out that the majority of Tumblr’s core users have signed on exclusively to use porn.

Or, as a Tumblr investor also told Kafka: “Non-story. Tumblr is the Internet. It’s a dashboard-follower model, opt-in.”

Moving on from porn, sources close to the situation — okay, pretty much everyone is chit-chatting away now — said that Mayer spent a lot of time with Karp (who was in Silicon Valley last week, in fact, visiting her) about the transition, and about how the new ownership would impact him and the service.

One source called them “kindred spirits” on the issue, and that Mayer has been given great purview by the Yahoo board to foster Tumblr to prevent it from turning out like Flickr, Delicious and many other big acquisitions dating back to GeoCities. (I was there covering that deal way back when, and what a mess that was!)

Mayer is well-liked by product and engineering entrepreneurs, and has often focused on them at Yahoo, over the perhaps more important demands of business and advertising execs.

That would appeal to Karp, who once famously said that online advertising made him physically sick. Still, he has recently begun to embrace ad sales at Tumblr.

Within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages on users’ dashboards, which has shown promise. Tumblr has said it had $13 million in revenue last year, and sources said it could get to up to $100 million this year.

“We’re going to be very careful here,” said a source with knowledge of the acquisition.

A source at Tumblr agreed: “This will be a very delicate dance, since so much could go wrong if done without care.”

Still, some at Yahoo are worried that the company might be chasing the youthful demographic at Tumblr too assiduously. “This is a very fickle audience,” said another high-ranking Yahoo exec. “Chasing a young one is a very tricky thing.”

Yes, indeed, but Mayer thinks she is the one to be able to pull it off and make Yahoo relevant with an even wider consumer base.

AllThingsD broke news of the deal in the offing last week, which has since been approved by Yahoo’s board.

The Yahoo board has approved a massive $1.1 billion all-cash deal to buy Tumblr.

It’s not clear when the official vote was taken, but sources close to the board said the acquisition was a foregone conclusion and was unanimously approved by the directors of Silicon Valley Internet giant.

The deal will likely be announced Monday morning, said numerous sources.

AllThingsD.com initially broke the story of the acquisition efforts and later followed up with details of the exact price and the board meeting to approve the transaction.

There were no other competing bids, despite reports, to snap up the New York-based social blogging service. That said, Tumblr had held some very preliminary discussions about various deals with Facebook, Google, Microsoft and also Twitter earlier this year.

As part of the Yahoo deal, Tumblr CEO David Karp — who will get a windfall of cash from the acquisition — will stay at Yahoo for four years at least and retain a lot of control over the service, much in the same way Instagram CEO Kevin Systrom does at Facebook. But, as there, Yahoo will undergird Tumblr’s nascent advertising business with its large and established infrastructure, said sources.

Yahoo had been mulling some kind of deal with Tumblr, from a strategic investment to an outright acquisition, for about six weeks. Sources said that Yahoo CEO Marissa Mayer had decided that buying the company was going to be “the stake in the ground of what her strategy is going forward for Yahoo.”

And that is to attract younger audiences with just the kind of user-generated content Tumblr has pioneered to impressive growth.

According to numerous sources, Mayer determined quickly in her research that the site was just the kind of property that Yahoo needed to make it both “cool” and relevant to new consumers.

Yahoo is looking to bolster its strong set of existing media offerings to appeal to a different demographic and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

Tumblr’s mobile usage has also been strong, which also interested Mayer. While Tumblr started as a desktop-based service, its mobile offering has ramped up quickly in the last few years. ComScore says that a quarter of the service’s U.S. visitors now come from mobile devices.

At this price, it will be Mayer’s biggest acquisition so far. Since she became CEO last summer, Mayer has made only a series of small acquisitions of mobile startups at a low cost.

According to sources, the Tumblr brand will continue.

The deal, if consummated, will be a big win for investors. In a series of fundings since 2007, Tumblr has raised $125 million so far and is now at a reported valuation of $800 million. Investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, Insight Venture Partners and the Chernin Group.

While Tumblr’s Karp has resisted various offers for the company over the years, Mayer spent a lot of time with him reassuring him that Yahoo could turbocharge his business. He has also been searching for a COO to help him build out the infrastructure of its business, especially its advertising one.

And as Peter Kafka and I previously wrote, Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocketship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards,” which has shown promise. Tumblr has said it had $13 million in revenue last year and sources said it could get up to $100 million this year.

Tumblr has been represented by Qatalyst Partners’ Frank Quattrone, while Yahoo’s Mayer, as well as M&A head Jackie Reses and CFO Ken Goldman, have been on the company’s side.

Interestingly, what got me first focused on Tumblr last week were Goldman’s comments at JP Morgan’s Global Technology conference last week, where he underscored the need for the aging Yahoo to attract more users from the coveted 18-to-24-years-old age bracket. Along with more marketing, he explicitly said Yahoo needed to be “cool again.”

“One of our challenges is we have had an aging demographic,” said Goldman at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”

Tumblr, apparently, fits the very expensive bill.

Demand Media, the online content company, said it had earned nine cents on an adjusted basis in the first quarter, on revenues of $100.6 million, topping Wall Street estimates of eight cents on $99.6 million in sales. On a fully diluted basis, earnings were one cent a share, or $700,000, compared to a loss of two cents, or $1.8 million, in the three months compared to a year ago.

“Strong growth from our owned & operated content and media properties drove our Q1 results, highlighting the unique capabilities of our content discovery, creation and distribution platform. Further, we accelerated our paid content strategy with the acquisition of Creativebug, a premier online destination for arts and crafts instruction, which will provide our large eHow crafts audience with an expanded learning experience. In addition, we signed up over 400 resellers to our new gTLD tools and received more than two million expressions of interest for domains to be registered with new gTLDs,” said Richard Rosenblatt, chairman and CEO of Demand Media in a statement. “We are excited about the distinct long-term growth opportunities for both of our businesses.”

Demand’s eHow site seems to have driven a lot of the gains in the content area.

Demand shares rose in trading yesterday by close to two percent, to close at $8.58, also its stock is down 7.6 percent for the year.

The company did not mention the planned split of its registar and content business that it announced in the last quarter in the current results, which might be covered on the conference call the Santa Monica, Calif. company will have with analysts at 2 pm PT.

In its last earnings release for the fourth quarter, Demand said it was spinning off its domain registrar business from its media one in a bid to better clarify the company to investors.

Since it went public several years ago, there has been some level of difficulty for each part of Demand to easily explain itself to Wall Street, given the very different natures of its key — but very different — revenue units. In a statement at the time, Demand said that it was “our intent to spin off our registrar business and separate into two independent, publicly traded companies.”

The company noted that the two units “divergent strategic priorities and opportunities” would be better in the new configuration with a pure-play media company and domain services company. At the time, the company said the transaction was expected to take place in the next nine to 12 months, although it required a number of company and regulatory approvals to do the tax-free spin-off to create two different stocks.

In a different kind of transaction, Demand had talked a little more than a year ago to a private equity company about taking the company private. The effort was abandoned, in which Boston-based Thomas H. Lee Partners would have purchased Demand for a price of up to $1.2 billion, due to a number of challenges. Its current market valuation is now about $744 million.

Until we hear more about the spin-off plans from Demand execs, here’s the full release from Q1 to peruse:

1Q 13 FINAL RELEASE

Here’s a brilliant segment on Jimmy Kimmel Live when Harrison Ford, who will be forever known as “Star Wars’” Han Solo, said he did not want to answer questions about the iconic, fan-addled movie.

That did not stop a great set-up with non-“Star Wars” audience questions coming from a man dressed up as Obi-Wan Kenobi, another dude as Princess Leia and yet another in full Wookiee costume as Solo’s sidekick Chewbacca, which did not end so well.

Enjoy:

According to sources, two high-ranking Yahoo execs have departed the company — longtime strategy exec Raymond Stern and advertising exec Liz Ritzcovan.

Stern — whose recent Yahoo title has been SVP of business development and partnerships — was hired at the Silicon Valley Internet giant in 2009, and has held a number of jobs in areas such as business development, audience, mobile and local. Ritzcovan has been at the company since early 2011, most currently as a VP of marketing solutions.

Meanwhile, SVP of advertising and data platforms Scott Burke has been elevated to the executive staff, reporting directly to CEO Marissa Mayer. Sources said Mayer has put him in charge of all ad tech platforms in a continuing product overhaul at Yahoo.

As March approaches — a time when stock options and bonus payments come due — insiders at Yahoo said to expect a lot of such talent movement within the company. Sources also noted that Mayer has been working hard to bring in new execs from outside Yahoo, but has been having a harder time than she expected recruiting high-level talent.

The Los Angeles-based Rubicon Project has hired two execs to fill top spots at the digital advertising company, in what looks like preparations for an eventual public offering.

Greg Raifman, the founder, chairman and CEO of Dragon Media, will become president, reporting to Rubicon CEO and co-founder Frank Addante. And SocialVibe CEO Todd Tappin will take over in the role of COO/CFO, reporting to Raifman.

Founded in 2007 and armed with more than $50 million in funding, Rubicon is one of the larger real-time bidding platforms that allows automated buying and selling of global online ads.

“Greg and Todd are extremely intelligent and capable executives who have guided significant, publicly traded companies,” said Addante in a statement. “Both Greg and Todd have great relationships within our industry as well as on Wall Street. Their presence will enable me to focus on our overall vision and product strategy so we can take best advantage of the opportunities we see.”

Tappin is replacing Brian Barnum, who will leave the company, along with Chief Revenue Officer Nick Hulse. The pair only arrived less than two years ago, presumably to also help professionalize the organization.

In addition to the other exec moves, general counsel Victoria Von Szeliski will add the title of EVP of culture and business affairs and will also be adding 100 employees this year via organic growth and acquisition.

Rubicon said Raifman — who recently served as the executive chairman of video ad-serving company LiveRail, as well as being founding and running ad-serving pioneer Mediaplex — will “manage the day-to-day operations of the Rubicon Project as he ramps the company’s buy-side automation initiatives.”

Tappin will be in charge of Rubicon’s operating and financial plan and also lead mergers and acquisitions for the company. Before running SocialVibe, a video real-time buying startup, he was founding CFO of Overture and helped sell the search automation company to Yahoo many years ago.

The exec roundelay — a not entirely uncommon thing for Rubicon over the years — is apparently part of a larger bid to eventually IPO the company. Rubicon had also been in recent preliminary discussions with several larger companies — Yahoo and Adobe — about being acquired. The ad tech space has heated up of late, with a range of startups, such as AppNexus, Pubmatic, Turn and others, looking to gain ground, get funding or sell out.

But with a large price tag and some strong growth over the last year, along with becoming profitable, Rubicon appears to now be aiming to remain independent. Over the last few years, the company has grown its business significantly — according to comScore, Rubicon Project reached 214.2 million monthly unique users.

Whether that is enough to keep up with powerful rivals such as Google is, of course, the big question, especially as the way publishers and marketers interact with the online ad market is changing quickly.

This week in Las Vegas, the new management team running Yahoo — including CEO Marissa Mayer — is at International CES to schmooze with big advertisers and convince them that Yahoo is the place to put large chunks of their marketing budgets.

One of the longtime selling points of the company is the sheer size of its audience, especially for the key money-making parts of the site — the homepage, Yahoo Mail and search.

But private stats from comScore show that those three areas have continued their longtime decline over the last year, in some cases dropping significantly. In November and December, for example, compared to the same two months a year ago, U.S. search was down 28 percent and 24 percent respectively, while mail was down 16 percent and 12 percent.

This matters a great deal, since the troika of homepage, mail and search have been the critical driver of the Yahoo value ecosystem for advertisers.

The impact of those drops is felt all over Yahoo, whose music, movie, games and travel site have also seen massive drop-offs in traffic year over year in those same months.

Stopping the decline is critical for Yahoo, since Mayer herself has underscored the need for size in her pushing for new businesses at Yahoo that are 100 million users in size and/or have revenue prospects of at least $100 million.

While this is a lofty vision, the reality of traffic falloffs on key properties is a vexing issue, especially since they remain its main source of revenue and also an important element in launching future products Mayer is promising will turbocharge the company.

It’s not that Yahoo is not huge, especially compared to most sites on the Web.

As one of the top Internet brands, according to a recent Nielsen report, the average number of total monthly unique visitors for the longtime Silicon Valley Internet company in 2012 was 141.6 million, No. 3 behind Google and Facebook in the U.S. market. Similar rankings were reported by comScore, which placed Yahoo at the No. 2 spot after Google, with 171.4 million monthly visitors in November.

But, for many years, traffic to those important consumer destinations of Yahoo has been on a clear and unstopping decline, statistics (usually from comScore) that the company nonetheless always dutifully puts in its earnings slides — see below — for investors to get some idea of the major and vexing issues facing the company.

That was suddenly ended in the last quarter with the engagement slide removed from Yahoo’s public deck entirely. Not all companies include such stats, so when I inquired as to why the company had made the change, Yahoo PR never returned my phone call.

But it’s not hard to guess the reason for the shift — the numbers were not good and they called more attention to Yahoo’s glaring challenge, which is getting users reengaged with its products by creating what Mayer has dubbed several times “delightful” experiences.

According to numerous sources, that has also been the case within the company too, with the new regime restricting an internal transparency initiative pushed by former Chief Product Officer Blake Irving that shared product performance numbers with the top 100 leaders at Yahoo.

And while it’s an interesting strategic choice, several sources inside the company this week urged me to get ahold of increasingly worrisome numbers from comScore — available to its private clients — comparing November 2011 to November 2012 and also December 2011 to December 2012 at home and work in the U.S.

So I did, getting the same stats from numerous sources — numbers that a spokesman for comScore confirmed were correct.

And, as promised, they are worrisome indeed.

In November 2012, compared to November 2011, the monthly unique visitors to the homepage declined 17 percent to 91.8 million from 110.9 million; Yahoo Mail dropped 16 percent (from 92 million to 77.7 million); and Yahoo search dropped 28 percent (from 93.3 million to 66.9 million).

Also off significantly for all three areas, often by one-third, were a plethora of other stats: Percentage of reach, total minutes, total page views, total visits and more.

One of the only bright spots for Yahoo was the relatively small Flickr sites, which were up 37 percent — 26.7 million versus 19.4 million — in unique monthly visitors year over year. The photo-sharing site — which has been getting a much-needed refresh — was also up in all other stats.

But Flickr — which Mayer (pictured here) has laudably touted and supported after years of inexplicable neglect — is not a money-maker for Yahoo, even if its return does burnish the company’s tech and innovation cred.

In December 2011 to December 2012, the homepage was more stable, gaining four percent in monthly uniques from 109.4 million to 114.2 million, but with other key stats both rising and falling. Total visits were up 14 percent, for example, while average minutes per visit was down 13.6 percent.

But the trouble for mail or search continued, off 12 percent (89.9 million to 78.7 million) and 24 percent (88.7 million to 67.4 million) respectively in monthly uniques, with similarly major declines in all other stats.

Mail recently got a refresh too under Mayer, despite some recent security glitches, so new stats will show if that will help stem the declines. Search is another story all together, with Yahoo in what can only be described as a dysfunctional partnership with Microsoft that numerous sources tell me Mayer is seeking to end.

The homepage, too, is undergoing a redo, with a design that has a decidedly more mobile and social feel, and pushing an ethos of Yahoo becoming a hub for content discovery. It is hoped the new look will boost traffic relatively quickly from its current downward trajectory.

To be fair, there can be lots and lots of reasons for these declines, although most of Yahoo’s competitors are, at worse, seeing a flattening of growth and not outright declines.

And sometimes Internet sites complain that services like comScore undercount, although Yahoo had previously used the firm in its public documents. More to the point, as multiple sources within the company note, the stats are directionally correct in that they closely track with internal Yahoo numbers.

Which is to say, traffic is going down rather than growing. That is clearly why Mayer has loudly stressed mobile since arriving at Yahoo, an area not included in these numbers that many sources said has strong growth to about 70 million monthly unique visitors via its apps and mobile-enabled Web offerings.

But unlike the homepage, mail and search — which push and pull traffic all over Yahoo and are responsible for most of its current monetization — mobile also makes very little money now. And Yahoo — unlike Facebook, which recently did — does not break out mobile results.

So, it will be interesting to see if the company does so when it reports fourth-quarter earnings on January 28 and also if it says anything about continued traffic declines of its traditional Web business in the period and the impact on revenue.

Still, there are lots of ways to counter declining or flat revenues, even with declining traffic — via cost cuts, efficiencies, charging more and selling assets (as Yahoo did in the last quarter). And Yahoo has ably managed to keep its operating margins growing over the years, despite both the declines in traffic and moribund growth in its revenue.

But the real and only fix is the drastic fix to existing tentpoles Yahoo has and the creation or acquisition of products that excite consumers and, therefore, advertisers.

It’s not an easy thing, of course, as well-known venture capitalist Ben Horowitz recently wrote in his blog about the need to focus on products over building and improving culture — one of Mayer’s other big initiatives at Yahoo.

Wrote Horowitz in what I consider one of the clearest articulations of what it takes to win for startups, as well as big companies like Yahoo:

“The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing. Two or three times better will not be good enough to get people to switch to the new thing fast enough or in large enough volume to matter. The second thing that any technology startup must do is to take the market. If it’s possible to do something 10X better, it’s also possible that you won’t be the only company to figure that out. Therefore, you must take the market before somebody else does.”

If you want to take a gander, here are some more of those old Yahoo quarterly engagement slides, which were recently eliminated from its presentations:

(Note: I reached out to Yahoo’s outside PR firm — since they do respond to queries — and also some company execs to get a comment on this story, but so far there has been none.)

As I had previously reported, Yahoo’s key business unit — its advertising sales force — is now getting details of a reorganization by its new leader, COO Henrique De Castro.

In making the changes, just weeks ahead of Yahoo’s annual sales conference in Las Vegas on Jan. 21, De Castro is borrowing rather heavily from the set-up of the powerful ad business at Google, from whence he came.

By shifting the sales organization to a “category” model, sales reps at the Silicon Valley Internet giant will sell all of Yahoo’s ad products, as well as its search offerings, across channels in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search, designed to avoid vertical conflict. Thus, the sales staff have built up advertiser relationships across many areas, which will not work in the new system.

Sources inside the company said regional leaders will now be shifted to running various verticals. There will be support specialists for those areas, too.

Mark Ellis, who was most recently VP of North American sales and global partnerships, will pay a key role in the new org, said sources. It is not clear, though, what role Peter Foster, who has headed audience advertising, will play. Another high-ranking exec, Keith Kaplan, has apparently been shifted to focus on agency relationships.

As I had previously written, there are many different ways to organize sales, but making such major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

According to numerous sources inside Yahoo, the changes are causing some measure of worry and confusion across the salesforce at the company, since it comes after a lot of wrenching changes over the last year.

That includes the departure of well-regarded Chief Revenue Officer Michael Barrett in mid-October, after De Castro got the COO job. He has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in its sales organization.

He will likely have a more high-profile next week at the International CES, the huge annual consumer electronics show taking place in Las Vegas, along with new Yahoo CEO Marissa Mayer, who was a top product exec at Google. The pair is planning on meeting with major ad clients while there, which is their first significant outreach to marketers since taking their new roles at Yahoo.

De Castro had outlined the new ad reorg plan immediately after a multiday offsite with top sales leaders several weeks ago, and said the changes would come at the very beginning of 2013.

The ad staff at Yahoo begin to hear of the changes on Friday, so it looks like De Castro has met his deadline.

Michael Katz, one of Yahoo’s high-ranking online advertising execs, is leaving the company, according to a memo he sent out to staff on Friday.

Considered a savvy online ad player and a well-regarded entrepreneur, Katz came to the Silicon Valley Internet giant a year ago when it bought Interclick, the ad-targeting company he co-founded and headed, for $270 million.

Yahoo later used Interclick’s technology in its audience-buying platform called Genome. In a reorganization announced in January, Katz was placed in charge of sales operations and data and performance optimization for Genome.

The data unit is at the center of efforts by Yahoo’s new CEO Marissa Mayer to turbocharge its ad business.

But the Katz missive, which is below in its entirety, clearly signaled that his departure was not an amicable one, which sources underscored was part of a larger rejiggering of the ad sales staff under new COO Henrique De Castro.

“As some of you are starting to learn, my last day with the company will be today,” wrote Katz on Friday. “Leaving Y! is not the hard part — how it happened and leaving all of you is what makes this difficult.”

How it happened, said several sources, was that Katz was suddenly told by HR head Jackie Reses last week that there was not a place for him, only days before a large 12-month retention bonus was to be paid out to him for the Interclick acquisition.

While it is an unusual thing to part on willfully difficult terms with an entrepreneur, as it sends a bad signal to others considering joining the company, Yahoo’s new leadership has been playing hardball with a lot of top execs it is parting ways with, and is also limiting departure packages.

Former marketing head Mollie Spillman, for example, was suddenly let go after she was replaced by former Lockerz CEO Kathy Savitt. And, though he had wanted to leave, former CFO Tim Morse was also told of his replacement in a swift exec house-cleaning move, as was former HR head David Windley.

Of course, such moves are not unusual when a new set of leaders enters the corporate picture. That’s why many at Yahoo expect even more changes to come soon in the ad unit, with most assuming that Mayer and De Castro will bring in new staff they had previously worked with at Google.

Currently, top Yahoo ad execs include Peter Foster, GM of audience advertising at Yahoo; and Mark Ellis, VP of North American sales and global partnerships.

It will be interesting to see what happens to them and others as part of a large ad reorg at Yahoo now taking place, which will definitely include a variety of departures and arrivals. One recent notable Yahoo ad exec departure, for example, was Debbie Menin, who headed entertainment and travel sales strategy, and is now a top sales exec at hot video entertainment network Machinima.

More will come in the new year, given that De Castro has recently briefed employees on a plan to move its sales organization to a “category” model. Simply put, that means its sales reps will sell all of Yahoo’s ad products, as well as its search offerings, in a vertical process organized around advertiser segments.

That massive shift is not Katz’s to worry about anymore, it seems. Here’s his entire email to staff, which is a pretty eloquent one, as goodbye letters go:

Friends and Colleagues,

6 years ago if someone would have told me that the hardest part about building a business would be to one day say goodbye, I would not have believed them. As some of you are starting to learn, my last day with the company will be today. Leaving Y! is not the hard part — how it happened and leaving all of you is what makes this difficult. I will miss the daily interactions and will take with me the many memories. This has honestly been so much fun.

I have learned a lot along the way:

Sometimes winning looks like losing. If you don’t fail, you can’t progress and the stakes only get bigger as you go further down your path.

Be genuinely happy for those that are successful at reaching their goals. If you spend anytime wishing it were you, it will never be.

Stay humble, and never declare victory.

Approximately correct is better than definitely wrong. Do not let perfection be the enemy of excellence.

We are all human — we may make mistakes, we must forgive, forget, and move on together.

Treating people right is not an option.

Treat adults like adults and they will behave like adults. Rules are for children.

People and culture are everything. It’s about so much more than free food and parties, it cannot be forced and without it a business cannot succeed.

I consider myself so very lucky to have known a handful of loyal friends that took a chance, quit their jobs and risked a lot to build this business with me. Their loyalty and hard work helped interclick get off the ground and for that I will forever be grateful. The team they helped to build has truly made this the greatest place to work. Each and every one of you made interclick the very best company to work for.

I would like to leave you all with a reminder of what together we built:

– A company that started with $27,000 and sold for $270,000,000

– A company that redefined the way that marketers think about audience targeting and data

– A company that went public in 2009 on NASDAQ defying all odds

– A company that spit in the face of adversity early in 2011 and came out victorious

– A company whose people are the future of this organization.

So be proud of what together we achieved, look back and know you were part of something big. Then look ahead and know that this is just the beginning, we will all one day build again. For those of you that continue your career at Y!, I ask that you don’t lose sight of greatness. Remember what you are capable of and continue to make me proud.

Thank you for your loyalty, passion, dedication, and collaboration. The finish line is only the beginning of a new race.

-MK

As AllThingsD previously reported it would, Yahoo has released a new version of its Yahoo Mail offering, updating its Web offering and also adding native mobile apps for Apple iPhone and Microsoft’s Windows 8. It also updated its Google Android app.

The new Web mail has a decidedly cleaner design and improved search, part of an effort to better compete with Google’s Gmail, which has taken major share from Yahoo in the arena in recent years.

In fact, one source told me that the aim was to be “more Gmail-like.” And, indeed, it looks like it is. Yahoo is also working on a radical rehaul of its homepage, which is set to debut in the coming weeks, although the Silicon Valley Internet giant has been rolling it out in testing for months now.

Redoing Yahoo’s flagship properties — especially to focus on mobile — is a key priority at the company under new CEO Marissa Mayer. She said in a blog post that the new Yahoo Mail will be rolled out to most users soon.

It’s an important step, as I noted in my post about the impending changes to Yahoo Mail, which got its last refresh a year ago:

At the time, the first change in five years got good reviews, with a cleaner design, Twitter and Facebook integration, improved spam filters and speedier delivery.

Unfortunately, since then, Google’s Gmail has become the most popular email service in the world, passing Microsoft’s Hotmail (which is now called Outlook.com after a recent rejiggering), according to recent stats from comScore. That has added up to Gmail’s 287.9 million monthly unique visitors worldwide, 286.2 million for Microsoft’s email product and 281.7 million for Yahoo Mail.

Still, in the U.S. at least, Yahoo is holding onto its longtime — though dwindling — lead, with 76.7 million using Google’s email product and 35.5 million using Microsoft’s.

It’s an important spot to maintain for Yahoo, since many of the users of its products now come to the site to access email and it has been a key driver to its content properties.

But to keep mindshare, Yahoo faces increasingly strong competition. Google’s Gmail released a series of solid improvements last fall. In addition, along with the positively reviewed Microsoft Outlook.com redo, AOL has just announced a new email product called Alto. While it is in beta to a small audience, it is aiming to help users with multiple email accounts organize them better.

In others words, the mail business — especially using it via smartphones and tablets — is another place Yahoo has to make sure it remains innovative.

In what will be a major shift in how the Silicon Valley Internet giant sells online advertising, Yahoo’s new COO Henrique De Castro has briefed employees on a plan to move its sales organization to a “category” model, according to numerous sources close to the situation.

Simply put, that means its sales reps will sell all of Yahoo’s ad products, as well as its search offerings, in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

This is how Google, where both De Castro and CEO Marissa Mayer recently worked, conducts its ad sales efforts. (After copying free food and smartphones, staff evaluation efforts and more, What Would Google Do seems to be strategery at Yahoo these days.)

In contrast, Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search.

The move from regional to vertical is a “seismic shift,” said one source quite accurately. That’s because Yahoo’s go-to-market efforts have been designed to avoid vertical conflict and its sales staff have built up advertiser relations across many areas. In a vertical organization, those reps will be forced to give up these long-term relationships with marketers, some of which have been built over years.

There are, of course, many different ways to organize sales — and each has its fans and detractors. But one thing is clear: Making such a major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

The change might also result in some attrition among the sales staff, said sources, although many at Yahoo are expecting that De Castro will bring in his own execs from outside to help with the transition. (One interesting name I heard floated was former Googler Penry Price, who was close to De Castro when they both worked there. He is currently president of Media6Degrees, an ad targeting start-up.)

De Castro (pictured here) will need all the help he can get as he overhauls Yahoo’s sales efforts. Well-regarded Chief Revenue Officer Michael Barrett left Yahoo in mid-October after De Castro got the COO job.

His departure has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in sales (more on that to come).

Currently, the key ad execs at Yahoo under De Castro are Peter Foster, who heads audience advertising, and Mark Ellis, VP of North American sales and global partnerships.

De Castro outlined the new ad org plan to staff immediately after a multi-day offsite with top sales leaders last week, at which Yahoo’s acquisition options in the ad tech market were also discussed.

Sources said De Castro noted that the changes could take place as early as January 1.

De Castro is also planning to have Yahoo’s annual global sales meeting for the end of January in Las Vegas. Last March, the gathering — then set for about 1,300 advertising staffers in Florida — was cancelled due to a restructuring under ousted CEO Scott Thompson.

In addition, sources said, Yahoo is planning on having a much more prominent presence at the upcoming Consumer Electronics Show — also taking place in Las Vegas in January — in order to solidify its relationships with advertisers.

Its big weapon at the giant annual confab will apparently be Mayer, who has not yet interfaced significantly with the company’s big ad clients since taking the top job in July. At CES, sources said, Yahoo is hoping the “Marissa Halo” — i.e. excitement around the telegenic exec — will help boost its business.

Tonight, new Yahoo CEO Marissa Mayer gave her first public interview since becoming the leader of the troubled Silicon Valley Internet giant.

Not to cranky me, of course, but to the much more amenable Fortune magazine writer and editor Pattie Sellers, who hosted the former Google exec at a dinner in Palo Alto, Calif., as part of the magazine’s Most Powerful Women franchise.

Fortune recently put a glamour shot of Mayer on the cover, and Sellers also did a profile. Now, Mayer was ready to sit down to talk about Yahoo and more.

(I wish I could have reported from the event, and almost did. I had initially been invited to the dinner at the Garden Court Hotel for about 100 guests, mostly women. But I was then waitlisted, and then told by Sellers directly that I could not attend, as the editors had decided to close out outside media and only have Fortune staffers covering it.)

Whatever! I have my ways to liveblog it and do it faster than any magazine writer can — and none involve disguising myself as a cater-waiter or solely using the Twitter feed from Fortune. As if!

Here goes:

7:50 pm: After some lovely cocktails, the audience sits down at about 10 tables of nine people and starts in on the salad course.

Soon enough, the night starts off with a speech by a McKinsey partner (and presumable sponsor of the dinner), delivering some stats as part of a study of some sort about how businesses are using — or should be using — social tools.

More than 60 percent of knowledge workers spend time exchanging information … Social can deliver an estimated $1 trillion in value.

Big news! Not! Even! Slightly! Oh dear, please get to the opening act!

Finally, Sellers gives her intro of Mayer.

8:04 pm: Sellers notes that her conference had hosted Yahoo CEO Carol Bartz in 2010 (she was ousted in 2011), and in 2011 had Mayer when she was an exec at Google (she became Yahoo CEO this year).

Now, in 2012, Mayer is top dog at Yahoo, and the youngest CEO in the Fortune 500.

“Why don’t we just call this ‘the most powerful Yahoo dinner,’” jokes Sellers.

Why not!

Mayer — for those who care, and forgive me, since I am fashion-stupid — is wearing a black frock and some heeled Mary Janes. She gets big applause when Sellers notes that Yahoo stock is up 18 percent since Mayer became CEO.

Note: It did go down when she made a shareholder misstep early in her tenure, but has gone up since she repeated mobilemobilemobile with confidence on a recent earnings call that got investors excited about her tenure.

8:08 pm: By the way, Mayer put in a call for people to vote for her as Time magazine’s Person of the Year (she is on the list of nominees — more kudos from a Time Inc. property).

Mayer starts off with basic PR messaging that she trotted out previously on the recent earnings call, around how she wants Yahoo to be focused on “delighting and engaging users” and how it is a brand that touches people every day.

Therefore, its products need to be inspiring and delightful.

Daily delight! This is the buzzword.

Also, she notes, Yahoo should be the bestest place to work.

As apparent proof of that, Mayer says that all Research In Motion BlackBerry smartphones have been banished, and that Yahoos will be using Apple’s iPhones, Google’s Android phones and Microsoft’s Windows phones.

This has been endlessly reported, even though most other Internet companies do this, but it’s a good line, anyway.

8:12 pm: By the way, iPhones are the most popular with Yahoo employees.

News at 11! (I will add that iPhones are the most popular with the Swisher boys, too, and — irony alert — one of their moms works at Google.)

Sellers then asks about what makes a good product, which is precisely why the product-savvy Mayer was brought in to fix Yahoo.

Says Mayer: “Acute user need.”

I acutely need doughnuts. Does this count?

Also, says Mayer, products have to be created in a way that is “frictionless and beautiful,” and that the offering cannot get in the consumer’s way.

Sellers asks her to name a great product. Mayer notes that she was not talking acquisitions, but quickly namechecks the iPhone and Google.

Since those companies’ market caps are a billionty times bigger than Yahoo’s, she def cannot acquire anything there.

8:17 pm: Mayer also apparently likes some kind of luxury paper made in Germany that looks like velvet. It’s Gmund, by the way.

The topic moves on to Flickr, the once hip photo-sharing service that Yahoo bought and proceeded to ignore. Meanwhile, Instagram.

Mayer says that Yahoo needs to focus on the “global suite” services that are excellent, and on executing them well.

She points out Yahoo’s fantasy football service, mentioning its recent breakdown on game day that sent fans into a tizzy.

It’s a they-love-us-so-much-they-hate-us point.

Yahoo will not do things like online maps, though, Mayer says, noting that where Yahoo cannot compete, it should partner.

Sellers asked about acquisitions.

Mayer: Mobilemobilemobile! (It worked before!)

8:22 pm: Mayer then mentions the importance of small teams that work together, such as its recent Stamped purchase.

She notes that the bigger and more strategic opportunities are around advertising technology. Calling the Rubicon Project!

Mayer veers away from a question about layoffs, a sad Yahoo tradition. I have reported previously that she will make cuts via performance reviews.

At Yahoo, she says, it’s now about performance, not potential: “No offense to potential, but what we really care about now is performance.”

No offense taken!

Also, everyone’s goals will be posted on the Yahoo Web site for everyone to see.

Oh, wait, there will surely be offense taken by those lazy potential people at Yahoo.

Mayer does add that Yahoo should be a “growth company,” and not one defined by cuts.

8:28 pm: “The consumer Internet is growing, and we need to invest,” she says.

To achieve this will be a hard job, and will take multiple years, she adds.

Sellers asks about the Disney turnaround, which Mayer is apparently fascinated with. Mayer does indeed love Disney.

Who doesn’t? (Well, me, but I am an outlier.)

Speaking of Disney, one of its directors, Facebook COO Sheryl Sandberg, sent regrets, but has emailed a question from its board meeting in New York.

Sandberg once worked at Google with Mayer, though the pair is still not working on a search engine together.

Sandberg asks what was most surprising to Mayer about taking over at Yahoo.

Mayer says she thought the job would be hard, and her new baby would be fun. Mayer had her first child at the end of September.

“The job is fun, and the baby is easy,” says Mayer.

Sellers wants to know how Mayer gets it all done. The answer: “Ruthlessly prioritize.”

She notes that that’s why she has not talked to the media at all, and why she will not be talking after this event.

(Well, I guess I will go back to not waiting by the phone for Yahoo PR to call back. Hi Anne! — also looking forward to not getting the holiday media party invite, which is no prob as the Googlers are throwing one the same night and they usually have organic arugula picked by elves they employ that’s acutely delicious.)

Then, as a Wisconsin Green Bay Packers fan, Mayer does her version of the famous Vince Lombardi quote: “God. Family. Yahoo.”

Cheesehead moment! And Mayer and I have so much in common! Mine is: Dog. Family. Yahoo.

8:33 pm: Sellers throws in one more question from famed investor Warren Buffett, who apparently wants to know what, if Mayer was not CEO of Yahoo, would she want to run?

Not Berkshire Hathaway! Mayer says she would build something herself.

It seems as if that is what she is doing at Yahoo, so we await the result.

Until then, Mayer’s mum. So to speak.

According to sources close to the company, Yahoo is prepping to launch a major overhaul of Yahoo Mail — which sources said has a cleaner, “more Gmail-like” look.

I am not clear exactly what that means in terms of features and design. But sources said the goal of the redo — which has been initiated by new CEO Marissa Mayer, who is also pushing ahead with a new homepage design — is to better compete with the fast-growing mail offering from Google.

“Marissa thinks Yahoo Mail has been a big missed opportunity for the company and she wants to fix that,” said one person with knowledge of the effort, which had also been mulled by previous CEO Scott Thompson.

Sources said the latest iteration of Yahoo Mail will be released in early December, just after the new homepage is rolled out widely.

That’s a lot of change at a critical money-making time for Yahoo, but Mayer — a former top Google product exec — has publicly committed the company to releasing innovative and mobile-focused products as a key differentiator.

It’s a good idea when it comes to Yahoo Mail, even though it got a major refresh just about a year ago. At the time, the first change in five years got good reviews, with a cleaner design, Twitter and Facebook integration, improved spam filters and speedier delivery.

Unfortunately, since then, Google’s Gmail has become the most popular email service in the world, passing Microsoft’s Hotmail (which is now called Outlook.com after a recent rejiggering), according to recent stats from comScore. That has added up to Gmail’s 287.9 million monthly unique visitors worldwide, 286.2 million for Microsoft’s email product and 281.7 million for Yahoo Mail.

Still, in the U.S. at least, Yahoo is holding onto its longtime — though dwindling — lead, with 76.7 million using Google’s email product and 35.5 million using Microsoft’s.

It’s an important spot to maintain for Yahoo, since many of the users of its products now come to the site to access email and it has been a key driver to its content properties.

But to keep mindshare, Yahoo faces increasingly strong competition. Google’s Gmail released a series of solid improvements last fall. In addition, along with the positively reviewed Microsoft Outlook.com redo, AOL has just announced a new email product called Alto. While it is in beta to a small audience, it is aiming to help users with multiple email accounts organize them better.

In others words, the mail business — especially using it via smartphones and tablets — is another place Yahoo has to make sure it remains innovative.

Hurricane Sandy’s impact was widespread and damaging all over the East Coast, much of it devastating.

But on a late-night comedy level, of course, it provided fodder. While Jimmy Kimmel — who usually does his “Live” out of Los Angeles — had to cancel a week’s worth of shows planned for Brooklyn, other hosts used the storm as a prop.

Here’s both Jimmy Fallon of “Late Night” and David Letterman of “Late Show,” doing their monologues in front of no one, because it was not safe to bring in audiences (although as a joke, Fallon had one dude named “Bucket Hat Guy”).

Here are the videos:

As most readers know, I love a good internal memo from Yahoo — and now I have landed a really meaty one.

It’s the “Yahoo! Three-Year Product Strategy” plan, a 21-page report that was completed in mid-2011 by a team headed by former product head Blake Irving.

While it is a year old — and five CEOs ago (no, really) — it’s an important read since it tracks closely to the strategic vision that Yahoo’s latest CEO Marissa Mayer discussed earlier this week at an all-hands employee meeting and, according to sources, is very similar to one she seems to be pursuing.

That includes a focus on personalization, mobile, social, improving Yahoo’s advertising tech platforms and more.

And here’s the centerpiece of goals — called “Five Strategic Elements” — from the Irving memo:

1. Infuse deep personalization using science and data into every consumer and advertising experience we build.

2. Delight our customers with best-in-class products, iterating frequently for constant improvement.

3. Build for connected devices first with localized, in-context, multi-screen experiences in mind.

4. Power real social relationships with features that enable 1:few conversations around content.

5. Build a digital media ecosystem that creates a premium marketplace for advertising and content and distributes Yahoo! experiences across the Web.

Sound familiar?

In fact, at the event’s Q&A part yesterday, one staffer specifically pointed out that her broad presentation to employees sounded a lot like the one Irving had proposed the year before.

Since that was never truly implemented, due to never-ending management crises, the obvious question was asked: “Why would things be different this time?”

Mayer answered that the execution against that strategy wasn’t good and she would have a better model to pull it off.

The memo, embedded in its entirety below, is really instructive to use as a possible roadmap, outlining Yahoo’s challenges, as well as the competitive landscape.

Noted the report, quite clearly: “Yahoo! does not have an audience problem, as we are growing on pace with the Internet. Yahoo! does, however, have an engagement problem, as our share of time spent is flat, relative to our competitors.”

It’s aim is to fix that by building the “One Yahoo! experience, in which each of our current and future products fortifies the whole.”

Easier said than done, especially in building up its ad tech business, as the report adds, zeroing in on its most potent rival:

“To defend and grow our share of the premium advertising market, Yahoo! must continue investing to reach parity where necessary and achieve sustainable differentiation against Google with our premium marketplace and technology stack.”

There’s a lot more than that, so dig in to the document, which suggest a whole lot of spending to turn around Yahoo.

Since Mayer is well on her way in that department — including bouncing CFO Tim Morse, who was very bottom-line wary — more on that, next!

You must now download the full report here, which was removed from DocStoc here after a takedown request from Yahoo’s lawyers.

And one of the top director candidates is well-regarded Hollywood exec Peter Chernin, said several sources.

He is an obvious choice, having been a top exec at News Corp. for many years. Since he left in mid-2009, Chernin has forged a successful film and television career, producing such hits as “Rise of the Planet of the Apes” and “New Girl.”

But, unlike many media execs, he has also focused on garnering much deeper digital experience.

Chernin was key to the formation of the Hulu premium online service, for example, and is also a board member of the Pandora streaming music service. He has also been making digital and media investments in Asia.

(And, interestingly, although apropos of nothing, Chernin’s former boss, Rupert Murdoch, has become an avid tweeter, too.)

Sources said Chernin has not decided if he even wants such a board seat, and Twitter management is still only in the early stages of its board effort, presumably to replace Flipboard’s Mike McCue.

The entrepreneur left the board earlier this year, after it was clear that his social media app and Twitter were on a collision course (or an acquisition one, depending how you looked at it).

But the addition of a media-savvy director — or even two — also makes sense in the context of the past year of Twitter’s evolution.

The brainchild of Jack Dorsey, Evan Williams and Biz Stone, Twitter first began as a microblogging social network.

While it did attract a lot of attention due to its celebrity tweeters — such as actor Ashton Kutcher and famebot Kim Kardashian — the management and board of Twitter is largely tech-centric in experience.

But, more recently, the service has taken its shape as a consumption-based media company, where some 40 percent of its user base read and consume content rather than create it. That is to say, they watch, but they don’t tweet.

Such a strategic direction is a natural extension for bringing in more advertising spending from outside partners, especially big media companies that have both the eyeballs and dollars that the company is hoping to attract.

Twitter is now commonly used throughout the media space in a variety of roles, from branding to audience-gauging, and also sometimes even as a plot device.

(That said, you won’t catch CEO Dick Costolo outright admitting Twitter’s media-company status; he still wants the Silicon Valley cred of being valued as a technology giant first.)

A Twitter spokesman declined to comment on any effort to bring in new directors; Chernin has not yet responded to a query for comment.

Much to the relief of many (and perhaps the consternation of a few intellectual property lawyers), Yahoo and Facebook officially settled their ugly patent lawsuit earlier today and also expanded their longtime partnership.

After the Silicon Valley companies — one an iconic Internet portal and the other the powerful social networking giant — agreed to formally cross-license large parts of their patent portfolio, not to sue each other over other similar intellectual property and work together on big advertising offering, Facebook COO Sheryl Sandberg and Yahoo’s interim CEO Ross Levinsohn got on the phone with me for an exclusive joint interview.

Sandberg began by noting that Facebook was not keen on battling its longtime partner, despite tough talk in its countersuit against Yahoo’s initial lawsuit.

“It’s important for us to have strong partners using our technology to make their experiences social,” she said. “[This patent battle] has been a weird anomaly in relationship of these two companies.”

Levinsohn said that is why he immediately moved to settle with Facebook as soon as he got the job to lead Yahoo temporarily in May. He replaced ousted CEO Scott Thompson, who had aggressively pushed for the initial patent infringement lawsuit against Facebook.

“It’s important for us as a company to fully embrace social and fixing the damaged relationship with Facebook was at the top of my list when I was asked to take this role,” he said. “It’s good for consumers that Yahoo and Facebook work together.”

He pointed to the pre-lawsuit success of Yahoo’s Social Bar feature, which connects its audience with Facebook friends and which has attracted 90 million users. “It was a taste of how well our two companies could work together,” he said.

Sandberg, who acknowledged that Facebook was both surprised and deeply angered by the Yahoo lawsuit, said that the kinds of situation that arise out of patent fight are bad for Silicon Valley overall.

“There is different means to play out competition and companies playing that out over patents is not it,” she said. “Yahoo and Facebook had a very good relationship and what happened was not in keeping with that relationship.”

Levinsohn noted that Yahoo needed a social element in its massive content offerings that it had unsuccessfully tried to inject itself before turning to Facebook several years ago.

Now, he noted, the “white board can be filled” again with new cross-company ideas.

While the pair would not go into many details about the patent arrangements, they said there will be no patent lawsuits in the future. The deal encompasses licensing of a little more than half of Yahoo’s rich portfolio of digital patents and an agreement not to sue on the remaining ones, which Facebook could license or even buy in the future.

“It’s really a good step in the right direction of the company,” said Levinsohn, who gave credit to Yahoo’s board for pulling back from the patent litigation and making nice with Facebook legally. “We are also grateful that Facebook dug in on this.”

Added Sandberg, pointing out the obvious need for both parties — who have bigger and more difficult fish to fry: “From our point of view, we need cooperation around Silicon Valley — we’d rather spend time on partnerships than on legal fighting.”

Hollywood super-writer Aaron Sorkin has already gotten his new show on the struggles of creating a new television news show in the Internet age renewed for another season.

The successful Sorkin made light of the struggles to attract a big audience for the HBO program in a recent onstage interview at the 10th D: All Things Digital conference.

Not so hard, as it turns out for the voluble scribe, whose “The Newsroom” got 2.1 million viewers in its opening two weeks ago, which is just behind HBO’s “Boardwalk Empire” and “Game of Thrones.”

Sorkin did manage to attract some controversy recently when he said in a tense interview with Sarah Nicole Pickett of Canada’s Globe and Mail:

“Listen here, Internet girl. It wouldn’t kill you to watch a film or pick up a newspaper once in a while.”

The fab line did result in an even funnier Tumblr on the kerfuffle.

Here’s the full video of Sorkin’s interview with Walt Mossberg at D10, as well as another very funny recent viral video, titled “Sorkinisms,” in which the writer uses his best lines over and over, compiled from a variety of his shows.

]]> http://allthingsd.com/20120704/hey-internet-girl-aaron-sorkins-tv-news-2-0-show-gets-a-second-season-video/feed/ 0 http://allthingsd.com/20120509/stern-named-head-of-new-strategery-role-at-yahoo/ http://allthingsd.com/20120509/stern-named-head-of-new-strategery-role-at-yahoo/#comments Wed, 09 May 2012 23:41:50 +0000 Kara Swisher http://allthingsd.com/?p=206367

Longtime Yahoo exec Raymond Stern (pictured here) — who seems to have fit into a lot of management reorgs in his short time at the Silicon Valley Internet giant — has been named to a new role at the company as SVP of strategy, corporate development and new ventures.

He’ll be reporting to CEO Scott Thompson, according to an internal memo I got sent by the people who send me internal memos from Yahoo. (A group, I might add, that is getting bigger by the day.)

When he got to Yahoo in late 2009, Stern had first been named SVP of North America partnerships and business development for Yahoo. He later had to also pinch-hit as its head of U.S. audience, mobile and local, after an exec left, before being named SVP of North America audience. Then, after another exec took over the audience job, he was back to business development and partnerships and also added the listings business to his portfolio. Then, Stern got mobile biz dev back, after another exec left.

Now, the man who has been the Swiss Army Knife of Yahoo will be the key strategy guy for Thompson, who clearly wants to do a lot of strategizing.

Interesting note: Stern was a former consultant to Boston Consulting Group, which is Thompson’s go-to outside team on his ongoing restructuring of the company. He is also a former Intuit exec.

As per usual, here is the internal memo on Stern’s appointment from Thompson, who is dealing with some other very thorny issues right now too:

Yahoos –

Over the last few months, you’ve heard me talk a lot about focusing our company around our core business. As part of this, we need to find new ways to strengthen, leverage, and monetize our core assets — all in conjunction with our long-term strategy focused on driving growth. To help tackle this challenge, I’m excited to announce that Raymond Stern will take on a new role at Yahoo! as senior vice president of strategy, corporate development, and new ventures, reporting to me.

For those of you who haven’t had the chance to meet Raymond over the last two and half years here at Yahoo!, he previously oversaw distribution partnerships and business development, as well as our Latin American, Canadian, and small business teams. Earlier in his career, he spent 10 years at the Boston Consulting Group, and later had various roles at Intuit including leading strategy and corporate development during a transformational period in the late 90s through the mid 2000s.

In his new role, Raymond will work across the teams to ensure alignment and that we are taking advantage of opportunities around the globe. He will lead three critical areas for us:

Strategy: Raymond will lead corporate strategy, working in close partnership with the senior leadership team and me.

Corporate Development: Raymond will work with the team to find opportunities to accelerate our progress and growth through acquisitions, investments and strategic partnerships. In conjunction with this, Marcus Shen and his group will be renamed corporate M&A, and will continue to be the transactional execution arm supporting Yahoo!’s corporate development initiatives.

New Ventures: Raymond will look at emerging areas outside of what’s happening in the halls of Yahoo! and bring new innovative and disruptive ideas to the forefront.

In the coming weeks, you’ll hear more from Raymond as he works with the leadership team to align our corporate priorities and long-term strategy.

Please join me in welcoming Raymond to this important new role.

/signed
/Scott Thompson

And here’s to your new job, Raymond:

]]> http://allthingsd.com/20120509/stern-named-head-of-new-strategery-role-at-yahoo/feed/ 0 http://allthingsd.com/20120507/content-is-no-longer-king/ http://allthingsd.com/20120507/content-is-no-longer-king/#comments Mon, 07 May 2012 21:14:23 +0000 Ben Elowitz http://allthingsd.com/?p=204771 “Content is king” has been a long-lived mantra of media. And in the 1990s and early 2000s, it was true.

But over the last several years, the Internet has upheaved the aphorism.

It used to be that media was linear. And in that world, content and distribution were married. The HBO channel had HBO content. A New York Times subscription bought you New York Times content. And Vogue and Cosmopolitan each month delivered exclusive and proprietary content from … Vogue and Cosmopolitan.

Until the Internet came along. In every single one of the varied businesses the Internet has touched — from commerce to media to communications to payments — there has been one common impact: disaggregation.

Content and distribution have parted

In the case of the hundreds-of-years-old media business, the Internet has fundamentally separated content from distribution.

Today I can watch hundreds of South Park and Jon Stewart clips, all without a cable box — on my Apple TV, my Android phone, or YouTube on my desktop.

But wait, South Park and Jon Stewart? Content is king, you say. It’s now even more free to reign, unfettered by distribution channels!

No; because content is no longer enough. Content has always been a means to an end. And the end has always been audience.

Content isn’t the goal. Audience is.

When it comes to the business of media, there’s no question: advertisers don’t pay to reach content. They pay to reach an audience.

What’s the first item in every brief from every advertiser? It’s not Target Content, it’s Target Audience.

Media has been slow to adjust to this new dynamic. Companies have sunk billions into content management systems — using CMS as the cornerstone of their modernization — under the impression that they traffic in content.

But they don’t. They traffic in audience. And how much have they spent on audience development systems? Not much, if any at all.

Now that distribution of content to audience is no longer linear, distribution decisions are suddenly more complicated. And, at the same time, they are immensely more important — and more dynamic — to create the impact media companies are looking for: drawing an audience! Social distribution can outperform search, if you use it wisely. Day-parting your postings can boost post performance by 100 percent or more. Packaging can triple the effectiveness of content in reaching an audience.

And yet, few in media have even begun to optimize these decisions.

Who’s your Chief Audience Officer?

Distribution decisions are just as important as content decisions in building and serving an audience, and yet they are being largely ignored. Everyone has an Editor-In-Chief or a Chief Creative Officer. But how many have a Distributor-In-Chief? Or a Chief Audience Officer? A Head of Digital Programming?

The myopic focus on content over distribution is widespread, and it’s a bad business decision. It ignores a critical access of leverage, and one of competitive advantage.

The smartest media companies will do three things to take control of their digital opportunity:

• Put someone in charge of audience development.
  Give them latitude to think about the interplay between distribution and content, so that they can marry the two. Like a head of programming for a cable network, they should be tasked to realize the full potential of your digital channels. They should support the delivery of your content, and they should also provide back pressure to your content creators. Don’t merge it into your editorial jobs — that’s too precarious. Make it its own discipline.
• Adopt an audience development strategy.
  There are three basic components you have to master: insights (know your audience segments, and what each one will like); channel selection (identify the highest value distribution outlets for your brand, whether it’s search, social, YouTube, Hulu, or your own channels); and optimization (use data to create a feedback loop and tune your content, packaging, and timing to what works for your audience).
• Systematize it.
  You have sunk millions into content management systems. But how much have you spent on your most monetizable asset, your audience? You should be as systematic in audience development as you are in content creation, if not more so. Whether it’s with established processes or dedicated algorithms, make audience development a competitive advantage. Get so good at it that you truly know how to maximize every piece of content you create — and multiply your ROI. Use technology for what it does best: Systematize your advantages over your competitors.

With the rise of new distribution platforms like Facebook, YouTube and Hulu, there’s no question that the next generation of digital media is as much about distribution as it is about content. Media companies that orient their organizations to prize audience development above all (with distribution as a key component) will catch the upside of these tectonic shifts. And they will be the ones that survive and thrive in the digital age. After all, audience is the ruler of media companies’ fortunes.

This article by Ben Elowitz (@elowitz) is an exclusive selection from his Media Success newsletter for digital media leaders. Elowitz is the co-founder and CEO of next-generation media company Wetpaint and the author of the Digital Quarters blog about the future of digital media. Prior to Wetpaint, Elowitz co-founded Blue Nile (NILE).

]]> http://allthingsd.com/20120507/content-is-no-longer-king/feed/ 44 http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/ http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/#comments Fri, 27 Apr 2012 16:48:12 +0000 Tricia Duryee http://allthingsd.com/?p=200553 It’s a battle between Mario and the farm, and the farm seems to be winning.

Yesterday, Nintendo reported an annual loss — its first in more than three decades — after revenues fell 36 percent. Hours later, five-year-old upstart Zynga reported nearly the opposite results, saying that first-quarter revenues jumped 32 percent year over year.

“Social, accessible and free are changing things,” said Zynga’s COO John Schappert in an interview. “We were built for this market; we live on free and in-app purchases. We never grew up on $60 games and consoles. It’s a different world, and it’s hard for some companies as they make the transition.”

For more than a year, the game industry has worried about the shift toward social and mobile from more traditional platforms like the home console. And now, after yesterday’s two drastically different financial reports, there is more than anecdotal evidence for concern.

Zynga continues to gain momentum and attract larger audiences with titles like FarmVille and CastleVille on Facebook and Words With Friends on mobile. On the flipside, Nintendo is facing yet another hardware cycle, with consumers waiting for its newest console, the Wii U, coming later this year.

Generally, experts believe that social and mobile games are expanding the overall games market. But yesterday it was hard not to see Nintendo’s first loss in three decades — totaling $531.1 million — as a hint of where things are headed.

Michael Pachter, an analyst with Wedbush Securities, is bullish on Zynga’s prospects but is not optimistic about the future of console games.

“Nintendo is living in the past, repeating what got them to where they are, and hoping that the recent downturn is a fad,” he said. “They aren’t adapting to the times, and it’s hurting them.”

To be fair, the companies approach the market completely differently, so it’s hard to compare the two.

Nintendo sells proprietary portable and home gaming units as well as the games that work on top of them. Meanwhile, Zynga gives away its games for free and lets them work across most computers and mobile phones. It makes money on advertising and microtransactions.

The two approaches lead to drastically different audience sizes.

Zynga said the number of monthly active users playing its games increased to 292 million in the first quarter, up 24 percent. The game company, which got its start on Facebook, is also expanding rapidly to mobile, reporting that it had 22 million monthly users on mobile, up from only 12 million one quarter ago.

Nintendo does not break out quarterly figures, but the number of new customers it reached during its fiscal year pales in comparison. Over the past year, it sold 13.53 million 3DS units, and expects to sell 18.5 million this year. Nintendo sold 9.84 million Wiis over the past year, down 35 percent.

This year, Nintendo is banking on the Wii U to revive the company and to better position itself against mobile devices like the iPad. The new console will come with a 6.2-inch touchscreen that will allow users to interact in a new way with games on TV screens. It plans to sell 10.5 million Wii units this year, including the Wii U.

Last year, Nintendo Global President Satoru Iwata told AllThingsD in an interview that he is not willing to gamble on free-to-play games, because consumers are willing to pay for Nintendo’s superior experiences and brands.

“If we were simply going to say okay, the only the way we could sell more products is by decreasing the price, then there wouldn’t be a bright future, and the entire industry will fold,” he said.

His point is not entirely lost.

Zynga makes far less money per user than Nintendo. In fact, the gap between them is enormous.

Each console or portable game unit Nintendo sells has the opportunity to generate hundreds of dollars in income, since console games cost $60 and portable games cost around $40 (not to mention the initial cost of the hardware).

Meanwhile, Zynga makes very little on each player. It reports a metric called average daily bookings per average daily active users (ABPU). Yesterday, Zynga said ABPU increased to $0.055 in the first quarter from $0.051 in the same period a year earlier.

For Nintendo to switch from one model to the other would be like giving up the farm.

And to be entirely fair, Zynga wasn’t profitable, either. In the first quarter it lost $85 million, primarily due to stock-based compensation.

]]> http://allthingsd.com/20120427/as-nintendo-fades-zynga-continues-to-grow/feed/ 0 http://allthingsd.com/20120423/new-s-1-facebooks-yearly-growth-up-45-percent-but-down-six-percent-from-last-quarter/ http://allthingsd.com/20120423/new-s-1-facebooks-yearly-growth-up-45-percent-but-down-six-percent-from-last-quarter/#comments Mon, 23 Apr 2012 19:13:53 +0000 Kara Swisher http://allthingsd.com/?p=199091

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

]]> http://allthingsd.com/20120423/new-s-1-facebooks-yearly-growth-up-45-percent-but-down-six-percent-from-last-quarter/feed/ 0 http://allthingsd.com/20120321/online-audiences-are-famished-for-the-hunger-games-though-vampires-still-rule/ http://allthingsd.com/20120321/online-audiences-are-famished-for-the-hunger-games-though-vampires-still-rule/#comments Wed, 21 Mar 2012 16:25:36 +0000 Kara Swisher http://allthingsd.com/?p=188161 As of yesterday morning, the movie version of the popular teen novel “The Hunger Games,” which comes out Friday, accounted for 92 percent of total ticket sales on Fandango. That includes 1,200 showtimes sold-out on the online ticketing service, which recently signed various deals with AMC Theatres, Facebook and, earlier this week, Yahoo Movies. Still, the kids-fight-to-the-death film has not yet topped the online advance sales for the three “Twilight” movies or the last two in the “Harry Potter” franchise.

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