According to numerous sources close to the situation, Yahoo CEO Marissa Mayer recently met with top execs at Hulu, the premium video service whose big media company owners have been considering selling it for some months.

Sources said Yahoo is “in the process,” although the Silicon Valley Internet giant has not made any kind of formal bid. Other players whom sources said are considering purchasing all or parts of Hulu include: Former News Corp. COO Peter Chernin, who now has a successful and well-funded multimedia and investment company called the Chernin Group; Guggenheim Partners digital arm, which is led by former Yahoo interim CEO Ross Levinsohn; and Amazon.

Sources said Mayer also had an extensive getting-to-know-you meeting, which was apparently not held at Hulu’s offices in Santa Monica, Calif., along with COO Henrique De Castro. The discussion is taking place in the wake of Yahoo’s failed bid — largely engineered by De Castro — to purchase a majority stake in France Télécom’s Dailymotion video service, after a top French government official said Yahoo could not own 75 percent of the company.

Had the deal — which was reportedly valued at $300 million — gone through, it would have been the most significant by Mayer since she took over at the company last July. Thus far, she has limited her purchases to small mobile startup.

While the meetings with Hulu are only preliminary, Yahoo has been to this video rodeo before, having seriously considering buying Hulu when it was previously being shopped by its owners, News Corp., Disney and Comcast. (News Corp. also owns this site.)

Of course, if Yahoo’s interest becomes more serious, Mayer will have to make important visits to top execs at those media giants, since they control the rights to critical content, and thus Hulu’s value.

As Peter Kafka noted in a previous post about Hulu’s possible sale, “much hinges on the licensing rights News Corp., Disney and Comcast would provide for the money-losing site, as well as what happens to the $300 million debt its owners have taken on in the last year.”

Without those rights, Hulu by itself is a very pretty Web site and video platform, but not worth the billions it would be with very long-term television rights, content that attracts users. Currently, sources said its media owners are offering two to three years of rights, with a lot of flexibility over removing content from the site, which is not quite as attractive a deal (to say the least).

But video is a key component of Yahoo’s strategy going forward. Along with mobile efforts, Mayer has explicitly told investors that video was a key to company under her tenure.

Coincidentally, today in an onstage interview at a Wired conference in New York, Mayer broadly addressed the video issue when asked a question about the topic, noting it was important across all of Yahoo’s properties.

“I think video is really important … video is something that we’re all innately designed and born to experience, everyone is born being able to watch and to hear,” she said. “Video is just this amazing format.”

Mayer would know that well, having been at Google when the search giant bought YouTube, ironically snatching it at the last minute from a competing bid by Yahoo, which was then led by Terry Semel. Since then, YouTube has become the most important and powerful player in the space by far.

Yahoo, despite being one of the largest video players on the Web, has mostly been a lackluster competitor in the arena, pinging over the years from creating original content to doing branded deals with media companies, but never establishing a major beachhead with consumers as Hulu did from scratch.

Short of a full acquisition, there may be a way for Yahoo to partner and invest in Hulu, instead of buying it outright that works for all sides — owners get a new owner to foot part of the bill and also increase distribution, and Yahoo can claim that it’s providing users with exponentially more content that would help Yahoo’s long-declining engagement problem.

Sources said News Corp. and Disney have mulled scenarios where one or both companies hang on to the site, while Comcast has no control over Hulu’s fate, having given up its management rights to the site as a concession to federal regulators.

But the strength of the Hulu brand is clear and it has had some success in building a more significant business. While a lot of its video offerings are free, about four million people are paying for a Hulu Plus subscription.

Still, Hulu’s strength might be lagging, especially given after talented founding leader Jason Kilar recently left. Last year, Hulu was a top 10 video site, according to comScore. No longer — in a report in March, it had dropped out of the top 10.

While this likely has more to do with methodology than real decline in Hulu ratings, it does show that while it’s the biggest thing Yahoo could buy or invest in, Yahoo itself has plenty of video views, many more than Hulu.

The question for Mayer then is how much of Yahoo’s multi-billon-dollar cash kitty she wants to bet on a big video play. She might also be considering buying several smaller ones, said sources, with Yahoo having also looked at some smaller video sites, including Blip and Grab Media.

A spokeswoman for Hulu declined to comment and Yahoo PR has not responded to a query for comment (if ever).

According to sources close to the situation, Yahoo is among the companies taking a serious gander at TVGuide.com, the online entertainment listings, video and news site and mobile app.

Earlier today, Deadline Hollywood reported that its owner, Lionsgate, was in “advanced negotiations” to sell the site for about $20 million to one strategic bidder.

That’s the approximate price, my sources said too, who noted that Yahoo is only kicking the tires to determine if the site would add to its online media efforts and that such a deal is not in a final state.

But TVGuide.com is right in the wheelhouse of Yahoo’s acquisition efforts under CEO Marissa Mayer. She said the Silicon Valley Internet giant was looking at smaller purchases to round out its product line, especially in the mobile area.

Thus, its M&A point person, Jackie Reses, has been looking at “everything in the world,” according to numerous sources, across a large spectrum of arenas. TVGuide.com is in the media space, obviously — another she’s looked at is Los Angeles-based Maker Studios.

Hollywood studio Lionsgate last reported that TVGuide.com has upward of 24 million unique monthly visitors, and also has almost seven million mobile app users.

Lionsgate bought the site and television network in 2009, which also is owned in part by J.P. Morgan’s One Equity Partners.

It’s been nice to see all the euphoria at Yahoo about free food and Apple iPhones kicking it up a notch.

But, purple people, guess what? Them’s just your basic table stakes in Silicon Valley these days and pretty much everyone else has had such perks for a long while now.

Thus, as nice as it is to drink your coconut water gratis, after two months in charge, it’s long past time to focus on what new Yahoo CEO Marissa Mayer is up to besides making much-needed but obvious cultural changes at the troubled Internet giant.

She’s been busy with the expected listening tour of employees and also outside tech players — such as former Yahoo CEO Terry Semel — which is a textbook stop in the turnaround playbook.

Now comes the hard part: Actually beginning to make the significant decisions about how she’s going to turn around Yahoo and what the key issues of strategic focus need to be.

In a series of recent meetings, according to numerous sources inside the company, Mayer has begun to outline what those are to top staff.

Not surprisingly, they are many of the same thorny issues that Yahoo has been facing for a long time and which center primarily on making the company relevant again in a wide number of ways.

I’ll get to many of them over the next week in a series of What Will Marissa Do? posts — including looking closely at her new hires, when and how Mayer will deal with inevitable layoff decisions facing the company, where the sale of Yahoo! Japan stands and, finally, what she’s cooking up for key Yahoo products.

But the focus has to fall first of all on search and advertising, the two arenas that Mayer has been studying most closely, according to numerous sources close to the situation.

That has included a recent meeting and numerous discussions with Microsoft CEO Steve Ballmer about improving Yahoo’s search advertising partnership, said sources at both companies.

That deal has been largely disappointing since it was struck under the regime of ousted CEO Carol Bartz several years ago.

Many reasons are given for the poor performance of the entire arrangement, including lack of improvement of cost per click and share growth for both parties. That means bid density and numbers of advertisers remain too low, especially compared to Google’s offering of access to a larger, more active and lucrative market.

Simply put, despite massive spending by Microsoft on search, users and advertisers get significantly better results overall with the search leader Google.

(You can read a great piece by Search Engine Land’s Danny Sullivan from last year, which exhaustively looked at the issues until then.)

The irony abounds that it’s up to Mayer to fix this problem of improving revenue per search with Ballmer, since she has been among the executives who have made Google the search behemoth it has become.

Her particular expertise has been on search experience for consumers, which is just the area that Yahoo desperately needs to improve after handing over technology duties to Microsoft.

That move was controversial at the time and some feel it was a big mistake. But, most also think there is no going back at this point, given the enormous cost of running a serious search enterprise.

Such an idea is still being raised inside Yahoo, although it seems more nostalgic than a realistic possibility, given the enormous price and, more importantly, the departure of the company’s core search engineers in recent years.

That doesn’t mean Yahoo under Mayer can’t be key to helping solve Microsoft’s search tech problems. She certainly knows the entire arena, which has already given Yahoo increased credibility among Microsoft’s search engineers.

“None of Yahoo’s many CEOs knew anything about search technology and that’s certainly not the case here with Mayer,” said one person close to the situation at Microsoft. “When she walks in, she instantly has status among the geeks as someone who knows what she’s talking about.”

It still may be a losing battle, due to Google’s overwhelming dominance, but if anyone at Yahoo can spot areas of even small improvement — which can yield big returns — it could be Mayer.

In addition, she can spearhead Yahoo’s own efforts to reverse — or perhaps simply stop — search market share declines via delivering a better consumer offering.

That’s still heavy lifting, no matter the exec, since both Microsoft’s Bing and Google are better equipped to win here, too.

“It hard to imagine we are going to slow down in any way,” said one former colleague of Mayer’s at Google to me recently in a rather ominous tone. “We’re only going to get more competitive.”

Pressure much?

And more: Mayer is under a time limit, since guaranteed payments Microsoft agreed to pay Yahoo for the shortfalls on what was promised will be running out next year. The pair has renegotiated that deal before, and it will likely have to do so again.

Of course, Mayer could try to walk and threaten to take Yahoo’s search business elsewhere, a move that former CEO Scott Thompson was mulling before his ouster.

That’s not a surprising ploy, except it is probably impossible to pull off, a fact acknowledged by top Yahoo execs.

“It might feel good to say we have options in search,” said one person close to the situation. “But that ship sailed years ago.”

Indeed, especially since Google is the only choice of possible alternate partners and such a move is rife with major obstacles.

There is the issue of the contract with Microsoft, which could lead to a potentially explosive legal struggle Yahoo can ill afford.

“They can try to get out of the deal,” said one high-ranking person at the software giant. “But that’s a lot easier threatened than done.”

And, there is the clear regulatory hairball any search hook-up between Google and Yahoo would lead to.

That’s happened before, which Mayer knows well since she was a top exec in Google’s business when it tried to partner with Yahoo as a way to prevent Microsoft’s hostile takeover bid for the company.

While times might have changed, Google is currently facing a likely battle with the Federal Trade Commission over its powerful search business, and trying to get Yahoo’s business now is a non-starter.

Thus, finally fixing the Microsoft partnership is key to Mayer’s success since it represents a little over one-third of revenue of Yahoo (see the chart below).

The bigger part of Yahoo’s business, as you can also see from the chart, has been display revenues. And that, too, has been a sorry tale of declines and ever more disappointing results.

A report by eMarketer on display market share had this depressing chart for Yahoo:

As is clear, the march downward for one-time leader Yahoo has been swift, and the prospects for the future are worse as Google and Facebook vie for leadership.

The reasons for this have been myriad, but Mayer has apparently decided that it’s been due in large part to the broken Yahoo ad tech platforms and their ever weaker performance.

As we have previously reported, she has determined that it’s now time to invest in improving them, both by funding internally and external acquisitions.

For that, she has formed a tight group of execs to scan the landscape for tasty and innovative treats for Yahoo to gobble up.

That includes: Scott Burke, SVP of Yahoo’s advertising and data platforms; Brian Silver, who runs the company’s Right Media Exchange; Xuhui Shao, a key engineering VP under Burke; and Mark Morrissey, the longtime tech exec who previously ran the company’s search business and was key to integrating the Microsoft search deal into place.

The cerebral Burke especially has been pushing ad platform improvement for a while and finally seems to have won the battle against detractors of the big and possibly grandiose plan by appealing to Mayer’s interest in not giving up.

Thus, the tabling of plans by Thompson, as well as interim CEO Ross Levinsohn, to outsource some of the automated parts of the display business to Google.

Those talks were very serious, as well as others to sell off Right Media, but they are done for now.

One major issue — the people in charge of the ad platform turnaround could also be seen (and most definitely are) as mired in Yahoo’s legacy of lackluster results and poor performance.

“It is kind of funny that the guys responsible for the decline now have the responsibility for fixing it,” said one source at Yahoo.

It’s a fair point to be made.

But that’s water under the bridge, apparently, since the group has been making the rounds, helped by Yahoo’s M&A execs, with a wide range of companies in many different ad tech area being considered (and some dismissed), including: Mediaocean, Turn, Criteo, PubMatic and Millennial Media.

Millennial is the most interesting, because it is a mobile ad play, where Yahoo is exactly nowhere (to be fair, less than nowhere) after years of botched efforts.

As with other companies, this is a critical arena for Yahoo, and yet one more that Mayer needs to focus on.

Lastly, Mayer has to make sure Yahoo’s premium display business remains strong. This is much more based on relationships with large advertisers than on major sponsorship and branding offerings, as well as creating consumer products and content that is appealing to marketers.

This area is now headed up by former Google exec Michael Barrett, who has publicly said he was staying put for now at Yahoo as its chief of revenue.

In fact, because he is in charge of all sales, he occupies the second slot under Mayer on Yahoo’s now strangely configured, punctuation-impaired and information-free management page.

But numerous sources inside and outside Yahoo said Barrett has also told many people that he is still not fully committed to staying in the role for the long haul.

If he eventually gets a lucrative exit package — something the new boss is not being very generous with overall, said sources — that will mean Mayer will need a high-profile and well-regarded ad exec to replace him; sources said Mayer has already begun reaching out to some candidates.

The pickings are slim, with only a few names on the list of those capable of taking on such a job. That includes: Demand Media’s Joanne Bradford, who was also a former top Yahoo exec; Microsoft’s Yusuf Mehdi; OWN’s Kathleen Kayse; MLB.com’s Bob Bowman; and any number of Google execs.

In that regard, as with all the other search and advertising overhaul efforts at Yahoo, it is a matter of attracting serious talent into the company going forward.

More on that — and more — to come.

Last week, Yahoo’s activist shareholder Dan Loeb of Third Point, the New York hedge fund that is waging a proxy fight against the Silicon Valley Internet giant, made a regulatory filing noting that it had spent $971.1 million to acquire 70.5 million shares of Yahoo, a 5.8 percent stake. Loeb asked for Yahoo to consider his alternate board slate, and also wanted its shareholder list to communicate with other investors.

But that’s not all: In another action last week, Third Point asked a Delaware court to give it a look at sealed documents from a now-settled 2008 shareholder lawsuit related to Microsoft’s failed bid for Yahoo.

Said Third Point in its legal request, which Yahoo is seeking to block (of course!): “It is not surprising, then, that Yahoo and its soon-to-be former directors wish to keep details of their embarrassing — and fiduciarily suspect — conduct hidden from view.”

Here’s a video I did talking about the mishegas on WSJ.com’s “Digits” online show:

Earlier today, I had reported that Yahoo Chairman Roy Bostock was stepping down.

He is, and the full letter he just released saying so is below.

Bostock did not say in the missive who will be Yahoo chairman in his place. Intuit CEO Brad Smith has a full-time job, and the newly installed Weather Channel CEO David Kenny does, too. Among the current directors, that would leave Sue James, Patti Hart and newly installed Yahoo CEO Scott Thompson — or one of Yahoo’s new board members.

In the letter, Bostock outlined the departures of four board members and the addition of five more directors (two of which were just named); did a little back-patting of his recent efforts to turn Yahoo around (after presiding over the board that got the Silicon Valley Internet giant into this mess); noted that the Asian talks to sell Yahoo’s stakes there are proceeding (it’s coming!); gave Thompson a thumbs-up (go, Scott!); and delivered kudos to Jerry Yang, the co-founder who left only weeks ago.

“Working with Jerry was always a delight,” wrote Bostock.

(Me, not so much, I would guess! Bygones?)

All kidding aside, Bostock has been the subject of a lot of criticism about Yahoo’s troubles, both deserved and undeserved, most especially for the non-sale to Microsoft several years ago. Many, including activist shareholder Daniel Loeb most recently, have called for his resignation.

It has not been an easy job, to be sure, so it must be a bit of a relief for the longtime advertising exec, who serves on other prominent boards, to finally pull away from the Yahoo black hole.

So, who’s next?

One interesting line in the letter, which everyone already knew, was that none of the various bids from outside investors have passed muster.

Wrote Bostock: “We have engaged with potential investors and reviewed proposals concerning an equity investment in the Company, although at this time there have not been any proposals which have been deemed by the Committee to be attractive to our shareholders.”

Here’s the Bostock letter:

Yahoo! Releases Chairman’s Update for Shareholders

SUNNYVALE, Calif., February 7, 2012 – Yahoo! Inc (NASDAQ: YHOO), the premier digital media company, today released the following shareholder update from its Chairman Roy Bostock.
February 7, 2012

Dear Fellow Shareholders:

I write today to update you on the actions the Yahoo! board has taken, and the actions it is pursuing, to increase shareholder value and position the Company for growth. These actions result from a process I initiated about six months ago in a special meeting of the independent directors in which we analyzed the reasons why Yahoo! was not meeting either our own expectations or those of our shareholders.

The board decided then to move aggressively on three fronts to position Yahoo! for future success: one, we initiated a search for a new Chief Executive Officer with a vision and set of skills to lead Yahoo! into the future; two, we undertook a comprehensive strategic and structural review of the business; and three, we decided to assess the composition of the Company’s board of directors relative to its ability to enhance the prospects for Yahoo!’s future success. We have made progress on all three fronts.

First, and most importantly, we have appointed Scott Thompson as CEO to lead our company. Scott is a capable and dynamic leader who brings the experience and expertise the Company needs to achieve robust growth and success in the marketplace. Over the coming months and years, Scott will lead an outstanding team of Yahoos to deliver engaging user experiences driven by innovative products.

Second, we have made significant progress on the comprehensive strategic review which is overseen by the board’s Transactions and Strategic Planning Committee, chaired by director Brad Smith, the CEO of Intuit. The Committee’s guiding principle has been to assess alternatives which would increase value for all Yahoo! shareholders, and the Committee has been open to any transaction or initiative that would serve this objective.

As part of this review, we have pursued a wide range of discussions with potential partners. We have engaged with potential investors and reviewed proposals concerning an equity investment in the Company, although at this time there have not been any proposals which have been deemed by the Committee to be attractive to our shareholders. We are also in active discussions with our partners in Asia regarding the possibility of restructuring our holdings in Alibaba Group and Yahoo! Japan. The complexity and unique nature of these transactions is significant. While we continue to devote significant resources to these discussions, we are not in a position at this time to provide further detail or to provide assurance that any transaction will be achieved.

Finally, the board has concluded that in order to accelerate the Company’s transformation, the combination of a new Chief Executive Officer with an enhanced team of independent directors would provide Yahoo! with the expertise and perspectives necessary to drive innovation and growth going forward. Therefore, Mr. Joshi, Mr. Kern, Mr. Wilson and I have volunteered not to stand for re-election at the next shareholders’ meeting.

Furthermore, the board today elected two highly qualified independent directors, Alfred Amoroso and Maynard Webb, Jr. Mr. Amoroso served as President and CEO of Rovi Corporation until December 2011 and, among other positions, had previously served as the President, CEO and Vice Chairman of META Group, Inc., the President and CEO of CrossWorlds Software, Inc. and as a member of the world-wide management committee of IBM Corporation. Mr. Webb, the Chairman of LiveOps, Inc., served as that company’s CEO until July 2011. Prior to that, Mr. Webb was Chief Operating Officer of eBay and Senior Vice President and Chief Information Officer for Gateway, Inc., in addition to management, leadership and board positions at several other companies spanning his 30-year career.

The board continues its search for additional independent directors. This search is being led by director Patti Hart, CEO of International Game Technology, Inc., who chairs our Nominating and Corporate Governance Committee. We anticipate announcing additional directors to round out the board as soon as this process concludes.

Separately, as previously announced, Jerry Yang has resigned from the board of directors and other positions within the Company to pursue his many interests outside of Yahoo!. Working with Jerry was always a delight. He is a visionary and a pioneer who contributed enormously to Yahoo! since he co-founded the Company in 1995. He will be missed. The board thanks him deeply for his service and commitment to the Company.

Thus, following this year’s Annual Meeting a majority of Yahoo!’s directors will be new to the board this year, and all directors will have joined the board since 2010. We believe that this reconfigured board, with a fresh set of perspectives and diverse set of skills, will enable the Company to move forward even more aggressively.

It has always been a privilege for me to serve as Chairman of Yahoo!. The employees of Yahoo! remain the heart, soul, and future of the company. And with Scott Thompson leading them, they are the reason why I believe Yahoo! will create significant shareholder value over the coming years.

In September, this board moved proactively and decisively to improve the performance of the Company for the benefit of its shareholders. These actions could not have been accomplished without the support and active participation of each director on the board. For that, I thank them. And I thank them for the knowledge, expertise, talents and commitment they have brought to Yahoo!. We all take pride in the fact that we are positioning Yahoo! for success in the future. Yahoo! is an incredibly strong brand with formidable assets. I have every expectation that under Scott’s leadership, working together with the reconstituted board, the Company will thrive for many years to come.

Sincerely,
Roy Bostock
Chairman of the Board

According to sources close to the situation, Yahoo is poised to name a CEO, an announcement that could come as early as tomorrow.

Sources said the leading candidate likely to get the nod is a dark horse and someone who has not been named in previous reports (and not on my suggested lists!): PayPal President Scott Thompson, who runs eBay’s massive online payments unit.

While the situation could certainly change, the Yahoo board has definitely been moving aggressively of late to try to find a new leader for the Silicon Valley Internet giant.

The company fired its last CEO, Carol Bartz, in September; Yahoo has been run by the board and also by interim CEO Tim Morse, who had previously been its CFO.

After Bartz’s ouster, Yahoo said it was looking at a range of strategic options, including the possible sale of all or part of the company.

That was the focus at first, although Yahoo had simultaneously hired Heidrick & Struggles to look for a new CEO.

The company attracted two partial investment bids from private equity firms, Silver Lake and TPG Capital, but shareholders were unhappy with the low prices of these so-called PIPE — Private Investment in Public Equity — arrangements.

Yahoo then moved to try to strike a tax-advantaged deal with its long-disgruntled Asian partners, China’s Alibaba Group and Japan’s SoftBank, to sell back parts of the large stakes it has long owned in Alibaba and Yahoo! Japan.

Those complex negotiations are still ongoing and look promising, which could yield Yahoo billions of dollars in capital to be given to investors, for stock buybacks or to invest in new initiatives.

Since then, the board — long considered one of the more cloddish in tech — has turned its attention to hiring a new CEO, in the hopes of trying once again to revive its flagging fortunes.

Thus, it began looking to hire someone with deep tech experience at a large public consumer Internet company in Silicon Valley.

That narrowed the field, with Yahoo looking at a range of choices with expertise in advertising, technology platforms and more.

There is a lot of that on the deep bench that eBay CEO John Donahoe has assembled at the online commerce giant, including Thompson.

Plus, he is a genuine Internet geek.

According to his eBay bio, Thompson became president of PayPal in early 2008, after serving as its CTO in charge of information technology, product development and architecture.

Before eBay, he worked at Inovant, a subsidiary of Visa formed to oversee global technology for the organization. He was also CIO of Barclays Global Investors and has worked at Coopers and Lybrand on information technology.

And here’s a tasty new wrinkle: Thompson recently “liked” Yahoo on his Facebook page, along with the decidedly more interesting Kickstarter and Splunk.

(Dear Scott, Nice to meet you. And thanks for the tip! FYI, it’s a juicy giveaway like that which feeds my insatiable quest to find out All Things Yahoo!)

More to come soon, I expect.

Yahoo, as usual, never got back to me on my query, although the much more cordial people at eBay politely declined to comment.

It’s the typically newsless time around Christmas and New Year’s, but for once there has actually been a lot going on at Yahoo.

Last week, the Silicon Valley Internet giant’s typically moribund board decided to move ahead with negotiations to sell part of its stake in China’s Alibaba Group, as well as all of its shares in Yahoo Japan.

While that is still not a done deal, it adds clarity to the Yahoo mishegas, as current leaders there seek to turn around the company’s lagging fortunes.

Now, as Yahoo continues to contemplate a pair of partial investment bids by private equity firms Silver Lake and TPG Capital into 2012, more focus will be on the selection of a CEO candidate to take over, sources said.

While I have floated some names that have been contemplated — such as Hulu CEO Jason Kilar, Juniper CEO Kevin Johnson, former aQuantive and Microsoft exec Brian McAndrews, and board member David Kenny — I have collected some more that seem to be getting the once-over and are being mentioned internally as well as externally.

Sources said that the Nominating and Corporate Governance Committee at Yahoo, which is run by independent director Patti Hart, has been looking for someone with definite public company experience, as well as expertise in large-scale management.

As to talent, candidates seem to be either good at running big platforms, or deeply knowledgeable about advertising and media as well as technology.

Another important criteria, said sources: Someone who is “collaborative” and nonconfrontational. As in, not like the former and very pugnacious CEO Carol Bartz, who was fired in September.

Thus, here’s another trio of candidates to consider, while we wait — and who knows how long that will be given that the Asian activity could have tired out for a bit this usually slow-moving board:

Chris Liddell: The former CFO of Microsoft is an interesting name that just popped up recently, and it makes some sense when you think about the possible mindset of the Yahoo board.

Liddell, who has a charming New Zealand accent, did a short stint, from January of 2010 to March of this year, as CFO at General Motors. Recently married to another former Microsoft exec, he has since been living in New York.

He apparently loves living in the Big Apple.

But when he left GM, Liddell made it clear he wanted to go for a top job next. He was among the candidates for a recent search for a CEO of Time Warner’s Time Inc. (an effort that was run by exec search firm Heidrick & Struggles, which is also conducting the Yahoo hunt).

Known as tough and decisive, he certainly is qualified to deal with complex financial situations, such as the one in which Yahoo now finds itself knee-deep. One knock: Little product or advertising experience.

Laura Desmond: While certainly a dark horse, Desmond has been queried by Heidrick, said several sources.

She is CEO of Starcom MediaVest Group, a subsidiary of Publicis, one of the largest media planning and buying agencies, making Desmond one of advertising’s most prominent players.

Well-known in Yahoo’s key market, she is considered a savvy and smart exec with a wry sense of humor.

I happen to particularly like one line from one of her bios:

“Ms. Desmond’s career has been driven by two caveats: Take intelligent risks and learn more from failure than from success.”

She could learn a lot at Yahoo. (I know, easy jab, but it works!)

David Rosenblatt: The former DoubleClick CEO, who went on to a big ad job at Google after it paid $3.2 billion for the company, is also a long shot, mostly by his own choosing.

The sharp exec is always on the short list of CEO candidates for a lot of big, splashy online jobs, but he seems to want to swim his own way.

Case in point: He was recently named CEO of New York-based 1stdibs, a relatively obscure online marketplace known among antique dealers and interior designers looking for one-of-a-kind furniture, art and lighting.

Yes, that’s right: Fancy lamps.

Rosenblatt also serves on the boards at Group Commerce, Twitter and IAC.

All that Internet ad and e-commerce experience is exactly why Rosenblatt would be one of the better choices for CEO of Yahoo. But, for him, I would guess taking such a job is probably in the life’s-too-short category.

More to come, obvi!

Yahoo shareholders felt a little giddier earlier this week, when it seemed as if the company had finally decided to make a deal with its Asian partners.

But the happiest crew might end up being the Silicon Valley Internet giant’s outside counsel, Skadden Arps — and especially Leif King, the fantastically named legal eagle who has been advising Yahoo on the deal.

That’s because today the Yahoo board approved continuing the negotiations to come to a final agreement over the stake, sources said, which should take six to eight weeks.

It’ll surely be happy holidays for billable hours!

As costly as the legal bills will be, if it all goes well, an Asian solution will mean one major problem solved, with a possible pile of cash and new assets coming in to Yahoo.

To get there, the company signed a term sheet earlier this week with Japan’s SoftBank to sell back all its holdings there, and with China’s Alibaba Group to sell off more than half its stake (moving from a 40 percent stake to a 15 percent one).

The deal values Yahoo’s total shares in both companies at about $17 billion.

While it gets a pretty accounting name — “cash-rich split “– the vehicle to unwind it all is essentially a complex tax dodge finally cooked up by the trio, in which cash, new assets and stock will be moved around until everyone gets what they want (except the U.S. government).

I would explain it — but I am on vacation, and would rather drink eggnog and sleep — so here is The Wall Street Journal’s version, which I like because it sounds like Alibaba and SoftBank are giving Yahoo a hugely loaded Starbucks card for Christmas:

“As envisioned in the scenario, Alibaba would create a subsidiary into which it would put several billion dollars of cash, plus an operating asset that Yahoo wants to buy using additional cash from Alibaba, almost like giving Yahoo a prepaid card for an asset of its choice, the people said.”

Everyone is hoping there will not be any hiccups in the deal, which has been spearheaded by Yahoo board member and Intuit CEO Brad Smith, and Jerry Yang, who is also the company’s co-founder and a major shareholder.

Alibaba CEO Jack Ma and CFO Joe Tsai, both co-founders of that company, were the point men for the Chinese company. And for SoftBank, it was its founder and CEO Masa Son and his main U.S. exec, Ron Fisher.

Now, said sources, Yahoo’s board is hoping to still keep the bids from a pair of private equity firms — Silver Lake and TPG Capital — alive.

While initially the focus on the action, the PE bidding for partial Yahoo stakes has recently been sidelined by the Asian deal.

Now, sources said, Yahoo is hoping the new infusion of cash and assets will allow it fend off shareholder unrest — stock buybacks and dividends, anyone — to solicit higher prices from the firms to make strategic investments.

Yahoo had considered the initial bids too low, as did some very pissed-off activist shareholders.

Still, it’s not clear if those firms will jack their offers now, although sources said Silver Lake is still interested in some sort of deal that would give it influence over remaking Yahoo.

Silver Lake and others think the long-troubled company could be revived with some effort, and become a much more lucrative Web property.

But those negotiations might run into roadblocks over who gets to pick leadership for the company. Yahoo has accelerated its efforts to hire a new CEO, after firing Carol Bartz in September.

The PE firms, who would buy a large stake in Yahoo, also have wanted some level of control, including CEO and board approval, in order to be able to make massive changes at the company to turn it around.

Wall Street seems to like the Asian part of the deal, at least, since it shows some sort of forward momentum at Yahoo, and from its often-lugubrious board.

Shares are up almost 7 percent in the last few days, although they are not popping as they might be, given that new valuations based on a successful Asian deal put the stock at a much higher price.

In other words, investors like what they see, but are watching and waiting for more.

Earlier this week, Google and Mozilla said they had struck a deal to renew their search royalty agreement for another three years.

What the pair declined to add: The search giant will pay just under $300 million per year to be the default choice in Mozilla’s Firefox browser, a huge jump from its previous arrangement, due to competing interest from both Yahoo and Microsoft.

Sources said this total amount — just under $1 billion — was the minimum revenue guarantee for delivering search queries garnered from consumers using Firefox.

Google’s main rival in the bid, sources said, was Microsoft’s Bing search service, which was aggressively trying to hip-check it from the main search spot on the browser.

That’s because the software giant has been spending a lot of money in efforts to grow Bing’s market share in the search market.

Microsoft, of course, also owns the still-dominant Internet Explorer browser, but Google’s Chrome has recently been making major gains over both IE and Mozilla’s Firefox.

Still, Mozilla’s recent negotiations with both companies was about search market share.

Yahoo was also in the mix, even though Microsoft powers its search technology, because a hookup with Firefox was considered a plus in holding on to its declining search market share.

But the deal, which was being pushed hard by Yahoo’s Chief Product Officer Blake Irving and its search head Shashi Seth, was determined to be too costly for Yahoo.

Costly indeed, since the new price is much higher than Google had previously ponied up to Mozilla. In 2010, Google contributed 84 percent of Mozilla’s $123 million in revenue.

A previous version of the partnership had expired at the end of November, and the new talks were done against a backdrop of simmering tension between Google and Mozilla over Chrome.

As Liz Gannes wrote earlier this week:

Since the first search royalty deal was signed in 2008, Google’s own Chrome browser has become a significant competitor. Just last month, Chrome overtook Firefox in global usage for the first time, according to StatCounter. Both browsers — software which is used to navigate the Internet — have about 25 percent market share.

Even with the new default deal with Google, Mozilla still also has partnerships with other search providers, including Bing, Yahoo, Yandex, Amazon and eBay.

Of course, everybody declined to comment on my queries to hand over all the financial deets stat.

But Google’s SVP of Search, Alan Eustace, said in a statement: “Mozilla has been a valuable partner to Google over the years and we look forward to continuing this great partnership in the years to come.”

Great, perhaps, but also much more expensive — so presumably Firefox is worth it.

Whatever you want to call him or her — a silver bullet, the cure or, as I like to say, the last unicorn — Yahoo’s ever-seeking and never-deciding board has now renewed its focus on finding a new CEO.

Also on the docket: Working on a deal to sell back at least some of its stake in its twin Asian assets — Yahoo Japan and the Alibaba Group — back to the companies. A partial sale of stock back could placate the often tense situation among the partners.

What is clear is that the two bids from private equity firms are now in an undetermined circling pattern — due to a variety of concerns around shareholder unrest (Occupy Yahoo looms for 2012).

Therefore, the idea of bringing in said fantasy leader to perhaps finally be the one to revive the long-troubled company has returned to the forefront of action, according to numerous sources both inside and outside the company.

The concept in short, said people familiar with the situation: Hire some compelling and entrepreneurial CEO to get the company moving again from a product point of view, do a massive organizational overhaul and help settle Yahoo’s thorny Asian issues.

While a number of names have been rumored in reports — such as Google business lead Nikesh Arora, who is actually not likely to leave his top post at the search giant — sources said the board has been targeting a number of candidates, including Hulu CEO Jason Kilar.

Others on Yahoo’s wish list include Juniper CEO Kevin Johnson and online advertising entrepreneur Brian McAndrews, who sold aQuantive to Microsoft. There are several others also being considered.

Sources said Kilar has met with Yahoo board members about the offer, but his hiring would be a long shot.

It’s an interesting — if complex — gambit to bring in Kilar, who has had his own wrangles with the multi-owner structure of the premium video service over the years.

Kilar’s status at Hulu has been in question ever since it was put on the block, then removed and then — well — who knows.

Hulu’s owners — News Corp., Disney and Providence Equity Partners, along with Comcast (which is a now a passive investor) — did not like the offers it got from various bidders, including Yahoo.

While the media giants have made noises about wanting to keep a stake in distribution, their commitment to that remains unclear.

The situation has put Kilar — who already had tense relations with the service’s shareholders — in limbo until a valuation is determined next year. Without going into the complex details, Kilar has a large equity stake that could be liquid in April, related to certain rights held by Providence.

It is well known that Kilar has been concerned the team that built Hulu gets some sort of payout for their work. In fact, many years ago, Hulu was seen as a possible IPO candidate.

What’s not in question is Kilar’s talent at creating a cohesive team and a compelling product — especially with an advertising and media focus — and the need at Yahoo for a vibrant leader to encourage innovation and discourage its rapidly increasing attrition issues.

The search for a new Yahoo CEO — which is being led by director Patti Hart, and is being conducted by Heidrick & Struggles — had been mostly sidelined until recently, as the board solicited bids for a partial investment from PE firms.

Two emerged, from Silver Lake and TPG Capital, which had wanted to pay from $16.50 to $18 a share for a stake of just under 20 percent in what is called a PIPE (Private Investment in Public Equity) arrangement.

But the low price, and worries about lawsuits and even a proxy fight related to such a deal, have slowed down the momentum significantly, said sources.

Instead, Yahoo has told bidders it will get back to them in the coming weeks about the direction it will take. Thus, the focus on lining up CEO candidates and plans related to reviving Yahoo.

Some of those possible execs have put their hand up, while others — like Kilar — are being solicited. In addition, some still think that Yahoo board member David Kenny remains an internal option, especially if the board of Yahoo gets a refresh, despite his recent announcement that he has no intention of seeking the job.

In general, this shift should not come has a surprise for the hurry-up-and-wait board of Yahoo, which has struggled over the years to make good choices for the Silicon Valley Internet giant.

That drift has resulted in a downturn in its prospects, even as other companies have surged.

Those troubles were brought into sharp focus in a recent report by new Goldman Sachs Internet analyst Heath Terry, who strafed Yahoo in his “sell” recommendation.

Among the gems by an analyst whose investment bank is currently an advisor to Yahoo on its strategic options:

Yahoo simply faces too many competitive and structural headwinds to believe any kind of meaningful turnaround is possible. While there is significant asset value on the balance sheet and in the company’s large, though increasingly less engaged user base, we continue to believe, as we have since before the first Microsoft offer, that the segment of management driving the company is intent on trying to revive Yahoo as a company, regardless of the cost to shareholders.

And, noting the need for a new CEO:

We would become more positive if we felt there was a likely event in the near term that might unlock the value of the balance sheet assets at Yahoo. While we believe the aggregate value of those assets is above the value reflected in YHOO, in order to be more positive on the stock we would need some proof that management is willing and able to take the steps necessary to unlock that value either through a sale or distribution to shareholders. Meanwhile, the declining profitability of the core display advertising business is masked by a search business that continues to lose share and relies on artificial support from Microsoft. We would become more positive on the core Yahoo business if the company is able to find a new CEO capable of focusing the business on its core advertising and communications opportunities, rationalizing costs, and driving growth. This would require user growth and especially engagement improvements in both online and mobile, improving monetization of advertising inventory, and stabilizing its search business.

In other words: Wanted, one unicorn to work magic against increasingly troublesome dragons. Ability to sparkle a plus.

In a positively Shermanesque blog post titled “A Clarification With Respect to Yahoo,” Marc Andreessen wrote that neither he nor partner Jeff Jordan would become an operating exec, including CEO, acting CEO, chairman or executive chairman at the troubled Internet giant.

Of course, if the VC firm wins the partial investment deal against other bidders, Andreessen will absolutely be a key player in the remaking of the company. Already, he and Jordan have met with numerous Yahoo execs as they have assessed the company.

The bid by Silver Lake and Andreessen Horowitz is about $16.50 a share for slightly less than 20 percent of the company. The group, which is competing with another bid by TPG Capital, has a lot of other plans around reviving Yahoo and dealing with its myriad of issues.

The reason for the pronouncement, sources said (and I am just boldly declaring myself) is because the firm is now in the middle of raising a mega-funding round of up to $1.5 billion and limited partners are worried about a lack of focus on its many other investments.

So Marc and Jeff are fully committed to moolah-making at the VC firm. Please pay no attention to the whole Yahoo mishegas over in that corner there!

Here’s the entire post (full disclosure — I got the Jordan part right, but surmised that Andreessen could become chairman if his group won the bid):

A Clarification With Respect to Yahoo

From Marc Andreessen, co-founder and general partner of Andreessen Horowitz:

Over the last several weeks, there have been erroneous reports in the press that my partner Jeff Jordan and/or I might become an operating executive of Yahoo in some capacity.

To be crystal clear, neither Jeff, nor I, nor any of our partners at Andreessen Horowitz, are in the running for, or would accept, any operating role at Yahoo, including CEO, acting CEO, chairman, or executive chairman.

Jeff and I have high regard for Yahoo, but we are fully committed to our day jobs as general partners at Andreessen Horowitz and board members of our portfolio companies.

“Let’s go. Yes, let’s go.” [They do not move.]

– Samuel Beckett, “Waiting for Godot”

In Internet terms, the removal of Yahoo CEO Carol Bartz happened a dog’s age ago.

In fact, it was September 6.

Since then, it has felt like a slow slog, especially contrasting the situation with that of another troubled Silicon Valley giant, Hewlett-Packard, which fired its CEO Léo Apotheker and appointed a new one, Meg Whitman on September 22.

Since then, in comparison, the former eBay CEO has been like the Energizer Bunny, making a series of major and often difficult decisions, including: Holding onto its PC unit; reaffirming its controversial deal to buy Autonomy; promising a decision on the fate of its webOS unit within the next two weeks; appointing new execs; and even buying a company.

To be fair, Yahoo did acquire advertising start-up Interclick.

Otherwise, still no sale or investment deal. No new CEO. No Asia resolution. And, perhaps most importantly, no clearly articulated strategy going forward.

It’s not that Yahoo’s leadership isn’t working at it.

Some fervently insist to me that there is a “plan,” as if there is some clever game of Internet Stratego going on that I cannot possibly grok.

Mebbe — but of this I have no doubt: The Yahoo board has indeed been huffing and puffing away, weighing and measuring, considering and debating.

A lot.

Maybe I’m just too impatient. I am (ask my kids).

Or maybe Yahoo’s beleaguered employees are, one of whom just wrote me plaintively, “unreal how they can drag this out,” in what has become a common refrain up and down the ranks.

Or maybe it’s the Asian partners, Alibaba Group and SoftBank, who are antsy and have considered a variety of nuclear options in order to get back stakes Yahoo holds in them. Said one: “The strategy seems to be to frustrate and exhaust us into submission.”

Or, finally, maybe it’s the newly frustrated recent bidders for a partial stake in Yahoo, Silver Lake and TPG Capital. Declared one to me after I warned that Yahoo might, in fact, drag the proceedings out longer than you might expect: “I thought you were kidding.”

Nope, welcome to the Yahoo waiting game, PE guys!

So, to help us all get through it, here’s a quick update primer on what’s what on the various fronts:

Who’s in Charge Here?

Technically, it is the Yahoo board, which is aided by interim CEO Tim Morse.

First, a word about Morse: By all accounts, he is doing a very good job as temporary head honcho — calming the troubled company, making swift decisions about daily operating issues and being a generally nice dude to deal with.

“He’s Yahoo’s no-drama Obama, in comparison to what was happening before,” said one exec, in reference to the more volatile regime under Bartz.

Still, despite his very pleasant all-hands meetings, such as one earlier this week, Morse had previously been Yahoo’s CFO and not an Internet-savvy visionary to give the company inspiration. No insult intended, but he’s the accountant guy.

To be fair, he is not meant to be the visionary, but many at the company are yearning for exactly that.

A role that is now being taken up again by co-founder, former CEO and director Jerry Yang, who dozens of employees tell me is unusually involved in operational details these days for a board member.

I get reports of sightings of him all the livelong day: Jerry in demand-side advertising confab! Jerry chitchatting with entrepreneurs from a possible start-up acquisition! Jerry weighing in on a variety of products. Look, over in the cubicle, it’s Jerry!

This is seen by Yahoo employees as a good thing and also a bad thing, since it’s hard to be running your little divisional show at Yahoo with the dude who invented it all looking over your shoulder, even if he means well. People naturally defer to Yang, the 800-pound Web icon in the room.

But, given the overwhelming state of stasis at Yahoo now — “No one can do anything until we find out how the story ends,” said one staffer — and employees eying the exits, no power at Yahoo really matters but the board.

You know, the board that has gotten the company to this moment of crisis and profound ennui, which is its own particularly ironic irony.

To better understand the power dynamics on the board, above is a little chart for you to peruse to give you an idea of which independent board member is running what key committee.

The only truly important one is the Transactions and Strategic Planning committee, which is headed by Intuit President and CEO Brad Smith and includes former Akamai President (and former Yahoo CEO candidate) David Kenny, top HP exec Vyomesh Joshi and other guy Gary Wilson.

And, in completely visible shadow form, Yang. Multiple sources close to the situation said he has been a key force in the strategery around a possible sale or investment.

This has caused not more than a little tension among board members, but everyone seems to like the much described nicest-man-in-the-room, Smith, and hopes his cool head will prevail.

Another important part of the board is the Nominating and Corporate Governance committee run by Patti Hart, who is energetically and simultaneously — if pointlessly — in search of a capable new Yahoo CEO.

Or, as I like to call this mythical person: The Unicorn.

The Deal

As I and many others have previously reported, there are bids on the table for partial investments in Yahoo by two very powerful private equity firms, Silver Lake and TPG Capital.

It’s a PE rumble, with a side of Microsoft financial backing! (I think Silver Lake’s Egon Durban makes a very nice Riff, while Microsoft’s Steve Ballmer is the perfect Officer Krupke.)

My fervent wishes for some figurative and dance-accompanied knife-play aside, the bids are essentially the same in general and different in particular. Silver Lake is offering about $16.50 a share, while TPG is dangling a tiny bit more. Silver Lake has power entrepreneur and VC Marc Andreessen on its side, while TPG is trying to get Silicon Valley fave investor and start-up whisperer Reid Hoffman of Greylock Partners and LinkedIn on its team. Both have ideas on CEOs, strategy and what to do about the Asian assets.

This type of deal could happen suddenly and you’ll hear about it quick, since the losing side will immediately trash it to the media.

As you might expect, each director has their favorite PE firm, with some not liking Andreessen, some thinking the TPG bid is a little light, some for a whole-company deal and some wanting Yahoo to hire its own CEO and run the place itself.

Of course, the last one shows a disturbing level of denial and should be a nonstarter, given the board’s abysmal record on CEO choice and its riding of Yahoo to this sad point in its storied history.

Here’s what to expect on the PE front: A lot of wrangling behind the scenes with frequent leaks to the media about what each side wants and will not yield on.

CEO choice or no CEO choice, that is the question!

Also a big factor are Yahoo’s major shareholders, few of whom like the partial investment deal, which is known as a PIPE (Private Investment in Public Equity), because of the insiderness of it all and because they prefer a whole-company sale at a higher price.

There is also pressure from activist shareholders like Daniel Loeb of Third Point, who has attacked Yang and others on the board and is ready to pounce with a proxy fight if Yahoo tries to override shareholders too egregiously. And, of course, the inevitable lawsuits over any arrangement that seems to block a whole-company bid.

That said, such a mega-deal seems unlikely, since it is too pricey and despite a lot of noise that Yahoo’s Asian partners were ready to strike with a takeover in order to get back Yahoo’s big stakes in their companies.

That’s kind of like buying a store to get back the cool pair of shoes you sold, but bankers love to scheme up this stuff. While it certainly could happen, it would be a bear of a deal.

Perhaps more like Yogi Bear, hopelessly angling for a tasty pic-a-nik basket — but grrrr anyway.

But perhaps the biggest factor in all of this mishegas is time. There is none on a lot of levels, most especially the increasing level of brain drain and drift at Yahoo. After the New Year dawns, this is going to spin right out of control and amount to the biggest internal challenge Yahoo faces.

An Asian Solution

As I and others have reported, Yahoo is entertaining yet another proposal to sell all or part of its Asian assets back to the companies, which make up a bulk of its market valuation.

The relationship between Yahoo and its Asian partners has long been fraught, and today the difficulty of reaching an agreement remains a vexing issue. That’s because it is hard and complex and because no one wants to do what the other side wants.

I am no tax attorney, but it seems as if Yahoo will ultimately come to some deal with China’s Alibaba and Japan’s SoftBank, which could include big investors like Russia’s DST Global.

And, as I reported last week, the Asian partners want to strike a deal with the current board rather than lose leverage with a much cannier new owner.

It’s a tough decision in all aspects to strike, but would remove the focus on the fact that Yahoo’s most valuable asset is something it is not running and simply holds due to a good stock trade in years past.

Years past should be the operative thought here, since the Asian assets have nothing to do with what Yahoo needs to do with its core U.S. and global brand.

You know, the thing that allowed them to buy those lucrative Asian assets in the first place?

Strategery

And that’s the crux of all this, isn’t it? Yahoo needs a new strategy and fast.

Or it needs to clarify and hone its current strategies around advertising and media and define itself once and for all. While it often touts itself as a premier digital media company, it’s still not clear exactly what Yahoo is saying by that.

In fact, incredibly, sources told me that the board was still wrangling over the tired issue of what Yahoo is at its most recent meeting — essentially, is it a products company or a media company?

If I had to listen to that who-am-I-anyway debate again, I think I would scream, given how many important Web trends that Yahoo has whiffed in recent years, many of which were right in its own wheelhouse.

How much damage this has caused to Yahoo’s core business is a critical one to determine, with many feeling the situation is too far gone to revive it and others confident that this is simply an issue of poor execution.

I am in the middle on this one, but all the indicators of Yahoo’s business have long been heading in the wrong direction, and results in the next quarter are expected to underline this even more.

Thus, the board’s navel-gazing at this point is untoward, considering that it is presiding over the possibility of a sale that should not have had to happen in the first place. While it is not quite a fire sale, it’s no cause for celebration at all the attention, either.

In fact, it’s also pointless, since — if this all resolves as it should — the current Yahoo board will not be the one determining the company’s future any longer. Remember that: This group should and will be gone for the most part.

Yahoo shareholders and employees can hope, at least.

Then, it will be up to the next group of leaders to make the very hard choices — including what are likely to be massive layoffs and radical surgery on its offerings — for what’s to come next.

In the end, that is all that will matter. Until then, as usual, you’ll have to sit tight.

What took so long?

Actually, it did not take any time at all for someone to start legal proceedings against the current effort by Yahoo to sell itself.

In this case, no surprise, it is aimed directly at the how of doing it.

In an unusual injunction request, M&C Partners is seeking to enjoin the Silicon Valley Internet giant from using its stringent “no cross talk” rule for its potential buyers to limit possible bidding syndicates.

“The No Cross Talk Provision constitutes an unreasonable anti-takeover device, designed to entrench and favor [Yahoo co-founder, director and major shareholder Jerry] Yang and the current Board,” reads the legal filing, in part.

In addition, M&C does not like what it calls a “Minority Stake Promise,” which it alleges Yahoo is “requiring those who sign the Confidentiality Agreement to use any information they receive to confine themselves to a bid for only a minority stake.”

That refers to the fantastically named PIPE deals — or Private Investment in Public Equity — that PE firms like Silver Lake and TPG Capital have just offered. These are bids to buy 19.9 percent of Yahoo, which will essentially give them a lot of power.

Both allegations are, well, exactly what Yahoo is doing, even if it’s not for the filing’s stated nefarious reason. Thus, M&C doesn’t think that’s okay, presumably because it wants investors to be able to make a deal without Yahoo’s bossy rules.

To be clear, Yahoo is named in lawsuits all the time for a wide variety of things, such as a case in which one group is alleging it botched a deal with the Alibaba Group over its Alipay controversy to another alleging the price it paid for in its recent $270 million acquisition of Interclick was too low.

And so it is here, one of many to come, I suspect. In this one, there’s also a class-action request and various and sundry bashing of Yang, which you can read below:

yhoo

Last night, the New York Times dropped a juicy little tidbit into its everything-but-the-kitchen-sink daily update of the board mishegas at Yahoo around the deliberations yesterday over two competing private equity bids to buy a partial stake in the company.

No, not the one about Jeff Jordan — former eBay exec, OpenTable CEO and now VC at Andreessen Horowitz — possibly taking a big role at Yahoo if the firm’s bid with Silver Lake prevailed — which was mysteriously removed very soon after it posted (’cuz he will not, so good move, NYT!)

I mean the one about the venture firm’s big-kahuna partner, Marc Andreessen — who will indeed take a board seat and play a strong role in Yahoo’s future if his bid wins — getting a possible competitor in the Silicon Valley savior section of the ongoing show.

That would be in the form of Reid Hoffman, the well-known entrepreneur, VC and angel investor, who the Times said had talked with TPG Capital, Silver Lake’s rival in the Yahoo bidding, about becoming a possible partner.

Wrote the Times:

“TPG has held discussions with Greylock Partners, another venture capital firm, about a possible alignment, two people said. TPG is hoping to draw on the expertise of Reid Hoffman, one of Greylock’s partners and the founder of the professional social network LinkedIn, these people said.”

Translation: If Silver Lake has a tech icon of substance on its team to give uber-geek appeal to its offer — dagnabbit — then TPG was going to raise with another one, whom the very same Times reporter who wrote last night’s article recently nicknamed “The Start-Up Whisperer” in a recent glowing profile of Hoffman.

While I am still trying to grok what a start-up whisperer exactly means (and how someone as self-effacing as Hoffman would react to such a twee moniker without snickering), it’s a move that has likely already irritated Silver Lake.

After all, TPG aiming at nabbing Hoffman is akin to two crazy neighbors trying to one-up each other in holiday-lighting lawn decor. (You have a singing Santa, so I’ll have a singing Santa — and I might even add a Lady Gaga-themed crèche for good measure!)

But it’s not a bad instinct, either, to get your own live-action Silicon Valley legend, even if it is only half true in Hoffman’s case.

Because, according to sources who know such things, while Hoffman and TPG have had conversations, there have been no commitments, and nothing is close to being agreed on to link the pair.

That could certainly change, and quickly, but Hoffman or Greylock aren’t currently in TPG’s proposal to Yahoo.

That’s in contrast to Andreessen, who is all in (I am not even going to bother with “sources said” here, since everyone and my mother has seen the proposal) with Silver Lake on the deal to purchase 19.9 percent of Yahoo for about $16.50 a share.

As I reported earlier this week, for Silver Lake’s money and expertise in fixing broken things, the bid includes: Silver Lake getting three board seats; cash going to a buyback of stock or granting of a dividend to shareholders; the ability to select a CEO; approval of its strategic plan for Yahoo, and its solution to come to terms with Yahoo’s unhappy Asian partners; and all the purple wearables you could ever hope for (perhaps Yahoo’s best asset, IMHO, especially worn by such obviously cool dudes, as seen here).

Also, controversial Yahoo co-founder Jerry Yang gets to stay around on the board (but only if he becomes very, very quiet, so as not to rile the activist shareholders).

TPG’s bid is less formed, although its price is slightly higher. And the PE firm has yet to check the “Big Geek Included” box.

Hence, the floating of Hoffman as a contender to take on Andreessen, who was once dubbed the “Golden Geek” by Time magazine.

I hope TPG does, soon, since what a matchup it would be!

But, for now at least, the pair — who share big investments in a range of Web companies, most especially Facebook (Andreessen is on the board of the social networking giant, and Hoffman was an early investor and adviser) — are at peace.

Dagnabbit.

What an amazing coincidence.

On the very day Yahoo’s board is considering actual bids from two private equity firms interested in deals to buy close to 20 percent of the company for between $16.50 and $17.50 a share, comes a spate of eerily similar breathless media postings that there’s another bid in the making for $20!

That’s totes better, right? I mean, how can Yahoo’s directors accept a real live lesser-priced bid now when there’s a prettier one in the fog just ahead?

No, really, it’s there — if you squint really, really hard.

Except it’s not even close, when you actually check with two of the key members of the group of alleged buyers, which would apparently be Blackstone, Bain Capital and Yahoo’s Asian partners, Alibaba Group and SoftBank.

Sources close to Blackstone and Alibaba said while there have been talks, which have been previously reported weeks ago here and elsewhere, there is no bid in the offing that is close to fruition and at that price.

In an unusual public statement, in fact, Alibaba’s John Spelich said flatly: “Alibaba Group has not made a decision to be part of a whole-company bid for Yahoo.”

This from a company whose voluble CEO Jack Ma is prone to making giant and noisy speeches to signal his interest in finding a way — any way — to get back shares of the Chinese Internet giant from Yahoo.

Not this time, and several sources close to Alibaba reiterated that it was nowhere near close to any bid as yet and that a price is still up in the air. In addition, sources added, Alibaba might decide to work with another PE group, such as Providence Equity.

In addition, sources noted that if Alibaba could strike an adequate deal with private equity bidders to get a large chunk of the stake back, it would be highly preferable to a hostile takeover of Yahoo that could end in tears and little else.

“The threat of a takeover is more useful than the damage an actual takeover would cause for everyone,” said one person close to the situation. “No one wants this to be unfriendly.”

So why the rumors — doubtlessly being spread around by hopelessly cynical Wall Street types interested only in stock manipulation — surfacing today?

Simple: To get some easy-to-play media outlet to bite, report it as speculative fact and cause the stock of Yahoo to take flight tomorrow.

Hey, it could happen!

Sadly, this junior-league trick has already worked — Yahoo shares were up a dollar to $16.72 in after-hours trading tonight.

It is likely to go even higher tomorrow, which could cause the board of Yahoo to delay accepting either of the partial bids from Silver Lake or TPG Capital, even if they were the best thing for the company and its employees.

Except that the job of the Yahoo board is to evaluate what’s before them and not what is perhaps, someday, soon, wait-by-the-phone, really soon, I promise is going to be delivered.

In fact, several sources noted that it’s not clear if the Yahoo board has even asked for parties to submit whole-company bids yet.

When and if Yahoo’s board does that and if something better actually does come down the pike, with a much fatter price tag of $20 or more, then the directors can mull that over.

That would be the prudent thing to do for the company, its employees and its shareholders, even if Yahoo’s stock gets a temporary lift now.

Maybe I am just a hopeless Silicon Valley romantic and not a hardened Wall Street M&A type, but the survival of Yahoo is the real point here, rather than the lining of bankers’ already fee-stuffed pockets.

And anything other than that is just fog.

Last night, Yahoo’s board gathered for a pre-meeting dinner, a precursor to a day-long meeting today to weigh several bids from private equity firms to buy part of the Silicon Valley Internet giant, including Silver Lake and TPG Capital.

Among the thorniest of issues will be the low price that the firms want to pay for a 19.9 percent stake in the company. Silver Lake has offered $16.50 and TPG a dollar more.

In the past year, Yahoo share prices have seen a low of $11.09 and a high of almost $19. It closed yesterday at $15.70 — a price that is mostly due to sale rumors — making the offers not much of a gain on current market valuation.

The transaction type being contemplated is called a PIPE — or a Private Investment in Public Equity — with the investment below 20 percent, which allows Yahoo to avoid a shareholder vote on the issue.

While the Yahoo board had hoped for bids above $20, they are not expected to be forthcoming, considering the weakness in its business over recent years and the difficulty of returning it to health and growth.

Results in its upcoming quarter, for example, are expected to be weak again, with trouble in its advertising business, largely due to uncertainty around the business.

The low price, along with the attempt to bypass shareholder approval, is sure to infuriate Yahoo’s major investors, given they have watched the value of their stakes wilt over the years under current board management.

In the last five years, due to continually muddled leadership and the missing of key Internet trends, Yahoo shares have dropped 44 percent in value, which compares with huge gains from companies like Amazon and others.

Major Yahoo stakeholders are already irked by the PIPE idea itself, which could transfer power to private equity firms at preferential terms.

Another possible bone of contention will be the preservation of at least some parts of Yahoo’s current board.

Under a plan by Silver Lake, for example, it would get three board seats, as well as another one for a CEO of its choosing. Another seat will go to Yahoo co-founder and current board member Jerry Yang. There will be six independent board members, but it is not clear if they would be new or include some current directors.

One of the Silver Lake choices would be well-known Silicon Valley legend Marc Andreessen, who is now a powerful VC. The appeal of Andreessen is important to some major shareholders who have turned sour on Yang.

Who will be CEO of the rejiggered entity will also be discussed at the meeting. Sources said Silver Lake and TPG have definite candidates in mind and Yahoo has also been conducting an official search.

In other words, there’s a lot on the plate of Yahoo’s board today, which also needs to revisit continued proposals from its Asian partners — China’s Alibaba Group and SoftBank of Japan — to sell back its stakes in Alibaba and Yahoo Japan in various tax-free schemes.

Sources said Yahoo — which has thus far rejected such efforts — might now consider selling a part of their shares back, up to half. This would allow the company to give a cash dividend to its disgruntled shareholders.

If thwarted, as has been previously reported ad nauseum, Alibaba and SoftBank are considering their own bid with the help of other U.S. private equity firms, such as Blackstone.

Other PE firms — especially ones who have not signed Yahoo’s non-disclosure agreement related to any deal — are also hanging under the hoop, so to speak, to see what happens. At least one firm hopes the Yahoo board will reject the low-priced partial bids, leaving the court wide open again.

“It’s still anyone’s game,” said one possible bidder.

Except for Yahoo’s put-upon employees and shareholders, this is anything but fun. More on that soon.

Score one for Yahoo, it seems, getting some key private equity firms to sign its restrictive non-disclosure agreement to allow them a special peek at its business.

And now that includes Silver Lake, which has already had several discussions with Yahoo management and its board members, including co-founder Jerry Yang.

Silver Lake, which has perhaps been among the more aggressive of the possible bidders for Yahoo, had been a significant holdout over the NDA, because of provisions it felt were too onerous.

That included restricting “cross-talk” among the variety of suitors interested. Sources said Silver Lake had been discussing various scenarios related to Yahoo that might take a consortium of players to realize.

It seems it will agree to none of that, for now at least, joining several others who have also signed on the dotted line of secrecy. While Yahoo could have agreed to changes in the NDA, sources said the one Silver Lake agreed to was the same as others previously signed.

Those NDA-ready PE firms include TPG Capital and KKR. As of today, other bidders — such as Providence Equity Partners, Bain Capital, Blackstone and Hellman & Friedman — have not yet signed the document.

Yahoo had extended a deadline for doing to into this week, but firms can also get involved in later rounds of talks.

In addition, signing the NDA is not the end of the road for those who do not — Yahoo is a prominent public company and there are plenty of sources to talk to about its prospects.

But getting cooperation of Yahoo management could be critical, unless a bidder is contemplating making an unsolicited offer.

And that would be a tough road — just ask Microsoft.

Most of all, getting everyone to sign is important for Yahoo, which wants to control any sales or investment process and wants to avoid bidders taking control of its fate.

Thus, Silver Lake accepting the NDA is a big deal, since it had been considering hooking up with China’s Alibaba Group in a possible bid for all or part of Yahoo.

In addition, it has had success in a smaller but similar scenario around Internet telephony giant Skype, which it eventually sold to Microsoft for a lucrative upside.

As with Skype, Silver Lake is still working with Andreessen Horowitz, as I had previously reported. In fact, principal Marc Andreessen was present in a recent informational meeting Silver Lake had with Yahoo’s Yang.

I asked Silver Lake for comment about the NDA, bur it, um, deflected my swooping inquiry (inside joke alert!).

Tuesday, Renaissance said the Paul family has informed its board that it won’t support an acquisition by suitor Plato Learning Inc., which on Monday said it increased its offer. Plato’s bid is now valued at about $496 million, or $41 million more than the deal Renaissance struck with European private-equity firm Permira.

About two weeks ago, the Pauls, who control 69% of the Wisconsin-based company’s shares, turned down a Plato bid that was $16 million higher than the Permira offer.

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Is this investment-banker-hype week and nobody told me?

It certainly seems so from all the almost ridonkulous rumors about everyone and their mother being “imminently poised” to make a bid for Yahoo.

In fact, the process is only beginning to chug along with the Yahoo board, aided by Allen & Company and now Goldman Sachs.

At this point, it is lots of folks rubbernecking, books being prepared and all the other stuff bankers do to look like they are busy, busy, busy.

Among the most serious players: Silver Lake and a shifting group; and a consortium that includes former News Corp. exec Peter Chernin and Providence Equity Partners.

And, just slightly, News Corp. (which owns this Web site) is considering dipping a very small toe in as part of a larger group.

That has been copiously reported here and elsewhere a badillion times already.

But — and I have been clear on this, as have others — no one is near anything of substance, which has not stopped this really lame game of Clue being pumped up by bankers who should know better.

Yesterday, it was Silver Lake, DST Global and the Alibaba Group in the billiard room with foreign money. Nope, nope, nope. Silver Lake and DST are indeed looking hard and Alibaba is a player here, but there is no grand troika going at this moment.

In fact, Alibaba’s Jack Ma — after declaring he was “very interested” in buying Yahoo — has since backed off.

And today, it’s a thinly sourced and carefully worded report of Microsoft in the basement, interested in bidding with a pile of their own dough.

How can I put this delicately? How about: No.

According to my sources, throughout this entire process Microsoft execs have taken pains to make it clear that they are not going to be among the bidders in any significant manner.

In addition, the company has also been communicating with bidders that — while Microsoft is interested in a stable Yahoo, given their search and advertising partnership — it would not throw in with anyone in the process yet.

And, finally, if a winner eventually emerges, it might — and this is only might — consider making a token investment to help get the deal completed.

Certainly, Microsoft has been and is willing to talk to anyone interested, said sources, given their Yahoo business relationship. But this does not make it a bid of any shape or size. They are not even “considering” it, unless that means watching from a distance.

I suppose in some incredible shift Microsoft could change its mind, but most credible sources I spoke to said that is not happening now.

In fact, after its bruising and failed takeover attempt of Yahoo several years ago, said multiple sources, Microsoft now has the deal it wants with Yahoo.

“Why buy the cow when you can get the search and advertising deal for free,” joked one person close to the situation.

A range of major players interested in acquiring all or a large piece of Yahoo have been prepping possible bids and have been in touch with the Internet giant’s board over the last several days.

While Yahoo has publicly said it was not for sale, according to numerous sources both inside and outside the company, it has been receptive to the interest and its Chairman Roy Bostock and Co-founder Jerry Yang have spoken to several.

Among the possible players: Silicon Valley venture firm Andreessen Horowitz, which is working with private equity firm Silver Lake, in a deal that also might include Russia’s DST Global and Yahoo’s Japanese partner Masa Son; former News Corp. exec Peter Chernin, who is partnered with Providence Equity Partners; and the possibility that Yahoo’s Chinese partner, Alibaba Group, might consider entering the fray in what could be a reverse merger of sorts.

Also being rung up by some of the parties: Microsoft — Yahoo’s advertising and search partner — which is being seen as a possibly moneybags in any deal.

The movement among these investors is against a backdrop of increasing pressure for Yahoo’s board, after it fired CEO Carol Bartz last week. In the wake of the dramatic move, shareholders have upped criticism of Bostock and the board and have been looking hard for alternatives.

Today, that included hedge fund investor Daniel Loeb of Third Point, which has a 5.1 percent stake in Yahoo. In a filing this morning, he said he might increase that amount, and described a testy hour-long phone call he had earlier this week with Bostock that ended abruptly with a hang-up from Yahoo.

Sources said Loeb called Bostock a “fool,” among other not-so-nice names, on the call and asked for Yang’s help in dumping him.

This comes as exactly no surprise, given his previously strong letter in which Loeb called for Bostock’s ouster.

Loeb has been calling out Bostock — who is also on the boards of Morgan Stanley and Delta Airlines — for a series of gaffes at Yahoo since he became chairman in 2008 (he’s been on the board since 2003).

Those have included: Yahoo’s bungled effort to stave off a takeover by Microsoft several years ago; the too-long enthusiasm for Bartz, who was hired in early 2009 and fired last week; sitting unusually still as competitors such as Facebook, Google and more have out-innovated and outgrown Yahoo; and, of course, the falling knife of a stock, which has dropped precipitously since Bostock has been in charge of the board.

As Loeb wrote in a letter he sent to the company last week:

“It is time that certain members of this Board were held accountable for its past failures and their individual roles. Accordingly, we insist that Mr. Bostock, who championed Ms. Bartz’s hiring and led the charge against the Microsoft deal, promptly resign from the Board.”

Loeb is likely to add to that later today at a high-profile investor conference in New York, where the colorful but tough-talking investor is sure to add more logs to the fire.

But it not only him. Other major shareholders of Yahoo are also in touch with possible outside buyers, seeking a change at the long-troubled company, after its shares have remained in the doldrums, its attrition rate of employees has spiked and its product pipeline has slowed to drip.

This has all been taking place — of course — during one of tech biggest and most innovative booms, in which Yahoo competitors have grown strongly.

Enter Marc Andreessen, the well-known entrepreneur who has transformed himself into one of Silicon Valley’s most powerful venture capitalists.

He and his partner Ben Horowitz recently pulled off another similar deal — with Silver Lake — to take control of a then-troubled Skype. They later flipped it to Microsoft for a large return.

Sources familiar with the situation said the pair have become increasingly intrigued by the situation at Yahoo and believe that its assets and brand are still strong, despite its management turmoil in recent years.

One problem is the huge cost of almost any kind of takeover and also the complexity, given much of Yahoo’s $18.5 billion valuation is due to its Asian assets.

The sale of those shares, as well as the selling off of some of Yahoo’s less core properties, makes for a very complicated situation for anyone.

Said one person looking at the company: “It is one of the more massive hairballs around.”

That is a common sentiment among many of those looking at Yahoo, which has hired Allen & Co. to manage the process.

Also of worry is a bid that would include too many players. Yahoo has long been plagued by indecisiveness on the part of its execs and, mostly, its board.

But one thing all the possible buyers of Yahoo, as well as an increasing number of its shareholders, agree on: The Yahoo board needs a major shake-up.

As Loeb wrote last week, which many I interviewed also echoed:

“This letter details our principled demands for sweeping changes in both the Board of Directors (the “Board”) and Company leadership, and outlines the hidden value of Yahoo, which has been severely damaged — but not irreparably — by poor management and governance.”

Later this morning, I will scramble the private ATD jet to make my way down south to Anaheim for Microsoft’s annual Financial Analyst Meeting.

That’s right: A bunch of Wall Street types, asking not very challenging questions of top Microsoft execs in a ballroom perilously close to Disneyland.

Taking place this afternoon, starting at 1 pm PT, the confab will include appearances by its top execs, including CEO Steve Ballmer, CFO Peter Klein, COO Kevin Turner, Online Services President Qi Lu and Satya Nadella, who helms the Servers & Tools division of the software giant.

There will be lots to discuss at the confab, including: What is up with Microsoft’s search and advertising partnership now that Yahoo CEO Carol Bartz — who struck the deal — was ousted, and whether it is involved in a possible bid for the Silicon Valley Internet giant again; an update on the Windows Phone business; prospects for Windows 8, which the company just highlighted at its huge developers conference there; questions about its nascent tablet business; comments on Google’s recent moves, including its purchase of Motorola Mobility; and, of course, how Ballmer sees his own tenure at Microsoft, given its longtime lackluster stock performance (paging investor David Einhorn!).

In other words: Mr. Ballmer’s Wild Wall Street Ride!

Look for my live blog from the event later today.

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The move added some $3 billion to the cost of a deal ultimately valued at $12.5 billion. The transaction gives Google a thick portfolio of patents to help defend its Android smartphone operating system and an in-house hardware maker that could make it a tougher competitor for iPhone maker Apple Inc.

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The results are in for AllThingsD’s survey of readers to determine the best (and snarkiest) moniker for the $12.5 billion Google bid for Motorola Mobility.

And the winner, by a huge amount, is Googorola, with 53.2 percent of more than 1,000 votes, with second place going to ScrewYouApple at 14.9 percent.

It was followed by: GooMo (6.7 percent); Gotorola (5.8 percent); MoGoo (4.9 percent); Motoroogle (4.6 percent); Motoogle (four percent); Moola (2.8 percent); YouTooMicrosoft (1.1 percent); MaBell (0.8 percent); AlsoNokia (0.6 percent); and NotSoMuchHP (0.6 percent).

Here’s a colorful chart to peruse:

You have to hand it to the CGI folks at Taiwan’s Next Media Animation for this depiction of Google’s $12.5 billion bid for Motorola Mobility.

It includes the search giant’s co-founders riding a pony (it’s a one-trick one); Asian handset makers jumping out of Windows (Phone); and Apple CEO and co-founder Steve Job as a lightsaber-wielding Darth Vader (the helmet looks good with the black turtleneck).

Please enjoy: