Steve Ballmer is no longer “Monkey Boy,” at least according to the cover of the issues of Bloomberg Businessweek that hits newsstands on Friday.

The magazine has a long cover story on how Ballmer has quietly rebooted the software maker.

It’s a good read, with writer Ashlee Vance interviewing Ballmer over a pork chop and wedge salad at an unnamed Bellevue, Wash., steakhouse. During the conversation, Ballmer addresses both the challenges Microsoft faces as well as what it has been like for him trying to lead in the shadow of Bill Gates.

“The fact of the matter is that the new guy will never quite look exactly like the visionary founder no matter how hard they try,” Ballmer said, according to an advance copy we got our hands on. The full article should be on the magazine’s Web site in just a bit. (Update: It’s up now, here.)

Ballmer reflects on things he might have done better as well as where the company is going, including a critical “reset” this year, as the company debuts Windows 8 — arguably the most significant shakeup of Windows in its history.

In the piece, Netflix chief — and Microsoft board member — Reed Hastings calls Ballmer “the most honest, self-critical, self-aware person I have ever met.”

“I think he embodies a key quality of a great leader, which is he cares more about the company than himself,” Hastings said. “He’s willing to be open and drive improvement instead of being defensive.”

It also notes that, despite the criticism of where Microsoft has fallen short, he has managed to create greater annual profit growth in his tenure (16.4 percent) than either GE chief Jack Welch (11.2 percent) or IBM’s Lou Gerstner Jr. (2 percent).

There are a few newsy nuggets as well, such as the fact that Microsoft plans to open 75 more of its own retail stores over the next three years. It currently has 14.

So, should we give the Monkey Boy thing a rest?

Ballmer did use his “Developers, developers” line this week, though without the enthusiasm of the original. So I think we’ll keep calling him Monkey Boy.

Since I know you want the videos, here you go.

The classic:

And here’s this week’s iteration, as captured by yours truly, on an iPhone:

Correction: The article hits newsstands on Friday, not Thursday. In any case, you can read it online in just a bit, I’m told.

The San Francisco social games company is looking to raise as much as $1.15 billion, which would make it the largest IPO from a U.S. Internet company since Google raised $1.7 billion in 2004.

Shares will likely be sold on Thursday, with the company trading under the ticker ZNGA for the first time on Friday. In the meantime, the company is trying to jockey for the best price and the most shares sold.

At a luncheon yesterday with potential investors, CEO Mark Pincus made one of his boldest predictions yet when it comes to how well its games will monetize.

Currently, Zynga has about 227 million monthly active users who play games for free on Facebook, such as FarmVille, CityVille, Zynga Poker and Mafia Wars. But only a small fraction — around 3 percent — pay for additional features, such as decorative items for a farm or new clothes for an avatar.

“We could see that doubling,” said Pincus, according to Reuters.

Doubling? That’s sure to whet investors’ appetites.

But it’s hard to know how the company will accomplish that.

To be sure, Zynga is about to enter one of its biggest growth periods yet and anticipates launching several new games over the next few months.

On one level, more games will likely translate to more players. But will it translate to more players willing to pay?

That seems like a leap of faith.

However, based on documents filed with the Securities & Exchange Commission, we have gleaned that some of Zynga’s growth prospects are guaranteed thanks to the company’s close – albeit complicated – relationship with Facebook.

As one of the conditions of its partnerships, Facebook is obligated to help Zynga meet certain growth targets. In return, Zynga has committed to offering Facebook a number of exclusive game titles.

The specific details of the relationship were redacted in the document, so it’s not clear how aggressive those growth targets are over the five-year life of the contract.

Zynga also has close ties with Google, which has recently launched its own games network. Zynga has already launched several titles there, including CityVille. Following the offering, Google will own 3.8 percent of the company.

Also during yesterday’s lunch, Zynga’s executives were grilled about player retention and churn rates and its growth prospects for mobile.

Among several responses, Pincus joked about how Alec Baldwin was recently kicked off a flight after getting caught playing Words With Friends while still at the gate.

It seemed investors were not as interested in hearing about recent negative reports that Pincus’s hard-charging personality has made it an unfavorable working environment or that some employees were asked to give up their stock options.

Plus, it’s a crowd that Pincus should be comfortable speaking in front of. This will be the second company the Wharton and Harvard Business School grad has taken public.

The company will continue to have meetings today and into next week. So far, reports indicate that the conversations are going well.

Zynga has apparently already received enough orders to cover all the shares being sold in its initial public offering, reports BusinessWeek, which talked to two people with knowledge of the situation. Zynga plans to sell 100 million shares for $8.50 to $10 apiece, which would value the company at as much as $7 billion.

Don’t worry about it, Forbes chairman Steve Forbes tells his staff, via an internal memo which you can read below.

Before we go further: I worked at Forbes for 10 years; I still know lots of folks who work there. Now: The Fortune piece is useful because it details, via internal documents from banker J.P. Morgan, just how badly the bet that Elevation Partners placed on the magazine in 2006 has worked out.

The fact that Elevation (better known as either Roger McNamee’s private equity fund, or Bono’s private equity fund) bought a minority stake in the publisher at close to the market peak has been well known.

But the Fortune piece spells out just how badly timed it was: Elevation’s projections had Forbes generating close to $90 million in EBITDA in 2009; instead, the company had operating losses of $19.7 million. Last year the company went into default on a $90 million credit line.

Fortune also argues that the deal has been a disaster for the Forbes family, but I’m not sure that this is the case. After all, it allowed them to take more than $100 million out of the company while holding on to a majority stake. If they hadn’t done that five years ago, they certainly couldn’t do so today.

Regardless, Fortune does a good job of showing just how precarious life has been at Forbes for the past couple years — as it has been at every business magazine (just ask Portfolio and BusinessWeek) — and the publisher’s uncertain future. Elevation and Forbes have interlocking put and call options that kick in next month, and it will be interesting to see how long Elevation remains a minority owner.

—

Fortune Story on Forbes
Steve Forbes [XXX@forbes.com]
Sent: Thursday, July 28, 2011 9:43 AM
Today Fortune magazine published a story on Forbes with the clear intention of disrupting the business of its most formidable competitor.

Fortune was aware that this was highly confidential, private information and of no value to release to the public. Though the intention is to harm our business, it will not adversely impact Forbes because it highlights a very difficult time in the past when all the media industry was going through unprecedented upheaval.

Forbes has the finest team – you – in the media world today. Forbes is profitable and is successfully navigating these extraordinarily turbulent seas. The company continues to grow and thrive with powerful new strategies and talent.

We are attaching (below) a statement that will be sent later today to the media responding to this article.

Media Statement
Contact: Monie Begley Feurey
SVP Corporate Communications, Forbes Media
XXX@forbes.com

Forbes Media is profitable and in full compliance with all bank loan covenants.

In 2010, as part of a newly formulated strategy, Forbes sold Investopedia for cash realizing a profit on the sale of this investment. The decision to sell this non-core investment was taken
by the board of Forbes Media upon the recommendation of management.

In 2008, Steve Forbes and Tim Forbes, CEO and COO repectively, initiated a reorganization of the company, including the integration of its independent operating units, Forbes magazine and Forbes.com.

They also decided to expand the company management team, which led to the successful recruitment first of Lewis D’Vorkin as Chief Product Officer and then Mike Perlis as CEO of the integrated business.

The last decade has seen unprecedented upheaval across the media industry.Within that decade Forbes magazine, uniquely among its largest competitors, Fortune and Business Week, grew its total readership to record levels – 5.4 million in 2010 – and grew its share of advertising from 33% to 40%. The company also launched 16 local language editions, giving it the largest worldwide brand footprint among business publishers. At the same time, Forbes.com grew to one of the largest and most profitable business websites in the world, with, on average, 20 million monthly unique visitors.

Since 2010, the company has pursued its strategy of putting journalism at the center of social media. This strategy is at the cutting edge of media today, which is why it is garnering support from audiences and advertisers alike.

Elevation Partners are enthusiastic supporters of the direction of the company and have been full participants as these strategies have been developed.

Steve Forbes remains Editor in Chief and Chairman of Forbes Media. Tim Forbes is Chairman of Forbes Digital. The Forbes family remains the controlling shareholder of Forbes Media.

According to sources close to the situation, Intel Capital and Advance Publications will lead a $30 million investment round in Kno, the high-profile student tablet start-up.

In addition to the funding from its venture capital arm, Intel itself will consult with Kno on its tablet design. Kno, which is getting out of the hardware business, will now focus on its software to manage the devices that are aimed at the college market.

Intel will not manufacture tablets either. Instead, its engineers will consult with Kno on power management, graphics, display, systems integration, which it does for a variety of its customers.

Along with Intel Capital and Advance, current investors will also participate in the round, said sources. But Intel Capital and Advance, the owner of the Condé Nast publishing empire, make up a big part of the funding.

Sources said Intel Capital’s investment is $20 million and Advance and others make up the rest of it.

BoomTown reported in February that the much-funded and high-profile Silicon Valley start-up–aimed at making tablet computers focused at students–was considering selling off the entire hardware part of the business.

Sources said Kno execs have recently decided that the quicker-than-expected uptake in tablet production by a multitude of powerful device makers had made its efforts to package a seamless offering less critical.

Instead, the company will now focus on its robust software and services to offer students on the Apple iPad, as well as upcoming tablets based on Google’s Android mobile operating system and others.

The move is a dramatic shift for the company, which had not shipped significant numbers of the touchscreen device as it has long touted.

In fact, Kno said in November that it would ship a $599 and $899 version of the tablet by the end of the year.

The lower price was for its single-screen device, while the clamshell double-screen version was more expensive.

And, although it has been reported no pre-orders were fulfilled, Kno did indeed ship several hundred of them, built by China’s Foxconn, before stopping doing so earlier this year.

Many have been dubious about Kno’s ambitious hardware efforts.

That’s because marketing a new and complex product like the Kno takes a lot of effort and cash, especially since it is an increasingly competitive market for mobile and portable computing products that includes Apple, Microsoft, Hewlett-Packard, Google, Amazon, Dell and many others.

Before this $30 million, Kno has raised another $46 million in funding to add to an earlier $10 million round.

Sources in February said that the Santa Clara, Calif.-based company considering going back out to raise even more.

Its current backers include prominent venture players like Andreessen Horowitz and First Round Capital, along with angel investors Mike Maples and Ron Conway.

Sources said the shift to deliver textbook and other student-related delivery system would be a better path for all that investment money, since Kno has established a wide range of partnerships with colleges and universities.

In addition, Kno co-founder Osman Rashid has a lot of experience in digital education market. He was also the co-founder of Chegg, the textbook rental business that is reportedly aiming for an IPO soon.

BusinessWeek was first to report that Intel Capital was making the investment in Kno, but the post did not mention Advance’s involvement or that Intel itself was licensing the hardware design business from Kno.

The story comes only days before Apotheker, whom Bloomberg’s Aaron Ricadela describes in one passage as a “peripatetic polyglot,” is to have his formal public debut next Monday before an assembled mass of reporters and analysts at HP headquarters in Palo Alto. (I’ll be there.) The story drops a lot of the same hints that have been making the rounds for some time. HP is going to be shopping for software companies. We heard that hint last year from key HP execs like Marius Haas.

So whom might HP buy? An analyst trots out the usual list of targets: Informatica, BMC Software, SAS, Symantec are among them. Apotheker himself rules out two: SAP and Salesforce.com. HP has “no interest” in SAP’s business and financial software–and being a former SAP CEO, he would know whether its a worthy target or not–or in Salesforce’s cloud-based CRM product. His eschewing of Salesforce probably has more to do with its lofty $17 billion valuation than with its actual line of business. HP has about $11 billion in cash plus another $14 billion or so in borrowing resources, according to its 10K.

A fund manager that holds HP stock argues in the story, as so many others have, that the company is missing out on the cloud computing trends. Apotheker doesn’t seem to express any interest in it whatsoever. He goes on to talk about how HP will put webOS, the smart phone/tablet operating system it acquired when it bought Palm last year, on all its PCs. The idea is to get software developers interested in writing applications for webOS. Well, that’s kinda cloudy, maybe.

Apotheker also says the Mark Hurd era of zealous cost-cutting is over. Product quality is in. Those quality-assurance experts that Hurd fired? Those jobs are coming back. Machines that work right when they’re first turned on, incur lower service costs over time, he says: “We have cut enough costs.”

It’s about IBM’s years-long effort to build a computer smart enough to beat the world’s best “Jeopardy” players. And we’ll know how it turns out next month, when the quiz show airs a series of pretaped matches between Watson–IBM’s machine–Ken Jennings and Brad Rutter, “Jeopardy”’s most successful champions.

But Baker and publisher Houghton Mifflin aren’t waiting for the end of the show to start selling the tale.

You can buy an e-book version of “Final Jeopardy: Man vs. Machine and the Quest to Know Everything” via Amazon or Barnes & Noble today, and start reading immediately–you just won’t get the last chapter, about the climactic battle.

Then in mid-February, immediately after the face-off has aired, the booksellers will send readers the end of the book, either beamed directly into their e-readers or shipped to their PCs.

(And if you’re into delayed gratification, or paper and ink, you could also just wait till mid-February to buy the complete edition in hardcover.)

Novel, right? Sort of. For e-books, the serial approach is a new one, and both booksellers had to be coaxed into doing it.

But selling books on an installment basis is a really old idea, dating back at least to the 1800s, when greats like Balzac and Dickens used to serialize their stories. New Yorkers supposedly gathered at the docks to ask incoming passengers for updates on Dickens’s characters.

And perhaps we’re headed back that way, since digital media allows creators to put out work in as long, or short, a format as they’d like, at whatever pace they want.

Amazon is already playing around with this with its clever “Kindle Singles” format, which sells mini e-books (i.e., novellas or long magazine articles) at mini prices.

And in Baker’s case, the strategy theoretically allows him to piggyback on a wave of publicity that IBM and “Jeopardy” are generating in advance of the shows. If you watched the NFL playoffs this weekend, there’s a good chance you saw, or at least fast-forwarded past, this spot:

Now the trick is to figure out how to turn that kind of media into book sales, which isn’t a given.

But Baker’s a clever guy–prior to writing this book, he was a longtime BusinessWeek writer and editor, and spent the last several years of his tenure covering technology–so I give him decent odds. He was able to get me to write this piece, for starters….

Welcome to NewEnterprise, the latest in the ever-growing stable of offerings at All Things Digital.

I am Arik Hesseldahl and I’ll be following the world of information technology with an emphasis on the enterprise. This is a deliberately loose definition that encompasses a lot, so I expect I’ll have a lot of room to roam.

Consider for a minute all the different threads that can reasonably fall under the umbrella term “Enterprise IT”: Everyone loves Twitter and Facebook and Google, but when some part of them fails to work right, phrases like “Fail Whale” enter the popular lexicon, and careers, reputations and investments are all at risk.

When they do work, the people who assembled all the hardware and software become the unsung heroes. I’m fascinated by both scenarios, because in their own way they’re both great stories that others can learn from.

You can expect me to pay a great deal of attention to developments in the burgeoning cloud computing industry, and in the traditional enterprise IT business of selling computers and other products and services to large companies.

Beyond that I’ll be looking deeper at the chips and other components inside them, and the companies and people who make them.

And I’ll also be keeping an eye on issues relating to computer and network security, an issue that has suddenly taken on significant heft, as computer worms have evolved from stealing credit card numbers to attacking nuclear plants.

Plus, I’ll be on the lookout for new start-ups aiming to change the way things are done in the workplace.

I’ve covered technology for more than a decade, most recently for Bloomberg Businessweek, and for Forbes.com before that. In those years I’ve learned to treat buzzwords and hype cycles with suspicion and to question the so-called conventional wisdom wherever possible.

So, I promise to tell you what I think is going on in straight and simple terms, and in a jargon-free manner.

In short, I think we’ll have a great deal to talk about. And that’s where you come in. I’d like to hear from you. Give me feedback. Tell me what I’ve missed and where I could do better and also whether or not you agree with what I’m saying, or where you think the next important story is.

Leave a comment here or send an email (Arik@AllThingsD.com).

What I need most are thoughtful ideas and feedback from the people on the front lines at tech companies, and those making tech-related decisions at non-tech companies.

Remember those unsung heroes I mentioned before? They’re you. And NewEnterprise is nothing without you.

The problem, as Byrne explains in a blog post, is that Google (GOOG) doesn’t seem to care. Or at least not in the way he’d like it to: Search for “poetsandquants” and you’ll find many references to the site, including the site’s Twitter and YouTube accounts, but no direct links to the site itself.

And, frustratingly, many of the links that Google does show searchers are simply scraping/Google gaming sites with no connection to Byrne’s site at all. Byrne:

As you go through the first five pages of Google results, there are all kinds of websites that have essentially highjacked Google, rendering its search product less useful and helpful to users. There’s a so-called weblog that is little more than a place to advertise Viagra and Cialis. There’s links to TweetMeme, Interceder, tweetcepts, twapperkeeper, rallyclips, and whotechpunditstweet, among many others. Most of them are search traps that have gamed Google. There’s even a link to one fool who has no idea who I am yet calls me a “douchebag” on page three of Google’s results for PoetsandQuants. (See the screenshot below to get a real glimpse of how bad Google’s results are.) Get through the first ten pages of results and there is still not a direct link to the site.

Two thoughts:

• Join the club, John. You’re now one of many publishers who have a gripe with Google.
• The fact that you’re one of many doesn’t make your gripe less worthy. And this sort of thing really should be worrisome for Google. It’s not that the search engine is ignoring your site–it’s that it is sending searchers to the wrong place. This happens much too often, and it’s a huge hole for a competitor to exploit.

I assume that Byrne, and Google, will sort this out fairly quickly–Bryne doesn’t tell us whether he’s been able to get ahold of a human in Mountain View to hash this out. And perhaps a link from this site will help!

But I also assume that Byrne, as a bootstrapping publisher, has less advanced SEO help than he had at his last gig, which means he’s always going to have some version of this problem.

So. Any generous SEO experts want to offer some advice about ways to solve his problem? You’ve got an open forum in the comments section below.

Make that some of the liabilities. Here’s the Post’s official description of the price: “The Washington Post Company retains the pension assets and liabilities and certain employee obligations arising prior to the sale. The resulting gain or loss at closing is not expected to be material…”

The official release is at the bottom of this post.

As Ad Age’s Michael Learmonth reminds us, the $1 + debt price point is the new standard for dying print pubs: That’s what the current owner of TV Guide paid for that pub, while Bloomberg paid a comparatively rich $5 million plus liabilities for BusinessWeek. (Sorry about lowballing the Bizweek price in a previous edit.) Serious question: What does Allen & Co. get for brokering the Newsweek deal?

The magazine’s employees have an all-hands meeting at 4:30 Eastern to hear about their fate. But here’s the quick and dirty version:

The good news: Their new owner apparently impressed Washington Post (WPO) Chairman Donald Graham with his pledge not to carve up the magazine, as most buyers would have done. So many of them are likely not to lose their jobs in the near-term–or even undergo the kind of wrenching overhaul that Bloomberg has put BusinessWeek through.

The bad news: It’s hard to see how Harman or his heirs (he’s 91 years old) will be able to avoid doing that, eventually. The reason that Graham gave away Newsweek is that he couldn’t figure out how to make it stop bleeding red ink. And Graham ran a big media company that could, theoretically, offer lots of assistance to a struggling magazine. Harman is just going to own Newsweek, which has lost lots of money for many years.

Good luck to everyone there.

WASHINGTON–(BUSINESS WIRE)–The Washington Post Company (NYSE: WPO – News) announced today that it has signed a contract to sell Newsweek to Dr. Sidney Harman.

“In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism. We found that person in Sidney Harman,” said Donald E. Graham, chairman and chief executive officer of The Washington Post Company. “He has pledged not only to continue to produce a lively, compelling and first-rate news magazine, but also an equally dynamic Newsweek.com – and he intends to keep a majority of Newsweek’s very talented staff.”

Dr. Harman said, “Newsweek is a national treasure. I am enormously pleased to be succeeding The Washington Post Company and the Graham family and look forward to this great journalistic, business and technological challenge.”

The terms of the asset purchase agreement were not announced; however, The Washington Post Company retains the pension assets and liabilities and certain employee obligations arising prior to the sale. The resulting gain or loss at closing is not expected to be material to the financial position of The Washington Post Company.

Allen & Company advised The Washington Post Company on the transaction. Dr. Harman was advised by Guggenheim Securities, LLC. Covington & Burling LLP served as lead counsel for The Washington Post Company, and Williams & Connolly LLP represented Dr. Harman.

Dr. Harman’s biography is attached.

Dr. Sidney Harman

Sidney Harman, one of the pioneers who began the audio industry, is Founder and Chairman Emeritus of Harman International. He served as the U.S. Deputy Secretary of Commerce from 1977-78; founded the Program on Technology, Public Policy and Human Development at Harvard University’s John F. Kennedy School of Government; and was President of Friends World College, a worldwide experimental Quaker college, from 1970-73. He is the author of Mind Your Own Business (2003) and, with Daniel Yankelovich, co-author of Starting With The People (1988).

Dr. Harman holds a Presidential Chair at the University of Southern California and is the first Isaiah W. Hellman Professor of Polymathy. The Chair is named for one of the three founders of the university. He is a Fellow of the American Academy of Arts and Sciences; a member of the Executive, Program Strategy and Trustee Affairs Committees of The Aspen Institute; Trustee Emeritus of the Board of Trustees of the Carter Center of Emory University; and a member of the Board of Trustees of Freedom House. He is a member of the Council on Foreign Relations; President of the Harman Family Foundation; a member of the Board of the Leadership Institute of USC; and former Chair, Executive Committee of the Board of Directors of Public Agenda. He is the founder of The Harman Center for the Arts and of Sidney Harman Hall in Washington, DC, and a member of the Executive Committee of the Board of Trustees of The Shakespeare Theatre Company. For many years he served as Chair of the Executive Committee of the Board of Business Executives for National Security and on the Corporate Fund Board of The Kennedy Center for the Performing Arts.

After what he considered weeks of unfair press coverage and running down of Microsoft (MSFT), the software giant’s Corporate VP of Corporate Communications, Frank Shaw, posted a pugnacious corporate blog entry today that trotted out some impressive numbers about Microsoft’s business.

Of course, he also took the opportunity to put up some not-so-much figures about competitors such as Apple (AAPL), Netflix (NFLX), Salesforce.com (CRM) and, of course, Google (GOOG).

My favorite dig is the stat on the “percent chance that Salesforce.com CEO [Marc Benioff] will mention Microsoft in a speech, panel, interview, or blog post.” The answer, natch: 100!

As it turns out, that was a follow-up to a very sharply worded letter Shaw sent out to communications teams across Microsoft (MSFT) earlier this month, obtained by BoomTown, in which he noted at the start:

“It has been a rough couple of weeks for us from a coverage standpoint. It seems like every time I turn on the computer, or talk to a reporter, or pick up a publication at home, or do a scan of my RSS feeds or Twitter client that I see more stories and opinions about the challenges we have, and how great some of our competitors are doing. iPad this, Droid that, sheesh.”

Sheesh? Who says that anymore?

Still, I like his gumption in using it! Thus, Shaw–who is an active blogger and Twitter poster–is apparently mad as heck and not going to take it anymore!

Here’s the blog post below, followed by the internal email Shaw sent (apparently inspired by the landscape at our eighth D: All Things Digital conference earlier this month):

Microsoft by the numbers

25 Jun 2010 12:30 PM

You probably saw the news this week that we’ve sold 150 million Windows 7 licenses in 8 months. That’s more than 600,000 per day. And, perhaps fittingly for a product called Windows 7, it adds up to 7 copies every second of every day since launch.

As a communications guy, I’m generally most comfortable with words. But since Microsoft is a pretty numbers-driven company, the Windows 7 milestone got me thinking about some *other* numbers, too.

Of course, numbers are only one dimension of a story. And we live in a hyper-competitive industry, with loads of challenges to go along with loads of opportunity. All the same, with Windows 7, Office 2010, Bing, Xbox 360, Kinect, Windows Phone 7, our cloud platform, and many other products, services and happy customers, 2010 is shaping up as a huge year for us.

So, without further ado, a few of my favorite numbers:

1

150,000,000
Number of Windows 7 licenses sold, making Windows 7 by far the fastest growing operating system in history.[source]

2

7.1 million
Projected iPad sales for 2010. [source]

58 million
Projected netbook sales in 2010. [source]

355 million
Projected PC sales in 2010. [source]

3

>10
Percentage of US netbooks running Windows in 2008. [source]

96
Percentage of US netbooks running Windows in 2009. [source]

4

0
Number of paying customers running on Windows Azure in November 2009.

10,000
Number of paying customers running on Windows Azure in June 2010. [source]

700,000
Number of students, teachers and staff using Microsoft’s cloud productivity tools in Kentucky public schools, the largest cloud deployment in the US. [source]

5

16 million
Total subscribers to largest 25 US daily newspapers. [source]

14 Million
Total number of Netflix subscribers. [source]

23 million
Total number of Xbox Live subscribers. [source]

6

9,000,000
Number of customer downloads of the Office 2010 beta prior to launch, the largest Microsoft beta program in history. [source]

7

21.4 million
Number of new Bing search users in one year. [Comscore report--requires subscription]

8

24%
Linux Server market share in 2005. [source]

33%
Predicted Linux Server market share for 2007 (made in 2005). [source]

21.2%
Actual Linux Server market share, Q4 2009. [source]

9

8.8 million
Global iPhone sales in Q1 2010. [source]

21.5 million
Nokia smartphone sales in Q1 2010. [source]

55 million
Total smartphone sales globally in Q1 2010. [source]

439 million
Projected global smartphone sales in 2014. [source]

10

9
Number of years it took Salesforce.com to reach 1 million paid user milestone. [source]

6
Number of years it took Microsoft Dynamics to reach 1 million paid user milestone. [source]

100%
Percent chance that Salesforce.com CEO will mention Microsoft in a speech, panel, interview, or blog post.

11

173 million
Global Gmail users. [source]

284 million
Global Yahoo! Mail users.[source]

360 million
Global Windows Live Mail users.[source]

299 million
Active Windows Live Messenger Accounts worldwide. [Comscore MyMetrix, WW, March 2010--requires subscription]

1
Rank of Windows Live Messenger globally compared to all other instant messaging services. [Comscore MyMetrix, WW, March 2010 - requires subscription]

12

$5.7 Billion
Apple Net income for fiscal year ending Sep 2009. [source]

$6.5 Billion
Google Net income for fiscal year ending Dec 2009. [source]

$14.5 Billion
Microsoft Net Income for fiscal year ending June 2009. [source]

$23.0 billion
Total Microsoft revenue, FY2000. [source]

$58.4 billion
Total Microsoft revenue, FY2009. [source]

fxs

It has been a rough couple of weeks for us from a coverage standpoint. It seems like every time I turn on the computer, or talk to a reporter, or pick up a publication at home, or do a scan of my RSS feeds or Twitter client that I see more stories and opinions about the challenges we have, and how great some of our competitors are doing. iPad this, Droid that, sheesh. Even BusinessWeek got into the act, taking some unfair shots at Natal under the guise of looking at our consumer strategy all up. Man, when someone is beating on Natal prior to E3, you can bet we’ve got momentum against us.

Sitting there at the All Things Digital conference last week and hearing from our competitors really got me thinking, though. What is our differentiation? Why do we make certain decisions? What drives the way we think about business and technology? The morning after the Steve Jobs q&a (which everyone should watch), I dragged myself out of bed to go for a run. As I’d driven into the hotel, I noticed with a sinking feeling that there were lots of hills. I asked the desk clerk if they had a jogging map. They did not. I asked if he could point me a direction that did not have a bunch of hills. He laughed and pointed “up” the driveway and said that if I turned left there would be a nice running path. “I drove in that direction,” I said. “Seems like it’s uphill.” He shrugged, and away I went. Up.

And to keep my mind off the elevation gain, I was thinking about that previous question–what drives Microsoft? Coming up the second hill, I got it. Fundamentally, we believe that we have the opportunity to make life better for billions of people around the world through our products and services. Not millions, not tens of millions, but billions. We started with the idea of a computer on every desktop, and even though the computer looks a lot different today than it did those years, and even though the developed world probably does have a computer on every desk, there are still billions more to go, and we are going to get there. And when you start thinking about serving billions, which we do, we’re playing a game that nobody else in the industry is. I don’t know about you, but I come to work thinking about what I can do to help w/ that big goal. And it’s not all altruism and unicorns, when we do a great job of creating products that make life better for billions, it makes us better as a company, we sell more, we learn more, our partners do better, we do better. And when you have big dreams and big ambitions (like we do) and when you set the bar high (which we do) then sometimes we don’t get over the bar. There are people in the world that see that and call it failure; but failing to hit the mark doesn’t mean quitting. That’s part of our culture, too.

The run back to the hotel was easier. I even scrambled up a bluff next to the path (imagining the theme to “Rocky” in my head) and stood looking out over the Pacific for a bit. And I thought about our challenges, internal and external. External is easy. Internal is harder.

There is a saying I’ve heard a bunch since I’ve been at Microsoft: “Hope is not a strategy.” Heck, I’ve used it myself, and felt pretty superior while saying it, since I was talking about something I didn’t really own. But standing on the bluff, I wondered.

In my last mail, I referenced the need for us all to be comfortable in the gap between what is and what we desire to create. If we simply live in what we have, we become cynics. And if hope is not a strategy, then neither is cynicism, and we have lots of cynics among us. It is a challenge, especially for those of us who help tell our story. I often see it used, and use it myself, to cover up the pain of not meeting a goal, or seeing a product/service be ill-received by the market. If I am able to mock and sneer, then nobody outside the company can make me feel worse at setbacks and even failures.

As the evangelists for the company, we must guard against this. Hope can’t be a strategy, but it (and its cousin belief) is a needed ingredient in any success. Think about this for a bit. Each and every one of us needs to be grounded in our challenges and our wins. Right now, we are massively over-indexed in thinking and knowing about our losses and challenges. But what of our wins?

At the conference later that day, I had a chance to engage in a spirited and mostly friendly discussion with some folks who thought we were doing a crap job all up. Stock price flat, no iPad, etc. Instead of shrugging and agreeing, I talked about our wins and our momentum. We’ve built a huge server business over the last decade, something else nobody has done. Windows 7 sales are up about 39 percent year over year, against a huge base. Office 2010 beta largest ever, Office is in the cloud. Bing is one year old, 4 points of market share–nobody has grown search market share against Google but we are doing it. They are copying our look, our home page. New Hotmail is driving them to offer something other than threaded email for Gmail. Xbox Live has 23 million users–again, only two companies in the last decade have built subscription services like this (Netflix is the other). Windows Azure has 10,000 paying customers, we just announced 700k deployment of live@edu, probably the largest cloud deployment in the world. Natal is coming, it’s cool. Yes, we want to (and will) do better in phones. Yes, we want to (and will) have more cool thin slate/tablet/other form factor devices that run Windows. I’ll tell you, while I don’t think I created any true believers, I did force people to think differently about Microsoft and what we’re doing, and I call that a win.

This is our job. We don’t just represent the products and services we work on, we represent the company all up. Be ready to tell that story. Tell it to your co-workers here at Microsoft, to your family and friends, to members of the media. They know about our challenges, they don’t know about our wins and momentum. So tell them.

fxs

According to several sources, Yahoo’s SVP of U.S. Revenue and Market Development Joanne Bradford (pictured here) is planning on leaving the Internet giant to take a new position as chief revenue officer of online content upstart Demand Media.

The surprise move is sure to have reverberations throughout the online advertising arena, but more so at Yahoo (YHOO), where Bradford’s job encompasses a wide range of key revenue-generating duties.

She has also been tapped as one of the execs to play a key role in the recently approved search and online ad partnership with Microsoft (MSFT).

Yahoo declined to comment. BoomTown has also contacted Demand and is awaiting comment.

Bradford had actually once been a Microsoft exec, serving as VP and chief media officer of MSN Media Network. She had worked at BusinessWeek before that.

Bradford came to Yahoo in the fall of 2008, at the tail end of the tenure of Co-founder Jerry Yang, who stepped in as CEO after the previous CEO Terry Semel departed.

Immediately previous to her job at Yahoo, she had been helming national ad sales at then-trendy Los Angeles-based ad services company Spot Runner.

Demand will be her second time going from a large company to more of a start-up.

But–unlike the troubled Spot Runner where Bradford worked for only six months–Demand has been on a growth tear of late with a social media strategy that is also being pursued by AOL (AOL) and others.

It owns heavily trafficked sites, such as how-to juggernaut eHow and the health- and fitness-focused Livestrong.com, putting Demand in the list of the top 20 Web properties.

It reportedly has about $200 million in annual revenue–mostly from advertising, but also from a domain registration business–and is profitable with several hundred employees.

The Santa Monica, Calif.-based company is headed by serial entrepreneur Richard Rosenblatt (pictured here), former chairman of Intermix Media. Intermix was the parent company of MySpace, which was sold to News Corp. (NWS).

Armed with an astonishing $355 million in funding from a range of prominent investors, he has been trying to fight some mainstream media depictions of his social media content company, especially one report that called Demand a “content mill.”

Via its Demand Studios, the company uses an army of freelancers to produce all kinds of content for its sites and others, using a complex automated system, but which also includes vetting and editing.

In fact, irked at the characterization of Demand as a content spammer, Rosenblatt even issued a manifesto for Demand in January.

“There has been so much misinformation about our model and what we actually do, that I thought it was a good idea for our company and those who work for us to lay out our principles,” said Rosenblatt in an interview with me at the time. “We are so different from traditional journalism, which I have nothing but admiration for, so it was time to make people understand that.”

The role of Demand Media, said Rosenblatt, was to help readers solve problems, laugh and get good advice, while figuring out how to create a profitable media business in the digital age.

(Walt Mossberg and I have invited Rosenblatt to share the stage at the eighth D: All Things Digital conference this June, along with former Wall Street Journal editor Paul Steiger, who is trying to save investigative journalism at a nonprofit called ProPublica, to talk about it all.)

If Rosenblatt is successful, Demand appears to be aiming for an IPO or merger with another company. Ironically, Demand has also been eyed by Yahoo in the past, as a possible acquisition.

Nabbing a top Web exec like Bradford from Yahoo is obviously a definite step in raising the stakes for Demand with big, established advertisers.

That’s because Bradford is well-regarded in the industry and is a prominent player. She recently signed a high-profile deal with Hollywood producer Ben Silverman to create premium content for Yahoo.

Bradford’s departure will be seen, both internally and externally, as a definite blow to turnaround efforts by CEO Carol Bartz. Bradford currently reports to Hilary Schneider, EVP of Yahoo’s U.S unit.

My reporting does not indicate that Yahoo’s top brass know about Bradford’s expected move, so it is not clear who would replace her at the Silicon Valley icon, which has been hard hit by an exodus of talent over the last two years.

Internal candidates could include 11-year Yahoo veteran Mitch Spolan, VP of North American sales, or Seth Dallaire, a former Microsoft exec whom Bradford brought to the company last fall as VP of mid-market sales, a newly-created role responsible for all mid-market sales efforts across search and display advertising.

More to come, obviously…

I still don’t know how close Google (GOOG) and Yelp came to actually consummating a transaction, but Elevation’s involvement does clear one thing up. As I noted in December when news of the would-be Google deal broke, Yelp had already been exploring a large funding round. And now sources tell me that Elevation had been in the mix for months.

Elevation, whose most prominent portfolio company to date has been Palm (PALM), will put $25 million into the local reviews site for expansion and has earmarked up to $75 million more to buy shares from employees. That structure is similar to the deals Russian investors Digital Sky Technologies have done with Facebook and Zynga–and as in those deals, the Elevation bet means any public offering has likely been pushed back by a year or more.

BusinessWeek pegs the value of the round at $475 million. TechCrunch first reported Elevation’s involvement earlier this month.