As I reported late last night, Yahoo said it had named PayPal President Scott Thompson as its new CEO. The exec is currently in charge of the large eBay online payments unit.

He’ll start next week, but there are staff conference calls today and also an all-hands meeting on Yahoo’s main Silicon Valley campus (meet at URLs, troops!) tomorrow.

Yahoo shares are down almost three percent on the news so far, as Wall Street has been hoping for a big sale of some sort and not another turnaround.

Yahoo will be holding a 7 am PT press conference about the move and presumably to swan around Thompson.

(Welcome, Scott! I hope you were informed — please do not listen to what co-founder Jerry Yang says on this important issue — that you are supposed to send all internal memos to me! Also, as one of my Twitter followers, Mike Dudas of Google just tweeted: “If Thompson leads companies as well as he grows a moustache, Yahoo made a great CEO choice!!” I concur.)

A Yahoo PR person confirmed the hire very cordially in a phone call early this morning and the Internet giant also put out a press release.

So did I, of a sort, last night. Given I am too tired to rewrite myself, here is what I had reported:

The company fired its last CEO, Carol Bartz, in September, and 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.

Again, Scott, thanks for the Facebook tip — I knew the social networking site could come in handy!

(Also, here is an interview I did with him post-announcement.)

And here is Yahoo’s official press release where Yahoo Chairman Roy Bostock says nice stuff about Thompson:

YHOO_News_2012_1_4_General

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.

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.

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.

After a down and up and down week, tech stocks had a solid recovery yesterday, keeping pace with or even surpassing the Dow Jones Industrial Average gains of nearly four percent.

Can anyone predict what will happen next?

Probably not — including this creepy dude to the right — so let’s look backward at how tech stocks fared yesterday:

Google shares were up 2.4 percent, Microsoft 4.1 percent, Amazon 2.2 percent, eBay 3.6 percent, LinkedIn 4.1 percent and Pandora 3.7 percent.

Most interesting were the two big stock losers of late, Yahoo and AOL, both of which rose even more. They were up 9.3 percent and 12.2 percent, respectively.

AOL’s rise had to do with the New York online media company’s announcement of a stock buyback program yesterday, while Yahoo’s was perhaps due to investors questioning the steepness of the recent valuation falloff at the Internet giant.

There is no question that while most of these companies had decent quarterly returns recently, they have all collectively gotten smacked hard by the market volatility.

The financial turmoil has also caused some to speculate on the delay or cutting back of the IPOs of high-profile digital companies — most especially Groupon and Zynga.

Here’s one certainty: Both the social buying start-up and the online gaming phenom are going to get out, if not in September, then soon after.

As for Silicon Valley venture firms cutting back from their aggressive and eye-popping fundings of start-ups? As a new meme has been speculating this week: They still seem to be partying like it’s 1999.

In the last month, the stock of AOL has declined just over 50 percent.

But that drop is not just due to the turbulent markets of late. AOL stock had a 50 percent drop over the last six months, a 57 percent decline since the beginning of the year, and a 56 percent plunge since it went public in late 2009.

Which is why some in the industry — at private equity firms and bigger companies — have noted to me that the price of AOL might have gotten low enough for a very cheap takeover.

“You have to look, even with all the problems they have been struggling to fix,” said one person, who also underscored the advertising and other challenges that AOL faces. “But it is so inexpensive, it’s also an interesting idea.”

Said another large investor: “It’s almost free, given its cash on hand.”

Indeed, since in its recent second-quarter earnings report, AOL said that, as of June 30, it has $458.7 million in cash.

That matters, since at $10.22 a share — a far cry from its $28.45 high of all time in late April of 2010 — the market valuation of the New York-based Internet giant is only $1.09 billion.

You do the math.

To give that number perspective, AOL paid out $315 million in cash to buy the Huffington Post in the beginning of this year. And, let us not forget, under different management, AOL forked over $850 million in cash to buy the Bebo social network in 2008, and sold it for a song last year.

Even AOL thinks the price is low, announcing a $250 million stock buyback program this morning, just as shares hit their lowest point ever yesterday.

The stock is up today, though still in the basement.

To be fair, comparable companies’ valuations have also taken a hit recently. Yahoo shares are down 29 percent since the beginning of the year, giving it an affordable $15.3 billion valuation; and Demand Media’s stock has dropped 63 percent in that period, making its current price tag only $703 million.

Calling all shoppers?

You’d think there would be a party in Redmond, Wash., today, as software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released earlier today.

Microsoft said it had revenue of $16.43 billion for the quarter ended March 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

The surge was led by sales of Office, Kinect and Xbox and a stronger economy.

But there are shadows, too, as results were dragged down by weaker revenues for its flagship Windows unit.

The report comes as Microsoft’s stock continues to lag, declining 14 percent for the year.

Buzz kill!

BoomTown livedblogged the call for Wall Street analysts:

2:30 pm PT: Peter Klein, Microsoft’s CFO, who sounds super peppy, outlined the strong quarter, especially for its Office products.

He also mentioned some glitches, such as Microsoft’s still-struggling efforts to increase revenue per search (RPS) in its longtime search and online advertising partnership with Yahoo and the slower growth of the PC sector upon which the software giant’s Windows relies.

PC should stand for “possibly crappy,” but good-boy Klein did not say so.

Investor relations dude Bill Koefoed also read through the news, sounding at times like a sports announcer on a cable television network.

“Quuuuaaadrupled…,” he intoned about one part of Microsoft’s business.

This all went on for a while, since Microsoft has a lot of divisions. Servers & Tools. Online Services. Entertainment and Devices. Fashion & Cute Tops.

Okay, not that one, but a girl can dream.

It was all fun and games until Koefoed got to the Yahoo problem, which Yahoo CEO Carol Bartz had used as a cudgel in her earnings report recently.

Yes, it is a bummer. But soon it was back to the happy land of Xbox!

Klein said he was pleased with the results in a jaunty manner, which made me desperately wish Microsoft CEO Steve Ballmer led the call.

Because he’s always one obnoxious query away from a volcanic popping off.

Which is why I love those Yahoo calls and Bartz.

Buzz kill!

2:54 pm PT: That was fast–the call was quickly into questions.

The first is about COGS–cost of goods sold–and how it impacts gross margins.

Klein said the expenses were volume driven. I’d explain, but then I would fall asleep.

The next question was about stock buybacks.

That might get the stock up. Yeah, said Klein, they’ll keep doing that–not that it has helped much on the share price front.

More and more questions, about the PC market, the issues at Yahoo (let’s get that RPS up!), the Windows Phone 7 business.

I’ll be honest, I was a bit bored and started reading a riveting Business Insider interview with TechCrunch’s Michael Arrington on his myriad conflicts of interest related to his tech investing while also blogging as a news guy.

Whatever you think about him, that dude is good copy.

Wait, back to growth rates for Office!

It’s going great, said Klein (hey, maybe Arrington will invest!).

The call wraps up on news of an upcoming investor conference, being held near Disney World.

Oooh, party time!

The company increased its quarterly dividend payment by 10 cents to 75 cents a share. It was the 16th consecutive year IBM has lifted the payout, and the eighth year in a row the dividend notched a double-digit increase on a percentage basis. Last April, the increase was 18 percent.

The latest increase will cost IBM an additional $496 million a year. IBM has paid a dividend every year since 1916.

Read the rest of this post on the original site »

The Santa Clara, Calif., company reported its best year ever in 2010, helped by a surge in demand for tech products after a pullback in spending during the recession. Yet Intel’s shares are up only 3.1% since the end of 2009 as investors have focused on the company’s struggles to expand in the fast-growing mobile arena.

Read the rest of this post on the original site »

The latest to be arrested is Winifred Jiau, 43, of Fremont, Calif. Like others charged or arrested on Dec. 16, she has ties to Primary Global Research. She’s accused of providing inside information to Primary Global clients who were portfolio managers at hedge funds of Nvidia and Marvell Technology during a period from 2006 to 2008. Prosecutors say she collected $200,000 during that time. She’s facing charges of conspiracy and securities fraud.

In August of 2008, the complaint says, she provided managers of two hedge funds with detailed numbers for quarterly revenues, per-share earnings and gross margins for the quarter ending that month. The complaint says that in the conversations she made it clear she had obtained the information directly from an employee of Marvell. The funds in question–they were not named in the complaint–allegedly made $820,000 on trades from the information.

On Aug. 8, 2008, the complaint says, Jiau provided the hedge fund managers with an early look at Nvidia’s quarterly revenue and told them it planned to announce a stock buyback, which it did four days later.

I’ve embedded the complaint below.

Jiau, Winifred Complaint

If wishes were horses, as the old proverb goes, all beggars would ride.

Or, in the case of the incessant corporate drama around Yahoo: If wishes were deals, all bankers would get big fat fees.

Even BoomTown has been harboring a big wish that there were some new scenario–instead of the same retreads that have been bandied about for more than a month–that was at least possible.

But because making up scenarios about the fate of Yahoo is all fun and games, it goes on and on and on.

Today’s latest intrigue is from Reuters, which reports that the Alibaba Group’s Jack Ma is considering entreaties by moneybags private equity folks to give him the many billions of dollars needed to buy back Yahoo’s 40 percent stake in the Chinese Internet giant and perhaps even participate in a takeover of Yahoo itself.

As has been reported here and in many places many times already, private equity and other investor interest has centered for a while on working with Ma to unlock critical financial value for anyone interested in doing any kind of buyout of Yahoo.

And, as it turns out, Ma has long been explicit about wanting to rid himself of Yahoo and to take back control of Alibaba completely.

There’s no doubt the government of China would also look kindly on that result too, many sources say, given the huge size of the vexing foreign ownership of one of the country’s brightest Internet stars.

But, as most also know, wishing–and even offering a giant pile of money–doesn’t make it so, unless Ma can convince Yahoo to sell to him.

And, of course, he also does not have to do anything either, since Yahoo management has little say over his actions at Alibaba, in spite of the large stake Yahoo holds.

As you can see, you can spin these ideas all day long, which is what bankers apparently get paid so much for.

Luckily, I will do it for free.

You could, for example, add Microsoft into the Yahoo mix once again. Would it engage, in order to get the search business in China from Alibaba? Or to finally unload its pricey MSN unit?

And what of News Corp., with its extensive ties in Asia and interest in trading its weak digital properties, such as Myspace, for something better? Wasn’t CEO Rupert Murdoch sniffing around before?

There is also a renewed scenario for Demand Media to become involved.

Of course, let’s not leave out the old faithful plots about how tiny AOL, with its high-Q-quotient CEO Tim Armstrong, could still be a contender.

Just for fun, I will add another interesting idea I recently heard: Comcast. Could the cable and now media giant swoop in at some point and pick up a lot of digital assets it might need going forward?

Don’t forget Disney either–the Hollywood entertainment giant, which has a key interest in moving into the digital space even more boldly.

On consolation: Google is probably out, having been burned before, because of all the antitrust issue inherent in any hookup with Yahoo.

Of course, it will not be a party until Twitter gets here, with its date Zynga.

Finally: Where, oh, where is the holy union of Facebook CEO Mark Zuckerberg and Apple CEO Steve Jobs when you need them to knock this corporate drama into the stratosphere?

Until it is all sorted out for real, here is a reprint of some of the many similar scenarios I cooked up way back in late September–most of which were investor fantasies, but now are being taken more seriously–in a post titled “Could AOL Merge With Yahoo? Could News Corp. Make a Play? Takeover 2.0 With a Little Help From China’s Alibaba?”

Enjoy–although, as you will see, it’s the same scenarios floated then as now:

Today, as news of the departure of Yahoo’s U.S. head Hilary Schneider and two other top execs got around Wall Street, investors and dealmakers were actually thinking of things other than executive turmoil.

As in: Does the uncertainty, along with a naggingly lackluster stock price and weak growth, create pressure on its CEO Carol Bartz and its board to do something dramatic?

In addition, does the messy public situation even provide an opportunity to put Yahoo into play, despite its market cap of $19 billion?

These and many more are the scenarios being debated in boardrooms of big media and Internet companies today, as well as at private equity firms, investment banks and even in Asia.

That’s because many are focusing on Yahoo’s Asian investments. Yahoo itself owns almost 35 percent of Yahoo Japan and a 40 percent stake in China’s Alibaba Group, assets that now make up–along with cash on hand–most of the company’s valuation.

Alibaba and Yahoo have recently gotten into an ugly public tussle over the Chinese firm’s desire to buy back the shares now, with Bartz holding out for more appreciation.

Now, she might have to do a deal with Alibaba, according to one theory, because a sale of its stake would give Yahoo’s stock a significant boost.

One problem: Alibaba CEO Jack Ma has made it known to anyone who will listen that he loathes Bartz personally, after a series of awkward encounters. That said, he has a close relationship with former Yahoo CEO and co-founder Jerry Yang, who is on both companies’ boards.

That puts Ma in an interesting position, according to another theory, because other U.S. companies with an interest in Yahoo might try to make a deal with him to do some kind of deal with Yahoo.

Most frequently mentioned by big investors in Yahoo: AOL and its CEO Tim Armstrong.

Armstrong, said sources, has not shied away from the idea of Yahoo acquiring AOL and installing him as CEO with Bartz as chairman. AOL’s valuation is just $2.65 billion.

Although AOL has also been trying to turn itself around and is in a much less powerful position than Yahoo, Wall Street likes Armstrong’s story for AOL as a modern-day media and media distribution company.

“At least he has a narrative that is believable,” said one big investor in both companies. “Bartz has no vision.”

Another plus for Armstrong: His friendly and Don Draper-smooth demeanor, in contrast to Bartz’s tough-talking and now too-often curse-laden patter.

And while, Armstrong has assembled an experienced staff. And he himself has deep online advertising sales experience, given his last job as head of U.S. sales at Google.

Also likely to be interested: News Corp. The reason is that its own digital efforts, especially at the MySpace social networking site, have gone sideways.

And there’s history: News Corp. tried to facilitate a merger of MySpace, MSN and Yahoo into a company codenamed “TrafficCo” at the time Microsoft was attempting a takeover of Yahoo.

It was supposed to be headed by former Microsoft exec and now Juniper Networks CEO Kevin Johnson, another possible Yahoo CEO candidate.

That plot did not pan out and News Corp. has been trying mightily to revive MySpace ever since. It certainly would trade it into Yahoo for some stake.

Another hook: Its digital head Jon Miller, who used to be CEO of AOL, almost was CEO of Yahoo, during that same takeover fight. But a noncompete agreement with Time Warner was enforced by CEO Jeff Bewkes at the time.

Both AOL and News Corp. could certainly make approaches to Ma or Yahoo Japan’s Masayoshi Son to agree to help them get back their Yahoo stakes.

Son was the one who made the move recently to switch out Yahoo search for Google in Japan.

And, by the way, Son was one of Yahoo’s earliest investors.

Confused? Well, it is certainly shaping up to be a lively Silicon Valley goat rodeo, as there are also all kinds of private equity companies with spreadsheets already figured if Yahoo shares decline enough.

And there are other ideas spinning on spins into Yahoo, such as Demand Media, which is prepping an IPO, and its perpetually enthusiastic CEO Richard Rosenblatt.

One unlikely player is Microsoft. The once hostile suitor is now a partner to Yahoo in search and online advertising.

Of course, the last and biggest question is what happens between Bartz and the board. While they seem to have backed her this far, she has not performed as she has promised and now seems to have gotten publicly grumpy about all the pressure to do so.

Will the directors, who proved themselves pretty ineffectual in the past, continue to support her? Or will they find some self-protecting way to ease her out?

Some directors are definitely unhappy, sources said, but no one seems to be in charge or particularly influential.

Which could mean even more confusion as Yahoo moves unsteadily forward.

Great fun to listen to for Apple watchers. But not that meaningful, really–mostly positioning and spin. There was at least one important nugget, though: Apple has a specific shopping list, with some very big-ticket items on it.

Jobs wouldn’t lay those out, of course. But when asked if he planned on spending any of Apple’s $51 billion (!) in cash via a dividend or stock buyback, he explained that he had something else in mind. From my notes, a combination of direct quotes and paraphrase:

“We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash,” and we want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

M&A guys, start your engines!

The “what will Apple do with all its cash” speculation story is a time-honored tradition–I seem to remember writing one four or five years ago, when Apple had $6 billion or so lying around, and discussing whether it made sense for Jobs to buy a music company like Universal.

But I don’t remember Jobs every signaling his desire to go shopping quite as openly as this before (feel free to correct me in comments if I have this one wrong). Two caveats:

• Jobs is famous for saying one thing and doing…something else. So don’t get too riled up about this.
• Just because Jobs is talking about spending money on “opportunities” doesn’t mean he’s talking about buying a company. He could be talking about big, hairy capital expenditures, like the billion-dollar server farm Apple is finishing up in North Carolina.

Still. It’s hard not to read or hear that quote and not think that he’s thinking about some very big buys. Like what?

A lot of folks will assume that Jobs is talking about buying a big content producer. Music doesn’t make any sense, because there’s little value left in that business. But if Jobs wants to make headway in the TV business, perhaps it makes sense for him to snag a big broadcaster or programmer to give him the leverage he needs with the Comcasts, Viacoms and Time Warners of the world.

Or you could make the same argument for other content makers, like game studios. The biggest one, Electronic Arts, has a market cap of a mere $5.21 billion. Jobs could give ERTS shareholders a hefty premium and still have plenty of walking-around money.

Or perhaps it makes zero sense for Apple to be in the content business, because it’s done just fine not being in the content business to date.

So then what?

Feel free to throw your own guesses in, but I’ll kick off with my own: It’s a company that has yet to compete with or brush up against Apple in any significant way. And it’s one that Apple seems unlikely to be able to move aside, even if it wanted to. And it’s one that’s already competing directly with Google, which has to make Jobs like it even more.

And, if you believe this L.A. Times report, Jobs is already strolling around Palo Alto with its CEO: What do you think of Apple buying Facebook? Discuss….

Earlier

Apple investors who got their first look at the company’s earnings numbers don’t like them–AAPL is trading down seven percent after hours. Let’s see if Apple executives can soothe their concerns during the earnings call.

You can listen in for yourself via this link, or follow along in my liveblog below:

Live Blog

Apple or Apple’s IR company trying some very, very mellow string and piano stuff while we wait.

CFO Peter Oppenheimer kicks off. “Outstanding results” for September quarter. Highest quarterly revenue, earnings.

Mac products and services: 3.9 mm Macs. Record quarter. 27% y/y growth. Double market growth for Q.

IMac, Macbook, Macbook Pro all good. Asia/Pacific performing best.

IPods: 9.1 million.

ITunes revenue more than $1 billion.

IPhone. “Extremely pleased” with 14.4 million unit sales; basically doubled y/y.

$8.6 billion in sales value of iPhones alone.

Heaping praise on iPhone 4 (justified) and stressing iPhone’s move into corporate market, rattling off blue-chip customers.

IPad. “Thrilled” with momentum. “Great enthusiasm” from customers.

65% of Fortune 100 deploying or piloting iPad. Lists some of them.

125 million iOS device sales last month.

200,000 registered iOS developers.

“Very happy” with results of iAd so far.

On to Apple stores. More records here.

Expects to open 40-50 stores next year, 50% of them outside U.S.

IPhone sales mix “better than expected”–boosted overall margin.

$51 billion cash hoard. [Deep, longing sigh from everyone in media, tech business.]

For the year: 5x revenue and 10x earnings compared with five years ago.

“Very enthusiastic” about lineup, “extremely confident” in new product pipeline.

Rare appearance from Steve Jobs!

Had to drop by for first $20 billion quarter.

“We’ve now passed RIM, and I don’t see them catching up to us in the foreseeable future.”

They have to move into software/platform development, and I don’t think they can.

So what about Google?

Apple is activating 275,000 iOS devices per day on average over the past 30 days; peaked at 300k iOS devices some days. 300,000 apps in app store.

Unfortunately, there is no solid data on how many Android handsets sold each quarter.

Google loves to characterize Android as open, Apple as closed. “We find this a bit disingenuous.”

Windows is “open.” But Android is “very fragmented.” OEMs like Motorola install own stuff to make their phones stand out. We don’t do that.

Shout out to “Twitterdeck” ( I think he means Tweetdeck) and their challenges running 100 versions of Android client. “Compare this to iPhone, where there are two versions of the software…to test against.”

Meanwhile, at least four app stores on Android. “This is going to be a mess for both users and developers.”

Apple’s app store has 3x apps compared with Google marketplace.

“Even if Google were right, and the real issue was closed vs. open, it’s important to remember that open systems don’t always win.”

For instance: Microsoft’s [miserable] “PlaysForSure” strategy, RIP.

Google’s “open” argument is a “smokescreen.” Real issue is what’s best for customer–”fragmented vs. integrated.”

Integrated is a huge advantage for us, because it’s better for customers, and better for developers. “We are very committed to the integrated approach no matter how many times Google tries to characterize it as closed.”

Now! On to our tablet competitors:

First of all, only a few credible competitors.

Second, most of them are pushing 7.5″ screen. That means they are just at 45% size of our 10″ screen. “You heard that right….This size isn’t sufficient to create great tablet apps.”

Extolling features of iPad size vs. teeny tiny tablet competitors: They’re “tweeners”–too small to compete with iPad, too big to compete with smartphones.

IPad has 35,000 apps. New crop of tablets will have “near zero.”

Competitors having a hard time coming close to iPad pricing, even with their puny screens. We make our own everything, and this results in an “incredible product, at a great price.” Our competitors will “likely offer less, for more.” They’ll be “DOA. Dead on arrival.”

Questions and Answers

Supply constraints on iPad?

COO Tim Cook: We’ve got a handle on it. And note that we’re expanding distribution in the U.S. and internationally, with more countries to come.

Question about margins I didn’t quite catch.

Oppenheimer: Sold more iPhones than planned, and commodity prices came down, so that helped.

Q for Steve. Please talk about “iPad opportunity.” Size of business, etc., two years or more down the road?

Jobs: “The iPad is clearly going to affect notebook computers. The iPad proves it’s not a question of if, it’s a question of when.” Already seeing “tremendous” interest from education and “much to my surprise, from business.”

“The more time that passes, the more I am convinced that we’ve got a tiger by the tail here.” We’ve trained tens of millions of people on this OS via the iPhone. “I see it as really general purpose, and I see it as very big.”

Could it be the second biggest business after the iPhone?

“I try not to predict, I try to report.” We’re selling more iPads than Macs.

What about Flash? Any update?

“Flash memory? We love flash memory” [hohoho]

A question on iPhone demand, which I missed.

Q: Steve, “You are the tablet market.” Do you see tablet competitors cutting into your market in the same way you cut into RIM’s market? Won’t that fragment the market?

“I have a hard time imagining what those strategies…are.” Pricing won’t work. “Flash hasn’t presented any problem at all; as you know, most video on the Web is now presented in HTML5.” The iTunes store is dominant and “we’re not done” working on stuff for the future.

Q: Smartphones–”Do you see that as a zero-sum game?”

Jobs: As you know, most phones in the world aren’t smartphones. They’ll convert over time, so there will be room for multiple competitors, but “eventually it will turn into a zero-sum game, or close to that.”

Q: For Oppenheimer: Another margins question.

A: We do see a small sequential decline. Higher-than-expected mix of new iPods and new iPads. We’ve been very aggressive on pricing there, and that’s what’s pushing down margins.

Q: Steve, how’s your Apple TV “hobby” coming? And what’s up with streaming media?

Jobs: We don’t talk about unannounced products, but I’m happy to tell you what we know about Apple TV. We have moved to streaming. It’s all streaming. Everything is rented, and/or soon to be streamed from iPad or iPhone.

So far we’ve sold 250,000 new Apple TVs. “I’m thrilled with that.” And with Airplay set up, “it will give people another big reason to buy it.”

Another margin/guidance question. Seems to be the same one repeated each time, with the same answer.

Q for Steve: Key risks for company?

The goal is to make the best devices in the world. “It’s not to be the biggest. As you know, Nokia’s the biggest… but we don’t aspire to be like them.”

Android is the biggest competitor. Outshipped us in June quarter as we transitioned. We’re waiting to find out what happened in this quarter. “I don’t know how we’ll find out” though.

Our approach is to create products that “just work” and “their approach is very different from that.”

Questions for Steve and Tim: Aspirations for iPhone and iPad. In Mac, you didn’t aspire to high market share; in iPod, it was the opposite–you own that market. In the past, Tim you’ve described iPhone business as closer to the iPod model. Steve, you sort of said something different. Please resolve that difference: Biggest, or best?

Jobs: “Nokia makes $50 handsets. We don’t know how to make a great handset for $50.” We want to make “breakthrough, best products,” and “drive costs down” while making them better through “relentless improvement.”

We have a very low share in the phone market. Single digits. And a very high share in tablets. But we don’t think about it that way.

The reason we won’t make a seven-inch tablet isn’t because of price point, “it’s because we don’t think you can make a great tablet with a seven-inch screen.” And as a software company, we think of software first. Developers don’t want to build for all these different platforms and devices, and on this small screen. “It’s not about cost, it’s about value, when you factor in the software.”

Q: Okay, but if the market moves toward lower-functionality smartphones and “dramatically lower price points,” then you’ll cede share, right?

Jobs: “You’re looking at it wrong.” You’re looking at it as a hardware guy who doesn’t really know about software. You assume that software “can come alive on this product that you’re dreaming of. But it won’t” because developers want to build for better products, with faster processors and better screens.

Q: You have about $50 billion in cash. What are you going to do with that? Why not return it to shareholders?

Jobs: “We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash” and want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

Missing next question about iPhone and iPad penetration into corporate market.

[Market not sold on Apple's story yet, btw: Stock still down 5.84%.]

Question for Oppenheimer. Guess what? It’s about gross margins. Any change in manufacturing, etc? Any color at all?

Oppenheimer: Don’t provide product-specific gross margins. Always trying to lower costs, though. “We were happy” with gross margins for quarter. Down slightly because of product mix, as I’ve said over and over.

Q: Talk about demand from carriers to pick up iPhone 4.

Cook: The pressure I’m feeling is about supply. That’s the problem. At the country level, we have 166 relationships in 89 countries. In many countries, we went to more than one carrier. Latest one of those is Germany.

IPhone 4 in 85 of 89 countries. Will be in all 89 by end of year.

What happens to margins and subsidy when you go nonexclusive?

We don’t give information out on specific markets, but you can see that our ASPs have stayed above $600.

For Steve: Why do you have advantage in price on iPad, as opposed to PC?

Jobs: We engineer so much of it ourselves. Everything from chip to battery to enclosures. We’ve learned so much. We’ve learned a lot, developed a lot of our own components, where competitors have to go through middlemen. “This is a product we’ve been training for for the last decade.”

Call is over. You can hear the whole thing on a podcast later this evening.

Suddenly–although not entirely unexpectedly–the major investors of Yahoo are getting restless.

If you talked to many of them in recent weeks, there has developed a confusion over the stock sitting stagnant in the mid-teens for far too long now, a vague disgruntlement that CEO Carol Bartz has not provided enough of a vision and innovation in her 18 months in charge to turn around the iconic but long-struggling Internet giant, a nagging worry about the continuing exodus of top execs and, perhaps most of all, vexation that Yahoo (YHOO) is just too big not to be, well, bigger than it is.

“It just feels like there is nothing going on to get any momentum going,” said one major shareholder, whose sentiment is more common than not among longtime stock owners of Yahoo. “And it is not clear if there is anything on the horizon to get it going.”

Many point to the value of Yahoo’s Asian holdings, especially its stake in China’s Alibaba Group, as its most promising set of assets, valuing them much more than management’s recent attempts to focus on its media properties while shedding search technology costs under its ongoing partnership with Microsoft (MSFT).

“A Yahoo shareholder has to have the patience of Job,” said another major stock owner, noting shares of the Silicon Valley company are down more than 10 percent compared to a year ago, in contrast to an 8.3 percent rise at Google (GOOG) and a 3.9 percent increase at Microsoft.

To be fair, for the year to date, all Yahoo shares have declined less than those of either of those two digital giants.

And analysts are expecting some sunshine from today’s second-quarter earnings results, which will be reported after the markets close.

The company is expected to report a strong gain in profits, even with revenues rising only slightly.

The consensus: Yahoo will earn 14 cents a share for the three months ended in June, on $1.16 billion in revenue. That compares to 10 cents on $1.14 billion in the same period a year ago.

Several analysts are raising their ratings on Yahoo, noting that Bartz’s efforts to cut costs and improve margins have not been fully appreciated by investors.

Reaction to Yahoo’s results will be interesting. Google’s earnings report earlier this week disappointed Wall Street, since its profit was less than expected, although U.S. revenue growth was promising.

“In particular, we believe that the robust and accelerating Google U.S. revenue results, based on both Search and Display growth, provide a broad positive market read-thru for Yahoo!,” wrote Citigroup analyst Mark Mahaney in his “cheat sheet” note ahead of earnings.

Mahaney reiterated his $22-a-share price target, pointing to display advertising recovery, margin expansion, search share stabilization, Yahoo’s recent stock buyback authorization and the eventual value of the Asian assets.

Yahoo shares closed yesterday at $15.10.

It’s been almost four months since Joanne Bradford stepped down as head of U.S. revenue and market development for Yahoo and the company has yet to hire a new exec to fill the key job.

That’s got a lot of people inside Yahoo (YHOO) a little jumpy, according to numerous sources who have contacted me recently, because of the importance of firm leadership in the premium display online ad business in which the Internet giant needs to keep excelling.

U.S. head Hilary Schneider has been leading the search for a replacement for Bradford, using star headhunter Jim Citrin of Spencer Stuart.

But she’s reportedly been unable to land the kind of prominent name Yahoo has been seeking for the job, after trying to attract several well-known candidates and rejecting others.

Microsoft (MSFT) recently hired an exec Yahoo had considered–former MTV Networks ad exec Carolyn Everson, who is likely to be announcing a new sales structure there soon–for its head of U.S. online ad sales.

With Everson and others not panning out, one hope was that Patrick Keane, CEO of Associated Content, which Yahoo just acquired, would take the job. But sources said he has thus far declined the offer.

And that’s why, sources said, Yahoo is back to eyeballing internal candidates again, especially 11-year Yahoo veteran Mitch Spolan, VP of North American field sales, and Mollie Spilman, Yahoo’s SVP of B2B marketing and also its packaging group.

Another Yahoo exec who had been in the running: 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.

We’ll see how it turns out, but as Yahoo just closed its second quarter, it will be important to get some clarity around its most important business in its most important market, especially as its stock continues its lackluster performance.

To help goose its shares, Yahoo announced a $3 billion stock buyback plan last week.

As BoomTown wrote last week, Yahoo’s stock has performed poorly over the last year.

Let’s go to the numbers: Yahoo (YHOO) is down 9.8 percent for the month and 17.5 percent YTD.

And while most digital stocks are off in 2010–except for the soaring Apple (AAPL)–Yahoo’s shares performed the worst year over year, down 11.6 percent, compared to a decline of 3.2 percent for Microsoft (MSFT) and an increase of 5.5 percent for Google (GOOG).

The message from investors to CEO Carol Bartz’s efforts to turn around the fortunes of the Internet giant: Meh.

So, today, the company is trying to do something about that via a board authorization to repurchase $3 billion in shares over the next three years.

In its regulatory filing, Yahoo said the transactions could “take place in the open market or in privately negotiated transactions.”

Naturally, the move caused an initial jump in Yahoo stock in after-hours trading, up just under one percent to $13.93.

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The sale to Dassault, which makes software for computer-aided design and product management, removes one of the last vestiges of IBM’s once vast applications-software business. The two companies will retain a formal alliance in which the French company will recommend IBM services and infrastructure software.

Separately, IBM’s board expanded its stock buyback program, authorizing the spending of another $5 billion. It currently has $4.2 billion remaining from previous repurchase programs. The buyback announcement sparked a rally in IBM stock, which rose $1.06 to $121.17 in midday New York Stock Exchange trading.

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No doubt, Rackable’s business is hurting. For Q4, revenue was $38.8 million, well below the consensus at $46.7 million, and down a whopping 65 percent from a year ago. The company lost 17 cents a share on a non-GAAP basis in the quarter, two cents worse than the Street consensus.

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Earlier today Microsoft decided it would drop the bomb early by moving its second-quarter earnings conference call with Wall Street analysts to 8 a.m. PST, instead of 2:30 p.m. PST.

Microsoft earlier reported a sharp decline in revenues and net income, as well as layoffs of up to 5,000 employees and other cost cuts.

BoomTown, naturally, had to liveblog the Microsoft (MSFT) event.

8 a.m. PST

Could not get into call, as everyone and their mother wanted into this disaster.

Finally, the call was connected at 8:06 a.m. right in the middle of the bad news being delivered by CFO Chris Liddell, which has already begun to sink into the stock market, causing it to–um–sink even farther.

Liddell’s New Zealand accent was vaguely comforting, but it still cannot put lipstick on this pig. Down, down, down. And did we mention down?

8:09 a.m. PST

The call got handed over to Investor Relations GM Bill Koefoed.

“Adding a bit more color,” he said curiously, as he started to talk about the darkly troubling trends in the PC market.

At least Xbox 360 consoles were doing well, with six million units sold in the quarter. Too bad, it’s not a moneymaker! Well, actually, it has been a money pit, but at least the kids like it!

8:18 a.m. PST

Back to Liddell and more unhappy news on the economy, which was why he said Microsoft is not going to give guidance going forward.

“The economy has obviously declined further than we expected,” said Liddell.

Too obviously!

8:23 a.m. PST

Next up was CEO Steve Ballmer, who was also trying his best to make the bad news sound a little less bad.

But, he noted that the the econalypse was a “once-in-a-lifetime set of economic conditions.”

You can say that again, and Ballmer did.

But he soon was underlining Microsoft’s product pipeline and his bullishness on the tech sector.

“We are prioritizing, we are focusing,” Ballmer said. “[But] the pause the economy is imposing on our business will be just that.”

8:31 a.m. PST

First question was about whether Microsoft had acted quickly enough to cut costs amid the carnage.

Liddell answered this one: Of course!

Ballmer added that fixed costs at Microsoft make it hard to make better margins when revenue is declining.

But cost-cutting has now become priority one.

The next one was about the layoffs, including costs of it and if contractors are impacted.

Nope, though they will be getting cut too, said Liddell. But the 5,000 jobs announced are all just Microsofties.

Ballmer then jumped in and noted that the company would also be adding jobs, with a net of 3,000 jobs cut.

The third question was about buyback of stock, which was slowing, as execs said earlier. Wall Street loves buybacks. Also, what about PC growth?

Capital preservation was more important than ever said Liddell, noting that merger and acquisition activity will be lower in the next quarter.

As to the PC market–”a continuing or slight deterioration,” said Liddell.

The fourth question: More about the PC market and where to reset it.

Noted Ballmer: “It’s dynamic.” Which, I think, translates to “I don’t know exactly.”

The fifth question was about layoffs and costs again.

Will Microsoft cut again? Or do increasing expenses on a relative basis mean that Ballmer anticipates a rebound?

“We’re not used to down markets,” said Ballmer. “[But] our model is not for a quick rebound.”

Instead, Ballmer repeated his assertion that this was a wholesale resetting of the economy, which will build back on a lower level.

8:45 a.m. PST

GAAP earnings question. Zzzzzzz.

Next one was on whether Microsoft should commit to more buybacks of its stock instead of doing less?

Wall Street loves buybacks!

Sorry, but Microsoft was going to be more liquid going forward, said Ballmer.

The next question went back to why guidance for expenses is higher year over year, if the outlook was so bad.

Liddell noted it was a change in “momentum” of spending, which was slower.

8:50 a.m. PST

The questioner wanted to know about the annuity business versus the more volatile consumer sector.

Obviously, said Liddell, Microsoft likes regular money coming over the transom, but that could also decline in the future.

Now a question for Ballmer on what Microsoft might divest.

“I like our portfolio,” said Ballmer flatly.

The last question was about Yahoo (YHOO) and Microsoft’s ongoing talks about an alliance of some sort! Finally!

“I don’t think I have anything to say about Yahoo,” said Ballmer, after he laughed a bit with the other execs.

As he has previously noted, he still wants a search deal, said Ballmer. But not acquisition, added Liddell.

Ballmer noted that Microsoft was not an M&A company, in general.

In other words, Microsoft was still not buying Yahoo.

Announced before the bell, the plans had a mixed effect on investors. In Microsoft’s case they pushed the company’s shares up nearly 4 percent in early trading. HP shares gained 1.6 percent before starting to head back down.