As AllThingsD reported several days ago they would, Yahoo and Alibaba Group have finally reached an agreement for the Silicon Valley Internet giant to sell back half its stake in the Chinese Web company in a $7 billion deal.

The taxable shares sale agreement, which is now being approved by both boards, is part of a larger and more complex arrangement, which will also include a multibillion-dollar stock buyback by Yahoo and an eventual IPO of Alibaba.

And, perhaps most importantly, it will bring to an end what could be the longest running global cat fight in Internet history, in which the long-time partners have bickered over the terms of their relationship for years now.

It has mostly been over how they could get to the transaction they should be announcing later tonight (or morning in Hong Kong, which it is there now). While it could fall apart at the last minute, that is highly unlikely at this point.

(Update: The Yahoo board has approved the deal unanimously, said sources, so it is done done.)

(Update 2: Yahoo and Alibaba both confirmed the deal in a joint press release, which is below.)

Thus, after many failed attempts to strike a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed, the pair have finally settled on a taxable deal, which could net Yahoo upwards of $4 billion.

The transaction values Alibaba at $35 billion and is subject to a number of funding issues that could change the value of the deal.

But here is the overall situation, as I previously reported:

Yahoo is set to sell half of its roughly 40 percent stake in Alibaba, in a taxable deal. The transaction is likely to value that portion of Yahoo’s holdings at about $7 billion — or 20 percent of Alibaba’s $35 billion enterprise valuation. Alibaba is in the midst of raising capital to fund the sale.

After taxes of upward of 35 percent are paid on the long-term gains — remember that Yahoo bought the now-lucrative Alibaba stake for just $1 billion in 2005 — the company will use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while, so this could help boost shares significantly.

A shareholder dividend is also being considered by the Yahoo board, but it is unlikely. It’s also not clear if some of the cash will be held back for acquisitions by Yahoo, sources added, but it is also unlikely.

As part of the deal, sources said, medium-term incentives have been put in place for Alibaba to move forward with a public offering, which sources stressed is without contractual obligation or a time frame. Alibaba execs have already been publicly indicating such a direction recently, but this will put them more firmly on that path.

Although there are no plans to go public as yet, the IPO incentive revolves around several terms, including the right to buy back half the remaining stake, which expires in December of 2015. As I previously reported, Yahoo will be required to sell back half of the 20 percent remaining stake upon IPO and the other half after that if Alibaba goes public in the time frame agreed to.

Lastly, the Alibaba voting rights for both Yahoo and SoftBank are much diminished in the new deal, according to sources, to under 50 percent.

Translation: Alibaba CEO Jack Ma is now in the driver’s seat completely.

Once close, the pair have been wrangling over the large Yahoo ownership, which Ma has been trying to dislodge in a variety of nice and not-so-nice ways. It has resulted in a number of very public disagreements.

That included a nasty back-and-forth over its Alipay unit with now-fired CEO Carol Bartz, threats of takeover of Yahoo with private equity firms and, more recently, making friendly with its just-ousted CEO, Scott Thompson.

Those talks with him in recent weeks, which included a visit to China by Thompson, led to the new deal, which was negotiated primarily between Yahoo’s CFO Tim Morse and legal head Mike Callahan and Ma and Alibaba’s Joe Tsai.

The talks continued even as Thompson was suddenly engulfed in a controversy over a fake computer science degree on his resume that quickly led to his departure from Yahoo.

Ironically, the error was first discovered by activist shareholder Daniel Loeb, who is now voting on the deal as a newly named director of Yahoo, after successfully helping to oust Thompson.

He owns almost 6 percent of Yahoo.

The final decision to approve the deal was in the hands of a very new board of Yahoo, which has been drastically reshaped in recent weeks. It met to decide on the deal this weekend.

While the deal with Alibaba is finally nearing an end, Yahoo’s talks to sell its 33 percent stake in Yahoo! Japan is not part of this agreement. That’s due to what Thompson had called a “valuation gap,” which sources said is still an outstanding issue.

New interim CEO Ross Levinsohn has not been involved in the Alibaba deal in any significant way. But he certainly will benefit from its halo effect, if approved, especially given that it will likely boost Yahoo shares.

It also puts Yahoo in a unique situation, in which it must sink or swim more largely based on the value of its troubled core business.

That could mean a lot of things, including the eventual sale of the company, whose most lucrative asset recently — its Alibaba holding — will matter much less.

As soon as I get the press release, I will post it here, but no one is commenting, despite the inevitable happy ending to this long-running story.

And here’s the press release, finally:

Yahoo! and Alibaba Reach Agreement on Comprehensive Plan for Alibaba Stake Agreement Realizes Significant Value, Immediate Liquidity and Path to Future Monetization

Yahoo! Board Increases Share Repurchase Plan by US$5 Billion

May 20, 2012 — Sunnyvale, California and Hangzhou, China – Yahoo! Inc. (NASDAQ: YHOO) and Alibaba Group Holding Limited today announced they have entered into a definitive agreement for a staged and comprehensive value realization plan for Yahoo!’s stake in Alibaba.

The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock.

The agreement also establishes a framework for Yahoo! to monetize its remaining interest in Alibaba in stages. First, at the time of an initial public offering (IPO) of Alibaba in the future, Alibaba will be required either to repurchase one-quarter of Yahoo!’s current stake at the IPO price or allow Yahoo! to sell those shares in the IPO. Second, following such an IPO, Yahoo! has registration rights and rights to marketing support from Alibaba to enable Yahoo! to dispose of its remaining shares, at times of Yahoo!’s choosing following a customary lock-up period.

This agreement is a result of extensive discussions between the two parties and a comprehensive review of both taxable and tax-efficient alternatives. Yahoo! and Alibaba believe this agreement to be the best path to align incentives and maximize value for shareholders of both companies and it paves the way for Alibaba to achieve future public market liquidity for all of Alibaba’s shareholders. For Yahoo!, the agreement provides for a staged exit over time, balancing near-term liquidity and return of cash to shareholders with the opportunity to participate in future value appreciation of Alibaba.

“Today’s agreement provides clarity for our shareholders on a substantial component of Yahoo!’s value and reaffirms the significance of our relationship with Alibaba,” said Ross Levinsohn, Interim CEO of Yahoo!. “We look forward to continued collaboration with the Alibaba team on business initiatives as we explore joint opportunities for growth and benefit from Alibaba’s future. I want to thank Jack Ma, Joe Tsai and the Alibaba team, as well as Tim Morse, Michael Callahan and our Yahoo! team for their dedication in achieving this successful outcome.”

“This transaction opens a new chapter in our relationship with Yahoo!,” said Jack Ma, Chairman and Chief Executive Officer of Alibaba Group. “I look forward to working with Ross Levinsohn and the Yahoo! team as Alibaba builds China’s leading e-commerce company. Yahoo!’s global audience reach will provide attractive partnership opportunities for Alibaba to explore markets outside of China. The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.”

“We look forward to delivering the proceeds of the near-term transaction to our shareholders, and to the further enhancement of value and the additional monetization in the future that this agreement enables,” said Timothy R. Morse, Executive Vice President and Chief Financial Officer of Yahoo!.

In addition to the share repurchase, the companies have also agreed to amend their existing technology and intellectual property licensing agreement. Among other things, this amendment will result in Yahoo! granting Alibaba a transitional license to continue to operate Yahoo! China under the Yahoo! brand for up to four years, while restrictions on Yahoo!’s ability to make other investments in China will be terminated. Alibaba will make an upfront lump sum royalty payment of US$550 million to Yahoo! and continuing royalty payments for up to four years. In addition, Alibaba will license certain patents to Yahoo!. Upon closing of the repurchase transaction, the Alibaba shareholders’ agreement will be amended so that the parties’ respective rights will be commensurate with the parties’ post-closing level of ownership in Alibaba. Yahoo! will continue to be represented on Alibaba’s board of directors with the right to appoint one of four existing directors.

Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction. While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction.

The transaction is subject to customary closing conditions. Alibaba will be required to close the repurchase with respect to at least one-quarter of Yahoo!’s current stake in Alibaba regardless of the amount of financing raised, and up to one-half of Yahoo!’s current stake if it obtains the requisite financing. Alibaba intends to finance the repurchase through a combination of its own cash resources, debt, equity and equity-linked financing. The transaction is expected to close within approximately six months.

UBS Investment Bank acted as lead financial advisor to Yahoo! and Allen & Company LLC and Goldman Sachs & Co. also served as financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP acted as lead legal counsel to Yahoo! and Weil, Gotshal & Manges LLP also acted as legal counsel. Munger, Tolles, & Olson LLP acted as legal counsel to the Yahoo! Board of Directors. Credit Suisse acted as lead financial advisor to Alibaba and Wachtell, Lipton, Rosen & Katz acted as lead legal counsel to Alibaba. Freshfields Bruckhaus Deringer LLP acted as counsel to Alibaba on certain financing and Hong Kong legal matters and Fenwick & West LLP acted as counsel to Alibaba on intellectual property matters.

Yahoo is in the final stages of selling a large chunk of its stake in the Alibaba Group back to the company — in a complex deal that is set to include a multibillion-dollar share buyback to investors of the Silicon Valley Internet giant and an eventual IPO of the Chinese company — according to multiple sources close to the situation.

The deal has yet to be officially approved by the boards of both companies, but sources said it is likely to be, and could be announced as early as Monday.

This all could change, of course, since negotiations between Alibaba and Yahoo have taken place in a variety of ways in recent years, without success and with much acrimony. Talks over a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed in February, for example.

But the 324th time is apparently the charm — so here are the details of what looks to be a nearly complete agreement that I have ferreted out thus far from lots of relieved sources familiar with the situation:

Yahoo will sell half of its roughly 40 percent stake in Alibaba, in a taxable deal. The transaction is likely to value that portion of Yahoo’s holdings at about $7 billion — or 20 percent of Alibaba’s $35 billion enterprise valuation. Alibaba is in the midst of raising capital to fund the sale.

After taxes of upward of 35 percent are paid on the long-term gains — remember that Yahoo bought the now-lucrative Alibaba stake for a fraction of that, many years ago — the company will likely use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while.

A shareholder dividend is also being considered. It’s not clear if some of the cash will be held back for acquisitions by Yahoo, sources added, but it is unlikely.

As part of the deal, sources said, incentives have been put in place for Alibaba to move forward with a public offering, which sources stressed is without the contractual obligation or a time frame. Alibaba execs have already been publicly indicating such a direction recently, but this will put them more firmly on that path.

In return, Yahoo has agreed to sell the remaining quarter of its current holdings when that IPO does occur. It would then have an only 10 percent stake of Alibaba, which it could sell at any time after the IPO.

If finally struck, the transaction will finally bring to an end one of the more protracted and disputed relationships in the Internet world.

Once close, the pair have been wrangling over the large Yahoo ownership, which Alibaba CEO Jack Ma has been trying to dislodge in a variety of nice and not-so-nice ways. It has resulted in a number of very public disagreements.

That included a nasty back-and-forth over its Alipay unit with now-fired CEO Carol Bartz, threats of takeover of Yahoo with private equity firms and, more recently, making friendly with its just-ousted CEO, Scott Thompson.

Those talks with him in recent weeks, which included a visit to China by Thompson, led to the new deal, which was negotiated primarily between Yahoo’s CFO Tim Morse and legal head Mike Callahan and Ma and Alibaba’s Joe Tsai.

The talks continued even as Thompson was suddenly engulfed in a controversy over a fake computer science degree on his resume that quickly led to his departure from Yahoo on Sunday.

Ironically, the error was first discovered by activist shareholder Daniel Loeb, who will now vote on the deal as a newly named director of Yahoo, after successfully helping to oust Thompson.

He owns almost 6 percent of Yahoo, and is expected to approve the transaction.

But the final decision to approve the deal will be in the hands of a very new board of Yahoo, which has been drastically reshaped in recent weeks. It is meeting tomorrow and perhaps over the weekend to vote on it.

While the deal with Alibaba looks to be nearing an end, Yahoo’s talks to sell its 33 percent stake in Yahoo Japan is not part of this agreement. That’s due to what Thompson had called a “valuation gap,” which sources said is still an outstanding issue.

New interim CEO Ross Levinsohn has not been involved in the Alibaba deal in any significant way. But he certainly will benefit from its halo effect, if approved, especially given that it will likely boost Yahoo shares.

Next up for Levinsohn, who has just rejiggered Yahoo management again, other sources said, is an effort to settle the patent-infringement lawsuit with Facebook, and also to renegotiate its search deal with Microsoft.

And, oh yes, fix Yahoo’s rocky core-advertising business, which is still in distress and needs a major overhaul to push it back to growth.

But that, as they say, is yet another episode of Yahoo’s ongoing reality show.

Since launching in August, Belly has signed up 1,400 merchants in eight markets, and is adding an average of 100 more merchants each week. Additionally, it has more than 200,000 active users, who have checked into business more than 800,000 times.

The business draws a little bit from Foursquare, because it requires users to check in to earn points; and also draws a little bit from Groupon, because of its focus on local commerce.

But Jeff Jordan, a partner at Andreessen Horowitz, argued that Belly is not at all like Groupon. “It’s the anti-Groupon,” he said. “Groupon is doing lead generation through discounting. … What Belly is trying to do is loyalty.”

The difference, Jordan said, is that Belly doesn’t require merchants to offer discounts to get consumers to come back.

For example, a Chicago comic book store owner is letting shoppers punch him in the stomach; a Washington, D.C., Ben & Jerry shop is giving away a chance to eat ice cream with Jerry after 200 visits; and a barber is handing over the clippers to frequent customers, who will shave off his own beard.

Jordan, the former chairman and CEO of OpenTable and former president of PayPal, said there are four reasons why he was attracted to the start-up:

1. The management team: Founder and CEO Logan LaHive previously worked at Redbox, and before that, Pay By Touch, the biometrics payments company that raised $350 million in capital before failing.
2. Product execution: Jordan said both merchants and customers like the product. Merchants must install an iPad at the register, where consumers can check in to earn points by scanning a bar code from their phone or a loyalty card.
3. DNA of the investors: Before Andreessen Horowitz got involved, LaHive incubated the company in the offices of Lightbank, the VC fund created by Groupon founders in Chicago. Jordan believes that the one who gets to market fastest will win in this market. Belly has that in its DNA.
4. Connected retailers: Once retailers have an iPad in every store, there will be additional opportunities for Belly to roll out other services.

LaHive said the capital will be used to fuel expansion into new markets and to develop new services. To date, the company has raised $13 million.

Belly charges merchants $50 to $100 a month for the service, which includes an iPad, a case and lock for the iPad, marketing materials, and data and analytics to manage their business better.

Belly @ Berry Austin from Bellycard.com on Vimeo.

Instead, the Burlingame, Calif., company was going to focus on building games for smartphones.

Now CrowdStar, known for titles such as Top Girl, Social Girl and Modern Girl, is announcing that it has raised $11.5 million in a second round of funding to fuel its mobile ambitions.

Investors in CrowdStar’s second round are Time Warner, Intel Capital, YouWeb, The9 and NV investments. To date, the company has raised $35 million in capital.

With the new funding, the company said it plans to pursue mobile games targeting the female audience and focusing on shopping and fashion. The games will be distributed using Facebook’s social graph, the Gree social gaming network and Apple’s Game Center.

“This funding round validates our pivot to mobile social games,” Relan said in a release. “We’re going for a bigger market with lower production and acquisition costs compared to social games on the web.”

This summer, CrowdStar will launch a brand-new Girl franchise game on Gree’s emerging mobile social network. Just yesterday, Gree announced it had acquired mobile social game maker Funzio for $210 million, showing its committment to signing up new games to the network. CrowdStar is also distributing games on Amazon’s Kindle Fire.

A month ago, I posted an initial list of speakers for the 10th D: All Things Digital conference.

After a decade, the event — which is held in Rancho Palos Verdes, Calif., just south of Los Angeles, at the end of May — has attracted another amazing group of speakers, including: New York City Mayor Michael Bloomberg; serial entrepreneur Sean Parker, who will appear with Spotify co-founder and CEO Daniel Ek; Zynga founder and CEO Mark Pincus; Federal Trade Commission Chairman Jon Leibowitz; LinkedIn Chairman and VC Reid Hoffman, who will appear with the social business site’s CEO Jeff Weiner; and Skype CEO Tony Bates.

Now, here’s another group of stellar speakers we’ve added to the programming lineup (and there are still even more big names to come in the weeks ahead): Oracle CEO Larry Ellison; former tech analyst superstar and now VC Mary Meeker of Kleiner Perkins; Intellectual Ventures’ Nathan Myhrvold; Pixar co-founder and Disney animation head Dr. Ed Catmull; and Visa President John Partridge.

Larry Ellison, CEO and founder of the enterprise giant Oracle, needs little introduction, as one of tech’s highest profile figures and a true Silicon Valley icon. Frankly, I think the short bio that’s on Oracle’s Web site says it all: “Larry Ellison has been CEO of Oracle Corporation since he founded the company in 1977. He also races sailboats, flies planes, and plays tennis and guitar.” There will be a lot to talk about with the voluble and always entertaining exec — who appeared at the D conference once before many years ago — from the current state of the tech industry to insights to where it’s all going. (In addition, Ellison has agreed to appear on a panel we are doing as a tribute to his close friend, Apple’s former CEO Steve Jobs.)

Another well-known tech figure is Meeker, who is now a partner at Kleiner Perkins Caufield & Byers, having joined the storied venture capital firm in early 2011. She focuses there on investments in its digital practice and via KP’s Digital Growth Fund, working with companies such as Spotify, Jawbone and One King’s Lane. But Meeker is perhaps best known for her long stint — 1991 to 2010 — as a star Internet research analyst at Morgan Stanley, where she brought many of the Internet’s great companies to the attention of Wall Street and beyond. She also wrote a series of groundbreaking reports on the landscape. That includes her annual “State of the Internet,” which Meeker will debut this year at the conference in an extended demo of her always riveting Internet trends presentation.

Nathan Myhrvold is also a tech legend, having worked for 14 years as chief strategist and CTO of Microsoft. But, instead of retiring, the avid inventor decided to focus on patents, founding and leading a controversial company called Intellectual Ventures, which buys them up and licenses them out (or sues if it doesn’t sell). With all the mishegas around patents right now, it’s a good time to have Myhrvold back to explain it all and perhaps to take some of the blame for the explosion in intellectual property lawsuits. (Myhrvold also co-authored a cookbook, “Modernist Cuisine,” so we hope we will also get some sort of futuristic cooking demo. Perhaps, Patently Delicious Flan?)

Speaking of tasty, the animation from Pixar over the years has been just that and it’s been one of Disney’s greatest acquisitions. Given how much Pixar has contributed to animation technology, we are glad to finally get Dr. Ed Catmull onstage. As co-founder of Pixar Animation Studios and president of Walt Disney and Pixar Animation Studios, he will discuss where entertainment and technology are intersecting and where they are not. Catmull is a geek’s geek in the industry — having also founded the computer graphics laboratory at the New York Institute of Technology, the computer division of Lucasfilm, as well as Pixar, which he did with chief creative officer John Lasseter. Get ready to talk about image compositing, motion blur, subdivision surfaces, cloth simulation and rendering techniques, texture mapping and the z-buffer. Also, Catmull’s five Academy Awards.

Lastly, it is perfect timing for bringing on John Partridge, president of Visa. With swirling issues around online identity theft, digital privacy, the future of money and the rise of upstart competitors such as Square, Partridge has his hands full at the credit card giant. One of the most neglected arenas in tech, the way we manage payments is perhaps the biggest story of the next era, especially as it relates to mobile and the rise of smartphones as all-purpose devices.

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.

Silicon Valley’s Silver Lake and DST Global of Russia, as well as Chinese private equity firm Yunfeng Capital, are leading a $1.6 billion tender offer for privately held employee and shareholder stock of China’s Alibaba Group, according to sources close to the situation.

Yunfeng, by the way, was co-founded by Alibaba Chairman and CEO Jack Ma, as well as other prominent Chinese entrepreneurs.

Along with DST, Silver Lake and Yunfeng, Singapore-based investment firm Temasek is also participating in the tender offer as an investor, but in a smaller way.

The deal, which has been discussed for some time, was signed earlier today and will be presented to its employees in an internal company blog, which will be in Chinese.

To get around persistent foreign ownership issues in China, sources said, DST and Silver Lake are ceding voting control of their stakes to Alibaba management.

If the tender is fully subscribed, that would mean a stake of just under five percent for the group, sources said, and it gives Alibaba a $32 billion enterprise valuation.

The impetus for the tender offer, which begins today, appears to be trying to address a cash-out, paper-rich issue for Alibaba employees.

There are no active secondary private markets in China, as is the case for tech start-ups in the U.S., and there is also no IPO in the foreseeable future for Alibaba. Thus, management has been looking for a way to give its employees and also other shareholders some liquidity.

This tender offer is not a capital raise by Alibaba and is only aimed at eligible employees and shareholders. The purchase of the Alibaba shares is expected to close before the end of December.

It will be done via a special investment vehicle, specifically aimed at this purchase, that includes a spate of investors. Giant Interactive Group, a Chinese online game developer, for example, said it had committed $50 million to the fund.

It’s not clear what the implications are for Alibaba’s biggest shareholder, Yahoo, which sources said is not selling shares in the tender offer. Yahoo’s fully diluted Alibaba 39 percent stake is now worth $12.5 billion in the deal.

That’s discounted due to tax issues and also the inability of the Silicon Valley Internet giant to sell its Alibaba shares.

In other words, investors will likely welcome this higher valuation, but realize a public offering is farther away than ever.

But it is interesting in that it clearly shows a strong relationship between DST and Silver Lake, which have jointly been mulling a possible bid for Yahoo along with Silicon Valley venture firm Andreessen Horowitz, as I previously reported.

Some will speculate that Silver Lake and DST now have an in with Alibaba, which is important, since a large slug of Yahoo’s market valuation is due to its Alibaba and also Yahoo Japan! assets.

If Yahoo is sold, of course, the disposition of the Alibaba asset is an important part of the deal.

More to come, including the implications for Ma, who has been under siege of late around his spinning out of Alibaba’s Alipay payments service and the noisy battle that later ensued with Yahoo. Yahoo and Alibaba, as well as its other large shareholder, Japan’s SoftBank, settled that dispute earlier this summer.

His involvement in Yunfeng, which is buying the company’s shares in a special fund that Ma is not in, will likely attract some scrutiny, anyway.

Sources said Ma is a minority investor in Yunfeng itself, has no control rights and is not a director. In addition, Yunfeng has no relationship with Alibaba.

In another interesting twist, Alibaba rival Tencent has close ties with DST’s Internet affiliate that used to share the same name, having invested $300 million last year in the affiliate that holds major Russian Internet properties.

Chegg — best known for online rentals of textbooks to college students — said it has just bought Zinch, a start-up that links high school students and college recruiters.

Terms of the deal were not disclosed.

The purchase of the San Francisco-based Zinch, said CEO Dan Rosensweig in an interview earlier this week, is part of a larger plan involving a series of acquisitions aimed at “how we move from two-day relevance to relevance all year around for students.”

By that, he meant the short time period when students either buy or rent their textbooks for the semester.

That’s certainly been a good business for Chegg, which is the leader in the online textbook-rental arena, including digital distribution.

But to further solidify its relationship with students and expand its market base to include high schoolers along with college consumers, Chegg has picked up a number of start-ups like Zinch, using its stock and also the whopping $220 million in funding from a number of venture firms, including Kleiner Perkins.

In late September, for example, the company bought CourseRank, which helps students share course schedules, take classes with friends, and read and write reviews on classes and professors, as well as find out how they grade.

Also scooped up by Chegg: Notehall, which is a student-to-student note-taking trading market; Cramster, a social homework helper; and Student of Fortune, a homework-answers site for student questions (which a recent filing by Chegg noted was bought for $5.9 million in stock).

Also being tested are such offerings as deals for students and other ways to leverage the original textbook relationship.

“This is the beginning of a connected student network that we hope to build into a giant platform,” said Rosensweig. “We want to have a student using us all the way through for a 10-year span, from high school on.”

In related news, Chegg said it has hired former Palm CFO Andrew Brown as its new CFO. Prior to Palm, he served as the CFO of Pillar Data Systems Inc., a storage start-up funded by Oracle’s Larry Ellison.

While a CFO hiring often indicates a soon-to-happen IPO, Rosensweig said that Chegg has more than enough capital, needs to focus on building up its offerings and is in no rush to go public.

We’ll see, but here’s the official press release from Chegg about Zinch:

Chegg Plans to Expand into $7 Billion College Recruiting Market and Increase Student Base By Over 3.5 Million

Chegg enters into a definitive agreement to acquire Zinch, the leading digital network that helps high school students research, connect with and pay for college

SANTA CLARA, Calif., September 15, 2011 – Chegg today announced it has entered into a definitive agreement to acquire Zinch. The acquisition is subject to standard closing conditions and is expected to be completed by the end of this month. The acquisition will expand Chegg’s social education platform into high schools. Zinch, founded in 2007, connects prospective college and graduate students to scholarships, admissions officers and other students who have been through the same process.

The acquisition of Zinch, with over 3.5 million members, $1.9 billion in scholarships and over 5,000 school profiles, will significantly expand Chegg’s customer base and its social education platform. Colleges and students will be able to connect more effectively for less through Chegg, helping to streamline the college recruiting process globally. In addition, unlike any other company in the education space, Chegg will provide resources to students at every major milestone before, during and after their college career — including bridging the gap from high school to college.

“Our mission has always been to save students time, money and help them get smarter,” said Dan Rosensweig, president and CEO of Chegg. “With our acquisition of Zinch, we’re extending our mission to high school students through the $7 billion college recruiting market, while continuing to break down the barriers of a college education, from the high cost of tuition and textbooks to helping students make money, pick their courses and get the academic help they need.”

At Zinch, over 3.5 million students have built online profiles to showcase themselves as “more than test scores” to shine in the admissions process, and to be matched with schools and scholarships that might be a good fit. Colleges and universities worldwide, including more than half of the US News top ranked national universities, use Zinch for cost-effective student recruiting and outreach.

“Getting in and paying for school is daunting. Together, Chegg and Zinch can not only make higher education more affordable and accessible, it gives students an edge in finding the right school, getting admitted and reducing the cost. Students can put their best foot forward, be recognized for their achievements and be discovered by programs that fit their interests,” said Anne Dwane, CEO of Zinch.

The acquisition is subject to standard closing conditions and is expected to be completed by the end of this month.
To learn more about Chegg’s social education platform and its network of services, go to www.chegg.com.

Today and tomorrow, Yahoo’s directors are gathering here in Silicon Valley for one of their regular meetings that take place over the course of the year.

While board meetings in general are usually pretty dull affairs–and Yahoo’s, in particular, are typically glacial ones–there is a lot on the plates of those with purview over the machinations of the long-struggling Silicon Valley Internet giant.

Here’s a primer of what might (and might not) be happening, according to sources, of course, as Yahoo continues on its quest to reinvigorate itself–a journey that is beginning to make Siddhartha’s transformation into Buddha enlightenment look speedy.

A Yahoo spokeswoman declined to comment on anything below, although I did run it all by them.

The U-Shaped Turnaround

At Yahoo’s recent sales meeting in San Antonio, CEO Carol Bartz went all Sesame Street on the troops, using the letter “U” as an illustration to indicate where in the cycle the company was in its turnaround.

Apparently, just on the other side of the very bottom of the letter, heading inevitably upward.

Her argument was that the company has finally cleaned up its platform mess and its confusing corporate structure, and that its display and search advertising business is now recovering nicely.

All true, except there are some other key issues, such as the slowness of the search and online advertising partnership with Microsoft to make some serious hay.

In fact, although its display business will show a definite strong recovery in Yahoo’s quarterly results next week, its search business–both in market share and revenue per search (RPS)–has, as one person close to the situation put it succintly, “fallen off the cliff.”

That’s due, in part, to getting the new system with Microsoft delivering better results, which is not happening yet (if ever!).

In this quarter, Microsoft has honored its contractual guarantees and will make up the difference–which will result in masking the magnitude of the RPS loss. It’s a worrisome trend to watch.

The Asia Situation

Yahoo and its Asian partners are still mulling over various options regarding the company’s large ownership stakes there.

What is happening with its share in China’s Alibaba Group, according to sources, is precisely nothing right now, as has been made clear in recent comments by its CEO and co-founder Jack Ma.

“If you cannot make the business cool, you have no right to be angry with me,” said Ma in an article in Forbes published this week, referring to Yahoo. “I just don’t trust them…I’ve been working with them for years, and I’m disappointed.”

Relations between Ma and Bartz, sources said, remain as bad as ever, and even the normally close one between Ma and Yahoo co-founder Jerry Yang is strained.

Plus, Ma told Forbes, as he has said before, Alibaba is not taking its auction site, Taobao, public–leaving Yahoo in possession of an appreciating but decidedly private asset.

Japan is a different story, with the disposition of Yahoo’s stake in Yahoo! Japan the subject of long and continuing negotiations for a while now.

While the earthquake and tsunami crisis there did slow discussions down, there is still active recent movement about a variety of cashing-out scenarios, all of which have massive tax and regulatory issues.

Without boring you with the specifics, one option is to create a tracking stock, another a spin-off of the asset and still another some sort of stock trade.

But no matter what happens, Yahoo will have to pay some sort of taxes on its 35 percent stake in Yahoo! Japan, now worth $8 billion.

But if its CFO Tim Morse–the key figure working on the deal–can pull it off, what will Yahoo do with all that money?

Acquisition Guns Blazing? Or Sputtering?

In a recent forum in Silicon Valley, one of its M&A minions said Yahoo had its “guns blazing” with regard to acquisition activity in 2011, as deliciously reported in The Wall Street Journal, despite the company’s lackluster acquisition record.

Sources said the exec had his ears soundly boxed by his managers for the dopey remarks, since Yahoo has had such a lackluster record in the arena–especially compared to others.

And, oh yes, Yahoo’s M&A head just decamped to gaming phenom Zynga.

That aside, Yahoo should be deep in the market for hot start-ups to help revive its innovative spirit, but it remains hindered by a continued reluctance by new start-ups to join it and by its reputation for being a place where entrepreneurs go to die.

That certainly could change at any time with the right execs in place, but Yahoo is competing with a plethora of more exciting companies and also a seemingly endless venture capital gusher of cash of late.

While it is the board’s job to approve acquisitions and not source them, perhaps it is its job to pressure Bartz and other execs to get off the stick and hit at least one of the targets Yahoo aims at.

Targets are plentiful in advertising, content and even social, with many start-ups playing right into a lot of arenas Yahoo needs some help.

And help it does need as talent keeps walking out the door daily, mostly to hotter prospects such as Zynga and social buying sites Groupon and LivingSocial.

There is no question it is hard for any large company to hold onto top staff when there are so many enticing bonbons out there as options, but it can be done.

One good thing: Its newish head of product Blake Irving and head of U.S. media and advertising Ross Levinsohn seem to be playing well together and are setting a tone of stability that is much needed.

Enter the Kenny

That said, there remains endless swirl, especially with key investors, about the performance of its CEO.

While she started off as a publicly in-your-face exec, Bartz has definitely stepped out of the limelight of late, as her pugnacious manner started to irritate Wall Street and others.

It was a good idea, since it has taken the focus off the lack of stock and revenue progress she had loudly promised.

Still, Yahoo shares have continued to stay locked in the mid-teens, as investors wait for some sign that Bartz’s turnaround has worked.

The entrance of its spanking new director, Akamai President David Kenny, has further increased speculation about management and board changes at Yahoo.

This is Kenny’s first board meeting, but this well-connected newbie is someone who is clearly going to rise quickly to the top of decision-making at Yahoo.

That’s because the smooth and well-liked Kenny, who also has deep advertising experience as founder of the Digitas agency, has a long relationship with Yahoo and also with Yang.

He also now has much more tech cred as a leader of one of the Internet’s most important infrastructure companies, with a ton of regular contacts with media giants, ad networks and video providers that are Akamai’s clients.

In other words, Kenny (pictured here) is the full package of ad and tech experience that would make him an obvious Yahoo CEO candidate when Bartz’s contract is up in early 2013, if not before.

He’s also the person most likely to take over for longtime BoomTown punching bag Roy Bostock as chairman of the board at some point.

None of this is happening soon, but it is clearly an interesting development.

There are other machinations, of course, from continued interest from private equity players in Yahoo, as well as a variety of takeover scenarios, each more complex than the next.

While often derided as yesterday’s news by the elite of Silicon Valley as on an inevitable downward path, those plots are there because Yahoo remains a stellar brand with consumers worldwide and an Internet property with huge traffic and a big ad business.

In other words, it’s a U that someday maybe could be a V.

The review by the Securities and Exchange Commission, disclosed in a letter to a lawmaker, could fuel the fast-growing market in private shares of technology firms such as Facebook Inc., Twitter Inc. and Zynga Inc. The steps under consideration would help such privately held companies raise more money without incurring the increased reporting and other requirements of becoming a public company.

According to the letter and people familiar with the matter, the likely changes would include raising from 499 the number of shareholders private companies can have without being required to open their books, and also making it easier for such companies to publicize share offerings.

Read the rest of this post on the original site »

Mr. Levie, 26 years old, founded online storage provider Box.net in 2005. While his 140-person Palo Alto, Calif., company has money in the bank, Mr. Levie saw the Web investing environment heat up recently, driven by interest in fast-growing start-ups such as Facebook Inc. and Zynga Inc.

So Mr. Levie decided to tap that interest and raise new capital. In less than three weeks last month, he closed a hefty $48 million round of financing from venture-capital firms including Meritech Capital Partners and Andreessen Horowitz. In the process, Mr. Levie said he turned down several other venture firms that wanted a piece of the deal.

“There was no capital limit and we could’ve raised more,” said Mr. Levie, whose start-up counts about five million users at 60,000 companies.

Read the rest of this post on the original site

That Internet sprite, Groupon Co-founder and CEO Andrew Mason, continued in his quest to be the cleverest little entrepreneur on the Web with a very funny post on the Chicago-based start-up’s blog yesterday titled: “No Comment!”

Mason is well known for his hipster-ironic-cute no-comment responses to the media, such as one he gave the New York Times recently:

“Andrew Mason, Groupon’s chief executive, declined an earlier interview request, adding that he would talk ‘only if you want to talk about my other passion, building miniature dollhouses.’”

Buuuuuurn, NYT!

In his latest rumination on life as a digital celebrity, Mason more fully outlined what he would not comment on, including everything even remotely interesting you might want to know about the social buying company, including:

* Plans relating to capital-raising, including a possible public offering

* Pre-announcements of new products

* Our competitors or the competitive landscape

* Statements on core business metrics, including margins or profitability

* Any projections regarding revenue, growth rates or other financial metrics

*Strategic transactions or partnerships with other companies

Thank goodness any metrics we want about how many discounted stripper pole lessons Groupon has sold in Omaha is on-limits!

Mason–who appears to want to become the Midwestern version of comic Jackie Mason, except Jackie would have taken the $6 billion from Google–is now styling a very scruffy Jeremiah-Johnson beard on this blog post, which you can see above.

BoomTown’s query on that: Why, dear God, why?

Here is Mason’s full “No Comment!” post:

No Comment!

As press interest in Groupon has grown, I’ve found myself increasingly uttering two words that have always annoyed me: “no comment.” We like to be as transparent with our customers as possible, but, just as people don’t walk around naked, there are some things that we as a company don’t talk about (for obvious reasons).

The least we can do is be transparent about the things we won’t be transparent about, which are listed below:

* Plans relating to capital-raising, including a possible public offering

* Pre-announcements of new products

* Our competitors or the competitive landscape

* Statements on core business metrics, including margins or profitability

* Any projections regarding revenue, growth rates or other financial metrics

* Strategic transactions or partnerships with other companies

While we’ll clam up when asked about the above business-y stuff, we’ll always be straight forward about things that affect the experience we’re creating for customers and merchants.

Investors hoping Yahoo might benefit from the same surge in online display advertising spending that drove Google to its recent big quarter are in luck–except for the big-quarter part.

Posting fourth-quarter earnings today after sacking one percent of its staff, the company reported net income of 24 cents per share on revenue of $1.21 billion. The Street doesn’t seem convinced, though. Yahoo shares are down 3.5 percent as I write this.

Analysts had been expecting earnings of 22 cents per share on $1.19 billion in net revenue–a big jump from the 11 cents per share the company reported in the same period last year, but a troubling decline from the $1.26 billion in net revenue that accompanied it. That said, display advertising did grow. For the current quarter, the company sees revenue in a range of $1.02 billion to $1.08 billion; analysts had been looking for $1.13 billion.

“We just completed a very encouraging quarter and year for Yahoo!, where we saw our plans to turn around the company gain momentum,” CEO Carol Bartz said in a canned statement. “For the year, operating income, margins, EPS, and return on invested capital doubled. Display advertising grew 17 percent. We completed the important North America Search transition to Microsoft on schedule and with high quality. We introduced new and updated products at a faster pace. And our content properties–like Yahoo! Sports and Yahoo! Finance–continued to innovate and extend their massive lead.”

Look for more coverage of the earnings call at BoomTown later this afternoon. Meanwhile, here’s the press release in full:

YHOO_Q410PressRelease_Final

(Also, you can see a slide deck of the financials here.)

[Image Credit: Byzantin3]

Demand Media is set to go public, according to an amended filing with the Securities and Exchange Commission, with shares priced from $14 to $16 each.

The online publisher could sell up to 8.625 million shares and, if it prices at the top of the range, it could be worth about $1.3 billion and raise $138 million.

That includes 4.5 million shares from the company, three million shares from existing shareholders and another 1.125 shares that its underwriters have an option to sell.

Demand will net $58.1 million, if the IPO price is $15.00 per share, which it said it will use for “investments in content, international expansion, working capital, product development, sales and marketing activities, general and administrative matters and capital expenditures.”

The company added that “we currently anticipate that our aggregate investments in content during the year ending December 31, 2011 will range from $50 million to $75 million.”

Demand’s ticker symbol will be DMD on the New York Stock Exchange.

In its amended prospectus, Demand said:

This is an initial public offering of shares of common stock of Demand Media, Inc.

Demand Media is offering 4,500,000 of the shares to be sold in the offering. The selling stockholders identified in this prospectus are offering an additional 3,000,000 shares. Demand Media will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $14.00 and $16.00.

The common stock of Demand Media has been approved for listing on the New York Stock Exchange under the symbol “DMD.”

Demand’s road to an IPO has been relatively quick.

One bump came last month, as BoomTown reported after the Santa Monica, Calif. company had to satisfy government regulatory questions over the way it recognizes costs of creating content.

Currently, using a concept of “long-lived” content, Demand has been amortizing those expenses over five years, since it says it continues to generate revenue on that material over that much time. Most publisher recognize costs immediately.

That’s different from many companies in the publishing business, which typically account for costs of creating content immediately as they are incurred or over a much shorter time period.

Demand has determined that its content has a more evergreen nature, compared to more topical–and perishable, from a revenue point of view–material produced by others.

Obviously, since this accounting treatment results in more attractive financial results, the longer expense period is of great interest to many other online content creators–such as AOL and Yahoo–which are watching the Demand IPO closely.

While the SEC did not ask Demand to make changes to its accounting practices, the amended S-1 is more detailed about them.

To be allowed to expense over five years, Demand said, the company has to use a sophisticated algorithmic platform–which other content creators do not have–to provide proof of “probable economic benefits” from that content over that time.

Since Demand has long claimed that it has a new and innovative approach to content creation, it is making the case to investors that it needs to have the correct accounting for that approach.

Said Demand in its amended filing:

“In determining whether content embodies probable future economic benefit required for asset capitalization, management has reviewed, and intends to regularly review the operating performance of content published.”

But, it warned:

“Changes from the five year useful life we currently use to amortize our capitalized content would have a significant impact on our financial statements. For example, if underlying assumptions were to change such that our estimate of the weighted average useful life of our media content was higher by one year from January 1, 2010, our net loss would decrease by approximately $1.6 million for the nine months ended September 30, 2010, and would increase by approximately $2.4 million should the weighted average useful life be reduced by one year.”

The practice has passed government scrutiny and now investors will decide what they think of this and the entire business of Demand.

Demand execs will now go on a road show for the offering, which is being led by Goldman Sachs and Morgan Stanley.

Under its new identity, the San Francisco-based company is helping social and mobile games and virtual worlds make money and gain users. To do so, Tapjoy operates an alternative payment platform and a “pay-per-install” advertising network.

The round was led by Rho Ventures, with participation from all existing investors including InterWest Partners, North Bridge Venture Partners and D. E. Shaw Ventures. To date, it has raised more than $40 million.

In a release, the company said the funds will be used to grow the number of ecosystems it supports domestically and internationally. Today, it operates on iOS, Facebook and Android.

But it’s easy to see how the capital will also be used for completing a transformation it started a year ago.

Before acquiring Tapjoy, the company operated under the name Offerpal, which helped game makers, like Zynga, monetize their traffic.

However, the company took some heat after many of its offers were considered scammy. It was like the early days of ringtones, where consumers unknowingly signed up for a monthly subscription instead of buying only one. Similarly, consumers thought they were getting free tokens in a game, but ended up paying much more than they were worth.

In comparison, the new incarnation of the company is almost unrecognizable.

TechCrunch reports the company is on its third CEO since November 2009, and since then, Facebook has transitioned games and applications over from Offerpal’s currencies to Facebook Credits. It has since formed a partnership with Tapjoy’s rival Trialpay.

In an appeal to customers today, Groupon co-founder and CEO Andrew Mason explained in a blog post why it is suing an Australian competitor, Scoopon.

And the story is pretty juicy: Gabby and Hezi Leibovitch, two brothers who started Scoopon in Australia, have purchased the Groupon.com.au domain name, registered the company name of Groupon Pty Limited and tried registering the Groupon trademark in Australia.

“The way we see things, this is a classic case of domain squatting–an unfortunate reality of the Internet business,” Mason wrote. “As Groupon became internationally known, opportunistic domain squatters around the world started to buy local Groupon domain names, thinking that we’d eventually be forced to buy them at an insane price.”

But wait, there’s more: Groupon offered the brothers $286,000 for the Groupon.com.au domain and trademark, and Mason claims they accepted the offer.

Then they changed their minds (presumably around the time Groupon turned down $6 billion from Google, and then was rumored to be raising nearly $1 billion in fresh capital). No doubt, the Leibovitch brothers now have a much richer number in mind.

To that end, Mason says his company is choosing the path of last resort: “Left with no other options, we’ve filed a lawsuit against Scoopon, claiming that their Groupon trademark was filed in bad faith (amongst other things).”

In the meantime, the nearly $300,000 offer continues to stand, and Groupon has opened shop under an alias: www.stardeals.com.au/.

If a court doesn’t come down on his side, Mason is hoping customers will: “Apologies–we don’t like to bother our customers with these things, but felt you deserved to understand why it’s taking us so long in Australia,” he wrote.

A “Groupon in Australia” Facebook group has been created to raise awareness of the situation, and by this afternoon had already counted 568 members.

Beyond the directory-style LinkedIn, that could mean facilitating professional profiles on social sites, pushing job postings through networks, introducing contacts, soliciting referrals and sharing resources.

Part of the reason this idea has been so resonant with Web entrepreneurs–and investors too–is the trouble they’re having with hiring qualified people to work at their own companies.

(Unlike in other parts of the world right now, unemployment rates are not as much of a problem among techies.)

Assetmap, a pre-launch San Francisco-based start-up, for example, wants to help companies and nonprofits understand what assets they may have at their disposal through their networks.

These connections already exist, but they’re often unexploited, according to Assetmap co-founder Nathaniel Whittemore, who let me in on a bit of what he’s doing.

Whittemore told NetworkEffect the failings of sites like LinkedIn include “forcing a distinction between personal and professional that is becoming less and less obvious and failing to recognize that the one-to-one friend-based social graph isn’t the only graph that has value for business.”

Whittemore and co-founder Danny Moldovan hail from the world of social entrepreneurship. Former Northwestern classmates, they had both been at the fast-growing activism platform Change.org.

They have teamed with Jayson Vantuyl, co-founder of Engine Yard, the Ruby on Rails hosting service. At the moment, they are funded by friends and family while looking for outside capital, and plan to launch this spring.

There are many early companies in this space with fancier pedigrees.

Top Prospect, a social recruiting site that rewards users with $10,000 or more for helping friends find jobs, was funded by Andreessen Horowitz, Spark Capital, Ron Conway, David Goldberg, Dustin Moskovitz, Rick Thompson, Chamath Palihapitiya and other angels.

Also based in San Francisco, Top Prospect was founded by Rotem Perelmuter, who formerly sold an online radio service to MTV Networks during the dot-com boom (and more recently ran a hedge fund). The site is currently in open beta.

Delicious founder Joshua Schachter’s Tasty Labs, which has gotten money from Union Square Ventures, hasn’t said much about what it is doing, but is also working on something similar to the idea of an asset map.

Elsewhere, BranchOut, which bills itself as offering “your professional profile on Facebook,” raised $6 million from Accel Partners, Floodgate, Norwest Venture Partners and many angels.

And Hashable, a network for introductions, raised $4 million, also from Union Square Ventures.

And Namesake, from Ad.ly and Newroo co-founders Brian Norgard and Daniel Gould, offers a pretty site for “opportunity routing,” with features such as a real-time stream and chat.

It goes on–other young start-ups in the space include Sumazi, Pursuit, Identified and Gild. (You knew this would happen: Gild turns the social recruiting concept into an online game.)

It wouldn’t really make sense to combine social and professional networks by starting from scratch, so these sites are built on top of existing networks like LinkedIn and particularly Facebook. If you want to try them out, be prepared to cough up those Facebook Connect credentials a whole bunch of times.

(Cute explainer graphics above from Assetmap, Top Prospect and Identified, respectively.)

Does tea with Silicon Valley venture capitalist Ron Conway and 1990s rap legend MC Hammer sound too legit? What about spending the day harvesting crabs under the Golden Gate Bridge? Or maybe a hands-on coffee-crafting session with an expert barista?

Skyara, a buzzy little start-up has created a marketplace for people to sell experiences to folks who are looking to do something other than the same old thing.

“It’s sort of like Airbnb for experiences,” co-founder Dennis Liu explained, referencing another buzzy start-up.

He continued: “It’s one part Etsy, some Expedia and a little of Groupon built on top of our own robust scheduling platform.”

In practice, users log in and are asked if they want to purchase or provide a service. The providers are taken through a process of describing their offering, providing images, setting up times and providing enough personal info so the Skyara team can contact them and verify they are legit. Skyara takes a 12 percent fee on the transaction on the seller’s side.

The purchasers can currently browse or search through about 200 different experiences, ranging from a boudoir photography session (Skyara checked–the photographer is well known in the arena) to the less understandable half-hour of punching dozens of plastic inflatable clowns that someone has collected in an apartment.

But according to Liu, the service has an almost three percent conversion rate from visit to actual sale on their Web site, including all the diluting traffic it gets from outside of the San Francisco area, Skyara’s only market so far.

He said that about 10 percent of all visitors do something valuable on the site, whether that’s offering a service, buying one, telling Skyara where they live and that they’d like to have the service there or signing up for updates.

An interesting wrinkle has emerged in the last few days, as Skyara has partnered with the ongoing UCSF Children’s Hospital charity challenge. This is where the current deal to meet Conway and Hammer came from–which you may enter to win by donating to the UCSF challenge. It brings the “experience sales” idea right back to its ancestral home–charity auctions.

Skyara came together as the brainchild of Liu and Jonathan Wu, former classmates at the University of Pennsylvania, who had moved to New York for jobs as business consultants.

They originally conceived of it as an Expedia for outdoor activities and brought on Steven Ou, the third co-founder, to help them build out the scheduling platform.

The trio was accepted into the i/o Ventures incubator this past March and decided to pivot into Skyara’s current “experience marketplace” model shortly before its first public demo in late September.

“It was like two weeks of fighting, but we decided to pivot because we’d all spent several weeks cold-calling outdoor activity businesses and it was really slow,” Liu said.

Wu, who now heads business development, explained that the founders were concerned that they were going to have an “Open Table” problem, referring to the restaurant reservation service.

“We didn’t want it to take 10 years to have it be really useful,” said Wu.

The whole team agrees that their growth model will be all about expanding into new markets, the first of which will be New York and Chicago. Skyara plans to raise capital to expand early next year.

Besides new markets, the company is adding tools to help people come up with ideas for experiences to offer, and to boost the community aspect of the experience, building a little more of Etsy’s users-as-both-buyers-and-sellers model to its service.

Said Liu: “I’ve met some incredible people on these experiences, and that should be a part of it.”

We spoke with the fresh-faced Skyara trio at Park Chow restaurant in San Francisco. Here’s the video:

]]> http://allthingsd.com/20101210/for-the-person-who-has-it-all-skyara-sells-new-stuff-to-experience/feed/ 0 http://allthingsd.com/20101202/with-goopon-stealing-the-spotlight-tippr-says-dont-forget-about-no-3-or-its-patents/ http://allthingsd.com/20101202/with-goopon-stealing-the-spotlight-tippr-says-dont-forget-about-no-3-or-its-patents/#comments Thu, 02 Dec 2010 15:00:01 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=42 Tippr CEO Martin Tobias hopes that between Google’s potential big-ticket purchase of Groupon (a.k.a. Goopon) and Amazon’s pending investment in LivingSocial, consolidation in the group-buying space will accelerate as others scramble for a partner.

As the No. 3 in the market, the Seattle-based company may be the next candidate, if things remain as frothy as they have been.

“My phone is certainly ringing,” Tobias said in an email yesterday.

Tippr has taken a slightly different approach than either LivingSocial or Groupon. It doesn’t have thousands of employees, for example–only 45, of whom 24 are in sales.

In February, it had launched in Seattle with five subscribers. Today, it’s up to 13 markets and “hundreds of thousands of subscribers.” The growth is not only thanks to their own sites, but also by enabling others to join the group-buying frenzy, as well.

Tippr wants to be a platform, not a brand, so if you haven’t heard of it, it’s possible you never will. Even in Seattle, deals seem sporadic, and most offers are from places within walking distance of Tippr’s Queen Anne neighborhood office.

But, to cast a wider net, Tippr recently signed a partnership with Belo Corp., a television network that leverages Tippr’s platform to power its own local deals site, Yollar.com. It uses its own local sales force to make deals with merchants in markets such as Dallas, San Antonio, Houston, Seattle, St. Louis, Portland and Boise. All these individual sites, powered by their own sales force, creates a magnifying affect that Groupon can only match by adding more sales people.

“Groupon is not like Facebook or eBay, where the winner takes all,” he said. “This is more like search.”

EBay became successful by generating a critical mass of buyers and sellers, and Facebook has staying power because once you define your social network, Tobias posits, you don’t want to have to build it again.

“With Groupon there’s nothing locking you in,” he said. “You haven’t invested anything, and the merchants don’t care either.”

Tobias talks tough–despite the apparent lack of interest from Google or Amazon–because he believes he has the IP to back it up. In November 2009, he acquired the patent portfolio of defunct Mercata, a Paul Allen-backed group-buying venture from Web 1.0.

He traded stock in Tippr’s parent company Kashless for the patents, which include more than half a dozen granted patents covering areas like price optimization, demand curve modeling and buyer-seller interaction models. Today, Tippr is announcing a strategy around these patents. A spokesperson said its new “patent licensing program for group-buying” will charge anyone, from white label partners to competitors (theoretically, Groupon), a fee to license them.

Tobias is also bullish, because in his last venture he was attempting something much larger. As CEO of Imperium Renewables, he raised around $500 million in capital to produce biodiesel on a mass scale, which he admits is not enough “when taking on Exxon.”

But taking on Groupon, which may have annual revenues of up to $500 million? To him, that’s doable.

]]> http://allthingsd.com/20101202/with-goopon-stealing-the-spotlight-tippr-says-dont-forget-about-no-3-or-its-patents/feed/ 4 http://allthingsd.com/20101201/silicon-valley-go-to-guy-peter-currie-to-join-twitter-board/ http://allthingsd.com/20101201/silicon-valley-go-to-guy-peter-currie-to-join-twitter-board/#comments Wed, 01 Dec 2010 11:53:56 +0000 Kara Swisher http://kara.allthingsd.com/?p=37832

According to sources close to the situation, well-known Silicon Valley power player Peter Currie is joining the board of directors of Twitter.

It’s an interesting choice to bring the well-regarded moneyman to the microblogging start-up, and could indicate an intent to push to an IPO eventually.

As first reported by NetworkEffect’s Liz Gannes earlier this week, Twitter is now considering funding offers from big venture funds, specifically Russia’s DST Global and Silicon Valley’s Kleiner Perkins, as well as fielding incoming acquisition interest from Google and Facebook.

Currie should know about this kind of noisy swirl around a hot start-up.

Back in the heyday of Web 1.0, as the CFO of Netscape Communications, he led the iconic browser software company into history, as the first great Internet rocket ship, when it went public on August 9, 1995.

While the Netscape experience ended in tears, Currie’s career has not, and he has become a kind of go-to elder statesman in the Web 2.0 era.

A year ago, for example, he joined Facebook as its temporary CFO.

That move came after the social networking site, in a bit of turmoil, parted ways with its then CFO, Gideon Yu, following mutual disagreements.

Indeed, Currie plays the calm, collected wise man well.

Unusually tall, aggressively avuncular and laid-back, he loves Elvis and enjoys pranking reporters like BoomTown.

(Case in point: Back in the day, he spread the rumor around Silicon Valley that I was short due to a medical condition.)

Now the president of Currie Capital, a private investment firm, he had previously worked at General Atlantic in private equity.

After Netscape, he was a partner and co-founder of the Barksdale Group, an early-stage (and ill-fated) venture capital firm.

Before Netscape, he was CFO of McCaw Cellular Communications and also worked at Morgan Stanley.

Currie is also board-happy, serving as a director of a variety of tech firms, private and public, which have had varying degrees of success.

They have included CNET, Critical Path, Clearwire, Safeco, Ofoto, Tellme Networks and Zantaz, as well as Sun Microsystems.

He has an MBA from Stanford University and went to Williams College.

In other words, just the kind of pedigree needed to give some additional burnish to the Twitter board, which now includes Fred Wilson of Union Square Ventures, Spark Capital’s Bijan Sabet, Benchmark Capital’s Peter Fenton, co-founder and former CEO Evan Williams, co-founder Jack Dorsey and CEO Dick Costolo.

Apparently, it’s time to toss another dude in there!

]]> http://allthingsd.com/20101201/silicon-valley-go-to-guy-peter-currie-to-join-twitter-board/feed/ 0 http://allthingsd.com/20101018/live-apple-earnings-call-2/ http://allthingsd.com/20101018/live-apple-earnings-call-2/#comments Mon, 18 Oct 2010 22:58:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=24788 Steve Jobs made a rare appearance during today’s Apple’s earnings call and spent most of his time beating up his rivals, past and present. Summary: The iPhone has left Research in Motion’s BlackBerry in the dust. And while Google’s Android phones and tablets-to-be looked impressive, they weren’t.

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.

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