You want news out of Scott Thompson? Then you’d be very disappointed with the Yahoo CEO today. Not surprisingly, the new boss — who wants us to remember that he’s really only officially been at work for two weeks — says it’s too early to talk about his plans.

But he does have some, he insists. For instance:

• He has a plan to fix Yahoo’s big mess in Asia.
• And he has a plan to help fix ad sales, which have been in turnaround for nine months and are still declining.
• And he has a plan to buy some stuff to “fill in technology gaps” that will help with all of that.

But no details on any of that during the Q4 earnings call. Instead, Thompson repeated what he told Yahoo employees during his first address to them — Yahoo is both a media and technology company, and people should get their heads around that — and he laid out some big, pretty obvious ideas:

• It’s important to pay attention to users and advertisers.
• Yahoo should move fast, etc.
• He’s going to double down on some existing Yahoo projects, and cut others.

Got it? Good. More details to come, Thompson says. And yes, for the record: That is a serious Massachusetts accent on the new guy.

—————–

EARLIER

Earlier this month, Yahoo CEO Scott Thompson got on the phone with Wall Street analysts, and refused to discuss the company or his plans for it in much detail.

Fair enough: He had just been hired that morning, and had barely met anyone in the company.

So now it’s been nearly three weeks. Think he’ll offer much more in the way specifics, in the wake of the company’s Q4 earnings report?

Me, neither. But Wall Street will still be hungry for any scraps it can get, whether it’s an update on the company’s Asia mess, a hint about future cost-cutting moves, or a general “here’s what I think we should be doing” state-of-the-state.

We will definitely get a chance to hear the Boston accent that seemed to charm everyone so much in early January. Time to see if it’s still as effective.

4:58 pm: Greetings! Just doing some finger exercises in advance of the call. Also looking for some Kara Swisher aviator glasses, since La Swish is in transit and cannot cover the call herself. I’d say I’ll do my best to channel her as I type, but I don’t think I could handle that.

5:00 pm: There’s time for a quick ticker check: Investors still yawning, and YHOO shares are nearly flat, after-hours. But Apple!

5:01 pm: And we’re off. On the call: Thompson and CFO Tim Morse.

5:03 pm: Thompson: Even though I’ve been here for three weeks, my official start date was only two weeks ago. Still! I had strong opinions before I arrived, and since then, I’ve been looking around: Big opportunity here.

Powerful brand, lots of visitors: 702 million globally! Advertisers like us, etc. “We’re going to work not just at scale, but with speed.” “I feel great about that, but I’m still very clear that we have a lot of work to do.”

You want details? Won’t give ’em. But I’ll talk about guiding principles:

For me, I insist “that we be balanced.” Have to think about customers, who we are, [something I missed] and how we allocate capital. I’ll come back to this in a bit.

And before we get to any of that, let’s talk about Q4 numbers and 2012 projections.

[At this point you can consult the numbers they've already put out]

Let me praise some people. And, “there’s no question” that we can do better. “And we will.” Need to get to market faster, monetize better.

5:07 pm: Here’s Tim Morse, with some numbers. [Again, you can read most of this, so I'll skip most until he gets to the "color" part.]

Challenging quarter, but I’m proud of the team. Etc.

And now, some 2011 numbers. [Again, I'll also skip this stuff.]

[Meanwhile, here's Citigroup analyst Mark Mahaney's take, fresh off the grill: "Fundamental trends remain nothing to email home about. The Display Advertising results were a clear negative, and the Search Advertising results continue to remain murky. Stock buybacks are (almost) always good … Scott Thompson has his work cut out for him …"]

Some details on our display missed. We missed by $15m; $10m of that is from Europe and macroeconomic stuff.

We’re nine months into salesforce revamp. We’re doing pretty good with that. “Several major advertisers” that had bailed or cut back on Yahoo spend have made “meaningful commitments for 2012.”

Some search notes. A reminder that we extended Microsoft search deal through 2013.

We’ll get to 2012 guidance in a minute. But first, a reminder that we’re still growing visitors and page views. More of that to come. U.S. elections and Olympics will be big for us.

“In short, we’ve made progress on many fronts, but that’s not the whole story.” Revenue isn’t growing, and “we expected better.”

5:18 pm: Guidance numbers, which you can also get from the release. But they are “not reflective” of our long-term goals. Because we want to grow.

And margins will get better, too.

And yes, we’re talking about fixing our Asia mess. But we won’t be able to go into details about that on this call.

5:21 pm: Back to Thompson. Okay. So here’s more on that “balance” stuff.

First: Customers. Both our users and our advertisers — we want them both to get real value from us, “and we will focus equally on both.”

We have to get people to use us more frequently. And we need advertisers to know we like them, we really like them.

5:22 pm: Two: “Balance in who we are.” We’re a media company and a tech company. We need to be great about both. “So we end the debate about which is more important … we must do both. End of discussion.”

Three: We gotta grow fast. “When it comes to making decisions, I make them quickly, and then push to move fast, fast, fast.”

Four: We gotta balance investment resources for today, tomorrow and long-term. Right allocation of capital is very important. Most resources have to go to “current core business.” But a lot also has to go to the products of tomorrow and the next 12 months. And also a “small but meaningful” amount into products that won’t show up for a year or more. We need a vibrant long-term product pipeline, and we have to consider businesses that don’t look anything like what we’re doing today.

But need to be very clear — not about restarting investment cycle. Refocusing, which means there are some things that we’re going to stop doing [that is, we'll have shutdowns and cuts].

I have some very clear ideas about the specifics of what we’ll do. But I won’t tell you about them.

Still, some big ideas: Customer experiences, and data.

5:26 pm: On customer experience: 702 million users a month. Did I mention that? Yes, I did. I’ll say it again. “But the sheer numbers of users will not get us to where we need to be.” We have to improve their experience while they’re here: Better interfaces, faster speed, deeper and “much more relevant content.”

And we need advertisers to get better results, and spend more money with Yahoo. [Don't do the opposite!]

On to data: We can use data to make the experience better for users — tweak layout, content, flow of the page and advertisers. “Nobody has done that yet on the Web.” “I know lots of companies talk about using data.” But we mean it. Crucial for you to understand that data is core to our plans. It “will be the key component for driving innovation at Yahoo.”

5:30 pm: So there’s some insight for you. Now on to strategic-review update. Roy said on last call that BOD considered a lot of alternatives. “It’s important for you to know that the company remains open to anything that’s good for our shareholders.” but we’re “focusing on what appears most promising.” “The work is ongoing, and I won’t say more about that today,” but it’s going to be good for shareholders.

Here’s the takeaway: There’s plenty of opportunity here. “Much bigger than the outside world imagines for us today.”

I’m here because we can do more.

5:32 pm: Alrighty. Q&A time.

Q: Please talk about that Interclick deal. What will they contribute in revenue and earnings? Also, update on revenue per search, please.

Morse: $25M of cost in Q1 from ICLK. $10M in revenue. We expect revenue to ramp throughout the year. As far as RPS increase, Microsoft is doing a nice job, and so are our sales guys.

“We’re definitely closing the gap” when it comes to search. But a reminder that we have a guarantee though March 2013.

Q: On that balance thing: How important will Q&A be here? Big deals in the works? Also, what do you see in macro environment?

Thompson: I think there’s going to be some stuff that we need that we don’t have, and so we’ll probably have to be “aggressive” in the market. “I’m relatively certain that there will be things that interest us” to help us “fill in technology gaps.”

Morse: Europe wasn’t great last quarter, and early indications are the same now. Not expecting much change this quarter, anywhere.

Q: How about a dividend? Also, how do your big principles play into display ad turnaround?

Thompson: “Too early” to imagine dividends. On turning around display: I’ve tried to spend a lot of time trying to figure out our problems there. “We are after that with a very high sense of urgency.” Number-one priority for now.

Q: Also on display. Any sacred cows going forward? Also, on premium video — how are your original series performing?

Thompson: Not sure how to interpret that cow question. “We are understanding and evaluating all options … personally, I’m being very aggressive.”

Morse: Last month, we had nine out of the top 10 original shows in U.S. We don’t give out revenue and pageview and streaming numbers, but “assume healthy growth there.” But more work to be done.

Q: Tim: Please give us more detail on premium display pricing. Scott: You guys made a lot of buzz with that Tom Hanks show announcement. Please discuss economics. Also: Experiment, or prelude to more?

Morse: Like I said, premium display below where we wanted, but it was in the range. And Interclick will make that better.

Thompson: Yeah, that was great buzz at CES. “It was more than the event itself,” everyone had nice things to say. “I was pleasantly surprised.” Not going to share details on dollars. So far, “we’ve had reasonably good success” with the originals we’ve done past.

Q: You talked about doing things Yahoo hasn’t done before. Like what? Also, for Morse: Shouldn’t he be worried about Yahoo’s share on mobile devices?

Thompson: Too early for me talk about strategically what we’re doing.

Morse: On search — yeah, we want to grow our O&O. In terms of mobile share, it’s so early right now. “It’s very intriguing in terms of how we’re going to play.”

But new revenue streams from mobile are even more important than existing ones.

Thompson: Important to point out that “no winner” has shown up yet when it comes to mobility. [Really?]

Thompson: Did I mention data? Let me mention it again. We have tons of it. It’s going to be huge for us. Data and technology can help us predict what users want to do next; it’s a huge advantage for us.

Q: Carol called this a communications company. Terry Semel called it a media company. And you?

Thompson: I had this all-hands meeting, and I said it again today. There’s this long-standing debate here. But “we better be darn good at both. In fact, I think we ought to great.”

Morse: Discussion of financials. Gap between reporter and subject.

Q: You said you’d realign around key areas of focus. But what’s new about that? Are there new verticals? Also, since you’re talking about investing, how does that jibe with operating margin goals?

Thompson: We’re working really hard to evaluate options. “Providing more detail for you today … is just a little bit premature.” “I actually feel a little bit bad” that I can’t tell you more.

“Just a little bit longer, if you will, before we get really specific” on that.

Morse: Yes, we’re going to spend money. But we’re also going to stop those projects, so we can move money around.

Q: On display: Seems like big opportunity to monetize your leftover inventory. Talk about that, please.

Morse: Yep. That’s one reason why we bought Interclick. (Also, theoretically, the reason for this.)

Q: Talk more about Interclick. $10m revenue, $25M costs. But that doesn’t look like what they were doing before you bought them — they had $2M EBITDA per quarter. What’s going on?

Morse: A lot of what they were doing before was related to Yahoo, so we have to eliminate some of that for reporting. Also, we’re building out so we can do more with that. Also, we have to start amortizing intangibles. Also! “This is the first quarter, right out the gate.”

Q: For Scott: You talked about growth before. Can you talk about growth via acquisition, and new business versus growth of existing business? Also, please talk about mobile traffic.

Thompson: I’ve talked to customers. “The conversations were fascinating.” People want us to grow. They also told us “exactly what we have to do to get more of their spend, today.” We can do that. We don’t have to grow solely via M&A. “The really good news is, the customers are there, they’re cheering for us.”

As far as mobile, I haven’t really seen the data. But I’m sure it’s growing really fast. It did at the last business I was at.

Morse: Right.

That’s it, everyone. All done for today.

First look at Yahoo Q4 earnings: Earnings of $0.24 a share on revenues of $1.17 billion. Wall Street was looking for $0.23 and $1.19 billion.

For a look at what investors had been expecting, consult Kara Swisher’s preview from last night. Short version: Not a lot, which is why the CEO spot is now filled by Scott Thompson instead of Carol Bartz.

A few details:

Display revenue is down four percent, which isn’t a huge shock since Yahoo U.S. boss Ross Levinsohn is trying to rebuild the company’s sales force. Plus, he is making some structural changes along the way that might cost it a few sales dollars in the short term, at the very least. But still, it’s worth remembering that for just about everyone on the Web, with the possible exception of AOL, Web advertising is growth business.

Yahoo would also like you to know that its worldwide traffic was up 12 percent, and that page views for its media properties were up seven percent. That’s a good thing, because the core of Yahoo’s pitch to investors and advertisers is “we’re still really, really big, and that’s important.” So if it was shrinking that would be bad.

But unless Yahoo posted some very unusual numbers this afternoon, this report wouldn’t be crucial for Thompson — which is why shares are basically flat in after-hours trading.

Much more interesting will be his first earnings call, where he’ll have the chance to give people his first impressions of his new company: Just how bad are things? Or, if you want to be more positive: How long will it take to turn things around?

I’ll cover that call at 2 pm PT; head here for live coverage.

According to sources close to the situation, Yahoo has instituted a hiring freeze across the company and is considering a reduction in force in support units of the company.

While the details of any layoffs — which are expected to be small and selective for now — are still being worked out, sources said that the stricture not to fill hundreds of open positions is the first step toward significant cost-cutting initiatives across the Silicon Valley Internet giant, in the wake of what it expects to be another weak quarterly report next week and a looming proxy fight.

Yahoo reports its fourth quarter earnings Tuesday. While the company has managed to improve the results in the last part of the quarter, sources said they will still show continued weakness in its key businesses and consumer usage.

That’s as competitors such as Google and Facebook have been showing significant growth, especially in the display advertising market.

Thus, new Yahoo CEO Scott Thompson appears to be zeroing in on costs and managing for margins, said multiple sources, much as his predecessor Carol Bartz did at the start of her tenure.

But many think Yahoo needs even more drastic changes, including massive cuts in staff and also product arenas, to give the company new life.

That includes shifts in leadership at the top levels too. In a major move this week, co-founder Jerry Yang stepped down from the company’s board and all roles there. More directors are expected to leave soon, too.

That will likely come after negotiations to sell part of its lucrative stakes in both the Alibaba Group and Yahoo Japan are successfully completed.

While not a certainty, Yahoo’s board hopes that will happen sometime before activist shareholder Daniel Loeb initiates a proxy battle against the company in the coming month.

Sound complex?

It is, and also troubling to Yahoo’s long beleaguered rank and file, who have been worried about more layoffs.

The Yahoo troops have been under intense pressure and have suffered from ongoing attrition. Just yesterday, for example, Yahoo lost one of its top advertising execs, Seth Dallaire, to Amazon.

The company can ill afford such departures of key talent, even as it seeks to pare employee numbers in other parts of its business.

At the end of its last quarter, Yahoo reported that it had 13,700 staffers, down from 14,100 in the previous year.

Yahoo, of course, declined comment.

This morning, Yahoo said it had hired PayPal President Scott Thompson as its newest victim, oops, CEO.

(You can read my interview with him too, here.)

AllThingsD.com had reported the pending development last night — which is how we roll here.

Now we will roll into the conference call on the matter, and are hoping that the head of the lucrative eBay payments unit will make an appearance, given that he does not start until next week.

One piece of advice I will extend Thompson: I would refrain from cursing, as previous Yahoo CEO Carol Bartz did on her first outing. (She was fired in September, although not precisely for the cussing she so enjoyed partaking in.)

Here we go!

7:02 am: It’s on, with Thompson present.

Yahoo Chairman Roy Bostock begins, and he is “very excited, very excited.”

I’d be very excited if Thompson talked and not Roy, who has been to this particular Yahoo CEO rodeo a few too many times before.

Bostock is making promises that this time it’s going to be different. Really!

He also notes that the company will continue its “strategic review” — but who knows what that means now.

And he thanks Tim Morse, the interim CEO who is moving back to the CFO job. (Agreed — nice work, Tim!)

7:06 am: Scott Thompson is on and is “just thrilled” to be the new Yahoo CEO.

I like his accent, which seems like he might be from Boston. He does look and sound like Cliff Clavin, the mailman guy at the Beantown bar from the television classic “Cheers.”

Except, given he has been the darkest of dark horses in this CEO race, nobody knew Thompson’s name.

Thompson is saying all the right stuff, about wanting to increase shareholder value and such.

He sounds so hopeful! Urgency! Thoughtfulness! A bright new morning at Yahoo!

I have been to this rodeo before too, but I am still hoping this time it’ll work.

Scott, if you let me down, I might cry, because you sound so nice.

7:09 am Q&A time already.

Congrats from the Wall Street analyst peanut gallery.

Then, it’s right into a question for Bostock, about the progress of the Asian assets deal.

Also, is Thompson too much of a technologist and not a media dude?

Bostock wants to talk about only Scott, but notes that there will be “no slowdown and no delay” in the Asian process. And Thompson will be all onboard when he comes on board, folks.

Bostock sounds tired, but starts to talk about how a “great customer experience” is the key to the advertising business. He notes that Thompson knows how to do this, hence he’ll be fantastic.

“I have every expectation he’ll be out there calling on advertisers,” says Bostock. I would hope so, given that is where Yahoo makes most of its lettuce.

Bostock is saying Yahoo has been “treading water” and now needs to swim fast. Treading water? I wonder who the top honcho at Yahoo has been while the company has been listlessly dangling its legs in the drink?

Roy — that’s who!

7:15 am: Another analyst asks about margins.

Thompson is not having any of it! He is polite when asking for time to get on the job to make proper statements.

But he does focus on the need to build “great, innovative” products. True, but Yahoo has been incredibly unable to do this of late.

Thompson gives no specifics, though. My big idea: I would steal the self-driving car from Google.

7:17 am: A question about what the core of Yahoo is, and about what lessons Thompson is bringing from his experience at PayPal.

Well, he has not met the team — literally. Yahoo’s board consulted almost no one in the top ranks of execs on this appointment.

But Thompson “suspects” there is talent there. Given the recent attrition, he’ll need a big Inspector Clouseau magnifying glass to find it!

From eBay’s PayPal, he says that the key was balancing the customer experience with network effect and, well, blah, blah, blah Internet-speak.

I am still thinking shoplifting the self-driving car is the bestest idea.

7:20 am: A question about Yahoo’s display business versus Google.

Thompson notes it is too early for him to say — though he had better say soon! — but notes that data is key. He is a well-known by-the-numbers guy, and that is clearly where we are going at Yahoo, now that he is the big dog.

Thus:

“The data these Internet businesses create, the ability to use analytical technology to build a better businesses for your customers … I feel certain that wealth of data is going to be exploitable for next generation products, next generation experiences … My instinct says down in that data we’re going to be able to find ways to compete and innovate that the world hasn’t seen yet.”

I am really liking this accent, which is almost lulling. And so polite! Sources tell me that being “collaborative” was a big goal in this hiring.

7:22 am: A question about the identity of Yahoo, and whether it should be public or private.

Thompson harps on the need for innovation, and hopes it will be the future.

“I would not be here if I didn’t think it was possible,” says Thompson.

Bostock takes the public/private question. Yahoo will be public, he declares! Mostly, because it would be too pricey to take private.

“It’s a moot point,” he says.

7:25 am: More questions about what Yahoo is.

Thompson declines to run off the rails on this dicey one, but he says he believes that Yahoo has great assets.

It does. It’s just that it has been crashed many times — by the people who just hired him — right into a wall.

Just sayin’ — a self-driving car would have done a better job.

7:27 am: A brain-drain question, and more on Asia and on mobile.

Bostock butts in again. He said that Thompson will not be distracted by that, and will concentrate on the core business. Hush up, Roy.

Thompson says that he looks forward to meeting the peeps of Yahoo. (’Cuz he has not, as yet!)

He also loves mobile — which Yahoo has largely borked.

7:32 am: A content strategy question. Early days, so Thompson is still keeping his yap shut.

In this, he’s like the anti-Bartz. Is this good? It’s certainly different.

He says again that, “I can’t wait to meet” everyone at Yahoo. Vice versa, because this dude came from left field.

Thompson promises that he will be a “sponge.”

He closes by noting that he is “genuinely excited,” and says he believes in Yahoo.

Indeed, when it comes to Yahoo, you definitely gotta have faith.

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.

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

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

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

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

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

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

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

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

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

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

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

He apparently loves living in the Big Apple.

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

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

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

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

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

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

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

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

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

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

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

Yes, that’s right: Fancy lamps.

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

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

More to come, obvi!

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

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

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

It’ll surely be happy holidays for billable hours!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

– Samuel Beckett, “Waiting for Godot”

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

In fact, it was September 6.

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

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

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

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

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

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

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

A lot.

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

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

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

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

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

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

Who’s in Charge Here?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Deal

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An Asian Solution

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

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

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

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

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

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

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

Strategery

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

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

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

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

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

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

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

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

Yahoo shareholders and employees can hope, at least.

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

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

I hate to use a personal story to make a professional point — but when I was in the hospital recently, after suffering from a mini-stroke, I got an important piece of health advice that, oddly enough, applies perfectly to Yahoo, the Silicon Valley Internet icon I cover very closely.

I know, I know, but listen up …

When I was close to going home, one of my doctors told me I had to make sure I paid attention to any signs that might indicate a recurrence. The issue around any possible future ischemic attack taking place, he said, is speed in getting critical care once any unusual symptoms become apparent, such as numbness, tingling, confusion and cognitive difficulty.

That’s because every second of delay translates to increased damage to cerebral cells that could badly impact speech, movement and worse.

“Remember,” the doctor intoned with great and very appropriate gravity. “Time is brain.”

Yes, indeed it is — for me, and also very much so for Yahoo these days.

Leaving aside my own mortality, one of the most important issues going forward for Yahoo’s long-hoped-for revival will be how quickly the company moves in the next month, in what has so far been a lugubrious and rumor-heavy process to figure out its strategic plan in the wake of the firing of CEO Carol Bartz in early September.

That means — going into a major holiday season — Yahoo has about 30 working days to make what has to be a complex and multiparty deal. It is likely to include private equity firms, big companies, Asian partners, investment bankers, major shareholders and scrutiny from the media, in an effort that is approximately akin to herding cats.

This from a board that has often moved with snail-like reflexes in the midst of much more minors crises, and has shown a talent for disaster.

So, while speed is sometimes the enemy of reason, in this case, it is now more necessary than ever before.

There are three key reasons why Yahoo’s leaders have to perform quickly now, each of which could spell even more turmoil for the long-troubled company, if botched.

The first is the possibility — actually, the probability — of a proxy fight that might begin informally just after the new year.

That’s when you could start hearing from someone like activist shareholder Daniel Loeb of Third Point — who has been vocal about ousting Yahoo board members, including co-founder Jerry Yang. Yahoo directors are fully aware that he is eyeing this ugly option, which will include readying an alternate slate of directors.

According to a Yahoo spokeswoman, the earliest nominations for directors can be submitted is February 24 for those “shareholder proposals not intended for inclusion in proxy materials and for nomination of director candidates.”

But while there is a formal process, you will hear it coming long before that, unless Yahoo gives Loeb board seats to quiet him down — which is unlikely but possible.

Such a noisy fight is not one Yahoo can afford to have, and it has already shown some cloddish sensibilities in its response to a recent letter by Loeb — who has many more shares than Yang, and should still be accorded a certain amount of respect, no matter what he says.

Given how badly the last Yahoo shareholder tussle with Carl Icahn went, another proxy battle could be deadly, and might drag on through the first half of 2012. In his Yahoo tussle, Icahn ultimately got three seats on the Yahoo board, but eventually went away with everyone the poorer.

Second, Yahoo will report its fourth-quarter earnings in late January, which will likely continue to show weakness in key sectors of its business. While interim CEO Tim Morse is doing a laudable job given the shaky circumstances, drops in advertising revenue growth, engagement and search are not anything Yahoo can keep making excuses for.

While it is likely the company’s beleaguered operating execs will pull out the stops to make the numbers look better — a new game I like to play is “how many homepage ads can they jam in there at the quarter’s end?” — it’s no panacea for the kinds of dramatic and even drastic changes that new ownership will have to make, sooner than later.

And, speaking of beleaguered, perhaps the most important reason that Yahoo has to get the lead out and clarify its situation is due to one consistent thing about the company: Talent attrition and employee fatigue.

Speaking to one exec after another in recent weeks, it is dead clear that Yahoo is increasingly hard-pressed to hold on to the best of its current employees, or to attract any terrific new ones.

The impact on product innovation, morale and more is obvious.

One exec who has long been one of the more cheerleader types for Yahoo — often calling me out in the past for being too negative on the company’s prospects — has recently turned weary, cynical and even depressed about the future — so much so that I now find myself bucking up the worker.

“You can’t hire anyone, since you can’t tell them honestly who their bosses might be in three months,” said the staffer. “And you can’t look anyone who works for you now in the eye and tell them it will turn out right in the end, either, given the track record so far.”

Indeed. And, more than any other factor that could hurt Yahoo in the competitive tech sector, brain drain is what will always get you in the end.

One of Yahoo’s biggest problems — brain drain — has turned out to be an asset for private equity firms and other players interested in figuring out their best moves related to the Silicon Valley Internet giant.

A plethora of ex-Yahoos, including many former top execs, are getting buttonholed by those who want to know more about the inner workings of the company that might not be obvious from its copious financial data available publicly.

That includes former Americas head Hilary Schneider, who has a longer-term consulting gig with TPG Capital, one of the several PE firms that has recently signed a non-disclosure agreement with Yahoo; former COO and President Sue Decker, who has had a longtime informal relationship with Blackstone, which has not signed the NDA and has been in talks with Yahoo’s Asian partners, China’s Alibaba Group and Japan’s SoftBank; and even former CEO Carol Bartz, who sources say has also been contacted to get her insights.

She is one of many in that regard, in a large pool of former Yahoos, such as: LinkedIn CEO Jeff Weiner, who had run Yahoo’s media efforts; Chegg CEO Dan Rosensweig, former Yahoo COO; SurveyMonkey CEO Dave Goldberg, who ran swathes of Yahoo’s entertainment properties; Criteo CEO Greg Coleman, former Yahoo sales head; former CEO Terry Semel, who is now an investor; former communications exec Brad Garlinghouse, who is now at AOL; and Demand Media Chief Revenue Officer Joanne Bradford, who also was a top Yahoo advertising exec.

Not all are cooperating with the requests for a chitchat about Yahoo, but there is much incoming interest in ex-Yahoos and what they might know.

There’s lots more where that came from, from all parts and all levels of Yahoo, given the breadth of the exes now doing very well — thank you very much — throughout the tech and media industries.

Thus, calls from PE firms, from Silver Lake to Bain Capital to Providence Equity Partners, as well as interest from major and majorly irritated shareholders, such as activist hedge fund investor Dan Loeb.

It’s a smart idea to tap this rich vein of information, as all contemplate possible multi-billion-dollar investments.

While some of these execs have not worked at Yahoo in many years, all have significant knowledge about the challenges and also the culture that cannot be gleaned from spreadsheets.

They also know a lot about the internal politics and personalities of the existing inside players, too. More importantly, several were involved in similar previous major business decisions at Yahoo.

Decker, for example, was a key exec in the Yahoo takeover attempt by Microsoft several years ago; Schneider and Bartz were deeply involved in striking the advertising and search partnership with Microsoft.

“Between everyone, it’s a good way to figure out where all the bodies are buried,” said one person close to the situation. “And there are a lot of bodies.”

Maybe get something cooking in the whole what-will-Yahoo-do stakes, now that one of Yahoo’s more active board members is back.

And by “back,” I mean that Kenny — no longer a candidate for CEO — has no further need to recuse himself from the strategic process in which the Silicon Valley Internet company finds itself.

In an interview with Advertising Age last week, Kenny — the well-regarded online ad exec who recently stepped down as president of network infrastructure giant Akamai — released an unusual statement:

As a matter of policy, I do not comment on matters related to Yahoo as a Yahoo director. However, as a personal matter, I want to clarify that I believe Yahoo is a great company with enormous potential, but I am not — and will not be — a candidate for the CEO position. I look forward to my continued service on the Yahoo Board of Directors.”

By removing himself from the fray, that means, according to several sources, that Kenny will be diving back into sleeve-rolling duties at Yahoo, as one of its — how can I put this? — less comatose board members.

In fact — until he was sidelined by the obvious conflict of interest inherent in wanting to be CEO, while also directing the fate of Yahoo for shareholder value — Kenny had been deeply involved in a lot of the changes that had taken place of late, after a long period of board inaction.

That included the ouster of CEO Carol Bartz, who was fired for a number of reasons, including lack of strategic vision. It was relatively new board member Kenny — he became a director in February — who led the strategy committee that had asked Bartz for her road map, which she did not deliver to their liking. Obviously.

Because of the swirl around his possible CEO candidacy — Kenny was a noticeable inside candidate, since he is well known in the Internet advertising world for running and then selling Digitas to the Publicis Groupe for $1.3 billion in 2006 — he gave up leadership of the committee to Intuit President Brad Smith.

Sources said it is unlikely Kenny will get that top job back, but he remains a member of the transactions committee, which is leading the strategic review of the company.

That’s the key slot for the independent board members of Yahoo, who must ultimately be the ones to determine what path or offer the company will take.

One plus: Kenny has close relationships with most of the bidders — largely private equity firms — looking at Yahoo, and also is well known among the media and tech companies poking around, too. He also has advertising — and now tech — experience, which will be much needed as Yahoo explores its options.

Most importantly, Kenny is an independent director, which will be very important to the process going forward, especially since a lot of the spotlight has fallen on Yahoo co-founder and director Jerry Yang.

Yang — who has been a bit of a Yahoo lightning rod at times — has been involved in some of the meetings with those interested, along with interim CEO Tim Morse. The company recently noted that this was at the behest of the board.

While these were only informational meetings so far — and not negotiations, as some reports have surmised — Yang’s involvement will likely have to be more curtailed, at least publicly, especially if any of the deals include using his own large stake in Yahoo.

“This process has to be above board, since it is so easy for those wanting a better deal to try to cause all kinds of trouble,” said one source. “The company is already under attack in that regard.”

That’s a reference to a recent salvo by hedge fund activist Dan Loeb, a major Yahoo shareholder who has taken aim at the board and, last week, at Yang. Loeb essentially accused Yang of double-dealing in the process.

Enter Kenny, along with Smith and — to an increasingly lesser extent, of late — Yahoo Chairman Roy Bostock. While there are other independent board members involved, these are the three to watch most closely now.

While some think Kenny still would like to be CEO of Yahoo — he was also on the short list several years ago when Bartz was hired — sources said he is more likely to take a job at another consumer Internet company.

While he certainly could slot into a large advertising firm or into the digital division of a big media concern, sources said Kenny is looking to be a CEO.

Just not at Yahoo.

At least for now, since down the road it is unclear what will become of Yahoo and who will run it in years to come.

In fact, it might even be Kenny in the end.

I am here at Yahoo HQ in Sunnyvale, Calif., to check out “Product Runway,” which is the Silicon Valley Internet giant’s attempt to show that it can still innovate.

First and foremost is the launch of Livestand, a personalized news reader that is similar to Flipboard and a variety of other rivals, including — soon — Google.

It’s Yahoo’s attempt to present a business-as-usual feel — amidst a long and agonizing and very public strategic overview that might also include the sale of the company (or not!), in the wake of the recent firing of its last CEO, Carol Bartz.

It has caused a lot of trauma inside Yahoo, which can’t help with innovation.

But we press on!

In other words, despite the three-ring circus going on outside, Yahoo wants you to know it is still hard at work.

We begin:

10:35 am: As the strains of U2 die out, Yahoo Chief Product Officer Blake Irving takes the stage, which is actually set up in the company’s cafeteria. I can smell lunch being made nearby and I am hungry.

Apt — Yahoo certainly needs to show off a lot of cool stuff or its fate will be cooked.

No pressure, Blake!

“Personally, I am more bullish on Yahoo today,” he said. “What is Yahoo? Simple. It’s the premier digital media company. Period. Stop.”

Oh, if it were only that easy.

10:46 am: Irving pulls out his favorite slide, which looks like a chemistry test. It lists the various elements of the product strategy, with things like personalization, mobile, premium.

Now to Livestand, which is available on the Apple iTunes app store right now.

Don’t all rush at once!

Irving notes that Livestand is more than just an app — it is a platform.

In other words, Yahoo wants to help publishers publish online. Kind of a Facebook of content.

If Yahoo can pull it off, that is. (And, of course, unless Facebook decides to do the same.)

10:50 am: Livestand is an HTML5 “personalized living magazine.”

“This is the way Web pages are going to look,” declares Irving. Which is to say, heavy on photos, swoopy navigation, a television screen-like interface.

Irving uses the example of Surfer magazine, which is a good idea since waves always look pretty. Especially in a video-in-frame with Kelly Slater in Hawaii.

But, in essence, for anyone who has used Flipboard for years now, none of this is entirely different.

10:54 am: The look of what would be the Yahoo News page is actually much more interesting, since it is clearly a whole lot better than the Web page.

Irving also shows off a “living ad” — in this case, an unusually snuggly couple on a couch. It is cool, but creepy.

When launched, the ad has tap points. Irving — naughtily declaring about what is an ad, “I’ll tap that” — taps the lady’s butt, which would also have been my move. We learn about the jeans, of course.

10:58 am: Irving then shows off the ability to add feeds.

Next, something called “Cocktails.” First up, a developer tool called Yahoo Mojito and Yahoo Manhattan, which is a hosting service. The company will open-source both the technologies in 2012.

Irving brings up Mike Kerns, VP of Personalization & Social, who came to Yahoo when it bought the innovative sports fan site called Citizen Sports.

“We like to ship sh#t,” he notes. I like Mike Kerns immediately.

Kerns intros C.O.R.E. No, it is not a secret government organization that takes out fussy bloggers, who might be more critical than Yahoo execs would like.

In fact, it stands for “content optimization relevance engine.” Of course it does.

Simply put, C.O.R.E. is trying to link the right content or whatever to the right consumers and who likes what. Ladies like this, dudes like this. Apparently, “men of multiple ages” enjoy stories about golden chicken.

11:11 am: Kerns is moving on to social, especially its integration with Facebook. While much touted, sources tell me it has gone slower than expected in terms of use, but that it is improving.

Kerns talks about the idea of matching content to conversations to interests and, well, you know — the now exhausting world of modern media consumption.

The world in which you can no longer simply read an article and enjoy it — you must comment, share, discuss, parse, tweet.

Does anyone remember when you read something cool and just kept it to yourself?

Forget it, pal! It is a full-information society now and you better get on board and start poking your friends about every little thing.

(Personally, I plan on becoming a hermit in 3 … 2 … 1.)

11:18 am: Now Tim Parsey, who is Yahoo’s design head. He is hands down the most delightful exec the company has had in a while, mostly because he loves to smirk adorkably.

He shows off Yahoo’s first original design, which was a dull list. And then another really bad logo. But Parsey loves it! It’s kitschy!

Smirk attack!

Parsey moves into what has to happen now, which is to deliver a much more emotional experience and a much better designed one. He uses words like “humanism.”

Say what? He is right — Yahoo has for too long completely ignored design as an important part of the experience.

That’s why Flipboard was so quickly touted — it was pretty and fun. And it is why everyone is simply forced to love Apple products.

11:22 am: Parsey even has a code for it, called REM — for rational, emotional and meaningful.

He shows off a weather app. People take photos and they can be used in the app. Then Yahoo Mail for the iPad, whic is also handsome with photos and video. Livestand, also pretty.

“Great way to differentiate,” says Parsey. He calls it “one Yahoo!” Indeed.

11:35 am: I’ll admit it. After Parsey-fest, I zoned out for a sec when IntoNow dude, Adam Cahan, comes up.

Donut emergency!

Back to IntoNow, it’s the television indexing service that Yahoo bought in April.

Essentially, more ways to watch the media — in this case, video — and do 53 other things at the very same time. Memo to humanity: We will all be paying continuous partial attention for the rest of eternity.

Like I said: Hermitage!

11:41 am: Product dude Irving is back, making a point that, despite all the public mishegas, Yahoo has been busy at innovating.

A redo of email, better search, social “Facebar” with Facebook, Flickr for Google Android.

Irving is correct — Yahoo’s engineers have been hard at work and deserve kudos for doing so, even with attrition issues, stock declines and questions about the company’s very future being debated daily.

The problem is that too many of these improvements are mostly incremental and essentially table stakes for tech companies, most of whom have introed many more significant innovations in the same time frame as Yahoo has.

Google did Android, Google+ (as well as some notable failures). Microsoft did Kinect, Windows Phone, Windows 8. Amazon did Kindle Fire. Facebook did a range of major updates, as it has grown like a weed.

And there’s Apple. You might have heard of the iPhone and the iPad.

You get my point. Yahoo’s Product Runway today is well done, but what it really needs to be is just the beginning of a take-off.

11:48 am: Now Q&A time.

The first question is what took so long to get Livestand out, the second is why should people use Livestand since Flipboard and others have already been around for a dog’s age.

I ask about design — mostly because I want Parsey to use the word “delicious” a lot — and also about all the turmoil around the company and its impact on product creation. (I decide not to mention that Yahoo blew its acquisition of the bookmarking site, Delicious, and then sold it.)

Parsey delivers on the delicious scale, noting that Yahoo must have one design experience and yet has a lot of different interfaces. In other words, it cannot be Apple, but it can feel a lot more cohesive.

Irving talks a little bit around the obvious elephant in the room — the future of Yahoo — noting that the product staff was trying to focus and forget the storm going on outside.

“We have dreams about what this company can be,” says Irving.

You and me both, brother.

12:04 pm: More questions that are too detailed for my tastes, since they have delivered lunch and I can see it and I am ravenous.

As Parsey might say: It looks deliiiiiccccious.

Now, let’s hope Yahoo can do even more tasty stuff.

Memo to Flipboard, as well as Pulse, CNN’s Zite and AOL’s Editions: You might want to make some room in the already-crowded news and social reader space, because you’re about to get some bigfoot company.

Next Wednesday, according to sources close to the situation, Yahoo will finally officially unveil its offering, called Livestand.

And perhaps as early as next week or in the weeks soon after, Google will also weigh in with its version of the genre — code-named Propeller — which also might be the product’s name. Another moniker under strong consideration: Currents.

As I have previously reported, Google Propeller is an HTML5 reader for the Apple iPad and Android — essentially a souped-up version of similar apps such as Flipboard, AOL’s Editions, Zite (which was just bought by Time Warner’s CNN) and Pulse.

All these apps are part of the drastically changing habits of media consumers, helping users better navigate numerous social and media feeds — such as Facebook and Twitter, as well as news sites and more — using handsome interfaces and touch technologies on tablet devices.

Flipboard, the most prominent and elegant of these offerings, is now available only on the Apple iPad.

Flipboard’s traction among elite users, along with its high-level design ethos and strong reviews, is why Google tried to buy the well-funded company last year, sources said.

But Flipboard — which is backed by some of tech’s biggest venture players, who have invested more than $60 million at a $200 million valuation — declined the kind offer.

At the time, sources said, Google told Flipboard execs that if it did not buy the start-up, it planned to do a version of its own.

Hence, after I heard about the product earlier this year, I dubbed it the Flipinator.

According to sources, Propeller will launch with a plethora of media partners, as well as integration into the Google+ social network. The aim of the search giant is to offer media companies easy tools for publishing content on these devices, as well as a better path to monetization.

That is essentially the same plan at Yahoo, which has been working on Livestand with hopes of it being a product that will woo publishers into tight collaboration with the Silicon Valley Internet giant.

Livestand was announced by Yahoo’s now-fired CEO Carol Bartz in February, at a speech at the World Mobile Congress in Spain.

At the time, Bartz demoed a magazinelike platform that would allow publishers to put up content easily and give users the ability to personalize their selections based on search history and interests.

Bartz called it “content in context.” (You can see the demo video below.)

But while Bartz promised the product within three months, development has been slowed by its complex technologies, bugs and the need to sign on publishers.

Yahoo’s Chief Product Officer Blake Irving is pushing the product hard as a way for the company to reinvigorate its media products.

It’s not clear how many publishers Yahoo will have at launch, and neither are the distribution plans, beyond flacking it from the Web site and being present in app stores.

Google, on the other hand, has its Android platform to push out Propeller, although it all must work as well on Apple’s iPad, which is the dominant tablet on the market.

But just because both Yahoo and Google are big companies is by no means a guarantee of success — think Yahoo 360 or Google Wave or Buzz — and their lateness might be a hindrance.

And, in fact, other news reader apps are much further along. The leader, Flipboard, has already had four million downloads and 50 partnerships with leading publishers.

It also has started to introduce rich advertising products and, perhaps most importantly, has tight social integration with Twitter and Facebook.

There will be social elements on both Yahoo’s Livestand and Google’s Propeller. But news reading will be stressed more, making them more like Pulse, a tiny but highly innovative start-up.

Each of the existing apps will presumably compete by adding on more features. Pulse recently added cross-platform, cross-device syncing, while Flipboard is close to unveiling an iPhone version it has said it was working on.

Yahoo and Google PR declined comment.

Here is the Livestand demo video from February:

Akamai president David Kenny has stepped down after a year on the job — and in the midst of Yahoo’s CEO search, where his name has come up as a possible replacement for fired CEO Carol Bartz.

Kenny is also a Yahoo board member — joining early last year — and had quickly become one of the major forces in pushing for change at the company in the wake of the troubled Bartz regime.

In a statement distributed along with Akamai’s Q3 earnings, Kenny said he wants to “to return to my first passion of pursuing emerging opportunities on the consumer Internet.”

You can decide for yourself whether Yahoo represents an “emerging” opportunity or something else.

Sources said the departure from the networking company was mutual, although there has been an increasing amount of tension over Kenny’s involvement on the Yahoo board, which has been working on a massive strategic review.

Kenny, who was the initial leader of the effort, stepped down from that board task and also recused himself from any involvement in the simultaneous search for a new CEO.

Whether he will get the job is not a done deal by any means. He is among several candidates Yahoo has been contemplating pursuing, after only recently hiring Heidrick & Struggles for its executive search.

In fact, it’s not entirely clear Kenny wants to be CEO of Yahoo or if he would want to return to his roots at a consumer advertising agency. Another issue: He currently lives in Boston.

Before coming to Akamai, he was managing partner of VivaKi, the media and digital arm of marketing giant, Publicis Groupe. He came to the French concern after it bought relationship marketing services firm Digitas, which Kenny ran.

All that advertising experience is one of the reasons he is being looked at by Yahoo, which is contemplating doubling down in online advertising platforms and products if it does not sell.

Many assumed that Kenny’s move to the Web platform company meant that it would become more actively involved in Web media itself. But Akamai didn’t make any major moves or acquisitions during his tenure.

Meanwhile, back at Akamai, Kenny’s title will be assumed by CEO Paul Sagan, who had previously served as president as well.

It should probably come as no surprise to the board and top managers of Yahoo that the just-released annual poll of its workers — called the Yahoo Employee Satisfaction Survey — paints a picture of a deeply demoralized workplace.

Apparently, Yahoos can’t get no satisfaction.

The YESS questions went out to employees the week that the company fired CEO Carol Bartz, with most of the responses gathered in the ensuing weeks.

One major drop — not much of a shockeroo — was the employee assessment of senior leadership, under the question of whether “Yahoo is an effectively managed well-run organization.” That dropped 11 percent from last year.

Also troubling, according to numerous sources who have recounted the results to me, was that 19 percent of employees said they planned to leave the company within less than a year, in case a better opportunity arises.

(I like to call that the anywhere-but-here question.)

This is a large figure for any tech company for such a survey, which is commonly done throughout the industry. Typically, those numbers are around 10 percent, according to several human resources execs I queried, although Yahoo’s chart noted that the industry benchmark was 14 percent.

In any case, this YESS is Yahoo’s highest percentage of negatives for departure intent in several years.

Worse, it is higher in the product unit, where most of Yahoo’s engineers work and which is key to any technology company’s viability. Intent not to stay is 21 percent in the division.

On the plus side, numbers for manager effectiveness, teamwork and accountability did grow year over year in the product unit.

YESS documents sentiments I have been hearing widely and ever louder anecdotally from a plethora of mid-level managers at the Silicon Valley Internet giant.

Most are worried that they cannot hold onto critical employees as Yahoo is conducting a major strategic review of its businesses, either to sell it or make sweeping changes.

The uncertainty has put its employees on edge and there has been a spike in attrition throughout the company.

And worry. At a recent meeting with its staff, interim CEO Tim Morse was buffeted with questions about the fate of employee stock options and other similar issues.

Despite all the turmoil, Yahoo has surprisingly not yet put an overall new plan into place for retention, although it has given some employees more money and other benefits.

“Can a company collapse from attrition?” one exec joked to me recently.

Yes, it can, which has to be of prime concern to the board of Yahoo, as it seeks to right itself. I cannot stress enough how many talented and committed employees remain at the company, desperately hoping for some effective leadership to finally take hold.

Because for all the swirl of what will happen to the whole company, one truism of technology innovation in Silicon Valley remains, if you want to survive: It’s still all about the talent.

[UPDATE: Here are some more YESS stats, according to sources:

"Yahoo is innovative": 42 percent agree, 27 percent neutral, 31 percent disagree.

"Yahoo anticipates changing customer needs and wants": 33 percent agree, 37 percent disagree, five points worse than the previous year.

But here is the hopeful kicker: 79 percent feel proud to say they work for Yahoo.]

As happened last week to its centralized marketing division, Yahoo has broken up its Customer Advocacy organization, with its staff distributed to the various regions and the product unit of the Silicon Valley Internet giant.

Customer Advocacy has been led by EVP Jeff Russakow, whose fate is now similarly unclear as it is for CMO Elisa Steele, whose division was diced up to the regions last week.

Both execs — who were hired by fired CEO Carol Bartz — plan to remain at the company until at least January, sources said.

Russakow, according to his Yahoo bio, has had “global responsibility for all of Yahoo!’s customer support functions, including audience, small business, ad operations, and search network quality.” He came to Yahoo from previous jobs at Symantec and Adobe.

Interim CEO Tim Morse sent a memo to employees about the change, noting Russakow is looking for his next opportunity, using much the same language as Steele used in her internal email.

The moves are interesting, given Yahoo’s current effort to find a new strategy, which includes a possible sale of all or parts of the company. But there is also a strong sentiment within the company to reorganize around strengthening its advertising platform and products.

I have a call into Yahoo PR for comment (but let’s assume I am accurate about this, shall we?).

More, obviously, to come.

Yahoo is drastically rejiggering its marketing division, according to an internal memo sent today to employees from its Chief Marketing Officer Elisa Steele, in a move that seems to leave her future role unclear.

Steele was brought to Yahoo over two years ago by now-fired CEO Carol Bartz — whom she had been very close to — and charged with turbocharging and reorganizing the unit, which has never been strong.

While Steele certainly did overhaul the marketing department, some of her efforts, such as Yahoo’s pricey “It’s You” advertising campaign, have not worked out. And, largely due to the ongoing turmoil at the company, its brand has suffered under her watch.

The changes, which appear to be at the behest of Steele (though you never know at Yahoo!), will shift the major marketing functions back to the regions of the Silicon Valley Internet company from its current global centralized one.

“I believe we now need to bring marketing decisions, marketing talent and marketing budgets closer to the customer — and into the regions that depend on these critical plans,” she wrote. “We need to further link our marketing strategies to revenue growth, sales objectives and overall accountability.”

Since Steele took over the marketing department at Yahoo several years ago, she has been moving those powers to a more centralized system.

No longer.

In the internal memo, which I obtained and is embedded below, Steele outlines the shift, which will remove a lot of that control of marketing from the HQ and out to its business units.

Steele said in the email to the marketing team that she will remain at the company as CMO for now, although seems to indicate that she is also evaluating her future role.

“My current role as CMO on CEO staff is unchanged,” she wrote. “However, whatever I decide to do next for my career is my choice — and I’ll think about that on my own timeline.”

Sounds like an eventual departure to me, with Steele trying hard to stress she was going out on her own motor, even though giving up contro of big parts of your unit is unusual.

In any case, Steele obviously is betting now that on-the-ground control of marketing will help improve things for the beleaguered company. Here’s the memo:

Team,

It is critical for Yahoo! to grow faster and become more agile. We need to make decisions to accelerate the Regions’ growth plans around the world, and Marketing plays a crucial role in helping develop, support and execute these plans. We’ve built an integrated marketing machine that is an asset to help the company grow now and into the future. When we assembled a global and centralized organization in 2009, we took the opportunity to create best practices, establish consistency, deepen domain expertise, enhance functional capabilities and innovate for one of the biggest brands in the world. And, in the past 12 months, Global Marketing took home dozens of industry awards for marketing leadership in integrated consumer marketing, digital marketing and event marketing – including the acclaimed Cannes Lions, a Clio, a Webby and IAB Awards. Our Marketing achievements have been broad, deep and well recognized.

Now that we have this strong capability, it is time to leverage it even further. I believe we now need to bring marketing decisions, marketing talent and marketing budgets closer to the customer — and into the regions that depend on these critical plans. We need to further link our marketing strategies to revenue growth, sales objectives and overall accountability. Therefore, I want to put the marketing programs and tools we’ve developed right with the Sales and Audience teams responsible for the business outcomes.

It is with this in mind that I recommended a marketing reorganization plan to align to these objectives, accelerate decision-making and simplify roles. The plan centers on decentralizing the current global team into 2 types of specific teams:

1. Regional Marketing: Our regional marketing teams will move to report directly to the Regional leaders in Americas, EMEA and APAC.

2. Corporate Marketing: Our strategic brand, communications and marketing services teams will remain centralized and report into HQ.

This was my proposal to Tim for the best interests of Yahoo! today, and I am glad he agreed with my thinking. I really hope you will endorse and support these changes, too. Yahoo! needs your help and expertise to insure this important next phase is successful.

I want you to know how proud I am of your achievements and contributions. I also want to thank you for the incredible support you have shown me over the past 2.5 years in the current organization. It’s been an amazing brand adventure and working with each of you has been a great source of satisfaction.

My current role as CMO on CEO staff is unchanged. However, whatever I decide to do next for my career is my choice — and I’ll think about that on my own timeline. First, I will work with Tim, my peers and all of you to ensure a smooth transition — and that is my focus for now.

We have a meeting scheduled with the marketing leadership team on Monday and I can address any questions you may have about this transition.

Thanks,

Elisa

That question has been put to the company’s leadership innumerable times over the past few years, each time with wildly different answers:

At D6 in 2008, Yahoo co-founder and then-CEO Jerry Yang said the company is a consumer starting point on the Web. “We want you to start your day at Yahoo,” he said.

At D7 a year later, Yang’s successor, the recently ousted Carol Bartz, defined the company as something entirely different: “The place where people find relevant contextual information about things they care about.”

And in 2010, when the question was asked of Yahoo EVP Blake Irving, he replied with the most unwieldy, nonsensical answer of all.

“Yahoo is a global series of Web experiences delivered across a variety of devices that gives people what they want,” he said. “It connects advertisers to a global audience. Yahoo is all about delivering experiences to individuals that make them engage with each other. Folks always ask, ‘Is Yahoo a search company? A content company? A communications company?’ In a world where people only have so much time, we’d like to help them engage with the things that matter most to them.”

That’s a pretty lousy elevator pitch.

So when the “What is Yahoo” question was put to Yang once again, at AsiaD today, expectations for a decent answer weren’t particularly high. Good thing, too, because he didn’t exactly raise the bar with his reply.

What is Yahoo? “It’s the premier digital media company,” Yang said.

The premier digital media company? Really? I imagine Apple, Amazon and YouTube might have a thing or two to say about that — even if Yahoo’s video and entertainment offerings in India are as big as Yang claims.

So again, what is Yahoo?

Who knows? But maybe it’s time to stop asking.

10:16 am: Walt takes the stage to introduce Peter Kafka, who will be interviewing Ma for the absent Kara Swisher today.

Peter Kafka: It seems like every time you’re on stage with us, we have to talk about Yahoo. So we may as well get that out of the way right away. We heard from Jerry Yang. What’s the latest? We know that you’ve expressed interest in buying all or part or some of Yahoo over the summer; in the past you’ve been trying to sort of at least get Yahoo out of Alibaba. So where do things stand right now?

Jack Ma: I think we still have not changed our mind, and we keep our strong interest on the Yahoo. The things that we are waiting for the Yahoo board, and especially their independent directors, to tell us what exactly they want to do.

PK: What do you think they want to do?

JM: I don’t know. [laughter] I’m waiting.

PK: And what have you proposed to them?

PK:JM: Well, I think not us, I think a lot of people have already talked to Yahoo for years. And I think we are, we have to know exactly what their — I know they have a lot of options, but you have to take one option first, what they want to do.

PK: Yeah, Jerry Yang said they have a lot of options, a lot of things on the table.

JM: Okay, I did not know that.

PK: They’re going to make one decision.

JM: Yeah, they have to make one decision.

PK: So, in the past you said, “I’d like to extract myself from Yahoo,” and I think you surprised some people this summer at Stanford when you said, “I would like to buy all of Yahoo.” Is that still what you would like to do if you had that option?

JM: Yes.

PK: You’d like to buy the entire company … Alibaba –

JM: Yeah, even though, as I said, if the, their board say … Yahoo, I’m interested. If our piece. We are interested, but just let us know what they want to do. [laughter]

PK: I understand why you’d want to buy back Yahoo’s stake in your company.

JM: Yeah.

PK: Why would you want to own the entirety of Yahoo?

JM: Well, I think Yahoo is so important to us, and we are also very important to Yahoo. And Yahoo is also so important to the industry. And we, you know, we’ve been thinking about that for a long time, we talked to Yahoo for a long time, and of course we know there is something that we can add value to Yahoo.

PK: Why are they important to the industry? Why — and how could you add value?

JM: Well, Yahoo, without Yahoo probably I will not start my Internet business, ’cause Yahoo, when I started business, Yahoo was my idol. And I don’t want my idol to fall down, and it’s so important to us, ’cause we are partners for so many years. And you don’t want to see your partners in trouble. So, if you can do anything to help, just help. If they don’t want the help, then don’t help them.

PK: But you guys have said recently, several times, that really that Yahoo doesn’t add a lot of value to your operations here. So I don’t want to belabor this, but I would assume that the main value to Yahoo would be to sort of get them out of your hair. But if you had to run the U.S. part of the company, and Jerry was on earlier and said the idea is to become the premier digital media company, is that what you would do with the Yahoo U.S. operations, and operations outside of China?

JM: I never tried to say, “Well, we want, I want the team, I want the market to know what exactly the company should do.” The people should know where they want to do, and make this thing come out and happen. Otherwise, this thing will go nowhere.

PK: Well, you said the people, you mean the management?

JM: I mean the management, and the people — I mean, when I say people in the company it’s about my colleagues. We know this is what we believe, if it is our belief, make it happen.

PK: So, if you were in charge of all of Yahoo today or tomorrow, what would you do? It’s your management.

JM: I think Yahoo is a great company, with great assets. And also, I think there’s so many great CEOs in U.S. that can run this business well.

PK: So you would bring in new management?

JM: Yeah. I don’t, I don’t — I think it’s a big challenge for Chinese people to go to the U.S. and run an American company. But we could definitely help.

PK: And you have a shortlist of people you’d like to hire? You want to tell us who you’d put in charge? [laughter]

JM: That’s, that’s too early to discuss about that.

PK: Okay, I tried.

JM: Of course, we will be thinking about that now.

PK: And I think you can answer this pretty quickly, but in the past, it’s been quite obvious that if you were going to buy all of Yahoo, you’d need financing, you’d need partners. And then there was a weird story that came out earlier this week, and it was a translation issue perhaps, but it said, “Jack Ma says ‘I have $20 billion, I can buy all of Yahoo by myself.’”

JM: Yeah.

PK: Am I missing something?

JM: I absolutely don’t have $20 billion. [laughter] But I’d love to, right? I think money’s, finance is not, never a problem. Today the financial market is no good, but the money is there. We’ve been working with Yahoo for years, and trying to buy some back and work something out, so we never think that the financial is a problem. The problem is what they want to do.

PK: Jerry was here, did you talk to him earlier? Did you ask him this yourself [laughter]

JM: No, I did not meet him today, and I just arrive last night for this event and go back.

PK: I’ve got to say, one of the cool things about an event like this is backstage — you can’t see this, but there’s lots of people hovering back. And you just talked to Jack Dorsey, from Square and Twitter, I think that was the first time you guys had met.

JM:: Yeah.

PK: Do you think there’s a business relationship between your company and either Twitter or Square, going forward?

JM: I think there will be a lot of business going on with our company with the U.S. economy — I see when I look at so many American amazing Internet companies. I think there are so many things that we can work together. So many. If, especially when we go to the States, we have to find partners, instead of finding competitors. And when they come to China, they need partners. And we are one of the best partners people can find.

PK: A lot of U.S. companies have come here with mixed records: eBay, sort of a competitor of yours, came, basically left; Google left for different reasons. Why do you think some of the big Internet companies have struggled, the big U.S. Internet companies have struggled in China?

JM: I think any company go to any nation, you need to have this struggling. The very important thing you should have is patience. And instead of looking at your own strategy about the … you should focusing on the customers in the local market. Serve them well, just like any entrepreneur, any business going there. For example, when we start Alibaba, I never thought this thing, and I believed this thing would never succeed within first five years. Takes about at least eight, 10 years. When I start a … I say, “Let’s wait ten years later, not now.” So if you come to China, or any big Internet companies, think about five, 10 years later what’s going to happen, instead of next year, five months later what is going to happen.

PK: You started your first Internet company in 1995, when most people weren’t starting Internet companies in any part of the world, with the exception of a few in the U.S.

JM: Yeah.

PK: Were you looking out five, 10, 15 years ahead then? Or were you just marveling at the fact that you could use Prodigy to dial up to the Internet?

Jack: Well, yeah, I start — You know, people know about Alibaba knew about … Alibaba know about today what we are doing. But the people did not know our China pages and our, the … Web sites, all filled. They only see some good side and they don’t want to see the bad sides. And when they see the bad sides, they forget about the good sides. So, I think it’s a long, when we started, we thought it would, we probably would be successful in three years and fail. And then, we start Alibaba, we know, “Okay, it takes long time.” When we start Alibaba — Taobao, we say, it’s a long time. When started Ali-Paint we know it a long time. So whatever we do today, everything, and I think as the CEO, everything I did, the decision I made, I asked myself, asked a team, “What’s this thing going to happen in five years?” And 10 years? Not in five months. I don’t want to see five months.

PK: And with the pace of change in any part of the world, but especially with the Internet, especially with Asia, where all these things are growing so fast, is it realistic to say, “I’m going to try to predict what the world will look like in five years?”

JM: Absolutely. I think when everybody’s talking about a fast and quick, you should think about slow. When everybody think about slow, you know, we have a long time, let’s move fast. This, this is always the right way to do business. Well, I did that, and now we, and everybody, everybody’s criticize this, and so wait a minute, let’s think about it. Everybody think this is a great, okay, be careful because you may not have the chance.

PK: Counterintuitive thinking, it works for a lot of people. One of, one of the themes that I, Walt brought up with Jerry, and I think he’ll, we’ll bring up throughout the conference, is this notion that a lot of what we’re seeing in China from the technology community, or what we could charitably call imitations of things we’ve seen in the U.S. Most of the stuff here comes from the U.S., and in iterates, to put it politely. First of all, do you agree with that, with that description?

JM: Mmm. No, I don’t really. I think, you know, the na–, I respect intellectual properties, I respect the great ideas, innovation, but these things, if nobody use it, if nobody devel–, if nobody innovate on innovations, that’s a big problem. You know, the IM was AOL first — I think the ICQ first made it, but now … make it even better. Right? And Twitter did a great job, and Weibo in China, also did a great job. And China invented the … but the USA and Western country made it better. The campus, everything, you know. The war is about learning.

PK: So you’re not spending time thinking, “How can I create the most innovative possible company,” you wanted to, that’s not keeping up enough.

Jack: I never think about “How can I make this company most innovative?” only think about how can I make my customer much happier and comfortable and last long. I don’t care whether people call you, “Jack you’re, your innovative company, or internet techno–” We are service company. Our job is using Internet as a tool to serve the customers, instead of, “Oh, we are innovative company.”

PK: And let’s be clear about who your customers are, ’cause it — some people might be confused about it. It’s generally not a consumer, right? You’re generally a B2B play.

JM: Yeah, we started from B2B play, we just focus a small business. My customer, as I said, my belief is my customers always be small business entrepreneurs. ‘Cause I’ve been working as a start-up entrepreneur for 15 years. And I know how tough it is, how difficult it is. Somebody, if somebody got it, help them, it’s not, Jack Ma can’t help them, it’s the Alibaba people useI internet that can help the small business. So, my customer is small business, entrepreneurs, and …

PK: [interposing] Small-business entrepreneurs who want to sell something, you enable that.

JM:: Sell something on the Internet.

PK: Like these shoes.

JM: Oh, yeah, yeah, this the shoe I bought on Taobao, because, oh, some, some lady in the countryside, they are making shoes and selling online, and I think if I buy it for $20-$30 … and they can have a job and they have fun, and I feel very comfortable. I think I’m getting older, love this kind of shoes. It’s very comfortable.

PK: They look comfortable. I might get some for the flight back, I don’t want to have a Kara Swisher incident. [laughter] But you guys just raised prices for some of your merchants, and that inspired a big protest. And you didn’t really back down. You didn’t change your mind. When customers or people who say that they’re customers, tell you they’re unhappy with the way the company is run, and you don’t change your mind, you say, “I’m going to go ahead,” what should we take away from that?

Jack: Yeah, the the past 10, 10 days was the, one of the most painful days for me, in my life. And when I fly back from the States to China to solve the problem, I listened to music, there’s a sunset, the people hurt you most are the people you love most. And I love the … I never thought about that. Alibaba never think about raising, you know, for the, raising the price and collecting more money from the poor SMEs. The purpose for doing that is because we want against the fake products, intellectual properties.

PK: So let’s explain exactly what you did do.

JM: Okay. We have, for Taobao’s side, we have one billion proud listings. And we have over 70 million unique visitors every day, and we are probably the largest e-commerce site, if not in the world, we’re at least in Asia. But there are a lot of fake products, intellectual property issues, and so we got to solve this problem. If we don’t solve the problem, Taobao will never last long. Three years, five years, we’re in trouble, ’cause we have to respect these things. So we said, “If anybody sell these kind of things, if you sell one, we find out, we’ll pay fine for five times.” And take the businesses seriously. And anybody come to Timo, which is focus of big B2C, all this big business –

PK: It’s the equivalent of a mall, an online mall.

JM: It’s a mall. We have 50,000 business selling these things on our site. So we said, “Anybody, if you’re on Timo, no intellectual property issues, no fake products,” all those were serious punished. And this message turned out to be we raised 10 times more fee. Because, thanks to the Internet time, you know, people don’t believe for the, what you want to do, people believe the rumors.

PK: You blaming that on the Internet or just human nature? The answer is human nature. [laughter]

JM: I think human nature plus the Internet [laughter] growth very fast.

PK: We’ll do our best to get things accurate. At least this is being recorded, so people can always check, check back. But you still had a lot of people protesting, and you didn’t back down. You said, “Well, we’ll try to make this more palatable for you, we’ll create funds that will make this easier for some merchants.” But it didn’t cause you to rethink your strategy?

JM: No, I, I’ve side, I announced firmly and clearly that we will never step one back from the intellectual property problems. And, and these fake products, and these is trust problem. So, but, helping small business entrepreneurs, we will do it. And the way, how we communicate, we are reviewing ourselves. So, that is why we invest. The problem, this problem can never be solved by Alibaba alone. This problem can never be solved within three years. It’s a long one, this is why I’m getting, oh, terrible days. But you know, this is why they probably decide to need us.

PK: I think if you buy Yahoo, there’ll probably be more difficult days ahead.

JM: More problems, oh, yeah, oh, yes. [laughs] Oh, yeah.

PK: But you’re okay with that.

JM: But you know, you know, if life is so short, if you really do, can do something, that help others and meanwhile you enjoy it, you know, enjoy. The other side is a pain. It’s your own choice. If you pick it up, go ahead. My friend said, if you pick up the way go to paradise, go ahead. If you pick up the way go to the hell, go ahead. [laughter]

PK: What about a nice middle ground? [laughter]

JM: No, you have two options, you have to pick up one. [laughter]

PK: Back to the U.S. for a minute. You bought a couple companies in the U.S., some of the other big Chinese Internet companies, Ten Cent in particular, have bought several more. Is that something that interests you? Do you want to acquire more companies within the U.S., or are those sort of one-off purchases?

JM: Well, I think we are interested in partnering more, and we are interested in invest — I think U.S. in need more Chinese investment, foreign investment. And they should accept it, because it’s good for USA, it’s good for the others. And I don’t want to come, to go to U.S. or go to Europe and just to go there fighting. We want to go there partnering.

PK: And the reason it’s important for the U.S. to take in Chinese investment? Spell that out for us.

JM: They need jobs. They need innovation from the others. Yeah, they, I think it’s great, U.S. have so many great innovation, like Apple, this and that. They also need a tiny SME innovations, which we can bring.

PK: You don’t think eBay’s going to take care of that on their own?

JM: Well, I think that eBay should take it up themselves, you know, they have great ideas and they, they develop it. Does not mean that this market should be eBay alone. And they come to China, I mean, anybody can do.

PK: So, you sort of own this commerce market in China.

Jack: Well, no, we are contribution.

PK: You dominate it. [laughter]

Jack: Yeah. I help.

PK: It’s a good thing. And the other big Chinese Internet companies all do things that are separate from that, but it seems like you’re starting to rub up against each other, along the side. Baidu is the dominant search engine, you’ve created your own search product. And you said something to the effect of, one of the reasons we’re doing a search engine is we want to sort of make it difficult for the folks at Baidu to sleep at night. Do you think you’ll become more direct competitors over time?

JM: Yeah. Yeah, absolutely, because it’s good for markets, it’s good for industry. It is good for — we are, we’ve been separating Taobao three, three companies, in June, you know, because Taobao’s getting bigger, so I separate it in three. And the other, one of the reason is that I want, that make, running big company like a small company, make us small and the industry will be bigger. If we are big, industry was small. So, separate to three, and I said, well, 10 years later, any small piece of the three pots bigger than the others, let’s separate the three again. So, the competition, I don’t really focus on competition a lot. Competition is just, to me, is a dessert, it is a fun part of the business.

PK: But inevitably, like the bigger you get, and the bigger your people who aren’t competitors but might be, get, that stuff’s going to overlap. I mean, the analogy in the U.S. would be Apple and Google weren’t competing for a long time; now they are. Amazon is, in theory, a separate business from Apple and Google, but there’s a lot of overlap there, on and on and on. Do you think that’s inevitable in China?

JM: Absolutely. This is a market effect. You have to face it, you have to challenge it. And e-commerce is … Taobao is big, but compared to the tomorrow, the future, e-commerce, it is pretty small. It is pretty small. It is just a beginning. And I think it’s not — one thing I feel very different, because not only may, not only China, especially in the U.S., a lot of people that do their business, think first of competition. And I think the first is the customer, how big the customer base. And then think about, when you get tight, let’s find some competitors.

PK: So, don’t go find a market where there’s no competitors, find a market where there are a lot of customers and …

Jack: [interposing] Exactly. When you get bored, find the competitors. [laughter]

PK: [laughs]

Jack: Yeah, it’s true.

PK: You’re not bored yet.

Jack: Well, no. I’m kind of busy, I have to go back to business, you know?

PK: Let me just ask you a couple philosophical questions. Someone asked you a question, I’ve seen it on some previous interview, about donating money to charity and doing philanthropy. And your answer, in short, was, “I’m not that interested in that because what I think, I think the best use for my money is to build companies and to create jobs.” Do you ever think about reconsidering that, and thinking, “Well, maybe I could do something with these resources”?

JM: Well, I never said that I do not donate money to something. I think we probably contribute, I don’t know about the other Internet, Chinese Internet, we give 0.3 percent of our revenues to … to the environment protection.

PK: Right.

JM: Right? And we, I think, you know, I think together with my colleagues, we prob–, I probably spent a lot of money and efforts on doing this thing. Because it’s my private thing, I just don’t want to tell in the public it’s a private thing. I don’t want to say, “Well, I’ve donated money here.” Because for a business, I agree with … had a business, we have to bury our social responsibility into our business model. Instead of, well, “I’m making some money here by cheating the others,” and then donate money. I hate that. The business model itself should be, create value, and be good to the society.

PK: But, very often what a customer wants, you’re trying to serve the customer, may not be good for, say, the environment, right, the two can be–

Jack: And then don’t do it.

PK: –in natural conflict. So, who, what wins, if there’s a conflict between what a customer wants and what the effect might be on the environment?

JM: I think the choice is very clear. If it is hurt the environment, if it is no good for the society, just don’t do it. No matter how much money–

PK: Even if the customer says, “Give me more of that.”

JM: Well–

PK: “Take down that tree, dig up that hole.”

JM: Yeah, exactly, just … did last week, people say, “I want in on these kind of fake products,” intellectual properties. I say, “Well, kill me or put me in the prison, this is my decision.” I have principles.

PK: Is it realistic to have companies self-regulate themselves instead of the government doing it? I mean, we have this debate in the U.S. constantly, we go back and forth. Right now the pendulum is sort of tilting I think towards self-regulation.

JM: Yeah, where, whether there’s a government regulate or yourself, it’s your own belief. If you believe it is right, you don’t need other people to discipline you. And it’s better for the market, you know, company’s a market product. What I believe is that this is something you’re doing this good for the others, just do it. Right? Don’t wait for the government come. And if they can come, sometimes things get messed up.

PK: Another government question. In the earlier interview with Yahoo, Rose said, I think it was Jerry, perhaps, it was Jerry, said, “It’s an open question about whether or not censorship is going to ultimately stifle real entrepreneurial spirit and drive and creativity in China.” And it may be that enough government restriction will make it difficult for entrepreneurs to really succeed on the level we’ve seen in the U.S. and other countries. Do you agree with that?

JM: Well, it depends on which angle you see. I think censorship is, yeah, it’s issue, but it’s not that big issue. Let’s look at the good side of the Internet, let’s look at the good things you can do. This is always my optimistic view. If you focus on one side, for example, censors were so serious you got tied up about that, and we started developing the others. And I think Chinese government is sometime, you know, they are getting, they are getting more and more open. And then in some period, they’re getting close. Which I think it’s very natural for people like me, sometimes very happy, sometimes not happy. You know? Confidence … Tai Chi …

PK: [interposing] Do you think they inevitably, do you think they inevitably grow more open as commerce grows, as the country gets bigger? Or do you think they could still pull back?

JM: Yeah, this is, this is what I’m doing. I think the e-commerce, the commerce and trading, trading can help people understand each other, make full use of the Internet by creating value for the others. And then the more they do it, if you’re accountable, they release. So, but, I think it’s like in the company, when I look at my colleagues, my partners, my assistant. If you look at the bad side of this guy, you can never make things forward. Well, his best side is my, this is why I, they need me. Because Jack Ma’s shut … that’s why Jack Ma needs partners. So I think we try sometimes, you know, censorship, let’s see as a business what’s the opportunity we can do? And then, make them comfortable, things will get better. I hate to criticize people, I mean.

PK: But you will.

Jack: Yeah, sometimes get just annoyed, and I mean, then I criticize myself and then change, you know, this is life.

PK: So we started this interview 25 minutes ago, I asked you about Yahoo, this situation changes a lot — has anything changed in the last 25 minutes? Are you going to buy Yahoo [laughter]

Jack: No.

PK: Okay.

JM: No. I said we are waiting for answers. And there are so many people talking, and talking to us. And we will start to talk to them. Very, in the next few weeks. Because if we don’t do it, it’s no good for all of us.

PK: So if I ask you in a few weeks, I’ll get an answer.

Jack: I wish I could, it’s not on my side, it’s their side.

On to the audience Q&A …

Q Hi, I’m Justin Fung from HSBC. In your China 2.0 interview at Stanford, you mentioned that China’s going to go through many of the same challenges that the U.S. is going to go through in about three years. Can you go into a little bit more detail as to why you feel that’s going to happen in three years? What are the key issues that they’re driving at?

JM: Thank you. I’m not a financial columnist, but I just as a business guy, you have to smell what’s going on in the market. It’s instinct. And I think what’s happening to the U.S. today, and Europe, is going to happen in China, next three, five years. The problem, like of job problems, the problems like the economic structure problems, will all appear. So, the import/export problem, because the Asia — the USA economy and European economy, the China exporting, the problem is getting even worse, it’s getting worse. And the other thing is a domestic demand, we need take actions. And also in China called upgrade. Upgrading you have to pay the price. And I don’t see people are ready to pay the price yet. And these things are losing, and anything three years later, I think the past 30 years, for the first 10-some years, private sectors bump up the China economy. And next 10 years, in the international companies, multinational companies, half to China.

PK: Can you be clear about what you mean by upgrading? Who needs to upgrade? What are they upgrading?

JM: Well, China government it’s called upgrading, you know, and transforming called [Mandarin] upgrade whatever management or upgrade the industry. Upgrade, you have to pay the price. For example, I’m upgrading Taobao against these kind of intellectual properties. I got to pay price, I got 50,000 people demonstrate against me. But that’s the price you have to pay. If you don’t pay, come back to work, get bigger. So, this is the issue we are facing. We have to take the challenges. And I don’t see a lot of people ready to take challenge. They’re ready to talk, but don’t take challenge yet. So, if we don’t take challenge, three years later you will see what’s going on. So that’s my point: Let’s get ready for that, and jobs, as in small business, private sectors, they are going to be facing troubles. And we have to get ready for that. Thank you.

PK: In 2008, in retrospect, it’s easy to say you saw this coming, but you did see that there was going to be the credit collapse.

JM: Yeah.

PK: How are you feeling about the next six months to a year, nationally, internationally?

JM: Well, I don’t see there are any, for China. I’m pretty confidence in the next two years that, well, the problem will come in three, five years.

PK: And can you imagine what that precipitating event will be? What will trigger that problem?

JM: I don’t, I’m not fortune teller, just to say this thing is going to happen. And we got ready for it. If this thing, if we’re ready, that thing does not happen, everybody happy. For example, when we talk about the financial crisis, what’s the early beginning of year 2008, we find something wrong. So, I make the whole economy get ready for that.

PK: What was the signal to you that there was something wrong in 2008?

JM: Import/export is in problems. And people, for the forums, every forum I go, people talking about IPO, people talking about PE, people talking about profit margin, yet nobody talk about the value we created. People start greedy, people — everybody’s talking about how many, you know, times you can go, if you got to raise money and the IPO. So I know something wrong. People change. If everybody change that direction, this angle is in problem.

Q I’d like you, if you could talk about online currencies in China, their importance, and how you see the government attitude towards them as they grow.

JM: Okay. Honestly, I’m not, I may not be right, because few years ago when we talk about the online virtual money in the Alibaba internally, and I’m, I was strongly against it. Because I think if you are doing business in China, better believe IMB is the only currency. And if there anything that could probably get annoyed people or the government, just don’t do it, because there are so many ways you can do it. So, I was against it, and later that thing grows so fast. And I still think that Alibaba should not involve that. So that’s why Alipay the only currency for Alipay is IMB. Which, you know, we accept U.S. dollars, too. [laughter] But virtual money, I worry about that. I don’t — I just don’t want to have, like, 1,010 minutes of coins which I don’t know what I’m going to do. And the bigger that thing is, the government would take action. And they will. Any government will. I don’t know how, but I, I think they will. So, but based on the IMB, U.S. dollar, the pounds, I feel more comfortable on that. So, for example, why we did not do the online gaming? Because when, many years ago when everybody, any company, goes, “Let’s do the online gaming thing,” I know someday the government would take action where every kids are learning how to killing. [laughter] Something’s going to happen. Now it’s peaceful and quiet now, it’s much better. This is, this is, say, this is what I — when either you can make the too big or this become two bigger problems. Somebody got to involve it. So, I don’t know, I cannot answer the question, I just Alibaba does not have the intention of doing that, ’cause I worry about.

Q: Hi there, Richard Lai from Engadget here. Your company recently released Aliyun OS, which is a new mobile operating system. And last month you announced plans to release an English version, and even a tablet version in the near future. Can you talk about what benefits that will bring to the Western market, and even to Alibaba itself?

JM: I think, you know, a lot of companies are talking about cloud computing. And we take it very seriously because we have so much data. Datas from small business, datas from the consumers, and datas from Alipay transactions. And I think three years ago, we met internal, the strategic meeting, I sat. We don’t know how to make from the datas, but I believe datas will be so important to our small business, our consumers, and manufacture base. So, let’s, let’s invest money, then. We’re not sell, because of cloud computing, we are selling softwares; we’re not selling hardwares, we are selling services to these. So, this is our principle. And the, the OS for the, for the mobile phone, I think the next big wave, which we have to face the challenge is mobile Internet. We should make Internet mobilized. And how we can, how we can do that, China have like, I was told 60, 600 million mobile phones. And most of them are feature phones. And one thing struck me why I want to do — when people talk to me, they say, “Jack, we’re going to OS, we’re going to launch an OS.” I was shocked, “What, OS?!”

So complicated, how can we do that. Right? ‘Cause why Alibaba can do it? And these crazy guys working for, for one year, you know, our OS came out. It’s not beautiful, like any babies when they were born, it’s ugly looking. [laughter] But the mom always say, “Beautiful,” right? But takes time to make it beautiful. I said, “Wow, the baby’s there, let’s make this beautiful baby, baby beautiful.” But the thing that make me work on whether we will have the opportunity to do it, or the other company have, the opportunity to do it, China needs an operating system to lower the cost of mobiles. And I read one news, which I was touched, moved and I came back to talk to the CEO of Ali … We pay any price to move this industry up.

PK: You don’t think Google, Apple, people who are in the OS business, already spent a lot of years making that ugly baby prettier? You don’t think they can do this for you?

JM: Let ‘em do, let them do it. They should do it, like on eBay when they have 90 percent market share, I want to do it. The purpose I do it is different from eBay. And I think the market is so big. You know, I tell you the news, why I, the news I made full determination to do it. I read an article in the newspaper, there is a girl, 11 years old, her parents went to the city, as a, you know, as a city worker, and brought her, brought them together. She was 11 years old, the only things stay with her was three cats, seven chicken, in a lonely big house. And she wants to make phone call to her parents, but it’s too expensive, and it’s also so far away from where she live, in a village. So, I say, “Let’s make this mobile thing cheap. Make these girls can call their parents, brothers, at the cheapest prices. Second, when I see my daughter playing the iPad, I think all the girls should have this opportunity. And as whether we’ll make money or not, I don’t care, ’cause Alibaba, you know, we have so much cash, we need to be invested for the future. Let’s do it. So, this is what I believe.

Q: Does this also mean you’re also looking into maybe offering data service, as well?

JM:: Yeah.

Q: So, does that mean you’re looking into maybe entering that market as well?

JM: Yeah, at least if we’re not entering the market, we want promote, we want to encourage more people entering that market, making sure that the total cost of mobile going down, making sure China with the, with the managing factory capability, with innovation, with so many people today telling me, said, “Jack, you know, to make a Internet entrepreneur, this job is so difficult, because you guys are there.”

PK: So if you’re not going to get into wireless yourself, how do you encourage other people to do it and to bring the price down?

JM: Yeah, we are building up the infrastructure as always. We are not making trade our self, we build up a platform, making all the Taobao and Alibaba sellers to do it. We try to promote the industry, to make industry, because see, last six months was amazing, amazingly funny. When we announced we go to the mobile things, suddenly everybody said, “We are being in mobile system.” This is what I want. Let’s get people move with that. Because the mobile Internet is such a huge potential market for next China’s innovation.

Q: Coming back to Yahoo, there’s so much speculation about this future of Yahoo, but something most people are agreed on is that whatever happens to Yahoo, Alibaba is going to be thickly involved in any deals surrounding Yahoo. Do you agree with that analysis?

Q: Can be any deal for Yahoo without you being involved?

JM: Oh. I did not know we’re so important. [laughter] We wish we could, that’d be, that’d be that inference. But definitely, we are the main driving force. And we want to be the main driving force, and we want to do this thing as a partner-like thing.

Q: Okay, one follow-up question is you mentioned your interest in buying the whole of Yahoo. But do you see other outcomes for Yahoo? Do you think perhaps some people have speculated perhaps you’ll be interested in buying back your own stake held by Yahoo? Is that a possible outcome? Do you think that is more likely? Less likely than the sale of the whole of Yahoo?

JM:My answer, first, we are ready. Second, we also have options. And third, we are eagerly waiting for answers. [laughter] And they have to make decision. Today, as this environment, all the beautiful flowers withdraw very quickly. [laughter] And we got to, time is so precious for all of us. It’s not a good, it’s no good for Yahoo. It’s no good for everybody.

PK: So if you can sum up, Jerry Yang, Yahoo, independent directors, please make up your mind. Signed, Jack Ma.

JM: Yes! [laughter]

Doggedly committed to the company he co-founded, Yang joins us today as a Yahoo director — ironically, one facing many of the same obstacles that confronted him back in 2008. One bright light amid the darkness: Yahoo’s massive and successful business interests Asia, currently overseen by Senior VP Rose Tsou, who joins Yang on the D stage today.

7:57 am: Good morning from Hong Kong. Yahoo’s Jerry Yang and Rose Tsou will be on stage shortly.

In the meantime, I can report that we’re playing Stray Cats in the ballroom here at the Grand Hyatt.

And now, some Devo. Perhaps at some point we’ll move to non-80s music. And if so, I’ll advise.

The Devo’s pretty good, though. If you want to play at home, enjoy.

8:03 am: And here’s Walt Mossberg. (Who walks onstage to Van Halen)

Walt delivers an update on Kara. She’s doing just fine, as you can tell if you follow her Twitter account.

Walt starts out with a D tribute to Steve Jobs. “I personally believe he’s a historical figure. Somebody who will be remembered alongside Ford and Edison.”

Walt talks about Jobs agreeing to come to the first D conference, and four more following. The last year, “he looked extremely frail — I think a lot of people were concerned.” And then he spoke with great vigor for an hour and a half.

“He’s been a terrific supporter of AllThingsD. That doesn’t mean he wouldn’t complain. That doesn’t mean he wouldn’t try to get us not to talk about things, and we would say no, and he would knock it out of the park anyway.”

8:08 am: And now, Jerry Yang and Rose Tsou.

Some discussion of Kara’s health and great affection for writing about Yahoo. Walt notes that Kara filed a couple Yahoo stories while en route to the hospital Wednesday.

8:10 am: Walt: Tell us about the status of the CEO search.

Jerry: There’s a search and a search committee. “I think the board is pretty excited about the prospects, about the way we can invigorate the company, and the search process is one of them.”

Looking at all the options, both for Yahoo, and a prospective CEO.

8:12 am: Walt: How do you look for a CEO while you’re putting yourself up for sale?

Jerry: “The board works for the shareholders, and anything that benefits the shareholders, the board has to listen to.”

8:13 am: So what are some of the real options: A sale, and what else?

Jerry: Yahoo has a great core business “and I feel like we’re making great progress.” Great brand, 700 million users, etc. “It is the thing that everybody is looking at, and saying, “how do we invigorate growth around that?”

And we have investments with Softbank in Yahoo Japan, and here in China with Alibaba. Very valuable.

8:14 am: Walt: That’s the most important asset, according to Wall Street.

Jerry: Yes, there are plenty of options.

Walt: But you need to decide what you are. Last time you were here in 2008, I asked you and Sue Decker “what is Yahoo”? And to be honest, you guys had a lot of answers, but not a crisp answer, like Steve Ballmer or Steve Jobs or Larry Page would have.

So let’s try another version. “Why should 700 million keep going to Yahoo?”

8:16 am: Jerry: Everyone who works at Yahoo gets what we want to do — “we want to be the premier digital media company.”

8:16 am: Walt: Are you that now? Because I think people might say YouTube, or Apple, or Amazon…

Jerry: Yes.

Walt: Really?

Jerry: Sure.

Walt: Give me examples.

Jerry: You can watch videos, for instance, we’ve also got news, finance, sports, entertainment. “We’re probably category leaders across the spectrum, in different regions.” Yahoo Mail is big.

Walt: But hasn’t Yahoo Mail gone down?

Jerry: Yes, people think Yahoo Mail is declining, but the number of messages is up, engagement is up. Web-based mail is being replaced by mobile and other devices. But the fundamental back-end proposition that we offer is stronger than ever.

8:18 am: Rose: People come for Yahoo news, or finance, and they discover other stuff, like videos. A couple of weeks ago, we launched a premium video consumption site in the U.S. In India, where there’s low-bandwidth access, video and entertainment are very big for us.

Providers want to be on our platform, because of our reach, all over the world.

8:20 am: Walt: Jerry, do you have all the Hollywood and big media deals you need to make this happen?

Jerry: If you look at the media part, we’ve evolved from being a pure aggregation play to “having a voice.” We’re creating “color” around other people’s stuff, and we’re making our own. Like last week, when we were the exclusive streamer for the Bill Clinton concert.

Yahoo Sports “is a very well-known service in the United States that routinely breaks news now.”

8:21 am: Walt: Do you need to move more into video, etc.? Sports is big for you but you can’t watch sports on Yahoo.

Jerry: At the end of the day, if you look at what Yahoo’s been for past 15, 16 years, the part we have to sharpen is distributing content for our partners. Outside the U.S., we’ll definitely be distributing TV. In the U.S., less of that, but note our (most recent) partnership with ABC News.

In Silicon Valley there’s one view. But the reality is Yahoo is doing lots of those things.

8:23 am: Walt: Back to the review. What’s the best outcome. Would it be best if Jack Ma bought the whole thing?

Jerry: You’d have to ask him.

Walt: I’m asking you.

Jerry: As the founder, “the true ambition for me is to see Yahoo achieve the potential it’s in the position to achieve.”

I think that’s what the board and management are trying to do.

Walt: So can an entrepreneur like Jack make that happen?

Jerry: We’re looking at everything.

Walt: Do you want to be in the hands of a PE company?

Jerry: I don’t know, Walt. I think all of the options will work themselves out.

8:25 am: Walt: OK. The Microsoft deal, where at one point they were going to buy you, and then it became a search deal. It seems like it hasn’t caught fire and done as much for you as you’d hoped.

Jerry: “I think Microsoft is a very very important partner for us.” We’ve extended our revenue guarantee. But we both realize this has to work for both sides. “It takes trial and error. It takes work. I will probably venture that the Microsoft folks would say the partnership hasn’t gone the way they wanted.”

Walt: Meanwhile other people keep nudging into search. Even Apple’s Siri can represent search.

Jerry: Our focus is simple. We can control the way our users conduct a search. We’ve gotten very good at that. Microsoft is responsible for the back end, and for monetization. And the core focus is monetization. So there will be innovation about the way you find search, and define search, but really the core focus is on monetization, and we can’t help Microsoft much with that.

8:29 am: Walt: Rose, let’s talk about Asia. How important is Asia to Yahoo and consumers as a whole?

Rose: Very important! And growing! Between southeast Asia and India, in the next three years, there will be 100 million users coming online.

Walt: Primarily through mobile, right?

Rose: Yep. And not the smartphone we’re used to, but the $50 feature phone.

Walt: But as you know, smartphones will get even cheaper.

Rose: Yes, and a $100 feature phone now functions much like a smartphone.

Walt: So are you building features for that market segment?

Rose: Absolutely. For starters, we have to make sure media and communication products render well on those phones. And then we have to work on discoverability. People have to find your services. So we do a lot of partnership deals with chipset deals, and handset manufacturers, for instance.

Walt: How does a chipset deal help media discovery?

Rose: Great question. For example, we did a deal with a chip company so the media discoverability is sort of baked into the middleware. So when they pass on the chips to handset makers, it’s that much easier. In the feature phone market, lots of local makers are very happy to have brands like Yahoo baked onto the chipset market. We’ve gotten great feedback from manufacturers in India, Indonesia, China.

8:34 am: Walt: Jerry, there was a good story in the Asian WSJ the other day, tied to Steve Jobs’s death. It wanted to know about the Steve Jobs of China, and whether China was able to harness the energy and wonderful companies and services you have here, “but a lot of it is considered derivative” — they iterate on ideas that originate in the U.S. or elsewhere. Jerry, “what’s the deal there?” Do you think that’s right? When will China “startle the U.S.” by thinking up its own stuff?

Jerry: Two sides to that. I’m an optimist about China and Asia. “It’s just a matter of time… before true innovation comes. Now, it’s just not fair comparing it to Steve. He’s rare even for the U.S.”

Walt: I know. But he did lots of great world-changing things, and it’d be nice if a Chinese entreprenuer did one.

8:37 am: Jerry: “This is a statistics and probability question.” The number of people with technical training, and a Western education and understanding of how platforms work, and experience. Even compared to 10 years ago, management has so much more experience.

Still, there are challenges. “This is not a foregone conclusion.” There’s a question about how does media censorship affect creativity and entrepreneurial spirit. We don’t know yet.

8:39 am: Walt: I’m sure you remember that 20 years ago, it seemed like Japan was going to surpass the U.S., and there was a lot of government organization around that. But it didn’t happen.

Jerry: Please understand. “I’m not saying that China is going to overtake the U.S.” — there’s still a tremendous amount of advantage that Silicon Valley, or New York, or whatever, has with entrepreneurial culture, etc.

8:40 am: Rose: It’s harder to do breakthrough stuff here because the market is really big, and the competition is really fierce. “So I think there is less risk-taking, in going about doing something that’s never been proven elsewhere.” It’s more natural to see what works somewhere else, and replicate that.

Walt: Like those fake Apple stores they have in China.

Rose: Yep. On the other hand, the speed of iteration they have here is amazing. So they take a concept from the West, but they move so fast, that soon it’s a different thing.

8:42 am: Q&A:

Q: As you look at what Yahoo could be, what are the one or two key areas that it could go after to truly transform itself?

Jerry: We’re really focused on trying to “turn Yahoo inside out.” We do a huge amount of services internally: Data, content, personalization. Lots of other people on the Web around the world could use that.

Also, there are going to be multiple platforms: iOS, Android, maybe Microsoft. And we have to be able to play on all of them. And that’s an opportunity for people like us, who can distribute a large amount of content and services.

But this “inside out” idea is a big one.

8:45 am: Q: (via Eric Jackson): Your media answer reminds me of your vision 10 years ago, with Terry Semel, and Lloyd Braun, etc., that you backed down from. What did you learn then and how is that affecting what you’re doing now?

Jerry: The realization is “that we have to continue to disrupt ourselves in terms of how we distribute.” So just publishing on Web pages and HTML, and don’t pay attention to apps, and mobile, and social media, and we’re not being disruptive, then that won’t work. People think that media means you have to stream or pipe data. But it can be more than that. Ten years ago, we didn’t really focus on that disruptive element — “we just tried to put TV on the Internet.” And some of that worked, but some of that didn’t.

And we’re done — though as Jerry walks off stage, he tells Walt “I passed.”

Now, off to a demo from digital camera-maker Lytro.

Still, shares were up 3.3 percent, or 51 cents, on news that it had topped expectations.

In Q3, the Internet search giant said profits had slipped and revenues dropped — the fall just wasn’t as steep as analysts had anticipated.

As this was the first quarter since Carol Bartz’s firing, analysts will have plenty to ask about, from the company’s search for a full-time CEO to its potential sale. Today will be a busy call.

Since our in-house Yahoo aficionado Kara Swisher is in Hong Kong, where Yahoo’s Jerry Yang will be appearing at our own AsiaD conference on Thursday, I’ll be helping her out today by covering the call.

While there’s no replacing Kara, here’s my best interpretation of her liveblog style:

2:01 pm: Here we go, time to get started after all of the standard regulatory warnings.

We are pleased that the results exceeded expectations, says interim CEO Tim Morse.

The board is looking for all options to return to robust growth, and to create value for employees, users and shareholders. Also, when the board has something to say, it will do so. It will not be today and not on this call. This call will focus on third-quarter results and fourth-quarter guidance.

Darn, if only Kara were here, she’d have something snarky to say about that.

Perhaps this call will be shorter than we thought.

Typically, Morse, who was CFO, is doing double duty by also going through all the numbers.

2:15 pm: Sorry, a few technical difficulties. After a very thorough review of the business, it’s been turned over to Q&A.

Morse already warned analysts that he wasn’t going to address any hot topics, so don’t expect any fireworks.

Morse says attrition is lower as we went through the quarter, and headcount stabilized. According to the company, it ended the third quarter with 13,700 employees — or 400 fewer employees — than a year ago.

Not to mention Kara’s exclusive scoop earlier this week that Raymie Stata stepped down as CTO.

2:20 pm: Zipping through all these questions on Microsoft partnership and the state of the display industry and how Yahoo is reorganizing its sales force.

Kara would definitely consider this the norm. Analysts haven’t asked about anything related to questions surrounding the board, the CEO search or a sale — at least not yet.

Once again, having some audio difficulties.

2:27 pm: Morse is feeling a little bullish about how some of the things they’ve been talking about over the past two years are coming to fruition. In particular, he’s speaking a lot about an “anchors and tent pole” approach, which is working.

In response to a question about some of Yahoo’s growth opportunities, Morse actually uses the b-word.

“We really are quite bullish on where we can take some of the investment areas. As we go forward, the goal is to balance growth opportunities and cost efficiencies. The cost structure is right on track, so it’s largely focused on revenue growth.”

Finally, a good question: So, why did the board fire Carol if you were on track to exceed consensus?

Morse: “We are pleased to exceed consensus. All I can say is, the board’s process is the board’s process.”

Here’s another relevant question from an analyst: How’s the CEO search going?

No comment, essentially. “On the CEO search, all I can tell you is that it’s under way and that’s the board process.”

2:37 pm: Next question, please!

Another question that is getting to the heart of the matter: When will the board communicate its decisions about the future of the company? I think a lot of folks would be interested in knowing if and when some of these things will be resolved.

Morse draws from his opening comments: “This will take some time. The board wants to do what’s best for the company, and it will take some time. … That’s my only comment on it.”

2:43 pm: Isn’t anyone following instructions? Only one question each, and that last guy just asked five boring ones.

Next question, please!

Morse says congratulations to the product team, which has been busy launching things over the last quarter, like a news product on Facebook.

“We have some really talented people, and are refreshing the way we go about launching products and the innovation we use. They will be a big part of our success going forward.”

Last question, and it was really just clarifying something, so Morse signs off by saying he appreciates everyone joining the call.

Tomorrow, after the markets close, Yahoo will announce its third-quarter earnings, perhaps one of its more important reports in recent years.

Wall Street analysts are expecting the Silicon Valley Internet giant to report earnings of 17 cents per share on $1.07 billion in revenues.

But whether or not Yahoo has beat expectations will be less scrutinized than information about the state of Yahoo’s key search and display advertising businesses, as well as other user metrics.

It is at those numbers that a range of players — including major shareholders, possible bidders and media — will be looking to see just how badly the company’s business has fared with all the turmoil of late.

That has included the firing of its CEO Carol Bartz, a massive strategic review that includes the possibility of a sale to a range of mostly private equity buyers, a persistent attrition problem and a worry that the company continues to drift in its product innovation, even as others have surged.

Last week, I reported that Yahoo had finally selected an executive search firm to help it find a new CEO, which many think is a difficult task given the uncertain situation.

A series of worrisome trends across its ad businesses over several recent quarters has some looking at the company for possible purchase with some skepticism.

“What if it is too broken to fix, what if trends to Google’s and Facebook’s premium offerings is too overwhelming?” said one potential bidder for Yahoo. “There are a lot of what-ifs at Yahoo.”

By comparison, Google posted impressive earnings last week.

Yahoo stock closed at $15.70 today, down 1.3 percent.

Today, in an internal meeting of its VP-level execs, Yahoo’s interim CEO Tim Morse said of the Silicon Valley Internet giant’s strategic review that “we know time is a constraint and we are mindful we have to go quickly.”

Morse, who is largely seen as a figurehead by Yahoo insiders and a proxy for the board after the recent firing of CEO Carol Bartz, held the confab this morning.

(Note to Tim: I don’t know why I am not just invited to these Yahoo gatherings, since it would make my life a lot easier.)

Back to the meeting action: Morse got a lot of questions from the execs, who were very concerned by the muddled swirl of rumors about the future of Yahoo, including a possible sale.

While saying he was open to all questions, Morse began with an explanation for the group that he could not answer “unwise” ones that he either did not have insight into or could not answer in a semi-public forum.

That included upcoming quarterly results, retention plans and, of course, sale offers.

Only wise questions, peeps! (And no wisenheimer stuff, either!)

Of course, no one paid attention to that request. They launched instead into multiple queries about the strategic plan the board is working on.

Morse told the group that there was interest in Yahoo and that its banking advisers were reaching out to those “we think we should be talking to.”

He added, noting that Yahoo had to focus on its ongoing business: “We know time is a constraint and we are mindful we have to go quickly” on the strategic review of what to do.

Previously, the board has said the process would take months, which is too glacial, considering.

There was also a question about the stock and the risks to their jobs in any deal. Cautioning that he could not say what would happen, Morse assured them that any party that buys the company would likely want to retain talent.

Someone else asked what a good buyer would look like. Morse replied that it would be someone who was good for employees, for shareholders and for customers.

But not good for the wretched media!

Morse took particular aim at us, noting that the press was writing stories “because they make money out of clicks.”

Actually, while we will take the clicks, AllThingsD is writing stories so Yahoos and everyone else can get a clearer picture of what is going on, as opposed to the incessant corporate confusion coming from Yahoo.

(By the way, just sayin’, but Yahoo also likes the clicks to its pages.)

One person asked if Yahoo was officially for sale. Morse said, “No, we are not trying to sell the company.” Then, he blamed the media again for misreading co-founder Jerry Yang’s recent memo about evaluating options as code for a sale.

Which it was — and you can take that click to the bankers.

A Yahoo spokeswoman, natch, declined to comment.