Let’s be clear on the much-awaited Asian deal that Yahoo and its Asian partners have been working on: While it is certainly still moving forward, once signed, it will not actually officially close until next year.

Yes, that’s right — 2013!

Still, what everyone and his investor is waiting for is the splashy announcement of the agreement, which involves the Silicon Valley Internet giant, China’s Alibaba Group and SoftBank, a large shareholder in Yahoo Japan.

Yahoo leadership has been hoping that could happen before Feb. 24, an important date after which activist shareholder Daniel Loeb could begin to mount a proxy fight against the current board.

And while the definitive agreement — involving the sale of Yahoo’s 33 percent stake in Alibaba and 35 percent stake in Yahoo Japan — has been moving back and forth among the dealmakers, one source said its completion might take a little longer than that, perhaps even into mid-March.

“It is one of the most complicated cross-border transactions in a long time,” said one person close to the situation. “It’s three different languages, three time zones and three companies that have not always seen eye to eye.”

It’s not that the companies don’t have the top talent on the effort. For Yahoo, it is CFO Tim Morse (who most recently also warmed the CEO seat, until Scott Thompson’s recent appointment); for Alibaba, it’s CEO Jack Ma and CFO Joe Tsai; and, for SoftBank, it is top man Masa Son and his top man Ron Fisher.

To make things even more complex, at the same time as the negotiating is going on, the trio also has to pay mind to how the Internal Revenue Service in the U.S. is going to view the whole deal.

As you can see here from a Wall Street Journal chart, it’s a pretty complicated “cash-rich split-off” to avoid taxes.

While the IRS cannot take an application for a “private letter ruling” until it has an actual agreement in hand, and will not issue one on a hypothetical transaction, the agreement still must be crafted so it is most likely to pass muster.

And only then can anyone move on to the many billions of dollars that Yahoo will instruct Alibaba and SoftBank to pay or contribute in kind for the asset part of the arrangement.

As the Journal noted, in more clarity than I ever could: “A key part of satisfying tax-code requirements is that the company shedding its shares get assets, not just cash, in exchange for them. Cash can’t account for more than two-thirds of the transferred value, tax rules say. This restriction was adopted in 2005 to limit misuse of the provision.”

While Yahoo’s execs have met about the various possibilities, it is more considering now than anything else.

And although a lot of names have been bandied about — Weather Channel, WebMD, as well as Glam Media and even Digg — the more likely direction Yahoo will go in will be different, according to many sources.

First, said sources, the key criteria for the purchase will be to diversify revenue streams, a theme Thompson sounded in his first earnings report recently. That could mean more online commerce, perhaps, rather than advertising or media assets.

Second, said sources, international properties might be more valuable to Yahoo than owning more U.S.-based ones, which opens up a range of interesting possibilities.

This could even include some already held by Alibaba, for example, such as garnering a big stake in its publicly-traded Alibaba.com. Technically, via Alibaba, Yahoo already owns some of the e-commerce giant, but not directly. Another possibility is to get back the Yahoo China business, also now owned by Alibaba.

Third, U.S. companies that Yahoo might look at could be unusual and even bold. Two names brought up in recent internal meetings, for example, were Netflix (before its stock revived) and Yelp (which is prepping for an IPO, and which Yahoo once tried to buy already).

And if things were not already needlessly complex in fixing its Asia problem, expect a change in the Yahoo board composition, too, as early as this week.

As I previously reported, at least four directors are expected to move on. More to the point, there will also be replacements announced at the same time.

To stave off Loeb and even give him a perceptible win, sources said the company is considering announcing the changes sooner than later, with the hope that fresh new members will placate other shareholders.

Lastly, with Thompson starting to take the reins after a month there, I would also expect he’ll weigh in on some significant restructuring (his word, not mine!) at Yahoo soon enough, too.

Complicated? Sure is! Perplexing even? And how! But until Asian and board resolutions, the real work of fixing Yahoo can’t really begin.

The company said last week in a blog post that it is now able to censor tweets by country, igniting something of a firestorm over how it will use that power.

“There’s been no change in our stance or attitude or policy with respect to content on Twitter,” Costolo said, speaking Monday evening at the D: Dive into Media Conference.

What is different, Costolo said, is that now it will only have to block tweets in the country issuing an order, rather than for all users around the world.

“When we receive one of those, we want to leave the content up for as many people as possible while adhering to the local law,” Costolo said.

He added that the policy isn’t really about China or Iran, countries where Twitter is already blocked entirely. Nor does he expect this new capability to allow the company entree into China.

“I don’t think the current environment in China is one in which we could operate,” Costolo said.

Costolo also rejected the idea that Twitter could just ignore certain countries’ laws and still do business there.

“It is simply not the case you can operate in these countries and choose which of the laws we want (to adhere to),” Costolo said.

Remarking on sales of the 4S in Greater China, during the company’s recent first-quarter earnings call, CEO Tim Cook said demand for the device there has been staggering. “We felt we were betting bold, as I think many of you would have thought if you would have known what we were doing,” Cook said of the 4S rollout plan for the country. “But as it turns out, we didn’t bet high enough.”

That’s a rare admission of misjudgment from a company that doesn’t often make them. It’s also a comment that speaks to the massive size of the Chinese market, which remains largely untapped by Apple, thanks to its lone-carrier deal in the country.

Right now, Apple only has a deal with China Unicom, which gives it access to about 10 percent of China’s 150 million “high-end” mobile subscribers, according to Morgan Stanley analyst Katy Huberty. If it were to a sign a similar deal with China Telecom, it would gain access to another 15 million. And if it at long last brought the iPhone to China Mobile, it would gain access to an additional 120 million.

That’s a massive addressable market, and one that Apple can ill afford to ignore. To do so would be to leave a lot of easy money on the table, according to Huberty. She figures that adding China Telecom as a carrier partner would create an additional two million to four million iPhone users in the near term. And adding China Mobile would create a much bigger multiple of that.

“We estimate China Unicom has 3 million iPhone users, implying a 20 percent penetration of its 15 million high-end subscriber base,” Huberty said. “The same penetration at China Mobile given its 120 million high-end subscribers would equate to 24 million iPhones, with 14 million switching from other feature phones or smartphones and 10 million existing iPhone users on the 2G network upgrading to the faster 4G network.”

Huberty expects the iPhone to arrive on China Telecom in the next few months. Its debut on China Mobile, however, will take a bit longer, and isn’t likely to occur until Apple introduces the iPhone 5, which is expected to be compatible with the carrier’s upcoming 4G network (TD-LTE).

So, 24 million to 26 million additional iPhone users, if Apple were to sign up both China Telecom and China Mobile. And that’s the base-case scenario. Huberty’s more bullish view of the situation lifts that number to 40 million, and predicts that a few years from now, Apple could sell 57 million iPhones per year in China alone. And that is truly a spectacular number.

After all, Apple sold 68.5 million iPhones worldwide in fiscal 2011.

When pressed for an assessment, Cook pointed to the company’s just-reported monster earnings.

“You can see our results,” Cook said during a conference call with analysts. “I think the team is doing a fantastic job. We feel really good about where we are.”

And it’s tough to argue otherwise. Apple’s profits for last quarter, at more than $13 billion, were more than what most tech giants report in revenue. Apple also posted twice as much revenue and profit as Microsoft did in its holiday quarter.

Apple’s quarterly iPhone sales, at more than 37 million smartphones, were numbers that its rivals would kill to have for a year, let alone a quarter. And recent data for the U.S. shows Apple alone nearly even with the entire Android world in market share.

Cook said he is focused on remaining the lead horse in the race, but said he doesn’t see Android as the only competitor.

“I wouldn’t say it is a two-horse race,” he said. “There’s a horse in Redmond that always suits up and always runs.”

On the tablet side, Cook said that Apple continues to dominate the market despite the flood of would-be rivals. And that market, Cook notes, is huge and growing, recently surpassing the market for desktop PCs. Eventually, Cook said, many people expect it to be larger than the PC market as a whole.

“In terms of competitiveness, the ecosystem for iPads is in class by itself,” Cook said, noting that there are 170,000 apps customized for Apple’s tablet as compared with what he said appears to be only a few hundred designed specifically for rival tablets.

Last year, Cook said, was supposed to be “the year of the tablet.”

“I think most people will agree it was the year of the iPad for the second year in a row.”

As for where Apple is headed, Cook stuck to the company’s standard secretiveness, though he did offer a few insights, at least geographically. China, he reiterated, remains the company’s big bet with regards to emerging markets, with Brazil a distant second in terms of focus and investment. India, he noted, saw its sales go threefold from a year earlier, but from a very small base.

While not mentioning any rumored plans for an Apple-badged television, Cook said the company sold 1.4 million Apple TV units in the December quarter, as compared to 2.8 million devices for the entire prior fiscal year.

“We still classify this as a hobby,” he said. “However, we continue to add things to it.”

Yahoo co-founders David Filo and Jerry Yang

Yes, he jumped, even though being pushed was surely looming on the horizon ahead.

But the decision of Yahoo co-founder, former CEO and director Jerry Yang to leave Yahoo was indeed sudden, with the board meeting just this morning about the issue.

It was so sudden, in fact, that Yahoo’s key execs — including its communications arm — had only a few minutes heads-up to what is arguably one of the more momentous events in the history of the Silicon Valley Internet giant.

In fact, newly installed CEO Scott Thompson was in Los Angeles in a previously planned visit to meet his new staffers, said multiple sources, forcing him to participate in the board meeting from there.

As it turns out, according to numerous sources, Yang had had enough, and had finally realized that perhaps the many players in the ongoing Yahoo drama inside and outside the company had also had enough of him.

As I wrote last week about the possibility of Yang stepping down from the board, such a move of a founder from its board is unusual, although it was possible in this case:

“While Internet company founders usually stick on boards, it’s not a given, especially with all the turmoil at Yahoo, some of which is related to Yang.”

In fact, as the pressure has mounted on Yahoo to right its ever-listing ship, a lot of the rancor was being piled atop Yang, whether deserved or — in some cases — undeserved.

That’s because, even after the rough time he had as CEO of Yahoo, Yang had remained unusually active in its affairs, joining internal meetings and being part of discussions about its strategic alternatives.

And while he might protest that he was doing what was asked of him by the board, his status as the company founder made it hard to minimize his clout.

“It’s hard to ignore Jerry Yang,” said one exec. “He has an impact on everything, even if he thinks he does not.”

The recent negotiations with Yahoo’s Asian partners is a case in point. While board member Brad Smith and others have been a key part of the talks to sell off parts of its stakes there — which are critical to Yahoo to complete — execs at both China’s Alibaba Group and Japan’s SoftBank both pointed to a too-strong influence of Yang in the deal as a possible stumbling block.

Yang served on both the boards of Alibaba and SoftBank’s Yahoo Japan, so his interest would have been obvious. But sources involved in the talks would often blame him for their rocky nature and difficulty.

“Jerry just does not want to sell,” one said to me last week.

Maybe he didn’t or maybe he did, but one thing was clear: Yang had become a lightning rod for a lot of the trouble Yahoo has gotten into over the years.

That was true with major investors, who have been more loudly saying of late to its board that his continued presence was a problem. The most vocal, of course, was Yahoo’s activist shareholder Daniel Loeb, who has called for Yang’s ouster, and has been contemplating a proxy fight to make it so.

Loeb was out in Silicon Valley last week, talking to possible alternate board members, many of whom have been longtime colleagues and even friends of Yang, and took the meeting anyway.

Worse, perhaps, was the prospect that Yang has also been losing his most ardent fan base: Yahoo employees.

With all the mishegas over recent years, they had also begun to question his role as a leader in the company, many voting with their feet by leaving in droves.

With a new CEO in place, and the possible chance that its Asian problems were moving in the right direction, it had to have sunk in for Yang that it had finally become time to make peace with the present by abandoning his future at Yahoo.

Thus, he wanted to leave on his own terms, even if — in the end — the man who is most definitely one of the Internet’s most important pioneers did not have much of a choice.

Credit: Feng Li/Getty Images

Apple has decided to postpone the retail availability of its new iPhone 4S at some stores in mainland China, after a rowdy crowd disrupted the device’s debut at its Sanlitun store in Beijing.

Would-be customers — many of whom had waited overnight in the freezing cold to be among the first to purchase the latest iPhone — became so unruly when the store failed to open its doors on time that Apple was forced to cancel first-day sales there. Further inflaming the situation: organized groups of scalpers paid to purchase iPhones for later resale at exorbitant prices.

So rather than risk a repeat of the incident, which ended in profanity, egg-throwing and a few scuffles, the company decided not to sell the 4S at any of its retail stores in Beijing and Shanghai. Instead, it will sell the device through its Web site and carrier partners.

“The demand for iPhone 4S has been incredible, and our stores in China have already sold out,” an Apple spokesman told AllThingsD. “Unfortunately, we were unable to open our store at Sanlitun due to the large crowd, and to ensure the safety of our customers and employees, iPhone will not available in our retail stores in Beijing and Shanghai for the time being. Customers can still order iPhone through the Apple Online Store, or buy at China Unicom and other authorized resellers.”

Apple declined to say when it planned to resume sales of the 4S at its Beijing and Shanghai stores.

(Image courtesy of Feng Li/Getty Images)

The U.S. software giant said in a statement that a protest erupted earlier this month over “staffing assignments and transfer policies, not working conditions” at the Wuhan facility, where Foxconn reportedly manufactures the Xbox game console. Redmond, Wash.-based Microsoft said workers at the plant manufacture hardware products but didn’t specify which ones.

Read the rest of this post on the original site »

The Chinese company is perhaps originally known for bringing World of Warcraft to China through a prior partnership with Activision. More recently, it invested in U.S.-based OpenFeint, which was acquired by Japan’s Gree last year. It continues to work with OpenFeint on a version of the social gaming platform for China.

But the deal with Sony Ericsson in China will be a first for The9, which will be the exclusive operator of its PlayNow app store. It will provide technical and operational support, including testing, releasing and promotion of all apps.

The partnership is not unheard of; Sony Ericsson has leaned on other providers in the U.S., such as GetJar, to manage its app store here.

The PlayNow store in China will include games, as well as other apps and content, such as ringtones. It will work on Xperia phones that operate Android and Java.

Feature phones continue to be the dominant phone factor in China, but increasingly smartphones are being adopted, said Chris Shen, general manager of The9’s Mobile Business Unit, in an interview.

He said that since games are the company’s strength, it will be looking to partner with other content providers to integrate other products into the PlayNow experience. So far, 50 games have already been added to the store.

Shen said it will receive a cut of the revenues from sales of games, advertising and microtransactions. The9 must also share the revenue with third-party developers.

The company, which trades on the Nasdaq, has struggled to regain revenues that were lost after its World of Warcraft contract was not renewed in 2009.

In the second quarter of 2011, it reported a loss of $1.9 million on revenues of $3.9 million. The company’s stock fell 2 cents today, to trade at $6.80 a share.

The China Radio Management office, which certifies cellphones for use in the country, has approved an iPhone that appears to be built for China Telecom’s CDMA2000 network.

For some time now, China Telecom has been rumored as one of Apple’s future iPhone partners, so this certification isn’t particularly surprising. Nor is it indicative of an imminent launch. There’s at least one more stop in the device’s regulatory journey. It must receive a license from China’s Telecommunications Equipment and Certification Center before it can be officially sold in the country.

But once that hurdle has been cleared and a deal with Apple officially signed, sales could begin rather quickly, increasing Apple’s addressable iPhone market by China Telecom’s 123 million mobile subscribers. Currently, China Unicom is Apple’s sole iPhone partner in China.

China Telecom did not respond to a request for comment.

CAVEAT: As MacRumors editor Eric Slivka wrote in to point out, while this CDMA-2000-compatible iPhone could cetainly be used on China Telecom’s network, it’s actually the same A1387 world-mode device that’s already headed to China Unicom.

As the father of eight kids — now all between the ages of 12 and 21 — he knows a thing or two about the importance of finding the perfect place. (Note: Kaufer delicately calls family trips “adventures,” while getaways with his wife are “vacations.”)

Since then, TripAdvisor has become the online go-to destination for reviews of hotels from Barbados to bed-and-breakfasts in New York City.

In 2004, Kaufer sold the company to IAC for $210 million, setting off a somewhat complicated operating journey. A year later, TripAdvisor spun out of IAC as part of Expedia. It remained a division within the online travel agency until last month, when it broke off into an independent publicly held company.

Today, the Newton, Mass.-based company has 1,100 employees, attracts more than 50 million unique visitors and has published more than 60 million reviews. It trades on the Nasdaq under the ticker symbol “TRIP,” while Expedia continues to trade under the symbol “EXPE.”

Kaufer talked to AllThingsD about being an independently traded company, and about the media company’s prospects for growth:

AllThingsD: What is it like to be out from under Expedia’s wing?

Stephen Kaufer: There was a joke when we were spun out as part of Expedia from IAC. People asked me, “What’s your vision for TripAdvisor?” I would always say, “I want to be bigger than Expedia,” and people’s response always was, “That’s what the little brother might say.”

A year or two ago, we passed Expedia in comScore metrics, and are still experiencing growth. It’s a free service that’s valuable. It’s worldwide. TripAdvisor is in 21 languages, and three-fourths of the traffic comes from outside of the U.S.

Now that you are out from under Expedia, do you have more flexibility on where you send leads that are generated from people reading reviews on TripAdvisor?

Under Expedia, we had no obligation to send traffic to them … That never happened, and we were allowed to run independently. But at the end of the day, they [competitors] knew their marketing spend was going into Expedia’s pocket. That’s the most exciting thing. We are now completely independent. Expedia now owns no stock, so when I talk to Orbitz or Priceline, these folks can now partner with TripAdvisor without any hint of helping to fuel the competitors.

Why the spinoff now?

It was announced back in April, but basically there was a view that there was a class of investors that liked a pure Internet category leader and a fast-growing media company like TripAdvisor, and there’s another class that appreciates Expedia, which is in the dominant online travel agency position.

We were blurring the two when they were together. It gives Wall Street the opportunity to invest in either, and each company will find its own set of investors.

Do you think Wall Street is correctly valuing TripAdvisor? (The stock failed to come roaring out of the gate.)

No. But I’m not complaining. I think Wall Street, over the next couple of quarters, will appreciate how both companies perform as independent companies. The numbers have been a little hidden because they were jumbled together. … They’ve never seen TripAdvisor operate independently. They ask, “What will you do differently? How will things be the same?” Watch us, and I think you’ll like what you see.

Will you grow mostly organically, or through M&A?

We have a good track record on acquisition and product innovation.

The last few acquisitions, you saw a focus on our strategic priorities: A mobile company, a social company, two vacation rental companies and a company in China. Our four key investment areas that we called out are vacation rentals, mobile, social and geographic expansion.

In many ways, TripAdvisor was one of the original social networks, where users shared information on their vacations. Now you see Facebook getting into the space with Facebook Connect and other initiatives, too.

Everyone feels like being able to get travel recommendations from their friends is a natural evolution for getting a better recommendation, period.

There’s a couple of different angles. Some social travel companies are focused on making planning a group trip easier. No site out there has scale and does that well, and we don’t do that now. Facebook is a great platform to do it on, and it may be interesting to us in the future.

Our focus is leveraging the friend graph on Facebook and our rich content to give someone the experience of seeing recommendations or ratings from friends.

We love the concept, and we are furiously building up our own product offering to make it more valuable. If it’s not too early to call someone a leader, we are clearly it, because we have the content and the friend graph. We aren’t a site that’s based on Facebook, which is an advantage, because you can do anyting you want to do on the Web or the tablet or mobile.

What about Google moving into travel?

They have a couple of different approaches. They have Google Places, which reviews everything; and they have Google Hotels, which is a hotel finder; and then Google Flights, to help you find the best fare.

With Google Places, they still can’t seem to generate enough high-quality reviews to be useful. They compete with Yelp and us, and I’ve yet to be concerned. I was concerned about Google Flights — a lot — before they launched, but you cannot book through an online travel agent like Expedia — only directly through the airlines for now.

It’s an incomplete product, so I still use TripAdvisor flights, or go to Expedia or Orbitz. They get better results, and maybe aren’t as fast, but more information is still better.

They say they want to include online travel agents, but the airlines won’t let them. … Don’t mistake my tone for being sympathetic to Google on this one.

What about vacation rentals? HomeAway went public last year.

After HomeAway, there’s not that much.

We agree it’s a great market, and it deserves to be online. It helps consumers and there’s a need to bring a trust element into the equation. Folks who have tried it have liked (renting homes), and a whole lot of people haven’t tried it, because a hotel is all they’ve ever tried.

If they are reading hotel reviews, but I see that you are trying to stay seven nights in Orlando, I might say, “Did you know that you might be able to save money and get a private swimming pool?” They never would have thought of that as an opportunity, but there’s lots of great opportunities in Orlando and tons of other cities.

HomeAway dominates the category, but there’s plenty of room for a second, third and fourth.

I’m surprised that already three-fourths of your traffic comes from outside the U.S.

Yes, and that portion is growing. We have offices all over the globe, and our biggest investment opportunity is in China. We purchased a metasearch site for air, hotel and train in China. We view international growth as a tailwind to the business.

So what’s your price target for the stock? It’s currently trading around $25 a share.

I’m looking at how I can grow the business over the long term, and that’s why we are making some of these investments. I might be ahead of it, or other folks ahead of me, but I’m a nuts-and-bolts operator. I like to build stuff, and getting TripAdvisor to the next level of functionality and awareness is my priority — not the stock price.

I love talking points as much as the next person, but there’s a striking similarity between recent statements by Yahoo’s co-founder and former CEO Jerry Yang and its new CEO Scott Thompson, who was just hired after a stint running eBay’s PayPal unit.

It seems from the pair that the exploitation of Yahoo’s troves of data might take center stage from the “premier digital media company” moniker that the Silicon Valley Internet giant has been using of late.

Premier consumer data mining and usage company just rolls off the tongue, doesn’t it? (And it’s also usually called Google!)

Here’s Yang from an interview with Walt Mossberg at our AsiaD conference in Hong Kong this past October (this is a liveblog with quotes and paraphrasing of quotes).

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.

And, from my liveblogging, here’s Thompson last week on his aspirations, which were much less focused on Yahoo’s longtime — and, ahem, bill-paying — advertising business (which the new leader keeps saying he knows nothing about) than on exploiting its consumer data businesses (which he certainly does know about from running the online payments giant).

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.

Data it is, then!

“Customer response to our products in China has been off the charts,” Apple CEO Tim Cook said in a statement. “With the launch in China next week, iPhone 4S will be available in over 90 countries making this our fastest iPhone rollout ever.”

In addition to China, Apple is also bringing the 4S to a host of other countries, from Anguilla to Uganda. In all, 22 countries will be added to the list of places carrying Apple’s latest smartphone.

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.

The New York Times published something of an exit interview with Palmisano over the weekend. It read a bit like a victory lap, and that’s not undeserved. The record books will show that IBM shares during the Palmisano era (2003-2011) rose by 125 percent; sales grew from $81 billion in 2002 to an expected $107 billion; and annual profits on a per-share basis went from $3.07 to a consensus forecast of $13.38.

But it got me to thinking about one of the highlights of the Palmisano era; one that generated a great deal of attention at the time: IBM’s decision to sell its personal computer division to Lenovo, the Chinese PC maker. It was a relatively small deal, worth less than $2 billion at the time, but it was a controversial move. Despite the fact that IBM wasn’t making much money on the business, IBM PCs, especially its ThinkPad line of notebooks, were generally considered to be pretty good.

Nearly seven years later, it’s worth noting that Lenovo is now the world’s second-largest PC vendor, behind Hewlett-Packard, having vaulted past Dell earlier this year, according to the market research firm IDC. It’s also worth noting that Lenovo is in fifth place in the U.S., behind HP, Dell, Apple and Toshiba, in that order.

IBM initially owned 15 percent of Lenovo and maintained a stake in that company until February of this year, when it sold its remaining 4.3 percent shares at a profit of more than a quarter-billion dollars.

Lenovo’s biggest shareholder is Legend Holdings, of which 36 percent is owned by the Chinese Academy of Sciences, a.k.a. CAS Holdings, a state-controlled entity. The state has pared back its stake, though: When the IBM-Lenovo deal was announced in 2005, Lenovo was 57 percent state-owned.

There was a lot of natural controversy, and even national security concerns in 2005, about selling so red-blooded an American product as the IBM PC to China. But there was also a solid business case to consider. The PC business was a drag on earnings because of downward price pressure exerted by Dell and all the others, and it wasn’t even leading the market, as was the case with Hewlett-Packard, which engaged in some very public contemplation about spinning off its own PC division.

But there was also a potential strategic benefit, which Michael Useem, a professor a the University of Pennsylvania’s Wharton School of Management, pointed out at the time: Making friends with China.

By selling an underperforming asset to a buyer willing to take it and run with it, IBM got solid access to the exploding Chinese market. In paraphrased remarks to the Times, Palmisano concedes the point:

Palmisano says he deflected overtures from Dell and private equity firms, preferring the sale to a company in China for strategic reasons: the Chinese government wants its corporations to expand globally, and by aiding that national goal, IBM enhanced its stature in the lucrative Chinese market, where the government still steers business.

So how has that worked out? It’s a little hard to tell from reading Big Blue’s Byzantine financial statements. In fiscal 2005, the year the deal closed, IBM reported $18.6 billion, or about 20 percent of revenue, came from the Asia-Pacific region, including China.

And though it declined to provide specific dollar amounts, it said that year that sales in China had dropped by 19 percent, but after after stripping out the PC division, would have grown by 8 percent.

For the first nine months of fiscal 2011, IBM reported that the Asia-Pacific region accounted for exactly the same dollar figure — $18.6 billion — amounting to 24 percent of its overall sales of $77.4 billion, and there’s still a quarter to go. That would put Asia on track to account for a little less than a quarter of IBM’s revenue.

In its earnings statement, IBM also makes a point of calling attention to what it calls “growth markets,” which are generally the BRIC countries — Brazil, Russia, India and China. These markets combined for 23 percent of sales in IBM’s most recent quarter.

This is about as close to understanding the size of IBM’s business in China as we’re going to get. On balance, it looks to have been a positive move, especially when you consider that if IBM had kept its PC division, it would have likely only gotten smaller and become more of a profit drag on a company that’s increasingly focused on high-margin businesses like services and consulting.

Nor can we judge by IBM’s headcount. Globally, as of the publication of its last annual report, IBM employed 426,751 people. But it has stopped providing a geographical breakdown. A report in the Times of India in 2010, mentioned by The Wall Street Journal, suggested that Big Blue’s headcount in India might be as high as 130,000; which, if true, would make it one of that country’s top 10 employers.

There is no question that IBM’s presence in China has grown. You can tell by the press releases. There was for example, a new IBM Research lab in Shanghai in 2008, and another in 2010. Just last month, IBM announced that it had closed a significant IT deal for a major health-care provider in Hong Kong, and another with a Chinese province to improve the safety of pork (which included a food-safety video I embedded below).

For better or worse, Palmisano will be remembered as the man who traded PCs for access to China. On balance, it seems to have been a good trade, but the jury is still out.

Tomorrow is the first business day of IBM’s Rometty era. Assuming she retires at age 60, a well-established IBM tradition, she’ll have about six years to make her mark. One wonders what she’ll be remembered for most.

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.

The break-in at the U.S. Chamber of Commerce is one of the boldest known infiltrations in what has become a regular confrontation between U.S. companies and Chinese hackers. The complex operation, which involved at least 300 Internet addresses, was discovered and quietly shut down in May 2010.

It isn’t clear how much of the compromised data was viewed by the hackers. Chamber officials say internal investigators found evidence that hackers had focused on four Chamber employees who worked on Asia policy, and that six weeks of their email had been stolen.

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’Twas the deal before Christmas and all through the Valley,
Not a creature was stirring, not even a PE.
Their low bids for Yahoo were hung by the board room with care
In hopes that Dan Loeb would not soon be there.

Yahoo used to be grand, it used to be great
And it certainly does not deserve this sad fate.
But if they don’t act real soon, it could fade out of sight
Leaving Google to rule, which just gives me a fright.

(And to the fantastic rank and file of Yahoo: Happy Christmas to all and to all a good night!)

[UPDATE: At the request of Fortune magazine’s Miguel Helft on Twitter, I did a Hanukkah version, using the famous dreidel ditty:

Yahoo, Yahoo, Yahoo, I made it on the Web.
And when it’s dried and played out,
It might turn out dead.

Here’s a recent speech I gave at the TEDx BayArea Global Women Entrepreneurs event, in which I somehow compared my recent stroke in Hong Kong with innovation at Apple, weird street graffiti, women in tech and, um, sparkly vampires.

You might not agree with my contention that life-changing health events engender the feeling that one has to work even harder, but that’s my little lesson from my recent brain scare.

Thus, it’s titled “More,” and here’s the video of the speech, as well as the deck I was referencing in the talk, so you can follow along:

Presentation 1