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Belly Now Aims Its Loyalty Platform at National Enterprise Businesses

Kara Swisher — Thu, 25 Apr 2013 14:00:43 +0000

Chicago-based Belly said it was rolling out its customer loyalty and marketing platform to larger national enterprise clients. The startup has been aimed at the consumer market and smaller businesses since its launch in 2011, focused on increasing customer engagement, driving repeat business and helping attract new customers. Belly said it has been working with 40 national chains representing more than 500 current locations, using a system that includes a tech platform, an in-store tablet, analytics and marketing, as well as helping clients do email campaigns, social media integration and other mobile marketing.

Facebook Nabs Brunswick's Buckley for Top Communications Job

Kara Swisher — Thu, 31 Jan 2013 18:00:35 +0000

Brunswick Group’s Michael Buckley, who has been working with Facebook on a range of corporate and other PR issues over the last several years, will be joining the social networking giant as VP of business communications.

Buckley is essentially taking the job held by well-known Washington, D.C., player Joe Lockhart, who left the company last fall.

In his new job, Facebook said that Buckley would be in charge of the company’s international, monetization, corporate, consumer and policy communications.

Buckley has been with the global strategy and communications consultancy Brunswick Group, one of Facebook’s outside agencies, for a decade, most recently as a U.S. managing partner, where he represented a number of clients at once. In tech, that has included Groupon’s Andrew Mason, as well as Mike Lynch of Autonomy, which is battling Hewlett-Packard right now.

At Facebook, he will report to Elliot Schrage, who is VP of communications and public policy, where Buckley will be one of three top execs in that organization. The others are VP of tech communications Caryn Marooney, and Marne Levine, VP of global policy.

Mayer's 10X Challenge: Yahoo's Homepage, Mail and Search Traffic Show Significant Year-Over-Year Declines

Kara Swisher — Wed, 09 Jan 2013 20:45:18 +0000

This week in Las Vegas, the new management team running Yahoo — including CEO Marissa Mayer — is at International CES to schmooze with big advertisers and convince them that Yahoo is the place to put large chunks of their marketing budgets.

One of the longtime selling points of the company is the sheer size of its audience, especially for the key money-making parts of the site — the homepage, Yahoo Mail and search.

But private stats from comScore show that those three areas have continued their longtime decline over the last year, in some cases dropping significantly. In November and December, for example, compared to the same two months a year ago, U.S. search was down 28 percent and 24 percent respectively, while mail was down 16 percent and 12 percent.

This matters a great deal, since the troika of homepage, mail and search have been the critical driver of the Yahoo value ecosystem for advertisers.

The impact of those drops is felt all over Yahoo, whose music, movie, games and travel site have also seen massive drop-offs in traffic year over year in those same months.

Stopping the decline is critical for Yahoo, since Mayer herself has underscored the need for size in her pushing for new businesses at Yahoo that are 100 million users in size and/or have revenue prospects of at least $100 million.

While this is a lofty vision, the reality of traffic falloffs on key properties is a vexing issue, especially since they remain its main source of revenue and also an important element in launching future products Mayer is promising will turbocharge the company.

It’s not that Yahoo is not huge, especially compared to most sites on the Web.

As one of the top Internet brands, according to a recent Nielsen report, the average number of total monthly unique visitors for the longtime Silicon Valley Internet company in 2012 was 141.6 million, No. 3 behind Google and Facebook in the U.S. market. Similar rankings were reported by comScore, which placed Yahoo at the No. 2 spot after Google, with 171.4 million monthly visitors in November.

But, for many years, traffic to those important consumer destinations of Yahoo has been on a clear and unstopping decline, statistics (usually from comScore) that the company nonetheless always dutifully puts in its earnings slides — see below — for investors to get some idea of the major and vexing issues facing the company.

That was suddenly ended in the last quarter with the engagement slide removed from Yahoo’s public deck entirely. Not all companies include such stats, so when I inquired as to why the company had made the change, Yahoo PR never returned my phone call.

But it’s not hard to guess the reason for the shift — the numbers were not good and they called more attention to Yahoo’s glaring challenge, which is getting users reengaged with its products by creating what Mayer has dubbed several times “delightful” experiences.

According to numerous sources, that has also been the case within the company too, with the new regime restricting an internal transparency initiative pushed by former Chief Product Officer Blake Irving that shared product performance numbers with the top 100 leaders at Yahoo.

And while it’s an interesting strategic choice, several sources inside the company this week urged me to get ahold of increasingly worrisome numbers from comScore — available to its private clients — comparing November 2011 to November 2012 and also December 2011 to December 2012 at home and work in the U.S.

So I did, getting the same stats from numerous sources — numbers that a spokesman for comScore confirmed were correct.

And, as promised, they are worrisome indeed.

In November 2012, compared to November 2011, the monthly unique visitors to the homepage declined 17 percent to 91.8 million from 110.9 million; Yahoo Mail dropped 16 percent (from 92 million to 77.7 million); and Yahoo search dropped 28 percent (from 93.3 million to 66.9 million).

Also off significantly for all three areas, often by one-third, were a plethora of other stats: Percentage of reach, total minutes, total page views, total visits and more.

One of the only bright spots for Yahoo was the relatively small Flickr sites, which were up 37 percent — 26.7 million versus 19.4 million — in unique monthly visitors year over year. The photo-sharing site — which has been getting a much-needed refresh — was also up in all other stats.

But Flickr — which Mayer (pictured here) has laudably touted and supported after years of inexplicable neglect — is not a money-maker for Yahoo, even if its return does burnish the company’s tech and innovation cred.

In December 2011 to December 2012, the homepage was more stable, gaining four percent in monthly uniques from 109.4 million to 114.2 million, but with other key stats both rising and falling. Total visits were up 14 percent, for example, while average minutes per visit was down 13.6 percent.

But the trouble for mail or search continued, off 12 percent (89.9 million to 78.7 million) and 24 percent (88.7 million to 67.4 million) respectively in monthly uniques, with similarly major declines in all other stats.

Mail recently got a refresh too under Mayer, despite some recent security glitches, so new stats will show if that will help stem the declines. Search is another story all together, with Yahoo in what can only be described as a dysfunctional partnership with Microsoft that numerous sources tell me Mayer is seeking to end.

The homepage, too, is undergoing a redo, with a design that has a decidedly more mobile and social feel, and pushing an ethos of Yahoo becoming a hub for content discovery. It is hoped the new look will boost traffic relatively quickly from its current downward trajectory.

To be fair, there can be lots and lots of reasons for these declines, although most of Yahoo’s competitors are, at worse, seeing a flattening of growth and not outright declines.

And sometimes Internet sites complain that services like comScore undercount, although Yahoo had previously used the firm in its public documents. More to the point, as multiple sources within the company note, the stats are directionally correct in that they closely track with internal Yahoo numbers.

Which is to say, traffic is going down rather than growing. That is clearly why Mayer has loudly stressed mobile since arriving at Yahoo, an area not included in these numbers that many sources said has strong growth to about 70 million monthly unique visitors via its apps and mobile-enabled Web offerings.

But unlike the homepage, mail and search — which push and pull traffic all over Yahoo and are responsible for most of its current monetization — mobile also makes very little money now. And Yahoo — unlike Facebook, which recently did — does not break out mobile results.

So, it will be interesting to see if the company does so when it reports fourth-quarter earnings on January 28 and also if it says anything about continued traffic declines of its traditional Web business in the period and the impact on revenue.

Still, there are lots of ways to counter declining or flat revenues, even with declining traffic — via cost cuts, efficiencies, charging more and selling assets (as Yahoo did in the last quarter). And Yahoo has ably managed to keep its operating margins growing over the years, despite both the declines in traffic and moribund growth in its revenue.

But the real and only fix is the drastic fix to existing tentpoles Yahoo has and the creation or acquisition of products that excite consumers and, therefore, advertisers.

It’s not an easy thing, of course, as well-known venture capitalist Ben Horowitz recently wrote in his blog about the need to focus on products over building and improving culture — one of Mayer’s other big initiatives at Yahoo.

Wrote Horowitz in what I consider one of the clearest articulations of what it takes to win for startups, as well as big companies like Yahoo:

“The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing. Two or three times better will not be good enough to get people to switch to the new thing fast enough or in large enough volume to matter. The second thing that any technology startup must do is to take the market. If it’s possible to do something 10X better, it’s also possible that you won’t be the only company to figure that out. Therefore, you must take the market before somebody else does.”

If you want to take a gander, here are some more of those old Yahoo quarterly engagement slides, which were recently eliminated from its presentations:

(Note: I reached out to Yahoo’s outside PR firm — since they do respond to queries — and also some company execs to get a comment on this story, but so far there has been none.)

Yahoo's De Castro Begins Reorg of Ad Sales Unit

Kara Swisher — Sun, 06 Jan 2013 16:01:35 +0000

As I had previously reported, Yahoo’s key business unit — its advertising sales force — is now getting details of a reorganization by its new leader, COO Henrique De Castro.

In making the changes, just weeks ahead of Yahoo’s annual sales conference in Las Vegas on Jan. 21, De Castro is borrowing rather heavily from the set-up of the powerful ad business at Google, from whence he came.

By shifting the sales organization to a “category” model, sales reps at the Silicon Valley Internet giant will sell all of Yahoo’s ad products, as well as its search offerings, across channels in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search, designed to avoid vertical conflict. Thus, the sales staff have built up advertiser relationships across many areas, which will not work in the new system.

Sources inside the company said regional leaders will now be shifted to running various verticals. There will be support specialists for those areas, too.

Mark Ellis, who was most recently VP of North American sales and global partnerships, will pay a key role in the new org, said sources. It is not clear, though, what role Peter Foster, who has headed audience advertising, will play. Another high-ranking exec, Keith Kaplan, has apparently been shifted to focus on agency relationships.

As I had previously written, there are many different ways to organize sales, but making such major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

According to numerous sources inside Yahoo, the changes are causing some measure of worry and confusion across the salesforce at the company, since it comes after a lot of wrenching changes over the last year.

That includes the departure of well-regarded Chief Revenue Officer Michael Barrett in mid-October, after De Castro got the COO job. He has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in its sales organization.

He will likely have a more high-profile next week at the International CES, the huge annual consumer electronics show taking place in Las Vegas, along with new Yahoo CEO Marissa Mayer, who was a top product exec at Google. The pair is planning on meeting with major ad clients while there, which is their first significant outreach to marketers since taking their new roles at Yahoo.

De Castro had outlined the new ad reorg plan immediately after a multiday offsite with top sales leaders several weeks ago, and said the changes would come at the very beginning of 2013.

The ad staff at Yahoo begin to hear of the changes on Friday, so it looks like De Castro has met his deadline.

Yahoo's Mayer Hoping What Happens With Big Advertisers at CES Doesn't Stay in Vegas

Kara Swisher — Wed, 26 Dec 2012 22:05:46 +0000

So far in the six-month reign of Yahoo CEO Marissa Mayer, there has been a pile of attention paid to the flashy cultural changes (free food!), much-needed rehauls of key mainstays (Flickr, Yahoo! Mail, homepage), a focus on attracting entrepreneurial talent (Hey, we got Max Levchin to join the board!) and, of course, the frequent mention of mobilemobilemobile by the former Google product exec.

But on the topic of where the Silicon Valley Internet giant’s search and display advertising business is headed — which is, of course, its key revenue and profit generator — it’s pretty much been crickets.

No longer, it seems, according to multiple sources inside and outside Yahoo. Mayer is planning a series of appearances at the upcoming Consumer Electronics Show — which is taking place in Las Vegas in less than two weeks.

That includes sitting for a high-profile fireside chat with Starcom MediaVest Group Global CEO Laura Desmond in front of several hundred ad clients on Wednesday, January 9; organizing a plethora of one-on-one meetings; and throwing a Yahoo dinner party, as well as angling for invites to key parties thrown by others, such as MediaLink’s power player dinner on Tuesday, January 8.

As I previously reported, the company is planning on having this much more prominent presence there in order to reset its sometime rocky relationship with advertisers.

And, not surprisingly, its big weapon at the giant annual confab will apparently be Mayer, who has not yet interfaced significantly with the company’s big ad clients since taking the top job in July. At CES, sources said, Yahoo is hoping the “Marissa Halo” — i.e. the excitement around the decidedly telegenic exec — will help boost its business.

It’s important, since big agencies and advertisers have privately been grumbling about the lack of outreach by Yahoo and also how much more active execs at rivals such as Facebook, Google and AOL have been.

More than one source close to Yahoo said the dissatisfaction was being heard loud and clear at the company. “[Everyone will] take it as an opportunity to vent (again), while Yahoo promises a new beginning,” said one exec.

New beginnings will again be the case, though, with new COO Henrique De Castro also in place. He’s been making a series of moves to rejigger the ad business at Yahoo since he got there earlier in the fall, also from Google, including shifting its sales process to a category model.

In addition, Yahoo execs have continued their noodling on whether or not to make significant ad tech purchases — with no major deals in place yet — along with improving the creaky performance of the company’s own owned-and-operated offerings.

It’s all in the hope that advertisers and agencies will reconnect with Yahoo after the nearly consistent CEO changes over the last year. For those keeping score, after Carol Bartz was fired in the fall of 2011, CEO Scott Thompson made his debut at CES in early 2012, touting Yahoo’s data prowess before being ousted only months later. He was followed by renewed efforts toward marketers by interim CEO Ross Levinsohn.

And now there’s Mayer.

Interestingly, while many major ad players are looking for more specifics about how Yahoo will improve its mobile, search and data products to give better insights to advertisers, they also are simply wanting to hear Mayer’s plans for Yahoo.

“What I don’t see yet is what the vision for Yahoo is, articulating the bigger ideas than just presenting an assemblage of products,” said Rob Norman, chief digital officer of GroupM Global. “And what everyone would still like to see is what is the escape route from being a portal or even reemerging from what that means, so I am really interested in what she has to say.”

Added another top ad exec: “She really has not said anything yet about how she plans to capitalize on Yahoo’s strengths over the next year in the ad space. People are genuinely excited about Mayer, but the stakes are still high for her since everyone feels as if they have already given Yahoo a lot of extra chances.”

High stakes, indeed. But, then again, it is Vegas.

In "Seismic Shift," New COO De Castro Planning to Move Yahoo Ad Sales to Category Model (Backed Up by "Marissa Halo")

Kara Swisher — Mon, 10 Dec 2012 13:01:57 +0000

In what will be a major shift in how the Silicon Valley Internet giant sells online advertising, Yahoo’s new COO Henrique De Castro has briefed employees on a plan to move its sales organization to a “category” model, according to numerous sources close to the situation.

Simply put, that means its sales reps will sell all of Yahoo’s ad products, as well as its search offerings, in a vertical process organized around advertiser segments, such as automotive, entertainment and packaged goods.

This is how Google, where both De Castro and CEO Marissa Mayer recently worked, conducts its ad sales efforts. (After copying free food and smartphones, staff evaluation efforts and more, What Would Google Do seems to be strategery at Yahoo these days.)

In contrast, Yahoo has long sold its advertising in a regional and tiered organization against premium and performance inventory in display and search.

The move from regional to vertical is a “seismic shift,” said one source quite accurately. That’s because Yahoo’s go-to-market efforts have been designed to avoid vertical conflict and its sales staff have built up advertiser relations across many areas. In a vertical organization, those reps will be forced to give up these long-term relationships with marketers, some of which have been built over years.

There are, of course, many different ways to organize sales — and each has its fans and detractors. But one thing is clear: Making such a major change has potentially large ramifications on Yahoo’s financial performance, at least in the short term, since advertising makes up the bulk of its revenue.

The change might also result in some attrition among the sales staff, said sources, although many at Yahoo are expecting that De Castro will bring in his own execs from outside to help with the transition. (One interesting name I heard floated was former Googler Penry Price, who was close to De Castro when they both worked there. He is currently president of Media6Degrees, an ad targeting start-up.)

De Castro (pictured here) will need all the help he can get as he overhauls Yahoo’s sales efforts. Well-regarded Chief Revenue Officer Michael Barrett left Yahoo in mid-October after De Castro got the COO job.

His departure has left a large gap in sales leadership and in maintaining strong relationships with big advertisers and agencies. De Castro himself is not as well known in the ad marketplace, despite many years at Google in sales (more on that to come).

Currently, the key ad execs at Yahoo under De Castro are Peter Foster, who heads audience advertising, and Mark Ellis, VP of North American sales and global partnerships.

De Castro outlined the new ad org plan to staff immediately after a multi-day offsite with top sales leaders last week, at which Yahoo’s acquisition options in the ad tech market were also discussed.

Sources said De Castro noted that the changes could take place as early as January 1.

De Castro is also planning to have Yahoo’s annual global sales meeting for the end of January in Las Vegas. Last March, the gathering — then set for about 1,300 advertising staffers in Florida — was cancelled due to a restructuring under ousted CEO Scott Thompson.

In addition, sources said, Yahoo is planning on having a much more prominent presence at the upcoming Consumer Electronics Show — also taking place in Las Vegas in January — in order to solidify its relationships with advertisers.

Its big weapon at the giant annual confab will apparently be Mayer, who has not yet interfaced significantly with the company’s big ad clients since taking the top job in July. At CES, sources said, Yahoo is hoping the “Marissa Halo” — i.e. excitement around the telegenic exec — will help boost its business.

Federated Media Buys Lijit Networks

Kara Swisher — Tue, 04 Oct 2011 12:00:16 +0000

San Francisco-based Federated Media Publishing said it has bought Lijit Networks, a smaller online advertising analytics and tools firm.

The price for the Boulder, Colo., start-up — which was founded in 2006 — was undisclosed, but it has received just under $29 million in venture funding from firms such as Foundry Group. Federated said Lijit would continue to operate independently, “but in conjunction.”

In an interview yesterday, Federated CEO Deanna Brown said the buy was to round out offerings for its clients and to better compete in a world where most of the online ads go to the top five players.

“I am excited we can give both publishers and advertisers more tools for engagement and monetization,” she said.

Federated, which lost big social-media news site Mashable earlier this year, also benefits from increased scale and inventory of sites.

Lijit CEO Todd Vernon, who will become EVP of technology at Federated, said that it was ever more important for ad-focused firms on the Web to “deliver the entire stack.”

“Lijit has a core competency in the media business, and combined with FM’s best-in-class sales force, we can offer everything needed to do effective online campaigns,” he said.

Here’s the official press release:

Federated Media Publishing To Acquire Lijit Networks

Combined Entity Will Power More than 77,000 Independent Publishers Across the Web Via Comprehensive Advertising, Analytics and Reader Engagement Tools

SAN FRANCISCO, October 4, 2011 – Federated Media Publishing, which powers the best of the Independent Web, today announced the acquisition of Lijit Networks, Inc. Lijit is a leading provider of advertising services, audience analytics and reader engagement tools for online publishers of all sizes. The combined entity will reach nearly 300 million global unique visitors according to Quantcast.

Lijit, headquartered in Boulder, Colorado, will continue to operate independently but in conjunction with the rest of Federated Media Publishing. Lijit CEO Todd Vernon and COO Walter Knapp will take on corresponding EVP of Technology and SVP of Platform Revenue responsibilities at Federated Media Publishing and will report directly to Federated Media Publishing’s CEO, Deanna Brown. Additionally, Lijit board member Seth Levine from Foundry Group will join the Federated Media Publishing board of directors, effective immediately.

With the addition of Lijit Networks’ existing publisher relationships, Federated Media Publishing will now reach more than 77,000 online publishers and nearly 15,000 expert communities, making it one of the largest companies to power publishing on the Independent Web. The acquisition vastly expands the combined company’s inventory of sites, offering premium advertisers improved scale and reach.

Publishers Will Profit and Flourish

Lijit helps publishers more thoughtfully interact with and better understand their audience by providing analytics and engagement tools that build deeper relationships, lengthen time on site and increase page views. These robust and actionable audience analytics and reader engagement tools leverage intent, behavior and demographics to help publishers of all sizes increase revenue and better engage their readers.

Additionally, the combined advertising services provided by FM and Lijit will give publishers of all sizes a revenue stream that complements existing sales efforts and helps grow and monetize their website businesses, no matter what the size.

Advertisers Can More Easily Analyze and Engage

The combination of Federated Media Publishing’s premium online advertising and conversational marketing programs and Lijit’s proprietary data collection tools will empower advertisers to better understand user intent, contextual relevance and demographic information. And by leveraging the combined entity’s extensive publisher relationships, advertisers will have unprecedented scale on the Independent Web.

Introducing Programmatic Buying to the Independent Web

Programmatic buying is one of the fastest growing trends in digital media and the introduction of Lijit’s robust RTB exchange will equip media buyers with one of the largest platforms available. Over the next few months, Federated Media Publishing and Lijit will develop a series of private exchanges that will highlight leading independent publishers. These exchanges will allow brands to engage active, passionate consumers found in highly conversational online communities and publications, while delivering premium CPM rates via FM’s conversational marketing programs.

Quote

“The Lijit Networks team is just as passionate and committed to powering publishers as we are at Federated Media Publishing and that was a crucial element to this decision,” said Deanna Brown, chief executive officer, Federated Media Publishing. “Our combined relationships, proprietary tools and conversational marketing services will be invaluable to publishers and advertisers alike.”

“Federated Media invented how to leverage authentic voices and engaged conversations that exist in the Independent Web,” said Todd Vernon, founder and CEO of Lijit Networks. “The combination of the two companies is a game changer in the industry that unlocks new opportunities for both companies and our combined publisher network.”

Exclusive: MailChimp Buys Phil Kaplan's Tiny Newsletter Start-Up, TinyLetter

Kara Swisher — Wed, 31 Aug 2011 17:58:01 +0000

MailChimp, the Atlanta-based email marketing service, has bought TinyLetter, which is well-known entrepreneur Phil Kaplan’s most recent start-up.

While MailChimp focuses on more commercial clients — including AllThingsD — who want to send email newsletters and manage subscriber lists, TinyLetter is aimed at individuals who want similar services.

In an interview this morning, Kaplan said he sold the nine-month-old company, which he self-funded, in order to take advantage of MailChimp’s infrastructure and scaling capabilities.

He will remain an adviser to MailChimp, which now has about 950,000 newsletters, with about two billion emails sent monthly. It has 100 employees.

In contrast, TinyLetter has about 30,000 newsletters and sends out about one million emails a month.

Kaplan would not disclose terms of the acquisition deal, even though I asked him nicely several times. But the TinyLetter brand will remain.

Who's to Blame for Yahoo's Q2 Revenue Rout? The Line Forms Around Back…

Kara Swisher — Tue, 19 Jul 2011 21:02:54 +0000

Yahoo turned in another weak performance in the second quarter, with yet another decline in revenue.

This time it was five percent, compared to last quarter’s six percent. In other words, at least things are looking up as they go down!

While earnings per share rose smartly, Wall Street is still looking for strong sales growth from the Silicon Valley Internet giant, which seems unable to provide it.

Blamed most this time for the revenue fall: Yahoo’s changes in its display sales operations in the key Americas region, reasons for which were largely unspecified in the initial company press release. (You can see the damage in this slide deck from the company here.)

Maybe Yahoo CEO Carol Bartz will explain it all in its upcoming conference call with analysts (or she could try the I-don’t-know approach taken by News Corp. CEO Rupert Murdoch in PhoneGate hearings in Britain earlier today!).

2 pm PT: It starts with the usual regulatory blah-blah, which I always enjoy.

Bartz gets right into it, opening with the key problems with China’s Alibaba Group, as well as its display and search revenue weaknesses.

The fight with Alibaba is over its Alipay payments unit, which was spun out of the Chinese company without Yahoo’s say-so. Yahoo is a big shareholder.

Bartz says that the company was working on a settlement night and day.

But she quickly gets onto how display did not perform as expected in its key Americas arena. “Obviously, I am not happy,” she said.

Obvi! Neither are shareholders, Carol.

She says it was not about new competitive development. It was not about the economy. It was not about engagement.

So what was it? Changes in its sales leadership and organization, says Bartz, which has included talent walking out the door in droves.

A lot more than Yahoo expected, but no surprise to anyone who has been paying any attention to the brain drain at the company.

Bartz promises a new approach to sales, part of its endless turnaround, which is beginning to feel like a digital version of “Waiting for Godot.”

Search revenue, though, says Bartz, was better than expected.

2:11 pm: CFO Tim Morse is on now, running through the numbers and the display shortfall in the Americas region.

“We simply did not have appropriate coverage,” says Morse, noting consumer products, tech and autos as weak spots in the advertising market.

Thank goodness, then, for the guarantees from search revenue in the Microsoft partnership deal.

More numbers and then it is back to Bartz to talk about search, which is going better than the last quarter, when it was the culprit for the revenue decline.

She says that Microsoft and Yahoo were working together to improve the issues.

“We’d like to be further down the road,” says Bartz about the goal of search revenue per search growth, as well as settling all the other problems, such as the Asian issues.

And, by further, I am presuming she means actual forward movement, which is what roads are actually for.

2:27 pm: Q&A time, the part of our program where Wall Street analysts do not ask the questions that need asking (and where I win fancy journalism awards for pointing this delta out!).

Therefore, Bartz is first thanked for providing “color” about the display disaster and is not asked about more specifics of the disaster itself.

The second question still does not get to it either, but she does note Yahoo’s sales force has to sell beyond “Gee, we’re big” and come up with better ad solutions.

“The issue is we did not have enough sales people in front of the big clients,” says Bartz.

That’s because all those former Yahoos are now working at Groupon, LivingSocial, Facebook and on down the line and now in front of big clients for those hotter companies.

2:34 pm: Question about its Asian assets. Yahoo’s talks with Yahoo! Japan and Alibaba are separate, says Bartz, although I would add that they have non-movement in common.

And also a question about Yahoo’s interest in the acquisition of the Hulu premium online video service.

Bartz winks verbally and says nothing, which translates into: Of course, it is interested.

More on the reasons for the display fall-off, which Bartz makes clear is not due to big competitive threats, but internal issues.

Maybe she’s saving big competitive threats as the reason for a revenue decline in the third quarter!

I look forward to the quarter I get the finger pointed at me for causing revenue to fall, due to my snarky posts.

Now, we are into softball questions about improvements in engagement. It’s up, but no one asks why Yahoo is still not doing anything very cutting edge in product innovation compared to competitors.

I believe Google has launched at least 14 new social networks since this Sunday, along with its strong quarterly performance last week. And Apple, well, blew away its quarter today as it is about to release more cool new stuff later this week.

And that might be the crux of the issue for Yahoo, which might not solve its woes by throwing a more focused sales army at the issue.

That’s because Yahoo’s products are simply not nearly has social as Facebook or even Google right now, which might be the true problem as old customers move on to new advertising solutions.

Whatever the reason, Yahoo clearly needs a refresh of its ad products and how it sells them, especially in its fast-growing mobile, video and communications products.

Bartz talks about getting better expertise, a tighter regional focus and other issues of going to market, which is perhaps something she might have realized many, many quarters ago.

After all, she’s been in charge for a while, and these issues are not new.

In fact, in an earlier quarter, Bartz was stressing “tentpole” events and anchor media properties and the power of the size of Yahoo as a selling point.

This was in April, in fact, in the first quarter of this year.

As I wrote then:

“CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars. In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.”

Now big is out! Moving on!

The last question is another about Yahoo’s talks with its Asian partners.

“It’s complex,” says Bartz.

You can say that again.

Exclusive: Efficient Frontier Buys Context Optional for $50 Million

Kara Swisher — Wed, 04 May 2011 16:15:53 +0000

Online performance marketing firm Efficient Frontier is acquiring San Francisco-based social marketing software and services start-up Context Optional, the company said.

While terms of the deal were not revealed, sources said the price was $50 million.

The purchase of Context Optional is the first acquisition for Efficient Frontier, which has grown from a start-up that focused solely on search engine marketing to now including display and social media campaigns.

The move is a significant sign, said Efficient Frontier CEO David Karnstedt, that social has become a key part of the advertising ecosystem and an end-to-end solution is important to marketers.

With the purchase, for example, he said advertisers will be able to run Facebook ads all the way through to managing their brand’s fan page and help with both acquisition and retention.

“Our heritage is that we were early in optimizing search engine advertising for clients, so we wanted to expand our efforts exponentially with Context Optional, since social is different than search,” said Karnstedt in an interview yesterday with BoomTown. “We want to help advertisers interested in social media keep engaged and regularly returning customers.”

Context Optional was founded in 2006 and competes with other start-ups, such as Buddy Media, Involver and Vitrue.

Here is the official press release from Sunnyvale, Calif.-based Efficient Frontier:

Efficient Frontier Acquires Context Optional to Create the First Comprehensive Solution for Social Media Marketing

Unites Leading Advertising and Page Management Platforms to Maximize Social Marketing Impact

Sunnyvale, Calif.–May 4, 2011–Efficient Frontier, a leading global performance marketing company, today announced that the company has acquired Context Optional, a leader in enterprise social marketing solutions. The acquisition expands Efficient Frontier’s social media offering which will combine the company’s advertising campaign management and optimization with Context Optional’s page management platform. This marks the first unified solution for managing and optimizing Facebook fan acquisition through to fan retention and engagement. Terms of the deal were not disclosed.

“We are excited to offer marketers a complete solution for capitalizing on the growing social marketing opportunity across Facebook, Twitter and LinkedIn,” said David Karnstedt, Efficient Frontier’s CEO. “Social media marketing is more than just the initial contact with the customer and requires both compelling experiences and an ongoing dialog to realize the full potential of the interaction. The acquisition of Context Optional will create a unified platform for marketers to manage all of their social media touch points with brand enthusiasts.”

Efficient Frontier’s platform manages ad campaigns across search, display and social media, enabling customers to acquire audiences across multiple channels and optimize for better results. Context Optional’s Social Marketing Suite of products is an enterprise solution for brands to engage and retain audiences across Facebook and Twitter.

By aligning acquisition and engagement strategies, the combined company will be able to deliver a seamless and measurable user experience by integrating advertising and social marketing content. Brands will be able to more efficiently target audiences based on social engagement insights and continually refine their Facebook application experiences to better match their audiences’ interests. Efficient Frontier will also be able to provide integrated analytics to provide a more complete view of performance including virality.

“Efficient Frontier is a leader in digital marketing and our respective clients are asking us for a comprehensive solution to both acquire and build relationships with their customers,” said Kevin Barenblat, Context Optional’s Co-Founder and CEO. “This combination is recognition that social media is now indeed a powerful marketing channel in which brands are significantly investing. “We’re excited to be the first in the market with an integrated, enterprise solution to enable brands to effectively scale their investment in social.”

Yahoo Bored Meeting? Not This Time!

Kara Swisher — Wed, 13 Apr 2011 16:35:48 +0000

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

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

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

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

The U-Shaped Turnaround

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

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

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

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

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

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

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

The Asia Situation

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

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

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

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

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

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

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

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

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

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

Acquisition Guns Blazing? Or Sputtering?

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

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

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

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

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

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

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

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

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

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

Enter the Kenny

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Microsoft-Facebook Tiff Over Ad Talent Raid Downgraded to "Disappointed" (With a Side of Settlement)

Kara Swisher — Mon, 04 Apr 2011 17:14:40 +0000

While Facebook should not be expecting big bouquets of love from its partner and investor Microsoft, at least it’s not going to be getting legal brickbats either.

According to sources close to the situation, the pair have settled a dispute over the Silicon Valley social networking site’s talent raid of Microsoft’s head of global ad sales, Carolyn Everson, for a similar job at Facebook.

In fact, Everson has already been at work for a week, sources said, after she agreed not to solicit a small group of advertising clients for a short period of time.

She is also barred from using any strategic information in her new Facebook job that she obtained while at Microsoft, sources said.

This kind of agreement is not uncommon in disputed job shifts and is also a far cry from a more stringent legal outcome, which might have benched her completely for some time.

But Everson is a veteran ad exec, having previously worked at Viacom’s MTV Networks. Thus, Microsoft could not have barred her from calling on advertisers she had known previous to her short employment there.

Still, the February hiring by Facebook came as a surprise to many at Microsoft, especially since Everson (pictured here) had been hired only last June, after a long search. In that time, she had become a high-profile presence at internal and external Microsoft events.

So, it’s clear the Everson hiring infuriated Microsoft execs, especially since the company regards Facebook as a close partner. Microsoft is a longtime investor too.

“We’re no longer angry,” said one source at Microsoft, about the cooling of tensions, “as much as disappointed.”

But key in the weighing of options at Microsoft is the obvious importance of keeping up good relations with Facebook. It is an important partnership, especially for its Bing search business, especially as an advantage over Google.

Thus: Bygones!

AOL Layoffs Coming Soon, Followed by Champagne and Cookies for Advertisers When HuffPo Deal Closes

Kara Swisher — Fri, 04 Mar 2011 08:29:48 +0000

[UPDATED: Corrections below and in headline that layoffs coming soon after close, but not today.]

There’s no question it’s a jarring contrast–layoffs versus champagne and cookies.

But that’s the reality at AOL as its acquisition of the Huffington Post closes this week, even as it sheds employees as part of its ongoing turnaround effort.

Sources said the New York-based Internet portal could announce layoffs as early as today.

[UPDATE: Layoffs will not come until after the Huffington Post deal is closed said other sources, although they are coming.]

AOL CEO Tim Armstrong indicated job cuts were definitely coming at a paidContent conference in New York yesterday.

“There will be job changes,” he said, when asked about layoffs.

Perhaps sooner than later.

BoomTown received several emails from worried AOL employees, noting that human resources staffers were taking steps to initiate the layoffs at 10 am ET/7 am PT this morning and that there would also be employee meetings then too.

I followed up with several sources close to the situation, who confirmed that the layoffs are imminent. Nonetheless, they could not specify the timing, size and scope of them.

[UPDATE: There will be an all-hands meeting for AOL staff with Armstrong, as well as new content head Arianna Huffington.]

The last time AOL laid off employees a year ago, it was a large action with job cuts of 2,300.

The latest slashing comes just as AOL management will try to aggressively tout the closing of its $315 million purchase of the Huffington Post.

The integration of the well-known news and opinion site will mean a significant change for AOL’s editorial efforts, as well as an opportunity to impress advertisers.

Thus, AOL is prepping boxes with Greek cookies and pricey champagne to send out to key advertising clients, to celebrate the deal’s close.

Why Greek cookies? Because it’s the original country of Huffington, co-founder and editor-in-chief of the Huffington Post.

I have emails into AOL for a comment.

Exclusive: Microsoft Mulls Legally Poking Facebook Over Ad Talent Raid

Kara Swisher — Thu, 03 Mar 2011 00:10:41 +0000

Microsoft–furious over a recent talent grab of its top advertising exec by Facebook–has been considering a wide range of options, including legal action to block the move, according to sources close to the situation.

Lawyer at both companies have been in back-and-forth talks in recent days after the hiring of Microsoft’s global ad sales head Carolyn Everson by the Silicon Valley social networking powerhouse to be its VP of global sales.

Among the more likely solutions being discussed: Barring Everson–a longtime ad sales exec who came to Microsoft from MTV Networks–from using any strategic information she learned at the company and also from contacting certain ad clients on behalf of Facebook for a certain period of time.

While a legal action to stop her from actually taking the position is the most serious option, it is certainly not without precedent for Microsoft. The company recently got a temporary restraining order to block one of its top government relations execs, Matt Miszewski, from working at Salesforce.com, pointing to non-compete and confidentiality contracts.

Whatever happens, it is clear the Everson hiring has infuriated Microsoft execs, especially CEO Steve Ballmer, since the company regards Facebook as a close partner. Microsoft is also a longtime investor in Facebook.

While considering a temporary restraining order against Everson in this kind of situation–since it is essentially the same job–is standard operating procedure for any company, several sources said tensions are higher than usual.

“This is just tone deaf on Facebook’s part not to think this would not be a problem,” said one person.

One particularly irksome aspect–top Facebook execs did not call Ballmer before news of the appointment leaked out to assuage the situation.

Facebook COO Sheryl Sandberg did release a statement when BoomTown broke news of the move in mid-February, in an attempt to make nice.

“Microsoft was one of our earliest partners and is still one of our most valued,” she said, in part. “We look forward to continuing to expand our relationship with them.”

Her dulcet words have apparently not worked.

In fact, the talent raid came as a surprise to many at Microsoft, especially since Everson (pictured here) had been hired in June after a long search and had become a high-profile presence at internal and external Microsoft events.

That included organizing the splashy “Imagine 2011, Microsoft Advertising’s Marketing Leadership Summit.” The event is set to take place at the end of March at the software giant’s Redmond, Wa. HQ and will include an evening concert by the band Train.

Now she will be doing such things for Facebook, where Everson will be replacing longtime and well-regarded ad exec Mike Murphy, who left the Palo Alto, Calif., company last fall. She will report to former Googler David Fischer, VP of Advertising and Global Operations.

Having a top exec who is amenable to and well known by Madison Avenue is key for Facebook as it ramps up its business, in anticipation of an IPO next year.

Despite being private, Facebook has recently been valued at between $50 and $60 billion by investors, who have been eagerly buying up shares of the company on secondary markets.

Under Murphy and Fischer, ad sales have been doing well already. Facebook’s share of online display advertising has more than quadrupled, from about three percent to almost 14 percent of the nearly $9 billion U.S. market, according to a recent survey.

In growing so quickly, Facebook has grabbed ad revenue–reportedly $2 billion last year–from old online powerhouses, especially Yahoo, Microsoft and AOL, and is also in a big fight with Google over premium ad sales.

Facebook’s surging usage and engagement are the reasons for the increased interest from advertisers, as well as its global growth in both market share and mindshare of consumers.

The opportunity at Facebook is clearly a big–and probably irresistible–move for the dynamic Everson, who has mostly worked in the mainstream media for much of her career.

Still, while movement of execs among top tech companies is not uncommon, there has been a lot less from Microsoft to Facebook.

Instead, Facebook has been most aggressive in its efforts to attract talent from Google.

No longer. In fact, the week before Facebook grabbed Everson, it also hired an up-and-coming exec, Chris Daniels, GM of Bing Mobile Product Management, to be its director of business development.

Still, there is some hiring war history between the companies. In late 2008, Microsoft’s Ballmer managed to lure former Yahoo exec Qi Lu to run its Online Services Division, several sources at both companies said, after he had told Facebook he would work there as its engineering lead. Lu had also been heavily recruited by Google.

Eventually, that was water under the bridge, which is what Facebook is hoping will happen with Microsoft over Everson.

Also important in the weighing of options at Microsoft is the obvious importance of keeping up good relations with Facebook. It is an important partnership, especially for its Bing search business, as an advantage over Google.

“Everyone is hoping to resolve this amicably,” said one person close to the situation. “There has been some damage to the relationship for sure, but the question is whether Microsoft wants to do something that would escalate that damage.”

Not surprisingly, both Facebook and Microsoft declined to comment on the fracas.

Was TweetDeck's Sale a Good Deal? That Depends on Bill Gross.

Peter Kafka — Mon, 14 Feb 2011 22:04:22 +0000

On paper, Twitter is worth $4 billion. Its investors, at least, believe it will be worth $10 billion sooner than later.

So why is the leading Twitter application–the one that many of Twitter’s most ardent users rely on–selling itself for $30 million?

That’s the question lots of people are mulling over since Friday’s news about the UberMedia/TweetDeck deal.

The tech investors and observers I’ve chatted with in the last couple of days generally land in one of two camps. Either:

TweetDeck is the biggest Twitter client not owned by Twitter, and they sold too early.
TweetDeck is the biggest Twitter client not owned by Twitter and, given the circumstances, they did okay.

This is basically a more muted replay of last year’s Twittersphere freakout, when it became clear that Twitter wanted to own much more of the Twitter ecosystem itself, and would place more limits on everyone else.

One important variable here is the way you view Bill Gross and UberMedia. A big chunk of the TweetDeck payout–the majority, according to multiple sources–will be in UberMedia stock. So if you think that company–which just raised another $17.5 million itself–has an upside, then the deal looks that much better.

That’s hard to figure, though, because Gross seems to be doing two things: Buying Twitter apps that compete with Twitter’s own products, and building a Twitter advertising system that will compete with the one Twitter is trying to build itself.

And Twitter doesn’t seem any more receptive to any of that now than it did 10 months ago. But Gross and his backers argue that they’re going to pull it off in a way that makes Uber become the Zynga to Twitter’s Facebook–a smaller company built on another bigger company’s platform, that makes both of them more valuable. So if they’re right…

Meantime, this seems like a good time to revisit Twitter investor Fred Wilson’s “inflection point” essay from last April.

That’s the one that precipitated much quaking among third-party Twitter developers and investors, with good reason: In part, it explained that Twitter would be buying or building “hole-filling” services, which meant there wouldn’t be much reason for many of the Twittersphere’s existing apps to exist.

A year later, though, it’s the second part of Wilson’s essay, where he calls on developers to build new apps and services that “create something entirely new on top of Twitter,” that seems more striking.

Because if Twitter really does end up being worth $10 billion or more, it seems like someone ought to be trying to do that. I’m not sure I’ve seen any, though.

Am I missing something? Feel free to weigh in below.

Warning: Oversharing Ahead, as Wall Street Bankers Start to Talk Up Web 2.0 IPOs

Kara Swisher — Tue, 18 Jan 2011 22:50:15 +0000

Here’s the tastiest part of an article in the New York Times yesterday about how Goldman Sachs essentially borked a deal to offer its rich clients in the U.S. private Facebook shares:

“However, over the last two weeks, the companies’ [Goldman and Facebook] relationship has grown increasingly tense, people involved in the offering said. Accusations about the news leak have flown back and forth, these people said.”

You can say that again, but –as leaky as the social networking giant has been over these many years in Silicon Valley–it seemed obvious that most of the intricate financial details about the offering were hand-delivered right from some of Wall Street’s hired guns to the DealBook scribes at the Times.

(Memo to myself: Start kissing up to those bankers, however appalling!)

Unfortunately for Facebook, it was those massive news leaks that drew the attention of government regulators to the deal. And with worries that it veered too close to the edge of violating securities regulations, the U.S. part of the offering had to be pulled.

Despite this particular mess, this kind of mishegas is only going to increase now that the banker bloviating is getting fired up a notch in 2011, as a spate of Web 2.0 Internet companies moves to public offerings.

Along with Facebook, that includes Zynga, LinkedIn and Groupon, as well as several others, all of which are just starting the banker bake-offs that used to be common in the Web space.

And that’s going to mean plenty of information to be found as some of those bankers inevitably drop a dime on the companies they are hired by.

Translated into more modern social terminology that these companies better understand: Bankers are really good at oversharing.

How do I know this? Because that is exactly what happened when the Web 1.0 bubble was in full froth.

Like Christmas in July, as bankers arrived to compete to win IPOs, the information flow suddenly became huge for reporters like me–I was at The Wall Street Journal at the time–covering it all.

It looks like more of the same for this round of stock sales likely to come. Already we know more about Facebook’s financials than we ever did.

And to that, I say: Loose lips may sink ships, but it will make for an awesome amount of news to come in 2011 about the Internet’s starring players.

Even If It Had 500 Shareholders Today, Facebook Doesn't Have to Disclose Financials Until Spring of 2012

Kara Swisher — Thu, 06 Jan 2011 10:15:48 +0000

For all those in a tizzy–including BoomTown–about Facebook’s deal with Goldman Sachs, which some think is designed to circumvent securities rules related to shareholder numbers and financial disclosure, meet Section 12(g)(1) of the Securities Exchange Act of 1934.

Because if anyone cared to read the actual text of the law in question (as I did, after it was pointed out to me), even if it was determined that Facebook had 500 shareholders at this very moment, it is technically not required to disclose any of its financial details until May of 2012.

As in next spring, which is exactly when its execs have told many sources it will finally have its much anticipated IPO. Thus, look Facebook to finally go public in the second quarter of 2012.

As far as government literature goes, 12(g)(1) is pretty clear, noting that any company of Facebook’s size, after it reaches 500 shareholders, must make financial and other disclosures “within one hundred and twenty days after the last day of its…fiscal year.”

For Facebook, its current fiscal year ends December 31, 2011, making its disclosure deadline April 29, 2012.

As the New York Times noted today:

“Section 12 (g) of the Securities Exchange Act of 1934 came about in the 1960s as over-the-counter trading in shares of privately held companies began to heat up and regulators worried that investors were not getting enough information.”

The huge amount of time Facebook has to adhere to the private company disclosure law has not been noted in copious coverage of the deal, in which Goldman Sachs clients would be able to invest up to $1.5 billion in the Silicon Valley company, as part of a single entity “special purpose vehicle.”

But it brings into focus–given its long lead time–whether Facebook would go to such lengths to keep its shareholder size small at this point.

Nonetheless, from a perceptual viewpoint, the Goldman investment has brought unneeded scrutiny to Facebook, from both the public and also government regulators.

It has also painted the company–which has an everyman, mainstream image, in general–as elitist and consorting with rich Wall Street bankers.

In any case, with the Goldman deal, a lot of financial information about Facebook is now seeping out anyway, as part of the investment bank’s offering documents to the clients it is presenting the Facebook opportunity to.

As The Wall Street Journal reported yesterday:

“According to people familiar with the document, Facebook had net income of $200 million in 2009 on revenue of $777 million. Figures for 2010 weren’t disclosed, but analysts have said the company’s revenue last year could be as much as $2 billion, fueled by advertising growth.”

Whether that smallish net income and revenue deserves a $50 billion valuation or not will be up to investors to decide. But, as the Journal also pointed out, the Facebook offering is oversubscribed already, even without any significant information about the company’s finances.

Which Facebook can keep from us all for a while–although I urge CEO Mark Zuckerberg, Google-style, to FREE THE DATA!

And if you don’t believe me, please enjoy the 12(g)(1) below:

Every issuer which is engaged in interstate commerce, or in a business affecting interstate commerce, or whose securities are traded by use of the mails or any means or instrumentality of interstate commerce shall—(a) within one hundred and twenty days after the last day of its first fiscal year ended after July 1, 1964, on which the issuer has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by seven hundred and fifty or more persons; and (b) within one hundred and twenty days after the last day of its first fiscal year ended after two years from July 1, 1964, on which the issuer has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by five hundred or more but less than seven hundred and fifty persons, register such security by filing with the Commission a registration statement (and such copies thereof as the Commission may require) with respect to such security containing such information and documents as the Commission may specify comparable to that which is required in an application to register a security pursuant to subsection (b) of this section. Each such registration statement shall become effective sixty days after filing with the Commission or within such shorter period as the Commission may direct. Until such registration statement becomes effective it shall not be deemed filed for the purposes of section 18. Any issuer may register any class of equity security not required to be registered by filing a registration statement pursuant to the provisions of this paragraph. The Commission is authorized to extend the date upon which any issuer or class of issuers is required to register a security pursuant to the provisions of this paragraph.

Pulse News App for iPad Gets Social

Liz Gannes — Wed, 01 Dec 2010 23:00:15 +0000

Pulse, the visually engaging mobile news reader, is adding a social element today. To date, Pulse (for iPad, iPhone and Android) gave users an easily scannable and image-driven view of their favorite RSS feeds. Now, users will also be able to add their Facebook accounts and flip through material posted by their friends.

The social version of Pulse will be available only for iPad for now, and is to be released this afternoon at 3 pm PT.

Palo Alto, Calif.-based Alphonso Labs, which makes Pulse, recently stopped charging for its apps and raised $800,000 in venture funding. CEO Akshay Kothari came up to San Francisco today and showed me the new iPad app.

The new Pulse for iPad gives users three feeds of Facebook information: Friends’ status updates, friends’ shared links and a historial look at the user’s own Facebook wall. In keeping with Pulse’s design, items are image driven and easily swipe-able, and expand into a second panel when users tap on them (see screenshots). Users can add comments or “Like” statuses and shared links as they would on Facebook, but this is more of an alternate way to consume content than a full-featured Facebook client.

As with other content feeds, Pulse caches the 25 most recent Facebook updates in each category, so a user who goes somewhere without Internet access could continue to read the content there.

As Alphonso grows from being some young folks with an interesting design approach into a real company, it is exploring closer relationships with publishers like the Huffington Post. “We don’t want to be a company that makes a news reader,” said Kothari. “We want to help people discover awesome content.”

Kothari added that with the influx of new users since Pulse went free two weeks ago, Alphonso is looking to improve content discovery by mining user data to show a “most-emailed” story list across all feeds.

He said his aim is to get away from the hierarchical structure of Web sites–where one must return to the homepage before moving on–and help people scan quickly through potential reading material. Ultimately, Kothari said, recommendations will be done through a balanced combination of machine and social factors.

Further reading: Earlier this year, Pulse was mentioned as an example app by Steve Jobs, then yanked from the App Store due to complaints about content usage by the New York Times. The app was quickly reinstated and Alphonso has an open dialogue with the Times about how best to send it new readers and subscribers, according to Kothari.

Video: BoomTown Puts Twitter's Revenue Dude Adam Bain in the Deep Freeze

Kara Swisher — Fri, 19 Nov 2010 17:30:48 +0000

There is no question Adam Bain is a charmer, as you will be see from the video below.

He has to be, of course, as a longtime online advertising guy running News Corp.’s Fox Audience Network and now as president of global revenue at Twitter.

It’s a big splashy job for Bain, who also has some substantive geek credentials, unlike most sales people. But it is also a really tough one being the point man behind figuring out and building a viable and lucrative advertising business for the popular San Francisco-based microblogging service.

Is there gold in them thar Tweets? We’ll see, and Bain has to show us the money–and fast.

In fact, that was the title of an interview I did with Bain yesterday at TWTRCON SF 10, which also published an interesting poll about consumer reaction to Promoted Tweets and more.

The chat we had was a lively one–at one point I asked Bain if he would tell me Twitter’s revenues, if he “did not mind,” and he answered, “I do mind. I’m all about managing expectations.” Which is to say, they are probably less-than-impressive still.

Bain also pulled out a bullhorn to make his point to advertising clients about the noise online (and also to shut me up!).

Like I said, charming!

Here’s the two of us talking more about it, inexplicably inside a freezer at the hotel where the conference was held:

[ See post to watch video ]

Using Phones Globally

Walter S. Mossberg — Wed, 17 Nov 2010 22:40:27 +0000

My Motorola Android phone does not work outside of the U.S. Does the Samsung Galaxy have the same problem? Will the forthcoming Verizon iPhone work in Europe?

I combined two reader questions here, because they both touch on a common source of confusion. I presume that the Motorola Android phone that only works in the U.S. is sold by either Verizon or Sprint, because they use network technology that is primarily found in the U.S., and not, say, in Europe. Thus, phone makers like Motorola and Samsung tailor their Verizon and Sprint models to this U.S.-centric technology, called CDMA.

However, both Motorola and Samsung also make Android phones for AT&T and T-Mobile, which use a network technology called GSM that is standard in most of the rest of the world. These models should work outside of the U.S. There are a few “world phones” sold by Verizon and Sprint, which include both network technologies. For instance, Verizon sells two Android phones, the Droid Pro and the Droid 2 Global, which fall into that category.

As for the reported forthcoming Verizon iPhone, I don’t know if it will be limited to CDMA, which would make it essentially a U.S.-only device, or whether it will also be compatible with GSM, which would make it a world phone.

I live in South Africa, and want to buy the Samsung Tab to make my job easier, but to do that I must be able to work with Microsoft Excel documents. Editing and using dropdown boxes is essential. Can this be done?

The Tab, and other Android devices, can view and edit Excel documents using either a built-in mobile office suite (ThinkFree was pre-installed on the Tab I tested) or one you can obtain through the Android Market, like Quickoffice. You can also use online spreadsheet apps.

However, as with the same or similar apps for the iPad, these are limited compared to using Excel on a PC or Mac, and I cannot say whether they’d have the features and two-way document fidelity you personally might require. I didn’t test editing Excel documents on the Tab.

I am considering purchasing the iPad but have learned that it does not allow users to create folders in which documents can be stored. This would be incredibly useful for me for business purposes while I travel (i.e., separate client folders with client-specific documents in each). I have heard that Apple’s new operating system upgrade might make this possible, but I haven’t been able to confirm it. Do you happen to know whether that is the case?

The new folder feature coming to the iPad is meant for grouping apps, not documents. Apple’s operating system for its mobile devices, called iOS, doesn’t have a global document folder capability.

However, individual iPad apps, such as the very powerful GoodReader, do allow you to create folders that can hold all manner of documents, and you can name and organize these folders as you wish. But these folders are only accessible from within the app that creates them.

You can find Mossberg’s Mailbox, and my other columns at the All Things Digital website, http://walt.allthingsd.com.

Exclusive: Brandee "No Comment" Barker Finally Comments–Longtime PR Honcho Is Leaving Facebook

Kara Swisher — Mon, 08 Nov 2010 19:35:47 +0000

BoomTown usually does not get all weepy over the departure of public relations folks at Internet companies, in that cynical I’ve-seen-’em-come-and-I’ve-seen-’em-go kind of way.

But the leaving of Brandee Barker (pictured here) from Facebook most certainly elicited a small single tear of sadness this morning, when she called into All Things Digital Global HQ to say she would no longer be tossing me her patented–and very endearing–hand-in-the-face “no comment” for the powerful social networking site.

After four long and tumultuous years, she leaves the company on Dec. 10.

(In a changing-of-the-guard theme, Barker follows longtime advertising sales exec Mike Murphy, who also recently resigned, out the door.)

In a statement, Facebook said:

“We can confirm Brandee is leaving Facebook to start a communications consulting business focused on early stage tech companies. We are grateful for her dedication and the company has benefited greatly from her contributions. We suspect Brandee’s future clients will also value her talents and experience and we wish her much success with her new venture.”

Indeed, although the geeks always get the credit, Facebook owes an awful lot to Barker, for helping its products and services stand out in a sea of competitors.

For certain, it was not as influential as it is today when Barker got there as its head of PR, just as the start-up was beginning to make itself known.

There were only seven million Facebook members when Barker joined, compared to 500 million today.

Still, the veteran communications exec was quickly aware of its power when 750,000 of those members protested against Facebook’s introduction of the initially controversial news feed.

“I had no idea when I took the job that it would be like that,” said Barker, who was employee No. 120 at Facebook, in an Interview with me this morning.

In fact, it has been like that ever since then, as she has navigated a series of triumphs and just as many mishaps for the company as it grew and grew.

One of her favorite moments, she told me, was the introduction of the Facebook platform at its inaugural F8 developers event several years ago.

“Mark [Zuckerberg] had a real vision and the craziness that followed it was an incredible experience,” said Barker, who was the one largely responsible for introducing the decidedly quirky co-founder and CEO of Facebook to the world.

For the most part, Barker shepherded him well, even as the fire hose of attention increased in media, consumer and regulatory pressure over issues ranging from the controversial founding of Facebook–Barker has a masters from Harvard University in Winklevii crisis management–to privacy snafus and more.

A lot of her ministrations were funny, though, as she remembered: “Another great moment was when I insisted Mark take a suitcase instead of a backpack to his first Davos in 2007, so I went out and bought him one.”

And let us not even get into the flip-flop controversies or when I snarkily called Zuckerberg “toddler CEO” to Lesley Stahl on “60 Minutes.”

Barker handled it all with grace and humor.

But as Facebook has grown to more than 1,500 employees and its business has boomed, Barker–who recently returned to the company after having a baby–decided that bigger was not better, at least for her.

“I had a pretty deep evaluation when I was away from the company that what I am good at and what I like is working with early-stage companies and their teams,” said Barker, who will start a communications consultancy. “At this point in my career, that’s what I want to do.”

Barker noted, in fact, that there were a lot of companies started by former early Facebook employees like her that might become clients, although she declined to be more specific.

In the end, another “no comment” for me from Barker!

I don’t mind, because here is my comment, on the record and for attribution: It’s a sad day for Facebook, and I’ll miss Brandee Barker very much.

Speaking of no comment, here is Barker in one of my favorite no comments, from behind a plant at a 2008 Silicon Valley luncheon for the German DLD conference:

[ See post to watch video ]

LimeWire Gives Up the Ghost, Shuts Down P2P File-Sharing Client

Peter Kafka — Tue, 26 Oct 2010 19:57:57 +0000

Last spring, music file-sharing service LimeWire suffered a crushing blow in federal court. This is the net result: The company is shutting down its core software–though it insists it’s not doing that exactly. It’s the victory the big music labels have been seeking for some time.

The company says it will comply with a court injunction to turn off “the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality” of its software, which remains one of the most popular methods of finding free–and illegal–music on the Web.

That means the company will stop offering downloads of its software, which you could still get on its site as of late Tuesday afternoon. And it also means that the company will disable the software that’s already been downloaded, according to people familiar with LimeWire’s plans.

I don’t know if LimeWire intends to cripple its client via a “kill switch” or some other method, but as of 20 minutes ago it hadn’t gone into effect–I was able to locate and download a version of the Clash’s “I Fought the Law” within a minute of booting up LimeWire’s software. (UPDATE for the technically minded, via a person familiar with the company’s plans: “They’ve taken down the relay severs on the Gnutella network which the Limewire client uses to figure out which other p2p clients have what info on them.” This should render existing clients effectively useless as anything other than a media player within the next nine hours, I’m told.)

LimeWire‘s client has been downloaded “hundreds of millions” of times, and is still responsible for the “vast majority” of usage on the Gnutella trading network, says Eric Garland, who runs the BigChampagne media tracking service. The company’s moves won’t affect other open source clients that run on the same Gnutella network, like FrostWire.

Meanwhile, LimeWire’s parent company, Lime Group, is prepping a new music service that it says will be legal, and should be due out in a month.

But the utility of that service depends on the participation of the big music labels, and at least for now the labels are still trying to extract a big piece of Lime Group’s hide. Court hearings in the damages phase of Lime Group’s hire are scheduled to resume in January. And this statement by industry trade group RIAA makes it clear that the labels aren’t feeling conciliatory:

“For the better part of the last decade, Limewire and Gorton have violated the law. The court has now signed an injunction that will start to unwind the massive piracy machine that Limewire and Gorton used to enrich themselves immensely. In January, the court will conduct a trial to determine the appropriate level of damages necessary to compensate the record companies for the billions and billions of illegal downloads that occurred through the Limewire system.”

Today’s announcement comes after Lime and the labels spent weeks trying to negotiate an out-of-court settlement; Federal District Court judge Kimba Wood actually handed down the injunction in August.

Here’s LimeWire CEO George Searle’s description of events, via blog post:

As of today, we are required to stop distribution and support of LimeWire’s P2P file-sharing service as a result of a court-ordered injunction.

Naturally, we’re disappointed with this turn of events. We are extremely proud of our pioneering history and have, for years, worked hard to bridge the gap between technology and content rights holders. However, at this time, we have no option but to cease further distribution and support of our software.

It’s a sad occasion for our team, and for you–the hundreds of millions of people who have used LimeWire to discover new things.

While we have enabled open sharing and discovery for the past decade, LimeWire is mostly the product of the people who used it. You made LimeWire. Thank you for letting us being part of that. Your support and enthusiasm has fueled everything that we do.

During this challenging time, we are excited about the future. The injunction applies only to the LimeWire product. Our company remains open for business.

We remain deeply committed to working with the music industry and making the act of loving music more fulfilling for everyone – including artists, songwriters, publishers, labels, and of course music fans.Our team of technologists and music enthusiasts are creating a completely new music service that puts you back at the center of your digital music experience.

We’ll be sharing more details about our new service and look forward to bringing it to you in the future.

And here’s a LimeWire PR rep’s description of what’s going on:

As a result of a court ordered injunction, we are required to disable “the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality” of LimeWire’s P2P file-sharing software.

Please note LimeWire’s official statement on this legal development is as follows:

“While this is not our ideal path, we hope to work with the music industry in moving forward. We look forward to embracing necessary changes and collaborating with the entire music industry in the future.” – LimeWire Spokesperson.

An important point of clarification, LimeWire is not “shutting down”, in specific regarding our software, we are compelled to use our best efforts cease support and distribution of the file-sharing software, along with increased filtering. And, that is what we are doing.

Skype and Facebook Announce Partnership

Beth Callaghan — Thu, 14 Oct 2010 18:41:37 +0000

As BoomTown’s Kara Swisher reported here on September 29, Skype and Facebook have announced a significant integration–as of today, users of Skype 5.0 for Windows can sign in using Facebook Connect, which will allow them to SMS, voice chat, make status updates, like and comment on Facebook posts from within the Skype desktop client.

Panasonic Develops Hair-Washing Robot

Beth Callaghan — Thu, 30 Sep 2010 21:03:13 +0000

Showcasing an interesting new use of 3D technology, Panasonic unveiled a hair-washing robot today that scans the shape and surface of a client’s head in order to apply “just the right amount of pressure” while shampooing and massaging each scalp. The robot was designed to help at understaffed healthcare facilities in Japan, where the rapidly aging population is a growing issue.

Exclusive: BermanBraun Strikes Big Ad Deal with Starcom

Kara Swisher — Wed, 18 Aug 2010 00:57:44 +0000

In an interesting move for premium online content, Hollywood’s BermanBraun has signed an advertising deal with Starcom MediaVest Group, the media agency unit of advertising giant Publicis Groupe, sources said.

As part of the deal, Starcom gets a “first look” at all of the online properties created by the innovative production company headed by Lloyd Braun (pictured here) and Gail Berman. BermanBraun produces both digital and mainstream content.

Both Berman and Braun are longtime Hollywood execs, and Braun also did a rocky stint running media at Yahoo (YHOO).

Sources said the goal for the parties is that the advertising spend exceed north of $100 million over four years on BermanBraun sites.

This is important, since Starcom’s clients, which include Wal-Mart (WMT) and Procter & Gamble (PG), are big spenders offline.

Thus, getting regular ad dollars to online properties is critical to the success of digital content, which has remained an experimental spend, compared with offline entertainment.

Those sites include its celebrity Wonderwall site, the women-focused Glo on Microsoft (MSFT) portal MSN, the upcoming political site on MSNBC and others being developed.

The deal is apparently nonexclusive to Starcom, sources said, so BermanBraun can sell to other advertisers.

The deal will be shepherded by Brian Terkelsen, who runs Starcom’s LiquidThread unit aimed at the Web and mobile devices.

To understand where it is all headed, here is a video of Braun onstage at the eighth D: All Things Digital conference in June, in an interview I did with him and Steve Levitan, co-creator of the television hit “Modern Family”:

[ See post to watch video ]