Yahoo CEO Scott Thompson, who has developed a tough-talk reputation within Yahoo of late, went all sweet — well, less crabby, I guess — the day after the layoffs in which 2,000 employees were fired.

After dressing down top execs the night before the cuts by telling them the bad situation was due to their poor performance as leaders, his internal letter to the troops was also a bit cut-and-dried, with the not-very-sympathetic admonishment, “change is never easy.”

Not exactly what someone who just got their pink slip — or saw a close colleague get axed — likes to hear!

Today, Thompson opted to go with the softer side of Scott, in an internal memo I obtained titled “time to move forward.” It includes a promise to deliver a real strategic plan next week at an “All Hands” meeting. (I have previously reported that he was rolling out a new structure next week.)

Yahoo’s activist shareholder Third Point admonished Thompson yesterday for not having such a plan in place before making such widespread layoffs, which shed 14 percent of the workforce from the Silicon Valley Internet giant.

“While this action was unfortunately necessary and widely expected, Third Point, Yahoo!’s largest outside shareholder, is disappointed that this round of cuts occurred before CEO Scott Thompson has articulated his strategic plan for the Company,” it wrote in a letter (embedded below). “Shareholders deserve a management team and board who have a vision and strategic plan.”

Internally, there was also a lot of grumbling over the lack of a vision before the layoffs and worries that Thompson does not have a clear path for Yahoo.

“It’s like going into war and killing a big chunk of troops right before, without a plan in place about how to win,” said one person, in a common sentiment I heard from employees. “Everyone left feels shell-shocked and with no direction.”

In recent meetings about various options, including selling off a variety of Yahoo’s businesses, the former president of eBay’s PayPal payments unit has focused on a range of ideas, especially adding more commerce and data to the mix.

Apparently, all will be revealed next week, in what Thompson called “comprehensive plans for Yahoo!’s future.”

Thompson also did a little cheerleading:

“We can do this. We will do this! One thing I’ve heard repeatedly since I got here is that everyone wants to win again…I have seen big turnarounds before, and this company has the foundation, the spirit, the backbone, and the creativity to get it done,” he wrote. “Personally, I can’t wait to get moving.”

That’s good, because shareholders and employees have been waiting a long time for any forward momentum at Yahoo.

Here’s the memo below in its entirety:

From: Scott Thompson
Sent: Thursday, April 05, 2012 1:15 PM
To:
Subject: time to move forward…

Yahoos –

This was a tough week. Thank you all for supporting each other through a difficult time.

As hard as big changes like this can be, I was encouraged to hear support from so many of you who really understand our need to operate differently. That said, I also know many of you still have a lot of questions about where we’re headed and how fast we can get there. I shared a few thoughts in my note earlier this week and you’ll hear more at our All Hands next week.

We deliberately separated this week’s employee action from next week’s discussion of our strategy. The reason was simple: we felt it was only fair and respectful to those who are leaving and transitioning to take care of each of them before turning to our future.

Starting next week we will begin looking forward and our All Hands is just the beginning. You’ll be hearing a lot more from me and other leaders about our comprehensive plans for Yahoo!’s future. The immediate next step for all of us is to get clear on our goals, and then take action and move.

There’s a lot to do and that’s why I can’t stress enough that we all need to focus on getting stuff done. Getting stuff done is short hand for eliminating bureaucracy and barriers so we can all innovate as fast as our customers and the industry require. That’s pretty fast.

Our users want fun, informative, engaging experiences on all screens that they feel were designed just for them. Advertisers want it to be much easier to work with us and they want measurable ROI on their spending. We can do all that. But we won’t win by talking about the opportunity. We’ll win by putting our customers first, creating high-quality experiences, and iterating on them quickly. Great user and advertiser experiences are what will ignite excitement around our brand and get us growing again.

You’ll receive the official invite to our All Hands shortly and we want to know what’s on your mind in advance. If you have questions before we meet next week, please check Backyard for information and answers to your questions. If you don’t see the answers, please post questions on Backyard, or you can email questions directly to the leadership team.

We can do this. We will do this! One thing I’ve heard repeatedly since I got here is that everyone wants to win again. There is so much passion for Yahoo! — for what it was and for what we all believe it can be. Even after all you’ve been through, there’s a hard core crew of Yahoos who believe in this company and in its ability to thrive. I have seen big turnarounds before, and this company has the foundation, the spirit, the backbone, and the creativity to get it done.

Personally, I can’t wait to get moving.

Scott

And here’s the Third Point letter from yesterday:

TP April 4 Statement

Finally, here is a video of a “Reporters’ Roundtable” I did last week on CNET:

In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

According to sources close to the situation, Yahoo’s massive round of layoffs — which is likely to impact up to 2,000 employees — is just the tip of the proverbial iceberg that will hit the storied Silicon Valley Internet giant in the months to come.

Sources said Yahoo is currently planning to announce the cuts in staff in the early morning, just as the markets open. That could change, of course, but the cuts will definitely occur within the next two days.

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions. While still sustaining losses, its media units will not be as badly impacted. And it’s not clear how many employee terminations will be aimed at the company’s general and administrative staff.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be “doubling down” in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

But not tomorrow, which will be one of the tougher days in Yahoo’s long history of periodic layoffs. Newly installed CEO Scott Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

That is indeed the case, which is causing massive strain throughout the company, which now employs over 14,000 and has many thousands more hired as contractors.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counter-claim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week, which will create several major, soup-to-nuts units at the company. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

Let’s hope that Yahoos who will be let go tomorrow find themselves with many new employment choices after the ax falls.

Yahoo is preparing to begin layoffs of what could be thousands of employees starting next week, according to multiple sources, and is then expected to announce a new restructuring of the company the week after.

The swirl at the Silicon Valley Internet giant has grown more intense this week, as new CEO Scott Thompson has brought in top management for a series of meetings both Tuesday and Wednesday to outline the plans.

What has emerged — although sources noted that Thompson and others communicating the pending changes said nothing was yet set in stone — is the picture of a drastically slimmed-down organization with a focus on media, advertising and new but unclear “future” initiatives.

First the layoffs: Sources said the cuts will be deep and mostly aimed at the product, research and marketing units of Yahoo, which are likely to take place Wednesday. The ultimate goal, said multiple sources, is to cut many thousands from Yahoo’s staff of close to 14,000 employees, which is actually much larger, due to contract workers not officially in its roster.

The entire cut will not take place at once, said sources, since Thompson and others are still trying to figure out how to dispense with its ad technology org and, potentially, its search business. He has been in discussions with both Microsoft and Google about this, although there are other possibilities, too.

Both these parts of Yahoo together have about 2,500 staffers, whose fate is not yet sorted out.

Also still baking is the new structure, although sources said it is most likely to be comprised of a global media division, one that encompasses Yahoo’s communications and search businesses, and ones focused on global and also regional sales. There could also be a small organization of about 50 aimed at future innovation.

Americas head Ross Levinsohn is the likeliest exec to run the media arm, while Shashi Seth — who now heads search and marketplaces — would be the obvious candidate for the the communications/search one.

Thompson has already been conducting a search for a new worldwide sales head, although one possible internal exec for the job could be Rich Riley, who was recently running Yahoo’s Europe, Africa and Middle East region.

It is not clear how Chief Product Officer Blake Irving fits in the possible new org, since much of the development could now move to the decentralized units.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

Thompson, along with consultants he has hired from the Boston Consulting Group, presented the possible plan in front of Yahoo’s senior execs on Tuesday. That was followed by more meetings with a wider range of top management yesterday, although Thompson was not as highly specific in these meetings.

In fact, according to a half-dozen sources, Thompson apparently grew somewhat testy in one of the gatherings, when asked if there was a strategy he was going to announce in more detail to the group.

(Dear Scott, these are very talented employees who love the company and who have been through the wringer and it’s not their fault that leadership has failed them, so it might be a good idea to treat them with as much respect as possible right now.)

More to come, obviously.

What is Yahoo?

While that has been the perennially unanswered question at the Silicon Valley Internet giant for many years, according to dozens of sources inside and outside the company, Yahoo’s leadership is now deeply embroiled in an intense — and sometimes very tense and fast-changing — debate over a number of critical issues about what is expected to be the most sweeping restructuring in its history.

Top executives at the company are conducting what is likely to be a lively all-day “offsite” meeting today (which is actually taking place on Yahoo’s Sunnyvale campus) to continue to discuss, among other things: How and where the company will make large-scale cuts in staff, which I have previously reported were coming and will perhaps be numbering in the thousands; which businesses to sell off and which to keep, including its ad tech unit; the correct structure for the reconfigured entity; and who will be left to run it all when it is all settled.

Also up for debate is the best course of a two-pronged effort — being led primarily by CFO Tim Morse and members of his corporate strategy team — to renegotiate its search and advertising partnership deal with Microsoft, while also engaging in active discussions with Google about it taking over Yahoo’s search business.

“Everything is on the table,” said one person. “And anything could be blown up by Scott.”

The Scott being referenced is new CEO Scott Thompson, who has become something of a whirling dervish since he arrived at Yahoo only three months ago from the top job at eBay’s PayPal unit.

If shaking up the place — as he has promised in public and internal statements, including a recent memo in which he wrote that “real change is coming” — was his aim, Thompson is certainly doing just that and more.

Along with immediately initiating a massive effort to figure out the best way to restructure the long-troubled and ever-meandering company and all that entails, Thompson has also been meeting players all over Silicon Valley for advice; stopping and then restarting negotiating discussions with Yahoo’s Asian partners, visiting major advertising clients; and engaging in talks with activist shareholder Dan Loeb about settling a looming proxy fight, while also packing the board with allies to help fend off said battle.

And, oh yes, he also took a little time out from his busy schedule to sue Yahoo partner Facebook for patent violations.

But the real action is the remaking of Yahoo in his image. To do so, Thompson has been furiously evaluating the entire company, with the help of Boston Consulting Group and a small group of execs, especially Morse.

While it is all still undecided, he seems to be leaning toward Yahoo as a drastically slimmed-down entity without a central product group and with a simplified structure that includes global units — such as media, commerce and sales organizations — which will again be in charge of the entire development of their offerings.

(I will note, since I have been covering Yahoo since near its founding, this is a structure that has been in place before. In other words, at least for dinosaurs like me, there is nothing new under the sun here.)

The changes being contemplated include, as I have written previously, the possible sale or drastic reconfiguration of its ad technology business, which will effect at least 1,000 employees. Another 1,500 involved in Yahoo’s search business will also be impacted, depending on talks the company has been having with Microsoft, as well as Google, about better monetization.

Such a structure brings up a lot of questions about how, and by whom, it will be run. To figure it out, Thompson has been evaluating — sometimes rather brusquely — his own top managers, as well as looking for new ones outside the company, such as a search for a chief marketing officer and other key positions.

Confused? Perhaps, but not for much longer, said multiple sources, as Thompson moves closer to delivering his answer to the what-Yahoo-is question.

Yahoo PR — by the way, it will not escape Thompson’s change machine, either! — declined comment.

One of Yahoo’s most respected researchers, Raghu Ramakrishnan, who is the author of one of the most famous database textbooks, “Database Management Systems,” has left the Silicon Valley company to join Microsoft. He was also critical to the development of much of Yahoo’s personalization technology.

Sources said the chief scientist for search and cloud platforms at its Yahoo Labs unit will be a fellow on the software giant’s SQL team.

Ramakrishnan, who has been at Yahoo since 2006, is one of many key researchers to depart before what is expected to be a gutting of the company’s research division in upcoming layoffs and other cuts by new CEO Scott Thompson.

None of this exodus of high-level research talent comes as a surprise. Prabhakar Raghavan, the well-respected head of the Yahoo Labs unit and also recently its head of strategy, has recently left the company to take a job at Google.

Ramakrishnan came to Yahoo from a professorship at the University of Wisconsin-Madison. According to his bio from Yahoo, he was the “founder and CTO of QUIQ, a company that pioneered crowd-sourcing, specifically question-answering communities, powering Ask Jeeves’ AnswerPoint as well as customer-support for companies such as Compaq.”

A Yahoo spokesperson declined comment (but, trust me, it is true).

Prabhakar Raghavan, the well-respected head of Yahoo’s Labs unit and also recently its head of strategy, is leaving the company to take a job at Google.

The departure comes ahead of what will be very deep cuts in his division, which is in charge of long-term research at the Silicon Valley Internet giant, said sources, and is spread all over the country. More researchers at Yahoo — which is a very well-respected group — are also expected to go too and will be the subject of fervent recruiting interest by companies such as Google and Facebook.

Yahoo confirmed the move after I made an inquiry about it this morning.

In a statement, the company said:

“Yahoo! thanks Prabhakar Raghavan for his dedication and contributions to Yahoo! for the past 7 years. We wish him well in his next endeavor. Ash Munshi, CTO, will assume leadership for Y! Labs.”

It is unclear what Raghavan’s new role at Google is.

But, as head of Yahoo Labs, Raghavan’s research arena has been extensive, encompassing everything from data mining to algorithms to search.

He is also a consulting professor of computer science at Stanford University. According to his bio, Raghavan has “co-authored two textbooks, on randomized algorithms and on information retrieval.”

The Berkeley PhD had been CTO at Verity and had held a number of jobs at IBM Research.

More to the point, he was very well respected within the company, which seems to be curtailing its commitment to research as it attempts to turn itself around under the new leadership of CEO Scott Thompson.

Raghavan had been made head of strategy under former CEO Carol Bartz, who was fired.

He has been at Yahoo seven years.

Arriving at Silicon Valley’s Computer History Museum, in the heart of the tech industry, with the leader of the free world talking jobs and digital, you might expect fantastic wireless access.

You might, but not so much if you are a “local” reporter and can’t jack into the extra-secret-special wireless link the national White House press corps apparently has reserved for itself. (They also get a lovely noshing buffet, whilst we tech reporters have been instructed not to touch the pineapple and scones or else!)

Famished for coffee and carbs, we’re left with glomming onto the museum’s slowish wireless service — there are lotsa geeks here today jamming up the lines — and every now and then getting some juice from Google. The search giant blankets the Mountain View, Calif. area near its HQ with free Wi-Fi, but it fades in and out.

I am now reconsidering the antitrust investigations that the Obama administration is conducting against Google, as long as its signal is good enough to check Twitter.

So this liveblog of President Barack Obama’s LinkedIn Town Hall — which will center on jobs and is titled, “Putting America Back to Work” — could be glacial with not much news, much like what I am expecting from the event itself.

I’d certainly like to work, as long as the wireless does! (Plus, limited power outlets in the room, so it’s every reporter for herself!)

But bygones, while we await the Prez!

10:18 am: One thing that made me flee Washington, D.C., when I worked for the Washington Post, was all the rigmarole that surrounded the appearance of and access to politicians.

I get it, the security and all, and am all for it on a general safety level. But, no matter how you slice it, it hinders any kind of movement or genuine interaction, like being stuck at a really dull opera. All the world’s a stage and we are all merely waiting in traffic.

In contrast, and one of the joys of Silicon Valley, is that anyone can get up right up into the grill of the various billionaire potentates littering the landscape, engage in a debate and get a possibly real answer.

Thus, I am hoping for a lot here from LinkedIn CEO Jeff Weiner, who is going to moderate the hour-long session with the President.

By the way, while he is busy running the business-focused social networking site, Weiner is looking good in a fancy suit, almost as if he could be Secretary of the Internet. I’d vote for him.

10:28 am: Some painless but hip music is playing now, as we wait, wait, wait for Obama, who is set to begin in 30 minutes.

I wonder if the President is ever early. Wouldn’t that freak the peeps out?

(Obviously, I am bored, so I shall now go monitor Twitter to catch up on the latest in the new bad-marriage-or-not cat fight between Brad Pitt and his ex, Jennifer Aniston — as if we need him to tell us Angelina Jolie is more interesting. Frankly, Angie’s midday snack is more interesting than Jen.)

There is now what appears to be a Secret Service dude next to me, giving me a hairy eyeball. If I am jailed over my wireless protest, please give generously to my defense fund.

Free the Internet! Free the Internet!

10:35 am: Finally, the production guy is up giving out the rules. Turn off the cellphones, no making noise.

The head Secret Service guy then takes the stage. No getting out of your seat. No sudden movements. And no crossing the blue line in the front row.

“All joking aside,” he says, he will take you down. He also notes that if the President moves toward you to shake your hand, “do not move toward him.”

I love Secret Service agents — especially when played by Clint Eastwood — and wish I had one to give a few people in tech a little smackadoo on my behalf. And not only if they moved toward me!

10:47 am: This little frisson of excitement is followed by more waiting, as the final seats are filled up in the room, which is an unusually (and welcome) multi-racial and gender-balanced crowd for Silicon Valley.

Various White House aides skitter back and forth like nervous ground squirrels — I would imagine their life is one big effort to avoid any gaffe — so the Prez must be near.

I am actually looking forward to seeing him, as I never have in person and am looking forward to seeing the famous Obama charm and techie cred.

Indeed, he is probably the most fast-forward tech president there has ever been. That said, buffeted by more serious issues facing the nation, his administration has delivered on few — by which I mean none — of its promises around the digitization of the U.S.

Our high-speed broadband, for example, is still woefully slow, inordinately expensive and not easily available nationwide.

And I will not even go into the need for increased focus on math and science education or the importance of our broken visa policies.

But the topic today is jobs, which is an arena where Silicon Valley and tech shines in the U.S., even as manufacturing of it has mostly moved overseas. How tech can help improve in the creation of jobs will be issue No. 1 here.

10:55 am: Total silence with five minutes to go. I need the President around to quiet my kids.

Now, LinkedIn Chairman and VC Reid Hoffman comes in, so the event is probably about to begin.

And, indeed, Weiner emerges to cheers, to give a little speech on “changing the way we work … and connecting talent to opportunity.”

11:01 am: Then, the session starts right on time with President Obama.

He begins with a rote speech on jobs, which is nonetheless the most important issue he faces going into next year’s election.

11:14 am: Ah, wireless glitch! Back!

President Obama is inexplicably in the middle of a Medicare question, which gives him an opportunity to talk about the need for the rich to pay more taxes.

And pass his American Jobs Act, of course.

11:17 am: More on proposing legislation for retraining workers, such as the questioner’s mom.

Now to a group of email questions. The first is about when small businesses are going to get a break from onerous regulations and taxes.

President Obama says since he has been in office, he has cut taxes 16 times for those who create a business.

But he is not going to apologize for some regulations, such as those for the financial industry over the mortgage crisis.

“There are some regulations that have outlived their usefulness,” he says, but others not so much.

11:24 am: The next question is from a Chicago IT employee. Except she is not employed.

She is asking a question about keeping her skills up and what programs are needed.

“The best thing we can do for you is that the unemployment rate goes down,” said President Obama, but also adds that making it easy to go to school while waiting on a job is also important.

“Just looking at you, I can tell you are going to do great,” he tells her in an awkward effort at reassurance.

Thanks, Barack, but she needs a job!

11:28 am: A veteran is asking a question about transitioning out of the military.

Obama launches into a story of a medical technician who faced all kinds of experiences, but had to start over again with new classes when out of the military. He suggests some level of credentialing based on experience.

11:33 am: Obama gets to pick out someone from the crowd and manages to pick out a dude who is a former Googler — although he only says that he works down the street — and is out of work by choice.

He asks: “Will you please raise my taxes?

A plant? I wish!

President Obama asks the name of the start-up. “A search engine,” says the ex-Googler-in-disguise, who is Doug Edwards, an early marketing exec there who actually wrote a book on being an ex-Googler.

“That worked out well for you,” kids President Obama.

Everyone likes a rich-guy joke!

He is soon onto the idea that we’re all dang lucky and declares he does not want it to turn the debate over taxes into a rich-poor war.

Bottom line, he notes that we have to raise taxes on the very wealthy. Frankly, if we raised taxes on a bunch of folks in this room, it would help a lot.

11:42 am: A teach-training question, especially math and science teachers.

President Obama is all for it.

He is meaning well here, but all he seems to offer is a lot of bromides about the importance of education and errant related anecdotes.

Like one from IBM, where the company hires the kids in the program at the end.

President Obama wants students to see a direct connection between learning and jobs.

Then, he kind of says it again. Gosh, he can talk. How does the well-fed and wirelessly connected White House press corp take it? Lotsa donuts, I would imagine.

President Obama also wants us to turn off the electronics and video games for kids, too, thereby instantly losing the votes of my two sons!

Another laid-off guy is up at the mic. He had 22 years in IT management and is disheartened.

He wants a statement of encouragement from the CEO of America.

President Obama assures him that his track record of success gives him a leg up, but that the problem is the economy and the global meltdown, too.

It’s systemic, apparently.

“The problem is not you, the problem is the economy as a whole,” says President Obama.

That was the last question. Weiner, who has been sitting quietly (I know it was hard, Jeff, but good job), thanks the President and tells him that this is a big issue.

President does his thanks, too, for being able to speak, although not really that much was actually said.

And then a genuine moment, finally, of clarity.

“Look, we’re going through a very tough time, but we have gone through tougher times before,” he says. “But the trajectory we are going on is one that is more open, more linked …”

He talks about the need for being ready to take advantage of that opportunity.

“Things have gotten so ideologically driven, putting party above country,” he adds, that nothing is getting done. That’s why the people, the voters, have to demand leadership from their elected officials.

Or, presumably, fire them and let them try to find another job, too.

It might turn out to be the best idea yet, if these pols don’t agree on something and quick.

Yahoo, which will announce fourth-quarter earnings later today, is also laying off another one percent of its staff, according to sources.

The layoffs of well over 100 employees are taking place across the company, although cuts are largely in the media and advertising group.

Yahoo currently has about 13,600 staffers worldwide.

After initially declining comment, a Yahoo spokeswoman confirmed the move and released the following statement:

“The personnel changes we are making are part of our ongoing strategy to best position Yahoo! for revenue growth and margin expansion and to support our strategy to deliver differentiated products and experiences to the marketplace. We’ll continue to hire on a global basis to support our key priorities.

Today’s action impacts approximately 1% of the global employee base.”

The Silicon Valley Internet giant conducted a larger layoff of four percent of its staff–mostly in its product organization–in December.

It matters a great deal to the unfortunate employees at Yahoo who are being laid off this week for the reporting on the subject to be accurate and to entail some serious effort.

(It’s bad enough to lose a well-paying job in this still-tough economy, but to lose one over the holidays requires quite a lot more than incorrectly quoting a tweet off Twitter without checking first.)

And so here’s the deal, as BoomTown has previously reported, about what’s happening with Yahoo layoffs, set for tomorrow morning:

Yahoo will lay off about 650 to 700 employees.

Those layoffs will come largely from its product division, headed by Blake Irving, although there could be firings in other parts of Yahoo.

The layoffs are mostly in the U.S. units of Yahoo.

Those let go will be notified tomorrow and will likely have to leave Yahoo facilities immediately. Company sources said the action will be completed by early afternoon, Pacific time.

It’s definitely bad timing for Yahoo, given it is less than two weeks until Christmas, but cost-cutting at the company seems unavoidable as it seeks to improve revenue and spur growth.

Still, it is another sad day in Sunnyvale, Calif., where the iconic Internet giant is headquartered.

Although Andy Rubin’s keynote at D: Dive into Mobile is scheduled for just before dinner, expect to hear a lot of talk about dessert. On the menu are Froyo, Gingerbread and perhaps even a hint of Honeycomb.

Google did release a couple of tasty treats already on Monday–announcing plans for the Samsung co-developed Nexus S as well as the release of Android 2.3 (Gingerbread). But I hear the cookie jar isn’t quite empty yet.

In between sugary snacks, Kara Swisher and Walt Mossberg will pepper Rubin on the many issues facing Android and the wireless industry. Mobilized will have live coverage of the session at this spot beginning around 6:45 pm PT.

Liveblog

6:37 pm: The crowd is still settling into their seats here at the Ritz-Carlton San Francisco, the swanky home to the inaugural D: Dive Into Mobile.

6:40 pm: Lights dim. Kara Swisher and Walt Mossberg take the stage. “My husband, Walt Mossberg, and I would like to welcome you to this intimate dinner,” Swisher quips.

6:42 pm: Ironically, the crowd was asked to silence their mobile devices, but Kara says they should just feel free to leave them on.

6:44 pm: It’s Rubin time (and he has brought a satchel of goodies with him).

Rubin is asked about the Nexus One and why it didn’t shake up the business model. “We bit off a little more than we can chew.” Rubin says that they were hoping for a model more like that in Europe, where people can pick a phone and then separately pick service, typically at retail stores like Carphone Warehouse. “We were trying to do that model in the U.S. and only do it online.”

6:46 pm: Kara: So have you given up on that business model?

Rubin: With Nexus S, which is the thing we announced today, we still have that notion of an unlocked phone. But we are not selling it ourselves, but through traditional channels, in this case Best Buy.

6:48 pm: Walt: How is Android doing?

Rubin: Android started as an eight-person start-up. “During that time at Google we obviously staffed up.” Now there are 172 different phone models using Android after the OS was launched two years ago with one, the T-Mobile G1.

Rubin credits the quality of the software and the open nature of it.

6:49 pm: Walt: I notice more and more they are taking on the personality of the carrier, not Google, not the handset maker. There are lots of what I would call craplets. Verizon, for example, swapped out Google for Bing. Is there a danger it is being taken over?

Rubin: That’s the nature of open. That’s actually a feature of Android.

He takes a swipe at Windows Mobile, saying that the alternative is a commoditized world where all the phones have to have a start menu in one place and all the icons have to be tiles.

6:54 pm: Kara: Do you consider yourself the Microsoft of phones in that regard?

Rubin: No. We’re probably more like the Linux of phones, and that’s a true statement.

Walt: You mean hard to get drivers for, only for geeks, no real consumer would buy it?

Rubin: No, I think we’ve already proven that wrong. Bad analogy.

6:55 pm: Discussion about all the crapware that comes on many phones.

Rubin: The consumers are voting and the consumers are voicing their opinions.

6:56 pm: Rubin has some relatively nice things to say about the iPhone.

“I think everybody is embracing the iPhone. They are pretty open.”

Rubin says that most developers actually are having a pretty easy time getting their apps approved by Apple.

6:57 pm: Kara: How do you consider Apple as a competitor?

Certainly they make great products, Rubin says–robust, solid, good user experiences. A lot of consistency across applications. More recently I see them getting involved in the other end of the spectrum–services like a bookstore, the app store.

6:59 pm: Walt: What about Apple’s massive data center? That’s another area of competition for you guys.

Rubin talks about the power of Google’s ad-based model, which allows the core advertising to fund all kinds of applications.

Walt: Do you think Apple has the DNA to do this?

Rubin: “My assumption is Apple is a company that learns from its mistakes.”

7:01 pm: Kara and Walt: Are you profitable? Is Android profitable? Does Android make any money?

Rubin: We’re making money on the advertising that’s generated through Android.

Walt: Are you profitable if it was broken out as a separate business?

Rubin: Yes. [Wow. I'm curious about the math, but maybe if you add all the searches on Android-based devices.]

There’s no way I would have ever been profitable as a start-up. I probably wouldn’t have made it as a separate company.

7:06 pm: Walt: How do you see the rest of the competition beyond Apple?

Rubin: I don’t think it’s ever going to be just two [Apple and Android]. There’s a lot of innovation and a lot of ideas out there.

Rubin says there is a fundamental advantage to Android and iPhone since they are new and designed from the ground up.

He notes even Windows Phone 7 has legacy code from the original Windows Mobile from way back when.

“You just have this package of stuff that was invented before the Internet,” Rubin says. “When the architects built that product, they didn’t have the Internet in mind.”

7:08 pm: Walt: Is there anything you do like about Windows Phone 7?

Rubin: It was a big bet. They struck upon that notion of the centerpiece of the main tiles. It’s a good 1.0 product. It does look different and it does look unique. It’s solid. I’m not the predictor of being successful.

He says if he were to give advice to Microsoft, he would suggest that it give more freedom to carriers and phone makers so the devices don’t look the same.

Kara: Have you gone to Finland to woo Nokia?

Rubin: I haven’t been to Finland.

Walt: Forget Finland, have you tried to convince Nokia?

Rubin just laughs (a-ha).

7:12 pm: Kara: The discussions with Nokia–talk about them in detail.

Rubin: The company has new leadership [referring to CEO Stephen Elop]. They are evaluating lots of alternatives. I’m open-minded and a big proponent of Android.

Rubin again declines to talk about any meetings he may have had.

7:14 pm: What about the challenge of iconic products like RIM?

Rubin: Talks about the challenge of legacy and points out Motorola had that problem when it became overly dependent on the Razr. Then, “they bet the company on Android,” he points out.

Rubin said RIM is doing the right things–acquiring assets like QNX and DataViz to build a more modern operating system.

7:16 pm: Walt points out that RIM will be here Tuesday–PlayBook tablet in hand.

7:16 pm: Back to the discussion about persuading companies to use Android.

Rubin: If it’s good–and we all believe that it’s good–everybody can use it.

“You don’t need to be a partner of Google to run Android.”

7:17 pm: Walt asks about tablets. Are they exciting to you? Are they important to you? Can they replace laptops for some people?

Rubin: I think what is going on in tablets is interesting. It’s fundamentally changing the model of computing interaction.

It is much more physical. You touch it. You feel it.

7:19 pm: What changes in the paradigm? It’s not a laptop. It’s not a phone.

Rubin points out that we used to have PDAs, but the cellphone eventually replaced it. The tablet is a sort of in-between device so the use case is less clear. You might definitely have it on the couch, but maybe not on the subway.

7:21 pm: Walt: What makes it more interesting and more immersive? There is something different there?

Rubin: If you do a good job, what you’ve done is make it a reflex. Like a car. You learn how to drive and you can drive almost any car. You don’t get distracted by things. That’s the result of many, many years of evolution. That’s true of any consumer product. They become almost like second nature for you.

7:24 pm: Kara and Walt ask about privacy.

Rubin: There is nothing in open source Android OS that sends keystrokes or what applications you use to Google.

He encourages people to look at the source code.

Walt: There are Google services that do collect certain things?

Rubin: Yes, like on other platforms. But he encourages people to read the company’s privacy policy.

7:27 pm: How do you overcome the perception that Google wants to collect more information than the others?

I think you just have to be transparent. You have open source–be inspectable. Any other interpretation is either FUD or just people who don’t understand.

7:28 pm: On to the goodie bag. Rubin pulls out a Nexus S. Says it is his personal device.

Kara: Oh good. She grabs it and pulls it close to her.

Now Rubin is showing the features, screen, etc. He’s talking about the Near Field Communications technology that is actually printed inside the back of the case. NFC allows a phone to scan specially printed tags.

Walt: Is that what sends all the information back to Google?

Rubin: Laughs. Goes back to demoing NFC and showing the Nexus S scanning a tag, which sends a URL for a video of the Nexus S to the phone, which then starts playing.

7:31 pm: Rubin talks about the applications: Buying coffee, getting coupons.

What we are hoping is third-party developers create a lot of cool apps. Devices can also use NFC to exchange contact info between two devices as well, kind of like beaming in the old Palm days.

7:32 pm: Rubin is talking abut the Nexus strategy.

To give a “Pure Google” phone. Google works with the hardware maker to take maximum advantage of Android’s features.

7:35 pm: What’s new with Gingerbread?

We added a garbage collector. Added broader voice over Internet Protocol support. Can cut, copy and paste without a trackball.

7:36 pm: Walt: What about video calling? I know there are third-party apps that do that. It seems like a natural thing that it belongs in the phone function.

Kara: FaceGoog or GoogleTime.

Rubin: There’s a whole bunch of software engineers hitting their keyboards back in Mountain View. If consumers want it, we’ll add it. [He strongly hints that it is coming, points out there already is Google video chat for PC.]

7:38 pm: Rubin reaches into his bag of tricks again. Pulls out a prototype Motorola tablet to show a forthcoming version of Google’s mobile map application.

7:38 pm: Shows the improved 3-D abilities and new panning and zooming options. What we are showing off here is some pretty cool performance.

“It will be available for cellphones in a matter of days,” Rubin says.

What allows the new presentation is that maps are no longer a series of tiles, but rather vector graphics.

7:40 pm: Vector data is smaller and more efficient, so users can load data in case they go offline. “You could load a whole state,” Rubin says.

This app runs on Android only for now, though it will work on tablets and phones.

Walt: What about PCs?

Rubin: That would be a natural extension.

7:41 pm: What version of Android is running on that tablet?

Rubin: Honeycomb [the next version of Android, due out some time next year]. There are no buttons on the Motorola tablet. He’s showing his personal email again.

7:43 pm: More on Honeycomb: We added new APIs to Honeycomb that allow an application to split its views to multiple views. On a a tablet they can be side by side, while on a phone they might be one after the other.

7:46 pm: On to Q&A.

7:46 pm: What about the Chrome OS team? What’s the delineation between the two?

Rubin: That’s a good question. Google was born on the Web. “I don’t think it would be doing its job unless it reinvested in the Web.”

But evolution of the Web had stagnated a bit, prompting Chrome. “It’s kind of slowed down a bit.”

Apps vs. Web?

There’s no need to argue. We’re doing both, Rubin says.

7:50 pm: What are the plans for the Android team to focus on the enterprise?

We did a little bit, Rubin says, but he likens it to baby steps. Support for VPN and some secure browsing. Gingerbread has some added features like remote wipe. Each release you will see more and more.

7:51 pm: App discovery. What are your plans?

Rubin: This is all evolving. The Android market is evolving as well. Gingerbread allows “related applications.” We are always adding features.

As a search company, if we can’t help you discover apps, I think we have a problem. We should be very easily able to organize a few hundred-thousand apps.

7:53 pm: Question about mobile payments; What is Andy Rubin’s vision? Groupon?

Rubin: I think there is a lot of opportunity. It is not an opportunity that is going to be seized by one company. Today Android does carrier billing integration, so you can put apps on your carrier bill. Creates an efficient micropayment option.

With Nexus S having added gyroscope capability, can see things from even within a store. Should help make, for example, better coupon apps.

7:57 pm: Android on TVs?

Rubin: That’s exactly what Google TV is. It is Android running on a set-top box. The first versions of that are running an Intel processor.

Have demonstrated the same app can run on both a three-inch screen or a flat-panel TV.

People are building all kinds of things. Refrigerators, ovens, automotive. Rubin says the nice thing about open source is that he and Google don’t have to be involved in every use. “We knew what to do to make it scale as widely as possible.”

7:58 pm: Question about carrier data plans and pricing.

Rubin: Average usage on an Android phone is 440MB a month. Rubin points out we are at a bandwidth crunch, but that it tends to be a cycle. New networks tend not to be overwhelmed by demand at first, but then the demands grow. Then new networks come along.

How should OEMs try to differentiate?

Rubin: I think HTC has done a really good job with Sense. Motorola has Blur. People are really differentiated.

Rubin says he often hears complaints about fragmentation. “Fragmentation” is the wrong word. Different phones do things differently, but that’s differentiation. Basically the apps are still compatible, Rubin says.

8:04 pm: Is Android too clunky? Will we see a sea change where Android really gets more user friendly?

Rubin: I would probably characterize Android today as an enthusiast product for early adopters–or wives of tech enthusiasts.

8:05 pm: Rubin says the company made some concessions that led to “geeking it out.” But then there are apps that offer easier customization and personalization.

8:07 pm: Walt points out places where it requires an extra step to do things like compose an email, while the iPhone does it in a single step.

Rubin: Yep. We get it. You will see the fruits of that investment in the tablets first and then in the phones. It’s going to get better. Honeycomb will be a good start

8:08 pm: Applause and they exit stage. ‘Night.

Yahoo is indeed preparing to lay off employees, in a reduction in force that will be done in December.

But the layoffs, first reported in TechCrunch at 20 percent, will be closer to 10 percent and be almost completely centered on the product organization under Chief Product Officer Blake Irving, said sources close to the situation.

That would mean layoffs of about 650, since that part of Yahoo has about 6,500 employees.

Yahoo, in fact, just put out a statement saying the 20 percent figure was “inaccurate.”

Said the company in a statement: “Yahoo! is always evaluating expenses to align with the company’s financial goals. However, a 20% reduction in Yahoo’s workforce across the board is misleading and inaccurate.”

Well, kind of, because it is a big layoff nonetheless.

In addition, said sources, the layoffs might result in the outsourcing of some functions at the company.

Even at a lower figure, the move will surely be yet another blow to morale at the much-buffeted Silicon Valley Internet giant.

Just this week, for example, Google gave each of its employees a 10 percent pay raise and $1,000. Facebook, similarly, is showering benefits on its fast-growing pool of workers.

Along with a spate of top-level executive departures, Yahoo is under scrutiny by Wall Street, as well as the subject of much takeover speculation.

This has put Yahoo CEO Carol Bartz under even more pressure to show results after almost two years as top manager.

Known as an exec who knows how to cut costs, she has yet to prove she can grow the Yahoo business with new innovations.

Yahoo has just over 14,000 employees. It has undergone many layoffs and restructurings, but only once in a major one under Bartz.

Earnings from a spate of top digital companies will be reported in the coming days, including for Google (April 15), Yahoo (April 20), Apple (April 20), eBay (April 21), Netflix (April 21), Amazon (April 22) and Microsoft (April 22).

Most Wall Street analysts expect good news from the group as a whole, especially as the economy recovers. Bright points include the e-commerce and advertising markets, both of which have been rebounding.

In addition, extensive cost cuts over the last year and easy year-over-year comparisons for most companies will brighten the financial picture.

That’s the hope at least, especially since tech stocks have been performing less robustly than the S&P of late.

Of all the tech companies, analysts are most worried about Google (GOOG), which has seen its share price pushed down over a variety of issues.

There are good reasons for long-term concern, despite expected strength in its core search business, when the search giant reports tomorrow. But from its battle with China to possible regulatory scrutiny from the federal government to its escalating fight with Apple, Google is an ongoing digital soap opera.

And while its Android mobile operating system is growing, there are still questions about if and when Google can make bank from the business.

Yahoo (YHOO), the perennial weakling in recent quarters, is getting much better reviews, especially as the display ad market improves. Also a plus: Cost savings from its online ad and search partnership deal with Microsoft (MSFT).

Yahoo’s stock has been rising of late above its consistent $15 range to over $18 yesterday. Crossing to a $20 a share price would be a significant Rubicon for Yahoo.

Apple (AAPL), though, seems to have remained an investor darling and is expected to turn in another stellar quarter. Investors will be looking to hear if the company will release actual iPad sales results, which some think the secretive company is lowballing.

Also of interest are sales of its powerhouse iPhone, as well as any more news on the new operating system for it.

For eBay (EBAY), improvements in its main marketplace business, as well as continued strength in its PayPal division, will be closely watched by investors.

But continued pressure from a range of new and old competitors and eBay’s ability to respond and grow remain a worry.

Netflix (NFLX), though, is hindered only by existing bullishness around the stock. Wall Street is expecting strong results from the online video rental company, especially as it continues to add subscribers and innovate its intense customer service focus.

For Amazon (AMZN), the impact of the Apple iPad and e-book prices will likely get a lot of attention, even though it has a much larger business beyond its Kindle e-reader. The improvement in the e-commerce arena is likely to be a boon to Amazon.

Last of all to report will be Microsoft, whose earnings are more complex, given its many businesses.

While the focus will be on sales of Windows 7, in the digital arena, analysts will likely be interested in the status of its Yahoo partnership, the gains in search share for Bing and what plans the software giant has related to the cloud-computing arena.

Yesterday, BoomTown began grading the performance of Yahoo CEO Carol Bartz, after she gave herself a B- for overall performance for the year since she took over the troubled Internet giant.

But I decided to be more specific, splitting the grades into five categories: Management, financials, product innovation, deal-making and moxie.

For management, I gave Bartz an A-, because she has been a definite improvement on previous leadership in terms of decision-making, speed and essentially grabbing the mantle of control firmly from the start.

Some thought I was too generous and others thought the grade should have been an A+. Which means it was just about right!

Today, let’s look at financials–by which I mean Yahoo’s fiscal performance and its stock price.

In this regard, Bartz only gets a C++ (it’s a techie joke, get it?).

I could have given her a B- here, I guess, but–to me–C+ simply means financials have remained in a holding zone under Bartz, so she does not deserve to be completely decried, or applauded either.

Why? Well, let’s start with the stock.

While Yahoo (YHOO) shares are up about 38 percent for the year, which is a good thing, they still lag those of other Internet companies, as well as the market.

In the same period, the Nasdaq was up about 44 percent, Google’s stock has doubled and Microsoft (MSFT) shares are also up a lot more.

In an interview with Bloomberg recently, Bartz claimed that Yahoo was in the “penalty box” with investors–a hangover from former management, presumably–and this is the reason for its weaker stock gain.

Whatever. But Bartz has been the CEO for a year and Wall Street is still holding out. Thus, she has to fully take the blame instead of pointing at the previous administration.

In other words, former CEO and co-founder Jerry Yang and the Yangtanic are ancient history. So, all is forgiven, Jerry (call me!).

Bartz also blamed the recession for Yahoo’s continued revenue decline in 2009, about 12 percent overall in the most recent quarter.

She told Bloomberg, “We came out of one of the worst climates ever. And if you look at growth of Fortune 500 companies, only being down 12 or 15 percent is damn good. I’m not going to apologize for our growth.”

Again, whatever. But she runs a company in a high-growth industry and is not selling hams or socks, so perhaps bragging that being down 12 to 15 percent is “damn good” is a bit of a stretch.

(Microsoft certainly did not crow over its 14 percent decline in revenue in the most recent quarter even though it beat expectations, and its fiscal results rely a lot on something that does get profoundly affected–namely, sales of PCs–in a recession.)

Specifically, in the third quarter, Yahoo’s search advertising revenue was off 19 percent, and display was off eight percent at “Owned and Operated” sites on Yahoo.

Google, in contrast, reported a seven percent rise in its third-quarter results, and its execs projected a mood of smooth sailing ahead and no more econalypse. Financial performance at Amazon (AMZN) was also way up, as it was at Netflix (NFLX) and Apple (AAPL).

Still, Yahoo’s fiscal performance relies a lot on premium branded advertising, so it has remained weaker and will do so until the economy really comes back.

Many analysts are predicting exactly that, with double-digit sales growth in this area ahead.

And Yahoo’s bottom line is likely to get a boost when its costs are off-loaded to Microsoft, as part of the search and advertising partnership Bartz struck with the software giant earlier this year. The deal awaits regulatory approval, which is likely, and will then start to kick in later in the year.

Still, a dark cloud hangs ominously over the persistent search share declines Yahoo has suffered, which Bartz and others attribute to loss of toolbar and other distribution deals that Google (GOOG) and Microsoft picked up.

But query growth rates are also down and that’s a red flag, especially since Microsoft and Google are up a lot.

Nonetheless, depending on how these various parts of Yahoo revenue sort themselves out, along with Bartz’s cost-cutting, Yahoo’s bottom line is most likely to look better in the quarters ahead, so the stock could certainly go up quickly.

And so could her financial grade. Bartz is well known for being great at managing the bottom line and Wall Street expectations, so I suspect it is top of mind for her.

That said, once that registers, everyone will then be looking for not just a return to normal, but for actual growth.

And that can only come from product innovation–the name of the game in Silicon Valley–which is what will be on the grading block Monday.

Essentially–although AOL is located in New York and not California–it’s going to be like tremors before the Big One at the online company today, as about 100 employees are laid off.

Sources said the cuts, first reported by Valleywag’s Ryan Tate, will be widespread across AOL, even as the company inches ever closer to being spun off from its corporate overlord, Time Warner (TWX).

That will come within the next month, once the spate of regulatory comments and approvals is in place, said sources.

And during this time, AOL CEO Tim Armstrong’s “Project Everest”–the code name for cost-cutting across the company–will be chugging along to its final destination.

After tomorrow’s small cut, sources said, Armstrong has told employees he is seriously considering a suggestion made to him on a listening tour of AOL, which he took in his first 100 days on the job, of asking for voluntary departures that would include some sort of buyout.

It’s unlikely that that will be enough to achieve the kinds of cuts needed to bring costs in line with depressed revenue at AOL.

At its third-quarter earnings call last week, Time Warner reported that AOL revenue was down 23 percent. In addition, subscription revenue, which will continue to shrink, was down another 29 percent, and advertising revenue, which is supposed to improve one day, was down 18 percent.

Thus, with that performance, AOL is likely to do a massive layoff of upward of 1,000 employees.

That action will take place right before or, more likely, at the same time or right after the spinoff.

In other words, not very happy holidays for some.

But AOL is not alone in making cuts in the tech space. Last week, both Microsoft (MSFT) and RealNetworks (RNWK) laid off staff, as did Electronic Arts (ERTS) yesterday.

Here is a recent interview I did, while in Germany, with Armstrong, where he talked about AOL’s prospects:

]]> http://allthingsd.com/20091110/aol-small-layoff-today-a-voluntary-buyout-and-then-the-big-one/feed/ 0 http://allthingsd.com/20091105/realnetworks-to-lay-off-four-percent-of-staff-today/ http://allthingsd.com/20091105/realnetworks-to-lay-off-four-percent-of-staff-today/#comments Thu, 05 Nov 2009 08:34:22 +0000 Kara Swisher http://kara.allthingsd.com/?p=20317

The Seattle area is going to get another jobless jolt today, with RealNetworks planning to lay off four percent of its workforce, sources said.

That’s a small number–just about 70 people out of its 1,700-person staff–but the move comes on the heels of layoffs of another 800 employees at nearby Microsoft yesterday.

The software giant has cut thousands of jobs over the last year, part of a move to eliminate 5,000 positions by mid-2010.

While the dismissals–which are likely to be announced by managers to affected RealNetworks (RNWK) employees sometime this morning–will be global, both companies are tech leaders with headquarters in the Pacific Northwest.

According to sources, the reasons for the layoffs at RealNetworks are, as was the case at Microsoft (MSFT), to realign the workforce after the recent economic downturn and to control costs.

But RealNetworks could also hire back some of the laid-off employees, as other parts of the company are expanding.

The company had signaled the possibility of staff cuts previously, but had not been specific.

The last staff cuts at the company, which makes digital media software and tools, were larger, about 130 employees sacked about a year ago.

RealNetworks announced better-than-expected third-quarter earnings last week, barely returning to profitability by cutting costs to make up for weaker revenue.

(Digital Daily’s John Paczkowski contributed to this report.)

]]> http://allthingsd.com/20091105/realnetworks-to-lay-off-four-percent-of-staff-today/feed/ 0 http://allthingsd.com/20091023/liveblogging-the-microsoft-first-quarter-earnings-call-look-wall-street-no-hands/ http://allthingsd.com/20091023/liveblogging-the-microsoft-first-quarter-earnings-call-look-wall-street-no-hands/#comments Fri, 23 Oct 2009 14:42:52 +0000 Kara Swisher http://kara.allthingsd.com/?p=19858

Well, well, well, that financial imp at Microsoft–CFO Chris Liddell–pulled a fast one on Wall Street and turned in first-quarter earnings that blew away all estimates and even the whisper numbers.

While revenue and net income were down for the third consecutive quarter, they were not as bad as investors had expected.

Perhaps those Microsoft (MSFT) financial predictions were no good, but the results were a strong sign of recovery at the software giant.

BoomTown liveblogged the morning conference call with Liddell, which took place at 7:30 am PT–thanks for the Kiwi-laced wake-up call, Chris!

(You can see the financial slides of the Q1 performance here.)

7:34 am: “It might have been the bottom of the economic reset,” said Liddell in the opening. “I’m very happy.”

Still, Liddell, who has been a glum goose for many quarters now, could not quite do cartwheels, noting that the economy was “still challenging.”

He also still repeated his favorite term for the market, calling it: “The new normal.”

7:38 am: Other investor guy, whose name I always forget (and who is Bill Koefoed, by the way), got on and went through the numbers. He also sounded deeply relieved and noted that it looked pretty good out there.

Liddell returned and said Microsoft was “well-positioned” to exit the econalpyse stronger than competitors.

Not so bad, although he expected personal computer and hardware sales be weak still and was not promising anything.

The online and search and advertising partnership with Yahoo (YHOO) was also on track, said Liddell.

“In summary, I feel great about how we are executing,” said Liddell, who made sure to give credit to “cost discipline.”

It was nowhere near the strong performances of Google (GOOG) and Apple (AAPL) recently, but allowed Microsoft some much needed breathing room.

7:51 am: Question time!

The first was about when the launch of Windows 7 would start bringing home the bacon.

The next was about “channel inventory build,” which was like asking Liddell to be a soothsayer. “Net positive,” he opined.

The third question was about costs from the transition of the Yahoo deal and the contribution.

Costs will up front and there will be a contribution in the “hundreds of millions.”

Next: The future of cost cuts.

“I see that as the journey that never ends,” said Liddell.

Memo to PR head Frank Shaw: Cancel the truckload of caviar for a big honking party in celebration of these results. Stat!

7:58 am: I missed one question, since it was so boring, as was the answer.

Then a good one came about the deployment of Windows in corporate environments and elsewhere.

“All of the feedback we get so far is positive,” said Liddell, not that he is bragging or anything. “The sales in retail, we are expecting to be very good.”

Another cost question, this time about whether more investments are coming in the years ahead.

No ramping back, thank you very much!

The next question was about the impact of netbooks on the bottom line.

Not bad, but not huge, said Liddell.

What about display advertising online? In line with the weaker market, said Liddell, but it should improve.

8:09 am: PC demand? Liddell notes the “robustness” of the PC, which Microsoft has actually been pooh-poohing over many quarters.

Liddell said he saw better days ahead, perhaps because past ones had been weak, especially business PCs. “That can’t continue forever,” he noted.

A question about Europe. “Relatively weak,” said Liddell, while emerging markets were stronger.

“This calendar year is transition to next calendar year,” said Liddell.

A query about Windows 7 revenue recognition, which comes when Microsoft sells to OEMs.

8:14 am: More on OEMs, who are the big buyers of Microsoft’s operating system software.

Next up: Another question about outlook.

“Generally speaking, we are seeing good adoption of our products,” said Liddell, but the true rebound is coming next year.

The last question is about Windows Live.

It’ll get better, but next year, folks!

Translation, if you imagine Liddell channeling “Annie”: The sun’ll come out tomorrow. Bet your bottom dollar that tomorrow, there’ll be sun!

Enjoy this lovely video of the classic song:

]]> http://allthingsd.com/20091023/liveblogging-the-microsoft-first-quarter-earnings-call-look-wall-street-no-hands/feed/ 2 http://allthingsd.com/20091020/chartastic-heres-yahoos-q3-financial-highlights-now-with-even-more-bars/ http://allthingsd.com/20091020/chartastic-heres-yahoos-q3-financial-highlights-now-with-even-more-bars/#comments Wed, 21 Oct 2009 05:06:28 +0000 Kara Swisher http://kara.allthingsd.com/?p=19658

Yahoo reported its third-quarter earnings earlier today, a pretty good performance in which it soundly beat Wall Street expectations with a stronger net income than expected.

While revenue at the Silicon Valley Internet giant was down, also as expected–both owned-and-operated search and display advertising saw big declines, 19 percent and eight percent–cost-cutting by CEO Carol Bartz and the sale of the company’s stake in China’s Alibaba.com seem to have more than made up for it.

You can read BoomTown’s liveblog of the conference call by CFO Tim Morse here, but please also enjoy Yahoo’s (YHOO) financial highlights presentation, as well as its condensed financial documents, full of more numbers than you will ever want to crunch.

And, yes, Tim Morse, because I know how little attention the work of accountants get, I have actually read them all!

Here they are:

YQ3_Q309EarningsPresentationFINAL –

YHOO Condensed Financial Documents –

]]> http://allthingsd.com/20091020/chartastic-heres-yahoos-q3-financial-highlights-now-with-even-more-bars/feed/ 2 http://allthingsd.com/20091020/liveblogging-yahoo-third-quarter-conference-call-bartz-comes-down-with-something-and-cfo-carries-on/ http://allthingsd.com/20091020/liveblogging-yahoo-third-quarter-conference-call-bartz-comes-down-with-something-and-cfo-carries-on/#comments Tue, 20 Oct 2009 21:15:15 +0000 Kara Swisher http://kara.allthingsd.com/?p=19647

Uh-oh, Yahoo CEO Carol Bartz was expected to appear on the Internet giant’s third-quarter earnings call, but she has apparently “came down with something,” according to CFO Tim Morse.

BoomTown is sending over chicken soup right now, but let’s hope she gets her vaccinations tout de suite!

Worst of all, no sassy quotes or cursing, replaced by a very earnest Morse, who sounded like he was once a Boy Scout.

After the markets closed, Yahoo reported better-than-expected earnings on still lackluster revenues.

Overall, the conference call boiled down to one quote from Morse that seems to have been selected as the Yahoo (YHOO) buzzword of the moment:

“The theme for third quarter was stabilization.”

2:02 pm PDT: Investor stuff from guy who sounded like a robot that I completely ignored, since I was much more interested in a conversation between two women about a bad date this past weekend, which I eavesdropped on in its entirety while liveblogging from a Starbucks (SBUX) in San Francisco.

By the way, the man whom the ladies are ripping was a very unstable date!

2:04 pm: Morse jumped on and gave everyone the bad news about Bartz being sick and the good news about the better-than-expected net income, while also updating all the various happenings of the quarter.

“I am happy to report that our Q3 revenue came in above our guidance range,” said Morse, who sounded somewhat jaunty.

Morse reeled off numbers, numbers and more numbers, some stuff about the new marketing campaign ($18 million spent so far and $45 million in the next quarter!) and other stuff about the cost cuts and fourth-quarter guidance.

Also, no sale of the company’s Alibaba in China or the Yahoo! Japan stake, thank you very much!

2:12 pm: Morse also gave a quick update about the search and online advertising partnership Yahoo has struck with Microsoft (MSFT).

His message: The Silicon Vally Internet icon is not out of search, because it is not about the algorithm, but a better search product.

Tim, you might want to roll that claim back, especially since you also might want to notice how well Google (GOOG) has done with its giant math-brains in the search business.

Morse tried mightily to channel Bartz on search, using a comparison she has made about the Intel (INTC) chip, which is widely used by computer makers. Said Morse, it’s the “differentiation” that matters!

I wonder if Yahoo will keep repeating that one, even as its search share continues to decline.

But Morse did make a funny about how many ex-Yahoos are on the Microsoft payroll now, so the partnership transition should go smoothly.

Well, there’s that!

2:28 pm: Morse mentioned Yahoo’s analysts day next week, and then opened up the call to questions.

Analysts always ask very dull questions at earnings calls and this one proved no different.

The first was about display run rate and about the search market in comparison to Google.

What’s the good word? Stabilization, of course!

The next question was about eBay (EBAY), which seems far from the point.

Morse agreed and cut it short.

Then, a question about guaranteed placement and stock buybacks. Zzzzzzzzz–even Morse sounded bored.

The Starbucks lovelorn ladies had left by now, so I was too.

2:37 pm: The next question concerned the affiliate business and how it might be affected by the Microsoft deal.

I immediately summoned the barista, since it was clearly time for a double espresso!

A question came next about when the display ad business would recover from the econalypse. Morse: Stabilization!

Then, a query about gross margins and whether they can be maintained. Morse was not saying, except to point out that there was a “good, old-fashioned, get-your-hands-dirty” attitude at work at Yahoo now about watching costs.

I was suddenly worried about dirty-handed Yahoos, just when the CEO is sick!

Use Purell, please–or suffer the wrath of Judy!

2:43 pm: Another question on ad sales and quality. Thus, I moved onto mainlining coffee beans en masse. I long for a visit from Juan Valdez!

Then, a question about Q4 guidance, which was not good enough for one analyst, who wanted more.

Morse did not really bite, although he talked a lot.

Next, a question about slow-growing page views and what was Yahoo planning to sell of its various assets.

Morse tried to be all silver-lining about page views and would not talk about specific divestitures (nor did he mention the appointment of a new head of Yahoo M&A).

“We continue to look at the landscape,” he said.

What about more job cuts or hiring, since Yahoo added 200 people in the quarter? Morse noted Yahoo was staying strong in tech talent and was “putting feet on the street” in advertising.

Also something about paid inclusion, but a new person at Starbucks was having a really good cellphone argument, so I zoned out of Morse-talk for a second!

2:56 pm: A question about premium and nonpremium inventory. Looks good on premium, said Morse.

The next query was about the different metrics between the new and old homepage, as well as a request for more info about the analyst day next week.

Morse refused to “steal my own thunder” on what is going to happen there. But, there will be thunder? I am always dubious when it comes to Yahoo and thunder.

As for the homepage, Morse said Yahoo was still evaluating the performance.

2:58 pm: Mobile. Aaaaaghhh, another chance for Morse to say not much about anything substantive. Morse: Better and more established! Translation: No moolah yet!

A head count question. Will improvement come from cost cuts due to the Microsoft deal or revenue improvements?

Three guesses and the first two don’t count. Thanks for the row-boatloads of money, Microsoft!

Something about bookings and small-to-medium businesses. Morse did not understand the question and neither did I.

Next, a question on search monetization, which has weakened. Answer: Stabilization!

3:02 pm: A question about the new $100 million branding campaign. Morse: “It’s very, very early.”

Some deal question and then one about behaviorial targeting, which Morse said will apparently be a “lifeblood” of the future.

Incredibly, Morse has gone hog-wild chatty with Bartz laid low and is asking for more questions, without making one good joke or salty remark yet.

I was completely losing it when it gets to ad exchange details and not as coffee-saturated as I needed to be.

Finally, the LAST question: Another one about divestiture and acquisition.

As if Morse was going to answer, referring instead–as he has many times in the call–to his “script.” Yahoo will buy stuff, Yahoo will sell stuff, but pretty much a no-comment!

And on that note…Carol: Please, pretty please GET WELL SOON!

Until then, here is a minidose of Bartz, via video snippets from an interview with me at the seventh D: All Things Digital conference.

Her lively tone seen here at D7 would have been a good thing at today’s earnings call:

(And, here is a link to Yahoo’s presentation of its financial highlights, for those with a hankering for even more numbers.)

]]> http://allthingsd.com/20091020/liveblogging-yahoo-third-quarter-conference-call-bartz-comes-down-with-something-and-cfo-carries-on/feed/ 1 http://allthingsd.com/20090907/sticky-situation-of-the-month-ex-yahoo-communications-head-and-peanut-butter-manifesto-scribe-garlinghouse-to-helm-similar-unit-at-aol/ http://allthingsd.com/20090907/sticky-situation-of-the-month-ex-yahoo-communications-head-and-peanut-butter-manifesto-scribe-garlinghouse-to-helm-similar-unit-at-aol/#comments Tue, 08 Sep 2009 03:45:02 +0000 Kara Swisher http://kara.allthingsd.com/?p=18169

In the ongoing game of musical chairs among top managers at Internet companies, former Yahoo exec Brad Garlinghouse–famous for his controversial “Peanut Butter Manifesto,” which correctly chided the Internet giant for becoming so lugubrious several years ago–is taking a job at AOL very similar to the one he left at Yahoo last year.

Garlinghouse, 38, has been named president of Internet and mobile communications at AOL, putting him in charge of the New York-based Time Warner (TWX) online unit’s powerful email and instant-messaging properties, including ICQ and AIM.

He has only been in talks with AOL–which used Spencer Stuart’s Internet-top-exec-finder-in-chief Jim Citrin–for a few weeks, in a deal that came together quickly, he and the company said.

Garlinghouse, a longtime Web entrepreneur and exec, had reportedly been considering a number of start-up and venture-related jobs since he left Yahoo last summer after six years there.

Sources said he was seriously considering becoming the CEO of a mobile firm.

He was most recently at Silver Lake Partners, as an “in-house senior advisor,” the private equity firm that recently bought the Skype Internet telephony firm for $1.9 billion. Garlinghouse also reportedly helped work on that deal.

“It’s really exciting to be to able to rebuild and revitalize an industry giant,” said Garlinghouse in an interview with BoomTown earlier today. “I make no bones that these [properties] are in need of that…but there is also a huge opportunity to do something cool.”

Garlinghouse has to hurry. Despite being among the top communications players online–a group that also includes Yahoo (YHOO) and Microsoft (MSFT) and, more recently, Google (GOOG)–AOL has lost relevance with key audiences, even as social networking properties like Facebook and the microblogging service, Twitter, have innovated in the communications space.

The hiring of Garlinghouse, well known in Silicon Valley circles, is meant to counter that.

He will head up AOL’s operations from its Mountain View, Calif., campus–which is also the former HQ of AOL-acquired Netscape Communications–where, said AOL CEO Tim Armstrong, Garlinghouse will “be CEO of Silicon Valley for us.”

Between all its various properties, AOL has several hundred employees in the Northern California area.

Armstrong said AOL–which was founded 25 years ago on the East Coast and has tried and failed many times to get a true foothold in the West–thinks having an important player at the center of the tech industry is critical as it moves to spin off as an independent company by the end of the year.

“We have a triple play in getting a great executive, who is a master in the communications on the Web and who is well known out there,” said Armstrong. “Brad is our senior AOL manager there.”

Along with running all of AOL’s communications properties, Garlinghouse will inherit some of its community properties, although AOL’s Bebo social networking unit–now considered to be an overpriced acquisition error–now resides in its ventures unit, headed by Jon Brod.

Garlinghouse will also be aiding Brod, said Armstrong, with AOL on the lookout for acquisition opportunities in communications and other arenas.

While Garlinghouse declined to be specific about what would pique his buying interest, he was responsible for such big Yahoo deals as its $350 million purchase of Zimbra in the fall of 2007.

He was also key to bringing both Oddpost, which is at the heart of Yahoo’s email offering, and the popular Flickr photosharing service to Yahoo.

Garlinghouse said he has admired what Twitter and Facebook have done, but that they were not destroying traditional online communications, pioneered by AOL, as some assert.

“It’s a vibrant segment and this just means there are a lot of opportunities to enable integration,” he said. “I think of it as an expansion of online communications and I hope AOL can do more collaboration and partnerships.”

Garlinghouse also has to watch AOL’s basic products like email, which was recently passed by Google’s Gmail as the No. 3 email service in the U.S. Yahoo Mail is the top email, while Microsoft’s Hotmail is second.

How much Garlinghouse can do will depend on the future financial strength of AOL. Its advertising business has been hit hard in the econalpyse, with hopes it will return before its money-generating access business continues its slow decline.

Armstrong is now in the midst of looking over AOL’s cost structure and employee base, which most expect will eventually result in another round of layoffs and cuts.

He has been busy creating a different strategy for the company since he arrived earlier this year, as well as hiring (and firing) top execs to create a new management structure.

Now, that includes Garlinghouse.

So, for a look-see at AOL’s latest talent acquisition, here’s a video interview I did with him, just after Yahoo bought Zimbra:

[ See post to watch video ]

And here’s the full press release from AOL about the hiring of Garlinghouse:

AOL NAMES BRAD GARLINGHOUSE AS PRESIDENT, INTERNET AND MOBILE COMMUNICATIONS

NEW YORK, N.Y.–September 8, 2009–AOL today named Brad Garlinghouse as President of Internet and Mobile Communications, spearheading AOL’s global efforts to expand the reach of its e-mail and instant messaging. Garlinghouse will also take on an expanded leadership position for the company, heading up AOL’s Silicon Valley operations from its Mountain View campus and serving as the West Coast lead for AOL Ventures, the company’s venture capital arm headed globally by Jon Brod. Garlinghouse was most recently at Silver Lake Partners as an in-house Senior Advisor.

Prior to Silver Lake, Garlinghouse spent nearly six years at Yahoo!, where he led that company’s communications and community products. Garlinghouse will report directly to AOL’s Chairman and CEO Tim Armstrong.

” Brad Garlinghouse is an all-star in the Internet industry with an unparalleled background and proven track record, having led Yahoo’s communications products to unprecedented growth,” said Armstrong. “In addition to leading our efforts to grow our communications products, Brad will be bringing his global leadership and business experience as a key member of our company’s executive leadership team. He will also be a major force for AOL in Silicon Valley, working to expand our presence there and in the tech community in general. We’re delighted to have Brad on board and know he’ll do great things for AOL.”

“It’s a tremendous opportunity to join AOL at this pivotal moment in its history,” Garlinghouse said. “Tim has set out a clear strategy and vision for where he is taking this company as it becomes independent again. I’m looking forward to working with him and the rest of the team to realize that vision.”

Armstrong, who joined AOL in April, identified Communications as one of the five key areas of strategic focus for AOL after an extensive 100-day review of the company’s business. Other focus areas include Content, Advertising, Local & Mapping and AOL Ventures.

Garlinghouse spent nearly six years at Yahoo! where he most recently served as SVP of Communications and Communities. Prior to that he served as SVP of Communications, Communities and Front Doors, which included the Yahoo! home page. He came to Yahoo in 2003 as VP, Communication Products. During his time there, Yahoo! Mail went from No. 3 to leading all competitors by a wide margin, and the company’s instant messaging service rose to become the leader in that market as well. Garlinghouse also oversaw the company’s Flickr photo-sharing service and Yahoo! Groups.

Prior to Yahoo!, Garlinghouse was CEO of Dialpad.com Inc., responsible for all aspects of the company’s operations, finance, sales and marketing. He was also General Partner at @Ventures, Category Manager of Media Development for the @Home Network, Inc., and Manager at SBC Communications.

Garlinghouse, 38, received his BA in economics from the University of Kansas and his MBA from Harvard Business School.

]]> http://allthingsd.com/20090907/sticky-situation-of-the-month-ex-yahoo-communications-head-and-peanut-butter-manifesto-scribe-garlinghouse-to-helm-similar-unit-at-aol/feed/ 0 http://allthingsd.com/20090814/massive-aol-layoffs-not-imminent-but-top-to-bottom-cost-exam-definitely-in-process/ http://allthingsd.com/20090814/massive-aol-layoffs-not-imminent-but-top-to-bottom-cost-exam-definitely-in-process/#comments Fri, 14 Aug 2009 08:35:32 +0000 Kara Swisher http://kara.allthingsd.com/?p=17611

After a while–in a BoomTown mangling of the old cliché–if you are a nail, everything begins to look like a hammer.

So, it is probably inevitable that the next thing for much-beleaguered AOL staffers to start rumbling about is 2,000 people getting laid off next week, as was reported earlier this week by Silicon Alley Insider.

After all, the Time Warner (TWX) unit has a long history of whacking employees. So, it is easier to assume things will not be different under the regime of the latest CEO Tim Armstrong.

Except it’s not actually true that such massive cuts are in the offing, since–as many sources I spoke to said–Armstrong is only in the early part of figuring out what to do about the cost structure of AOL, after laying out a company strategy and rejiggering management recently.

While the end result of the cost-to-benefit analysis might, in all likelihood, mean layoffs of a chunk of its 7,000 employees–a larger number for its smaller operations.

And, after all, staff costs are one of the biggest line items in AOL’s budget–sources at the company said Armstrong will not rely on simply cutting jobs to craft a more attractive budget for its upcoming spinoff.

Still, there is obviously a lot of pressure on Armstrong to get the financials–which are still largely dependent on AOL’s declining, but money-generating, access business–looking pretty.

That access business did almost $2 billion in revenue last year–about half its sales–and it represented almost all its profits.

In contrast, AOL’s advertising business lagged, dropping hugely over the last several quarters.

Still, Armstrong has laid out a strategy that has included, in part:

Being a new kind of content giant, via a series of branded niche media sites, with about 500 full-time writers and editors and 1,500 freelancers; selling premium display advertising on these sites and strengthening its third-party self-service ad network business; finding a way to use its communications properties to redistribute traffic to other properties in a kind of virtuous circle.

There are also local, analytical and venture elements. But–for all intents and purposes–Armstrong’s plan is a content-and-advertising model, supported for now by the dwindling piles of cash from the access business.

That’s why, of course, costs are the next item on Armstrong’s to-do list.

“The cost structure is the last part of what was going to be dealt with, as Tim has told everyone,” said one person close to the situation about the former Google (GOOG) exec. “But, if it is slash-and-burn only, that would be pretty short-sighted.”

Perhaps, except that it is that exact tactic that has been business-as-usual at AOL for far too long.

]]> http://allthingsd.com/20090814/massive-aol-layoffs-not-imminent-but-top-to-bottom-cost-exam-definitely-in-process/feed/ 0 http://allthingsd.com/20090716/do-that-thing-you-do-after-cuts-both-yahoo-and-myspace-need-a-little-something/ http://allthingsd.com/20090716/do-that-thing-you-do-after-cuts-both-yahoo-and-myspace-need-a-little-something/#comments Thu, 16 Jul 2009 14:02:42 +0000 Kara Swisher http://kara.allthingsd.com/?p=14849

A few weeks ago, when I was having breakfast with legendary Silicon Valley entrepreneur Marc Andreessen about his new venture fund, he talked about what he thought was critical to being successful as an Internet company.

Ticking off names, from Apple (AAPL) CEO Steve Jobs to Facebook CEO Mark Zuckerberg, Andreessen said he always favored technical entrepreneurs for one key reason: “You need someone who lives and breathes product.”

It’s a refrain I have heard a lot recently from a wide range of people in the sector, most especially when talking about two of the more challenging renovations of key Internet brands going on of late.

That would be: Yahoo and MySpace.

In recent days, the focus at both Yahoo (YHOO) and MySpace, a division of News Corp. (NWS), has been on cost cuts, management rejiggering and, of course, layoffs, as new leaders at each Web giant are trying mightily to push the reset button. (News Corp owns Dow Jones, which owns this Web site.)

No surprise, their efforts have gotten a lot of attention and have been the subject of a lot of coverage (here for Yahoo and here for MySpace).

But, as those clean-up efforts wrap up, both have to show a whole lot more than that if either is to truly succeed at their tasks–which is to make both services much more relevant and exciting in the fast-changing Web arena.

While Yahoo and MySpace remain huge Web properties–and Yahoo, in particular, is very profitable in comparison to most Internet outfits–the widespread perception across the digital sector for too long now is that they are both tired in some significant ways and in desperate need of innovation.

Their big tasks include an overhaul of product offerings and features, a refreshing of brand and, most importantly, a strategic rethink that will set them on a new course for the next several years.

This is not a new thing in the Internet space, which has seen once-popular companies fall by the wayside as their products have gotten dull and consumers weary.

AOL–the Time Warner (TWX) unit whose new CEO, Tim Armstrong, is trying to reinvigorate that iconic but deeply tarnished brand too–is the classic example of this problem. But there have been too many that either hobble along, get subsumed into a larger company or just wither and die.

Sudden death is not likely to be the case for either Yahoo or MySpace, but time is most definitely running out for the pair to show some true product pizzazz and a strategic road map.

At Yahoo, most of the glitter thus far has come from the personality and charms of CEO Carol Bartz (pictured here), who has been hard at work projecting an image of moxie and decisiveness in her efforts to get some momentum at the turmoil-plagued company.

Replacing former CEO and co-founder Jerry Yang, Bartz has largely been busy cutting staff, pruning products that she recently dubbed “space debris” and rounding out her executive staff.

She’s also been prepping a new branding campaign to accompany Yahoo’s overhauled front page, which is set for the fall.

But, as the famous Peggy Lee song (see video below) goes: “Is that all there is, is that all there is?/If that’s all there is my friends, then let’s keep dancing/Let’s break out the booze and have a ball/If that’s all there is.”

But breaking out the booze and having a ball is actually not such a bad idea. To my mind, instead of tweaking what is there and emphasizing what it has been, Yahoo now has the chance to just go for broke and boldly make some dramatic choices.

That is especially true if it forgoes a search and online advertising partnership with Microsoft (MSFT), since Yahoo is going to have to do more than just what it already does better.

Interestingly, it is Microsoft, with its well-reviewed new Bing search service, that seems the most aggressively innovative these days.

So, why not, for example, make a shocking move, say, into the premium online video space? Yahoo certainly could pick up some damaged goods, like Veoh and Joost, on the cheap.

But what about buying the early winner: Hulu?

While the three studios that are its joint owners (the fourth owner is Providence Equity Partners)–News Corp., Disney (DIS) and GE (GE) unit NBC Universal–don’t seem inclined to sell, many sources close to the company said they most certainly would for the right price and perhaps a stake in Yahoo too.

Yahoo has been one of Hulu’s many distribution partners, but that effort has been lackluster. As owner, it would surely point its vast traffic and tech resources at Hulu to good effect.

In this kind of scenario, Google (GOOG) and Comcast (CMCSA) are also contenders for Hulu, but it is only Yahoo that has the truly better record of being able to create, manage and distribute Web content.

Plus, you could call it: HuHoo or YaLu or, better still, HooLu.

There are lots of ideas along these lines for Yahoo, but the overarching idea is to dominate in areas its rivals do not.

For MySpace, which was the dominator until rival Facebook cleaned its clock and then some, it is both a crisis of identity, a broken consumer experience and technology that needs a major overhaul.

It is hard to say what MySpace is, except really noisy. While the music part of that is good, the idea of making it hip again seems well-nigh impossible.

But it could be useful as an entertainment hub where it is fun to be. News Corp. CEO Rupert Murdoch raised this concept recently, in fact, and it is a good one.

That’s because Facebook is aggressively un-fun, with a fascist design sensibility and a thick ethos of utility and enforced busy-ness. Whenever I use it, I always start to feel like I am 23 minutes late.

There really is no good overall and unified entertainment hub on the Web in a massive way–one that aggregates all kinds of interests. I would, for example, love a place where I could easily live in a “Gossip Girl” universe.

Best of all, such a direction moves MySpace well away from Facebook, where is needs to get pronto.

MySpace CEO Owen Van Natta (pictured here) said as much in a memo to employees yesterday:

“As I’ve said before, simplifying and unifying our site is fundamental to our success going forward. MySpace should feel like one platform–not 15 sites loosely stitched together. We consider our diverse content offering a strength but too many logos and disorganized verticals makes the site difficult to navigate and creates confusion about our brand identity. Our users don’t know if we’re a social portal, a music site, or an entertainment hub.”

In her own memo last week, Bartz also talked about the need for speed and definition of Yahoo:

“I’ve noticed that since the reorg, people seem like they’re waiting for something. I’m not sure if it’s a sugar-low or what, but we need to stop waiting and get moving. Good things do not come to those who wait, they come to those who make things happen.”

Actually, per Marc Andreessen, good things come to those who make things. Wonderful things, fun things, memorable things and, if you are Steve Jobs, just one more thing.

Let’s just hope in the case of Yahoo and MySpace, they don’t settle for just any thing.

Until they do that thing they do, here is a catchy video from the movie, “That Thing You Do”:

]]> http://allthingsd.com/20090716/do-that-thing-you-do-after-cuts-both-yahoo-and-myspace-need-a-little-something/feed/ 3 http://allthingsd.com/20090617/iphone-30-it%e2%80%99s-finally-here/ http://allthingsd.com/20090617/iphone-30-it%e2%80%99s-finally-here/#comments Wed, 17 Jun 2009 20:18:22 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=19750

]]> http://allthingsd.com/20090617/iphone-30-it%e2%80%99s-finally-here/feed/ 0 http://allthingsd.com/20090617/new-iphone-is-better-model-or-just-get-os-30/ http://allthingsd.com/20090617/new-iphone-is-better-model-or-just-get-os-30/#comments Wed, 17 Jun 2009 18:00:38 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20090617/new-iphone-is-better-model-or-just-get-os-30/ Apple Inc.’s iPhone has been a smashing success, redefining the smart-phone market and creating a new hand-held computing platform that has attracted over 50,000 third-party apps, or software programs, in less than a year. With its nearly identical sibling, the iPod Touch, it has sold a combined 40 million units since June 2007, when the computer maker plunged into the phone business.

But the iPhone is drawing increasing competition from entrenched smart-phone makers anxious to emulate the upstart. The most significant of these is Palm’s (PALM) impressive new Pre, which is off to a good start with an estimated 100,000 or so units sold since it launched on June 6.

So, like a shark, Apple (AAPL) must keep moving. This week, it is introducing two new products designed to consolidate and increase its position as the leader in this new generation of hand-held computers. I’ve been testing both and I like them a lot, with some minor caveats.

One of the new products is a refreshed model of the iPhone itself, called the iPhone 3G S. It looks the same, but offers more speed, more memory, more battery life, and a few new features, including video recording and a better camera for still photos.

The second is OS 3.0, the third version of the iPhone’s operating system, which comes on the 3G S and also can be installed on all prior iPhones and Touches. It includes a much longer list of added features, some innovative and some long overdue catch-ups to other phones. These include such widely requested capabilities as cut, copy and paste; systemwide searching; a wider virtual keyboard; and a feature called MMS that allows users to send photos and videos directly to other phones without using email.

Apple last week also made a bold business move to complement these new products. It decided to keep making the current model, the iPhone 3G, and to slash its price by 50%, to $99. That’s an unheard-of price tag for a pocket computer of this power and versatility, and gives millions of additional consumers a reason to choose the iPhone instead of a competitor.

In my tests, both the new phone and the new operating system performed well, with a few small exceptions. I believe the two strengthen the iPhone platform, make it likely the iPhone will continue to attract scads of apps, and are good for consumers.

But I also regard these changes as more evolutionary than revolutionary, and I don’t think this latest iPhone is as compelling an upgrade for the average user as the 3G model was last year for owners of the original 2007 iPhone.

Current iPhone owners can get an improved product by merely sticking with their existing phones and upgrading to the feature-laden new operating system, which is free (it costs $10 for iPod Touch owners), rather than shelling out at least $199 for the new iPhone 3G S. And many new iPhone buyers can opt for the $99 3G model, which is not only cheaper, but also greatly improved by the new OS 3.0.

On the other hand, power users will crave the new model’s much-better performance, battery life, storage and other features. And some will want the new model because, unlike the current model, it’s capable of handling a new cellular network feature that, in the next few years, will offer double the current data speeds.

The new, free operating system is available for download starting June 17. The iPhone 3G S will go on sale June 19 for $199 for a version with 16 gigabytes of memory, and $299 for 32 gigabytes of memory. Those memory capacities are double the amounts offered on the previous model last year at the same prices, and far exceed the built-in memory on most competing smart phones.

These prices are for new U.S. customers on the AT&T network, plus current owners who are eligible for what AT&T (T) calls a “standard” upgrade. If you already own an older iPhone, you could pay $200 more to upgrade, depending on how far along you are in your two-year service contract and how much you spend monthly. But AT&T, stung by criticism in recent days, has just decided to offer the lower, new-customer prices at launch to iPhone 3G owners eligible for upgrades at any time up to Sept. 30 of this year, even if they were originally told they’d have to pay the $200 premium.

Before I detail the new features and how they worked in my tests, let me state up-front what the new iPhone and its new operating system don’t deliver. The iPhone still lacks a physical keyboard. It still can’t run more than one third-party app at a time, as the Pre does. Its otherwise excellent Web browser still can’t play videos created in Adobe’s Flash software, which is widely used on the Web. And it still isn’t available on any U.S. carrier besides AT&T.

Also, AT&T won’t enable MMS until late this summer, even though dozens of other iPhone carriers in other countries are doing so immediately. And AT&T hasn’t set a date by which it will offer tethering, a new iPhone feature that allows the device to be used as a modem for a laptop. Other carriers in other countries are allowing this right away.

Here’s a rundown of the most important new features of both the new hardware and software, and how they performed in my tests.

The iPhone 3G S

Speed: To me, this is the most important feature of the new iPhone 3G S. In fact, the “S” in the name stands for speed. During my week of testing, the new model proved dramatically snappier in every way than my iPhone 3G. Its processor is 50% faster than in the prior model, and it sports a new graphics chip.

Applications opened much more quickly. Web pages loaded far faster. The camera was ready to use almost instantly. And I never once saw the occasional, annoying iPhone behavior where you strike a key while typing and it sits there, seemingly stuck, before you can continue.

Cellular-data speeds were about the same, but in repeated testing on different Wi-Fi networks, the 3G S racked up speeds 30% to 50% faster than on the 3G running at the same time on the same networks.

Battery Life: On my 3G iPhone, I usually could make it through the day, but it was often a close call, with the battery indicator winding up in the red. By contrast, the new model did much better, never hitting the red zone and rarely requiring interim charging at the office or in the car, even though, because I was testing it, I was pounding it much harder than usual, making more voice calls, playing lots of videos and music, trying numerous apps, constantly downloading email from two accounts, and syncing two calendars over the air.

Apple claims about the same talk time for the new model as on the old, and about the same Web-surfing time over the cellular network. But it says the 3G S gets about 50% more battery life when playing videos or surfing the Internet over Wi-Fi and 25% more time — an astounding 30 hours — for continuous music playback.

Memory: With the new 32-gigabyte model, I was able to store over 3,000 songs, more than 1,600 photos, 74 videos, 67 applications, 400 emails, nearly 1,000 contacts, months of calendar data, and dozens of documents, and still have 5 gigabytes left over—more than most phones offer out of the box.

Camera: The new model’s camera has a 3 megapixel resolution, up from 2 megapixels, and has autofocus and a feature that lets you tap the screen to change the focus to an object or person in the background of a shot. It still lacks zoom or a flash, though it does better in low light. It also has a macro feature for close-up shots. In my tests, all of this worked, but I didn’t think the pictures it took were dramatically better than those on the old model, and it can’t compete with phones like Nokia’s (NOK) new $700 N97, which has a 5-megapixel camera with zoom.

Video: The new video recorder worked well, even in low light, and lets you post videos directly to YouTube, among other places. You can also trim your videos right on the phone. This all worked well, but the videos aren’t high definition, and pale in comparison to those on the latest HD model of the popular $229 Flip pocket camcorder.

Voice Control: By simply holding down the new iPhone’s home button, you can dial contacts and control music playback by uttering voice commands. The phone will even tell you which song is playing. Like most voice-recognition systems, this one isn’t perfect. But it worked most of the time.

Compass: I don’t consider this important for most users, but it did work when I was walking or driving. It can orient maps in the direction you’re heading.

Small Touches: You can optionally turn on a new battery indicator that shows a precise percentage of battery life left. The screen has a new coating that resists oil and grease from fingerprints.

Downsides: The new phone crashed on me twice during my tests. Once, the voice-control feature killed the sound on the built-in iPod, requiring a reboot. But I couldn’t replicate this problem. Another time, the phone froze while downloading a TV show. Apple blamed this on a prerelease server issue, and it didn’t happen again.

iPhone Operating System 3.0

Copy, Cut and Paste: Apple is late with this common feature, but it’s the best implementation I’ve seen on a phone. In a text page, you just double tap on a word, and it is selected with little handles around it that let you expand or contract the selected area. Then, you just click on a copy icon that pops up over the selection. To paste, you tap elsewhere in the page, or even in another app, and a paste icon pops up. Click that icon, and the selected text is pasted in. It worked well in all my tests.

The feature works a bit differently for some Web pages, where you hold down your finger over an area and it selects a whole block of text, like a paragraph, but still has the handles that allow adjusting the selection. It also allows copying and pasting photos. You can also just select a word or a section or a whole page of text and delete it. And if you want to undo a paste, just shake the phone.

Some Web pages and third-party apps don’t yet support this feature, but most do.

Search: Before, you could search only in the Contacts app. Now, there are search features in Mail, Calendar, the built-in iPod and Notes. And there is a way to search the whole phone at once. You just hit the home button, slowly, twice, and a special search screen appears. Type in any phrase, and it brings up every instance in multiple apps.

This is another catch-up feature, but it works well. For instance, when I searched for the word “Phil,” it brought up songs by Phil Collins, a note about Philadelphia, calendar items mentioning people named Phil or Phillips, emails to or from people with those names, and contacts for people named Phil or Phillips.

In email, the search function will even find messages that aren’t on your phone but that are stored on the servers of certain email services. For instance, I was able to almost instantly find emails from two years ago stored on Google’s (GOOG) Gmail.

One downside — in email, search looks for words only in email headers, not in the body of the messages.

Landscape Keyboard: In older iPods, the only built-in program that supported a wider, landscape keyboard, which is better for thumb typing, was the Web browser. Now, you can turn the phone horizontally and use a landscape keyboard in the Mail, Messages and Notes programs as well.

Find My iPhone: If you belong to Apple’s $99 a year MobileMe service, you can now locate a lost iPhone on a map on any computer, send the iPhone a message saying how to return it to you, and cause it to emit a beep, even if the sound is turned off. I tested this and it worked well. You can even remotely wipe all your data off the phone.

Voice Memos: The OS includes a Voice Memo app that lets you dictate reminders or other messages, and then edit and email them. I found it worked well.

Navigation: Another catch-up feature, turn-by-turn navigation with voice prompts, is also now supported. I tested this with a third-party app called Gokivo, and it did OK, though the developer admits to a prerelease bug I encountered.

Auto-Authentication: In the new OS, the iPhone can remember your log-in credentials for commercial Wi-Fi hotspot services, so you don’t have to enter them again and again. Unfortunately, in my tests with the AT&T Wi-Fi service, this failed repeatedly in several Starbucks (SBUX) shops. Apple blames a glitch in my prerelease phone’s SIM card.

Push Notification: To make up for its lack of multitasking, the new iPhone OS has a feature where third-party apps can notify you of new events, like a sports score, or a new invitation to an online game. I tried this with a game called TapTap Revenge, and it worked fine.

Stocks: The built-in stock application now has much more detailed data, including market cap, news headlines and price/earnings ratio for each stock.

MMS and Tethering: I couldn’t test these useful features because my tests were all done on AT&T, which hasn’t rolled them out.

Minor Touches: You can now move an icon among screens with one continuous motion, instead of stopping at each screen. And there are two more screens to house icons. You can finally synchronize Notes with your PC or Mac. You also can now maintain both calendars and contacts synced wirelessly with online services and those synced via cable with your computer. And you can play games and transfer files wirelessly over Bluetooth with other iPods or Touches that are nearby.

Bottom Line: Both the new iPhone and iPhone OS are packed with features that make a great product even better. But, for many users, the software may be enough of a boost to keep them from buying the new model.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

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