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

Yes, that’s right — 2013!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

According to sources close to the situation, new Yahoo CEO Scott Thompson is meeting with the two private equity firms that had made previous partial investment overtures to the Silicon Valley Internet company.

While those deals are now tabled, sources said that Thompson and the Yahoo board still wants to engage investors — Silver Lake and TPG Capital — in discussions about how to best turn around Yahoo.

Thus, sources said, Thompson was interested in meeting with the firms — as well as others involved, such as VC Marc Andreessen, who had been working with Silver Lake — in order to discuss their ideas and get up to speed on them.

And, of course, keep the discussions alive to see if there is any kind of different deal to be done in the future.

That’s after, of course, Yahoo completes its complex negotiations with its Asian partners — Alibaba Group and SoftBank — over selling off parts of its own stakes there.

While Yahoo’s success in resolving Asia is not assured, this transaction was a key part of proposals for a PIPE — Private Investment in Public Equity — deal that both Silver Lake and TPG had made.

But, after shareholders looked askance on such a deal due to price and other issues, Yahoo decided to negotiate on its own and picked a new CEO.

Still, in a have-your-cake-and-eat-it-too move, the company leadership also did not want to close the door on the PE firms (and their money and expertise). completely.

That’s especially true, since the distinct possibility of a proxy fight from activist Yahoo investor Daniel Loeb is now hovering over the company’s neck.

Both Loeb and Yahoo are scrambling to prep for the potential battle. Loeb is trying to assemble a slate of alternate directors, and shoring up other major Yahoo shareholders as allies, while Yahoo is moving to shed some directors while also adding new ones.

Hence, the meetings with PE firms to keep the proverbial ball rolling, which presents at least the facade that the company is intent on turning the core parts of Yahoo around by any means possible.

Sources close to the PE firms remain dubious, with both feeling burned by the last process.

“I’m not sure anything will come of this, and the way Yahoo conducted the last talks was not encouraging,” said one source. “But it does not cost anything to keep listening.”

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

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

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

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

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

Here we go!

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

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

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

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

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

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

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

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

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

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

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

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

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

7:09 am Q&A time already.

Congrats from the Wall Street analyst peanut gallery.

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

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

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

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

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

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

Roy — that’s who!

7:15 am: Another analyst asks about margins.

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

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

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

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

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

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

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

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

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

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

Thus:

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

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

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

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

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

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

“It’s a moot point,” he says.

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

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

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

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

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

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

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

He also loves mobile — which Yahoo has largely borked.

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

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

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

Thompson promises that he will be a “sponge.”

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

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

As I reported late last night, Yahoo said it had named PayPal President Scott Thompson as its new CEO. The exec is currently in charge of the large eBay online payments unit.

He’ll start next week, but there are staff conference calls today and also an all-hands meeting on Yahoo’s main Silicon Valley campus (meet at URLs, troops!) tomorrow.

Yahoo shares are down almost three percent on the news so far, as Wall Street has been hoping for a big sale of some sort and not another turnaround.

Yahoo will be holding a 7 am PT press conference about the move and presumably to swan around Thompson.

(Welcome, Scott! I hope you were informed — please do not listen to what co-founder Jerry Yang says on this important issue — that you are supposed to send all internal memos to me! Also, as one of my Twitter followers, Mike Dudas of Google just tweeted: “If Thompson leads companies as well as he grows a moustache, Yahoo made a great CEO choice!!” I concur.)

A Yahoo PR person confirmed the hire very cordially in a phone call early this morning and the Internet giant also put out a press release.

So did I, of a sort, last night. Given I am too tired to rewrite myself, here is what I had reported:

The company fired its last CEO, Carol Bartz, in September, and Yahoo has been run by the board and also by interim CEO Tim Morse, who had previously been its CFO.

After Bartz’s ouster, Yahoo said it was looking at a range of strategic options, including the possible sale of all or part of the company.

That was the focus at first, although Yahoo had simultaneously hired Heidrick & Struggles to look for a new CEO.

The company attracted two partial investment bids from private equity firms, Silver Lake and TPG Capital, but shareholders were unhappy with the low prices of these so-called PIPE — Private Investment in Public Equity — arrangements.

Yahoo then moved to try to strike a tax-advantaged deal with its long disgruntled Asian partners, China’s Alibaba Group and Japan’s SoftBank, to sell back parts of the large stakes it has long owned in Alibaba and Yahoo! Japan.

Those complex negotiations are still ongoing and look promising, which could yield Yahoo billions of dollars in capital to be given to investors, for stock buybacks or to invest in new initiatives.

Since then, the board — long considered one of the more cloddish in tech — has turned its attention to hiring a new CEO, in the hopes of trying once again to revive its flagging fortunes.

Thus, it began looking to hire someone with deep tech experience at a large public consumer Internet company in Silicon Valley.

That narrowed the field, with Yahoo looking at a range of choices with expertise in advertising, technology platforms and more.

There is a lot of that on the deep bench that eBay CEO John Donahoe has assembled at the online commerce giant, including Thompson.

Plus, he is a genuine Internet geek.

According to his eBay bio, Thompson became president of PayPal in early 2008, after serving as its CTO in charge of information technology, product development and architecture.

Before eBay, he worked at Inovant, a subsidiary of Visa formed to oversee global technology for the organization. He was also CIO of Barclays Global Investors and has worked at Coopers and Lybrand on information technology.

And here’s a tasty new wrinkle: Thompson recently “liked” Yahoo on his Facebook page, along with the decidedly more interesting Kickstarter and Splunk.

Again, Scott, thanks for the Facebook tip — I knew the social networking site could come in handy!

(Also, here is an interview I did with him post-announcement.)

And here is Yahoo’s official press release where Yahoo Chairman Roy Bostock says nice stuff about Thompson:

YHOO_News_2012_1_4_General

According to sources close to the situation, Yahoo is poised to name a CEO, an announcement that could come as early as tomorrow.

Sources said the leading candidate likely to get the nod is a dark horse and someone who has not been named in previous reports (and not on my suggested lists!): PayPal President Scott Thompson, who runs eBay’s massive online payments unit.

While the situation could certainly change, the Yahoo board has definitely been moving aggressively of late to try to find a new leader for the Silicon Valley Internet giant.

The company fired its last CEO, Carol Bartz, in September; Yahoo has been run by the board and also by interim CEO Tim Morse, who had previously been its CFO.

After Bartz’s ouster, Yahoo said it was looking at a range of strategic options, including the possible sale of all or part of the company.

That was the focus at first, although Yahoo had simultaneously hired Heidrick & Struggles to look for a new CEO.

The company attracted two partial investment bids from private equity firms, Silver Lake and TPG Capital, but shareholders were unhappy with the low prices of these so-called PIPE — Private Investment in Public Equity — arrangements.

Yahoo then moved to try to strike a tax-advantaged deal with its long-disgruntled Asian partners, China’s Alibaba Group and Japan’s SoftBank, to sell back parts of the large stakes it has long owned in Alibaba and Yahoo! Japan.

Those complex negotiations are still ongoing and look promising, which could yield Yahoo billions of dollars in capital to be given to investors, for stock buybacks or to invest in new initiatives.

Since then, the board — long considered one of the more cloddish in tech — has turned its attention to hiring a new CEO, in the hopes of trying once again to revive its flagging fortunes.

Thus, it began looking to hire someone with deep tech experience at a large public consumer Internet company in Silicon Valley.

That narrowed the field, with Yahoo looking at a range of choices with expertise in advertising, technology platforms and more.

There is a lot of that on the deep bench that eBay CEO John Donahoe has assembled at the online commerce giant, including Thompson.

Plus, he is a genuine Internet geek.

According to his eBay bio, Thompson became president of PayPal in early 2008, after serving as its CTO in charge of information technology, product development and architecture.

Before eBay, he worked at Inovant, a subsidiary of Visa formed to oversee global technology for the organization. He was also CIO of Barclays Global Investors and has worked at Coopers and Lybrand on information technology.

And here’s a tasty new wrinkle: Thompson recently “liked” Yahoo on his Facebook page, along with the decidedly more interesting Kickstarter and Splunk.

(Dear Scott, Nice to meet you. And thanks for the tip! FYI, it’s a juicy giveaway like that which feeds my insatiable quest to find out All Things Yahoo!)

More to come soon, I expect.

Yahoo, as usual, never got back to me on my query, although the much more cordial people at eBay politely declined to comment.

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

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

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

It’ll surely be happy holidays for billable hours!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Earlier this week, Google and Mozilla said they had struck a deal to renew their search royalty agreement for another three years.

What the pair declined to add: The search giant will pay just under $300 million per year to be the default choice in Mozilla’s Firefox browser, a huge jump from its previous arrangement, due to competing interest from both Yahoo and Microsoft.

Sources said this total amount — just under $1 billion — was the minimum revenue guarantee for delivering search queries garnered from consumers using Firefox.

Google’s main rival in the bid, sources said, was Microsoft’s Bing search service, which was aggressively trying to hip-check it from the main search spot on the browser.

That’s because the software giant has been spending a lot of money in efforts to grow Bing’s market share in the search market.

Microsoft, of course, also owns the still-dominant Internet Explorer browser, but Google’s Chrome has recently been making major gains over both IE and Mozilla’s Firefox.

Still, Mozilla’s recent negotiations with both companies was about search market share.

Yahoo was also in the mix, even though Microsoft powers its search technology, because a hookup with Firefox was considered a plus in holding on to its declining search market share.

But the deal, which was being pushed hard by Yahoo’s Chief Product Officer Blake Irving and its search head Shashi Seth, was determined to be too costly for Yahoo.

Costly indeed, since the new price is much higher than Google had previously ponied up to Mozilla. In 2010, Google contributed 84 percent of Mozilla’s $123 million in revenue.

A previous version of the partnership had expired at the end of November, and the new talks were done against a backdrop of simmering tension between Google and Mozilla over Chrome.

As Liz Gannes wrote earlier this week:

Since the first search royalty deal was signed in 2008, Google’s own Chrome browser has become a significant competitor. Just last month, Chrome overtook Firefox in global usage for the first time, according to StatCounter. Both browsers — software which is used to navigate the Internet — have about 25 percent market share.

Even with the new default deal with Google, Mozilla still also has partnerships with other search providers, including Bing, Yahoo, Yandex, Amazon and eBay.

Of course, everybody declined to comment on my queries to hand over all the financial deets stat.

But Google’s SVP of Search, Alan Eustace, said in a statement: “Mozilla has been a valuable partner to Google over the years and we look forward to continuing this great partnership in the years to come.”

Great, perhaps, but also much more expensive — so presumably Firefox is worth it.

Whatever you want to call him or her — a silver bullet, the cure or, as I like to say, the last unicorn — Yahoo’s ever-seeking and never-deciding board has now renewed its focus on finding a new CEO.

Also on the docket: Working on a deal to sell back at least some of its stake in its twin Asian assets — Yahoo Japan and the Alibaba Group — back to the companies. A partial sale of stock back could placate the often tense situation among the partners.

What is clear is that the two bids from private equity firms are now in an undetermined circling pattern — due to a variety of concerns around shareholder unrest (Occupy Yahoo looms for 2012).

Therefore, the idea of bringing in said fantasy leader to perhaps finally be the one to revive the long-troubled company has returned to the forefront of action, according to numerous sources both inside and outside the company.

The concept in short, said people familiar with the situation: Hire some compelling and entrepreneurial CEO to get the company moving again from a product point of view, do a massive organizational overhaul and help settle Yahoo’s thorny Asian issues.

While a number of names have been rumored in reports — such as Google business lead Nikesh Arora, who is actually not likely to leave his top post at the search giant — sources said the board has been targeting a number of candidates, including Hulu CEO Jason Kilar.

Others on Yahoo’s wish list include Juniper CEO Kevin Johnson and online advertising entrepreneur Brian McAndrews, who sold aQuantive to Microsoft. There are several others also being considered.

Sources said Kilar has met with Yahoo board members about the offer, but his hiring would be a long shot.

It’s an interesting — if complex — gambit to bring in Kilar, who has had his own wrangles with the multi-owner structure of the premium video service over the years.

Kilar’s status at Hulu has been in question ever since it was put on the block, then removed and then — well — who knows.

Hulu’s owners — News Corp., Disney and Providence Equity Partners, along with Comcast (which is a now a passive investor) — did not like the offers it got from various bidders, including Yahoo.

While the media giants have made noises about wanting to keep a stake in distribution, their commitment to that remains unclear.

The situation has put Kilar — who already had tense relations with the service’s shareholders — in limbo until a valuation is determined next year. Without going into the complex details, Kilar has a large equity stake that could be liquid in April, related to certain rights held by Providence.

It is well known that Kilar has been concerned the team that built Hulu gets some sort of payout for their work. In fact, many years ago, Hulu was seen as a possible IPO candidate.

What’s not in question is Kilar’s talent at creating a cohesive team and a compelling product — especially with an advertising and media focus — and the need at Yahoo for a vibrant leader to encourage innovation and discourage its rapidly increasing attrition issues.

The search for a new Yahoo CEO — which is being led by director Patti Hart, and is being conducted by Heidrick & Struggles — had been mostly sidelined until recently, as the board solicited bids for a partial investment from PE firms.

Two emerged, from Silver Lake and TPG Capital, which had wanted to pay from $16.50 to $18 a share for a stake of just under 20 percent in what is called a PIPE (Private Investment in Public Equity) arrangement.

But the low price, and worries about lawsuits and even a proxy fight related to such a deal, have slowed down the momentum significantly, said sources.

Instead, Yahoo has told bidders it will get back to them in the coming weeks about the direction it will take. Thus, the focus on lining up CEO candidates and plans related to reviving Yahoo.

Some of those possible execs have put their hand up, while others — like Kilar — are being solicited. In addition, some still think that Yahoo board member David Kenny remains an internal option, especially if the board of Yahoo gets a refresh, despite his recent announcement that he has no intention of seeking the job.

In general, this shift should not come has a surprise for the hurry-up-and-wait board of Yahoo, which has struggled over the years to make good choices for the Silicon Valley Internet giant.

That drift has resulted in a downturn in its prospects, even as other companies have surged.

Those troubles were brought into sharp focus in a recent report by new Goldman Sachs Internet analyst Heath Terry, who strafed Yahoo in his “sell” recommendation.

Among the gems by an analyst whose investment bank is currently an advisor to Yahoo on its strategic options:

Yahoo simply faces too many competitive and structural headwinds to believe any kind of meaningful turnaround is possible. While there is significant asset value on the balance sheet and in the company’s large, though increasingly less engaged user base, we continue to believe, as we have since before the first Microsoft offer, that the segment of management driving the company is intent on trying to revive Yahoo as a company, regardless of the cost to shareholders.

And, noting the need for a new CEO:

We would become more positive if we felt there was a likely event in the near term that might unlock the value of the balance sheet assets at Yahoo. While we believe the aggregate value of those assets is above the value reflected in YHOO, in order to be more positive on the stock we would need some proof that management is willing and able to take the steps necessary to unlock that value either through a sale or distribution to shareholders. Meanwhile, the declining profitability of the core display advertising business is masked by a search business that continues to lose share and relies on artificial support from Microsoft. We would become more positive on the core Yahoo business if the company is able to find a new CEO capable of focusing the business on its core advertising and communications opportunities, rationalizing costs, and driving growth. This would require user growth and especially engagement improvements in both online and mobile, improving monetization of advertising inventory, and stabilizing its search business.

In other words: Wanted, one unicorn to work magic against increasingly troublesome dragons. Ability to sparkle a plus.

Mozilla is set to announce that it has signed a new three-year agreement for Google to be the default search option in its Firefox browser.

It’s a critical renewal for the Silicon Valley software maker, since its earlier deal with the search giant has been a major source of revenue to date.

The companies said the specific terms of the commercial agreement are not being released. But, in 2010, Google contributed 84 percent of Mozilla’s $123 million in revenue.

A previous version of the arrangement had expired at the end of November. Mozilla said at the time that it was in “active negotiations” with Google.

The relationship has not been without some tension of late. Since the first search royalty deal was signed in 2008, Google’s own Chrome browser has become a significant competitor. Just last month, Chrome overtook Firefox in global usage for the first time, according to StatCounter. Both browsers — software which is used to navigate the Internet — have about 25 percent market share.

Mozilla also has partnerships with other search providers, including Microsoft’s Bing, Yahoo, Yandex, Amazon and eBay.

Here’s the full announcement Mozilla will soon put out:

Mozilla and Google Sign New Agreement for Default Search in Firefox

We’re pleased to announce that we have negotiated a significant and mutually beneficial revenue agreement with Google. This new agreement extends our long term search relationship with Google for at least three additional years.

“Under this multi-year agreement, Google Search will continue to be the default search provider for hundreds of millions of Firefox users around the world,” said Gary Kovacs, CEO, Mozilla.

“Mozilla has been a valuable partner to Google over the years and we look forward to continuing this great partnership in the years to come,” said Alan Eustace, Senior Vice President of Search, Google.

The specific terms of the commercial agreement are confidential and are not being released.

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

– Samuel Beckett, “Waiting for Godot”

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

In fact, it was September 6.

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

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

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

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

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

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

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

A lot.

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

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

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

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

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

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

Who’s in Charge Here?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Deal

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An Asian Solution

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

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

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

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

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

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

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

Strategery

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

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

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

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

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

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

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

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

Yahoo shareholders and employees can hope, at least.

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

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

What took so long?

Actually, it did not take any time at all for someone to start legal proceedings against the current effort by Yahoo to sell itself.

In this case, no surprise, it is aimed directly at the how of doing it.

In an unusual injunction request, M&C Partners is seeking to enjoin the Silicon Valley Internet giant from using its stringent “no cross talk” rule for its potential buyers to limit possible bidding syndicates.

“The No Cross Talk Provision constitutes an unreasonable anti-takeover device, designed to entrench and favor [Yahoo co-founder, director and major shareholder Jerry] Yang and the current Board,” reads the legal filing, in part.

In addition, M&C does not like what it calls a “Minority Stake Promise,” which it alleges Yahoo is “requiring those who sign the Confidentiality Agreement to use any information they receive to confine themselves to a bid for only a minority stake.”

That refers to the fantastically named PIPE deals — or Private Investment in Public Equity — that PE firms like Silver Lake and TPG Capital have just offered. These are bids to buy 19.9 percent of Yahoo, which will essentially give them a lot of power.

Both allegations are, well, exactly what Yahoo is doing, even if it’s not for the filing’s stated nefarious reason. Thus, M&C doesn’t think that’s okay, presumably because it wants investors to be able to make a deal without Yahoo’s bossy rules.

To be clear, Yahoo is named in lawsuits all the time for a wide variety of things, such as a case in which one group is alleging it botched a deal with the Alibaba Group over its Alipay controversy to another alleging the price it paid for in its recent $270 million acquisition of Interclick was too low.

And so it is here, one of many to come, I suspect. In this one, there’s also a class-action request and various and sundry bashing of Yang, which you can read below:

yhoo

Even Gowalla CEO Josh Williams isn’t pretending a deal for Facebook to buy the location-sharing company isn’t happening, as you can read below in an email he sent to his investors.

Both companies declined to comment on a story on Friday and over the weekend. CNN had the scoop about the social networking giant acquiring Gowalla, which I have taken to calling Not-Foursquare.

That’s because — despite its often clever approach and innovation — it never caught up with the leading social location service.

Gowalla, which changed its approach several times, had been for sale for some time, said several sources.

The Austin-based start-up has raised just under $11 million from a range of investors, including Greylock Partners, Shasta Ventures, Alsop Louie Partners and the Founders Fund, along with a batch of well-known angel investors.

But let’s put this one to bed with the email that Williams sent out after the CNN story broke Friday, which was read to me tonight, so I might not have all of it perfectly and it is missing a sentence about I-will-smack-the-leaker):

Subject: Rumors and speculation

CNN just broke the news that Gowalla has been acquired by Facebook. This story was leaked from an unknown souurce.

The ink on the deal is not dry, so our holding pattern is that we do not comment on rumors and speculation. I have another email penned that was ready to send you today, assuming you would get this news before the story was officially released.

But now it is all over Twitter, so you have likely heard. A longer email will be sent soon. Until then, I am so very grateful for what you have done to make Gowalla a success.

The second confirmation email has apparently not yet been sent, but I will try to get it when it is, along with the price.

So, until the official official yes, here’s a video interview I did with Williams in April of 2010 about the location “wars”:

]]> http://allthingsd.com/20111204/heres-gowalla-ceos-non-denial-denial-email-to-investors-about-facebook-acquisition/feed/ 0 http://allthingsd.com/20111202/wielding-a-sword-of-damocles-yahoos-asian-partners-await-answer-on-yet-another-proposal-to-buy-back-shares/ http://allthingsd.com/20111202/wielding-a-sword-of-damocles-yahoos-asian-partners-await-answer-on-yet-another-proposal-to-buy-back-shares/#comments Sat, 03 Dec 2011 01:13:26 +0000 Kara Swisher http://allthingsd.com/?p=149910 There were a lot of furious rumors earlier this week that Yahoo’s longtime Asian partners — the Alibaba Group and SoftBank — were poised to lob a $25 billion takeover bomb at the Silicon Valley Internet giant to get back big stakes it holds in their companies.

Though last week’s reports were overblown and premature, it certainly might come to that at some point if past is prologue — Alibaba CEO Jack Ma has declared his interest publicly a number of times and has certainly been busy lining up his financial and strategic partners to do so.

This is one very sharp sword of Damocles hovering over Yahoo that could drop at any time and very quickly. It has impact, too, because every day there are unsettling Wall Street whispers that the bid is coming — I got three today, in fact, that it would happen Monday.

Actually, the day it is most likely to happen is the moment after Yahoo once again turns down the pair’s latest offer to buy back their shares in a complex tax-free transaction.

This has been a multi-year effort on the part of the trio, one littered mostly with recrimination and tears. Lots and lots of tears.

But this time, it’s critical to the Asian partners to strike the deal with Yahoo — and before its current board does another deal with current private equity bidders it is now contemplating.

Because once new leadership is in power, Ma’s leverage goes buh-bye. Now, it is a quantum level higher with the old Yahoos than with the next ones, who will have much more control and power over the company.

Thus, the threat of a possible whole company bid at a higher prices — a tasty treat to disgruntled shareholders — keeps the pressure on Yahoo’s current directors not to make a partial deal that is considered wanting.

This bird in the hand is seen as critical to Alibaba and SoftBank, who want only to get back their stakes and not to engage in what would turn into an ugly and hostile battle for control of all of Yahoo.

As one source told me last week: “The threat of a takeover is more useful than the damage an actual takeover would cause for everyone. No one wants this to be unfriendly.”

Perish the thought!

Yahoo board member Brad Smith — who is Intuit’s CEO and president in his spare time — has become the key man in this whole complex sales process and has also taken up the central role in dealing with the Asian proposal, along with Yahoo’s interim CEO, Tim Morse, and its legal head, Mike Callaghan.

They have to wrangle what to do with Yahoo’s 40 percent stake in Alibaba and a 35 percent holding in Yahoo Japan, which makes up a great deal of the company’s value and has become its most vexing Gordian knot.

Still, after a number of previous efforts failed miserably, Alibaba and Softbank brought yet another proposal to Yahoo in early October that would spin off the stakes to them and also avoid a big tax bill.

The sides have been talking on and off amid the other noise at Yahoo of late, which this week centered on low-priced bids for a partial investment in Yahoo from two separate PE firms, Silver Lake and TPG Capital.

Now what Yahoo does with its Asian assets matters to them, too, as both have their own plans for the dispensation of those stakes as key elements of their deals.

So it is not clear what would happen if the Alibaba and SoftBank shares were sold before either deal was done.

But it is unlikely to be a positive thing.

“The Asian assets are downside protection if the core Yahoo business is melting faster than anyone thinks,” said one person. “Without it there, Yahoo might be a lot more risky to buy into.”

Like, you might say, trying to catch a falling knife.

]]> http://allthingsd.com/20111202/wielding-a-sword-of-damocles-yahoos-asian-partners-await-answer-on-yet-another-proposal-to-buy-back-shares/feed/ 0 http://allthingsd.com/20111201/the-golden-geek-vs-the-start-up-whisperer-in-yahoo-savior-faceoff-not-yet-but-delicious-to-imagine/ http://allthingsd.com/20111201/the-golden-geek-vs-the-start-up-whisperer-in-yahoo-savior-faceoff-not-yet-but-delicious-to-imagine/#comments Thu, 01 Dec 2011 10:23:15 +0000 Kara Swisher http://allthingsd.com/?p=149087

Last night, the New York Times dropped a juicy little tidbit into its everything-but-the-kitchen-sink daily update of the board mishegas at Yahoo around the deliberations yesterday over two competing private equity bids to buy a partial stake in the company.

No, not the one about Jeff Jordan — former eBay exec, OpenTable CEO and now VC at Andreessen Horowitz — possibly taking a big role at Yahoo if the firm’s bid with Silver Lake prevailed — which was mysteriously removed very soon after it posted (’cuz he will not, so good move, NYT!)

I mean the one about the venture firm’s big-kahuna partner, Marc Andreessen — who will indeed take a board seat and play a strong role in Yahoo’s future if his bid wins — getting a possible competitor in the Silicon Valley savior section of the ongoing show.

That would be in the form of Reid Hoffman, the well-known entrepreneur, VC and angel investor, who the Times said had talked with TPG Capital, Silver Lake’s rival in the Yahoo bidding, about becoming a possible partner.

Wrote the Times:

“TPG has held discussions with Greylock Partners, another venture capital firm, about a possible alignment, two people said. TPG is hoping to draw on the expertise of Reid Hoffman, one of Greylock’s partners and the founder of the professional social network LinkedIn, these people said.”

Translation: If Silver Lake has a tech icon of substance on its team to give uber-geek appeal to its offer — dagnabbit — then TPG was going to raise with another one, whom the very same Times reporter who wrote last night’s article recently nicknamed “The Start-Up Whisperer” in a recent glowing profile of Hoffman.

While I am still trying to grok what a start-up whisperer exactly means (and how someone as self-effacing as Hoffman would react to such a twee moniker without snickering), it’s a move that has likely already irritated Silver Lake.

After all, TPG aiming at nabbing Hoffman is akin to two crazy neighbors trying to one-up each other in holiday-lighting lawn decor. (You have a singing Santa, so I’ll have a singing Santa — and I might even add a Lady Gaga-themed crèche for good measure!)

But it’s not a bad instinct, either, to get your own live-action Silicon Valley legend, even if it is only half true in Hoffman’s case.

Because, according to sources who know such things, while Hoffman and TPG have had conversations, there have been no commitments, and nothing is close to being agreed on to link the pair.

That could certainly change, and quickly, but Hoffman or Greylock aren’t currently in TPG’s proposal to Yahoo.

That’s in contrast to Andreessen, who is all in (I am not even going to bother with “sources said” here, since everyone and my mother has seen the proposal) with Silver Lake on the deal to purchase 19.9 percent of Yahoo for about $16.50 a share.

As I reported earlier this week, for Silver Lake’s money and expertise in fixing broken things, the bid includes: Silver Lake getting three board seats; cash going to a buyback of stock or granting of a dividend to shareholders; the ability to select a CEO; approval of its strategic plan for Yahoo, and its solution to come to terms with Yahoo’s unhappy Asian partners; and all the purple wearables you could ever hope for (perhaps Yahoo’s best asset, IMHO, especially worn by such obviously cool dudes, as seen here).

Also, controversial Yahoo co-founder Jerry Yang gets to stay around on the board (but only if he becomes very, very quiet, so as not to rile the activist shareholders).

TPG’s bid is less formed, although its price is slightly higher. And the PE firm has yet to check the “Big Geek Included” box.

Hence, the floating of Hoffman as a contender to take on Andreessen, who was once dubbed the “Golden Geek” by Time magazine.

I hope TPG does, soon, since what a matchup it would be!

But, for now at least, the pair — who share big investments in a range of Web companies, most especially Facebook (Andreessen is on the board of the social networking giant, and Hoffman was an early investor and adviser) — are at peace.

Dagnabbit.

]]> http://allthingsd.com/20111201/the-golden-geek-vs-the-start-up-whisperer-in-yahoo-savior-faceoff-not-yet-but-delicious-to-imagine/feed/ 0 http://allthingsd.com/20111130/yahoo-stock-gets-gaslit-by-bidders-trying-to-thwart-other-bidders/ http://allthingsd.com/20111130/yahoo-stock-gets-gaslit-by-bidders-trying-to-thwart-other-bidders/#comments Thu, 01 Dec 2011 06:03:48 +0000 Kara Swisher http://allthingsd.com/?p=148966

What an amazing coincidence.

On the very day Yahoo’s board is considering actual bids from two private equity firms interested in deals to buy close to 20 percent of the company for between $16.50 and $17.50 a share, comes a spate of eerily similar breathless media postings that there’s another bid in the making for $20!

That’s totes better, right? I mean, how can Yahoo’s directors accept a real live lesser-priced bid now when there’s a prettier one in the fog just ahead?

No, really, it’s there — if you squint really, really hard.

Except it’s not even close, when you actually check with two of the key members of the group of alleged buyers, which would apparently be Blackstone, Bain Capital and Yahoo’s Asian partners, Alibaba Group and SoftBank.

Sources close to Blackstone and Alibaba said while there have been talks, which have been previously reported weeks ago here and elsewhere, there is no bid in the offing that is close to fruition and at that price.

In an unusual public statement, in fact, Alibaba’s John Spelich said flatly: “Alibaba Group has not made a decision to be part of a whole-company bid for Yahoo.”

This from a company whose voluble CEO Jack Ma is prone to making giant and noisy speeches to signal his interest in finding a way — any way — to get back shares of the Chinese Internet giant from Yahoo.

Not this time, and several sources close to Alibaba reiterated that it was nowhere near close to any bid as yet and that a price is still up in the air. In addition, sources added, Alibaba might decide to work with another PE group, such as Providence Equity.

In addition, sources noted that if Alibaba could strike an adequate deal with private equity bidders to get a large chunk of the stake back, it would be highly preferable to a hostile takeover of Yahoo that could end in tears and little else.

“The threat of a takeover is more useful than the damage an actual takeover would cause for everyone,” said one person close to the situation. “No one wants this to be unfriendly.”

So why the rumors — doubtlessly being spread around by hopelessly cynical Wall Street types interested only in stock manipulation — surfacing today?

Simple: To get some easy-to-play media outlet to bite, report it as speculative fact and cause the stock of Yahoo to take flight tomorrow.

Hey, it could happen!

Sadly, this junior-league trick has already worked — Yahoo shares were up a dollar to $16.72 in after-hours trading tonight.

It is likely to go even higher tomorrow, which could cause the board of Yahoo to delay accepting either of the partial bids from Silver Lake or TPG Capital, even if they were the best thing for the company and its employees.

Except that the job of the Yahoo board is to evaluate what’s before them and not what is perhaps, someday, soon, wait-by-the-phone, really soon, I promise is going to be delivered.

In fact, several sources noted that it’s not clear if the Yahoo board has even asked for parties to submit whole-company bids yet.

When and if Yahoo’s board does that and if something better actually does come down the pike, with a much fatter price tag of $20 or more, then the directors can mull that over.

That would be the prudent thing to do for the company, its employees and its shareholders, even if Yahoo’s stock gets a temporary lift now.

Maybe I am just a hopeless Silicon Valley romantic and not a hardened Wall Street M&A type, but the survival of Yahoo is the real point here, rather than the lining of bankers’ already fee-stuffed pockets.

And anything other than that is just fog.

]]> http://allthingsd.com/20111130/yahoo-stock-gets-gaslit-by-bidders-trying-to-thwart-other-bidders/feed/ 0 http://allthingsd.com/20111130/yahoo-bidders-come-in-at-16-50-to-17-50-with-plan-to-keep-jerry-yang-staying-on-board/ http://allthingsd.com/20111130/yahoo-bidders-come-in-at-16-50-to-17-50-with-plan-to-keep-jerry-yang-staying-on-board/#comments Wed, 30 Nov 2011 08:36:12 +0000 Kara Swisher http://allthingsd.com/?p=142001

Last night, Yahoo’s board gathered for a pre-meeting dinner, a precursor to a day-long meeting today to weigh several bids from private equity firms to buy part of the Silicon Valley Internet giant, including Silver Lake and TPG Capital.

Among the thorniest of issues will be the low price that the firms want to pay for a 19.9 percent stake in the company. Silver Lake has offered $16.50 and TPG a dollar more.

In the past year, Yahoo share prices have seen a low of $11.09 and a high of almost $19. It closed yesterday at $15.70 — a price that is mostly due to sale rumors — making the offers not much of a gain on current market valuation.

The transaction type being contemplated is called a PIPE — or a Private Investment in Public Equity — with the investment below 20 percent, which allows Yahoo to avoid a shareholder vote on the issue.

While the Yahoo board had hoped for bids above $20, they are not expected to be forthcoming, considering the weakness in its business over recent years and the difficulty of returning it to health and growth.

Results in its upcoming quarter, for example, are expected to be weak again, with trouble in its advertising business, largely due to uncertainty around the business.

The low price, along with the attempt to bypass shareholder approval, is sure to infuriate Yahoo’s major investors, given they have watched the value of their stakes wilt over the years under current board management.

In the last five years, due to continually muddled leadership and the missing of key Internet trends, Yahoo shares have dropped 44 percent in value, which compares with huge gains from companies like Amazon and others.

Major Yahoo stakeholders are already irked by the PIPE idea itself, which could transfer power to private equity firms at preferential terms.

Another possible bone of contention will be the preservation of at least some parts of Yahoo’s current board.

Under a plan by Silver Lake, for example, it would get three board seats, as well as another one for a CEO of its choosing. Another seat will go to Yahoo co-founder and current board member Jerry Yang. There will be six independent board members, but it is not clear if they would be new or include some current directors.

One of the Silver Lake choices would be well-known Silicon Valley legend Marc Andreessen, who is now a powerful VC. The appeal of Andreessen is important to some major shareholders who have turned sour on Yang.

Who will be CEO of the rejiggered entity will also be discussed at the meeting. Sources said Silver Lake and TPG have definite candidates in mind and Yahoo has also been conducting an official search.

In other words, there’s a lot on the plate of Yahoo’s board today, which also needs to revisit continued proposals from its Asian partners — China’s Alibaba Group and SoftBank of Japan — to sell back its stakes in Alibaba and Yahoo Japan in various tax-free schemes.

Sources said Yahoo — which has thus far rejected such efforts — might now consider selling a part of their shares back, up to half. This would allow the company to give a cash dividend to its disgruntled shareholders.

If thwarted, as has been previously reported ad nauseum, Alibaba and SoftBank are considering their own bid with the help of other U.S. private equity firms, such as Blackstone.

Other PE firms — especially ones who have not signed Yahoo’s non-disclosure agreement related to any deal — are also hanging under the hoop, so to speak, to see what happens. At least one firm hopes the Yahoo board will reject the low-priced partial bids, leaving the court wide open again.

“It’s still anyone’s game,” said one possible bidder.

Except for Yahoo’s put-upon employees and shareholders, this is anything but fun. More on that soon.

]]> http://allthingsd.com/20111130/yahoo-bidders-come-in-at-16-50-to-17-50-with-plan-to-keep-jerry-yang-staying-on-board/feed/ 0 http://allthingsd.com/20111129/remedy-health-media-acquires-healthcentral/ http://allthingsd.com/20111129/remedy-health-media-acquires-healthcentral/#comments Tue, 29 Nov 2011 14:30:55 +0000 Kara Swisher http://allthingsd.com/?p=147993

Remedy Health Media, a New York-based health information company, has bought HealthCentral, a start-up that offers online clinical and patient tools, community and content in a variety of topic areas.

Terms of the deal were not disclosed, but the Arlington, Va.-based HealthCentral has raised $50 million from investors such as the Carlyle Group, IAC/InterActiveCorp, Polaris Venture Partners and Sequoia Capital. Allen & Co., which was HealthCentral’s financial adviser for the transaction, was also an investor.

The market for online-based information about health has been a fast-growing one, but it’s still a nascent arena.

Here’s the official press release:

Remedy Health Media Acquires HealthCentral: Creates Industry-Leading Health Information and Technology Platform

NEW YORK, NY – Remedy Health Media, America’s fastest-growing health information and technology company, today announced its acquisition of HealthCentral, a leading provider of online clinical and patient community resources and tools that help millions of patients and caregivers take control of their health and improve their well-being. The acquisition brings together two companies with the shared mission of empowering patients and caregivers with the information and applications needed to efficiently navigate the healthcare landscape to receive better health outcomes. The acquisition is expected to close this week. Terms were not disclosed.

“This acquisition means Remedy now provides the health information industry’s leading portfolio of digital, mobile, and point-of-care information and technology products,” said Remedy Chief Executive Officer, Mike Cunnion.

HealthCentral’s CEO, Christopher M. Schroeder, adds, “This combination creates real opportunities for innovation in an industry segment that is growing rapidly and seeking new solutions. All of us at HealthCentral are very excited that the union of the two companies and the strength, scope, and reach of the new Remedy will be a unique force for better health and wellness.”

With the addition of HealthCentral, Remedy Health Media creates a market-leading platform for healthcare audiences seeking proprietary information and technology to manage their health concerns on their terms as well as marketing partners who want to connect with patients and caregivers on a number of platforms: online, in doctors’ offices, pharmacies, and through their mobile devices. The new Remedy Health Media will influence more than 150 million consumers annually. The company’s reach now includes 23 million unique monthly visitors to its health websites, more than 17 million patients and caregivers at pharmacy counters nationwide, a 20-million member customer database, and a network of more than 600,000 physicians.

“With the acquisition of HealthCentral, we’ve dramatically increased our online reach, sales capacity and our ability to create industry leading health information and technology applications,” notes Cunnion. “The combination creates exciting opportunities to provide even more value to our audiences, customers and strategic partners.”

Remedy Health Media is a Veronis Suhler Stevenson (VSS) company; a leading global private investment firm focused on the information, education, media, communications and business services industries. “Communications growth will be driven by the convergence of technologies in digital and mobile platforms,” said David Bainbridge, Managing Director, Veronis Suhler Stevenson. “Nowhere is this more evident than in the health and wellness sector where the ability to access accurate information is paramount.”

HealthCentral is backed by leading interactive media and technology investors IAC/InterActiveCorp, Polaris Ventures, Sequoia Capital, The Carlyle Group and Allen & Company. Notes Alan Spoon of Polaris Ventures, “We are thrilled to join forces with Mike and the Remedy team. This combination is a unique opportunity to create the largest and most innovative platform for health seekers looking to take action on their terms, and connecting them with our partners and clients.”

Schroeder will remain involved in the business as a consultant to Remedy and the board of directors, and has been named an Advisor to Polaris Ventures.

]]> http://allthingsd.com/20111129/remedy-health-media-acquires-healthcentral/feed/ 0 http://allthingsd.com/20111128/yahoo-will-marc-or-wont-he/ http://allthingsd.com/20111128/yahoo-will-marc-or-wont-he/#comments Mon, 28 Nov 2011 23:54:01 +0000 Kara Swisher http://allthingsd.com/?p=145846

As bidders ready their offers for all or parts of Yahoo this week, a lot of the eyes for one of the more aggressive ones will likely be on well-known Silicon Valley entrepreneur and powerful VC Marc Andreessen.

That’s because he’s deciding whether or not to play a significant role — as a key board member and even possibly as chairman — in an effort by private equity firm Silver Lake to buy part of the troubled Internet giant and attempt a dramatic reversal of its waning fortunes.

Andreessen, who now runs the Andreessen Horowitz venture firm with Ben Horowitz, has visited Yahoo execs, as I reported last week, part of a weighing of whether to deeply enmesh himself in turning around the iconic Web property.

He has been, as was also reported several months ago, allied with Silver Lake on a Yahoo effort since September and worked with the firm on its purchase and then sale of Internet communications service Skype.

For Andreessen — who serves on the board of Hewlett-Packard and has a lot on his plate running a major venture firm with investments at key companies throughout the tech sector — the decision to join with Silver Lake is a tough one, given that the possibility of failure is not unheard of.

“The question is whether Yahoo can be a growth company again,” said one person close to the situation. “And that is still unclear.”

In meetings with Yahoo execs, several sources noted that Andreessen was unusually blunt about the problems Yahoo faces and its mistakes in the past. They noted as well his reticence over the amount of work required to make a difference.

“He seemed very negative on the idea of whether anyone had what it took to turn it around,” said one exec.

Another factor: Possible friction with Yahoo co-founder and Andreessen friend Jerry Yang. The pair have discussed the issue on friendly terms. “Marc would not do this without Jerry being okay with it,” said one source.

That’s because observers expect the entrance of the Netscape co-founder — who has enormous clout with engineering talent across Silicon Valley, which Yahoo dearly needs — to overshadow and even minimize Yang’s involvement.

One thing is clear: Major shareholders, who are wary of any deal that would keep the current regime in place at Yahoo, told me in multiple interviews last week that the only way they would accept a partial investment by a private equity firm — called a PIPE — would be if there was new leadership in any deal.

And the first name mentioned by almost every Yahoo investor as a key get? Marc Andreessen.

Andreessen declined to comment on any of the 53 emails I sent him asking to.

]]> http://allthingsd.com/20111128/yahoo-will-marc-or-wont-he/feed/ 1 http://allthingsd.com/20111124/att-to-take-4-billion-charge-in-event-t-mobile-deal-fails/ http://allthingsd.com/20111124/att-to-take-4-billion-charge-in-event-t-mobile-deal-fails/#comments Thu, 24 Nov 2011 08:16:01 +0000 Ina Fried http://allthingsd.com/?p=147399 AT&T said late on Wednesday night that it will take a $4 billion charge as opposition to its T-Mobile USA purchase mounts.

The charge reflects $3 billion in cash and $1 billion worth of spectrum that AT&T will owe T-Mobile parent Deutsche Telekom if the deal fails to garner regulatory approval.

The companies also said they would withdraw their pending applications before the Federal Communications Commission seeking approval for the deal, though they intend to continue fighting for it.

“AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice,” the companies said in a statement. “As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval.”

The FCC chairman earlier this week indicated he was seeking a hearing on the deal, which commission staff found will lessen competition and lead to fewer U.S. jobs.

AT&T is already facing a Department of Justice lawsuit seeking to block the $39 billion purchase.

]]> http://allthingsd.com/20111124/att-to-take-4-billion-charge-in-event-t-mobile-deal-fails/feed/ 0 http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/ http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/#comments Wed, 23 Nov 2011 22:38:45 +0000 Kara Swisher http://allthingsd.com/?p=147167

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

I know, I know, but listen up …

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

]]> http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/feed/ 0 http://allthingsd.com/20111118/annoying-orange-finally-gets-some-much-deserved-juice-from-cartoon-network/ http://allthingsd.com/20111118/annoying-orange-finally-gets-some-much-deserved-juice-from-cartoon-network/#comments Fri, 18 Nov 2011 13:54:11 +0000 Kara Swisher http://allthingsd.com/?p=145604

The Swisher boys and I are giant fans of “Annoying Orange,” the YouTube video sensation that stars a very irksome citrus fruit (not to be confused with a bitter, teensy one).

That’s why I was thrilled that the meme finally penned a long-expected deal with the Cartoon Network to produce a regular animated 30-minute cable television series for 2012.

Apparently, the toothy Orange and his long-suffering fruit and vegetable friends will travel through time in a “magical fruit car” and have adventures.

I am in — and, presumably, Apple, even after the knife incident.

You can see that below, along with my favorite Webisode, “Sandy Claus”:

]]> http://allthingsd.com/20111118/annoying-orange-finally-gets-some-much-deserved-juice-from-cartoon-network/feed/ 0 http://allthingsd.com/20111117/exclusive-zyngas-van-natta-moves-to-strategic-advisor-feld-off-board-paul-in/ http://allthingsd.com/20111117/exclusive-zyngas-van-natta-moves-to-strategic-advisor-feld-off-board-paul-in/#comments Thu, 17 Nov 2011 18:30:08 +0000 Kara Swisher http://allthingsd.com/?p=145219

In a new filing with the Securities and Exchange Commission concerning its upcoming IPO, Zynga is expected to unveil two key management and board changes at the online gaming phenom:

Chief Business Officer Owen Van Natta — who came to the San Francisco-based start-up several years ago to help CEO Mark Pincus grow it and develop it — will step down from his job and become a strategic adviser focusing on major partnerships. He’ll still remain board member at Zynga, but will give up millions of pre-IPO shares by moving out of his operational role.

And director and venture investor Brad Feld will leave the the board, which VCs sometime do as companies move to a public offering and add members with more specific business experience.

In his place, longtime entrepreneur and investor Sunil Paul, who founded a company called FreeLoader with Pincus many moons ago, will join the board.

Zynga confirmed the changes to me in a statement by Pincus:

“Owen is a valuable business partner. He’s made great contributions to Zynga and continues to be an important part of our team.”

Sources said the changes related to Van Natta around are not part of a recent controversy around a Wall Street Journal story about clawing back of some share options grants of early Zynga employees who had become less involved in the company. While the company cannot actually take back already vested shares owned by those staffers, the article has put a lot of scrutiny on Zynga and raised questions about how to cope with the kind of hyper-growth some Internet firms experience.

That’s certainly been the kind of rocket ride Zynga has been on, as it has grown from a small social gaming company on Facebook to a high-profile public company.

Zynga is in the final stages of its IPO process, answering questions from the SEC that are typical. If all goes well, Zynga execs are expected to go on a road show after the Thanksgiving and go public by the end of the year at a market valuation of close to $20 billion.

That was different from when Van Natta officially got to Zynga in the spring of last year — after a rocky experience running the doomed Myspace. At the time, he told me at the time that planned to be focused on scaling the business and did not consider himself a long-term operating executive.

Since then, he has helped Pincus hire a series of experienced gaming execs, including a chief operating officer, a chief marketing officer and others.

Zynga was Van Natta’s third high-profile Web company in recent years. He was a top early exec for Mark Zuckerberg at Facebook until early 2008, and in 2009 he took over News Corp.’s (NWS) MySpace, a job that lasted less than a year.

Early in his career, Van Natta was also was a top strategy, marketing and deal exec for Amazon, which bought an early social networking start-up called PlanetAll that he worked at.

It will now be interesting to see what Van Natta does next, but it is unlikely he will take a permanent position. He is a longtime angel investor in Silicon Valley, including in hot start-ups such as Asana and still holds a significant stake in Facebook.

But, in moving out of his job at Zynga, he will be giving up many millions of shares of a rich trove he was given when he arrived at the company. That said, Van Natta already owns millions of accelerated vested shares and will get another large grant as a board member.

Translation: Don’t cry for Mr. Van Natta, Silicon Valley — he made $42 million last year from Zynga shares alone.

]]> http://allthingsd.com/20111117/exclusive-zyngas-van-natta-moves-to-strategic-advisor-feld-off-board-paul-in/feed/ 0 http://allthingsd.com/20111103/alibabas-jack-ma-on-yahoo-and-more-yahoo-the-full-asiad-interview-video/ http://allthingsd.com/20111103/alibabas-jack-ma-on-yahoo-and-more-yahoo-the-full-asiad-interview-video/#comments Thu, 03 Nov 2011 20:00:04 +0000 Kara Swisher http://allthingsd.com/?p=140152

We are now posting the full videos from the recent AsiaD conference, which took place in Hong Kong in October.

Over the next two weeks, we’re going to follow the schedule of the actual event. Up now: Alibaba Group’s voluble CEO and co-founder Jack Ma.

Ma has cut quite a colorful path through the Internet space, both in China and, more recently, in the U.S. — mostly due to his high-profile wrangling with partner and major shareholder Yahoo.

And, in the midst of the Silicon Valley Internet company’s endless agonizing over what to do with itself, Ma has thrown Alibaba into the mix prominently as a self-described kingmaker to any deal. Also, he has said he wants to buy Yahoo too.

Ma talks about all this, as well as his thoughts on the Asian markets, his goals for Alibaba and more, in an onstage interview with Peter Kafka.

As he told the audience at the AsiaD event:

“We’ve been working with Yahoo for years to buy a portion of them or buy them out. Money is not the problem. The problem is what Yahoo wants to do.”

Indeed, so watch Ma in action:

]]> http://allthingsd.com/20111103/alibabas-jack-ma-on-yahoo-and-more-yahoo-the-full-asiad-interview-video/feed/ 0