Is there more than one way to skin a social graph?

Yesterday, Yahoo (YHOO) took another step in its efforts to play fast catch-up in the social networking arena, by dramatically expanding its relationship with Twitter and integrating the microblogging service broadly throughout its Web site.

In much the same way it did recently with Facebook, Yahoo’s move is part of a massive integration of more innovative and popular third-party social networking sites across the giant Internet portal, which is code-named internally “Project Rushmore.”

Some think outsourcing the job to more capable companies is yet another monument to Yahoo’s failure at its own much touted plans to socialize itself.

And while this is true to a large extent, BoomTown is not so sure it’s a bad idea, especially compared with the flailing experienced by Google (GOOG) recently from its own attempts to compete with Facebook and Twitter via the rollout of Google Buzz.

That has certainly turned out to be a confusing mishmash so far and most definitely a privacy quagmire for the search giant, which–let’s be honest–might not be able to grok social even if it got poked in the head relentlessly.

And while Google execs have loudly claimed that they are not aiming at the social networking’s twin phenoms, the air of aggressive desperation–or maybe desperate aggression–is palpable.

That’s why what the Silicon Valley icon is doing might be the best solution for it at this point–if you can’t innovate, aggregate!

“We want to integrate across all social networks to give consumers a better experience,” said Cody Simms, senior director of product management for Yahoo’s open strategy, in an interview yesterday. “Yahoo then becomes a network of social networks, making it easier for users.”

And that effort to make Yahoo the one place to gather it all is just what it seems to be trying to do. In December, Yahoo announced it would integrate Facebook Connect with its many properties–from its powerful media sites to its Flickr photo service to its email.

That has now been followed by the weaving of Twitter’s real-time feed throughout the service in a variety of ways. Under terms of the deal, users can access the data stream of tweets while on Yahoo, make status updates and share Yahoo content.

In addition, Yahoo said that search and media properties “like News, Finance, Entertainment, and Sports will include real-time public Twitter updates across a variety of topics.”

Yahoo sources said the company would be striking similar deals with other social networking sites, and MySpace and LinkedIn are likely candidates for the next two spots on Yahoo’s social monument.

This kind of search and presentation improvement is key, of course, as Yahoo must present a more innovative palette of tools to consumers as Microsoft (MSFT) takes over its search technology and others offer users an increasing number of features.

Without naming Google Buzz, Jim Stoneham, Yahoo’s VP of Communities, said he thinks it is the best course at this point in the game, in which Facebook and Twitter have run far ahead with the social ball and do not show any signs of slowing down quite yet.

“I don’t think yet another social network, no matter how you try to force it on consumers, is what people want,” said Stoneham, in a not-so-veiled slap at Google Buzz. “So, Yahoo will obviously not be doing another social network.”

That’s the best news I have heard in a long time from Yahoo. Now, let’s see if it can turn not making something into, well, something.

Yahoo announced tonight that it is dramatically expanding its relationship with Twitter, integrating it broadly through its Web site, much in the same way it did recently with Facebook.

In December, Yahoo (YHOO) announced that it would integrate Facebook Connect with its many properties–from its powerful media sites to its Flickr photo service to its email.

While the Internet giant once had grand plans to socialize itself, it seems that task is being outsourced to more successful and innovative companies in the social networking space, part of a massive integration of them across the giant Internet portal, in an effort dubbed internally as “Project Rushmore.”

So, as it previously indicated, Yahoo is now moving beyond Facebook, weaving Twitter’s real-time feed throughout the service in a variety of ways.

Under terms of the deal, users can access the microblogging service’s data stream while on Yahoo, make status updates and share Yahoo content.

In addition, Yahoo said that search and media properties “like News, Finance, Entertainment, and Sports will include real-time public Twitter updates across a variety of topics.”

Yahoo once again declined to comment on whether and when the service would be striking similar deals with other social networking sites.

But sources told me that MySpace and LinkedIn are likely candidates for the next two spots on Yahoo’s social monument.

That would, of course, account for the four presidential stone faces on Mount Rushmore–George Washington, Teddy Roosevelt, Thomas Jefferson and Abraham Lincoln.

No money was exchanged in the five-year deal with Facebook; nor was there any other financial or advertising element. Yahoo declined to give such details about the Twitter deal, but some sort of payment seems likely.

Whatever the case, other big Internet companies are getting into the social act.

Separately, both software behemoth Microsoft (MSFT) and search giant Google (GOOG) recently struck a data-mining deal with Twitter, and Microsoft did so with Facebook.

Yahoo’s deals are broader, because such an overall move by the company is an important and necessary one.

It is also very late in coming, since Yahoo nearly completely missed the social networking train and needs to figure out how to be part of it in a way that is useful to users, as well as open.

Here is the full press release from Yahoo, with more bird puns than BoomTown can stand (Sheila, I give):

@yahoo + @twitter Sitting in a Tree…T.W.E.E.T.I.N.G.

Yahoo! gives ‘em something to tweet about, partnering with Twitter to integrate content and social experiences from across the Web

SUNNYVALE, Calif., Feb. 23, 2010–As part of its ongoing commitment to be the center of people’s online lives, Yahoo Inc. (NASDAQ:YHOO) today announced a global partnership with Twitter to integrate Twitter’s real-time social experiences with more than 600 million people in Yahoo!’s global network. The integration is part of Yahoo!’s commitment to provide personally relevant information to people, from sources across the Web.

A little bird told me: @yahoo is the place to tweet and be tweeted

This partnership includes three primary elements:

1) People will be able to access their personal Twitter feeds across Yahoo!’s many products and properties, including the homepage, Yahoo! Mail, Yahoo! Sports, and others, letting them check in more easily on what’s happening with the people and things they care about while on Yahoo!.

2) People will be able to update their Twitter status and share content from Yahoo! in their Twitter stream, so they can easily share their Yahoo! experiences with their friends and followers on Twitter.

3) Yahoo! Search and Yahoo! media properties like News, Finance, Entertainment, and Sports will include real-time public Twitter updates across a variety of topics. Yahoo! Search users will immediately see real-time Twitter results today; go to Yahoo! and try it out.

Tweet and shout: @yahoo pumps up the social volume

Today’s Twitter partnership, along with Yahoo!’s recently announced Facebook relationship, will transform Yahoo! into a highly customizable social experience that lets people bring together and unify their activity from their many social experiences across the Web. Because of these connections, anyone with a Yahoo! ID can update multiple social networks simultaneously and stay in touch with the people and information that matter most at every moment of the day.

“Let me try to capture the enormity of this integration in 140 characters or less: We’re turning the key to the online social universe–you will find the most personally relevant experiences through Yahoo!,” said Bryan Lamkin, senior vice president, consumer products group, Yahoo!. “We’re also simplifying people’s lives by bringing their social worlds–and the world–together for easy access.”

Add an exclamation point to your tweets

The Twitter integration also provides full access to the complete Twitter public data stream, which Yahoo! will use to improve the relevance and freshness of content across Yahoo! properties. This will drive deeper user engagement, and create new and compelling opportunities for developers, advertisers, and publishers.

“The information in one single tweet can travel light-years farther with this Yahoo! integration,” said Twitter cofounder Biz Stone. “Tweets in more places brings relevance where and when you need it most.”

The real-time Search integration is available immediately. Other parts of the integration are expected to launch later this year.

• News Corp. CEO Rupert Murdoch tried to lower expectations that his Fox broadcast network would hire Conan O’Brien.
• Murdoch hinted that his book publishing unit is in line to get a new deal on e-books from Amazon, just as Macmillan has demanded (as will other publishers).

On the second point, here’s my on-the-fly transcription and paraphrasing of Murdoch’s comments about Amazon (AMZN), Apple (AAPL) and e-book pricing. It’s one of the most candid descriptions you’ll hear from a top executive about Big Media’s reluctance to embrace digital distribution at the expense of its existing system and revenue:

“We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much” because they cost us less to distribute, “but we want some room to maneuver.” The Apple deal…“does allow some flexibility and higher prices” though e-books will still be lower than print versions. And now Amazon is willing to sit down with us again and renegotiate.

UPDATE: Here’s a more complete transcript from Seeking Alpha:

We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against [inaudible] books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it. Amazon, sorry Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices.

There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing.

Again, it’s impossible to stress how scarring the music labels’ experience has been for Big Media. And they’re determined not to repeat the experience. Their takeaway, though, seems to be that they can stave off digital distribution by keeping prices high and inventory relatively scarce. Hard to believe consumers are going to go for that.

Earlier

A first glimpse at News Corp.’s fourth-quarter earnings (which, due to the company’s weird fiscal calendar, is technically the company’s Q2 for 2010): Pretty good. And much better than a year ago (thankfully). After factoring out one-time charges, the company posted earnings of 25 cents on revenue of $8.7 billion.

The Street was looking for earnings of 20 cents on revenue of $8.23 billion, and analysts were also hoping the company would boost its earnings forecast, due in part to a bump from the ginormous success of “Avatar.” No word on guidance in the earnings release, though.

I’ll pick through the release for other worthwhile nuggets for the next few minutes. And then the real show begins at 4:30 Eastern, when the company’s earnings call–easily the most entertaining one in its peer group due to the censor-free presence of CEO Rupert Murdoch–begins. We’ll be looking for commentary on his battle/negotiation with Google (GOOG), upcoming content deals with Apple and the iPad, his thoughts on paid content in general, a dash of political commentary or two, and an update on the turnaround effort at MySpace.

From the release: A pretty nice quarter at most of the conglomerate’s divisions, including the previously battered broadcast TV and newspaper groups. News Corp. says print revenue at The Wall Street Journal was up five percent and ads on the Journal’s digital network were up 17 percent.

MySpace and the company’s other digital properties, shuffled into the “other” category, don’t get much of a mention, but don’t seem to have done much, not surprisingly.

But News Corp does mention that digital media earnings were down $32 million compared with a year ago, “principally due to lower search and advertising revenue.” And the company lost $29 million on “digital media dispositions”–i.e., the fire sale/giveaways of properties like Rotten Tomatoes and Photobucket.

Here’s the breakdown by segment (click table to enlarge):

Liveblog

CFO Dave DeVoe: “Extremely pleased” with the quarter.

Movies: Revenue up due to decent DVD sales (no MGM problem here). Also high costs due to “Avatar,” but big profits from the movie will be coming in during the next couple quarters.

Broadcast TV: Local ads are improving; the telecom, fast food, finance categories are all improving.

Cable: Revenue is up 18 percent. Affiliate revenue is up 21 percent (more money for Fox News subs), and there was a “single-digit” boost in ad dollars.

Newspapers: Journal dollars are up, operating costs down. Ad revenue got better as the quarter progressed.

Books: Revenue up, expenses down.

“Other”/MySpace: Digital media revenue down, but cost-cutting helped trim losses.

News Corp. is boosting its dividend by 25 percent.

Guidance: The company’s operating income growth rate is expected to grow from single digits to the high teens. Better than anticipated: Film group, TV and cable. But revenue goals for digital media, including MySpace, will take longer than anticipated.

Murdoch sings the praises of content. [I will not argue with him, for now]. “Avatar” is awesome, he says, a “harbinger of fundamental change in the industry.” Also really good: “Alvin and the Chipmunks.” Fun to hear Rupe say “Alvin and the Chipmunks.”

WSJ is the No.1 paper in U.S. in terms of circulation, influence, quality. WSJ.com is a “digital model for newspapers around the world.”

Fox News Channel’s audience is both “loyal and lucrative.” Roger Ailes is doing an “admirable job” [translation: Bite me, Michael Wolff--the author of a recent Murdoch biography].

Last year, Murdoch says, News Corp.’s pay-to-play ideas sounded nutty, but now “the content clan has gathered around our ideas.” Consumers must pay and will pay “to be entertained and informed.” All those awesome new gadgets being made in China and sold at the Consumer Electronics Show need content or they’re worthless. Content, content, content. Get it? Content, content, content.

Murdoch says he’ll be wringing more dollars from cable operators. And “when it comes to online news, we’ll be changing that model too,” adding that News Corp. is in “substantive conversations with device makers on developing subscription models” to deliver content. And don’t forget about 3-D!

Not performing well but “long-term growth drivers”: Sky Italia satellite service. Also Sky Deutschland. And MySpace is “not yet where we want it.” In the last quarter, however, MySpace “started to see signs of traffic stabilization.”

Shout-outs for Chase Carey and other managers (but not by name).

Q&A

Question: How big a deal is retransmission consent in coming years? $40 million a month? $100 million a month?

Chase Carey: No numbers, but it’s going to be a “transforming event.” We have two of top 10 distributors done, more coming. It’s a three- or four-year process to knock these deals out.

Q: Does this fix the broadcast model?

Carey: “Yes, I guess you could say simplistically, it fixes it.”

Q: What’s the timing on an “Avatar” DVD, and what about a sequel? Also, how do TV ads look this year?

Murdoch: For “Avatar,” we think about 60 percent of profits will be in the next six months. Which means the DVD will be coming “as soon as possible,” but the movie will stay in cinemas for a while because we’re doing huge dollars in theaters still. Sequel? “Very early talks about it. Jim has ideas for one. We haven’t come to any agreement with him….Being Jim Cameron, I wouldn’t hold your breath for an early one.” Asked about the economics of a future release (“Will you keep the same revenue split?”), Rupe sort of rumbles and growls and sort of doesn’t have much to say. “Ask anybody; it is very easy to drop a $100 million in a hurry on a film, and we’d like to lay off some of the risk.”

Carey: TV trends for this year are “positive.”

Murdoch: TV stations will be up 18 or 19 percent, but last year was terrible. We’re still down compared with two years ago. Hard to see more than a quarter in advance. In newspapers, it’s hard to see more than a few weeks.

[Missed a question on Sky Italia here.]

Q: What are growth prospects for cable networks? They’ve been driven a lot recently by new subscriber fees. How much longer can you get those boosts?

Murdoch: Overall, “we think we have great potential for growth. Quite a long way to go yet.” Look at how NBCU’s USA is growing.

Carey: In the U.S., we’re moving to “quality over quantity”–we can wring more out of foreign exchange, etc. Fox News is only getting more powerful; it has “great upside.”

Q: Regarding newspapers, what growth came from organic increase versus currency fluctuations?

The majority is from foreign exchange.

Q: Does your guidance assume that the “Avatar” DVD is coming in the next two quarters?

Murdoch: “Yes, but it won’t be 3-D” [which I don't think the analyst was asking about].

Q: Back to retransmission consent: You’ve been getting more and more money from cable guys. Why can’t you get $4 or $5 per subscription for Fox broadcast subs?

Murdoch: “We’re modest people.”

Carey: Hyuk, hyuk. Real answer: It takes time. “We try to approach this constructively. We’ve built businesses with [cable guys], we’ve built valuable cable channels” [translation: patience!]. We want to extract more without killing the cable guys.

Murdoch: That said, we’re asking for the same thing [for broadcast channels] that the cable networks are getting, which “certainly won’t kill the cable companies.”

Q: Please talk about value of film libraries (i.e., MGM). They’re generating big operating profits for cable now. How long will this last?

Murdoch: Regarding the MGM auction, “you can count us out of that one altogether” because others will pay more than we’re willing. And we’re not pursuing the Miramax catalog at all.

Carey: A film library by itself, without new stuff coming through, is a “depreciating asset.”

Q: On guidance: You say the ad market getting better, etc., but it sounds like you’re saying Ebidta growth is slowing.

Murdoch: “We honestly do not have any visibility about the last quarter.”

Q: On books/e-books/Apple, what’s going on with that?

Murdoch: We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much, lower costs to us, but we want some room to maneuver. The Apple deal does allow “some flexibility and higher prices” though e-books will still be lower than print. And now Amazon is willing to sit down with us again.

Press Q&A

Q: What’s up with plans to charge for newspapers on the Web?

Murdoch: “Not ready to announce yet [long pause]. We won’t be ready yet to make an announcement.” A “lot of talks with a lot of people.” There will be more to say within the next two months, Murdoch adds.

Q: Are you still going to fall $100 million short on the Google deal?

Murdoch: Yes. People using social networks don’t use search a great deal. Facebook has seen this, too. It’s “really too early to make confident predictions…but from going down, we’re beginning to go up.”

Q: Can we get some details about Time Warner Cable (TWC) deal?

Nope.

What about Conan O’Brien on late night?

Murdoch: If the programming people can show us we can do it and make a profit on it, we’ll do it in a flash. I’m sure there have been conversations with Conan, but “if you mean real negotiations, no.”

[Missed two questions here.]

Q: Another late-night question: If you do go into negotiations with Conan, how do you placate your affiliates?

Murdoch: It’s a different deal than NBC. They screwed up 10 pm, which reduced the lead-in to local news. Our affiliates run syndicated programming at 11:30, though, so it will take time to adjust there.

Call ended. This one seemed short to me.

More or less redundant disclosure: News Corp. (NWS) owns this Web site.

David Ko (pictured here), head of Yahoo’s mobile division, has added the Internet giant’s vast media properties in the U.S. to his portfolio, according to several sources.

BoomTown recently reported that Ko was the likely person to take over as North American Audience head at Yahoo (YHOO), reporting to U.S. EVP Hilary Schneider.

With purview over programming and more for the main Yahoo media properties, such as News and Finance, he fills a slot left by the departure of Jeff Dossett in May.

Since then, the key Yahoo content division has been run jointly by Jimmy Pitaro, who heads Vertical Audience Experiences for Yahoo, and Tim Mayer, who is in charge of Search & Social Applications, as well as the powerful homepage of Yahoo. Both now report to Ko, who joined Yahoo in 2000, sources said.

But, in a related move, product development for mobile has moved from under Ko to CTO and EVP of Products Ari Balogh.

A similar move of Yahoo’s media properties took place earlier this year, shifting key tech development responsibility to a global product organization at Yahoo’s HQ in Sunnyvale, Calif.

Previously, as had been the case in mobile, such development had been mostly carried out by individual media properties.

The argument for the shift posits that centralizing product development of Yahoo offerings drives efficiencies, saves money, eliminates redundancies and accelerates growth around the world.

Those who do not like the idea think it is wrong to separate the development of a product from programming because the two are intricately dependent and need to be tweaked delicately.

But, said one source, mobile has been deemed by CEO Carol Bartz as “part of the core” at Yahoo instead of more an experimental offering as it has been viewed internally.

Thus, mobile apparently needs to be closely aligned to all product development going forward.

Ironically, one of Yahoo’s more high-profile mobile efforts, its Yahoo Go mobile software application and portal, which was launched to much fanfare at the Consumer Electronics Show in Las Vegas almost four years ago, will be shuttered Jan. 12, 2010.

Now, under Ko, Yahoo’s mobile efforts have been centered around building apps for smartphones, although that market has become increasingly dominated by players such as Apple (AAPL) with its iPhone, Google (GOOG) and its Android effort and many others.

Google also just bought an innovative mobile advertising company, AdMob, which gives it a headstart in this nascent arena.

Without its own device and a dominating strategy, Yahoo must use its Web heft to push its content into the mobile space.

Presumably, that is the thinking behind giving Yahoo’s mobile and media properties the same boss.

Ko, who has worked in a variety of areas at Yahoo, took over as SVP of Yahoo Mobile after Marco Boerries left in late February as EVP of the Connected Device Division, which now does not exist under that name.

He had run Yahoo’s mobile business in the Asia Pacific region.

According to Ko’s Yahoo bio, he previously worked at Salomon Smith Barney as a senior associate and analyst. He is a graduate of New York University’s Stern School of Business.

Ko, who lives in San Francisco with his family, the bio notes, inexplicably “enjoys reading tech blogs.”

Well, then, Dave, we hope you have enjoyed this post!

Microsoft CFO Chris Liddell (pictured here) is leaving the software giant at the end of the year and will be replaced by longtime Microsoft finance exec Peter Klein.

A Microsoft (MSFT) spokesman said Liddell wants to pursue jobs beyond his finance role outside the company.

Liddell, 51, arrived at Microsoft in 2005 and many of his years at the company have been tough ones financially due to the weak economy. It was up to Liddell to deliver the bad news at quarterly earnings calls.

Still, BoomTown always enjoyed his adorkable New Zealand accent, even when he was talking econalypse 24/7, as well as about layoffs and cost cutting.

One post from last spring, for example, was titled: “Glum Chris at the Recessiondome.”

Klein (pictured here), 47, has been at Microsoft since early 2002 and currently serves as CFO of its Business Division, which is one of the company’s largest units.

Here is the official press release:

For Release 2 p.m. PST

Nov. 24, 2009

Microsoft Announces Chief Financial Officer Transition

Chris Liddell to leave Microsoft Dec. 31; Peter Klein assuming CFO role.

REDMOND, Wash.–Nov. 24, 2009–Microsoft Corp. today announced that Chris Liddell will be leaving the company at the end of 2009, and named Peter Klein as the company’s new chief financial officer.

“Chris and his finance team have accomplished a great deal over the past four and a half years. The team is deep and strong, and has an excellent record of building value for our shareholders,” said Steve Ballmer, Microsoft chief executive officer. “Peter brings great finance and operations expertise and a deep understanding of the company, and I am looking forward to a smooth transition that continues our commitment to cost containment and finance excellence.”

In the past fiscal year, Microsoft reduced costs by $3 billion compared with its original plan, and returned $14 billion to shareholders through dividends and stock buy-back.

Klein, 47, joined Microsoft in February 2002 and currently serves as CFO of Microsoft’s Business Division, overseeing all financial strategy, management and reporting for the $18.9 billion business with 7,800 full-time employees. Previously, Klein served three years as CFO of Microsoft’s Server and Tools Business.

“My time at Microsoft has been an outstanding experience, and I am delighted to be leaving the company in such great shape,” Liddell said. “We have built a world-class finance team and established strong internal accountability. Microsoft is coming out of the economic downturn with not only great product momentum but also strong discipline around costs and a focus on driving shareholder value.”

Liddell, 51, joined Microsoft in May 2005 after serving as CFO at International Paper Co., and chief executive officer of Carter Holt Harvey Ltd., then New Zealand’s second-largest listed company. He said he is looking at a number of opportunities that will expand his career beyond being a CFO.

Liddell will continue at Microsoft working closely with Klein through Dec. 31, to ensure a smooth transition.

Before joining Microsoft, Klein spent 13 years in corporate finance, primarily in the communications and technology sectors: McCaw Cellular Communications; Orca Bay Capital, a private equity firm; and several startups, including HomeGrocer.com, where as vice president and treasurer he helped lead an IPO and subsequent acquisition by Webvan.

“I’m honored to take on the role of Microsoft CFO. I’ve learned a lot working with Chris, and I’m excited about the opportunities ahead for Microsoft,” said Klein. “We have an incredible pipeline of products, we have strong financial and operational accountability, and we are well-positioned for growth as the economy recovers.”

Klein holds a bachelor’s degree from Yale University and an MBA from the University of Washington. Outside of work, he is an avid sports fan and serves on the board of NPower Seattle, a nonprofit organization dedicated to enhancing the effectiveness of nonprofit service providers through technology. He and his wife have two sons.

My productivity lapses don’t come from Facebook. My problem is a combination of world news sites and Twitter. Using RescueTime, an online time management tool, I’ve named two productivity goals for myself. One goal sets my unproductive time at less than 90 minutes per day. The other sets my highly productive time at greater than five hours per day. After setting up these goals, I’ve been able to monitor what applications I use, what internet sites I visit, and the exact duration of both. It quickly becomes painfully clear how easily I can become distracted and miss these goals. As I only report to myself, this tool is obviously self-policing, but it has been extremely useful to see when I’m not being as focused as I need to be. For example, I’ve adjusted my morning time with a cup of coffee and reading the news from 45 minutes down to about 15.

Read the rest of this post on the original site

Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to help power music offerings on the giant portal.

While sources at both companies cautioned that the talks are still early, Microsoft (MSFT)–which has its own music site that it programs with original and partnered content–execs are interested in goosing it.

That’s because MSN Music consistently ranks substantially lower than other big online music properties in terms of traffic, while MySpace Music is always near the top.

Sources said Microsoft execs don’t think they can do as good a job as MySpace is doing and don’t see the point in striking needed but complex deals with music labels, which the News Corp. (NWS) property already has.

In an April report by comScore (SCOR), for example, MySpace Music was No. 2, just behind AOL Music, with 27.4 million unique monthly visitors. MSN Music was No. 6 with just 7.4 million.

Nonetheless, music is an area MSN cannot lag so badly in, given that entertainment is one of the key categories it is focusing on as it preps for a major renovation of the portal.

As BoomTown wrote in mid-July about a wide variety of changes coming to MSN:

MSN, Microsoft’s online portal, is also preparing a major redo of what U.S. and, possibly, international consumers will see, as it doubles down on five key content verticals, while cutting back on others.

In a new focus that will start to be apparent in the next month, MSN will heavily add to its News, Sports, Finance, Lifestyle and Entertainment offerings, weaving more data from [its search service] Bing into the mix.

“It’s a decision to make it so MSN does less better,” said one source close to the situation. “So there will be a focus of attention on a smaller number of categories in which we can be either #1 or #2 in, rather than #4 or #5.”

It is not clear exactly what the financial terms would be in any tie-up between MSN and MySpace, which could include licensing of content and other services related to music.

But such a deal is not unusual–MSN’s sports site is powered by Fox Sports, which is another News Corp. property.

And such a partnership would also key into concepts that MySpace CEO Owen Van Natta outlined in a recent interview onstage at the Web 2.0 conference.

Key among them was boosting music and entertainment overall and making them the prime focus in the site’s efforts at reinvigorating itself, as well as expanding distribution of MySpace.

In fact, MySpace recently bought social music service iLike to expand its distribution all over the Web, for example–including on Facebook, the longtime social networking rival from which MySpace is now trying mightily to differentiate itself.

In his appearance, Van Natta also unveiled a music video hub, the ability by users to buy music using Apple (AAPL) iTunes, and a set of better analytical tools–called MySpace Music Artist Dashboard–to help artists figure out how to best work with fans.

But MySpace needs more than these, and a link with Microsoft would provide it with a traffic gusher, since MSN’s main page remains one of the most trafficked sites on the Web.

If such a distribution partnership were struck, it would also raise the question of what will happen regarding MySpace’s negotiations with Google (GOOG) over renewal of their search deal, which expires next summer.

Dissatisfaction over the pricey three-year deal has been expressed by both sides; their mutual grumbling is one of the biggest open secrets in Silicon Valley.

Doing a search deal with Bing is the obvious and only alternative, although few expect any agreement to be as rich as the one MySpace did with Google in 2006 for $900 million.

Interestingly, it was recently reported that both Google and Facebook were bolstering music search and sales offerings, and Google’s apparently includes the use of the iLike player.

In other words: This could get really complicated.

Execs at both MySpace and Microsoft I reached out to declined to comment.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

According to sources close to the situation, AOL has been busy selecting the board for the company, which is still set to spin itself off by year’s end–even as it slows down a decision on a new search deal with either current partner Google or a more emboldened Microsoft.

AOL is using Spencer Stuart in the search for directors, led by well-known headhunter Jim Citrin, sources said, and the company has already settled on several outside candidates.

The final board is likely to have about 10 members, and up to a dozen.

At least one of those seats will go to CEO Tim Armstrong, with one or two more claimed by its current corporate owner, Time Warner (TWX).

AOL and Time Warner made their own wish list of potential directors earlier this year, but some people are also lobbying the company to join the board.

BoomTown is working on discovering all those names, but sources added that the candidates being looked at are a mix of personalities culled from the media, advertising and Web worlds.

Among the key attributes: More presumably fast-forward and innovative Silicon Valley types that can help burnish AOL’s tarnished tech cred.

Here are some of my picks:

Facebook COO Sheryl Sandberg, Guitar Hero CEO Dan Rosensweig, WordPress founder Matt Mullenweg (actually, AOL should buy the start-up), eBay (EBAY) CEO John Donahoe, LinkedIn Chairman Reid Hoffman or CEO Jeff Weiner, Juniper Networks (JNPR) CEO Kevin Johnson, Netflix (NFLX) CEO Reed Hastings, and former AOL iconic exec Ted Leonsis.

And, just for fun, News Corp. (NWS) digital don (and ousted former AOL head) Jon Miller or former Yahoo President Sue Decker.

(I might also add former AOL exec, Netscape co-founder and all-around entrepreneur Marc Andreessen, but if he joins another tech/Web board, he is going to get splinters.)

That’s because Armstrong has set a strategy centered around the turbocharging of online content, powered by a more flexible platform and paid for by goosing AOL’s graphical advertising business.

This puts the online icon–once a powerhouse and now not so much, having operated inside Time Warner since its merger early in this decade–in more serious competition with Yahoo (YHOO).

Yahoo now dominates content on the Web, with powerful news, sports and finance sites, and has recently been trying to reinvigorate its brand. This week, it launched a new marketing campaign with the motto, “It’s Y!ou.”

Yahoo also recently struck a search technology and advertising partnership with Microsoft (MSFT), which has now aimed its efforts at AOL.

According to sources, Microsoft execs have been aggressively courting AOL to switch its search business from Google (GOOG).

The search behemoth has long been AOL’s partner in what sources at both companies said has been a productive and lucrative relationship.

Armstrong is also a former top exec at Google, which many at the company hope will further cement its chances.

And while the renewal of that deal does not officially need to be struck until late next year, sources add that Google has already prepared and offered what it considers an attractive new deal for AOL.

But, much to Google’s chagrin, with a focus on the spinoff and preparations for some more cost-cutting in the months ahead, AOL has decided not to accept it yet and is not likely to anytime soon.

While hedging the situation in a recent video interview with MediaMemo’s Peter Kafka, Armstrong has also recently met with Microsoft execs, sources said, who have discussed a number of partnership options with him, including a tighter relationship with its MSN content properties.

“There’s no need to rush, especially since there is already a lot on AOL’s plate,” said one source close to the situation. “And, since it has options, AOL is going to take time considering them.”

(For more on Armstrong’s thinking, here’s a link to another video interview I did with Armstrong while both of us were in Germany today, in which he talked about the ad market and AOL’s strategy, but was cagey about being more specific.)

Please see this disclosure related to me and Google.

In a risky but interesting move that has some at the company nervous and others excited, Yahoo is in the process of moving key development responsibility for its juggernaut Yahoo News unit to Taiwan.

Under the new system, product management, engineering and user interface design for the powerful Yahoo (YHOO) property will become the responsibility of staffers there.

Editorial employees for Yahoo News–which is the No. 1 news site on the Web with 48.4 unique monthly visitors, according to comScore data (SCOR)–will remain in the U.S., largely located at its Santa Monica, Calif., office.

Sources had alerted BoomTown to the change at Yahoo’s flagship content offering this week and many I spoke to about it were deeply worried about further separating key functions in the creation of Yahoo News.

“We are losing more and more of our ability to make quick changes and react to new technologies, which has worked pretty well so far, since we are #1,” said one staffer. “First, we all worked together across a room, then hundreds of miles away and now it is thousands.”

Previously, as was first reported here in February, the distributed and regional method of developing content was shifted to a central global product development organization, with product management, engineering and UI design centered at Yahoo’s Sunnyvale, Calif., HQ under CTO Ari Balogh.

The argument for the shift posits that centralizing the product development of a Yahoo media offering drives efficiencies, saves money, eliminates redundancies and accelerates growth across the world.

Those who do not like the idea think it is wrong to separate the development of a product from the programming because the two are intricately dependent and need to be tweaked delicately.

In addition, they argue, it makes Yahoo media offerings, which have been largely successful, less unique and more dull.

Well, tough tomatoes, because Yahoo confirmed the transition to me when I inquired about it. It was announced internally several weeks ago.

In an interview I did yesterday afternoon with Jeff Kinder, SVP of media products and solutions, who is spearheading the change, he said it was key that Yahoo News streamline how it makes its products in order to be more innovative and responsive on a global basis.

Before the shift to a global system, he pointed out that Yahoo had 26 different news products worldwide, using nine content management systems.

“This is part of building a global media platform,” said Kinder, who leads development of Yahoo’s anchor media properties, as well as its listings and regional products around the world.

Kinder said the staff in Taiwan was selected to take on Yahoo News because it had been creating top-level news products and was passionate about the arena.

Nonetheless, similar functions for other major Yahoo content categories–Sports, Finance and Entertainment–will remain in the United States.

In addition, he noted, with employees in Taiwan taking over these functions at Yahoo News, it would “free up some of the talent” in Silicon Valley to work on other critical content projects.

Kinder dismissed worries about any logjams in the ability of U.S.-based Yahoo News staffers to make changes to offerings, either for consumers or advertising partners, noting there were weekly calls between the teams and plenty of ways to communicate online.

But those worried about the change said the reason for the move was more to cut costs in the content arena, which–like many parts of Yahoo–has undergone layoffs and expense reductions.

Countered Kinder: “We are all driving to the same goal….This is not about cost savings, but about accelerating change and leveraging a global team.”