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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They like her, they really like her.

Wall Street, that is, in regards to new Yahoo CEO Marissa Mayer, assigning the former Google exec a clear premium.

And whether it is deserved or not yet from a pure performance perspective — we actually won’t know for several quarters ahead — the shares of the Silicon Valley Internet giant over the past three months have gone up 22 percent. The rise has taken place pretty much on the promise that she will finally be the one to deliver what no other Yahoo leader has done.

And that is, besides making the company relevant and innovative again: Getting Yahoo’s stock past $20 a share again.

That’s within striking distance now. Shares are at $18.40 today, close to an all-time high for the year. The recent rise certainly isn’t taking into account the results of the recent lackluster third quarter, which continued to show the worrisome downward trends — even though partial asset sales of the company’s Chinese Alibaba stake successfully masked the problems — in growth, engagement and overall profitability.

But Mayer’s confident I’ve-got-this tones on the earnings call itself — especially in pushing a mobile strategy that has not been put in place as yet in any substantive way — won over Wall Street investors, who apparently like how she sounds and, thus, are intrigued with what she might do.

While this kind of perceptual game will only get Yahoo so far, moving out of the teens in share price would be an important benchmark for the company.

The stock was last at that level in August of 2008. At the time, in fact, $20 a share was considered very disappointing, taking place after Microsoft dropped its $44.6 billion hostile bid for Yahoo a few months earlier. Indeed, $20 was a big comedown from when Yahoo shares were above $43 in 2006.

The lowest price Yahoo shares got in recent years were $9.39 in November of 2008, just before then CEO and co-founder Jerry Yang stepped down.

Now the stock is close to double that sad trough, fueled in part by some cosmetic moves to improve culture by Mayer — including free food, smartphones and a promise to end the slow-moving decision-making at Yahoo.

There has also been a start of the promised multi-billion-dollar stock buybacks by the company, although Yahoo has been cagey about how and when it is purchasing. Also helping, more recently, is that several big hedge funds are buying into the story of hope.

Following in the footsteps of successful activist shareholder Dan Loeb of Third Point, who is now on the board and is a major Yahoo investor, others like him have now joined in the party in a bigger way. That includes David Einhorn of Greenlight Capital and Chase Coleman of Tiger Global Management.

The thoughtful Einhorn, who is a friend of Loeb’s, has been in and out of the stock before, buying it on hopes that now ousted CEO Carol Bartz would be Yahoo’s savior and selling it soon after it was clear she might not be. He came back in February with three million shares, sold them in May, but now has upped his stake to just over five million more under Mayer’s regime.

More substantively, Tiger’s Coleman has grabbed 25 million shares (interestingly, he’s also upped his stakes in Groupon and Facebook).

Obviously, they must believe Yahoo is set to move upward, which all depends on Mayer. She’s made one critical stock misstep early in her tenure, by announcing that she was considering keeping the huge cash windfall from its sale of Alibaba stock and not giving it back to shareholders in some form.

That dropped Yahoo’s shares to under $15, but Mayer walked back that mistake and the stock has been climbing since.

For the year to date, it’s up almost 14 percent — a nice rise — although that pales in comparison to Apple’s 39 percent rise, Amazon’s 37 percent rise and, most of all, AOL’s 136 percent leap.

The comparison to the massive stock run that AOL has had, after CEO Tim Armstrong — also a former Googler — cut costs, focused units, sold patents and bought back stock, is often made. It’s perhaps apt, but arguably Yahoo has much better and fixable assets than AOL.

More to the point, Yahoo’s price-to-earnings ratio remains unusually low — it’s 5.6, compared to the S&P’s 14.2 average — which means that the entire business is severely undervalued by Wall Street.

It is if Mayer can create real value by actually staging the comeback she is already getting credit for accomplishing. She certainly has a lot of levers to improve results, from the stock buyback to finally making a deal to sell its multi-billion-dollar stake in Yahoo! Japan to making expense cuts to buying some innovative small start-ups to creating products that aren’t, well, lame.

Most importantly, Mayer has to stop the decimation of Yahoo’s once mighty advertising business, which makes up the bulk of its revenue, as well as improve its search monetization by rejiggering its heretofore dysfunctional partnership with Microsoft. (But, as I wrote earlier this week, she will not be making new search engines with Facebook.)

A gander at this chart of Yahoo’s declining quarterly revenue should give you a good visual of the problem with the core business:

YHOO Revenue Quarterly data by YCharts

And, indeed, Yahoo’s sales have dropped 29 percent since 2007, with typically flat display revenue and declining search revenue, which was once Yahoo’s crown jewel. While operating margins have risen over the years, very few point to the company as an exciting growth story.

And it still isn’t, although investors are starting to consider it a possibility. We’ll see as Mayer makes more significant changes in 2013, hopefully underpinning the stock’s recent rise with a true story of financial strides.

But, for now, giddy shareholders probably should not get too far ahead of themselves. Not that you can stop them: Mayer fan Eric Jackson is calling for Yahoo’s stock to be over $40 again by end of 2013.

Whether the Mayer premium can do pull off that particular investor miracle or not remains to be seen.

Yahoo CEO Marissa Mayer is now starting to unveil the flip side of free lunches and smartphones, with two employee-focused moves that are a little more tough love in nature.

According to several sources close to the situation, she has officially ended a longtime practice at the Silicon Valley Internet giant of giving most of the company the week off between Christmas and New Year’s.

While many Internet companies slow down in that holiday period and many are much looser about employees taking time off, Yahoo is one of the few that closes down the company, except for essential staff. (LinkedIn also currently offers a rest week to employees.)

Eliminating the rest week is probably a long time in coming and many at the company have long thought it should be eliminated, since it has been paid time off for Yahoo’s 12,000 employees.

“Yahoo has a lot of work to do, so there’s no time to rest,” said one staffer in a common sentiment.

That said, from a financial point of view, the rest week practice does have positive implications for Yahoo. Besides compelling staff to burn off a week of vacation in the current quarter and not carrying over those costs into the new year, there are also cost savings in terms of keeping its facilities going.

No rest week aside, employees are also about to experience an even bigger change soon, as Yahoo’s HR department prepares a new plan to evaluate the efficacy of its staff.

Under Mayer’s plan, sources said, there will be new measurements of performance instituted, based on a variety of benchmarks and evaluations, in order to better understand who the best employees at Yahoo are.

Once that is complete, the company is likely to begin cutbacks on compensation for the bottom 20 percent, including moving them out of Yahoo entirely. The company has suffered many rounds of layoffs over the years, which hurt morale badly due to the often haphazard nature of the cuts.

Mayer is aiming to make the process more organized; she talked about this performance-based system in a company meeting in September. At the time, she noted that employees would be judged on four “Cs” — culture, company goals, calibration and compensation.

In a follow-up memo and meeting, Mayer told staff about this process:

“Moving forward, we will have both annual goals and quarterly goals that we will all commit to, track, and grade ourselves based on … We will then cascade the goals down through the company at the department, team, and individual level …”

What she was talking about is similar to an employee evaluation method used at Google — where Mayer spent her entire career before becoming Yahoo’s latest leader — using an elaborate series of data points to judge how individual employees are doing.

In other words, Yahoos are about to get graded on a very clear curve.

It’s been nice to see all the euphoria at Yahoo about free food and Apple iPhones kicking it up a notch.

But, purple people, guess what? Them’s just your basic table stakes in Silicon Valley these days and pretty much everyone else has had such perks for a long while now.

Thus, as nice as it is to drink your coconut water gratis, after two months in charge, it’s long past time to focus on what new Yahoo CEO Marissa Mayer is up to besides making much-needed but obvious cultural changes at the troubled Internet giant.

She’s been busy with the expected listening tour of employees and also outside tech players — such as former Yahoo CEO Terry Semel — which is a textbook stop in the turnaround playbook.

Now comes the hard part: Actually beginning to make the significant decisions about how she’s going to turn around Yahoo and what the key issues of strategic focus need to be.

In a series of recent meetings, according to numerous sources inside the company, Mayer has begun to outline what those are to top staff.

Not surprisingly, they are many of the same thorny issues that Yahoo has been facing for a long time and which center primarily on making the company relevant again in a wide number of ways.

I’ll get to many of them over the next week in a series of What Will Marissa Do? posts — including looking closely at her new hires, when and how Mayer will deal with inevitable layoff decisions facing the company, where the sale of Yahoo! Japan stands and, finally, what she’s cooking up for key Yahoo products.

But the focus has to fall first of all on search and advertising, the two arenas that Mayer has been studying most closely, according to numerous sources close to the situation.

That has included a recent meeting and numerous discussions with Microsoft CEO Steve Ballmer about improving Yahoo’s search advertising partnership, said sources at both companies.

That deal has been largely disappointing since it was struck under the regime of ousted CEO Carol Bartz several years ago.

Many reasons are given for the poor performance of the entire arrangement, including lack of improvement of cost per click and share growth for both parties. That means bid density and numbers of advertisers remain too low, especially compared to Google’s offering of access to a larger, more active and lucrative market.

Simply put, despite massive spending by Microsoft on search, users and advertisers get significantly better results overall with the search leader Google.

(You can read a great piece by Search Engine Land’s Danny Sullivan from last year, which exhaustively looked at the issues until then.)

The irony abounds that it’s up to Mayer to fix this problem of improving revenue per search with Ballmer, since she has been among the executives who have made Google the search behemoth it has become.

Her particular expertise has been on search experience for consumers, which is just the area that Yahoo desperately needs to improve after handing over technology duties to Microsoft.

That move was controversial at the time and some feel it was a big mistake. But, most also think there is no going back at this point, given the enormous cost of running a serious search enterprise.

Such an idea is still being raised inside Yahoo, although it seems more nostalgic than a realistic possibility, given the enormous price and, more importantly, the departure of the company’s core search engineers in recent years.

That doesn’t mean Yahoo under Mayer can’t be key to helping solve Microsoft’s search tech problems. She certainly knows the entire arena, which has already given Yahoo increased credibility among Microsoft’s search engineers.

“None of Yahoo’s many CEOs knew anything about search technology and that’s certainly not the case here with Mayer,” said one person close to the situation at Microsoft. “When she walks in, she instantly has status among the geeks as someone who knows what she’s talking about.”

It still may be a losing battle, due to Google’s overwhelming dominance, but if anyone at Yahoo can spot areas of even small improvement — which can yield big returns — it could be Mayer.

In addition, she can spearhead Yahoo’s own efforts to reverse — or perhaps simply stop — search market share declines via delivering a better consumer offering.

That’s still heavy lifting, no matter the exec, since both Microsoft’s Bing and Google are better equipped to win here, too.

“It hard to imagine we are going to slow down in any way,” said one former colleague of Mayer’s at Google to me recently in a rather ominous tone. “We’re only going to get more competitive.”

Pressure much?

And more: Mayer is under a time limit, since guaranteed payments Microsoft agreed to pay Yahoo for the shortfalls on what was promised will be running out next year. The pair has renegotiated that deal before, and it will likely have to do so again.

Of course, Mayer could try to walk and threaten to take Yahoo’s search business elsewhere, a move that former CEO Scott Thompson was mulling before his ouster.

That’s not a surprising ploy, except it is probably impossible to pull off, a fact acknowledged by top Yahoo execs.

“It might feel good to say we have options in search,” said one person close to the situation. “But that ship sailed years ago.”

Indeed, especially since Google is the only choice of possible alternate partners and such a move is rife with major obstacles.

There is the issue of the contract with Microsoft, which could lead to a potentially explosive legal struggle Yahoo can ill afford.

“They can try to get out of the deal,” said one high-ranking person at the software giant. “But that’s a lot easier threatened than done.”

And, there is the clear regulatory hairball any search hook-up between Google and Yahoo would lead to.

That’s happened before, which Mayer knows well since she was a top exec in Google’s business when it tried to partner with Yahoo as a way to prevent Microsoft’s hostile takeover bid for the company.

While times might have changed, Google is currently facing a likely battle with the Federal Trade Commission over its powerful search business, and trying to get Yahoo’s business now is a non-starter.

Thus, finally fixing the Microsoft partnership is key to Mayer’s success since it represents a little over one-third of revenue of Yahoo (see the chart below).

The bigger part of Yahoo’s business, as you can also see from the chart, has been display revenues. And that, too, has been a sorry tale of declines and ever more disappointing results.

A report by eMarketer on display market share had this depressing chart for Yahoo:

As is clear, the march downward for one-time leader Yahoo has been swift, and the prospects for the future are worse as Google and Facebook vie for leadership.

The reasons for this have been myriad, but Mayer has apparently decided that it’s been due in large part to the broken Yahoo ad tech platforms and their ever weaker performance.

As we have previously reported, she has determined that it’s now time to invest in improving them, both by funding internally and external acquisitions.

For that, she has formed a tight group of execs to scan the landscape for tasty and innovative treats for Yahoo to gobble up.

That includes: Scott Burke, SVP of Yahoo’s advertising and data platforms; Brian Silver, who runs the company’s Right Media Exchange; Xuhui Shao, a key engineering VP under Burke; and Mark Morrissey, the longtime tech exec who previously ran the company’s search business and was key to integrating the Microsoft search deal into place.

The cerebral Burke especially has been pushing ad platform improvement for a while and finally seems to have won the battle against detractors of the big and possibly grandiose plan by appealing to Mayer’s interest in not giving up.

Thus, the tabling of plans by Thompson, as well as interim CEO Ross Levinsohn, to outsource some of the automated parts of the display business to Google.

Those talks were very serious, as well as others to sell off Right Media, but they are done for now.

One major issue — the people in charge of the ad platform turnaround could also be seen (and most definitely are) as mired in Yahoo’s legacy of lackluster results and poor performance.

“It is kind of funny that the guys responsible for the decline now have the responsibility for fixing it,” said one source at Yahoo.

It’s a fair point to be made.

But that’s water under the bridge, apparently, since the group has been making the rounds, helped by Yahoo’s M&A execs, with a wide range of companies in many different ad tech area being considered (and some dismissed), including: Mediaocean, Turn, Criteo, PubMatic and Millennial Media.

Millennial is the most interesting, because it is a mobile ad play, where Yahoo is exactly nowhere (to be fair, less than nowhere) after years of botched efforts.

As with other companies, this is a critical arena for Yahoo, and yet one more that Mayer needs to focus on.

Lastly, Mayer has to make sure Yahoo’s premium display business remains strong. This is much more based on relationships with large advertisers than on major sponsorship and branding offerings, as well as creating consumer products and content that is appealing to marketers.

This area is now headed up by former Google exec Michael Barrett, who has publicly said he was staying put for now at Yahoo as its chief of revenue.

In fact, because he is in charge of all sales, he occupies the second slot under Mayer on Yahoo’s now strangely configured, punctuation-impaired and information-free management page.

But numerous sources inside and outside Yahoo said Barrett has also told many people that he is still not fully committed to staying in the role for the long haul.

If he eventually gets a lucrative exit package — something the new boss is not being very generous with overall, said sources — that will mean Mayer will need a high-profile and well-regarded ad exec to replace him; sources said Mayer has already begun reaching out to some candidates.

The pickings are slim, with only a few names on the list of those capable of taking on such a job. That includes: Demand Media’s Joanne Bradford, who was also a former top Yahoo exec; Microsoft’s Yusuf Mehdi; OWN’s Kathleen Kayse; MLB.com’s Bob Bowman; and any number of Google execs.

In that regard, as with all the other search and advertising overhaul efforts at Yahoo, it is a matter of attracting serious talent into the company going forward.

More on that — and more — to come.

Remember the infamous “Peanut Manifesto,” in which former Yahoo exec Brad Garlinghouse likened the company’s innovation process to peanut butter?

In it, he wrote:

“I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: A thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter. We all should.”

Not new Yahoo CEO Marissa Mayer, who has cooked up a new recipe for the longtime company albatross by sweetening it up.

Thus, yesterday, she sent out a new memo announcing a new sandwich topping to get the Silicon Valley Internet giant moving again: PB&J.

That stands for “Process, Bureaucracy & Jams,” and it is kind of like a city’s pothole alert line, except with more geeky pep.

Wrote Mayer and Patricia Moll Kriese — the ex-Googler who is now senior director of corporate projects at Yahoo — in a memo to employees, in part:

“Do you see a problem and know how to solve it? Want to brainstorm with colleagues about what to fix and how to fix it? Give us your ideas. Or be heard loud and clear by simply voting.”

In the missive, the pair also noted that besides the free food and new Friday FYI staff meetings, both of which I have previously reported on, the new leadership of Yahoo has been busy with some other stuff.

That apparently now includes: Turning off the turnstiles in building D at its Sunnyvale HQ, removing parking lot barriers, eliminating mandatory orientation at the gym.

(Yahoo really has been hopelessly bureaucratic, if it is requiring engineers to get schooled on how to work an exercise bike.)

In any case, it’s another interesting idea from Mayer to instill more ease and transparency to logistical aspects of running Yahoo (except when it comes to talking to media, of course — in that case, it’s awfully dark in here!).

These are important culture changes, of course, but the real rubber hitting the road will be what major execs Mayer brings in from elsewhere to really foment managerial change and innovation.

Sources say that at least one big hire is happening soon, with Mayer looking at candidates from “outside the box” from the regular suspects in the industry.

She has certainly been active in buttonholing important tech players on the subject over the last month, said sources, and asking for their input — from Facebook COO Sheryl Sandberg to former Yahoo CEO Terry Semel to a variety of others.

So far, her outside hires have been from Google, including Kriese (pictured here). While she had been listed as a project manager at Google, several sources said her last contracted job there was primarily to organize the annual trip to the World Economic Forum in Davos, Switzerland, for top execs at the search behemoth. Apparently, Kriese is a whiz with a spreadsheet in marshaling the tetchy potentates of Google, so PB&J seems right up her alley.

Here’s the full memo:

From: Marissa Mayer
Sent: Friday, August 24, 2012 10:00 PM
To: [All Yahoo]
Cc: Patricia Moll Kriese
Subject: Announcing PB&J — Process, Bureaucracy, & Jams!

YAHOO! PROPRIETARY AND CONFIDENTIAL INFORMATION — DO NOT FORWARD

Process blocking your success?

Bureaucracy getting you down?

Jammed by problems and see a solution? We are looking at how to streamline process, reduce bureaucracy, and remove jams — PB&J!

We’re launching PB&J today to gather your feedback on how to make Yahoo! the absolute best place to work. Share your ideas on what would make your job easier, boost your productivity and help solve problems.

What’s on your wish list for our corporate culture and work environment?

For example:

* GitHub for Code Review

* Dogfooding Yahoo! Mail & Calendar

* SSD’s (Solid State Drives) for faster machines

* Mi-Fi’s (mobile wi-fi cards)

We have done a few things already — free food, FYI, turning off the turnstiles in building D, removing parking lot barriers, eliminating mandatory orientation at the gym, etc. However, we know there’s more we can do!

Do you see a problem and know how to solve it? Want to brainstorm with colleagues about what to fix and how to fix it? Give us your ideas. Or be heard loud and clear by simply voting.

PB&J is available globally on Backyard: http://allhands.corp.yahoo.com/qna/pbj/latest

We will review your ideas and votes, reporting back in FYI each month on
actions taken. August PB&J starts now — and look forward to an update at
the next FYI in early September!

Questions/concerns/suggestions around PB&J, please contact Patricia Moll
Kriese, who’s our lead on PB&J.

Marissa & Patricia

And here is my fave depiction of PB&J, in the fantastically addictive “It’s Peanut Butter Jelly Time” dance:

David Windley

According to sources close to the situation, active new CEO Marissa Mayer has turned her focus on the troubled Silicon Valley Internet giant’s human resources unit.

It is now headed by David Windley, whose tenure has included a huge brain drain and a series of layoffs at Yahoo, as well as an ongoing series of top leaders.

Yahoo, as has become its new practice, has not returned an email seeking comment.

Some in the company think a big shakeup is coming, which could include Windley’s departure.

He could stay too, but it is clear his new boss will be in his business much more than previous CEOs.

That is probably no surprise in the wake of the hiring of Mayer. The former Google exec has instituted a series of quickfire changes across the company related to its culture and recruiting, which have basically boiled down to making a Yahoo version of the search giant.

While free food and better swag have attracted attention, Mayer has also plunged into the recruiting arena aggressively. She is now reviewing all new hires personally — another steal, um, borrow, from Google — and has also begun to require a much more stringent set of standards.

That has included the requirement of the addition of solid college grade-point averages and a preference for higher-level educational institutions for incoming resumes.

Windley has been at Yahoo through a long series of CEO musical chairs and has been criticized internally for the talent loss and also its series of layoffs at Yahoo.

While none of this is his fault specificially, Windley is the person, according to its Web site, in charge of “driving Yahoo!’s worldwide strategies around talent, culture and organization effectiveness.”

Which has not been very effective — thus, the Mayer scrutiny.

If he left, Windley would follow former interim CEO Ross Levinsohn out the door as Mayer begins her house-cleaning of the company and looks to put her own team in place.

Mayer is reaching out to a number of execs outside the company, including Twitter exec Katie Stanton, as well as perusing at a series of start-ups to bring new people into the company.

New Yahoo CEO Marissa Mayer descended on two of its New York offices today, declaring that she would summarily be granting free food to all there as she had recently done to much acclaim at its Silicon Valley HQ.

After firmly establishing herself as the munificent provider of free Odwalla juices for all, the former Google exec plunged into much more serious topics with the group of Manhattan-based employees. The New York staff is mostly focused on advertising — Yahoo’s most important business.

A number of Yahoo senior execs, as well as its several hundred others, were there to hear Mayer for the first time since she got the job about a month ago in a surprise and very high-profile hire, beating out media-focused candidate Ross Levinsohn.

In any case, Mayer seemed to be talking the language of the crowd, noting that Yahoo was an advertising company first and foremost.

A key area of focus is obviously display, she noted, as well as improving its ad network efforts. Mayer also told those gathered that the mobile strategy for Yahoo has moved around way too much, which is a nice way of saying there has been pretty much no direction under past CEOs.

Indeed, mobile efforts have been a longtime weakness of Yahoo.

Mostly, though, it was the same kind of things the energetic former Google exec has been saying to the Yahoos at its Sunnyvale HQ: Faster decisions, more accountability for top execs, hipper culture, all-hands meetings, question-rich involvement for employees.

In other words, in a performance coming soon to a Broadway theater: Google Clone — The Yahoo Edition.

One notable new aside Mayer made, several sources noted, was that she was not going to be answering the perennial query that has tripped up its leaders for years now: What is Yahoo?

She apparently does not like this line of inquiry one little bit and told the crowd it was not the right way to look at the long-troubled company or how to define it.

Now I am intrigued, since she is essentially correct in the concept that Yahoo is about what it does well more than anything else.

Not being able to execute has been a long-time issue for Yahoo, which has stumbled from one thing to the next in a much less disciplined manner than all of its competitors.

That said, every one of them still clearly communicates a basic core promise via strong execution, even as each has added on new businesses, for example:

Google = fab search, Amazon = top-notch retail, Apple = elegant devices, Microsoft = dominant Windows, Facebook = best social networking.

Yahoo — which ousted CEO Scott Thompson dubbed a technology-enabled media company (and he was right on that score) — has, of course, been about too many things, from a directory to an advertising service to a content provider and distributor.

Mucking up the works, though, have been a thousand other lesser efforts not done well and most of which have petered out.

In any case, the simple question of what Yahoo is has been banish’d for now, and Mayer will presumably not be answering that nettlesome query, even if it bubbles up on her nifty new interactive employee Q&A system.

But, if you really want to know, I can tell you exactly what it is at this moment in time and going forward: Yahoo is whatever Marissa Mayer says it will be.

More to come on exactly what that means.

Until then, here is my favorite quote from Shakespeare’s “Romeo and Juliet” about being banish’d:

Hence-banished is banish’d from the world, And world’s exile is death: then banished, Is death mis-term’d: calling death banishment, Thou cutt’st my head off with a golden axe, And smilest upon the stroke that murders me.

Well, it wasn’t as tasty as free food this week at Yahoo, but in her second official all-hands meeting with employees — now reportedly called “Friday FYI” — new CEO Marissa Mayer rolled out another new Google-inspired Q&A tool to get the company talking about what matters.

The system allows anyone at the Silicon Valley Internet giant to post questions, ideas or suggestions on a variety of topics, which can then be voted up and down.

Actually, it’s been in use internally at — you guessed it — Google for some time, and is even available to the general public in a product called Google Moderator. Mayer has been importing a lot of corporate practices from the search giant where she worked for her entire career — from free food to better swag to these weekly confabs to, now, its method of hearing from the staff.

While Yahoo previously used its Messenger product to garner questions for its less-regular all-hands meetings, this is apparently a new interactive tool built by the company’s engineers (and not using Google’s free APIs, as far as I can tell).

It seems to be working fine, and there were a number of questions that bubbled up.

That included one about Mayer’s thoughts on her current executive team — which is still largely inherited from a series of previous administrations, despite some departures recently — and also how her regime will hold them accountable.

Algorithmic accountability among Yahoo execs? Things have changed!

Even better, declared the questioner of that particular query, to whoops from the audience: “I want an honest answer!”

But Mayer was diplomatic, only saying she was “pleasantly surprised” by the top execs. She also noted that the management would have quarterly goals that are transparent to the whole company. (I won’t say they do that at Google, but — ahem — they do that at Google.)

Mayer went through a number of questions in a precise and cut-the-mustard manner that employees seem to be enjoying, overall.

One very voted-up question was about leaks to the media, in particular to this Web site, and whether a board mole hunt has been successful (obviously not). Also, of course, what she was going to do about the situation.

Apparently, Mayer said she won’t be tracking down leakers, and that this new openness will solve the problem.

Good idea, but all that lovely transparency also needs some pretty good products if it’s going to work.

And product focus most definitely appears to be the path now. Mayer also showed off the new Yahoo Mail — which has been under revamp for a while, and was started under former Chief Product Officer Blake Irving — with some good response from Yahoos (last week, it was a look-see at its recent iteration of its IntoNow video offering).

There are other interface changes that have been in the works too, likely under the direction of Tim Parsey, Yahoo’s head designer, who also came on under Irving.

In fact, a lot of what Irving had pushed, including keeping advertising technology in-house and also maintaining control of key monetization engines, is the likeliest path going forward. The ad tech outsourcing deals, pushed by the interim CEO and his strategy head Jim Heckman, are apparently gone (and so are Levinsohn and now Heckman).

Also of interest to many at the company is the increased involvement of co-founder David Filo, who has become much less quiet under Mayer. I’d expect him to report directly to her — he’s actually been reporting for years to a variety of product and tech execs, despite owning more than six percent of Yahoo.

Thus, here’s my question for the new Q&A system for next week: So, when’s Jerry Yang showing back up?

Created by game industry vet Julie Uhrman and designed by Yves Behar, the Ouya is an open-sourced console running its own user interface and game store on top of an Android OS. It’s built with a Tegra3 chipset for HD game play, and comes with a compatible, Ouya-branded controller.

Boxer8, the name of Uhrman’s start-up company, is launching a fundraising campaign today on crowdfunding site Kickstarter. The Ouya expected to cost $99.

Unlike traditional game consoles, the Ouya won’t have an optical drive. It will be built with one gigabyte of RAM, 8GB of flash storage and an HDMI port for connecting directly to the TV, in addition to both wireless and Bluetooth connectivity. The controller is designed with two standard analog sticks, eight game-play buttons and a touchpad.

Uhrman’s end goal is to develop a system that not only provides easy access to games and uninterrupted connectivity for players, but is also an open platform for developers and hackers. Any publisher can develop a game through the console’s built-in software development kit, and developers choose the pricing model, as long as the initial download is free. Hacking the device won’t result in a voided warranty.

So game players will have access to online games, Android apps and games created specifically for Ouya, all as part of a free-to-play model, says Urhman, the former head of digital distribution at IGN. When asked about specific titles — for example, whether there will be titles to sate the appetites of hardcore gamers — Urhman said it was too early to discuss partnerships with publishers, given that the start-up is still in the fundraising stage.

You might think: Do we need another console? Some analysts have been predicting the slow phase-out of the game console for a while now, as more games shift to the cloud and become available online and on mobile devices. Services like OnLive, which allows consumers to stream games to their TV, or to a PC or Mac, have spurred further discussion about the demise of the console.

And this year at E3, electronics giant Samsung announced plans to build an online gaming service, powered by Gaikai and Nvidia, directly into its “smart” Internet-connected TVs.

On the flip side of that, many Internet-connected TVs don’t yet have the chipsets needed to smoothly run graphics-heavy games. As more games migrate to the cloud, gamers used to the processing power of a console may find themselves waiting for technology to catch up.

Ouya, in the meantime, is hoping to position itself as the go-to device for online gaming.

“Ultimately, we believe that the console is going to go away,” Uhrman said in an interview. “We think it’s all going to the TV. That’s why our focus is also on the platform and the controller, which, for the most part, has been an afterthought.”

Boxer8 is looking to raise $950,000 on Kickstarter to produce the initial batch of Ouyas. Current investors include former Digg CEO Jay Adelson, and Hosain Rahman, the founder of Jawbone.

Update: In just eight hours and with 29 days left to go in its campaign, the Ouya has surpassed its fund-raising goal of $950,000, with more than eight thousand backers throwing money behind the new game console.

The top ranking will go a long way in quieting the critics who believed Zynga was foolish to acquire OMGPOP for $180 million on the day of Rovio’s big launch, only to see it fall to second place the next day.

In addition to climbing its way back to the top, Zynga also disclosed that the game has now been downloaded more than 50 million times in 50 days, making it the fastest-growing mobile game ever — or so it believes.

In other words, that would be like everyone in England downloading the app in less than two months.

While it still may end up being true that Zynga overpaid for OMGPOP, there is little doubt that the game is an overnight success.

If you are one of the few people who haven’t already played it, Draw Something challenges players to use their finger to draw a picture of a person, place or thing; for example, “hoodie,” “golf cart” or “Rihanna.” The completed picture is handed off to another player, who must guess what is being drawn, sort of like Pictionary.

Inside the game, players can pay for additional features, such as new colors that can help make the illustrations easier to guess, new words if they don’t like the choices that are presented to them, or bombs that will eliminate some of the letters to make guessing an illustration easier. The free version has ads; users can pay 99 cents to get rid of them.

Zynga also said that since the game launched, more than six billion drawings have been created (that’s 120 for every resident of England), and that at the game’s peak hours, it generates 3,000 drawings per second. The most popular words are “starfish,” “pregnant,” “six-pack,” “Hangman” and “boom box.” The least popular word is “latrine.”

The mobile game also registers as the most popular game on Facebook, because it allows people to log in to the game on the phone using their credentials.

However, people do not have to register using Facebook, so the number of players using it is actually bigger than what’s being reported by AppData, which tracks application usage on Facebook.

Still, AppData reports that the game has 14.4 million daily active users, where it has plateaued for the past week. The next most popular game, also owned by Zynga, is Words With Friends, which draws about eight million daily users, slightly more than half of Draw Something’s crowd.

That milestone was reached in the last week of 2011. And what’s really interesting is how people are finding their apps. According to new monthly data from Chomp, a search engine for mobile apps, most users aren’t looking for specific app titles, but rather features and functions — and the top feature is “free.”

In December, 82 percent of iOS users, and 86 percent of Android users, looked for apps using such common search terms as “free,” “games,” “free games,” “fun games,” “ringtones” and “shopping,” rather than searching by name.

The word “Christmas” appeared on Chomp’s list of top search terms for December, across multiple countries. The company says query volume for the word, already elevated that month, spiked an additional 300 percent immediately before the holiday, then decreased again on Dec. 25.

Chomp’s data was culled from a sample of one million search queries, across mobile platforms iOS 4.0 and higher, and Android 2.1 and higher. Chomp, which powers app searches on Verizon Android phones, just started measuring tablet-app downloads, so those apps currently account for a very small percentage of its data.

What is somewhat surprising about this report is that other data, put out last year by Latitude and MTV Networks, shows that personal recommendation is one of the biggest driving factors when it comes to app downloads, with an estimated 53 percent of mobile app users saying their friends’ suggestions are most important when it comes to finding and trying apps. If that’s the case — say, if someone asks, “What’s that iPhone app that makes photos look old and cool?” (as I was recently asked) — users wouldn’t necessarily tell their friends to search for “free photo app” but rather, look up “Instagram.”

Chomp’s technology, however, is meant to enable app search based on functionality; it also factors user recommendations and social recommendations into its algorithm. Ben Keighran, the company’s founder and CEO, says he believes Chomp’s app-recommendation engine offers more to users than just lists of top-selling apps. (For app creators, though, nabbing a top-ranking spot in app stores has been shown to boost downloads significantly, as evidenced by RunKeeper’s 637 percent increase in average daily downloads after it became a featured app in the Android store.)

Chomp’s own list of top apps for iOS devices in December included WhatsApp Messenger, JunoWallet GiftCards, Pandora, and Adobe Photoshop Express; the top Android downloads for December were Angry Birds Rio, eBay, Google+ and Google Sky Map. GT Racing: Motor Academy Free+ was at the top of Chomp’s international download charts.

Another interesting nugget from the monthly report: While paid-app downloads on Android showed no change, paid-app downloads for iOS jumped to 30 percent of all app downloads, for the first time ever. The jump was concentrated at the 99-cent price point, which increased from 15.9 percent to 17.8 percent of all apps.

Last week, the six-month-old service’s profile received a big boost after eBay announced it was buying its parent company, GSI Commerce, for $2.4 billion.

As part of the acquisition, eBay plans to spin off a few of the company’s properties to create a well-funded entity.

The spin-off includes ShopRunner, GSI’s licensed sports merchandise business, and Rue La La, a flash sales site. EBay, which is retaining a 30 percent stake in the new entity, is also loaning it nearly $500 million in capital.

ShopRunner, which is headquartered along with GSI outside Philadelphia in King of Prussia, is positioning itself as a defensive play for retailers that are competing against the Amazonian e-commerce giant.

Amazon Prime members pay $79 a year for free two-day shipping on all orders, and more recently, Prime added additional perks, such as free access to 5,000 streaming movies. Similarly, consumers pay ShopRunner $79 for free two-day shipping, but it works across a number of retailers, such as Borders, Barnes & Noble, Toys R Us, Drugstore.com, PetSmart and 40 sites in all.

Mike Golden, ShopRunner president and co-founder of GSI Commerce, says the service is super relevant today as retailers try to defend themselves against Amazon’s increasing dominance.

Not only is it growing its market share online, but it is also becoming a threat in physical stores. He said consumers are increasingly looking at brick-and-mortar stores as showcases, where they can touch and feel products, but then use their smartphones to comparison shop and buy online.

With free two-day shipping, Prime has become the modern day loyalty program.

But it’s unclear how successful Amazon’s so-called Prime service has been since launching in 2005.

Golden claims he’s done his homework and believes it is one of the smartest moves by the Seattle-based retailer to date. And by tracking what analysts have said and by conducting focus groups with dozens of Amazon’s Prime customers, he feels he has a fairly good handle on how well Amazon is doing.

Amazon does not release data on Amazon’s Prime service, and a spokesperson did not return a request for comment.

So, with that in mind, here’s a bullet point list of Golden’s estimates, which he considers conservative:

• In nine purchases out of ten, a Prime consumer would have already qualified for free shipping because their order was above $25. Now, Amazon is collecting $79 a year and all they had to do was upgrade one out of 10 shipments.
• Out of the 25 million items Amazon sells, he believes only 30 percent are eligible for Prime (the item has to be stored in Amazon’s own warehouses to qualify). That means Amazon has an impressive seven to 10 million products that are eligible.
• There are at least five million Prime users in the U.S.
• After joining Prime, users spend two to three times more.
• Prime members were already some of Amazon’s best customers, who were spending on average $600 a year. With Prime, that goes up to $1,200 to $1,800.
• In total, Prime members spend roughly $7.5 billion annually.
• 88 percent of Prime members start their shopping experience on Amazon, rather than any other portal, like Google.

Golden said the three attributes that have made Amazon successful are: having a huge assortment of products, having a huge reach in terms of customers and being a place where people shop frequently. ”We don’t think there’s any other retailer that has the strength to replicate the value proposition that Prime has,” he said. “How do you compete with Prime? You have to have a stronger value prop, not a weaker one, and all we’ve seen launch so far has been weaker and has failed.”

Other stores have tried one-off super saver shipping programs, including Sears, William Sonoma, Walmart and Overstock.

He said what they needed was a coalition.

While Golden was generously willing to share what he knew about Amazon’s Prime program, he was fairly mum about how ShopRunner’s math pencils out. Of course…

But roughly speaking, he said the membership fees consumers pay, along with the cost of two-day shipping, is split among the retailers and ShopRunner, which is then compensated for managing the program.

This week, ShopRunner launched a Marketplace where members can visit one location to search for products they want. This way, they don’t have to memorize which retailers are associated with the program. When searching for watches, you’ll see results from Toys R Us, Drugstore.com, Calvin Klein, Sports Authority and Lord & Taylor. Once an item is clicked on, the user is redirected to that retailer’s Web site to complete the transaction.

Next month, ShopRunner will roll out an iPhone application that allows people to search for merchandise in the store, but ultimately buy from one of the participating retailers online.

He said ShopRunner has more than five million items available overall. When they launch an additional 40 retailers soon, it will have 10 million items, which is getting close to Amazon’s scale.

Golden said the lines between brick and mortar and e-commerce are blurring. It’s no longer a weakness to have low inventory in a story if you can steer users to your online site, where they can get free shipping. A mobile application can help with that–and no longer be considered a threat.

“By using ShopRunner along with smart use of leveraging your store footprints and your e-commerce and distribution centers, they have a better chance of not making it a weakness or a threat, but a competitive advantage,” Golden said.

Today, BoomTown braved the floods and skippered All Things Digital‘s S.S. Minnow through a Noah-like rainstorm in Silicon Valley to visit the HQ of Pulse.

Last summer, you might recall, co-founders Akshay Kothari and Ankit Gupta of the nifty visual news-reading app got publicly picked out by Apple’s Steve Jobs in a speech about third-party innovations on the iPad.

It was a high point for the pair of Stanford University students and newbie entrepreneurs–except that the very same day, the New York Times slapped them with a cease and desist for misusing its RSS feed.

Dramatic, for sure, but they have made nice with the Times since then and have also raised more than $1 million in funding from a range of notable venture players.

Compared to a similar start-up–the social news-reading app Flipboard–that’s a very small budget for Pulse, which was making a profit on a paid app but, since it went free in November, it’s not making a profit now.

The move–while it will require a new business plan at some point–allowed Pulse usage to explode, hitting three million users today from 250,000 paid users only four months ago.

A lot of that growth has been on Apple’s iPhone and Google’s Android smartphones, rather than on the iPad tablet, where Pulse began.

And, although the Android mobile operating system was the last platform to be introduced, it is the fastest growing one, with over one million users on it, Pulse said.

Pulse launched a 2.0 update for the iPhone and Android today, with “enhanced performance, new content sources and improved sharing with social feeds and news discovery features.”

That means the app is speedier, has more news offerings in more categories and a bigger dollop of social content and sharing tools with Facebook, Twitter and other social networking companies.

Pulse now has eight employees squeezed into its small offices in downtown Palo Alto, CA–complete with the required start-up garage door.

Here’s a video interview I did with Kothari and Gupta this afternoon, just as the sun came out, along with one I did with them in cloudier times last June during the Times’ dopey assault:

]]> http://allthingsd.com/20110324/video-the-pulse-boys-to-men-talk-about-huge-growth-of-visual-news-reading-app/feed/ 0 http://allthingsd.com/20110321/asana-hires-coo-type-van-sant-first-biz-side-hire-for-group-collaboration-start-up/ http://allthingsd.com/20110321/asana-hires-coo-type-van-sant-first-biz-side-hire-for-group-collaboration-start-up/#comments Tue, 22 Mar 2011 01:19:47 +0000 Kara Swisher http://kara.allthingsd.com/?p=41770

As it gets ramped up for a wider launch, Asana, the high-profile workplace collaboration start-up founded by top former Facebook execs, has hired former SolarWinds product strategy exec Kenny Van Zant in a “COO-type of role.”

Van Zant, who will be Asana’s first business-side hire, has also worked at a variety of tech companies, including Cisco.

Co-founders Dustin Moskovitz and Justin Rosenstein remain at the top of the leadership at the productivity software company, which–perhaps in keeping with its yoga-style name–does not have official titles.

But Van Zant will essentially fulfill the COO role, focusing on bringing Asana to the enterprise market in a socially-fueled, “bottom-up” approach.

“We now have a great product and are ready for our next phase of bringing it to the market,” said Moskovitz, in an interview this afternoon with BoomTown. “While Justin and I continue to work on product and engineering, Kenny will be the driver of that launch.”

Specifically, in a blog post today, Moskovitz wrote:

“Kenny will be leading functions outside of product and engineering, and serve as a key driver for Asana’s marketing and corporate strategy.”

Asana, which is aimed at helping people work on projects together in groups, is now in private beta.

It tackles the often unexciting, but very large and problematic, workplace collaboration and communications software market.

In Sanskrit, “asana” means “sitting down” and refers to strong but relaxed postures in yoga, which presumably means the product will help frustrated workers achieve a digital form of nirvana.

The San Francisco-based start-up, which has raised $9 million in venture funding from Benchmark Capital and Andreessen Horowitz, now has 15 employees.

Asana had previously garnered just over $1 million in an angel round, which included a spate of Silicon Valley bigwigs.

Still, it has not, thankfully, received the intense hype of other innovative start-ups from former Facebookers–hello, Quora!

That said, many who are using Asana think it will make a huge splash as it is rolled out and attempts to bring consumer-style tools to the workplace.

There are, of course, a range of companies doing this in different ways–from Jive to Yammer to LinkedIn and to a variety of cloud-based enterprise efforts by Google and Microsoft.

In an interview, Van Zant said the time was ripe for big changes in the way enterprise-aimed products were bought and sold.

“I will be focused on selling our enterprise software product from the bottom up, rather than targeting the CIO,” said Van Zant. “It is clear the world of enterprise is being impacted by consumer behavior.”

While he does not start until Monday, Van Zant speculated that Asana’s free product offering will remain, with a premium version to come.

Benchmark’s Matt Cohler, who made the Asana investment for the firm and is on its board, said the time is right for such businesses aimed at enterprise transformation.

“Kenny wrote the book on this at SolarWinds,” he said. “The consumerization of the enterprise isn’t going to happen–it already has.”

Here is a demo video Asana put out in February of an open house, as well as the blog post from Asana on the Van Zant hire:

Asana Open House from Jerry Phillips on Vimeo.

Justin and I are excited to welcome Kenny Van Zant as the newest member of the Asana team. Kenny will be leading functions outside of product and engineering, and serve as a key driver for Asana’s marketing and corporate strategy.

Until now we’ve focused primarily on developing the Asana product into the best of class solution for task management and project execution. Encouraged by positive feedback from the early adopters in our beta program, we’re now preparing for the company’s next phase–bringing this technology to the rest of the market–and we can’t imagine a better partner than Kenny to drive this strategy and build a strong organization to support it. At SolarWinds, Kenny helped pioneer the bottom-up distribution model for selling software and SaaS into enterprises and small businesses–a sales approach we plan to develop further at Asana. This experience, together with an almost uncanny overlap of values, made it clear that Kenny is the right fit.

While finding Kenny concludes a long search for the right leader of Asana’s business operations, we are continuing to grow the team, looking for passionate designers and engineers to join us in our common purpose: using software to help groups of people work together more effectively.

–Dustin

Kenny Van Zant is a technology entrepreneur with leadership experience in start-ups and public companies. Kenny was most recently the SVP and Chief Product Strategist for SolarWinds (NYSE: SWI) from 2006-2010, where he was responsible for products, marketing, and corporate strategy. At SolarWinds, Kenny helped pioneer a disruptive business model for selling software and SaaS into the enterprise and SMB segments from the “bottom-up,” using inside sales, online marketing, free products, and a loyal user community. Based on a unique combination of growth and profitability, SolarWinds enjoyed a successful IPO in May of 2009.

Prior to SolarWinds, Kenny was the EVP of Marketing and GM of the Communications BU for Motive (NASD: MOTV) and the co-founder and COO for BroadJump (acquired by Motive), where he managed the company’s growth from start-up in 1999 to over $60M in revenue and 350 global employees within 3 years.

Kenny has a BS in Electrical and Computer Engineering from the University of Texas at Austin.

]]> http://allthingsd.com/20110321/asana-hires-coo-type-van-sant-first-biz-side-hire-for-group-collaboration-start-up/feed/ 2 http://allthingsd.com/20110315/ebay-drops-the-price-to-free-for-up-to-50-auction-listings/ http://allthingsd.com/20110315/ebay-drops-the-price-to-free-for-up-to-50-auction-listings/#comments Tue, 15 Mar 2011 16:25:41 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=3589 EBay said Tuesday that for the first time ever, it is making it free to list up to 50 items a month on its auction site and that it will be free to add the “Buy it Now” option. Prices will be effective starting April 19. The promotions are designed to drive increases in both new listers and listings. Currently the prices for the service vary by the starting price of the item. If someone were listing 50 items a month at the highest price and added Buy It Now to all of them, the current cost would be $112.

]]> http://allthingsd.com/20110315/ebay-drops-the-price-to-free-for-up-to-50-auction-listings/feed/ 3 http://allthingsd.com/20110309/skype-rival-rebtel-hits-10-million-users/ http://allthingsd.com/20110309/skype-rival-rebtel-hits-10-million-users/#comments Thu, 10 Mar 2011 05:00:14 +0000 Ina Fried http://mobilized.allthingsd.com/?p=4898 Rebtel said late on Wednesday that it has hit 10 million users for its voice-over-Internet calling service and has now connected more than 200 million calls.

Rebtel, which offers free and discount calling on a number of mobile devices, also offered up some financial numbers, saying it is profitable and 2010 revenue was $40 million, up 120 percent from a year earlier. The company said it expects 2011 revenue to reach $75 million.

]]> http://allthingsd.com/20110309/skype-rival-rebtel-hits-10-million-users/feed/ 0 http://allthingsd.com/20110222/overdrive-new-way-to-check-out-ebooks/ http://allthingsd.com/20110222/overdrive-new-way-to-check-out-ebooks/#comments Wed, 23 Feb 2011 00:21:49 +0000 Katherine Boehret http://solution.allthingsd.com/?p=1662 Get out your library cards: Now you can wirelessly download electronic books from your local library using the Apple iPad or an Android tablet.

Last week, OverDrive Inc. released OverDrive Media Console for the iPad, a free app from Apple’s App Store. With the app, you can now borrow eBooks for reading on the go with a tablet.

You can already borrow an eBook from a library using an eReader, including the Sony Reader and Barnes & Noble Nook, but you’ll need a PC and a USB cable for downloading and synching. Amazon’s Kindle doesn’t allow borrowing eBooks from libraries.

For the past week, I borrowed and wirelessly downloaded digital books onto tablets primarily using OverDrive, the largest distributor of eBooks for libraries. I tested the OverDrive Media Console for the iPad. I also used the Dell Streak 7 tablet to test the app on the Android operating system; this app also works on Android smartphones. An iPhone app is available.

Before you go hunting for your library card, there are a few factors to consider. While there are positives to borrowing eBooks from a library, the process has significant limitations that can be frustrating.

The biggest upside, of course: They’re free. In comparison, digital bookstore apps like Amazon’s Kindle, Apple’s iBooks and the Barnes & Noble Nook app charge around $10 a book. Local libraries pay for licenses to each eBook just like they pay for each physical book. Lending periods vary among libraries, from seven to 21 days, and some libraries let patrons set due dates. Fines or late fees are nonexistent because digital access to the books expires on a set due date, at which point titles lock up and users are prompted to delete the titles.

There’s a major downside to borrowing digital books. If the book you want is checked out, you still have to wait until someone returns it to borrow it. OverDrive’s licenses allow one book copy per person, so several people can’t simultaneously borrow the same eBook. Libraries can buy several licenses for a title so they can have multiple copies of popular books for borrowing. I found seven eBook copies of “The Girl with the Dragon Tattoo” in my Washington, D.C., public library system.

The OverDrive app, running on an iPad, shows how many copies of each book are available and how many people are waiting for each book.

But the OverDrive interface showed me that most of the books I wanted to read were checked out, and in several cases, there were other patrons on a waiting list for the copies. While “The Girl with the Dragon Tattoo” had seven copies, it also had seven patrons waiting for copies of the book. The idea of waiting for a book with many people lined up to borrow it is enough to inspire even some of the most frugal readers to cough up the dough to buy digital books. Just like with “real” library books, checked-out eBooks shouldn’t impact sales of eBooks.

An OverDrive spokesman says, “Libraries set the number of titles that can be checked out by each cardholder at any one time. That number varies from library to library, and the average is about five titles across our network.”

Book selection is also a challenge. According to fiscal records, my library’s physical book collection numbers well over two million books, while its OverDrive titles total about 11,000 eBooks. And only a portion of those were in the EPUB format, which is the only format that works with the Android, iPhone and the iPad apps. That meant the selection for me is pretty small. Smaller libraries have even fewer eBooks from which to choose. Users can’t borrow digital content from libraries where they don’t have library cards.

Many of my book searches showed the that my library didn’t have a digital copy of the incredibly popular “Team of Rivals” by Doris Kearns Goodwin, or even anything by the popular mystery novelist, Mary Higgins Clark. I tried entering broader terms into the OverDrive search box and didn’t have much luck then either: The term “London” only returned two results.

According to a spokesman, the D.C. library system has more than 25,000 eBook titles, including the OverDrive offerings, and “will be adding new titles in EPUB format weekly as new titles are released and to meet demand.”

Part of the selection problem, of course, is that many libraries are new to the eBook borrowing experience and are in the midst of building up digital collections.

Since availability is a problem, it would make sense that users could view books by seeing just those books that are available for borrowing. But OverDrive lacks this feature, so users are stuck searching for—or scrolling through—titles over and over again only to find that they’re already checked out by other people. After a dozen searches like this, I was ready to give up.

The OverDrive spokesman said a feature that sorts books to display only those available will be out sometime this year. He noted that several libraries are increasing their eBook catalogs to adjust to increasing demand from tablet users.

But the process for selecting and downloading books is clumsy. After choosing the correct local library, the OverDrive app sends the user out into the tablet’s Web browser to find books in the library’s system. OverDrive’s spokesman said this preserves library branding but that, in the future, this selection process will be in the app.

To download and read the EPUB formatted book, you must sign in with an Adobe ID. This is in addition to entering your library card number. I had one of these IDs from past use of Adobe products, but many people won’t and will groan over this extra registration step.

Actually checking out a book, takes very little time. After all, these files contain only text, not large video or audio files. Since I had trouble finding books to download, I settled on a romance novel featured on OverDrive’s homepage titled “Hawk’s Way: Rebels” by Joan Johnston. It took less than 30 seconds to download to my iPad.

Once downloaded, books looked fine on the iPad and Dell Streak. The screen’s brightness can be adjusted using an on-screen slider and a handy navigation strip at the bottom of each page shows where you are in a book and how many pages remain in the currently opened chapter. Publishers can set the number of font sizes to which text can be adjusted. And with the app, text can’t be displayed like pages in a real book (with two columns of text on two pages opened in front of you) when the tablet is held horizontally.

OverDrive doesn’t enable synchronizing of material across multiple devices, like Amazon’s Kindle app does with Whispersync. So if I download a book on my iPad in the OverDrive app, I can’t open that book on an Android phone or desktop using OverDrive.

OverDrive serves more than 13,000 libraries with a catalog of 400,000 titles from 1,000 publishers, but it’s possible your library may not use this system (check OverDrive.com for participating libraries). The spokesman said the company plans an app for the BlackBerry by June and hopes to enable wireless downloads on other devices in the future.

Write to Katherine Boehret at mossbergsolution@wsj.com

]]> http://allthingsd.com/20110222/overdrive-new-way-to-check-out-ebooks/feed/ 0 http://allthingsd.com/20110217/got-broadband-not-sure-theres-a-map-for-that/ http://allthingsd.com/20110217/got-broadband-not-sure-theres-a-map-for-that/#comments Thu, 17 Feb 2011 22:30:04 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=3437 When President Obama came into office, one of his first significant acts on the tech front was a $7.8 billion broadband stimulus effort, aimed at handing out grants and loan guarantees for projects meant to bring fast Internet connections to areas where coverage was scarce or nonexistent.

Nestled within that amount was $350 million to draw a map showing a detailed, block-by-block inventory of the existing broadband infrastructure in the U.S. It took two years, but the results were unveiled by the National Telecommunications and Information Administration today on the Web site Broadbandmap.gov.

This is far from the first time someone has tried to tackle the problem of mapping existing broadband pipes in order to show where service is lacking. But prior attempts have generally been haphazard because service providers tend to carefully guard the precise maps of their physical plant as competitively sensitive. And prior federal efforts fell short because the maps were based on ZIP codes. If one person in some geographically large but sparsely populated rural ZIP code had access to service, prior federal maps showed that area as “served,” even if the majority of the population didn’t have access. The new map uses the far more granular census tracts.

The map shows some new data that shouldn’t come as a surprise to anyone who’s been following the saga of broadband in America: Anywhere from 5 to 10 percent of Americans lack access to broadband at acceptable speeds. Recall that the Federal Communications Commission last July set a benchmark of 4 megabits per second downstream and 1 MBPS upstream as what it considers acceptable.

Another key finding is that so-called “community anchor institutions” are going without adequate access to broadband. These are schools, libraries and hospitals, where different kinds of services are needed. As a rule of thumb, a school needs about 50 to 100 MBPS for every 1,000 students, and most of the schools surveyed had speeds of 25 MBPS or less, and precious few libraries reported speeds approaching that.

When residential service isn’t available, these are the institutions that people turn to when they need to use the Internet. A few years ago I visited a rural county in Tennessee where the local library had broadband and provided free wireless. If you watched the parking lot after the library was closed you’d often see people pull their cars up with laptops and use the Wi-Fi to work on homework assignments with the kids. Even the local sheriff’s deputies would pull up and use it to check their email.

There was some good news. Alongside the map, the NTIA released a separate report on broadband adoption. It found that 68 percent of households have access to a cable modem, a DSL line or a home fiber connection, up from less than 64 percent a year ago. The usual demographic disparities remain: People living on low incomes or with disabilities, along with seniors, minorities and those with low educational attainment, tend to lag behind other groups in home access. The city-country divide remains as well: 70 percent of city dwellers, versus 60 percent of rural residents, access broadband at home.

But here’s a stat that should surprise you: 28.3 percent of all the people in the nation do not use the Internet, period. That’s down about two percentage points from a year ago, but still means that out of every 25 Americans, seven don’t use the Internet at all. I don’t know about you, but that surprises me.

]]> http://allthingsd.com/20110217/got-broadband-not-sure-theres-a-map-for-that/feed/ 2 http://allthingsd.com/20110216/slideshare-adds-live-web-conferencing-with-video/ http://allthingsd.com/20110216/slideshare-adds-live-web-conferencing-with-video/#comments Wed, 16 Feb 2011 16:00:01 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=3654 Today SlideShare, the presentation-sharing site with 45 million monthly uniques, is launching its take on improving Web conferencing.

In general, this arena has been prone to complicated setups and frequent glitches for users.

The two possible highlights of SlideShare’s offering, called Zipcasts: They happen within a browser without additional software, and there are no limits on the number of meetings or the number of participants in meetings.

There are also some tweaks like allowing watchers to flip through slides at their own pace.

While users will still need to call each other on the phone to have a two-way conversation about the slides, presenters can also include live Flash video–powered by TokBox–of themselves to give a more personal connection.

Users who want to create something like a public Webinar can use Zipcast for free with advertising, but those who want to make their meetings private need to pay $19 or more per month. premium users can also get two-way audio through a partnership with FreeConferenceCall.com.

In other SlideShare news, Ross Mayfield, the co-founder of Socialtext, recently joined the company as VP of business development.

]]> http://allthingsd.com/20110216/slideshare-adds-live-web-conferencing-with-video/feed/ 0 http://allthingsd.com/20110208/spotify-clears-its-throat-for-a-u-s-launch-in-coming-months/ http://allthingsd.com/20110208/spotify-clears-its-throat-for-a-u-s-launch-in-coming-months/#comments Tue, 08 Feb 2011 17:35:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=29494 Spotify can’t come to the U.S. until it nails down more deals with the major labels. But here’s another indicator of the music service’s confidence in an American debut sometime…soonish.

It’s a note to the European company’s select group of freeloading American users, letting them know they’re going to have to start paying sooner or later. And it says Spotify is “looking forward” to a U.S. launch in ‘the coming months.”

From: Spotify
Date: February 8, 2011
To: xxx
Subject: Spotify Payment Problem- ACTION REQUIRED!

Hello from Spotify!

You are one of only a few people who has access to a Spotify promotional test account in the USA, and we hope you’re enjoying listening to Spotify through our Premium or Unlimited service.

We are really looking forward to launching the service in full in the USA over the coming months, and hope that you will continue to use the service and be one of our key advocates.

We need to make some small system changes to our payment system for our USA launch, and so in order to make the transition for you as smooth as possible, we have credited your Spotify account with 1 month worth of FREE Spotify Premium/ Unlimited!

In return for this, we ask that you please do the following:

• Visit our website https://www.spotify.com/account/subscription/change-payment/
• Login with your username and password.
• Select a payment method (Card or Paypal) and click ‘Change’
• Click ‘I Accept/ Continue’ to accept the new product in US Dollars
• Provide us with your payment details once more, so that after your FREE
month has expired you will be able to keep listening to music through Spotify.

Your next bill is due to us on ’14/02/12′, so please provide us with your payment details before then, otherwise you will revert back to Spotify Free and if you have Premium you will lose access to Spotify on your mobile. On this date, you will then be billed in Dollars!

Thanks for your help, and please feel free to reply to us directly if you have any
questions!

Obviously this note isn’t anything like a confirmed launch date. In order to do that, Spotify needs U.S. deals with the big music labels, and so far only has Sony signed on.

Industry sources keep telling me a deal with EMI is this close, but they’ve been saying that for weeks now. Which doesn’t mean that it won’t happen. Just that it hasn’t yet.

And no matter what happens with EMI, Spotify can’t go anywhere unless it has Universal Music Group, the world’s largest label, on board. Again, lots of people tell me they’re confident a deal will get done soon, but…

In any case, the note does point out one of the reasons so many plugged-in Americans you know are raving about Spotify, even though the service doesn’t formally exist here–Spotify has quite cleverly been handing out free test accounts to lots and lots of people who might rave about it.

That includes VIPs and their families, all sorts of music industry people and media people, including yours truly.

And if you’re getting Spotify in the U.S., you are indeed getting a really, really good service: Free, unlimited music, anywhere you want it, whenever you want it, without ads.

Which is not what Spotify’s “real” users actually get. The ones who use the free service have a cap on the number of hours they can listen for free, can only listen on their PCs and will encounter a smattering of advertising. To get the real deal–mobile, no ads, no limits–they’ll need to cough up the equivalent of about $13.50 a month.

So far, about a million people are doing just that, people familiar with the company tell me. But how many will go for it if, or when, it gets to the U.S.?

]]> http://allthingsd.com/20110208/spotify-clears-its-throat-for-a-u-s-launch-in-coming-months/feed/ 10 http://allthingsd.com/20110202/okcupid-and-match-com-to-marry/ http://allthingsd.com/20110202/okcupid-and-match-com-to-marry/#comments Wed, 02 Feb 2011 15:39:08 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=2274 Match.com gets a little sweeter. The dating site, which operates as part of IAC, says it has acquired OkCupid for $50 million in cash, plus more payments based on future performance. OkCupid, which is mostly ad-supported, targets younger adults by creating low barriers of entry to participate. Once users get a taste of online dating for free, the hope is to introduce them to pay sites, like Match.com and Chemistry.com.

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