In spite of intense criticism against its patent infringement lawsuit in March, Yahoo filed additional claims against Facebook today.

“Today Yahoo! filed additional claims against Facebook in U.S. District Court in San Jose related to two additional patents on which Facebook infringes. Today’s filing underscores the breadth of Facebook’s violation of Yahoo!’s intellectual property,” said a Yahoo spokesperson in a statement. “As we have stated previously, Yahoo!’s technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. We intend to vigorously protect these technologies for our customers and shareholders.”

Facebook had filed its own counterclaims against the Internet portal over various social networking patents and also has recently spent hundreds of millions of dollars for patents and licenses from both IBM and Microsoft to bolster its portfolio.

In its filing, Yahoo’s legal aces got all hot and bothered that Facebook did this, especially the part about handing over piles of dough to others (and not Yahoo).

“However, on information and belief, Facebook lacks a good faith basis for most, if not all, of its counterclaims, particularly those patents that it purchased from others,” read the filing. “All eight of these patents were purchased by Facebook in the past five months, and several of these patents were purchased (independent of any separate technology acquisition or merger) after Yahoo! filed its complaint in this action. On information and belief, many, if not all, of these patents were acquired by Facebook for purposes of retaliation against Yahoo! in this case.”

Uh, duh! (Also, not to be picky, but Yahoo also bought a lot of the patents they are asserting way back when from its acquisition of Overture and did not invent all these innovations, either.)

I am awaiting a response from Facebook, which will probably be along the lines of: Byte me.

[UPDATE: I was right -- here's the comment:

"We remain puzzled by Yahoo's erratic actions. We disagree with these latest claims and we will continue to defend ourselves vigorously."

(Erratic, by the way, means desperate and pathetic in Facebook-speak.)]

Here is the latest filing:

Yahoo Reply to Counterclaims 4-27

As many readers know, we have been adding to our staff here at AllThingsD, most recently in our new reviews section, with the addition of Lauren Goode earlier this year.

Now Walt Mossberg and I are proud to announce that Mike Isaac is joining our team to cover the social Web and its biggest players, including Facebook, Twitter and Google+.

He comes to ATD most recently from a staff writer position at Wired, where, among many other things, he spent much of his time writing about Google’s mobile and social efforts.

From 2010 to 2012, his coverage at Wired included the decline and fall of Hewlett-Packard’s mobile empire, Google’s surprise acquisition of Motorola Mobility, and Facebook’s steady trudge toward IPO-hood.

Prior to that, he wrote about the business of tech for Forbes magazine and Forbes.com, with a particular emphasis on start-ups and social. His work has also appeared in Paste magazine, Performer magazine, DNR magazine and the Washington Examiner.

Isaac holds a degree in English literature from the University of California at Berkeley, and is a former Georgetown University journalism fellow.

He takes over the social beat from Liz Gannes, who will be stepping up our coverage of the many businesses of Google, innovation, venture investing and the start-up scene — especially its bigger companies, from Pinterest to Quora to Dropbox. Gannes, as everyone who follows her knows well, has become a key observer of Silicon Valley and its players, and her insights into the tech scene have become one of our most invaluable offerings.

We’re excited for both of them, and look forward to their stellar work on our site.

If you want a quick analysis of why Facebook would pay $1 billion for popular photo-sharing service Instagram, please ignore the obvious financials that just don’t add up at all and have most of the typically unshockable digerati shocked by the sheer amount of the price.

Actually, it’s pretty simple: Photos. Photos. And, oh yes, mobile photos — lots and lots and lots of them.

Astonishingly, Facebook users already upload an average of more than 250 million images daily, making it the most popular photo-sharing service on the Web.

But it’s not the best by far and not the most mobile, which is Facebook’s biggest weakness — that has been accomplished many others, especially Instagram, the favorite of power users who scoffed at Facebook’s weak tools. (The horror of no filters!)

Now — instead of all those billions of juicy digital photos snapped by an ever-growing legion of smartphone users loading up to the beautifully designed Instagram mobile app and living on the servers of the small San Francisco-based start-up — Facebook has now captured all these memories for its massive social networking site.

And while $1 billion seems an awful lot to pay for that privilege — Twitter is quaking with “OMG!” and “Wow!” and “WTF!” tweets about the acquisition — this is apparently priceless for Facebook in a deal that went down quickly and quietly in recent weeks.

That and the fact that the huge sum prevented Instagram from being scooped up by Google.

It’s a clear signal from CEO and co-founder Mark Zuckerberg — who rules all product efforts at the company — of his intent to dominate all innovations that have to do with owning the social experience.

Because while many Instagram photos quickly made their way onto Facebook — sharing on the service, as well as on Twitter, was a big part of the app’s offering — the future of the Menlo Park, Calif.-based company is tied to having control over key elements of the user experience.

Of all of those — communications, status updates, content linking — it has been photos that have become perhaps the most important part of Facebook, almost since its beginnings.

Photos are what allowed Facebook to grow so quickly and what made it more than just a blue sea of text and links to consumers. Its new Timeline depends on big, pretty photos, and Facebook even recently announced that it would allow full-screen viewing of high-resolution photos on its Web site, a pricey endeavor.

So, perhaps it was inevitable that Zuckerberg would pay up for Instagram, too — he knows a good entrepreneurial success when he sees one and apparently has the power to convince start-ups that he can make their bigger dreams come true.

Whether or not Instagram ever makes money is perhaps beside the point at this moment in time, as Facebook is poised to go public at 100 times the amount it forked over for Instagram.

But that it considers such a purchase worth as much as one percent of its expected valuation says a thousands words. And most of those words are “mobile” and “photo.”

As Ben Jacobs noted on Twitter: “Kodak goes bankrupt and Instagram is worth a billion dollars. 2012, y’all.”

Indeed. And, I have no doubt if Zuckerberg could figure out a way to shove all those Kodak moments from analog snapshots onto Facebook easily, he’d have paid up for that, too.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

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

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

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

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

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

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

Yahoos –-

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

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

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

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

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

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

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

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

Scott

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It began: “Yahoos: A lot has happened since I last talked to you.”

You can say that again!

Yesterday, Yahoo CEO Scott Thompson sent out an email to the troops in what appears to be an attempt to soothe the company, which has been under a lot of stress, including more high-level exec departures, board changes and more. More importantly, the Silicon Valley Internet giant is nervously waiting for a restructuring expected to hit within weeks, and also has been unnnerved by Thompson’s aggressive legal attack on one of its key partners, social networking site Facebook.

Unfortunately, the memo didn’t say much, except vaguely but definitively referencing that even more tumult was coming.

After noting that he had been making a “deep dive” into the company after getting there at the beginning of the year, Thompson said that he was focused on “what makes Yahoo special and what doesn’t work.”

The plan then? To get the company to be “aggressive and lean forward,” because “real change is coming.”

Rut-roh.

(In a related move, but not noted in the memo — which several sources said was linked to all the uncertainty around the expected restructuring and also high costs — Thompson also cancelled Yahoo’s annual global sales meeting, which was to be held for about 1,300 advertising staffers in Florida later in the month.)

“We are moving as fast with real urgency to move back to Yahoo playing offense once again,” said the Thompson memo, which was read to me by several sources, because of increased worries about the company once again hunting for leakers.

(Apparently, like his predecessor before him did unsuccessfully early in her tenure, Thompson is on a yet another pointless hunt for those who talk to outsiders. Memo to Scott: Yahoo is an online media company and not a pay-for-that-used-iPad-on-eBay outfit and the peeps there like to share.)

Back to the memo action. “Were are fundamentally rethinking every part of our business and looking at all options to put maximum effort where we can succeed,” wrote Thompson. “I’m putting tons of pressure on my leadership team … so we can move faster and more deliberately.”

He added — and the bolding is his — “the changes we make will not be incremental ones. We will make bold, fundamental changes to what we do and how we do it.”

After properly freaking the Yahoo staff out — with everyone trying to grok exactly what that meant in terms of their jobs — Thompson then went into three core things the company was going to focus on under his rule (more bolding!):

“1) Focusing intently on those parts of the business that have a competitive advantage.

2) Liberating all of us to work faster and make better decisions.

3) Thinking really creatively about how to build new businesses that leverage our trusted relationships with users.”

Those will be applied, wrote Thompson, to five key parts of Yahoo: Its core business (such as the homepage and news); platforms (such as its cloud services and Yahoo Publishing Platform); data (which Thompson said was the “single most underrated, underappreciated and underused asset, also calling it a “cornerstone for the next generation” of Yahoo); international; and an amorphous thing he called “our future.”

About that, Thompson said Yahoo would “go beyond simply protecting our core assets … we will more than just tweak what we have today … to innovate, acquire and disrupt outside our core.”

Then, without giving any specifics at all, he noted that it’s as “important to know what we’ll do as how,” before launching into three “core principles” for the company, which were all in bold caps (this dude loves punctuating, which I can appreciate!).

They are:

“LISTEN, UNDERSTAND AND PUT THE CUSTOMER FIRST.

GET STUFF DONE.”

(Thompson also underlined “listen,” as well as bolding it, in an orgy of key-shifting.)

“I learned early in my career that innovative concepts without execution are of no value,” he then said, in a classic business-bromide tone. “The Yahoo of the future has to be the organization that consistently surprises the world by how much we get done and deliver to our customers.”

The letter did reference the patent-infringement lawsuit with Facebook at the very end.

“I want to point out that this lawsuit has one simple purpose: Protecting valuable assets of the company and its shareholders,” Thompson wrote. “Others have respected and have licensed our valuable innovations and Facebook must too.”

Thompson ended by noting that “my door is open.” It will be interesting to see who has the guts to walk through it today.

On the sixth page of its just-filed patent lawsuit against Facebook, Yahoo quotes the social networking company’s CEO and co-founder Mark Zuckerberg:

“Getting there first is not what it’s all about.”

The quote, which Yahoo contends shows Zuckerberg has “conceded that the design of Facebook is not novel and based on the ideas of others,” is woefully taken out of context, but it’s an attempt to hit home one point:

We were here first and we have more patents.

Even if, as it has turned out, Yahoo has done little over the years with the innovation those patents might represent. Meanwhile, Facebook has run the bases with the wide range of the advertising, messaging, customization, privacy and social networking concepts involved.

Of the 10 patents Yahoo is using in the 19-page lawsuit, filed today in California, the company said: “For much of the technology upon which Facebook was based, Yahoo was there first.”

First but worst, as Yahoo has struggled in recent years to make itself more relevant and prevent the decline of its once mighty business.

Via a series of ineffective leaders and strategies, that has not worked at all, as its business has declined. Now — under the much more in-your-face reign of new CEO Scott Thompson — Yahoo is hoping that courts will determine that what it says it invented counts for something.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

That includes in the legal action, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

Given the scope of the patents Yahoo said it has, that means it wants Facebook to essentially close down.

Therefore, I would be expecting Facebook to poke back in three … two … one …

In what is either the boldest gamble of its history or the most boneheaded, Yahoo has filed a massive patent infringement lawsuit against Facebook.

The attack by the Silicon Valley Internet icon against perhaps the most powerful consumer social networking site today — also based in tech’s heartland and also an important partner of Yahoo — is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

Multiple sources said he is primarily driving this new aggressiveness from Yahoo.

Since Yahoo told the New York Times that it was considering such a move last week, the issue has been widely debated within the company, with many top techies there opposed to it, due to the company’s longstanding ethos of using patents for defense rather than offense.

Thus, the decision to move was closely held, sources said, with only Thompson and legal chief Michael Callahan largely working on it.

Still, patent lawsuits have become ever more prevalent among tech companies, as they seek to battle for advantage in a rapidly changing competitive landscape. Apple, Google, Microsoft and others are involved in several legal actions, although they are largely related to mobile technology.

Yahoo’s lawsuit is the most prominent in the social networking arena, a sector that has seen a huge explosion of late. Its timing could not be worse for Facebook, since it is in a quiet period for its upcoming IPO, which is expected to value the company at close to $100 billion.

Yahoo has done this kind of thing before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock.

Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook’s initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets.

More importantly, at least initially, the move did nothing to boost Yahoo’s moribund shares — the stock was down about one percent to $14.49 in after-hours trading.

More to come, but here is the entire document below. The lawsuit has been filed in San Jose, Calif., federal court.

Lastly, the official PR back-and-forth:

Said Yahoo, in its statement:

“Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Facebook, obviously, disagrees, and also threw in a jab about the lack of discussions over the issue between the pair:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

I’ll admit to also being puzzled about the strategery here, but I am sure there will be much more to come.

Until then, read on:

Complaint

And here is what I wrote last week on the subject:

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.
That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

And in 2012 — which also happens to be the 10th anniversary of the confab of tech and media titans — it’s already shaping up to be another fantastic event in terms of programming, with a lineup of onstage appearances that is sure to make some news.

There are many more very big names to come, but Walt Mossberg and I are pleased to introduce the first group of interviewees, which will give you a glimpse into the firepower we expect at D10 in late May. It is again being held in Rancho Palos Verdes, just south of Los Angeles.

The initial speakers we have confirmed so far include: New York City Mayor Michael Bloomberg; serial entrepreneur Sean Parker, who will appear with Spotify co-founder and CEO Daniel Ek; Zynga founder and CEO Mark Pincus; Federal Trade Commission Chairman Jon Leibowitz; LinkedIn Chairman and VC Reid Hoffman, who will appear with LinkedIn CEO Jeff Weiner; and Skype CEO Tony Bates.

It’s hard to imagine someone we have wanted to have onstage more than Michael Bloomberg, a man of many talents and interests. He’s known worldwide as the 108th Mayor of the City of New York. First elected in November 2001 (and again in 2005 and 2009), he is also one of the most compelling politicians in the U.S. today.

But Bloomberg is also a pioneer in terms of the business of digital news and information technology, having built a huge and groundbreaking media company and information service. Bloomberg (the company) has 310,000 subscribers to its financial news and information service, and more than 15,000 employees worldwide.

There will be a lot to talk about with him, from the upcoming presidential election to the state of our government to the future of innovation, news and technology.

Also sure to be voluble is Sean Parker, the legendary Silicon Valley entrepreneur who has been on the cutting edge of innumerable important digital trends of the recent decade. In 1999, Parker co-founded Napster, the controversial and industry-changing music service, at the age of 19.

He followed up with early contact information service Plaxo, and then shifted over to his critical involvement as founding president of Facebook in its early days as a start-up, an experience which was dramatized in the movie “The Social Network.” Parker continued to found and also invest in companies, from Causes to Spotify to his most recent, Airtime, a social video company that he is doing with his Napster co-founder Shawn Fanning.

Parker will be appearing onstage with Daniel Ek, another serial entrepreneur and technologist, who started his first company in 1997 at the age of 14. The Swedish native later co-founded online music phenom Spotify in 2006, with Martin Lorentzon.

The former CTO of Stardoll and founder of Advertigo leads a company that is changing the way music is delivered and consumed by fans, against a backdrop of intense change in the industry, succeeding even as a plethora of other services have stumbled.

Also a groundbreaker is Zynga CEO and founder Mark Pincus, yet another serial entrepreneur, whose latest effort in the online gaming arena has finally resulted in his biggest success. It recently went public, and now has a nearly $10 billion market cap.

Before founding Zynga in 2007, Pincus had already started three other companies: Push start-up Freeloader in 1995; automated tech-support company Support.com after that; and early social networking site Tribe.net in 2003.

(I met Pincus when he was at Freeloader in Washington, D.C., while writing a profile of him for the Washington Post, so I have enjoyed tracking his progress since then.)

Pincus is also an avid angel investor, with early stakes in Napster, Brightmail, Twitter and Facebook.

Reid Hoffman was another early investor in Facebook, along with many of Web 2.0’s most successful ventures. Well-known in Silicon Valley as an entrepreneur and VC, and recently dubbed the “start-up whisperer” by the New York Times (although I am not sure exactly what that means), he’s also chairman of LinkedIn, the business-networking service that also recently went public (at a $10 billion valuation, too).

He’ll appear with LinkedIn CEO Jeff Weiner, who started out life in Hollywood, but soon made his way to Silicon Valley as a top exec at Yahoo. After running its media division, Weiner spent a short time at venture firms before going operational again at LinkedIn.

What it takes to build and maintain momentum as tech companies move into more mature stages, as well as how the social networking space evolves, are among the many topics on tap for the pair.

The evolution of a start-up phenom — in this case, Internet telephony service Skype — will be among the topics covered by Tony Bates, who is now a president at Microsoft, which bought it last year.

As such, he is responsible, says the software giant in its description of his job, “for overseeing the company’s direction, strategy and overall mission to become a global communications service that will eventually reach billions of users.”

That’s a tall order for Bates, who came to Skype from a top job at Cisco. Bates has deep roots (or maybe, routing?) in the guts of the Internet, having done backbone-engineering strategy for Internet MCI. The U.K. native also holds nine patents.

Lastly, given all the activity we expect will happen between government regulatory agencies and tech companies over the next few years, we felt it was key to bring in FTC Chairman Jon Leibowitz. He has been at the FTC as a commissioner since 2004, but was given the top job by President Barack Obama in 2009.

Among his priorities, according to his bio, is “promoting competition and innovation in the technology sector through law enforcement and policy initiatives; and protecting consumers’ privacy — especially while they are using the Internet.”

Uh-oh!

Leibowitz knows from regulation, having served as the Democratic chief counsel and staff director for the U.S. Senate Antitrust Subcommittee from 1997 to 2000, where he focused on competition policy and telecommunications matters, as well as a similar stint at the Senate Subcommittee on Terrorism and Technology before that.

There will be a lot more speakers to come, of course. But, so far, we think D10 is off and running fast.

PeopleMatter said it has raised $14 million in a Series C funding, which was led by Morgenthaler Ventures.

The Charleston, S.C.-based software company, which focuses on hourly workers, said the new investment will be used for product innovation and customer-acquisition strategies.

Existing investors Noro-Moseley Partners, C&B Capital, Intersouth Partners and Harbert Ventures also participated in the round. PeopleMatter had previously raised $14.4 million, which brings its total funding to just over $28 million.

PeopleMatter competes with other online talent management firms, such as SuccessFactors, Taleo and Rypple, although those focus on career professionals. In contrast, PeopleMatter is aimed at service-industry workers, including food service, convenience store, hospitality and retail verticals.

The company’s offering allows organizations to manage applicant tracking, hiring, onboarding, training and scheduling processes. It is also launching a smartphone app this week that workers can use.

Cisco appears to have continued its recovery following a painful restructuring. Sales are up and setting records, earnings beat the consensus of analysts, and Cisco’s outlook for the coming quarter is positive, too. Cisco’s even reached a point where it’s at least close to fitting into its old skinny jeans. What a difference a year makes. Last year it was all about gloom and doom and some irritable investors were calling for Chambers to lose his job.

Since then the company has undergone a painful but necessary restructuring, shed thousands of jobs, shut down marginal business units and refocused on its core businesses, and as yesterday’s quarterly earnings report proved, the results are not only starting to show, but starting to stick.

So is the work done? Definitely not. Yes, Cisco is showing some return to its strengths, but there’s still a long way to go. We talked about that, the troubles Cisco’s competitors are facing, his long-held view that companies like Cisco should get a tax holiday to repatriate their cash held outside the U.S. and many other things.

Also Chambers, remembering that I dedicated “How Ya Like Me Now” to Cisco last quarter as it turned the corner on its troubles, asked me what song I might use to characterize its results this quarter. Taking inspiration from the headline of my first story and from his cautiously optimistic tone, I settled on “It’s Getting Better All The Time,” the Beatles track, performed by Paul McCartney and embedded after the Q&A. Enjoy.

AllThingsD: John, I don’t know if you saw the headline I wrote earlier, but I said you fit into your skinny jeans again. Is that fair?

John Chambers: [Laughs] I think it’s fair. We were up about four or five inches there so I think we have an inch or two to go, but we’re getting close.

So let me ask about the quarter. It looks like a solid quarter where a lot of the troubles were starting to get behind you. In broad brush strokes, where were Cisco’s strengths? I know some of your competitors were having their own troubles, but where were you strong in particular?

The strengths were that we appear to be executing on the market transitions that are going on, and we appear to be reinventing ourselves, not just in terms of how we control our costs, but in terms of the productivity we’re getting out of our employees. So if you look at the major transitions going on in the industry from an economic point of view, to how customers buy, to where the high tech industry is going, which I would argue is all connected to intelligent networks, that all appears to be playing out as we had hoped. The other transitions that you think about, like data centers and the cloud, we saw 90 percent growth in an industry that is growing at best in the teens. Our ability to move in collaboration, where we grew 10 percent though I think we could do better — it remained solid for us. In video with set-top boxes up 23 percent to new video technologies growing well and seeing improvement in the margins. There are things we need to do to reinvent Cisco. I think I said this at your own conference a decade ago [Chambers spoke at D5 in 2007, but that is not where he made this comment. -Ed.] that voice will be free. It’s almost there. You could see the trend, and what it meant is that once voice would become a smaller part of the network load, that would be given away in order to make way for the video and the entertainment. The same trends are taking place all over again at multiple speeds and multiple gears, which if we’re right, they all play together. Everything from mobility to cloud to the intelligent network, to wireless to security, to video being pervasive, all of those are coming together at tremendous speed. And we’re pulling them all together pretty well for our customers. Now, this is just the beginning if we execute right, and we have plenty of hurdles in front of us, but this may be the voice-will-be-free trend times 10 in terms of the impact of the transitions going on. We appear to have managed them well; we did what we said we would do, turned in record earnings and record revenues, and earnings per share were up 48 percent. We’ve realigned ourselves and reinvented the company, which I think you have to do every five years. Sometimes it takes a crisis to reinvent. … It’s a journey and we’re just getting started.

What’s the number one hurdle that you want to get over this year, that’s in front of you right now and keeping you up at night?

I want to build deeply into our capabilities, a continued focus on gross margins and effectiveness, from product design to sales all integrated together. You probably know this, but we’re the only company who’s anywhere near this profitable with $45 billion in sales with open standards. It isn’t a mainframe business where everything is proprietary or like in Apple’s situation where it’s a wonderful company but it has an architecture. We do it entirely with open IP, so we can be challenged by a 10-person start-up or a by the biggest giants like Dell or IBM or Hewlett-Packard to come at us. With this type of margin but so low a barrier to entry, we’re doing relatively well. But we still have to reinvent ourselves at a faster pace. We have to do what I call the basic blocking and tackling to participate in the new capitalism that we’re heading into. That’s the attention to gross margins, getting the market transitions right, tying the products together so you can get the price premium on them. But what really keeps me up at night this last year was the realization that this has to be constant reinvention. Average is over. An average high-tech company is headed down. Those above-average companies are going to head down in 3 to 5 years. If as a company you can’t reinvent yourself every 3 to 5 years, you have a problem coming at you.

Does that then imply that Cisco had become complacent or even average? It was and is the biggest networking player, but did Cisco lose its way and try to do too much?

Well, I could give you a long list of things we have to do better. We’re a healthily paranoid company so we always have things we could do better. I do think we were fat. Four to five inches, not just one or two. We’re not back in our skinny jeans yet, as you put it, but we’re within an inch or so of getting there. We missed market transitions at the speed at which they occurred. We should have seen the drop-off in public spending coming at us sooner. Everyone else has still run off the turn, even though they saw what happened to us two to four quarters ago. We should have seen it sooner and reinvented ourselves before it hit us, and made the turn much more effectively, and I’m committed to doing that, and the leadership team is, too. It would have been easy to just cut a billion dollars in expenses, reorganize sales and how customers buy. We realized that gross margins can deteriorate not just because of what competitors do but what we do to ourselves, like what we did on switching. We should have been smarter there.

On the conference call you mentioned the possibility of getting back into the mergers and acquisitions game. Any hints on where you might go or whom you might buy?

I think it’s a fair question. Part of the reason we said that was to explain why we’re building up cash in the U.S. Part of it was for share buybacks because the price was attractive. A lot of people don’t realize that we use M&A deals to gain leadership. We were a routing company, we acquired three switching companies. We were an enterprise and commercial company, we acquired a service provider company in Stratacom. If you look at where it’s going to be, it’s probably in data center, collaboration and video, and combining those with security, bring your own device and mobility. A large part has to do with our government allowing us to bring money back to our country.

That’s always been a big issue of yours. You made some comments about it on the conference call as well. Care to elaborate?

I think that it’s going to happen in the next presidential administration whether the president is re-elected or someone else is. I’ve been disappointed that we haven’t been able to get our message out about this more effectively. Ironically, I was in Europe, the government leaders there look you right in the eye and ask what they need to do to bring jobs to their country and keep the ones they have. They are partnering with business. I think we’re following Europe in the wrong way and following more of what they did to get them in trouble in the first place.

There’s a bit of a disconnect, however, to anyone who sees on one hand a company that wants to bring cash back in a tax-advantageous manner in the name of creating jobs, while the same company just fired so many people in the restructuring. Can you connect those dots for the person who sees the apparent logical disconnect? If it’s about jobs, then why are you firing people in the first place? If you were having lunch with President Obama or any other political leader, they might be confused, so how do you explain it?

They’re related. The first thing you’ve got to do when you hit bumps in the market is find out how much of the damage was self-inflicted and how much was the result of the conditions of the market. It would be a cop-out to say it was all the general market. We had to look at what we were doing internally. Every government leader in the world who’s adding to government payrolls and adding government debt is going in the wrong direction. We have to use technology to deliver services better. You do see most government leaders saying they want to get their own houses in order. The second thing they do is look at ways to generate private sector jobs. I’m a strong Republican, but I think President Clinton got it right with business and knocked the ball out of the park. He partnered with business, he was critical where appropriate, but in six years he generated 22 million jobs, grew GDP on average by 4 percent per year, and he was America’s champion on the Internet. I think that’s a more practical example. He grew private sector employment versus government employment by a ratio of 9 to 1, and created a positive climate for business, and when business got out of line he’d whack ’em. I think it would be a major mistake not to let companies repatriate their cash because whoever is in the Oval Office next year is going to want to get private sector jobs growing again, and there really aren’t very many levers left to pull. We’ve never had this slow a recovery after this deep a recession.
–

Getting Better – Paul McCartney

As has been widely reported, well-known TechCrunch columnist and Silicon Valley journalist Sarah Lacy has a new gig: Running her own new tech news site, which debuts today.

(She’s pictured here with another recent adorable start-up of hers, named Eli.)

Not so widely reported? The site, called PandoDaily.com, will feature three of TechCrunch’s most high-profile former bloggers: Michael Arrington, M.G. Siegler and Paul Carr.

That’s right, Lacy is Arrington’s boss this time around — even though his CrunchFund venture firm will also be an investor, in a funding round of more than $2 million for PandoDaily.

Other investors — whom Lacy described as “people I like and respect” — include a panoply of tech movers and shakers, including personal investments from Marc Andreessen, Peter Thiel, Matt Cohler, Jeff Jordan, Josh Kopelman, Zach Nelson, Andrew Anker, Saul Klein, Tony Hsieh and Chris Dixon, as well as seed investments from Greylock Partners, SV Angel, Lerer Ventures, Accel Partners and Menlo Ventures.

There will certainly be questions about all these funders who are also topics of PandoDaily’s posts, which Lacy acknowledged. She said the large number of funders was calculated so that none had undue influence.

Of course, many in Silicon Valley will be watching her carefully for any conflicts of interest or punches pulled. Lacy insisted that there will not be a problem and joked that she will definitely not become a VC, referring to the controversy around Arrington becoming one while at TechCrunch.

That issue blew up like a Roman candle, of course, leaving everyone with powder burns — I called the incident a “giant, greedy, Silicon Valley pig pile.”

Interestingly, Lacy did manage to stay out of the spotlight (she was, in fact, having her baby during the worst of the controversy, which was likely more painful).

Ignoring the delicious epic revenge part of this on AOL — which bought TechCrunch and then promptly presided over a tech version of the War of the Roses (and is, ironically, an investor via CrunchFund) — PandoDaily will focus on start-ups in Silicon Valley and everywhere else that homegrown spirit of innovations reaches.

Here’s a screenshot of the cleanly designed and handsome site:

In an inaugural post, titled ““Why I Started PandoDaily,” Lacy compared the site to a colony of trees in Utah, saying, “We have one goal here at PandoDaily: To be the site-of-record for that startup root-system and everything that springs up from it, cycle-after-cycle.”

Which is kind of like TechCrunch, which she left earlier this year.

“This is not TechCrunch 2.0,” Lacy said to me in an interview last week. “But, of course, we will be compared to TechCrunch.”

Of course, especially because of the presence of its star lineup on PandoDaily — who will write regularly, along with an initially small staff of other writers — and also its plans for conferences and other gatherings.

(An AOL source, by the way, said there were no contractual noncompete issues for PandoDaily to worry about.)

Here’s a longish interview I did about PandoDaily with Lacy, who has written two books focused on entrepreneurs, worked at Businessweek and was founding co-host of Yahoo Finance’s daily show “TechTicker.”

She talks about the site’s unusual name, her wrangling over leaving TechCrunch, and the prospect of now running her own show.

Welcome back, Sarah (and call me if you need help with those dudes, as we have wrangled before).

Here’s the video:

]]> http://allthingsd.com/20120116/sarah-lacy-debuts-new-tech-site-pandodaily-and-guess-whos-working-for-her-video/feed/ 0 http://allthingsd.com/20111220/yahoo-intensifies-search-for-ceo-with-hulus-kilar-as-dream-unicorn-candidate/ http://allthingsd.com/20111220/yahoo-intensifies-search-for-ceo-with-hulus-kilar-as-dream-unicorn-candidate/#comments Wed, 21 Dec 2011 00:40:07 +0000 Kara Swisher http://allthingsd.com/?p=154996

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And, noting the need for a new CEO:

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

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

]]> http://allthingsd.com/20111220/yahoo-intensifies-search-for-ceo-with-hulus-kilar-as-dream-unicorn-candidate/feed/ 0 http://allthingsd.com/20111218/copiers-vs-innovators/ http://allthingsd.com/20111218/copiers-vs-innovators/#comments Mon, 19 Dec 2011 07:59:52 +0000 Jessica Parks http://allthingsd.com/?p=154908

What’s happening is that we might, in fact, be at a time in our history where we’re being domesticated by these great big societal things, such as Facebook and the Internet. We’re being domesticated by them, because fewer and fewer and fewer of us have to be innovators to get by. And so, in the cold calculus of evolution by natural selection, at no greater time in history than ever before, copiers are probably doing better than innovators. Because innovation is extraordinarily hard.

– Mark Pagel, fellow of the Royal Society and professor of evolutionary biology, in conversation with Edge.org

]]> http://allthingsd.com/20111218/copiers-vs-innovators/feed/ 0 http://allthingsd.com/20111204/heres-gowalla-ceos-non-denial-denial-email-to-investors-about-facebook-acquisition/ http://allthingsd.com/20111204/heres-gowalla-ceos-non-denial-denial-email-to-investors-about-facebook-acquisition/#comments Mon, 05 Dec 2011 05:54:43 +0000 Kara Swisher http://allthingsd.com/?p=150077 Update: Facebook has confirmed it is hiring Gowalla’s core team, while the Gowalla product will be shut down.

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

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

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

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

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

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

Subject: Rumors and speculation

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

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

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

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

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

]]> http://allthingsd.com/20111204/heres-gowalla-ceos-non-denial-denial-email-to-investors-about-facebook-acquisition/feed/ 0 http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/ http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/#comments Wed, 23 Nov 2011 22:38:45 +0000 Kara Swisher http://allthingsd.com/?p=147167

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

I know, I know, but listen up …

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

]]> http://allthingsd.com/20111123/for-yahoo-and-me-too-time-is-brain/feed/ 0 http://allthingsd.com/20111109/adobe-admits-its-saying-buh-bye-to-flash-for-mobile-devices/ http://allthingsd.com/20111109/adobe-admits-its-saying-buh-bye-to-flash-for-mobile-devices/#comments Wed, 09 Nov 2011 18:15:30 +0000 Kara Swisher http://allthingsd.com/?p=142353

In a blog post by one of its execs, titled “Flash to Focus on PC Browsing and Mobile Apps; Adobe to More Aggressively Contribute to HTML5,” Adobe said what had already been reported: That it would no longer be developing its well-known Flash for mobile devices.

Here’s the key graph:

“Our future work with Flash on mobile devices will be focused on enabling Flash developers to package native apps with Adobe AIR for all the major app stores. We will no longer continue to develop Flash Player in the browser to work with new mobile device configurations (chipset, browser, OS version, etc.) following the upcoming release of Flash Player 11.1 for Android and BlackBerry PlayBook. We will of course continue to provide critical bug fixes and security updates for existing device configurations. We will also allow our source code licensees to continue working on and release their own implementations.”

Last night, reports surfaced that the high-profile software company — whose Flash technology has been a flagship product — was halting development on the mobile version of its browser plug-in.

Now, Adobe will focus its PC Web browser business on tools that allow Flash developers to create mobile apps by packaging their code to run on Adobe’s AIR platform.

The move has big implications for Adobe going forward and also for mobile device makers, such as Google and Research In Motion. But not Apple.

As Ina Fried wrote:

“The move, if true, would be a major blow to Android device makers, who have long touted Flash compatibility as a key competitive advantage over Apple’s iPhone and iPad.

It would also mark a posthumous vindication for former Apple CEO Steve Jobs, who took a controversial stand by not supporting Flash on Apple’s mobile products.”

Turns out Jobs was prescient, as usual.

Here is the full version of the Adobe blog:

Flash to Focus on PC Browsing and Mobile Apps; Adobe to More Aggressively Contribute to HTML5

POSTED BY DANNY WINOKUR, VICE PRESIDENT & GENERAL MANAGER, INTERACTIVE DEVELOPMENT AT ADOBE ON NOVEMBER 9, 2011 5:59 AM IN BUSINESS PROFESSIONALS, CREATIVE PROFESSIONALS, DEVELOPERS, VIDEO

Adobe is all about enabling designers and developers to create the most expressive content possible, regardless of platform or technology. For more than a decade, Flash has enabled the richest content to be created and deployed on the web by reaching beyond what browsers could do. It has repeatedly served as a blueprint for standardizing new technologies in HTML. Over the past two years, we’ve delivered Flash Player for mobile browsers and brought the full expressiveness of the web to many mobile devices.

However, HTML5 is now universally supported on major mobile devices, in some cases exclusively. This makes HTML5 the best solution for creating and deploying content in the browser across mobile platforms. We are excited about this, and will continue our work with key players in the HTML community, including Google, Apple, Microsoft and RIM, to drive HTML5 innovation they can use to advance their mobile browsers.

Our future work with Flash on mobile devices will be focused on enabling Flash developers to package native apps with Adobe AIR for all the major app stores. We will no longer continue to develop Flash Player in the browser to work with new mobile device configurations (chipset, browser, OS version, etc.) following the upcoming release of Flash Player 11.1 for Android and BlackBerry PlayBook. We will of course continue to provide critical bug fixes and security updates for existing device configurations. We will also allow our source code licensees to continue working on and release their own implementations.

These changes will allow us to increase investment in HTML5 and innovate with Flash where it can have most impact for the industry, including advanced gaming and premium video. Flash Player 11 for PC browsers just introduced dozens of new features, including hardware accelerated 3D graphics for console-quality gaming and premium HD video with content protection. Flash developers can take advantage of these features, and all that our Flash tooling has to offer, to reach more than a billion PCs through their browsers and to package native apps with AIR that run on hundreds of millions of mobile devices through all the popular app stores, including the iTunes App Store, Android Market, Amazon Appstore for Android and BlackBerry App World.

We are already working on Flash Player 12 and a new round of exciting features which we expect to again advance what is possible for delivering high definition entertainment experiences. We will continue to leverage our experience with Flash to accelerate our work with the W3C and WebKit to bring similar capabilities to HTML5 as quickly as possible, just as we have done with CSS Shaders. And, we will design new features in Flash for a smooth transition to HTML5 as the standards evolve so developers can confidently invest knowing their skills will continue to be leveraged.

We are super excited about the next generations of HTML5 and Flash. Together they offer developers and content publishers great options for delivering compelling web and application experiences across PCs and devices. There is already amazing work being done that is pushing the newest boundaries, and we can’t wait to see what is still yet to come!

]]> http://allthingsd.com/20111109/adobe-admits-its-saying-buh-bye-to-flash-for-mobile-devices/feed/ 0 http://allthingsd.com/20111102/liveblogging-yahoos-product-runway-are-you-in-or-out/ http://allthingsd.com/20111102/liveblogging-yahoos-product-runway-are-you-in-or-out/#comments Wed, 02 Nov 2011 17:41:24 +0000 Kara Swisher http://allthingsd.com/?p=139502

I am here at Yahoo HQ in Sunnyvale, Calif., to check out “Product Runway,” which is the Silicon Valley Internet giant’s attempt to show that it can still innovate.

First and foremost is the launch of Livestand, a personalized news reader that is similar to Flipboard and a variety of other rivals, including — soon — Google.

It’s Yahoo’s attempt to present a business-as-usual feel — amidst a long and agonizing and very public strategic overview that might also include the sale of the company (or not!), in the wake of the recent firing of its last CEO, Carol Bartz.

It has caused a lot of trauma inside Yahoo, which can’t help with innovation.

But we press on!

In other words, despite the three-ring circus going on outside, Yahoo wants you to know it is still hard at work.

We begin:

10:35 am: As the strains of U2 die out, Yahoo Chief Product Officer Blake Irving takes the stage, which is actually set up in the company’s cafeteria. I can smell lunch being made nearby and I am hungry.

Apt — Yahoo certainly needs to show off a lot of cool stuff or its fate will be cooked.

No pressure, Blake!

“Personally, I am more bullish on Yahoo today,” he said. “What is Yahoo? Simple. It’s the premier digital media company. Period. Stop.”

Oh, if it were only that easy.

10:46 am: Irving pulls out his favorite slide, which looks like a chemistry test. It lists the various elements of the product strategy, with things like personalization, mobile, premium.

Now to Livestand, which is available on the Apple iTunes app store right now.

Don’t all rush at once!

Irving notes that Livestand is more than just an app — it is a platform.

In other words, Yahoo wants to help publishers publish online. Kind of a Facebook of content.

If Yahoo can pull it off, that is. (And, of course, unless Facebook decides to do the same.)

10:50 am: Livestand is an HTML5 “personalized living magazine.”

“This is the way Web pages are going to look,” declares Irving. Which is to say, heavy on photos, swoopy navigation, a television screen-like interface.

Irving uses the example of Surfer magazine, which is a good idea since waves always look pretty. Especially in a video-in-frame with Kelly Slater in Hawaii.

But, in essence, for anyone who has used Flipboard for years now, none of this is entirely different.

10:54 am: The look of what would be the Yahoo News page is actually much more interesting, since it is clearly a whole lot better than the Web page.

Irving also shows off a “living ad” — in this case, an unusually snuggly couple on a couch. It is cool, but creepy.

When launched, the ad has tap points. Irving — naughtily declaring about what is an ad, “I’ll tap that” — taps the lady’s butt, which would also have been my move. We learn about the jeans, of course.

10:58 am: Irving then shows off the ability to add feeds.

Next, something called “Cocktails.” First up, a developer tool called Yahoo Mojito and Yahoo Manhattan, which is a hosting service. The company will open-source both the technologies in 2012.

Irving brings up Mike Kerns, VP of Personalization & Social, who came to Yahoo when it bought the innovative sports fan site called Citizen Sports.

“We like to ship sh#t,” he notes. I like Mike Kerns immediately.

Kerns intros C.O.R.E. No, it is not a secret government organization that takes out fussy bloggers, who might be more critical than Yahoo execs would like.

In fact, it stands for “content optimization relevance engine.” Of course it does.

Simply put, C.O.R.E. is trying to link the right content or whatever to the right consumers and who likes what. Ladies like this, dudes like this. Apparently, “men of multiple ages” enjoy stories about golden chicken.

11:11 am: Kerns is moving on to social, especially its integration with Facebook. While much touted, sources tell me it has gone slower than expected in terms of use, but that it is improving.

Kerns talks about the idea of matching content to conversations to interests and, well, you know — the now exhausting world of modern media consumption.

The world in which you can no longer simply read an article and enjoy it — you must comment, share, discuss, parse, tweet.

Does anyone remember when you read something cool and just kept it to yourself?

Forget it, pal! It is a full-information society now and you better get on board and start poking your friends about every little thing.

(Personally, I plan on becoming a hermit in 3 … 2 … 1.)

11:18 am: Now Tim Parsey, who is Yahoo’s design head. He is hands down the most delightful exec the company has had in a while, mostly because he loves to smirk adorkably.

He shows off Yahoo’s first original design, which was a dull list. And then another really bad logo. But Parsey loves it! It’s kitschy!

Smirk attack!

Parsey moves into what has to happen now, which is to deliver a much more emotional experience and a much better designed one. He uses words like “humanism.”

Say what? He is right — Yahoo has for too long completely ignored design as an important part of the experience.

That’s why Flipboard was so quickly touted — it was pretty and fun. And it is why everyone is simply forced to love Apple products.

11:22 am: Parsey even has a code for it, called REM — for rational, emotional and meaningful.

He shows off a weather app. People take photos and they can be used in the app. Then Yahoo Mail for the iPad, whic is also handsome with photos and video. Livestand, also pretty.

“Great way to differentiate,” says Parsey. He calls it “one Yahoo!” Indeed.

11:35 am: I’ll admit it. After Parsey-fest, I zoned out for a sec when IntoNow dude, Adam Cahan, comes up.

Donut emergency!

Back to IntoNow, it’s the television indexing service that Yahoo bought in April.

Essentially, more ways to watch the media — in this case, video — and do 53 other things at the very same time. Memo to humanity: We will all be paying continuous partial attention for the rest of eternity.

Like I said: Hermitage!

11:41 am: Product dude Irving is back, making a point that, despite all the public mishegas, Yahoo has been busy at innovating.

A redo of email, better search, social “Facebar” with Facebook, Flickr for Google Android.

Irving is correct — Yahoo’s engineers have been hard at work and deserve kudos for doing so, even with attrition issues, stock declines and questions about the company’s very future being debated daily.

The problem is that too many of these improvements are mostly incremental and essentially table stakes for tech companies, most of whom have introed many more significant innovations in the same time frame as Yahoo has.

Google did Android, Google+ (as well as some notable failures). Microsoft did Kinect, Windows Phone, Windows 8. Amazon did Kindle Fire. Facebook did a range of major updates, as it has grown like a weed.

And there’s Apple. You might have heard of the iPhone and the iPad.

You get my point. Yahoo’s Product Runway today is well done, but what it really needs to be is just the beginning of a take-off.

11:48 am: Now Q&A time.

The first question is what took so long to get Livestand out, the second is why should people use Livestand since Flipboard and others have already been around for a dog’s age.

I ask about design — mostly because I want Parsey to use the word “delicious” a lot — and also about all the turmoil around the company and its impact on product creation. (I decide not to mention that Yahoo blew its acquisition of the bookmarking site, Delicious, and then sold it.)

Parsey delivers on the delicious scale, noting that Yahoo must have one design experience and yet has a lot of different interfaces. In other words, it cannot be Apple, but it can feel a lot more cohesive.

Irving talks a little bit around the obvious elephant in the room — the future of Yahoo — noting that the product staff was trying to focus and forget the storm going on outside.

“We have dreams about what this company can be,” says Irving.

You and me both, brother.

12:04 pm: More questions that are too detailed for my tastes, since they have delivered lunch and I can see it and I am ravenous.

As Parsey might say: It looks deliiiiiccccious.

Now, let’s hope Yahoo can do even more tasty stuff.

]]> http://allthingsd.com/20111102/liveblogging-yahoos-product-runway-are-you-in-or-out/feed/ 0 http://allthingsd.com/20111026/out-of-the-factory/ http://allthingsd.com/20111026/out-of-the-factory/#comments Wed, 26 Oct 2011 22:18:07 +0000 Evan Ramstad and Loretta Chao http://allthingsd.com/?p=137078 Asia’s place in the global high-tech industry has broadened and become more sophisticated, a shift from its decades-long role as a cheaper builder of gadgets and software than North America and Europe.

U.S. companies such as Apple Inc., Google Inc., Amazon.com Inc., Microsoft Corp. and Facebook Inc. are driving the tectonic change from personal computers to mobile ones, chiefly in the shape of smartphones and tablets. But Asian companies are in the forefront of innovation, designing and building the devices and many of their key components, from chips to screens.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20111026/out-of-the-factory/feed/ 0 http://allthingsd.com/20111025/yahoogle-redux-why-project-porcupine-means-someones-definitely-going-to-lose-an-eye-this-time/ http://allthingsd.com/20111025/yahoogle-redux-why-project-porcupine-means-someones-definitely-going-to-lose-an-eye-this-time/#comments Tue, 25 Oct 2011 13:07:20 +0000 Kara Swisher http://allthingsd.com/?p=136354 Please see this disclosure related to me and Google.

You gotta hand it to those geniuses over at the Googleplex, thinking up adorkable names for all their various plots and schemes.

And for its latest look-see of the Yahoo situation, it has revived an old one: “Project Porcupine,” presumably from the old joke about how you hug a porcupine.

Very carefully.

Or maybe you don’t hug it at all, which is why all the rumors about the search giant hooking up with some unnamed private equity firms have been so unclear and, well, hard to grab ahold of.

According to sources, there are three clear aspects of what is actually going on:

1. Interest in using Google’s vast cash hoard as part of an investment it would make in a deal — meaning the company was approached, which it is, often.

2. Desire of Google’s crafty Chief Business Officer Nikesh Arora to perhaps find a clever way to get ahold of Yahoo’s display inventory to add to Google’s own fast-growing DoubleClick display advertising subsidiary — meaning Arora has been making the rounds at Yahoo to gauge interest.

3. Pure enjoyment in messing with Microsoft execs — who are now allied with Yahoo via its Bing search technology — as well as getting up any price the software giant would have to fork over to be part of any consortium that will be cobbled together in what is sure to be a hopelessly complex deal.

Whether incoming or outgoing or just an early version of Mischief Night, any one of these options — while interesting to contemplate — is certainly fraught for Google.

Remember the trouble three years ago when Google tried to do a simple search-advertising partnership with Yahoo, in order to pull it out of the clutches of Microsoft?

That effort ended with a resounding oh-no-you-don’t by the Justice Department, which promised an antitrust lawsuit was awaiting such a move to bring together the No. 1 and No. 2 search services.

And if it was a no-no then, any formal relationship or even arm’s-length investment in Yahoo by Google would inevitably be more closely scrutinized this time around.

In fact, what I wrote in 2008 applies a dozen times more emphatically today:

“It is bad for advertisers, it is bad for consumers, it is bad for innovation, no matter how well-intentioned Google is.”

Fast forward to today, after Google has already played a worrisome game of chicken with regulators over a number of acquisition deals — which makes trying to bring back Yahoogle akin to reaching for the third rail.

But that’s not what it’s going to do, in truth, because — even though Yahoo is still a tempting target — there is usually only one outcome to hugging a porcupine.

Ouch.

]]> http://allthingsd.com/20111025/yahoogle-redux-why-project-porcupine-means-someones-definitely-going-to-lose-an-eye-this-time/feed/ 0 http://allthingsd.com/20111019/dave-goldberg-sukhinder-singh-cassidy-brian-chesky/ http://allthingsd.com/20111019/dave-goldberg-sukhinder-singh-cassidy-brian-chesky/#comments Thu, 20 Oct 2011 05:52:02 +0000 John Paczkowski http://allthingsd.com/?p=133873 If you don’t want to call it a “bubble,” that’s up to you. But it’s clear that what’s happening in Silicon Valley is different from what’s happening just about everywhere else: The optimism of the start-up economy seems endless, and investors will throw money at new companies just as quickly as they’re founded.

Three of the area’s most interesting entrepreneurs join us to share their take on the Valley’s culture and commerce, and how they’re trying to export that as they venture into Asian markets.

Dave Goldberg had already built a successful company — Launch — before selling it to Yahoo; now he’s trying for a second act with SurveyMonkey’s very profitable self-serve surveys. Sukhinder Singh Cassidy traded a high-flying job at Google for a chance to build her own company at Joyus, a new take on e-commerce. And Brian Chesky’s Airbnb has become one of the era’s iconic success stories: the vacation rental service seems to have moved from concept to billion-dollar hit overnight.

1:52 pm: Peter Kafka takes the stage followed by SurveyMonkey’s Dave Goldberg, Joyus’s Sukhinder Singh Cassidy and Airbnb’s Brian Chesky.

“This is relaxing because I don’t have to ask you whether you’re buying or selling Yahoo,” Peter quips.

1:53 pm: A first question about the bubble in Silicon Valley: Why are so many people throwing money at companies like the ones you people run? Are you aware that what’s going on in Silicon Valley doesn’t really look like the rest of the world?

Airbnb’s Brian Chesky’s fields this one, but answers it with a pitch for Airbnb.

Peter circles back and puts the question to him again.

Another non-answer from Chesky.

1:57 pm: Peter moves on to Joyus’s Sukhinder Singh Cassidy who seems more willing to answer the question at hand.

“There is a tremendous amount of revenue traction against companies who are getting premium valuations,” she says. “Look at Groupon, Zynga … their revenue traction is real. People are spending money on those services … But what’s most interesting is that when you have that many companies innovating and growing, you end up with a talent war and what you really see is a bubble around talent. That’s more what concerns me. I don’t look around and say wow, people who are non-substantive are getting funded, I look around and say wow, I’m competing for talent with Google and Facebook.”

2:00 pm: SurveyMonkey’s Dave Goldberg jumps in. “I think the difference with companies being created now is that not only are they getting revenue traction very quickly, but they have great margin structures. So they will be quite profitable, when they choose to be. … A lot of the the valuations are real. I think people are going to be surprised by how many big businesses are being created right now.”

2:03 pm: Sukhinder Singh Cassidy: “If there is a lot of capital available, you do want to take it and you take more than you need. But the rate at which you spend it is a fundamentally different question. … the glory of a high valuation is a means to an end. It’s more about saving for a rainy day.”

2:05 pm: Question for Airbnb’s Brian Chesky: Is anyone counseling you to scale back your rounds?

Chesky says no. Talks a bit about investing ahead of growth.

Peter circles back, “What do you use the money for?”

Chesky explains that Airbnb is opening lots of local offices around the world. The company is also investing quite a bit in product and in marketing as well.

2:07 pm: In the first bubble, the idea was to go public. That phenomenon doesn’t exist anymore. Does the fact that there really isn’t an IPO window anymore affect your planning?

Goldberg: “If you’re building a long-term business, you don’t really need to worry about the IPO window. People are building businesses that don’t need to go public. It’s a huge headache to run a public company. I think a lot of people could go public today, but they’re choosing not to.”

2:09 pm: Do you think we’ll see a boom in start-ups in Asia, or do you think there’s something special about Silicon Valley?

Chesky believes we will. He notes that there are start-up cultures emerging abroad, in Berlin for example.

Sukhinder Singh Cassidy says she sees huge pockets of innovation in lots of emerging markets. But she notes that many of the entrepreneurs in those markets got their “sea legs” in Silicon Valley.

“What I see now is people who’ve lived in the Valley moving back to these emerging markets and bringing their experiences back with them,” she says.

2:16 pm: Can a guy in a garage still build a successful company?

Sukhinder Singh Cassidy: “I think there is always that possibility. If you’re smart enough, you can make it happen.”

2:19 pm: On to the Q&A …

2:19 pm: Question for Chesky: Can you extend your business model into other categories?

Absolutely, says Chesky. He talks a bit about how Airbnb has already expanded to more categories (whole-home rentals, sublets, boats, cars etc.).

Chesky’s next vertical? He won’t say. “We’re going to take cues from the community.”

2:24 pm: How do you bring your success in Silicon Valley to Asia?

Goldberg says it’s all about talent: It’s hard to hire people locally and it’s even harder to hire them abroad. So really, you need to tap into the entrepreneurs around you. … It’s a real challenge in places like China. It’s definitely not easy.

2:30 pm: That’s it. Up next, a demo from Kibot.

Silicon Valley’s Entrepreneurs

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]]> http://allthingsd.com/20111019/dave-goldberg-sukhinder-singh-cassidy-brian-chesky/feed/ 0 http://allthingsd.com/20111017/all-eyes-on-yahoos-q3-earnings-tomorrow-with-results-under-pressure/ http://allthingsd.com/20111017/all-eyes-on-yahoos-q3-earnings-tomorrow-with-results-under-pressure/#comments Mon, 17 Oct 2011 22:23:03 +0000 Kara Swisher http://allthingsd.com/?p=132860

Tomorrow, after the markets close, Yahoo will announce its third-quarter earnings, perhaps one of its more important reports in recent years.

Wall Street analysts are expecting the Silicon Valley Internet giant to report earnings of 17 cents per share on $1.07 billion in revenues.

But whether or not Yahoo has beat expectations will be less scrutinized than information about the state of Yahoo’s key search and display advertising businesses, as well as other user metrics.

It is at those numbers that a range of players — including major shareholders, possible bidders and media — will be looking to see just how badly the company’s business has fared with all the turmoil of late.

That has included the firing of its CEO Carol Bartz, a massive strategic review that includes the possibility of a sale to a range of mostly private equity buyers, a persistent attrition problem and a worry that the company continues to drift in its product innovation, even as others have surged.

Last week, I reported that Yahoo had finally selected an executive search firm to help it find a new CEO, which many think is a difficult task given the uncertain situation.

A series of worrisome trends across its ad businesses over several recent quarters has some looking at the company for possible purchase with some skepticism.

“What if it is too broken to fix, what if trends to Google’s and Facebook’s premium offerings is too overwhelming?” said one potential bidder for Yahoo. “There are a lot of what-ifs at Yahoo.”

By comparison, Google posted impressive earnings last week.

Yahoo stock closed at $15.70 today, down 1.3 percent.

]]> http://allthingsd.com/20111017/all-eyes-on-yahoos-q3-earnings-tomorrow-with-results-under-pressure/feed/ 0 http://allthingsd.com/20111017/2011-technology-innovation-awards/ http://allthingsd.com/20111017/2011-technology-innovation-awards/#comments Mon, 17 Oct 2011 20:10:00 +0000 John M. Leger http://allthingsd.com/?p=132996 If you think start-ups have a monopoly on innovation, think again. Some of the world’s biggest companies are among the winners of The Wall Street Journal’s Technology Innovation Awards this year.

The winners include such big names as International Business Machines Corp., Novartis AG, Intel Corp., Abbott Laboratories, Xerox Corp. and runners-up Hewlett-Packard Co. and Yahoo Inc.

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]]> http://allthingsd.com/20111017/2011-technology-innovation-awards/feed/ 0 http://allthingsd.com/20111013/exlcusive-yahoo-hires-heidrick-struggles-for-ceo-search/ http://allthingsd.com/20111013/exlcusive-yahoo-hires-heidrick-struggles-for-ceo-search/#comments Thu, 13 Oct 2011 23:53:18 +0000 Kara Swisher http://allthingsd.com/?p=132200

According to sources close to the situation, Yahoo has hired Heidrick & Struggles for its CEO search.

It will be a dicey job, since the effort is on a separate track than the Silicon Valley Internet giant’s wide-ranging strategic review, which is looking at a range of options including the sale of the company.

That’s why many see the move as window-dressing for Yahoo’s board, rather than any real interest in hiring a new leader.

Sources said that will make the search a difficult one for Yahoo, since any CEO candidate would be coming into a very volatile situation. In addition, Yahoo has been struggling — Struggles, struggling, get it? — to recharge its advertising and search business and also its product innovation cycle.

That’s the reason — among several others — that the board of Yahoo suddenly fired its former CEO Carol Bartz last month.

Heidrick has worked for Yahoo previously, in the now ill-conceived placement of Bartz by partner John Thompson. A different partner will be handling this assignment, sources said.

The pool of possible CEOs to lead Yahoo is not a large one, but could includes execs such as Juniper Networks CEO Kevin Johnson, Chegg CEO Dan Rosensweig, Skype CEO Tony Bates, John Pleasants of Disney’s Playdom, Hulu CEO Jason Kilar, Facebook COO Sheryl Sandberg and any number of top Google execs, as well as Yahoo board member and Akamai President David Kenny.

(I am, of course, waiting by the phone for the call.)

A Yahoo spokeswoman declined to comment.

]]> http://allthingsd.com/20111013/exlcusive-yahoo-hires-heidrick-struggles-for-ceo-search/feed/ 0 http://allthingsd.com/20111013/groupons-third-and-quieter-co-founder-brad-keywell-talks-about-chicago-ideas-week-video/ http://allthingsd.com/20111013/groupons-third-and-quieter-co-founder-brad-keywell-talks-about-chicago-ideas-week-video/#comments Thu, 13 Oct 2011 21:00:24 +0000 Kara Swisher http://allthingsd.com/?p=132030

I was in the Windy City earlier this week to appear at a panel on the future of news for a newly-born citywide event called Chicago Ideas Week, which is the brainchild of Brad Keywell.

Never heard of Keywell? That’s perhaps because he is the third founder of Groupon and — kudos to him! — the one who has not made some oh-no-he-didn’t controversial statement during the daily deal start-up’s ongoing rocky IPO process that has landed it in hot water with regulators.

That would be Keywell’s other founders, CEO Andrew Mason and Chairman Eric Lefkofsky, with whom Keywell built Groupon into the powerhouse social buying site it has become.

While on the Groupon board, Keywell plays a less prominent role there than the other two. He is busy at his and Lefkofsky’s investment firm, Lightbank, as well as engaged in a lot of civic efforts.

That includes the first Chicago Ideas Week, a massive, citywide event that Keywell pushed for and has also been funding, to bring the city more than 100 prominent speakers on a wide variety of weighty topics.

As it describes itself, the undertaking is a “celebration of ideas, innovation, and community designed to ignite, inspire, connect, and catalyze our community around great ideas and great people.”

In other words, put Chicago on the innovation map — it’s no surprise that tech topics are woven all through the talks, which end Sunday.

Here’s Keywell discussing the effort, as well as the struggle to create a significant tech ecosystem away from the Death Star of Silicon Valley.

He is an energetic speaker himself, as you will see below, just not about Groupon:

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