If you’re going to trash the competition in the online advertising business in a widely quoted press interview, it’s probably a good idea to check if someone on your staff was, you know, buying up the very product you dissed.

That’s precisely the case with Yahoo CEO Carol Bartz, whose shoot-from-her-hip stylings in a wide-ranging chat with Reuters, published earlier this week, took aim at–among many others–Apple and its mobile iAds product.

“That’s going to fall apart for them,” she said to Reuters, apparently referring to reports that the perfection-obsessed tech giant would involve itself in the creative part of ads on its service. “Advertisers are not going to have that type of control over them. Apple wants total control over those ads.”

At an Apple event in April, Apple CEO Steve Jobs was certainly insisting on beauty and usefulness, as well as on deep interactivity within the app itself, unlike other mobile ads that take a user from the app to a Web site.

It’s definitely a clear strategic direction by Apple, exerting more control as they do with its App Store, and many are not going to like it.

Thus, Bartz, whose company has been lagging in the mobile-ad arena behind both Apple (AAPL) and Google (GOOG), took the obvious shot.

Except, as you can see below, Yahoo (YHOO) bought one of many iAds last week within the Pandora music app, which went live this week, touting its Sportacular iPhone app.

What adds a level of irony here is that Bartz, in another interview, in The Wall Street Journal, this week, continued to compare Yahoo to Apple and herself to Jobs, when insisting investors be patient with the Silicon Valley Internet giant’s continued lackluster performance.

According to the Journal:

“Apple’s stock-market capitalization was ‘dead a– flat’ for a number of years after Mr. Jobs returned in 1997, Ms. Bartz said in a wide-ranging interview on Wednesday. ‘You don’t come in and do fairy dust. You upgrade technology, you see what drives engagement,’ she said.”

Bartz has used this comparison a lot over the last year–although I am not sure it is the best idea unless she is certain there is a golden iPod-like innovation coming out in the end for Yahoo.

The iHoo? I think not.

BoomTown has a call into Yahoo PR, on whose last nerve I am working this week, for an explanation.

And here is the lovely iAd Yahoo bought:

When cards really attack

I’m intrigued, though, by the idea that the iPad, and eventually other tablet devices will give rise to a hybrid medium—call them book apps—that mix text with video, sound and game-like interactivity.

After sampling several early examples of these books apps, I’ve seen some tantalizing hints of the creative possibilities for authors and publishers who recast themselves as app makers.

I focused on kids’ books because they’re among the first to cleverly exploit the iPad’s capabilities and their rich illustrations can look great on the iPad’s color screen. It also helped that my 7-year-old daughter and 3-year-old son were fascinated with the iPad, looking for any opportunity to smudge up its touch screen.

The most interesting of the book apps I found in Apple’s (AAPL) online App Store was “Alice for the iPad,” a 52-page version of “Alice in Wonderland” by a small company called Atomic Antelope that costs $9.99. (A shorter “lite” version of the book is free.) The color illustrations for “Alice for the iPad” are based on the elegant wood engravings Sir John Tenniel did for the original 19th century “Alice’s Adventures in Wonderland,” which, like the text of the book, are now in the public domain.

White Rabbit’s pocket watch swings as you tilt the iPad.

The first sign there’s something different about “Alice for the iPad” comes when you flip to its third page, where the White Rabbit’s old-fashioned pocket watch, dangling by its chain from text, starts swinging whichever way the reader is holding the iPad. Other animated objects appear on later pages—a jar of marmalade, and collection of mushrooms—and move when you tilt the iPad or touch an object and drag it across the screen.

The animations can be predictable. On a page where Alice eats a cake that shrinks her body, a pile of cupcakes falls to the bottom of the screen, accumulating in an undamaged little pile, an action repeated on many pages with other objects. How much cooler would it be for the cupcakes’ frosting to get messy when they drop? I wanted to be able smear them all over the text on the page.

Still, there are wonderful moments in “Alice for iPad.” My favorite is when Alice is assaulted by a pack of flying playing cards. Alice’s arms and body bobble as a blizzard of cards slams into her. My daughter and I couldn’t resist trying to make the cards pile up on her by angling the iPad just so.

There’s something fitting about the sensation of gravity that the animations bring to a story with so much body-shrinking and mind-blowing going on it. It will be exciting to see what the Atomic Antelope crew does with their next project: an iPad version of “The Wonderful Wizard of Oz.”

“The Lorax” ($3.99, also for the iPhone) from Oceanhouse Media is a vivid rendition of the Dr. Seuss classic, with some nice features to assist early-readers.

The app lets you read “The Lorax” like a traditional book, but with fun atmospheric sound effects like the sound of wind blowing and old crows cawing.

With my son, I choose another option that reads the book to him in a narrator’s voice. Words on the page were highlighted as the narrator said them.

While there’s no animation, one nifty feature of “The Lorax” app lets readers tap objects, like faucets, rocks and pails, to hear their names sounded out. My son was particularly fond of tapping to hear the words “Grickle-grass” and “Once-ler” over and over again.

The iPad version of “The Lorax” was the most static of the book apps I looked at, but considering the modest interactivity it brought to a lovely reproduction of a classic kids’ book, it was worth the price.

“Miss Spider’s Tea Party for the iPad” ($9.99) from Callaway Arts & Entertainment is based on a picture book about a lonely, tea-sipping spider that longs to make friends with other insects. The app narrates the story to readers or lets them read it on their own. Bumblebees, beetles and other illustrated characters make noise and move when readers tap on them—another big hit with my son.

The app also lets you passively experience the story as a short animated movie. With another option, you can assemble puzzles or color in paintings featuring the story’s characters.

“Miss Spider’s Tea Party” illustrates an approach I predict many book-app creators will take: tacking a lot of multimedia material onto an electronic book, without paying enough attention to weaving it all into one coherent story.

This app can’t decide whether it’s a book, a movie or a game.

I believe it’s a matter of if, not when, the great book apps for iPad will show up. I wager the good book apps will be original works, rather than adaptations of existing books, with an electronic version built from the ground up that will take advantage of the device. For now, “Alice for iPad” is the coolest book app out there.

Walter S. Mossberg will return June 24. Email Nick Wingfield at nick.wingfield@wsj.com.

BoomTown liveblogged Yahoo’s first-quarter earnings call with analysts today, which started at 2 pm PT.

Earlier today, Yahoo said its net income spiked to $310 million, or 22 cents a share, in the period.

Revenue, after subtracting what Yahoo (YHOO) pays in advertising commissions, was $1.13 billion.

Wall Street was expecting earnings of nine cents per share and net revenue of $1.17 billion.

Here we go:

2:02 pm PT: Investor lady said stuff. But, yay, Yahoo CEO Carol Bartz was on the call, so–not that I don’t enjoy CFO Tim Morse, also on the call–it promised to be much livelier.

Bartz got on first and called it a “solid” quarter. Nothing fancy, but pretty accurate.

She quickly turned it over to Morse for the numbers.

It’s all in the charts and slides here, but Morse did stress the importance of the search and advertising partnership with moneybags Microsoft (MSFT).

It is like cost-savings manna from heaven–$78 million in this quarter alone–for Yahoo. In fact, it’s the gift that will keep on giving, noted Morse, although not in those words.

Also, advertising, especially display, is back! Search, not so much. Revenue per search down, share down–a true weakness for the No. 2 search player.

More numbers from Morse, who began to lull me into an afternoon nap, so there was joy on my part when he said: “On a final note…”

Overall, Morse said that things are looking up.

2:21 pm: Bartz is back, noting first that the ad market is looking up and that marketers are looking to get creative with Yahoo’s “digital canvas.”

“Science, art and scale,” said Bartz.

I had no idea Yahoo was Rembrandt!

She used examples of work the Silicon Valley Internet giant is doing with retail giant Walmart (WMT).

Search is not so pretty: “I don’t think it is any secret that we have had a hard row to hoe in search,” Bartz said.

The bad crops metaphor is right!

2:27 pm: Microsoft deal stuff, though Bartz gave few details.

Suddenly, she threw a bit of a tantrum about those who focus too much on Yahoo executive talent, or–actually–the departure of executive talent from the company, which she called “borderline” obsessive.

I think she just took a smack at my reporting and called me the Vincent Van Gogh of the Internet, since All Things Digital breaks most of those stories.

Memo to Carol: I have covered both goings and comings. Did you miss the Blake Irving piece just this week?

And, frankly, when you lose your chief ad sales person and CTO in a month, it’s kind of a big story.

I am a bit obsessed with Yahoo, it is true, but I still have both ears. (Unless Judy comes at me with some scissors for giving you a hard time!)

End of my tantrum.

Bartz then moved onto details about programming and other features at Yahoo–sports, mobile, Facebook integration–and the company’s recent content deal with Hollywood producer Ben Silverman.

She called what he makes for Yahoo “video snacks.”

Smacks and snacks!

2:37 pm: Q&A time!

First up, a question about search and display.

Morse answered: Display great, search not.

Next: Flat page views and how do you increase engagement?

Bartz will “take a whack at that,” since she is clearly in a whacking mood.

Engagement is a big focus and Yahoo is working on it: More interactivity, social networking, better targeting.

Bartz said she has been getting a lot of diet recipes in that targeting, although she has no idea why. I think she looks great!

Next: What’s up with search declines again?

Morse: We are working on it!

Bartz: “We’re not a long-tail buy.”

Now, a tax guidance question (which means I headed to the bathroom at this point).

Next: What up with international? Also, another question about search decline trends–there has to be a morning after!

“We’re not fighting comScore (SCOR) on this,” said Bartz. Good idea.

“We have a lot of effort going into this,” she added. Stabilization is apparently the new up.

2:50 pm: I missed the last question because I had been looking at an OMG! story about actress Sandra Bullock not wearing her wedding ring. What can I say, except that Yahoo content is a lot more interesting than this earnings call.

But essentially, Bartz was talking about making Yahoo’s internal operations more consistent, which has been one of her favorite memes.

There was also a China question, but Yahoo is not running the show there.

More about the search alliance with Microsoft and its costs.

“There are a lot of moving pieces on this,” said Morse, which means he does not know yet.

He added that Yahoo might buy back some stock, but did not give specifics.

More search questions, this time about how Yahoo sells it. Bartz sounded weary of the questions about this key arena.

I can almost hear the internal dialogue in her head: “WHY THE #@&%*# ARE THEY SO BORDERLINE OBSESSED!?!”

Face it, Carol, we can’t get enough of your search non-answers.

Bartz moved onto Yahoo’s strength in the content space. She is right about this, which is Yahoo’s major differentiation.

And again she stressed the artistic canvas metaphor, for both content and advertising.

Yahoo is the Da Vinci of Digital! The Michelangelo of Microchips! The Picasso of Pixels!

I am borderline choked up at the thought of it.

So here come the folks who want to invest in iPad apps. Last week, a U.K. group announced a very small fund to promote iPad apps in that country. Today, we hear from AppFund, which says it has a “multi-million” kitty that will allow it to invest any amount between $5,000 and $500,000 in new iPad apps.

The two obvious questions here are:

• How does this differ from any of the iPhone app funds we’ve already heard about, specifically Kleiner Perkins’s $100 million iFund? After all, one of Apple’s (AAPL) key selling points for the iPad is that all existing iPhone apps will work on it from Day 1.
• If you really only need $5,000 or so to help you build your app, does it really make sense to give up equity to get it?

Daniel Klaus, who is launching the AppFund with Kevin Wendle (bios here), says his venture differs from iFund in that it has a smaller scope–the iFund’s minimum investment starts at $100,000–and that his group is willing to buy pieces of individual apps instead of their parent companies.

As to the economics? Hard to tell, since the AppFund guys aren’t providing any transparency into their offer to developers (as opposed to groups like Y Combinator, which offer entrepreneurs a fairly boilerplate deal).

In any case, if you’re interested, here’s what the AppFund guys are looking for in an app:

• Target early adopters and urban dwellers
• Target users 16-39 with higher incomes
• Incorporate video, audio, interactivity, and other capabilities unique to the iPad
• Have a long shelf life
• Have the potential to become “hits”

Microsoft co-founder Bill Gates–who has been devoting most of this time to philanthropic work via the Gates Foundation–has just launched an ambitious blog and information site.

He is calling it “The Gates Notes: An Inside Look at Global Matters,” but BoomTown has officially nicknamed the site–which you can see on a screen grab below–All Things B(ill) or perhaps the more hip-hoppy All Things G(ates) today.

Here’s a note about the effort, sent out today:

Today, Bill Gates launched The Gates Notes (www.gatesnotes.com), a website designed to share his learning and excitement with his new foundation work along with his personal interests in areas such as energy and the environment. Bill has been spending time learning a lot from thought leaders in their fields. He has been taking notes and sending emails, and the site is a collection of the conversations, books, articles, trips and people who have inspired and informed Bill. The site is designed to encourage people to dig deeper–to explore questions from multiple angles. Bill will update the content on an ongoing basis, and we also plan to add some features in the near future to make the site more interactive such as RSS and commenting/discussions.

And in a welcoming note on the site, Gates writes:

Since leaving my fulltime job at Microsoft to dedicate more time to our foundation, a lot of people have asked me what I’m working on. It often feels like I’m back in school, as I spend a lot of my time learning about issues I’m passionate about.

I’m fortunate because the people I’m working with and learning from are true experts in their fields. I take a lot of notes, and often share them and my own thoughts on the subject with others through email, so I can learn from them and expand the conversation.

I thought it would be interesting to share these conversations more widely with a website, in the hope of getting more people thinking and learning about the issues I think are interesting and important. So, welcome to the Gates Notes.

The site has a spare and elegant look–dare I say, it looks as if it could have been designed by Apple (AAPL)? Interactivity is limited at this point and social networking nonexistent.

The site includes several sections: “What I’m Thinking About” (cheery things today like pandemic response and Haiti), “What I’m Learning” (He loves the book “Super Freakonomics” and lectures from global health professor Hans Rosling), “My Travels” (a video about a recent trip to see health clinics in India), “Curious Classrooms” (questions Gates answers from students), and “Infrequently Asked Questions” (more questions he answers).

Yesterday, Gates officially joined Twitter and restarted his Facebook account.

This has all been in anticipation of this site’s launch, which appears to be part of an effort by Gates to raise awareness of what he has been up to since he stepped down from day-to-day involvement at Microsoft (MSFT) in mid-2008 and stepped up his ambitious philanthropic work.

Here’s the homepage screen (click on it to make it larger):

The new whitehouse.gov site promises more interactivity than that of the Bush administration, with a presidential blog as well as a briefing room, where President Obama will give a weekly video address. A “citizen’s briefing book” will allow users to add suggestions to posted proposals so that heads of agencies and the president will see them, and another feature called Your Seat at the Table lets users follow the proceedings of government meetings and add their commentary.

Read the rest of this post

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s an interview I did with Barry Diller, the always clever chairman and CEO of IAC, the Internet conglomerate whose holdings include Ask.com, Match.com and many others.

The video of the interview is in three parts, all of which I will post this week.

After a bruising court battle with shareholder and cable mogul John Malone of Liberty Media (LINTA) over the last year, Diller finally broke apart IAC (IACI) just six weeks ago. His reason: The company had become too complex and its stock had suffered due to the operating confusion.

In this second part, Diller talks about the dire digital crossroads in Hollywood, the prospects for the Ask.com search service, his take on the Yahoo-Microsoft takeover battle (no one is a winner here), Google’s dominance, Facebook’s hype (Diller calls the hot social-networking site the “princess phone” of this era) and the power of interactivity.

“The amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small,” Bronfman said during an earnings call today. “There is what I would call a very paltry licensing fee per song. … I think the industry as a whole needs to take a very different look at this business and participate more fully and in a much more partnership way. And if that does not become the case, as far as Warner Music is concerned, we will not license to those games.”

Leaving aside, for a moment, the question of why Warner (WMG) agreed to a royalty scheme it apparently finds unappealing, you’ve got to wonder why the company persists in lambasting these new media that so obviously invigorate the industry and promote its music. And beyond that, you’ve got to wonder why Warner is doing it at a time when games like Guitar Hero and Rock Star are clearly becoming viable distribution outlets.

Of course, we already know the answer. Bronfman himself gave it to us in a speech last year. “We used to fool ourselves,” he said. “We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result, of course, consumers won.”

“The amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small,” Bronfman said during an earnings call today. “There is what I would call a very paltry licensing fee per song. … I think the industry as a whole needs to take a very different look at this business and participate more fully and in a much more partnership way. And if that does not become the case, as far as Warner Music is concerned, we will not license to those games.”

Leaving aside, for a moment, the question of why Warner (WMG) agreed to a royalty scheme it apparently finds unappealing, you’ve got to wonder why the company persists in lambasting these new media that so obviously invigorate the industry and promote its music. And beyond that, you’ve got to wonder why Warner is doing it at a time when games like Guitar Hero and Rock Star are clearly becoming viable distribution outlets.

Of course, we already know the answer. Bronfman himself gave it to us in a speech last year. “We used to fool ourselves,” he said. “We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result, of course, consumers won.”