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

Yes, that’s right — 2013!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Rakuten is set on challenging Amazon’s global dominance by appealing to the third-party merchants Amazon works with today and by growing it’s digital content business to compete with the Kindle.

We recently learned about the company’s strategy through the eyes of Neel Grover, the CEO of Buy.com, Rakuten’s online shopping subsidiary in the U.S.

For now, Rakuten is admittedly Amazon’s much smaller competitor, though it is dominant in Japan.

The publicly held company is worth $14.5 billion compared to Amazon’s $85 billion market capitalization, and it pales in comparison to Amazon’s mass in the U.S. Buy.com is ranked 410th here versus Amazon’s sixth-place standing, according to Compete.

But Grover said Rakuten has a two-part plan for going up against Amazon.

First, it will target and partner with third-party resellers and merchants.

Amazon does this, too, but often ends up competing with the merchants because it has its own warehouses and products that it is selling, he said.

“Oftentimes Amazon will compete with the retailer. [Third-party merchants] teach Amazon what to buy and sell, which is ultimately not good for the merchant,” he said.

Rakuten, on the other hand, does not own any warehouses or any inventory itself and instead gives retailers — brick and mortar or e-commerce — the tools and traffic to support their own businesses.

In May 2010, Rakuten acquired Buy.com.

“I sought out Rakuten. … I thought their model was one that would give us a unique differentiator in the U.S. and we could learn and bring their model to our site and customers,” Grover said. “We are still in the final stages of transforming, and it’s taken a bit of time to get it transformed.”

But, he confidently added, “It will win out in the long-term.”

A similar approach is being taken by eBay, another e-commerce giant in the U.S.

The second part of Rakuten’s plan is to go after Amazon’s growing digital business, spanning music, e-books and other content.

In November, the Japanese company purchased Kobo, a runner-up in the e-reader race behind the Kindle and Barnes & Noble’s Nook. It paid $315 million in cash for the Canadian company.

Rakuten is banking on the Kobo in assisting with its move into providing downloadable media to consumers, starting with e-books.

At the time of the acquisition, Kobo CEO Michael Serbinis told All Things D that Rakuten will give Kobo the financial backing to grow internationally, as well as compete in the U.S.

“The U.S. is absolutely important. It’s fundamental. We have millions of U.S. users today, and we plan to grow that substantially, and internationally it represents a big opportunity as well,” he said.

Earlier this month, Buy.com started linking to Kobo from its site, so that consumers have the option of buying a physical copy of a book or a digital version. Other integration efforts are also under way.

It also wants to get into other digital content, like music. Back in 1999, Buy.com was one of the original sites to have a digital music store, but Grover said it was a pretty poor experience because of all the restrictions that record labels were mandating. A lot of that has now changed.

“We are definitely looking as a group at all digital content. … We are looking at different solutions, but today we have not continued on with our initial music store,” he said.

As with Kobo and Buy.com, acquisitions are always an option, he said.

“We’ll continue to look at everything that would make our business better. It hasn’t been shy over the past two years. We have a global vision to create an e-commerce marketplace offering all goods, and we continue to see that grow.”

And going up against Amazon, some serious growth is what Rakuten and Buy.com will need.

Travelers have used Airbnb to book a total of five million guest nights in the past four years, staying in spare bedrooms and empty homes around the world.

Even more impressive is that a majority of those bookings — four million — occurred in 2011 alone, according to the San Francisco vacation-rentals company.

Today, the start-up provided a number of metrics for how the company performed last year, and in the months since it raised $112 million, which valued the company at more than $1 billion.

The one figure Airbnb neglected to provide, however, was the number of renters who have applied to receive a $50,000 Host Guarantee, which would reimburse them for the cost of property damage, theft or vandalism.

In August, the company initiated a number of security features, including the guarantee, after a host had a particularly horrible experience with guests who ransacked her apartment and stole her identity.

A spokesperson said Airbnb doesn’t disclose the number of claims that have been submitted, but said that the overall number is much lower than it originally anticipated. “We think this is a testament to the quality and caliber of our community,” she added.

In today’s release, Brian Chesky, CEO and co-founder of Airbnb, said that reaching five million bookings demonstrates the demand for people all over the world to monetize extra space in their homes.

The closest comparison to Airbnb is likely Austin, Texas-based HomeAway, which reports results because it is a public company, even though it focuses more on renting people’s vacation homes, not their primary residences.

HomeAway did not have a comparable figure for homes rented, but it did say the vacation property market is growing quickly. In a 2010 survey it commissioned from Radius Global Market Research, it found that there were more than six million vacation properties in the U.S. and Europe that are rented for a fee to travelers for at least two weeks of every year.

According to the same survey, these vacation rentals generated more than $85 billion of annual rental income in 2010, or nearly $14,000 per property.

HomeAway’s marketplace includes more than 500,000 paid listings of vacation rentals in more than 145 countries worldwide.

In comparison, Airbnb says it lists more than 100,000 properties in 192 countries. Instead of charging for listings, it collects 3 percent of each reservation, and guests are charged 6 to 12 percent of the booking fee.

Here are some of Airbnb’s other numbers:

• More than 75 percent of all reservations in 2011 were international, with either the guest, host, or both located outside the U.S.
• The number of available listings increased 166 percent in 2011, and 70 percent of all listings are now located outside the U.S.
• In 2011, Airbnb added 24-hour customer support in 16 languages through email, live chat, and seven global toll-free phone numbers.
• The company launched 40 features in 2011 to bulk up trust and safety.
• Airbnb has offices in San Francisco, Hamburg, Berlin, and London, with new offices opening in Barcelona, Copenhagen, Milan, Moscow, Paris and São Paulo, Brazil.

And if you’re more of a visual learner, here’s the story in a graphic almost big enough to rent out:

The company has confirmed to All Things D that it is actively investigating several opportunities, and is in talks with several partners about gambling on the Internet.

A Zynga spokesperson provided this statement to AllThingsD:

“We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than 7 million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.”

As with any new entrant in the space, Zynga will have to fulfill several requirements, meaning any major rollout is still months away.

The San Francisco-based social games maker will have to wade through a maze of state, national and international regulations. It will have to secure the correct licenses, and it also needs the right technology to make betting over the Internet secure.

For either of these last two requirements, a partnership or acquisition of an online gambling organization or other technology would make the most sense, instead of starting from scratch.

However, the effort could easily pay off.

Zynga was one of the first online gaming companies on Facebook, and continues to dominate the platform today. If it is able to get its toe in the door, just as the laws change in the U.S., it could be a leader yet again.

Back in October, Zynga first started showing broad interest in the casino category.

Zynga founder and CEO Mark Pincus announced at a press event that the company was going to launch Zynga Casino, which would serve as a single destination on Facebook to build off its strong brand in poker.

Its first new game, which has not launched yet, will be bingo.

Until now, the company’s efforts have been limited to building social and mobile games that are given away for free and monetized through the sale of virtual goods.

Getting users to make bets and part with real money could prove difficult, even for a company that has so many dedicated fans.

One thing Zynga has going for it is that social games are frequently compared to gambling because of their addictive nature — both lure consumers into spending a few more dollars to continue playing.

The casino genre has also been quietly racking up big numbers on Facebook.

Besides Zynga Poker, which is the most popular poker game on Facebook, and one of the company’s longest standing titles, there are many other sleeping giants. Sean Ryan, Facebook’s director of game partnerships, has even called them “unbelievable monsters.”

Said Ryan: “It turns out that people are completely okay winning virtual currency that they can never cash out.”

If players actually have the chance to win money, who knows the size of the opportunity?

A Facebook spokesperson said the company does not necessarily see a future for gambling on the social network. “We don’t have any plans to get into real-money gambling,” she said.

It’s unclear if that eliminates others from experimenting. In the meantime, it hasn’t stopped game makers from exploring the category or the concept.

Last week, Seattle-based Double Down Interactive, which was named by Facebook as one of the most popular game makers of 2011, was acquired by video poker giant International Game Technology for $500 million. It has 4.7 million monthly active users playing a variety of games, including blackjack, slots, video poker and roulette.

The deal closely followed Caesars Entertainment’s purchase of Playtika, an Israeli game company known for its Facebook title Slotomania. Caesars bought the company in two stages, the first of which was rumored to be purchased for up to $90 million.

Caesars, which filed to go public in November, declined to comment because it is currently in its quiet period.

However, some of its plans were revealed in a document filed with the Securities & Exchange Commission. It said its Caesars and World Series of Poker brands are dedicated to online gaming, and will take advantage of real-money gaming as it becomes legalized. Right now, Caesars Entertainment offers games “for fun” in jurisdictions where online gambling is not yet legal, but has identified the legalization of online poker in the U.S. as “the largest opportunity in online gaming in the near term.”

Still, the biggest hurdle is the law.

Internationally, several countries have permitted gambling for some time, and those areas represent the most immediate opportunities.

But there are signs of the U.S. beginning to open up, too. On the day before Christmas, the Department of Justice gave the online gambling community an early present, according to a blog post written by Nelson Rose, a professor and lawyer.

“President Barack Obama’s administration has just declared, perhaps unintentionally, that almost every form of intra-state Internet gambling is legal under federal law, and so may be games played interstate and even internationally,” Rose wrote.

Essentially, what the Justice Department did was to issue a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests, according to an article in the San Francisco Chronicle.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures. So far, Nevada and the District of Columbia have moved quickly to enact laws. To get other state laws passed could be a lengthy process, especially during an election year.

In the meantime, launching games only in Nevada and D.C. doesn’t represent the big opportunity everyone was hoping for.

To be competitive against Caesars and IGT, Zynga may have to partner or acquire companies that already have the licenses in place or the necessary expertise.

Some of the more obvious candidates include Bwin, which operates PartyGaming.com and is traded on the London Stock Exchange; Betfair, and other operators, like Bodog, Bet365 and 888.com. Many are based in the U.K. and handle a variety of casino games and sporting contests there.

The entrance into a new market, such as gambling, would take substantial resources, and Zynga has them thanks to its public offering. In December, it raised $1 billion, making it the largest Internet IPO since Google.

So, will Zynga be the next “unbelievable monster?” Clearly, it is willing to try.

As the father of eight kids — now all between the ages of 12 and 21 — he knows a thing or two about the importance of finding the perfect place. (Note: Kaufer delicately calls family trips “adventures,” while getaways with his wife are “vacations.”)

Since then, TripAdvisor has become the online go-to destination for reviews of hotels from Barbados to bed-and-breakfasts in New York City.

In 2004, Kaufer sold the company to IAC for $210 million, setting off a somewhat complicated operating journey. A year later, TripAdvisor spun out of IAC as part of Expedia. It remained a division within the online travel agency until last month, when it broke off into an independent publicly held company.

Today, the Newton, Mass.-based company has 1,100 employees, attracts more than 50 million unique visitors and has published more than 60 million reviews. It trades on the Nasdaq under the ticker symbol “TRIP,” while Expedia continues to trade under the symbol “EXPE.”

Kaufer talked to AllThingsD about being an independently traded company, and about the media company’s prospects for growth:

AllThingsD: What is it like to be out from under Expedia’s wing?

Stephen Kaufer: There was a joke when we were spun out as part of Expedia from IAC. People asked me, “What’s your vision for TripAdvisor?” I would always say, “I want to be bigger than Expedia,” and people’s response always was, “That’s what the little brother might say.”

A year or two ago, we passed Expedia in comScore metrics, and are still experiencing growth. It’s a free service that’s valuable. It’s worldwide. TripAdvisor is in 21 languages, and three-fourths of the traffic comes from outside of the U.S.

Now that you are out from under Expedia, do you have more flexibility on where you send leads that are generated from people reading reviews on TripAdvisor?

Under Expedia, we had no obligation to send traffic to them … That never happened, and we were allowed to run independently. But at the end of the day, they [competitors] knew their marketing spend was going into Expedia’s pocket. That’s the most exciting thing. We are now completely independent. Expedia now owns no stock, so when I talk to Orbitz or Priceline, these folks can now partner with TripAdvisor without any hint of helping to fuel the competitors.

Why the spinoff now?

It was announced back in April, but basically there was a view that there was a class of investors that liked a pure Internet category leader and a fast-growing media company like TripAdvisor, and there’s another class that appreciates Expedia, which is in the dominant online travel agency position.

We were blurring the two when they were together. It gives Wall Street the opportunity to invest in either, and each company will find its own set of investors.

Do you think Wall Street is correctly valuing TripAdvisor? (The stock failed to come roaring out of the gate.)

No. But I’m not complaining. I think Wall Street, over the next couple of quarters, will appreciate how both companies perform as independent companies. The numbers have been a little hidden because they were jumbled together. … They’ve never seen TripAdvisor operate independently. They ask, “What will you do differently? How will things be the same?” Watch us, and I think you’ll like what you see.

Will you grow mostly organically, or through M&A?

We have a good track record on acquisition and product innovation.

The last few acquisitions, you saw a focus on our strategic priorities: A mobile company, a social company, two vacation rental companies and a company in China. Our four key investment areas that we called out are vacation rentals, mobile, social and geographic expansion.

In many ways, TripAdvisor was one of the original social networks, where users shared information on their vacations. Now you see Facebook getting into the space with Facebook Connect and other initiatives, too.

Everyone feels like being able to get travel recommendations from their friends is a natural evolution for getting a better recommendation, period.

There’s a couple of different angles. Some social travel companies are focused on making planning a group trip easier. No site out there has scale and does that well, and we don’t do that now. Facebook is a great platform to do it on, and it may be interesting to us in the future.

Our focus is leveraging the friend graph on Facebook and our rich content to give someone the experience of seeing recommendations or ratings from friends.

We love the concept, and we are furiously building up our own product offering to make it more valuable. If it’s not too early to call someone a leader, we are clearly it, because we have the content and the friend graph. We aren’t a site that’s based on Facebook, which is an advantage, because you can do anyting you want to do on the Web or the tablet or mobile.

What about Google moving into travel?

They have a couple of different approaches. They have Google Places, which reviews everything; and they have Google Hotels, which is a hotel finder; and then Google Flights, to help you find the best fare.

With Google Places, they still can’t seem to generate enough high-quality reviews to be useful. They compete with Yelp and us, and I’ve yet to be concerned. I was concerned about Google Flights — a lot — before they launched, but you cannot book through an online travel agent like Expedia — only directly through the airlines for now.

It’s an incomplete product, so I still use TripAdvisor flights, or go to Expedia or Orbitz. They get better results, and maybe aren’t as fast, but more information is still better.

They say they want to include online travel agents, but the airlines won’t let them. … Don’t mistake my tone for being sympathetic to Google on this one.

What about vacation rentals? HomeAway went public last year.

After HomeAway, there’s not that much.

We agree it’s a great market, and it deserves to be online. It helps consumers and there’s a need to bring a trust element into the equation. Folks who have tried it have liked (renting homes), and a whole lot of people haven’t tried it, because a hotel is all they’ve ever tried.

If they are reading hotel reviews, but I see that you are trying to stay seven nights in Orlando, I might say, “Did you know that you might be able to save money and get a private swimming pool?” They never would have thought of that as an opportunity, but there’s lots of great opportunities in Orlando and tons of other cities.

HomeAway dominates the category, but there’s plenty of room for a second, third and fourth.

I’m surprised that already three-fourths of your traffic comes from outside the U.S.

Yes, and that portion is growing. We have offices all over the globe, and our biggest investment opportunity is in China. We purchased a metasearch site for air, hotel and train in China. We view international growth as a tailwind to the business.

So what’s your price target for the stock? It’s currently trading around $25 a share.

I’m looking at how I can grow the business over the long term, and that’s why we are making some of these investments. I might be ahead of it, or other folks ahead of me, but I’m a nuts-and-bolts operator. I like to build stuff, and getting TripAdvisor to the next level of functionality and awareness is my priority — not the stock price.

It’s 2012 and it’s time for a brand news obsession for me besides the mishegas of Yahoo — and the winner is: Facebook’s upcoming IPO.

Thus, I shall endeavor to scoop all deets great and small about the social networking site’s moving on up to a deluxe public company in the Wall Street sky, which is expected in the spring of this year.

From bankers battling for purchase to who’s selling what to the delightful back and forth with regulators to Google’s lobbing the inevitable screaming meanies at its rival during Facebook’s quiet period, this is going to be a good one.

And CEO and Co-founder Mark Zuckerberg — and his hoodie — are back in the brightest of spotlights!

Speaking of the need for PR, one of the unsung but critical parts of any company’s public offering process is the hiring of an outside communications firm to handle the deluge of media, rumors and other breathless attention Facebook is sure to get.

It’s a highly specific job, given the reporters a company will be dealing with — in this case, sharp-elbowed Wall Street reporters — are usually different than the ones the Silicon Valley start-up has mostly dealt with (the geeks!).

And the expected winner of that thankless job is likely to go to the Brunswick Group, which describes itself as an “international corporate communications partnership that helps businesses and other organizations address critical communications challenges.”

In other words: Will be putting out the endless wildfires sure to rage around tech’s hottest IPO since Google.

Brunswick is among a small group of high-powered strategic communications firms that compete for such high-profile IPO jobs, as well as mergers and acquisitions and other corporate battling.

Others include Sard Verbinnen & Co. (it has worked for Groupon board and Alibaba Group); Joele Frank, Wilkinson Brimmer Katcher (it has toiled for Hewlett-Packard) and Kekst and Company (now cat-wrangling the Yahoo drama).

It’s probably not a surprise that Brunswick won the deal, since it has worked with Facebook in the past, including on its controversial private offering with Goldman Sachs a year ago.

No surprise, everyone declined comment.

Thus, let the Hunger, oops, PR games begin!

In an interview, Doug Bergeron explained to AllThingsD the reasoning behind the spending spree, saying that the company is undertaking a major transformation that requires selling software and services — not just hardware.

Only two weeks ago, VeriFone agreed to acquire Point, a major retail payment provider in Europe, for $817 million (not including $230 million in debt). Two weeks before that, it picked up Global Bay, a smaller company that helps retailers connect their e-commerce assets to physical stores through the use of iPads. Terms of the deal were not disclosed.

Additionally, a year ago, it agreed to buy payment security provider Hypercom in an all-stock transaction valued at about $485 million, including debt.

The three acquisitions easily push the company’s investment above $1 billion. A bet of this kind represents a substantial risk, but Bergeron believes the decision to turn into a services company was a no-brainer, even calling it “obvious.”

The San Jose company, which has about 3,000 employees globally, has a history of growing through acquisitions stretching back to 2005, so maybe it can pull it off. In its fiscal 2012, the publicly-held company is projecting it will make a profit of up to $2.50 a share on revenues of up to $1.72 billion before the Point merger is taken into account.

Earlier this year, VeriFone appeared on the defensive, after Bergeron attacked San Francisco-based Square for not providing encryption in its mobile card readers. Since then, Square has promised to add another layer of protection, although the rollout is still pending.

VeriFone now seems to be on the offensive, having figured out what role it will inhabit as mobile payments come increasingly into play. And despite Bergeron’s earlier outcry about Square, he says the company will play “the role of Switzerland,” and will be neutral about which technology will win.

In particular, VeriFone wants to be the software developer that makes all the new innovations — including Google Wallet, PayPal, ISIS, the carrier-led initiative and others – work with a retailer’s existing systems. Since retailers have limited resources for technology, he believes this will be an important role.

Here are excerpts from my interview with Bergeron, who is not modest in calculating the opportunity in front of VeriFone.

What was the thought process behind the acquisitions?

Broadly speaking, VeriFone has a very impressive market share at the point of sale, and now worldwide with Point. We see the most signficant dynamic shift taking place is the new complexity that’s hitting the point of sale as a result of all the innovation that’s taking place.

It means transforming VeriFone from a focus on the best in products to both products and services. We will be delivering payments as a service. Retailers want to take advantage of Google Wallet and the iPad, and brick-and-mortar stores want to connect with online stores through multichannel integration. But these retailers don’t have 100 people on staff capable of integrating. They can either be left behind and not participate, or they can reach out to a partner to co-manage the increasing complexity at the point of sale.

Global Bay is providing software for tablets that basically allows for integration with inventory systems and e-commerce solutions and other types of services that the market is going to demand. At the end of the day, the retailers don’t want to lose a sale, and if they have someone ready to buy something, like women’s apparel or jewelry or apparel of any type or home repairs, where there’s a dialogue in the store with the customer, they want to upsell or make sure they leave with more than they would otherwise.

Otherwise, it’s hard to compete with Amazon, which has massive distribution centers across the country. But if small or large retailers can leverage their corporate distribution centers, then they have an advantage over Amazon. They have the touch factor with the person [in the store]. It’s a new age that has arrived for multichannel retail, where brick-and-mortar meets e-commerce. That’s what Global Bay is doing so well.

So you are evolving from a hardware company to a services company?

I’m going to edit your question.

We don’t produce hardware. It’s manufactured by third partners, and our product comes out of a $130 million R&D budget, of which $110 million is software.

For VeriFone, 90 to 95 percent of revenue has been product, but over the past two years, we’ve stepped up our services business with encryption and content at the point of sale.

In the fourth quarter, the quarter we are about to report on, we are projecting that services will be 22 percent of our business, and that’s on top of the total business growing dramatically. By the end of 2015, we think we can get it to 50 percent.

With the Point acquisition, which is all services — or close to it, at 88 percent — we’ll now be in the low-30s percentage.

I’m pretty sure, but for the most simple requirements, we’ll say [to the retailer], here’s the products, here’s all the boxes, and then check all the boxes for things you want, like Google Wallet, encryption; or do you want to support gift cards, or multichannel sales through the Global Bay capability?

You have a good perspective on the wide range of mobile payments that are rolling out. How many of these technologies will make it?

What I don’t know is what are the next types of innovations coming out of the Valley or other places.

Everything looks good on YouTube, or in a standalone trial, but if you have to roll it out to thousands of stores — and 50 lanes in each store — whatever new that’s out there has to coexist with the old stuff.

Who’s going to do that and the integration, and who’s going to manage the software updates? It certainly can’t be the two guys in IT, because they don’t have the resources.

How slowly will these rollouts occur? When you put it that way, it seems impossible for retailers to adopt it very quickly.

I think things move deliberately, not slowly.

That’s a bit of a wake-up call to those who come out of the online world and think they can put some code up in the cloud and it works. But when you talk to Costco, Macy’s or McDonald’s, which are all our accounts, they are innovative. They’ve rolled out pin debit or cash back, but it goes through a process of quality assurance, and they have labs where they test all this stuff, and then methodically move it out.

National retailers will have to get on board. They are the ones that move mindshare. They want the same experience in every store in every city in every state, and to mass deploy that, it takes a fair amount of planning.

How many new providers will make it?

There’s no question there will be a few, but it’s not limitless.

There’s a limit to the amount of change and chaos that the important retailers are willing to deal with at any given time. I’m describing a situation why VeriFone is so important. They [the retailers] love the meetings with PayPal and Google and ISIS, but all of this stuff has to coexist together.

In a lot of ways, we are playing the role of Switzerland. We are supportive and encouraging of all the innovation. We are the systems-agnostic guys that are operating on behalf of the retailers.

But all of these things would require software. The things that Google is trying to accomplish integrates with back-office systems at the SKU level. If it was just throwing hardware at the problem, it’s one thing, but it’s software.

You’ve talked about the importance of Global Bay, but now let’s talk a little more about the Point. Why was that acquisition important?

The data is out there. It’s a company that has grown fivefold over the last eight years, and is precisely located in the geographies in Europe that are A) healthy, and B) prone to be the first movers of mobile payments.

That’s where the Point lives and breathes. They have massive market share using VeriFone solutions, and more than half a million merchants in Northern Europe and the U.K. are using them to manage services that are largely around keeping EMV, which stands for Europay, MasterCard and Visa, up to date. EMV uses chip technology instead of swipe technology like we do here in the U.S.

They took out all the complexity of managing EMV and provided them [retailers] a monthly managed service. It’s precisely that framework and model that will allow us to turn the lights on for PayPal and Google Wallet and other services. The Point has been very much ahead of the pack, rolling out NFC capabilities before retailers have asked for it. This can be very exciting for Google and others, because it can enable a rapid deployment capability for any of them.

Are you going to make any more acquisitions? 

We are busy integrating right now. I don’t think you’ll see anything sizable for quite some time. For the most part, we are done with Hypercom, and waiting to do integration in January for the Point. For the most part, it will be independent. I think we have a lot of tools in the shed to help to find a new VeriFone.

On Tuesday, the company said that it is bringing the device to Hong Kong and South Korea, as well as Albania, Armenia, Bulgaria, El Salvador, Greece, Guatemala, Malta, Montenegro, New Zealand, Panama, Poland, Portugal and Romania. Preorders for the iPhone 4S will begin on Nov. 4 in all of those countries, except for Albania, El Salvador, Guatemala, Malta, Montenegro and Panama.

Jared Grusd, AOL’s SVP of business development and chief of strategy, is leaving the New York Internet giant to work at Spotify, according to sources close to the situation.

At AOL, according to his bio, Grusd “oversees the organization responsible for all domestic and international strategic partnerships and commercial alliances for AOL and each of its operating units. He is also responsible for identifying and evaluating new corporate strategies and opportunities for the company.”

The marathon fiend and former Google exec — who held top legal-deal jobs there — also serves on AOL’s Executive Management Team.

It is not clear what the well-respected Grusd will be doing at the online music service, which has been expanding its executive ranks as it has moved aggressively into the U.S. market. But sources said it was a high-level position in New York.

Spotify recently hired former Clear Channel exec Gerrit Meier as GM of distribution and partnerships, reporting to U.S. head Ken Parks.

Spotify also just scooped up former AOL sales head Jeff Levick — another Google alum — as its chief advertising officer.

The departure of Grusd further thins out the exec ranks at AOL, which is still mired in a turnaround under the leadership of CEO Tim Armstrong (yes, he too is a former Googler!).

I lobbed a query into AOL PR for comment, and am awaiting news of my news.

According to sources, AOL’s head of Europe Kate Burns has left the company and has been replaced by Goviral chairman and co-founder Jimmy Maymann.

Goviral is a unit of AOL’s Advertising.com and has been a bright spot in its ad business. Goviral’s CEO René Rechtman will now serve as the new head of the European Advertising.com Group.

Burns, who is SVP of sales and operations for AOL Europe, does not seem to have immediate plans and will stay at the company until the end of October.

Maymann reports to Ned Brody, who was recently named AOL’s sales head and Chief Revenue Officer.

According to an internal memo, he will head the Huffington Post owned-and-operated businesses for both Europe and Latin America. The Huffington Post unit has taken over all of AOL’s content businesses.

In related news, Peter Kafka reported earlier today that AOL’s music head had left the New York-based company for a start-up.

The change in Europe happened last week, the second international shift at a big U.S. Internet concern. Yesterday, I reported that Yahoo’s Latin America head left the company.

In fact, here is the memo from Brody, if you want go to town:

From: “Brody, Ned”
Date: Wed, 21 Sep 2011 09:40:03 -0400
To: AOL_Advertising, B2B, FriendsofAdvertising, B2B_Partners
Cc: AOLExecTeam
Subject: Organizational Update

Team,

As you know, one of our focus areas has been to re-emerge as a dynamic player outside of North America. As a part of this plan, we made the strategic decision two weeks ago to focus these sales and marketing efforts on our core global businesses: the Advertising.com Group and The Huffington Post. I’m excited about the plans we have to move these businesses forward.

To best support these changes, we’ve formalized an operational structure that we believe will set us on the path for even greater global growth. I’m excited to announce that René Rechtman will serve as the new head of the European Advertising.com Group business and Jimmy Maymann will lead the Huffington Post O&O business for Europe and Latin America. René and Jimmy will report directly to me.

René will lead our strategy of partnering with publishers and advertisers across Europe. We believe that his proven leadership and expanded focus on our publisher and advertising businesses will allow us to scale quickly. Advertising.com and goviral operate in over 10 countries in Europe and we have an opportunity to fulfill our mission of building the strength of quality publishers and the strength of Europe’s best brands.

To help meet the outpouring of demand in many countries for our brand and content, we will be moving our global content platforms back into Europe — having started with the UK — and opening opportunities in Latin America. Jimmy will lead our European and Latin America operations, pushing our content expansion opportunities. He is one of the most talented entrepreneurs in our organization and the right person to lead this forward.

Our strong leadership team will continue to support the execution of our strategy. Nimeshh Patel will continue his role as head of European operations and will report directly into Artie Minson. Sarah Gavin will continue to lead marketing and communications, reporting into Maureen Sullivan. Noel Penzer will now serve as VP, Europe and Latin America, reporting into Jimmy. Luke Aviet will take on a wider European remit in the Advertising.com group, focusing on internationalization and expansion, and will continue to report into René.

It’s important to note that our current progress could not have been achieved without tremendous leadership. At this point in our company’s development, Kate Burns has made a personal decision to leave AOL to spend more time with her family and personal pursuits. Two years ago, Kate came on board as the SVP of European Sales and CEO of the European operation to help turn the business around. In that short time, she has successfully refocused our efforts, established a strong leadership team and scaled the new business operational structure.

She and the team have done this well ahead of schedule and I’m particularly proud of this progress. Kate will remain on board until the end of October in an advisory capacity and to help with the transition. Please join me in wishing Kate well in her future endeavors.

We told the world AOL would return to the global stage and that’s exactly what we did and what we’re doing. We have a number of exciting launches in the works in the coming months as well as executing on our daily commitment to our consumers, advertisers and teams. I ask that you continue to stay focused on our goals and most important, celebrate the amazing accomplishments of our collective teams in advancing our global strategy.

Best,

Ned

According to sources close to the situation, longtime Yahoo front page chief Liz Lufkin has parted ways with the company.

The departure last week appears to be related to a reorg by newish editor-in-chief Jai Singh, who used to run the editorial efforts for the Huffington Post, at the Silicon Valley Internet giant.

Singh appears to be setting up his own team and, thus, Lufkin was out.

Lufkin has been at Yahoo for many years, most recently as VP of front page programming. In that job, according to one bio, she supervised “editors in Sunnyvale, Santa Monica, New York and Dallas and consult[ed] to various international Yahoo! sites. Liz’s group contributed to the successful development of Yahoo’s pioneering content optimization personalization system, improving the relevancy of Front Page for users and providing new insights on audience behavior.”

Previous to Yahoo, she had been deputy managing editor at Gannett’s USATODAY.com and USA Today. She had a similar job at the Hearst-owned San Francisco Chronicle.

Lufkin’s job at Yahoo is a critical one, given how powerful the front page of the site is, with 600 million unique visitors and billions of page views.

While the portal system has been under siege in recent years, it is still a massive driver of traffic to Yahoo’s own Web properties and elsewhere on the Internet.

Yahoo declined to comment (but I am right!).

UPDATE: Yahoo said that it had hired CNET editor-in-chief Scott Ard to take Lufkin’s place. Ard, who worked for the CBS-owned tech news property for 12 years, will report directly to Jai Singh, editor-in-chief of the Yahoo Media Network.

Today, Demand Media beat Wall Street expectations in its second-quarter earning, growing revenue and lessening losses.

The Santa Monica, Calif., online content maker also announced that it had re-upped and expanded its advertising partnership with Google and also bought two start-ups in social media and advertising.

Now, it’s time for the inevitable conference call to explain it all to Wall Street analysts and the media.

2:02 pm PT: The call starts off with an unusually jaunty CEO Richard Rosenblatt, who quickly got to the real deal: Exactly how badly did Google’s changes to its search algorithm, under a program code-named Panda, hurt Demand’s content business?

Not much, says Rosenblatt, who reels off a list of things the company has done to improve its offerings, which have been dinged by many as, well, spam.

Rosenblatt was not having any of that, talking about removing 300,000 pieces of crappy content and also “quality improvements” with partners such as cheerily demented cooking goddess Rachael Ray. She might cook with spam — here is a delightful Spam Hawaiian recipe — but she ain’t spam!

2:13 pm: Now it is on to the acquisition of IndieClick. Essentially: It’s for the young people.

Then, international. Latin America Demand editorial via eHow en español! (Actually, the acquisition of Emergincast.com, an Argentine start-up. Coming soon to a blog site near you: ¿Cómo se hierve el agua?

Last, social media. Demand will be doing a lot more of it, like everyone else in the world, including more recommendations. I would really like it if some Internet company said it was going anti-social.

2:18 pm: The finance guy comes on, covering everything already in the press releases. Which is why I am cutting out here and getting a gluten-free doughnut at the Whole Foods store where I am writing this post.

It is as delicious as you might imagine a gluten-free doughnut can be. Which is to say: Not very!

2:32 pm: Q&A time from the Wall Street dudes — and, let it be said, they are all dudes.

The first question is about the “cleansing” of its cruddy content and if it is all flushed out.

It might be baked-on sludge, but Rosenblatt assures that Demand has it all figured out.

Then, a query about international and how the company decides what to pick. Algo, of course! And local content writers.

Back to the spam content: Does the need to have better content mean less of it? Kind of, since there is a lot more video. But still a lot of content churning out of Demand!

A question about Facebook and how to program Demand content into it. Good lord, it’s hyper-poking!

“It’s not clear the best way of how you expand into all these properties,” said Rosenblatt, specifically referring to its acquisition today of both IndieClick and RSS Graffiti.

The next question is how successful Demand is in the display and brand business, and how IndieClick, a premium ad company aimed at niche blogs, will be integrated in.

More on social media advertising’s future. Aaaghh, this is as obvious as a store-bought-crust apple pie baked by Rachael Ray.

Rosenblatt notes that its flagship site, eHow, is but one means of distribution, but Demand content is going all over the place and winging by people when they least expect it.

“Social is more effective … to try to find stuff you didn’t know that you needed,” says Rosenblatt, who also would not dis search as a means of discovery.

That’s important, since Google is a major traffic driver and advertising partner, when it is not terrorizing Demand and others with its search algo version of Defence Against the Dark Arts Professor Snape.

And presto, here comes a question about Demand’s Google ad relationship, which Rosenblatt touts nicely.

Of course he does. It’s tastier than spam, after all.

The British version of the Huffington Post, which has been expected, went live today.

It is the site’s first major international expansion beyond North America (Canada was first).

While the content is aimed at the audience there, it will still have the usual HuffPo mix of saucy news, videos and blogs.

But in this case, instead of U.S. celebs and pols, those blogs will come from famous British luminaries, including former Prime Minister Tony Blair; Sarah Brown, wife of another former PM, Gordon Brown; and entertainers Ricky Gervais and Tracey Ullman.

The Huffington Post apparently already attracts a monthly audience in excess of 1.2 million in the U.K.

AOL — which bought the high-profile news and opinion site for $315 million — has given its content head, Arianna Huffington, a lot of backing and also funding for expansion, including globally.

Other international Huffington Post sites are likely to roll out soon.

Here’s the official press release:

BRITAIN WAKES UP TO THE HUFFINGTON POST UK TODAY

Latest Edition of “HuffPost” Blends Brand’s Unique Mix of News, Opinion, Community, and Engagement with Original, UK-centric Content

6th July, 2011, London – The Huffington Post UK (http://www.huffingtonpost.co.uk/), a UK version of The Huffington Post (“HuffPost”), the popular American news and opinion site, goes live today. The site features HuffPost’s unique combination of original reporting, aggregation, a leading-edge commenting forum, pioneering social engagement tools, and a vibrant platform for a wide range of bloggers. High profile bloggers already lined up to contribute through the site include Tony Blair, Jeremy Hunt and Sarah Brown as well as comedy and entertainment luminaries such as Ricky Gervais, Tracey Ullman, Imogen Edwards-Jones, Jonathan Meades and Kate Garraway .

The Huffington Post UK is edited by Carla Buzasi (nee Bevan), Editor-in-Chief, AOL Europe who leads an initial team of ten dedicated editors and writers, with further support from the wider AOL editorial team in the UK, as well as The Huffington Post team in the United States. The Huffington Post UK platform gives hundreds of British bloggers the opportunity to showcase their work to millions of readers globally.

Other recent new hires include Political Editor Chris Wimpress, a former political correspondent for BBC Radio 4; News Editor Jacqui Head, formerly an Online Journalist at Al-Jazeera, with stints at BBC and CNN; and Caroline Frost, Entertainment Editor, previously an Arts Producer for BBC News, and Online Entertainment Editor at the Herald Sun in Melbourne. Lady Lynn Forester de Rothschild, Chief Executive Officer of E.L. Rothschild and board member of Estee Lauder and The Economist Group, is the site’s Editor-at-Large.

The Huffington Post (US) was founded in May 2005, and has become an influential and oft-quoted media brand, “The Internet Newspaper.” It attracts 36 million* readers and only last month overtook the New York Times to become the world’s biggest newspaper online.

The UK site offers coverage of politics, entertainment, living, style, world news, technology, comedy, and is a top destination for news, blogs and original content. In the coming months, The Huffington Post UK will evolve to feature even more content across a whole range of genres.

Commenting on the launch of the UK site, Arianna Huffington, President and Editor-in-Chief of AOL Huffington Post Media Group, said: “We are arriving here in the midst of a rich and thriving media culture marked by great innovation. We look forward to adding HuffPost UK to the mix, and to our real-time ‘digital water cooler’ — which embraces the best of the new (immediacy, transparency, interactivity) and the best of the old (fact-checking, accuracy, fairness, and an emphasis on storytelling) — becoming the spark for many interesting conversations.”

Kate Burns, SVP, AOL Europe, said: “The Huffington Post has pioneered a new way for people to connect with the news of the day, and with each other, so we’re excited to bring this unique platform to the UK. We’re giving people the chance to write, share and debate opinions, creating a democratic site that can give Joe Bloggs the same platform as Ricky Gervais.”

The Huffington Post (US) already attracts a monthly audience in excess of 1.2 million [comScore, May 2011] UK based readers who are engaged, influential, and affluent. The UK site will feature premium ad formats, including the recently launched “Project Devil,” which has generated unprecedented engagement levels, time spent on ads and time spent viewing ad videos. At launch The Huffington Post UK will showcase an LG Project Devil campaign brokered through leading media agency Mindshare and a Dell PLE campaign negotiated by Mediacom.

Today, after Demand Media beat Wall Street expectations, its execs got on the horn with investors to explain how it plans to beat the Panda.

That would be the beastly name for Google’s rejiggering of its search algorithm, in order to rid search results of poor quality content.

Along with many other sites, Demand has gotten smacked by its raging paw.

Still, the Santa Monica, Calif.-based company reported revenue of $79.5 million and six cents a share in adjusted net income.

Wall Street was expecting the company to report about $69.6 million in revenue for the three months, with four cents a share in adjusted profits.

On a GAAP basis, net loss per share was 13 cents compared to 94 cents a year ago.

Here’s the liveblog of the conference call:

2 pm PT: Demand’s investor relations dude came on and I immediately tuned out until CEO Richard Rosenblatt got on the line to talk about the results.

He was as perky as ever, launching right into the meat of the situation–how Demand was going to pretty up its offerings, such as a redesign of its flagship eHow site and its new editorial arrangement with another perky person, food lady Rachael Ray and the also perky fashionista/talk show lady Tyra Banks.

Gone will be user-generated content that Demand used to let people post at will on its eHow site that was, well, less than good.

As in, bad.

Instead, it’s “curation,” “editorial innovation” and feedback cycles.

We old-timers like to call that journalism and copyediting, complete with mean old editors who spiked said copy when it was crappy.

“Let me be clear,” said Rosenblatt, the Google changes did negatively impact Demand’s traffic. But Rosenblatt said the company dug into its content and has been improving it since.

2:17 pm: Now it was CFO Charles Hillard reading the results themselves. I am sorry, Mr. Finance Guy, but I can read it myself, so this is always the time in earnings calls when I check out and spend my time improving my content.

So when I heard words such as “stock-based comp,” I moved on to fixing all the typos that a very nice reader alerted me to, since I was writing too quickly.

Then, I briefly considered writing a high-quality post for eHow on how to write earnings and fix typos at the same time. I am that good.

2:30 pm: The CFO dude finished up and the Q&A with analysts started.

All Panda questions, natch!

Rosenblatt seemed calm, cool and collected.

“We think on this one, they did a very good job,” he said of Google’s search-fixing efforts, trying to soothe the savage beast. “We all continue to evolve.”

Which translated to: Google says jump and we say: “How high?”

Which is then followed by: “Please sir, can I have some more (traffic)?”

More Google algo change questions.

I suspect there is a new tactic afoot by Demand: Bore us into submission about the traffic devastation from Larry Page’s minions with endless questions about algo.

Finally, a question about mobile and international expansion. Apparently, Demand content is going to be translated into five different languages.

Yay! I am readying my version of “How to Boil Water” in French! (“Comment Faire Bouillir L’eau”!)

Mobile is going to be big too for Demand, which it is for everyone.

Then it was onto a question about improving content, including paying its writers more moolah, which would then eat into the Demand cheaper content business model.

I liked that question! I suddenly decided I was going to shift to a lugubrious post on the history of the Maginot Line in 132 parts!

Oops, Rosenblatt said the data has to show that the peeps want those longer pieces.

Back to the boiling water opus!

It’s on to some video questions and then back to search, as in diversifying away from relying on search to get traffic and premium prices for its advertising.

As in, how much are you going to cozy up to Facebook CEO Mark Zuckerberg?

“It’s less about where traffic comes from and more about where they land,” said Rosenblatt, except you just know he sent a lovely floral bouquet plus a hefty selection of citrus to Zuckerberg’s new house in Silicon Valley right after Panda roared.

Rosenblatt deflected a lot of questions in this arena. “We still think that search is a fantastic way” to gain traffic, he said, making sure Google’s Page did not chomp off his hand as he courted his social networking nemesis at Facebook.

But as the old Kikuyu proverb goes: “When elephants fight, it is the grass that suffers.”

More likely, as Mary Chapin Carpenter sings: “Sometimes you’re the windshield. Sometimes you’re the bug.”

We’ll see which is which for Demand in the quarters ahead.

Until then, here’s Carpenter performing her song, “The Bug”:

MicroHoo is funky!

At least according to Yahoo CEO Carol Bartz on the Silicon Valley search giant’s first-quarter earnings conference call about its recent financial performance.

Yahoo’s results showed a continued worrisome revenue growth stall, due in large part to a search advertising fall-off, and a still-turning turnaround.

Yahoo reported revenues of $1.06 billion, down six percent from a year ago, on net earnings of 17 cents a share, down 28 percent.

The results were essentially in line with Wall Street expectations.

2:03 pm PT: The call started right on time, as per usual. Maybe they can’t get search right anymore, but Yahoo execs sure know how to start an analysts’ confab.

Bartz started off the call, noting “overall, our turnaround is proceeding on schedule.”

Well, the schedule of a three-toed sloth, I suppose, but it’s on schedule!

Bartz is too smart, though, and quickly noted the problems with search revenue declines, related to its search and online advertising partnership with Microsoft.

Still, she then used the unusual term “funky comparisons” to dismiss the key issue.

But isn’t she the one who struck the funky deal with Microsoft that has resulted in these funky comparisons and these even funkier search advertising revenues?

Just askin’!

Bartz proceeded quickly to noting Yahoo’s advances due to technology improvements, which showed a doubling of impressions to big events such as the Super Bowl and the Oscars.

It’s a good point, since Yahoo–for all its troubles–is still a huge traffic driver, including serving up 1.3 billion page views for the Oscars.

Bartz talked about monetization and said a lot of other stuff, but got to the finances quickly.

“Search was a mixed bag,” she said flatly. You can say that again–but not in a good way.

Bartz tried to put a good-news spin on it, but had to admit that “on the downside [Microsoft's] adCenter is not seeing strong RPS,” she said.

That’s revenue per search and a key number that Yahoo had thought would be better by now.

Bartz noted that the paid search markets internationally will be delayed until MicroHoo gets its act together.

Good idea!

2:16 pm: CFO Tim Morse took over to go through the numbers.

“We had good display momentum around the globe,” he said.

But search was, um, bad. It underperformed, but Yahoo had that guarantee from Microsoft to pay out, which Morse called a “financial floor.”

Morse pretty much read the press release from here on out.

2:24 pm: Bartz was back talking up the huge audience Yahoo has abroad. And it is true–the Yahoo brand is a golden one globally.

Also video consumption is up too, as it is across the Web, in terms of views and time spent. Yahoo’s “Primetime in No Time” got 500 million streams in the quarter.

Bartz turned to mobile, which is weak no matter what she said about the laudable Livestand. It’s one of many in a very competitive market.

Same for social, which Yahoo has essentially abdicated to Facebook. That said, Yahoo has tried to weave social within its myriad of sites and it gets it, especially compared to the socially awkward Google.

Bartz summed up that she hoped everyone gets that profitability and revenue growth were on track to get better, promising more at the investor day in May.

2:30 pm: Q&A time!

The first question is about display growth. It’s a softball, since display was up.

The next is about other revenue growth areas to come.

Bartz–who seemed not so prepped for such an obvious question–ticked off shopping, travel and uuuuuh….

Morse jumped in and talked about making internal connections, which I also did not understand.

An analyst then wanted to “dig into” search problems. I’d say it’s time to call in Mike Mulligan and his steam shovel!

Relative to RPS, Bartz acknowledged it was low and everyone was studying the issue. There is a plan, apparently. Again, Bartz was maddeningly vague.

I missed the next question and then it was back to search.

Bartz was not getting too specific about search, but would say video advertising was going to do well.

She did note that Yahoo expected a dip in Q1 related to search revenue, “but the dip went a little lower than we expected and lasted a little longer than expected.”

Bartz said she had recently sat down with Microsoft execs to go over the problems. How much would I have liked to have been a fly on that wall!

The next question was about video and it turns out Bartz loves the babbling babies too! I knew we had something cool in common.

The next question is about Japan and the possible deal to sell off Yahoo’s ownership of Yahoo Japan!

Morse said diddly, except “we continue to make progress.”

A question about display and possible content verticals.

Verticals Yahoo is interested in, according to Bartz: Entertainment, lifestyle, women, gossip.

“The things people really want to do, they want to disappear,” said Bartz, which was an interesting way of putting it.

Yet another question in what was beginning to feel like an endless call.

It was about Right Media, Yahoo’s advertising exchange. Cleaning it up, etc.

The next question is about communications, as in email.

Bartz even sounded bored and messed up a few words. “I’ve had too many Diet Cokes,” she joked.

Personally, I am considering disappearing into some content, since there is yet another question.

It’s–no surprise–an RPS question!

Funky!

Search guarantee payments from Microsoft are in place for another four quarters. Thank goodness.

Bartz got more detailed about the problems. There is some kind of prediction issue, which she said Microsoft is working on.

Now a local advertising question and its relationship with Facebook.

Bartz grabbed this one by the horns, noting you don’t have to run to the social networking powerhouse to get you a social ad!

It’s about branding with a social component. Which would be, um, Facebook, which was part of Yahoo’s Chrysler campaign referenced by Bartz.

A question about daily deals.

It’s growing, but more at Groupon and LivingSocial, which Morse does not mention.

Finally, the last question.

Another gigantic softball on engagement and Yahoo’s new content platform and some mobile deets query about whether Yahoo can make it there.

Bartz said she was working on it. As to content, Bartz said stats show big lifts.

“The good news is that it’s all in the right direction,” she said.

Up would certainly be good.

Late last month, BoomTown posted about a huge venture funding effort by the high-profile and even more highly designed social media reading app for the Apple iPad, Flipboard.

Today, its co-founder and CEO Mike McCue confirmed the $50 million round at an eye-popping $200 million valuation, in a wide-ranging interview at the start-up’s Palo Alto, Calif., HQ.

“We’re obviously thrilled, because we think it confirms our focus that people want a beautifully designed way to interact with content and to share it,” he said. “And there is a lot more to come–on a scale of one to 10, we’re just at a two or three.”

The bulk of the new second round of funding–Flipboard had previously raised $10.5 million–came from New York-based Insight Venture Partners.

Insight’s Jerry Murdock said in an interview that he was excited about the idea of “social endorsement” that Flipboard was pioneering.

“We back great entrepreneurs and Flipboard is that and also in an obviously unique position to solve a problem of media consumption in the digital age,” he said. “The sky is the limit. Or more precisely it is the best environment to consume curated real-time content for Twitter and Facebook, because of the user experience and social endorsement integration with the content.”

Insight is also an investor in Twitter.

Also stepping up in the new Flipboard round is Comcast’s venture arm, as well as previous investors, including Kleiner Perkins, Index Ventures and a spate of well known angels, such as Twitter co-founder and product guru Jack Dorsey, Facebook co-founder and Asana dude Dustin Moskovitz, the ubiquitous Ron Conway, actor Ashton Kutcher and the investment company of former News Corp. exec Peter Chernin.

“From a Comcast perspective, we’re intrigued with Mike and what he’s doing with content aggregation,” said Amy Banse, Comcast Interactive Capital’s new head. “We think we can learn from him and he from us.”

Co-founded by longtime entrepreneur McCue (Netscape, Tellme) and former Apple iPhone engineer Evan Doll in January, Flipboard launched to much attention in July.

The elegant Flipboard–which McCue recently told me in an onstage interview at the South by Southwest conference in Austin had zero revenues thus far–has changed the game on the consumption of social media.

Its innovative social magazine concept is attempting to make the social networking universe more accessible, consumable and, perhaps most importantly, visually arresting via its rich app.

Essentially, Flipboard pulls information from media RSS feeds and sites such as Twitter and Facebook data streams and then reassembles it in an easy-to-navigate, personalized format in a mobile tablet touchscreen environment.

In its current offering, there are pull-quotes, photos, videos, status updates and even the first paragraphs of linked-out content. There is also the ability to comment and share, as if one were on a social networking or microblogging site.

McCue said the new giant pile of cash will be used to increase its 32-person staff to about 50, international expansion, small acquisitions and more product development on more platforms.

The next in the arena will be the iPhone version of Flipboard, said McCue, followed by one for the Google Android mobile operating system eventually.

Left unsaid, of course, was the need for funding to fight the likelihood of increased competition in the hot space for delivering both professional and social content to consumers on a wide range of devices.

Rivals are varied, such as Silicon Valley’s most adorable news reader start-up Pulse and also Zite, a news reader which was recently sued for copyright infringement by a group of major publishers.

There are bigger potential players, such as Google, which is trying to find various ways to move into the social space.

In fact, said several sources, Google and others have made acquisition approaches to Flipboard, which has instead opted for raising more funding and staying independent for now.

McCue declined to talk about that, but did note that he is not surprised by publisher interest, especially of the worried and wary kind, in the arena.

“Anyone not respectful of others’ content is going to get in that kind of trouble,” he said, noting Flipboard has struck deals with 17 big publishers so far, including this morning’s announcement about a partnership with Oprah Winfrey’s and Discovery’s OWN cable network. “There is not one half to this equation.”

Right now, the Flipboard app is free and the business plan is advertising and some possible subscription scenarios.

McCue said advertising will be the key to Flipboard’s business plan in the future, although it’s not clear if the company will ever sell advertising itself.

Rather, it will partner with publishers seeking better distribution in the explosive tablet and smartphone market, where Flipboard has been gaining traction quickly.

But until that is sorted out, there is now $50 million more in the Flipboard kitty to figure it all out.

“With this funding, we can grow at the right pace and have a lot of flexibility to get the product right,” said McCue. “And, that’s the most important thing.”

Sassy women-focused content site, Sugar Inc., has raised another $15 million in late-stage venture funding from new investor Institutional Venture Partners, as well as its original one, Sequoia Capital.

The San Francisco-based site, which has now raised a total of $46 million, said it would “use the funds for brand extensions, acquisitions, and international growth…”

Sugar, which runs the flagship PopSugar.com site, is in a media space that is both competitive and fast-growing.

Several bigger sites, such as Yahoo, have been interested in acquiring it, but its husband-and-wife co-founders Brian and Lisa Sugar have wanted to remain independent.

In 2009, the company broke off ties with NBC Universal by buying back its shares and got a Series C funding of $16 million from Sequoia.

Sequoia was an earlier venture investor, having put $5 million into the start-up in late 2006.

NBC invested $10 million in 2007. The media giant had been selling online advertising for the site, an arrangement that had previously ended.

Onward and upward, apparently!

Here’s the official press release:

Sugar Inc. Closes Investment from Institutional Venture Partners and Sequoia Capital

San Francisco, CA, April 13, 2011–Sugar Inc., a fast-growing global media company for women, announced today that it has completed a $15 million later-stage round of financing led by Institutional Venture Partners (IVP), one of the premier later-stage venture capital and growth equity firms. The Company’s original and consistent partner Sequoia Capital also participated in the round.

Sugar intends to use the funds for brand extensions, acquisitions, and international growth in pursuit of its goal of becoming the world’s largest media company focusing exclusively on women’s lifestyle. This round brings Sugar’s total funding to $46 million.

Sugar is the online leader in original content, social media, and commerce targeting trendsetting women, with a global audience of more than 20 million. The company has two business segments focusing on original content and commerce with a portfolio of brands including PopSugar.com, ShopStyle.com, PopSugarCity.com, and Fashionologie.com. Sugar has 190 employees and operations in the U.S., Europe, Japan, and Australia.

“On the eve of our five-year anniversary, Lisa and I are proud of the success and rapid growth we have demonstrated to date,” said Brian Sugar, founder and CEO of Sugar. “In the last year we achieved significant milestones, including growing our audience to over 20 million unique visitors per month, driving over $250 million in commerce to our partners, and reaching profitability for the full year. We are excited with the opportunities ahead of us as we continue to pioneer the combination of content and commerce.”

“Sugar is led by an outstanding management team that has driven impressive growth in a diverse set of complementary revenue streams,” said Dennis Phelps, General Partner of IVP. “We see an enormous market opportunity and are excited about Sugar’s ability to execute in a world of slower-moving incumbents.”

“Brian and Lisa Sugar are entertaining a new generation of women. They do so around the clock and on hundreds of millions of mobile and web devices. But Sugar Inc. is still at the beginning of what is possible,” said Michael Moritz, General Partner of Sequoia.

After it struck its online advertising and search partnership with Yahoo, Microsoft tapped longtime Internet exec Brett Wayn (pictured here) to work with Greg Nelson during the integration.

Well, Wayn must have liked what he saw at the Silicon Valley Internet giant, since he is bouncing there from his job at the Redmond, Wash. software giant to help run local efforts at Yahoo.

[UPDATING local roles at Yahoo.]

Wayn will be working for Chief Product Officer Blake Irving and will be responsible for product management of Yahoo’s local “horizontal.”

He will work closely with whoever Yahoo finds as a replacement for Matt Idema, a longtime Yahoo exec who shuttled over to Facebook as a director of business operations, working on the local arena.

Luke Beatty, who heads up Yahoo’s Americas region community and local businesses, including Flickr, Groups, Answers and hundreds of local sites, is doing Idema’s job for now within Americas head Ross Levinsohn’s unit.

Local is a hugely hot space right now, with a spate of Web focus from giants like Google and Facebook to powerful start-ups such as Foursquare and Groupon.

Wayn has more recently been working on international for Microsoft’s MSN portal. The Australian native has also worked at AOL and, interestingly, has an actual medical degree.

In other words: Paging Dr. Local, stat!

Of all the many job openings in tech, perhaps the most interesting to watch will be who Groupon selects as its next COO.

The search has been on for a while for the critical hire for the Chicago-based social buying company, well before the recent announcement that it was parting ways with President and COO Rob Solomon.

Among those approached, said sources close to Groupon: Former Doubleclick and Google exec David Rosenblatt.

He’s not taking the job for a variety of reasons, sources said, but
finding someone to step up for the job will be tough, since it is likely to be one that will require a wide range of talents.

That includes: epic cat-wrangling of thousands of employees in far-flung locations; deep marketing and advertising prowess; high-level technology, product, mobile and e-commerce chops; and international experience.

The last is perhaps the most critical of all, since global growth–especially in Europe and Asia–is increasingly becoming Groupon’s main revenue driver, and the COO will have to pull together a crack team across the world.

That will become even more important after Groupon’s top international managers–Germany’s entrepreneurial Samwer brothers–move out of active management by the end of this year.

While company sources said this has been long planned, the Samwers (pictured here) have been fully involved in Groupon’s fast trajectory in Europe and elsewhere, since it bought their Citydeal discounting clone last May.

Thus, sources said, Groupon is looking at a range of candidates with experience abroad, as well as talent in scaling businesses quickly and to huge size.

And that means looking to companies such as Google and Amazon for an exec, where there are quite a few choices.

While BoomTown could not confirm whether Groupon has spoken to any of them, possible COO types are obvious.

At Amazon, some qualified execs include: Sebastian J. Gunningham, SVP of Seller Services; Diego Piacentini, SVP of International Retail; H. Brian Valentine, SVP of Ecommerce Platform; and Jeffrey A. Wilke, SVP of North America Retail.

At Google, there are tons of good candidates that Facebook has not yet raided, including: Stephanie Tilenius, VP of eCommerce; Henrique de Castro, VP of Media and Global Platforms; Dennis Woodside, VP of Americas Operations; and Margo Georgiadis, VP of Global Sales Operations (plus a Chicagoan!).

Other names being raised include Hulu’s Jason Kilar (unlikely, but I’d like it), various Microsoft execs and a spate of others.

(I say, let’s bring in Zynga’s Owen Van Natta, who was once COO of Facebook, since he’s missing a big pile of Groupon stock to add to his enviable collection of hot Web 2.0 company shares.)

While there are probably qualified execs outside the tech industry at retail and media outfits, sources said it is likely Groupon will select within the digital ranks.

Lastly, and perhaps most important, the Groupon COO candidate is going to have to accept that the role will not be a CEO-in-waiting, either before or after its inevitable IPO in the next year.

While I have received several tips that Co-founder and CEO Andrew Mason (pictured here) might not stay its principal exec, extensive checking with sources inside and outside the company indicate that such a move is highly unlikely.

“Andrew is beloved to the board, by investors and, most of all, by employees,” said one source. “He’s not going anywhere.”

Indeed, Mason has a close working relationship with Co-founder Brad Keywell, as well as Groupon Co-founder and Chairman Eric Lefkofsky.

In fact, despite other business interests, Lefkofsky has been very involved in all key decisions with Mason.

That job, presumably, would fall to the new COO, which Groupon should be hiring sooner rather than later.

“Groupon needs a world-class COO, who can manage hyper-growth, but also who knows that a No. 2 stays in the background while doing it,” said another source. “That’s a tall order.”

As we await the decision of which uneasy head gets the COO crown at Groupon, here is the opening from the Swisher boys fave Animal Planet cable television show, “Must Love Cats,” to get you in the mood:

Reports of stock-outs are widespread, coming in from Canada,  Germany, Australia, and Great Britain, where the iPad 2 evidently sold out in 24 hours. An ATD reader in Paris tells me that both Apple Stores in the city–Opéra and Louvre–were sold out by weekend’s end. Another in the U.K. says Apple’s Regent Street Store–which, ironically, sits across the street from Nokia’s now shuttered flagship shop–had a line “so long I expected to see the Pied Piper at its head” (see video below courtesy of Only Gizmos).

Clearly, demand for the iPad 2 is as “amazing” abroad as it is at home. Which makes you wonder if some of those early sales estimates were a bit too conservative–bullish ones, too.

Long queues for the device are being reported pretty much everywhere it’s gone on sale today–France, New Zealand, Scotland, Canada, England and Australia, where ship times for online orders went from 2-3 weeks to 3-4 weeks in a matter of hours.

Demand for the iPad abroad appears to be just as strong as it is at home. And that bodes well for Apple, because demand in the States continues to be very strong indeed: Two weeks after launch there are still lines for the device. “Never before have we seen lines as long or as persistent as the iPad 2 lines at U.S. Apple stores,” Piper Jaffray analyst Gene Munster said today. “Lines at Apple’s flagship store in New York City’s Meatpacking district were upwards of 400 people one week after the iPad 2 launched. And at more typical stores, lines were 30-100 people long waiting for 9am sales of iPad 2 shipments, which are selling out before the stores open at 10 am.”

Wall Street’s generous run-up can be traced to two drivers: The company’s quarterly profits increased 73 percent year-over-year, and its rosy forecast exceeded analysts’ expectations.

But despite the gains today, Priceline’s stock is trading slightly lower than last week, when it hit a five-year high of roughly $460 a share.

The e-commerce site, which is the largest online travel agency by market value, reported fourth-quarter net income of $135.7 million, compared to $78.4 million in the same period a year ago. Revenues totaled $731 million, increasing 35 percent over a year ago.

Quarterly revenues were boosted by strong international operations, which contributed $374.9 million, increasing 68 percent over the same period a year earlier.

Priceline’s outlook is also positive.

The Norwalk, Conn.-based company expects first-quarter net income, excluding some items, of between $2.34 and $2.44 a share. Analysts on average predicted earnings per share of $2.30, according to a Bloomberg survey. Sales are also expected to grow at least 29 percent to $753.9 million, exceeding estimates of $731.9 million.

BoomTown always enjoys the maiden voyage of a newly public company, so liveblogging Demand Media’s first quarterly earnings seems like a must-do.

It’s also the first public outing for CEO Richard Rosenblatt, who has sold off his previous entrepreneurial efforts.

And it seems like a good start, as the Santa Monica, Calif.-based online content company, which had its IPO in late January, finally out to rest some controversy about how much is actually earns by posting $1 million in net income in the last three months of 2010.

Okay, that is a weensy amount, to be sure, but it beat expectations, as well as for revenue, with sales of $73.6 million for the fourth quarter.

Of course, Demand wants Wall Street to look at “Adjusted OIBDA” results, which was up 88 percent, and which it is a much prettier $20.1 million in earnings.

Also on deck, as MediaMemo’s Peter Kakfa noted today:

“Expect to hear at least one riff on whether or not the company feels threatened by Google and changes the search engine is making to push “content farms” out of its results. CEO Richard Rosenblatt insists that his company is not a content farm, and that Google is just fine with his stuff, but I have a feeling the issue won’t go away just yet.”

We’ll see–here we go:

2:05 pm PT: It took me a bit to get into this conference call, since I could not get the live broadcast from the Web site at all and the teleconference operators were snoozing.

And I tuned in just as Rosenblatt (pictured here) was talking about how Demand was helping people get information about how to ripen avocados.

No, really.

(Memo to self: Curb the snotty journalist tone, especially since I love me a good, ripe avocado.)

Rosenblatt, who seems only a little nervous, pressed on by talking about its massive eHow site, as well as Cracked.com and other major branded sites Demand has.

The latest is TypeF women’s health and beauty site, which is guided by supermodel Tyra Banks.

Rosenblatt then linked it all to advertisers and how much they want to spend on sites like this.

“We are not limited to just a few key verticals,” he said, touting its sales staff, including Rosenblatt’s daring raid of Chief Revenue Officer Joanne Bradford from Yahoo.

“The company is well positioned to capture an increasing share of brand revenue,” said Rosenblatt.

2:18 pm: Rosenblatt then zeroed in on the juicy issues, which center around the quality of the content Demand churns out.

Or, as critics have argued, lack of quality.

“The level of specificity is arcane to some,” noted Rosenblatt, using the example of flying paper lanterns and how to make a roof rake as examples of the kind of niche content Demand produces.

Arcane is right, but it takes all kinds!

Plus, insisted Rosenblatt, it’s good! Accurate! Edited! Useful!

He took the gloves off here, which made me want a Demand piece about taking care of leather gloves (linseed oil?).

“We’re just getting started,” said Rosenblatt, about the company and not the glove care tips.

2:24 pm: The CEO turned it over to the CFO, Charles Hilliard, which meant I was off on my critical Web search about taking care of my gloves.

That’s because he immediately said: “Adjusted OIBDA.”

Which-let’s be honest–sounds like a communicable disease.

Essentially, said Hilliard, it’s up, up, up for Demand, in terms of revenue, earnings, page views and more.

You can read all these gory financial details in the press release here.

For some reason, Hilliard is using the retail term, “same store sales,” as a comparison. I covered retails for years, so it is a surprise for this to be the metaphor, but Demand obviously sees itself as a content store.

2:39 pm: Q&A time and the Google-fights-spam question came first!

Rosenblatt said he welcomed it and appeared unconcerned. His avocado-ripening, roof-rake-making, flying-lantern company needed to make no excuses!

The next question is about expansion, including internationally. Sure, Western Europe.

Then, a sneaky follow-up on content farms.

“We consider ourself very white hat,” declared Rosenblatt.

I wonder what the best way to clean a white hat is?

Voila! It’s right here on eHow:

“1. Wash your white hat in the washing machine if it is made of cotton or polyester. Just add laundry detergent and one cup of bleach. Wash the hat using the hot water setting. Do not put the hat in the dryer. The hat will shrink and then it won’t fit your head.”

Call the Pulitzer Prize committee!

(Wait, snotty again! I also love clean, white hats.)

I was so riveted by the white-hat thing, I completely missed the next question, but tuned in again to one about revenue momentum.

Essentially, Bradford–who looks great in a white hat, I might add–is on the case.

Then some internal technical questions and about guidance for Q1. CFO Hilliard said that the company was guiding for growth, despite more public company expenses.

(Needless to say, you can find out about how to run a public company here on eHow.)

The last question was about how much branded advertising will make up total revenue. Between five and 10 percent of 2010, said Hilliard, but it is the fastest category of growth.

And also one about curation of content and use of social networking sites like Facebook and Twitter for feedback.

Rosenblatt said that feedback can even become content, which will be part of new eHow redesign to come.

Want some tips on that? Of course, Demand Media has the answer, at least to this easy question.