And while some people called to question that assertion, there’s no question that something interesting is clearly happening at Vidyo. Today it will get only more interesting.

You may remember how, in that previous story, I mentioned that Vidyo had raised a $22.5 million Series D round of funding led by QuestMark Partners, with Menlo Ventures, Rho Ventures, Star Ventures and Four Rivers Group all participating. Vidyo left that round open and now Juniper has joined it though the precise amount is not being disclosed.

Today, Vidyo says its total capital raised has reached about $97 million, and that Juniper Networks is making a strategic investment by way of its Junos Innovation Fund. While Vidyo isn’t exactly saying what the terms of the investment are, it’s pretty easy to do the math. (Earlier I had portrayed this as a $97 million Series D. Clearly I got a little confused. Sorry about that.)

The investment round will basically help Vidyo boost its go-to-market activities, but it will also give Juniper a big benefit by allowing Vidyo to integrate its videoconferencing products with Juniper’s numerous offerings. That will likely give it some new competitive plays against rival Cisco Systems, which has considerable video offerings. We’ll see how that turns out.

Video Conferencing Seen as Important and Growing Sector

Hackensack, NJ – May 22, 2012 – Vidyo, Inc., the world’s fastest-growing video conferencing company, today announced that Juniper Networks, the industry leader in network innovation, is joining as a strategic investor through its Junos® Innovation Fund, alongside lead investor QuestMark Partners and other existing investors Menlo Ventures, Rho Ventures, Star Ventures, and Four Rivers Group. Though terms of the investment were not disclosed, Vidyo has raised $97M to date to accelerate its growth. The investment from Juniper Networks enables Vidyo to increase its go-to-market activities and integrate its video conferencing products with Juniper’s numerous offerings.

According to numerous analysts, Vidyo is disrupting innovation in the video communications and collaboration market, driving the industry forward with its paradigm-shifting platform. Vidyo delivers telepresence-quality conferencing to more than 1850 enterprise, healthcare, education, and government customers. Juniper Networks is leading the charge to architecting the new network based on a unique single architecture and single operating system, Junos®, that ensures performance, reliability and security without compromise and at the scale customers demand.

“As the use of video in the enterprise and on end devices continues to expand, our customers are seeking new ways to improve video delivery,” said Jeff Lipton, vice president, Venture and Strategic Investments, Juniper Networks. “Vidyo is an emerging player that is driving innovation in software-based videoconferencing, and we believe its leading technology will improve the experience and economics of video communications alongside advances in networking technologies.”

“Juniper Networks’ strategic investment in Vidyo is a solid endorsement of our vision and a recognition of how rapidly the videoconferencing market is expected to grow in the near future; Infonetics Research states the market will reach a cumulative $22 billion over the next 5 years,” said Ofer Shapiro, Vidyo’s co-founder and CEO. “We see Juniper as a kindred spirit, itself a pioneer in its industry, having revolutionized networking for over 16 years. Their investment validates the approach we have taken to successfully create new video conferencing markets and deliver superior value, accessibility and scalability to our customers and partners. We are extremely honored that such a world-renowned leader recognizes the unique strengths and proven abilities of Vidyo that are driving the video communications industry forward.”

The Vidyo Difference

The Vidyo communication and collaboration platform is software-based, highly flexible and can be easily customized for individual enterprise and vertical market video conferencing needs. The patented VidyoRouter™ architecture introduces Adaptive Video Layering™, which dynamically optimizes the video for each endpoint leveraging H.264 Scalable Video Coding (SVC)-based compression technology and Vidyo’s IP. Adaptive Video Layering eliminates the MCU and offers unprecedented error resiliency, low latency rate matching thus enabling natural, affordable, high-quality video to work over the Internet, LTE and 4G networks. The platform allows users to quickly leverage the latest hardware innovations, new consumer devices and partner applications that utilize Vidyo’s APIs, such as the recently announced partnership with Philips and AMD in the Healthcare industry. Vidyo has been active driving H.264 SVC and SIP videoconferencing interoperability in various standards bodies since 2005.

About Vidyo, Inc.
Vidyo, Inc. pioneered Personal Telepresence enabling natural, HD multi-point videoconferences on tablets, smart phones, PCs and Macs, room systems, gateways, telepresence solutions and affordable cloud-based broadcast solutions. Headquartered in the US, with 12 additional international offices, the company has more than 225 employees and has to date raised $97M. Learn more at www.vidyo.com, on the Blog or follow @vidyo on Twitter.

But after a major company-wide restructuring and the divestiture of several non-core businesses, CEO John Chambers (pictured here at D5) is finding that turning the massive Cisco ship around — something he seemed to have started two quarters ago, and which continued last quarter, isn’t coming easy.

There’s the global economy to worry about. All that messy complicated news coming out of Europe about sovereign debt and cuts in government spending around the world has a way of eating into technology budgets both at Cisco’s government customers and at its large enterprise customers.

Cisco’s guidance for the quarter ending in July was especially worrisome for investors, who promptly sent Cisco’s share price plummeting by more than 8 percent in after-hours trading. Cisco called for revenue to grow between 2 percent and 5 percent, which works out to sales in the range of $11.4 billion to $11.8 billion, well off the consensus forecast of $12 billion.

Guidance on earnings was equally disappointing. At 44 cents to 46 cents a share, the midpoint lags the consensus by two cents.

So what’s going on? I asked Chambers about it in a phone interview with AllThingD held after the conclusion of Cisco’s conference call with analysts.

AllThingsD: John, the markets clearly don’t like very much what they saw today. So, from a high level, what happened — good, bad and indifferent — with this quarter?

Chambers: The first thing from a high level is that we’re executing pretty well on our vision and strategy, and we did exactly what we said we would do. We guided for growth of 5 percent to 7 percent for the year and for the first nine months we’re at 7.5 percent [revenue]. We said profits faster than revenues, and we’re at 9.5 percent. Earnings per share increasing 13 percent year over year for the first nine months and gross margins down just 1 percent primarily on product mix. We’re winning versus our key competitors and winning at a pretty fast rate. When you’re number one or two in most product categories, holding your own in switching and making it very challenging for the Huawei’s of the world, the Junipers and Hewlett-Packards … Juniper and HP we’re pulling away from and we’ll see if we can maintain it. Huawei, for the first time we’re getting much better and competing against them and understanding their weaknesses. And if you look where we are in terms of the bigger picture, we’re in the right markets. We’re in the mobility market. We’re in video. We’re in the cloud market. We’re in the social networking segment. We’re pulling them all together, and our customers are buying the architecture in a pretty good amount. Even in service providers, where most people thought they would never move toward having preferred vendors, we’re seeing something close to that at some service providers and at many of them they are starting to think about going all-Cisco.

So on things we can control and influence I think we’re in pretty good shape. In terms of the market, I’d like to add another couple of points [of growth] in service providers, another couple of points from commercial customers. The public sector is at 3 percent. I’d take that for the year, but we think it’s going to be flat, give or take a couple points.

The issue is the enterprise. And there the problem is not that they don’t have the money or that they don’t understand that it’s important to get productivity. It’s that they’re uncertain. When they are uncertain, that’s because of economic issues primarily because of Europe. And uncertainty on government policy. Then you see people deciding not to invest. And that affects not only capital spending but jobs.

So I think the market understood what we’re saying and I think most people would give us credit for being a very good indicator of what the point in time change is. But this is not necessarily a given for what is going to happen in the second half of the year. I’m just trying to be as transparent as I know how.

The July quarter is usually your seasonally strongest. Given that your guidance was relatively weak compared to the consensus, what are we to make of the quarter coming up? Is it a secular weakness or mostly the economy? Are your competitors just taking it on the chin worse that you are?

Let’s look at Juniper. It’s down 6 percent a year and routing down 9 percent. Huawei is growing 11 percent a year, but its service provider segment is growing only 3 percent. HP’s networking business is back to the levels in their switching business to what they were when HP first bought 3Com. There’s an explosion in the data center business, it’s to the point that companies who have been there a long time like IBM or HP, we’re growing 67 percent and their servers are flat or slightly down. So the results speak for themselves in terms of what we’re doing right in some areas. But we’re learning to tie things together in a way that saves customers money, saves them time to market and allows them to achieve their business goals quicker. That is the game we’re playing for. The major thing we’re after is getting the enterprises spending again. Customers — almost uniformly — are saying that my business is okay, not great, they expect it will go up gradually, and that they’re probably going to spend more in the second half of the year than they did in the first. But immediately as a follow-up to that, they all say that’s true only if they’re not surprised by something from the economy. That’s the kind of uncertainty we’re seeing, and in talking with my peers in the industry who are in similar markets, they can finish my sentences. The question is whether it’s temporary or is it a blip? We just don’t know yet.

So given the restructuring we’ve been talking about for the last year or so, is Cisco the right size? Your overall headcount is down more than 8,000 from a year ago, but it’s up by more than 1,300 since the last quarter. Are you at the right size or are there more changes coming?

Out of the 1,353 people we added, the vast majority were either advanced services or engineers. We needed more engineers. The additions were around either building products or converting services. In terms of our organization structure, we re-did Cisco. We’ve learned from what we did well in the past, and you wouldn’t see the turnaround as quickly as we did if the structure weren’t so strong. But we needed to restructure how our customers buy, and how we build products. We needed to be nimbler and simpler in how we get decisions done. And that is a journey. In the past we tended to get a market transition, good or bad, and take off on a good one or address a bad one, and we would end up gaining market share almost always coming out of these. We’ll see if we do it again this time. But we weren’t constantly reinventing ourselves to avoid hitting the next wall or the next inflection point. That is what we’re trying to do. This is a continuous journey. While we were four or five inches around the waist, I think there’s still more work to be done in our middle levels. I think you’ll see us address that in the next year or two. Does that mean we’re going to adjust the market given that the market may have slowed? I’m not sure it has yet, we’ll know in a couple of quarters which way it’s going. The answer is, not in a major way. It’s too early to say which way this market is going. We’re not going to over-react or under-react.

You just made a major acquisition with NDS, about $5 billion. You still have a lot of cash on the balance sheet. What’s your stance on acquisitions?

Ongoing at Cisco we will do innovation through internal development, including internal start-ups, through strategic partnership, and acquisitions and intergrating all of the above. NDS is one of multiple moves that we will make, not just in the video space for us, but it was also a major cloud play for us and a major social media move if we do this right. It plays right into the sweet spot of our service providers and content providers. Our ideal target has not changed: 100 engineers with a product that is just about to come to market, where our customers say that if they were owned by Cisco they’d buy a lot of it. The $5 billion price is higher than what we’ve traditionally paid, but it’s on the order of Stratacom and Tandberg, for which we paid about $3 billion each. But our ideal target is smaller, and you’ll see us continue to be selectively active in the market.

You’re said to be heavily focused on gross margins. One point that came up on UCS: You say it’s growing like crazy, off a low base, but one of the analysts pointed out this week that it has the overall effect of bringing down the gross margin a bit. How are you addressing that?

That’s true on specifics. UCS by itself, even with a premium versus our peers, is going to be below our gross margin of 65 percent. So, by definition, as you add more of those it has a major effect on gross margin. When you combine UCS with our Nexus 2000 and 5000 switches the blended version gets the margin higher, though still not as high as the overall gross margin. Our challenge on gross margin, and the reason why we’re going to focus aggressively on each gross margin area this year, is that it’s more of a product mix issue than it is an issue of pressure on gross margins on any specific product. In terms of the base for UCS, it’s getting close to a $2.5 billion run rate and probably closer to $3 billion by now. So the base is getting larger, and in North America our market share is close to 20 percent and globally our best guess is 14 percent as best as we can tell. So that’s pretty good execution.

At this point, as he did last time we talked, Chambers asked me what song I’d pick to musically illustrate Cisco’s quarter, sticking with a tradition started a few quarters back and continued last quarter. I told him I wanted it to be a surprise, but that I think he’d like it.

This quarter, I dedicate to Cisco Ringo Starr’s “It Don’t Come Easy.” The hard work of transformation done, Cisco is finding that, despite being leaner and meaner, it has still got some way to go and finds itself in a tough market. In the video below, Ringo performs with fellow Beatle George Harrison at the 1971 Concert for Bangladesh. As everyone at Cisco knows, nothing worth having comes easy.

Revenues were $11.6 billion, up 6.6 percent from the year-ago quarter, while per-share earnings on a non-GAAP basis were 48 cents, versus 42 cents a year ago, up 14 percent. That’s essentially right in line with what the consensus of Wall Street analysts had expected Cisco to report: $11.58 billion in sales, and 47 cents in per-share of earnings, with a penny-per-share beat on the EPS front.

I’m going quickly through the numbers, but here’s the announcement in full so you can look for yourselves. I’ll be dialing in to the conference call shortly and will be talking to CEO John Chambers after that.

Cisco shares are headed lower in after-hours trading. As of 4:45 pm ET, shares are down 48 cents to $18.30, or 2.5 percent.

Update: Cisco just issued its guidance on the conference call. CFO Frank Calderoni says that Cisco expects to report revenue to grow 2 percent to 5 percent year over year in the fourth quarter. It also expects to earn a gross margin in the range of 61 percent to 62 percent on a non-GAAP basis. Operating margins should be 26.5 percent to 27.5 percent, up about a point from the year-ago quarter. EPS will be 44 to 46 cents a share. The outlook is lower than the consensus of 49 cents.

On this, the shares have continued to fall after hours. Cisco shares are now, as of 5:02 pm ET, down more than 8 percent, or $1.55, to $17.23. Investors clearly don’t like what they see. Tomorrow looks like it’s going to be a rough day.

SAN JOSE, CA–(Marketwire -05/09/12)- Cisco (CSCO)

Q3 Net Sales: $11.6 billion (increase of 7% year over year)

Q3 Net Income: $2.2 billion GAAP (increase of 20% year over year); $2.6 billion non-GAAP (increase of 11% year over year)

Q3 Earnings per Share: $0.40 GAAP (increase of 21% year over year); $0.48 non-GAAP (increase of 14% year over year)

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 28, 2012. Cisco reported third quarter net sales of $11.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion, or $0.40 per share, and non-GAAP net income of $2.6 billion, or $0.48 per share.

“We delivered solid results this quarter with record revenue and non-GAAP earnings per share,” said John Chambers, Cisco chairman and CEO. “We are successfully executing against our long-term strategic plan of growing profit faster than revenue, and in a cautious IT spending environment, we continue to outperform our competitors.”

Chambers continued, “In a world of clouds, video and mobile device proliferations, the role of the intelligent network has never been greater and our value proposition with our customers is the strongest it has ever been. Our vision and strategy is focused on the right market transitions, and I want to thank our shareholders, employees, customers and partners for their ongoing commitment to Cisco.”

GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
—————- —————- —————
Net Sales $ 11.6 billion $ 10.9 billion 6.6%
Net Income $ 2.2 billion $ 1.8 billion 19.8%
Earnings per Share $ 0.40 $ 0.33 21.2%

Non-GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
————— ————— —————
Net Income $ 2.6 billion $ 2.3 billion 10.9%
Earnings per Share $ 0.48 $ 0.42 14.3%

Net sales for the first nine months of fiscal 2012 were $34.4 billion, compared with $32.0 billion for the first nine months of fiscal 2011. Net income for the first nine months of fiscal 2012, on a GAAP basis, was $6.1 billion, or $1.13 per share, compared with $5.3 billion, or $0.94 per share, for the first nine months of fiscal 2011. Non-GAAP net income for the first nine months of fiscal 2012 was $7.5 billion, or $1.38 per share, compared with $6.8 billion, or $1.22 per share, for the first nine months of fiscal 2011.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 5.

Cisco will discuss third quarter results and business outlook in a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

Other Financial Highlights

Cash flows from operations were $3.0 billion for the third quarter of fiscal 2012, compared with $3.1 billion for the second quarter of fiscal 2012, and compared with $3.0 billion for the third quarter of fiscal 2011.

Cash and cash equivalents and investments totaled $48.4 billion at the end of the third quarter of fiscal 2012, compared with $46.7 billion at the end of the second quarter of fiscal 2012, and compared with $44.6 billion at the end of fiscal 2011.

During the third quarter of fiscal 2012, Cisco repurchased 27 million shares of common stock under its stock repurchase program at an average price of $20.28 per share for an aggregate purchase price of $550 million. As of April 28, 2012, Cisco had repurchased and retired 3.6 billion shares of Cisco common stock at an average price of $20.47 per share for an aggregate purchase price of approximately $74.3 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $7.7 billion with no termination date. During the third quarter of fiscal 2012, Cisco also paid a cash dividend of $0.08, or $432 million.

Days sales outstanding in accounts receivable (DSO) at the end of the third quarter of fiscal 2012 were 31 days, compared with 31 days at the end of the second quarter of fiscal 2012, and compared with 37 days at the end of the third quarter of fiscal 2011.

Inventory turns on a GAAP basis were 11.5 in the third quarter of fiscal 2012, compared with 11.1 in each of the second quarter of fiscal 2012 and the third quarter of fiscal 2011. Non-GAAP inventory turns were 11.1 in the third quarter of fiscal 2012, compared with 10.8 in the second quarter of fiscal 2012, and compared with 10.3 in the third quarter of fiscal 2011.

Select Global Business Highlights

Cisco announced its intent to acquire NDS Group Ltd., a provider of video software and content security solutions. The acquisition is expected to help Cisco’s ability to transform how service providers and media companies deliver next-generation video experiences to subscribers.
Cisco completed the acquisition of privately held Lightwire, Inc. Lightwire develops advanced optical interconnect technology for high-speed networking applications. The acquisition is expected to allow Cisco to deliver cost-effective, high-speed networks with the next generation of optical connectivity.
Cisco acquired privately held ClearAccess, Inc. The acquisition enhances Cisco’s network management capabilities and enables service providers to better deliver, manage and monetize their services.
Cisco announced strategic investments in Brazil to foster innovation, transformation and socio-economic development.

Cisco Innovation

Cisco announced it has updated its cloud-ready switching portfolio to enhance network virtualization with simplicity and scale.
Cisco announced a successful demonstration and validation of its coherent 100G dense wavelength division multiplexing solution, exceeding 3,000 km in reach without the need for regeneration. This distance is 50 percent farther than any non-Raman alternative solution on the market today.
Cisco introduced the industry’s first carrier-grade, end-to-end Wi-Fi infrastructure to deliver next-generation hotspots. The technology is designed to deliver seamless mobile experiences and enables operators to support a continuing expansion of mobile traffic, devices and new services.
Cisco announced innovations across the Cisco Unified Computing System® (UCS) that quadruple memory capacity, double switching capacity and simplify management for large-scale Cisco UCS® deployments.
Cisco introduced new Linksys Smart Wi-Fi Routers with app-enabled capabilities for new home experiences. The three new routers offer wireless performance and support for Cisco Connect® Cloud.
Cisco announced it expanded its small business product portfolio with new wireless access points, routers, switches, unified communications and partner-managed service offerings.
Cisco and NetApp announced FlexPod was the first data center infrastructure solution to be validated by Microsoft for the updated Microsoft Private Cloud Fast Track 2.0 program.

Select Customer Announcements

TELUS announced it has deployed key components of the Cisco Videoscape™ platform to extend its Optik TV services to mobile devices.
Cisco announced it has been chosen by Fastway Transmissions Private Ltd. to facilitate cable digitization deployment across its customer base in India. Fastway is expected to deploy more than two million next-generation digital set-top boxes from Cisco during the next two years.
Magyar Telekom rolled out 4G LTE services with Cisco mobile internet solutions. Magyar Telekom is Hungary’s largest telecommunications company.
IPLAN chose Cisco technology for its newest data center which is expected to be launched in June 2012. IPLAN is a leader in telecommunications and cloud computing services for small and medium-sized businesses in Argentina.
Videotron launched its enhanced illico digital TV service with Cisco’s HD set-top box platform. Videotron is a leading Canadian telecommunications operator providing communications and broadband entertainment services.
Peru Credit Bank implemented the Cisco Unified Communications system to increase business flexibility and reduce costs.
Kabel Deutschland (KD) selected Cisco CRS-3 routers for its Internet Protocol Next-Generation Network core to meet demand for video and broadband services. KD is Germany’s largest cable operator.
Netelligent announced that it will collaborate with Desktone, Inc. to offer cloud-hosted virtual desktops. These cloud-based solutions will include Cisco UCS, the Desktone desktops-as-a-service (DaaS) platform and NetApp storage systems.

Editor’s Note:

Q3 FY 2012 conference call to discuss Cisco’s results along with its business outlook will be held at 1:30 p.m. Pacific Time, Wednesday, May 9, 2012. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
Conference call replay will be available from 4:30 p.m. Pacific Time, May 9, 2012 to 4:30 p.m. Pacific Time, May 16, 2012 at 866-493-8039 (United States) or 203-369-1749 (international). The replay also will be available via webcast from May 9, 2012 through July 20, 2012 on the Cisco Investor Relations website at http://investor.cisco.com.
Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 9, 2012. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at http://investor.cisco.com.

About Cisco

Cisco (CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

The consensus of Wall Street analysts has Cisco reporting $11.6 billion in sales, and 47 cents per share of earnings.

The big question, writes analyst Sanjiv Wadhwani of Stifel Nicolaus in a note to clients on May 7, will be around margins. Last quarter, Cisco gave guidance for gross margins — a key measure of profitability — with a narrow range of 61.5 percent to 62 percent, while operating margins were guided to the range of 27 percent to 28 percent. Wadhwani thinks that guidance may stand up as pressure on Cisco’s supply chain from the Thailand flooding, favorable pricing on switching products, and a less-aggressive posture from Hewlett-Packard’s networking arm are all providing a little breeze at Cisco’s back.

Yet one product in Cisco’s stable may, in success, be hurting margins overall: Cisco’s Unified Computing and Servers line (UCS) tends to carry a lower gross margin, Wadhwani writes, and so may eat into its overall gross margin. The product line — which combines computing, storage and networking into a single product offered to corporate and service-provider data centers — had 10,000 customers worldwide last quarter, and was showing “positive momentum” in Wadhwani’s checks. “Overall, we believe that there is intense focus on margins internally, which should allow the company to report an in line margin quarter,” Wadhwani wrote.

Cisco has been operating “with more confidence and aggressiveness with its refreshed product line, making it tougher for competitors,” writes Shaw Wu of Sterne Agee in a note to clients issued May 7, and has been a lot of the reason that Juniper and Alcatel-Lucent have missed expectations recently. He expects Cisco to give guidance for the quarter ending in July that’s more or less in line with consensus expectations. He also sees Cisco benefiting from Apple’s next iPhone: “We believe this could mark the fourth quarter in a row where Cisco does not guide down expectations further building investor confidence. We see Cisco benefiting in the second half of 2012 from the continued build-out of 4G LTE wireless infrastructure ahead of the iPhone 5 refresh likely in the September-October time frame.”

I’ll be covering Cisco’s earnings announcement later today. Having dedicated songs to CEO John Chambers two quarters in a row now, I’m going to have to scramble to see what song fits today’s results, because I just know he’s going to ask.

That funding round, I’ve since learned, was so oversubscribed that it reached $80 million and now includes a significant new investor: GE Asset Management. A filing is expected with the U.S. Securities and Exchange Commission Tuesday.

GE Asset Management is joining a funding round that includes strategic stakes from Toshiba, the Japanese chip and electronics maker, and networking gear player Juniper Networks as well as Highland Capital and SAP Ventures, the investment arm of German software giant SAP.

The funding is Violin’s latest step toward filing for an initial public offering. Violin CEO Don Basile told me that the company has selected four banks to work with on the offering, following the bake-off process we mentioned last month: J.P. Morgan, Deutsche Bank, Bank of America Merrill-Lynch and Barclay’s, confirming a report from Bloomberg News last month.

Basile told me that he expects Violin’s road show will take place during the summer and that the company is now well within what he says is a 180-day window during which it will go public. That would place the offering no later than October 27.

It would make Violin the second company using flash memory in the data center to go public within roughly a year. Fusion-IO went public last June in a successful offering that boosted the company’s valuation above $2 billion.

And if the interest of pre-IPO investors is any indication, and it often is, Violin’s public offering, whenever it finally does occur, should prove popular.

When the company posted its earnings press release early by mistake before markets had closed, word of the beat encouraged traders to rush in and buy. The shares rose by 7 percent initially, and went as high as $22.20 per share after opening at $20.19.

Telecom carriers are again spending to build out and improve their networks, and that makes Juniper the Little Engine That Could, writes ISI analyst Brian Marshall in a note to clients today. Investments in wireless LTE (Long Term Evolution) networks are bringing carriers “back to the trough,” he wrote. “Carriers are searching for ways to stabilize their capital expenditures, reduce network cost per bit and increase average revenue per user.”

And so they’re turning to Juniper, which makes about two-thirds of its revenue from service providers. Marshall writes that, in the quarter, Juniper accounted for about 10 percent of Verizon’s capital spending; up from about 5 percent last quarter. “Even in the face of ‘stable’ CapEx budgets, we believe Juniper can flourish over the next several quarters as carriers re-allocate priorities. Marshall rates Juniper a “buy,” with a target price of $30.

Update: And apparently the Little Engine is headed back down the hill. Juniper shares are falling, and are down almost 7 percent to $20.22 as of 10:30 am ET, which is right back where it started yesterday.

Murphy has spent the last eight years at Riverbed, and before that spent about seven years at places like Mercury Interactive, EMC and BlueArc. He’s joining Nicira just as it’s getting off the ground for real. It has been hiring an impressive roster of people away from companies like Cisco and Juniper for several months.

Nicira is backed by investments from Andreessen Horowitz, Lightspeed Venture Partners and NEA, plus personal investments from VMWare founder Diane Greene and venture capitalist Andy Rachleff. I first noticed it when it hired Alan Cohen away from Cisco as its vice president of marketing.

It aims to be the vendor of a new networking technology that’s built specifically for the age of cloud computing. While the pipes through which bits flow in and out of data centers have gotten faster, there’s a need to make them smarter and more flexible, not unlike virtual servers in that data center. Adding Nicira’s software to a server creates the ability to “spin up” virtual networks as readily as you might virtual servers in order to meet surging demand. Nicira calls it an NVP, or network virtualization platform. AT&T, eBay, Fidelity Investments, Rackspace and the Japanese telecom giant NTT are all using Nicira, the company says.

That’s the finding of a new research report from the networking concern Juniper Networks. Its 2011 Mobile Threats Report found that the amount of malware created for mobile devices across all operating systems more than doubled in 2011 over the previous year. Juniper said it found nearly 28,500 samples of malware, up from a little more than 11,000 in 2010. Most of them — more than 46 percent, in excess of 13,000 samples — targeted Google’s Android operating system, Juniper said. Another 41 percent targeted the older Java ME operating system.

And what kind of malware was it? Spyware, mostly — stuff designed to capture information and send it on to someone else. More than 63 percent of the malware found could track a phone’s location, collect financial information, and other stuff you’d probably rather your phone didn’t do without you knowing about it. Another 36 percent were Trojans sent via text message. These Trojans run in the background and send text messages to premium-rate numbers the attacker owns, then collect the fees generated for sending the message.

And what about Apple’s iOS? Apple’s tight control on the application ecosystem — the iTunes App store, where all applications have to be approved — has so far given it a pretty good record on security. That doesn’t mean it’s completely out of the woods, Juniper says. Apple doesn’t provide developers with the information they need to create security screening programs that run on the phone itself. That means that if, for some reason, its application-vetting process fails — let’s say some app contains an evil feature that no one notices before it’s too late — there’s no competitive set of third-party security companies providing software to help clean up the mess afterward.

In one example during 2011, a security researcher found a way to upload an unapproved app to iTunes by faking the code-signing process used for approved applications. It proved the point that a chink in Apple’s armor did exist, and Apple later issued a fix.

Juniper predicts that it’s going to get more complicated this year. While Google has started to actively scan applications on its Android Marketplace for malicious code, that only means that third-party app stores will become more attractive targets. And as certain apps become popular across many platforms — think office applications — attackers will go after those in much the same way they did popular applications on the PC. That smartphone you have in your hand may soon be a digital battlefield.

Cisco’s recent history is peppered with instances of missed quarters that deliver on results but offer poor outlook. After a restructuring that saw the company cut 6,500 jobs, kill its consumer-oriented products, sell off its Mexico-based manufacturing operations to China’s Foxconn and recalibrate its long-term growth expectations with the financial community, the pressure is on Cisco and its CEO John Chambers to show that the changes were not only for the better, but that they’re taking hold.

Cisco is supposedly back in fighting trim. A new ad campaign, coupled with aggressive strategies in new market areas like cloud computing, coupled with a pivot away from unsuccessful consumer products, suggest that the company is back on track. But can the apparent progress made last quarter stick?

Analysts are expecting a profit of 43 cents a share on sales of $11.23 billion. Analyst Sanjiv Wadhwani of Stifel Nicolaus expects the results to come in slightly better than that. Writing in a research note to clients last week, he checked Cisco’s channel and found that sales of switching products, weak in recent quarters, appears on track to better than expected. Router sales appeared stronger versus competitors, specifically Juniper, despite a relatively weak environment for IT spending overall.

Geographically, spending in the U.S. was steady and, surprisingly, so was spending in Europe, except for in southern European countries like Greece and Italy, were the sovereign debt crisis has been so acute.

Weaknesses will be apparent, Wadhwani says, in sales of set-top boxes, suffering, in part, because of the shortage of hard drives as a result of the flooding in Thailand. Gross margins, a key metric of profitability, may be down slightly in part of a large sale of aggressively priced routers to China. One bright spot of note: During the quarter, Cisco announced that its Unified Computing System — its cloud computing hardware offering — has reached 10,000 customers and is, roughly, a $1 billion business.

Wadhwani says he expects Chambers to set a positive tone in his guidance. “As far as orders are concerned, feedback has been generally positive and consequently we expect the company to provide solid guidance for April. We also expect a positive tone from CEO John Chambers with optimism about the U.S. leading the world in an economic recovery.” That would be a nice change from the depressing results announced a year ago.

The spot depicts a batch of assembly-line robots busily building cars, as an instrumental version of the 1979 Gary Numan hit “Cars” plays happily. All is well until one of the robots experiences trouble and complains to the others, “I’m broken.” No problem, one of the others says, fixes his stricken comrade, and all is again well. Cue the voice-over, saying something about assembly lines that repair themselves. Then cue the corporate logo, aaaand … out.

The spot — which has exactly 100 percent less Ellen Page than the last series of Cisco TV ads — is part of a significant new advertising offensive that Cisco is launching today on television, in print and online. The TV spots will appear during the NCAA basketball games, the National Hockey League’s All-Star Skills Competition, and on CNBC and other business-oriented programming. However, it notably won’t appear during the Super Bowl.

Those robots will be seen again, disassembling and reassembling sections of certain Web sites as part of a series of “site takeovers,” including CNBC and The Street, among others.

The print portion is a six-page “manifesto” that explains ways that Cisco’s “Human Network” plays important and unexpected roles at banking companies and companies that sell chutney, and helps the National Basketball Association push its video around the world. The manifesto will appear in The Wall Street Journal (which, like this Web site, is owned by News Corp.), the Economist and the New York Times.

There will also be a social campaign via LinkedIn that goes after 140,000 C-level executives registered on that network. It will be the first time that embedded video will be used in a LinkedIn campaign. More TV ads will come later this year, as will localized versions of the campaign for international markets.

Last week, I talked with Blair Christie, Cisco’s chief marketing officer, who said that the manifesto in particular is about using the voice of its customers to show how Cisco’s technology can help companies do things they couldn’t do before. Of course, the point they’re supposed to get is that a Cisco intelligent network is what’s enabling them to do that.

Christie says it’s all part of Cisco’s effort to simplify how it communicates about itself. There’s no more muddling of the message. There’s no more consumer division to eat into the perception that Cisco is anything but an enterprise- and service-provider-focused networking company, so no more need for cute ads that overdo awkward jokes about teleconferencing, or showing a giggly twentysomething woman in a virtual fitting room. Cisco is now about transforming how companies do what they do, either by doing it better, or seeing new opportunities. It’s a big message, and a tricky one to get across in 30 seconds during a football game.

I asked Christie about the state of Cisco’s brand before this campaign, and whether or not there were any perceived weaknesses, given its recent troubles, that this ad effort is meant to shore up. “There was actually a lot that was right with our brand,” she told me. “The opportunity we had was clear and simple. Our customer voice is our talent, and that’s what we’re showing, and it’s consistent with our strategy. We use our customers as a test bed, so why not use them as a reflection of our brand? It wasn’t rocket science. But it was the customer voice that was missing.”

Simplifying and streamlining are themes that Cisco is certainly acquainted with of late. It has been doing a lot of those, and indeed, even shrinking itself as part of a broad-based restructuring. The results of that effort are starting to show up in Cisco’s results.

Time will tell if this new advertising campaign will help Cisco effectively reintroduce itself to its core customers; fight off strong competitive thrusts from the likes of Hewlett-Packard, whose networking division marketed itself aggressively against Cisco in 2010; and perhaps press a perceived advantage against Juniper Networks, which has been having its own problems.

What I find notable, or maybe missing from the campaign, are recognizable names of customers doing innovative things. Yes, there’s the NBA, but in the print manifesto, who’s the bank that’s using Cisco’s video TelePresence to interact with customers? Who’s the small chutney company that turned “browsers into buyers”? And who’s the car company with such smart assembly-line robots? It’s a good message that, to my mind, could be made a lot more effective with more specific examples.

And while I grant it’s often difficult to get customers to agree to be named in ads like this — you could almost hear CEO John Chambers’s frustration about not being allowed to name a certain banking customer, about which he was obviously proud, on a recent conference call — the biggest networking company in the world shouldn’t have such a problem. It should be able to brag that this or that household-name bank is an enthusiastic Cisco customer, and that Cisco networks powered the manufacturing of that popular car everyone is talking about right now. That would add some real oomph, and really serve to remind potential customers that Cisco is still, despite its recent missteps, the networking world’s alpha dog.

Anyhow, my critique aside, here’s the robots spot. Enjoy:

Cisco Robots from Arik Hesseldahl on Vimeo.

Of the companies in Marshall’s coverage universe, only Apple, IBM and Dell had positive returns and saw their shares rise by an average of 20 percent. By contrast, the three biggest decliners were Hewlett-Packard, Juniper and NetApp. (For the record, the others Marshall covers are Brocade, EMC, VMware, Cisco Systems and F5 Networks.)

One thing the advancers had that the decliners didn’t? Conservative guidance. “The importance of conservative guidance practices was underscored as investors had little tolerance for companies that could not execute on stated growth targets,” Marshall writes. HP, NetApp and Juniper all set out aggressive earnings goals that proved too optimistic. Per-share earnings estimates for the coming year among those three were revised downward by an average of 15 percent.

By comparison, Apple, IBM and Dell set lower barriers and ended up having positive earnings surprises, and have moved up their forward earnings estimates by about 17 percent. “Setting conservative targets will again remain critical in 2012,” Marshall writes.

So what’s going to set the tone for tech stocks in 2012? A lot of the same things that made 2011 so difficult. Sovereign debt concerns in Europe, coupled with governments around the world implementing austerity measures to help get their budgets back on track, will hammer IT spending at companies that sell to governments.

That doesn’t mean there won’t be positive trends to look for. Certain megatrends in computing will sail on, despite the rough economic waters. “Cloud computing and mobile internet remain firmly in place and can drive outperformance for companies positively exposed,” Marshall says in his note.

The growth in mobile clients like smartphones and tablets will spur ever more rich and complex computing environments in the cloud, meaning more and better data centers packing more computing power into the same or smaller footprint. Marshall mentions microservers, which brings to mind HP’s Project Moonshot, which aims to create dense racks of small servers, as an important trend to watch. “We think many data centers could look to microserver solutions that deliver thousands of cores in a rack and order of magnitude improvements in performance/power,” writes Marshall. These microservers, he says, could be powered by both x86 chips from Intel or Advanced Micro Devices, or by ARM-based chips.

And since there will be more servers — all of them virtualized, allowing one single server to act like dozens or even hundreds of servers, plus increased demands for storage and video — they will require higher-performing connections. That’s going to push companies building data centers to adopt Ethernet fabrics. On top of that, more companies build servers that support faster 10 gigabit Ethernet. Marshall argues that these Ethernet fabrics could constitute as much as one-third of the $6 billion market for data center switching within three years.

Then there’s big data. With more information than they know what to do with scattered all over the place, companies are struggling to make sense of it all. Large enterprises will be investing in data integration tools to get a unified view of all their information. “We believe organizations will continue investing in data integration tools which can help link historical and real-time data, and enable more valuable business intelligence and predictive analytics,” Marshall writes, adding that the market is worth about $2 billion today, but is in the “early innings of a growth cycle.”

(Image courtesy of chainsawpanda)

Last week, I posted on the so-so overall performance of tech stocks in 2011.

Most were in the negative numbers going into last week, and they stayed that way for the full-year comparison.

Bottom line: Tech was a bad investment if you started buying stocks on the first day of trading in January of 2011. And you got really socked if you bought into most of the IPOs of a spate of new Internet companies.

No pressure for 2012, Facebook! (I’m talking to you, Sheryl Sandberg!)

As we open trading this morning after the holidays, here’s where we stand with share prices since one year ago from a sample group I wrote about the most in 2011:

UP

Google: Rose 8.7 percent.

eBay: Rose 8.98 percent.

Apple: Rose 25.6 percent.

Jive Software: Rose 6.7 percent (went public December 15, 2011).

DOWN

Amazon: Declined 4.3 percent.

Yahoo: Declined 3.01 percent.

Microsoft: Declined 6.99 percent.

Cisco: Declined 10.6 percent.

ROUT-ROH DOWN

AOL: Declined 36.3 percent.

Hewlett-Packard: Declined 38.8 percent.

Juniper: Declined 44.7 percent.

FRESHMAN SLUMP (AND INVESTOR DUMP)

Zynga: Declined 0.95 percent (went public December 19, 2011).

Groupon: Declined 20.99 percent (went public November 7, 2011).

LinkedIn: Declined 33.2 percent (went public May 20, 2011).

Pandora: Declined 42.5 percent (went public June 16, 2011).

Yandex: Declined 49.3 percent (went public May 25, 2011).

It’s the typically newsless time around Christmas and New Year’s, but for once there has actually been a lot going on at Yahoo.

Last week, the Silicon Valley Internet giant’s typically moribund board decided to move ahead with negotiations to sell part of its stake in China’s Alibaba Group, as well as all of its shares in Yahoo Japan.

While that is still not a done deal, it adds clarity to the Yahoo mishegas, as current leaders there seek to turn around the company’s lagging fortunes.

Now, as Yahoo continues to contemplate a pair of partial investment bids by private equity firms Silver Lake and TPG Capital into 2012, more focus will be on the selection of a CEO candidate to take over, sources said.

While I have floated some names that have been contemplated — such as Hulu CEO Jason Kilar, Juniper CEO Kevin Johnson, former aQuantive and Microsoft exec Brian McAndrews, and board member David Kenny — I have collected some more that seem to be getting the once-over and are being mentioned internally as well as externally.

Sources said that the Nominating and Corporate Governance Committee at Yahoo, which is run by independent director Patti Hart, has been looking for someone with definite public company experience, as well as expertise in large-scale management.

As to talent, candidates seem to be either good at running big platforms, or deeply knowledgeable about advertising and media as well as technology.

Another important criteria, said sources: Someone who is “collaborative” and nonconfrontational. As in, not like the former and very pugnacious CEO Carol Bartz, who was fired in September.

Thus, here’s another trio of candidates to consider, while we wait — and who knows how long that will be given that the Asian activity could have tired out for a bit this usually slow-moving board:

Chris Liddell: The former CFO of Microsoft is an interesting name that just popped up recently, and it makes some sense when you think about the possible mindset of the Yahoo board.

Liddell, who has a charming New Zealand accent, did a short stint, from January of 2010 to March of this year, as CFO at General Motors. Recently married to another former Microsoft exec, he has since been living in New York.

He apparently loves living in the Big Apple.

But when he left GM, Liddell made it clear he wanted to go for a top job next. He was among the candidates for a recent search for a CEO of Time Warner’s Time Inc. (an effort that was run by exec search firm Heidrick & Struggles, which is also conducting the Yahoo hunt).

Known as tough and decisive, he certainly is qualified to deal with complex financial situations, such as the one in which Yahoo now finds itself knee-deep. One knock: Little product or advertising experience.

Laura Desmond: While certainly a dark horse, Desmond has been queried by Heidrick, said several sources.

She is CEO of Starcom MediaVest Group, a subsidiary of Publicis, one of the largest media planning and buying agencies, making Desmond one of advertising’s most prominent players.

Well-known in Yahoo’s key market, she is considered a savvy and smart exec with a wry sense of humor.

I happen to particularly like one line from one of her bios:

“Ms. Desmond’s career has been driven by two caveats: Take intelligent risks and learn more from failure than from success.”

She could learn a lot at Yahoo. (I know, easy jab, but it works!)

David Rosenblatt: The former DoubleClick CEO, who went on to a big ad job at Google after it paid $3.2 billion for the company, is also a long shot, mostly by his own choosing.

The sharp exec is always on the short list of CEO candidates for a lot of big, splashy online jobs, but he seems to want to swim his own way.

Case in point: He was recently named CEO of New York-based 1stdibs, a relatively obscure online marketplace known among antique dealers and interior designers looking for one-of-a-kind furniture, art and lighting.

Yes, that’s right: Fancy lamps.

Rosenblatt also serves on the boards at Group Commerce, Twitter and IAC.

All that Internet ad and e-commerce experience is exactly why Rosenblatt would be one of the better choices for CEO of Yahoo. But, for him, I would guess taking such a job is probably in the life’s-too-short category.

More to come, obvi!

The stock market is closed today, as part of the Christmas holiday. But it is doubtful — barring any major announcements — that the vastly different performances seen by a range of tech companies will change much.

Which is to say, some companies — such as eBay and Google — did well, although only Apple shares rose significantly enough to cause festive feelings.

As of Friday, Google rose almost 7 percent for the year to date, eBay rose 10.8 percent and Apple was up almost 26 percent.

As for all the others in tech? Lumps of coal for investors of varying size.

Let’s start with the better negative performances: Amazon was down 1.95 percent, Yahoo was down 2.7 percent and Microsoft was down 6.7 percent.

Not exactly anything to wassail about. And Yahoo shares were only down a little, since the recent swirl around its possible sale gave its stock a recent bump, or the performance would have been worse, based on its financial results.

And the oft-troubled AOL? Down 35.3 percent.

The crop of new Internet companies was also not doing so great. The latest, Zynga was down only 1.2 percent, Groupon down 12.5 percent and LinkedIn down 32.3 percent. Pandora truly tanked, with a 42.5 decline in share price. Only Russia’s Yandex bested that, with a 48.6 percent drop.

Enterprise-focused companies also had a lackluster year. While recently public Jive Software was up 9.2 percent, Cisco was down 8.7 percent and Hewlett-Packard was down 38.5 percent. Juniper got truly socked, with a 43.6 percent decline.

The music you are looking for right about now is “(Hey, Won’t You Play) Another Somebody Done Somebody Wrong Song” by B.J.Thomas, which you can enjoy here in this timely video:

This time the target is Cotendo, a company that uses a network of 30 data centers distributed around the world to put video content physically closer to consumers, and thus speed up delivery, especially to mobile devices. The acquirer is Internet concern Akamai, which says it will pay $268 million, plus the assumption of unvested options.

Cotendo had been reported to be the subject of a bidding war between Akamai and rival Juniper Networks. Breathless reports at the time, sourced to enthusiastic Israeli newspapers, valued Cotendo as high as $350 million. The deal will close during the first half of 2012.

Even at the lower price, the deal marks a nice exit for several U.S.-based venture capital funds. Cotendo raised $7 million from Sequoia Capital and Benchmark Capital in 2009, and then another $12 million in a round joined by Tenaya Capital last year. In June, it took a $17 million strategic investment from Juniper and Citrix Systems.

Cotendo had grown into an Akamai competitor, with a reputation for being faster at some things than Akamai, and also cheaper to boot. That made it an obvious Akamai target, given its history of acquiring rivals — usually after suing them. In 2005, it took out Speedera Networks for $130 million, after a contentious patent lawsuit between them. Akamai had sued Cotendo last November. So the next time Akamai sues someone, set your stopwatch, because the defendant may be the next one to be acquired.

Akamai’s statement on the deal is below:

Akamai to Acquire Cotendo

Combined technology and teams expected to help accelerate pace of innovation in cloud and mobile optimization

CAMBRIDGE, MA and SUNNYVALE, CA – December 22, 2011 – Akamai Technologies, Inc. and Cotendo announced today that the two companies have signed a definitive agreement for Akamai to acquire Cotendo.

Helping to mitigate the challenges of operating in a hyperconnected world, Akamai provides a secure platform over which businesses can engage users across the Web, mobile, cloud, or a mix of public and private network environments. Cotendo offers an integrated suite of Web and mobile acceleration services. The combination of the two companies’ technologies and teams is expected to increase the pace of innovation in the areas of cloud and mobile optimization.

“As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo,” said Paul Sagan, president and CEO of Akamai. “Cotendo’s technology, partnerships and people are a strong complement to Akamai. Together, we believe there is tremendous opportunity for our combined technologies as enterprises embrace the move to the cloud and seek solutions for an increasingly mobile world.”

“The Cotendo team is very proud of our accomplishments in delivering proven and effective solutions for accelerating Web and mobile assets. By combining our innovative technology and employees with Akamai, we expect our customers and partners will gain access to a comprehensive, global platform and wider portfolio of leading-edge services supported by some of the most experienced providers in the industry,” said Ronni Zehavi, CEO and co-founder of Cotendo. “We look forward to working with Akamai in an effort to create the strongest offering in the industry.”

Founded in 2008, Cotendo is headquartered in Sunnyvale, CA, with a technology center in Israel. Cotendo currently has approximately 100 employees, with over 50 based in Israel.

Under terms of the agreement, Akamai will acquire all of the outstanding equity of Cotendo in exchange for a net cash payment of approximately $268 million, after expected purchase price adjustments, plus the assumption of outstanding unvested options to purchase Cotendo common stock. The closing of the transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to occur in the first half of 2012.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And, noting the need for a new CEO:

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

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

It wouldn’t be a bad exit for a bunch of U.S.-based venture capital funds, either. Cotendo raised $7 million from Sequoia Capital and Benchmark Capital in 2009, and then another $12 million in a round joined by Tenaya Capital last year. In June, it took a $17 million strategic investment from Juniper and Citrix Systems.

Cotendo is an Akamai competitor. Its content delivery system uses a network of distributed servers around the world to put content physically close to consumers, and it specializes in speeding up delivery to mobile phones and tablets, which is a lot like the business Akamai is known for. The thing about Cotendo is that it has a reputation for being faster at some things than Akamai, and also cheaper.

Akamai has been known to buy competitors. In 2005, it took out Speedera Networks for $130 million, after a contentious patent lawsuit between them. Part of the story driving the Akamai takeover chatter is the fact that Akamai sued Cotendo last November. Akamai CFO J.D. Sherman will be speaking at a Credit Suisse conference in Phoenix on Wednesday. Maybe he’ll shed a little light on the situation.

Meanwhile, analyst Brian Marshall of ISI likes the idea of Juniper acquiring Cotendo in a joint deal with AT&T. Since AT&T is a big Juniper customer, accounting for about 8 percent of sales, and AT&T is also a big Cotendo customer, it would mean good things for Juniper’s relationship with AT&T. If the numbers being reported are correct, it would amount to about 10 percent of Juniper’s cash on hand, which was about $3.4 billion as of the quarter ended Sept. 30. It would be a much bigger deal for Akamai, which had $688 million in combined cash and short-term investments as of the same date.

I was on the phone with its two founders: Alon Maor, CEO; and Dan Sahar, VP of marketing. They had just started telling me about how they plan to sell network appliances that network operators — like, say, Comcast or Time Warner or Verizon — might put on their network in order to help them meet the growing demand for video content. The aim, Maor told me, is to get the most popular content as close as you can to the customer.

The first thing that popped into my mind was creating an appliance that sits on the network; close to, but not in the customer’s house. Maybe in the nearest network hub or central office. It turns out I was right. Then I wondered aloud what Qwilt might be using as storage technology. Could it be, maybe … flash memory? The chips that have so revolutionized the data centers of companies like Facebook and Apple and the banking systems of Credit Suisse, among others, when put to use by the likes of Fusion-io and Violin Technology?

Why yes, it does use flash memory, they told me, making them the latest member of the steadily growing “Flash Madness” club, which gives me yet another excuse to use the image taken from the cover of Flash Comics #1, circa 1940. For reference, the other members are Fusion, Violin Memory and Pure Storage.

Maor and Sahar laughed on the other end of the line at my guesses. “Would you like a job in our engineering department?” Sahar kidded me. I didn’t answer, because I wasn’t done guessing things like how Qwilt does what it does. “You must use some kind of algorithm to figure out what’s popular,” I said. Right again, mostly. The interview hadn’t been going for as much as five minutes, and I hadn’t even asked a single question and pretty much had it all figured out.

Well, not everything. There was the small matter of funding. Qwilt has raised $24 million in two rounds from Accel Partners, Redpoint Ventures and the Crescent Point Group, a fund based in Singapore. Maor is a Cisco veteran who got absorbed into that company following its $200 million acquisition of P-Cube. Before that, he was an engineer at Seabridge, which is now known as Nokia Siemens Networks. Sahar was director of marketing at Crescendo Networks, now part of F5 Networks. Tom Dyal, a Redpoint partner, is on Qwilt’s board.

Video is so popular with consumers that Internet services providers are struggling to get their networks scaled up to meet the demand, Maor says. The traditional way to solve that problem when everyone is watching the same show on Hulu, or the same movie on Netflix, is to just add routers and pray. That’s expensive. What if you could add some extra piece of gear that works with the existing network infrastructure? If you could figure out what was the most popular show in a particular neighborhood, make a copy of it right in that very neighborhood, and deliver it from there rather than all the way back from Hulu’s or Netflix’s data center, you’d lessen the network’s burden.

So that’s exactly what Qwilt does: It has three patents pending on processes for determining what video applications are being used on a network, and for figuring out what content is most popular in a particular area. So if you’re in a neighborhood full of “Jersey Shore” fans, the Qwilt box would figure that fairly quickly, and keep copies of it close at hand so that everyone gets their required daily dose of Snooki.

Also on Qwilt’s board is Rich Wong of Accel; Peter Wagner, an independent board member who has previously worked at Accel; Ohad Finkelstein, a partner at Crescent Point; and Giora Yaron, the former chairman of Mercury Interactive, which is now part of Hewlett-Packard. Also investing is Rob Glaser, the former CEO of RealNetworks.

Got all that? I told you it was an easy interview.

Alan Cohen, Cisco’s vice president for Enterprise and Public Sector, has agreed to join Nicira as its vice president of marketing. Cohen has more than 20 years’ experience in tech marketing and product management. He’s been on Cisco’s team since 2005, when it acquired Airespace, a maker of wireless networking switches, where he was VP of marketing. His resume includes stops at IBM, the old Baby Bell phone company US West, Tahoe Networks, Coopers & Lybrand and the U.S. Department of Energy. He’s a grad of the New York University Stern School of Business and American University.

By my count, Cohen will be the seventh person connected to Cisco in some way to join Nicira’s senior ranks. Nicira, which is backed by a $9 million investment from Andreessen Horowitz and another investment from VMware founder Diane Greene, is working on technology aimed at “virtualizing the network.” Its CEO is Steve Mullaney, a veteran networking executive who has worked at Palo Alto Networks, Shoretel and Cisco Systems. Its CTO and co-founder, Martin Casado, did his Ph.D. on the technology the company plans to bring to market. Its other founders, Nick McKeown and Scott Shenker, are electrical engineering profs at Stanford and Berkeley, respectively.

Cohen’s LinkedIn profile also says he spent nine years as a director of the real estate concern General Growth Properties. He briefly sat on the board of flash memory start-up Violin Memory until Cisco’s archrival Juniper Networks invested in that company earlier this year.

As a Cisco VP, Cohen may have been barred from being a director of a company that Juniper invested in, but now he’ll be working with some Juniper alums. In January, we reported that Nicira had hired Rob Enns, Juniper’s former VP of engineering.

Cisco also did what many analysts have been urging for some months and reduced its long-term growth targets to levels it has a better chance of meeting. It said it now expects revenue to grow annually at 5 to 7 percent through 2014 and called for operating margins in the 25 percent range, which is pretty much in line with what some analysts had suggested.

So were they convinced? A little. John Marchetti of Cowen and Co. called it “a positive analyst day.” The more aggressive stance versus competitors and the realistic targets should give the shares a “boost over the near term,” he wrote in a note to clients today. While Cisco’s valuation, which is at about nine times Marchetti’s forward EPS for the 2012 calendar year, is arguably low, he kept his rating at neutral. “Shares look cheap,” he said, “but we do not see a near-term catalyst to drive the stock higher and believe the muted growth outlook and macro-headwinds especially in light of Cisco’s exposure to government and European customers.”

Sanjiv Wadhwani of Stifel Nicolaus was more convinced. In a note to clients today he wrote that “the worst seems to be behind” Cisco following a product transition in its switching business that was responsible for at least part of its troubles over the last few quarters. Moreover, the pricing environment in switching — which had been driven down in part by an aggressive Hewlett-Packard campaign and profit margins on many of its switching products — are “approaching historical levels.” On top of that, he says Cisco has some moves it can make to trim some operational expense — he called them “opex levers” — to make sure that per-share earnings grow faster than sales. He rates Cisco shares a buy with a $20 price target.

Cisco sees Juniper as being “spread too thin” in the marketplace right now, Wadhwani writes. But Cisco’s line of attack won’t necessarily be lower prices. Indeed, the opposite may be true, he wrote: Cisco “will intensely focus on gross margins going forward.”

But that’s not to say there won’t be other weapons, like marketing trash talk. Here’s a sample: Cisco has launched a site where it accuses Juniper of “overpromising and under-delivering.” If there’s more to come like this — frankly, from both sides — the fight should be fun to watch.

The firing of Yahoo CEO Carol Bartz leaves open one of the bigger and more difficult jobs in tech — one that has taken its toll on many.

Nonetheless, rapper Snoop Dogg stepped right up to the Twitter plate yesterday, as soon as news broke of the ouster.

Tweeted Snoop Dogg:

“Im takn over as tha CEO of Yahoo. Need sum of tha Snoop Dogg content ya digg. Nuff Said.”

Not nearly nuff!

Thus, while the Yahoo board has yet to begin a search, I have already been hard at work on selecting the next CEO.

(Last time, the company took none of my suggestions, but after the most recent result, the directors might want to pay mind!)

Sources said Yahoo is looking for an experienced Internet type, either from inside or outside the company.

“Yahoo has put its flag in the ground as a digital media company with a technology base,” said one source. “The job requires big buckets of expertise and needs someone who will grow the company.”

Here I go with the outsiders:

Peter Chernin: The former News Corp. exec has been eyeing Yahoo for a possible takeover with other investors. Both Yahoo and I had picked him when co-founder Jerry Yang stepped down as CEO almost three years ago, and he had declined the offer. This time, perhaps a big chunk of the company and total autonomy would work, even if making a hit like “Rise of the Planet of the Apes” is more fun.

Sheryl Sandberg: The COO of Facebook is sort of the anti-Bartz, with a smooth and efficient persona, and she is an experienced tech exec. But the former Google exec is at a place of growth at the social networking site, and is unlikely to want to leave the big show, especially since a blockbuster IPO is looming.

Jason Kilar: The Hulu CEO is in the midst of the process of selling the premium video service, with Yahoo as a bidder. While he has some tense relations with the studios, Kilar is top notch in his dedication to consumer products, and has a lot of experience from his stint at Amazon, too.

Dan Rosensweig: Currently CEO of IPO-headed Chegg textbook rental service, the former Yahoo exec never got a chance to run the company as its top leader. Well-connected and still well-liked by the troops at Yahoo, it still would be pretty hard for him to go home again.

Dave Goldberg: Sure, he’s married to Sandberg (see above), but the savvy CEO of polling phenom SurveyMonkey is one of the sharpest thinkers in Silicon Valley. He sold his music company to Yahoo many years ago and has a strong background in consumer online services.

Jon Miller: The chief digital exec at News Corp. almost got the CEO spot years ago when Carl Icahn was agitating for change at Yahoo, before Time Warner blocked him via a noncompete. With the mishegas at the media giant, and dwindling digital businesses there, it might be a good escape hatch for Miller.

Susan Wojcicki: The accomplished Google exec, who runs all its ad products, has the kind of calm, cool, collected persona that Yahoo could use right about now. The search giant was founded in her garage, and she has been a key part of its success since then. Wojcicki is also an understated class act in hey-look-at-me Silicon Valley.

Todd Bradley: The Hewlett-Packard exec just got blindsided when the company kicked webOS to the curb. While he is in line to run a possible spinoff of the device business, Bradley might also want to jump out of the frying pan into the fire.

Mike McCue: The CEO of Flipboard would certainly energize Yahoo with his intense focus on quality and consumer delight. The news app start-up could be a good addition to Yahoo, and McCue, the former Netscape and Microsoft exec who is well-liked in the Internet scene, would be, too.

Joanne Bradford: The former Yahoo advertising head bolted Bartz’s regime early on to run revenue for Demand Media. Well-liked in the ad business, she also knows where all the bodies are buried at Yahoo. Since ads and media are key at the company, she’d make an interesting choice.

Yusuf Mehdi: The Microsoft online exec would also be a left-field candidate to run Yahoo, given his even-keeled personality and longtime experience in the sector. And, though pricey, Mehdi’s impact on Bing search has been important. But he’s also been involved in the software giant’s lackluster ad and search partnership and still has not turned around the situation at MSN.

Kevin Johnson: The former Microsoft exec and current CEO of Juniper was once slated to be the CEO of Yahoo, had Microsoft managed to win the company in its hostile takeover attempt. In fact, Johnson was the architect of the idea of Yahoo running the media and Microsoft running the tech.

Tim Armstrong: Well, he might have been a good candidate before the downward slide of AOL and a recent series of questionable judgments. If Armstrong can’t keep a loud tech blogger in line, it’s not clear he can wrangle the Yahoo beast.

And here’s the insider scoop:

Ross Levinsohn: The former News Corp. exec is running the Americas for Yahoo, which puts him in charge of the company’s key businesses. But he’s still struggling to turn the ad business around, and how well he does that could be a major determinant of his success. But fantastic hair!

Blake Irving: The former Microsoft exec has an amiable nature and is well-liked at Yahoo, but he still needs to show that the company can ship some innovative products, and quickly. Like Livestand, the news reader, which is muchly late.

David Kenny: The Yahoo board member is now president of Akamai, which might preclude him from the job. But the well-regarded exec — he’s a snazzy dresser, too — ran one of the Internet’s top digital ad agencies and now has tech chops from the content delivery network.

Memo to Yahoo board: I have a million more ideas, from former Viacom exec Tom Freston to former Yahoo board member Eric Hippeau. Or why not bring back a passel of former Yahoos to advise, such as former CEO Terry Semel or former president Sue Decker?

Or Oprah! I hear Winfrey will be in Silicon Valley later this week, and she has a lot more free time now.

Like Snoop Dogg, she would fo shizzle be the bomb to cover.

Related posts

• As Yahoo Continues to Wobble, Investors (And Board) Eye Options
• Exclusive: Carol Bartz Out at Yahoo; CFO Tim Morse Named Interim CEO
• Carol Bartz’s Last F%*& You — Now Aimed at Yahoo Board
• Yahoo’s Statement on Bartz Ouster
• Wall Street Likes Bartz’s Firing — Yahoo Stock Spikes on News
• My Picks for Yahoo’s Next CEO — Maybe Snoop Dogg, Ya Digg?

The comments from the Sunnyvale, Calif., company raised concern about second-half spending on networking products and weighed on the sector’s stocks Wednesday. Industry giant Cisco Systems Inc., which has talked about the economy’s “mixed signals” and air pockets for almost a year, fell 3.7 percent.

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Of those leaving the company, 2,100 are taking a voluntary retirement buyout package that’s been made available to people whose age and years of service add up to a sum of 50 60. For example, an employee 40 50 years old with 10 years at Cisco would be eligible. An additional 4,400 will lose their jobs outright, but will no doubt receive severance packages. The remaining 5,000 or so are employees of a Cisco plant in Mexico that is being sold to Foxconn, the Taiwanese contract manufacturer. They will become Foxconn employees.

These reductions are the third significant step in what’s expected to be a four-step process, spearheaded by CEO John Chambers, to get Cisco on a leaner, more competitive and more profitable path. Analysts are, so far, fairly positive on the cuts.

Brian Marshall of Gleacher & Co. in San Francisco, who last week predicted that Cisco would cut 5,000, gave a tentative thumbs-up to the move. Cisco’s goal throughout the process has been to take out $1 billion in annual operating costs. Marshall says that it looks like Cisco could do better than that: He thinks the cuts could yield $1.7 billion in savings and add 25 cents in per-share earnings to the bottom line in 2012.

Breaking it down, he says the 6,500 jobs cut could result in $1.3 billion in savings from retirements and firings, assuming a cost of about $200,000 per head. The sale of the facility in Mexico will yield about $400 million in reduced cost of goods sold (COGS).

The next step, which Marshall expects in September, will be for Cisco to recalibrate its long-term financial expectations. Long accustomed to telling Wall Street to expect in the 12 to 17 percent range, the more realistic range for Cisco, Marshall says, is now closer to 10 percent, plus or minus a few points. Gross margin expectations will have to come down, too, to about 25 percent, down from a range of 28 to 31 percent.

Shaw Wu of Sterne Agee in San Francisco called the reductions “painful but necessary.” He notes that Silicon Valley hiring has been pretty strong of late and that those Cisco folks losing their jobs should have little trouble finding work at companies like Facebook, Apple or Google, though I’d suggest that Hewlett-Packard’s up-and-coming networking unit or Juniper will be eager to pick up some Cisco talent.

On the sale of the factory to Foxconn, Wu sees Cisco as winding up for a spin-off of the set-top box business. “We view the Foxconn transaction as effectively a restructuring of its lower margin set-top box business and think ironically, could make a potential future spin-off easier with the manufacturing detached.”

Update: A few of you have written to say my initial characterization of the retirement package terms was incorrect. The required sum of age plus years of service is 60, not 50. Sorry about that.

Conceding that Cisco has been “slow to make decisions” and “been surprised where it should not,” he promised to take “bold steps and make tough decisions.” The consensus appears to be that divestitures are coming.

Cisco has been an acquisition machine during the last decade, but has little to show for it. Obvious candidates for divestiture are its consumer products business, which includes the Linksys brand of home networking gear, and Pure Digital, the makers of the Flip Digital video cameras. Consumer products carry lower margins than other products, and Cisco’s already got enough problems with its gross margins, which have stood at 64 percent since 2008 and gone nowhere.

One problem, the analyst Brian Marshall of Gleacher and Co. wrote in a note to clients issued yesterday, is that Cisco has so thoroughly dominated its core networking markets that it has effectively saturated its market. In looking for new areas to grow into, Cisco has been forced to look for what Marshall calls “adjacent markets,” like consumer networking gear, TV set top boxes, among others, both of which sap the potential for margin growth.

And while it’s hard to argue that Cisco’s low valuation doesn’t create a buying opportunity, there’s a lot more to consider, Marshall says. While Cisco grew its total revenue base by 7 percent from 2008 to 2010, a group of smaller independent competitors–Marshall calls them the “chimps” compared to the Cisco “gorilla”–like Juniper, Checkpoint, F5 Networks, Aruba Networks and a few others–collectively added roughly the same amount of incremental revenue that Cisco did during the same period, and nibbled away at Cisco’s dominance in the process. “Innovative companies can still have an impact in the technology industry even when competing against an 800-pound gorilla,” Marshall wrote.

One ace in Cisco’s deck, Marshall says, is VBlock, a data-center-in-a-box made by VCE, a company Cisco jointly owns with EMC and VMWare, and run by former Compaq CEO Michael Capellas: Cisco adds the networking component, servers and management software, EMC brings the storage and VMWare brings the virtualization. The product is just getting off the ground, but VCE recently said it has a pipeline of orders worth $1 billion and 120 interested customers. It is at least something for Cisco bulls to hang their hats on for now.

Today, as news of the departure of Yahoo’s U.S. head Hilary Schneider and two other top execs got around Wall Street, investors and dealmakers were actually thinking of things other than executive turmoil.

As in: Does the uncertainty, along with a naggingly lackluster stock price and weak growth, create pressure on its CEO Carol Bartz and its board to do something dramatic?

In addition, does the messy public situation even provide an opportunity to put Yahoo into play, despite its market cap of $19 billion?

These and many more are the scenarios being debated in boardrooms of big media and Internet companies today, as well as at private equity firms, investment banks and even in Asia.

That’s because many are focusing on Yahoo’s Asian investments. Yahoo (YHOO) itself owns almost 35 percent of Yahoo Japan and a 40 percent stake in China’s Alibaba Group, assets that now make up–along with cash on hand–most of the company’s valuation.

Alibaba and Yahoo have recently gotten into an ugly public tussle over the Chinese firm’s desire to buy back the shares now, with Bartz holding out for more appreciation.

Now, she might have to do a deal with Alibaba, according to one theory, because a sale of its stake would give Yahoo’s stock a significant boost.

One problem: Alibaba CEO Jack Ma has made it known to anyone who will listen that he loathes Bartz personally, after a series of awkward encounters. That said, he has a close relationship with former Yahoo CEO and co-founder Jerry Yang, who is on both companies’ boards.

That puts Ma in an interesting position, according to another theory, because other U.S. companies with an interest in Yahoo might try to make a deal with him to do some kind of deal with Yahoo.

Most frequently mentioned by big investors in Yahoo: AOL (AOL) and its CEO Tim Armstrong.

Armstrong, said sources, has not shied away from the idea of Yahoo acquiring AOL and installing him as CEO with Bartz as chairman. AOL’s valuation is just $2.65 billion.

Although AOL has also been trying to turn itself around and is in a much less powerful position than Yahoo, Wall Street likes Armstrong’s story for AOL as a modern-day media and media distribution company.

“At least he has a narrative that is believable,” said one big investor in both companies. “Bartz has no vision.”

Another plus for Armstrong: His friendly and Don Draper-smooth demeanor, in contrast to Bartz’s tough-talking and now too-often curse-laden patter.

And while Bartz is losing execs, Armstrong has assembled an experienced staff. And he himself has deep online advertising sales experience, given his last job as head of U.S. sales at Google (GOOG).

Also likely to be interested: New Corp. The reason is that its own digital efforts, especially at the MySpace social networking site, have gone sideways.

And there’s history: News Corp. (NWS) tried to facilitate a merger of MySpace, MSN and Yahoo into a company codenamed “TrafficCo” at the time Microsoft was attempting a takeover of Yahoo.

It was supposed to be headed by former Microsoft exec and now Juniper (JNPR) CEO Kevin Johnson, another possible Yahoo CEO candidate.

That plot did not pan out and News Corp. has been trying mightily to revive MySpace ever since. It certainly would trade it into Yahoo for some stake.

Another hook: Its digital head Jon Miller, who used to be CEO of AOL, almost was CEO of Yahoo, during that same takeover fight. But a noncompete agreement with Time Warner (TWX) was enforced by CEO Jeff Bewkes at the time.

Both AOL and News Corp. could certainly make approaches to Ma or Yahoo Japan’s Masayoshi Son to agree to help them get back their Yahoo stakes.

Son was the one who made the move recently to switch out Yahoo search for Google in Japan.

And, by the way, Son was one of Yahoo’s earliest investors.

Confused? Well, it is certainly shaping up to be a lively Silicon Valley goat rodeo, as there are also all kinds of private equity companies with spreadsheets already figured if Yahoo shares decline enough.

And there are other ideas spinning on spins into Yahoo, such as Demand Media, which is prepping an IPO, and its perpetually enthusiastic CEO Richard Rosenblatt.

One unlikely player is Microsoft (MSFT). The once hostile suitor is now a partner to Yahoo in search and online advertising.

Of course, the last and biggest question is what happens between Bartz and the board. While they seem to have backed her this far, she has not performed as she has promised and now seems to have gotten publicly grumpy about all the pressure to do so.

Will the directors, who proved themselves pretty ineffectual in the past, continue to support her? Or will they find some self-protecting way to ease her out?

Some directors are definitely unhappy, sources said, but no one seems to be in charge or particularly influential.

Which could mean even more confusion as Yahoo moves unsteadily forward.

Until it all settles down, please enjoy this video of an actual goat rodeo: