That Internet sprite, Groupon Co-founder and CEO Andrew Mason, continued in his quest to be the cleverest little entrepreneur on the Web with a very funny post on the Chicago-based start-up’s blog yesterday titled: “No Comment!”

Mason is well known for his hipster-ironic-cute no-comment responses to the media, such as one he gave the New York Times recently:

“Andrew Mason, Groupon’s chief executive, declined an earlier interview request, adding that he would talk ‘only if you want to talk about my other passion, building miniature dollhouses.’”

Buuuuuurn, NYT!

In his latest rumination on life as a digital celebrity, Mason more fully outlined what he would not comment on, including everything even remotely interesting you might want to know about the social buying company, including:

* Plans relating to capital-raising, including a possible public offering

* Pre-announcements of new products

* Our competitors or the competitive landscape

* Statements on core business metrics, including margins or profitability

* Any projections regarding revenue, growth rates or other financial metrics

*Strategic transactions or partnerships with other companies

Thank goodness any metrics we want about how many discounted stripper pole lessons Groupon has sold in Omaha is on-limits!

Mason–who appears to want to become the Midwestern version of comic Jackie Mason, except Jackie would have taken the $6 billion from Google–is now styling a very scruffy Jeremiah-Johnson beard on this blog post, which you can see above.

BoomTown’s query on that: Why, dear God, why?

Here is Mason’s full “No Comment!” post:

No Comment!

As press interest in Groupon has grown, I’ve found myself increasingly uttering two words that have always annoyed me: “no comment.” We like to be as transparent with our customers as possible, but, just as people don’t walk around naked, there are some things that we as a company don’t talk about (for obvious reasons).

The least we can do is be transparent about the things we won’t be transparent about, which are listed below:

* Plans relating to capital-raising, including a possible public offering

* Pre-announcements of new products

* Our competitors or the competitive landscape

* Statements on core business metrics, including margins or profitability

* Any projections regarding revenue, growth rates or other financial metrics

* Strategic transactions or partnerships with other companies

While we’ll clam up when asked about the above business-y stuff, we’ll always be straight forward about things that affect the experience we’re creating for customers and merchants.

Dell just reported quarterly earnings, and the numbers are a bit mixed. First off, sales in the fourth quarter were $15.692 billion, just a whisker short of consensus analyst expectations of $15.72 billion. That represents a 5 percent improvement over a year ago.

Per-share earnings, however, were way ahead of the consensus at 53 cents versus 37 cents, amounting to a change of 89 percent over the year-ago quarter.

In its outlook, Dell said it expects revenue to to grow in the range of 5 to 9 percent in its fiscal year 2012 (underway as of Jan. 29), and for profits to grow in a range of 6 to 12 percent. Cash flow from operations will exceed profits.

Dell shares are up more than 6 percent in after-hours trading.

Here are some highlights:

• Enterprise sales and services grew 7 percent to $4.6 billion, or 29 percent of overall sales.
• Server revenue increased 16 percent.
• EqualLogic sales grew 49 percent and, combined with Dell PowerVault sales, accounted for almost two-thirds of storage sales and north of 80 percent of storage gross margin dollars.
• Sales in the combined large enterprise, the public and small- to medium-business sector was up 9 percent to $12.4 billion in the quarter, with revenue for commercial laptop and desktop computers growing 10 percent.
• PC profitability (Dell calls them clients) improved in the second half of the year, driven by improvements in the supply chain, lower input costs and improved product quality. For the full year, PC revenue grew 14 percent to $33.7 billion, driven on a refresh cycle from corporate buyers.

CEO Michael Dell sounded an optimistic note, the first I can recall in some time:

“I’m very pleased with our fiscal year results and the strong performance we’re seeing in our commercial businesses. We remain focused on developing and acquiring new technologies and capabilities, and our IT solutions portfolio has never been stronger. Customers are now seeing Dell in a fresh light, and we’re heading into the new year with strength and optimism.”

So many people have asked Napier about the possibility that Rackspace might be taken out, it’s not hard to detect that his answer is well rehearsed. Rackspace is not for sale, he says, and he won’t comment on any approaches by larger companies it may be fielding. But he clearly doesn’t mind the speculation.

The market certainly is working on the assumption that an acquisition is coming. I talked with Napier on Friday, the day after Rackspace reported quarterly earnings that grew 50 percent over the same period in 2009, which was enough to send Rackspace shares up by more than $3, or more than 8 percent, closing at $40.07–more than twice what it traded for a year ago.

Rackspace will be a giant all its own, Napier insists, before it gets taken out by one of the lumbering tech giants that might like to drop a few billion dollars to absorb it. Ask him Rackspace’s chances of being acquired in the next several months, and he insists the company is not for sale. It sure sounds like he means it, as the growth opportunity that lies before him is just so good. But it’s also clear that he enjoys being in the position of being asked.

It’s a nice sentiment, but organic growth is only going to get you so far. Rackspace will cross the billion-dollar mark in revenue for the first time this year, and it has only $105 million in cash, so the only acquisitions Rackspace can make without going into a debt are small ones like the one last week of Anso Labs that NewEnterprise reported exclusively. The smart money says we’ll get a chance to see how serious Napier is about remaining independent before the end of the year.

NewEnterprise: Let’s talk about your business against the backdrop of the industry you’re in. In the last few weeks we’ve seen both NaviSite and Terremark acquired by larger companies. Clearly there’s some consolidation going on in the Web hosting and cloud services hosting business.

Napier: There is a shift in technology market around cloud. The market is shifting from one where companies do things themselves to buying technology as a service. We think of it as a world that’s going from buying inputs to buying outputs. We think this is a nascent trend and we’re in the first game of a seven-game series. On a macro basis we see this as the biggest growth opportunity in technology. Our strategy is to win the most valuable segment, which we believe is going to be the service segment. So if you look at how the market is developing, you have players like Amazon that’s offering a do-it-yourself cloud. For people who want the lowest price, and can do the work themselves, Amazon is an incredible pick. What we’re focused on is trying to be a service leader. We want to serve companies that want to run a critical app and who want us to run it for them and take accountability for it so they can sleep well at night. Over the past six quarters or so we’ve found ourselves in a crazy good spot. The growth opportunity ahead of us is expanding.

Let’s talk about growth. You don’t have all much cash on the balance sheet, about $105 million or so. You can grow organically, or you can acquire. You’ve made some small acquisitions recently. Is that going to continue?

We are an organic growth company. We have been since inception. The acquisitions we’ve done have been about technology and talent to improve our portfolio and the way we serve customers. We will remain an organic growth company. There are, I think, really two kinds of companies. Those that can grow organically and those that can’t, and so they grow by acquisition. Some companies are good at growing through acquisition. We’re just not. We’re organic growth folks here, so we’re going to stick to that. But we’ll still buy technology, capabilities and talent that we think is critical. As to the consolidation that’s taking place in the industry, it’s a great validation of the growth opportunity. There are some legacy tech and telecom companies that are behind and are trying to buy their way into the game. There was a similar wave of consolidation eight years ago and a lot of our competitors got taken out.

So let me ask the question you’re getting a lot lately. I’ve had three conversations with different people who have each picked three different large technology companies they think should acquire Rackspace. Have you been approached by anyone?

We have a policy not to comment on anything like that all. What I will tell you is that we’re not for sale. We feel like we have a tiger by the tail. I’ve been lucky to be at the company for 11 years and I think the next 11 years look better than the last. We’re not building the company to flip it. We think the market opportunity is such that new giants are going to emerge, and we want to be one of those giants.

Absent a scenario that someone shows up with eight or 10 billion in cash to buy your company, what are your strategic priorities for the year?

There’s a couple. We are making big investments in our product and service portfolio. That’s one. And then number two, we think we have a chance to improve the fundamental economics of our business model. As we make these investments, we’ll add more services and capabilities on top of our basic compute service. This drives up the average revenue for our basic compute which creates better outcomes for our customers and increases our economics. It’s a virtuous cycle. Our average revenue per server has increased for six consecutive quarters.

What are your biggest costs, and what kind of gross margin do you tend to run?

I think of them as investments, but I know that’s just semantics. Our no. 1 investment is technology and the Rackers [employees] that serve our customers. So if you look at the cost of revenue line, a year ago it was 31.5 percent. As of the end of 2010 it was 31.1 percent. We made some improvement. But we’re more focused right now on developing customer loyalty than we are in driving efficiency. It’s early in the game, and anytime a market is going through a period of rapid growth like this, it’s all about winning as many loyal and profitable customers as we can. When the growth slows down someday we’ll focus more on improving efficiencies throughout the business. Even so, in 2010 we grew faster, increased our margin and and improved our return on capital. Those are all difficult things, and we pulled it off.

“We are hearing that Verizon…may be willing to pay for exclusivity to itself and AT&T. For these reasons, Verizon could be more willing to give in to Apple’s terms,” Wu said in a note to clients this morning, adding that the iPhone’s continued success has undoubtedly given Apple the upper hand in its negotiations with the carrier. “Apple is back in the driver’s seat with a record 14.1 million iPhone shipments in the September quarter helping AT&T gain share against Verizon over the last two quarters as Android starts to lose some of its luster (at least at Verizon). In addition, our sources indicate that Verizon does not believe the pending launch of BlackBerry 6 on its network is likely to have a material impact.”

An interesting bit of speculation. If Apple were to win concessions from Verizon and AT&T to keep the iPhone exclusive to those carriers, it might be able to drastically expand the device’s distribution in the States and keep its margins in line at the same time. As Wu writes, “This is important as many, including ourselves, have been concerned that Verzion iPhone economics could be less favorable given the strength of Android and higher cost of components, particularly those associated with CDMA.”

That said, with Google’s Android OS gaining market share so quickly it might be a better move strategically to sacrifice a bit of margin to bring the iPhone to more carriers and temper its rival’s growth.

BoomTown will begin livebombing, oops, liveblogging the Yahoo third-quarter conference call with Yahoo execs and Wall Street analysts in five minutes.

Until then, please peruse the slides the Silicon Valley Internet giant has provided.

Here is a primer to the just-released results:

Net income: Slightly above investor expectations with operating margins improving nicely to 12 percent from six percent a year ago. CEO Carol Bartz sure can cut costs.

Revenue: Uh oh. Down from downer expectations to $1.12 billion, which is minus traffic acquisition costs. Bartz sure needs to juice the advertising sales team.

Page-view growth: Also down four percent. Time to prod the editorial and products team.

Employees: Up seven percent to 14,100.

Owned and Operated Search Revenue: Down seven percent.

O&O Display Revenue: Up 17 percent.

Big plus: Yahoo’s Japan and China assets ad up to $10 billion in value!

Well, you can crunch away on numbers as well as I can:

Q310EarningsPresentationFinal

After announcing its second-quarter earnings this afternoon after the markets closed, Yahoo (YHOO) CEO Carol Bartz and CFO Tim Morse held the usual conference call.

The results: Net income and margins were up at the Silicon Valley Internet giant, while revenue was meh. Display advertising growth was up, while search ad revenue was down.

Revenue and worries about future direction turned out to be the questions of the day.

2:03 pm PT: While she touted the improved margins with a confident tone, a nice accomplishment, Bartz quickly pointed out the obvious on revenue weakness.

She blamed a combo of issues, such as not monetizing search-share improvements.

“How do we measure our business?” asked Bartz, in her financial soliloquy. Another laundry list of stuff, such as engagement, editorial expertise and scale.

Then it was off to the races with updates on Yahoo’s social, local, video and mobile improvements.

That would be things such as integration with social networking powerhouse Facebook and online gaming phenom Zynga, more video all over the site and other initiatives to spur consumer engagement.

Bartz’s faves are the “Bikini 101″ videos, she said, which apparently get you ready for the summer season.

BoomTown last wore a bikini in 1974.

2:12 pm PT: Morse came on and started going over the numbers.

Yay on costs and margins. Not-so-yay on revenue growth.

You get the picture. Morse had some excuses, all of which seemed reasonable, including a pullback of advertisers in July.

More numbers on the savings from the Microsoft (MSFT) search and advertising alliance, tax issues, guidance, cash status and more.

I like listening to Morse, who always sounds super-competent. But he completely bores my assistant, Ed, just like other CFOs he is subjected to in earnings season, since I blast these calls on my computer’s speakers.

Sorry, Tim!

2:27 pm PT: Bartz was back and talking about display advertising and how Yahoo is working on all kinds of new schemes to improve advertiser experience, as well as to engage consumers more.

Onto search, which has long been Yahoo’s Achilles heel, no matter how Bartz spins it. Revenue per search is down and has been, which is a problem.

“As for search, we remain focused on growing our search business,” she said firmly. We’ll see about that after a year into the deal with Microsoft.

She touched on the controversy around contextual search being counted on comScore (SCOR) and dismissed it–although we will see how that turns out!

Then Bartz gave an update on the Microsoft alliance transition. Nothing new here, and the hope is that it will begin to take place by the end of the year, but only if it can be done with “quality.”

Bartz then touted Yahoo’s performance related to delivering information on the World Cup soccer, which she should as the company’s media arm did a bang-up job.

More on improvements in development and innovation, although it was a little light on deep examples.

Bartz summed up by again mentioning margin improvements, which was a good idea, and then moved onto Q&A.

2:38 pm PT: First question is about revenue lag, natch.

Bartz noted that customers’ marketing budgets are “easy to turn on and off.” The perils of the ad market! But, she said, she felt it was more of an overall market issues, rather than Yahoo-specific.

The next question was about page-view decline. Are these Wall Street analysts actually doing their job?

Morse answered that page views might not be all that anymore, since consumer use of Web technologies has changed.

“What we are trying to do is move toward a more holistic view,” he said.

But he admitted, “It is honestly a bit of a surprise.” Say what?!?

The next question was more on display advertising revenue drop-off and inquired about whether it impacted search.

Bartz said she thought it was because of those nagging on-off switches marketers can use!

The next question was about revenue pick-up on bucket tests of new system with Microsoft and, again, more on where the weakness in revenue is located.

“I will tell you we are pleased with it,” said Bartz coyly about the Microsoft test results.

As to revenue slowdown: No specific category and it was those big knob-turning customers.

More on cost-cutting and advertising revenue, which were essentially the same question over and over.

It is the right question, too.

At one point, Bartz talked about redefining advertiser expectations and how targeting was a better way to get to consumers.

Actually, it is pretty much about that old sales mantra of ABC: Always Be Closing!

More shuffling the papers about what was going on and what was coming next. Bartz noted that consumer confidence is “really weird now.”

Then there was a question about this “science, art and scale” motto that Yahoo has been using and calling SAS for short (internally, many move the letters around to make a naughty word).

The larger point, said Bartz, was that Yahoo is one of the new places that can deliver big results to advertisers in an unusual and engaging way.

True enough, which begs the question again: So what’s with these weak revenues? And, of course, what is Bartz going to do about it?

Suddenly–although not entirely unexpectedly–the major investors of Yahoo are getting restless.

If you talked to many of them in recent weeks, there has developed a confusion over the stock sitting stagnant in the mid-teens for far too long now, a vague disgruntlement that CEO Carol Bartz has not provided enough of a vision and innovation in her 18 months in charge to turn around the iconic but long-struggling Internet giant, a nagging worry about the continuing exodus of top execs and, perhaps most of all, vexation that Yahoo (YHOO) is just too big not to be, well, bigger than it is.

“It just feels like there is nothing going on to get any momentum going,” said one major shareholder, whose sentiment is more common than not among longtime stock owners of Yahoo. “And it is not clear if there is anything on the horizon to get it going.”

Many point to the value of Yahoo’s Asian holdings, especially its stake in China’s Alibaba Group, as its most promising set of assets, valuing them much more than management’s recent attempts to focus on its media properties while shedding search technology costs under its ongoing partnership with Microsoft (MSFT).

“A Yahoo shareholder has to have the patience of Job,” said another major stock owner, noting shares of the Silicon Valley company are down more than 10 percent compared to a year ago, in contrast to an 8.3 percent rise at Google (GOOG) and a 3.9 percent increase at Microsoft.

To be fair, for the year to date, all Yahoo shares have declined less than those of either of those two digital giants.

And analysts are expecting some sunshine from today’s second-quarter earnings results, which will be reported after the markets close.

The company is expected to report a strong gain in profits, even with revenues rising only slightly.

The consensus: Yahoo will earn 14 cents a share for the three months ended in June, on $1.16 billion in revenue. That compares to 10 cents on $1.14 billion in the same period a year ago.

Several analysts are raising their ratings on Yahoo, noting that Bartz’s efforts to cut costs and improve margins have not been fully appreciated by investors.

Reaction to Yahoo’s results will be interesting. Google’s earnings report earlier this week disappointed Wall Street, since its profit was less than expected, although U.S. revenue growth was promising.

“In particular, we believe that the robust and accelerating Google U.S. revenue results, based on both Search and Display growth, provide a broad positive market read-thru for Yahoo!,” wrote Citigroup analyst Mark Mahaney in his “cheat sheet” note ahead of earnings.

Mahaney reiterated his $22-a-share price target, pointing to display advertising recovery, margin expansion, search share stabilization, Yahoo’s recent stock buyback authorization and the eventual value of the Asian assets.

Yahoo shares closed yesterday at $15.10.

Perhaps both.

The Web video site is getting ready to roll out its much discussed subscription offering of $9.95 a month, the Los Angeles Times reports. That jibes with chatter I heard earlier this week, though I’m not yet convinced this is a done deal.

But for argument’s sake, let’s say the report is correct, and the joint venture between GE’s (GE) NBC, Disney’s (DIS) ABC and News Corp.’s (NWS) Fox is about to test a premium plan. If they are doing so at $9.95 a month, it’s possible they’ve ended up with a price that will make both consumers and network TV guys unhappy.

How’s that?

$9.95 a month–$120 a year–is an awful lot to pay for free TV. Industry sources expect the initial plans for “Hulu Plus” to focus on access to a deep catalog from its broadcast TV owners. So instead of just getting the most recent five episodes of, say, “Family Guy”–those will still be available for free on regular Hulu–you’ll get an entire season or more.

If you’re really, really into a couple shows that run on ABC, NBC or Fox, then perhaps a Hulu subscription makes more sense than buying the shows on DVD or downloading them from iTunes.

But if you’re really into “Mad Men” on AMC or “Justified” on FX (which is great), or anything else on cable, Hulu Plus may not do much for you. And at the same time…

$9.95 a month doesn’t go that far once Hulu pays the bills. TV executives expect that Hulu will need to hand over something like $1 to $1.50 per subscriber to each of its network owners. Because that’s the same price the broadcast networks are trying to extract from cable TV operators in “retransmission” fights (see: ABC vs. Cablevision). And that money is worth a whole lot more to them than Hulu subscriptions. Which means the TV guys can’t undercut themselves on the Web.

So Hulu will need to pay out something like $3 to $5.50 off the top for every $10 it brings in. And then it has to shoulder the streaming costs, billing costs, customer service costs, etc.–figure a couple bucks a month more for that stuff. That gets you something like a 30 percent gross margin, which is nothing to brag about.

And what happens if Hulu wants to expand the service and add shows from other providers? It will either have to cut into its thin margin to pay for the programming or raise its rate above $10 a month. Which is already a lot to pay for free TV.

There are a few things Hulu and its owners can do to make Hulu Plus more attractive. Offer the service on more platforms, for one, like Apple’s iPad. And tinker with “windows,” so that Hulu subscribers get to see stuff before the freeloaders.

But moving windows is a good way to confuse/piss off most users, who don’t have any interest in digital/analog TV economics and just want to watch shows.

Also, access to Hulu on the iPad seems a bit less valuable given that Disney’s ABC, one of Hulu’s owners, is already giving away free access to its shows via a very popular app. Industry sources says Hulu CEO Jason Kilar tried desperately to get ABC not to introduce its free app for this very reason.

But while Disney is a minority owner in Hulu, Apple (AAPL) CEO Steve Jobs is the largest individual shareholder in Disney. If you want to connect the dots on that one, you’ll be doing the same thing everyone else in TV Land is doing.

“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),” Shope wrote.

Now, it’s a truism that most companies are open to price cuts on any product if they need to increase sales. That said, this is an interesting disclosure coming from Apple (AAPL) execs, particularly so far in advance of the iPad’s actual debut. Certainly, it calls to mind the company’s decision to slash the price of the iPhone by $200 two months after it went on sale and the early-adopter rebate it was forced to issue afterward. It seems odd, then, that Apple execs would even hint at the possibility of an early price cut lest they give folks already on the fence about buying the first iteration of the device more reason to stay there.

Unless they’re planning a prerelease price cut to really juice sales. Remember, Apple reportedly stands to make about a 42.9 percent margin on the iPad, so there’s presumably plenty of room for the company to hit an even more aggressive price point that would really put the device in the netbook range.

BoomTown liveblogged the AOL conference call, the first since it spun off from Time Warner (TWX).

And essentially, it was all about turning the Internet icon around. Bottom line: Still turning, but the lid is super-duper tight, folks!

Earlier this morning, AOL (AOL) reported its fourth-quarter results, which beat very, very low Wall Street expectations.

As MediaMemo reported:

After factoring out one-time charges, AOL posted earnings of 71 cents per share on revenue of $810 million. Wall Street expected earnings of either 62 cents or 66 cents per share, depending on who you ask, on revenue of around $766 million.

And while advertising revenue was lousy, it wasn’t as bad as Wall Street had expected–it dropped eight percent, and analysts had assumed it would show a double-digit decline. Subscription revenue, which still drives the company, though, dropped more quickly than analysts assumed, down 28 percent.

5:39 am PT: I jumped on the call a few minutes late, since AOL’s fancy system for listening to the call using a Webcast would not play in Apple’s (AAPL) Safari browser. Or else I am an idiot.

In any case, Firefox worked and we pressed on!

When I finally got on the call, it was perfect timing, since CFO Arthur Minson was delivering the results in a deeply glum manner, but with a very nice New York accent. It could have also been a Boston accent.

It was definitely a glum accent! “To be clear,” said Minson, AOL’s model “was not working.”

Well, it was nice to hear the obvious!

Minson continued to smack AOL around for quite a bit, which is a good strategy–to drop expectations in order to raise the company’s prospects with Wall Street later.

But the team led by CEO Tim Armstrong was on it! It has cut employees and other costs! It has decided to dump businesses that aren’t working! It has even cutting coupons, metaphorically speaking! This was serious beeswax, people!

5:52 am: Armstrong came back to answer questions from the analysts gathered.

He’s all about the content and how it will bring in the audience to sell advertising to.

The next question: Others have tried this niche content strategy and failed. Why was Armstrong different? Also, can AOL control its search destiny?

Armstrong begged to differ on calling AOL’s content strategies “niche.” Engadget is HUGE!

“It’s a scale that…advertisers find very attractive,” he said. “It works for consumers, it works for advertisers.”

As to search engine ranking? Search is not the only game in town, said the man who made his fortune as an exec at search giant Google (GOOG).

There are other fish in the sea, said Armstrong, such as Facebook and Twitter. “Our strategy on distribution is not relying on search,” he added. “Fragmentation is our friend.”

The next question: How’s AOL on display advertising compared with others?

What else was he going to say? Great, natch! Lots of low-hanging fruit (whatever that means!).

“Advertisers tend to vote where momentum is,” said Armstrong. “AOL is the company people are used to kicking around.”

No longer! The 98-pound weakling is now 99 pounds!

6:08 am: Another question on how AOL is improving itself. No more obsession with page views! No more tricks, like too many slideshows.

“As a net takeaway, the company is getting healthier, although you may see bumps,” said Armstrong.

It sounds painful!

More questions about fixing what’s broke.

And then, finally, a different one on what AOL is going to do around products and what it is planning on acquiring to help it do so, as well as what’s up with its search deal, which is up for renewal soon.

“We’re bringing product mentality back into the company,” said Armstrong, continuing to bash the previous administration about its overspending and lack of innovation.

Apparently, AOL is also done with “Hail Mary” acquisitions.

As to the search deal, Armstrong said AOL likes Google, but it is not making any commitments!

Also: “If you’re looking at this deal to squeeze out extra pennies,” look elsewhere, said Armstrong, who uses the word “partner,” which could also translate to “Microsoft” (MSFT).

What about making capital expenditures? We’re comfortable, said Minson. And no more short-term thinking!

More bashing of the past, which was getting a little tiresome.

6:22 am: What about divestitures?

Minson noted that he could not comment, but took a long time doing so.

A question about brand advertising and whether it is in good shape.

Yes, said Armstrong, but what else was he going to say again, since AOL sells brand advertising?

Last question: What is the key driver of margins at AOL going forward? As in: What the heck is going to get this baby humming and not sputtering?

“I think it comes down to user engagement,” said Armstrong about brand advertising.

To wrap up, after a decade of quiet, concluded Armstrong, who also underscored that the management team is more interested in execution than pleasing investors: “We’re live.”

Apparently, reports of AOL’s death are greatly exaggerated.

UPDATE: I got to chat with Armstrong for a bit after the call and he reiterated his essential talking points, including the need for execution, the importance of running AOL for the long term, and how he thinks Wall Street has patience for the company.

“AOL had a premise of making decisions for next week,” he said. “We are now stringently focused on the user.”

Obviously, Armstrong added, there will be focus on expanding AOL’s ad business. “That expansion is strong and continuing,” he said.

But there were no in-place strictures he called “guardrails.” And anything not in the guardrails? Off the road!

As to investor patience? “My guess is that we have multiple years,” said Armstrong.

Google (GOOG) stock has lurched five percent lower in the first few minutes of after-hours trading, as investors digest the news. If you want to anthropomorphize the market, you might speculate that it’s bummed that CEO Eric Schmidt and company didn’t show a higher revenue lift. But if you’re keeping track, revenue is up 17 percent compared with last year, and up 12 percent from the previous quarter.

Here is Citigroup (C) analyst Mark Mahaney’s “cheatsheet” for those playing at home (click to enlarge):

And you can see the company’s profit and loss and balance sheet here.

Google will be using YouTube to livestream its earnings call, but I’ll be providing some annotation here starting at 4:30 pm Eastern. You can also check out the company’s accompanying slide presentation here, and here’s a chart it’s particularly proud of (click to enlarge):

I’m trying out a promising new liveblog tool, but please bear with me if there are bumps along the way.

On the call: CEO Eric Schmidt, CFO Patrick Pichette, product guy Jonathan Rosenberg, sales boss Nikesh Arora. No Larry or Sergey.

Schmidt declares that he’s very pleased with Q4: “An extraordinary end to a roller coaster year.”

Schmidt: Clearly, we were right to start ramping up investments and will continue to do so. We’re investing in people and investing in tech based on our “70/20/10″ rule: 70 percent in core products, 20 percent in new business like mobile/Android, and 10 percent in “long view” initiatives like commerce and social.

And of course, more mergers and acquisitions. We’re continuing on a pace of roughly one M&A per month, some small, some big.

Pichette runs through the numbers in the release above. He reiterates Schmidt’s line about continuing investments.

Jonathan Rosenberg has a cold, but gets his message across: “We made some very hard decisions” to shut down some products to focus on winners. It’s our “more wood behind fewer arrows approach.” We’re focusing on DoubleClick integration, Android expansion and the Chrome OS. “YouTube, is in fact, monetizing well,” and we hope our partners make money, too.

Obviously, going forward, we’re going to plow resources into search. But other stuff too. Social, for instance. Not just social networking, but all of our products should be “social.” This can apply to search, local search, etc. We’re also focusing on commerce, whether people are making their purchases online or offline.

More Rosenberg: Mobile is important, and so is moving enterprise to the cloud.

Arora: We improved throughout the year, and Q4 was strong. Large companies like Staples (SPLS) and Volvo are directing an increasing portion of spending online [as they're supposed to do].

Arora: Search ads are always a value in December! Costs go up but they get more effective because people buy more.

Arora: Brand marketers are increasing their spending too. YouTube has had many successful brand campaigns. Have you seen Fox’s “Avatar” ads? They’re great. Other shoutouts for Sony (SNE) and American Express (AXP).

Arora: Most of the top networks have signed onto AdX ad exchange since we launched it in the fall.

Time for Q&A.

Google’s U.S. revenue had a big jump, but international revenue did not accelerate as quickly. What gives?

Arora: In the U.S., we saw large advertisers shifting offline to online. Other markets have different issues; hence, the different growth rates.

Are we back to normal in regard to seasonal patterns? Also, can you talk about “materiality” of mobile?

Pichette: We won’t talk about mobile revenue in any concrete way.

Arora: There is some different performance by vertical. Finance, obviously, isn’t as strong as it used to be.

Another question about mobile: Is Google trying to push revenue? Profitability? Also, please talk about China.

Rosenberg: Advertisers are starting to figure out what works on mobile. For instance, adding a phone number or an offer for mobile helps a lot.

Pichette: Regarding mobile, we want to drive innovation that in turn drives people to the Web, which is better for us. That’s the core engine of mobile.

Schmidt: “China stuff has been well-covered in the press,” the CEO notes before recounting the China story. “We’re in conversations with the Chinese government,” and our business has remained unchanged. “But in a reasonably short time, we’ll be making some changes there.” That said, we’d still like to be in China.

Missed a question. Apologies.

Please talk about outperformance of network business vs. owned and operated. Also, what accounts for higher marketing costs?

Pichette: Nothing to talk about re: network versus O&O. Re expenses, we said we were going to ramp up investment and we put in more there because we can track the results and the return on investment.

Arora: Yep, some of that money was to support consumer launches.

You said search increased five times on mobile. So what does that mean for revenue per search? Also, please talk more about increased spending on marketing.

Pichette: We’re really pleased with the marketing experiments we’re running.

Rosenberg: Regarding mobile, the new formats, targeting tools and reporting we’re giving mobile advertisers is making a huge difference. But I won’t answer your question about revenue.

Missed another question here.

YouTube monetization: Can you give us some metrics on how much inventory you’re selling?

Arora: Nope. But it has “gone from being a nice-to-have” to essential.

Pichette: The Youtube homepage nearly sold out in Q4. Hope that’s useful.

Can you break out ad spending by advertiser size?

Arora: Large advertisers are moving online, which is good. Retail was strong in Q4. We’re working with smaller advertisers to “bring them into the fray.” But the discrepancy so far has been mainly seasonal.

Can you rank your core businesses in terms of growth potential? Also, what’s up with you and Apple (AAPL)?

Schmidt: We’ve been saying for a while that display is a big opportunity. One story you haven’t seen so far is how successful we’ve been in display, but that will come out in 2010. [Note to PR staff: Start pitching!]

And obviously, mobile is small now but will grow quickly.

“With respect to Apple, it’s probably better to say”…that as a former board member “I have a special spot for Apple in my heart.” They’re a very well run company and “they have some very good stuff coming” strong competitor, etc.

Schmidt on Nexus One: What it is really about is a new way of buying a phone. Nexus One itself is the first in a series of examples where you can buy the phone online and pick your carrier.

Is Bing having an impact on cost per click?

Rosenberg: We think out CPCs are generally not affected by competitors. Prices are set by buyers.

Can you talk about Nexus One’s impact on margin?

Pichette. Not really. We want to innovate, etc. Nexus One will have its own margin and that’s how we’re focused on building the business.

We’ve seen third-party data on mobile projecting that iPhone could account for 50 percent of mobile traffic. Does that make sense to you? Also, you have said that the Apple relationship is “stable.” So what are the odds that you’re going to continue to provide search on the iPhone?

Schmidt: We won’t talk about the market share of Apple. And we won’t “speculate about any deals of any kind–true, not true, rumored, not rumored.”

Given that new display products are so great, is there any notion that people are moving dollars from search to display?

Schmidt: Advertisers “don’t shift, they add.” They might maximize search to maximize revenue and they might spend on display for long-term growth, branding, etc.

Pichette thanks Googlers listening for all their hard work. There’s an auxilary call at 6 pm Eastern with Pichette and Rosenberg, but I won’t be able to cover that one.

Looking ahead, IBM (IBM) expects full-year 2009 earnings of at least $9.85 a share, compared to its previous estimate of $9.70 per share.

“Our long-term strategic shift to higher-value businesses again enabled us to deliver outstanding margin, earnings and cash flow growth in the third quarter,” IBM CEO Sam Palmisano said in an earnings release. “We also saw improved revenue trends in our business and share gains in software and hardware. We continued to invest for growth in areas where clients see potential for value creation including Smarter Planet solutions, cloud computing and advanced business analytics.”

Looking ahead, Palmisano added, “We are optimistic about 2009 as we again raise our full-year expectations and we remain well ahead of pace for our 2010 roadmap of $10 to $11 per share.”

Taken together with Intel’s (INTC) latest earnings, which also beat expectations for revenue and profit, IBM’s report provides more evidence that the tech sector recovery is underway.

Sacconaghi believes that Dell (DELL) isn’t interested in a “transformational” acquisition, though its interest in the handset market might suggest otherwise. Rather, the company is mulling the acquisition of small- to medium-sized enterprise-related companies.

“While there has been speculation that Dell could look to acquire a handset company and we continue to believe that a consolidation play in the PC space could make sense for additional details, Dell appears focused on boosting its enterprise business by acquiring small to medium sized companies with strong margin profiles and higher levels of recurring revenues,” Sacconaghi writes.

Which companies? Software, services or storage and networking outfits, most likely, says Sacconaghi. Companies like Perot Systems (PER), Salesforce.com (CRM), Compellant (CML) and 3Com (COMS).

“We see Dell potentially looking to acquire a smaller remote infrastructure management company, or a smaller outsourcer–Perot fits the latter description, and is possible, but it is unclear that it is a willing seller, and its unique concentration (50 percent) in healthcare may be too narrow a platform for Dell’s offerings,” the analyst writes.

“…Dell’s software acquisitions to date have largely centered around systems management and we believe that similar types of companies could be acquired to further expand Dell’s capabilities. Also in software, we believe that [Salesforce.com] would be strategically consistent with Dell’s efforts to drive business at mid to large enterprises, but would be expensive ($4.8B current market cap) and would have a limited impact on revenues ($1.1B in their last FY)….

“Given that Dell’s biggest enterprise partnership is in storage, we believe the company could look to acquire additional IP for its own use. Compellent and CommVault (CVLT) could be appropriate targets. We think a networking deal is less likely, but purchasing someone such as 3COM and attempting to commoditize the networking space would not be inconsistent with Dell’s stated enterprise strategy.”

An interesting list of targets. Still, you’ve got to wonder why it doesn’t include Palm (PALM). After all, Dell really can’t afford to miss out on the handheld market completely. Can it?

All in all, a very impressive showing. Certainly, investors were agog over RIM’s financials. Shares in the company spiked on the news, rising more that 20 percent to $59.37 in after-hours trading. “This is wildly better than people were looking for,” said Duncan Stewart, analyst at DSAM Consulting in Toronto. “Getting improvement in both margin and growth at the same is a rare thing.”

Cupertino is reportedly in talks with some of the major music labels about adding over-the-air downloads and a greater variety of ringtones and ringbacks to iTunes in advance of the debut of the 3G iPhone. But getting the labels to agree to such a thing may come at a price, or rather a variable-pricing model.

The labels have long wanted iTunes to abandon its policy of selling songs at a flat rate of 99 cents in favor of a variable-pricing system that allows them to charge more for popular tracks. In the past, they haven’t had the leverage they needed to force Apple to do this. But with the mobile music market at stake and the company gunning for a big 3G iPhone launch come June, Apple may have no choice but to agree to the labels’ terms.

“[Mobile is] clearly an opportunity Apple is missing,” IDC analyst Lewis Ward told Wired News. “And Apple is going to want to do it all themselves, but these OTA music storefronts have not sold very well. Maybe there’s secret sauce Apple’s thinking about, but the track record [of mobile music and ringtone stores that require a credit card rather than charging users via their cellphone bills] has not been impressive to date. The real issue is billing. People are much more comfortable with paying through a carrier [because] you don’t have to enter a credit card number or be worried about security. … That puts the carrier in the supply, and the carrier is going to want their cut, which means the margin for Apple goes lower.”

Cupertino is reportedly in talks with some of the major music labels about adding over-the-air downloads and a greater variety of ringtones and ringbacks to iTunes in advance of the debut of the 3G iPhone. But getting the labels to agree to such a thing may come at a price, or rather a variable-pricing model.

The labels have long wanted iTunes to abandon its policy of selling songs at a flat rate of 99 cents in favor of a variable-pricing system that allows them to charge more for popular tracks. In the past, they haven’t had the leverage they needed to force Apple to do this. But with the mobile music market at stake and the company gunning for a big 3G iPhone launch come June, Apple may have no choice but to agree to the labels’ terms.

“[Mobile is] clearly an opportunity Apple is missing,” IDC analyst Lewis Ward told Wired News. “And Apple is going to want to do it all themselves, but these OTA music storefronts have not sold very well. Maybe there’s secret sauce Apple’s thinking about, but the track record [of mobile music and ringtone stores that require a credit card rather than charging users via their cellphone bills] has not been impressive to date. The real issue is billing. People are much more comfortable with paying through a carrier [because] you don’t have to enter a credit card number or be worried about security. … That puts the carrier in the supply, and the carrier is going to want their cut, which means the margin for Apple goes lower.”