Earlier today, Yahoo reported its first-quarter earnings, which showed revenue and earnings declines, which the Silicon Valley Internet portal said was due to its search and advertising partnership with Microsoft.

BoomTown liveblogged the conference call with Wall Street analysts, but there’s more deets to peruse and numbers to crunch–in order to figure out whether to blame Microsoft CEO Steve Ballmer or not.

Thus, here’s a deck by Yahoo, with all kinds of charts and graphs to wallow around in:

YHOO_Q111EarningsPresentationFinal

Yahoo announced its first-quarter earnings today, showing a continued worrisome revenue growth stall, due in large part to declines in search revenue from its partnership with Microsoft.

The Silicon Valley search giant reported revenue of $1.06 billion, down six percent from a year ago, on net earnings of 17 cents a share, down 28 percent.

The performance was essentially in line with Wall Street expectations, which had been estimating that Yahoo would report $1.05 billion in net revenue and earnings of 16 cents a share, after traffic acquisition costs (TAC) was taken out of its results.

That compared to revenue of $1.13 billion and 22 cents in earnings in the same period a year ago, results that were goosed by the sale of its Zimbra email asset to VMware.

Yahoo’s revenue growth drought was due largely to declines in its search advertising business, which fell 19 percent in the quarter from $440 million to $357 million.

Contractual guarantees paid by Microsoft, its search partner, masked even larger declines.

On a GAAP basis, search revenue was $455 million, a 46 percent decrease compared to $841 million for the first quarter of 2010.

Yahoo said display revenue ex-TAC increased 10 percent to $471 million, compared to $427 million for the first quarter of 2010.

It was a good performance, but by no means a barn burner, especially compared to Google’s 27 percent revenue growth year-over-year in its earnings last week.

Thus, it seems the turnaround efforts at Yahoo, much touted by CEO Carol Bartz, are still turning.

In a statement, she said:

“We are solidly executing toward our plan for returning Yahoo! to sustainable revenue and profit growth. During the quarter, we beat the midpoint of revenue guidance while continuing to deliver on the bottom line.”

As BoomTown had previously written, in the last quarterly call, Bartz had warned that MicroHoo had not grown yet into the beautiful swan expected in this ugly-searchling tale, noting that it might take until the second half of 2011 to see some prettier results.

Thus, Yahoo is right to focus on display advertising, an arena it dominates still, despite increasingly successful incursions from Google and Facebook.

Yahoo’s stock is certainly reflecting the worry, holding fast to its share price in between $16 and $17 for a while now. It closed today at $16.12, down 23 cents a share.

A year ago it was above $18.

The shares rose almost three percent in after-hours trading, though, to $16.57.

I will be liveblogging the conference call Yahoo’s top execs have with analysts, starting at 2 pm.

Until then, here’s the official Q1 earnings press release to peruse:

YHOO_Q111PressReleaseFinal

Will Yahoo’s revenue growth drought finally end this quarter?

We’ll see tomorrow when Yahoo reports its first-quarter earnings, after the markets close.

As usual, investors will be looking for some sign that the Silicon Valley Internet giant’s lackluster revenue results have improved in CEO Carol Bartz’s over-promised but still under-delivered turnaround effort.

And despite Wall Street worries that sales will remain flat, sources insist that display revenue will be slightly better than expected, although those from its declining search business will remain weak.

A poll of analysts is expecting Yahoo to report $1.05 billion in net revenue and earnings of 16 cents a share.

That compared to revenue of $1.13 billion and 22 cents in earnings in the same period a year ago, which was goosed by the sale of its Zimbra email asset to VMware, as well as some benefits from its search and online advertising partnership with Microsoft.

There’s no extra cherries on top this quarter, especially in the search arena, which BoomTown previously reported was troubled.

As I wrote last week:

In fact, although its display business will show a definite strong recovery in Yahoo’s quarterly results next week, its search business–both in market share and revenue per search (RPS)–has, as one person close to the situation put it succintly, “fallen off the cliff.”

That’s due, in part, to getting the new system with Microsoft delivering better results, which is not happening yet (if ever!).

In this quarter, Microsoft has honored its contractual guarantees and will make up the difference–which will result in masking the magnitude of the RPS loss. It’s a worrisome trend to watch.

In the last quarterly call, Bartz had warned that MicroHoo had not grown yet into the beautiful swan expected in this ugly-searchling tale, noting that it might take until the second half of 2011 to see some prettier results.

Thus, Yahoo will turn Wall Street’s greedy eyes to display, an arena it dominates still, despite increasingly successful incursions from Google and Facebook.

A win here is key, of course, with investors hoping for a strong performance.

Yahoo’s stock certainly is not doing that, holding fast to its share price in between $16 and $17 for a while now. A year ago, the stock was above $18 a share.

As Citi Investment Research’s Mark Mahaney noted in an earnings preview today:

Valuation remains interesting, with a highly attractive Asian Internet investment portfolio. In terms of risks, we focus on: 1) Competition in the Display Ad segment from Google, Facebook, etc; 2) YHOO’s overall Internet Usage Share Loss–now less than 10% of U.S. ’Net usage minutes; 3) YHOO doesn’t have assets in place to take advantage of trends in Social, Mobile & Local Internet, and Video Advertising; & 4) We are challenged to identify a near-term positive catalyst.

“Challenged” translates to Mahaney saying politely that Yahoo has zip coming down the pike to change its situation.

That means Wall Street is not yet in the mood to give Yahoo shares a break. Here is one of BoomTown’s fave videos–the great Diana Ross, with the infectious song hit, “I’m Coming Out”–to get the right vibe going:

Yesterday, BoomTown posted Part One of an interview with Microsoft’s Greg Nelson and Yahoo’s Mark Morrissey.

The pair (pictured here) are in charge of a two-year effort to coordinate a massive search and online advertising partnership, the result of a deal the companies struck last year.

It is critical they get it right, as Microsoft (MSFT) and Yahoo (YHOO) have a lot riding on the success of the effort, which is an attempt to catch up with search giant and dominant market leader Google (GOOG).

The companies–one from Washington state and the other from Silicon Valley–have a combined share of close to 30 percent, and the hope is that together the partnership is a better offering to both advertisers and consumers.

We’ll see about that, of course, but here’s the rest of what they had to say about the attempt in all its gory details:

MARK MORRISSEY: Let’s talk a little bit about–hopefully this won’t be too boring–but let’s talk a little bit about the execution process, because then this will give you the insight.

So, remember, Greg said we had about 25 people in each of our respective transition teams, that basically there’s a lead, and they’re all mirrored for each of the major elements of the program. Each of them, they all have their own execution structures, right, because they have whole teams of people that are working on their stuff.

So, we basically…Greg and I lead the overall transition. There are three primary areas: The algo transition, the paid search transition, and all sales and marketing. That third part is maybe the biggest of the three.

Then the 25 underneath that group, and then there’s hundreds and in some cases thousands of people underneath them in support of that.

So, they have each of their own weekly cadence of when they get together and how they make their decisions. That rolls all up to Greg and I, and Greg and I are responsible for what we call the plan of record that sets the milestones and locks the scope and the sequence of markets.

We completed our plan of record, except for the sequence of markets, because we’ve not finalized that, but all the rest of it, the scope, the timing, major milestones. We signed that off in what we call our joint operating team that meets weekly up here. And that’s just about 16 people on the joint operating team.

GREG NELSON: Yeah, more or less, all your core leads.

MARK MORRISSEY: We meet weekly. We make basically the scope change control decisions, any changes in milestones.

So, that’s how we control the overall program, keep it on schedule; we look at confidence levels, sign off on road maps, final signoff, that kind of stuff gets handled there.

Then once a month each of us…so, I meet with [Yahoo CEO Carol Bartz]. So, I work for Carol. I meet with Carol’s staff, give her staff a full briefing. Greg meets with the executive steering committee.

And then about every six or eight weeks, Carol wants to get together.

So, we have real, unbelievable top-down support and engagement, and we have a formal decision-making process that goes all the way down from the individual sub-element of the program up to a common place that we guide and make decisions on.

BOOMTOWN: And going forward–what I’m thinking about is things that happen later that you might want. All of a sudden Google is doing search by mental telepathy, for example.

MARK MORRISSEY: I heard about that one, yeah.

BOOMTOWN: Whatever they’re doing.

MARK MORRISSEY: It’s going to take them a long time to get that done.

BOOMTOWN: Well, they’re aliens. I told you, they’re aliens. No one believes me.

So, they decide to do something that you need, or else you like come up with some grand new idea that Google hasn’t thought of. How does that go into place?

GREG NELSON: Well, I mean, it could be…it would probably start informally, right? So, Mark and I either talk or email basically every day.

MARK MORRISSEY: Usually many times.

BOOMTOWN: I’m talking about year four.

GREG NELSON: Yeah, I know, but I’m just saying the strength of the relationship is in large part…you know, this is the pivot point. You’re sitting with the two guys to try and pivot this thing both up and down.

More likely than not, like just before you were coming up here, we were trading notes on a couple different processes that we’re trying to build or checking in on one thing or another.

So, if [Microsoft Online Services President Qi Lu] gets a big brainwave about the next big thing we’re going to do in search, and we’re going to build it into the API, probably what happens, because I get asked to do this 50 times a week, is, “Hey, why don’t you chat with Mark about that and see if Yahoo has got any interest.”

So, you’ve got this really high-frequency, pretty high-fidelity conversation, and then we might say, okay, yeah, that’s interesting, like let’s go activate it in the sales track and in the ops track and let’s pull in some of our leads, let’s brainstorm it, and then you’d push it in both directions.

MARK MORRISSEY: Right, because it has to fit into both companies’ road maps, right, and then what sales and marketing does, and if it’s customer facing it affects what sales is going to do.

GREG NELSON: And then you’d say, okay, we have this plan of record, that’s a big enough one, wow, that’s an amazing idea, let’s change the plan of record, and then we have a formal process to do that kind of change.

MARK MORRISSEY: And four years from now the plan of record won’t be around transition, it will be around what’s the next set of releases, what are our market objectives, how are we going to go.

BOOMTOWN: Let’s talk about that, what the next, when you’re not as you’re thinking this all the time on a daily basis, what is from your perspective the next thing in search or things that are further along.

GREG NELSON: Next big idea?

BOOMTOWN: Yeah.

GREG NELSON: Is that what you mean?

BOOMTOWN: Yeah.

GREG NELSON: Yeah, we can come back to that one. I’ll try and think up something really smart by the time we get back to it.

BOOMTOWN: Okay. So, sales and marketing.

MARK MORRISSEY: Yeah, so like I said, one of, if not the most important area for long-term success, is around sales and marketing. There’s a rather interesting and complicated setup here where we have a larger sales team with a little bit more experience, and then each of the regions, right, will have their sales teams. The sales team will still report to [Yahoo U.S. head Hilary Schneider] to run the overall thing, but the sales teams report regionally. And yet they have to learn adCenter.

So, there’s just a tremendous amount of training, right, to bring the Yahoo team up on adCenter, because I think the most important thing is not the transition, it’s optimizing on behalf of every advertiser after the transition, to achieve their market objectives.

There’s just a humongous amount of training broken up into four courses, huge investment that the Yahoo team is making in the training materials and the man-hours and all that preparation work that they have with their customers. All the customer communications that are happening now, we’re starting to do joint communication events, we had a big search alliance forum in Seattle two weeks ago.

GREG NELSON: Yeah, the search and marketing forum was here, and so we brought customers in a day before to just spend a day with Microsoft and Yahoo to learn about the search alliance.

We got up on stage first and sort of told the vision and took just open Q&A and said, what do you want to talk about, and then we had breakout groups with customers just to say what are you really interested in, what does a successful transition look like to you, what services or kind of information do you need.

This is an area where you could easily be in tension, right, or where you could have conflict between your two sales forces. That’s been so much easier than I would have guessed, because of the maturity and professionalism.

We still handle what we call standard advertisers. So, if you are not a hand-sold kind of premium customer, but you come directly to the platform, then you come to Microsoft, because you’re really just coming to adCenter. Otherwise, you’re with Yahoo and Yahoo is your sales force.

BOOMTOWN: And I assume if you ever got to a display agreement struck, that would be a similar.

MARK MORRISSEY: I can’t comment on display, but there’s definitely a synergy between search and display, as you well know, yeah.

[But] I think I should talk about two things that we haven’t covered. One is about the benefits of the combined marketplace, and then also we haven’t mentioned anything about where we are in terms of the current progress, because it’s actually from my perspective pretty phenomenal in terms of how much we’ve gotten done.

Starting with the unified marketplace, one of the biggest benefits here in a scale business is having a sufficient level of volume in a single buy, with a single campaign, a single set of optimizations, to help advertisers to achieve their marketing objectives.

So, by combining each of our respective share numbers, it now produces really for any sizable advertiser close to 30 percent, plus or minus, right, depending on a couple things in the U.S., and that’s a must buy.

GREG NELSON: Lots of upside.

MARK MORRISSEY: We’ve got work to do.

GREG NELSON: Unlimited potential.

MARK MORRISSEY: Our Yahoo consumers who want to stay on Yahoo search, and we believe that because of the relevance of Microsoft’s results and the rest of the stuff we’re going to put around it, and how we wrap search into the overall experience, we shouldn’t give consumers any reason to go anywhere else to search. That should just lift share in and of itself.

GREG NELSON: The other nice thing, both if you want to look at it that way, is the more lopsided the share, the more enthusiastic advertisers and publishers are about the search alliance.

We have lots of friends all around the world rooting for us and asking how they can help.

MARK MORRISSEY: So, the benefit of a unified marketplace is that advertisers, you know, today they spend most of their time on Google, a little less time on Yahoo, less time on adCenter, and now we’re going to give them one system, one buy, with more clicks, which gives you more consistent performance. Their time is better spent on that optimization.

And not only does that generate just natural lift across the marketplace, but the main byproduct is it produces better ads. Better ads help produce a better search experience, better search experience and all positive…to feed the positive virtuous cycle.

We’ve gotten outstanding feedback, not that every single advertiser is happy, because there are some advertisers that would like to see maybe a non-liquid marketplace, because that was good for them. But, by and large, you look across the base, our customers are very happy.

The biggest thing is they want us to do it with quality, and they want us just to be transparent with where we are along the process.

So, can we switch to talk about where we are?

BOOMTOWN: Okay.

MARK MORRISSEY: So, we signed in December. We have regulatory clearance, commencement in February, and we got to plan of record in May. We’ve been coding like mad, sales, market teams working through their plans. And we are now in the testing phase, which is really significant.

We still have coding to do, there’s a couple more really significant releases that we have to do together before the paid transition can occur. But right now we’re in the testing phase.

We are well into the testing phase for algo, and we’re starting the testing phase for paid. I think what I said at analyst day, because I did show that one example from that, and that was we are continuing to progress right along our testing plan. A huge achievement on Friday, we got to 100 percent of a certain level of testing, and so far so good.

But the hardest work is still in front of us, but if you just think of it, we’re chipping away week by week by week.

That requires all this complexity to work, right, because a query has to come to Yahoo, we’ve got to send it off through Microsoft’s API and we’ve got to get the results, and then we’ve got to put all of our other stuff around it and deliver the whole page experience.

BOOMTOWN: In speed.

MARK MORRISSEY: In speed, that’s right, that’s right.

BOOMTOWN: And you’re also testing the advertiser experience.

MARK MORRISSEY: Right. They’re separate, okay. We are going to run bucket tests of them together and separate, as you’d expect, but the actual traffic switch can be done separate, algo versus paid.

Right now we’re in the testing phase, and it’s going as well…it’s going better than I had hoped it would go. I mean, it’s not to say that we are in the clear on this, but, in terms of ramping up that process, checking off our weekly milestone, the testing process is going really well so far.

BOOMTOWN: And the people at Yahoo in that area are pleased with it? Because they’re again the customers in a weird way.

MARK MORRISSEY: We have a lot of work to do, too. I don’t want to make it sound like we’re all just customers here, but yeah, I mean, like we were skeptical about how quickly some of this work could get done, how quickly the relevance numbers could get achieved. We were confident Microsoft was the right choice. And it’s so far, so good. The things are working as we had hoped. Relevance is really good. I said that at analyst day the relevance is really good, and we’re cautiously optimistic.

BOOMTOWN: And the other thing that’s interesting to me now is the thing that Google can’t search, and neither can you is a lot of the people data in Facebook and all the social networking sites that get very deep and complex.

GREG NELSON: Part of your question about the future of search may be more a cooperation, really driven by consumer demand for those parts of the Web to become more open, which would be great.

There are some companies that don’t necessarily want to participate, but if consumers either vote with their feet or apply enough pressure, that that stuff should open up.

At some point maybe it just becomes overwhelming. You know [Yahoo Chief Product Officer Blake Irving], who’s now at Yahoo. One of the things he worked on really hard here when he was at Microsoft was interoperability between our two messaging platforms.

There is an example where really the consumer value is very obvious, very powerful, and eventually it broke through. You may find the same in the sort of non-crawlable parts of the Web, because when people think of search-oriented, keyword-based navigation of information as something that they expect, if you can’t get to some type of data through that, they may just stop using it, because it’s too inconvenient.

MARK MORRISSEY: I think that’s kind of the point I was trying to make earlier is that the search experience has to evolve significantly.

And I’ll call it the traditional search if the consumer knows exactly what they’re looking for, and they’re going to go through page after page of results. That’s yesterday’s search game. Search is more navigational now, it’s definitely more social, and helping users to find information that they’re looking for in a more natural way, rather than just a query and going through pages of blue links. We think that’s really critical.

By leveraging Microsoft’s huge investments in I’ll call it the traditional aspect of search, that always has to happen, right, the indexing, the crawling and the ranking is huge, hugely important, and useful, absolutely, and then layering on top of that two companies really focused on evolving the future of the search experience, and each of us having our own skills.

GREG NELSON: Just getting back to sort of what people want or what they expect, I assume you saw some of the research that we did when we were designing Bing. It’s something like over 60 percent, something like 65 percent of search sessions are unsuccessful.

So, the future of search is not just improving relevance, but also bringing people the answer so that your percentage of sessions that are successful goes very close to 100 percent, and the amount of time that you spend in that navigational part of the session has to get smaller and smaller and smaller.

The decision engine sort of positioning, the thing that led us in that direction was that very long term bet that you can understand the intent of the user, and then translate that into a different form of relevance, and you can serve up increasingly rich, not links, because links are just a way to end up somewhere else that you may not know anything about, but serve up high quality, credible answers or results or experiences, without having to navigate out of the search paradigm.

MARK MORRISSEY: To me when we talk about experiences, it’s that. It’s not just a query and results, it’s leading the user through the information that they’re looking for.

A big driver for the decision that we made in the partnership with Microsoft is to allow us to focus on that.

GREG NELSON: There are a whole lot of premium opportunities that are available to Yahoo.

We have a lot of things that are in the core API, we have a lot of things that can be put in the API.

And so Yahoo can form their strategy about what they want to do with the user experience, and we have a lot of things to do too.

The thing that’s been fun for me, and you know this by covering MSN, too, is you step into the search discussion at Microsoft at any level of the company, and you feel the level of focus and energy and forward momentum. Because when this company gets really serious about something, you really feel it. I mean, you felt it in Windows and Office and Internet Explorer. And now you feel it in search. Both the product experience like Bing but also at the platform level.

It’s fun. Like as someone that has spent 15 years now, I just had my 15th anniversary a couple weeks ago…

BOOMTOWN: What do you get?

GREG NELSON: You get a big piece of glass.

BOOMTOWN: Really?

GREG NELSON: Yeah.

BOOMTOWN: Like a vase?

GREG NELSON: No, like a big monolith.

BOOMTOWN: Really?

GREG NELSON: Yes.

BOOMTOWN: Nice.

GREG NELSON: Come over to my office and I’ll show you.

BOOMTOWN: Okay. [Laughter.]

GREG NELSON: But, I mean, the focus that you feel there, for somebody that has worked on a part of the business that’s less strategic, has been really fun, really energizing, and just great to work on.

MARK MORRISSEY: And that’s been proven out as we’ve worked through step by step through the things that we’ve needed to do. There hasn’t been a time where they’ve said, no, we’re not going to invest to go get that stuff. There has been clear focus at every level of the organization. And again the quality of what they’ve produced so far–not that they’re done, there’s a lot of work still left to go–but the quality has been fantastic. And I have looked forward to the future stuff that we’ve started to talk about here.

BOOMTOWN: Who do you actually report to?

MARK MORRISSEY: Carol.

BOOMTOWN: Carol, directly.

MARK MORRISSEY: Yes.

We sat down when she asked me to take the job, and she decided she wanted to have direct engagement.

And then clearly because this role spans across each of the different functions, our entire search business is what we’re changing in order to facilitate that.

BOOMTOWN: So, you’re up here [in the Seattle area]. You’re up here, what, every week?

MARK MORRISSEY: I live in southern California, because I started with Panama.

BOOMTOWN: So, you come up every week?

MARK MORRISSEY: Yeah, yeah, at least once a week. And generally it’s Thursdays is when we have our joint operating team meeting.

GREG NELSON: Yeah, if you want to buy airline stocks, like Alaska (ALK) and Southwest (LUV), I mean, between our leads going down and Yahoo’s leads coming up, wow, it’s amazing.

MARK MORRISSEY: When we have a center of operation for decisions tend to be here a little bit more, but that when you get down a level and we’re into each individual team’s discussion, like the algo team, their big meetings are on Thursdays, and they switch back and forth between here and the Sunnyvale area.

GREG NELSON: A lot of what we’re working on right now is engineering migration; we try and put Mark in the rooms with engineering leaders and whatever.

BOOMTOWN: Right, okay. And then you’ll continue to do that right through the…

MARK MORRISSEY: As long as it’s needed.

After months of trying, BoomTown was finally granted an audience with the two key execs who are now responsible for one of the diciest digital jobs going right now: Microsoft’s Greg Nelson and Yahoo’s Mark Morrissey.

The pair’s two-year task is to coordinate the massive search and online advertising partnership the companies struck last year, a job that is perhaps one of the more complex and critical to their businesses going forward.

The deal was finally approved by government regulators in February, and that started the clock for Nelson and Morrissey to get it cooking with gas.

Although it is not as if either Microsoft (MSFT) or Yahoo (YHOO) had a choice but to join together in order to make a dent in the dominant market position of Google (GOOG) in search, the companies are hoping their combined share of close to 30 percent will make a difference to both advertisers and consumers.

The integration will be ongoing, with hopes that the U.S. market will see a unified backend for search technology by the end of the year. Paid search will follow, as will the rest of the global markets.

As part of the shift, some staff from the Yahoo search technology group have either left, been laid off or have been moving over to Microsoft in the transition.

That has meant a Silicon Valley-to-Seattle area back and forth commute for Nelson and Morrissey, both longtime employees who have worked on a variety of other jobs at both companies, including heading MSN and major advertising platform initiatives, respectively.

But this effort is bigger than any of that, since it essentially is the search equivalent of herding cats–by creating a seamless search and online advertising product that works quickly and well across two major Web properties.

Thus, here is the first of two parts of an edited transcript of much of my hour-long interview with both, in which we talked about a range of issues from operations to culture to codependency.

Part Two of of the interview is posted here.

GREG NELSON: So, you want to hear how I got into this thing?

BOOMTOWN: Yeah…explain it to me.

GREG NELSON: So, you know me from the MSN days. And [Microsoft search head Qi Lu] said, “I like what you’re doing with your team, but I have this assignment. And I said, “Qi, I really respect what you’re trying to do. I don’t know if I’m the right guy for you, but go ahead and talk to everybody you want to talk to. And if you come back and ask me to do it, I’ll say yes.”

So, he went out and interviewed a bunch of people and then came back and said, I want you to do it. That was hard, because I loved my MSN team, and I loved what I was doing. But, you know, when Qi asks, you say yes.

BOOMTOWN: Had you been doing any search business?

GREG NELSON: Well, only through the MSN lens. I was a publisher in a way, because I had the responsibility to drive search volume through MSN as a publisher. So, I would work with our editorial staff in all these different markets to think about search experiences in the context of a portal or a media property, and how you turn search into content or how you drive premium content experiences that add value to search, whatever it might be.

So, I thought about it only from that point of view. The algorithmic part of search, like the way that you generate relevance in search, the way that you attach it to advertising in search, that’s sort of my…that’s what I get to learn out of this job, which is great.

MARK MORRISSEY: When he started, both of our executives got our top level teams together. We wanted to be really on the ground running by the time they got regulatory approval.

GREG NELSON: Just to give you a sense of what I walked into, there were hundreds…I don’t remember exactly how many, probably 200 people that had expressed interest in working on that Yahoo partnership by the time that I was asked to take it on. And they were people from all different parts of the company and division; not necessarily all at senior levels, but people that had said, “Wow, I think that’s really interesting, I’d like to come work on it.”

So, I went through a review of all those resumes and all that talent, and then also did additional sort of looking around and picking people one at a time to build what we thought we would be a great team.

BOOMTOWN: And how many people are working on it from Microsoft?

GREG NELSON: All up?

BOOMTOWN: Yes.

GREG NELSON: Thousands.

BOOMTOWN: No, of course, but…

GREG NELSON: Yeah, I mean, there’s about 25 on my team, 25, 30, something like that.

MARK MORRISSEY: But even after you got your team together, one of the things that we’ve continued to do is find some key talent at Yahoo that has moved over to also be part of the Microsoft team.

GREG NELSON: That’s been really key.

MARK MORRISSEY: Yeah. So, we want people that really understand the search business and have extensive experience at Yahoo and can really help bridge not only the cultural differences, but the technical differences and the way we’ve approached the market.

BOOMTOWN: You’ve done a lot of these.

MARK MORRISSEY: So, yeah, about five years ago, they brought me into the product portion of Panama….And then that’s probably the closest comparable effort in the industry, because we did have to move our 400,000, plus or minus, global advertisers over from the platform over to Panama.

When [Yahoo CEO Carol Bartz] came on board, she asked me to be part of a small team that worked directly with Microsoft from the very beginning to figure out what the right thing was for us to do at the company, and obviously then to do…figure out what the right aligned incentives and the right structure would be for a long term, 10-year, global agreement between the two companies.

So, I did that, and that was a big portion of my responsibility last year. And then similar to Greg, as soon as it became clear that we were going to get an agreement signed sort of in the October timeframe, maybe a little bit sooner than that, Carol sat me down. I had another position in the company, and she said, it’s the right thing for you to do, and she asked me to do it.

So, she asked me to take on this role, and I just have had a long term affinity for search and search advertising. I wanted to make sure with all the work that we did on Panama and all the investments we made in search that we really ended up with the right future. Search is critical to Yahoo’s future, and yet we’ve got to make sure that we do this transition in a way that really puts us forward of all of our different customers.

BOOMTOWN: When you say Yahoo’s future, how do you look at it in search?

MARK MORRISSEY: It’s a critical part of our business today, and a critical part of our consumer experience, and it always will be. What the market deserves is it really needs a true alternative to Google. And the best way for us to achieve that is to acknowledge things that we do well, and the things that Microsoft does well, and to leverage those things together, as opposed to us trying to do everything ourselves, particularly in the areas that we’re maybe not so good at.

So, between Microsoft’s experience and focus on delivering great global platforms with true scale, Yahoo’s strength in terms of working with advertisers and understanding of the market, I really believe that in the mechanics we set up from the very beginning of this that by leveraging both of our strengths, that we can really deliver a true competitor to Google.

Not only does our scale combine to really give them much better liquidity that is huge, right, getting up close to 30 percent in the U.S., big, but then the focus that we have really helps out.

[We're not going to be in] the search platform business, the crawling, the ranking and the indexing of the Web. There is a lot of search-related technology that we’re still going to do, because we believe that the search experience…where the market needs to go for search, it’s still a relatively young market, at least from my perspective. But the search experience really needs to evolve significantly.

So, rather than us with less resources than what Google or Microsoft have had in the past trying to do all the back-end platforms and do search experience, now we’re going to take our best talent and focus on search experience and the overall consumer experience.

And then some of our talent is moving over to Microsoft. There’s about 400 people in the products organization between the search technology and paid search that are moving between Yahoo and Microsoft.

BOOMTOWN: And how successful have you been recruiting those [to Microsoft]?

GREG NELSON: Oh, really. Yeah, very successful.

BOOMTOWN: And they’re staying down there [in Silicon Valley]?

GREG NELSON: Yeah, most of them are in India. Some of them are in Silicon Valley, and other places. We’ve had a super-high acceptance rate.

So, we’ve made that quite a big priority, including a lot of executive visits, and a lot of kind of, “Hey, welcome to Microsoft, we’re excited to have you.”

BOOMTOWN: So, then you brought up over about 400, is that right?

GREG NELSON: They come in waves actually, because Mark had talked about Panama, if you want, but they still have to continue to run Panama over a period of time, across all these different markets.

So, as they are closing down Panama in various places, then we’re bringing waves of employees over and training them on adCenter.

MARK MORRISSEY: And that was one of the things that really started to demonstrate and build a lot of confidence in the execution portion of the partnership. There’s two very competing objectives: Get the employees over as fast as you possibly can, because getting that talent into Microsoft not only puts more key talent on developing the things that we need to have done for the future of the platform, but also helps in just the transition itself.

And yet we don’t want to move the talent so quickly that we’re not able to continue to the platform all the way through.

So, we went through a very rigorous…I think it took about five or six weeks with the senior leadership at Microsoft on what employees can go in what locations with what skill sets to allow us to balance between the two, and I thought it went fantastic.

Employees are engaged; the Microsoft team did an excellent job of helping to explain their level of investment and give those employees…because employees, they want to beat Google, and knowing that they have a future at a company that is going to invest significantly to make that happen was a big deal.

BOOMTOWN: And, Greg, when you’re saying, when they move over, there’s not a flipped switch, I understand that, but what’s the time line at this point?

GREG NELSON: I think we’ve brought over 100 or so.

MARK MORRISSEY: A big chunk went last week.

BOOMTOWN: When does it switch over?

MARK MORRISSEY: Beginning of next year.

BOOMTOWN: The U.S. moves first and then…

GREG NELSON: Yeah. Well, U.S. and Canada, North America.

BOOMTOWN: Right, and then? Then the rest of the world?

GREG NELSON: You can kind of do it by size of market. So, Europe next.

MARK MORRISSEY: Basically, there’s 59 total countries and the objective is to get all countries done by Q2 of 2012, the first few markets being U.S. and Canada.

GREG NELSON: It’s 24 months after commencement, which is February 18th.

BOOMTOWN: Right, but it begins next January, correct?

MARK MORRISSEY: The principle is to transition with quality. That’s the overriding factor. And that’s based on the consumer experience and the yield and performance of advertisers and publishers in our owned-and-operated properties, right, because the intent here is make sure that, as we make the transition to going forward, we want the business results to get nothing but better and better.

We set a goal for both of our teams, if we can possibly move U.S. and Canada over before the holiday season, with quality, this year–this year, we want to do so.

BOOMTOWN: Quality, what does that mean?

MARK MORRISSEY: The first one is the experience. For consumers we want to deliver the same quality experience–basically the look and feel before and after the transition.

And the results will get nothing but more and more relevant over time. But the overall experience, the speed, the performance need to be as good or better going forward. For advertisers, there are capabilities that they’ve really enjoyed in Panama that are not in adCenter today. We’re not promising them one-for-one capabilities, but there are investments that we’re making together with Microsoft to bring adCenter up for advertisers and publishers.

In terms of the first one is experience–experience for consumers, advertisers, publishers, and we want the capabilities to be what they expect or better.

Then secondly, it’s around the business metrics….We want to make sure that again for not every single advertiser, not every single publisher, but if you look at in aggregate the groups of major marketplaces, we want the overall performance and business metrics, particularly going into the holiday season, it needs to be as good or better going forward.

So, quality is about the experience itself, measured probably in terms of capabilities, and then there’s the business metrics, and we need to make sure that their yield is as good.

GREG NELSON: And there’s great alignment on that. It’s a 10-year partnership at minimum, hopefully longer, and you want to get off on the right foot with everybody: Consumers, advertisers, publishers. You want them to feel like this is a strong launch, it’s a credible alternative, and we’re in.

So, we’re not going to rush it. If the companies don’t feel ready, like we can really achieve that, then, of course, we’re better to wait.

BOOMTOWN: Well, there is some pressure.

GREG NELSON: The time line that we started to communicate to–publicly, specifically–our advertisers and publishers, is our goal is to have, you know, as pretty confident, algo transition, U.S. and Canada, will happen this year.

We want the paid transition to happen this year, if we can do so with quality, before the holiday season. We’ve got to protect the holiday season at all costs here. And then the next big part of the goal is we have to have it all done by Q2 of 2012.

So, right now we’re finalizing with each of our markets what that sequence will be in terms of the countries, starting in the first quarter of next year, and then we just roll all the way through to that last year.

BOOMTOWN: And how have the cultural changes [been managed]?

GREG NELSON: It’s interesting, because, of course, walking into this I had sort of a point of view and some apprehension, like “Wow, is this going to be really hard.”

It’s been far easier than I had expected, and I think part of that is just that Mark and I get along very well. We’re both kind of pragmatic and it takes a lot to kind of get us ruffled. So, I think we have similar styles. And the people that we’ve hired, we’ve really focused on finding people that are resilient and emotionally mature, and it will sort of steer something of this complexity over a long period of time.

So, I think you often read about, oh, Microsoft has this one culture, Yahoo has another. In practice, at least between these teams, I haven’t found that to be true.

MARK MORRISSEY: Well, right, and the interests here and the incentives that sort of reinforce those interests are very aligned. The way that the partnership was put together, we all have this one big goal, and we’ve hired people that are just really strongly committed to getting that done, and you have support from both companies at the CEO level down. It’s the top priority for both companies. It’s been far easier than I thought.

BOOMTOWN: But in terms of disgruntlement at Yahoo over not being in search technology anymore, how did you cope with that?

MARK MORRISSEY: So, first, we are in search, we’re always going to be in search. There’s an element of that particular part of the search technology that we’re not going to be in. Yeah, there were some disgruntled employees, there always will be when you make a hard decision.

But, in general, employees have responded very well, and the level of commitment that we’ve seen from the Yahoo end, work that we have to do, because this is an extraordinarily complex transition process where we have to connect our front-end to Microsoft’s back-end, and it’s got to work at tremendous scale.

I don’t know if you had a chance to see my presentation from investor day, but one of the things that I showed was some of the screenshots of what we already have in test. February wasn’t that long ago. To have gotten regulatory approval for us, to get through the mountain of requirements and use cases that we had to figure out, to have gotten the API, agreement on the APIs, and to get the coding behind those APIs and get into test by June is phenomenal.

It’s really just a long way of saying that doesn’t happen unless the Yahoos that are working on this are incredibly committed to the future of where Yahoo is going, and the future of working together with Microsoft to achieve this objective.

So, while there will always be disgruntled employees, if you look at the larger population, I mean, we have people that are not just working, they’re working unbelievably hard to make this happen.

BOOMTOWN: Now, the search experience teams are competitive teams.

MARK MORRISSEY: Some are competitive and there are some places that we’re working together. It’s a mix of both.

BOOMTOWN: Such as? Bing has been very impressive in terms of their innovation.

MARK MORRISSEY: Absolutely.

GREG NELSON: Right, and then there’s a separate conversation which is longer term, and, you know, it’s the sort of thing that would feel great to work on if we could do it right now, but right now we’re sort of just trying to ship.

But, both companies have unique assets that we’d love to put into the search alliance, and we want to drive that conversation. And right now we just want to make sure that we get Yahoo to parity of their existing experience, and then we also want to have that conversation about how do we build strength.

MARK MORRISSEY: Another way of looking at it is this is the first agreement in the industry where we have full parity in the platform.

So, as Microsoft invests in innovation around the experience, that’s going to require changes in the platform. As Yahoo invests in things that we want to do in the search experience, that will require changes in the platform. So, we’re always going to meet in the middle at the platform anyway.

Now, that’s not to say that every single thing that we decide to do around entertainment will be the same things that Microsoft decides to do. Some of the things we want to innovate independently, because we’ll discover more things and really move the ball forward. But we already have established a very strong working relationship around how we make those platform decisions, because there are things that Yahoo does today that are quite different than the way Microsoft does them today.

In order for us to get to that comparable experience, this could have been a fight to the death, right? Why would we want to do that in the Microsoft platform? And they’d say, well, “No, we don’t want to do it.”

What we did–and again I think it speaks to the maturity of both of our teams–is we just worked through use cases. Well, what are consumers really trying to do here, how has Microsoft been approaching solving that problem, how is Yahoo doing that. I thought we worked not just agreeable solutions, but ones that moved the ball forward for both of us.

But I’m anxious to get into those future conversations much more. But right now we’ve got to ship.

GREG NELSON: That’s the next chapter. The chapter right now is everybody’s head is down trying to just land Yahoo properly on the platform, and with the great equivalent searching experience.

BOOMTOWN: And when you have complaints? [Microsoft is the] vendor essentially and [Yahoo] the customer.

MARK MORRISSEY: The structure of the agreement, we really worked hard. This goes way back to the very first discussions that we had. We wanted to have aligned incentives where we set up this codependence that kept us really working well together through each of our respective roles. So, by and large, the issues or concerns, why isn’t this working, why don’t I have this capability, you know, it’s Google does it this way…we are going to be a major voice of the customer to the Microsoft teams.

In the structure of the agreement we have both this operational rigor of how do we bring those things in, how do we make marketplace decisions, which are really important. They have the technology, we have the customer-facing piece–and then how do we make road map decisions.

So, throughout transition I have approval authority in Microsoft’s platform road maps, and then going forward then we have a way of we keep providing that type of input.

It’s not a typical vendor-customer complaint process, it’s much more of a partnership, but we each have respective roles where one of us is more the vendor and one of us is more the customer.

So, for the platform they’re more the vendor, we’re more the customer. For sales we’re the vendor, they’re the customer.

And that keeps us again this kind of healthy codependence. And again to leverage–that aligns with each of our strengths.

BOOMTOWN: Is there such a thing as a healthy codependence?

GREG NELSON: Just watch.

Even the Justice Department gets it.

The MicroHoo deal is pretty much about catching Google.

But with a combined market share at less than half of Google’s, of course, that is an awfully tall marching order.

Still, although the DOJ has not yet ginned up its courage to investigate the search giant–something it may never do, in fact–it approved the search and online advertising partnership between Microsoft and Yahoo (without any restrictions, mind you) as a kind of proxy.

The key government regulator of such deals noted:

“[It] would be likely to increase competition by creating a more viable competitive alternative to Google, the firm that now dominates these markets…Most customers view Google as posing the most significant competitive constraint on both Microsoft and Yahoo, and the competitive focus of both Microsoft and Yahoo is predominately on Google and not on each other.”

In other words, MicroHoo floats together or sinks apart.

Not that the companies want to paint it so starkly right away, loudly not mentioning Google (GOOG) by name after the approval Thursday.

As Microsoft (MSFT) CEO Steve Ballmer said: “I believe that together, Microsoft and Yahoo will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Instead, as you will see from a pair of Yahoo (YHOO) CEO Carol Bartz’s aggressively jaunty videos below, it’s all about improving the “search experience.”

For Yahoo, at least, that had better be true, as it needs to stanch the decline in its search market share, much of which is getting eaten up by–uh-oh–Microsoft.

And that is not even good news for the software giant.

As one top Microsoft exec told a crowd of lesser online execs at a recent meeting: The share gain has to come from Google and not Yahoo to really count.

Now–unless the Federal Trade Commission decides to step in over privacy concerns–we’ll finally see if the pair can pull off what would be the greatest coup ever in the tech arena: Knocking Google down a peg or two.

Here are those Bartz videos, in which she extols the deal:

Please see this disclosure related to me and Google.

Like victims in the thriller, “Ten Little Indians,” the directors of Yahoo involved in its Microsoft takeover debacle are moving off its board.

Today, it’s billionaire businessman Ron Burkle (pictured here) doing the leaving, after serving since 2001, when he was brought onto the Internet giant’s board by former CEO Terry Semel.

So far under the tenure of CEO Carol Bartz, who came to Yahoo (YHOO) in January 2009, Carl Icahn, the activist shareholder who was also a big player in the MicroHoo fight, departed in late October 2009.

(Icahn has since been dumping Yahoo shares, which reached a high of 75 million and are now at about 12 million, as reported by Digital Daily’s John Paczkowski earlier today.)

In addition, Maggie Wilderotter–who was once thought to be a candidate for Yahoo’s CEO job after former CEO and co-founder Jerry Yang stepped down–left in late September 2009.

Yahoo named Sue James, a former high-ranking Ernst & Young exec, as a new board member in January.

More appointments are likely as Bartz adds directors of her choosing.

Yahoo said in a press release this afternoon that Burkle, who made his giant fortune in the supermarket business, had decided not to stand for re-election at its 2010 annual stockholders’ meeting.

Speaking for BoomTown alone, it is a welcome departure, since it was Burkle, along with Yahoo Chairman Roy Bostock, who was most influential and involved in key decision-making in Yahoo’s disastrous battle with Microsoft (MSFT) in 2007 and 2008.

The fight wounded Yahoo badly, both on Wall Street and within the organization, leaving the Silicon Valley icon struggling to return itself to relevance and growth.

Here is the full press release from Yahoo about Burkle’s leaving:

Yahoo! Announces Ron Burkle Will Not Stand for Re-Election to Board

SUNNYVALE, Calif., Feb 16, 2010–Yahoo! Inc. (NASDAQ: YHOO) announced today that Ron Burkle has decided not to stand for re-election to the company’s Board of Directors at its 2010 annual stockholders’ meeting in order to devote more time to his other business interests. Mr. Burkle has served on the company’s board since November 2001.

“On behalf of our entire board, I would like to thank Ron for his distinguished service and invaluable contributions to our company and board,” said Roy Bostock, chairman of Yahoo!’s Board of Directors. “Yahoo! and its stockholders have benefited greatly from the counsel, insights and objectivity Ron has brought to the company during his nine years on the board. We wish him well in his future endeavors.”

“It has been a great privilege to serve on Yahoo!’s board and to work with such an outstanding group of people,” said Ron Burkle, managing partner of The Yucaipa Companies.

It was back to normal for Microsoft, at least if you looked at its stellar results in the second quarter, which the software giant reported earlier today.

BoomTown liveblogged the company’s call with Wall Street analysts, which began at 2:30 pm PT today.

Microsoft (MSFT) has been through the financial wringer over the last year, announcing the first mass layoffs in the its 35-year history a year ago.

But after the markets closed today, Microsoft said its earnings for its fiscal second quarter handily beat expectations.

Net income for the period rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period last year. Meanwhile, revenue rose 14 percent to $19.02 billion.

Analysts had been expecting earnings of 59 cents a share, and $17.9 billion in revenue.

It’s hard to tell if Microsoft–which has been one of the grumpier tech companies publicly, due to its weaker results over the last year–would start to put on a happy face or not.

2:31 pm: Welcome to new CFO, Peter Klein (pictured here) for his first earnings call. He replaced Chris Liddell, whose kiwi-cute New Zealand accent will be missed.

Klein gave a big hello, which was made happier by the news he got to deliver. “We reported record revenue and record profits,” he said.

Thank you, consumers!

But Klein also noted that Microsoft did “not see return of enterprise spending growth,” which was the big bummer.

No thank you, business folks!

But working the cost side made that all okay, for now at least.

Then the call was turned over to investor relations dude, Bill Koefoed, who also noted that the results were “phenomenal.”

Koefoed went through the numbers reported, which were all in the press release.

2:47 pm: Klein came back, discussing the outlook, which is not as glum as any of the Microsoft quarterly calls over the last year.

Then it was onto questions.

The first was on what will drive sales going forward, besides the success of WIndows 7 operating system software.

Microsoft’s future results would depend on and be “in line with PC” business, said Klein.

What about costs–will Microsoft keep the screws on?

We’ll see!

Next question: More details on enterprise?

We’re working on it! “As the enterprise [business] picks up…we are very well positioned,” said Klein.

More enterprise questions. “We have a great product pipeline,” he said, but we can’t predict what will happen.

2:57 pm: How’s the shrink-wrapped retail business going?

Great!

I became numbed into a stupor by the dullness of the next several questions, all internal chair-moving queries and repetition of previous questions.

Finally, one about exactly what Microsoft might be increasing spending on!

Well, the still-unapproved search and online advertising partnership with Yahoo (YHOO), for one, said Klein.

Back to more dull ones, until one on when the MicroHoo deal will be approved by federal regulators and how Bing is going to keep growing market share, which it has been doing admirably.

Klein said nothing on either, but very politely.

Another sleep-inducing question and then one on Microsoft’s giant pile of cash and whether the compay would hand it back to shareholders.

Klein gave another nonanswer.

The last question was about the flat performance from the gaming unit.

Well, there is the upcoming Project Natal, said Klein, to look forward to. But–keeping up his newly hatched CFO equanimity–no news to report here either.

“Microsoft eats, sleeps and drinks search,” said one Yahoo source to me this week. “And we just don’t.”

That was one very stark way of explaining why Yahoo, the No. 2 search player, continues to lose market share in the lucrative online arena, even as Microsoft’s Bing service has been slowly gaining.

The latest proof of this came this week from a comScore (SCOR) report that showed a decline of 0.5 percent, to 17.5 percent, for Yahoo (YHOO) in November, even as Microsoft (MSFT) saw a gain from 9.9 percent to 10.3 percent, and Google (GOOG) had a slight uptick, from 65.4 percent to 65.6 percent.

Yahoo’s share is the lowest it has seen and part of a nearly year-long decline in search for the Silicon Valley Internet giant.

That hurts, according to a variety of internal sources at Yahoo, as well as analysts, since each point of lost share represents $100 million to $150 million in revenue.

“We estimate that every one percent search market share is worth approximately $150 million,” noted J.P. Morgan analyst Imran Khan in an email. “However, it’s a blended number.”

What Khan means is that Yahoo’s revenue per search is a lot lower than that generated by Google. And–since Yahoo has a much lower market share–the average is higher.

Still, no one at Yahoo wants to watch search share seep away.

So, not surprisingly, a spokeswoman for the Internet giant–echoing sentiments of CEO Carol Bartz since she signed the search and online advertising pact with Microsoft earlier this year–said Yahoo is committed to excelling in search, especially in search experience.

The spokeswoman also maintained that Yahoo’s share will change for the better as soon as a series of recent updates to Yahoo search–and as increased “infusion” of search throughout site, such as in email–kicks in.

In addition, she noted that Yahoo’s $100 million “It’s Y!ou” marketing campaign is about to turn its attention to the site’s “hero products,” including search.

Since that is still to come and because many of the other changes “were put into place just in September,” she said, improvements will be apparent in the months ahead and not now.

Lastly, the spokeswoman added, some of the declines are related to the inevitable impact of Yahoo losing “non-economic” toolbar and affiliate distribution deals to Microsoft and Google.

Before the comScore figures came out, in fact, Bartz underscored this particular point at an investor conference last week, and Khan also noted it in a recent report.

“We are concerned by this [search decline] trend, but we think some of the market share loss is associated with the discontinuation of tool bar and affiliate deals,” he wrote. “We believe that many of these deals were uneconomical and were created solely to expand its market share. Thus, we think this market share loss will have a much lower impact on profitability than many investors fear.”

Maybe so, but Bing’s slow and steady gains since the new service was launched this summer is still not a plus for Yahoo.

And while those gains are due in part to those pricey distribution deals, they have also been boosted by Microsoft’s own $100 million Bing marketing campaign and an increasingly hopped-up innovation war with Google.

Yahoo, for the most part, has been missing in action in that loud battle, although the company has indeed released a series of new features, including recent integration with Twitter and an upcoming one with Facebook, to increase more real-time search results.

But both Google and Microsoft have done similar deals and continue to update search on a much speedier schedule.

What this ultimately means to the pending MicroHoo partnership will be interesting to watch, since the deal makes more money for Yahoo the higher its share of search.

As part of the agreement–under which Microsoft takes care of the technology for both Yahoo and itself (using, ironically, a lot of former Yahoo techies it has poached)–the software giant will pay Yahoo almost 90 percent of the revenue it gets from search on Yahoo sites.

Less search share, of course, means less revenue, even if Yahoo is not paying for the costs of delivering that search.

On the plus side, Khan and others have noted recently that a recovery in the graphical advertising business could give Yahoo’s stock a boost.

Since Yahoo does eat, sleep and drink display, this might counter its search shortfalls, until, presumably, Yahoo can stop them.

[Bumper sticker courtesy of Zazzle.com.]

Yahoo announced a new consumer tool this morning, called “Ad Interest Manager.”

BoomTown is going to ignore the could-it-be-duller name for the feature, which–Yahoo (YHOO) said in a press release you can see below–gives users a “central place where Yahoo! visitors can see a concise summary of their online activity and make easy, constructive choices about their exposure to interest-based advertising served from the Yahoo! Ad Network.”

What fortuitous timing, since the first of three of the Federal Trade Commission’s “Exploring Privacy: A Roundtable Series” begins this morning in Washington, D.C.

And, of course, the bigger backdrop is the pending regulatory approval of the massive search and advertising partnership with Microsoft (MSFT). Yahoo and Microsoft announced Friday that they had completed the definitive agreement for the deal.

Among the key issues for regulators, of course, are the privacy implications of combining the search and online ad technologies of the No. 2 and No. 3 players.

Today’s day-long agenda is chock-full of academics and privacy group folks, but there is a Microsoft lawyer on a panel. (The next roundtable in the series takes place at the University of California, Berkeley, School of Law, Jan. 28, 2010.)

Said the FTC on its site:

The Federal Trade Commission will host a series of day-long public roundtable discussions to explore the privacy challenges posed by the vast array of 21st century technology and business practices that collect and use consumer data. Such practices include social networking, cloud computing, online behavioral advertising, mobile marketing, and the collection and use of information by retailers, data brokers, third-party applications, and other diverse businesses. The goal of the roundtables is to determine how best to protect consumer privacy while supporting beneficial uses of the information and technological innovation.

There will surely be lots to discuss, since privacy groups are wary of self-regulation by the very companies that link consumer data to advertising.

And they have a point.

Visiting my Ad Interest Manager page is kind of freaky, to be honest. It shows I am interested in entertainment, technology and travel, checking in most on the finance and television pages. Correctomundo!

Also, it has detailed data about my computer, including its color depth, as well as my age and gender.

If I want, it is pretty easy to opt-out of the whole “interest-based” ad categories completely or by category, with on-off switches, which is a good thing.

If you want to know more, here is the Yahoo press release:

YAHOO! INTRODUCES AD INTEREST MANAGER

PROVIDES CONSUMERS WITH GREATER TRANSPARENCY AND CONTROL OVER THEIR ONLINE ADVERTISING EXPERIENCE

Today Yahoo! Inc. (NASDAQ: YHOO) released a beta version of a new consumer tool called Ad Interest Manager, which takes transparency in online advertising to a new level for building user trust. Ad Interest Manager http://privacy.yahoo.com/aim is a central place where Yahoo! visitors can see a concise summary of their online activity and make easy, constructive choices about their exposure to interest-based advertising served from the Yahoo! Ad Network.

“Ads tailored to users’ interests make online experiences more compelling and user-focused, and the new tool Yahoo! is launching today will provide transparency into how Yahoo!’s interest-based advertising works,” said Yahoo! Vice President of Policy and Head of Privacy, Anne Toth. “Yahoo! is committed to providing consumers with increased transparency and control when they are online. Ad Interest Manager will show users what interests we think they have, and also let them edit and change those interests to reflect the most up-to-date information.” Anne Toth also pointed out: “Importantly, users who don’t want interest-based ads can turn them off completely.”

Yahoo!’s new Ad Interest Manager tool:

• Provides a central point where Yahoo! visitors can assert even greater control over their online experience.

• Gives visitors an unparalleled view into the information used to deliver interest-based advertising.

• Shows the visitor both Yahoo!’s educated guesses about their interests and a summary of observations, along with other information they have provided.

• Provides a list of specific interest categories that Yahoo! has placed a user into and lets people turn those categories off.

• Allows people who don’t want to see interest-based ads to turn them off entirely.

“Yahoo! has long provided its users with products and services for free, thanks to a business model based almost entirely on advertising, and we’ve found that consumers are more likely to click on advertising that speaks directly to them and their interests,” said Yahoo!Vice President and General Manager of Display Advertising, David Zinman. “With the introduction of Ad Interest Manager, users can not only get a better understanding of how the process works, but they can also communicate better with Yahoo! and our advertisers about what most interests them.”

Yahoo!’s Ad Interest Manager is currently available in beta in the U.S. and will soon be made available to UK and European users. Planned future enhancements to the Ad Interest Manager will also let users add categories of interest that Yahoo! may have missed.

To see what the new Ad Interest Manager looks like and how it works, please visithttp://privacy.yahoo.com/aim.

Yahoo! was one of the first companies to implement a layered privacy center http://info.yahoo.com/privacy/us/yahoo/details.htmlmodel more than eight years ago, which provides people with a central place to understand and control their privacy online, as well as their options when it comes to the use of personal data. This information is coupled with our industry-leading data-retention policy http://ycorpblog.com/2008/12/17/your-data-goes-incognito/, which anonymizes most Web log data within 90 days. The policy also strives to ensure that Yahoo! retains data only long enough to serve the business and create the highest-quality user experiences, while simultaneously maintaining the ability to fight fraud, secure systems, and meet legal obligations.

And here is the consumer privacy groups’ press release on the FTC hearings:

Consumer and Privacy Groups at FTC Roundtable to Call for Decisive Agency Action

Washington, DC, December 6, 2009–On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in today’s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.

The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.

Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation, because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at: http://www.democraticmedia.org/release/privacy-release-20090901.

These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.

Quotes from Monday’s panelists:

Marc Rotenberg, EPIC: “There is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy. The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.”

Jeff Chester, Center for Digital Democracy: “Consumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.”

Susan Grant, Consumer Federation of America: “It’s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected. Rather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.”

Pam Dixon, World Privacy Forum: “Self-regulation of commercial data brokers has been utterly ineffective to protect consumers. It’s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. It’s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.”

For those who don’t know him, Chester is the executive director of the Center for Digital Democracy, a nonprofit consumer advocacy group that works to promote privacy and protection online.

In other words, a professional–and much needed–thorn in the side of Facebook, Google (GOOG) and these days, MicroHoo.

That’s because, while advertisers and publishers are supportive of the massive search and online advertising deal between Microsoft (MSFT) and Yahoo (YHOO)–which now looks close to being launched–Chester has a more whoa-nelly attitude.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Chester right after the deal was announced. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Violations of consumer privacy by such unions or by Facebook’s efforts to use data to better deliver online ads or by any of the myriad ways such companies are honing their behavioral targeting skills worries Chester.

Thus, in patented D.C.-style, he hectors government agencies, politicians and the media to look more closely at such practices.

Here is my video interview with him about all this, which is well worth listening to, especially in an era when online powerhouses like Google are learning more and more about you, and not in a good way:

]]> http://allthingsd.com/20091118/center-for-digital-democracys-jeff-chester-talks-about-microhoo-and-more/feed/ 1 http://allthingsd.com/20091118/exclusive-yahoo-and-microsoft-poised-to-finally-sign-definitive-search-and-ad-agreement/ http://allthingsd.com/20091118/exclusive-yahoo-and-microsoft-poised-to-finally-sign-definitive-search-and-ad-agreement/#comments Wed, 18 Nov 2009 08:01:27 +0000 Kara Swisher http://kara.allthingsd.com/?p=20743

Yahoo and Microsoft are poised to finally sign the definitive agreement that will govern the complex and far-reaching search and online advertising partnership they struck in late July, said sources close to the situation.

If all goes well, the various Microsoft and Yahoo execs–who have been ferreted away over the last weeks, busy dotting all the i’s and crossing all the t’s in the massive document–could even turn in their deal homework to their bosses for signature by the end of the week.

Yahoo (YHOO) officials declined to comment, while Microsoft (MSFT) has not gotten back to BoomTown as yet.

In any case, getting the definitive agreement in place is critical to making the high-profile MicroHoo deal a reality and, of course, getting the anti-Google (GOOG) party started.

So when the pair blew through a deadline to complete it in late October, there were eyebrows raised all over Wall Street and Silicon Valley.

When Yahoo filed an 8-K with the Securities and Exchange Commission in August, it noted that the “Definitive Agreement” between the Silicon Valley Internet company and the Redmond, Wash., software giant needs to be sketched out by Oct. 27, 2009.

But it is a monster document, which is why MicroHoo did not complete it in time. After that whiff, Yahoo said as much in another filing with the SEC:

“The Letter Agreement specified that the parties would execute definitive agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized.”

Added Microsoft similarly:

“We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details.”

Nonetheless, both companies have consistently said that they would be able to close this deal by early 2010.

Yahoo and Microsoft had already done a pretty hefty binding-agreement letter (here is a picture of Yahoo’s CEO Carol Bartz and Microsoft CEO Steve Ballmer holding it, in fact).

Also key: Getting approval for the deal from regulators in Washington, D.C., which, sources said, also seems to be on track.

With little opposition, Yahoo and Microsoft policy types have been chipping away on regulatory issues with federal regulators in Washington.

And, several sources said, those government approvals are now nearing completion at the Justice Department, even though the Federal Trade Commission might still ask for more assurances on privacy issues related to online advertising and consumer data.

International regulatory approval is another story, especially in Europe, which could further delay the implementation of the partnership, since it is unlikely the pair would move forward without clearance globally.

When that is done, the real game begins, as MicroHoo faces its the much more critical Tim Gunn acid test for the deal:

Making it work.

]]> http://allthingsd.com/20091118/exclusive-yahoo-and-microsoft-poised-to-finally-sign-definitive-search-and-ad-agreement/feed/ 1 http://allthingsd.com/20091031/weekend-update-10-31-09%e2%80%94heartbreaks-heart-trobs-and-heart-attacks/ http://allthingsd.com/20091031/weekend-update-10-31-09%e2%80%94heartbreaks-heart-trobs-and-heart-attacks/#comments Sat, 31 Oct 2009 19:10:44 +0000 Drake Martinet http://digitaldaily.allthingsd.com/?p=27914

BoomTown’s week began onstage in front of thousands of chanting women. No, Kara wasn’t filling in for Oprah; she was doing something much cooler. She got snagged to moderate a panel entitled “Changing the World Through the Web” at Maria Shriver’s six-year-strong Women’s Conference. Kara’s panel included a group of VIPs from Facebook, Kiva, Blue State Digital–and the Twitterific Ashton Kutcher. With “Mission: Kutcher” accomplished, Kara followed up with the complicated world of MicroHoo and offered analysis on the still-pending search deal. Moral of the story: Commentators should give it time, and Carol Bartz should quit with the Jerry Yang jabs. BoomTown rounded out the week at TEDMED. The conference covered the scalpel’s edge of med tech. And yes, in case you were wondering, synthetic skin feels gross.

Digital Daily covered the real-time search war early in the week when Microsoft’s Bing search folks announced a nonexclusive deal with Twitter to feed on its data stream. The deal did put Bing out front for once, but no one knows if the new info source will turn into profits for either search group. In a post foreshadowing a grisly murder, John reported results from a ChangeWave research study that placed the iPhone within striking distance of overtaking the Blackberry from Research in Motion (RIMM) in the smart-phone market. Okay, maybe it wasn’t that grisly, but it’s Halloween. Digital Daily rounded out the week by adding the iPhone to the pantheon of cat, dragon, rat and rooster that occupies the rim of your Chinese restaurant placemat. Apple’s (AAPL) iPhone officially made it to China this week, though without its signature Wi-Fi, and at a much heftier price point.

Peter Kafka lives at the crossroads of media and tech, and that’s exactly where he was almost run down by the Windows 7 “Family Guy” episode. Microsoft (MSFT) apparently bailed out of the deal when it took a closer look at what was actually inside. From the “not so fast” files, Peter covered a report from Interpublic Group (IPG) noting that ad revenue isn’t quite as sunny as some have suggested. Grim economic times caught up to AllThingsD’s big brother late in the week when The Wall Street Journal closed its Boston bureau. The move resulted in nine job losses, despite significant resources being poured into the paper by parent News Corp. (NWS).

The leaves are changing color over at Personal Technology, and Walt sensed that chill in the air meant it was time for his annual fall computer-buying guide. Operating-system choice was a big discussion; but he also touched on the latest must-haves in the memory, graphics, processor and form-factor categories. With a cup of Earl Grey tea to fend off the autumn chill, Walt trudged out to Mossberg’s Mailbox this week and came back with a fistful of letters. He dutifully replied to a question about migrating Microsoft files to a Mac running windows, offered clarification on the Windows 7 upgrade process, and weighed in on the rumor of a pending Apple device below a laptop but above an iPhone.

Katie finished it all off with a deep dive on the two latest netbooks. The HP (HP) Mini 31 and the Nokia (NOK) Booklet 3G both offer high style compared with their competitors, and each boast much higher screen resolutions than previous models. Though she came down on the side of the Nokia, Katie remarked that neither option would disappoint.

Bundle up as you head out for tricking and treating, and learn from Weekend Update’s mistakes. Remember to check and make sure that scary face is actually a mask before you bring that new friend home.

]]> http://allthingsd.com/20091031/weekend-update-10-31-09%e2%80%94heartbreaks-heart-trobs-and-heart-attacks/feed/ 0 http://allthingsd.com/20091028/its-complicated-but-microhoo-also-hasnt-fallen-and-will-get-up/ http://allthingsd.com/20091028/its-complicated-but-microhoo-also-hasnt-fallen-and-will-get-up/#comments Thu, 29 Oct 2009 01:34:03 +0000 Kara Swisher http://kara.allthingsd.com/?p=20056

In what should come as a shock to almost no one, the detailed negotiations to complete the Microsoft and Yahoo search and online advertising final agreement are more complicated than its authors anticipated and are taking longer than expected to complete.

Relax, folks–they’ll get done.

But here’s a more important thing that should wrap up sooner than later: Yahoo CEO Carol Bartz’s seemingly never-ending gibes about former CEO and co-founder Jerry Yang’s tenure.

First, let’s deal with the issues around the agreement, which is a monster document.

That’s why MicroHoo missed the deadline yesterday to execute its definitive agreement on the transaction struck in July.

In a filing with the U.S. Securities and Exchange Commission, Yahoo (YHOO) said:

“The Letter Agreement specified that the parties would execute definitive agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized.”

Added Microsoft (MSFT) in a long statement:

“Microsoft and Yahoo! are committed to this agreement and believe this is a highly competitive deal that is good for consumers, advertisers and publishers. We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details. So, the teams at Yahoo! and Microsoft are continuing to work on the remaining details, and we have mutually agreed to extend the period to negotiate and execute the agreement. We plan to do this as expeditiously as possible. Both companies are optimistic that we will be able to close this deal by early 2010.”

Thus, the deadline has been pushed back indefinitely, which is very common in such larger and complicated deals.

Yahoo and Microsoft had already done a pretty hefty binding letter agreement (here is a picture of Yahoo’s Bartz and Microsoft CEO Steve Ballmer holding it, in fact).

Getting approval from regulators is also part of the deal, and it is likely to happen in the U.S. just after the new year.

International regulatory approval is another story, especially in Europe, which could further delay the implementation of the partnership, since it is unlikely the pair would move forward without clearance globally.

But perhaps most of all, what seems more likely to never end and probably should is the proclivity of Yahoo’s Bartz to use sharp-tongued analogies to talk about just how bad Yahoo had been doing and how it is now poised to make a comeback.

In her very first press conference when she got the job, in fact, she noted that Yahoo, “frankly, could use a little management.”

Bartz was right then and even more correct to say it out loud, but she has not stopped the criticism.

And, like clockwork, at an analyst day at Yahoo HQ in Sunnyvale, Calif., today, Bartz trotted out a yet another in a long series of backhanded insults to former CEO Jerry Yang and his crew.

Said Bartz at the event about the Silicon Valley icon:

“We have fallen and we really want to get back up. If you haven’t had good times and bad times, you don’t know what you’re doing. We prefer the good times. We have passion to get back there. Today is the start of that.”

Today is the start? Didn’t Yahoo declare a version of the same theme when the MicroHoo deal was announced in July? And at the the launch of the new homepage in September? And the more recent rollout of its massive marketing campaign?

It seems to me that since she has been there almost a year, much like the Obama administration, Bartz should not be looking backward anymore and keep announcing that it is time to get back on track.

Because she is most definitely in charge now at Yahoo and should be the one to get all praise and all blame from here on out.

So, as someone who has definitely been very tough on Yang while CEO, it’s time to stop knocking him over now, because it is starting to feel like a very cheap shot.

]]> http://allthingsd.com/20091028/its-complicated-but-microhoo-also-hasnt-fallen-and-will-get-up/feed/ 5 http://allthingsd.com/20091023/goodbye-to-all-that-icahn-leaves-yahoo-board/ http://allthingsd.com/20091023/goodbye-to-all-that-icahn-leaves-yahoo-board/#comments Fri, 23 Oct 2009 22:00:00 +0000 Kara Swisher http://kara.allthingsd.com/?p=19921

Carl Icahn, the activist billionaire investor who made such a noisy fuss in his quest to force management and other changes at Yahoo, is taking a much quieter leave from the Internet giant’s board.

He apparently has told the Yahoo (YHOO) board that “there was not a need at this time for an activist investor” and that he has a lot of other companies he invests in to focus on.

That’s true, of course, given a spate of troubled investments that Icahn is dealing with.

But here’s BoomTown’s quickie analysis: Yahoo CEO Carol Bartz completely ignores him.

In fact, Bartz often has gone out of her way to take little gibes at Icahn since she got the top job in January, whether it’s to say he called her too much or that he could try to fire her if he did not like the job she was doing.

For example, she just dissed him publicly in a piece in Forbes, tossing off a saucy insult:

“Icahn is just another shareholder. What’s he going to do, fire me?”

But Yahoo was cordial to Icahn as he departed, even if a lot of people at the company who had battled him were likely thinking: “Don’t let the door hit you on the way out!”

“Carl has been an important member of our Board and has helped us through some significant transitions,” said the Yahoo statement. We are all grateful for his active role shaping the future of Yahoo! and wish him well in all his endeavors.”

Icahn in the second board member to leave under Bartz’s tenure.

Frontier Communications (FTR) CEO Maggie Wilderotter announced in late September that she was stepping down from the board by year’s end.

It will be interesting to see who–if anyone–will comes on board as a director and, of course, if there are more departures. After the departures of Wilderotter and Icahn, there will be 10 directors.

(Here is BoomTown’s No. 1 pick still in that regard.)

In taking his leave, Icahn praised the recent search and online advertising deal Bartz struck with Microsoft (MSFT), noting that it will “provide great long-term benefits, the potential of which many still do not understand.”

Nice final toss to try to spike the stock, Carl! But the MicroHoo deal, which has yet to be approved by regulators, was likely cold comfort for him.

Icahn sank large sums of money in Yahoo with hopes of a big score via the hostile takeover attempt by Microsoft at a price upward of $30 a share.

After that deal tanked, Icahn has seen his stake decline in value.

He sold 16 percent of his Yahoo shares in late August, leaving him with a 4.5 percent stake, or about 63 million shares.

It is also not clear today if Icahn intends to unload more of the stock.

In 2008, he couldn’t buy enough, scooping up the stock at much higher prices.

After mounting a proxy fight–including the lobbing of a series of poison-pen letters–against former CEO and co-founder Jerry Yang and his management team, Icahn got board seats for himself and two others (John Chapple and Frank Biondi) in July of 2008.

As Digital Daily’s John Paczkowski put it perfectly then:

“Having so persuasively argued that Carl Icahn is a doddering Luddite with no articulated plan for Yahoo other than the company’s sale to Microsoft, Yahoo has taken the logical next step and appointed the activist shareholder to its board of directors.”

At the time of the fighting, Yahoo used a quote from Icahn to insult him: “It’s hard to understand these technology companies.”

In a way, that is a pretty accurate description of Icahn’s long wrangle with the Silicon Valley icon.

And, while some might not agree with my take, this is the way the Yahoo world ends for Icahn: Full of sound and fury, signifying nothing.

Here is Icahn’s entire letter to the Yahoo board:

To the Yahoo! Board of Directors:

I am hereby tendering my resignation as a director of Yahoo! to take effect immediately.

When I joined the Board, the company was in a state of turmoil. In the period since then, we have all worked together to achieve much for the Company, most notably bringing Carol on to be the CEO and then consummating the search deal with Microsoft. I am proud to have played a role in both these decisions. Carol is doing a great job and I believe the Microsoft transaction will provide great long term benefits, the potential of which many still do not understand.

I don’t believe that it is necessary at this time to have an activist on the Board of Yahoo! and currently, my attention is focused on other matters. As a result, I do not presently have the time that is necessary to devote to the business and affairs of Yahoo! required if a board member is to fulfill his fiduciary duties to the shareholders

Again, I want to thank the members of the Board for acting so responsibly during my tenure. I look forward to maintaining my relationship with each of you.

Sincerely,

Carl Icahn

]]> http://allthingsd.com/20091023/goodbye-to-all-that-icahn-leaves-yahoo-board/feed/ 4 http://allthingsd.com/20091008/yahoo-and-microsoft-answer-some-deal-questions-for-critic-a-qa/ http://allthingsd.com/20091008/yahoo-and-microsoft-answer-some-deal-questions-for-critic-a-qa/#comments Thu, 08 Oct 2009 20:20:11 +0000 Kara Swisher http://kara.allthingsd.com/?p=19205

Yesterday, BoomTown wrote about the status of the regulatory approval for the Microsoft-Yahoo search and online advertising pact.

While none of the key constituencies wanted to comment or make predictions about the outcome of the government scrutiny, most seem to agree that the MicroHoo partnership is more likely to be approved than not.

One of the few vocal critics of the deal, though, is Jeffrey Chester, the executive director of the Center for Digital Democracy, a public interest group.

CDD, along with several other consumer groups, recently sent a letter to the Justice Department’s antitrust head, Christine Varney, expressing concern about the control and collection of consumer data in the deal.

CDD also has been querying Microsoft (MSFT) and Yahoo (YHOO) directly about the data collection and privacy implications of the deal, which is something the government should be doing.

So, to further get a glimpse into MicroHoo’s arguments, here is a set of important questions Chester asked then that were answered in a memo by the pair:

What specific data collection, interactive ad technologies and targeting applications will be used for search under the 10 year deal?

Today, Yahoo! collects data about Yahoo! visitors to our search product and uses that information to deliver products and to customize advertising and content, among other purposes described in its Privacy Policy. Microsoft and Yahoo! have each adopted industry-leading privacy practices with respect to search. For instance, under Yahoo!’s global data retention policy, Yahoo! anonymizes user log data within 90 days with limited exceptions for fraud, security and legal obligations. For search specifically, Yahoo! will convey certain data to Microsoft to fulfill a user’s search request. This includes the query and the IP address. Microsoft will anonymize this data sent to it by Yahoo! in accordance with Yahoo!’s announced data retention policies. Microsoft is only permitted to use search data that it obtains under the deal to operate and improve its search services and for no other purpose.

Will Yahoo’s behavioral targeting technologies for search still be used?

Yahoo! does not currently employ behavioral targeting in search. [Ed. note: Not completely true; see press release from Yahoo here on new targeting capabilities.]

Will any of Yahoo’s targeting apparatus be incorporated in any way with Microsoft Advertising, including with Bing?

No. This deal is limited to search, and as noted above, Yahoo! does not employ behavioral targeting in search.

Will search ads be sold by either Yahoo or Microsoft that provide for multimedia results, such as video?

Video advertising is still a small and growing area and as such, it’s impossible to predict what video ads in any form, including what a potential video search ad, could look like several years from now.

How may this deal affect the Yahoo! Newspaper Consortium?

The partnership Yahoo! has with the newspapers is broad and includes everything from content distribution, advertising cross sales, and technology platform development, to the display of Y! sponsored search listings on the newspapers’ own Web sites. Yahoo! Does not see the Microsoft deal as having an immediate impact on its newspaper consortium dealings. However, by combining its platform with Microsoft’s, Yahoo! and Microsoft will be in a position to offer the Newspaper Consortium and other web publishers more competitive bids for search syndication deals than either company can offer separately.

What ad research and development will be shared or done in common?

It is premature to speculate about the exact research that will be done, but the increased scale that will result from this search deal is expected to significantly enhance the ability to conduct meaningful research in a timely manner.

What rationale was used to embrace the 3 month data retention time? Why isn’t a shorter retention time adopted?

Yahoo! did an extensive analysis and review of all our data systems globally in 2008. Yahoo! arrived at 90 days retention as the right timeframe for most of its log file data that allows it to deliver the industry-leading products and services its users expect from them, but that also minimizes the duration of time Yahoo! holds data in identifiable form. It’s important to note that some of Yahoo!’s log file systems retain identifiable data for less than 90 days but none will hold data longer except for a limited number of specific systems dedicated to fraud and abuse and to meet legal obligations.

How do you envision Yahoo remaining viable when it no longer has a meaningful independent search service, given the need to have a coordinated search/display environment for digital marketing?

Future growth in online marketing will come from shifting spend from offline advertising to the online world. Offline advertising spend is disproportionately held by the largest advertisers and they control the vast majority of ad spend. Yahoo! has the leading position in branded advertising and Yahoo! also serves the needs for the growing market of performance advertising. So this deal with Microsoft enables Yahoo! to deliver a fully integrated solution that meets marketers’ needs at scale. Through this deal, Yahoo! retains a revenue stream in search without incurring the costs of developing a search platform or engine. Yahoo! will get paid an 88% TAC rate while eliminating significant expenses, enabling Yahoo! to invest more heavily in other areas of focus: amazing audience properties, web products, enhanced display advertising capabilities, and fantastic mobile experiences.

]]> http://allthingsd.com/20091008/yahoo-and-microsoft-answer-some-deal-questions-for-critic-a-qa/feed/ 1 http://allthingsd.com/20091007/microsoft-yahoo-deal-regulatory-update-eh/ http://allthingsd.com/20091007/microsoft-yahoo-deal-regulatory-update-eh/#comments Wed, 07 Oct 2009 14:31:36 +0000 Kara Swisher http://kara.allthingsd.com/?p=19165

Unlike the gripping back and forth of the fight over Yahoogle last year, the approval process for the search and online advertising partnership of Microsoft and Yahoo is chugging along slowly but surely as the Justice Department has deepened its investigation by reaching out to a broad range of publishers, advertisers, public interest groups and rivals for comment recently.

A month ago, the government agency lobbed in a “second request” for information about the deal the pair struck earlier this summer.

This kind of regulatory review is typical in deals of this magnitude.

But so far, there is no significant external challenge to the MicroHoo deal, even–according to many sources BoomTown has interviewed over the last week–from Google, the likeliest company to try to scuttle or, at the very least, slow down the deal.

“Is it worth fighting a big fight over?” asked one person close to the thinking of Google (GOOG). “Not really.”

Said another source, surveying the state of play: “It’s eh, kind of inevitable and not that interesting on a lot of levels.”

While none of the key constituencies wanted to comment or make predictions about the outcome of the regulatory scrutiny, most seem to agree that MicroHoo is more likely to be approved than not.

At the time the partnership was announced in July, execs at both Microsoft (MSFT) and Yahoo (YHOO) said a lot of investigation was likely from Justice, although they said they were also confident that it would be allowed go through by year’s end.

So far, several sources said, the key issue raised by the Justice Department has been whether the argument Microsoft and Yahoo are making–that they need scale to compete with Google–is valid or not.

Currently, Google has just under 70 percent of the search market in the U.S., while Microsoft and Yahoo together have about 28 percent.

Google has been arguing that huge scale is not necessary to be successful in the search ad market, although its execs have often said bigger is better when it comes to natural search and in spurring more clicks on ads.

Meanwhile, Microsoft and Yahoo have said they need all the firepower they can muster together to battle Google’s hegemony.

In a related concern, some regulators are worried–as they were when Google and Yahoo were trying to get approval for a similar deal last year–that any hookup of big players in the market will effectively take Yahoo out of the search business.

“With only three big players, going to two is not desirable to the government,” said one source. “Yahoo has to reassure everyone that it is focused on a sustainable business model beyond search.”

In a blog post yesterday, in fact, Yahoo said it was committed to search innovation.

In any case, most expect another month of investigation at least, although the lack of any loud voice in opposition could shorten that time frame.

And, added some sources, unlike with Yahoogle, there is not likely to be any kind of Congressional hearing on the deal.

Nonetheless, Microsoft, Yahoo and Google remain concerned that deals like this will lead to more focus on privacy issues, specifically around behavioral targeting.

That would be more a matter for legislators or the Federal Trade Commission and would probably come well after the deal is cleared and as part of a bigger topic.

Rep. Rick Boucher (D., Va.), who chairs the Subcommittee on Communications, Technology and the Internet, said he will consider consumer privacy legislation this fall.

Boucher led hearings on the subject this summer, and there might be more, especially as Web companies garner a lot of personal information from consumers with little oversight of what they do with those data.

If Boucher does call for hearings, he might want to replay this particularly boneheaded (but funny!) video from Yahoo’s U.K. ad staff, which classifies various Yahoo customer types–such as “disco-dancing heart surgeons from Nantwich”–as farm animals:

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20091007/microsoft-yahoo-deal-regulatory-update-eh/feed/ 2 http://allthingsd.com/20090910/justice-department-to-microhoo-please-sir-may-i-have-some-more/ http://allthingsd.com/20090910/justice-department-to-microhoo-please-sir-may-i-have-some-more/#comments Fri, 11 Sep 2009 03:39:49 +0000 Kara Swisher http://kara.allthingsd.com/?p=18330

Although it is not a particular surprise, because Microsoft and Yahoo execs had previously said they expected as much, the Justice Department lobbed in a “second request” for information about the search and online advertising partnership the pair struck earlier this summer.

A Microsoft spokesman confirmed the request to BoomTown.

“As expected Microsoft and Yahoo received an additional request about the agreement, as we said when this agreement was announced,” said Microsoft’s Jack Evans. “We anticipated this deal would be closely reviewed and we continue to be hopeful that it will be approved by early 2010.”

Simply put, the Justice Department wants more information about the 10-year deal and will do more investigation before approving it–or not.

This kind of review is typical in deals of this magnitude, although it is unlikely to be as fraught as Yahoo’s attempt last year to form a similar partnership with Google.

That deal collapsed after regulators indicated that they would oppose the arrangement, which caused Google to pull out.

At the time the partnership was announced in July, execs at both Microsoft (MSFT) and Yahoo (YHOO) said a lot of scrutiny was likely from Justice, although they were also confident that it would go through.

And, indeed, there seem to be no major objections from publishers and advertisers, as was the case with Yahoogle, even though a privacy group has raised some concerns.

Even Google (GOOG) has been unusually quiet about the deal, perhaps because its nearly 70 percent of the search market makes it the behemoth. Together, Yahoo and Microsoft have close to a 30 percent market share.

The deal must also be approved by European regulators, according to the terms negotiated by Yahoo and Microsoft. But since Google’s share there is even higher, roadblocks seem unlikely.

Meanwhile, according to numerous sources, Microsoft and Yahoo are separately working on transition plans in order to move quickly once it gains regulatory approval.

While they cannot work together as yet at a detailed level, Microsoft will eventually be absorbing hundreds of Yahoo search engineers as part of the deal.

So as we all wait in breathless anticipation, enjoy this hysterical video version of the famous gruel scene in the movie, “Oliver,” with the lines speeded up and then slowed down:

]]> http://allthingsd.com/20090910/justice-department-to-microhoo-please-sir-may-i-have-some-more/feed/ 0 http://allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/ http://allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/#comments Mon, 10 Aug 2009 22:59:43 +0000 Kara Swisher http://kara.allthingsd.com/?p=17321

MicroHoo. Check! FaceFeed. Check!

And Twoogle? Let’s check!

Yahoo (YHOO) and Microsoft (MSFT) have finally partnered. Microsoft is already a big investor in Facebook. And today, the huge social networking site just picked up online content-sharing site FriendFeed, which is chock-a-block full of ex-Google execs.

Now, one has to wonder if it wouldn’t be easier if Google (GOOG), the cash machine of a search giant, finally ponied up and bought the most recent star of Web 2.0?

That would be, of course, Twitter.

While previous rumors in the early spring that Google was imminently poised to acquire Twitter proved premature, the investors of the fast-growing microblogging service and Google execs have got to be thinking the same thing right about now:

Do we need each other to make some real-time noise?

It’s true that a lot of the hubbub around the idea of Twitter selling out has been mostly hype.

In addition, there are a lot of good arguments to be made that the San Francisco start-up is likely to be fine on its own and will soon find some very lucrative revenue streams.

Still, it is probably very disconcerting for Twitter to be holding onto the tail of the tiger of its own phenom and hope that it will not turn out to be a bad decision to imagine it will always be thus.

Linking up Twitter and Google is certainly a big idea, giving Google de facto ownership of real-time search, a big lift in the status-update game and yet another major and innovative Internet name brand.

It would also likely ensure that Twitter will dominate its sector for a very long time.

In other words: Gentlemen–and, since this is Silicon Valley, I do mean pretty much all gentlemen–start your engines.

Because whatever happens, it certainly will be fun to watch from the sidelines as MicroHoo, FaceFeed, Twoogle and more crash into one other and make the Internet as thrilling a place as it has ever been.

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20090810/now-that-theres-facefeed-does-that-make-twoogle-more-inevitable/feed/ 3 http://allthingsd.com/20090804/yahoo-microsoft-regulatory-filings-begin-this-week-let-the-legal-game-playing-begin/ http://allthingsd.com/20090804/yahoo-microsoft-regulatory-filings-begin-this-week-let-the-legal-game-playing-begin/#comments Tue, 04 Aug 2009 10:01:32 +0000 Kara Swisher http://kara.allthingsd.com/?p=16965

After all the investor hubbub over the oh-no-they-didn’t deal between Yahoo and Microsoft starts to die down a bit, the pair are now embarking on the path that is the only way toward proving the efficacy of them joining together.

That would be getting a variety of state, federal and international regulators to say yes to the wide-ranging online advertising and search arrangement they announced last week so they can start making it work.

According to sources at both companies, a variety of filings will be made this week, including one to the Securities and Exchange Commission that should provide more details of the partnership.

When it was unveiled last Wednesday, the companies said Microsoft (MSFT) will run search technology for the two, while Yahoo (YHOO) will sell the premium search advertising.

That SEC filing could answer a number of questions some still have about the deal, such as whether there is a large break-up fee that Microsoft would pay Yahoo in case the deal is scuttled.

That’s just the outcome that Microsoft and Yahoo are trying to avoid.

“We think of it as an outreach effort to explain how we are creating a strong No. 2 to Google,” said one source close to the situation. “The main goal will be to show that a better competitor in the marketplace is a good thing.”

While the companies are prepping for opposition from Google (GOOG), sources close to the thinking at the dominant search company said it is more likely to be muted and indirect.

That’s especially true since a MicroHoo makes Google–currently under a lot more government scrutiny than ever before–look like less of a bully.

Thus, Google’s tactics would entail less direct statements and more pointing out the discrepancies between what Microsoft said when Google tried to get approval for a search deal with Yahoo last year and what it argues now.

“They will probably not be that obvious, but they will be there still,” said Microsoft CEO Steve Ballmer to me, in an off-hand remark at the software giant’s Financial Analyst Meeting last week.

It’s a game of legal chicken that Ballmer knows well.

Already, for example, Microsoft and Yahoo execs have been aggressively reaching out to major publishers and advertisers to get their staunch support.

That included calls immediately after the deal was announced last Wednesday to such execs as Martin Sorrell of the WPP Group (WPPGY) and Jeff Zucker, CEO of NBC Universal, a unit of GE (GE).

In Washington, D.C., both companies have legions of lawyers to try to make sure the Justice Department, which will review the case due to its antitrust implications, has all the information it might need.

And, more to the point, they want to avoid the debacle that took place when Yahoo and Google tried to get approval for their failed deal last year.

That deal was ended by Google after it became clear that Justice was going to fight it by arguing that top search companies hooking up hurt competition and stifled innovation.

In addition, there might be Congressional scrutiny, with possible hearings, similar to those held when the Yahoogle deal was pending, such as in the Senate Judiciary Antitrust Subcommittee.

And, of course, there are actually independent groups concerned and they have also been in contact with regulators.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Jeff Chester, executive director of the Center for Digital Democracy, a D.C.-based group that works to promote consumer privacy and protection online, in a statement last week. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Sources said Microsoft and Yahoo also plan to petition regulators in the European Union this week, which is likely to be most concerned about privacy issues involved in their union.

They will also be doing the same in other key countries worldwide, such as Korea, Taiwan and Brazil.

And, finally, given how involved state attorneys general became in beaching the Yahoo deal to partner with Google, they also will be starting outreach to key states, such as California, where Silicon Valley-based Yahoo is headquartered.

“Once again, it will be the Lawyer Employment Act of 2009,” joked one person close to the deal. “At least, that shows there is some economic benefit to this deal already.”

While we all wait in breathless regulatory anticipation, here are interviews I did at last year’s Senate hearings on Yahoogle, with lawyers from Google (David Drummond), Microsoft (Brad Smith) and Yahoo (Mike Callahan).

Incredibly, they are the very same lawyers who will be pretzeling themselves in entirely different shapes than they pretzeled themselves a year ago.

I would expect nothing less!

Here’s the video:

]]> http://allthingsd.com/20090804/yahoo-microsoft-regulatory-filings-begin-this-week-let-the-legal-game-playing-begin/feed/ 0 http://allthingsd.com/20090731/the-microhoo-juggernaut-or-not/ http://allthingsd.com/20090731/the-microhoo-juggernaut-or-not/#comments Fri, 31 Jul 2009 17:15:27 +0000 Nitrozac and Snaggy http://voices.allthingsd.com/?p=13962

]]> http://allthingsd.com/20090731/the-microhoo-juggernaut-or-not/feed/ 0 http://allthingsd.com/20090729/complete-coverage-yahoo-microsoft-deal/ http://allthingsd.com/20090729/complete-coverage-yahoo-microsoft-deal/#comments Wed, 29 Jul 2009 15:13:06 +0000 Kara Swisher http://kara.allthingsd.com/?p=16735 After months of speculation, interviews and statements to the contrary, Microsoft and Yahoo have finally reached a deal. Details of the story are still emerging, so for your reading convenience, BoomTown’s full coverage is below:

Complete Coverage

• Analysts to Yahoo CEO: Where are Those “Boatloads of Money” You Were Talking About?
• Yahoo Gag Reel
• WWGD: What Will Google Do, Now That There Is Finally a MicroHoo?
• Liveblogging the Yahoo-Microsoft Search Deal Conference Call: The Carol and Steve Show Debuts!
• Yahoo Investors on Microsoft Deal: Do Not Want
• Yahoo CEO Carol Bartz’s Letter About the YaSoft Deal
• MicroHoo Deal Finally Official in a 10-Year Landmark Partnership (Plus the Full Press Release)
• Yahoo To Get 110 Percent of Search Revenue in First Two Years of Deal With Microsoft
• Before Yahoo-Microsoft Deal Terms Are Unveiled, Let’s Go to the Videotape From the Last One
• Microsoft-Yahoo Deal Struck–Will Be Announced Within Next 24 Hours

]]> http://allthingsd.com/20090729/complete-coverage-yahoo-microsoft-deal/feed/ 2 http://allthingsd.com/20090526/my-bing-a-ling/ http://allthingsd.com/20090526/my-bing-a-ling/#comments Tue, 26 May 2009 18:51:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=18334 What’s in a name? Apparently, the answer to Microsoft’s (MSFT) many search problems. As we previously reported, the software behemoth plans to debut its new search service at our D: All Things Digital conference later this week, and when it does it may have a new name.

Reports claim that Microsoft Live Search, once known as Windows Live Search and, prior to that as MSN Search, will henceforth be known as…

Bing.

Which is pretty much what we’ve expected all along. Just what form Bing will take is another matter entirely. Will it simply be Live Search updated and recast? Or will it involve something more? Like perhaps that long-rumored deal with Yahoo (YHOO) BoomTown’s been talking about? Or what if, ZDNet’s Mary Jo Foley speculates, “Microsoft and Yahoo announce some kind of jointly-managed company that will trade ad sales for search engine placement. This ‘MicroHoo’ won’t be a merged Microsoft-Yahoo. Instead it will be some kind of ad/search entity.” What if, indeed. We may find out later this week.

UPDATE: Interesting. ZDNet’s Larry Dignan points to a report from Jeffries analyst Katherine Egbert that suggests Microsoft is indeed preparing for some sort of joint venture or acquisition. A quick excerpt:

“It’s also possible that Microsoft could debut a partnership or make an acquisition of some type that will bolster its online search presence. The software giant registered an LLC Corp. in Delaware last week, a move often made in advance of acquisitions or joint ventures. The registration gave rise to widespread speculation that Microsoft would acquire Citrix since the name of the LLC is somewhat similar to Microsoft’s code name for Citrix. While that’s possible, the timing of the registration and recent debt raise indicate that it might be more likely Microsoft uses the LLC to form a partnership that will boost the amount of traffic flowing through its search engine, perhaps through a partnership with Yahoo! or others.”

]]> http://allthingsd.com/20090526/my-bing-a-ling/feed/ 0 http://allthingsd.com/20090309/microhoo-stop-them-before-they-publicly-negotiate-again/ http://allthingsd.com/20090309/microhoo-stop-them-before-they-publicly-negotiate-again/#comments Mon, 09 Mar 2009 22:59:34 +0000 Kara Swisher http://kara.allthingsd.com/?p=10758

Oh dear, one endless, screwed-up global airline ride without Internet connectivity and when I finally manage to get online (looking right at the Spanish Steps in Rome. Sweeeeet!), BoomTown finds that a new round o’ MicroHoo is apparently on again.

(In the immortal words of Michael Corleone–see video below–in the otherwise awful “Godfather: Part III”: “Just when I thought I was out, they pull me back in!”)

Except, judging from exactly how loud the loudmouthed chatter from a trio of Microsoft execs has become–the latest being COO Kevin Turner–it’s actually not.

Because if there were real and substantial talks going on right now between Yahoo (YHOO) and Microsoft (MSFT) about a new deal to partner, of course, you likely would not hear a peep from them.

Nonetheless, Turner is the third exec from the software giant to mention that Microsoft would love to play let’s-make-a-deal with Yahoo–not to necessarily go back and swallow it whole, a deal that Yahoo would now do in a New York minute, but related to its search assets.

In an interview with the Times of London, referencing new CEO Carol Bartz:

“We’ve certainly made her aware and the Yahoo! board aware that if they are ever interested in an opportunity to partner with them on search, we’d like to sit down and at least have the conversation. It has to make economic sense to both parties.”

Turner’s words come after similar sentiments were recently expressed by both Microsoft CFO Chris Liddell and the very-on-the-topic CEO Steve Ballmer.

We’ve seen this public tactic before, of course–actually, ever since Ballmer’s ill-fated attempt to take over Yahoo ended badly. Since then, he and others at Microsoft have not failed to either insult Yahoo’s prospects or say how very much it would like to do a deal with Yahoo.

The recent carrot approach, of course, is because Microsoft is now facing three important challenges.

First, for now, it looks like Yahoo’s search share seems to have stabilized and even improved, after years of decline.

Second, for all its efforts at hiring top search guns, spending heavily and generally declaring war on market leader Google (GOOG), Microsoft’s share has remained puny and static.

And third, it is facing a much different kind of Yahoo leader, who–while not necessarily as Web savvy as she should be–is not someone who is likely to be rolled or rattled as easily as former CEO Jerry Yang.

Because, as Bartz recently quipped–this woman likes to throw out the biz bromides more than Warren Buffett–at the Morgan Stanley Technology conference:

“I said this to Mr. Ballmer, I will not negotiate with you and 30,000 of my closest friends. I will negotiate privately….If something happens, you will know about it then.”

Still, despite Bartz’s cool demeanor, she and Ballmer will surely soon–if they have not already, that is–be meeting in some “secret” airplane hangar or other remote place dealmakers like to reconnoiter.

(Here’s a we-have-a-lot-in-common opening chit-chat topic: How snarky/rude/pushy you both think bloggers like me are!)

Because in order to get some traction on Google in the search arena, Microsoft has little choice–except perhaps making a big, sloppy bid for Facebook or Twitter–but to find a way to partner with Yahoo.

Yahoo too. As much as Bartz has been bragging that she has tons of leverage (she both does and she doesn’t), she also needs a powerful and rich friend in the years ahead in the search game, which will get uglier and more expensive as growth slows and massive innovation is needed.

Already, reports of that slowdown–spurred by the economic crisis–are here. It is in these down times that doing a deal, to get ready for the inevitable revival, seem most fortuitous.

That is, if everyone can stop talking and start, well, talking.

Until then, here’s the great Al Pacino, delivering the classic line:

]]> http://allthingsd.com/20090309/microhoo-stop-them-before-they-publicly-negotiate-again/feed/ 2 http://allthingsd.com/20080715/kara-visits-the-senate-hearings-on-the-yahoo-google-ad-search-deal/ http://allthingsd.com/20080715/kara-visits-the-senate-hearings-on-the-yahoo-google-ad-search-deal/#comments Tue, 15 Jul 2008 16:21:06 +0000 Kara Swisher http://kara.allthingsd.com/?p=2355 Please see this disclosure related to me and Google.

Sitting at the Senate hearings about the Yahoo-Google ad search deal this morning in Washington, D.C., let it be said that BoomTown is deeply dubious about whether it is a good thing for consumers and advertisers, as both Internet companies have asserted.

But this was my most certain conclusion:

The worst-case scenario is actually for politicians to meddle in the Internet space with their largely Web-ignorant mitts.

But that’s just me!

Titled “The Google-Yahoo Agreement and the Future of Internet Advertising,” the hearings were called by the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights, chaired by Sen. Herb Kohl (D., Wis.).

In any case and as usual, the hearings on the Yahoo agreement with Google (transcripts of testimonies here) to outsource some of its ad search business were a lot of show and not so much content.

There was an interesting little testy back-and-forth between Sen. Arlen Specter (R., Pa.) over remarks that Yahoo (YHOO) CEO Jerry Yang might have made in a previous meeting with Microsoft (MSFT) that was recounted by Microsoft General Counsel Brad Smith.

The gist of it was that Yang sketched out a world of two “poles”–Google (GOOG) on one side and Microsoft and Yahoo on the other. And if Yahoo moved over to the Google side, the World Wide Web would be terribly askew!

Yahoo General Counsel Michael Callahan said that was not his recollection of the meeting, in which he also participated.

Specter wondered who was telling the truth, which only made me want to yell out: Welcome to the MicroHoo Hall of Crazy Mirrors, Senator!

Mostly, Google and Yahoo argued that by doing an ad-search partnership they would stay aggressively competitive with each other.

Microsoft, of course, argued that the end was nigh.

“Never before in the history of advertising has one company been in the position to control prices on up to 90 percent of advertising in a single medium,” said Microsoft’s Smith. “Not in television, not in radio, not in publishing. It should not happen on the Internet.”

Countered Yahoo’s Callahan: “The purpose of this commercial arrangement, the intent of Yahoo moving forward, is to make our company an even stronger competitor to Google, to Microsoft and to others in the dynamic and rapidly growing online advertising world.”

Of course, Google chimed in, via Google Chief Legal Officer David Drummond: “Google and Yahoo will remain vigorous competitors, and that competition will help fuel innovation that is good for users and the economy.”

Yes, concentration of power is always good for the world! I mean, Microsoft’s Windows monopoly turned out so well for the industry for so long!

Wait, that’s not a very political thing to say. (Then again, I completely forgot just how stuffy D.C. was and wore Silicon Valley garb–jeans and a T-shirt–to the hearing.)

In any case, the sideshow to the MicroHoo drama moves to the House side of Capitol Hill this afternoon.

There the Task Force on Competition Policy and Antitrust Laws held the less dramatically named hearing “Competition on the Internet.”

It was the same trio of Yahoo, Microsoft and Google lawyers, of course, and more of the same.

Which is to say–a lot of hot air, little movement, but much more evidence of the next phase of the Internet and the two true poles: The Web World War of Microsoft versus Google.

In any case and speaking of hot air, here’s my video interview with the lawyers from Google, Yahoo and Microsoft, which is also posted here:

[ See post to watch video ]

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