AllThingsD » Microsoft

Court Bans Import of Some Motorola Phones Found to Infringe on Microsoft Patent

Ina Fried — Fri, 18 May 2012 21:44:37 +0000

Microsoft on Friday won a decision in one of its patent disputes with Motorola Mobility, as the full International Trade Commission ruled that some Motorola devices infringe on its technology.

This patent dispute, one of several between the companies, centers on Microsoft’s ActiveSync technology. Ultimately, the ruling could lead to the ban of imports of Motorola products that infringe on the patent in question.

“Microsoft sued Motorola in the ITC only after Motorola chose to refuse Microsoft’s efforts to renew a patent license for well over a year,” Microsoft deputy general counsel David Howard said in a statement. “We’re pleased the full Commission agreed that Motorola has infringed Microsoft’s intellectual property, and we hope that now Motorola will be willing to join the vast majority of Android device makers selling phones in the U.S. by taking a license to our patents.”

The ITC issued an initial finding of infringement in this case back in December.

Motorola, for its part, notes that it can continue shipping products during a 60-day presidential review process and said it will ponder its options. It also noted that Microsoft had originally sought a ruling that Motorola had infringed on nine patents.

“Although we are disappointed by the Commission’s ruling that certain Motorola Mobility products violated one patent, we look forward to reading the full opinion to understand its reasoning,” Motorola said in a statement. “We will explore all options including appeal.”

Motorola said it will be required to post a 33-cents-per-unit bond for products it ships during the 60-day review period.

This dispute is separate from other conflicts between the two companies, including one related to Microsoft’s Xbox. Motorola has won an initial ruling it its favor from the ITC in that case.

Exclusive: Yahoo Finally Set to Strike Alibaba Share Deal -- Half Now, Then Half of What's Left After Eventual IPO

Kara Swisher — Fri, 18 May 2012 06:39:00 +0000

Yahoo is in the final stages of selling a large chunk of its stake in the Alibaba Group back to the company — in a complex deal that is set to include a multibillion-dollar share buyback to investors of the Silicon Valley Internet giant and an eventual IPO of the Chinese company — according to multiple sources close to the situation.

The deal has yet to be officially approved by the boards of both companies, but sources said it is likely to be, and could be announced as early as Monday.

This all could change, of course, since negotiations between Alibaba and Yahoo have taken place in a variety of ways in recent years, without success and with much acrimony. Talks over a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed in February, for example.

But the 324th time is apparently the charm — so here are the details of what looks to be a nearly complete agreement that I have ferreted out thus far from lots of relieved sources familiar with the situation:

Yahoo will sell half of its roughly 40 percent stake in Alibaba, in a taxable deal. The transaction is likely to value that portion of Yahoo’s holdings at about $7 billion — or 20 percent of Alibaba’s $35 billion enterprise valuation. Alibaba is in the midst of raising capital to fund the sale.

After taxes of upward of 35 percent are paid on the long-term gains — remember that Yahoo bought the now-lucrative Alibaba stake for a fraction of that, many years ago — the company will likely use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while.

A shareholder dividend is also being considered. It’s not clear if some of the cash will be held back for acquisitions by Yahoo, sources added, but it is unlikely.

As part of the deal, sources said, incentives have been put in place for Alibaba to move forward with a public offering, which sources stressed is without the contractual obligation or a time frame. Alibaba execs have already been publicly indicating such a direction recently, but this will put them more firmly on that path.

In return, Yahoo has agreed to sell the remaining quarter of its current holdings when that IPO does occur. It would then have an only 10 percent stake of Alibaba, which it could sell at any time after the IPO.

If finally struck, the transaction will finally bring to an end one of the more protracted and disputed relationships in the Internet world.

Once close, the pair have been wrangling over the large Yahoo ownership, which Alibaba CEO Jack Ma has been trying to dislodge in a variety of nice and not-so-nice ways. It has resulted in a number of very public disagreements.

That included a nasty back-and-forth over its Alipay unit with now-fired CEO Carol Bartz, threats of takeover of Yahoo with private equity firms and, more recently, making friendly with its just-ousted CEO, Scott Thompson.

Those talks with him in recent weeks, which included a visit to China by Thompson, led to the new deal, which was negotiated primarily between Yahoo’s CFO Tim Morse and legal head Mike Callahan and Ma and Alibaba’s Joe Tsai.

The talks continued even as Thompson was suddenly engulfed in a controversy over a fake computer science degree on his resume that quickly led to his departure from Yahoo on Sunday.

Ironically, the error was first discovered by activist shareholder Daniel Loeb, who will now vote on the deal as a newly named director of Yahoo, after successfully helping to oust Thompson.

He owns almost 6 percent of Yahoo, and is expected to approve the transaction.

But the final decision to approve the deal will be in the hands of a very new board of Yahoo, which has been drastically reshaped in recent weeks. It is meeting tomorrow and perhaps over the weekend to vote on it.

While the deal with Alibaba looks to be nearing an end, Yahoo’s talks to sell its 33 percent stake in Yahoo Japan is not part of this agreement. That’s due to what Thompson had called a “valuation gap,” which sources said is still an outstanding issue.

New interim CEO Ross Levinsohn has not been involved in the Alibaba deal in any significant way. But he certainly will benefit from its halo effect, if approved, especially given that it will likely boost Yahoo shares.

Next up for Levinsohn, who has just rejiggered Yahoo management again, other sources said, is an effort to settle the patent-infringement lawsuit with Facebook, and also to renegotiate its search deal with Microsoft.

And, oh yes, fix Yahoo’s rocky core-advertising business, which is still in distress and needs a major overhaul to push it back to growth.

But that, as they say, is yet another episode of Yahoo’s ongoing reality show.

Comcast Turns the Broadband Meter On, and Moves to Usage-Based Billing

Peter Kafka — Thu, 17 May 2012 18:12:39 +0000

Important for people who stream a whole lot of Internet video, or think they might one day, or would like to make money by streaming a lot of Internet video: Comcast is overhauling its rules which limit the amount of data its broadband subscribers can use.

In short, Comcast is moving from a flat cap to usage-based billing.

It is scrapping its 250-gigabytes a month cap and trying a couple different plans in its place. One version will introduce a 300-gig cap and offer additional tiers of service, with bigger caps, along with the ability to buy more chunks of data. Another version also uses a 300-gig cap and the ability to buy incremental blocks of data as needed.

Comcast, which has more than 18 million high-speed data customers, says it will experiment with the two plans in some of its territories.

It also says that in markets where it’s not trying the new plans, it will scrap its data cap entirely until it settles on a new plan.

The move comes as Comcast has taken heat about the way it treats data on some of its proprietary video services, in particular the Xfinity app for Microsoft’s Xbox console.

Netflix CEO Reed Hastings has argued that because Comcast doesn’t count data delivered via that service against its usage caps, it is violating “net neutrality” principles. Comcast says it’s in the clear because that data isn’t delivered via the public Internet but on its own network, and doesn’t plan on changing its policy.

Comcast executives referenced the debate as they introduced the new plans today. “There has been a little bit of noise along with the Xfinity Xbox plan,” said Comcast EVP David Cohen. But Comcast also insists that only a small handful of its users come close to using the 250-gig cap today. The company says median usage runs around 8 gigabytes to 10GB a month.

Other broadband providers, notably Time Warner Cable, have also moved to usage-based pricing. If you take the companies at their word, they’re doing it because they need to charge more money to provide more bandwidth because “our network is not an infinite resource, and it is expensive to build it,” as Cohen says.

But usage-based pricing is also a useful tool to have available if cable TV users really do stop subscribing in large numbers, and replace their pay TV packages with Web video. That gives the cable (and telco) guys a way to replace the video revenue they lose with more broadband dollars. A bonus for them: Broadband subscriptions are much more profitable than video subscriptions.

[Shutterstock/Janos Levente]

Microsoft Gives Windows a Clean Sweep

Walter S. Mossberg — Wed, 16 May 2012 01:01:54 +0000

For a long time, some Microsoft officials have privately griped that PC makers don’t present Windows in its best light. They clutter desktops with icons that are often little more than ads for third-party products; include confusing utilities that duplicate functions already in Windows; require lengthy setup; and configure PCs in ways that slow them down.

One consequence, in the eyes of these Microsoft executives, is to confer an advantage on the company’s main operating-system rival, Apple.

[ See post to watch video ]

Now, Microsoft is doing something about the situation. In a program unknown to most computer users, the company has been using its small chain of retail stores and its online computer store to sell customized versions of popular PC models that have been streamlined for a cleaner look and better performance. It calls these machines “Signature” PCs. They retain the maker’s brand, but sport a special Signature desktop and configuration. And they cost about the same as the identical stock version of the machine sold elsewhere.

Microsoft also offers a program that, for $99, will turn users’ Windows 7 PCs into Signature versions, if the owner brings the computer into one of its 16 stores, due to grow to 21 outlets in coming months. All Signature computers come with 90 days of free phone support, as well as help at the stores’ “Answer Desks,” which are like the Genius Bars at Apple stores.

I’ve been testing three Signature models and comparing them with the same machines as sold elsewhere without the Signature modifications. I found the Signature versions much cleaner and easier to navigate and faster in a variety of tests.

A Folio 13 model PC desktop, as shipped by Hewlett-Packard, shows a cluster of third-party software icons.

I’d recommend that prospective Windows PC buyers who live near a Microsoft store, which are mostly in the West, or are willing to shop at the company’s online store, consider a Signature machine. Information on store locations, as well as a link to online PC shopping from Microsoft, is at microsoftstore.com. Information on Signature is at signature.microsoft.com.

Some important caveats are in order. The hardware makers presumably believe, and some consumers may well agree, that the extra software, utilities and settings, which Microsoft removes or buries, are beneficial. Some of these, like offers to join game or music services, may be viewed as welcome bonuses. Others, like customized networking utilities, or launchers for the PC makers’ own media software, may be viewed as better matched to the hardware, or superior to Microsoft’s approach, even though they duplicate Windows functions. Many can be turned off, or removed, by a user with sufficient skill and time.

Also, Microsoft loads Signature machines with its own add-on software, such as its free email, photo and video programs, its Zune music and video program, and a stripped-down “Starter” version of Microsoft Office, that includes only Word and Excel, plus ads, and an offer to buy the full version.

However, the company says the stores will remove any of these a customer doesn’t want and even help the customer install competing software, such as Google’s Chrome browser, or Apple’s iTunes for Windows.

The same PC as sold by Microsoft in its Signature configuration.

At my request, Microsoft supplied me with before-and-after laptops from Hewlett-Packard, Sony and Samsung. Over the past few days, I’ve been comparing the stock and Signature versions, and testing how much time it takes to set them up, start them and restart them in daily use, resume them from sleep, and shut them down.

The Signature desktop, which is labeled “Microsoft Signature,” features a picture of a sunset over a lake as its wallpaper. It contains no icons other than the recycling bin. The Taskbar contains only icons for Internet Explorer, the Explorer file browser, and Microsoft’s free email, photo and moviemaking programs. The system tray, to the right of the Taskbar, contains only the bare minimum of items, such as the network and battery indicators.

Signature machines are also configured with battery, audio and touch-pad settings Microsoft considers optimal. The usual third-party security software—which is typically provided for only 30 to 90 days, makes you go through some setup, and nags you to subscribe—is replaced by Microsoft’s own Security Essentials program, which is free, required no registration or subscription and updates itself automatically.

By contrast, my test HP Folio 13 had eight icons besides the recycling bin, including several that were come-ons for music and game services. It also featured several HP utilities.

A Sony EH37FX included an app from Best Buy that launched every time the PC started (though you could turn this off). Both stock machines festooned the IE browser with two space-hogging toolbars, including one from Microsoft’s own Bing search service; the Signature machine had none.

The Samsung Series 7 I tested came with 10 extra icons and a bunch of special utilities.

Signature isn’t the same on every machine. In most cases, it strips out some of the added software and utilities, and retains others, but hides them in a folder buried in the Start Menu. In some cases, however, where a utility is deemed essential for a computer’s particular hardware, it retains these.

Such decisions, and indeed all of the Signature settings, are controlled by a team of engineers housed in Microsoft’s retail division.

In my speed tests, Signature beat all the stock machines on all my trials, but the margins weren’t dramatic, usually from a few seconds to 25 seconds. On the HP, the differences were especially minimal. Across all three machines, the biggest differences were the time it took to set the PC up out of the box and the time it took to shut down the PC.

One Microsoft official told me that Signature represents “Microsoft’s perspective on Windows,” rather than that of the hardware maker.

In my opinion, although it may generally benefit Microsoft at the expense of the hardware maker, it also makes for a better experience for the user.

Email Walt at mossberg@wsj.com.

Bing Goes Sleek and More Social

Katherine Boehret — Tue, 15 May 2012 22:43:47 +0000

If you’ve ever cleaned off a cluttered desk, replacing messy stacks of paper with framed photos of people who really matter, you have a rough idea of what Microsoft did with its new Bing search engine this week. Gone are the distracting, multicolored search results. Gone are the lists of recently searched terms that you never looked at anyway. Gone are the search results mingled with Facebook “likes.”

[ See post to watch video ]

What’s left? A lot of white space, which creates a calmer environment for reading and digesting information. A new middle column, which Microsoft calls Snapshot, displays task-oriented content to help people do things like making restaurant reservations, getting directions or seeing movie times. And Bing’s most unusual new feature is a flush-right column called Sidebar designed to automatically surface names of relevant Facebook friends and others around the Web who could best help you with a specific query.

Bing's Snapshot column helps users do things like make a hotel reservation. Its Sidebar column, far right, shows friends who may have answers to help with a person's current search.

The new Bing is automatically available to about 20% of users starting Tuesday. If you’re not one of the 20%, you can see the new interface and Sidebar on Bing.com/new. By June 1, all features will be automatically available to everyone.

I’ve had access to this revamped Bing for the past week, and its prospects are promising. It feels cleaner and clearer. Sidebar’s integrated social knowledge of friends linked to Bing through a person’s Facebook account—or people from Twitter and blogs who are suggested by Bing—can turn the solitude of Web searching into a group activity. For example, a search for Napa Valley restaurants smartly brings up the name of a friend who recently posted a photo album from Napa, a colleague who lists Napa Valley as his hometown as well as a well-known blogger who reviews restaurants in that area. Sidebar maintains a neat list of your queries and the responses, saving you the trouble of hunting through past Facebook posts.

Compared with the way Google integrated Google+ “personal results” with regular search results—which ruffled a lot of feathers—Sidebar is more sophisticated.

But Bing’s Sidebar faces a challenge: People aren’t used to searching like this.

As fun as it is to poll people—even specifically suggested people—in queries, we usually search alone. Many of the things I type into Bing are quick ask-a-question-get-an-answer searches, and Sidebar’s format requires waiting for someone’s response. It’s possible that it just takes time to adjust to this new way of searching, but I’m comfortable with the Web sources that I already know and trust. (No offense, Facebook friends.)

Additional partners, including LinkedIn, Foursquare and Quora, will eventually be included to help with queries in Bing’s Sidebar. Some of these will work later this summer. For now, Twitter provides the biggest source of people from around the Web who might know the answer to your query.

Bing will continue to make improvements, according to Stefan Weitz, senior director of Bing search. By late June or early July, you’ll be able to tag friends in queries even if Bing doesn’t suggest those people as relevant to a query. This would have helped me when I searched for restaurants in Boston, where my foodie sister has lived for 11 years, though she didn’t automatically appear as a suggested source. Then again, when I searched for a Mexican restaurant in Kirkland, Wash., called Cactus, a friend who “liked” another Mexican restaurant in nearby Seattle popped up in my Sidebar.

I didn’t realize this friend had ever visited Seattle or that he enjoyed one of Seattle’s Mexican restaurants enough to “like” it on Facebook. These helpful, serendipitous experiences may be enough to keep people using the Bing Sidebar.

Bing’s Sidebar queries currently have a clumsy way of working with Facebook. If I query three people who are auto-suggested as friends who might know the answer to my question, the query only shows up on my Facebook page, not on the pages of people who were questioned. They must visit my Facebook page to see responses, an extra step that may discourage ongoing conversations. An Activity feed in the Bing Sidebar shows all Facebok friends’ query activity, but people look at Facebook more often.

The middle column of the rebuilt Bing, called Snapshot, doesn’t always display content. When it does, it is geared toward helping people accomplish specific tasks, like booking a hotel room or restaurant table. In a search for the Oval Room, a Washington, D.C., restaurant, Snapshot showed a map of its location, four ratings from websites like TripAdvisor, hours of operation and a link to OpenTable for making a reservation.

A shrunk-down version of this new Bing—including its cleaner look, Snapshot and Sidebar—will be available this week to run on smartphones including Windows Phone, Apple’s iPhone, Android phones and RIM’s BlackBerrys. Microsoft says it will work on tablets by early July.

The new Bing is sure to get people talking—and its Sidebar is likely to tell you something you didn’t know about a friend that may or may not help you make a decision. But until it gets more accurate and more partners, I’ll use Sidebar like a side dish: It won’t make a big impact on my overall search experience.

Write to Katie at katie.boehret@wsj.com.

At 28, Few Tech Titans Could Hold a Candle to Zuck

Mike Isaac — Mon, 14 May 2012 22:55:25 +0000

It’s a big week for Mark Zuckerberg. Facebook, his baby of the past eight years, is expected to go public on Friday morning. He’s just coming off a cross-country road show speaking to investment banks hungry to scoop up shares of Facebook stock.

And on top of it all, it’s May 14 — Mark’s 28th birthday.

Aside from the intense scrutiny of the company by the tech and financial press leading up to the IPO, Zuckerberg is doing all right. Especially when stacked up against some of the biggest names in tech that came before him.

Consider Steve Jobs. He was zooming along just fine in his twenties. Until, that is, in his 28th year he recruited the man who would eventually become his — and Apple’s — undoing (temporarily, of course). That man was John Sculley, then ~~CEO~~ President of Pepsi-Cola, who traded the position to be the CEO of Apple Computer after intense courting from Jobs. Of course, Sculley would eventually play a part in Jobs’s ouster from Apple; Sculley would also oversee the company in what proved to be the darkest years in its 36-year history. Jobs was also in the process of launching the Lisa when he was 28, one of the biggest commercial computer hardware failures the company has ever released. In other words, 28 wasn’t the greatest year of Jobs’s career.

Amazon luminary Jeff Bezos’s best years were yet to come. At 28, he was still at his hedge fund gig, where he first saw the opportunity in the fast-growing Internet use around the country. Two years later, he would go off on his own to start Amazon.

Bill Gates, on one hand, had founded Microsoft in 1976 — then known as “Micro-Soft,” begun in a small Albuquerque office in partnership with Paul Allen — at the ripe age of 20. It’s the same age Zuck was when he officially founded Facebook in his Harvard dorm room. At 28, Gates was certainly upwardly mobile — the year before his 28th saw him begin to license MS-DOS — though his best years were yet to come: In two years, Gates would launch the first retail version of the Windows operating system.

Larry Page and Sergey Brin were still three years off from Google’s IPO when they turned 28 (Page in March of 2001, Brin in August). It was that year in which the two — who had run Google since they co-founded it in 1998 — decided to turn the reins over to Eric Schmidt, a learned executive well versed in leading technology companies. Unlike Zuckerberg, who retains full control over Facebook with his majority of voting rights, Page and Brin let a seasoned Valley veteran guide Google through its early days.

In all, it seems Zuck is doing just fine. Still two years off from the big 30, he’s number 35 on Forbes’ Billionaires List with an estimated net worth of $17.5 billion. Better still, he’s got a longtime live-in girlfriend and an adorable floor mop of a dog, “Beast.”

Happy birthday, Mr. Zuckerberg. And enjoy a quiet moment of reflection while you can; Friday isn’t too far off.

Twilio Taps Say Media Vet Kirkpatrick as CFO

Arik Hesseldahl — Mon, 14 May 2012 12:00:37 +0000

Something is going on at the telephony software start-up Twilio, and I guess the word to use is “growth.”

Barely two weeks after hiring former Jive exec Lynda Smith as its chief marketing officer, today it will announce that it has a new CFO. It’s Lee Kirkpatrick, and he’s leaving Say Media, where he had the same title. He started his new job on May 7.

Twilio is growing so fast that it’s a little hard to keep track of all the news coming out of it. In his new role, Kirkpatrick will be responsible for Twilio’s finances and worldwide strategy. The company recently added Belgium, Finland, the Netherlands and Sweden to the steadily growing stable of countries where it is operating. It also recently struck a deal with Microsoft to add telephony features to its Azure cloud computing platform, so, yeah, maybe now might be the time to add a CFO.

What’s Job One? Well, here’s a funny tradition at Twilio: Every employee, no matter their level or level of technical ability, is required to build a Twilio application in order to become familiar with how the service works. So, part of this week will be devoted to that. Companies like eBay unit StubHub, Salesforce.com and Airbnb have used it to create some custom apps that include the use of a phone.

It’s a very Twilio sort of thing to do. When the company was in the process of raising its most recent funding round — a $17 million series C led by Bessemer Venture Partners and Union Square Ventures — Bessemer partner Byron Deeter created a Twilio-connected number and asked CEO Jeff Lawson to call it. As VentureBeat reported at the time, when Lawson called, he heard an automated voice message asking him to press 1 for $5 million, press 2 for $10 million and press 3 for $15 million.

It turned out that C round topped out at $17 million late last year, bringing its total capital raised to about $34 million, so there’s a decent-sized pile of money to look after. Before Say Media, Kirkpatrick held executive jobs at Ofoto, the Kodak Gallery and Reuters.

Ross Levinsohn's Yahoo Plan: Back to the Future

Peter Kafka — Sun, 13 May 2012 23:08:16 +0000

Ross Levinsohn wants to be known as more than a deal guy. Now he gets his chance.

Assuming Yahoo gives its interim CEO real power — either by making him its actual CEO, or at least letting him behave as if he has the job — then he’ll finally have full control of a giant media company. That’s something he’s been working toward for a long time, despite his rep as a guy who enjoys buying companies more than running them.

Just like his predecessors, Levinsohn will have to untie Yahoo’s knotty Asian problem. He’ll also have to spend time repairing relationships with Facebook and figuring out what to do with a Microsoft search deal that hasn’t been a huge success.

But if Levinsohn gets to run Yahoo the way he wants to run Yahoo, he’ll focus on getting the most out of its media business, because that’s his strength.

Bear in mind that this is still a huge business — the portal attracts some 700 million visitors a month, which helped it generate nearly $1 billion in ad sales last quarter. But that business is listing and under attack from Google, Facebook, and a swarm of nimble start-ups pulling eyeballs and dollars away.

If you want to get a sense of what Levinsohn may try to do next, it’s good to review what he did last year, when he had control of the company’s U.S. operations — and what he tried to do but couldn’t get done.

Ads: Yahoo used to have one of the Web’s best sales operations, but those days are long gone. Levisonsohn spent much of 2011 trying to fix that. Part of that involved restaffing his team, and part of it was a strategy that was supposed to cut out some of the ad tech middlemen and allow the company to increase its yield on the ads it sold. Those moves, which included a would-be alliance between Yahoo, AOL and Microsoft, all went into a holding pattern when Scott Thompson took over in January. Levinsohn will try restarting that again now.
M&A: Levinsohn has a reputation as a dealmaker because he’s made some pretty big deals. Most notably, he brought Myspace to News Corp. in 2005, then helped the company secure a $900 million ad deal with Google (News Corp. also owns this Web site). Last year, he tried to land another big fish, when he pushed to pursue Hulu. But Levinsohn couldn’t get buy-in from then-CEO Carol Bartz, and Hulu’s owners decided not to sell after all. I think Levinsohn would still be interested in the site under certain conditions, but he’d need more cash than he has on hand to do it. Selling off his Asian assets might make that possible. If he can’t land Hulu, I don’t see him chasing after Instagram-like companies with big price tags and no near-term revenue plans. I do see him making some plays on cheaper start-ups, as well as some technology plays, to shore up/replace the company’s very old infrastructure/platforms.

Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.

Kara Swisher — Fri, 11 May 2012 15:15:28 +0000

While he has only been CEO of Yahoo for less than five months, in the next several days Yahoo CEO Scott Thompson is facing perhaps the most critical moment of his short tenure.

According to sources with knowledge of the situation, the board of Yahoo is not likely to take long in assessing whether he will stay or if he will be let go, due to a controversy around how a non-existent computer science degree got on his bio and also in Yahoo regulatory filings.

A special committee of independent directors is now investigating the matter, including trying to assess the damage has had on Thompson’s ability to lead the Silicon Valley Internet giant.

How quickly the board moves is likely to be a sign of their intent. If within the next days, it is likely to let the former president of eBay’s PayPal payments unit go and replace him with a current company exec; if it waits longer and shows some public support of him — which the board has not done since the scandal erupted — Thompson’s chances are better that he will only be given some sort of censure.

One important task is also closely considering the impact of possible legal problems related to Thompson and others signing documents with the Securities and Exchange Commission that were not accurate.

One thing is clear from interviews with multiple sources, many members of the board have not been happy with how Thompson has handled the matter since activist shareholder Daniel Loeb of Third Point uncovered the problem a week ago.

While first tossing the borked bio as an “inadvertent error,” Thompson was then largely silent about the issue with staff, despite being in close meetings with them, which caused stress among key execs.

Then, he made a public announcement in which he apologized for only the “distraction” caused by the incident and not the error itself as some had hoped he would.

Yesterday, apparently feeling it was time to try to explain things face-to-face, Thompson made another attempt to explain what happened in two separate meetings with his direct reports and then his senior staff, apparently trying to get through to employees that he did not fake his resume nor did he give an inaccurate bio to Yahoo when he was being hired for the job earlier this year.

Thompson thought it was time — now that the board investigation was underway — to answer questions directly, said a source.

Among other things, Thompson gave a somewhat convoluted explanation that it appeared in his bio due to a misunderstanding during an interview with a headhunting firm. And that he never noticed it once it proliferated And that when an NPR interviewer asked him directly about his CS degree, he did not want to correct her in mid-discussion — although others report he said he did not hear the question fully.

Sources said Thompson — who is on the midst of initiating changes across a large and troubled organization, after laying off 2,000 employees — thought the sessions went well, that he clearly communicated that he was taking blame for the problem and its repercussions. Those sources also noted that he received support for doing so after the talks.

But, more than a dozen others I interviewed who were listening remotely — some of whom I sought out and some who contacted me directly — thought Thompson’s complex explanation was deeply problematic and that he tried to foist the blame on others rather than on himself.

Every one of these people expressed the need for him to step down to allow Yahoo to move forward.

What the board thought about the performance is still not clear, said sources, but things are coming down to two distinct scenarios.

The first is a quick parting of the ways with Thompson, within days, either for cause or via a negotiated settlement. Others at Yahoo involved with perpetuating the mistake in the bio are also at risk.

This option is perhaps the more likely at this moment, unless the scandal dissipates and employees continued rancor over the situation can be assuaged soon.

In this case, sources said, Thompson will be replaced by a current board member or a member of the top staff. When directors fired Carol Bartz last fall, CFO Tim Morse became interim CEO and he is one of the likely candidates for the job again.

The second scenario centers on needing Thompson to complete a number of complex transactions related to the sale of Yahoo’s Chinese assets and its re-negotiations with Microsoft over its troubled search partnership, among other things.

In that case, Thompson will be censured in some manner by the board and will also probably have to endure some punishment for allowing false regulatory documents to be filed by Yahoo. Others at Yahoo will also be subject to the same treatment in such an outcome.

How will it turn out?

Only board member Patti Hart has so far paid for her faulty vetting of Thompson, stepping down from the board earlier this week.

But whether she will be the only shoe to drop in what has turned out to be a bizarre wildfire that as raged across Yahoo’s troubled landscape remains to be seen.

Thus, most definitely watch this space this weekend.

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CEO Says Sorry to Yahoos for Borked Bio “Distraction” — But Will Mea Culpa Work Without an Apology for Error? (Memo)

Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”

Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess

As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)

Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring

They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.

Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him

In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)

Yahoo’s Board Will “Review” Resume Discrepancy of CEO

How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.

Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”

Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Is YouTube's Ad Pitch Working?

Peter Kafka — Fri, 11 May 2012 14:19:25 +0000

Last week, YouTube threw a glitzy party designed to get advertisers to move their money from TV to the giant video site. Is it working?

Capstone analyst Rory Maher thinks so. He’s been polling ad buyers and thinks they may collectively be spending 40 percent more on YouTube than they did a year ago.

He also thinks YouTube’s strategy of grouping its new channels into “genres” — like “women,” “pop culture,” etc. — and selling those as megapackages is attractive to advertisers, and that they’ve at least placed tentative commitments on all 18 packages YouTube is selling.

But those dollars aren’t going to come from TV, Maher thinks. Instead, advertisers will take money they would have spent on other Web ads and move them over to YouTube. That’s still a win for Google, but it’s not the win it really wants.

Last week’s event didn’t win everyone over. Several folks I’ve talked to — including people who are making stuff for YouTube’s channels — say they’re underwhelmed with the actual content they saw onstage at the Beacon Theater.

“It looked like Web video,” one Web video maker told me. That is, it didn’t look like the stuff the TV guys show off at their advertiser events.

Some of the stuff may get close to TV.

YouTube is brimming with pride over WIGS, a series of soapy dramas featuring actresses you’ve heard of, like Jennifer Beals and Julia Stiles (News Corp., which owns this site, had a hand in putting the series together). The teaser trailer they’ve put out looks like a reasonable facsimile of Lifetime, at least to my eyes. And Machinima is planning a series based on Halo, the hit Xbox game, and the few seconds of that they showed looked pretty slick.

It’s more likely that most of the Web video YouTube produces with its channels this year really will end up looking like Web video. But if that doesn’t bother the people who watch it — and there are some 800 million people watching this stuff every month — then it shouldn’t be a problem for the ad guys, either.

Bing and You're Modeling Every Object on the Planet

Voices — Fri, 11 May 2012 07:17:43 +0000

We’re literally no longer indexing text. We’re trying to associate data that exists on the web in all forms with the physical object that spawned it in the first place.

– Bing director Stefan Weitz, in an interview with Fast Company’s E.B. Boyd

Microsoft's Sneaky Success: The Xbox Is the Most Popular Video Player in the U.S.

Peter Kafka — Thu, 10 May 2012 18:41:24 +0000

More evidence that Microsoft is increasing its lead in the digital living room race: Data that shows its Xbox gaming console is the most popular non-PC device to watch Web video.

That is, more people are watching Web stuff on Microsoft’s machine than on the iPad, iPhone or any Android machine, anywhere. And when it comes to home viewing, competitors like Apple TV, Google TV and Roku are so far behind they’re not even competitors.

This data comes from Freewheel, an online video ad company, and it comes with caveats. We’ll get to those below. But first, take a look:

Now the asterisks: Freewheel is only measuring “professional content” that runs with ads, because that’s how it makes its living. So that means it’s counting stuff from companies like NBC, CBS, ESPN and Vevo, but not YouTube cat videos. It’s also not measuring Netflix usage. On the other hand, this isn’t a poll or sample, but data compiled by the company’s own ad servers.

So it’s possible there’s some variance here with the larger Web video world, but it seems reasonable to assume that this is at least directionally correct. At the very least, it gives credence to Microsoft’s claim that Xbox users are spending more time watching videos on the machines than playing games, and that its deals with conventional TV programmers may be bearing fruit.

And it shows you how much ground Google will need to make up as it gets ready to relaunch its Google TV. Ditto for Apple, if and when it ever gets serious about transforming Apple TV into something other than a “hobby.”

Bing Redesigns to Split Out Details and Social Into Their Own Panes

Liz Gannes — Thu, 10 May 2012 17:00:04 +0000

Microsoft today is changing up its Bing search interface to separate out a lot of the information it had previously packed directly into the core list of search results.

The new Bing features a three-panel layout, with the left-most a pared-down list of straight search results. The second column appears when users hover over a certain result, and shows dedicated visual results for 150 different categories like restaurants, transit, movies and hotels that include maps, ratings and other information.

This “Snapshot” screen tries to help users take action on those results — for instance, to make a restaurant reservation or check availability at a certain hotel — without leaving the Bing page.

The third column is the most radical change from the traditional search layout — it’s a social friend list and feed that stays on the page at all times over to the right. For each query, Bing will automatically suggest Facebook friends who know about a topic as well as relevant experts from Twitter, Foursquare, Quora, LinkedIn, Google+ and Blogger.

When a user asks one of those people to help with a query, the conversation shows up in an activity feed on the sidebar and also back on Facebook.

Microsoft had considered giving users the option to broadcast — with their permission — all their Bing search queries to Facebook through its Open Graph API. That would have been super controversial, and it was dropped from the release over the last couple of weeks.

Bing search director Stefan Weitz told me that there are a couple of goals for this launch. The first is to show users that “Bing is for doing stuff.” And the second is to acknowledge that search has become too crowded, with additions like social seeming to randomly sprinkle Facebook profile photos throughout the results page.

The new interface’s three panels are, in order, “what the Web knows,” “what Bing knows,” and “what friends know,” Weitz said.

One thing that’s not clear to me is how a three-panel design that’s dependent on hovering will work within the constraints of small mobile touchscreens. Microsoft is demoing that and more at a San Francisco launch event that’s being live-streamed here.

Update: Qi Lu, Microsoft’s president of online services, replied at the event that the three-panel approach should actually ease translations to various form factors, including phones and Xboxes.

“Separating aspects allows us to customize for different form factors, so the experience can be consistent,” he said. Lu added that hovering would be replaced by swiping between panes on mobile devices.

The new Bing won’t be available to all users immediately, but people can sign up to be notified about it here.

MS iCloud.NET Live

Eric Johnson — Thu, 10 May 2012 07:02:36 +0000

iCloud is among the best products Microsoft has ever designed.

– Mike Monteiro, via Twitter

When the Devices Are Done

Katherine Boehret — Tue, 08 May 2012 22:32:23 +0000

It is time for spring cleaning, or as I think of it, my yearly chance to shove old technology products to the back of my storage closet. Instead, this should be a chance to take advantage of companies’ stepped-up recycling efforts.

[ See post to watch video ]

Last year, 460 million pounds of electronics were collected and recycled in the U.S., a 53 percent increase from 2010, according to the Consumer Electronics Association.

People know they should recycle their old or unwanted technology products, but they don’t know where to begin. So this week, I did the dirty work, rounding up details from eight major companies about their recycling programs, including fees, dropoff locations, acceptable products, shipping options, haul-away services and personal-data-wiping solutions. Readers: Your days of pack-rat procrastinating are numbered.

Best Buy’s recycling program is made up of four categories: in-store kiosks for ink and toner cartridges, rechargeable batteries, wires, cords and cables; free removal and recycling of an appliance or TV when a new appliance or TV is delivered; home pickup of two appliances or two TVs for $100 with a $20 charge for additional units; and BestBuy.com/tradein for trading gently used electronics for Best Buy gift cards. The store’s Geek Squad offers services like removing a PC’s hard drive before handing it over to be recycled.

Apple invites its customers to bring all batteries and iPods into its 247 U.S. stores for recycling, and any iPod (except the iPod shuffle) can be turned in for a 10 percent discount on a new iPod. People also can opt to ship their old products off to be recycled free by filling out a form found at Apple.com/recycling; Apple contracts with a company called PowerON to do this recycling. Acceptable products include desktop or notebook Windows PCs and Macs, iPads, iPhones as well as any make or type of mobile phone. If the product is worth something, you’ll get an Apple gift card.

Amazon doesn’t charge people to recycle its Kindle e-readers or Kindle batteries, and this includes non-working and working units. People can print free UPS labels for shipping their old Kindles to be recycled on ecotakeback.com/kindle; they then simply drop the Kindles off at a UPS store. Amazon wipes all identifying marks or personal documents from these Kindles. Further details can be found at amzn.to/JkilQX. If Kindles are in good condition, customers can opt to trade them in for Amazon gift cards via the company’s Electronic Trade-In program.

HP’s new partnership with Staples offers a physical location where people can drop off HP and non-HP consumer products for recycling. The Staples stores will accept a variety of products, including laptops, monitors, mice, fax machines and GPS devices, though not televisions. People who recycle printer cartridges can earn Staples rewards points toward store merchandise. FedEx Office stores also serve as dropoff locations for products that will be shipped off for recycling: HP and Compaq products can be shipped using a free pre-printed voucher found at HP.com/recycling, but shipping vouchers for other brands of consumer products will cost $10 to $25.

Dell’s recycling program includes free home pickup and FedEx shipping options, but these are only for Dell products; details can be found at Dell.com/recycle. If a customer buys a new Dell product, the company will take the old one, even if it isn’t Dell-branded, though the buyer must remember to select “free recycling” when buying. Dell’s partnership with Goodwill helped the company create its Dell Reconnect program, which lets people drop off old computer electronics at Goodwill stores such as PCs, laptops, tablets and keyboards, but not mobile phones. At Goodwill, someone will inspect the products to decide whether they can be reused, refurbished or recycled. If the products are reused or refurbished, they’ll be sold at Goodwill.

People with Samsung products can use free mail-back shipping options via one of three links: Samsung.com/starus for toner cartridges, mobile.samsungusa.com/recycling for mobile products, or www.oemtakeback.com/samsung for all other Samsung products. Samsung and non-Samsung products also can be dropped off at more than 1,000 locations listed on this website: Samsung.com/recyclingdirect.

Sony accepts its brand of products for free recycling at about 850 dropoff centers; some of the centers also offer free recycling for other manufacturers’ products. Sony also offers free shipping and recycling only for Sony products as long as they weigh less than 25 pounds and the person shipping lives more than 25 miles away from a dropoff center. Sony and other brands of products can, if eligible, be traded in for purchasing new Sony products. Eligibility and details on Sony dropoff locations can be found at Sony.com/ecotrade.

Microsoft Stores, of which there are 16 nationwide, offer free in-store recycling of cellphones, rechargeable phone batteries and computers. If the item has value, which is determined by its age, condition and current market value, customers will receive Microsoft store gift cards; items eligible for this include all smartphones, computers and gaming consoles, including Xbox. Xbox owners can ship and recycle their Microsoft hardware using prepaid shipping forms at http://bit.ly/Kjk6xk. Microsoft stores offer services to wipe personal data from products before recycling, although there may be a cost for this depending on whether the customer is doing a trade-in, upgrade or just recycling.

So do as I say, not as I do, and get to one of these online or physical recycling locations.

Write to Katie at katie.boehret@wsj.com

The Point of Return

Here are recycling options from some major companies:

COMPANY (website)	SHIPPING/RECYCLING FEES	IN-STORE DROPOFF
Apple (Apple.com/recycling)	Free with shipping form.	Batteries and iPods accepted at Apple stores.
HP (HP.com/recycling)	Free shipping via FedEx for HP and Compaq products with pre-printed voucher. Fee for other products is $10-$25.	Staples stores accept many HP and non-HP consumer products, except TVs.
Dell (www.dell.com/recycle)	Free shipping or pickup of Dell product. Free pickup of non-Dell item with purchase of Dell product.	Partnership with Goodwill for Dell Reconnect accepts any brand of electronics except mobile phones.
Amazon (http://amzn.to/JkilQX)	Free shipping for Kindles via UPS with pre-printed voucher.	Not available.
Samsung (Samsung.com/recyclingdirect)	Free mailback shipping for various Samsung products.	Drop Samsung and non-Samsung products at over 1,000 third-party locations.
Sony (Sony.com/ecotrade)	Free shipping for Sony products weighing less than 25 pounds.	Drop Sony products at about 850 third-party locations.
Best Buy (BestBuy.com/recycling)	Free appliance removal when purchasing new one. Or, $100 for home pickup of two items.	Recycling kiosks for ink cartridges, rechargeable batteries, cord, cables, etc.
Microsoft (http://bit.ly/roNymi)	Free shipping of Microsoft hardware, including Xbox.	Cellphones, rechargeable phone batteries and computers accepted at Microsoft stores.

EA Says Digital Will Offset New Console Investments for the First Time

Tricia Duryee — Tue, 08 May 2012 21:45:24 +0000

Despite having to sink $80 million into new console game development this year, EA’s CEO John Riccitiello is upbeat, saying that “we are absolutely a different company in a different spot.”

Typically at this point in the hardware cycle, he said, the cost of developing new videogames would lead to a loss. But in a conference call with investors yesterday, Riccitiello said revenue from digital content will keep EA profitable.

“In the face of, unfortunately, somewhat of a headwind relative to console, we’re getting top line growth, robust digital growth, robust margin expansion, robust EPS growth, while affording the investment in the next-gen console. I don’t think, going back to our foundation in ’82, that’s ever happened before. So what we are guiding for is entirely unprecedented, and it’s a function of everything we’ve been saying on the call so far. … It’s our hope to be able to accelerate top line through a transition and accelerate bottom line growth through a transition because we won’t be facing sort of negative console compares.”

Nintendo expects to release the Wii U later this year, which will require new games that tap into both the TV and a touchscreen device. Neither Microsoft or Sony have unveiled plans for their respective next-generation hardware systems, the Xbox and PlayStation. Riccitiello did not mention the new consoles by name, and instead referred any direct questions about hardware to Sony, Microsoft and Nintendo.

“We intend to invest $80 million in Gen4 console development in fiscal ’13. We are strong believers that console will return to strong growth, and represent a great opportunity — one that is in lockstep with our digital plans.”

In fiscal 2012, EA generated $1.2 billion in digital revenues, representing a 47 percent increase year over year. In the past six months alone, FIFA 12 — one of the company’s traditional packaged good titles — was able to break $100 million in digital revenues for the first time. This year, it’s predicting digital revenues of $1.7 billion, representing 40 percent of the company’s overall business.

Even though Riccitiello painted a positive outlook, he failed to turn to the tide.

Along with a broader market meltdown, the company’s stock fell 65 cents, or 4.3 percent, at $14.48 a share. At that price, the company’s stock is off more than 40 percent from its 52-week high of $26.13 a share.

During the call, Riccitiello also tried to stress that while Star Wars: The Old Republic is an important title for the company, it is getting an unfair amount of attention by analysts. In the quarter, he said the number of subscribers fell to 1.3 million from 1.7 million when the game launched.

“So while I understand there’s an enormous amount of interest, I don’t know that it warrants as much as what we’re seeing right now,” he said, according to a SeekingAlpha transcript.

The final highlight from the call was when Riccitiello questioned how much Zynga paid for OMGPOP and its hit title Draw Something, which was No. 1 for a short period of time. He didn’t actually name the two companies, but it was implied.

“Right now, what I’m starting to see is valuation expectations that assume that these things are all hockey stick moving up and to the right with no end in sight, and I think those are bad assumptions,” he said. “Some of them will work, some of them won’t, but they can’t all be worth the multiple that I’m seeing in the market right now.”

CTIA Gets Down to Business in the Big Easy

Ina Fried — Mon, 07 May 2012 21:42:27 +0000

With the New Orleans Jazz Fest now over, it’s time for the cellphone industry to get to work.

In town for the annual CTIA trade show, the mood shifted back to business on Monday, at least until the evening parties kick off. The U.S. cellular trade association moved the convention from March to May (and to a party town) in hopes that the event can avoid being lost in the shadows of Mobile World Congress and the Consumer Electronics Show.

Although the main part of the show doesn’t begin until Tuesday, the first bits of product news were announced this morning. Verizon debuted the HTC Droid Incredible 4G LTE, while AT&T announced a $49 Samsung LTE Windows Phone as well as its plans to enter the home security business. This afternoon, MasterCard announced its new PayPass digital wallet.

AT&T is planning a press event later on Monday, with further news expected.

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Harriet, Check the Books and See if I Can Dismiss This on the Grounds of Asshattery

John Paczkowski — Mon, 07 May 2012 21:28:51 +0000

U.S. District Judge James Robart has just about had it with Microsoft, Motorola and their pitched patent battle. Remarking on the dispute Monday after suffering through three hours of oral arguments, Robart laid into both companies for blurring the line between business negotiation and litigation.

“The court is well aware that it is being played as a pawn in a global industry-wide business negotiation,” Robart lamented after reserving judgment on the motions of Microsoft and Motorola for a later date. “The conduct of both Motorola and Microsoft has been driven by an attempt to secure commercial advantage, and to an outsider looking in, it has been arbitrary, it has been arrogant and frankly it appears to be based on hubris.”

Which, if you’ve been following these cases, is a reasonably accurate assessment. Using litigation to squeeze exorbitant licensing fees out of a rival for intellectual property is becoming par for the course in negotiations like those between Microsoft and Motorola, and as Robart points out, not only is that a drag, it’s often a waste of everyone else’s time.

Flipboard CEO McCue Likely to Step Down From Twitter Board Over Potential Future Conflicts (Or Closer Cooperation)

Kara Swisher — Mon, 07 May 2012 20:37:24 +0000

According to sources close to the situation, Flipboard co-founder and CEO Mike McCue has approached Twitter CEO Dick Costolo and co-founder Jack Dorsey about moving off the board of Twitter.

It is not clear when McCue — who became a director of the San Francisco social communications company in late 2010 — will step down, but it could come soon.

The reason, sources said, is McCue’s growing feeling that the companies are on a product collision course, with a possible troubled or perhaps more attractive result.

In other words, Flipboard will either face increasing rivalry from Twitter or will end up as a possible acquisition target for it or other companies.

“How users consume and use Twitter is a key part of its future, and that is what Flipboard does well already,” said one person with knowledge of the situation. “There is going to be an inevitable crossroads for the two companies.”

Indeed, Twitter has bought several companies that help users read and discover, such as Summify.

The goal has been to better make sense of the massive amount of data that the service produces daily; to that end, Twitter has pushed to improve its user interface design on a number of devices.

And Twitter is a big part of Flipboard’s app, which is very dependent on the tweet feed and accounts for 70 percent of its links, sources said.

Flipboard is also more of a “mobile first” company, which is where Twitter is also headed even more aggressively.

Already popular on the Apple iPad, Flipboard launched its iPhone app late last year and it is prepping a version for Google Android soon.

That’s why, in addition to being a rival, it is also an obvious acquisition target for Twitter, as well as others such as Yahoo and Microsoft.

In fact, Google already tried to buy it last year, before Flipboard did a massive $50 million fundraising round that valued it at $200 million.

Its investors include Insight Venture Partners, Comcast’s venture arm, Kleiner Perkins Caufield & Byers, Index Ventures and a spate of well known angels, such as Dorsey, Facebook co-founder and Asana dude Dustin Moskovitz, Ron Conway, actor Ashton Kutcher and the investment company of former News Corp. exec Peter Chernin.

Co-founded by longtime entrepreneur McCue (Netscape, Tellme) and former Apple iPhone engineer Evan Doll, Flipboard launched to much attention in mid 2010.

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

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

Google has mounted a competitor, called Currents, as has Yahoo with its Livestand offering, neither of which have gotten much traction. In fact, sources said, Yahoo is likely to shut Livestand down completely.

There have also been a spate of other similar readers, such as Pulse and Zite.

Spokespersons for both Flipboard and Twitter politely declined comment.

Get Yer Subscription Xbox for $99 (And $15 a Month)

Lauren Goode — Mon, 07 May 2012 18:03:03 +0000

Microsoft will sell the Xbox 360 game and media console, with the Kinect sensor, for $99 as part of a two-year, $15 per month “Gold” contract. The news was first reported last week by The Verge. Interested takers, however, will have to live near one of the 21 Microsoft stores across the U.S. to opt in to the deal.

They Shoot Yahoo CEOs, Don't They? But Not Without a Really Smoking Gun and a Much Stronger Board.

Kara Swisher — Sat, 05 May 2012 16:33:02 +0000

Earlier today, Yahoo’s persistent thorn, activist shareholder Dan Loeb of Third Point poison-penned another letter to the board of the Silicon Valley Internet company, demanding that Yahoo fire its new CEO Scott Thompson, as well as director Patti Hart, over bizarre inaccuracies related to their academic achievements.

“Permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top,” Loeb wrote.”[Yahoo must] terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.”

And while many across the blogosphere — including some very clever tweets — called for his head tout de suite, that’s just not going to happen.

At least for now, at this early point in a controversy over Yahoo filing legal documents that misrepresented Thompson’s long-ago degree from Stonehill College.

In a nutshell: Thompson does not have a computer science degree, as he had maintained he did in public bios for almost a decade, a falsehood that mysteriously seeped into documents Yahoo filed with the Securities and Exchange Commission.

That’s bad news for Yahoo, for sure, on many levels, but moving against Thompson at this moment is not likely to be the answer — for the short term, at least.

That’s due to many reasons, that I like to think of it as three hopelessly complex puzzles that need solving pronto.

The What-Did-Yahoo-Know-and-When-Did-It-Know-It Question

There is no question the first thing Yahoo’s board needs to do is a thorough investigation to determine how a borked bio could proliferate so widely and for so long.

Most importantly, Yahoo will have to reveal if Thompson actually gave them this incorrect information, as he aggressively lobbied for the then-open CEO job.

As I had previously reported several times, Thompson cold-emailed a Yahoo director — Intuit CEO Brad Smith, as it turns out — despite not being on the list of potential candidates. Thompson was then shuttled over to Hart, who was running the vetting process with the help of headhunting firm Heidrick & Struggles, and hired within weeks.

Oddly, sources said Thompson never filled out the required informational papers for the job, nor did Heidrick conduct the normal background check on him. Instead, another forensic firm Yahoo hired did the work.

If it turns out Thompson gave any of them the bad bio info, it would be quick curtains for him.

But if Yahoo’s board members obtained his info on their own, the next key query would be how no one at Yahoo — especially its legal and compliance staffers, as well as outside help — managed to catch the problem during the vetting of Thompson.

Here are some good questions to start with:

Who put a faux computer science degree on Thompson’s bio in the first place, why and when did it happen?

Where did Yahoo get the inaccurate information?

Who was in charge of checking Thompson’s academic record for Yahoo?

And, who checked the work of the checkers?

The problem is made more complicated, because correct information was easily available in the SEC filings of eBay for years, since Thompson was head of its PayPal payments unit.

While the resume information was indeed wrong on eBay’s Web site and on numerous bios of Thompson for years, how did eBay legally get it right while Yahoo did not?

That calls into question the expertise of the company, its directors and those they hired to make sure execs were completely on the up and up, a task they clearly failed at.

If rank incompetence is the reason, which it looks like it might be, expect certain board members and other Yahoo staffers to go, along with anyone who helped in the Thompson vetting, or lack thereof.

Unless, of course, the gang-that-couldn’t-shoot-straight actually did shoot straight and some one at Yahoo found out about the educational discrepancy before the new CEO was announced, but declined to fix it.

While sinister, such a scenario is not entirely implausible, given how much pressure Yahoo was under at the time to hire a CEO quickly, due to Loeb and his looming proxy fight.

If any evidence were to surface that this was so, it is curtains all around, which would rain the kind of disaster down on Yahoo’s Sunnyvale HQ that would make Loeb’s attacks look like a Nerf battle. Instead, it would be “The Hunger Games” — except that no one survives.

The Chaos-in-Sunnyvale Conundrum

Which brings us to the profound implications of Yahoo jacking its second CEO within six months.

While it’s easy to yell “Fire the CEO” on a crowded Twitter, it’s simply not so easy in practice.

How long did it take Yahoo’s lugubrious board to figure out Carol Bartz needed to go? A … long … time. (And, she had a CS degree!)

More to the point, Thompson — and his not-so-merry band of consultants from Boston Consulting Group and, this week, McKinsey & Company — has only just completed a massive layoff of 2,000 employees and a jarring restructuring of management.

He’s also in the early stages of rolling out a new and decidedly still-squishy strategic plan to top execs (also just this week), along with working on some other key initiatives.

That includes renegotiating its search partnership with Microsoft; noodling around on a possible deal with Google; contemplating the sale of a variety of assets; and — oh, yes — trying to take on social networking Godzilla Facebook over patent infringement.

Busy much?

But, most importantly, Thompson is now the umpteenth Yahoo CEO to be working on the never-ending talks with its Asian partners over selling back a piece of the company’s lucrative stake to them.

While Yahoo CFO Tim Morse and head lawyer Mike Callahan are the point men on the deal, the lack of CEO would be an issue in the now-proceeding again talks.

This is a sale that must — and I underscore must — get done and soon, giving Yahoo much-needed breathing room and a whole lot of cash to fork over to increasingly disgruntled shareholders.

So, expect Yahoo to try to milk that deal for all it’s worth in the coming week, in order to give the appearance, at least, of positive forward momentum.

And, like it or not, Thompson has to play a key role in it getting done.

Thus, the likelihood of wait-and-see over point-and-shoot on Thompson is higher than you might think.

That’s especially true given four members of the board are leaving within six weeks and have either or are in the process of being replaced by new members.

Then, Thompson will be their problem to solve.

Again, no small thing, since the old crew — led by feckless Chairman Roy Bostock — is not likely to want to end its appalling tenure with yet another disaster.

Such a move would further tarnish the legacy of its outgoing directors, although I am not sure how it could be any more sullied, given their consistent record of one bad decision after the next.

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

It could be a different case with the new directors, of course, who all seem pretty sharp and not as easily impressed by a record of failure.

They will surely be monitoring Thompson carefully, as will employees, who have taken to internal message boards with a rage not seen in a while over the resume debacle.

Their morale might be one uncertainty impacting Thompson’s fate. If a lot of key employees continue to bolt Yahoo or those remaining more loudly express their disdain for the bio antics, the new directors might listen.

The Whatever-Loeb-Says-We-Won’t-Do-Till-Later Head-Scratcher

Which brings us back to Loeb, whose noisy campaign to grab seats on the Yahoo board has certainly hit home this week.

And, though Yahoo likes to ding him a lot, since he started his campaign of terribly entertaining investor terror, a lot of what he’s been calling for has happened.

That includes a major flushing of the board — with five longtime members, including co-founder Jerry Yang, going, going and gone.

In addition, Loeb brought pressure to slow down some questionable deals, from Yahoo’s PIPE dream to a tax-free spinoff in Asia in a deal only an accountant could love.

He’s also — though they try to deny it — got the Yahoo directors in the dangerous habit of reacting to him, rather than playing their own game.

While the Yahoo board has resisted any deal with Loeb (pictured here), blaming him for rejecting their kind offers of settlement, it is he who is setting the tone more than Yahoo.

And that tone is of alarm and trouble and chaos at Yahoo.

That’s not going to work to convince other Yahoo investors to back his cause — in fact, Loeb has a decidedly uphill battle to win his proxy challenge — he has still scored a direct win with the bio relevations.

So far, though, Loeb has not sunk Yahoo’s battleship, so it is unlikely the board will acquiesce to his latest demand of Thompson being fired by noon on Monday.

Maybe it will eventually, or maybe it will just scold Thompson or maybe it will do nothing at all.

All that is an unknown — a riddle, wrapped in a mystery, inside an enigma, with a lot of managerial incompetence thrown in. And that, most of all, is the sad definition of today’s Yahoo.

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A Class Action Suit? Yeah, That Will Do Wonders For the Value of Your Nokia Shares …

John Paczkowski — Fri, 04 May 2012 15:41:49 +0000

Nokia’s legal team is going to be busier than usual this summer — suing and being sued. On Thursday, the company — which earlier this week filed patent infringement suits against HTC, Research In Motion and ViewSonic in the U.S. and Germany — found itself on the receiving end of a class action suit brought by an irate shareholder.

Filed by Robert Chmielinski, the suit alleges Nokia misled investors by promising that its transition to Microsoft Windows Phone platform would reinvigorate its flagging smartphone sales.

“Defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not,” the lawsuit states. “This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected. Nokia expected its first quarter 2012 non-IFRS Devices & Services operating margin to fall by 3%, and projected first quarter 2012 Devices & Services net sales of €4.2 billion.”

The lawsuit further alleges that Nokia fumbled the launch of the Lumia 900, shipping it with a glitch that ultimately forced it to offer customers an automatic $100 refund, “making the phone essentially free.”

Which is true, of course. But how ironic is it that a shareholder outraged over the slow pace of Nokia’s nascent transition to Windows Phone is suing the company, a move that will arguably further slow that pace by distracting management and drain away further resources?

And c’mon: the Lumia line isn’t even a year old yet. It debuted in Europe last November.

Asinine.

Robbins Geller, the law firm representing Chmielinski, says it seeks to recover damages on behalf of all purchasers of Nokia’s shares.

Nokia, for its part, says it will defend itself against the suit, whose allegations it believes to be “without merit.”

Tablets Quickly Becoming the Portable PC of Choice

John Paczkowski — Fri, 04 May 2012 11:01:49 +0000

If tablet shipments continue to trend the way they have been, they’ll grow more than fivefold in as many years.

That’s the latest forecast from NPD DisplaySearch, which anticipates a massive uptick in tablet adoption over the next few years, one that will ultimately vault the device’s market share over the PC’s. The research outfit figures tablet shipments will grow from 81.6 million units in 2011 to 184.2 million in 2013 — significantly more than the 168.9 million NPD had originally predicted.

And by 2017, NPD expects them to hit 424.9 million units, exceeding notebook PC shipments — for the second year in a row.

The key drivers of that explosive growth: The tablet’s rapidly evolving feature set, and increased investments in the tablet supply chain, as consumer interest in other device categories cools.

“So far in this relatively young product category, the tablet PC market has been dominated by Apple and has tended to include a number of competing products that are similarly configured to the iPad,” says NPD DisplaySearch’s Richard Shim. “However, as the market matures and competitors become better attuned to consumer preferences and find opportunities to break new ground, we expect the landscape to change dramatically, giving consumers more choices, which will drive demand for more devices.”

More choices in hardware, perhaps. But not so much in operating systems.

Over the next five years, NPD sees the tablet market dominated by Apple’s iOS and Google’s Android, with some small inroads made by Microsoft’s Windows 8 and Windows RT. By 2017, the firm sees iOS with a 50.9 percent share of the market, Android with a 40.5 percent share, and Windows with a 7.5 percent share.

Yahoo's Board Will "Review" Resume Discrepancy of CEO

Kara Swisher — Fri, 04 May 2012 02:28:55 +0000

Yahoo just released a statement that its board will “review” today’s revelation that the bio of its CEO Scott Thompson contained an error related to his educational achievements and will make “appropriate disclosure” about what happened.

On both the Web site and in the regulatory filings of the Silicon Valley Internet giant, Thompson is described as having a degree in both computer science and accounting from Stonehill College.

He does not have a degree in computer science from the Boston-based school, but does have a Bachelor’s of Science in Business Administration (Accounting).

Yahoo said in full in its statement:

“In connection with the statement the company made earlier today about Scott Thompson, the Yahoo! board will be reviewing this matter, and upon completion of its review, will make an appropriate disclosure to shareholders.”

Earlier today, Yahoo first blamed the issue on an “inadvertent error” — but provided no further details — which sources said did not sit well with the board.

“Many members of the board are deeply concerned,” said one person with knowledge of its thinking. “This is a problem on a lot of levels, especially related to the trust of shareholders.”

Indeed, especially since the news came to light via activist shareholder Dan Loeb of Third Point, who is agitating for board seats via a proxy fight.

Loeb’s efforts to impugn Thompson appear to have caused some level of damage, at least in terms of perception about the level of vetting that was done when the former president of eBay’s PayPal unit was hired earlier this year.

In fact, the error has been around for a half-dozen years, which begs the question of why Thompson never noticed it.

While his bio on filings made by eBay to the Securities and Exchange Commission were accurate, the one on the online commerce site’s Web site incorrectly said he had a computer science degree.

It is not known who introduced the error there.

But the inaccuracy moved inexplicably to both Yahoo’s corporate Web site and also its SEC filings, and the company declined to provide any details earlier today as to how that happened.

It’s not clear what happens next, or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.

As I wrote earlier today:

Thompson himself is probably not at risk unless it can be definitely proved he was the one who misrepresented having the degree in the first place. He can simply say he had no idea who added it to the eBay Web site and that he did not notice it there on the Yahoo Web site and SEC filings.

While that makes him look careless, how big a deal it becomes with shareholders, as well as Yahoo employees, is also an unknown. While a computer science degree is not a requirement for a CEO of a tech company — both Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates dropped out of college and did pretty well in computer science anyway — tech resume padding, even inadvertent, is not a characteristic that is going endear Thompson to anyone.

The controversy could not have come at a worse time — Thompson was actually in meetings all day yesterday and today with senior staff, following recent layoffs of 2,000 and a massive restructuring, to discuss plans for moving the long-troubled company forward.

And besides the proxy fight, he is also dealing with selling off Yahoo’s Asian assets, renegotiating a new search deal with Microsoft, and also trying to figure out what parts of Yahoo to keep and what parts to jettison to improve its prospects.

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Kara Swisher — Thu, 03 May 2012 23:08:24 +0000

Back in early 2008 when Scott Thompson got the job as president of eBay’s PayPal, the regulatory filing accurately listed his educational pedigree:

“Mr. Thompson holds a B.S. degree in Accounting from Stonehill College.”

The eBay filings over the next several years — until he left the online commerce giant for a much bigger job as CEO of Yahoo in January of this year — remained consistent.

But, curiously, Thompson’s bio on eBay’s Web site added an additional degree to his curriculum vitae for more than a half-dozen years, different from its Securities and Exchange Commission documents:

“Scott received a bachelor’s in accounting and computer science from Stonehill College.”

As it turned out, according to the Boston-area school, he had not gotten a computer science degree at all and graduated with the Bachelor’s of Science in Business Administration (Accounting).

An eBay spokesman I called today had no explanation for the discrepancy, except to note that its legal filings were correct and that it was an error due to the lack of cross-checking the Web bio, which was apparently posted by Thompson’s staff at the time.

Also without explanation — and perhaps more seriously — is that the false computer science degree claim somehow then made it into Yahoo’s SEC filings, as well as his Web site bio, when Thompson took the helm. (The inaccurate line about his schooling is in its latest filing and all others.)

Without providing further explanation of how it got there, Yahoo today called the mistake an “inadvertent error” and said it had no bearing on his ability to lead the Silicon Valley Internet giant.

But the long troubled company might be speaking too soon, given that the revelation was uncovered this morning by activist shareholder Dan Loeb of Third Point. Loeb has called into question the vetting process that Yahoo’s directors did to hire Thompson, as part of a proxy fight he is waging to gain several board seats.

And, while such an allegation is normal for an increasingly nasty battle, Loeb has hit his mark with deadly accuracy this time, putting into question both Thompson’s credibility and Yahoo’s obvious botching in its vetting of him.

“If there is a good explanation for the apparent discrepancies regarding the academic records of Mr. Thompson and Ms. Hart, we are confident that it will be provided promptly,” wrote Loeb in a letter to Yahoo’s board today. “However, in the event that there is no good explanation, we expect the Board to take immediate action.”

The Ms. Hart that Loeb was referring to is Patti Hart, the board member who ran Yahoo’s process for hiring a new CEO after it fired Carol Bartz — who does have a CS degree — last year. (In his letter today, Loeb also correctly called into question how she portrayed her own college degree in a more impressive fashion than was accurate.)

The search for a new Yahoo CEO was conducted by headhunter Heidrick & Struggles, which did not have Thompson on its list of candidates, since it had placed him at eBay many years before.

In fact, according to numerous sources, without involvement by Heidrick, it was Thompson who cold-emailed key Yahoo board members, nominating himself for the CEO job. He was quickly brought in for interviews and, presumably, a thorough vetting.

Despite that and despite the fact that eBay’s SEC filings did not list a computer science degree, Hart or others seem to have totally missed the discrepancies and it was added to Thompson’s official Yahoo bio and legal filings.

It’s not clear what happens next or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.

Yahoo’s not talking either, with its spokesperson declining to provide any explanation for its lapse or who had maintained that Thompson had that degree when he did not.

It’s essentially a mistakes-were-made-let’s-move-on defense.

I think not, for my part, and a number of prominent Silicon Valley people I spoke to today agreed that these issues tend to spin out of control.

“This is going to get very messy, very quickly,” said one person in a common sentiment I heard.

Maybe, and it’s not clear if the company has to release any details of how this occurred or if its board needs to investigate the situation.

In addition, Thompson himself is probably not at risk unless it can be definitely proved he was the one who misrepresented having the degree in the first place. He can simply say he had no idea who added it to the eBay Web site and that he did not notice it there on on the Yahoo Web site and SEC filings.

While that makes him look careless, how big a deal it becomes with shareholders, as well as Yahoo employees, is also an unknown. While a computer science degree is not a requirement for a CEO of a tech company — both Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates dropped out of college and did pretty well in computer science anyway — tech resume padding, even inadvertent, is not a characteristic that is going endear Thompson to anyone.

Plus, it just handed Loeb a very potent weapon in his fight against Yahoo, the very day after the company said the hedge fund manager’s expertise was not “relevant” to gaining a board seat.

One thing’s for sure: Loeb is most certainly very good at vetting.

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