AllThingsD » monetization

Music for Nothing and the Fans for Free

Hany Nada — Sat, 29 Oct 2011 00:10:56 +0000

Consumers won’t pay for recorded music in the future — but fans will pay for music experiences.

When the dust finally settles between the artists, labels, and distribution companies, everyone will finally realize fans are more valuable than recorded music. As traditional monetization models for recorded music sales slowly fade away, new monetization methods centered on the fan will emerge.

How do we know music will become free? The stats point to this trajectory. Total revenues for CDs, vinyl, cassettes, and digital downloads worldwide dropped 25 percent from $38.6 billion in 1999 to $27.5 billion in 2008, according to the International Federation of the Phonographic Industry (IFPI). The same revenues in the U.S. dropped from a high of $14.6 billion in 1999 to $10.4 billion in 2008.

As the stats show, sales of recorded music are headed one way — down. Sure, digital music sales have been on the rise in recent years, but they have only partially replaced physical sales, so the overall sales figures are still headed south. And it surely isn’t because people are listening to less music. It’s simply because the old adage holds true: why pay for something that you can get for free? In addition, artists, the ones with the talent, aren’t making money off digital sales. Artists get about $0.09 per song sold digitally on iTunes or Amazon. So for a million downloaded hits, an artist earns $90K. Subtract manager, lawyer, agent and other “fees”, and an artist selling one million downloads would barely make minimum wage off of the recording.

Source: CNN, Forrester

Already, there is a deluge of great (and legal!) sites providing free music — including Pandora, YouTube, Spotify, Grooveshark, MOG, Rdio, and other online destinations. This is a big change from the early days of online music, when free meant illegal. Today, music start-ups have caught on to the profit potential in “giving it away.” Companies like Pandora, which generated $67M of revenue in 2011 Q2, and Spotify with over two million paying users, don’t charge for entry-level service. Instead, these music innovators found a way to monetize music indirectly through advertising and other means. Music still comes at great cost — start-ups still pay high licensing fees to labels — but as the economics shift, licensing fees are likely to decline. (Yes, labels will do a lot of kicking and screaming.)

So how will labels offset the decline in recorded music revenue? How will artists capture more value for their creative work? The clear answer is from their fans. Musicians have really never engaged their fans, maybe every three years while they were on tour, but otherwise they just released albums and expected fans to buy them. Myspace was the first experiment with direct musician-fan engagement, and it started a trend that has continued. Now, over 300,000 musicians have BandPages on Facebook. Just about every musician has a Web site, e-commerce site, and a web strategy. Many are putting their music “out there” for discovery and promotion before it’s ever part of an album. Soundcloud has seven million users who upload their music and recordings, for example. YouTube’s most popular videos are music-related. Bands, managers, and labels understand this trend and are finding new and innovative means to monetize fans.

We anticipate a lot of “creative destruction” and changes to the value model based on fan-driven music marketing models. There are ways to make money from the music experience, and those channels — new and old, low- and high-tech — are creating opportunities for artists, labels, and music start-ups.

Here are some of the ways the music industry will make money going forward.

Live Music
While recorded music sales continue to decline, live music revenue has increased in the past few years. The industry has been following this trend closely and focusing more and more on live tours and events. There really isn’t a way to replicate or pirate the live experience. As cellist Zoe Keating joked about piracy at the recent SFMusicTech conference: “Go ahead, try copying me! Just try!”

Source: CNN, Forrester as above

Patronage
In the Elizabethan era, artists were supported by wealthy patrons; we’re headed back toward that world. Two models are possible here, and will probably coexist as supplements to the live music monetization. The first is corporate sponsorship, which is already used widely. Take the OK GO music video “This Too Shall Pass,” in which the band discreetly thanks State Farm for making it possible, or the somewhat distasteful product placements ($500K worth) in Britney Spears’s “Hold it Against Me” video. The Black Eyed Peas have become so intertwined with brands that The Wall Street Journal dubbed them the “Most Corporate Band.”

The other sponsorship model is direct fundraising from fans – also known as crowdsourcing. In 2007, Radiohead released its album “In Rainbows” for free, asking fans to pay as much or little as they pleased. And more recently, Nataly Dawn from Pomplamoose used a Kickstarter campaign to fund her forthcoming solo album. She set out to raise $20,000 but fans overfunded her project by $104,788. This may not seem like a huge sum, but crowdsourcing will make all the difference for indie artists worrying how to pay their rent.
Curation, Discovery and Network effect
MP3 players were around for years before the iPod took them from the technophiles to the masses. Likewise, music services spread when they are easy to use and approachable. Pandora has managed to attract tens of millions of users to its radio service because of the KISS principal (keep it simple, stupid). While this sounds easy, it took them years to develop the music genome and “taste” algorithms that analyze billions of thumbs up/down votes to offer effortless music curation.

Upstart Spotify made access and friends the top priority for its music service, and has unseated Rhapsody as the top dog in on-demand listening. Others like Turntable let listeners do the heavy lifting — letting anyone be a DJ and mix tracks via a competitive, social, cartoony environment. And still others, such as the Hype Machine, rely on the old-school expertise of hardcore music junkies, letting bloggers curate their own selections. The ad-supported model is all about building audiences, and it’s an ongoing cat-and-mouse game where new methods continue to emerge.
Whales
One dirty little secret in the free-to-play online gaming world is that “whales” — to use a Las Vegas term for big spenders — often account for a significant portion of the revenue. In many examples in the free-to-play world, the top 10 percent often contribute 50 percent or more of the revenue for virtual goods, game play, tokens, premium versions and more. In one recent example, one happy gamer spent more than $76K on a single social game buying the accessories he needed to build his fortress. Would “whale” fans of Arcade Fire spend tens of thousands of dollars to sit in on a studio recording session? Yes, and I’m offering!

And beneath the mega-whales, there is a larger base of dedicated fans willing to pay to be a part of the experience, even if they don’t have thousands to spend. “Baby whales” mostly tend to buy merchandise: T-shirts, caps, branded toys, etc. These baby whales are still a small share of any overall fan base, but collectively, an extra $50 each from a small percentage of fans can really add up.
Unique Experiences
People love to engage with unique experiences — things you just can’t replicate — and will often pay top dollar for them. Concerts are one kind of unique music experience, but there are others. Nataly Dawn’s Kickstarter campaign offered big donors rewards, like their choice of a song for her to cover, early prerelease access to her album, and even a private in-house concert. In addition, there are now countless apps that let you be a part of the music, from the T-Pain auto tune app to ShapeMix’s tool that lets you remix songs yourself with isolated melody/bass/drums/vocal stems and post those to your friends. While, selling these extra experiences may not be a major monetization method, such methods do allow indie artists to generate income, and top artists to experiment with new avenues to engage and grow their fan bases.
The Bottom Line
Music is getting closer and closer to free. Distribution is becoming commoditized, so monetization must change. To this end, artists will have to pull out the stops to engage with fans more directly, and actively seek out fans and benefactors willing to pay more than usual for their work. The music startups that will make money over the long term are those that will connect artists with fans, help people filter and discover new music they love, and offer unique experiences. People will never stop listening to music — they’ll just change how they find it, hear it, and pay for it.

Hany Nada is a founding partner of GGV Capital (www.ggvc.com), a $1B venture capital firm with a dual focus on China and the U.S. Some of GGV’s investments include Alibaba Group, Pandora Media, YY, RootMusic, Buddy Media, Tudou, SuccessFactors, Square, and 21ViaNet.

Spooking Flipboard: Yahoo's Livestand -- Followed by Google's Propeller -- Set to Launch Next Week

Kara Swisher — Fri, 28 Oct 2011 12:35:03 +0000

Memo to Flipboard, as well as Pulse, CNN’s Zite and AOL’s Editions: You might want to make some room in the already-crowded news and social reader space, because you’re about to get some bigfoot company.

Next Wednesday, according to sources close to the situation, Yahoo will finally officially unveil its offering, called Livestand.

And perhaps as early as next week or in the weeks soon after, Google will also weigh in with its version of the genre — code-named Propeller — which also might be the product’s name. Another moniker under strong consideration: Currents.

As I have previously reported, Google Propeller is an HTML5 reader for the Apple iPad and Android — essentially a souped-up version of similar apps such as Flipboard, AOL’s Editions, Zite (which was just bought by Time Warner’s CNN) and Pulse.

All these apps are part of the drastically changing habits of media consumers, helping users better navigate numerous social and media feeds — such as Facebook and Twitter, as well as news sites and more — using handsome interfaces and touch technologies on tablet devices.

Flipboard, the most prominent and elegant of these offerings, is now available only on the Apple iPad.

Flipboard’s traction among elite users, along with its high-level design ethos and strong reviews, is why Google tried to buy the well-funded company last year, sources said.

But Flipboard — which is backed by some of tech’s biggest venture players, who have invested more than $60 million at a $200 million valuation — declined the kind offer.

At the time, sources said, Google told Flipboard execs that if it did not buy the start-up, it planned to do a version of its own.

Hence, after I heard about the product earlier this year, I dubbed it the Flipinator.

According to sources, Propeller will launch with a plethora of media partners, as well as integration into the Google+ social network. The aim of the search giant is to offer media companies easy tools for publishing content on these devices, as well as a better path to monetization.

That is essentially the same plan at Yahoo, which has been working on Livestand with hopes of it being a product that will woo publishers into tight collaboration with the Silicon Valley Internet giant.

Livestand was announced by Yahoo’s now-fired CEO Carol Bartz in February, at a speech at the World Mobile Congress in Spain.

At the time, Bartz demoed a magazinelike platform that would allow publishers to put up content easily and give users the ability to personalize their selections based on search history and interests.

Bartz called it “content in context.” (You can see the demo video below.)

But while Bartz promised the product within three months, development has been slowed by its complex technologies, bugs and the need to sign on publishers.

Yahoo’s Chief Product Officer Blake Irving is pushing the product hard as a way for the company to reinvigorate its media products.

It’s not clear how many publishers Yahoo will have at launch, and neither are the distribution plans, beyond flacking it from the Web site and being present in app stores.

Google, on the other hand, has its Android platform to push out Propeller, although it all must work as well on Apple’s iPad, which is the dominant tablet on the market.

But just because both Yahoo and Google are big companies is by no means a guarantee of success — think Yahoo 360 or Google Wave or Buzz — and their lateness might be a hindrance.

And, in fact, other news reader apps are much further along. The leader, Flipboard, has already had four million downloads and 50 partnerships with leading publishers.

It also has started to introduce rich advertising products and, perhaps most importantly, has tight social integration with Twitter and Facebook.

There will be social elements on both Yahoo’s Livestand and Google’s Propeller. But news reading will be stressed more, making them more like Pulse, a tiny but highly innovative start-up.

Each of the existing apps will presumably compete by adding on more features. Pulse recently added cross-platform, cross-device syncing, while Flipboard is close to unveiling an iPhone version it has said it was working on.

Yahoo and Google PR declined comment.

Here is the Livestand demo video from February:

Federated Media Buys Lijit Networks

Kara Swisher — Tue, 04 Oct 2011 12:00:16 +0000

San Francisco-based Federated Media Publishing said it has bought Lijit Networks, a smaller online advertising analytics and tools firm.

The price for the Boulder, Colo., start-up — which was founded in 2006 — was undisclosed, but it has received just under $29 million in venture funding from firms such as Foundry Group. Federated said Lijit would continue to operate independently, “but in conjunction.”

In an interview yesterday, Federated CEO Deanna Brown said the buy was to round out offerings for its clients and to better compete in a world where most of the online ads go to the top five players.

“I am excited we can give both publishers and advertisers more tools for engagement and monetization,” she said.

Federated, which lost big social-media news site Mashable earlier this year, also benefits from increased scale and inventory of sites.

Lijit CEO Todd Vernon, who will become EVP of technology at Federated, said that it was ever more important for ad-focused firms on the Web to “deliver the entire stack.”

“Lijit has a core competency in the media business, and combined with FM’s best-in-class sales force, we can offer everything needed to do effective online campaigns,” he said.

Here’s the official press release:

Federated Media Publishing To Acquire Lijit Networks

Combined Entity Will Power More than 77,000 Independent Publishers Across the Web Via Comprehensive Advertising, Analytics and Reader Engagement Tools

SAN FRANCISCO, October 4, 2011 – Federated Media Publishing, which powers the best of the Independent Web, today announced the acquisition of Lijit Networks, Inc. Lijit is a leading provider of advertising services, audience analytics and reader engagement tools for online publishers of all sizes. The combined entity will reach nearly 300 million global unique visitors according to Quantcast.

Lijit, headquartered in Boulder, Colorado, will continue to operate independently but in conjunction with the rest of Federated Media Publishing. Lijit CEO Todd Vernon and COO Walter Knapp will take on corresponding EVP of Technology and SVP of Platform Revenue responsibilities at Federated Media Publishing and will report directly to Federated Media Publishing’s CEO, Deanna Brown. Additionally, Lijit board member Seth Levine from Foundry Group will join the Federated Media Publishing board of directors, effective immediately.

With the addition of Lijit Networks’ existing publisher relationships, Federated Media Publishing will now reach more than 77,000 online publishers and nearly 15,000 expert communities, making it one of the largest companies to power publishing on the Independent Web. The acquisition vastly expands the combined company’s inventory of sites, offering premium advertisers improved scale and reach.

Publishers Will Profit and Flourish

Lijit helps publishers more thoughtfully interact with and better understand their audience by providing analytics and engagement tools that build deeper relationships, lengthen time on site and increase page views. These robust and actionable audience analytics and reader engagement tools leverage intent, behavior and demographics to help publishers of all sizes increase revenue and better engage their readers.

Additionally, the combined advertising services provided by FM and Lijit will give publishers of all sizes a revenue stream that complements existing sales efforts and helps grow and monetize their website businesses, no matter what the size.

Advertisers Can More Easily Analyze and Engage

The combination of Federated Media Publishing’s premium online advertising and conversational marketing programs and Lijit’s proprietary data collection tools will empower advertisers to better understand user intent, contextual relevance and demographic information. And by leveraging the combined entity’s extensive publisher relationships, advertisers will have unprecedented scale on the Independent Web.

Introducing Programmatic Buying to the Independent Web

Programmatic buying is one of the fastest growing trends in digital media and the introduction of Lijit’s robust RTB exchange will equip media buyers with one of the largest platforms available. Over the next few months, Federated Media Publishing and Lijit will develop a series of private exchanges that will highlight leading independent publishers. These exchanges will allow brands to engage active, passionate consumers found in highly conversational online communities and publications, while delivering premium CPM rates via FM’s conversational marketing programs.

Quote

“The Lijit Networks team is just as passionate and committed to powering publishers as we are at Federated Media Publishing and that was a crucial element to this decision,” said Deanna Brown, chief executive officer, Federated Media Publishing. “Our combined relationships, proprietary tools and conversational marketing services will be invaluable to publishers and advertisers alike.”

“Federated Media invented how to leverage authentic voices and engaged conversations that exist in the Independent Web,” said Todd Vernon, founder and CEO of Lijit Networks. “The combination of the two companies is a game changer in the industry that unlocks new opportunities for both companies and our combined publisher network.”

Exclusive: France Telecom CEO on Apple, Android and How You Can Kiss Your Unlimited Plan Goodbye

Ina Fried — Mon, 23 May 2011 19:00:46 +0000

Stephane Richard knows a thing or two about the iPhone.

In addition to carrying one of Apple’s iconic smartphones, Richard is also the CEO of France Telecom, whose networks carry traffic from more iPhones than any other carrier except AT&T. France Telecom, with its Orange brands, sells the iPhone in 15 countries.

“They just created smartphones with the iPhone,” Richard said during an hourlong chat over breakfast in Downtown San Francisco last week. “Everybody should be grateful to them to have put such a product in our market.”

But, while he praises Apple, Richard is wary of the power that the company holds by having total say in which apps do and don’t get on its network.

Unlike with Android, where the carrier can largely configure phones the way it would like to, on Apple, the company has to settle for putting various services in the App Store. And, ultimately, it is Apple that controls what makes it into the App Store.

“Everybody is talking about net neutrality,” Richard said, but “net neutrality is not only dealing with pipes.”

“It also deals with management of application shops,” he said. “If you have people like Apple managing their application store and saying ‘This is OK and I don’t want to see this app in my shop,’ it’s a problem.”

In the interview, Richard offered a blunt take on a number of other key industry players and topics ranging from the need for variable pricing to the fates of Nokia and RIM.

Richard has been outspoken before, including calls last year for those flooding networks with data–companies like Apple and Google–to help pay some of the costs of making necessary network investments.

Though RIM and Nokia both face challenges, Richard said in our interview that he is glad that there are still a number of competing smartphone operating systems duking it out.

“For us we are quite happy with the existing landscape in terms of operating systems,” he said. “A world with 90 percent of Android-based devices would not be attractive for us, but we are far from that.”

Oh, and as for that report that France Telecom and Apple are working together on a standard for smaller SIM cards. That’s true, Richard said, and it’s a compromise designed to appease Apple’s desire for something smaller without resorting to a software-only virtual SIM card that Apple had initially been advocating.

Here were some of his more interesting comments from our conversation:

On the massive increase in mobile data use and the dangers that creates:

The real risk of everything is collapse. Nobody utters this loudly enough, but the real issue for the world is a collapse of the network or some local collapses.

We are the people with pipes. We are supposed to invest heavily in pipes in order to bring the capacity which is necessary to sustain the explosion of consumption and usage and data traffic in our networks. At the same time, the people that create this traffic…are not really incentivized to manage properly, globally, the traffic.

There is an unbalance in the overall system, which in our view is a major problem.

It is totally impossible to absorb such an explosion in traffic without first, clearly investing massively in spectrum and equipment, and second, without introducing some new pricing approaches.

On Microsoft-Nokia:

There are a lot of questions around Microsoft and Nokia–-capacity really to reverse the quite negative trend that they have in the market. It seems difficult, but we will see. We are still definitely in favor of seeing at least three or four big families of operating systems in the market. But it is true it is going to be difficult for them.

On RIM:

It’s not really declining. It’s still popular in Europe. They have customers and users that are quite faithful to them. It works more or less like a community of people. It’s often families that are big BlackBerry users, and of course companies.

They have had some quality problems in the recent period which is a concern, especially with the next generations of devices.

In my view as a customer, or as a partner of them, I think they really should fix very quickly their quality problems.

On Google and Android:

Android is, I think quite a solid and reliable operating system and doesn’t suffer with bugs. We have regularly problems with RIM. We have no problem with Apple and with Android. Let’s be frank and clear.

To me, the risk theoretically is more for Google to use releases–Android releases–as a weapon in their relationship with device manufacturers and indirectly with telcos than anything else. So far they have not really tried to do it.

On Apple and App Store openness:

Everybody is talking about Net Neutrality. Net Neutrality is not only dealing with pipes. It also deals with management of application shops. If you have people like Apple managing their application store and saying “This is OK and I don’t want to see this app in my shop,” it’s a problem.

So far, we have been able to come to solutions with Apple people, even though they are a little tough….We are able to find solutions. We are not at war with the Apple guys. But it is true that it can be tough.

Of course Ideally we would like to have those services embedded natively in the handset which is what we do with Android-based devices like with Samsung or HTC or people like that. It is not possible with Apple. We still are in a position to bring those apps to our customers through the app stores, provided clearly we have access to the App Store.

The problem is the day when Apple says “I don’t want this one.”

Definitely if we face these kind of problems we will go to court. Because competition is not only something that should be applied to telcos and to carriers. For us it should be a principle for the whole Internet environment.

On working with Apple on smaller SIM cards:

As you probably know, Apple has been working for years on reducing the size of SIM cards because they need space in the phone. They even thought about a device without any SIM card, that is what is known as the e-SIM project.

All of us told them it was a bad idea because the SIM card is a critical piece of the security and authentication process. It would be very difficult for a telco or carrier to manage the customer relationship. I think that they understood this point. We had a very constructive exchange and dialogue with them.

We are going to work with them in order to standardize a new format of SIM which takes into accout our needs with security and authentication and also is compatible with their wishes in terms of size.

I understood that the next iPhone would be smaller and thinner and they are definitely seeking some space.

This is good evidence we can work properly with Apple people, Apple teams. In that particular case, we have been able to find, I think, a good answer which is good for everyone.

On Tablets:
To be honest, I am still a little skeptical of the size of the world market in tablets. First, I do think the iPad is very well ahead of the competition in terms of tablets. To me as a user and as a partner, there is the iPad and there is the rest.

I think there will be a world market for the iPad. What will be, really, the size of this market, is difficult to say, because in fact it is a new market.

In fact I think that in the future people will have several devices, several screens. Nobody knows what is the mix or the range of devices that we will have.

Qualcomm Bringing Augmented Reality Software Kit to the iPhone

Ina Fried — Thu, 19 May 2011 12:00:30 +0000

Although its chips don’t power the iPhone, Qualcomm has decided to bring its augmented reality software kit to Apple’s phones in an effort to make it more attractive to developers.

Qualcomm released free software tools for Android last year in an effort to get more developers to write processor-hungry apps that combine the virtual realm with the physical one. Starting in July, though, developers will also be able to use Qualcomm tools to write augmented reality apps for the iPhone.

“We realize it is a complex ecosystem with multiple operating systems,” Qualcomm’s Jay Wright said in an interview at the ARE 2011 conference on Wednesday. “Developers need tools and technology that address that challenge.”

It’s an interesting move for Qualcomm, which plans to release the iOS tools for free through an Austrian subsidiary. Wright acknowledged that Android was a more logical operating system, given the fact that its chips are used there.

“Android was a logical starting point because of developer momentum and Snapdragon penetration,” Wright said. “Moving forward we will support additional operating systems.”

In any case, the move thrilled some of the developers that have been writing code using the Qualcomm tools.

“Its fantastic for us because it opens up a market,” said Morgan Jaffit, whose app, Inch High Stunt Guy, allows users to position various ramps and other objects on their screen in an effort to propel a stunt motorcycle rider to make it through a flaming hoop.

With the move, Jaffit and his Australian colleagues now hope to release both the iPhone and Android apps in the coming months.

Also pleased is Paulius Liekis, co-founder of Pixel Punch, the Lithuanian developer of Paparazzi, another augmented reality game built using Qualcomm’s tools. The app was released a week ago for $1 in the Android Market, but he sees the monetization policies as much better on the iPhone, where users are more willing to pay for content.

“They appreciate good content,” he said of those with an iPhone. “On Android, consumers are different. They do not want to pay.”

Paparazzi was the winner of a developer challenge Qualcomm funded last year, earning $125,000 for Pixel Punch, while Inch High Stunt Guy finished second, earning $50,000 for Jaffit’s company, Defiant Development.

The student team from USC that finished third in the contest said they, too, are looking forward to being able to bring their game–Danger Copter–to the iPhone as well as Android.

“Definitely it motivates us so much more to finish it up,” said Kedar Reddy, one of the USC graduate students.

Liveblogging Yahoo's Q1 Earnings Call: Get Me to Funky Town

Kara Swisher — Tue, 19 Apr 2011 21:21:01 +0000

MicroHoo is funky!

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

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

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

The results were essentially in line with Wall Street expectations.

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

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

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

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

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

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

Just askin’!

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

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

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

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

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

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

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

Good idea!

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

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

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

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

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

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

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

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

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

2:30 pm: Q&A time!

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

The next is about other revenue growth areas to come.

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

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

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

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

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

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

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

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

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

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

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

A question about display and possible content verticals.

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

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

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

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

The next question is about communications, as in email.

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

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

It’s–no surprise–an RPS question!

Funky!

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

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

Now a local advertising question and its relationship with Facebook.

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

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

A question about daily deals.

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

Finally, the last question.

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

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

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

Up would certainly be good.

Inquisitive Start-Up Qriously Queries Android Users on What They Make of Apple

Ina Fried — Mon, 04 Apr 2011 23:36:52 +0000

Android users may be loyal to their device, but they are certainly appreciative of what Apple has done in the market as well.

At least that was the finding of a flash survey of 10,500 Android users recently done over a 19-hour period by Qriously, an Accel Partners-backed start-up. Qriously’s polling found that 79 percent of those who responded believe Apple builds a good product, with only 21 percent disagreeing with that notion.

The start-up also found that far more users plan to buy another Android phone rather than an iPhone, though more would be open to buying an iPhone if it could also run their Android apps. About five times as many were happy with the quality of Android apps than those who were unhappy. And only about a third of respondents thought the iPhone had better apps than are available for Android.

Qriously bills itself as a quick way for customers to gauge public sentiment. It serves up its questions within mobile applications, replacing advertisements with various survey questions.

“We want to make the opinions of millions of people available in real time and be able to tag those opinions to location,” founder Christopher Kahler told Mobilized. The company’s business model, he said, is a simple one: Those who seek information pay for each response they get.

If successful, Qriously would offer app developers an additional way to monetize their software. Although Android sales have taken off, many developers say it is still hard to make money selling their programs directly, with many turning to advertising and other alternatives.

Developers got a boost late last month when Google turned on in-app payments for Android.

As for Qriously, the company is still tiny, just five people, and based in London. The company raised $1.6 million in December from Accel, and its service, in private beta, launched last month.

The Android poll about the iPhone is the first survey for which Qriously has released results publicly.

Android Market to Finally Get In-App Payments, Improved Discovery. When? "Soon."

Liz Gannes — Wed, 26 Jan 2011 01:46:29 +0000

Android will release an in-app payment system “soon,” said Eric Chu, group manager for Android platform at Google, speaking at Inside Social Apps in San Francisco today.

An in-app payment option was supposed to be released last quarter, but Google delayed the launch in order to get more feedback from developers, who had been very busy at the end of the year with Christmas app development and sales, according to Chu.

(Meanwhile, start-ups like Zong are already offering in-app payments for Android, but Chu said he’d prefer developers to wait until Google can get its own version out to provide a consistent user experience.)

In-app payments are important because they enable developers to sell virtual goods and premium features, both major potential sources of mobile revenue in addition to paid apps and advertising.

Android has a ways to go to convince developers that its app platform is on par with Apple’s iPhone, especially in terms of monetization. “We are not happy with the payout purchases in Android Market,” Chu said.

Google has been slow to form partnerships with carriers, and so far has done so only with T-Mobile USA and AT&T, but Chu said this is currently a major area of investment.

Asked whether carriers get too large a cut, Chu said that carriers deserve a share of the profits since they significantly subsidize the cost of phones.

Chu acknowledged problems with Android Market’s initial approach, mentioning Google has made changes, such as taking a more active approach to removing bad apps, and reducing the refund window (the length of time customers have to return paid apps) from 24 hours to 15 minutes.

Chu said his team is actively working on products to improve Android Market merchandising and app discovery with better search and lists, as well as an improved ranking system.

Google is open to feedback about changing the refund window, said Chu, but it will draw a hard line about refunds for virtual goods. Not gonna happen, he said.

Tapjoy Raises $21 Million to Complete Extreme Makeover

Tricia Duryee — Thu, 06 Jan 2011 20:33:40 +0000

Tapjoy, which formerly operated under the name Offerpal, has raised $21 million in capital.

Under its new identity, the San Francisco-based company is helping social and mobile games and virtual worlds make money and gain users. To do so, Tapjoy operates an alternative payment platform and a “pay-per-install” advertising network.

The round was led by Rho Ventures, with participation from all existing investors including InterWest Partners, North Bridge Venture Partners and D. E. Shaw Ventures. To date, it has raised more than $40 million.

In a release, the company said the funds will be used to grow the number of ecosystems it supports domestically and internationally. Today, it operates on iOS, Facebook and Android.

But it’s easy to see how the capital will also be used for completing a transformation it started a year ago.

Before acquiring Tapjoy, the company operated under the name Offerpal, which helped game makers, like Zynga, monetize their traffic.

However, the company took some heat after many of its offers were considered scammy. It was like the early days of ringtones, where consumers unknowingly signed up for a monthly subscription instead of buying only one. Similarly, consumers thought they were getting free tokens in a game, but ended up paying much more than they were worth.

In comparison, the new incarnation of the company is almost unrecognizable.

TechCrunch reports the company is on its third CEO since November 2009, and since then, Facebook has transitioned games and applications over from Offerpal’s currencies to Facebook Credits. It has since formed a partnership with Tapjoy’s rival Trialpay.

Yahoo Loses Monetization/E-Commerce Platform VP to LinkedIn

Kara Swisher — Mon, 03 Jan 2011 20:19:13 +0000

Greg Arnold, the executive in charge of Yahoo’s monetization/e-commerce platform. is joining LinkedIn to drive monetization there.

A LinkedIn spokeswoman confirmed the move after an inquiry by BoomTown and said Arnold would be director of engineering, working on monetization products at the fast-growing business networking site.

I am still waiting to hear from Yahoo about the departure, but sources said the announcement about Arnold was going out today.

Arnold seems to have survived the recent spate of layoffs at the Silicon Valley Internet giant, so I am chalking this one up to another drip in the continued talent drain at the Yahoo.

Exclusive: News Corp. Online Gaming Head Sean Ryan to Head Facebook's Social Gaming Partnerships

Kara Swisher — Mon, 03 Jan 2011 19:47:42 +0000

Sean Ryan (pictured here), who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources.

Currently, Facebook does not create social games, but hosts third-party publishers of them on its king-making platform. Its most stunning success has been Zynga, maker of Farmville and CityVille.

The move seems sudden, since he just got his latest position. But sources said Ryan and execs at the Silicon Valley social networking giant had been talking about a job there before he went to News Corp.

Thus, at this point at least, Ryan’s main job will be a high-profile developer relations dude–in essence, keeping Zynga CEO Mark Pincus in line and also, presumably, happy.

Translation: Adventures in babysitting former Facebook COO and now Zynga COO Owen Van Natta!

Ryan, whose title will be director of gaming partnerships, will report to Ethan Beard, director of the Facebook Developer Network.

Facebook is clearly building out its gaming talent bench.

Ryan will work closely with Cory Ondrejka and Bruce Rogers–who joined Facebook after the acquisition of their social gaming start-up Walletin in November to head platform games engineering efforts.

Sources said that News Corp.’s efforts will now be taken over by John Welch, who came to the media giant after Ryan acquired his casual games company Making Fun.

At the time, Ryan said he was working on a platform designed to support games on Facebook, Apple’s iPhone Google’s Android mobile operating system and News Corp.-owned Myspace.

Ryan got to News Corp. a little after it acquired Irata Labs, a social gaming developer. He had the title of EVP and GM of Games at News Corp. Digital.

Ryan is well known in the gaming and monetization space. He was acting CEO of Live Journal and also CEO of Meez, a virtual world and also Listen.com.

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

BoomTown is awaiting comment from Facebook and News Corp.

But Ryan and George Kliavkoff throw their 17th Annual “After-After” Party at the Consumers Electronics Show in Las Vegas at 11:59 PM Thursday, so come by and say congrats!

Angry Birds' Mighty Eagle Ruffles Some Android Feathers

Ina Fried — Wed, 29 Dec 2010 17:53:23 +0000

While Android has been getting lots of positive buzz in recent days, the picture is not entirely rosy in that neck of the mobile woods.

A top executive at Angry Birds creator Rovio says that it is still hard to make money selling apps for Google’s operating system and that Apple’s iPhone is likely to remain the top mobile destination for some time.

In an email interview with Technmarketing.com, Peter Vesterbacka praised Apple’s approach.

“Apple will be the number one platform for a long time from a developer perspective, they have gotten so many things right,” he said. “And they know what they are doing and they call the shots. Android is growing, but it’s also growing complexity at the same time. Device fragmentation not the issue, but rather the fragmentation of the ecosystem. So many different shops, so many different models. The carriers messing with the experience again. Open but not really open, a very Google centric ecosystem. And paid content just doesn’t work on Android.”

That said, he added that there is clearly room for both approaches. Even the muted criticism of Android is interesting given that Google was clearly trying to ride the Angry Birds’ coattails, citing the game as an Android developer success story in a recent YouTube video.

As for the other mobile platforms, Vesterbacka told the online publication that things are less clear as far as who the winners and losers will be.

“Besides Apple and Google, it will be interesting to see how long it will take for Nokia to get their act together,” he said. “MeeGo is clearly the future there, remains to be seen how big and how soon. HP-Palm WebOS is a really cool OS and has been a pleasure developing for that one, but the volume is irrelevant for the time being. Everything else is more or less ‘interesting’ right now, ie no real business to be had, at least not yet.”

In an interview earlier this month, Vesterbacka told Mobilized that the company is planning to do a Windows Phone 7 version of Angry Birds next year.

Video: Picplz's Dalton Caldwell Says It's All About the Money

Liz Gannes — Tue, 14 Dec 2010 04:48:03 +0000

When you talk to early-stage Web entrepreneurs, they often want to talk about their latest feature, their undying dedication to delighting users, how they’re growing like crazy and all the vast unmet needs their company is finally addressing. Believe me, I have nothing against changing the world, but often it all sounds the same.

However, when you talk to Dalton Caldwell about his start-up Mixed Media Labs, he pulls the conversation to the topic of making money. Priority No. 1 for Caldwell is building a sustainable business. That drive arises out of his last start-up experience, with the music site Imeem, which failed in dramatic fashion (something about which he’s spoken publicly).

Mixed Media Labs, said Caldwell in a recent interview, is setting out to build a series of apps intended to prove that monetization of a mobile social community is possible. The company’s first app is Picplz, which has logically been lumped in with other very similar recent mobile photo-sharing apps like Instagram and Path. Instagram has seen tremendous growth and is beloved by early adopters. Path is trying an audacious approach to controlled, personal sharing.

The strengths of Picplz appear to be a bit harder to describe, but they include being built primarily in HTML5 so that the company can launch and iterate quickly on multiple platforms rather than just on the iPhone. Picplz is available on Android, iPhone and through a fully featured Web app. It recently added support for posting photos to Flickr, Tumblr and Posterous.

Picplz is also the one competitor to have its Series A funding provided by and a board seat occupied by Marc Andreessen, whose firm Andreessen Horowitz put $5 million into Mixed Media Labs despite having also provided early funding for Instagram.

So what’s the big idea? Caldwell said “there was no secret PowerPoint” he was withholding from me about his company’s larger plans. Rather, he wants to test a lot of things and see what works. He sees Mixed Media Labs as an application studio like Ngmoco and Zynga, he said, where the goal is to find apps that monetize by empowering small teams to execute big ideas.

And speaking of monetization, what will this magical business model be? Caldwell said it’s likely to be performance ads. At this point, of course, Mixed Media Labs is really not much different from other early-stage start-ups; it has seven employees, none of whom are sales people (and yes, it’s trying to make some apps that delight users).

Here’s a short video of Caldwell in his new, virtually unadorned San Francisco office, elaborating on some of these topics.

[ See post to watch video ]

Can You Hear Me Now? D: Dive Into Mobile Debuts Tonight!

Kara Swisher — Mon, 06 Dec 2010 15:00:47 +0000

Tonight, All Things Digital will debut its first extension of the D: All Things Digital conference, with D: Dive Into Mobile.

The original nickname for the event was “mini-d,” since it is shorter than big-D, focused on one key topic and has a more intimate audience.

But the speakers Walt Mossberg and I have assembled are anything but small on the critical topic of mobile–beginning with tonight’s opening session with Google Android kingpin Andy Rubin.

There is a lot to talk, about from monetization of the ever-popular operating system to its rivalry with the Apple iPhone to its relationship with wireless carriers.

D: Dive Into Mobile continues all day Tuesday, with speakers that include: Dan Hesse, President and CEO of Sprint Nextel; Mike Lazaridis, co-CEO of Research in Motion; Mike McCue, CEO of Flipboard; Joe Belfiore, Vice President of Windows Phone Program Management at Microsoft; Jon Rubinstein of Palm, now owned by Hewlett-Packard; Foursquare CEO and co-founder Dennis Crowley; Google Ad Products Management head Susan Wojcicki; AT&T Emerging Devices President Glenn Lurie; and Spotify CEO Daniel Ek.

D: Dive Into Mobile is being held at the Ritz-Carlton in San Francisco and, as usual, we’ll be liveblogging the whole thing and also posting highlight videos.

Along with Mossberg and me, Mossberg Solution’s Katherine Boehret and MediaMemo’s Peter Kafka will be conducting the interviews.

For more information, click here for D: Dive Into Mobile news and more.

Google Tries to Ride Angry Birds' Coattails

Ina Fried — Fri, 03 Dec 2010 21:27:34 +0000

Google is hoping to use the Angry Birds to show the power of mobile advertising.

A video posted to YouTube has Rovio’s “Mighty Eagle” Peter Vesterbacka talking about, among other things, how an ad-based model can work to generate serious bucks. Off camera, Vesterbacka told Google that the company expects that by the end of the year, its ad-supported Angry Birds will be bringing in over $1 million per month. There have been more than five million downloads of the ad-supported Android version to date.

“It seems to be a very good fit,” he said. “We’re very happy with the monetization that provides us.”

Google is using the spot as the first in a series of YouTube videos to tout ways of establishing ad-based mobile businesses. Of course, the Angry Birds lesson is really more one of coming up with a hit game. Create a hit that everyone wants to play and you can find lots of ways to make money. That’s just a truism.

Vesterbacka did throw out a few interesting stats, such as the fact that 80 percent of everyone who downloads Angry Birds also downloads updates when they are available. Also, on just the iPhone version of Angry Birds, Vesterbacka said that there are 65 million minutes per day spent playing the game.

Plus, about four minutes into the video below, Vesterbacka works in a cute plug for the company’s forthcoming line of toys.

Virtual Monday? How Holiday Shopping Has Included Intangibles.

Tricia Duryee — Fri, 03 Dec 2010 19:06:32 +0000

Cyber Monday reached a record-breaking level this year with more than $1 billion dollars spent online, making it the heaviest U.S. online shopping day ever.

Those estimates, provided by comScore, include any transaction conducted over the fixed Internet, either from home or work.

That means the record-breaking year also included the intangibles in our lives that you can’t touch or feel, and can’t ship in a box, like e-books and music, and virtual goods, such as a Gingerbread House or a Poinsettia to brighten up your FarmVille home for the holidays.

While likely still a small percentage of the $1 billion-plus in sales (comScore wasn’t willing to break down the numbers), companies like Zynga that develop many popular social games on Facebook didn’t waste any time taking advantage of the shopping frenzy that hits the Monday after Thanksgiving as people return to work and click to buy.

Sales spiked as Zynga kicked off the week with a new holiday lineup. On FrontierVille, users were offered mystery animals, like a polar bear wearing a Santa hat and a penguin sporting a reindeer hat. The second most popular decoration of the day was a blanket of snow for the player’s homestead. It also debuted holiday cheer in FarmVille with a winter horse-drawn carriage and a Santa Gnome as two of the top-selling items.

But it wasn’t all about decorations. On Monday, Zynga offered its most expensive virtual item in FarmVille’s history. The so-called “Unwither Ring,” which has been offered only two other times, costs 250 in Farm Cash (roughly $40). Players who are willing to splurge will never have their crops wither again–a situation that occurs if you show up to plow too late. And if you are looking for something special for that certain someone, the Unwither Ring is also available as a gift.

Santa Clara, Calif.-based PlaySpan, which offers monetization platform services to 1,000-plus online games and social networks, was willing to be a little more specific about Cyber Monday’s spike. Sales of PlaySpan’s game card–available in North America at 7-Eleven, Rite Aid and other stores–were up 69 percent on Black Friday, compared to the previous week. Its corresponding marketplace, which features virtual goods, also reported a substantial increase in purchases over the weekend. The bump in sales increased 11 percent from Thursday through Sunday, compared to the same period a week earlier.

Liveblogging the Unveiling of the SFund at Facebook (With Guest Stars: Kleiner, Amazon and Zynga)

Kara Swisher — Thu, 21 Oct 2010 17:44:40 +0000

BoomTown had to park a badillion miles away from Facebook’s suburban HQ in Palo Alto, Calif. and hoofed it there for a press event that unveiled the sFund.

What’s that? A $250 million fund for social start-ups.

10:40 am PT: The excitement was building–well, not really…well, not at all, in fact–at the Facebook cafeteria, as the Silicon Valley press got to see the name of the sFund on screens throughout the room.

Kleiner Perkins power VC John Doerr started off the proceedings with some microphone snafus, when he tried to get out from behind the podium.

“John, sometimes you have to stay in the box,” joked Amazon CEO Jeff Bezos, who was sitting onstage in what appears to be an Internet Hall of Fame group.

The others would be Facebook CEO and co-founder Mark Zuckerberg, Zynga CEO and Founder Mark Pincus, and giant-man-about-Web Bing Gordon.

Doerr talked on about the importance of social, related to the Internet.

Then, he introed Zuckerberg, hoodie-less, who agreed with him, talking about photos and how social made them hot on Facebook.

Apparently, everything is going social. Personally, I am now contemplating becoming a hermit.

Doerr went full Oprah on him, asking what would inspire him to innovate, if he were starting out today (and presumably there were no Winklevii around to “borrow” an idea from).

“If you take any passion and map it to an industry,” said Zuckerberg, it will result in disruption.

Then Doerr channeled Barbara Walters at Pincus, tossing him a softball query about the fabulousness of it all.

For example: “What’s inspired you to be a CEO at this amazing company?” (Note to Walt Mossberg: Let’s file that tough one away for D9!)

11:01 am:Thank goodness then for Bezos, who simply said he hoped these new companies will take some of that $250 million and use Amazon Web Services.

He talked about how these trends grow virally and “sometimes violently.”

Ouch!

Speaking of pinchy, Bezos moved on to some chemical explosion metaphor, and I am now certain I want to be a hermit crab.

Then, after a question about what he would do now, he veered to bioengineering! Doerr wanted a social answer, but Bezos was talking test tubes and “engineered and synthetic life.”

But Gordon behaved for John “Diane Sawyer” Doerr and talked about how social is the only place to be for the cool kids.

He reeled off the other partners, including Comcast, Liberty Media and Allen & Co.

One more question from Doerr: Five years from now, what is going to make you “delighted” about and for the customers you service.

Gordon: He could see the family.

Pincus: He has 12-week twins, not the Winklevii, who are still too young to use Facebook. He was excited it is all getting wired.

“When everyone is always connected to one another, rather than connected to the Web,” he said, that’s the bomb.

He called the big social companies “dial tones,” as in Zynga was the gaming dial tone, Amazon was the shopping dial tone and Facebook was the dial tone.

Zuckerberg: I was not sure he was actually answering the question. But I believed his wish was about these social networks getting to scale.

He went on though, talking about how some companies were building a “light” social layer versus companies where social was “built fundamentally into the product.”

These, of course, have an advantage, according to the gospel of Zuckerberg.

Bezos: He talked about Amazon’s Web services some more–this dude is a retailer, so he was sure good at selling.

Gordon, who is apparently like Ed McMahon to Doerr’s Johnny Carson, rounded up the feel-good session.

11:17 am: Q&A.

Go Miguel Helft, from the New York Times, who asked a good question, about what took so long for Doerr to do this fund, since social–i.e., Facebook–has been around for seven years or more.

Doerr joked, “Next question.” Ha.

But really. Doerr did not answer except to say that Zynga only exploded a year ago, so back off, Miguel.

There were two other dullish questions, about new partners.

“It’s a quarter-billion-dollar party,” said Gordon, which I was not quite wanting to attend. Which made me a social party pooper.

Larry Magid from CBS asked about social responsibility around privacy, especially after the recent controversy around the leaking of Facebook user info to advertisers, via third-party apps companies such as Zynga.

Then, there ws a question about whether this is not simply the “fbFund,” as in Facebook, since the social networking site was going to benefit the most from all this.

No, it was not, declares Doerr.

More questions–about monetization, advertising, free versus paid and an off-topic one about rumors of Amazon launching an app store (of course it is!).

Zuckerberg took the monetization one. All of the above, it’s great, money for all.

The event finished with a very odd poem by Gordon, which ended with a decent joke about the possibility that entrepreneurs, if they are lucky, get a movie “made about you.”

He was referring to “The Social Network,” which trashed Zuckerberg.

In any case, quarter-billion-dollar party on, Mark.

Liveblogging Yahoo’s 3Q Earnings: Busy, Busy, Busy (So Go Away, Tim Armstrong!)

Kara Swisher — Tue, 19 Oct 2010 21:12:27 +0000

Here we go with the Yahoo third-quarter earnings call starring CEO Carol Bartz, who has some–in the immortal words of Ricky Ricardo–‘splaining to do.

Yahoo turned in a much-needed solid quarterly earnings report, with slightly better-than-expected earnings, although still weak revenue.

Of course, there are all the takeover rumors, the exec departures and fights with partners such as China’s Alibaba Group.

2 pm PT: First on is the lovely investor relations lady, Marta, saying stuff I never pay attention to.

But Bartz came on right away and she sounded subdued and very much on script.

Good idea!

She began by explaining what she has been up to and–once again with feeling–exactly what Yahoo is.

“The key words are innovative, content, media and communications,” she stressed.

Technology is all well and good, but Yahoo is the “largest digital media, content and communications company.”

She also briefly addressed the departure of execs: “Some people leave, some get promoted and some good people arrive.”

Well, you could put such turmoil that matter-of-factly, I suppose.

Bartz then asked the question: “What have we done to re-engineer Yahoo?”

She reeled off a list she has repeated many times before, the point of which was to let us all know she has been mighty busy cleaning up the big mess she had to deal with on arrival.

So lay off, all you naysayers! It’s kind of like what President Barack Obama is saying these days, as he looks forward to huge political losses in the upcoming election.

It’s apparently a disciplined approach. “First you walk, then you run.” Then, she added, you FLY!

Don’t look down, Carol!

She promised to talk about what’s on all our minds–as in the takeover swirl related to AOL, News Corp. and a passel of private equity moneybags circling Yahoo.

2:15 pm: Time for the numbers from CFO Tim Morse, which you can see here.

He was much jauntier than usual. I wonder if that was in the script. Smile with your voice, Tim!

I mostly did not listen to this spiel, as it was a recount of the numbers I already read. But there are some nuggets.

Apparently, for example, revenue for owned and operated search is down because users are clicking on the really good new results from the Microsoft algorithmic search transition, so they are not clicking on paid search as much.

Hmmm….I wonder what happens when they get great.

Then it was on to earnings and stock repurchases, designed to goose the shares, which Yahoo considers undervalued.

So do investors.

Next, he moved on to the outlook, which was weak.

And Morse also noted the uncertainty that has to do with the search and online advertising alliance transition. “Caution is warranted,” said Morse.

“We’re pleased with our third-quarter results,” summarized Morse, seemingly ignoring the revenue issue.

2:31 pm: Bartz was then back on discussing the search alliance and the rocky relationship with China’s Alibaba Group. Rocky is my word and actually is also Alibaba’s.

At least all is well with Microsoft, Yahoo’s one-time nemesis.

It has been a big transition, of course, Bartz noted. Indeed.

Then Bartz went out of her way in praising Alibaba CEO Jack Ma, whom many sources said she has treated shabbily in the past.

It is “a good productive business relationship,” said Bartz.

Other than that, she politely suggested we all butt out of what Yahoo is going to do with the asset, a 29 percent stake of Alibaba.com worth $3.1 billion, according to the company.

Finally, Bartz said Yahoo had “potential” and promised a payoff to shareholders in the months ahead.

That would be nice.

2:38 pm: Time for Q&A.

The first question was about the search revenue growth. Soon!

The next was about search revenue and display advertising and a left-field query on engagement on smartphones.

Same answer, and also people will use Yahoo on any screen.

Next question was on display growth. Same answer.

Will any of these analysts ask the good questions about takeover rumors and other thorny management issues?

Wait, finally there came a sheepish request for clarification about the rumors–well, they are real, so realmors–about takeover plans by private equity folks, along with AOL’s Tim Armstrong.

“As tempting as it is to tell you what I really think, you know I can’t comment,” said Bartz, who really sounded like she wanted to comment.

Give in, Carol! In the words of Oscar Wilde, which is BoomTown’s operating motto: “I can resist everything except temptation.”

Nope, she will not utter a word about “hypothetical this and hypothetical that.”

Instead, the boilerplate: “We like our strategy, we like our progress, and that’s what we’re focused on.”

Next, more questions about revenue weakness. Bartz blamed it all on the drag of search revenue. “The main drag on our growth has been search revenue,” she noted.

She said it will get better once the whole transition kicks in.

Bartz did sound convincing, especially when she noted it was part of a six-year trend in decline in search. By the end of 2011, she promised, it will all be different.

But, in the immortal words of Clint Eastwood in “Dirty Harry”: “You’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?”

Now, a question about a “bloated” work force. Yahoo employee count is up seven percent, although costs are down 12 percent.

Morse: “No, we’re not bloated.”

Bartz took a question about competition in the display market, as in Yahoo is going to get smacked by rivals, such as Google.

“There is always competition and competition only makes us better,” said Bartz. “We’re running very fast and not going to give up this leadership in display very easily.”

Given Google’s inroads here, she better run faster than the Road Runner.

The last question was about monetization of mobile.

Lots of pretty, empty words from Bartz, especially since Yahoo does not have a really competitive offering compared to Google and Apple.

It should be added that both Google and Apple smoked it in terms of revenue growth in their quarterly earnings this week.

Also, I hear that Facebook social networking site is growing pretty quickly.

And it ended, with nary a decent question from Wall Street analysts about the clear turmoil at the long-troubled Silicon Valley icon and answers about what Bartz is going to do to address it.

The media is in listen-only mode for these calls, which is a shame, since I for one would love to listen to what Bartz has to say.

I know you’re busy and all, Carol, but perhaps you can talk over dinner soon?

AOL Officially Adds 5Min to Its Roster. Next?

Peter Kafka — Tue, 28 Sep 2010 13:25:52 +0000

Here’s the official press release announcing AOL’s acquisition of 5Min Media. Sources familiar with the transaction tell me it’s an all-cash deal at the high end of the $50 million to $65 million range I reported earlier today. So let’s call it $65 million.

That’s a nice outcome for 5Min’s team, and for its investors, who put in $13 million, including Globespan Capital Partners and Spark Capital. (I mistakenly identified Scott Kurnit as an angel investor in the company. He was not.) Interesting that AOL (AOL), which has extensive reach already, felt it needed to invest in a distribution play, but you can read CEO Tim Armstrong’s explanation below.

And perhaps someone can ask him about it if he makes another acquisition announcement in the near future.

AOL ACQUIRES 5MIN MEDIA, WEB’S LARGEST VIDEO CONTENT SYNDICATION PLATFORM

Combination of 5min Media and AOL’s Video Capabilities Creates Powerful
End-to-End Offering

New York, NY, September 28, 2010 – AOL Inc. [NYSE: AOL] today announced it has acquired 5min Media, the Web’s largest video syndication platform.* The acquisition allows AOL to significantly expand its consumer offering of contextually relevant, high-quality video across its sites, increasing the AOL Network’s appeal to advertisers and is expected to further enhance the distribution and monetization of AOL-produced original video content throughout the Web.** Deal terms were not disclosed.

“Our acquisition of 5min Media is the latest in a number of steps we have taken this year to better position AOL to capture the growing video opportunity on the Web,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL. “AOL is building a video ecosystem for the next decade. 5min Media is the perfect complement to our powerful video capabilities — it provides a missing piece in the AOL value chain that completes our end-to-end video offering from content creation through syndication and distribution to the consumer experience and monetization.”

“AOL and 5min Media share the same excitement about the direction our industry is taking, and our complementary video capabilities make us a compelling fit and an attractive combination for content creators and publishers,” said Ran Harnevo, Co-Founder and Chief Executive Officer, 5min Media. “We’ve seen rapid and successful growth as an independent organization and becoming part of AOL is a natural next step. We’re confident that AOL’s organizational horsepower, combined with the vast library, audience and syndication capabilities 5min Media offers, present compelling opportunities for AOL as well as the content creators we work with and the publishers we serve.”

Leading Video Syndication Network and Library to Enhance AOL’s Properties

5min Media is the world’s leading video syndication network with a library of more than 200,000 categorized, tagged and rated videos from more than 1,000 of the world’s largest media companies and professional independent video producers. Founded in 2006 and headquartered in New York City with offices in Tel Aviv, 5min Media has been named the largest U.S. independent video property by comScore, with more than 20 million unique viewers and more than 130 million video streams (including ad and content videos) in the U.S. in August 2010. 5min Media’s growing network of 800 partner sites allows content creators to reach this audience of targeted viewers across 21 different verticals, including six verticals – Home, Food, Beauty / Fashion, Health, Travel and Pets – that lead their categories, according to comScore Video Metrix, August 2010. VideoSeed, 5min Media’s proprietary semantic technology, contextually matches the most relevant videos with a partner site’s text content to enhance the consumer experience and increase monetization rates.

AOL has already begun to integrate 5min Media’s video content on its sites through a commercial agreement executed prior to the acquisition. “With 5min Media we’ll be able to add more video inventory to our pages. Importantly, we’ll also be able to identify video content holes among our sites, tap our StudioNow capabilities to fill those needs and create a truly ‘demand informed’ video library,” Armstrong said.

Combination Completes Next Step in AOL’s Value Chain

With the addition of 5min Media, AOL will significantly increase its consumer offering in video programming and connect consumers with high-quality video. In January, AOL acquired StudioNow, the premier online platform for quality video content creation and distribution. With StudioNow, AOL has formed a fully functional platform to produce high-quality video content in a rapid, cost-effective and scalable way for both AOL as well as third-party publishers. In addition, AOL is forging exciting new partnerships to provide relevant content to specific audiences, including partnering with: The Ellen DeGeneres Show; Marlo Thomas; The Jonas Group and MGX Lab to found Cambio (www.cambio.com); and A Squared Entertainment LLC to create children’s content featuring Warren Buffett, Gisele Bündchen, Martha Stewart and the late Carl Sagan.

Exclusive: Facebook Snatches Another Google Ad Exec (This Is Getting Ridonkulous!)

Kara Swisher — Sat, 11 Sep 2010 04:20:39 +0000

Facebook–in its ongoing quest to poach as many Google execs as possible–has hired a well-regarded and upcoming ad sales and operations exec, Emily White (pictured here), away from the search giant.

White once worked for former Google exec David Fischer, who bolted to the social networking giant in late March to take a job as VP of Advertising and Global Operations.

Fischer worked for former Googler Sheryl Sandberg, who is now Facebook’s COO. (You get the Silicon Valley daisy-chain pattern here, right?)

Thus, White will work for both of them again, this time running the business and monetization side of local on a global basis.

According to her profile on LinkedIn, White is still employed at Google as a senior director of emerging businesses in its marketing and advertising unit.

But she began her stint at Facebook this week, a move which she and also Facebook confirmed after a Friday night email from BoomTown.

White, 32, has been at Google since 2001.

Please see this disclosure related to me and Google.

Exclusive: Twitter's Next Moneymaker–"Promoted Trends"

Peter Kafka — Fri, 11 Jun 2010 18:33:46 +0000

UPDATE: The new ad unit is now up and running (via Jason Calacanis).
————
Twitter is beginning to roll out its ad platform, which allows advertisers to insert messages into users’ streams. But the microblogging service already has an idea for a new product: Selling some of the real estate dedicated to its “trending” feature, where it highlights topics Twitter users are chattering about.

Twitter is describing the product to advertisers as “Promoted Trends,” an extension of the “Promoted Tweets” program announced in April. The messaging service has been talking about it in vague terms and has yet to test it.

But the basic gist seems to be this: Advertisers will be able to insert their own terms into the list of trends Twitter displays on users’ homepages (see image below; click to enlarge) and on its login page. Clicking on a term would call up a Twitter search results page, which would feature the associated advertiser’s “promoted tweet” at the top of the results.

Advertisers who have heard Twitter talk about the product say the service imagines charging “tens of thousands of dollars” a day for exclusive placement rights.

If Twitter moves forward with the plan, it’s going to need to iron out some details: For instance, will every one of Twitter’s 190 million users see the same promoted trend? Or will the service figure out how to filter them?

Just as important: Can Twitter ensure that its trending topics aren’t cluttered with spam? The service has been trying to tackle this by tweaking the algorithm it uses to generate trending topics, which is why there’s a lot less Justin Bieber in its results than there used to be. But it can still stand some work–can anyone tell me what “CALA BOCA GALAVO” is, and why I should care?

In any case, it’s early. Here’s Twitter’s position, conveyed via PR boss Sean Garrett:

As we have always said, we plan to test different advertising and promotional models in these early stages of our monetization efforts for both user and brand value. As part of this effort, we will likely test trends clearly marked as “promoted” for an undefined period of time. Assuming that we do, during this test, there will only be one visible at a time.

All of this makes plenty of sense. Twitter spent a long time trying not to become a media company, but it is certainly headed that way now: Twitter attracts users’ attention with content and then rents out access to those users’ eyeballs. So if you’re going with that model, no reason not to go all the way.

What's Up With Foursquare, Doc? Try a Bridge Investment, Facebook Talks and More!

Kara Swisher — Fri, 11 Jun 2010 12:10:39 +0000

Memo to Dennis Crowley: BoomTown has not forgotten you!

In fact, I have been tracking the popular social location service he helms the way Elmer Fudd chases Bugs Bunny, since my last update in April.

That was in the midst of a flurry of talks the New York-based start-up was engaged in with a series of Silicon Valley venture firms; it was also entertaining a serious $120 million acquisition offer from Yahoo (YHOO).

But because Foursquare had gotten so much media attention as the next big thing, the situation quickly became complicated and confused.

So much so, in fact, that one firm, Andreessen Horowitz, said publicly that it had pulled out of the funding talks due to the confusion and, well, hype, around Foursquare.

Things then quickly settled down, as the company and its investors went quiet.

Actually, not as quiet as they thought, said a range of sources close to the situation, with some under-the-radar activity of late from the innovative company.

Here’s the deal right now:

The current plan is for Foursquare’s original investors to do a “bridge” investment for a smaller sum, because the original $1.35 million raised from Union Square Ventures and O’Reilly AlphaTech Ventures, as well as some well-known angel investors, has been spent.

The valuation for the king of “check in,” said several people, is hovering at about $80 million.

Meanwhile, talks with new VCs have been tabled for now, said several sources, as several firms, such as Accel Partners, have decided not to move forward at this point.

But that could change quickly. In particular, Khosla Ventures’ Gideon Yu has reportedly been keen to invest, along with other firms.

While many in Silicon Valley feel Crowley mucked up the first round of talks, that will not matter if investors feel the company is on a strong growth path.

Also in the mix: Foursquare’s talks with social networking giant Facebook about a possible acquisition or investment.

Those discussions, said several sources, have gone from nonserious to serious, but have also not been conclusive.

Facebook execs have been trying to sort out their location strategy, which might involve more federation than the backing of one single service.

Interestingly, Foursquare CEO and founder Crowley has been burning up the tech conference circuit of late, dropping vague hints and making leading jokes about what’s next, even as he touts his company’s growth in an increasingly competitive space.

At the Mashable Media Summit in New York this past week, for example, he noted that Foursquare had almost 1.6 million users and is growing fast.

Crowley noted that more partnerships and features are coming, as the company tries to figure out a reliable monetization plan.

But this does not mean it is profitable and, thus, all that growth needs investments, which Crowley coyly referenced in his interview.

But the peek-a-boo is unnecessary, since what Foursquare needs to do is obvious, sometimes painfully so.

But, as always, it’s also entertaining.

Speaking of which, here is Crowley talking about Foursquare in a backstage interview at the Mashable event, as well as some Bugs and Elmer.

But, be vewy, vewy quiet–he’s hunting wabbits:

LIVE from New York: Twitter Pitches Ads to Madison Avenue

Peter Kafka — Tue, 13 Apr 2010 17:39:41 +0000

Twitter has quietly been reaching out to marketers about its new ad platform for a few months, but now it’s a full-fledged marketing blitz. The messaging service rolled out its ad strategy to the press last night; today it’s going directly to the ad industry, via COO Dick Costolo’s presentation at Ad Age’s Digital Conference.

I’m not sure how much more Costolo will reveal that Twitter hasn’t put out already–or may be waiting to talk about at tomorrow’s Chirp conference. But since I’m here I’ll liveblog it anyway.

Liveblog

Costolo says he has been waiting five or six months to give this presentation. It’s time to walk through the rollout, he adds, making note of his “fascinating nontraditional” prediction last fall.

He explains the Twitter ecosystem. The ad platform has to go everywhere, not just to Twitter.com. He refuses to call the ads, “ads.” They’re “just tweets.”

“Promoted tweets,” that is.

He walks through the @hashtagtees example.

There’s a menu from which ad buyers can pick search terms and associate them with specific tweets they’ve already published.

Promoted tweets look and act like regular tweets except that they’re labeled as promotions and stay at the top of the Twitterstream.

A promoted tweet “combines earned media and paid media in one space,” Costolo says.

“Earned” media are free, Costolo reminds the audience. That is, if people retweet your paid tweet, there’s no charge additional charge.

The pitch continues: Ads are “real time,” and so are analytics–you can see how ads are performing second-by-second.

Twitter will start with Twitter.com search. That’s phase one. The plan will roll out more broadly, but the company is doing it this way because it wants a “thoughtful, user-centric approach” to figuring it out. “We will quickly expand into syndication…all of our syndication partners.” And here, Costolo specifically mentions UberTwitter in the list of partners.

Important: Twitter will definitely expand into the regular timeline at some point. That is, you will be getting ads in your stream whether you search or not. Ad-free Twitter is over.

Costolo talks about the “resonance” metric Twitter will use to figure out which promoted tweets show up and where.

Each ad partner will see a scoreboard with different metrics: Retweets, @replies, #tag click, avatar clicks, link clicks, views after RT.

Advertisers won’t pay for ads that don’t resonate with users.

Next, Costolo describes communication on Twitter as both “one to many” and as a “real-time interest graph.”

Pricing will start as CPM. Twitter is doing this because it doesn’t know how to correlate “resonance” with value yet. As the company figures this out, it will move to a pricing model based on ROI.

Here comes Porter Gale, VP of marketing for Virgin America, a launch partner. She notes that @jack is flying VA right now.

[You're not missing anything here.]

Um, here’s a free ad for two-for-one tickets on Virgin. Don’t really follow it but sure you can figure it out if you’d like.

And here’s Ellen Stone, SVP of marketing at Bravo.

She is also excited!

[You're not missing anything here, either.]

Stone describes some sort of live, real-time convergence between shows broadcast and users’ tweets. Makes my head hurt. Hope it doesn’t pop up during “Top Chef.”

Back to Costolo: More monetization coming. Commercial accounts coming after promoted tweets will “feather into this platform very very nicely.” One dashboard will manage both products.

Q&A

Will tweets be syndicated to Google (GOOG), Yahoo (YHOO), and other partners that take the stream?
Costolo says yes, without mentioning any specific search engine or media pub.

Will there be revenue-sharing with publishers and bloggers?
Yes, with developers and publishers. Costolo says Twitter will talk about this at its Chirp conference and focus on the syndication piece there. Revenue sharing will be “very transparent,” he adds.

Early reaction from consumers?
Yes, Twitter is getting a “wait and see,” Costolo notes. [From whom? Who's seen it?] The company will take its “learnings” from search and go forward. Twitter ads should be live and running now.

What CPM are you charging?
Twitter is playing around with different numbers, trying to figure it out. When a term is owned or created by a client, like Virgin America, should it have “rights” to that hashtag, whereby no one can outbid it? Some hashtags only have value at certain times. Like “Super Bowl,” which is only useful for a couple hours in the year. So we have to play around and test different kinds of pricing. “We don’t know the answer to that yet.”

What kind of reactions are you looking for from users?
Costolo says Twitter is looking to see whether people click or interact with ads and paying attention to the tenor of reaction: Positive or negative, etc. Think about the iPad launch this month. People were having battery issues. Someone could have jumped in in real time and bought a promoted tweet that dealt with that. Twitter’s hope is that when people see these, they’ll get why they work.

Please talk about search volume.
“Massive. It’s huge.” Will talk about hashtags tomorrow. But on Twitter.com, it’s a small piece of traffic. So we’re not maximizing revenue now. We’re figuring it out.

How will location work with ads?
“We think significantly.” There are lots of opportunities down the road. As this gets more sophisticated, will see opps for small and big business.

Will marketers be able to get resonance scores for companies that aren’t using promoted tweets?
Not at first. But possibly.

Will you share revenue with TweetDeck, etc.?
Yes. We’ll talk about this tomorrow so we can save something for those guys. Revenue-sharing will be very transparent. Costolo name-checks Iain Dodsworth of TweetDeck and Loïc Le Meur at Seesmic.

Finished up. I will have some questions for Costolo myself, a little later this afternoon.

Though Numbers Still Down, Wall Street More Bullish on Yahoo's Fourth-Quarter Earnings Today

Kara Swisher — Tue, 26 Jan 2010 08:22:21 +0000

While Wall Street expects no huge upswing in Yahoo’s revenue or earnings when the company reports its fourth-quarter results today after the market closes, analysts are becoming increasingly positive about the prospects for the Silicon Valley Internet giant.

Why? Apparently, not-as-down-as-last quarter is the new up!

This makes sense given that Yahoo (YHOO) has had three consecutive declines in revenue of about 12 percent, so any lessening of the bleed is a good thing.

A consensus of Wall Street estimates expects Yahoo to report earnings of 11 cents per share on net revenue–taking out commissions to advertising partners–of $1.23 billion for the fourth quarter. That’s about a 10.4 percent decline in year-over-year revenue.

The improvement could come from the beginnings of a better outlook for display advertising online, an area where Yahoo shines, as marketers started returning to the Web in the quarter.

Not so shiny, of course, is Yahoo’s continued weakness in search monetization and market share. Both have been down.

While Yahoo CEO Carol Bartz’s cost-cutting and streamlining have offset some of the declines over the last year, eventually she will need to show real growth and innovation to investors.

That said, expected cost savings from the online search and advertising deal Bartz struck with Microsoft (MSFT) in July could also improve the bottom line later in the year, although the deal is still awaiting regulatory approval.

A good report could boost Yahoo shares, which have been up over the year about 38 percent.

The stock still lags those of other Internet companies, as well as the overall market. In the same period, the Nasdaq was up about 44 percent, Google (GOOG) stock has doubled and Microsoft shares are up a lot more.

Still, some analysts are expecting Yahoo shares to rise to above $20 from its current price, which has been hovering at about $15 to $16 a share.

The One-Year Report Card of Yahoo's Carol Bartz–Deal-Making: Incomplete

Kara Swisher — Mon, 25 Jan 2010 17:24:13 +0000

Sorry for the break in grading Yahoo’s Carol Bartz on her one-year anniversary as CEO.

But BoomTown was swanning around the Sundance Film Festival in Utah this weekend, went partying with those boozy Hollywood types and ended up in Provo with the crazy gals from “The Runaways”!

I wish! Actually, running away from issuing any grade for deal-making for Bartz is a pretty good way to put it.

Because today, after much thought, I have to give the Yahoo leader an incomplete for deal-making.

That’s because the only deal that truly counts–the search and online advertising partnership with Microsoft (MSFT) struck in July–has still not been approved by regulators.

More to the point, no one will really know what it means for Yahoo (YHOO) until the company finally embarks on the biggest bet of its recent history.

And that answer is many, many quarters away.

I began handing out marks to Bartz recently, after she gave herself a B- for overall performance for the year since she took over the troubled Internet giant.

But I decided to be more specific, splitting the grades for Yahoo in 2009 into five categories: Management, financials, product innovation, deal-making and moxie.

I awarded Bartz an A- for management, a C+ for financials and a C- for product innovation so far.

And as much as I would like to give a definite grade for deal-making, she has made no other deals of major consequence on which to base a grade.

The deal to integrate Facebook Connect and Twitter? A catch-up long past due and not as impressive as similar ones by Google and Microsoft. The sale of Zimbra and other assets? Essentially, cleaning up. A few minor acquisitions? No needle-movers in the lot.

Thus, the only deal has been with Microsoft, which is indeed a very big deal.

And it is, as I said, incomplete, although not to everyone.

Some thought the deal, which Bartz said she should have made sooner, was the best that Yahoo could pull off after the disastrous attempt by Microsoft to buy Yahoo for upward of $40 billion collapsed and left egg on everyone’s face.

With Google (GOOG) and Microsoft gearing up for a costly search war and no chance of Yahoo ever regaining any kind of tech advantage, the argument in favor goes, Bartz opted to get some kind of leverage while she still had some.

On many levels, that makes a lot of sense. And if it works, the deal will surely help improve Yahoo’s bottom line, cutting expenses in the search technology arena drastically and, the company hopes, giving it the ability to compete better in the marketplace by combining Yahoo and Microsoft search against the Google behemoth.

Presumably, if Yahoo can innovate in search experience and add to share, all is not lost.

But a lot of people certainly don’t like the deal, citing a variety of problems, especially the fact that Yahoo has essentially turned over all search monetization to Microsoft and traded away a big part of its business with no financial guarantees.

In fact, Bartz said in an interview with me at the seventh D: All Things Digital conference–months before she struck it–that she would want “boatloads of money” in any deal with Microsoft (see that video below).

[ See post to watch video ]

At the time, most people thought she meant a gigantic upfront guaranteed payment for handing over search to Microsoft, which she did not get in the final deal.

Wrote one Internet exec in a long email to me, expressing a typical sentiment I have heard time and again:

She would have been much better off to simply have sold the current Yahoo search biz to Microsoft along the lines of the deal Carl Icahn tried to broker the summer after the acquisition bid was pulled. The cut over could have happened much faster (just start running Bing results on Yahoo) and Microsoft would probably have given a revenue guarantee that would keep Yahoo whole on revenue per search for the traffic they generated. That would also have eliminated the sales overhead immediately, providing greater cost savings…She chose a middle-ground (classic Yahoo) and will end up with lower returns for the declining search business than she could otherwise have had.

Only reason she doesn’t get the F that [former Yahoo CEO and Co-founder] Jerry Yang obviously earned on this topic is that she did actually make a deal.

And, indeed, Bartz had to play the cards she was handed by her predecessors, and they were not good ones.

Still, Yahoo is now depending on Microsoft to innovate in search technology. If it does not or cannot, look out below in that category, even if Yahoo recovers in its stronger display advertising arena.

So, with Yahoo’s search share declining of late, even as that of Microsoft’s Bing grows, it is right to start worrying and be nervous.

Nonetheless, as much as I like to dole out grades and as much as Bartz’s detractors would like to say it is over, it’s probably fairer to wait and see what happens.

One thing is certain: Bartz has shown either amazing guts or an astonishing lack of foresight here.

But let’s save that particular grade–moxie–for tomorrow, on the day Yahoo’s fourth-quarter earnings come out and Bartz is front and center in the earnings call.

Speaking of moxie–a.k.a. ch-ch-ch-ch-ch-ch-ch-ch-ch-cherry bomb!–here’s the trailer for “The Runaways,” which just opened at Sundance: