Longtime Yahoo exec Raymond Stern (pictured here) — who seems to have fit into a lot of management reorgs in his short time at the Silicon Valley Internet giant — has been named to a new role at the company as SVP of strategy, corporate development and new ventures.

He’ll be reporting to CEO Scott Thompson, according to an internal memo I got sent by the people who send me internal memos from Yahoo. (A group, I might add, that is getting bigger by the day.)

When he got to Yahoo in late 2009, Stern had first been named SVP of North America partnerships and business development for Yahoo. He later had to also pinch-hit as its head of U.S. audience, mobile and local, after an exec left, before being named SVP of North America audience. Then, after another exec took over the audience job, he was back to business development and partnerships and also added the listings business to his portfolio. Then, Stern got mobile biz dev back, after another exec left.

Now, the man who has been the Swiss Army Knife of Yahoo will be the key strategy guy for Thompson, who clearly wants to do a lot of strategizing.

Interesting note: Stern was a former consultant to Boston Consulting Group, which is Thompson’s go-to outside team on his ongoing restructuring of the company. He is also a former Intuit exec.

As per usual, here is the internal memo on Stern’s appointment from Thompson, who is dealing with some other very thorny issues right now too:

Yahoos –

Over the last few months, you’ve heard me talk a lot about focusing our company around our core business. As part of this, we need to find new ways to strengthen, leverage, and monetize our core assets — all in conjunction with our long-term strategy focused on driving growth. To help tackle this challenge, I’m excited to announce that Raymond Stern will take on a new role at Yahoo! as senior vice president of strategy, corporate development, and new ventures, reporting to me.

For those of you who haven’t had the chance to meet Raymond over the last two and half years here at Yahoo!, he previously oversaw distribution partnerships and business development, as well as our Latin American, Canadian, and small business teams. Earlier in his career, he spent 10 years at the Boston Consulting Group, and later had various roles at Intuit including leading strategy and corporate development during a transformational period in the late 90s through the mid 2000s.

In his new role, Raymond will work across the teams to ensure alignment and that we are taking advantage of opportunities around the globe. He will lead three critical areas for us:

Strategy: Raymond will lead corporate strategy, working in close partnership with the senior leadership team and me.

Corporate Development: Raymond will work with the team to find opportunities to accelerate our progress and growth through acquisitions, investments and strategic partnerships. In conjunction with this, Marcus Shen and his group will be renamed corporate M&A, and will continue to be the transactional execution arm supporting Yahoo!’s corporate development initiatives.

New Ventures: Raymond will look at emerging areas outside of what’s happening in the halls of Yahoo! and bring new innovative and disruptive ideas to the forefront.

In the coming weeks, you’ll hear more from Raymond as he works with the leadership team to align our corporate priorities and long-term strategy.

Please join me in welcoming Raymond to this important new role.

/signed
/Scott Thompson

And here’s to your new job, Raymond:

Spencer Platt | Getty Images News

According to sources close to the situation, Starbucks Chairman and CEO Howard Schultz and Accel Partners’ Kevin Efrusy will be stepping down from the board of Groupon.

Schultz’s departure will be effective today, but Efrusy — who was critical to the initial funding around the Chicago-based daily deals site — will not be standing for re-election at the company’s annual meeting in June.

The departures are voluntary, but sources said the pair will be replaced by two new directors with significantly more fiscal oversight experience, whom one source characterized as “accounting types.”

(Update: Groupon just posted a press release noting the board departures, with the names of the new board pencil pushers: Daniel Henry, CFO of American Express, and Deloitte Vice Chairman Robert Bass. Henry joins immediately in Schultz’s place. Full press release below.)

It is a move that is critical, given Groupon’s recent series of missteps around its financial reporting that have hurt both its reputation and, more importantly, its stock.

Interestingly, several sources noted that Schultz almost left the board right before Groupon’s public offering last fall, after several ongoing disputes with its management, but stayed on so as not to scuttle its IPO.

The board of the company has not involved itself as prominently in the accounting messes at the company, but it appears as if they will begin to now.

It must, given Groupon shares have been trading at a low of $11. Its stock has dipped to $10.98 today.

As Tricia Duryee wrote recently about the fall:

At that price, it is now worth just over $7 billion, down 57 percent since the company went public last November and well off the more than $10 billion it was valued at as tech’s hottest start-up of 2011.

Ironically, Groupon’s current market valuation is actually not much more than the $6 billion offered for it by search giant Google in late 2010.

The fall of Groupon has been swift, from the honorific of being the fastest-growing company ever to one that cannot keep control of that runaway growth.

That’s perhaps no surprise.

Perhaps most significantly, Groupon went public in just four years, delivering the biggest tech IPO since Google.

The quicksilver move was typical for it. In just two years’ time, the company ballooned from 37 employees to 9,625 and from serving five markets in the U.S. to 175 in North America alone. And that’s leaving out massive expansion abroad. In the past year, Groupon has acquired roughly 17 companies, including many international copycats.

The company also has entered many new segments, expanding from selling lower-priced and simpler deals on restaurants and spas to more complex and pricey arenas, including travel, physical goods and luxury items.

But Groupon is now learning that its original business does not work across just any segment, especially to more discerning customers of its higher-level and more expensive offerings.

In fact, it was those newer and potentially more lucrative markets that forced the company recently to revise the company’s fourth-quarter report after returns skyrocketed on luxury items, such as Lasik eye surgery.

The problems forced Groupon to lower revenue in the period by $14.3 million and net income by $22.6 million. It is now reporting a wider net loss of $64.9 million on revenue of $492 million, pushing it further away from its goal of profitability.

The company also disclosed at the time that independent auditors had noted “material weakness” in its financial controls. In addition, The Wall Street Journal reported that the Securities and Exchange Commission was examining Groupon’s revision. 

With many companies, investors might have shrugged off such accounting issues, but the impact on the stock has been greater since they are only the latest in a string of similar mistakes at Groupon.

In its pre-IPO period, for example, Groupon was forced to restate revenues after counting both its portion of the revenue and the revenue that goes to the merchant together. It also had to dump a controversial accounting metric that made the company look more profitable than it was, because it did not include important costs, such as critical online marketing expenses to attract new customers.

Those came after the company retracted a statement by Eric Lefkofsky, Groupon’s co-founder and executive chairman, who told Bloomberg in an interview that Groupon would be “wildly profitable.”

At least the wild part was accurate.

Much of the blame for these missteps by Wall Street is being aimed at CEO and co-founder Andrew Mason, the iconoclastic 31-year-old entrepreneur who is largely responsible for defining the company’s culture, as well as Jason Child and Joe Del Preto, the chief financial and accounting officers, respectively.

Child joined the company in December 2010, coming from Amazon, where he held several roles over a 10-year period — including VP of finance, international, and director of investors relations. Prior to joining Amazon, he worked at Arthur Andersen as a certified public accountant.

Del Preto has been Groupon’s chief accounting officer for the past year and, before that, he was the company’s global controller for three months. Before Groupon, he was controller and VP of finance at Echo Global Logistics and also served as controller at InnerWorkings, the same company where Mason was a computer programmer in his early career.

Mason, of course, is the best known and the person most responsible for establishing the company’s whimsical culture and managing — or mismanaging, depending on how you look at it — Groupon’s hard-charging growth.

It will also be up to him to turn it all around, as the company sinks in both value and investor regard. Since the restatement, Mason has said little about how he intends to do that. In February, when Mason concluded Groupon’s first-ever earnings call, he said: “Thanks, guys, this was a lot of fun, and I look forward to many more of these.”

It’s not clear fun will be on the agenda at his next outing on Groupon’s first-quarter call in mid-May.

Here is the official press release from Groupon on the board changes:

Groupon Appoints Two Directors to Board Daniel Henry, CFO of American Express, and Robert Bass, Vice Chair of Deloitte

CHICAGO — (BUSINESS WIRE) — Groupon, Inc (http://www.groupon.com) (NASDAQ:GRPN) today announced that Daniel Henry, the chief financial officer of American Express Company and Robert Bass, a vice chairman of Deloitte LLP will join its Board of Directors. Both will serve on the Audit Committee with Audit Chair, Ted Leonsis. Daniel Henry was appointed to the Board on April 26, replacing Howard Schultz, who has stepped down from the Board. Robert Bass will stand for election at the annual stockholder meeting to be held on June 19 following his retirement from Deloitte, replacing Kevin Efrusy, who will not stand for reelection at that time. “With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward,” said Eric Lefkofsky, Groupon Chairman.

Daniel Henry, 62, has been the Chief Financial Officer of American Express Company since October 2007. Henry is responsible for leading American Express Company’s finance organization and representing American Express to investors, lenders and rating agencies. He has also served as Executive Vice President and Chief Financial Officer of U.S. Consumer, Small Business and Merchant Services and joined American Express as Comptroller in 1990. Prior to joining American Express, Henry was a partner with Ernst & Young.

Robert Bass, 62, has been a vice chairman of Deloitte LLP since 2006, and a partner in Deloitte since 1982. He will retire from Deloitte on June 2, 2012. Bass has specialized in e-commerce, mergers and acquisitions and SEC filings. At Deloitte, Bass is responsible for all services provided to Forstmann Little and its portfolio companies and is the advisory partner for Blackstone, DIRECTV, McKesson, IMG and CSC. He has also previously been the advisory partner for priceline.com, RR Donnelley, Automatic Data Processing, Community Health Systems and Avis Budget. He is a member of the American Institute of Certified Public Accountants and the New York and Connecticut State Societies of Certified Public Accountants.

“I’m thrilled to have been a part of Groupon’s development,” said Kevin Efrusy. “The Company is well on its way to becoming the operating system for all local commerce.”

“Howard and Kevin helped guide us on our journey to becoming a public company and I want to thank them and acknowledge their contributions,” said Groupon CEO Andrew Mason.

“During my tenure on the Board, I was impressed by the game-changing opportunities that Groupon has delivered for both merchants and customers on a global scale,” said Howard Schultz. “Groupon has a strong sense of mission and purpose, and as I move on to focus on my other time commitments, I wish them the very best.”

The New York-based company, which sells travel deals and daily deals via email and from its Web site, said fourth-quarter revenues totaled $35.2 million, falling below analyst expectations of $38.7 million.

However, Travelzoo did manage to return a healthy profit of 40 cents a share, exceeding estimates of 35 cents a share, according to Thomson Reuters, which conducted a survey of analysts.

The company is Groupon’s closest publicly held competitor, other than Google or Amazon, which don’t break out results from daily deals. Groupon was also trading lower today, falling about 3 percent, or 59 cents, to $19.49 a share. Groupon will report fourth-quarter earnings in two weeks on Feb. 8.

In a statement, CEO Chris Loughlin said despite a slower period for travel advertising in the fourth quarter, revenues in that period grew faster year over year than in any quarter in four years.

A majority of its revenues are still coming from travel. For instance, in 2011, Travelzoo reported that 57.8 percent of deals sold were for travel and only 26.7 percent came from local discounts. Search revenues coming from comparison shopping sites such as SuperSearch and Fly.com made up for the remainder.

Still, it is local that is growing the fastest. In North America, local deals grew 196 percent year over year.

The company ended the period with 21.5 million subscribers in North America and Europe, up 14 percent from the end of 2010.

After the departure of top Yahoo advertising sales exec Seth Dallaire, who decamped to Amazon this week, Yahoo did a little reorganization of its U.S. sales team.

(I promise to stop with the LOLcat images after this one for a while, but it is purrfect.)

Rather than go into the deets, you can just read the internal memo on it from Wayne Powers, SVP of advertising sales for North America:

Team:

These first few weeks of the year have been a phenomenal showing of Yahoo! pride and a clear display of the opportunities we’re poised to capitalize on this year.

In discussions with executives from our 100+ meetings with some of our largest advertisers, agencies, and holding companies at CES, it’s clear we’re changing the dialogue by having a consistent go-to-market strategy: Premium Content Experiences, at Scale, Across Screens; by listening to and engaging with our clients in meaningful ways; and by focusing on digital media and innovation. We were given the top performance rating by one of our Global Agency partners — out of the five media publishers they met with, we were ranked number one based on our continued commitment to providing clarity and consistency in strategy and to strengthening our partnership. Great work everyone!

With that context, there are some changes that I want to announce effective today. Seth Dallaire is leaving Yahoo! to run North American Sales at Amazon. While it’s never easy losing great people, we’re fortunate that he has a very talented team that will carry on the focus and momentum. Please join me in wishing him continued success!

As part of this transition, Mark Ellis will expand his role to take on leadership of the Global Agency and Client Partnership teams. He will continue to lead North American Field Sales.

I’m excited to announce that Peter Foster will to take on leadership duties and will serve as the lead for our partnership with AOL and Microsoft, Interclick, mid-market display, mid-market acquisition sales, and the Channel Reseller team, reporting to me. Peter joined us as part of the acquisition of 5:1 where he served as Chief Revenue Officer, and has a long career in the industry. He previously was SVP sales at ValueClick/Fastclick, one of the biggest ad networks in the world, oversaw revenue at Photobucket after it was acquired by News Corporation, was an early pioneer in the monetization space at L90, and held senior revenue posts at Kosmix and Hi5.

I’m also excited to announce that Marc Grabowski will take on an expanded role and now will head the combined Interclick and mid market sales teams. As part of this new team, Michael Katz, the CEO of Interclick, will lead all sales operations and data and performance optimization for the combined teams. Both Marc and Michael will report to Peter.

We are fortunate to have such a talented team here at Yahoo!. Ross and I are confident that Peter, Mark, and Michael will lead our efforts to change the conversation in this space and industry.

I want to thank everyone for their continued hard work and dedication. We have a great team and a lot to be excited about. We continue to hear feedback from the agencies and clients about our progress, so let’s keep up the focus and energy and deliver on our goals! Please let me or your managers know if you have any questions.

–Wayne

According to sources, Yahoo has lost one of its top advertising sales execs to Amazon.

Seth Dallaire, who was in charge of Yahoo’s important midmarket advertising accounts unit, will take a newly created role of VP of North America sales at the online commerce giant.

His departure is a blow to Yahoo, especially as it tries to revive its troubled advertising business. The company reports earnings next week, which are expected to show continued weakness in its key business.

The well-regarded Dallaire joined Yahoo in 2009 from Microsoft.

The ad exec told his staff today.

I reached out to Yahoo for comment, but am guessing I will not get one.

According to the expected year-end box-office data figures compiled by Hollywood.com, the industry raked in $10.1 billion for 2011 in North America.

While that seems like a nice haul, it’s 4.5 percent less than in 2010. While not enough to result a major downturn in limo-riding and Botox, the results are likely to cause entertainment moguls some worry, since they are accompanied by continuing trends, including another year of lower attendance.

And given that the revenue was unusually bolstered by more higher-priced 3-D movie-ticket prices — Hollywood released several dozen 3-D films in 2011, double the previous year’s amount — the latest numbers are even more disappointing.

While some holiday movies did well — namely “Mission: Impossible — Ghost Protocol,” which has taken in about $70 million domestically since its opening less than two weeks ago — it pales in comparison to such digital hits as Activision’s Call of Duty: Modern Warfare 3 videogame, which pulled in $400 million in one day from the much-desired youth market.

It surpassed $1 billion in sales in 16 days, eclipsing the box office of the blockbuster movie “Avatar,” which took 17 days to gross seven figures.

Does that mean that the continued competition for the leisure time of pretty much everyone between digital and analog has gotten worse — an epic battle of the movie industry versus game players, tablets and smartphones?

Or is it because so many movies made in 2011 turned out to be just awful? (If you saw “New Year’s Eve,” you’ll know exactly what I mean.)

One thing is clear: No one is going to pay for poor-quality content, no matter the screen size.

More number-crunching to come, as the industry debates the issue into 2012 (coincidentally, the title of a movie I happened to like, as you can see below!), and at the upcoming D: Dive Into Media at the end of the month, down near Los Angeles, in the belly of the Web-smacked beast.

Until then, let’s hope it does not come to this next year:

Today, Fortune magazine released its annual “50 Most Powerful Women in Business” and, as usual, it had its share of tech execs on the list.

And off it, too — first and foremost being ousted Yahoo CEO Carol Bartz, who was jacked completely from her 2010 No. 10 rank. She was No. 8 in 2009.

In her place: Newly designated Hewlett-Packard CEO and former eBay CEO Meg Whitman grabbed the No. 9 spot.

Also on the list: fast-rising IBM sales, marketing and strategy exec Ginni Rometty at No. 7; Xerox CEO Ursula Burns at No. 8; Oracle President and CFO Safra Catz at No. 11; Facebook COO Sheryl Sandberg at No. 12; Google execs Susan Wojcicki and Marissa Mayer at No. 28 and No. 38, respectively; IBM North America GM Bridget Van Kralingen at No. 39; and Best Buy Americas President Shari Ballard.

Catz was the highest paid of the group, with $42.1 million in total 2010 compensation.

And also taken off this year: 2010 No. 14, HP’s Ann Livermore, who left her top job there, but still is on the tech giant’s board; 2010 No. 28 Cathie Lesjak, CFO of HP; 2010 No. 44 Lorrie Norrington, a former president at eBay; and Apple’s communications head Katie Cotton (she was robbed!), who was No. 50 in 2010.

The new list will be in the magazine on Monday, which is when a related conference will take place in Southern California. (I will also be in attendance there, along with other less powerful ladies.)

Whitman is scheduled to speak at the conference in the afternoon on Tuesday, October 4.

In the first quarter of 2009, RIM shipped 54 percent of the smartphones sold in North America. Now, just a few years later, it’s shipping less than a quarter of that — an estimated 13 percent in the second calendar quarter of 2011.

That does not bode well for the BlackBerry maker, says Bernstein analyst Pierre Ferragu, who views the company’s “progressive effacement” from the North American handset market as a foreshadowing of things to come abroad.

“We see the beginning of a weakness in the U.K. market, and BlackBerry might soon be in decline in other European countries as well,” Ferragu writes in a research note today, adding that his discussions with European operators suggest the BlackBerry is no longer considered a preferred mid-range smartphone.

Ugly news for RIM, because the BlackBerry isn’t exactly killing it at the high end, either. As Ferragu notes, “RIM has been completely routed in high-end smartphones.” The 18 percent share of that market segment it held in the first calendar quarter of 2010 slipped to just 8 percent in the first quarter of 2011.

And at this point, RIM can ill afford to lose on one front, let alone two. Yet that appears to be what’s happening as rivals like Apple, Samsung and HTC extend the reach of their handset portfolios to lower price points.

“We believe that the sub-$300 smartphone market will soon display an evolution similar to that of the high-end market as Apple, Samsung and HTC, which have formed an oligopoly in the high end, expand into the mid- and low end,” Ferragu concludes. “RIM’s market share has already declined 3 points from the first quarter of 2010 to the first quarter of 2011. We expect RIM to lose a further 5 points of market share by 2012 as the oligopolistic players extend their domain.”

RIM reports results for its second quarter Thursday afternoon after the bell.

Of all the many job openings in tech, perhaps the most interesting to watch will be who Groupon selects as its next COO.

The search has been on for a while for the critical hire for the Chicago-based social buying company, well before the recent announcement that it was parting ways with President and COO Rob Solomon.

Among those approached, said sources close to Groupon: Former Doubleclick and Google exec David Rosenblatt.

He’s not taking the job for a variety of reasons, sources said, but
finding someone to step up for the job will be tough, since it is likely to be one that will require a wide range of talents.

That includes: epic cat-wrangling of thousands of employees in far-flung locations; deep marketing and advertising prowess; high-level technology, product, mobile and e-commerce chops; and international experience.

The last is perhaps the most critical of all, since global growth–especially in Europe and Asia–is increasingly becoming Groupon’s main revenue driver, and the COO will have to pull together a crack team across the world.

That will become even more important after Groupon’s top international managers–Germany’s entrepreneurial Samwer brothers–move out of active management by the end of this year.

While company sources said this has been long planned, the Samwers (pictured here) have been fully involved in Groupon’s fast trajectory in Europe and elsewhere, since it bought their Citydeal discounting clone last May.

Thus, sources said, Groupon is looking at a range of candidates with experience abroad, as well as talent in scaling businesses quickly and to huge size.

And that means looking to companies such as Google and Amazon for an exec, where there are quite a few choices.

While BoomTown could not confirm whether Groupon has spoken to any of them, possible COO types are obvious.

At Amazon, some qualified execs include: Sebastian J. Gunningham, SVP of Seller Services; Diego Piacentini, SVP of International Retail; H. Brian Valentine, SVP of Ecommerce Platform; and Jeffrey A. Wilke, SVP of North America Retail.

At Google, there are tons of good candidates that Facebook has not yet raided, including: Stephanie Tilenius, VP of eCommerce; Henrique de Castro, VP of Media and Global Platforms; Dennis Woodside, VP of Americas Operations; and Margo Georgiadis, VP of Global Sales Operations (plus a Chicagoan!).

Other names being raised include Hulu’s Jason Kilar (unlikely, but I’d like it), various Microsoft execs and a spate of others.

(I say, let’s bring in Zynga’s Owen Van Natta, who was once COO of Facebook, since he’s missing a big pile of Groupon stock to add to his enviable collection of hot Web 2.0 company shares.)

While there are probably qualified execs outside the tech industry at retail and media outfits, sources said it is likely Groupon will select within the digital ranks.

Lastly, and perhaps most important, the Groupon COO candidate is going to have to accept that the role will not be a CEO-in-waiting, either before or after its inevitable IPO in the next year.

While I have received several tips that Co-founder and CEO Andrew Mason (pictured here) might not stay its principal exec, extensive checking with sources inside and outside the company indicate that such a move is highly unlikely.

“Andrew is beloved to the board, by investors and, most of all, by employees,” said one source. “He’s not going anywhere.”

Indeed, Mason has a close working relationship with Co-founder Brad Keywell, as well as Groupon Co-founder and Chairman Eric Lefkofsky.

In fact, despite other business interests, Lefkofsky has been very involved in all key decisions with Mason.

That job, presumably, would fall to the new COO, which Groupon should be hiring sooner rather than later.

“Groupon needs a world-class COO, who can manage hyper-growth, but also who knows that a No. 2 stays in the background while doing it,” said another source. “That’s a tall order.”

As we await the decision of which uneasy head gets the COO crown at Groupon, here is the opening from the Swisher boys fave Animal Planet cable television show, “Must Love Cats,” to get you in the mood:

Recent reports have put excess Galaxy Tab inventory in the hundreds of thousands and claim that surplus–not the debut of 8.9-inch and 10.1-inch versions of the device–is the real reason Samsung recently lowered its price. Said Samsung spokesman James Chung, “We don’t comment on market speculation but such talk is absolutely groundless.”

It’s worth noting that this isn’t the first time Samsung has been dogged by reports that the Galaxy Tab isn’t selling as well as the company has let on. As I’ve mentioned here before, the high sell-in figures Samsung likes to tout don’t represent actual sales to consumers. Instead, they are the number of Galaxy Tab devices it has shipped to wireless companies and retailers around the world.

And then there are those return rates. ITG Investment Research, which tracked point-of-sale data from nearly 6,000 wireless stores in the U.S. from the Galaxy Tab’s November debut through January 15, found return rates running between 13 percent and 16 percent. Of course, Samsung disputed those figures, claiming the real percentage to be less than two percent. But it provided neither data or explanation to support that claim.

A 16-year Microsoft veteran, Weber held a variety of senior executive positions in sales, marketing and professional services before leaving to start his own consulting business.

His new gig as Nokia president and head of Markets, North America begins today as does Louison’s pursuit of “new career opportunities.”

COMPLETE COVERAGE:

• Nokia’s Stephen Elop Talks to Mobilized About the Big Microsoft Deal (Video)
• Massive Layoffs Expected at Nokia
• Nokia’s Microsoft Partnership: Does the New Strategy Add Up?
• Live From the Nokia-Microsoft Press Conference: It’s a Windows Phone World After All
• More From Nokia: Forecast Gets Cloudy, Plus Expected Executive Changes
• Nokia-Microsoft: What Steve Ballmer and Stephen Elop Have to Say in Their Joint Letter
• Nokia Confirms Microsoft Partnership With YouTube Video
• R&D Spending: Nokia Vs. Apple Shows Size Doesn’t Matter
• Not Seeing Much Return on That Massive R&D Spend, Are You, Nokia?
• Nokia: Big and Slow

Nokia has already announced the key piece of its strategy–a shift to Windows Phone for future smartphones. Now the company is set to talk about the financial implications of that and go through the rest of its strategy, which includes a mix of Symbian and even a dash of MeeGo.

The investor event is scheduled to start shortly and due to run until about 2 pm London time. Mobilized will have live coverage, providing our battery holds out. I’ll try to mention only the high points, however. Mobilized loves numbers, but it is awfully early for a whole lot of financial speak, especially for the U.S. insomniacs tuning in.

12:02 pm: Still waiting for things to get going. But if you really want something to do, we have plenty of earlier coverage, including the press conference and the YouTube video of Microsoft CEO Steve Ballmer and Nokia CEO Stephen Elop, as well as a chat with Elop on how he made his big decision.

12:05 pm: Okay, things are getting going as Elop takes the stage (the same one as the earlier press conference.

12:06 pm: Elop is reviewing things. Lots of talk of both challenges and gems. If you read his memo, or anything else he’s said recently, you have heard this.

Battle of devices to war of ecosystems, etc. Mobilized has this part memorized.

12:09 pm: Smartphone strategy is just one piece.

Reviewing the three alternatives that Elop considered–MeeGo, Android or some partnership with Microsoft.

As for Google, Elop says it is the case there are some advantages for that approach.

“There’s something happening there. There’s no denying that.”

However, Elop says the company was worried it would be late and be just one of many, and was not sure how it could leverage assets like its Navteq location-based services.

“Our sense was differentiation could be a pretty big challenge,” Elop says. “The risk for commoditization would increase dramatically.”

Feels profit would have eventually moved to Google, with handsets becoming a commodity.

“It felt a little bit like giving up and not enough like fighting back,” Elop says.

12:12 pm: As for Microsoft, Elop says both companies are bringing something to the table.

As expected, Elop is characterizing this as more strategic than just taking a license to Windows Phone. Talking about Nokia services like mapping, local advertising and other things that Nokia can bring to the table.

“It’s far more interesting than a simple licensing deal,” Elop says. This was the only strategy that makes it a three horse race with Google and Apple.

Elop says he is convinced that Nokia will be able to differentiate within the Windows Phone ecosystem on a sustainable basis.

12:15 pm: There were some challenges and potential disadvantages, he acknowledges.

Top among these is the fact that Windows Phone 7 is new on the market.

“It’s early,” he says. “Will it succeed?”

12:17 pm: Also, there is the issue of being locked in or a lack of control. Elop does not disclose terms but says the company has flexibility and “substantial control” over the future of the ecosystem.

“This is not your mother’s OEM deal with Microsoft,” Elop says.

12:17 pm: Elop says the deal is at the “term sheet” stage, noting that the companies have yet to sign the “definitive agreement.”

12:18 pm: Already the engineers are working through, and Elop says this deal will allow Nokia to move far faster than it has in recent years.

12:18 pm: He’s also making the cost-saving argument, saying Nokia can focus its investment, which he acknowledges hasn’t been getting the return it should.

Elop earlier acknowledged that the company expects significant cost savings from the move as well as substantial workforce reductions.

“Bottom line: Products that are more competitive,” he says.

12:22 pm: Operators are excited by a third viable option, Elop says.

“A two-horse race is not a satisfactory [situation] for operators,” Elop says.

Elop says that Microsoft-Nokia will be operator-friendly, as compared with Google and Apple.

12:24 pm: Elop talking about differentiation–a key concern of analysts and investors.

Elop talks about Windows Phone as offering differentiation form Apple and Google, but also insisting that Nokia has the assets and business terms it needs to stand out from other Windows Phones. He focuses on camera technologies and “unique relationship.”

Stresses again that this is not a standard handset maker agreement. But he also says that just because Nokia can change lots of things within Windows Phone, doesn’t mean it should.

Nokia, he says, must “resist the temptation to customize just for the sake of customization.”

12:27 pm: Now talking about Symbian. For those that missed it, Elop reiterates this is a transition strategy, but adds that the company still expects to sell 150 million more Symbian devices before that transition is complete.

12:29 pm: Strategy is more than just smartphones. He wants the company to be a leading force in connecting the next billion people to the Internet via phones in emerging markets. “The market for feature phones is pushing down the price curve and that is an opportunity for Nokia.”

Nokia will do incremental work in that area–things like Nokia Money for people that don’t have a bank account or telephone. Another, Nokia Life Tools, helps connect, say, farmers to market information.

This area is still a target for innovation, he says, but it also faces competition from Chinese-made phones based on MediaTek chipsets.

Elop says that the company must also plan for the future so that it can be disruptive down the road. “As they say in Finland, it is time to shoot ahead of the duck,” he says.

That’s where MeeGo comes in–the mobile version of Linux that until recently was seen as Nokia’s future. Nokia said that team will ship a phone later this year and then see where the future is headed.

12:35 pm: Want to point out this New York Times article that said both Google and Microsoft were offering hundreds of millions of dollars in engineering and marketing support in order to woo Nokia.

12:36 pm: Elop now talking about cost cuts, including significant job reductions.

“We are not announcing how many and in what country,” Elop says, but adds that the company wants to move quickly on that front.

He says that he has made changes to the business to ensure speed, including leadership structure changes aimed at ensuring accountability. “If things go well today, I’ll be the CEO.”

Of note, the two of the three business unit leaders are women–Mary McDowell, who will lead lower-end phones, and Jo Harlow, who will head the smartphone business.

12:40 pm: Nokia looking for a new leader for its services and developer division. The acting head is Tero Ojanpera, but he will soon be looking for other opportunities within Nokia, Elop says.

Also of note, Louise Pentland, who is head of the legal and intellectual property unit, is being elevated to the top leadership team.

“We have one of the strongest patent portfolios out there” he says, adding that he would encourage all players to take a license to said patents. (hear that, Apple?)

New leader of North American sales unit to be named in coming days.

“We are creating a different industry,” Elop says in closing his introductory remarks.

12:44 pm: Elop Brings on CFO Timo Ihamuotila to go through the numbers.

12:46 pm: Ihamuotila acknowledged Nokia didn’t meet the targets it had set out to achieve at its last financial analyst day.

“Our execution did not cut it.” he says.

12:49 pm: Ah, Now on to the good stuff. CFO talking financial impact from Microsoft deal. Says should be good over the long term.

Slide shows royalty payments to Microsoft causing lower gross margins, but says sales and marketing support from Microsoft should lower operating expenses.

“We will receive substantial go-to market support from Microsoft,” he says, without giving numbers.

12:52 pm: Ihamuotila talking now about the company’s long-term targets for devices and services period “after the transition period.”

Device sales to grow faster than the market, with operating margins of 10 percent or more–but this is only after the transition period, which the company has said could last this year and next.

Significant uncertainties in this period.

Ihamuotila shows a slide showing Symbian sales slowly giving way to Windows Phone with lower-end mobile phones remaining about half of sales.

12:57 pm: Ihamuotila shows chart of how it expects to cut R&D with the company investing less in services, more in entry-level phones and far less on MeeGo, though still some. The investment in Symbian will be replaced by a far lower investment in Windows Phone R&D. Overall, R&D should be a fraction of what it was.

1:02 pm: Over long term, Ihamuotila says that the Microsoft deal should help significantly boost the company’s Navteq navigation business.

“We think this new strategy is the best way to maximize long-term value, both to our shareholders and to other stakeholders,” Ihamuotila says.

On to Q&A for financial analysts.

1:03 pm: Question on how Nokia will keep employees motivated, something else and when to expect the first Windows Phone.

“Thanks for the one question” Elop quips, before addressing them in turn.

Elop says that the key is on focused innovation so they see the fresh opportunities (at least for the ones who don’t get cut by the large workforce reductions also promised).

He also pointed to his sharply worded memo, which he said was designed to convey the message that “Here is the truth, we’re making decisions and we’re moving forward.”

Won’t give date on first Windows Phone, but says again that the move will allow a substantially faster pace than the company was on with Symbian.

1:07 pm: Elop is asked about some of the challenges with Microsoft and Nokia each responsible for different pieces of software and services, as opposed to Google and Apple, where things are more integrated.

“We wanted to drive operational simplicity,” Elop says, adding that the companies talked about other arrangements, though not a full-on acquisition. The companies, Elop says, decided not to go with the operational complexity of a joint venture.

1:10 pm: Elop says Nokia has opportunities to differentiate from other Windows Phone devices, but adds it is in Nokia’s interest for there to be other strong handset players supporting Windows Phone.

“We’ve got to make Windows Phone successful,” he says.

Nokia’s mapping technology, he says, will benefit rivals like Samsung and HTC. “We’re willing to make those trades,” Elop says.

1:11 pm: Elop is asked why he feels comfortable with a “bet the farm” strategy on Microsoft, a company he clearly knows well.

Elop points out that it was harder to see how Microsoft would rapidly be successful without someone like Nokia.

“But this is now different,” he says, adding that this is now an ecosystem that Microsoft and Nokia are jointly helping to build.

Mapping and local advertising were not part of the ecosystem before the Nokia-Microsoft partnership.

As for impact of the transition, it’s hard to say, Elop says. Symbian is strong in some places where Apple and Google are present today.

1:14 pm: Asked whether Nokia will remain profitable during the transition. “It’s hard to say financially, and I am not going to provide any further specific guidance.”

1:17 pm: Elop won’t say when the first Windows Phone will ship, but lots and lots by next year at various price points.

“We’ll be shipping in volume in 2012,” he says.

1:20 pm: Another two-parter! 1) Why will Symbian be supported if it is transitioning away? 2) Why does Nokia think it will be able to have double-digit operating margins using someone else’s platform?

Elop: They recognize Symbian is key to Nokia being able to transition, but he agrees that consumers will have to want the Symbian phones Nokia builds. CFO also notes that less than half of Symbian phones are sold through carriers.

As for question on margins, CFO says the company has opportunities for higher margins around services and advertising.

1:23 pm: Asked about how the company is confident Windows Phone can get to lower prices, Elop says that was a key consideration, down to which chipsets will be supported, etc.

Between the two companies there was a lot of work to get a high degree of confidence.

“That was a critical evaluation,” he says.

That said, Elop agrees there is a smartphone market below Windows Phone that Nokia will manage with an evolution of today’s Series 30 and Series 40 operating systems.

1:31 pm: Elop: Some of the hardware designs that would have run MeeGo or Symbian will be repurposed for Windows Phone. Some devices may come out with similar models for both Windows Phone and Symbian.

1:32 pm: Question again on who pays whom in Microsoft-Nokia. Is there a lump payment from Microsoft?

Elop doesn’t answer and instead refers to slide that shows opportunities on both sides. Saying value going both ways. As for Microsoft’s payments, “That is a significant part of the conversation,” Elop says.

1:35 pm: Two good questions: Can Windows Phone be put on any current devices? What happens to QT development layer that Nokia bought and had sought to unify developer approach?

Elop: It’s not as simple as plugging in and downloading on to current phones, though some technologies can be repurposed.

QT continues to be the development for Symbian and lone MeeGo device. Also could have a role on low-end devices.

However, Elop says, “We are not proposing a QT on Windows Phone” approach. Adding another development environment could fork the ecosystem, which is not good for Nokia or Windows Phone, he says. Development environment for Windows Phone will be Silverlight and XNA–Microsoft’s current tools.

1:38 pm: Asked about branding, he says in some cases you will see both Microsoft and Nokia brands. Examples could include Nokia Search powered by Bing or Bing maps powered by Nokia, though he says those are examples and not final choices.

1:39 pm: Asking about tablets, questioner points out that Nokia had an early lead in tablets, but Apple “stole the show.”

“We are not announcing today a specific tablet strategy,” he reiterates, saying that Microsoft creates opportunities.

Elop notes that there are rumors of Windows Phone and Windows that could power tablets.

“We could do that,” he says. “We might do that.”

Also an opportunity for Nokia to step back into the game using its own software.

1:41 pm: Elop wrapping up.

“We have set a new course for Nokia,” he says, adding that despite what has been written, Nokia is still an incredibly powerful company, though perhaps not in North America. “Today we are diving forward” he says. “We have a strong partner in Microsoft who is incented as are we in making this successful.”

Investor guy closes by reminding there were forward-looking statements. He’s still going as people leave the room.

COMPLETE COVERAGE:

• Nokia’s Stephen Elop Talks to Mobilized About the Big Microsoft Deal (Video)
• Massive Layoffs Expected at Nokia
• Nokia’s Microsoft Partnership: Does the New Strategy Add Up?
• Live From the Nokia-Microsoft Press Conference: It’s a Windows Phone World After All
• More From Nokia: Forecast Gets Cloudy, Plus Expected Executive Changes
• Nokia-Microsoft: What Steve Ballmer and Stephen Elop Have to Say in Their Joint Letter
• Nokia Confirms Microsoft Partnership With YouTube Video
• R&D Spending: Nokia Vs. Apple Shows Size Doesn’t Matter
• Not Seeing Much Return on That Massive R&D Spend, Are You, Nokia?
• Nokia: Big and Slow

Whether he is walking the halls of Nokia’s headquarters in Espoo, Finland, or even just buying groceries at the market, Nokia’s chief executive is constantly flooded with suggestions for how the company should regain lost ground.

Elop recalled being at dinner just over a week ago and being approached by three young people who wanted to share their suggestions.

“The three of them couldn’t quite agree on what the right strategy was, but they clearly each had an opinion,” Elop said.

For his part, Elop has deeply considered three possibilities for its high-end smartphone business–sticking with plans to develop around MeeGo (a mobile version of Linux), shifting to Android or adopting Microsoft’s Windows Phone.

Without tipping his hand, Elop spoke with Mobilized last week about the pros and cons of the various options. The interview came before releasing his big “burning platform” memo and literally as the final decision was being made.

For Elop, it came down to which approach would offer enough differentiation and yet would also be part of an ecosystem that would be large enough to attract developers, advertisers, carriers and all the other partners.

“It’s not just differentiation but sustainable differentiation,” Elop said. He also said that as big as Nokia is, it can’t afford to go it alone.

It is also critically important to Elop that the company be more competitive in the United States. Although the company ships more phones worldwide than any other company, its presence in North America is basically nonexistent. And yet, he said, the U.S. is where the pace is set for the high end of the market.

“We need to be in the United States in one way, shape or form,” Elop said. “We have to have a viable way to reopen doors.”

So where did that leave the various options?

Although MeeGo left plenty of room for differentiation, that option would also mean trying to be unique at the same time, as the company would have to convince others to build on the platform.

“For it to be a valid ecosystem, that also implies other [phone makers]–our competitors–would be attracted to it as well,” Elop said. “That’s one of the things that give it critical mass and credibility.”

Although Elop didn’t say so in our interview, his comments in this week’s memo suggest that his confidence there was low.

“We thought MeeGo would be a platform for winning high-end smartphones,” Elop said in his memo to staff. “However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.”

As for Android and Windows Phone, Elop said Nokia could offer a significant boost to either ecosystem.

“Android is growing very nicely; it has significant market share,” he said. “The combination of Android’s existing market share plus the market share that Nokia could bring to the Android ecosystem is a very large number and would signal a very substantial shift in the dynamics of the mobile operating system market.”

As for Redmond’s operating system, Elop said it is early days.

“Windows Phone is in its early formative stages in terms of getting customer traction and so forth. It’s a beautiful product and I say that as someone who is competing with it.”

However, that may not be the case much longer. While Elop was still leaving all doors open when he spoke with Mobilized a week ago, the options appear to have narrowed significantly in recent days. His memo on Tuesday appeared to rule out MeeGo as the best option, while a tweet from Google’s Vic Gundotra suggests Android is out and a tie-up with WIndows Phone is Elop’s final choice.

But, no matter what decision gets made at the high end, Elop said that the company probably needs a separate strategy at the low end of the market, where there is intense competition from Chinese phone makers building phones around low-cost chips from MediaTek.

Friday’s investor meeting will also address other aspects of the company, including its services strategy, its plans for its Navteq navigation unit and its plans to leverage its huge patent portfolio. The announcement also comes just ahead of the cell phone industry’s big trade show, Mobile World Congress, which gets going on Sunday in Barcelona.

Mobilized is here in London and will have live coverage of the meeting, which kicks off at 11 am local time. That’s 3 am PT, so set those alarm clocks early.

Samsung today disputed ITG Investment Research’s claim that as many as 16 percent of Galaxy Tabs purchased in the States are returned, dismissing it as inaccurate.

The correct figure is less than two percent, according to Samsung Electronics Mobile Communications Business, which offers neither data nor explanation to support its claim. Not that I’m disputing it. That said, ITG’s estimate was based on hard point-of-sale data from nearly 6,000 wireless stores. A 14 percent disparity between that data and Samsung’s seems odd–unless the two are measuring different types of returns: Consumer returns to retailers versus retailer returns to Samsung.

One particular highly accessible kind of flash mob, in which local singing groups perform Handel’s “Hallelujah” chorus at shopping malls, has been replicated all over the U.S. and Canada in the last month or so.

Quickly: Flash mobs are traditionally secretly orchestrated performances that play out in public places while bringing a little bit of magic to unsuspecting people in the right place at the right time. If you’ve ever seen those videos of a person breaking into song or dance in a public place, then being joined by hordes of interlopers who somehow know the full routine, you’ve seen a flash mob. (There are also less choreographed variations, like public pillow fights.)

Since flash mobs seem so fun, organic and full of life, they’ve of course been co-opted by marketers who mimic the style right down to camera shots of the surprised and confused onlookers capturing videos of the moment with their own camera phones. But they’ve also recently been adopted by wholesome community groups wanting to spread a little holiday joy. And in many cases, both the performers and the audience know about the event in advance (element of surprise be damned).

One flash mob performance of “Hallelujah” in a Canadian shopping mall, posted on YouTube on Nov. 17, has been seen more than 25 million times. YouTube’s Trends blog recently called it “by far, the most popular video of the season.”

YouTube’s Kevin Allocca also highlighted some 20 other flash mob performances, also of “Hallelujah” and mostly in shopping malls, from Orlando, Cleveland, Chattanooga, Juneau and Winnipeg. Allocca says the meme may actually have been kicked off by the Opera Company of Philadelphia performing “Hallelujah” in a Macy’s as part of the Knight Foundation’s Random Acts of Culture. That video was posted Nov. 1 and has more than six million views.

It’s gotten so bad that on Monday night a mall near Sacramento had to be evacuated after crowds overwhelmed it and the fire department feared for its structural integrity. A planned flash mob by the Sacramento Choral Society and Orchestra and other local congregations had been endorsed by the mall and promoted for weeks, drawing thousands to watch and sing along with their printed-out sheet music.

Would-be flash mobbers broke into impromptu singalongs as they were escorted out of the building and into the parking lot (with their video cameras recording all the while, of course). So apparently spontaneity isn’t dead yet.

Earlier on Thursday, RIM reported earnings that topped estimates along with sales that were just about what many analysts were expecting. The company said it expects revenue for the current quarter to be around $5.5 billion to $5.7 billion with per-share earnings in the range of $1.74 to $1.80.

It said that it shipped 14.2 million BlackBerrys, up 40 percent from a year earlier, and added 5.1 million new subscribers net in the quarter. However the company is expected not to forecast those figures for the coming quarter, nor does it plan to continue reporting those numbers in future quarters.

Among the things investors are likely to be interested in is what the company forecasts as far as shipments to Verizon in a quarter during which many expect the carrier to start selling the iPhone. Motorola has already warned that it expects its shipments to Verizon to take a hit.

Mobilized will have live coverage of the conference call starting at 2 pm PT.

1:55 pm: RIM shares, which had been trading lower in after-hours trading are now up around 3 percent.

2:02 pm: Call just getting underway with the usual warnings, caveats, etc.

2:06 pm: BlackBerry Torch now in 75 markets, just rolling out in Latin America.

2:06 pm: BlackBerry Style is one-third of BlackBerry sales at Sprint.

2:08 pm: Our relationship with Verizon remains strong, RIM says. A number of new products coming for Verizon including adding the BlackBerry 6 OS to the curve and Bold lines early in the new year.

2:08 pm: Recap of recent developer announcements, including payment service, launch of WebWorks, etc.

2:10 pm: Now more than 16,000 applications in BlackBerry App World, RIM’s App Store.

2:11 pm: PlayBook tablet expected to ship in first quarter in U.S. and will be Wi-Fi only. Other markets and models with cellphone radios will follow.

2:14 pm: Review of Q3 results. Average selling price for BlackBerry was approximately $315, with half of shipments coming in last month of the quarter as resellers prepared for the holidays.

2:16 pm: Company says it is comfortable with inventory levels.

2:19 pm: On to outlook. No plans for PlayBook revenues, with first revenues not expected until following quarter. Sounds like the availability of PlayBook won’t be until at least March. (RIM’s current quarter goes through Feb. 26)

2:24 pm: On to Q&A.

BB6 will eventually work on QNX operating system, but the company says it hasn’t given any sense of timing.

As for what QNX can deliver, co-CEO Jim Balsillie says “You’ll see more at CES.”

2:25 pm: Sorry, some technical problems here at Mobilized. We got disconnected a couple of times, but have switched to the Webcast and are back on.

Seems like the talk is on average selling prices.

2:32 pm: North America is still performing very, very well but dynamics here are different.

Balsillie says he expects stronger year here next year based on product plans in place.

“I feel very, very good,” he says.

“I feel great about where we are sitting in North America for 2011,” Balsillie says, and the company has “knocked the cover off the ball” in a lot of other markets.

2:37 pm: Question on China market. “I think you should have very positive expectations in China,” Balsillie says.

“China does well,” he says. “You’d always want them to do better….All you can do is keep doing the right things and investing in these places. The market is just so big.” Sometimes markets come faster than you expect, sometimes they come slower, he says. But, he says, “I’ve never seen a market not take off.”

Demand strong, he says, for PlayBook in China and Japan.

2:41 pm: Question on payments. Balsillie says one wouldn’t be going out on a limb to predict Near Field Communications integration.

2:44 pm: A lot of talk on why PlayBook is a good bet for businesses with Balsillie talking about its enterprise strength. Not much new information there.

2:46 pm: Will there be a media strategy to promote the tablet’s media abilities to consumers?

“Oh yeah, yeah,” Balsillie says–again, without giving any new details. Lots of game and media partnerships.

2:50 pm: Everything is fine. Things are great. (That pretty much sums up Balsillie’s statements the last few minutes–Just insert a different question or topic).

2:56 pm: “I think the PlayBook redefines what a tablet should be,” Balsillie says, adding that the fact one can create apps without needing to learn a new language are strengths that RIM’s approach s bringing to the table. “We’re way ahead on that and CIO friendliness, we’re way ahead on that too.”

3:02 pm: Call’s done.

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.

Depending on how long it takes, the switch to QNX could cause RIM to suffer some share loss in the smartphone market, particularly its high end. That’s the theory put forth by Canaccord Genuity analyst Mike Walkley, who believes RIM’s going to have a tough time maintaining market share in higher-end smartphones given the execution risks involved in rolling out a new OS and related portfolio of products.

Says Walkley, “We believe RIM will likely lose high-end smartphone market share and higher-end North American subscribers over the next several quarters due to limited new high-end product launches ahead of new QNX smartphones combined with improving competitive smartphone offerings such as the Samsung and HTC Android based smartphones at most carriers.”

And the iPhone, likely launching at Verizon early next year, won’t make things any easier. The PlayBook, of course, has and will continue to drive upside in the months ahead–assuming its launch goes smoothly and it is as well-received as investors seem to hope. But it too faces rivals formidable enough that Walkley doesn’t see it selling much more than 1.75 million units in C2011.

“We believe the PlayBook will struggle to compete against the iPad given the large ecosystem of applications for the iPad and the form factor and GUI of the iPad versus the PlayBook,” he concludes. “Further, we anticipate several Android-based tablets launching in 2011 at very aggressive price points and potentially running the Android 3.0 (Gingerbread version) and we anticipate an increasingly competitive environment.”

Interesting, when you consider that prior to 2010, the Chinese smartphone market was ruled largely by Nokia’s Symbian OS and Windows Mobile.

How quickly things change. According to McCourt, Android now represents nearly 50 percent of smartphone volume in the country, up from zero last year. And Apple’s iOS, while a niche player with less than 500,000 iPhones sold last quarter, is ramping up quickly, thanks to the successful launch of the iPhone 4 in the country last month.

“Apple (must be) viewed as somewhat disappointing through Q3:10, but we suspect iPhone 4 and a WiFi-capable iPhone 3GS will substantially improve iPhone results in Q4:10 and beyond in China,” McCourt said in a note to clients. “The bigger picture is that the Chinese market for smartphones is exploding, but is at a much earlier stage of development than North America or Western Europe.”

Which means it’s a major geographic growth opportunity for the smartphone industry. Certainly, Apple views it that way. As COO Tim Cook said during an earnings call earlier this year, “If you look at greater China, which we define as mainland China, Hong Kong and Taiwan, the iPhone units were up year-over-year over nine times. We added another 800 points of distribution in China. The revenue, we have never released this number before but I will do this in this particular case, through the first half of the fiscal year that we just completed, for the six month period, our revenue from greater China was almost $1.3 billion and this is up over 200 percent year-over-year. So we are well pleased with how the company is positioned to take advantage of the growth in greater China.”

As the possible acquisition of Groupon by Google chugs along–sources tell me bankers are starting to swan around annoyingly, which could be a sign of fruition, but we shall see–BoomTown realized that I have been remiss in mentioning one likely key person in the deal strategy.

And, I am only guessing, that would be the Silicon Valley search giant’s relatively new head of commerce, Stephanie Tilenius (pictured above).

That’s because the unassuming former longtime eBay exec–you won’t see her all over the scene swanning, for sure–is one of the few at the company sharp enough to have seen Groupon’s copious local retail data from its social buying business as a strong fit into Google.

I met Tilenius a dog’s age ago when she co-founded PlanetRx.com, a very early online drugstore in Web 1.0.

In her long tenure at eBay, she ran eBay North America, global product management for eBay Marketplaces, merchant services at its PayPal unit, eBay Motors and eBay Asia Pacific and Latin America.

After she left eBay in late 2009, Tilenius came to Google early this year, in the newly created position of VP of commerce. In that job, she has purview over Google Checkout, payment system and e-commerce.

And, while Google’s former search experience and now new local head Marissa Mayer is often mentioned as benefiting from this Goopon deal, it seems to me that it is Tilenius who will be charged with taking Google in this pricey and risky new direction.

Please see this disclosure related to me and Google.

“Some people leave, some get promoted and some good people arrive.”

Yes, indeedy, and this afternoon, it was David Katz’s turn to say goodbye. He was Yahoo’s VP for Mobile, North America. (He is pictured here, and you can read his bio here.)

The move, said sources, is part of a reorganization in the wake of the departure of David Ko, SVP Audience of Mobile and Local, North America.

He was replaced by Raymond Stern, who also heads business development.

If it seems a little confusing, it is because it is.

But there are all kinds of management rejiggering discussions going on after the additional departures of U.S. head Hilary Schneider and Media VP Jimmy Pitaro.

Mobile is an important arena for Yahoo, as Bartz also stressed in the call today.

Let’s hope Dave lands somewhere good, as he seems so nice from this recent video from the CTIA conference just two weeks ago, posted by Yahoo:

Marketing companies are experimenting with a new wave of digital technologies to pitch to consumers while they shop: interactive dressing-room mirrors, kiosks with virtual customer-service representatives, and shopping carts and digital scanners that offer personalized discounts.

These futuristic technologies are among the interactive tools on display at Interpublic Group of Cos.’ new retail center at the advertising company’s Media Lab in Los Angeles.

There, Interpublic is testing innovative ways for marketers to connect with customers as part of an effort to better understand what makes consumers buy and to encourage companies to rethink their approaches to the role of the retail store.

Retailers are grappling with lackluster sales and consumers who are dissatisfied with the store experience as online shopping with its related interactivity becomes mainstream. Shopper satisfaction at retail stores is declining up to 15 percent a year, according to an ongoing IPG Media Lab study of more than 10,000 North American shoppers.

Read the rest of this post on the original site

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

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

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

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

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

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

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

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

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

Part Two of of the interview is posted here.

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

BOOMTOWN: Yeah…explain it to me.

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

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

BOOMTOWN: Had you been doing any search business?

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

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

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

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

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

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

GREG NELSON: All up?

BOOMTOWN: Yes.

GREG NELSON: Thousands.

BOOMTOWN: No, of course, but…

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

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

GREG NELSON: That’s been really key.

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

BOOMTOWN: You’ve done a lot of these.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MARK MORRISSEY: A big chunk went last week.

BOOMTOWN: When does it switch over?

MARK MORRISSEY: Beginning of next year.

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

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

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

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

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

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

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

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

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

BOOMTOWN: Quality, what does that mean?

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

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

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

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

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

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

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

BOOMTOWN: Well, there is some pressure.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MARK MORRISSEY: Absolutely.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

GREG NELSON: Just watch.