In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.

There will be more of that, it seems, with the elevation of Yahoo exec Sam Silverstein (pictured here) as head of its special events coverage. Sources said it will be a major area of emphasis, given obvious advertiser interest.

It’s all part of a lot of dramatic changes being made in the media unit at Yahoo, which is run by its newish Audience head Mickie Rosen.

Previous to his new duties, Silverstein has been mostly focused on major sports events for Yahoo, but has also been managing content on its front page and in tech and green arenas.

The move to taking over more comes after Lawrence Yee–who led Yahoo entertainment efforts and was once the managing editor of its omg! celebrity site–headed to TMZ.com, the competing and much sassier celebrity site, owned by AOL. His new job is as managing editor of its TooFab site, TMZ overlord Harvey Levin confirmed to me.

Also gone recently is Annette Cardwell, who was managing editor of Yahoo’s Shine women’s site, who is now working as director of digital content and games at Future US, according to her LinkedIn profile.

Now it will be up to Silverstein, who is well-regarded at Yahoo, to run the upcoming Royal Wedding coverage by himself.

William and Kate, as well as Bartz, will be watching.

BoomTown always enjoys the maiden voyage of a newly public company, so liveblogging Demand Media’s first quarterly earnings seems like a must-do.

It’s also the first public outing for CEO Richard Rosenblatt, who has sold off his previous entrepreneurial efforts.

And it seems like a good start, as the Santa Monica, Calif.-based online content company, which had its IPO in late January, finally out to rest some controversy about how much is actually earns by posting $1 million in net income in the last three months of 2010.

Okay, that is a weensy amount, to be sure, but it beat expectations, as well as for revenue, with sales of $73.6 million for the fourth quarter.

Of course, Demand wants Wall Street to look at “Adjusted OIBDA” results, which was up 88 percent, and which it is a much prettier $20.1 million in earnings.

Also on deck, as MediaMemo’s Peter Kakfa noted today:

“Expect to hear at least one riff on whether or not the company feels threatened by Google and changes the search engine is making to push “content farms” out of its results. CEO Richard Rosenblatt insists that his company is not a content farm, and that Google is just fine with his stuff, but I have a feeling the issue won’t go away just yet.”

We’ll see–here we go:

2:05 pm PT: It took me a bit to get into this conference call, since I could not get the live broadcast from the Web site at all and the teleconference operators were snoozing.

And I tuned in just as Rosenblatt (pictured here) was talking about how Demand was helping people get information about how to ripen avocados.

No, really.

(Memo to self: Curb the snotty journalist tone, especially since I love me a good, ripe avocado.)

Rosenblatt, who seems only a little nervous, pressed on by talking about its massive eHow site, as well as Cracked.com and other major branded sites Demand has.

The latest is TypeF women’s health and beauty site, which is guided by supermodel Tyra Banks.

Rosenblatt then linked it all to advertisers and how much they want to spend on sites like this.

“We are not limited to just a few key verticals,” he said, touting its sales staff, including Rosenblatt’s daring raid of Chief Revenue Officer Joanne Bradford from Yahoo.

“The company is well positioned to capture an increasing share of brand revenue,” said Rosenblatt.

2:18 pm: Rosenblatt then zeroed in on the juicy issues, which center around the quality of the content Demand churns out.

Or, as critics have argued, lack of quality.

“The level of specificity is arcane to some,” noted Rosenblatt, using the example of flying paper lanterns and how to make a roof rake as examples of the kind of niche content Demand produces.

Arcane is right, but it takes all kinds!

Plus, insisted Rosenblatt, it’s good! Accurate! Edited! Useful!

He took the gloves off here, which made me want a Demand piece about taking care of leather gloves (linseed oil?).

“We’re just getting started,” said Rosenblatt, about the company and not the glove care tips.

2:24 pm: The CEO turned it over to the CFO, Charles Hilliard, which meant I was off on my critical Web search about taking care of my gloves.

That’s because he immediately said: “Adjusted OIBDA.”

Which-let’s be honest–sounds like a communicable disease.

Essentially, said Hilliard, it’s up, up, up for Demand, in terms of revenue, earnings, page views and more.

You can read all these gory financial details in the press release here.

For some reason, Hilliard is using the retail term, “same store sales,” as a comparison. I covered retails for years, so it is a surprise for this to be the metaphor, but Demand obviously sees itself as a content store.

2:39 pm: Q&A time and the Google-fights-spam question came first!

Rosenblatt said he welcomed it and appeared unconcerned. His avocado-ripening, roof-rake-making, flying-lantern company needed to make no excuses!

The next question is about expansion, including internationally. Sure, Western Europe.

Then, a sneaky follow-up on content farms.

“We consider ourself very white hat,” declared Rosenblatt.

I wonder what the best way to clean a white hat is?

Voila! It’s right here on eHow:

“1. Wash your white hat in the washing machine if it is made of cotton or polyester. Just add laundry detergent and one cup of bleach. Wash the hat using the hot water setting. Do not put the hat in the dryer. The hat will shrink and then it won’t fit your head.”

Call the Pulitzer Prize committee!

(Wait, snotty again! I also love clean, white hats.)

I was so riveted by the white-hat thing, I completely missed the next question, but tuned in again to one about revenue momentum.

Essentially, Bradford–who looks great in a white hat, I might add–is on the case.

Then some internal technical questions and about guidance for Q1. CFO Hilliard said that the company was guiding for growth, despite more public company expenses.

(Needless to say, you can find out about how to run a public company here on eHow.)

The last question was about how much branded advertising will make up total revenue. Between five and 10 percent of 2010, said Hilliard, but it is the fastest category of growth.

And also one about curation of content and use of social networking sites like Facebook and Twitter for feedback.

Rosenblatt said that feedback can even become content, which will be part of new eHow redesign to come.

Want some tips on that? Of course, Demand Media has the answer, at least to this easy question.

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

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

Here is a primer to the just-released results:

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

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

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

Employees: Up seven percent to 14,100.

Owned and Operated Search Revenue: Down seven percent.

O&O Display Revenue: Up 17 percent.

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

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

Q310EarningsPresentationFinal

Yahoo turned in a much-needed solid quarter in its third-quarter earnings report, with slightly better-than-expected net income, although still weak revenue.

Wall Street has been watching Yahoo’s performance closely this quarter, due to the swirl around the company over takeover scenarios, departed execs and general management mishegas.

Wall Street consensus was that Yahoo’s net income would rise to 15 cents a share from 13 cents a year ago and that revenue would be a flattish $1.13 billion.

Instead, Yahoo’s net revenue was $1.12 billion–which is with traffic acquisition costs taken out–on earnings of 29 cents a share. But net earnings per diluted share for the third quarter of 2010 included a benefit of 13 cents per diluted share related to the gain on the sale of HotJobs.

The revenue weakness is worrisome, as it indicates a lack of search advertising growth at Yahoo, even as competitors such as Facebook expand rapidly as social networking explodes.

In addition, Google also turned in stellar quarterly results earlier this week, along with Apple.

Even more important is a weaker outlook for the fourth quarter.

In addition, the key metric of page views was down four percent in the quarter, while employee growth was up seven percent.

Here is a link to BoomTown’s liveblogging of the analyst conference call, as well as the Silicon Valley Internet giant’s financial slides.

See it all below in the official press release:

YHOO Q310PressRelease Final

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

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

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

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

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

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

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

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

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

BoomTown last wore a bikini in 1974.

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

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

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

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

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

Sorry, Tim!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It is the right question, too.

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

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

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

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

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

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

Good news for AOL CEO Tim Armstrong: His predecessor, AOL founder Steve Case, thinks the Google veteran has a chance to turn around the company. The bad news: He has a very long way to go.

Liveblog

11:14 am: Apologies, technical difficulties–joining late.

11:15 am: Armstrong is traveling back in time, discussing AOL (AOL) prior to his arrival. The company was managed based on gross revenue and page views, and that may work for some, but those metrics didn’t make sense to me.

Kara: Such as?

Armstrong: The Bebo acquisition looked successful, because page views were shooting up, but unique visitors were dropping down. Photo galleries with 80 photos into it. That sort of stuff. We’re pulling back on that stuff.

Kara: You’ve been pulling back on a lot of stuff. Revenue is down, too. Not a bad idea to go to zero so you can build back up.

Armstrong: Hopefully we don’t go to zero. But (former Gap CEO) Mickey Drexler gave me good advice. He told me I’d be under a lot of pressure to move the numbers up and that I should resist it.

11:17 am: Kara–anyone from Google (GOOG) you didn’t hire?

Armstrong: We need people who are passionate, but also willing to play on a team. The analogy I use is “when I got to AOL, there were a lot of people playing golf.” We need people on an orchestra or a football team.

11:18 am: Kara–I’ve called this the best management team to run a digital lemonade stand. You have a big team and a small business.

Armstrong: Compared to Time Warner (TWX), it’s a small business. But it’s still a large business: 100 million unique users in the U.S., etc. Bigger point: We have the largest opportunity on the Internet. But I tell investors that they shouldn’t be expecting quarter-after-quarter results. That’s not what we’re doing.

11:19 am: Kara–Okay, so what’s the opportunity?

Armstrong: It’s melding technology and journalism. Local efforts via patch. “We believe the local marketplace for journalism is important, and the local marketplace for services online is important.”

11:22 am: Armstrong–Beyond local, there are other areas that we can move into to fill unmet needs. Like religion–big opportunity there.

Kara: So how are matching tech with journalism?

Armstrong: We’re marrying demand algorithms with…

Kara: Like Demand Media?

Armstrong: They’re more search-based. We’re trying something else. But also giving editorial people better data. When I was at Google, I used to go to meetings at publishers where sales people had reams of data, and the journalists had none. There’s a lot of fear that some journalists have about technology and data, but they can use them as tools. But “the fear is where the opportunity is….There’s no reason why technology can’t fuel opportunity.”

11:26 am: Kara–So how do you sell all this stuff?

Armstrong: We service a lot of large audiences, but have technology that lets you delineate that audience and just serve who you want. And we also have models that let brands get next to the appropriate content.

Kara: You mean putting brands in the story?

Armstrong: No. Church and state is important. Brands next to stories, getting brands in front of the appropriate audiences.

11:28 am: Kara–You’re selling off Bebo. Will anyone buy it?

Armstrong: We’ve said we will sell it or shut it down. We’ve had interest from people who are interested in buying it. We’ll see how that turns out.

Kara: What about other stuff you might sell?

Armstrong: We’re keeping stuff that’s valuable. Mail and communications are important to us.

Kara: Social networking, given that you’re selling Bebo?

Armstrong: Very valuable. But it will be a joint strategy. Being a principal in a social network is something that we’re clearly not focused on.

11:29 am: Kara–What about search? You helped sign that big Google deal.

Armstrong: Last week, we kicked off the process of the search deal. We are meeting with multiple partners.

Kara: So you’re not re-upping with Google?

Armstrong: Google has been a great partner for 10 years. There’s a disadvantage in that we know what works and doesn’t work, and so do they. So now we need to compare both our needs, with Google and others.

Kara: There are only two partners, right?

Armstrong: There are probably more than two that we’ll talk to [like who?]. We’re valuable to search partners because the AOL audience performs very well for search. We perform more strongly than our market share implies.

Kara: Will you want a guarantee like the original deal?

Armstrong: We have a rev-share deal. There may be upfront payments, there may not be. But either way, those upfront payments are usually about market. They’re not core to the arrangement.

11:33 am::Kara–How do you look at Google and what they’re doing?

Armstrong: One of the things that Google has done a really good job with is taking risks, and you know, push, push, push. Like a lot of successful companies.

On the outside, as a partner, you appreciate that innovation. On the partnership side, you have to realize that you’re one partner out of a lot of partners that they have. And that’s the piece of it where personal relationships really matter. With them or other partners.

11:34 am: Kara–What about risks they face?

Armstrong: Risk for any company that size is how do you keep innovating? When Mark Zuckerberg was up here and you guys were hammering him, that can make you want to retreat. And you have to keep innovating.

11:35 am: Kara–AOL used to be innovative and important. The brand is tarnished now. Can you revive it?

Armstrong: Two different brands. By the way, before I officially left Google, I had a lot of people telling me to kill off the brand. But then I traveled around. And I found that there’s the brand that media people know about, and the merger, etc. And then there’s the brand that everyone else knows, and they have warm fuzzy feelings about it.

11:37 am::Who are your competitors? What do you think of Yahoo (YHOO), etc.

Armstrong: We have partnerships with Yahoo; we compete with them for users and advertisers. But AOL is not in a situation where we need to give advice or comment to people about what they ought to be doing. Yahoo is a big, strong company, though their strategy is much more focused on what we’re doing now, which is great.

Q&A

Q: Are you doing anything about the Gulf oil spill? Are you doing anything with your local journalism to help people with that? (seriously).

A: We’re covering it nationally. But we actually are working with someone locally, where there’s a girl in a town, where she’s raising money for the Gulf, and it’s not a town on the Gulf, but we’re trying to help her.

Q: Can you talk about AOL culture and how it’s changed since you got there?

A: At Google, I was managing 2,500 people. Now I’m managing 4,700. So I’ve learned that cultures are okay when they’re moving–up or down–and everyone knows what the plan is. They don’t work when there’s no plan. So people who don’t want to stay and don’t like the plan need an opportunity to leave. This is “Full Metal Jacket.” Turning this company around is not going to be easy. It’s not going to be eight-hour days.

Q from Kara: Management style?

A: I’m collegial. But at the end of the day, sometimes I need to execute and get it done. Like when I came aboard, there was a $400 million check I had to sign for a distribution deal. And then I asked people at a meeting to speak up about it and tell me what they said. There have been many cases where I’ve had to make decisions without a collegial environment. But the culture is getting better and collegial.

Q&A over.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

Who wants to bet on a Web company with lots of users but very little revenue? The same people who bet on it before. Spark Capital and Union Square Ventures have poured another $5 million into Tumblr, which lets people quickly and easily set up lightweight blogs.

Three-year-old Tumblr doesn’t charge its 4.5 million users for the service. It doesn’t sell advertising on the page views they generate. And it is only now beginning to generate “meaningful” revenue, says founder David Karp. (That’s Karp, flanked by two employees, engaged in some kind of new-fangled xtreme sport, on the cover of this week’s New York Magazine)

But this hasn’t dissuaded Spark and Union Square, the sole investors in the company’s C round, as well as its B round in 2008.* The company has raised $10.2 million to date.

So now what?

Karp, who turns 24 this summer, says his company has “carved out a real and substantial niche” in the last year, and he brandishes numbers to bolster his case. The service, for instance, is now generating one billion page views a month. Here’s a chart! (Click to enlarge.)

But until recently, Tumblr’s growing popularity hasn’t done much beyond racking up big infrastructure bills. Now Karp says the company is changing this by rolling out a series of paid services.

The Los Angeles Times has a nice summary of new services, and Karp says there are a “dozen more in the pipeline.” But the short version is that these are primarily bells and whistles–like digital “stickers” you buy for your friends at a buck a pop–that passionate Tumblr users may like, but don’t need.

This is a switch from the company’s earlier plan to bundle lots of must-have features into a “Tumblr Plus” subscription service aimed at its most passionate users.

The new strategy is a little more seat-of-the pants, but the bet is that it may be easier to coax money out of people a couple dollars at a time.

Not coincidentally, this is the same model that’s working out very well for social gaming companies like Zynga, which is also funded by Union Square Ventures (and to a lesser degree OMGPOP, which is backed by Spark).

Zynga is reportedly profitable, and many have it pegged for an IPO in the near future. I don’t see that in Tumblr’s cards, but if Karp and crew were interested, I can see them attracting interest from the likes of Google (GOOG) and Yahoo (YHOO) sooner than later.

Maybe sooner in Yahoo’s case, if it can’t snap up another company whose CEO also graces New York Magazine’s cover this week.

*“Inside rounds” like these are supposed to be no-nos in the VC world because existing investors traditionally want to find new money to validate their wagers. For the counterargument, consult Tumblr investor Bijan Sabet’s blog (hosted by Tumblr, of course).

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

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

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

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

As MediaMemo reported:

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

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

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

In any case, Firefox worked and we pressed on!

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

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

Well, it was nice to hear the obvious!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It sounds painful!

More questions about fixing what’s broke.

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

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

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

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

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

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

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

6:22 am: What about divestitures?

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

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

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

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

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

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

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

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

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

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

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

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

The new MSN homepage debuts tonight and you would be completely correct in thinking the recipe Microsoft (MSFT) has cooked up to inform its design ethos–white, clean and hiply modern–has definite echoes of a certain longtime tech rival.

That would be Apple (AAPL), of course, with a big dollop of Twitter and Facebook tossed in, and finished off with a generous sprinkling of Microsoft’s new Bing search service.

For those who care: The MSN butterfly logo remains, although it appears to have lost a lot of weight too.

(You can view a preview of the site here.)

The launch is the first major upgrade of the MSN main page in–if you can believe it–a decade, part of an overhaul that the software giant has been doing throughout its money-losing online services division.

That has included the launch of Bing in May, which has been a success for Microsoft, adding a small amount of search market share and, more importantly, some much needed respect to its long-beleaguered consumer Web efforts.

The company’s online execs are trying to keep up the innovation momentum with the new MSN redesign and–as you can see below from the various screenshots–it is a major shift for the portal site.

Together, MSN and Windows Live have about 100 million unique monthly visitors, putting Microsoft typically third behind Google (GOOG) and Yahoo (YHOO).

The company hopes to do better with a fresher MSN, which is clearly aimed, first and foremost, at clearing up the clutter and link-heavy old MSN homepage.

MSN execs said the new main page has about half the “blue” links.

(See a video interview I also did with MSN exec Bob Visse about all of this here, along with other videos Microsoft did with its MSN staff.)

The top of the new page features a big image module, with inline video and drastically reduced topic areas–as BoomTown has previously reported–limited to news, sports, entertainment, money and lifestyle.

Under that is a more customizable news module, to which feature tabs can also be added, such as for the World Series or–prolonged sigh–Balloon Boy coverage.

On the bottom left is a much-goosed local module that resolves to beefed-up local sites, which is right next another section featuring Bing top searches.

Bing is present in every part of the site now, with Microsoft stressing it and using its structured data to improve the consumer experience.

That’s important for Bing search too, since MSN provides 45 percent of its traffic.

Communications modules are to the right, midpage and on the bottom.

Unlike AOL and Yahoo, which have added the ability to put third-party email on their homepages, only Hotmail is now available on the new MSN, although this is likely to change soon.

But perhaps the design element that will garner the most attention is the prominent placement of both Twitter and Facebook tabs in the bottom communications module, right next to one for Windows Live.

This allows users to update their status and get instant access to the status of friends and followers.

“We wanted to cut the clutter, while also giving users one convenient place to find what they need quickly,” said Scott Moore, executive producer of MSN in the U.S., its most important market, in an interview earlier today with me.

“People are overloaded with information and they wanted us to fix that, even if the service is not ours.”

The focus on Facebook and Twitter was simply due to intense user interest in the popular social networking sites.

“Facebook has popped and Twitter was really growing,” said Moore, who noted that there was the possibility of adding other third-party apps in the future.

A heavy emphasis on apps was a key strategy of Yahoo’s homepage redesign, officially launched in late July, which SVP Tapan Bhat touted at an meeting with analysts last week as having increased page views and engagement.

Advertising on the page is perhaps the most conservative part, with units that remain largely as before.

The new MSN homepage will begin rolling out now, eventually reaching about 10 percent of users by early next year. After that, it is expected to become widely available to U.S. customers and then go worldwide.

Here are screenshots of the changes to peruse (click on top three images to make them larger):

Old Homepage:

New Homepage:

Local Edition:

Twitter Section:

Facebook Section:

And here is the official Microsoft press release:

New MSN Designed to Be the Best Home Page on the Web

Fresh, new design delivers best of Bing, latest in news and entertainment, instant access to Facebook and Twitter, and customized local information in one place.

REDMOND, Wash.–Nov. 3, 2009–Microsoft Corp. today unveiled a preview of its most significant home page redesign in over a decade. The new MSN home page is designed to be the best home page on the Web, with powerful Bing search, the top news and hottest entertainment, and some of the most popular social networks–all in a fresh new look. The new home page will deliver comprehensive local information from the new MSN local information offering, MSN Local Edition, also unveiled today. Beginning today, anyone can preview the new home page at http://preview.msn.com. The new home page will begin rolling out today and become widely available to U.S. customers early next year.

Ninety percent of people surveyed find home pages such as MSN to be valuable, and they like the convenience of a comprehensive site.* Nearly 100 million people in the U.S. visit MSN every single month, and MSN added over 10 million new customers in the last year alone. However, today’s sites often fall short of top customer needs and many haven’t kept up with evolving trends. Extensive customer research highlights that people want less clutter and easier access to information and services they care about, including search services that help them make decisions easier and faster.

“Now is the time to clean up the mess on the Web–people need less clutter and less hassle to find what matters most to them,” said Erik Jorgensen, corporate vice president, Microsoft. “Microsoft is uniquely invested in search, media experiences and technical innovation. Combining these assets to deliver our new MSN home page is a tremendous win for customers and advertisers.”

The clean, new MSN home page cuts through the clutter with 50 percent fewer links than the previous home page and a simplified navigation across news, entertainment, sports, money and lifestyle. The new MSN home page also embraces the latest customer trends by deeply integrating powerful search from Bing and providing easy access to Facebook, Twitter and Windows Live services, comprehensive local information and in-line video. Sophisticated technology powers the home page to deliver personally relevant information, and improved performance satisfies people’s need for speed.

New key features of the MSN home page include these:

* Innovative search technology from Bing. Deeper Bing integration on the new home page helps people make faster and more informed decisions and easily find the information they want from anywhere on the Web. Bing is deeply integrated as the core search service throughout the home page via key areas such as shopping, travel and local, and as a way of highlighting hot topics, trends or people.

* Information and news people care about. The new home page delivers against the No. 1 customer request–simplicity and ease of use–through its fresh design and smart categorization. In-line high-quality, top news and hot entertainment from trustworthy sources such as MSNBC, FOX Sports, Hulu and Hearst, and comprehensive local information provide a compelling one-stop shop for people to use as their home base online. More in-depth local information is offered on the new MSN Local Edition, which is the only local online source that smartly combines media with Bing search and provides access to real-time community news that is grouped by ZIP code.

* Convenient ways to communicate. Simplicity drove the clean integration of popular social networks, such as Facebook, Twitter and Windows Live “What’s New,” which aggregates up to 50 Web activities, including Yelp, Flickr, Pandora and more, onto the MSN home page. People no longer have to jump from site to site to update their status, tweets or see what their friends are up to; the new home page makes it easy to view and update in-line.

“Customers told us they want the latest information from their favorite sources, their friends and the breadth of the Web–and the new MSN home page delivers via a fresh new look and new features,” Jorgensen said. “Today is an important transformation for MSN, and it’s just the beginning.”

Uh-oh, Yahoo CEO Carol Bartz was expected to appear on the Internet giant’s third-quarter earnings call, but she has apparently “came down with something,” according to CFO Tim Morse.

BoomTown is sending over chicken soup right now, but let’s hope she gets her vaccinations tout de suite!

Worst of all, no sassy quotes or cursing, replaced by a very earnest Morse, who sounded like he was once a Boy Scout.

After the markets closed, Yahoo reported better-than-expected earnings on still lackluster revenues.

Overall, the conference call boiled down to one quote from Morse that seems to have been selected as the Yahoo (YHOO) buzzword of the moment:

“The theme for third quarter was stabilization.”

2:02 pm PDT: Investor stuff from guy who sounded like a robot that I completely ignored, since I was much more interested in a conversation between two women about a bad date this past weekend, which I eavesdropped on in its entirety while liveblogging from a Starbucks (SBUX) in San Francisco.

By the way, the man whom the ladies are ripping was a very unstable date!

2:04 pm: Morse jumped on and gave everyone the bad news about Bartz being sick and the good news about the better-than-expected net income, while also updating all the various happenings of the quarter.

“I am happy to report that our Q3 revenue came in above our guidance range,” said Morse, who sounded somewhat jaunty.

Morse reeled off numbers, numbers and more numbers, some stuff about the new marketing campaign ($18 million spent so far and $45 million in the next quarter!) and other stuff about the cost cuts and fourth-quarter guidance.

Also, no sale of the company’s Alibaba in China or the Yahoo! Japan stake, thank you very much!

2:12 pm: Morse also gave a quick update about the search and online advertising partnership Yahoo has struck with Microsoft (MSFT).

His message: The Silicon Vally Internet icon is not out of search, because it is not about the algorithm, but a better search product.

Tim, you might want to roll that claim back, especially since you also might want to notice how well Google (GOOG) has done with its giant math-brains in the search business.

Morse tried mightily to channel Bartz on search, using a comparison she has made about the Intel (INTC) chip, which is widely used by computer makers. Said Morse, it’s the “differentiation” that matters!

I wonder if Yahoo will keep repeating that one, even as its search share continues to decline.

But Morse did make a funny about how many ex-Yahoos are on the Microsoft payroll now, so the partnership transition should go smoothly.

Well, there’s that!

2:28 pm: Morse mentioned Yahoo’s analysts day next week, and then opened up the call to questions.

Analysts always ask very dull questions at earnings calls and this one proved no different.

The first was about display run rate and about the search market in comparison to Google.

What’s the good word? Stabilization, of course!

The next question was about eBay (EBAY), which seems far from the point.

Morse agreed and cut it short.

Then, a question about guaranteed placement and stock buybacks. Zzzzzzzzz–even Morse sounded bored.

The Starbucks lovelorn ladies had left by now, so I was too.

2:37 pm: The next question concerned the affiliate business and how it might be affected by the Microsoft deal.

I immediately summoned the barista, since it was clearly time for a double espresso!

A question came next about when the display ad business would recover from the econalypse. Morse: Stabilization!

Then, a query about gross margins and whether they can be maintained. Morse was not saying, except to point out that there was a “good, old-fashioned, get-your-hands-dirty” attitude at work at Yahoo now about watching costs.

I was suddenly worried about dirty-handed Yahoos, just when the CEO is sick!

Use Purell, please–or suffer the wrath of Judy!

2:43 pm: Another question on ad sales and quality. Thus, I moved onto mainlining coffee beans en masse. I long for a visit from Juan Valdez!

Then, a question about Q4 guidance, which was not good enough for one analyst, who wanted more.

Morse did not really bite, although he talked a lot.

Next, a question about slow-growing page views and what was Yahoo planning to sell of its various assets.

Morse tried to be all silver-lining about page views and would not talk about specific divestitures (nor did he mention the appointment of a new head of Yahoo M&A).

“We continue to look at the landscape,” he said.

What about more job cuts or hiring, since Yahoo added 200 people in the quarter? Morse noted Yahoo was staying strong in tech talent and was “putting feet on the street” in advertising.

Also something about paid inclusion, but a new person at Starbucks was having a really good cellphone argument, so I zoned out of Morse-talk for a second!

2:56 pm: A question about premium and nonpremium inventory. Looks good on premium, said Morse.

The next query was about the different metrics between the new and old homepage, as well as a request for more info about the analyst day next week.

Morse refused to “steal my own thunder” on what is going to happen there. But, there will be thunder? I am always dubious when it comes to Yahoo and thunder.

As for the homepage, Morse said Yahoo was still evaluating the performance.

2:58 pm: Mobile. Aaaaaghhh, another chance for Morse to say not much about anything substantive. Morse: Better and more established! Translation: No moolah yet!

A head count question. Will improvement come from cost cuts due to the Microsoft deal or revenue improvements?

Three guesses and the first two don’t count. Thanks for the row-boatloads of money, Microsoft!

Something about bookings and small-to-medium businesses. Morse did not understand the question and neither did I.

Next, a question on search monetization, which has weakened. Answer: Stabilization!

3:02 pm: A question about the new $100 million branding campaign. Morse: “It’s very, very early.”

Some deal question and then one about behaviorial targeting, which Morse said will apparently be a “lifeblood” of the future.

Incredibly, Morse has gone hog-wild chatty with Bartz laid low and is asking for more questions, without making one good joke or salty remark yet.

I was completely losing it when it gets to ad exchange details and not as coffee-saturated as I needed to be.

Finally, the LAST question: Another one about divestiture and acquisition.

As if Morse was going to answer, referring instead–as he has many times in the call–to his “script.” Yahoo will buy stuff, Yahoo will sell stuff, but pretty much a no-comment!

And on that note…Carol: Please, pretty please GET WELL SOON!

Until then, here is a minidose of Bartz, via video snippets from an interview with me at the seventh D: All Things Digital conference.

Her lively tone seen here at D7 would have been a good thing at today’s earnings call:

(And, here is a link to Yahoo’s presentation of its financial highlights, for those with a hankering for even more numbers.)

]]> http://allthingsd.com/20091020/liveblogging-yahoo-third-quarter-conference-call-bartz-comes-down-with-something-and-cfo-carries-on/feed/ 1 http://allthingsd.com/20090702/microsoft-pulls-projectile-puking-promo/ http://allthingsd.com/20090702/microsoft-pulls-projectile-puking-promo/#comments Thu, 02 Jul 2009 18:00:14 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=20698

]]> http://allthingsd.com/20090702/microsoft-pulls-projectile-puking-promo/feed/ 0 http://allthingsd.com/20090616/time-inc-ceo-ann-moore-lets-put-the-digital-genie-back-in-the-bottle/ http://allthingsd.com/20090616/time-inc-ceo-ann-moore-lets-put-the-digital-genie-back-in-the-bottle/#comments Tue, 16 Jun 2009 20:37:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8221 Poor John Squires. The Time Inc. SVP seems like an affable fellow. So what has he done to deserve this impossible task–figuring out a digital strategy for Time Warner’s (TWX) publishing unit? Or, to put it in Time Inc. CEO Ann Moore’s words, figuring out “how to put the genie back in the bottle”?

While Squires solves that riddle, he’ll leave his day job as head of the “news business unit” (Time, Fortune, Money, etc.). In his place will be… Moore, who is already running the company’s style group.

I chatted briefly via email with Squires, who is good-natured about the assignment. But I have to take issue with him (and everyone else who uses this example) re iTunes. Apple (AAPL) didn’t prove that people are willing to pay for content online–we’d already seen that (at The Wall Street Journal, among other examples). Apple proved that people are willing to pay for portions–that would be songs–of products that were previously only sold in bundles–that would be CDs.

You can debate whether this was terrible for the music industry or simply the least-bad option. But I don’t think it makes sense to compare the experience of the music industry with news and other Web content that people aren’t used to paying for in any form.

Here’s my Q&A with Squires:

MediaMemo: I’m struck by Ann’s “genie” reference–are we meant to take that in a tongue-in-cheek way, or do you folks really think you can put the free-content genie back in the bottle? Or am I misinterpreting that?

John Squires: We’re not unrealistic about the challenge, but iTunes showed people will pay for something attractively packaged and fairly priced that they once got for free….We also wanted to get your attention. So I guess we’re genies.

MM: Do you imagine that Time Inc. will be taking content that’s currently available for free online and putting it behind a pay wall? Or are you more focused on creating new products you can charge for?

JS: This is part of what we’ll be testing. Certainly some online content will remain free because we’re eager to keep our large online audiences (over 26 million Nielsen uniques) and successful advertising model. Some other online content may be subscription-based. And the content we create for mobile readers will be a completely new experience, with different design and functions that we think consumers will want to pay for.

MM: Haven’t heard Time Inc.’s voice in the “Google isn’t playing fair” chorus. How much, if any, energy are you spending on getting the search engine to help you/take less from you, etc.?

JS: We’re not part of that chorus at the moment.

MM: Is this a permanent assignment or will you go back to News at some point?

JS: We’ll see what comes out of this assignment.

And here’s the companywide memo from Moore:

To:       Time Inc. Employees

From:   Ann Moore

Re: How to Put the Genie Back Into the Bottle; Special Assignment for John Squires

It won’t be a revelation to any of you that the publishing business is changing rapidly. While print magazines are not going away, and while we have built vibrant websites with over 26 million unique visitors and 750 million pages views each month, it’s increasingly clear that finding the right digital business model is crucial for the future of our business. We need to develop a strategy for the portable digital world and to refine our views on paid content.

Given the magnitude of the opportunity, I have asked John Squires to take on a new role and devote his full time efforts this summer to developing the best business plan for the future. John’s qualifications for this assignment are ideal. He has a strong background in consumer marketing and digital content and has stature in the publishing industry, as well as with digital software and hardware companies. It is likely we will be seeking partners and allies in our quest to ‘put the genie back into the bottle’.

As many of you know, we are currently pursuing four related initiatives:

1.    Evolving our current website businesses by identifying and developing consumer revenue streams.

2.    Accelerating the creation of applications for smartphone platforms.

3.    Developing new products and business models for portable digital readers.

4.    Exploring partnerships with other publishers to develop the optimal retail store for our digital products.

John will need the support of many, including Consumer Marketing, Legal, Strategy and Business Development, and the Time Inc. titles. Please pitch in with all your resources available when he calls.

During this assignment, similar to the role I’m playing at the Style and Entertainment Group, I will assume responsibility for the News Business Unit.

A.M.

]]> http://allthingsd.com/20090616/time-inc-ceo-ann-moore-lets-put-the-digital-genie-back-in-the-bottle/feed/ 0 http://allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/ http://allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/#comments Tue, 26 May 2009 16:17:32 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=7743 Facebook is indeed taking money from Russian investor Digital Sky Technologies. As previously reported, the social network is selling $200 million of preferred stock at a $10 billion valuation; DST will also buy up to $100 million of common stock at a lower valuation later this year.

DST will not get a board seat or “special observer rights” in return for its money. The two companies are holding a press conference shortly, so we may be able to extract a few more details.

The $10 billion valuation is comedown from the $15 billion figure that accompanied Microsoft’s (MSFT) 2007 investment, but no one expected that figure to hold up–in large part that deal was driven by a bidding war with Google (GOOG) and not much else.

Facebook and its newest investors are conducting a conference call to discuss the deal; I’ll be covering the call live.

FACEBOOK RECEIVES INVESTMENT FROM DIGITAL SKY TECHNOLOGIES

Passive Investment Includes Stake in Preferred Stock, Common Stock and Support for Facebook’s Continued Global Growth

PALO ALTO, Calif. — May 26, 2009 — Facebook today announced that Digital Sky Technologies (DST), one of the leading internet investment groups globally with significant stakes in Eastern European and Russian internet businesses, has made a $200 million investment in Facebook in exchange for preferred stock, representing a 1.96 percent equity stake at a $10 billion valuation.

In addition, DST has indicated that it is planning to offer to purchase at least $100 million of Facebook common stock from existing common stockholders that would facilitate liquidity for current and former employees’ vested shares in the company. The details of the plan are expected to be announced to eligible participants during the summer. Consistent with Facebook’s practice with other recent investors, DST will not be represented on the Facebook board or hold special observer rights.

“This investment demonstrates Facebook’s ongoing success at creating a global network for people to share and connect,” said Facebook CEO Mark Zuckerberg. “We’ve worked hard to bring more than 200 million people — 70 percent outside of the U.S. — onto Facebook to share with friends, family and co-workers. A number of firms approached us, but DST stood out because of the global perspective they bring — backed up by the impressive growth and financial achievements of their internet investments. We’re looking forward to working with the DST team.”

“Our investment experience in other regions reveals the tremendous value social networking companies create as they redefine how people communicate and interact,” said Yuri Milner, chief executive of DST.  “By every important metric — user growth and engagement, technological innovation and financial performance — Facebook is on a similar trajectory, though on a much more global scale. We’re delighted to invest in Facebook, Mark and his management team as they make the world more open and connected.”

Based in London and Moscow, DST is a well-respected investor in a number of successful internet companies, holding significant interests in Russia and Eastern Europe, such as Mail.ru, Forticom and vKontakte.  DST’s main assets account for over 70 percent of all page views in the Russian-speaking internet and its social networks are the market leaders in more than 13 countries, addressing a combined population of more than 350 million.

DST is run by its three partners who have complementary backgrounds in operations, investments and finance: Yuri Milner, previously CEO of Mail.ru, the #1 Russian language website; Gregory Finger, previously head of the Moscow office of NCH, a multi-billion dollar hedge fund; and Alexander Tamas, previously co-head of internet and software coverage in EMEA for the Investment Banking Division of Goldman Sachs. With its advanced understanding of opportunities in technology and social media, DST is a good fit for Facebook and an insightful partner that can help unlock additional growth opportunities.

]]> http://allthingsd.com/20090526/da-facebook-takes-200-million-from-russian-investors-at-10-billion-valuation/feed/ 0 http://allthingsd.com/20081210/more-not-bad-news-from-time-inc-peoplecom-booming/ http://allthingsd.com/20081210/more-not-bad-news-from-time-inc-peoplecom-booming/#comments Wed, 10 Dec 2008 20:39:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=1939 That was fun writing not-bad news from Time Inc. yesterday. Let’s try it again:

While it’s true that Time Warner’s (TWX) magazine unit is embattled, there are bright spots in the portfolio. Take People.com: The gossip magazine has always been one of Time’s strongest performers (good luck trying to find a discounted subscription). Now its companion Web site is, too.

The site boasts 8.6 million unique monthly visitors, per comScore (SCOR), up 36 percent in the last year, and generates a staggering 700 million page views per month–per Omniture (OMTR). Meanwhile, once-hot sites like TMZ.com (another Time Warner property) have tailed off.

Much of the credit for that goes to Mark Golin, the awesomely sharp and frumpy editor best known as the man behind Maxim magazine’s rise, way back in the late 1990s. He’s successfully broadened the site beyond just Britney/Paris/Lindsay news by adding features like a game channel, a shopping channel and the like.

One of the most successful expansions came via acquisition: When People.com bought Celebrity Baby Blog back in May, it was generating 6.9 million page views per month. Now it’s doing 30 million, Time execs say. And before my fellow journobloggers dismiss the work that the people at Celebrity Baby Blog do, ask yourself this: Did you know that Ashlee Simpson has named her kid Bronx Mowgli? Aren’t you glad you know now?

In any case, all those page views are translating into actual dollars–not digital pennies, as NBC’s Jeff Zucker would say. Time Inc. says People.com is now one of its 10 most profitable titles–that’s out of all of the company’s 174 properties, on or offline.

The company won’t attach numbers to that claim, of course. But given that Time Inc. generated $162 million in operating profit during a very lousy third quarter, you can get some sense of the property’s success. Now Time just needs many more just like it.

]]> http://allthingsd.com/20081210/more-not-bad-news-from-time-inc-peoplecom-booming/feed/ 0 http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck/ http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck/#comments Wed, 05 Nov 2008 21:52:23 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=7909 Tuesday’s presidential election was a historic one for more than just the obvious reasons. Monomaniacal interest in its outcome drove Internet usage to a new record. According to Akamai Technologies, which operates a content delivery network that includes the likes of CNN, NBC, and the BBC, traffic to its member news sites reached 8.57 million visitors-per-minute at 11 p.m. EST, right around the time Barack Obama delivered his victory speech.

Breaking things down a bit further, Beet.TV reports that MSNBC.com received over 20 million unique visitors, nearly 250 million page views, and served up some nine million video streams yesterday. Meanwhile, CNN.com counted 27 million unique visitors during election day and 4.9 million live video streams–the most in its history.

Must have been that new holodeck that gave CNN the edge, eh?

]]> http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck/feed/ 0 http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck-2/ http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck-2/#comments Wed, 05 Nov 2008 21:52:23 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=7909 Tuesday’s presidential election was a historic one for more than just the obvious reasons. Monomaniacal interest in its outcome drove Internet usage to a new record. According to Akamai Technologies, which operates a content delivery network that includes the likes of CNN, NBC, and the BBC, traffic to its member news sites reached 8.57 million visitors-per-minute at 11 p.m. EST, right around the time Barack Obama delivered his victory speech.

Breaking things down a bit further, Beet.TV reports that MSNBC.com received over 20 million unique visitors, nearly 250 million page views, and served up some nine million video streams yesterday. Meanwhile, CNN.com counted 27 million unique visitors during election day and 4.9 million live video streams–the most in its history.

Must have been that new holodeck that gave CNN the edge, eh?

]]> http://allthingsd.com/20081105/and-we-couldnt-have-done-it-without-jessica-yellin-and-the-cnn-holodeck-2/feed/ 0