Earlier today, I had reported that Yahoo Chairman Roy Bostock was stepping down.

He is, and the full letter he just released saying so is below.

Bostock did not say in the missive who will be Yahoo chairman in his place. Intuit CEO Brad Smith has a full-time job, and the newly installed Weather Channel CEO David Kenny does, too. Among the current directors, that would leave Sue James, Patti Hart and newly installed Yahoo CEO Scott Thompson — or one of Yahoo’s new board members.

In the letter, Bostock outlined the departures of four board members and the addition of five more directors (two of which were just named); did a little back-patting of his recent efforts to turn Yahoo around (after presiding over the board that got the Silicon Valley Internet giant into this mess); noted that the Asian talks to sell Yahoo’s stakes there are proceeding (it’s coming!); gave Thompson a thumbs-up (go, Scott!); and delivered kudos to Jerry Yang, the co-founder who left only weeks ago.

“Working with Jerry was always a delight,” wrote Bostock.

(Me, not so much, I would guess! Bygones?)

All kidding aside, Bostock has been the subject of a lot of criticism about Yahoo’s troubles, both deserved and undeserved, most especially for the non-sale to Microsoft several years ago. Many, including activist shareholder Daniel Loeb most recently, have called for his resignation.

It has not been an easy job, to be sure, so it must be a bit of a relief for the longtime advertising exec, who serves on other prominent boards, to finally pull away from the Yahoo black hole.

So, who’s next?

One interesting line in the letter, which everyone already knew, was that none of the various bids from outside investors have passed muster.

Wrote Bostock: “We have engaged with potential investors and reviewed proposals concerning an equity investment in the Company, although at this time there have not been any proposals which have been deemed by the Committee to be attractive to our shareholders.”

Here’s the Bostock letter:

Yahoo! Releases Chairman’s Update for Shareholders

SUNNYVALE, Calif., February 7, 2012 – Yahoo! Inc (NASDAQ: YHOO), the premier digital media company, today released the following shareholder update from its Chairman Roy Bostock.
February 7, 2012

Dear Fellow Shareholders:

I write today to update you on the actions the Yahoo! board has taken, and the actions it is pursuing, to increase shareholder value and position the Company for growth. These actions result from a process I initiated about six months ago in a special meeting of the independent directors in which we analyzed the reasons why Yahoo! was not meeting either our own expectations or those of our shareholders.

The board decided then to move aggressively on three fronts to position Yahoo! for future success: one, we initiated a search for a new Chief Executive Officer with a vision and set of skills to lead Yahoo! into the future; two, we undertook a comprehensive strategic and structural review of the business; and three, we decided to assess the composition of the Company’s board of directors relative to its ability to enhance the prospects for Yahoo!’s future success. We have made progress on all three fronts.

First, and most importantly, we have appointed Scott Thompson as CEO to lead our company. Scott is a capable and dynamic leader who brings the experience and expertise the Company needs to achieve robust growth and success in the marketplace. Over the coming months and years, Scott will lead an outstanding team of Yahoos to deliver engaging user experiences driven by innovative products.

Second, we have made significant progress on the comprehensive strategic review which is overseen by the board’s Transactions and Strategic Planning Committee, chaired by director Brad Smith, the CEO of Intuit. The Committee’s guiding principle has been to assess alternatives which would increase value for all Yahoo! shareholders, and the Committee has been open to any transaction or initiative that would serve this objective.

As part of this review, we have pursued a wide range of discussions with potential partners. We have engaged with potential investors and reviewed proposals concerning an equity investment in the Company, although at this time there have not been any proposals which have been deemed by the Committee to be attractive to our shareholders. We are also in active discussions with our partners in Asia regarding the possibility of restructuring our holdings in Alibaba Group and Yahoo! Japan. The complexity and unique nature of these transactions is significant. While we continue to devote significant resources to these discussions, we are not in a position at this time to provide further detail or to provide assurance that any transaction will be achieved.

Finally, the board has concluded that in order to accelerate the Company’s transformation, the combination of a new Chief Executive Officer with an enhanced team of independent directors would provide Yahoo! with the expertise and perspectives necessary to drive innovation and growth going forward. Therefore, Mr. Joshi, Mr. Kern, Mr. Wilson and I have volunteered not to stand for re-election at the next shareholders’ meeting.

Furthermore, the board today elected two highly qualified independent directors, Alfred Amoroso and Maynard Webb, Jr. Mr. Amoroso served as President and CEO of Rovi Corporation until December 2011 and, among other positions, had previously served as the President, CEO and Vice Chairman of META Group, Inc., the President and CEO of CrossWorlds Software, Inc. and as a member of the world-wide management committee of IBM Corporation. Mr. Webb, the Chairman of LiveOps, Inc., served as that company’s CEO until July 2011. Prior to that, Mr. Webb was Chief Operating Officer of eBay and Senior Vice President and Chief Information Officer for Gateway, Inc., in addition to management, leadership and board positions at several other companies spanning his 30-year career.

The board continues its search for additional independent directors. This search is being led by director Patti Hart, CEO of International Game Technology, Inc., who chairs our Nominating and Corporate Governance Committee. We anticipate announcing additional directors to round out the board as soon as this process concludes.

Separately, as previously announced, Jerry Yang has resigned from the board of directors and other positions within the Company to pursue his many interests outside of Yahoo!. Working with Jerry was always a delight. He is a visionary and a pioneer who contributed enormously to Yahoo! since he co-founded the Company in 1995. He will be missed. The board thanks him deeply for his service and commitment to the Company.

Thus, following this year’s Annual Meeting a majority of Yahoo!’s directors will be new to the board this year, and all directors will have joined the board since 2010. We believe that this reconfigured board, with a fresh set of perspectives and diverse set of skills, will enable the Company to move forward even more aggressively.

It has always been a privilege for me to serve as Chairman of Yahoo!. The employees of Yahoo! remain the heart, soul, and future of the company. And with Scott Thompson leading them, they are the reason why I believe Yahoo! will create significant shareholder value over the coming years.

In September, this board moved proactively and decisively to improve the performance of the Company for the benefit of its shareholders. These actions could not have been accomplished without the support and active participation of each director on the board. For that, I thank them. And I thank them for the knowledge, expertise, talents and commitment they have brought to Yahoo!. We all take pride in the fact that we are positioning Yahoo! for success in the future. Yahoo! is an incredibly strong brand with formidable assets. I have every expectation that under Scott’s leadership, working together with the reconstituted board, the Company will thrive for many years to come.

Sincerely,
Roy Bostock
Chairman of the Board

When you own a large chunk of a major Silicon Valley Internet company, it’s probably not a surprise that you want to come to the center of the tech world to have a look around.

But Yahoo — of which Third Point’s Daniel Loeb owns over five percent — is unlikely to get a visit from the activist shareholder, who is in California this week.

Several sources said he has contacted many former Yahoos and other tech execs for meetings in the Internet heartland to chitchat about digital issues.

And, of course, search for possible board members for an alternate slate of directors, in case he decides to wage a proxy fight against Yahoo.

The earliest nominations for directors can be submitted is February 24 for those “shareholder proposals not intended for inclusion in proxy materials and for nomination of director candidates,” according to Yahoo’s corporate bylaws on such matters.

Loeb then has a month after that to submit a competing slate. In addition, many of Yahoo’s major investors are mulling backing Loeb if he initiates a battle for control of the company.

But it’s not a definite move as yet. The New York-based investor has not decided whether he will take on a proxy fight, sources said, given he has yet to assess Yahoo’s new CEO, former eBay exec Scott Thompson.

Thompson was president of the online commerce site’s PayPal payments division.

But while there is a formal process, you will hear a lot of noise coming long before that, unless Yahoo gives Loeb board seats to quiet him down — which is unlikely but possible.

Such an ugly fight is not one Yahoo can afford to have, and it has already shown some cloddish sensibilities in its response to a recent letters by Loeb asking for the ouster of its Chairman Roy Bostock and co-founder and director Jerry Yang.

But given how badly the last Yahoo shareholder tussle with Carl Icahn went, another proxy battle could be deadly, and might drag on through the first half of 2012. In his Yahoo tussle, Icahn ultimately got three seats on the Yahoo board, but eventually went away with everyone the poorer.

And no one wants a replay of that.

Last night, the New York Times dropped a juicy little tidbit into its everything-but-the-kitchen-sink daily update of the board mishegas at Yahoo around the deliberations yesterday over two competing private equity bids to buy a partial stake in the company.

No, not the one about Jeff Jordan — former eBay exec, OpenTable CEO and now VC at Andreessen Horowitz — possibly taking a big role at Yahoo if the firm’s bid with Silver Lake prevailed — which was mysteriously removed very soon after it posted (’cuz he will not, so good move, NYT!)

I mean the one about the venture firm’s big-kahuna partner, Marc Andreessen — who will indeed take a board seat and play a strong role in Yahoo’s future if his bid wins — getting a possible competitor in the Silicon Valley savior section of the ongoing show.

That would be in the form of Reid Hoffman, the well-known entrepreneur, VC and angel investor, who the Times said had talked with TPG Capital, Silver Lake’s rival in the Yahoo bidding, about becoming a possible partner.

Wrote the Times:

“TPG has held discussions with Greylock Partners, another venture capital firm, about a possible alignment, two people said. TPG is hoping to draw on the expertise of Reid Hoffman, one of Greylock’s partners and the founder of the professional social network LinkedIn, these people said.”

Translation: If Silver Lake has a tech icon of substance on its team to give uber-geek appeal to its offer — dagnabbit — then TPG was going to raise with another one, whom the very same Times reporter who wrote last night’s article recently nicknamed “The Start-Up Whisperer” in a recent glowing profile of Hoffman.

While I am still trying to grok what a start-up whisperer exactly means (and how someone as self-effacing as Hoffman would react to such a twee moniker without snickering), it’s a move that has likely already irritated Silver Lake.

After all, TPG aiming at nabbing Hoffman is akin to two crazy neighbors trying to one-up each other in holiday-lighting lawn decor. (You have a singing Santa, so I’ll have a singing Santa — and I might even add a Lady Gaga-themed crèche for good measure!)

But it’s not a bad instinct, either, to get your own live-action Silicon Valley legend, even if it is only half true in Hoffman’s case.

Because, according to sources who know such things, while Hoffman and TPG have had conversations, there have been no commitments, and nothing is close to being agreed on to link the pair.

That could certainly change, and quickly, but Hoffman or Greylock aren’t currently in TPG’s proposal to Yahoo.

That’s in contrast to Andreessen, who is all in (I am not even going to bother with “sources said” here, since everyone and my mother has seen the proposal) with Silver Lake on the deal to purchase 19.9 percent of Yahoo for about $16.50 a share.

As I reported earlier this week, for Silver Lake’s money and expertise in fixing broken things, the bid includes: Silver Lake getting three board seats; cash going to a buyback of stock or granting of a dividend to shareholders; the ability to select a CEO; approval of its strategic plan for Yahoo, and its solution to come to terms with Yahoo’s unhappy Asian partners; and all the purple wearables you could ever hope for (perhaps Yahoo’s best asset, IMHO, especially worn by such obviously cool dudes, as seen here).

Also, controversial Yahoo co-founder Jerry Yang gets to stay around on the board (but only if he becomes very, very quiet, so as not to rile the activist shareholders).

TPG’s bid is less formed, although its price is slightly higher. And the PE firm has yet to check the “Big Geek Included” box.

Hence, the floating of Hoffman as a contender to take on Andreessen, who was once dubbed the “Golden Geek” by Time magazine.

I hope TPG does, soon, since what a matchup it would be!

But, for now at least, the pair — who share big investments in a range of Web companies, most especially Facebook (Andreessen is on the board of the social networking giant, and Hoffman was an early investor and adviser) — are at peace.

Dagnabbit.

Last night, Yahoo’s board gathered for a pre-meeting dinner, a precursor to a day-long meeting today to weigh several bids from private equity firms to buy part of the Silicon Valley Internet giant, including Silver Lake and TPG Capital.

Among the thorniest of issues will be the low price that the firms want to pay for a 19.9 percent stake in the company. Silver Lake has offered $16.50 and TPG a dollar more.

In the past year, Yahoo share prices have seen a low of $11.09 and a high of almost $19. It closed yesterday at $15.70 — a price that is mostly due to sale rumors — making the offers not much of a gain on current market valuation.

The transaction type being contemplated is called a PIPE — or a Private Investment in Public Equity — with the investment below 20 percent, which allows Yahoo to avoid a shareholder vote on the issue.

While the Yahoo board had hoped for bids above $20, they are not expected to be forthcoming, considering the weakness in its business over recent years and the difficulty of returning it to health and growth.

Results in its upcoming quarter, for example, are expected to be weak again, with trouble in its advertising business, largely due to uncertainty around the business.

The low price, along with the attempt to bypass shareholder approval, is sure to infuriate Yahoo’s major investors, given they have watched the value of their stakes wilt over the years under current board management.

In the last five years, due to continually muddled leadership and the missing of key Internet trends, Yahoo shares have dropped 44 percent in value, which compares with huge gains from companies like Amazon and others.

Major Yahoo stakeholders are already irked by the PIPE idea itself, which could transfer power to private equity firms at preferential terms.

Another possible bone of contention will be the preservation of at least some parts of Yahoo’s current board.

Under a plan by Silver Lake, for example, it would get three board seats, as well as another one for a CEO of its choosing. Another seat will go to Yahoo co-founder and current board member Jerry Yang. There will be six independent board members, but it is not clear if they would be new or include some current directors.

One of the Silver Lake choices would be well-known Silicon Valley legend Marc Andreessen, who is now a powerful VC. The appeal of Andreessen is important to some major shareholders who have turned sour on Yang.

Who will be CEO of the rejiggered entity will also be discussed at the meeting. Sources said Silver Lake and TPG have definite candidates in mind and Yahoo has also been conducting an official search.

In other words, there’s a lot on the plate of Yahoo’s board today, which also needs to revisit continued proposals from its Asian partners — China’s Alibaba Group and SoftBank of Japan — to sell back its stakes in Alibaba and Yahoo Japan in various tax-free schemes.

Sources said Yahoo — which has thus far rejected such efforts — might now consider selling a part of their shares back, up to half. This would allow the company to give a cash dividend to its disgruntled shareholders.

If thwarted, as has been previously reported ad nauseum, Alibaba and SoftBank are considering their own bid with the help of other U.S. private equity firms, such as Blackstone.

Other PE firms — especially ones who have not signed Yahoo’s non-disclosure agreement related to any deal — are also hanging under the hoop, so to speak, to see what happens. At least one firm hopes the Yahoo board will reject the low-priced partial bids, leaving the court wide open again.

“It’s still anyone’s game,” said one possible bidder.

Except for Yahoo’s put-upon employees and shareholders, this is anything but fun. More on that soon.

I hate to use a personal story to make a professional point — but when I was in the hospital recently, after suffering from a mini-stroke, I got an important piece of health advice that, oddly enough, applies perfectly to Yahoo, the Silicon Valley Internet icon I cover very closely.

I know, I know, but listen up …

When I was close to going home, one of my doctors told me I had to make sure I paid attention to any signs that might indicate a recurrence. The issue around any possible future ischemic attack taking place, he said, is speed in getting critical care once any unusual symptoms become apparent, such as numbness, tingling, confusion and cognitive difficulty.

That’s because every second of delay translates to increased damage to cerebral cells that could badly impact speech, movement and worse.

“Remember,” the doctor intoned with great and very appropriate gravity. “Time is brain.”

Yes, indeed it is — for me, and also very much so for Yahoo these days.

Leaving aside my own mortality, one of the most important issues going forward for Yahoo’s long-hoped-for revival will be how quickly the company moves in the next month, in what has so far been a lugubrious and rumor-heavy process to figure out its strategic plan in the wake of the firing of CEO Carol Bartz in early September.

That means — going into a major holiday season — Yahoo has about 30 working days to make what has to be a complex and multiparty deal. It is likely to include private equity firms, big companies, Asian partners, investment bankers, major shareholders and scrutiny from the media, in an effort that is approximately akin to herding cats.

This from a board that has often moved with snail-like reflexes in the midst of much more minors crises, and has shown a talent for disaster.

So, while speed is sometimes the enemy of reason, in this case, it is now more necessary than ever before.

There are three key reasons why Yahoo’s leaders have to perform quickly now, each of which could spell even more turmoil for the long-troubled company, if botched.

The first is the possibility — actually, the probability — of a proxy fight that might begin informally just after the new year.

That’s when you could start hearing from someone like activist shareholder Daniel Loeb of Third Point — who has been vocal about ousting Yahoo board members, including co-founder Jerry Yang. Yahoo directors are fully aware that he is eyeing this ugly option, which will include readying an alternate slate of directors.

According to a Yahoo spokeswoman, the earliest nominations for directors can be submitted is February 24 for those “shareholder proposals not intended for inclusion in proxy materials and for nomination of director candidates.”

But while there is a formal process, you will hear it coming long before that, unless Yahoo gives Loeb board seats to quiet him down — which is unlikely but possible.

Such a noisy fight is not one Yahoo can afford to have, and it has already shown some cloddish sensibilities in its response to a recent letter by Loeb — who has many more shares than Yang, and should still be accorded a certain amount of respect, no matter what he says.

Given how badly the last Yahoo shareholder tussle with Carl Icahn went, another proxy battle could be deadly, and might drag on through the first half of 2012. In his Yahoo tussle, Icahn ultimately got three seats on the Yahoo board, but eventually went away with everyone the poorer.

Second, Yahoo will report its fourth-quarter earnings in late January, which will likely continue to show weakness in key sectors of its business. While interim CEO Tim Morse is doing a laudable job given the shaky circumstances, drops in advertising revenue growth, engagement and search are not anything Yahoo can keep making excuses for.

While it is likely the company’s beleaguered operating execs will pull out the stops to make the numbers look better — a new game I like to play is “how many homepage ads can they jam in there at the quarter’s end?” — it’s no panacea for the kinds of dramatic and even drastic changes that new ownership will have to make, sooner than later.

And, speaking of beleaguered, perhaps the most important reason that Yahoo has to get the lead out and clarify its situation is due to one consistent thing about the company: Talent attrition and employee fatigue.

Speaking to one exec after another in recent weeks, it is dead clear that Yahoo is increasingly hard-pressed to hold on to the best of its current employees, or to attract any terrific new ones.

The impact on product innovation, morale and more is obvious.

One exec who has long been one of the more cheerleader types for Yahoo — often calling me out in the past for being too negative on the company’s prospects — has recently turned weary, cynical and even depressed about the future — so much so that I now find myself bucking up the worker.

“You can’t hire anyone, since you can’t tell them honestly who their bosses might be in three months,” said the staffer. “And you can’t look anyone who works for you now in the eye and tell them it will turn out right in the end, either, given the track record so far.”

Indeed. And, more than any other factor that could hurt Yahoo in the competitive tech sector, brain drain is what will always get you in the end.

In a post tonight, he announced his engagement to fellow Google exec Irene Au, complete with a photo of the ring in a pretty dish. Horowitz asked her last week in Paris.

Both also worked at Yahoo.

In the status update — which begins “She said yes!” — Horowitz noted, “Having gotten through the trivial details of launching Google+ (!), I recently turned my attention to more important matters…”

And, in an email to me about it, Horowitz wrote (judiciously for both Google and Au): “And just to be clear…I got her *permission* to make it public. (So I’m off to a good start, eh?)”

Like I said, adorkable.

Your move, Facebook!

Now backing the measure: The Laborers’ International Union of North America and Institutional Shareholder Services, one of the most influential proxy advisory outfits around.

“ISS believes that shareholders would benefit by having a report on the company’s succession plans disclosed annually,” ISS said. “Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at that time.”

That may be so, but according to Apple, which recommends shareholders vote against it, such a report would also give the company’s rivals unfair advantage by publicizing its objectives and plans and would undermine its efforts to recruit and retain champion executives. “The company takes succession planning seriously, and the board has adopted a comprehensive process to ensure continuity and maintain the superior quality of its management team,” Apple said in its 2011 proxy statement. “This process also allows flexibility to adjust to unanticipated changes in the market.”

What it doesn’t allow for is transparency, something investors might appreciate with Jobs now on his third medical leave from Apple.

In 2010 CEO Steve Jobs retained his $1 annual salary and some 5.5 million shares of Apple stock as well. “Since rejoining the company in 1997, Mr. Jobs has not sold any of his shares of the Company’s stock,” the filing reads. “Mr. Jobs holds no unvested equity awards. The Company recognizes that Mr. Jobs’s level of stock ownership significantly aligns his interests with shareholders’ interests.”

COO Tim Cook earned $59.1 million for the fiscal year, thanks to a $5 million bonus and $52.3 million in stock awards. Quite a spike from the $1.64 million he earned in 2009, but well-deserved given his performance, particularly when he filled in for Jobs during his medical leave of absence.

Included in the proxy statement is a shareholder proposal asking Apple to adopt a CEO-succession-planning policy and appended beneath it is a strongly worded statement from the company opposing it. “The Company recognizes that a highly talented and experienced management team, not just the CEO, is critical to Apple’s success,” it reads. “Accordingly, the Board already implements many of the proposed actions and maintains a comprehensive succession plan throughout the organization. While the Board strongly supports the concept of succession planning, it recommends a vote against [the proposal].”

Why?

Evidently, the board feels a written succession plan would give Apple’s rivals unfair advantage by publicizing its objectives and plans. It also fears that identifying potential successors to Jobs would invite other companies to recruit those people away from Apple. Finally, the board feels that its directors and Apple’s leadership can handle succession planning on their own. “The Company takes succession planning seriously, and the board has adopted a comprehensive process to ensure continuity and maintain the superior quality of its management team,” Apple said in the filing. “This process also allows flexibility to adjust to unanticipated changes in the market.”

Plus, Steve doesn’t like talking about it.

Even those who are voting in favor are doing so holding their noses. Of the five voting members of the commission, only one, Democrat Michael Copps, had been considered remotely likely to vote with the two Republicans who had pledged to vote against it. When he announced he would vote in favor yesterday he said he was doing so with reservations.

Republicans, both on the commission and in Congress, sense an opportunity, the size of which you can discern by the size of the headlines topping the Drudge Report during the last few days. Genachowski is being portrayed in 80-point type as the villain “Julius Seizure” out to ruin the freewheeling Internet by shackling it with a list of bureaucratic rules and regulations. The irony is that the current proposal on the table is a dramatic step back from a far more ominous one: Immediately after losing a court case brought by the cable company Comcast over the extent of its legal authority to regulate the Internet, Genachowski considered reclassifying the Internet under the FCC’s Title II authority, which governs regulation of the phone system. This was an extreme response, thankfully abandoned, that would have certainly warranted the nickname. The current proposal is by no stretch of argument so extreme that it amounts to a seizure.

But rules they are, and no one likes new rules where none existed before, least of all multibillion dollar corporations like Comcast and Verizon. Having established in the courts that they have the right to control the use of certain applications that impact the performance of their network–or, more precisely, the fact that the FCC has no legal authority to tell them not to exercise such control–they’re now going to be required to disclose how and why they exercise such controls.

The rules allow for “reasonable network management” by service providers, which is a squishy phrase. Internet companies like Amazon and Skype, which aren’t service providers themselves, argue that the new rules are weak and don’t protect them from service providers that may “reasonably manage” their products and services out of existence. Get your stopwatches ready, because there will almost certainly be several lawsuits over what constitutes “reasonable network management.”

The scenario is easy to imagine: Embittered broadband customers band together in a class-action lawsuit complaining that their provider refuses to allow them to experience the latest video streaming or video chat application. They argue that the provider favors another inferior application that it happens to own. The provider argues that it’s only engaging in “reasonable network management” allowed under FCC rules, leaving judges to tease out what that means. Lawyers are probably already shining up their Ferragamos as they polish their legal briefs.

These cases are already appearing. Comcast and Level 3 Communications are sparring over the terms under which Comcast conveys to its customers video streaming traffic sent by Level 3 associated with its relationship with Netflix. Level 3 has turned to the FCC and the U.S. Department of Justice at a delicate time for Comcast: It wants federal approval for its takeover of NBC Universal, and wants it now.

The FCC’s new rules, rightly or wrongly, make Comcast and companies like it more vulnerable to similar threats by regulators in response to actions taken in their own reasonable self-interest. Until today, this sort of dispute between companies would normally be worked out by negotiators in private, not regulators on the public dime. No matter whose side you tend to favor, the prospect of government gumming up the work with endless busywork isn’t a happy side effect.

The rules themselves may also be challenged. There’s still a huge question–as FCC commissioners Meredith Atwell Baker and Robert McDowell have both argued in recent newspaper op-eds (one in yesterday’s Wall Street Journal, the other in today’s Washington Post)– about the FCC’s legal authority over the Internet. House Republicans are already making noise about jumping into the policy fray, and another court challenge is probably likely.

The one overarching mission concerning the Internet that the FCC can undertake with some measure of agreement is that of widening the availability of the network to places it doesn’t adequately reach and to people who don’t have broadband access for economic or other reasons. In an age where so much of daily public business–from applying for a job to becoming an informed voter in the presidential election–all but requires a broadband link, far too many remote and rural areas are the victim of market forces where the investment to build infrastructure in sparsely populated areas outweighs the potential for a reasonable return.

Genachowski has argued that by adapting the Universal Service Fund (which helped the telephone network penetrate these same underserved areas) for broadband, providers could get this otherwise impossible job accomplished. Extending broadband availability was one of President Obama’s campaign promises, but the $7.8 billion in federal stimulus funds awarded under the auspices of the National Telecommunications and Infrastructure Administration and the Department of Agriculture’s Rural Utilities Service have not and will not make a significant dent in the problem.

Why not focus on what is clearly the more important problem and without question in the national interest, and leave the finer points of how service providers and Web companies carry content to sort themselves out? Like it or not, a new, more legally complicated Internet is here.

The opening line of the classic J.M. Barrie book “Peter Pan” reads, “All children, except one, grow up.”

Actually, that one grew up, too, and now the whole Internet is angry at Google (GOOG) and taking shots, because of the Silicon Valley search giant’s recent joint public-policy proposal with Verizon (VZ) over net neutrality.

Many are claiming Google–in the most cynical of ways–sold out its long-standing commitment to the open Internet to make a corporately favorable deal.

Thus, Google–in this case, Richard Whitt, Washington Telecom and Media Counsel–took to the corporate blog yesterday to explain it all away in a post titled “Facts About Our Network Neutrality Policy.”

It practically begs for translation, so BoomTown shall not disappoint:

Google wrote: Over the past few days there’s been a lot of discussion surrounding our announcement of a policy proposal on network neutrality we put together with Verizon. On balance, we believe this proposal represents real progress on what has become a very contentious issue, and we think it could help move the network neutrality debate forward constructively.

We don’t expect everyone to agree with every aspect of our proposal, but there has been a number of inaccuracies about it, and we do want to separate fact from fiction.

Translation: Wait, the hypnotic multicolored letters aren’t working anymore? What about the cute logos on the homepage–didja see our whimsical “Wizard of Oz” montage? Hey, our founders still wear wacky shoes!

And look over here at the Googleplex: Segways with wings and coconut-water lattes for all!

Okay, we’ll come clean: This band of Lost Boys–and Wendy who runs search–didn’t want to grow up, either.

But Sheryl Sandberg did an Indian talent raid and convinced Tinkerbell to take all her fairy dust to work on magical social-marketing features at Facebook. Also, Captain Hook and that alligator are working up some geo-location thing with the ticking clock over at Foursquare.

In other words, that’s Mr. Peter Man to you now.

Google wrote: MYTH: Google has “sold out” on network neutrality.

With that in mind, we decided to partner with a major broadband provider on the best policy solution we could devise together. We’re not saying this solution is perfect, but we believe that a proposal that locks in key enforceable protections for consumers is preferable to no protection at all.

Translation: We caved. In fact, we spelunked. All right, we journeyed to the center of the earth. Second to the right and straight on till morning, times a google.

But it is not technically selling out, since we got no money in the deal. I mean, not yet.

That comes later, when we and Verizon control all the tolls on the private and exclusive Schminternet, named for Fearless Leader and CEO Eric Schmidt (pictured here), coming to you in 2020!

We’re not saying the solution is perfect. But we believe that a proposal that locks in key moneymaking fees for us is preferable to having to struggle later–like those losers at Microsoft (MSFT) do today–when the search business goes the way of boxed software.

Google wrote: MYTH: This proposal represents a step backwards for the open Internet.

* Newly enforceable FCC standards
* Prohibitions against blocking or degrading wireline Internet traffic
* Prohibition against discriminating against wireline Internet traffic in ways that harm users or competition
* Presumption against all forms of prioritizing wireline Internet traffic
* Full transparency across wireline and wireless broadband platforms
* Clear FCC authority to adjudicate user complaints, and impose injunctions and fines against bad actors
* Verizon has agreed to voluntarily abide by these same requirements going forward–another first for a major communications provider. We hope this action will convince other broadband companies to follow suit.

Translation: Did you ever do the Hokey Pokey? Jockeying for political power in Washington is like that, except someone always loses an eye.

You put your eternal soul in,
You put your ethics out;
You put your corporate standards in,
And you shake them all about.
You do the Hokey-Pokey,
And you turn yourself around.
That’s what it’s all about!

Which is why they say you should never watch sausage being made.

Google wrote: MYTH: This proposal would eliminate network neutrality over wireless.

It’s also important to keep in mind that the future of wireless broadband increasingly will be found in the advanced, 4th generation (4G) networks now being constructed. Verizon will begin rolling out its 4G network this fall under openness license conditions that Google helped persuade the FCC to adopt. Clearwire is already providing 4G service in some markets, operating under a unique wholesale/openness business model. So consumers across the country are beginning to experience open Internet wireless platforms, which we hope will be enhanced and encouraged by our transparency proposal.

Translation: By transparency, we mean a backroom deal so covered in the fog of compromise that it was like the Smoke Monster in “Lost.”

And you know what happened when he (she? it?) showed up. Not pretty.

Neither was the fact that we had to throw wireless–the most promising of networks–under the bus right now. While there is likely to be some crushing of competition and mangling of the bones of this little baby, you can be sure Congress can always step in to protect consumers’ interests with regard to wireless broadband.

In fact, Congress just hired Kate and Jon Gosselin to give parenting tips on how not to completely take advantage of the wired Internet’s most valuable offspring.

Google wrote: MYTH: This proposal will allow broadband providers to “cannibalize” the public Internet.

So we believe there would be more than adequate tools in place to help guard against the “cannibalization” of the public Internet.

Translation: Yes, the very same government that protected its citizens from the sub-prime mortgage mess by monitoring those giant, risk-mad banks so well.

The same government that was making sure oil giants like BP adhered to strict safety standard for its offshore wells.

The same government…well, you get the general idea, but you should have no fear of cannibals.

Of sharkish telcom companies, yes. Of man-eating lions from the cable business, certainly.

But of multicolored, letter-decorated piranhas who look harmless with their big squishy balls and organic guava smoothies but will cut you as soon as you stick one consumer finger in the digital pond?

Let’s just say: Don’t go in the water.

Google wrote: MYTH: Google is working with Verizon on this because of Android.

FACT: This is a policy proposal–not a business deal. Of course, Google has a close business relationship with Verizon, but ultimately this proposal has nothing to do with Android. Folks certainly should not be surprised by the announcement of this proposal, given our prior public policy work with Verizon on network neutrality, going back to our October 2009 blog post, our January 2010 joint FCC filing, and our April 2010 op-ed.

Translation: Rachel, are you in London or back in Mountain View? Please ring us up asap, as you need to come up with some fancy new talk. I don’t think they are buying this policy-proposal-not-a-business-deal pablum.

In fact, I am even giggling every time I write it.

Google wrote: MYTH: Two corporations are legislating the future of the Internet.

We hope this helps address some of the inaccuracies that have appeared about our proposal. We’ll provide updates as the situation continues to develop.

Translation: Indeed, two corporations are not legislating the future of the Internet.

In point of fact, there were at least a half-dozen of us on the G5 on the way back from divvying up the Web in D.C.

And we’re not so presumptuous to think that any two businesses could–or should–decide the future of this issue.

We are planning on including at least six or seven more businesses, since it will cost an awful lot of money to peddle all that influence in D.C.

Of course, that Mark Zuckerberg over at Facebook seems to be holding out and even criticizing our Verizon bear hug.

That kid has some guts all right–but he can’t live in Neverland forever.

At some point, you’ve got to grow up. You can’t clap your hands and believe you can fly. Even pixie dust eventually runs out.

And that’s something we at Google know very, very well by now.

And until the magic returns, please relish the incomparable Mary Martin in the famous stage version of “Peter Pan” singing “Never Never Land.” As Peter Pan described himself, “I’m youth, I’m joy. I’m a little bird that has broken out of the egg.” Martin is all that and more:

"Never Never Land"
Uploaded by computergirl07. – Music videos, artist interviews, concerts and more.

A new Securities and Exchange Commission filing from the company reveals that the buyout was the result of a process that began in February with a list of 24 potential acquirers that was subsequently winnowed down to 16 companies, then to five and finally to three.

“From February 25 to April 1, Palm management, Goldman Sachs and Qatalyst Partners were in contact with a total of 16 companies including HP,” Palm says in its Preliminary Merger Proxy. “Of these, six companies, including HP, entered into nondisclosure agreements and participated in meetings with Palm and its advisors to review non-public information concerning Palm regarding a strategic transaction.”

And of those six, three made formal acquisition proposals after Palm (PALM) determined that it preferred an outright sale to the intellectual property transaction that at least one of those companies had been leaning toward.

The two companies in addition to HP that presented acquisition proposals are referred to as Company A and Company B. A fourth company, referred to as Company C, had initially been in discussions with Palm regarding an intellectual property transaction and later made a proposal to acquire Palm….A fifth company, referred to as Company D, contacted Palm on March 18 to discuss an intellectual property transaction but did not make a proposal to acquire Palm. Company D did not enter into a nondisclosure agreement and did not review non-public information about Palm. Discussions with Company D continued intermittently until April 15.

So what are companies A, B, C and D? HTC, Lenovo, Dell (DELL) and Huawei, most likely, though there’s a chance that ZTE (Zhong Xing Telecommunication Equipment Company Limited), which was believed to be interested in Palm, could be one of the four as well.

Recall that HTC was rumored to have dropped out of the bidding for Palm in late April. At that point, speculation on potential acquirers focused on Lenovo, though already, some–ahem–were suggesting the more likely suitor was HP (HPQ).

Dell and Lenovo would have been interested in Palm for many of the same reasons as HP–a turnkey smartphone division with a robust, scalable operating system. And for telecommunications equipment suppliers Huawei and ZTE, the acquisition of Palm would have been a quick and easy way to leap into the smartphone market with a known brand and strong OS.

Anyway…ultimately the bidding war for Palm came down to a battle between HP and that mysterious Company C. HP’s first offer was for $4.75 a share in cash. A second company matched that bid, and a third proposed an all-stock deal. At this point Company C was interested only in an intellectual property deal.

After Palm balked at those $4.75 bids, the company that had proposed the all-stock-deal dropped out. And Company C suddenly circled back with an acquisition offer of $6 to $7 per share, evidently having determined that its need for Palm’s patent portfolio merited the acquistion price. That sounds to me like HTC, which is facing a nasty patent battle with Apple (AAPL), a battle in which Palm’s patents could have proven quite handy.

But C’s proposal included a $60 million kill fee and some other conditions Palm didn’t much care for. Then the company reduced its bid to $5.50 a share. At that point Palm approached HP and closed the deal.

On April 24 Palm’s CEO and advisors communicated to HP and its advisors that, to remain in the process, HP must improve its offer significantly and immediately. Later that day, HP’s financial advisors verbally delivered a proposal to acquire Palm for $5.70 per common share in cash. HP’s financial advisors also requested a five-day exclusivity period. On April 25 HP delivered a letter confirming this proposal with a target announcement date of close of business on April 27 and sent a draft exclusivity agreement covering such period on April 26.

That’s the counsel from Barclays analyst James Ratcliffe, who thinks concern about FCC head Julius Genachowski’s “third way” proposal is overblown.

Genachowski’s plan–in short, he wants the power to regulate broadband, but promises not to really regulate broadband–shouldn’t have surprised the market. Because that’s basically what he’s been saying for some time. But yesterday cable stocks like Comcast (CMCSA) and Time Warner Cable (TWC) tanked (before everything else tanked) on his most recent pronouncements.

Relax, says Ratcliffe. He thinks the “network neutrality” framework Genachowski wants to install won’t “limit broadband providers from doing anything they reasonably could have expected to do anyway.”

And he spells out exactly what Genachowski wants the power to enforce:

Section 201: Prohibits carriers from unreasonably denying service and requires that pricing for service be “just and reasonable.” In addition, the section requires carriers to connect with other carriers when the Commission finds that connection to be in the public interest.

Section 202: Prohibits carriers from engaging in “unjust or unreasonable” discrimination among customers or localities when it comes to providing or pricing services.

Section 208: Allows individuals or municipalities to complain to the FCC if the terms of the Act are violated, and requires carriers to either correct the violation or respond in writing arguing that the Act is not being violated. Importantly, the section expressly states that the lack of direct damage to the complainant is not grounds for dismissal of the complaint (in other words, there is no requirement that the complainant establish standing in order to complain).

Section 222: Requires carriers to keep customer information and customer usage information confidential. In the telecom world, this applies to call volumes and destinations, primarily. In the broadband world, it would apply to browsing habits, contents and destinations of emails, etc.

Section 254: Would expressly classify broadband as a service for which the FCC is empowered to work toward universal service, and, potentially, enable the FCC to include broadband service in the pool of services which are taxed to contribute to universal service deployment.

Section 255: Requires carriers to make their services usable by people with disabilities, if “readily achievable.”

Sure, the cable guys would like to see less of this, not more. But the cable guys have always had to work with government regulation–the only question is how much and what kind. Most important in Ratcliffe’s eyes is that, “just and reasonable” pricing clause aside, Genachowski is specifically not looking for the ability to regulate rates.

The cable guys’ worry: What if Genachowski changes his mind–or if one of his successors does?

Maybe Genachowski can allay some fears next month when he’s onstage at the D8 conference.

And–sorry, Apple (AAPL)–it wants those apps to be written for Google’s (GOOG) Android OS.

Read the rest of this post on the original site

With Motorola (MOT) and HTC building some compelling new Android devices and a new iPhone presumably on the way, there’s no telling what Nokia’s market share will be this time next year. The company desperately needs a worthy super-smartphone contender (it’s clearly not the N900 or N97) or it will end up reducing forecasts for market share and profitability in perpetuity.

So what should Nokia do? Wedge Partners analyst Brian Blair has a suggestion.

Nokia should buy Palm (PALM)–for its webOS operating system and for the guy who quarterbacked its development, CEO Jon Rubinstein. And then the company should abandon its Symbian and Maemo operating systems–Blair dismisses them as “inferior” and “lacking polish and smoothness”–and build just a handful of smartphones, all based on Palm’s webOS.

“You need each other,” Blair explains in an open letter to Nokia’s leadership. “You have the manufacturing and distribution capabilities and global carrier relationships and Palm has the second best operating system behind the iPhone. Alone, it will be difficult for Palm to ramp globally and compete with the top players largely because it takes meaningful marketing dollars to ramp units across global carriers especially while you remain focused on R&D efforts. You, by yourself, will cede market share to your competitors each quarter as smartphones become a larger part of global handset sales and you fail to offer a compelling offering in that category.”

Continuing his evaluation, Blair says, “I know you said you expect flat market share in 2010 but that isn’t going to happen if you don’t act. I think you could lose 10% of your share by the end of 2010 to your competition, taking your global share under 30%. However, together, as a unified company the two of you would rock the foundation of the handset industry and create real worry for your competition because each of you bring critical elements to the table that the other lacks and you would be a powerful force complimenting each other’s strengths and addressing the other’s weaknesses.”

As Blair notes, stateside carriers might not have been so quick to dismiss the N900 and N97 if they had run webOS. And developers might not be so hesitant to write apps for webOS if the market for them was as vast as Nokia’s. Finally, with Palm’s market cap at around $1.6 billion and Nokia’s at nearly $50 billion, the Finnish phone maker could easily figure out a way to finance an acquisition.

Interesting proposal, yeah? Tough to see Nokia adopting it, though. The company has been pushing Maemo pretty hard lately. And it wasn’t so long ago that it invested some $410 million in Symbian and released it as a royalty-free open mobile platform. It seems unlikely that the company would simply dump it now. Even more unlikely when you consider that Symbian is by far the world’s leading smartphone software platform.

But you never know. Anything’s possible. And remember, it wasn’t so long ago that Nokia was making rubber boots.

UPDATE: Looks like Blair’s assessment of Palm’s market cap is off, and by quite a bit. The company’s fully diluted shares number at least 236 million. With Palm shares trading at $11.73 as I write this, the company’s market cap is $2.7 billion, not $1.6 billion as Blair suggests.

PREVIOUSLY:

• Nokia Buy Palm? Riiiiight.

“The parties have been in discussions with the Department of Justice both prior to and since the October 7 status conference,” attorney Michael Boni explained in a letter requesting the extension. “We met with the Department as recently as this past Friday, November 6. In light of the above, the parties respectfully request this additional time to file the motion.”

It would seem, then, that the latest version of the settlement did not adequately address the DOJ’s concerns that the agreement could violate antitrust law by giving Google “de facto exclusive rights for the digital distribution of orphan works.” Presumably if it had, it would have been filed on time.

Just hours after Julius Genachowski, chairman of the Federal Communications Commission, unveiled his open Internet proposal, a number of Republican senators stepped forward to oppose it. Arguing that Net Neutrality will “impede investment and innovation of new technologies,” Sen. Kay Bailey Hutchison (R., Texas) proposed an amendment to an Interior Department appropriations bill that would bar the FCC from using federal funds to implement the proposal.

“I am deeply concerned by the direction the FCC appears to be heading,” Hutchison, the ranking Republican on the Senate Commerce Committee, said in a statement. “Even during a severe downturn, America has experienced robust investment and innovation in network performance and online content and applications. For that innovation to continue, we must tread lightly when it comes to new regulations. Where there have been a handful of questionable actions in the past on the part of a few companies, the commission and the marketplace have responded swiftly.”

Joining her in proposing the amendment were Senators John Thune (R., S.D.), Sam Brownback (R., Kan.), David Vitter (R., La.), Jim DeMint (R., S.C.), and John Ensign (R., Nev.), who had this to say in a statement of his own:

“In this struggling economy, any industry that is able to thrive should be allowed to do so without meddlesome government interference that could stifle innovation. We must avoid burdensome government regulations that micromanage private businesses or that limit the ability of companies to provide what their customers want. The Internet has flourished in large part because of a lack of government interference; I see no need to change that now.”

Nor does AT&T (T), which–coincidentally, I’m sure–happens to be a top-20 donor not just for Ensign and Hutchison, but for the four other senators who would block Genachowski’s initiative as well. Said Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs: “AT&T would be very disappointed if [the FCC] has already drawn a conclusion to regulate wireless services despite the absence of any compelling evidence of problems or abuse that would warrant government intervention.”

Just hours after Julius Genachowski, chairman of the Federal Communications Commission, unveiled his open Internet proposal, a number of Republican senators stepped forward to oppose it. Arguing that Net Neutrality will “impede investment and innovation of new technologies,” Sen. Kay Bailey Hutchison (R., Texas) proposed an amendment to an Interior Department appropriations bill that would bar the FCC from using federal funds to implement the proposal.

“I am deeply concerned by the direction the FCC appears to be heading,” Hutchison, the ranking Republican on the Senate Commerce Committee, said in a statement. “Even during a severe downturn, America has experienced robust investment and innovation in network performance and online content and applications. For that innovation to continue, we must tread lightly when it comes to new regulations. Where there have been a handful of questionable actions in the past on the part of a few companies, the commission and the marketplace have responded swiftly.”

Joining her in proposing the amendment were Senators John Thune (R., S.D.), Sam Brownback (R., Kan.), David Vitter (R., La.), Jim DeMint (R., S.C.), and John Ensign (R., Nev.), who had this to say in a statement of his own:

“In this struggling economy, any industry that is able to thrive should be allowed to do so without meddlesome government interference that could stifle innovation. We must avoid burdensome government regulations that micromanage private businesses or that limit the ability of companies to provide what their customers want. The Internet has flourished in large part because of a lack of government interference; I see no need to change that now.”

Nor does AT&T (T), which–coincidentally, I’m sure–happens to be a top-20 donor not just for Ensign and Hutchison, but for the four other senators who would block Genachowski’s initiative as well. Said Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs: “AT&T would be very disappointed if [the FCC] has already drawn a conclusion to regulate wireless services despite the absence of any compelling evidence of problems or abuse that would warrant government intervention.”

BoomTown is at the lovely Santa Clara Marriott in Silicon Valley at the 2009 Yahoo annual meeting, liveblogging the event, which should be spectacularly dull.

Here is a rundown of what went on.

10:05 am: The meeting kicked off with a little video presentation with various and sundry television talking heads saying “Yahoo” in quick succession.

Actually, this was the year during which all of those hype-magnets repeated “Twitter”–the hottest media trend these days–so many times that it has began to make my ears bleed.

But I like the spirit of trying to make Yahoo (YHOO) seem relevant and innovative again.

Then, CEO Carol Bartz (pictured below) walked onto the small stage in the California Ballroom, declaring: “Well, that made me feel good.”

Exactly when does Carol not feel good?

She explained why: “I am having a ball,” speaking about her rehaul job at Yahoo, and then thanked shareholders after what was “a tough year last year.”

The board was introduced, with most of them being present at the meeting, except for Ron Burkle and Carl Icahn.

10:12 am: General Counsel Mike Callahan comes on with the blah-blah-blah about rules and votes.

I soon started thinking of the lovely breakfast pastries outside that I passed by outside. Drat!

This year, the 12-member board, now including Bartz, was up for reelection.

Last year, as you might remember, many of those board members were under siege by shareholder discontent.

Not in 2009. A major shareholder who was unhappy last year told me there would be no protest vote.

“Carol is doing a good job,” said the investor.

Yahoo was also asking for approval of its accounting firm, Price Waterhouse.

There were several important votes before the shareholders.

One was a standard one regarding executive compensation or a “say on pay” proposal, which was introduced by an outside stockholder.

Yahoo’s board recommended against it.

Another proposal regarded changes to be made to a 1995 stock plan and to a 1996 employee stock purchase plan.

The latter was most important, because it was a request to authorize more shares for future employee options grants. It will mean a large addition to the pool–30 million more shares–if authorized.

The stock will be used to keep valuable Yahoo talent in place. Good idea.

10:23 am: The floor was then opened for comments on the proposal and ballots were collected.

I was not on the edge of my seat.

Like clockwork or an election in the former Soviet Union, the board was elected, the stock plans approved and Price Waterhouse was in.

The “say for pay” proposal? It went down in defeat.

The people have spoken!

10:29 pm: Bartz took back the stage, which immediately livened things up.

She went through the history of her coming to Yahoo, which began with former Yahoo CEO and Co-Founder Jerry Yang (pictured here) asking if she was interested in the job at a Cisco (CSCO) board meeting.

Both are on its board.

Bartz also briefly recounted her meeting with Yang at his house, although she minimized the insulting aspect of the story.

She has maximized it in other tellings–such as in an onstage interview with me recently at the D: All Things Digital conference.

The basic thrust of the story was that Yahoo was a big mess that needed the Carol treatment.

Bartz, of course, did not stress that as much today. After all, Yang was sitting right in front of her.

Bartz noted that she has been asked about two things since coming on board:

What about a deal with Microsoft? And what the heck is Yahoo anyway?

She had nothing to say about Microsoft (MSFT) and said it would be said publicly only after any such deal was struck.

Actually, she has commented about talks with the software giant publicly many times, but let’s overlook that.

The Bartz went into the definition of Yahoo. It’s simple, she said. The largest global online media company. With technology. That everyone knows. Plus email.

10:34 am: Bartz ran through the new staff she has put in place, such as CMO Elisa Steele and others.

She then moved onto the top-to-bottom reviews she has been doing of Yahoo.

Including what she dubbed “space debris,” which are Yahoo sites that should be shut down, repaired or outsourced.

Bartz’s tone? Calm and comforting and reassuring–less the live wire she usually telegraphs and more the I’m-in-charge-here-so-remain-calm vibe.

She hit all the big targets, for good measure. Front page. Mobile. And, of course, advertising.

“Yahoo has a distinct opportunity in this area,” said Bartz, referring to its online display ad business. “Advertisers come to us.”

She ended by calling Yahoo a “home,” which is one theme the company is considering using as a brand strategy in an massive overhaul it is working on.

10:45 am: The floor was open for questions.

The first was a good one. Essentially, why is Google (GOOG) such a money machine when Yahoo is not? And why are its workers so much more productive in comparison?

“We have a very different model than Google,” said Bartz. “It has a cleaner process.”

As in, it is better at vacuuming up the dough!

Bartz, who has been trying mightily to end the Yahoo/Google comparison (smart move!), did not really give an answer.

“Please, this direct comparison model to Google is not fair and is frankly not relevant,” she said.

Well, it is actually quite a bit fair and a lot relevant, but we shall also overlook that one too (for now).

10:49 am: A fan question about how it was good that Bartz has been taking the focus off of the Microsoft issue too.

He also liked that she said she would take piles of money from the software giant, though, in a search partnership deal.

Then, the questioner dived right into the weeds, with questions about the front page, such as having too much dopey entertainment news on it.

Especially all that Jon & Kate and their gazillion kids crap!

This is a favorite meme for Bartz, who proceeded to quickly one-up the question by strafing a perfect celebrity target.

“If I see another Britney Spears item, I am going to throw up,” she declared in nauseous solidarity.

She then mentioned something called a “fluffometer,” which is apparently taking care of this most pressing issue of our time–the Lindsay Lohan threat.

Will it defluff Yahoo?

Inquiring minds want to know.

10:54 am: The inevitable China question was asked, of course, a query which has always tripped up previous Yahoo management.

“It’s very easy to get crosswise,” said Bartz, trying not to get crosswise.

She mentioned a recent human rights summit Yahoo had hosted. “We have actually done a lot, but it is never enough.”

Well, actually, Yahoo and many others did not do enough previously, but Bartz was pretty much steering clear of the thorny realities of doing business in China.

Then came the “vision” question.

Actually, Bartz said it was not about vision, but about growth. “We don’t have a vision problem, we have an execution problem,” she said.

Another question was asked about Internet censorship in China.

“I’m going to go real simple here: Yahoo was not incorporated to fix China,” she said. “It’s that simple.”

Bartz said the company was not going to take on every government in the world and that its “mistake”–referring to activists jailed due to Yahoo handing over information to the Chinese government–should not hound it forever.

Well, it should, but point taken.

The next question was about Iran and how popular Twitter is. Bartz said Yahoo was also in there.

11:04 am: A questioner asked about Facebook and why the social networking site was so popular, even though Yahoo had better products.

Bartz said Yahoo was working hard on making those products more social.

The next questioner asked about whether another Google partnership deal with Yahoo could be reborn. That deal went down in defeat last year.

“Justice is Justice,” said Bartz, referring to the federal government department’s opposition to the deal.

As in, you don’t tug on Superman’s cape, you don’t spit into the wind, you don’t pull the mask off the old Lone Ranger and you don’t mess around with Uncle Sam.

The next questioner asked about why Yahoo always told shareholders at meetings like this that it was doing great every year and then didn’t deliver.

Bear with us, said Bartz.

As to selling off its Alibaba assets in China: Not a good time to sell.

11:09 am: A questioner asked whether Yahoo might buy a newspaper, like the New York Times (NYT).

Yes, that would be a good move–out of the frying pan into the fire!

I was sitting right next to one of its reporters, Miguel Helft. No comment!

Bartz then thanked the Yahoo shareholders for having faith.

As I said, it was Bartz’s first annual meeting. But, for Yahoo investors over the last several years, having a lot of faith–too often tested–kind of comes with the territory.

Microsoft hit back at Yahoo’s account of its weekend talks about a search deal, in their own statement this afternoon, noting that “Microsoft believes the statement contains inaccuracies that need to be corrected.”

BoomTown translation of what Microsoft was saying about Yahoo: Liar, liar, pants on fire.

(Here is the full text of Microsoft’s statement.)

The discussions for an enhanced search deal, which were brokered by activist investor Carl Icahn last week, are the latest flashpoint of the contentious but increasingly tedious battle that has broken out over the fate of Yahoo.

Those talks collapsed on Saturday, after Yahoo (YHOO) rejected the new terms, most especially a stipulation that Icahn take over the rest of Yahoo left over, after Microsoft (MSFT) bought its search business and Yahoo’s Asian assets were sold off.

But a source close to Microsoft’s thinking told BoomTown this afternoon that it still offering the sweetened search deal without the requirement that Icahn take over.

“We want to do the search deal,” said the source. “The new deal is not dependent on Carl.”

The source did not give specifics on whether Microsoft would resubmit its offer to the Yahoo board or if the company felt it needed to.

Meanwhile, Icahn is waging a proxy battle against Yahoo and upped the ante on today by writing yet another angry letter about Yahoo, in the wake of the latest mess.

He and Microsoft joined forces a week ago, but even that seems subject to change.

A source close to Yahoo’s thinking disputes Microsoft’s account: “It was a joint proposal. They were on the phone together with us on more than one occasion pitching it. And look at point C in Carl’s release today–he admits governance was in it. This is completely disingenuous by Microsoft.”

Oh, the plot just keeps thickening, doesn’t it?

Nonetheless, in its statement, Microsoft did not even bother to hide its disdain for Yahoo, pretty much saying it had improved the deal to Yahoo Chairman Roy Bostock’s specifications.

And, indeed, the deal is much better, adding more guaranteed revenue, an increase in the TAC (traffic acquisition costs).

But, as opposed to Yahoo’s account, the Microsoft statement noted, “Microsoft’s proposal did not include changes to Yahoo’s governance.”

And so it goes.

Here is the entire statement from Microsoft (MSFT), released this afternoon, about its version of the new proposal it made with the help of activist investor Carl Icahn, who is waging a proxy fight against Yahoo (YHOO):

Microsoft Sets the Record Straight

At the time Microsoft submitted its enhanced proposal, Microsoft asked that Yahoo! confirm whether it would agree that the enhancements were sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets. This discussion has been mischaracterized as a take-it-or-leave-it ultimatum, rather than a timetable in order to move forward to intensive negotiations. Yahoo! informed Microsoft on Saturday that it had rejected the proposal.

Here is Yahoo’s full statement on the issue on Saturday and BoomTown’s post on the conflagration.

Here is the full statement from Yahoo (YHOO), released tonight, about the new proposal from Microsoft (MSFT) and activist investor Carl Icahn, who is waging a proxy fight against Yahoo:

Yahoo! Inc., a leading global Internet company, confirmed today that it has rejected a joint proposal from Microsoft Corporation and Carl Icahn for a complex restructuring of Yahoo! that would include the acquisition of Yahoo!’s search business by Microsoft.

Mr. Bostock concluded, “Microsoft and Mr. Icahn are trying to dismantle the Company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders. We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming vote.”

Here is Microsoft’s statement on the issue.