This morning, Yahoo said it had hired PayPal President Scott Thompson as its newest victim, oops, CEO.

(You can read my interview with him too, here.)

AllThingsD.com had reported the pending development last night — which is how we roll here.

Now we will roll into the conference call on the matter, and are hoping that the head of the lucrative eBay payments unit will make an appearance, given that he does not start until next week.

One piece of advice I will extend Thompson: I would refrain from cursing, as previous Yahoo CEO Carol Bartz did on her first outing. (She was fired in September, although not precisely for the cussing she so enjoyed partaking in.)

Here we go!

7:02 am: It’s on, with Thompson present.

Yahoo Chairman Roy Bostock begins, and he is “very excited, very excited.”

I’d be very excited if Thompson talked and not Roy, who has been to this particular Yahoo CEO rodeo a few too many times before.

Bostock is making promises that this time it’s going to be different. Really!

He also notes that the company will continue its “strategic review” — but who knows what that means now.

And he thanks Tim Morse, the interim CEO who is moving back to the CFO job. (Agreed — nice work, Tim!)

7:06 am: Scott Thompson is on and is “just thrilled” to be the new Yahoo CEO.

I like his accent, which seems like he might be from Boston. He does look and sound like Cliff Clavin, the mailman guy at the Beantown bar from the television classic “Cheers.”

Except, given he has been the darkest of dark horses in this CEO race, nobody knew Thompson’s name.

Thompson is saying all the right stuff, about wanting to increase shareholder value and such.

He sounds so hopeful! Urgency! Thoughtfulness! A bright new morning at Yahoo!

I have been to this rodeo before too, but I am still hoping this time it’ll work.

Scott, if you let me down, I might cry, because you sound so nice.

7:09 am Q&A time already.

Congrats from the Wall Street analyst peanut gallery.

Then, it’s right into a question for Bostock, about the progress of the Asian assets deal.

Also, is Thompson too much of a technologist and not a media dude?

Bostock wants to talk about only Scott, but notes that there will be “no slowdown and no delay” in the Asian process. And Thompson will be all onboard when he comes on board, folks.

Bostock sounds tired, but starts to talk about how a “great customer experience” is the key to the advertising business. He notes that Thompson knows how to do this, hence he’ll be fantastic.

“I have every expectation he’ll be out there calling on advertisers,” says Bostock. I would hope so, given that is where Yahoo makes most of its lettuce.

Bostock is saying Yahoo has been “treading water” and now needs to swim fast. Treading water? I wonder who the top honcho at Yahoo has been while the company has been listlessly dangling its legs in the drink?

Roy — that’s who!

7:15 am: Another analyst asks about margins.

Thompson is not having any of it! He is polite when asking for time to get on the job to make proper statements.

But he does focus on the need to build “great, innovative” products. True, but Yahoo has been incredibly unable to do this of late.

Thompson gives no specifics, though. My big idea: I would steal the self-driving car from Google.

7:17 am: A question about what the core of Yahoo is, and about what lessons Thompson is bringing from his experience at PayPal.

Well, he has not met the team — literally. Yahoo’s board consulted almost no one in the top ranks of execs on this appointment.

But Thompson “suspects” there is talent there. Given the recent attrition, he’ll need a big Inspector Clouseau magnifying glass to find it!

From eBay’s PayPal, he says that the key was balancing the customer experience with network effect and, well, blah, blah, blah Internet-speak.

I am still thinking shoplifting the self-driving car is the bestest idea.

7:20 am: A question about Yahoo’s display business versus Google.

Thompson notes it is too early for him to say — though he had better say soon! — but notes that data is key. He is a well-known by-the-numbers guy, and that is clearly where we are going at Yahoo, now that he is the big dog.

Thus:

“The data these Internet businesses create, the ability to use analytical technology to build a better businesses for your customers … I feel certain that wealth of data is going to be exploitable for next generation products, next generation experiences … My instinct says down in that data we’re going to be able to find ways to compete and innovate that the world hasn’t seen yet.”

I am really liking this accent, which is almost lulling. And so polite! Sources tell me that being “collaborative” was a big goal in this hiring.

7:22 am: A question about the identity of Yahoo, and whether it should be public or private.

Thompson harps on the need for innovation, and hopes it will be the future.

“I would not be here if I didn’t think it was possible,” says Thompson.

Bostock takes the public/private question. Yahoo will be public, he declares! Mostly, because it would be too pricey to take private.

“It’s a moot point,” he says.

7:25 am: More questions about what Yahoo is.

Thompson declines to run off the rails on this dicey one, but he says he believes that Yahoo has great assets.

It does. It’s just that it has been crashed many times — by the people who just hired him — right into a wall.

Just sayin’ — a self-driving car would have done a better job.

7:27 am: A brain-drain question, and more on Asia and on mobile.

Bostock butts in again. He said that Thompson will not be distracted by that, and will concentrate on the core business. Hush up, Roy.

Thompson says that he looks forward to meeting the peeps of Yahoo. (’Cuz he has not, as yet!)

He also loves mobile — which Yahoo has largely borked.

7:32 am: A content strategy question. Early days, so Thompson is still keeping his yap shut.

In this, he’s like the anti-Bartz. Is this good? It’s certainly different.

He says again that, “I can’t wait to meet” everyone at Yahoo. Vice versa, because this dude came from left field.

Thompson promises that he will be a “sponge.”

He closes by noting that he is “genuinely excited,” and says he believes in Yahoo.

Indeed, when it comes to Yahoo, you definitely gotta have faith.

I am here at Yahoo HQ in Sunnyvale, Calif., to check out “Product Runway,” which is the Silicon Valley Internet giant’s attempt to show that it can still innovate.

First and foremost is the launch of Livestand, a personalized news reader that is similar to Flipboard and a variety of other rivals, including — soon — Google.

It’s Yahoo’s attempt to present a business-as-usual feel — amidst a long and agonizing and very public strategic overview that might also include the sale of the company (or not!), in the wake of the recent firing of its last CEO, Carol Bartz.

It has caused a lot of trauma inside Yahoo, which can’t help with innovation.

But we press on!

In other words, despite the three-ring circus going on outside, Yahoo wants you to know it is still hard at work.

We begin:

10:35 am: As the strains of U2 die out, Yahoo Chief Product Officer Blake Irving takes the stage, which is actually set up in the company’s cafeteria. I can smell lunch being made nearby and I am hungry.

Apt — Yahoo certainly needs to show off a lot of cool stuff or its fate will be cooked.

No pressure, Blake!

“Personally, I am more bullish on Yahoo today,” he said. “What is Yahoo? Simple. It’s the premier digital media company. Period. Stop.”

Oh, if it were only that easy.

10:46 am: Irving pulls out his favorite slide, which looks like a chemistry test. It lists the various elements of the product strategy, with things like personalization, mobile, premium.

Now to Livestand, which is available on the Apple iTunes app store right now.

Don’t all rush at once!

Irving notes that Livestand is more than just an app — it is a platform.

In other words, Yahoo wants to help publishers publish online. Kind of a Facebook of content.

If Yahoo can pull it off, that is. (And, of course, unless Facebook decides to do the same.)

10:50 am: Livestand is an HTML5 “personalized living magazine.”

“This is the way Web pages are going to look,” declares Irving. Which is to say, heavy on photos, swoopy navigation, a television screen-like interface.

Irving uses the example of Surfer magazine, which is a good idea since waves always look pretty. Especially in a video-in-frame with Kelly Slater in Hawaii.

But, in essence, for anyone who has used Flipboard for years now, none of this is entirely different.

10:54 am: The look of what would be the Yahoo News page is actually much more interesting, since it is clearly a whole lot better than the Web page.

Irving also shows off a “living ad” — in this case, an unusually snuggly couple on a couch. It is cool, but creepy.

When launched, the ad has tap points. Irving — naughtily declaring about what is an ad, “I’ll tap that” — taps the lady’s butt, which would also have been my move. We learn about the jeans, of course.

10:58 am: Irving then shows off the ability to add feeds.

Next, something called “Cocktails.” First up, a developer tool called Yahoo Mojito and Yahoo Manhattan, which is a hosting service. The company will open-source both the technologies in 2012.

Irving brings up Mike Kerns, VP of Personalization & Social, who came to Yahoo when it bought the innovative sports fan site called Citizen Sports.

“We like to ship sh#t,” he notes. I like Mike Kerns immediately.

Kerns intros C.O.R.E. No, it is not a secret government organization that takes out fussy bloggers, who might be more critical than Yahoo execs would like.

In fact, it stands for “content optimization relevance engine.” Of course it does.

Simply put, C.O.R.E. is trying to link the right content or whatever to the right consumers and who likes what. Ladies like this, dudes like this. Apparently, “men of multiple ages” enjoy stories about golden chicken.

11:11 am: Kerns is moving on to social, especially its integration with Facebook. While much touted, sources tell me it has gone slower than expected in terms of use, but that it is improving.

Kerns talks about the idea of matching content to conversations to interests and, well, you know — the now exhausting world of modern media consumption.

The world in which you can no longer simply read an article and enjoy it — you must comment, share, discuss, parse, tweet.

Does anyone remember when you read something cool and just kept it to yourself?

Forget it, pal! It is a full-information society now and you better get on board and start poking your friends about every little thing.

(Personally, I plan on becoming a hermit in 3 … 2 … 1.)

11:18 am: Now Tim Parsey, who is Yahoo’s design head. He is hands down the most delightful exec the company has had in a while, mostly because he loves to smirk adorkably.

He shows off Yahoo’s first original design, which was a dull list. And then another really bad logo. But Parsey loves it! It’s kitschy!

Smirk attack!

Parsey moves into what has to happen now, which is to deliver a much more emotional experience and a much better designed one. He uses words like “humanism.”

Say what? He is right — Yahoo has for too long completely ignored design as an important part of the experience.

That’s why Flipboard was so quickly touted — it was pretty and fun. And it is why everyone is simply forced to love Apple products.

11:22 am: Parsey even has a code for it, called REM — for rational, emotional and meaningful.

He shows off a weather app. People take photos and they can be used in the app. Then Yahoo Mail for the iPad, whic is also handsome with photos and video. Livestand, also pretty.

“Great way to differentiate,” says Parsey. He calls it “one Yahoo!” Indeed.

11:35 am: I’ll admit it. After Parsey-fest, I zoned out for a sec when IntoNow dude, Adam Cahan, comes up.

Donut emergency!

Back to IntoNow, it’s the television indexing service that Yahoo bought in April.

Essentially, more ways to watch the media — in this case, video — and do 53 other things at the very same time. Memo to humanity: We will all be paying continuous partial attention for the rest of eternity.

Like I said: Hermitage!

11:41 am: Product dude Irving is back, making a point that, despite all the public mishegas, Yahoo has been busy at innovating.

A redo of email, better search, social “Facebar” with Facebook, Flickr for Google Android.

Irving is correct — Yahoo’s engineers have been hard at work and deserve kudos for doing so, even with attrition issues, stock declines and questions about the company’s very future being debated daily.

The problem is that too many of these improvements are mostly incremental and essentially table stakes for tech companies, most of whom have introed many more significant innovations in the same time frame as Yahoo has.

Google did Android, Google+ (as well as some notable failures). Microsoft did Kinect, Windows Phone, Windows 8. Amazon did Kindle Fire. Facebook did a range of major updates, as it has grown like a weed.

And there’s Apple. You might have heard of the iPhone and the iPad.

You get my point. Yahoo’s Product Runway today is well done, but what it really needs to be is just the beginning of a take-off.

11:48 am: Now Q&A time.

The first question is what took so long to get Livestand out, the second is why should people use Livestand since Flipboard and others have already been around for a dog’s age.

I ask about design — mostly because I want Parsey to use the word “delicious” a lot — and also about all the turmoil around the company and its impact on product creation. (I decide not to mention that Yahoo blew its acquisition of the bookmarking site, Delicious, and then sold it.)

Parsey delivers on the delicious scale, noting that Yahoo must have one design experience and yet has a lot of different interfaces. In other words, it cannot be Apple, but it can feel a lot more cohesive.

Irving talks a little bit around the obvious elephant in the room — the future of Yahoo — noting that the product staff was trying to focus and forget the storm going on outside.

“We have dreams about what this company can be,” says Irving.

You and me both, brother.

12:04 pm: More questions that are too detailed for my tastes, since they have delivered lunch and I can see it and I am ravenous.

As Parsey might say: It looks deliiiiiccccious.

Now, let’s hope Yahoo can do even more tasty stuff.

“Better check yo self before you wreck yo self”
– Ice Cube

Everyone in the technology industry seems to agree that people are paramount, yet nobody seems to be on the same page about what the people organization — Human Resources — should look like.

The problem is that when it comes to HR, most CEOs don’t really know what they want. In theory, they want a well-managed company with a great culture. They know instinctively that an HR organization probably can’t deliver that. As a result, CEOs usually punt on the issue and implement something that’s suboptimal, if not worthless.

Interestingly, one of the first things that you learn when you run an engineering organization is that a good Quality Assurance department cannot build a high-quality product, but it can tell you when the development team builds a low-quality product. Similarly, a high-quality Human Resources organization cannot make you a well-managed company with a great culture, but it can tell you when you and your managers are not getting the job done.

The employee life cycle
The best way to approach management quality assurance is through the lens of the employee life cycle. From hire to retire, how good is your company? Is your management team world-class in all phases? How do you know?

A great HR organization will support, measure and help improve your management team. Some of the questions that they will help you answer:

Recruiting and hiring

• Do you understand the skills and talents required to succeed in every open position?
• Are your interviewers well-prepared?
• Do your managers and employees do an effective job of selling your company to prospective employees?
• Do interviewers arrive on time?
• Do managers and recruiters follow up with candidates in a timely fashion?
• Do you compete effectively for talent against the best companies?

Compensation

• Do your benefits make sense for your company demographics?
• How do your salary and stock option packages compare to the companies that you compete with for talent?
• How well do your performance rankings correspond to your compensation practices?

Training and integration

• When you hire an employee, how long does it take them to become productive from the perspective of the employee, her peers and her manager?
• Shortly after joining, how well does an employee understand what’s expected of her?

Performance management

• Do your managers give consistent, clear feedback to their employees?
• What is the quality of your company’s written performance reviews?
• Did all of your employees receive their reviews on time?
• Do you effectively manage out poor performers?

Motivation

• Are your employees excited to come to work?
• Do your employees believe in the mission of the company?
• Do they enjoy coming to work every day?
• Do you have any employees who are actively disengaged?
• Do your employees clearly understand what’s expected of them?
• Do employees stay a long time or do they quit faster than normal?
• Why do employees quit?

Requirements to be great at running HR
What kind of person should you look for to comprehensively and continuously understand the quality of your management team? Here are some key requirements:

• World-class process design skills: Much like the head of quality assurance, the head of HR must be a masterful process designer. One key to accurately measuring critical management processes is excellent process design and control.
• A true diplomat: Nobody likes a tattletale, and there’s no way for an HR organization to be effective if the management team doesn’t implicitly trust it. Managers must believe that HR is there to help them improve rather than police them. Great HR leaders genuinely want to help the managers and could not care less about getting credit for identifying problems. They will work directly with the managers to get quality up, and only escalate to the CEO when necessary. If an HR leader hoards knowledge, makes power plays or plays politics, he will be useless.
• Industry knowledge: Compensation, benefits, best recruiting practices, etc., are all fast-moving targets. The head of HR must be deeply networked in the industry and stay abreast of all the latest developments.
• Intellectual heft to be the CEO’s trusted advisor: None of the other skills matter if the CEO does not fully back the head of HR in holding the managers to a high standard of quality. In order for this to happen, the CEO must trust the HR leader’s thinking and judgment.
• Understanding of things unspoken: When management quality starts to break down in a company, nobody says anything about it, but super-perceptive people can tell that the company is slipping. You need one of those.

Acknowledgement
I would like to give a very special thanks to my head of Human Resources, Shannon Callahan, who taught me everything that I know about this subject.

The company, which was previously called Answerly and which has made various online Q&A products over the last two years, has now moved its focus to figuring out who expert tweeters are and helping other Twitter users find them.

InboxQ co-founder CEO Joe Fahrner called the new InboxQ Profile tool the inverse of his company’s previous product, which helped companies find tweeted questions about their products.

It does seem logical that people with questions are easier to come by than people who want to install a browser extension to go answer other people’s tweeted questions.

Some 100,000 questions are asked per day on Twitter, with the majority of them going unanswered, according to InboxQ. (Maybe some of them are rhetorical?) With the new tool, users can find others who are qualified to answer their questions and compose @mentions to ask them directly on Twitter.

The top categories of questions asked on Twitter are product advice, tech support and local recommendations, according to Fahrner. His team of five has worked to identify one million subject experts — see for instance the InboxQ listings for Amazon AWS and Bikram yoga.

A start-up called PeerPong recently tried to do something very similar, but ended up shutting down and being talent-acquired by Formspring. Fahrner contended that PeerPong was too much of a black box — it took user questions into its system and then tweeted them via company accounts to identified experts. By contrast, InboxQ connects the questioner and answerer, and then let’s things happen from there.

San Francisco-based InboxQ was a Y Combinator start-up, and raised angel funding a year ago from investors including SoftTech VC, Lowercase Capital and Trinity Ventures.

When Greg Niemeyer takes his kids to the park, he doesn’t let them to play in the sandbox. It’s because of the trash. And broken toy fragments. And the fact that local cats have made it their litter box.

He asks himself, “Why is this sand so dirty?”

The answer isn’t something you will find on Quora, or on Google, either.

That’s why Niemeyer — and the University of California at Berkeley Social App Lab he leads — is building CitySandbox — a place for people to Q&A on issues affecting their municipal community.

Niemeyer, who co-directs the Social App Lab and oversaw the development of CitySandbox, believes a major failing of the Internet is how self-focused its content is.

With the exception of commerce-based ranking sites such as Yelp, Niemeyer thinks the Web is still not closely tied to the physical world.

“There are fairly few resources that describe the world as a place where things don’t need to be bought or sold, but where instead things can be acted upon by citizens,” he said in an interview.

CitySandbox attempts to fill the gap by making physical location the central way to navigate questions, setting it apart from other question services. And the embedded Google maps let users see what people are saying about, for example, the park down the street.

But the real differentiator, according to Niemeyer, is CitySandbox’s “Events” feature — soon to be reworked into “Challenges” — which encourages people to get their analog hands dirty.

Getting people to take part in challenges, however, has proven a challenge itself, according to CitySandbox lead developer Alex Nisnevich.

“Right now there are many civic issues that are discussed on the site, and the discussions are usually informative and helpful, but not once has any action ever been taken as a result,” he said.

That’s a shame, since just a little more than a month after launching, there are more than 240 users, 190 questions and 430 answers on the site.

But as physical-world as CitySandbox’s focus is, there is still a serious tech/real-world discontinuity it has to address: Tech products such as CitySandbox are built quickly, and real vacant lots get filled at a much slower pace.

Thus Niemeyer thinks his app lab — protected from the ravages of market forces by its position in academia — is the ideal place to solve the harder problems.

Some might ask why academia is even needed in the space.

“Mostly we are expecting business to address problems. Recycling has become a business, for example,” said Niemeyer. “We always tend to think that solutions are productive in a business sense.”

That’s not always so, and it means that CitySandbox’s success will depend on people’s desire to take action.

The real unanswered question remains: Can we rely on people to take civic action via the Web?

The CitySandbox team is optimistic. After all, you can’t Quora-away the mess from a sandbox.

Today, Demand Media beat Wall Street expectations in its second-quarter earning, growing revenue and lessening losses.

The Santa Monica, Calif., online content maker also announced that it had re-upped and expanded its advertising partnership with Google and also bought two start-ups in social media and advertising.

Now, it’s time for the inevitable conference call to explain it all to Wall Street analysts and the media.

2:02 pm PT: The call starts off with an unusually jaunty CEO Richard Rosenblatt, who quickly got to the real deal: Exactly how badly did Google’s changes to its search algorithm, under a program code-named Panda, hurt Demand’s content business?

Not much, says Rosenblatt, who reels off a list of things the company has done to improve its offerings, which have been dinged by many as, well, spam.

Rosenblatt was not having any of that, talking about removing 300,000 pieces of crappy content and also “quality improvements” with partners such as cheerily demented cooking goddess Rachael Ray. She might cook with spam — here is a delightful Spam Hawaiian recipe — but she ain’t spam!

2:13 pm: Now it is on to the acquisition of IndieClick. Essentially: It’s for the young people.

Then, international. Latin America Demand editorial via eHow en español! (Actually, the acquisition of Emergincast.com, an Argentine start-up. Coming soon to a blog site near you: ¿Cómo se hierve el agua?

Last, social media. Demand will be doing a lot more of it, like everyone else in the world, including more recommendations. I would really like it if some Internet company said it was going anti-social.

2:18 pm: The finance guy comes on, covering everything already in the press releases. Which is why I am cutting out here and getting a gluten-free doughnut at the Whole Foods store where I am writing this post.

It is as delicious as you might imagine a gluten-free doughnut can be. Which is to say: Not very!

2:32 pm: Q&A time from the Wall Street dudes — and, let it be said, they are all dudes.

The first question is about the “cleansing” of its cruddy content and if it is all flushed out.

It might be baked-on sludge, but Rosenblatt assures that Demand has it all figured out.

Then, a query about international and how the company decides what to pick. Algo, of course! And local content writers.

Back to the spam content: Does the need to have better content mean less of it? Kind of, since there is a lot more video. But still a lot of content churning out of Demand!

A question about Facebook and how to program Demand content into it. Good lord, it’s hyper-poking!

“It’s not clear the best way of how you expand into all these properties,” said Rosenblatt, specifically referring to its acquisition today of both IndieClick and RSS Graffiti.

The next question is how successful Demand is in the display and brand business, and how IndieClick, a premium ad company aimed at niche blogs, will be integrated in.

More on social media advertising’s future. Aaaghh, this is as obvious as a store-bought-crust apple pie baked by Rachael Ray.

Rosenblatt notes that its flagship site, eHow, is but one means of distribution, but Demand content is going all over the place and winging by people when they least expect it.

“Social is more effective … to try to find stuff you didn’t know that you needed,” says Rosenblatt, who also would not dis search as a means of discovery.

That’s important, since Google is a major traffic driver and advertising partner, when it is not terrorizing Demand and others with its search algo version of Defence Against the Dark Arts Professor Snape.

And presto, here comes a question about Demand’s Google ad relationship, which Rosenblatt touts nicely.

Of course he does. It’s tastier than spam, after all.

As these companies are wont to do in the middle of the night, Yahoo, SoftBank and the Alibaba Group have reached an agreement in their nasty dispute around the Alipay payments unit, and they are ready to talk about it.

Well, not Alibaba’s CEO Jack Ma (pictured here), Yahoo’s CEO Carol Bartz or SoftBank’s Masa Son, but their functionaries are all set to discuss the deal.

The issue has revolved around the spinning out of Alipay by the Chinese Internet giant Alibaba, without the approval of large stakeholders Yahoo and Japan’s SoftBank, which the pair felt was a big no-no.

Much mishegas followed, but the trio has been hard at work on a settlement, which is here now.

Of course, had the three companies cooperated in the first place as joint owners and board members of Alibaba, this all would have been unnecessary.

5:48 am PT: The call starts without all kinds of regulatory info about what can and cannot be said, before being thrown to Yahoo CFO Tim Morse.

One interesting wrinkle is that SoftBank’s Ron Fisher cannot speak at all, due to some Japanese laws, which are unexplained. But, said Morse, he’s there to show his support.

Go, Ron!

Alibaba’s CFO Joe Tsai is up first to talk about the deal over Alipay, which he stresses does not really make much money now. As he says, it is “marginally profitable.”

Tsai walks through the facts that they have already outlined earlier today, including a variety of payments from Alipay to Alibaba, since — let’s be clear — it used to be part of Alibaba.

But Alibaba said it had to spin it out in order to get critical regulatory approvals from the Chinese government, which caused this mess.

Morse now comes on, noting the whole squabble really had “no direct impact” from a financial point of view on Yahoo or SoftBank at this time related to its Alibaba assets.

Well, shareholders of Yahoo might beg to differ, considering the huge hit the stock has taken due to the fight. Wall Street has long considered Yahoo’s Asian assets its most valuable part.

But Morse is pleased the complex agreement has finally been reached — I am guessing it was not easy to negotiate among three different countries with so much pressure.

5:59 am: Time for Q&A!

The first question is about more deets and also about the possibility of a liquidity event for Alibaba or its various units.

Tsai underscores that there might not be one or there might be one. In other words, the Chinese assets of Yahoo may or may not ever pay off.

The next question is about why Yahoo and SoftBank should have a cap on an asset they used to own 100 percent of. Good point!

Neither Morse or Tsai really answers the question, except for Tsai talking about how certain rules over foreign ownership of payment companies in China means it had to be like this.

“If you own 100 percent of the business that cannot operate, you own 100 percent of zero,” said Tsai.

Translation: That’s China, folks, so suck it up!

The next question is a promissory note, which Tsai says has value, even though it actually does not have value right now. China!

The analysts still are stuck on this fact that, under terms of the agreement, Yahoo will only get 37.5 percent of an IPO or other liquidity event, when it used to be owner of 100 percent of Alipay.

Good point: Will this happen to other Alibaba units, such as its Taobao commerce unit?

China is a good place to be, assures Tsai, which is cold comfort right now.

A lot of swirl around preferential terms in the deal for Alipay with Alibaba’s units, which seem to be the same as before. In other words, nothing has changed, except a lot of stock loss for Yahoo and less technical ownership of Alipay.

The Wall Street analysts on the line continue to be riveted to the idea of a liquidity event for Alipay and other Alibaba units, especially Taobao, and keep asking different versions of this question.

The last question is about more deets of the deal and new business ideas for Alibaba.

Tsai talks about a cloud-based system rolling out, for example.

The questioner moves to, you guessed it, a liquidity event.

“I don’t think we want to get into it at this point,” says Tsai.

Well, we do, but apparently Yahoo shareholders are not going to.

That said, the deal is finally settled, which has already given Yahoo shares a small bump today. And that’s not nothing.

Yahoo turned in another weak performance in the second quarter, with yet another decline in revenue.

This time it was five percent, compared to last quarter’s six percent. In other words, at least things are looking up as they go down!

While earnings per share rose smartly, Wall Street is still looking for strong sales growth from the Silicon Valley Internet giant, which seems unable to provide it.

Blamed most this time for the revenue fall: Yahoo’s changes in its display sales operations in the key Americas region, reasons for which were largely unspecified in the initial company press release. (You can see the damage in this slide deck from the company here.)

Maybe Yahoo CEO Carol Bartz will explain it all in its upcoming conference call with analysts (or she could try the I-don’t-know approach taken by News Corp. CEO Rupert Murdoch in PhoneGate hearings in Britain earlier today!).

2 pm PT: It starts with the usual regulatory blah-blah, which I always enjoy.

Bartz gets right into it, opening with the key problems with China’s Alibaba Group, as well as its display and search revenue weaknesses.

The fight with Alibaba is over its Alipay payments unit, which was spun out of the Chinese company without Yahoo’s say-so. Yahoo is a big shareholder.

Bartz says that the company was working on a settlement night and day.

But she quickly gets onto how display did not perform as expected in its key Americas arena. “Obviously, I am not happy,” she said.

Obvi! Neither are shareholders, Carol.

She says it was not about new competitive development. It was not about the economy. It was not about engagement.

So what was it? Changes in its sales leadership and organization, says Bartz, which has included talent walking out the door in droves.

A lot more than Yahoo expected, but no surprise to anyone who has been paying any attention to the brain drain at the company.

Bartz promises a new approach to sales, part of its endless turnaround, which is beginning to feel like a digital version of “Waiting for Godot.”

Search revenue, though, says Bartz, was better than expected.

2:11 pm: CFO Tim Morse is on now, running through the numbers and the display shortfall in the Americas region.

“We simply did not have appropriate coverage,” says Morse, noting consumer products, tech and autos as weak spots in the advertising market.

Thank goodness, then, for the guarantees from search revenue in the Microsoft partnership deal.

More numbers and then it is back to Bartz to talk about search, which is going better than the last quarter, when it was the culprit for the revenue decline.

She says that Microsoft and Yahoo were working together to improve the issues.

“We’d like to be further down the road,” says Bartz about the goal of search revenue per search growth, as well as settling all the other problems, such as the Asian issues.

And, by further, I am presuming she means actual forward movement, which is what roads are actually for.

2:27 pm: Q&A time, the part of our program where Wall Street analysts do not ask the questions that need asking (and where I win fancy journalism awards for pointing this delta out!).

Therefore, Bartz is first thanked for providing “color” about the display disaster and is not asked about more specifics of the disaster itself.

The second question still does not get to it either, but she does note Yahoo’s sales force has to sell beyond “Gee, we’re big” and come up with better ad solutions.

“The issue is we did not have enough sales people in front of the big clients,” says Bartz.

That’s because all those former Yahoos are now working at Groupon, LivingSocial, Facebook and on down the line and now in front of big clients for those hotter companies.

2:34 pm: Question about its Asian assets. Yahoo’s talks with Yahoo! Japan and Alibaba are separate, says Bartz, although I would add that they have non-movement in common.

And also a question about Yahoo’s interest in the acquisition of the Hulu premium online video service.

Bartz winks verbally and says nothing, which translates into: Of course, it is interested.

More on the reasons for the display fall-off, which Bartz makes clear is not due to big competitive threats, but internal issues.

Maybe she’s saving big competitive threats as the reason for a revenue decline in the third quarter!

I look forward to the quarter I get the finger pointed at me for causing revenue to fall, due to my snarky posts.

Now, we are into softball questions about improvements in engagement. It’s up, but no one asks why Yahoo is still not doing anything very cutting edge in product innovation compared to competitors.

I believe Google has launched at least 14 new social networks since this Sunday, along with its strong quarterly performance last week. And Apple, well, blew away its quarter today as it is about to release more cool new stuff later this week.

And that might be the crux of the issue for Yahoo, which might not solve its woes by throwing a more focused sales army at the issue.

That’s because Yahoo’s products are simply not nearly has social as Facebook or even Google right now, which might be the true problem as old customers move on to new advertising solutions.

Whatever the reason, Yahoo clearly needs a refresh of its ad products and how it sells them, especially in its fast-growing mobile, video and communications products.

Bartz talks about getting better expertise, a tighter regional focus and other issues of going to market, which is perhaps something she might have realized many, many quarters ago.

After all, she’s been in charge for a while, and these issues are not new.

In fact, in an earlier quarter, Bartz was stressing “tentpole” events and anchor media properties and the power of the size of Yahoo as a selling point.

This was in April, in fact, in the first quarter of this year.

As I wrote then:

“CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars. 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.”

Now big is out! Moving on!

The last question is another about Yahoo’s talks with its Asian partners.

“It’s complex,” says Bartz.

You can say that again.

You won’t find out on Curiosity.com, which Discovery Communications is unveiling today.

But you will find lots of other answers, some of which come from famous people, like musician Wynton Marsalis and Google “evangelist” Vint Cerf.

Q&A sites are a Web staple — see Answers.com, Yahoo Answers, and Quora, for starters — but Curiosity is an interesting take: Rather than providing crowdsourced answers to user-generated queries, the site relies on experts to respond to a selected set of questions.

Some of the experts are famous people the site has recruited, and who contribute their answers via text and video. The rest of the stuff is sourced from other Discovery networks and sites. The answer to “Can frogs fall from the sky?” for instance, comes from Discovery Channel. (Answer: Yes, more often than you’d think.)

The fact that this isn’t crowdsourced means that Curiosity will never have the search-friendly volume that sites like Answers generate, though Jeff Arnold, who built the site for Discovery, figures it will still get plenty of inbound links from Google.

The bigger idea, Arnold says, is to attract “learners” — people who will want to noodle around on the site and come back to it over time — instead of one-and-done searchers.

If Arnold’s name is familiar, there’s a reason: He’s the former CEO of WebMD and also the man behind HowStuffWorks, which he sold to Discovery in 2007. Most recently, he launched Sharecare, a Q&A site for health care, and is using the same engine to power Curiosity.

Today, after Demand Media beat Wall Street expectations, its execs got on the horn with investors to explain how it plans to beat the Panda.

That would be the beastly name for Google’s rejiggering of its search algorithm, in order to rid search results of poor quality content.

Along with many other sites, Demand has gotten smacked by its raging paw.

Still, the Santa Monica, Calif.-based company reported revenue of $79.5 million and six cents a share in adjusted net income.

Wall Street was expecting the company to report about $69.6 million in revenue for the three months, with four cents a share in adjusted profits.

On a GAAP basis, net loss per share was 13 cents compared to 94 cents a year ago.

Here’s the liveblog of the conference call:

2 pm PT: Demand’s investor relations dude came on and I immediately tuned out until CEO Richard Rosenblatt got on the line to talk about the results.

He was as perky as ever, launching right into the meat of the situation–how Demand was going to pretty up its offerings, such as a redesign of its flagship eHow site and its new editorial arrangement with another perky person, food lady Rachael Ray and the also perky fashionista/talk show lady Tyra Banks.

Gone will be user-generated content that Demand used to let people post at will on its eHow site that was, well, less than good.

As in, bad.

Instead, it’s “curation,” “editorial innovation” and feedback cycles.

We old-timers like to call that journalism and copyediting, complete with mean old editors who spiked said copy when it was crappy.

“Let me be clear,” said Rosenblatt, the Google changes did negatively impact Demand’s traffic. But Rosenblatt said the company dug into its content and has been improving it since.

2:17 pm: Now it was CFO Charles Hillard reading the results themselves. I am sorry, Mr. Finance Guy, but I can read it myself, so this is always the time in earnings calls when I check out and spend my time improving my content.

So when I heard words such as “stock-based comp,” I moved on to fixing all the typos that a very nice reader alerted me to, since I was writing too quickly.

Then, I briefly considered writing a high-quality post for eHow on how to write earnings and fix typos at the same time. I am that good.

2:30 pm: The CFO dude finished up and the Q&A with analysts started.

All Panda questions, natch!

Rosenblatt seemed calm, cool and collected.

“We think on this one, they did a very good job,” he said of Google’s search-fixing efforts, trying to soothe the savage beast. “We all continue to evolve.”

Which translated to: Google says jump and we say: “How high?”

Which is then followed by: “Please sir, can I have some more (traffic)?”

More Google algo change questions.

I suspect there is a new tactic afoot by Demand: Bore us into submission about the traffic devastation from Larry Page’s minions with endless questions about algo.

Finally, a question about mobile and international expansion. Apparently, Demand content is going to be translated into five different languages.

Yay! I am readying my version of “How to Boil Water” in French! (“Comment Faire Bouillir L’eau”!)

Mobile is going to be big too for Demand, which it is for everyone.

Then it was onto a question about improving content, including paying its writers more moolah, which would then eat into the Demand cheaper content business model.

I liked that question! I suddenly decided I was going to shift to a lugubrious post on the history of the Maginot Line in 132 parts!

Oops, Rosenblatt said the data has to show that the peeps want those longer pieces.

Back to the boiling water opus!

It’s on to some video questions and then back to search, as in diversifying away from relying on search to get traffic and premium prices for its advertising.

As in, how much are you going to cozy up to Facebook CEO Mark Zuckerberg?

“It’s less about where traffic comes from and more about where they land,” said Rosenblatt, except you just know he sent a lovely floral bouquet plus a hefty selection of citrus to Zuckerberg’s new house in Silicon Valley right after Panda roared.

Rosenblatt deflected a lot of questions in this arena. “We still think that search is a fantastic way” to gain traffic, he said, making sure Google’s Page did not chomp off his hand as he courted his social networking nemesis at Facebook.

But as the old Kikuyu proverb goes: “When elephants fight, it is the grass that suffers.”

More likely, as Mary Chapin Carpenter sings: “Sometimes you’re the windshield. Sometimes you’re the bug.”

We’ll see which is which for Demand in the quarters ahead.

Until then, here’s Carpenter performing her song, “The Bug”:

MicroHoo is funky!

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

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

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

The results were essentially in line with Wall Street expectations.

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

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

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

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

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

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

Just askin’!

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

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

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

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

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

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

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

Good idea!

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

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

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

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

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

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

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

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

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

2:30 pm: Q&A time!

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

The next is about other revenue growth areas to come.

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

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

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

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

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

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

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

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

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

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

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

A question about display and possible content verticals.

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

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

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

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

The next question is about communications, as in email.

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

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

It’s–no surprise–an RPS question!

Funky!

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

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

Now a local advertising question and its relationship with Facebook.

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

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

A question about daily deals.

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

Finally, the last question.

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

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

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

Up would certainly be good.

The new Questions has been built to spread throughout networks of friends, unlike the last version, which was only available to pockets of beta testers. Users can still ask open-ended questions on the service if they want to, but Facebook will mostly highlight requests for advice from friends in users’ feeds.

All questions are still public, and answers by all users to the same question are listed on the same page. However, each user gets a personalized view of the responses, ranked by what their friends voted. Respondents only have to check a box to participate in the poll themselves, and information about a movie or restaurant can be quickly included by linking to its Facebook page.

The current version of Facebook Questions is much more differentiated from Quora than the previous one, which had in many ways resembled the Q&A site founded by former Facebookers. In fact, Quora explicitly disallows polls.

The original Questions had a particularly rocky product launch, with lots of initial bugginess and a slow roll-out.

The new version is to be available much more broadly (though right now available only in English), Facebook said. Users can get access to the beta by opting in at Facebook.com/questions.

Please see the disclosure about Facebook in my ethics statement.

“Computers are really here to make us happier,” Schmidt said, promising these devices will give people more time with friends and family, not less.

Schmidt, who gave up the CEO role last month, said that nearly all devices will get more interesting when they connect to the Internet. A music player that doesn’t connect to the network isn’t very interesting, he said, perhaps opening the door to the announcement of a long-talked-about, cloud-based Google music service.

The talk is just geting started. Mobilized got a really good seat in the front row, just two seats over from Andy Rubin, and has live updates below.

5:59 pm: Schmidt talking about things phones should be able to do, such as figure out better traffic routes and bridge language barriers. “You really can do magic,” he says, pointing to Google Translate, which lets you speak one language and have a language you don’t speak returned. “That’s done in a twentieth of a second or what have you,” he says.

6:01 pm: Brings out colleague to show an application on “an interesting new device.”

6:03 pm: The device is the Motorola Xoom tablet and the program is “Movie Studio,” an app built from the ground up for creating and editing movies on tablets.

He has a few images and videos from around Barcelona.

He creates a movie onstage and shows how it can easily be shared on YouTube. (This looks like iMovie and Windows Live Movie Maker so far–both of which also let you edit movies and share directly to YouTube.)

6:07 pm: Upload goes slowly, though, as Schmidt notes it is the problem of doing a demo at a mobile network convention where everyone is hammering the networks.

6:09 pm: The goal of many of Google’s products, Schmidt says, is to do tasks quickly so that people can get back to being human. “We ultimately believe that speed matters,” Schmidt says. Google Instant, he says, can save two to five seconds per search.

Search is also becoming more personal. With permission, users can get more information. Next up, he says, is autonomous search as information comes up as one walks or drives, and is driven by location.

“That’s just the beginning of a large number of new apps that use that infrastructure to make a big difference,” Schmidt says.

Schmidt says how much info to share will be up to the user, but those that opt in can get much richer results.

There’s also a trend, he says, to returning more structured data, such as travel.

6:12 pm: Stat time: 120 million people using Chrome, up three times from a year ago.

YouTube revenue doubled in 2010. Now just being able to monetize professional content at a rate that starts to make sense for content partners.

6:18 pm: Computer science can help all kinds of things, Schmidt says. With phones and tablets, “You never forget everything” which is precisely what phones are good at.

If you choose, you can remember the hotels you stayed in and the people you met, etc., “Humans forget,” he says.

Computers are also preventing people from ever getting lost. When I was a boy growing up in Europe “I was always lost,” Schmidt says.

Translation may not prevent war, but should at a minimum increase dialogue, Schmidt says.

6:18 pm: “Even better you are never lonely,” he sats, because computers can point you to nearby friends or connect you to distant ones.

You are never bored, Schmidt says. You are never out of ideas because we can always suggest what you can do next.

Other changes, include the self-driving cars that Google has been working on.

“It’s obvious that cars should drive (themselves),” he says, adding that there will be a “kill switch” in case there are bugs. And it will take time, he says.

“This is coming. It will be decades, I suspect–not a year.”

He also says these innovations will scale to the masses.

“It’s a future for the masses, not the elites,” he says.

6:21 pm: With that, on to Q&A.

6:23 pm: Talking about targeted broadcast quality ads as next frontier.

“Who wants to see an ad that is not relavent to them,” Schmidt says. And that leads to revenue, which Schmidt points out is the whole point of advertising in the first place.

6:24 pm: Question on Android fragmentation saying there is frustration among phone makers and developers.

“We hear some of this,” Schmidt says. “You’ve stated the problem more strongly than I would have, but I will take that as feedback.”

6:26 pm: Question about role of Google in financial services.

Schmidt quips that Larry Page and Sergey Brin periodically suggest that Google issue Google Bucks as its own currency, but Schmidt says he always points out the regulatory issues.

On a serious front, he talks about the power of near-field communications as a means to turn real-world transactions into electronic ones.

“In that are very large businesses,” he says.

(Google built NFC into its Nexus S device.)

6:29 pm: Are you interested in Twitter?

“We love Twitter and I like to tweet,” Schmidt says, eliciting laughter from the crowd.

6:31 pm: Why so many operating systems?

Sometimes these things occur because the teams move so quickly, Schmidt says.

People have been asking when Gingerbread and Honeycomb will come together. Schmidt: You can imagine the follow-on release will start with an “I” and be named after a desert and will combine the best of both, Schmidt says.

These releases occur on roughly a six-month cycle, Schmidt says.

6:33 pm: On Chrome OS, Schmidt says there will be an opportunity to merge that with Android over time, but better to wait for the operating systems to mature and a natural time than to push them together too soon.

6:34 pm: On HTML5, Schmidt imagines that some number of years from now, most apps–mobile and desktop–will be running on HTML5.

6:39 pm: Question on Google’s role in health care.

Phone should be able to, at a minimum, carry medical info. Several percent of queries on Google are health-related.

6:42 pm: Is Facebook with its “Like” button a main competitor?

Today our main competitor is Microsoft. Microsoft has a good product in Bing, he says.

“There’s a couple cases where it might be too good. We discussed that in a blog post.”

They have the cash, the scale and the reach to do good and amazing things.

6:44 pm: On Nokia-Microsoft partnership:

“We would have loved it had they chosen Android,” Schmidt says. “That offer remains open.”

Android would have been a good choice for Nokia, he says.

‘We certainly tried” to get them, he says.

6:46 pm: How do you approach the fact that Android going higher and lower in the market?

Schmidt says that the company tries to show the best in its Nexus line, while putting minimum specifications out there to set the bar for what developers can expect.

6:47 pm: Question on why Google is not more broadly used in the education market?

Schmidt says the company has funded a number of YouTube professors. “We’ve not yet come up with the killer [education] app,” he says.

6:49 pm: Asked about Google’s interest in the PC operating system market, Schmidt says that Google’s answer is Chrome OS. Sometime in the spring you will see a series of PC makers come out with Chrome OS devices. However, he adds they won’t run current PC apps, such as Windows apps.

“It does not run any of your current PC applications so you might think about it,” Schmidt said. That said, he adds there are, in most cases, cloud-based options that are roughly equivalent.

6:52 pm: With that, Schmidt wraps up.

“The experience has to be the same,” Costolo said during an afternoon keynote speech at Mobile World Congress in Barcelona. “I shouldn’t have to think how to use Twitter.”

About 40 percent of tweets come from a mobile device, while half of all active users are active on more than one device, he said.

Until not that long ago, Twitter built only the product for the Web and let third parties handle phones and other devices. In recent months, though, it has scooped up various app makers and now offers official apps for the major smartphones. However, given that those official apps stem from different acquisitions, they often work in different ways.

Costolo said the company also wants to make sure that one doesn’t have to sign up and follow lots of people to get something out of the service.

“We want Twitter to be instantly useful,” he said.

With Twitter for Windows Phone 7, the company introduced the notion, already present on the Web, that one shouldn’t have to be an active user to have Twitter on their phone.

His talk is still ongoing and I’ll update things as it continues.

5:32 pm: Costolo said the company will begin offering crowdsourced translations of the service into Russian, Turkish and Indonesian and, later this year, will have its own translation to Portuguese.

5:33 pm: Some stats from Super Bowl, this year.

4,000 tweets per second at the end of the game and 3,000 tweets per second during the game. That was 27 tweets per second in 2008.

The overall record is New Year’s Eve in Japan (the country has a single time zone) and the prior sporting event record was from last year’s World Cup.

5:34 pm: Twitter is actually bringing things back to live TV and away from the DVR.

“That’s not just happening with live sporting events,” Costolo said. He cites game shows in the U.K.

5:36 pm: “Glee,” for example, has 30 times the number of tweets about it when the show is on.

Takeaway: the long-talked about second screen of interactive TV is here and it is Twitter.

5:38 pm: About Twitter as a business: The short answer is we are already making money, Costolo said. The really good thing, he said, is that businesses can use the service in the same way as others–building community around shared interest.

5:41 pm: A viral campaign of note. Al-Jazeera highlighting its coverage of the events in the Middle East and North Africa with the hashtag #demandaljazeera to get its programming on U.S. cable systems.

5:44 pm: Costolo, on the role of Twitter and Facebook in recent events there:

“I think that takes away from what these people have accomplished,” he said. “We are probably a very small piece of the puzzle.”

5:47 pm: On to Q&A. Battery is running low, but hoping to make it through the question period.

First question came in over Twitter and asks what is the company’s biggest fear.

“Twitter’s biggest fear is lack of execution,” Costolo said, saying he tries to convince workers not to focus on competitors. “If we execute on what we are trying to do we will be successful.”

5:48 pm: A couple of questions on local trends and translations. Costolo said that crowdsourcing offers a way to do more translations quickly, while the trends piece requires more work on Twitter’s part, some of which should be done this year.

5:53 pm: What is the biggest mistake Twitter has made?

Costolo said company’s founders would say they shot themselves in the foot, head and everywhere else not hiring or scaling fast enough.

“I think we are out of the woods on that one,” Costolo said.

Next question is on what Twitter is doing in response to its pivotal role in Arabic-speaking countries right now. Costolo noted that Twitter doesn’t yet support right-to-left languages.

On being blocked, Costolo said Twitter is only a 350-person company and doesn’t have the resources of some larger companies. “We try to just leverage our own platform to plead for help,” he said.

5:58 pm: Costolo is asked if there is a need for Twitter-branded smartphones.

“No,” Costolo said. “I believe there is a need for Twitter in the existing platforms.”

Earlier in his keynote, Costolo said he wants deep integration so that when a user takes a picture they don’t have to open a separate app to tweet out that picture.

6:03 pm: As for rumors that Google might be willing to pay $10 billion for the company.

“I don’t know where these things come from,” Costolo said. “It’s just a rumor.”

6:03 pm: End of keynote. (just as my battery was on its last sliver of red, too!

The VC arm, which gets $100 million from Google each year to invest as it sees fit, wants to give more early-stage companies seed funding, and to that end has taken over an enormous Google-owned building in Mountain View, Calif., and started filling it with companies. The space is mostly empty; there are just about 20 people working there now.

Google Ventures Partner David Krane took us on a tour of the Startup Lab, which opened in October and is currently occupied by start-ups like LawPivot (legal Q&A) and OpenCandy (software discovery), a product group from the vacation rental roll-up company HomeAway, and the yet-to-be-launched company of GrandCentral (now Google Voice) founder Craig Walker (which Google Ventures hasn’t invested in yet, though it’s made Walker an entrepreneur in residence).

The companies each pay $5 per month for as much space as they need, filled with recycled furniture from AdMob. They get a ping-pong table, free bikes and a microkitchen filled with snacks, courtesy of Google. They also added their own barbecue for the universal getting-to-know-you activity of grilling meat.

“This is not to be thought of as any sort of curated environment,” Krane said, anticipating the are-you-copying-Y-Combinator question. “This is merely work space.”

Krane said he mostly leaves the companies at the Startup Lab alone, stopping by about once a week. Google Ventures occupies its own floor of a building over on the other side of campus, right below Google’s autonomous car team, and also has offices in New York City, Cambridge, Mass., and Seattle.

Google Ventures has made about 30 total investments to date, with one exit: Ngmoco to DeNA. Just last week, it closed its first deal with a company led by former Google employees, the Web security provider Dasient.

It’s kind of crazy that a two-year-old venture firm with a staff of about 20 former Google employees wouldn’t have stumbled into investing in a former Googler’s company before now. And this is at a time when Google is fighting a talent war against its own employees’ entrepreneurial urges, which often lead them to join younger companies or start their own.

Krane said to expect more deals with former Googlers as Google Ventures “will do substantially more than 30 deals” this year.

“We don’t advocate or want people to leave Google,” Google Ventures Partner Bill Maris said, “but if someone has the entrepreneurial bug at that exit interview…”

]]> http://allthingsd.com/20110212/google-ventures-sows-seed-funding-with-new-startup-lab-video-tour/feed/ 6 http://allthingsd.com/20110211/live-from-nokias-investor-meeting-does-the-new-strategy-add-up/ http://allthingsd.com/20110211/live-from-nokias-investor-meeting-does-the-new-strategy-add-up/#comments Fri, 11 Feb 2011 12:02:08 +0000 Ina Fried http://mobilized.allthingsd.com/?p=3904

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Significant uncertainties in this period.

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

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

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

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

On to Q&A for financial analysts.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“That was a critical evaluation,” he says.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1:41 pm: Elop wrapping up.

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

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

COMPLETE COVERAGE:

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

]]> http://allthingsd.com/20110211/live-from-nokias-investor-meeting-does-the-new-strategy-add-up/feed/ 0 http://allthingsd.com/20110209/cisco-earnings-beat-estimates-but-only-a-little/ http://allthingsd.com/20110209/cisco-earnings-beat-estimates-but-only-a-little/#comments Wed, 09 Feb 2011 21:15:14 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=3015 Cisco Systems reported earnings that slightly beat the revised estimates of analysts for its fiscal second quarter. The company reported earnings of 37 cents per share on sales of $10.4 billion. The results slightly beat the consensus of analysts. Thomson Financial had forecast earnings of 35 cents a share on revenue of $10.24 billion. Shares in Cisco fell more than one percent in after-hours trading.

CEO John Chambers said in a company statement that the quarter “played out as we expected” and that the company is “going through a period of transition as we move aggressively in the market with our architectural strategy….Simply put, we are owning our evolution and the next generation of industry leadership.”

That’s a change from the “air pockets” phrase Chambers used to describe the surprise downward in Cisco’s guidance when it last reported earnings in November, and the stock has yet to recover from the drop that resulted. More as I go through the numbers.

4:38 pm: Chambers: Our routing architecture is in the best shape in its history.

Chambers: We are in the middle of a major product transition with dramatically higher price performance advantages. With this in mind we did see our switching revenue decline 7 percent.

4:41 pm: Chambers: We are seeing pricing pressures on our Catalyst portfolio. This is where our competitors are targeting us and this is where we intend to own our evolution.

We are moving very aggressively to prevent any future erosion of our product share.

Services revenue increase 18 percent year over year.

International bookings are okay. Italy was the only country to see a fall.

Enterprise solid. Grew 10 percent year over year. Public sector grew 7 percent. U.S. public sector orders grew 9 percent. [He thinks orders will worsen in this sector in the coming quarters.]

Set-top business declined.

4:44 pm: Initial customer and industry feedback to Videoscape is being received well

4:45 pm: Chambers: There were a number of areas where we are pleased with our progress.

Guidance coming up.

4:47 pm: Q3 revenue 4 to 6 percent year over year.

Q4: 8-11 percent increase year over year.

4:48 pm: As I look, stock is now trading down nearly 4 percent after-hours.

Frank Calderoni, Cisco CFO is now on the call.

Calderoni: There are multiple product transitions in areas such as switching, which, although expected, are happening faster than expected.

4:56 pm: Cash and equivalents: $40.2 billion. Cash flow from operations: $2.6 billion

4:58 pm: Calderoni says Cisco would issue a dividend in fiscal 2011 with a yield in the 1 to 2 percent range.

4:58 pm: Shares now down about 6 percent.

More guidance coming up from Calderoni.

5:00 pm: Q3, we exepect revenue growth of 4 to 6 percent year on year.

That’s with one less week this year than last year.

Q3 we expect non-GAAP operation 23 to 24 percent

EPS 35 to 38 cents per share.

In Q4 we expect 8 to 11 percent growth in revenue year over year.

FY11 will be mid to lower end of 9 to 12 percent given in previous guidance.

5:03 pm: John Chambers is back on the call.

Enterprise orders growth good. Grew high 20 percent range.

Shares are down 9 percent on that “lower range” guidance for the full year.

We believe we are not losing market share with developed-world governments.

This growth will be severely challenged in the next several quarters, and will grow in the low single digit.

5:11 pm: We believe the growth in enterprise will balance out the challenges in government business.

5:12 pm: Decrease in gross margins was affected by several factors.

He says the company has started something called a working group to study the decline in gross margins. What does that mean?

5:17 pm: Shares are within sight of trading down 10 percent after hours.

5:18 pm: Chambers: I think we will look back on this period of time and wish we could have avoided it, but it will make us stronger.

Q&A about to start. Should be interesting.

5:20 pm: Chambers: Bookings were comfortably above the revenues. In terms of momentum in switching I would expect them to be positive.

5:39 pm: Chambers is now talking about tax policy. Echoing a point he’s made repeatedly about bringing cash that’s held overseas into the U.S. He think the taxes are too high.

5:39 pm: Cash in the U.S. is $3.1 billion versus total cash holdings of more than $40 billion. Calderoni is talking about the $3 billion debt offering. He said Cisco has about $3 billion in long term debt that’s coming due soon, and that the debt it’s issuing will carry a lower rate.

I’m going to close this early because I have to make another meeting. I’ll be posting more on Cisco earnings shortly.

]]> http://allthingsd.com/20110209/cisco-earnings-beat-estimates-but-only-a-little/feed/ 0 http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/ http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/#comments Mon, 07 Feb 2011 13:55:58 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=29429 Tim Armstrong and company spent yesterday explaining their $315 million Huffington Post purchase to the press. Now they’re doing the same for Wall Street, via a conference call.

AOL CFO Artie Minson prepped investors for the call with a memo laying out expectations. Short version: AOL thinks HuffPo will earn about $10 million on revenue of $50 million this year (as long as you’re okay with using “adjusted OIBDA” as a proxy for “profit”). It also thinks the purchase will save it $20 million a year, but it’s going to spend around $20 million on restructuring charges when the deal goes through.

I’ll liveblog the call below:

8:02 am: Greetings! About to start now.

8:03 am: On the call: Tim Armstrong, Arianna Huffington, Artie Minson.

8:03 am: Armstrong makes a Super Bowl joke that I can’t quite follow, and I like football. But now praising Arianna, co-founder Kenny Lerer and outgoing AOL CEO Eric Hippeau.

“The Huffington Post is one of the best properties on the Internet.” Armstrong, Huffington and Minson are all BlackBerry users.

8:06 am: On revenue: This gives an opportunity to serve more brand marketers, who are “very interested” in the scale this gives us.

8:07 am: Spending next 30 days on integration. “Really synergies to be had.”

Next steps: Next 72 hours communicating with employees, talking to partners. 1,500 AOL workers on the phone this morning explaining deal to others.

“This may be the smallest disruption” internally of any deal I’ve worked on. Majority of integration done within 35 to 40 days.

8:09 am: We’ve looked at a bunch of companies, though we’re mainly going to concentrate on organic growth. But Arianna is great [many superlatives] and she “also happens to be a woman.”

8:10 am: Here’s Arianna.

8:11 am: “Amazing” how aligned two orgs are.

8:11 am: HuffPo was profitable last year. We were thinking about bringing in additional investors last year, and an IPO down the line. But this made perfect sense.

8:12 am: This deal provides a “dramatic acceleration” for the plans we already had.

8:13 am: Some praise for Patch, AOL’s local strategy.

8:14 am: Can’t wait to start!

8:14 am: Alrighty, then. Here’s Artie Minson with some nuts and bolts.

Actually, it’s some color on the deal. But a lot of it is in the prepared remarks he put out earlier this morning.

8:15 am: Again, $20 million in cost savings here. And again, we’ll have to pay up for restructuring: $20 million for cuts, and $10 million for purchase price.

8:17 am: Still basically reading from prepared remarks. Some bookkeeping talk re: compensation accounting.

8:18 am: Remember, display ad growth coming will finally start showing up second half of this year.

8:19 am: Q&A:

Q: Talk about content strategy. Does HuffPo become hub for content going forward? Does it replace Seed? And how long is Arianna’s contract?

A: “The press” has been talking about our content strategy, so let me be clear–we’re focusing on premium content. Things like Seed and StudioNow are platforms–you can do whatever you want with them, different quality levels, at different types of scale.

And then the other thing that is important about those platforms is the ability they give us to work with advertisers.

One of our main interests in HuffPo is their technology and publishing system. So now we have multiple systems [which he is saying is a good thing]. “Our content strategy hasn’t changed.” The “stuff that was out in the press about the AOL Way” was just one way of doing things. [This is not very convincing]

Arianna, tell us how long you’re going to stay.

8:24 am: Arianna: “I’ve told Tim I want to stay here forever. I want this to be the last act of my life.” Anything I want to do I can do here.

[Sorry, missed next part but it was a defense/explanation of content strategy.]

8:26 am: Armstrong: Arianna has a multiyear contract, but it’s open-ended.

8:27 am: Arianna: By the way, we’re going to bring back commenting to AOL stories, and socialize them.

8:28 am: Q: Why buy instead of partnering? Were there other bidders? Also, how will HuffPo politics affect AOL?

8:28 am: Armstrong: We do partnerships where there is “limited upside to those arrangements” so ” we can really spend time on the areas we want to win”–i.e., we don’t care about sports, we do care about women.

“Arianna is somebody we’d rather have inside our building than outside our building.”

“If there were or weren’t bidders on the other side,” I think we got the right price.

8:30 am: Arianna. “As we’ve said, again and again, Huffington Post was not for sale….Nobody was in a hurry to cash out, everybody believed that we could do an IPO down the road.” It’s just that Tim gave us a great offer. [hrrrm.]

On politics–we used to be all about politics, now we’re not. Just 15 percent of our traffic. We have a divorce section now.

Talking up AOL’s “college” section.

8:33 am: Q: For Arianna: More on Patch, please. What do think about what AOL’s done with it, and what you can do with it?

8:33 am: [Every time Arianna says "local level" I think she's saying "locker level." It's happened at least twice, maybe more, on this call.]

There’s a “greatest person of the day” feature we have, and I think Patch should use that. [Or maybe vice-versa, sorry.] I also like their five percent “giving back” rule, cause marketing, etc.

8:35 am: Armstrong: Again, we can do national and local. That’s important. NFL rights are important, and so are local news stories.

8:36 am: Q: Who’s going to sell what? And can you talk about pricing disparity between AOL and HuffPo?

8:37 am: Armstrong: “We would like to maintain all the people from both sales forces [except for Greg Coleman!]. I think we will end up with a large-scale, large-property organization–I don’t know exactly what that’s going to look like, though.

On sell-through rate: Slightly lower at HuffPo, because they’ve been ramping up traffic, and sales force. On CPM, same story. So we can bring up sell-through rate and CPM, and have a larger sales force. [This is pretty much the best argument for the deal that Armstrong can make.]

[BTW: Good back-channel discussion on Twitter right now about AOL's SEO skills, and the people behind it. None of that coming up during this call right now.]

[Sorry, I meant HuffPo's SEO skills, much of which stem from blueprint BuzzFeed CEO Jonah Peretti set out.]

Q: Why not use equity for this deal?

A: Because our equity is priced too low, essentially. But HuffPo employees did roll over 25 percent of deal consideration into AOL options. So as that equity gets more valuable, they’ll get upside.

8:45 am: Q: In your statement, you talked about OIBDA growth in 2013. More on that please.

Minson–probably going to stick to my prepared remarks on that one.

8:46 am: Last Q: Your acqusitions have been about toolsets or content. As you think about others going forward, what else do you want?

Armstrong: We have long-term vision. On plumbing: We’ve wanted to get platforms and plumbing straightened out, and we’re doing that now. Think about the bones or foundation of a very large property. That’s why we’ve been doing infrastructure, like with video–5Min and GoViral and StudioNow.

Going forward, we’ll be doing infrastructure. And we’ll continue to look at “media properties and media brands” that fit our strategy. [Remember, Web site owners: HuffPo just got 10x revenue.

8:50 am: Minson: But we're very price sensitive and we've walked away from deals.

8:50 am: Arianna: And we like women!

8:51 am: Armstrong sums up: Success "in the Internet space" requires vision and execution. That's this deal. And remember, content and brands become more valuable as tech gets faster, more advanced. And "expect us to stay on strategy and on point" going forward. "We're going to overcommunicate" with both sets of employees as we integrate. [You've been warned!]

And we’re done. Thanks for reading.

[Photo credit: Arianna Huffington]

]]> http://allthingsd.com/20110207/liveaol-explains-its-huffington-post-deal-to-wall-street/feed/ 5 http://allthingsd.com/20110203/q-whats-up-with-answers-com-a-sold-and-going-private/ http://allthingsd.com/20110203/q-whats-up-with-answers-com-a-sold-and-going-private/#comments Thu, 03 Feb 2011 17:40:04 +0000 Voices http://voices.allthingsd.com/?p=35881 Popular Q&A outfit Answers.com has agreed to be acquired by private-equity firm Summit Partners through its portfolio company, AFCV Holdings, for about $127 million in cash. The price of $10.50 a share represents an 18 percent premium over Wednesday’s close. A stockholders vote will be scheduled soon and the deal is expected to close in Q2.

]]> http://allthingsd.com/20110203/q-whats-up-with-answers-com-a-sold-and-going-private/feed/ 0 http://allthingsd.com/20110125/liveblogging-yahoo-4q-earnings-encouraging-is-the-new-black/ http://allthingsd.com/20110125/liveblogging-yahoo-4q-earnings-encouraging-is-the-new-black/#comments Tue, 25 Jan 2011 22:10:56 +0000 Kara Swisher http://kara.allthingsd.com/?p=39921

BoomTown was looking over Victoria Harbour in Hong Kong as I blogged the conference call after Yahoo released its fourth-quarter earnings after markets closed today.

It’s pretty! But Yahoo’s revenue growth–still, not so much.

Let’s begin:

2:02 pm PT: Yahoo turned in earnings that were slightly better than expected, although no big shakes either, so the call was likely to sound exactly like the last several quarterly calls.

Bingo! We’re trying! It’s encouraging! You’ll see!

In fact, “encouraging” was just the word that CEO Carol Bartz used as she tried to focus on a doubling of operating income, operating margin and earnings per share.

Impressive, the revenue at Yahoo is still stubbornly not moving, which the company continued to attribute to the new search and online advertising partnership with Microsoft.

“This is all part of our plan to turn Yahoo around,” said Bartz, who added a new buzzword, “personalized content,” to its offerings.

She turned the call over to Yahoo CFO Tim Morse, who ran through the numbers, which pretty much came down to this: Display advertising up 16 percent from last year, while search revenue dropped 18 percent.

As in previous quarters, Morse talked about how “headwinds” will soon lessen and it will be smooth sailing for Yahoo ahead.

After the stormy seas of recent years, that would be nice, since investors have gotten pretty seasick owning Yahoo shares.

Morse offered that, “while there is still much to do, we are still executing well against our plan” and went on about how good things are.

Finally, we have a “unified purpose,” which he characterized as personalized content too.

It’s a nice new catchword for Yahoo, and I liked Morse’s strong tone and gumption, which for an accountant was like hollering.

His big Achilles’ heel: The revenues projections ahead remain soft.

2:24 pm: Back to Bartz, who focused on the future success of the Microsoft advertising alliance and also Yahoo’s leadership in display advertising.

She listed some big offline brands, such as Wal-Mart and Macy’s, noting when looking for online ads, “That’s right, they all came to Yahoo.”

Bartz moved on to its stake in China’s Alibaba Group and noted it was a “great investment with a bright future.” Translation: We are not selling for now.

But noting its investment in Yahoo! Japan, Bartz had a slightly different take, mentioning talks to “unlock” the value of the stake. Translation: Maybe we’ll sell if we can figure out how not to pay all those taxes.

Bartz did the same with all of Yahoo properties, putting a sunny spin on what is still a turnaround situation.

It’s a good strategy, but it is one that is starting to sound like a broken record, especially when Google, Facebook and others seem to be like a house on fire.

2:35 pm: Now on to Q&A, in which Wall Street analysts ask softball questions of executives.

And so they do, asking queries that include small details about its operating margin, questions on tiny changes in numbers due to accounting changes. And very little about larger strategy.

You can read about this stuff in the press release, but whatever.

I am thinking of starting an investment bank, so I can jump in on these calls and ask some questions that have actual substance.

The United Bank of Swisher? Goldman Sucks?

Ooh, I was wrong, because one analyst asked a good one about possible future layoffs.

Bartz noted the company would be adding people, um, after laying some employees off.

It’s all about “re-allocating” staff, which Yahoo did earlier today by laying off one percent of its workforce, after an earlier four-percent cut.

Next, a question about search share, with Morse noting there will be search volume growth in the future.

Big message: We are in this to grow the share.

Except it has not been growing, as the last several months of surveys of search share have shown.

But Bartz firmly declared: “We’ll be up” in 2011.

A question focused in on mobile, and Bartz pointed out that Yahoo had the disadvantage of not having a mobile operating system such as Google does with Android.

Good point!

2:59 pm: Another terrific analyst comment about the disconnect between the execs encouraging comments and the actual financials, which show a downturn in, yes, revenue.

It is exactly the point here, which Yahoo has been trying to spin. Morse went through the list of excuses, from bumpiness of the search transition to weakness in affiliate sales to whatever.

Bartz jumped in and blamed the search alliance again, noting that moving advertisers over to the new platform was hard to do.

“I will not back down on the fact that we are gaining momentum,” said Bartz about search. “There is a lot going on here.”

Morse chimed in, noting he was the one using “gaining momentum” in his script. “I really believe that,” he said, going through the terrific plans.

“You’re correct the top line is not showing that yet,” said Morse in an increasingly loud voice. “There’s an awful lot there to be optimistic about.”

The accountant that roared.

Encouraging.

But then came the last question about the growth of Facebook, the Silicon Valley social networking phenom that is clearly going to be Yahoo’s biggest rival over the next years.

Bartz acknowledged Facebook’s explosive growth, but declared the company more compatible than competitive.

“There’s room for everybody here,” she said.

Presumably, that’s the hope for Yahoo.

(Also, you can see a slide deck of the financials here.)

]]> http://allthingsd.com/20110125/liveblogging-yahoo-4q-earnings-encouraging-is-the-new-black/feed/ 1 http://allthingsd.com/20110111/q-how-much-did-formspring-just-raise-a-11m/ http://allthingsd.com/20110111/q-how-much-did-formspring-just-raise-a-11m/#comments Wed, 12 Jan 2011 05:01:07 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=2279 The return of anonymity on the Internet was all the rage in 2010. But as some shooting stars like Chatroulette falter, Formspring is working to evolve its anonymous Q&A service into something more lasting and useful.

Not to say Formspring is making a business out of Web Q&A–yet. But Wednesday it is announcing a Series A round of $11.5 million led by Redpoint Partners. And it’s also releasing a self-service product called “the Respond button” that allows publishers to solicit responses to their content through a simple integration with Formspring’s API.

The Series A round, which also included Baseline Ventures and others, comes on the heels of Formspring raising $2.5 million from a large group of angels and Polaris Ventures last March. That prompted the company to move its headquarters to San Francisco from Indianapolis, where it had spun out of online form provider FormStack.

Of all the various Q&A startups, Formspring’s product is probably the closest to personal blogging. A user signs up for an account and then visitors can ask her questions, usually about herself.

$14 million is a ton of money, especially for a site that’s only a year old with no revenue. But Formspring CEO Ade Olonoh said the company now has 20 million registered users and 10 million daily answers to questions from its community, something he contended takes a lot of infrastructure and additional developers to support.

The new Respond button product will be free to publishers, but it will require users to log into a Formspring account to participate. Launch partners include the Huffington Post and AskMen (pictured).

Previously, Formspring questions existed in a world unto themselves of mostly casual conversations about users’ favorite movies and the like. Olonoh described the Respond button as a paradigm shift because it will introduce topic prompts from outside content.

]]> http://allthingsd.com/20110111/q-how-much-did-formspring-just-raise-a-11m/feed/ 3 http://allthingsd.com/20110107/live-twitter-ceo-dick-costolo-at-dces/ http://allthingsd.com/20110107/live-twitter-ceo-dick-costolo-at-dces/#comments Fri, 07 Jan 2011 23:49:28 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=27773 Twitter has crossed the threshold from Web novelty into something substantial. Now Dick Costolo’s job is to turn it into a business–one big enough to justify the sky-high valuation investors have given the messaging company.

He’ll talk to Kara Swisher about the company’s efforts to sell advertising on the service, and if we’re lucky, he’ll give us a glimpse of his improv comedy roots, too. Don’t be shy, Dick!

Dick starts off by insulting Kara’s vest. “Matador casual,” he calls it. Good one! Kara responds by asking him why he’s hanging out at CES.

The same reason everyone else is, Dick says: To talk to industry people. For example, he’d like to get device makers to preload some features like “Fast Follow.”

Kara wants to know if Dick would like a “Twitter button” installed on phones. No, says Dick. But he’d like Twitter to work the same way on different platforms.

So how do you make that happen?

Dick: We’re assigning a product team to make sure that this happens.

Kara: And you’re talking to TV people, too? What’s that about?

Dick: Yep. Because mainstream TV viewing, more and more, they have a device in their hand when they’re watching TV. Like on “Glee.” The characters tweet while the show is on. [This baffles Kara.] When “Glee” starts, tweets per second for “Glee” shoot up, and stay up 100 times that level until the show ends, and then they drop.

That has interesting implications. Like, it takes the DVR out of the mix, because you have to watch in real time to make it worthwhile.

But we don’t know if all of this means Twitter while you watch TV, or Twitter actually on your TV screen.

Kara: Is it important for you to be on the screen?

Dick: We’re already on the screen. But we don’t know if that will be the mainstream experience.

Kara: We had Steve Levitan from “Modern Family” talking about how the Web doesn’t help him, but that he and his team like Twitter.

Dick: Sure! “I was having a conversation with Conan O’Brien, as one does” and he was talking about the importance of Twitter to him, and how the 140 character limit is the right length for a joke. It’s definitely the case that network TV people like Twitter, because it gives them feedback, like they’re in the theater, watching how the shows play out.

Kara: Keep talking about celebrities! I love celebrities.

Dick: Sure! The folks that we’ve hired to work with talent and agencies, etc., we think of those people has high-value publishers. They have a huge following. A lot of people are on Twitter just to hear what those folks have to say.

The interesting thing about the top 200 to 300 tweeters–a lot of them are musicians, actors, etc. LeBron James, etc. I think Lady Gaga is number one. But! They’re not all celebrities. There’s CNN Breaking News. And the New York Times. And other brands like Gary Vaynerchuk, who aren’t really that known outside that world.

And Twitter is disaggregating some of those businesses. Like a third of all the players in the NFL playoffs are using Twitter actively. And many players have more followers than their teams. [Here Dick explains football to Kara.] That’s fascinating.

Kara: Let’s go back to phones. Whats the most important device? Tablet? PC? Phone?

Dick: Mobile is a more and more and more common use of Twitter–40 percent of all tweets created on mobile devices. That might seem low, but it was 25 percent a year ago. 50 percent of active users are also active on mobile.

But Twitter ought to work platform to platform. We want to be agnostic.

Kara: What about what’s coming out from Palm? Working with them?

Dick: Not yet.

Kara: What about games? Talking to those guys?

Dick: Yep. Like with Microsoft on their Xbox, you can see integrating tweets into people who have discussions on Xbox.

Dick: You lost interest in the answer to your question. [True!]

Kara: You’re so annoying.

[Some laughter. Not a lot, though!]

Dick: Anyway, the important thing for us is consistency across device to device to device.

Kara: Speaking of working consistently, how’s that going for Twitter?

Dick: Right. So, we raised a bunch of money. We’re hiring “tons of engineers and operations engineers” in the last year. We hired 100 people in Q4, out of about 350 total. And we’re working very hard on erasing our “technical debt.”

Kara: “That’s a great word for fuck-ups”

Dick: Anyway, we’ve got a guy assigned to this pretty much exclusively. And there used to be a tolerance for this, and now there isn’t. If someone fires a pistol next to your ear every hour, after a while you stop flinching when you hear it. It’s crucial that we do this, both for our users and our engineers, who shouldn’t have to get up at 3 am all the time.

Kara: Time for a vision question, which stumps Yahoo. What is Twitter? What is your vision?

Dick: “We want to instantly connect people everywhere to what’s most important to them.”

See, that’s a good statement. We’re not just a social network that’s connecting people. It’s connecting for a purpose.

So some people meet girlfriends on Twitter. And other people get tickets to shows they like on Twitter. Etc.

And you don’t have to tweet to get a lot of value out of it.

Kara: What’s the percentage of people who just read Twitter, and don’t tweet themselves?

Dick: Rising. And we have to make that easier to do. “We’re going to spend a lot of time making that consumption experience much better.”

Kara: What’s your business plan?

Dick: To continue to raise money!

[hohoho]

Dick: I’m going to steal Jeff Weiner’s line. We’re a technology company that’s in the media business. Our business model is an advertising model [cough, cough, that's familiar! You're welcome!] So we’re selling ads, and we’re letting people promote their accounts, etc. And we really don’t have to do anything else. Our engagement rates on these ads are ridiculously high. When we saw our stats this last spring when we launched, the numbers were so big we thought we were measuring it incorrectly.

Kara: Is that a big enough business to be a standalone company and/or IPO?

Dick: It’s enough to be a standalone company.

Kara: Sell or IPO?

Dick: We want to be a standalone company. It’s my sincere hope. We’ve accomplished 1 percent of what we want to do.

Kara: You like to sell companies, though.

Dick. Yes, I had two companies that I sold. But that doesn’t mean we’ll sell this one. I’ve had two kids too. But I shouldn’t get a reputation for having kids.

Kara: What’s up with people buying and selling secondary shares of Twitter. It’s an issue for Facebook. What about you?

Dick: We keep an eye on it, and talk to employees about it. But I just think that there are other people that are focusing on it and paying attention, and I’ll let them talk about it. But I just don’t think about that stuff on a day-to-day basis.

Questions and Answers

Q: [sorry missed it].

But answer seems to be about whether Twitter is a platform company or not. Dick quotes Ev Williams by saying they’re not a platform company–they’ve had an API. They want people to be able build off Twitter and build into Twitter. Which requires a more robust API.

Kara has more questions. How do you look at yourself as a leader?

Dick: As a very bald leader.

Kara: But you’re very different than Evan.

Dick: Right. Two components. Three founders at company: Ev, Jack, Biz. They all come at it from a different angle. Jack thinks about simplicity and elegance and the mobile experience. Ev thinks about the user. Biz is “the protector of the brand and the guardian of the culture.”

Kara: He’e the guy who goes on Colbert.

Dick: And he’s great at it. Anyway, those guys are great. My focus is on operational greatness. I try to emulate operators like Ben Horowitz (Opsware) and Susan Wojcicki (Google).

Q: What’s up with that internal page rank for each user? asks Ben Parr from Mashable.

Dick: Your’re not exactly right. We play around with stuff like that. But there’s nothing robust that we would think of productizing anytime soon, and we don’t use it for things like resonance, which we use in ads.

Q: [Sorry, couldnt quite understand.]

Dick is talking about WikiLeaks in general, says there was something specific about WikiLeaks today that he can’t talk about. In general, he hates government mandates to keep things quiet. And he hates that a woman in China was punished for retweeting something. He reiterates Twitter’s desire to connect people with useful information. “We’re going to lash out at things that prevent us from doing that, as aggressively as we can.” The proof is that we’re banned in China. “We’re not going to sacrifice what we’re trying to do to, you know, get into this country over here.”

Q: How will you work with brands in the future, vs. advertising?

Dick: Our promoted suite of stuff doesn’t simply let advertisers use a giant bullhorn. This stuff has to be organic. “It almost is like a quality-assurance program.”

[Some context for what Dick wouldn't talk about: Feds Subpoena Twitter Seeking Information on Ex-WikiLeaks Volunteer].

Dick is now talking about Twitter and international growth and language. Twitter is growing fast in the U.K. but not in Germany. Why is that? Because German has really, really long words. “There’s a bunch of stuff we want to do, and have to do” just to make things usable in those languages.

Last question, from Kara: What’s the most interesting thing you’ve seen at CES?

Dick won’t give a one-word answer. CES is a “quantum conference.” Some years are transformational, some are incremental. “This seems like it was an incremental year.”

And we’re done! Thanks all for your patience. We’ll have video up over the next few days, which should help fill in the gaps left by my lousy note-taking.

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]]> http://allthingsd.com/20110107/live-twitter-ceo-dick-costolo-at-dces/feed/ 3 http://allthingsd.com/20110107/live-microsoft-browser-boss-dean-hachamovitch-at-dces/ http://allthingsd.com/20110107/live-microsoft-browser-boss-dean-hachamovitch-at-dces/#comments Fri, 07 Jan 2011 22:28:59 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=27756

Microsoft’s Internet Explorer browser is still the world’s most popular, but its dominance is being steadily eroded by competition from Mozilla, Google and Apple. Can a new, aggressive approach to privacy change that? Can Microsoft really protect users from tracking across the Web–and do users really care?

Dean Hachamovitch, who oversees IE for Microsoft as a corporate VP, gives Walt Mossberg an update on the browser wars.

Greetings! We’ll be starting shortly. If you were in the room right now with our select crowd, you would have just heard some Aerosmith. And now, one of my favorite Van Morrison songs : “Jackie Wilson Said.” Also, we’re not using the classic red D interview chairs for this one. Going with a kind of teal blue. Now you know!

Some Isley Brothers now.

Some Elvis Costello. Don’t know this one, though.

And…here’s Walt Mossberg and Kara Swisher.

Kara is wearing something that might have been bedazzled. Walt’s wearing Waltwear.

An update on the state of the ATD empire, which is getting much bigger.

Walt brings on Dean Hachamovitch.

Dean, by the way, is wearing a black long-sleeve shirt that says “private” in big white letters. Hope someone asks him about it.

Ah, and Dean has a “private” shirt for Walt, too. We’ll get to privacy in a bit, it seems.

DEAN: Working on IE 9, in beta, downloaded over 20 million times. Most important is its performance. It’s amazingly fast. Also, it blurs the boundary between Web sites and apps. And also, some talk about privacy.

WALT: Okay, that was a nice ad. But please talk about reports that you’ve been eclipsed in Europe by Firefox.

DEAN: Yes, we used to have 90 percent market share back in the ’90s. But now we look at how many people choose to use our most recent versions. “We are delighted that IE 6 market share is going down. We are delighted that IE 7 market share is going down.”

DEAN: And bear in mind how much the Internet is growing. “There are a lot of different factors. It’s a very complex situation.”

WALT: Okay, on to privacy. Safari used to have some kind of privacy feature, but that’s old. Then in IE 8, you introduced a new feature, not by default, which tried to extend that protection to other sites on the Web you traveled to.

DEAN: You were describing “over the shoulder privacy.” But we’re also concerned about tracking. There are two kinds of tracking: “Expected tracking” and “creepy stalking.”

Pandora and Amazon are expected tracking. You want them to know what you’re doing. But the important thing is that you have visibility and control, and you get benefits.

For instance, when I go to Amazon, they know that I bought Spice Girls and Fergie, and they tell me other stuff I should get.

WALT: Some of that tracking isn’t sophisticated enough.

DEAN: Anyway, creepy stalking is bad. Because consumers aren’t aware of what’s going on, and they don’t have control of it.

WALT: We don’t allow slides at our conferences usually, but we’re going to make an exception. Please show us some slides!

Dean is showing people a monitor that shows you what cookies were attached to a certain NPR page, which includes tracking info that comes from Facebook integration.

Now a Fox News page with similar info.

A reminder that cookies, by the way, aren’t the only tracking info involved here. Also pixels, etc.

But even once you root around and look at the pixels and tracking info, you might not really understand what you’re looking at or who is behind them.

WALT: Microsoft is a big Internet advertiser and publisher. Don’t you do some of this stuff?

DEAN: Yes, and in addition to us and Google, etc, there is an amazing ecosystem of information brokers. There’s a huge industry around this.

WALT: So what’s coming?

DEAN: With the new rev of IE 9, first quarter of 2011, you’ll be able to “go to a Web page, click on a button and you’ll be protected from tracking.” Any Web page can do this.

It will block content on that page. It will be an open publishing platform.

WALT: Why would a publisher want to do this? They have a legitmate need to want to know things about you, to serve you better ads, right?

DEAN: We have a lot of interest from a lot of different organizations that want to make lists. Publishers, government agencies, consumer advocacy, etc.

WALT: So, I have to download a list from someone I trust to make this work. Will you maintain this list?

DEAN: No. People will find these lists the same way that they find other things on the Web they like. From Facebook, or friends, or wherever.

We think it’s important to have people exercise judgment in making these lists. The most important thing is that you go off to the Web and find one you have confidence in.

WALT: But why do I have to hope that I go to sites that have these buttons?

WALT and DEAN are trying to explain how the list and button combination will work. Frankly, I’m confused. We’ll have to circle back to this.

WALT: A cynical journalist might suggest that you’re embracing privacy and wearing a shirt because Firefox et al are eating your lunch.

DEAN: Paying Windows customers want a great experience that includes privacy, including through their browser. But another way to view people who use browsers is that they’re objects to be boxed and sold. We don’t believe that. We believe Windows customers should have a great experience with their browser.

WALT: As opposed to?

DEAN: Well, Chrome, for instance, is funded by advertising.

WALT: So is The Wall Street Journal.

DEAN: I think advertising is great. But be careful about connecting advertising with tracking. We have advertising customers, and we want them to be delighted. And we have Windows customers, and we want them to be delighted. We have a unique position on this that gives us an opporunity to lead.

WALT: All the other browsers have a privacy mode.

DEAN: But that’s for “over the shoulder” privacy, not tracking.

WALT: Some of this tracking stuff is very hard to block. Can you really protect a user from all of it?

DEAN: Good question. Flash, for instance, enables tracking “Flash cookies” and they’re inherent in Flash. Only way to turn them off is to turn Flash off.

WALT: So this won’t block Flash cookies?

DEAN: It will if you tell it to.

WALT: But that’s pretty extreme.

DEAN: Yes. We’re touching on the ambiguity to the consumer about what actually is important and worthwhile tracking, and what isn’t.

We want to help consumers make progress being in control, but it’s a work in progress. It’s happening in Berkeley and in Brussels.

WALT: Let’s switch gears. Some people, not mainstream people, are debating whether the future of entertainment and progress and productivity will be on the browser and in the cloud. Google is pushing that via Chrome OS, and they also have Android apps that store local cloud on the device. Where do you come down on that?

DEAN: It’s a great case of “and”–you’ll have local apps and cloud versions. Like with Office mail, etc. We’re doing work on speed and safety so you can feel more comfortable in the cloud. “I think it’s the best of both worlds.”

WALT: So not a religious issue? Just practicality?

DEAN: Yes.

Questions and Answers

Q: What do you think of what the FTC says about privacy?

DEAN: The paper they put out in December is a good framework. And they’ve responded positively to what we’ve put out. They’re in favor of self-regulation, and we’re eager to work with them. I’ve had conversations with them, and what they say makes sense.

WALT: You’ve been talking to competitors about working together on this?

DEAN: We’ve been talking across the industry.

Q: Who is supposed to make banking, etc., more secure? This isn’t just about someone saying something on Facebook, but opening up the wrong window and having your bank account drained.

DEAN: We take it very seriously. “Security is an industry issue. I have to say it that way, because anything that we can talk about here has multiple parties involved.” if your Facebook is hacked, was it using your banking password?

Q: I’m talking about a national security issue.

DEAN: There’s a lot of working going on within the industry, working with law enformecement, to make things more secure.

WALT: But since you have the biggest market share, there’s a lot of responsibility on you. What do you do about that?

DEAN: Well, one thing we do is put out updates every eight weeks, because things change.

But really, “the best thing you can do to remain secure is to keep all your bits updated….That would make such a difference.”

Q: Firefox has plug-ins like AdBlock, that let you block ads. They seem to be effective at blocking things like beacons, too. Are they effective and can you do something analogous?

DEAN: Add-ins require installation, etc. You need a list, too. But we’re building that functionality into IE, so you don’t need to download anything else. We’re also working with people who make lists for AdBlock Plus, and they’re eager to work with IE 9 as well.

WALT: But AdBlock blocks ads, too. You’re not going to do that, right?

DEAN: It comes down to the list. If a list author lists sites that involve ads, then they’ll go away, too.

WALT: So you could surf the Web without seeing ads?

DEAN: It depends on the list.

WALT: I do think ads are good, by the way. [Me too!]

DEAN: Right. “Ads are great!”

But this is one of the reasons the ad industry wants to create lists for this. So they can distinguish tracking from nontracking.

Q: You’ve been talking about desktop browsers. Will these features come to mobile as well?

DEAN: “We’ll be talking about our mobile browser very soon, and I’ll just smile, and you can infer from that.”

Q: How much more value does tracking really add to advertising?

DEAN: Hard for me to answer that. Maybe the next time you have one of these things, you could have someone from the ad industry.

WALT: Good idea.

And we’re done.

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]]> http://allthingsd.com/20110107/live-microsoft-browser-boss-dean-hachamovitch-at-dces/feed/ 0 http://allthingsd.com/20101228/for-ask-com-foray-into-social-search-points-to-mobile/ http://allthingsd.com/20101228/for-ask-com-foray-into-social-search-points-to-mobile/#comments Tue, 28 Dec 2010 20:56:29 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=1665 Ask.com is in the process of reformulating itself, having dropped its algorithmic search offering and laid off 150 employees in November. The company is billing the changes, which came after a community Q&A launch in July, as a return to its “Ask Jeeves” question-answering roots.

I recently had a chance to sit down with Ask.com President Doug Leeds, who was particularly high on the company’s efforts in mobile: A new iPhone app that includes the Q&A feature has been downloaded 250,000 times since being released in November.

(It might be premature to say mobile is the future of Ask, considering it has yet to launch apps on other mobile platforms.)

Refocusing Ask around Q&A on both the Web and mobile has already had an impact, even if it’s not fully rolled out. Leeds said 60 percent of Ask queries are in the form of a question now, up from 28 percent last year.

Questions are more monetizable than queries, he attested, because users stay on an Ask.com page rather than clicking to zoom off elsewhere on the Web. Ask has found that users who have their questions answered are 50 percent more likely to click on an ad.

Social search offers Ask.com a way to differentiate itself from the competition. Leeds said the company’s brand has long been a second-choice search engine: A huge percentage of Ask users go to Ask after Google fails to answer their query. That may not sound like something to brag about, but it’s made the company profitable, with consistent traffic as the sixth-largest U.S. site, at 90 million monthly visitors.

Ask doesn’t seem to get a lot of love within the halls of its owner, IAC, so it’s especially important for the company to grow its revenue, if not its traffic. Ask is hiring back 30 of the 150 positions it cut, for a total of 270 employees, said Leeds, who described the layoffs as a removal of satellite offices in order to consolidate operations at its Oakland, Calif., headquarters.

Leeds said that Ask has found social search works especially well on mobile, where, for instance, users can ask a question verbally using the free Ask.com iPhone app with speech recognition, put the phone back in their pocket and wait for a notification saying that a real person has answered the question.

The median answer time for questions posed to the Ask community is approaching five minutes. That’s eons in search time, but the fact that the answer is created within those five minutes matters, said Leeds.

According to a Harris Interactive survey of mobile users sponsored by Ask, 66 percent of respondents said timeliness matters more when they’re not in front of their computer, and 40 percent of smartphone users said they’re more influenced by users’ opinions given within the last 24 hours than those from a month ago.

To be clear, Ask has not completely converted to social. Only 20 percent of visits are currently exposed to community Q&A, and only after users say they want to ask a question or a search has failed to produce results. That’s because Ask doesn’t want to overtax its human question answerers, said Leeds. The majority of Ask user questions are answered through a machine process of extracting information from multiple Web pages (similar to the word definitions, flight status information and real-time weather you’ll get at the top of the search results page if you look for such things on Google or Bing).

To recruit and retain question answerers, Ask has a promotion going where it donates 10 cents per answer to Susan G. Komen for the Cure. “Altruism is the best incentive,” said Leeds. “We don’t want it to be a game; we want it to be useful.” Today, 65 percent of questions asked through community Q&A get accurately routed to an answerer.

Next for Ask is a “nearby” feature of its iPhone app that will launch early next year. The ideal question, said Leeds, would be “Why is there a crowd over there?” Or users could ask about the current state of traffic on roads, crowding in a particular restaurant or whether they should be worried about that smoke they’re smelling in the air. Of course, for this to work well, Ask will need much deeper penetration than 250,000 iPhone users.

As it tries to get social, another limitation for Ask is it doesn’t have much of an existing membership system. Unlike, say, Yahoo, where users are virtually always logged in, Ask has never had a portfolio of products, just search. The company introduced a revamped log-in system in July, but it will have to get many more users to sign in before it can make use of personalization, social connections and network effects to get questions answered. (Hmm…isn’t this what Facebook Connect does?)

]]> http://allthingsd.com/20101228/for-ask-com-foray-into-social-search-points-to-mobile/feed/ 1 http://allthingsd.com/20101222/stealthy-startup-sponge-builds-community-qa-for-companies/ http://allthingsd.com/20101222/stealthy-startup-sponge-builds-community-qa-for-companies/#comments Wed, 22 Dec 2010 22:25:14 +0000 Liz Gannes http://networkeffect.allthingsd.com/?p=1569 Q&A is a buzzy tech topic these days–see Twitter’s Fluther deal yesterday (though Twitter didn’t acquire the Fluther Q&A product, only its personnel)–but here’s a start-up trying to stay out of the spotlight, despite some high-profile backers. Sponge, which calls itself “the future of Q&A,” powers pages for businesses to share and build community knowledge.

In practice, Sponge appears to be a sort of community-sourced FAQ, where both representatives of a company and users can answer questions posed by users. You can see an example here, for the venture capital firm True Ventures.

Sponge seems somewhat similar to customer service plug-in Get Satisfaction, but with a focus on creating content that will engage an audience on the company’s own site. There’s also a company called Opzi that’s working on “Quora for the enterprise,” though it seems more oriented toward internal communications.

True Ventures, incidentally, appears to have led a $500,000 seed funding round for Sponge this past spring, which also included Matt Mullenweg’s Audrey Capital.

Sponge is led by CEO Krutal Desai, who had previously been with ACS, the SEO and social media advisory company that had helped many top blogs grow their traffic significantly a couple of years back. Web developer Henry Khachatryan is also a co-founder.

According to a published bio for Desai, Sponge was founded in 2009 after he graduated from UC Berkeley, and its customers include Intuit, Eventbrite, Vespa, TechStars and the Red Cross. The company maintains an active blog about building online communities.

Here’s how Sponge describes itself:

Sponge powers question and answer communities for brands, media outlets, and topical sites. Our Q&A platform enables online communities to ask questions and share answers in a structured manner.

Sponge is a proven, successful leader in developing customized communities around Q&A. Our technology unites traditional social features with question-and-answer functionality to foster knowledge sharing, collaboration, and customer engagement.

We believe we are working on the next generation of online community software that millions of people will use everyday to exchange information.

Q&A has been a field of Web development since at least the early days of Ask Jeeves. After the success of sites like Yahoo Answers, it has surged back again, with Quora, Facebook, many start-ups and even Ask.com launching social Q&A products in the last year.

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