HP shares rose nearly 5 percent to $22.10, up $1.02 as of 11:15 am ET. Investors appear to be showing new confidence in HP and how CEO Meg Whitman is running the show. All the announcements that HP made yesterday bear repeating, because it was a busy afternoon:

 
Update: A few readers have written to point out I was wrong about HP’s old ticker symbol. It wasn’t HP but HWP. Silly me. Even so, if the Compaq name is headed for some lesser level of importance in HP’s future, then perhaps the Q in the ticker symbol, which was added as a nod to Compaq’s old symbol CPQ, to give the impression that the combination was more a merger of equals, should go. Given the choice between them, I would vote for HP. I should stress that I have zero indications that this is even under consideration, and is really just me ruminating.

Analysts had a mixed view. Chris Whitmore of Deutsche Bank Securities has been one of the more skeptical voices on HP’s turnaround prospects. “New sheriff, old game plan,” was the headline on his note to clients today. “We remain cautious on HP’s weak fundamentals, challenging macro conditions and deteriorating cash flow,” he wrote. Despite the beat on earnings, free cash flow — at $1.4 billion in the quarter — declined by half, pointing to what Whitmore calls “very poor earnings quality.” He rates HP as a “sell,” with a $20 price target.

Brent Bracelin of Pacific Crest Securities wrote that he remains unconvinced that an unexpected strength in HP’s PC unit is sustainable. “Apple and Samsung now account for 39 percent of market share across PCs, tablets and smartphones, and have a volume advantage relative to HP’s 6 percent share,” he wrote in a note to clients this morning. He rates the shares “market perform,” or neutral, and worries that HP’s biggest problem is that about half its sales are still tied to PCs and printers.

Whitman took to CNBC this morning to talk about HP’s situation. She portrayed the turnaround under way as about “10 to 15 percent” complete. That means there’s still a lot of work to do ahead. “We’ve laid a lot of pipe and done a lot of groundwork,” Whitman told the network’s anchors in a 13-minute appearance. I’ve embedded it below:

Separately, HP just filed an 8-K with the U.S. Securities and Exchange Commission concerning a restructuring plan. It reads in part:

As part of the restructuring plan, HP expects approximately 27,000 employees, or approximately 8% of the company’s workforce as of October 31, 2011, to exit the company by the end of fiscal 2014, with a portion of those employees exiting the company as part of a voluntary early retirement program for U.S. employees whose combined age and years of service exceed certain levels. The total number of employees ultimately affected will be impacted by the number of employees that opt to participate in the early retirement program. The changes to HP’s workforce will vary by country, based on local legal requirements and consultations with employee works councils and other employee representatives, as appropriate.

In connection with the restructuring plan, HP expects to record aggregate pre-tax charges of approximately $3.5 billion through the end of HP’s 2014 fiscal year beginning in the third quarter of HP’s 2012 fiscal year. Of that amount, HP expects approximately $3.0 billion to relate to the workforce reductions and approximately $0.5 billion to relate to other items, including data center and real estate consolidation. HP expects approximately $2.7 billion of those aggregate pre-tax charges to result in cash expenditures during the term of the plan. HP expects to amend its U.S. pension plans to facilitate the funding of a portion of the cash expenditures using available U.S. pension plan assets.

HP has now posted a news release with some details on the restructuring plan:

The idea is apparently to get things under way in the third quarter of this year, which is the current quarter, and to take charges of $3.5 billion by the end of 2014, most of it in workforce reductions. That is in line with CEO Meg Whitman’s claim that the turnaround is going to take a few years. The 27,000 jobs eliminated amount to about 8 percent of the workforce. Of that, HP will take a $1.7 billion pre-tax charge this year.

There’s also going to be some “SKU rationalization,” which is something I’ve written about before. Look for some products to get axed around this.

“While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders,” Whitman said in a statement.

As AllThingsD also told you last week, the changes will be made in order to reinvest in things like research and development, one area that’s widely thought to have suffered too much in the last decade or so. There will also be investments in services, software and enterprise hardware.

Another surprise: Mike Lynch, the CEO of Autonomy, the British software company that HP paid $12 billion for last year and which was seen as an albatross around the neck of prior CEO Léo Apotheker, is stepping down. He’s not the only one, as other former CEOs of software companies that HP has acquired also have departed about a year later. Bill Veghte, HP’s chief strategy officer and executive vice president of HP Software, will run Autonomy. I had been hearing rumblings that Lynch would be leaving, but was never able to track it down.

Here’s the earnings announcement. I’ll have more as I go through it.

HP Reports Second Quarter 2012 Results
PALO ALTO, CA–(Marketwire -05/23/12)- HP (HPQ)

Second quarter non-GAAP diluted earnings per share of $0.98, above previously provided outlook of $0.88 to $0.91 per share
Second quarter GAAP diluted earnings per share of $0.80, above previously provided outlook of $0.68 to $0.71 per share
Second quarter net revenue of $30.7 billion, down 3% from the prior-year period
Returned $601 million in cash to shareholders in the form of dividends and share repurchases
Company announces multi-year restructuring to fuel innovation and enable investment — see separate press release for details

HP second quarter fiscal 2012 financial performance
Q2 FY12 Q2 FY11 Y/Y
GAAP net revenue ($B) $30.7 $31.6 (3%)
GAAP operating margin 7.2% 9.4% (2.2 pts.)
GAAP net earnings ($B) $1.6 $2.3 (31%)
GAAP diluted EPS $0.80 $1.05 (24%)
Non-GAAP operating margin 8.9% 11.3% (2.4 pts.)
Non-GAAP net earnings ($B) $1.9 $2.7 (28%)
Non-GAAP diluted EPS $0.98 $1.24 (21%)

Information about HP’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

HP (HPQ) today announced financial results for its second fiscal quarter ended April 30, 2012. For the quarter, net revenue of $30.7 billion was down 3% year over year both as reported and when adjusted for the effects of currency.

GAAP diluted earnings per share (EPS) was $0.80, down 24% from the prior-year period. Non-GAAP diluted EPS was $0.98, down 21% from the prior-year period. Second quarter non-GAAP earnings information excludes after-tax costs of $356 million, or $0.18 per diluted share, related to amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

“We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders,” said Meg Whitman, HP president and chief executive officer. “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”

Business Group Results

Personal Systems Group (PSG) revenue was flat year over year with a 5.5% operating margin. Commercial revenue increased 3%, and Consumer revenue declined 4% while Workstations revenue was down 1% year over year. Desktop units were up 5%, notebook units were down 6% and total units were down 1%.
Services revenue declined 1% year over year with an 11.3% operating margin. Technology Services revenue was flat year over year, Application and Business Services revenue grew 1% and IT Outsourcing revenue declined 3% year over year.
Imaging and Printing Group (IPG) revenue declined 10% year over year with a 13.2% operating margin. Commercial hardware revenue was down 4% year over year with commercial printer units down 7%. Consumer hardware revenue was down 15% year over year with a 13% decline in printer units.
Enterprise Servers, Storage and Networking (ESSN) revenue declined 6% year over year with an 11.2% operating margin. Networking revenue was up 2%, Industry Standard Servers revenue was down 6%, Business Critical Systems revenue was down 23%, and Storage revenue was up 1% year over year.
HP Financial Services revenue grew 9% year over year driven by a 4% increase in net portfolio assets and a 5% increase in financing volume. The business delivered a 9.9% operating margin.
Software revenue grew 22% year over year with a 17.7% operating margin, including the results of Autonomy. Software revenue was driven by 7% license growth, 17% support growth, and 72% growth in services. Autonomy saw a significant decline in license revenue.

To help improve Autonomy’s performance, Bill Veghte, HP’s chief strategy officer and executive vice president of HP Software, will step in to lead Autonomy. Veghte is an experienced software leader who will help develop the right processes and discipline to scale Autonomy and fulfill its promise. Mike Lynch, Autonomy’s founder and executive vice president for Information Management, will leave HP after a transition period. The market and competitive positioning for Autonomy remain strong, particularly in cloud offerings.

Asset Management
HP generated $2.5 billion in cash flow from operations in the second quarter. Inventory ended the quarter at $7.3 billion, with days of inventory up 2 days year over year to 28 days. Accounts receivable of $16.6 billion was down 4 days year over year to 49 days. Accounts payable ended the quarter at $12.9 billion, down 5 days from the prior-year period to 49 days. HP’s dividend payment of $0.12 per share in the second quarter resulted in cash usage of $251 million. HP also utilized $350 million of cash during the quarter to repurchase approximately 13 million shares of common stock in the open market. HP exited the quarter with $8.7 billion in gross cash.

Outlook
In connection with the restructuring efforts discussed in a separate press release issued today (http://www8.hp.com/us/en/hp-news/press-release.html?id=1247078), HP expects to record a pre-tax charge of approximately $1.7 billion in fiscal 2012 that will be included in its GAAP financial results for that period. Of that amount, HP expects to record a pre-tax charge of approximately $1.0 billion in its third fiscal quarter. The cash impact associated with the restructuring efforts is expected to be approximately $400 million in fiscal year 2012. Through fiscal 2014, HP expects to record additional pre-tax charges approximating $1.8 billion that will be included in its GAAP financial results for the applicable periods.

In May 2012, HP committed to a change in its PC branding strategy. As a result, HP has commenced an asset impairment analysis to determine the current value of the Compaq trade name acquired in 2002. Based on the preliminary results of that analysis, HP expects to record an impairment charge of up to approximately $1.2 billion that will be included in its GAAP financial results for its third fiscal quarter. There will be no cash impact associated with the impairment charge.

For the third quarter of fiscal 2012, HP estimates non-GAAP diluted EPS to be in the range of $0.94 to $0.97 and GAAP diluted EPS to be in the range of $0.00 to $0.03.

Third quarter fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.94 per share, related primarily to the amortization and impairment of purchased intangible assets, restructuring charges, and acquisition-related charges.

For the full year fiscal 2012, HP now estimates non-GAAP diluted EPS to be in the range of $4.05 to $4.10 and GAAP diluted EPS to be in the range of $2.25 to $2.30.

Full year fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.80 per share, related primarily to the amortization and impairment of purchased intangible assets, restructuring charges and acquisition-related charges.

More information on HP’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.

HP’s Q2 FY12 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2012q2webcast.

The consensus among Wall Street analysts calls for HP to report sales of $29.92 billion and a per-share profit of 91 cents. And, for the most part, analysts are expecting HP’s results to be in line with expectations, if maybe a little light on sales.

One possible curveball, however, is Europe. Given HP’s exposure to the faltering markets on that continent, about which Dell complained in its earnings report yesterday, HP could conceivably see its results hurt more by Europe than by Dell.

Europe accounts for 37 percent of HP’s revenue, making it the most heavily exposed there among the large IT vendors. “The increasing uncertainty and resulting macro weakness in Europe will likely act as an ongoing headwind to growth,” wrote analyst Chris Whitmore of Deutsche Bank Securities in a note to clients Tuesday.

But the big item on the agenda will be HP’s plans for restructuring, and how many jobs may be lost. As AllThingsD reported last week, HP is contemplating a restructuring that could see as many as 30,000 jobs eliminated, including 5,000 through voluntary retirements. What’s unclear is over what length of time these jobs will go — I’ve been told by sources that this is a key detail, and it is likely to be a fairly long period of time.

The reductions would be the latest in a long, painful sequence of cuts for HP that began years ago. Whitmore notes that HP chopped 50,000 jobs over the course of five years under the tenure of former CEO Mark Hurd. “We suspect HP will position this cost cutting as ‘cut to reinvest’ — an interesting strategy considering HP has been restructuring for the past decade,” Whitmore writes.

Whatever restructuring Whitman puts on the table, Whitmore expects it will help HP maintain its prior guidance — it expects to finish the year with a per-share profit north of $4.00 — but it’s still not going to be easy. Summer PC demand is expected to be soft, and the lack of a tablet strategy isn’t helping. Demand for corporate PCs will likely be a rare bright spot, but just barely.

In printers, the relatively weak results of printer concerns Canon and Lexmark don’t exactly imbue the market with confidence that the trend of sliding profits and sales in HP’s printer operation, recently combined with the Personal Systems Group in a sweeping reorganization announced last month, is anywhere close to being reversed.

One thing to watch for — and something about which Whitman has hinted in the past — is SKU reduction. An SKU is industry lingo for “stock-keeping unit,” and it refers to specific models and makes and packages of a given product. Consumer printers — and, in fact, printers in general — would be an obvious place to cut back on the number of models offered to the market, and it would be perfectly in line with Whitman’s prior messages emphasizing simplicity and streamlining HP’s approach to the market. While I don’t expect Whitman to go on at length about this subject, it’s the sort of thing she may touch on as she hones the “simplicity” message.

What not to expect: One big bomb dropped all at once, outlining the sum total of Whitman’s long-term strategy for HP — one she has already admitted will take a long time to implement. The fact is, it’s a big job, probably one of the biggest in all of the corporate world, and so it’s necessarily coming out in pieces. Today’s piece will be a big one.

The move is aimed at helping its smaller operations, such as its mobile, search and e-commerce businesses, gain more independence, analysts said. Over the past year Tencent’s profit growth has slowed as it has sought to spend on a wide array of initiatives to solidify its holdings in areas such as mobile chat and online shopping.

Read the rest of this post on the original site »

A report by Business Insider yesterday pegged the range of cuts at HP to between 10 percent and 15 percent of its current work force of 320,000 people. But sources familiar with HP’s plans tell AllThingsD that the cuts will be carried out over a relatively long period of time, perhaps a year or more. A report by Bloomberg News out minutes ago puts the target at 25,000. The exact number of cuts, one source told me, is still considered a “moving target” and could grow or shrink.

Additionally, sources say, Whitman will, during a conference call with analysts, portray the cuts as necessary — not to bolster HP’s earnings and satisfy shareholders, but rather as a means to make needed investments. On this point, Whitman will be borrowing a bit from the playbook of her short-lived predecessor, former HP CEO Léo Apotheker.

Whitman will argue that many of the cuts made at HP during the five years that Mark Hurd was at its helm were made without corresponding investments in new and growing initiatives. This “cut and reinvest” theme will apply across the company, sources tell me. The process has been an intense one among HP’s senior executive ranks and has, as one source put it, “consumed the company.”

Much like what happened at networking giant Cisco Systems, the restructuring will include a combination of voluntary retirement packages, the precise details of which are still under consideration, combined with outright cuts. The target for voluntary retirement, sources tell me, is about 5,000 people.

Brian Marshall, an analyst with ISI, in a May 3 note to clients estimated that a job reduction of about 18,000, amounting to about 5 percent of HP’s work force would, would save HP in the neighborhood of $1.2 billion and boost year-end earnings per share by about 50 cents, assuming a cost of about $100,000 per employee. “If HP institutes a reduction in force as we expect, we wouldn’t be surprised if calendar year 2013 EPS estimates eventually approach $5.00 as the business stabilizes, growth returns in the Jan 2013 quarter and the organization is streamlined,” Marshall wrote.

Yahoo’s embattled CEO Scott Thompson (pictured here) is set to step down from his job at the Silicon Valley Internet giant, in what will be dramatic end to a controversy over a fake computer science degree that he had on his bio, according to multiple sources close to the situation.

The pair will apparently say he is departing for “personal reasons.” Sources said that Thompson will be claiming to be leaving due to a serious illness that he recently discovered he had.

But the evolving crisis — which is just over a week old — centered on his botched resume and how he handled the thorny issue is the key reason for the abrupt end to his tenure as a CEO.

Thompson’s likely replacement on an interim basis will be Yahoo’s global media head Ross Levinsohn, who most recently also ran its Americas unit, including its advertising sales.

In addition to the management upheaval, Yahoo’s board is closing in on a settlement with the man who discovered Thompson’s misstep, activist shareholder Daniel Loeb of Third Point, said sources.

The situation could change, since Yahoo’s full board still has to meet this morning to officially approve the sweeping changes at the long-troubled company.

But, if it is, this development goes a long way toward fixing some of what has been ailing Yahoo recently.

And it’ll also be a stunning victory for Loeb (pictured here), since the pugnacious hedge fund investor is set to get three board seats from a slate proposed by him as part of a proxy fight aimed at Yahoo. The new Yahoo directors will be media exec Michael Wolf and turnaround specialist Harry Wilson. Loeb’s fourth selection — former NBC head Jeff Zucker — will withdraw.

The five current Yahoo directors — who were to step down at the company’s annual meeting this summer — will leave the board effective immediately, sources said, to make way for the Third Point selections.

Finally, Yahoo’s recently added director Fred Amoroso will be named chairman of the board.

Amoroso is the director who has been conducting the investigation into the issues raised by Loeb about how the fake academic credentials got in Thompson’s public bios, as well as in Yahoo’s regulatory filings, and also the hurried circumstances around his hiring in January.

Those mysteries — read, screw-ups — might never be solved now, although Thompson made a convoluted attempt to explain it all in two awkward employee meetings at the end of last week. In those gatherings, according to numerous sources, he blamed a headhunting firm for introducing the mistake when he was being hired for a job at eBay in the mid-2000 timeframe.

That company, Heidrick and Struggles, slapped back last week with an internal memo, noting that Thompson’s claim was “verifiably not true.” Sources said that Heidrick told Yahoo’s board that it was in possession of a resume that Thompson had apparently submitted showing the inaccurate CS degree on it.

That memo, impugning Thompson’s credibility, was one of many that piled on to create an impossible situation for the Yahoo board, related to his leadership ability going forward.

Thompson had also previously issued a Yahoo statement, in which he apologized for the “distraction” caused by the problematic resume, but not for the mistake itself.

And, initially, Yahoo — under his direction — had called the borked resume an “inadvertent error.”

Such fumbling to fix the situation was among the many other issues that the board has been considering relating the ability of Thompson to remain in his job. Also of importance was the sinking morale of Yahoo employees, who had largely rejected Thompson’s excuses in the ResuMess scandal.

Internal message boards at Yahoo lit up all last week, with staffers largely rejecting his explanations. In addition, a number of top execs and engineers approached the board calling for Thompson’s firing.

While that’s not precisely what happened here, it’s close enough to describe Thompson’s departure as inevitable.

All this change comes in the wake of a massive restructuring he was in the midst of at Yahoo, after 2,000 employee layoffs.

Thompson was pushing forward a vision of adding a much more significant data and commerce element to Yahoo’s largely ad-based business.

That is likely to be less stressed under media-focused Levinsohn, who will be essentially trying out to be the permanent CEO.

Well known in the media and advertising communities, he has worked at a number of big online efforts over many years.

According to his bio at Yahoo, where he arrived in 2010:

He previously served as the President of News Corporation’s Fox Interactive Media, where he was responsible for the day-to-day operations, strategy and acquisitions that helped transformed the company into a leader in digital media. He also held senior management positions with AltaVista, an early pioneer and leader in search, CBS Sportsline where he oversaw all content and development for the top rated sports site, and HBO where he launched and oversaw a unit developing new programming and revenue streams. Levinsohn also was the co-founder and managing director of Fuse Capital, an investment and strategic equity management firm focused on investing in and building digital media and communications companies.

Levinsohn sits on the board of Freedom Communications and the Bogart Pediatric Cancer Research Program. He holds a Bachelor of Arts in Communications from The American University.

So far in my checking, Levinsohn’s resume is accurate.

More to come, obviously.

I have emails and texts and calls into everyone for comment, but apparently they are all out at a Mother’s Day brunch (except me).

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

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

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

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

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

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

Yahoos –

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

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

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

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

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

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

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

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

/signed
/Scott Thompson

And here’s to your new job, Raymond:

The consensus of Wall Street analysts has Cisco reporting $11.6 billion in sales, and 47 cents per share of earnings.

The big question, writes analyst Sanjiv Wadhwani of Stifel Nicolaus in a note to clients on May 7, will be around margins. Last quarter, Cisco gave guidance for gross margins — a key measure of profitability — with a narrow range of 61.5 percent to 62 percent, while operating margins were guided to the range of 27 percent to 28 percent. Wadhwani thinks that guidance may stand up as pressure on Cisco’s supply chain from the Thailand flooding, favorable pricing on switching products, and a less-aggressive posture from Hewlett-Packard’s networking arm are all providing a little breeze at Cisco’s back.

Yet one product in Cisco’s stable may, in success, be hurting margins overall: Cisco’s Unified Computing and Servers line (UCS) tends to carry a lower gross margin, Wadhwani writes, and so may eat into its overall gross margin. The product line — which combines computing, storage and networking into a single product offered to corporate and service-provider data centers — had 10,000 customers worldwide last quarter, and was showing “positive momentum” in Wadhwani’s checks. “Overall, we believe that there is intense focus on margins internally, which should allow the company to report an in line margin quarter,” Wadhwani wrote.

Cisco has been operating “with more confidence and aggressiveness with its refreshed product line, making it tougher for competitors,” writes Shaw Wu of Sterne Agee in a note to clients issued May 7, and has been a lot of the reason that Juniper and Alcatel-Lucent have missed expectations recently. He expects Cisco to give guidance for the quarter ending in July that’s more or less in line with consensus expectations. He also sees Cisco benefiting from Apple’s next iPhone: “We believe this could mark the fourth quarter in a row where Cisco does not guide down expectations further building investor confidence. We see Cisco benefiting in the second half of 2012 from the continued build-out of 4G LTE wireless infrastructure ahead of the iPhone 5 refresh likely in the September-October time frame.”

I’ll be covering Cisco’s earnings announcement later today. Having dedicated songs to CEO John Chambers two quarters in a row now, I’m going to have to scramble to see what song fits today’s results, because I just know he’s going to ask.

Earlier today, Yahoo’s persistent thorn, activist shareholder Dan Loeb of Third Point poison-penned another letter to the board of the Silicon Valley Internet company, demanding that Yahoo fire its new CEO Scott Thompson, as well as director Patti Hart, over bizarre inaccuracies related to their academic achievements.

“Permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top,” Loeb wrote.”[Yahoo must] terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.”

And while many across the blogosphere — including some very clever tweets — called for his head tout de suite, that’s just not going to happen.

At least for now, at this early point in a controversy over Yahoo filing legal documents that misrepresented Thompson’s long-ago degree from Stonehill College.

In a nutshell: Thompson does not have a computer science degree, as he had maintained he did in public bios for almost a decade, a falsehood that mysteriously seeped into documents Yahoo filed with the Securities and Exchange Commission.

That’s bad news for Yahoo, for sure, on many levels, but moving against Thompson at this moment is not likely to be the answer — for the short term, at least.

That’s due to many reasons, that I like to think of it as three hopelessly complex puzzles that need solving pronto.

The What-Did-Yahoo-Know-and-When-Did-It-Know-It Question

There is no question the first thing Yahoo’s board needs to do is a thorough investigation to determine how a borked bio could proliferate so widely and for so long.

Most importantly, Yahoo will have to reveal if Thompson actually gave them this incorrect information, as he aggressively lobbied for the then-open CEO job.

As I had previously reported several times, Thompson cold-emailed a Yahoo director — Intuit CEO Brad Smith, as it turns out — despite not being on the list of potential candidates. Thompson was then shuttled over to Hart, who was running the vetting process with the help of headhunting firm Heidrick & Struggles, and hired within weeks.

Oddly, sources said Thompson never filled out the required informational papers for the job, nor did Heidrick conduct the normal background check on him. Instead, another forensic firm Yahoo hired did the work.

If it turns out Thompson gave any of them the bad bio info, it would be quick curtains for him.

But if Yahoo’s board members obtained his info on their own, the next key query would be how no one at Yahoo — especially its legal and compliance staffers, as well as outside help — managed to catch the problem during the vetting of Thompson.

Here are some good questions to start with:

Who put a faux computer science degree on Thompson’s bio in the first place, why and when did it happen?

Where did Yahoo get the inaccurate information?

Who was in charge of checking Thompson’s academic record for Yahoo?

And, who checked the work of the checkers?

The problem is made more complicated, because correct information was easily available in the SEC filings of eBay for years, since Thompson was head of its PayPal payments unit.

While the resume information was indeed wrong on eBay’s Web site and on numerous bios of Thompson for years, how did eBay legally get it right while Yahoo did not?

That calls into question the expertise of the company, its directors and those they hired to make sure execs were completely on the up and up, a task they clearly failed at.

If rank incompetence is the reason, which it looks like it might be, expect certain board members and other Yahoo staffers to go, along with anyone who helped in the Thompson vetting, or lack thereof.

Unless, of course, the gang-that-couldn’t-shoot-straight actually did shoot straight and some one at Yahoo found out about the educational discrepancy before the new CEO was announced, but declined to fix it.

While sinister, such a scenario is not entirely implausible, given how much pressure Yahoo was under at the time to hire a CEO quickly, due to Loeb and his looming proxy fight.

If any evidence were to surface that this was so, it is curtains all around, which would rain the kind of disaster down on Yahoo’s Sunnyvale HQ that would make Loeb’s attacks look like a Nerf battle. Instead, it would be “The Hunger Games” — except that no one survives.

The Chaos-in-Sunnyvale Conundrum

Which brings us to the profound implications of Yahoo jacking its second CEO within six months.

While it’s easy to yell “Fire the CEO” on a crowded Twitter, it’s simply not so easy in practice.

How long did it take Yahoo’s lugubrious board to figure out Carol Bartz needed to go? A … long … time. (And, she had a CS degree!)

More to the point, Thompson — and his not-so-merry band of consultants from Boston Consulting Group and, this week, McKinsey & Company — has only just completed a massive layoff of 2,000 employees and a jarring restructuring of management.

He’s also in the early stages of rolling out a new and decidedly still-squishy strategic plan to top execs (also just this week), along with working on some other key initiatives.

That includes renegotiating its search partnership with Microsoft; noodling around on a possible deal with Google; contemplating the sale of a variety of assets; and — oh, yes — trying to take on social networking Godzilla Facebook over patent infringement.

Busy much?

But, most importantly, Thompson is now the umpteenth Yahoo CEO to be working on the never-ending talks with its Asian partners over selling back a piece of the company’s lucrative stake to them.

While Yahoo CFO Tim Morse and head lawyer Mike Callahan are the point men on the deal, the lack of CEO would be an issue in the now-proceeding again talks.

This is a sale that must — and I underscore must — get done and soon, giving Yahoo much-needed breathing room and a whole lot of cash to fork over to increasingly disgruntled shareholders.

So, expect Yahoo to try to milk that deal for all it’s worth in the coming week, in order to give the appearance, at least, of positive forward momentum.

And, like it or not, Thompson has to play a key role in it getting done.

Thus, the likelihood of wait-and-see over point-and-shoot on Thompson is higher than you might think.

That’s especially true given four members of the board are leaving within six weeks and have either or are in the process of being replaced by new members.

Then, Thompson will be their problem to solve.

Again, no small thing, since the old crew — led by feckless Chairman Roy Bostock — is not likely to want to end its appalling tenure with yet another disaster.

Such a move would further tarnish the legacy of its outgoing directors, although I am not sure how it could be any more sullied, given their consistent record of one bad decision after the next.

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

It could be a different case with the new directors, of course, who all seem pretty sharp and not as easily impressed by a record of failure.

They will surely be monitoring Thompson carefully, as will employees, who have taken to internal message boards with a rage not seen in a while over the resume debacle.

Their morale might be one uncertainty impacting Thompson’s fate. If a lot of key employees continue to bolt Yahoo or those remaining more loudly express their disdain for the bio antics, the new directors might listen.

The Whatever-Loeb-Says-We-Won’t-Do-Till-Later Head-Scratcher

Which brings us back to Loeb, whose noisy campaign to grab seats on the Yahoo board has certainly hit home this week.

And, though Yahoo likes to ding him a lot, since he started his campaign of terribly entertaining investor terror, a lot of what he’s been calling for has happened.

That includes a major flushing of the board — with five longtime members, including co-founder Jerry Yang, going, going and gone.

In addition, Loeb brought pressure to slow down some questionable deals, from Yahoo’s PIPE dream to a tax-free spinoff in Asia in a deal only an accountant could love.

He’s also — though they try to deny it — got the Yahoo directors in the dangerous habit of reacting to him, rather than playing their own game.

While the Yahoo board has resisted any deal with Loeb (pictured here), blaming him for rejecting their kind offers of settlement, it is he who is setting the tone more than Yahoo.

And that tone is of alarm and trouble and chaos at Yahoo.

That’s not going to work to convince other Yahoo investors to back his cause — in fact, Loeb has a decidedly uphill battle to win his proxy challenge — he has still scored a direct win with the bio relevations.

So far, though, Loeb has not sunk Yahoo’s battleship, so it is unlikely the board will acquiesce to his latest demand of Thompson being fired by noon on Monday.

Maybe it will eventually, or maybe it will just scold Thompson or maybe it will do nothing at all.

All that is an unknown — a riddle, wrapped in a mystery, inside an enigma, with a lot of managerial incompetence thrown in. And that, most of all, is the sad definition of today’s Yahoo.

RELATED POSTS:

• Yahoo’s Parting With Thompson Will Be for “Cause” (a.k.a. CSLie)
• Ross Levinsohn’s Yahoo Plan: Back to the Future
• Here’s New Yahoo CEO’s First Note to Troops! (The Leaking-Internal-Memos-to-ATD Policy Remains in Effect As Usual)
• Yahoo Officially Confirms ATD Report on CEO Changes and Proxy Settlement
• Meet the Man I Call “The Hair”: The Video Stylings of Yahoo’s Newest CEO Ross Levinsohn
• Will Thompson’s Ouster Mean a Yahoo-Facebook Patent Settlement Too?
• Exclusive: Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
• Heidrick & Struggles Slaps Back at Thompson’s Yahoo in Blame Game Over ResuMess
• Is He In or Is He Out? Crunchtime for Scott Thompson at Yahoo.
• Not So Scott Free? Yahoo’s Other Big Shareholder — Cap Re — Leaning Toward Supporting Loeb Over Thompson ResuMess.
• Tech Nation’s Gunn Says She and Yahoo CEO Discussed Their CS Degrees Before 2009 Show (Video and Audio)
• Loeb Calls Again for Thompson Firing From Yahoo, as Former eBay Boss Supports Him
• Place Your Bets: Will Loeb Drop Another Bomb on Yahoo at Vegas Confab Later Today?
• Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board
• CEO Says Sorry to Yahoos for Borked Bio “Distraction” — But Will Mea Culpa Work Without an Apology for Error? (Memo)
• Buffett Comments on Trust Issue in Yahoo CEO BioGate: “You’ve Got a Problem”
• Loeb Lobs Lawsuit, as Expected, at Yahoo’s Borked Bio Mess
• As Yahoo CEO Reaches Out to Top Staff, Board Meets to Weigh “Options” (I.E., Deciding Who Gets to Take the Borked Bio Blame)
• Yahoo Should Expect Incoming Lawsuit Lobbed by Loeb Tomorrow on CEO Hiring
• They Shoot Yahoo CEOs, Don’t They? But Not Without a Really Smoking Gun and a Much Stronger Board.
• Yahoo’s Thompson Asks Employees to “Stay Focused” — Except Not on Him
• In 2009 Interview, Yahoo CEO Does Not Deny He Has a CS Degree, and Calls Himself an “Engineer” (Audio)
• Yahoo’s Board Will “Review” Resume Discrepancy of CEO
• How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
• Yahoo’s Response on CEO’s Computer Science ResumeGate: “Inadvertent Error”
• Dan Loeb Alleges “Discrepancies” on Yahoo CEO Scott Thompson’s Resume Related to Computer Science Degree

Earlier today, Yahoo released a letter talking itself up to investors, introing a new Web site called Yahoo Forward to do more bragging and — you guessed it — giving yet another smackdown to activist shareholder Dan Loeb of Third Point.

The move comes as the proxy fight over the Silicon Valley Internet giant moves ever closer to its annual meeting, which is set to take place sometime this summer.

In the letter, which had precisely zero new news, Yahoo recounted again that it tried hard to settle things with its disgruntled shareholder, but underscored its desire not to have Loeb on the board.

Why? Because the man who owns about six percent of Yahoo — which is about 99.99 percent more than any other current board member, which seems to make him pretty interested in Yahoo’s fate — is not qualified to be a director.

“The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board,” the Yahoo letter read. “In addition, we believe that, based on the specific qualifications of Third Point’s nominees relative to Yahoo!’s business and opportunities, the candidates nominated by the board’s Nominating and Governance Committee are significantly superior to those proposed by Third Point. “

Buuuurn! (Not really.)

Loeb has his own Web site, Value Yahoo, which he launched last month to pillory Yahoo. He used it today to post an infographic titled “The Incredible Shrinking Yahoo.”

Buuuurn! (Not really.)

In fact, the real fire could start as early as next week and in the months ahead when other Yahoo investors start to pick sides in the fight.

That should really begin when independent proxy advisory firm Institutional Shareholder Service gives its recommendation on the issue to Yahoo investors.

A backing by ISS for another prominent proxy advisor Glass Lewis will help Loeb, although he still has an uphill battle to convince other shareholders to vote down Yahoo, which has a new CEO in Scott Thompson and a mostly new board.

That will be even more difficult, given how active Thompson has been in making a ton of productive-sounding moves, such as a recent restructuring which included 2,000 layoffs. While results will not be in for a while, a lot of we’re-hard-at-work strategery noise is probably a good tack for Yahoo.

The company will surely try to drop some more Yahoo bombs on Loeb to burnish its chances in the coming month — most likely first around a taxable sale of a large portion of its Asian assets related to new rounds of talks now taking place again, which might include a fat dividend to investors.

(Investors like fat dividends and the people who give them fat dividends, by the way!)

The company could also sell off some of its underperforming units, such as its advertising technology business and renegotiate its search partnership with Microsoft, all of which will give Yahoo more of a case that Loeb’s complaints are now unfounded.

But don’t count Loeb out, either. He’s a deft campaigner and also deserves some credit for forcing Yahoo to make several of its recent moves to oust weak members of its longtime dysfunctional board.

In that regard, at least, Loeb has been very relevant.

Here’s Yahoo’s letter today, in full (the odd bolding is all done by the company):

Yahoo! Shareholder Letter Outlines Forward Momentum and Urges Election of Its Board Nominees

SUNNYVALE, California, May 2, 2012 — Yahoo! Inc. (NASDAQ: YHOO), the premier digital media company, today released the following letter to all shareholders from its board of directors:

Dear Shareholder,

Since last August, Yahoo! has moved forward aggressively, implementing a plan to position itself for future success and to increase the value of Yahoo! for you, our shareholders.

* Just four months ago, we appointed CEO Scott Thompson, a highly accomplished and dynamic leader with the experience and expertise required to lead Yahoo! to renewed growth, innovation, and success. Scott is already moving the company forward fast — dramatically reorganizing the business around its core strengths with a mindset of focus, speed, discipline, and putting the customer first.

* The company has reconstituted the board of directors, with the optimal mix of expertise, experience, and fresh perspectives to accelerate the company’s transformation. We recruited five new, highly qualified independent directors through the Nominating and Corporate Governance Committee’s thorough search process. In addition, four of our directors volunteered not to stand for re-election at the 2012 shareholders’ meeting. As reconstituted, following the annual meeting a majority of Yahoo!’s directors will be new to the board this year, and all directors will have joined the board since 2010.

* Following a detailed and diligent review in an accelerated timeframe, the company produced a comprehensive strategic framework that will change what we do and, most importantly, how we do it to enable us to put our customers first in everything we do. We will deliver fun, engaging, and personalized experiences on all screens and forge strong relationships with our advertisers by producing measurable results, including consumer insights derived from our vast data, and delivering a higher rate of return on advertising spend. Specifically, we will focus all we do on the consumers who trust us to deliver personalized content and communications in our core businesses, and on the advertisers who want to connect with our consumers. Just as importantly, we are identifying what we will no longer do, in order to direct resources toward those businesses that generate the highest consumer engagement and the best return on our investment. As we excel in our core business, we will earn the right to pursue new growth opportunities.

* With this renewed operational focus, the company has defined a new organizational structure to support our core business and put resources closer to our customers. Effective May 1, Yahoo! will operate in three groups — consumer, regions and technology — all supported by our corporate teams. Each of these three groups will have clear accountability for getting results by delivering the best customer experiences. This more efficient structure will enable faster decision-making and more effective delivery of innovative products and services that measurably impact the bottom line.

* Beyond our core business, we are committed to continuing to be prudent stewards of our non-core assets and investments and to be thoughtful and diligent about monetizing their significant value at the right time and in the right manner. Should we do so, returning capital to shareholders will be a high priority.

In identifying qualified new members for the board, the Nominating and Corporate Governance Committee, led by its independent chairperson Patti Hart, conducted a thorough and impartial search process. Working with a leading executive recruitment firm and using the committee’s desired skill sets and experience for new board members, the committee identified over 100 potential candidates and sought input from a number of our major shareholders. Committee members engaged with over 20 individuals, including the four nominees proposed by Third Point. Committee members then conducted numerous in-depth interviews and carefully analyzed the qualifications of each candidate, including each of Third Point’s nominees. Committee members conducted additional interviews with those candidates that warranted further consideration, as determined by the committee in its meetings held throughout the process. Following completion of the full process, the committee and the board determined that the distinguished group of five candidates recently announced were the best choices, based on their individual accomplishments, experience directly relevant to Yahoo!’s business and its challenges, and records of value creation.

The new directors have strong records of significant accomplishment at the highest levels of media, advertising, marketing, Internet, technology, and finance, including corporate finance and restructuring, and insight into customers’ perspectives. The continuing directors are independent thinkers who bring impressive track records of success, and have been actively and constructively engaged as the company has developed its strategic framework to deliver renewed success and value to shareholders. We are challenging Yahoo!’s entire leadership team by asking tough questions, establishing rigorous goals, and developing a framework for strict accountability to move Yahoo! forward … fast.

Our focus now is on operating the company so that it delivers superior value to our shareholders. Supported by the many talented people who have contributed to charting our new course and inspired by the many shareholders, customers, and employees who have communicated passion for this great brand, we know that we will succeed.

Regrettably, our efforts to avoid a proxy contest with Third Point were unsuccessful. Following the recommendation of the Nominating and Corporate Governance Committee, we offered Third Point two board seats, including one of its nominees and a second mutually agreeable candidate, which would bring Third Point’s perspective into the boardroom. Unfortunately, Mr. Loeb declined to end his proxy solicitation on that basis, insisting that there could be no settlement unless he was personally appointed to the board. The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board. In addition, we believe that, based on the specific qualifications of Third Point’s nominees relative to Yahoo!’s business and opportunities, the candidates nominated by the board’s Nominating and Governance Committee are significantly superior to those proposed by Third Point. Nevertheless, we want to emphasize that we remain committed to an open dialogue with all our shareholders and to working in a constructive manner with Third Point.

At the end of the day, we recognize that you, our shareholders, will make the decision as to the board you want to lead your company. We are confident that when you assess our new board’s qualifications against Third Point’s slate, you will come to the same conclusion that we did—that this is the right board with the right mix of skills and experience to lead the company forward to create value for shareholders. We also recognize that we have a great deal of work to do to support and challenge the management team to move the company forward fast. We intend to keep ourselves and the company focused and we do not intend to let ourselves be distracted from the work at hand.

Yahoo! is looking forward, focused on delivering superior value to all of our shareholders. We are building momentum with a great leadership team, unified in focusing the company on its core strengths, redeploying resources to the most productive areas of the business, and equipping the company to invest in growth and innovation. Your new board includes individuals who have proven operating expertise in media, advertising, marketing, Internet, technology, and finance, and have consistently proven to be thoughtful and responsible stewards of shareholder value, with a strong emphasis on disciplined capital allocation and a willingness to embrace structural change. They are already contributing to the rigorous action plan to realize Yahoo!’s potential and deliver increased value for shareholders.

With new leadership and the new board, we are building a stronger, nimbler, more profitable Yahoo! that is better equipped to innovate for our customers and will ultimately increase the value of Yahoo! for all shareholders.

You can read more about Yahoo!’s actions to move the company forward and create shareholder value at http://yahooforward.com.

Thank you for your support.

Yahoo! Board of Directors

One of the least-changed parts of AllThingsD since we started this site has been our “Voices” section, which has attracted robust and ever-increasing traffic over the years.

But today Voices gets a new look as we relaunch an updated section to bring you even more writing and information from outside sources. Voices will be run by senior editor Beth Callaghan, and will offer six regular features:

Must-Reads — formerly called Voices — will be the same daily compendium of links from around the Web. These are pieces we’ve selected editorially because we think they’re worth your time. We’ve made two changes in order to clarify the nature of the content and our role in suggesting them: We’ve renamed the links “Must-Reads From Other Web Sites” and we’ve simplified them to consist merely of outbound links. The links will appear in widgets across the site and in an archive — but when you click on a headline, you’ll be taken directly to the original Web site.

Voices is now made up of exclusive op-eds and posts from outside contributors who are well-versed in AllThingsD and have unique perspectives to share. We welcome and will evaluate all such pieces, and also plan to reach out to a range of industry experts on a variety of topics. Our goal is to spur debate and also give smart and engaging content a platform on our site.

Forum is conceived as an assembly of quick opinions from four or five well-known personalities on a single issue that is in the news. Topics can range from thoughts on the possible bubble in Silicon Valley to what’s the most interesting new trend to how possible privacy regulation will impact the tech industry. We hope to elicit a lot of different opinions and insights from a wide-ranging panel of execs, academics, venture capitalists, Wall Street analysts, entrepreneurs, bloggers and more.

Eye to Eye will be even more pointed, pitting a pair of often-opposing viewpoints on a controversial topic of the week — kind of like a Spy vs. Spy, but with words. The possibilities are endless here: Was $1 billion too much for Facebook to pay for photo-sharing site Instagram? Will Yahoo’s recent restructuring work? Do you think Google Glasses is a good idea? Where will Apple’s stock be in a year?

Numbers is a weekly story told by data — sometimes scientific, sometimes irreverent, always interesting. We will be working with many top research outfits, and will also be doing a number of our own polls of readers. We love infographics, surveys and pie charts at ATD and you’re going to get a whole lot of them.

Lastly, Ten Things About Me finds answers to entertaining and informative questions aimed at prominent people in the digital realm. It’s a little like the Proust Questionnaire mixed with the kind of queries that we are well known for at our D conferences, plus a whole lot of unusual ones, so you can get to know a variety of tech and media figures in a different way. First up: Twitter and Square inventor Jack Dorsey tells us what he’d be up to if he weren’t doing what he is doing now.

The new Voices will roll out all this week. Enjoy.

Oy.

That’s what I was thinking over and over in my head as I read through the many pretty decent questions that Yahoo’s activist investor Third Point asked on its Value Yahoo Web site yesterday.

Because there were so many — they are all embedded below — and mostly because they all need to be answered by Yahoo in some fashion over the next few months.

In addition, they are each time-consuming and all over the map, from figuring out its troubled advertising search partnership with Microsoft to the talks around selling off parts of its Asian assets to Yahoo’s patent lawsuit against Facebook to how it’s going to deal with Third Point’s possible proxy challenge to whether more layoffs beyond its recent 2,000 firings will be needed.

Like I said: Oy.

But for later today, when Yahoo reports its first-quarter earnings after the markets close, it will all be about the numbers and whether the long-troubled company has regained any of its momentum.

According to multiple sources, Yahoo will report earnings that will be decent enough and in line with Wall Street expectations — if not slightly better. What analysts hope is that declines in search will lessen and display growth will see improvement.

Currently, investors expect net revenue of $1.06 billion with earnings of 17 cents a share.

But what everyone will really be looking for is what’s next from new CEO Scott Thompson, who has yet to articulate a cogent strategy beyond the broad strokes of a restructuring and, of course, layoffs.

“Following the round of layoffs and the reorg, we believe investors are focused on Scott Thompson’s strategy for the business,” noted J.P Morgan’s Doug Anmuth in his pre-earnings note, expressing a common sentiment. “We know he’s focused on the core business, improved data and targeting functionality and fee-based revenue, but we’ve heard only limited details thus far.”

Indeed. So, perhaps tomorrow, Thompson will start to fill in the blanks.

Until then, here are some of those open questions from Third Point for Yahoo to consider:

QUESTIONS FOR YAHOO!’S MANAGEMENT AND BOARD

1. How does Yahoo!’s proposed operating plan differ substantively from those of the last 3 CEOs?

2. What are management’s financial targets for 2012?

3. Should investors expect to realize the cost savings from the announced headcount reductions in Yahoo!’s operating profits, or will the savings be “reinvested” in Yahoo!’s latest operating plan?

4. Does the previously announced headcount reduction represent the full extent of cost reductions investors should expect?

5. What is management’s plan to address the display ad business?

6. Please provide examples of the data driven product initiatives Mr. Thompson announced were coming “sooner rather than later.”

7. What is the status of the sales force turnaround begun in mid-2011? Will recent sales leadership changes re-set sales productivity expectations?

8. What is the status of these key initiatives announced last year:
APT 2.0/APT and RMX convergence
Project Rewire
User log-in traction

9. What is the latest assessment of the Microsoft search agreement’s progress? How has the revenue per search (RPS) delivered by Microsoft fared versus pre-partnership levels and industry peers?

10. What happened to the cost savings that the Microsoft search agreement was expected to provide?

11. Investor Communications: What is Yahoo!’s view on and outlook for the Asian stakes, particularly Alibaba? What kind of window (timeframe) is Yahoo!’s latest management team and Board asking for from investors with respect to the most recent operational turnaround strategy?

12. Facebook Lawsuit: Please provide the rationale and expectations behind the lawsuit. Did the Board authorize it? Has the Board considered alternative paths to unlocking the value of Yahoo!’s patent portfolio?

13. Asian Stakes: After over a year of talks, what is the status of the monetization of Yahoo! Japan? What hurdles remain?

14. What is the status of the Alibaba Group discussions? How is management approaching fair value of this asset? What is management’s view of the Alibaba Group value?

15. To the extent a rationalization of one or more Asian stakes is realized, what is Yahoo!’s plan for the proceeds? Will Yahoo!’s leadership commit to a return of substantially all cash proceeds to investors?

16. To the extent a rationalization of one or more Asian stakes is realized what is Yahoo!’s approach to assets contributed to Yahoo! as part of a tax efficient transaction? Does Yahoo!’s leadership believe it can integrate acquisitions or contributed assets? If so, why? Does Yahoo!’s leadership support transactions that would be dilutive to the multiple of Yahoo!’s core business?

17. Please explain why Daniel S. Loeb, as a representative of Yahoo!’s largest outside investor, would not be a good steward of investor interests and a valuable addition to the Board.

18. When will the 2012 shareholder meeting be held?

Our own sources familiar with the matter confirm that this is indeed the case.

It’s not yet clear how far along the process is or what specific opportunities RIM is seeking counsel on, but actively seeking outside financial advice is usually a sign that the company is at least mulling a sale or restructuring. It’s also an indication that Heins is willing to consider a wider range of options than his predecessors. Which is a good thing.

That said, if RIM is mulling a possible sale the company is likely going to run into the same issue that has troubled it in the past when chatter like this has cropped up: RIM’s not a takeover target if no one wants it.

As I’ve written before, “Implicit in the phrase ‘takeover target’ is the idea that someone actually desires the target in question.” And in RIM’s case, I’m not quite sure that’s true.

The company’s market cap is currently about $6.74 billion. Is there anyone willing to spend such a sum plus premium on that? For the chance to turn around RIM’s foundering business? The chance to arrive late to market with another ill-conceived BlackBerry? To make sense of the BlackBerry OS-to-QNX transition? And then to go head to head with Apple and Google, which have been wiping the floor with newcomers and pioneers both?

Startup Grind, which first reported the layoffs, said between 500 and 1,000 employees will be affected, representing between 5 percent and 10 percent of the game-publisher’s workforce.

In an emailed statement to All Things D, the company said: “EA is growing and looking to hire hundreds of people for our digital, console, mobile and social games. Like all game companies, we make occasional adjustments to resize teams as projects are completed and new priorities are established. Overall, we expect that headcount will be up at the end of this year.”

Our sources indicate that the layoffs will be closer to 500 and are tied to the company’s game schedule. Last year, the company shipped two epic projects: Battlefield 3 and Star Wars: The Old Republic, which were challenging Activision’s respective dominance in first-person shooters and massively multiplayer online categories.

Once a title shifts, some employees stay on to work on other projects or remain on teams that build new content for the existing games to keep them fresh.

In this case, it appears the cuts show just how many resources the company was investing in these titles before launch. We expect to hear about these titles’ performance in a couple weeks when EA reports fourth-quarter earnings.

Three years ago, the company conducted a larger restructuring, totaling 1,500 employees.

Still, the Redwood City, Calif., company has aggressive hiring plans. Previously, it disclosed it wants to hire 5,000 engineers by the end of the decade to help build a platform, crossing all of its labels, including mobile, social and console. In particular, CTO Rajat Taneja has been bulking up his team since joining EA in October and now has 600 people on staff.

In afternoon trading, EA’s stock was down more than 5 percent, or 89 cents, to trade at $15.29 a share. Over the past year, it has traded as high as $26 a share.

In his first news conference since succeeding Howard Stringer as chief executive of Sony, Hirai confirmed the company will sack 10,000 employees — roughly 6 percent of its global workforce — as it moves to refocus its efforts on three main businesses: Mobile devices, cameras and camcorders, and games.

“Now is the time for Sony to change,” Hirai said at the company’s Tokyo headquarters as he detailed his “One Sony” initiative. “We must accelerate the speed of our management, reform our business portfolio, and innovate.”

And to achieve that? First, an ugly employee bloodletting and a rejiggering of the company’s television business, which has racked up $10 billion in losses in the past eight years. Hirai says he aims to cut the division’s fixed costs by 60 percent and its operating costs by 30 percent over the next two years. Meanwhile, Sony will expand its PlayStation and online games business and push into new markets like medical equipment.

“Our goal at Sony is to become a company that creates products and services that stimulate curiosity in customers around the world and gives them an emotional experience,” Hirai said. “I am determined to transform and revive Sony. This is our only chance to change. We cannot shy away from difficult decisions.”

Yahoo CEO Scott Thompson and a very close-knit team at the Silicon Valley Internet giant worked into the night last night to put the final touches on a restructuring of the company that will drastically change how it is run.

Sources said Thompson has not fully briefed much of Yahoo’s senior staff about the changes, which he has been working on with Boston Consulting Group.

In other words: Aim. Fire. Ready?

That’s certainly what it has felt like to some, as Thompson has made changes out of typical order in a turnaround.

Most importantly, after laying off 2,000 employees last week before he unveiled a strategy, the new org is presumably Thompson’s first stab at a vision, by changing out and consolidating a number of divisions.

The plan is close to what I have previously reported on several times, with media, sales and consumer products units as the central ones, along with a new commerce/data one.

That could presumably be headed by Sam Shrauger, who left his job as head of product at eBay’s PayPal division yesterday. Sources said Shrauger did not get the top job there after Thompson left to run Yahoo, so his move to follow his old boss seems inevitable.

Right now, the obvious candidate for the media job, which might also include Yahoo’s popular email product, is current Americas head Ross Levinsohn; Shashi Seth is likely to take on search and other consumer products; sales in the important U.S. arena could be headed by Rich Riley, who recently ran Europe, Middle East and Africa for Yahoo.

Under the new plan, products — previously centralized under Blake Irving, who resigned from Yahoo last week — will flow out to the units. Certain units that could be sold, such as its advertising technology assets, will remain intact for now under current leadership.

Thompson might have more tricks up his sleeve — I like tricks, Scott, so let ’em fly!

In any case, all should be unveiled once he takes to the stage at an all-hands employee meeting this morning.

Until then, here’s a video of me on San Francisco’s KQED weekly news talk show, discussing Yahoo (I start at about the 7:30 minute mark):

The cuts could run through the two fiscal years until March 2014, although the final timing has not been settled, the people said.

Read the rest of this post on the original site »

According to sources close to the situation, Yahoo’s Chief Product Officer Blake Irving has turned in his resignation and it has been accepted by the company.

The process for Irving’s departure is a bit more formal since he is a top officer at the Silicon Valley Internet giant. But it is perhaps not that surprising, given that a brunt of the 2,000 employee layoffs at Yahoo yesterday were in his part of the organization.

Irving has not been at Yahoo this week during those wrenching cuts — that’s because the resignation has been in the works for some time.

In fact, in a restructuring to be announced next week, the central product organization at Yahoo he runs was essentially blown up, with the development moving back into media, sales and consumer products units being planned.

In addition, Yahoo’s new CEO Scott Thompson has been contemplating selling off large parts of the company’s advertising technology platforms, as well as its search business, also now under Irving.

Irving had largely opposed the strategy that Thompson has been aiming toward, said sources, and also strongly disagreed with laying off so many employees without a clear plan in place. Many inside and outside Yahoo agree.

He was also apparently concerned about the massive engineering and research talent exodus of late, especially in Yahoo’s vaunted Labs arm, which suffered major cuts in the layoffs.

The former Microsoft exec has no plans for another job, said sources, but has had a number of offers.

Yahoo confirmed the resignation when I called to ask about Irving’s goodbye. “Yahoo wishes him all the success in the future,” said the spokesperson.

Irving came to Yahoo in mid-2010 under former CEO Carol Bartz, who was fired last fall. Under his leadership, the product unit had focused a lot on creating a major publishing platform for Yahoo and other media companies. He debuted its Livestand content app earlier this year.

Here is a video interview I did with Irving in happier times, talking about Yahoo products, in which he sported a very handsome blue cashmere sweater:

]]> http://allthingsd.com/20120405/exclusive-yahoos-chief-product-officer-blake-irving-resigns/feed/ 0 http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/ http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/#comments Wed, 04 Apr 2012 13:22:13 +0000 Kara Swisher http://allthingsd.com/?p=192985

In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

]]> http://allthingsd.com/20120404/its-official-yahoo-lays-off-2000-employees/feed/ 0 http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/ http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/#comments Tue, 03 Apr 2012 22:16:46 +0000 Kara Swisher http://allthingsd.com/?p=192483

According to sources close to the situation, Yahoo’s massive round of layoffs — which is likely to impact up to 2,000 employees — is just the tip of the proverbial iceberg that will hit the storied Silicon Valley Internet giant in the months to come.

Sources said Yahoo is currently planning to announce the cuts in staff in the early morning, just as the markets open. That could change, of course, but the cuts will definitely occur within the next two days.

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions. While still sustaining losses, its media units will not be as badly impacted. And it’s not clear how many employee terminations will be aimed at the company’s general and administrative staff.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be “doubling down” in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

But not tomorrow, which will be one of the tougher days in Yahoo’s long history of periodic layoffs. Newly installed CEO Scott Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

That is indeed the case, which is causing massive strain throughout the company, which now employs over 14,000 and has many thousands more hired as contractors.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counter-claim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week, which will create several major, soup-to-nuts units at the company. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

Let’s hope that Yahoos who will be let go tomorrow find themselves with many new employment choices after the ax falls.

]]> http://allthingsd.com/20120403/yahoos-layoffs-tomorrow-morning-of-up-to-2000-will-only-be-the-first-move-of-a-larger-purge-to-come/feed/ 0 http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/ http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/#comments Tue, 03 Apr 2012 18:13:58 +0000 Kara Swisher http://allthingsd.com/?p=192686

Facebook has just taken strong aim back at Yahoo’s patent lawsuit with an answer and counter-claim filing of its own, alleging infringement over a number of issues.

“From the outset, we said we would defend ourselves vigorously against Yahoo’s lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook’s patents,” said Ted Ullyot, general counsel of Facebook. “While we are asserting patent claims of our own, we do so in response to Yahoo’s short-sighted decision to attack one of its partners and prioritize litigation over innovation.”

In its counter-claim filing involving 10 patents held by Facebook, the social networking giant said that Yahoo is infringing via a wide range of its offerings, including its homepage, content optimization, relevance engine, Flickr photo-sharing service and advertising throughout its huge site.

You know: The ads that make up most of Yahoo’s revenue.

In other words, Facebook CEO and co-founder Mark Zuckerberg does not like being poked by new Yahoo CEO Scott Thompson, especially on the eve of a $100 billion IPO.

You might have heard that Facebook is going public and it’s a big deal around Silicon Valley, which is why no one much liked Yahoo’s skunk-at-a-garden-party legal move two weeks ago.

Yahoo fired back at Facebook’s firing back, in a statement:

“We have only just received Facebook’s answer and counterclaims, but on their face we believe they are without merit and nothing more than a cynical attempt to distract from the weakness of its defense. As we have made clear from the outset, the unauthorized use of our patented technology is unacceptable and must be resolved appropriately. Other leading companies license these technologies, and Facebook must do the same or change the way it operates. We have proposed that Facebook join us in discussions to resolve the matter, but our overtures have been rejected. As a result, we are prepared to continue to seek redress through the courts.”

The new filing could not come at a worse time for Yahoo, which will announce thousands of layoffs of employees tomorrow morning, in a wrenching restructuring to revive its lackluster business.

In its legal filing, Facebook also pushed back on assertions in Yahoo’s initial patent lawsuit, noting that it denies that “[w]ithout Yahoo!’s achievements, websites such as Facebook would not enjoy repeat visitors or substantial advertising revenue.”

I think Facebook — which is sure to try to drag this thing out for a long, long time — just called Yahoo a tech loser.

Here is the full document:

FB_ANSWER_AND_COUNTERCLAIMS

More to come, obvi.

Here I am talking about the whole enchilada on WSJ Live’s News Hub.

]]> http://allthingsd.com/20120403/breaking-facebook-smacks-at-yahoo-with-patent-claims-of-its-own/feed/ 0 http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/ http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/#comments Mon, 02 Apr 2012 21:40:26 +0000 Kara Swisher http://allthingsd.com/?p=192357

In yet another high-level executive departure, top-level content exec Luke Beatty, the founder of the Associated Content unit that the Silicon Valley Internet giant bought several years ago for $90 million, is departing, according to sources.

Beatty’s move comes as Yahoo is preparing large-scale layoffs and a massive restructuring, which several sources said will begin mid-week.

It’s another blow for the company, given the entrepreneurial Beatty was the kind of exec that Yahoo desperately needs to keep if its media aspirations are to remain innovative.

While Associated Content — now called the Yahoo Contributor Network — has been integrated into the media offerings at Yahoo, other upcoming cuts in Beatty’s areas of management could be decimating.

The changes are due to a new initiative from new CEO Scott Thompson to turn Yahoo around after years of lackluster performance. The situation has been tense at the iconic company, made worse by an increasingly nasty proxy fight that is also looming.

]]> http://allthingsd.com/20120402/exclusive-yahoo-loses-associated-contents-luke-beatty/feed/ 0 http://allthingsd.com/20120402/third-point-launches-value-yahoo-blog-which-does-not-value-current-leadership/ http://allthingsd.com/20120402/third-point-launches-value-yahoo-blog-which-does-not-value-current-leadership/#comments Mon, 02 Apr 2012 14:30:09 +0000 Kara Swisher http://allthingsd.com/?p=192096

In another high-profile parry in its increasingly aggressive proxy fight against Yahoo, activist shareholder Third Point has launched an extensive Web blog to support its case with investors called “Value Yahoo.”

Along with a long statement — a blogifesto of sorts — about what it will take to fix the Silicon Valley Internet giant, Value Yahoo also tries to keep up the pressure on Yahoo’s board and management.

The purple-themed site — this is Yahoo’s well-known color — features a humorous take on Yahoo’s now dearly departed neon sign in San Francisco, with the banner: “Yahoo Shareholders Deserve Overdue Representation!”

It includes a section on “Failed Leadership,” info on its “Road to Recovery” slate of alternate directors and even an FAQ and mission statement.

“We believe in Yahoo!, its loyal users, committed employees, dedicated partners, and the potential of the brand,” it reads, in part. “Yahoo! shareholders, employees, and partners have suffered for too long with a revolving door of management teams and Directors who have been unable to seize opportunities despite the Company’s enduring role as the premier online source for news, sports, business, entertainment and email.”

By the way, in a clever dig, there is also a Facebook site for Value Yahoo — patent lawsuit or no, you can “like” Third Point’s effort.

Here, for example, is one of Value Yahoo’s charticles:

The goal of all this, presumably, is to get Yahoo to give in to demands for several board seats using its directors, including Third Point’s Dan Loeb. So far, ongoing discussions between Loeb and Yahoo have failed to stop the shareholder battle, which comes in the midst of the company’s wrenching restructuring.

Last week, Yahoo said it had appointed three new directors to its board. In a pointed slap at Loeb, the company said it had rejected him specifically, although Yahoo added that it was willing to accept one of his current choices and another that was mutually agreed to.

Loeb reacted to that, um, badly, with another letter last week that said Yahoo leadership was living in an “illogical Alice-in-Wonderland world.”

The war of words continues with the new site, which Third Point said it will maintain actively like a blog, with updates, charts, filings, outside news stories and more.

(Since Yahoo has apparently banned me from its internal news offering to employees, according to more sources than you can shake a stick at, I hope they can see my work here!)

In its newest post — titled “Why Are We Running for Election to the Yahoo! Board?” — Third Point presents an argument for other shareholders to act, even though Yahoo has actually made a lot of the changes that Loeb has been pushing for already.

(In fact, that’s an FAQ question on Value Yahoo, natch: “Yahoo! has made changes to its Board. Hasn’t Third Point already gotten what it wanted?” Short answer: Vigilance, since they are well-known backsliders over there!)

As the firm notes in its reasons-why essay, with the original bolding on the Value Yahoo blog:

“After years of failed leadership and poor governance, Yahoo! shareholders have a chance to inject experienced, independent voices aligned with their interests. The “Shareholder Slate” — Daniel Loeb, Harry Wilson, Michael Wolf, and Jeff Zucker — seeks a voice and a choice for Yahoo! owners hurt by the current “Legacy Board’s” track record of value disintegration, and wants to prevent the Board from simply nominating their handpicked replacements — the “Insider Slate” — for Yahoo!’s board.”

]]> http://allthingsd.com/20120402/third-point-launches-value-yahoo-blog-which-does-not-value-current-leadership/feed/ 0 http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/ http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/#comments Fri, 30 Mar 2012 16:00:38 +0000 Kara Swisher http://allthingsd.com/?p=191538

Yahoo is preparing to begin layoffs of what could be thousands of employees starting next week, according to multiple sources, and is then expected to announce a new restructuring of the company the week after.

The swirl at the Silicon Valley Internet giant has grown more intense this week, as new CEO Scott Thompson has brought in top management for a series of meetings both Tuesday and Wednesday to outline the plans.

What has emerged — although sources noted that Thompson and others communicating the pending changes said nothing was yet set in stone — is the picture of a drastically slimmed-down organization with a focus on media, advertising and new but unclear “future” initiatives.

First the layoffs: Sources said the cuts will be deep and mostly aimed at the product, research and marketing units of Yahoo, which are likely to take place Wednesday. The ultimate goal, said multiple sources, is to cut many thousands from Yahoo’s staff of close to 14,000 employees, which is actually much larger, due to contract workers not officially in its roster.

The entire cut will not take place at once, said sources, since Thompson and others are still trying to figure out how to dispense with its ad technology org and, potentially, its search business. He has been in discussions with both Microsoft and Google about this, although there are other possibilities, too.

Both these parts of Yahoo together have about 2,500 staffers, whose fate is not yet sorted out.

Also still baking is the new structure, although sources said it is most likely to be comprised of a global media division, one that encompasses Yahoo’s communications and search businesses, and ones focused on global and also regional sales. There could also be a small organization of about 50 aimed at future innovation.

Americas head Ross Levinsohn is the likeliest exec to run the media arm, while Shashi Seth — who now heads search and marketplaces — would be the obvious candidate for the the communications/search one.

Thompson has already been conducting a search for a new worldwide sales head, although one possible internal exec for the job could be Rich Riley, who was recently running Yahoo’s Europe, Africa and Middle East region.

It is not clear how Chief Product Officer Blake Irving fits in the possible new org, since much of the development could now move to the decentralized units.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

Thompson, along with consultants he has hired from the Boston Consulting Group, presented the possible plan in front of Yahoo’s senior execs on Tuesday. That was followed by more meetings with a wider range of top management yesterday, although Thompson was not as highly specific in these meetings.

In fact, according to a half-dozen sources, Thompson apparently grew somewhat testy in one of the gatherings, when asked if there was a strategy he was going to announce in more detail to the group.

(Dear Scott, these are very talented employees who love the company and who have been through the wringer and it’s not their fault that leadership has failed them, so it might be a good idea to treat them with as much respect as possible right now.)

More to come, obviously.

]]> http://allthingsd.com/20120330/yahoo-layoffs-set-to-begin-next-week-followed-by-restructuring-the-week-after/feed/ 0 http://allthingsd.com/20120329/best-buy-to-close-50-stores-cut-costs/ http://allthingsd.com/20120329/best-buy-to-close-50-stores-cut-costs/#comments Thu, 29 Mar 2012 17:15:35 +0000 Miguel Bustillo and Joan E. Solsman http://allthingsd.com/?p=191228 Best Buy Co. is beginning to acknowledge that its big-box business model, which dominated electronics retailing for much of the past two decades, is no longer working.

The world’s largest electronics chain by revenue said it would close 50 big-box stores this year, test remodeled store formats in San Antonio and Minneapolis, and lay off 400 corporate and support workers as part of a plan to trim $800 million in costs and restructure its ailing business.

Read the rest of this post on the original site »

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