AOL filed an investor presentation with the Securities and Exchange Commission today tooting its own horn, in prep for its upcoming annual meeting in which it is still facing a proxy challenge.

In a nutshell, readying to battle an alternate slate put up by Starboard Value: Our stock more than doubled from all-time lows of last summer; our turnaround is turning; we sold a buttload of patents that netted us a truckload of cash; and, of course, we’re not going to settle like Yahoo did with Daniel Loeb of Third Point, because CEO Tim Armstrong’s resume is fine and dandy, thank you very much!

(Okay, I made up the last one, but I am peckish today.)

In any case, AOL shares have indeed been on a fast upward move since the $1 billion patent sale, up 103 percent in the last six months, to close at $27.61 today.

Enjoy the pretty AOL slides:

AOL_Investor_Deck_May24

AOL-20120524-DFAN14A-0

AOL_Investor_Presentation_Release_May24

Zynga and LinkedIn were also down on the news, opening off around 2 percent and 5 percent, respectively.

After what many called out as a lackluster performance on its opening day, all eyes are on the company’s ticker this week to see how the shares perform going forward. Scores of financial analysts and armchair investors and much of the technology press expected an initial first-day “pop,” a jump of 10 percent to 20 percent or more for fast-moving retail flippers to make a quick buck.

But as Friday’s trading day came and went, and the stock closed only slightly higher than it debuted, many expected that Facebook shares would open off come Monday morning, especially since underwriters were no longer able to prop up the stock by dipping into the greenshoe like they did on Friday.

A great many argued that Facebook shares were priced perfectly, leaving no money on the table for retail investors to come in and sweep up in the first-day pop that so many had expected. Exercising the allotment option was the underwriters’ job, Fortune’s Dan Primack argued vehemently; first and foremost, Facebook was priced to get the most money it could for going public.

Here’s the thing: Like Benchmark Capital’s Bill Gurley reminds, Amazon’s debut saw the stock break issue and stay below its IPO price for months.

It then went on — over the long haul — to rise 1000x.

FB data by YCharts

RELATED POSTS

• In Its First Acquisition as a Public Company, Facebook Buys Social Gifting App Karma
• Zynga’s Stock Tanks After Facebook Fails to Pop
• The Price Is Right: Facebook Closes Near Opening Price
• And We’re Off! Facebook Shares Hit the Nasdaq at a Slight Increase Before Settling Back.
• Hear That?
• $$FB$$ Has Arrived: So Now What?
• Facebook Cheers On Mark Zuckerberg. Wall Street Gets Its Chance Soon.
• The Verdict Is In: Facebook Share Price Set at $38
• How Will Facebook’s Zuckerberg Adapt to Working in the Public Eye?
• Facebook IPO Halo Boosts Social Media Stocks
• How Will Facebook Ring in the IPO? With a Hackathon, Of Course.
• What to Expect When Facebook Is Expecting: Five Predictions for Facebook’s First Public Year
• Facebook Is Still Figuring It Out. Will Advertisers and Investors Wait Around?
• Investors Told Facebook IPO Will Be in $34 to $38 Price Range
• Facebook Roadshow Bloopers (Comic)
• Facebook’s Latest S-1 Amendment: Yep, We’re Still Weak on Mobile
• $FB Is a Buy, Analysts Say
• Facebook’s Road Show Kicks Off Electronically With Zuckerberg in a T-Shirt (Video)
• After Public Offering, Mark Zuckerberg Will Still Control More Than Half of Facebook
• Facebook IPO Docs Could Get Approval This Week, Followed by Road Show With Zuckerberg (No Guarantee on Tie)
• Updated S-1: Facebook’s Yearly Revenue Growth Up 45 Percent, But Down Six Percent From Last Quarter
• SecondMarket Lays Off 10 Percent in Light of Facebook IPO
• SEC Cracks Down on Firms Trading Facebook Pre-IPO Shares
• Tidbits From the Facebook IPO Filing: I’ll Have What SV VCs Marc Andreessen and Jim Breyer Are Having!
• During the IPO Quiet Period, Please Enjoy the D Stylings of Facebook’s Mark Zuckerberg and Sheryl Sandberg (Video)
• Facebook’s Ad Business Is a $3 Billion Mystery
• Viral Video: Farewell to the No-IPO Mark Zuckerberg
• Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO
• Zuckerberg Tells Investors, “We Don’t Build Services to Make Money”
• Mobile Highlighted as Key Risk Factor (and Opportunity) in Facebook Filing
• Stop All That Poking: Facebook Filing Temporarily Crashes SEC Web Site
• Zynga Accounted for 12 Percent of Facebook’s Revenue in 2011
• Facebook Has 845 Million Users
• On Its Eighth Birthday, Facebook Files to Raise $5 Billion in Massive IPO (Get Your S-1 Here!)
• Go the F**k Back to Sleep, Silicon Valley: Facebook IPO Likely to File Later Today at Earliest
• Dude, Where’s My Facebook IPO Filing? (Ashton’s on Hold!)
• The Quiet Man: Meet the Less-Known Face of the Facebook IPO, CFO David Ebersman
• Facebook Board Meeting Today for Final IPO Okays
• Facebook (Eye)PO: Tracking the Truth of the Biggest Deal of Web 2.0
• Viral Graphic: Visualizing the Facebook IPO
• Is Facebook IPO on Track for Late May?
• IPO Watch: Facebook Hiring Brunswick to Help With Comms for Expected Public Offering
• Complete Facebook coverage

Mr. Greifeld said in an interview with reporters that problems with order cancelations interfered with the IPO process. Tests Nasdaq had conducted ahead of the highly anticipated offering failed to detect the problems, he said.

Read the rest of this post on the original site »

Yahoo is in the final stages of selling a large chunk of its stake in the Alibaba Group back to the company — in a complex deal that is set to include a multibillion-dollar share buyback to investors of the Silicon Valley Internet giant and an eventual IPO of the Chinese company — according to multiple sources close to the situation.

The deal has yet to be officially approved by the boards of both companies, but sources said it is likely to be, and could be announced as early as Monday.

This all could change, of course, since negotiations between Alibaba and Yahoo have taken place in a variety of ways in recent years, without success and with much acrimony. Talks over a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed in February, for example.

But the 324th time is apparently the charm — so here are the details of what looks to be a nearly complete agreement that I have ferreted out thus far from lots of relieved sources familiar with the situation:

Yahoo will sell half of its roughly 40 percent stake in Alibaba, in a taxable deal. The transaction is likely to value that portion of Yahoo’s holdings at about $7 billion — or 20 percent of Alibaba’s $35 billion enterprise valuation. Alibaba is in the midst of raising capital to fund the sale.

After taxes of upward of 35 percent are paid on the long-term gains — remember that Yahoo bought the now-lucrative Alibaba stake for a fraction of that, many years ago — the company will likely use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while.

A shareholder dividend is also being considered. It’s not clear if some of the cash will be held back for acquisitions by Yahoo, sources added, but it is unlikely.

As part of the deal, sources said, incentives have been put in place for Alibaba to move forward with a public offering, which sources stressed is without the contractual obligation or a time frame. Alibaba execs have already been publicly indicating such a direction recently, but this will put them more firmly on that path.

In return, Yahoo has agreed to sell the remaining quarter of its current holdings when that IPO does occur. It would then have an only 10 percent stake of Alibaba, which it could sell at any time after the IPO.

If finally struck, the transaction will finally bring to an end one of the more protracted and disputed relationships in the Internet world.

Once close, the pair have been wrangling over the large Yahoo ownership, which Alibaba CEO Jack Ma has been trying to dislodge in a variety of nice and not-so-nice ways. It has resulted in a number of very public disagreements.

That included a nasty back-and-forth over its Alipay unit with now-fired CEO Carol Bartz, threats of takeover of Yahoo with private equity firms and, more recently, making friendly with its just-ousted CEO, Scott Thompson.

Those talks with him in recent weeks, which included a visit to China by Thompson, led to the new deal, which was negotiated primarily between Yahoo’s CFO Tim Morse and legal head Mike Callahan and Ma and Alibaba’s Joe Tsai.

The talks continued even as Thompson was suddenly engulfed in a controversy over a fake computer science degree on his resume that quickly led to his departure from Yahoo on Sunday.

Ironically, the error was first discovered by activist shareholder Daniel Loeb, who will now vote on the deal as a newly named director of Yahoo, after successfully helping to oust Thompson.

He owns almost 6 percent of Yahoo, and is expected to approve the transaction.

But the final decision to approve the deal will be in the hands of a very new board of Yahoo, which has been drastically reshaped in recent weeks. It is meeting tomorrow and perhaps over the weekend to vote on it.

While the deal with Alibaba looks to be nearing an end, Yahoo’s talks to sell its 33 percent stake in Yahoo Japan is not part of this agreement. That’s due to what Thompson had called a “valuation gap,” which sources said is still an outstanding issue.

New interim CEO Ross Levinsohn has not been involved in the Alibaba deal in any significant way. But he certainly will benefit from its halo effect, if approved, especially given that it will likely boost Yahoo shares.

Next up for Levinsohn, who has just rejiggered Yahoo management again, other sources said, is an effort to settle the patent-infringement lawsuit with Facebook, and also to renegotiate its search deal with Microsoft.

And, oh yes, fix Yahoo’s rocky core-advertising business, which is still in distress and needs a major overhaul to push it back to growth.

But that, as they say, is yet another episode of Yahoo’s ongoing reality show.

Spencer Platt | Getty Images News

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

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

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

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

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

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

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

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

As Tricia Duryee wrote recently about the fall:

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

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

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

That’s perhaps no surprise.

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

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

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

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

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

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

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

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

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

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

At least the wild part was accurate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

At least until next Tuesday when Apple reports earnings … then it might be better classified as profit-taking.

This morning alone, Apple shares fell more than 3 percent. And they’re down nearly 8 percent from last Monday’s close (caveat: The stock is still up well over 40 percent this year).

So what’s dragging the stock down?

Any number of things, really. The antitrust charges recently filed against Apple and major book publishers by the Department of Justice. Concerns that Apple’s carrier partners are tired of offering high subsidies on the iPhone and will soon begin to rein them in, cutting into the company’s high margins on the device.

Another thought: This could be profit-taking, plain and simple.

Or, as ISI Group analyst Brian Marshall suggests, the stock could just be cooling off a bit. “We believe this could be a simple ‘collapsing’ on its own weight given the year-to-date move (i.e., AAPL up ~45 percent vs. S&P 500 up ~10 percent).”

Facebook has just announced that it will acquire Instagram, the popular mobile photo-sharing service, for $1 billion in cash and shares.

The social networking giant posted on the acquisition, its biggest yet, on its site, as well as on CEO and co-founder Mark Zuckerberg’s Timeline on Facebook.

Photos are critically important for Facebook, which has been slow to innovate in the fast-growing mobile arena in the important consumer space. By contrast, Instagram has taken the arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Consumers have responded (including me — it is the only non-communications app I use many times a day). The San Francisco-based company — with only 13 employees — had 30 million Apple iPhone users before it came to Google’s Android last week, where it got more than a million new users in just 12 hours.

Still, despite all the usage, Instagram had not articulated a plan for, you know, making money. Now, that will presumably be Facebook’s problem to solve.

The Facebook acquisition has been kept very quiet, with its CEO Kevin Systrom working on it in conjunction with new fundraising efforts that would have valued the company at $500 million. Liz Gannes reported on this effort last week, which was poised to close, in fact, before the Facebook deal was struck over the weekend.

Until now, Instagram has received Series A funding of $7 million led by Benchmark Capital just over a year ago, when it only had 1.75 million registered users.

Seed investors include Andreessen Horowitz — which did not follow on later — and Baseline Ventures. Also in the Benchmark round: Twitter creator Jack Dorsey, former Facebooker Adam D’Angelo and Chris Sacca.

In a blog post titled “Instagram + Facebook,” Systrom promised no change, except for the $1 billion mountain of cash:

“It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network … The Instagram app will still be the same one you know and love.”

Zuckerberg also promised that Facebook would keep Instagram independent, and that such a large purchase would be rare for the company, which is set to go public soon.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users,” he wrote. “We don’t plan on doing many more of these, if any at all.”

Here is the full press release from Facebook:

Facebook to Acquire Instagram

MENLO PARK, CALIF. — April 9, 2012 — Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.

For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.

Less than five months after going public, Groupon’s stock is trading at more than half-off.

Today, the daily deals company’s shares slid another 3.2 percent, or 48 cents, to close at $14.54 a share. That’s less than half the $31.14 that some investors paid at the stock’s high point, just after it went public in early November.

At today’s close, the company’s stock hits a new low, though it slumped to similar levels at the end of November.

The stock has not recovered since last Friday, when Groupon revised its results for the fourth quarter due to higher-than-expected return rates during the holiday period.

Today, lawyers announced that multiple class actions have been filed against the Chicago company. The law firms, however, don’t have a lead plaintiff, and are looking for someone who participated in the company’s IPO and suffered financial losses. The complaint charges that certain officers issued materially false and misleading statements regarding financial results.

As part of the announcement on Friday, Groupon reaffirmed its guidance for the first quarter, and is still expecting revenue of up to $550 million, and net income from operations of up to $35 million. The company will release its first-quarter results on May 14.

Last week, Yahoo’s activist shareholder Dan Loeb of Third Point, the New York hedge fund that is waging a proxy fight against the Silicon Valley Internet giant, made a regulatory filing noting that it had spent $971.1 million to acquire 70.5 million shares of Yahoo, a 5.8 percent stake. Loeb asked for Yahoo to consider his alternate board slate, and also wanted its shareholder list to communicate with other investors.

But that’s not all: In another action last week, Third Point asked a Delaware court to give it a look at sealed documents from a now-settled 2008 shareholder lawsuit related to Microsoft’s failed bid for Yahoo.

Said Third Point in its legal request, which Yahoo is seeking to block (of course!): “It is not surprising, then, that Yahoo and its soon-to-be former directors wish to keep details of their embarrassing — and fiduciarily suspect — conduct hidden from view.”

Here’s a video I did talking about the mishegas on WSJ.com’s “Digits” online show:

It’s one thing to not be targeted in any regulatory action that strafed your competitors, but SecondMarket CEO Barry Silbert used the opportunity to tout just why his company missed the bullets.

In an unusual and interesting post on social answer service Quora, Silbert gave a long answer to the question entrepreneur Jason Calacanis asked there: “Why wasn’t SecondMarket part of the SharesPost/secondary market SEC action today?”

That would be the investigation by the Securities and Exchange Commission, which filed charges, as Arik Hesseldahl wrote earlier this week, “against two managers of private funds that had raised more than $70 million to acquire and trade pre-IPO shares of Facebook and other tech companies with misleading investors and charging undisclosed fees. It also brought charges against SharesPost, saying it had engaged in securities transactions without being registered as a broker-dealer.”

The move was part of a year-long inquiry aimed at secondary markets, where firms trade privately owned shares and options of pre-IPO companies.

Silbert, who runs one of the biggest companies in this sector, apparently decided to make hay while the Feds shone (up). In the Quora post, he noted: “I am proud to say that SecondMarket is not among those investigated or charged, which only reinforces SecondMarket’s ongoing commitment to being the trusted, compliant and fully-regulated marketplace in the startup and private company ecosystem.”

If he does say so himself!

All kidding aside, it is actually a novel way to turn a story that could tarnish everyone nearby into a plus. (Plus, ABC — Always Be Closing!)

Among the reasons that Silbert said SecondMarket was not part of the government probe: “Fully regulated, soup to nuts, from the start” (the company is a registered broker-dealer; “close coordination with private companies on all transactions” (“customized secondary markets,” he noted); “rigid accreditation process” of buyers; and “no disclosure of private company valuation and pricing.”

A hot Internet company poised for an even hotter IPO is attacked in court by a competitor whose lunch it has been eating.

Sound familiar? Actually, it’s just as much Google in 2004 as Facebook yesterday.

What the pair have in common is Yahoo, for whom this kind of patent infringement lawsuit is a whole lot of been there, done that.

In Google’s case, Yahoo was suing the then-smaller company over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting 2.7 million more shares of that stock, which it then sold off relatively quickly.

As part of the settlement from a lawsuit started in 2002, Google licensed U.S. Patent No. 6,269,361, entitled “System and method for influencing a position on a search result list generated by a computer network search engine,” which was owned by Yahoo Overture subsidiary.

In plain terms, the patent was over its key pay-for-performance service, which was at the heart of Google’s business of allowing bidding for search results placement related to relevant keywords.

In Facebook’s lawsuit, Yahoo is alleging intellectual property violations by the social networking giant, and is also taking credit for Facebook’s success.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

(Cue the movie script: If Yahoo had invented Facebook, it would have invented Facebook.)

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property, and that royalty payments alone will not suffice.

What happens next today will be interesting — way back when, Google finally gave in in the delicate game of chicken with Yahoo, at the last minute.

But it’s not clear whether Facebook will flinch — or not.

Until we find out, here’s the press release from the 2004 settlement between Yahoo and Google to peruse:

Yahoo! and Google Resolve Disputes

SUNNYVALE, CA & MOUNTAIN VIEW, CA — August 9, 2004 – Yahoo! Inc. (Nasdaq: YHOO) and Google Inc. today announced that the companies have resolved two disputes that have been pending between the companies.

Under the terms of the settlement agreement, Google will take a license to U.S. Patent No. 6,269,361 and several related patents, held by Yahoo!’s wholly-owned subsidiary, Overture, and Yahoo! dismissed its patent lawsuit against Google. The two parties have also resolved a dispute regarding shares issuable to Yahoo! pursuant to a warrant to purchase Google shares in connection with a 2000 services agreement.

In connection with the settlement of the warrant dispute, the patent lawsuit, and in payment for the license, Google issued shares of its Class A common stock to Yahoo!.

In what is either the boldest gamble of its history or the most boneheaded, Yahoo has filed a massive patent infringement lawsuit against Facebook.

The attack by the Silicon Valley Internet icon against perhaps the most powerful consumer social networking site today — also based in tech’s heartland and also an important partner of Yahoo — is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

Multiple sources said he is primarily driving this new aggressiveness from Yahoo.

Since Yahoo told the New York Times that it was considering such a move last week, the issue has been widely debated within the company, with many top techies there opposed to it, due to the company’s longstanding ethos of using patents for defense rather than offense.

Thus, the decision to move was closely held, sources said, with only Thompson and legal chief Michael Callahan largely working on it.

Still, patent lawsuits have become ever more prevalent among tech companies, as they seek to battle for advantage in a rapidly changing competitive landscape. Apple, Google, Microsoft and others are involved in several legal actions, although they are largely related to mobile technology.

Yahoo’s lawsuit is the most prominent in the social networking arena, a sector that has seen a huge explosion of late. Its timing could not be worse for Facebook, since it is in a quiet period for its upcoming IPO, which is expected to value the company at close to $100 billion.

Yahoo has done this kind of thing before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock.

Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook’s initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets.

More importantly, at least initially, the move did nothing to boost Yahoo’s moribund shares — the stock was down about one percent to $14.49 in after-hours trading.

More to come, but here is the entire document below. The lawsuit has been filed in San Jose, Calif., federal court.

Lastly, the official PR back-and-forth:

Said Yahoo, in its statement:

“Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Facebook, obviously, disagrees, and also threw in a jab about the lack of discussions over the issue between the pair:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

I’ll admit to also being puzzled about the strategery here, but I am sure there will be much more to come.

Until then, read on:

Complaint

And here is what I wrote last week on the subject:

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.
That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

It was Yahoo legal head Mike Callahan who had the thankless task yesterday of calling Facebook’s general counsel Ted Ullyot to tell him the Silicon Valley Internet giant was intent on pursuing patent lawsuits against the social networking giant.

The charge was being led by Callahan, as well as Chief Product Officer Blake Irving and, especially, Yahoo’s new CEO Scott Thompson.

Much of Yahoo’s senior leadership had no idea of the impending move until Callahan informed them it was about to happen at meeting Monday.

Facebook had known of the patent concerns of Yahoo for some months — the issue had also gotten some coverage in the media — but had not engaged formally on the topic, several sources said.

So, the suddenly aggressive call also apparently blindsided Facebook, even though it had been aware of the possibility of such an outcome.

Thus, it had little time to respond, since Yahoo was also simultaneously briefing the New York Times, according to numerous sources at both companies, and then released an astonishing statement to the newspaper:

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property. We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.

That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

A little more than a week ago, Morgan Stanley kneecapped Demand Media’s stock by downgrading the Santa Monica, Calif., online content company’s prospects.

Some worries: Pressure from algorithm-tweaking Google, upon which Demand relies heavily for traffic; worrisome drops in said traffic due to said tweaking; and not enough uptake on higher-quality, premium stories the company had promised in the fall.

Demand shares fell 6.5 percent that day, to close at $5.93.

It has recovered a bit to $6.13 today, but is still off almost 8 percent since the beginning of the year, and 71 percent from a year ago.

One irony to the tough call by Scott Devitt, of course, was that Morgan Stanley was the investment bank that had taken Demand public in January of 2011, at $17 a share.

In addition, the recent departure of three of the company’s six founders has also worried investors.

All this will presumably be on display today when Demand reports its fourth-quarter earnings. Wall Street analysts are expecting Demand to earn seven cents a share on an adjusted basis on an expected $81.95 million in revenue.

We’ll see after the market closes, as well as what its execs have to say about the key metrics of costs and traffic.

Persistence — even if it is the whiny, likely undeserved, lunkheaded legal version of it — certainly pays off.

But you have to marvel at the bizarre karma going on, given that my favorite matching pair of digital ottomans, Cameron and Tyler Winklevoss, are poised to collect up to $300 million from the shares they got in a settlement with Facebook and its CEO and co-founder Mark Zuckerberg over the founding of the social networking giant.

That’s right, folks, the rich do get richer, especially if they pursue their case well past the point of shame.

It’s not clear how many of the 1.2 million shares the Winklevii still have from the settlement they got in 2008, since they wrangled with their own lawyers over it, and the stock has also split.

But let’s assume the Olympic rowers kept a chunk, which will be worth a lot of gold-plated oars if Facebook reaches the upward of $80 billion valuation it is expected to in its upcoming initial public offering.

Facebook filed its long-expected IPO earlier this week.

And here’s a lovely tweet about the IPO from Cameron Winklevoss, who is looking very fetching on his Twitter page, even if it is perhaps about time to lose the rower meme image thing, given he’s on the closer side of 30 years old.

We r excited 4the #FacebookIPO + wish the company + all involved the very best,an amazing accomplishment! cc @tylerwinklevoss @DivyaNarendra

— Cameron Winklevoss (@winklevoss) February 2, 2012

He sent it to his twin brother, Tyler, and also to Divya Narendra, their other partner in the ill-fated ConnectU service.

Without going into all the well-gone-over deets (go see the Aaron Sorkin-penned movie and believe about 26 percent of it), ConnectU was the Harvard University dating site that Zuckerberg allegedly submarined in order to start Facebook.

Well, presumably water under bridge — unless you are talking about the perpetually disgruntled Winklevii.

At the time they finally dropped their seven-year fraud lawsuit this past summer, they then reopened to a different one then pending.

“The Social Network 2: The Overly Compensated Vii Strike Back,” anyone?

RELATED POSTS

• In Its First Acquisition as a Public Company, Facebook Buys Social Gifting App Karma
• Zynga’s Stock Tanks After Facebook Fails to Pop
• The Price Is Right: Facebook Closes Near Opening Price
• And We’re Off! Facebook Shares Hit the Nasdaq at a Slight Increase Before Settling Back.
• Hear That?
• $$FB$$ Has Arrived: So Now What?
• Facebook Cheers On Mark Zuckerberg. Wall Street Gets Its Chance Soon.
• The Verdict Is In: Facebook Share Price Set at $38
• How Will Facebook’s Zuckerberg Adapt to Working in the Public Eye?
• Facebook IPO Halo Boosts Social Media Stocks
• How Will Facebook Ring in the IPO? With a Hackathon, Of Course.
• What to Expect When Facebook Is Expecting: Five Predictions for Facebook’s First Public Year
• Facebook Is Still Figuring It Out. Will Advertisers and Investors Wait Around?
• Investors Told Facebook IPO Will Be in $34 to $38 Price Range
• Facebook Roadshow Bloopers (Comic)
• Facebook’s Latest S-1 Amendment: Yep, We’re Still Weak on Mobile
• $FB Is a Buy, Analysts Say
• Facebook’s Road Show Kicks Off Electronically With Zuckerberg in a T-Shirt (Video)
• After Public Offering, Mark Zuckerberg Will Still Control More Than Half of Facebook
• Facebook IPO Docs Could Get Approval This Week, Followed by Road Show With Zuckerberg (No Guarantee on Tie)
• Updated S-1: Facebook’s Yearly Revenue Growth Up 45 Percent, But Down Six Percent From Last Quarter
• SecondMarket Lays Off 10 Percent in Light of Facebook IPO
• SEC Cracks Down on Firms Trading Facebook Pre-IPO Shares
• Tidbits From the Facebook IPO Filing: I’ll Have What SV VCs Marc Andreessen and Jim Breyer Are Having!
• During the IPO Quiet Period, Please Enjoy the D Stylings of Facebook’s Mark Zuckerberg and Sheryl Sandberg (Video)
• Facebook’s Ad Business Is a $3 Billion Mystery
• Viral Video: Farewell to the No-IPO Mark Zuckerberg
• Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO
• Zuckerberg Tells Investors, “We Don’t Build Services to Make Money”
• Mobile Highlighted as Key Risk Factor (and Opportunity) in Facebook Filing
• Stop All That Poking: Facebook Filing Temporarily Crashes SEC Web Site
• Zynga Accounted for 12 Percent of Facebook’s Revenue in 2011
• Facebook Has 845 Million Users
• On Its Eighth Birthday, Facebook Files to Raise $5 Billion in Massive IPO (Get Your S-1 Here!)
• Go the F**k Back to Sleep, Silicon Valley: Facebook IPO Likely to File Later Today at Earliest
• Dude, Where’s My Facebook IPO Filing? (Ashton’s on Hold!)
• The Quiet Man: Meet the Less-Known Face of the Facebook IPO, CFO David Ebersman
• Facebook Board Meeting Today for Final IPO Okays
• Facebook (Eye)PO: Tracking the Truth of the Biggest Deal of Web 2.0
• Viral Graphic: Visualizing the Facebook IPO
• Is Facebook IPO on Track for Late May?
• IPO Watch: Facebook Hiring Brunswick to Help With Comms for Expected Public Offering
• Complete Facebook coverage

Like political junkies waiting up for election returns (losers!), Silicon Valley folks, including tech journalists (losers!), are up this morning to await and then pounce on the long-expected IPO filing of Facebook.

But, several sources said, the social networking giant — as I have previously reported — will likely not file its copious documents until this afternoon, after the markets close, at the earliest.

In other words, my day is shot. Thanks, Dave Ebersman!

Sources said the filing could even possibly slip a day, as the company’s suits get busy with dotting all the I’s and crossing the T’s.

That’s unlikely, though — Facebook was actually founded the first Wednesday in February of 2004, like today eight years later.

Sentiment from the not-very-sentimental co-founder and CEO Mark Zuckerberg? Awwwwwwww …

And, if those dudes rush, we might even see all the deets of the Silicon Valley darling’s finances and other info — including who’s got what shares and who doesn’t — earlier today. But don’t count on it.

That’s right — Facebook is sucking up even more of your precious time, and it is not even fun like beating your mother at Words With Friends or creepily poking old flames.

Facebook, Web 2.0′s most successful start-up, is expected to raise many billions of dollars on a valuation of tens of millions times that.

In other words, blah, blah, blah until we get the real numbers …

To send you off to IPO dreamland until then, here’s the genius viral video reading of the book “Go the F**k to Sleep,” read by Samuel L. Jackson:

RELATED POSTS

• In Its First Acquisition as a Public Company, Facebook Buys Social Gifting App Karma
• Zynga’s Stock Tanks After Facebook Fails to Pop
• The Price Is Right: Facebook Closes Near Opening Price
• And We’re Off! Facebook Shares Hit the Nasdaq at a Slight Increase Before Settling Back.
• Hear That?
• $$FB$$ Has Arrived: So Now What?
• Facebook Cheers On Mark Zuckerberg. Wall Street Gets Its Chance Soon.
• The Verdict Is In: Facebook Share Price Set at $38
• How Will Facebook’s Zuckerberg Adapt to Working in the Public Eye?
• Facebook IPO Halo Boosts Social Media Stocks
• How Will Facebook Ring in the IPO? With a Hackathon, Of Course.
• What to Expect When Facebook Is Expecting: Five Predictions for Facebook’s First Public Year
• Facebook Is Still Figuring It Out. Will Advertisers and Investors Wait Around?
• Investors Told Facebook IPO Will Be in $34 to $38 Price Range
• Facebook Roadshow Bloopers (Comic)
• Facebook’s Latest S-1 Amendment: Yep, We’re Still Weak on Mobile
• $FB Is a Buy, Analysts Say
• Facebook’s Road Show Kicks Off Electronically With Zuckerberg in a T-Shirt (Video)
• After Public Offering, Mark Zuckerberg Will Still Control More Than Half of Facebook
• Facebook IPO Docs Could Get Approval This Week, Followed by Road Show With Zuckerberg (No Guarantee on Tie)
• Updated S-1: Facebook’s Yearly Revenue Growth Up 45 Percent, But Down Six Percent From Last Quarter
• SecondMarket Lays Off 10 Percent in Light of Facebook IPO
• SEC Cracks Down on Firms Trading Facebook Pre-IPO Shares
• Tidbits From the Facebook IPO Filing: I’ll Have What SV VCs Marc Andreessen and Jim Breyer Are Having!
• During the IPO Quiet Period, Please Enjoy the D Stylings of Facebook’s Mark Zuckerberg and Sheryl Sandberg (Video)
• Facebook’s Ad Business Is a $3 Billion Mystery
• Viral Video: Farewell to the No-IPO Mark Zuckerberg
• Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO
• Zuckerberg Tells Investors, “We Don’t Build Services to Make Money”
• Mobile Highlighted as Key Risk Factor (and Opportunity) in Facebook Filing
• Stop All That Poking: Facebook Filing Temporarily Crashes SEC Web Site
• Zynga Accounted for 12 Percent of Facebook’s Revenue in 2011
• Facebook Has 845 Million Users
• On Its Eighth Birthday, Facebook Files to Raise $5 Billion in Massive IPO (Get Your S-1 Here!)
• Go the F**k Back to Sleep, Silicon Valley: Facebook IPO Likely to File Later Today at Earliest
• Dude, Where’s My Facebook IPO Filing? (Ashton’s on Hold!)
• The Quiet Man: Meet the Less-Known Face of the Facebook IPO, CFO David Ebersman
• Facebook Board Meeting Today for Final IPO Okays
• Facebook (Eye)PO: Tracking the Truth of the Biggest Deal of Web 2.0
• Viral Graphic: Visualizing the Facebook IPO
• Is Facebook IPO on Track for Late May?
• IPO Watch: Facebook Hiring Brunswick to Help With Comms for Expected Public Offering
• Complete Facebook coverage

The stock market is closed today, as part of the Christmas holiday. But it is doubtful — barring any major announcements — that the vastly different performances seen by a range of tech companies will change much.

Which is to say, some companies — such as eBay and Google — did well, although only Apple shares rose significantly enough to cause festive feelings.

As of Friday, Google rose almost 7 percent for the year to date, eBay rose 10.8 percent and Apple was up almost 26 percent.

As for all the others in tech? Lumps of coal for investors of varying size.

Let’s start with the better negative performances: Amazon was down 1.95 percent, Yahoo was down 2.7 percent and Microsoft was down 6.7 percent.

Not exactly anything to wassail about. And Yahoo shares were only down a little, since the recent swirl around its possible sale gave its stock a recent bump, or the performance would have been worse, based on its financial results.

And the oft-troubled AOL? Down 35.3 percent.

The crop of new Internet companies was also not doing so great. The latest, Zynga was down only 1.2 percent, Groupon down 12.5 percent and LinkedIn down 32.3 percent. Pandora truly tanked, with a 42.5 decline in share price. Only Russia’s Yandex bested that, with a 48.6 percent drop.

Enterprise-focused companies also had a lackluster year. While recently public Jive Software was up 9.2 percent, Cisco was down 8.7 percent and Hewlett-Packard was down 38.5 percent. Juniper got truly socked, with a 43.6 percent decline.

The music you are looking for right about now is “(Hey, Won’t You Play) Another Somebody Done Somebody Wrong Song” by B.J.Thomas, which you can enjoy here in this timely video:

Yahoo shareholders felt a little giddier earlier this week, when it seemed as if the company had finally decided to make a deal with its Asian partners.

But the happiest crew might end up being the Silicon Valley Internet giant’s outside counsel, Skadden Arps — and especially Leif King, the fantastically named legal eagle who has been advising Yahoo on the deal.

That’s because today the Yahoo board approved continuing the negotiations to come to a final agreement over the stake, sources said, which should take six to eight weeks.

It’ll surely be happy holidays for billable hours!

As costly as the legal bills will be, if it all goes well, an Asian solution will mean one major problem solved, with a possible pile of cash and new assets coming in to Yahoo.

To get there, the company signed a term sheet earlier this week with Japan’s SoftBank to sell back all its holdings there, and with China’s Alibaba Group to sell off more than half its stake (moving from a 40 percent stake to a 15 percent one).

The deal values Yahoo’s total shares in both companies at about $17 billion.

While it gets a pretty accounting name — “cash-rich split “– the vehicle to unwind it all is essentially a complex tax dodge finally cooked up by the trio, in which cash, new assets and stock will be moved around until everyone gets what they want (except the U.S. government).

I would explain it — but I am on vacation, and would rather drink eggnog and sleep — so here is The Wall Street Journal’s version, which I like because it sounds like Alibaba and SoftBank are giving Yahoo a hugely loaded Starbucks card for Christmas:

“As envisioned in the scenario, Alibaba would create a subsidiary into which it would put several billion dollars of cash, plus an operating asset that Yahoo wants to buy using additional cash from Alibaba, almost like giving Yahoo a prepaid card for an asset of its choice, the people said.”

Everyone is hoping there will not be any hiccups in the deal, which has been spearheaded by Yahoo board member and Intuit CEO Brad Smith, and Jerry Yang, who is also the company’s co-founder and a major shareholder.

Alibaba CEO Jack Ma and CFO Joe Tsai, both co-founders of that company, were the point men for the Chinese company. And for SoftBank, it was its founder and CEO Masa Son and his main U.S. exec, Ron Fisher.

Now, said sources, Yahoo’s board is hoping to still keep the bids from a pair of private equity firms — Silver Lake and TPG Capital — alive.

While initially the focus on the action, the PE bidding for partial Yahoo stakes has recently been sidelined by the Asian deal.

Now, sources said, Yahoo is hoping the new infusion of cash and assets will allow it fend off shareholder unrest — stock buybacks and dividends, anyone — to solicit higher prices from the firms to make strategic investments.

Yahoo had considered the initial bids too low, as did some very pissed-off activist shareholders.

Still, it’s not clear if those firms will jack their offers now, although sources said Silver Lake is still interested in some sort of deal that would give it influence over remaking Yahoo.

Silver Lake and others think the long-troubled company could be revived with some effort, and become a much more lucrative Web property.

But those negotiations might run into roadblocks over who gets to pick leadership for the company. Yahoo has accelerated its efforts to hire a new CEO, after firing Carol Bartz in September.

The PE firms, who would buy a large stake in Yahoo, also have wanted some level of control, including CEO and board approval, in order to be able to make massive changes at the company to turn it around.

Wall Street seems to like the Asian part of the deal, at least, since it shows some sort of forward momentum at Yahoo, and from its often-lugubrious board.

Shares are up almost 7 percent in the last few days, although they are not popping as they might be, given that new valuations based on a successful Asian deal put the stock at a much higher price.

In other words, investors like what they see, but are watching and waiting for more.

Though last week’s reports were overblown and premature, it certainly might come to that at some point if past is prologue — Alibaba CEO Jack Ma has declared his interest publicly a number of times and has certainly been busy lining up his financial and strategic partners to do so.

This is one very sharp sword of Damocles hovering over Yahoo that could drop at any time and very quickly. It has impact, too, because every day there are unsettling Wall Street whispers that the bid is coming — I got three today, in fact, that it would happen Monday.

Actually, the day it is most likely to happen is the moment after Yahoo once again turns down the pair’s latest offer to buy back their shares in a complex tax-free transaction.

This has been a multi-year effort on the part of the trio, one littered mostly with recrimination and tears. Lots and lots of tears.

But this time, it’s critical to the Asian partners to strike the deal with Yahoo — and before its current board does another deal with current private equity bidders it is now contemplating.

Because once new leadership is in power, Ma’s leverage goes buh-bye. Now, it is a quantum level higher with the old Yahoos than with the next ones, who will have much more control and power over the company.

Thus, the threat of a possible whole company bid at a higher prices — a tasty treat to disgruntled shareholders — keeps the pressure on Yahoo’s current directors not to make a partial deal that is considered wanting.

This bird in the hand is seen as critical to Alibaba and SoftBank, who want only to get back their stakes and not to engage in what would turn into an ugly and hostile battle for control of all of Yahoo.

As one source told me last week: “The threat of a takeover is more useful than the damage an actual takeover would cause for everyone. No one wants this to be unfriendly.”

Perish the thought!

Yahoo board member Brad Smith — who is Intuit’s CEO and president in his spare time — has become the key man in this whole complex sales process and has also taken up the central role in dealing with the Asian proposal, along with Yahoo’s interim CEO, Tim Morse, and its legal head, Mike Callaghan.

They have to wrangle what to do with Yahoo’s 40 percent stake in Alibaba and a 35 percent holding in Yahoo Japan, which makes up a great deal of the company’s value and has become its most vexing Gordian knot.

Still, after a number of previous efforts failed miserably, Alibaba and Softbank brought yet another proposal to Yahoo in early October that would spin off the stakes to them and also avoid a big tax bill.

The sides have been talking on and off amid the other noise at Yahoo of late, which this week centered on low-priced bids for a partial investment in Yahoo from two separate PE firms, Silver Lake and TPG Capital.

Now what Yahoo does with its Asian assets matters to them, too, as both have their own plans for the dispensation of those stakes as key elements of their deals.

So it is not clear what would happen if the Alibaba and SoftBank shares were sold before either deal was done.

But it is unlikely to be a positive thing.

“The Asian assets are downside protection if the core Yahoo business is melting faster than anyone thinks,” said one person. “Without it there, Yahoo might be a lot more risky to buy into.”

Like, you might say, trying to catch a falling knife.

What an amazing coincidence.

On the very day Yahoo’s board is considering actual bids from two private equity firms interested in deals to buy close to 20 percent of the company for between $16.50 and $17.50 a share, comes a spate of eerily similar breathless media postings that there’s another bid in the making for $20!

That’s totes better, right? I mean, how can Yahoo’s directors accept a real live lesser-priced bid now when there’s a prettier one in the fog just ahead?

No, really, it’s there — if you squint really, really hard.

Except it’s not even close, when you actually check with two of the key members of the group of alleged buyers, which would apparently be Blackstone, Bain Capital and Yahoo’s Asian partners, Alibaba Group and SoftBank.

Sources close to Blackstone and Alibaba said while there have been talks, which have been previously reported weeks ago here and elsewhere, there is no bid in the offing that is close to fruition and at that price.

In an unusual public statement, in fact, Alibaba’s John Spelich said flatly: “Alibaba Group has not made a decision to be part of a whole-company bid for Yahoo.”

This from a company whose voluble CEO Jack Ma is prone to making giant and noisy speeches to signal his interest in finding a way — any way — to get back shares of the Chinese Internet giant from Yahoo.

Not this time, and several sources close to Alibaba reiterated that it was nowhere near close to any bid as yet and that a price is still up in the air. In addition, sources added, Alibaba might decide to work with another PE group, such as Providence Equity.

In addition, sources noted that if Alibaba could strike an adequate deal with private equity bidders to get a large chunk of the stake back, it would be highly preferable to a hostile takeover of Yahoo that could end in tears and little else.

“The threat of a takeover is more useful than the damage an actual takeover would cause for everyone,” said one person close to the situation. “No one wants this to be unfriendly.”

So why the rumors — doubtlessly being spread around by hopelessly cynical Wall Street types interested only in stock manipulation — surfacing today?

Simple: To get some easy-to-play media outlet to bite, report it as speculative fact and cause the stock of Yahoo to take flight tomorrow.

Hey, it could happen!

Sadly, this junior-league trick has already worked — Yahoo shares were up a dollar to $16.72 in after-hours trading tonight.

It is likely to go even higher tomorrow, which could cause the board of Yahoo to delay accepting either of the partial bids from Silver Lake or TPG Capital, even if they were the best thing for the company and its employees.

Except that the job of the Yahoo board is to evaluate what’s before them and not what is perhaps, someday, soon, wait-by-the-phone, really soon, I promise is going to be delivered.

In fact, several sources noted that it’s not clear if the Yahoo board has even asked for parties to submit whole-company bids yet.

When and if Yahoo’s board does that and if something better actually does come down the pike, with a much fatter price tag of $20 or more, then the directors can mull that over.

That would be the prudent thing to do for the company, its employees and its shareholders, even if Yahoo’s stock gets a temporary lift now.

Maybe I am just a hopeless Silicon Valley romantic and not a hardened Wall Street M&A type, but the survival of Yahoo is the real point here, rather than the lining of bankers’ already fee-stuffed pockets.

And anything other than that is just fog.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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