AllThingsD » Slide

I'm Still Here: Stock Soars as Groupon Shows Stronger-Than-Expected Q1 Revenue

Kara Swisher — Wed, 08 May 2013 20:32:42 +0000

Groupon said it had revenue of $601.4 million, up eight percent, in the first quarter, and earnings of three cents. Those profits were in line with Wall Street expectations, but sales were better than the expected $590 million at the daily deals site.

The stock was up nearly 12 percent in after-hours trading to $6.21. Shares have risen 42.6 percent in the last six months, although that’s down 43.9 percent from a year ago.

There was no news of the search for a new leader for Groupon, which fired its CEO, co-founder Andrew Mason, in the quarter.

On a conference call later, co-CEO Ted Leonsis said that Groupon’s board had formed a search committee, but that it was “not in a hurry” to find a new company head.

But, in a statement, co-CEO Eric Lefkofsky said: “We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter.”

Anything up is good news for the suffering Groupon, which has been pilloried by Wall Street since its late 2011 IPO, although sentiment has improved since Mason’s ouster.

Gross billings, which is the amount consumers buy from Groupon overall, without subtracting payments to merchants, were up four percent, to $1.04 billion, on strong growth in North America. Sales were off internationally, though, by 9 percent.

International business, which has a bigger active customer base than North America, was the cause of much of Groupon’s declines, a problem execs have been trying to address with a new “One Playbook” strategy to consolidate systems.

On the conference call, COO Kal Raman called the situation “a tale of two Groupons.”

On a GAAP basis, Groupon had a loss of one cent, from two cents in the same period a year ago.

Groupon also said North American transactions on mobile devices accounted for 45 percent of the overall number, up from 30 percent last year, while email fell to less than 45 percent of the deals sold.

On a less happy note, Groupon said that its outlook for the second quarter would be below consensus.

Here’s the the Chicago-based Groupon’s official press release, as well as some tasty financial slides, so you can read it all for yourself:

GRPN

GRPN_1Q13_Earnings_Slides

Square Exec Jared Fliesler Becomes VC at Matrix Partners

Liz Gannes — Thu, 07 Mar 2013 16:00:43 +0000

An operational executive at Square has left to become a venture capitalist. No — not that one. This is Jared Fliesler, who was vice president of user acquisition and business operations for the company. He’ll be a general partner at Matrix Partners in Palo Alto.

Fliesler is leaving the entrepreneurial world for the cushy VC life at the relatively young age of 28. That’s because, as he put it, “I do growth.” He wants to work closely with young startups, rather than fill a role at an already large company.

At Square, “I was spending a lot of time being a manager and not as much time at the white board,” Fliesler said. And rather than repeat (hopefully) that pattern with other fast-growing companies, he chose what he called “a terminal path” of being a VC for the rest of his life.

Fliesler has had a rapid-fire career. From an early gig in real estate investments, he joined Max Levchin’s Slide in 2007, where he led partnerships, platform relationships, payments and various products. When Slide was acquired by Google, he was director of product.

Then he followed former Slide executive Keith Rabois to Square, where Rabois was COO until he left after allegations of personal misconduct (that’s the other Square guy who became a VC — Rabois is now joining Khosla Ventures). Fliesler attested that the departures were unrelated, and that Square has a strong remaining executive team. Former Square director of products Megan Quinn is also now a VC at Kleiner Perkins Caufield & Byers.

At Matrix, Fliesler said, he doesn’t intend to specialize in any particular category — Slide was a social product, Square was business-to-business — but rather intends to find young companies he likes and thinks he can help.

Exclusive: PayPal Co-Founder Levchin Launches New Payments Startup, Affirm

Kara Swisher — Tue, 26 Feb 2013 21:35:46 +0000

High-profile Silicon Valley entrepreneur Max Levchin is launching a new mobile payments startup today called Affirm.

It’s the first project emerging from Levchin’s San Francisco tech incubator Hard, Valuable, Fun (HVF), which he started after selling his last company — Slide — to Google and then eventually leaving the search giant. Previous to that, Levchin and investor Peter Thiel had sold PayPal to eBay.

While it might seem at first as if Affirm is in direct competition with other mobile payments-focused companies such as Square and Stripe, it seems to be aimed at another layer of the value chain in an effort to improve conversion for mobile payments.

In fact, Stripe — in which Levchin is an investor, too — will be processing credit card payments on the back end.

But it will be an uphill battle for Levchin in the current payments arena, with a range of challenges from a multitude of rivals to regulatory scrutiny to the risks associated with credit in general.

Its most similar competitor, for example, is Klarna, a hugely funded company based in Sweden that offers payment solutions for a wide range of online storefronts across Europe that did $200 million in revenue last year. Klarna, which means “clear” in Swedish, is likely to be eying the U.S. market and has well-regard VC Mike Moritz of Sequoia Capital on its board.

As part of its effort, Affirm will use Facebook for authentication of consumers, and also use a number of other social and data signals to assess risk. It will then guarantee payment to merchants — who will pay Affirm a fee — after this check.

“We are trying to get as close as possible to one-click, which has always been the case on the desktop,” said Levchin in an interview today. “In mobile, it has become an imperative to be able to buy it now or you lose a customer quickly.”

Levchin described Affirm as a digital charge card rather than a credit card, trying to be valuable to merchants by lowering the abandonment rate of mobile transactions. Affirm’s beta launch retail partner is 1-800-Flowers.

“You will essentially be putting a purchase on a digital tab, and we are going to make it work for us by looking at all available data to determine if you are someone who will pay it back,” said Levchin.

Like an American Express or other charge card, consumers will have about 30 days to settle bills, although Affirm will not be making any money from them.

As to why he decided to enter the increasingly competitive online payment space — which is also rife with regulatory and fraud issues — Levchin said that his efforts at PayPal did not go far enough.

“Payments online are still too hard — we started the revolution with PayPal and democratized payments for small businesses, but we stopped short of changing the system,” he said. “The world is now awash in data and we can see consumers in a lot clearer ways.”

In addition, he added, the “overwhelming transformation of everything toward mobile changes all the fundamentals.”

Relying on Facebook could be an issue, of course, opening up a thicket of privacy issues and also worrisome reliance on the social networking giant. But Levchin said that Affirm’s system depends on the company for confirming identity more than anything else and there will eventually be a number of ways to do that.

Other data Affirm will be using, he said, range from incomes per zip code and even a user’s mobile device ID.

Affirm has been funded by Levchin and a group of friends in the “low-digit millions,” he said, with only a few dozen employees compared to bigger mobile payments efforts from others.

He said he knows the risk of entering the space, especially given that there are only so many solutions and a limited retailer attention.

Still, Levchin noted: “I just think there is so much more to do. Technology has come a long way since PayPal.”

To VC or Not to VC: Former Square COO Rabois Leaning Toward Khosla Ventures Job

Kara Swisher — Sun, 24 Feb 2013 02:24:31 +0000

Keith Rabois, the former Square COO who left the company in the midst of unproven allegations of personal misconduct, is weighing an offer to join Silicon Valley venture firm Khosla Ventures, according to sources close to the situation, and is currently leaning toward accepting the job there.

But, that could change. In an interesting twist, the longtime entrepreneur and investor has also been in discussions with Airbnb CEO and co-founder Brian Chesky to become COO or president there.

Both the VC and the startup have been doing reference checks on Rabois, news of which has gotten out in the ever-chatty Silicon Valley scene. The Wall Street Journal reported earlier today that Rabois had been in talks with the San Francisco-based online housing rentals company.

But sources with knowledge of the situation said that Rabois — who has played the No. 2 to a string of high-profile entrepreneurs, including Peter Thiel at PayPal, Max Levchin at Slide and, most recently, Jack Dorsey at Square — seems “99 percent” ready to move into a more formal investing role.

Of course, there is still that one percent chance he might not, underscored by the eternal lure of the hot startup for serial entrepreneurs like Rabois. That said, he has also been an active angel investors for many years, with a wide-ranging portfolio, and is on many boards, including Yelp’s.

The choice of two very attractive alternatives is in stark contrast to the more tense situation for Rabois just a month ago, after accusations of sexual harassment arose related to a relationship he had with a Square employee.

Rabois has denied the allegations aimed at him and at the San Francisco payments company, which have not yet turned into a lawsuit, and has thus far been backed by Square. Rabois called the accusations by the employee “fiction” and a “shakedown.”

That said, due to the controversy around the serious workplace issue, he stepped down from his job as COO.

“At the end of the day, this is personally embarrassing to me, because when anyone’s life is exposed to a public forum, it creates quite a damaging situation,” said Rabois at the time in an interview with me. “As we looked at it, it was going to become a distraction that was going to hurt the company.”

Square COO Keith Rabois Departs Company

Kara Swisher — Fri, 25 Jan 2013 06:11:22 +0000

In a major exec departure, Square COO Keith Rabois will be leaving the San Francisco payments company.

Square gave no other information about the sudden management change, but sources said disagreements between Rabois and CEO and founder Jack Dorsey were part of the reason for his exit.

It’s not clear if there were more serious issues between them, or whether the parting was related to a specific business problem. But the departure of the No. 2 exec is significant, so definitely more to come on what happened.

In a statement about the move, Rabois only said:

It is amazing what Square has accomplished since August of 2010. When I joined, there were 17 engineers all reporting flatly to Jack. The local coffee shop served as our interview room. Leading our amazing crew has been the most rewarding professional journey of my life. I am forever grateful to Jack, for his confidence in me and to each and every member of the team for allowing me to learn from them.

But every day matters. And it is better at this point for me to be doing something different every day.

As a result, I’ve decided to resign from Square. I am very excited about what lies ahead for the company. Square could not be better poised for greatness.

I will have more to share about my next opportunity soon.

Said Square’s Dorsey:

Today I accepted Keith’s resignation from Square. When he joined, we had fewer than 30 employees and under 1000 active merchants. Today, over 3 million individuals and businesses are able to accept credit cards with Square, processing over $10 billion annually. We couldn’t have done it without him and we wish him well in his next opportunity.

Square CFO Sarah Friar will become acting COO, Square said. It’s an unusual move to put an exec without a lot of deep operational experience in the second-most-important slot at Square, though the former Goldman Sachs analyst and Salesforce.com finance exec is clearly familiar with the heart of the company’s business.

The change in top management comes at a time of fast growth for the three-year-old Square, which completed a $200 million funding round in the fall that valued the company at $3.2 billion. At the time, the company said it had more than 400 employees and would grow by 100 more by year’s end.

Square is best known for allowing a range of small businesses, such as taxicab drivers, to accept credit and debit cards using their mobile phones. But it has also branched out into other mobile payments areas.

Besides his stint at Square, Rabois is a well-known angel investor in Silicon Valley, and serves on several boards, including Yelp’s. He has worked at many startups, too, including PayPal (acquired by eBay) and Slide (acquired by Google).

Mayer's 10X Challenge: Yahoo's Homepage, Mail and Search Traffic Show Significant Year-Over-Year Declines

Kara Swisher — Wed, 09 Jan 2013 20:45:18 +0000

This week in Las Vegas, the new management team running Yahoo — including CEO Marissa Mayer — is at International CES to schmooze with big advertisers and convince them that Yahoo is the place to put large chunks of their marketing budgets.

One of the longtime selling points of the company is the sheer size of its audience, especially for the key money-making parts of the site — the homepage, Yahoo Mail and search.

But private stats from comScore show that those three areas have continued their longtime decline over the last year, in some cases dropping significantly. In November and December, for example, compared to the same two months a year ago, U.S. search was down 28 percent and 24 percent respectively, while mail was down 16 percent and 12 percent.

This matters a great deal, since the troika of homepage, mail and search have been the critical driver of the Yahoo value ecosystem for advertisers.

The impact of those drops is felt all over Yahoo, whose music, movie, games and travel site have also seen massive drop-offs in traffic year over year in those same months.

Stopping the decline is critical for Yahoo, since Mayer herself has underscored the need for size in her pushing for new businesses at Yahoo that are 100 million users in size and/or have revenue prospects of at least $100 million.

While this is a lofty vision, the reality of traffic falloffs on key properties is a vexing issue, especially since they remain its main source of revenue and also an important element in launching future products Mayer is promising will turbocharge the company.

It’s not that Yahoo is not huge, especially compared to most sites on the Web.

As one of the top Internet brands, according to a recent Nielsen report, the average number of total monthly unique visitors for the longtime Silicon Valley Internet company in 2012 was 141.6 million, No. 3 behind Google and Facebook in the U.S. market. Similar rankings were reported by comScore, which placed Yahoo at the No. 2 spot after Google, with 171.4 million monthly visitors in November.

But, for many years, traffic to those important consumer destinations of Yahoo has been on a clear and unstopping decline, statistics (usually from comScore) that the company nonetheless always dutifully puts in its earnings slides — see below — for investors to get some idea of the major and vexing issues facing the company.

That was suddenly ended in the last quarter with the engagement slide removed from Yahoo’s public deck entirely. Not all companies include such stats, so when I inquired as to why the company had made the change, Yahoo PR never returned my phone call.

But it’s not hard to guess the reason for the shift — the numbers were not good and they called more attention to Yahoo’s glaring challenge, which is getting users reengaged with its products by creating what Mayer has dubbed several times “delightful” experiences.

According to numerous sources, that has also been the case within the company too, with the new regime restricting an internal transparency initiative pushed by former Chief Product Officer Blake Irving that shared product performance numbers with the top 100 leaders at Yahoo.

And while it’s an interesting strategic choice, several sources inside the company this week urged me to get ahold of increasingly worrisome numbers from comScore — available to its private clients — comparing November 2011 to November 2012 and also December 2011 to December 2012 at home and work in the U.S.

So I did, getting the same stats from numerous sources — numbers that a spokesman for comScore confirmed were correct.

And, as promised, they are worrisome indeed.

In November 2012, compared to November 2011, the monthly unique visitors to the homepage declined 17 percent to 91.8 million from 110.9 million; Yahoo Mail dropped 16 percent (from 92 million to 77.7 million); and Yahoo search dropped 28 percent (from 93.3 million to 66.9 million).

Also off significantly for all three areas, often by one-third, were a plethora of other stats: Percentage of reach, total minutes, total page views, total visits and more.

One of the only bright spots for Yahoo was the relatively small Flickr sites, which were up 37 percent — 26.7 million versus 19.4 million — in unique monthly visitors year over year. The photo-sharing site — which has been getting a much-needed refresh — was also up in all other stats.

But Flickr — which Mayer (pictured here) has laudably touted and supported after years of inexplicable neglect — is not a money-maker for Yahoo, even if its return does burnish the company’s tech and innovation cred.

In December 2011 to December 2012, the homepage was more stable, gaining four percent in monthly uniques from 109.4 million to 114.2 million, but with other key stats both rising and falling. Total visits were up 14 percent, for example, while average minutes per visit was down 13.6 percent.

But the trouble for mail or search continued, off 12 percent (89.9 million to 78.7 million) and 24 percent (88.7 million to 67.4 million) respectively in monthly uniques, with similarly major declines in all other stats.

Mail recently got a refresh too under Mayer, despite some recent security glitches, so new stats will show if that will help stem the declines. Search is another story all together, with Yahoo in what can only be described as a dysfunctional partnership with Microsoft that numerous sources tell me Mayer is seeking to end.

The homepage, too, is undergoing a redo, with a design that has a decidedly more mobile and social feel, and pushing an ethos of Yahoo becoming a hub for content discovery. It is hoped the new look will boost traffic relatively quickly from its current downward trajectory.

To be fair, there can be lots and lots of reasons for these declines, although most of Yahoo’s competitors are, at worse, seeing a flattening of growth and not outright declines.

And sometimes Internet sites complain that services like comScore undercount, although Yahoo had previously used the firm in its public documents. More to the point, as multiple sources within the company note, the stats are directionally correct in that they closely track with internal Yahoo numbers.

Which is to say, traffic is going down rather than growing. That is clearly why Mayer has loudly stressed mobile since arriving at Yahoo, an area not included in these numbers that many sources said has strong growth to about 70 million monthly unique visitors via its apps and mobile-enabled Web offerings.

But unlike the homepage, mail and search — which push and pull traffic all over Yahoo and are responsible for most of its current monetization — mobile also makes very little money now. And Yahoo — unlike Facebook, which recently did — does not break out mobile results.

So, it will be interesting to see if the company does so when it reports fourth-quarter earnings on January 28 and also if it says anything about continued traffic declines of its traditional Web business in the period and the impact on revenue.

Still, there are lots of ways to counter declining or flat revenues, even with declining traffic — via cost cuts, efficiencies, charging more and selling assets (as Yahoo did in the last quarter). And Yahoo has ably managed to keep its operating margins growing over the years, despite both the declines in traffic and moribund growth in its revenue.

But the real and only fix is the drastic fix to existing tentpoles Yahoo has and the creation or acquisition of products that excite consumers and, therefore, advertisers.

It’s not an easy thing, of course, as well-known venture capitalist Ben Horowitz recently wrote in his blog about the need to focus on products over building and improving culture — one of Mayer’s other big initiatives at Yahoo.

Wrote Horowitz in what I consider one of the clearest articulations of what it takes to win for startups, as well as big companies like Yahoo:

“The primary thing that any technology startup must do is build a product that’s at least 10 times better at doing something than the current prevailing way of doing that thing. Two or three times better will not be good enough to get people to switch to the new thing fast enough or in large enough volume to matter. The second thing that any technology startup must do is to take the market. If it’s possible to do something 10X better, it’s also possible that you won’t be the only company to figure that out. Therefore, you must take the market before somebody else does.”

If you want to take a gander, here are some more of those old Yahoo quarterly engagement slides, which were recently eliminated from its presentations:

(Note: I reached out to Yahoo’s outside PR firm — since they do respond to queries — and also some company execs to get a comment on this story, but so far there has been none.)

Levchin Officially Confirmed by Yahoo as Board Member; Kenny and Smith Off Board

Kara Swisher — Thu, 13 Dec 2012 19:17:21 +0000

Here’s the official news from my earlier report about new Yahoo board member Max Levchin and the departure of two directors, Weather Channel’s CEO and Chairman David Kenny and Brad Smith, CEO of Intuit.

Levchin is the fourth director to be appointed as part of an mutually agreed-upon agreement between Yahoo and Third Point’s Dan Loeb, as part of a settlement of its proxy fight earlier this year.

He’s a well-known Silicon Valley entrepreneur, with stints at PayPal and Slide, a Facebook social apps maker that was sold to Google and later closed down.

Some sources close to the situation maintain that other current board members are also mulling eventual departure and that there will be more director additions, but that is not expected to happen for the next months.

Here’s the official press release:

YHOO_News_2012_12_13_General

Along With Flickr, Mail and Homepage, Yahoo's Board Will Also Get a Refresh (and SuperPoke Dude!)

Kara Swisher — Thu, 13 Dec 2012 16:05:47 +0000

In the last week, Yahoo has redone its powerful Yahoo Mail, refreshed its Flickr photo-sharing service and is also set to release a spanking new homepage design.

It’s part of a series of changes made since new CEO Marissa Mayer arrived this summer from Google, including detailed employee performance reviews, free food, new smartphones and a hunt for innovative mobile properties to scoop up to improve Yahoo’s creaky Silicon Valley reputation.

Now, according to sources close to the situation, that rejiggering will extend to Yahoo’s board too, with an effort to add more Internet savvy members as directors.

That’s actually be an aim for a while, including a board appointment for longtime entrepreneur Max Levchin, which sources said will occur soon.

In fact, Levchin has been mulling the Yahoo board job for a while, having long been intrigued by the company’s troubles and seeing it as an opportunity rather than a liability.

The wooing of Levchin is also not new. As I wrote in February, he had been pegged for a board seat by then-activist shareholder Dan Loeb of Third Point — who is now on the board after winning his fight with Yahoo and ousted former CEO Scott Thompson. But Levchin, as well as SurveyMonkey CEO David Goldberg, did not want to be part of a dissident slate against Yahoo co-founder and then-board member Jerry Yang.

I had written in September that the board was again looking at Levchin, for a seat designated under an agreement Yahoo had made with Loeb.

The hedge fund investor, who owns a large chunk of Yahoo, had the right to nominate a mutually agreed-upon fourth director after the company settled the proxy fight with him earlier this year. The other directors he nominated previously were Michael Wolf and Harry Wilson.

The thoughtful and cerebral Levchin (pictured here) is best known as a top exec at PayPal. He then founded Slide, a then-hot start-up that made apps — then called “widgets” — for Facebook, including some that let you toss sheep (remember SuperPoke!?!).

(I had been hard on Slide back then, noting that the idea of a “Widget IPO” was ludicrous: “It’s a sign to me that suddenly makes the scene feel very bubbly, given that Slide certainly has traffic, but no proven track record to continually make money.”)

But Slide, which Levchin considered a disappointment despite a huge funding valuing the company at $550 million, was sold to Google for $180 million in mid-2010.

Levchin quickly chafed at the search giant, after working on a variety of social efforts there, including clashing with Google+ leader Vic Gundotra. Levchin did not work that closely with Mayer while at Google, although they are friendly.

He eventually left the company in mid-2011, with Google shuttering Slide, and has since been working on a new start-up in San Francisco.

An active angel investor, he’s one of many entrepreneurs in the Web arena that young start-ups look up to, which is the presumable reason for bringing him onto the Yahoo board. Once added, he’d easily be the hippest director in the group.

The Yahoo board changes will also include the departure of some board members, including Weather Channel CEO David Kenny, who had once been considered as a possible CEO of Yahoo. Other rumors that had been raised included a change in chairman, but sources said that this is not the case for now.

When I emailed and texted him yesterday afternoon about the board changes I had heard were coming, Yahoo Chairman Fred Amoroso wrote me: “As a matter of policy, I don’t comment on rumors.”

Kenny also declined to comment yesterday, noting he was on a plane and was not reachable.

Presumbly, he was returning east from the Yahoo board meeting that was held earlier this week in Silicon Valley.

The Yahoo board moves echo similar changes that were made when former CEO Carol Bartz came into office.

The New York Times also posted on the changes, noting Intuit CEO Brad Smith was also leaving the board. Last year, Smith had become a very active board member, especially after Bartz and then Thompson were ousted, but his own board at the financial software company had been asking him to cut back.

Sources said other new directors might also be named to replace him, but that this was not going to be announced by Yahoo at this time.

Until the inevitable board news, here’s a video of one of many interviews I did with Levchin — this back in 2009 — to give you an idea of his stylings:

[ See post to watch video ]

First-Episode Clips From "Start-Ups: Silicon Valley" -- Dave McClure Is "Disrespectful" (For Doing His Job)

Kara Swisher — Thu, 25 Oct 2012 15:45:54 +0000

Here are two clips from the first episode that Bravo has put up about its new and controversial-before-it’s-aired reality television show, “Start-Ups: Silicon Valley.”

The cable program chronicles the ups and downs of a group of young entrepreneurs in tech, and some have decried it from simply seeing the promo sizzle reel that featured lots of partying and pool-hanging.

No frolicking here in a short clip, as super angel investor Dave McClure looks over a pitch deck of brother-and-sister team Ben and Hermione Way for their health-and-lifestyle start-up, apparently called Ignite.

With that reality show rut-roh music playing in the background, Ben inexplicably says he thinks McClure was “slightly disrespectful, him going through the whole thing and making his own judgments.”

Which is, of course, an investor’s job, going all Judge Judy on entrepreneurs. And, in my experience, McClure was awfully polite about grabbing the deck.

And alls I can say is that Ben is very lucky he managed to avoid bringing his pitch deck near me.

There’s also one that seems a lot more reality-show, with Hermione arguing over a botched event with another person on the show, Sarah Austin. There is mention of “making out” with Ben and SXSW.

In any case, the show looks interesting enough to take a gander when it airs on Monday, November 5 at 10 pm.

Here are the video clips:

Hall Pass: Yahoo Meets Lackluster Expectations in Third Quarter, As Investors Focus on Mayer's Plans for What's Next

Kara Swisher — Mon, 22 Oct 2012 20:26:41 +0000

Yahoo is nothing if not consistent, turning in yet another weak quarter that met weak expectations from investors.

The 98-pound weakling is still weak!

In the third quarter, the Silicon Valley Internet giant had $1.089 billion in revenue, a hair above expectations and just two percent higher than a year ago. (Please note that competitors, such as Google and even Facebook, are growing revenue like gangbusters.)

Profits were also weak, despite an apparent pop from a gain from its sale of some of the shares it holds in China’s Alibaba Group. But let’s focus on operations, people, which are the real numbers to gauge. As Yahoo noted: “On a GAAP basis, income from operations decreased 14 percent to $152 million in the third quarter of 2012, compared to $177 million in the third quarter of 2011.”

Minus traffic acquisition costs, display revenue was down to $451.6 million, compared to consensus estimates of $484 million; search revenue was up only a tiny bit to $414.1 million (consensus was $411 million).

Interestingly, Yahoo left out detailed information it has usually provides about engagement and other user metrics. Let me take a big guess: The numbers are simply not impressive, or else they would have been touted.

Also left out was any guidance going forward — new CFO Ken Goldman just came on today, so that’s no surprise. Guess it’s time to throw out the trash, as they say in politics!

But here’s an interesting factoid in the press release: “In October 2012, Yahoo! entered into a 364-day, $750 million unsecured revolving credit facility. The facility is currently undrawn and is expected to be used for general corporate purposes.”

More available cash to go with the pile of cash that Yahoo has already piled up for purposes unclear right now.

To be clear, this meh quarter does not matter at all — with Yahoo getting a financial equivalent of a hall pass for these results — as investors look to hear from new CEO Marissa Mayer about her plans to make all the bad go away. Until she charts a course and sets out on it, it is likely that no one is going to blame her for Yahoo’s past woes.

As Mayer said in a statement today: “Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue. We’re taking important steps to position Yahoo! for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders.”

Everyone is looking forward to hearing how, which the former Google exec will presumably explain in more detail on a conference call with Wall Street analysts — her first as a public company CEO — at 2 pm PT. Tune in for my live blog.

Until then, here are Yahoo’s Q3 slides to peruse:

YHOO_Q312EarningsPresentation_FINAL

Broken Windows: Microsoft Misses on Revenue and Earnings in Q1

Kara Swisher — Thu, 18 Oct 2012 20:42:39 +0000

One of the main things that Wall Street analysts had been watching for in the first-quarter earnings for Microsoft today was how its current flagship Windows software business was doing in the lead-up to the release of Windows 8 on October 26.

A little cracked, as it turns out.

Investors had expected that the Redmond, Wash., software giant’s first-quarter earnings would be $16.4 billion, compared to $17.4 billion last year, and that earnings would drop to 56 cents from 68 cents.

Instead, Microsoft turned in quarterly revenue of $16.01 billion and earnings of 53 cents a share.

One big culprit was a decline in sales of Windows, which was impacted by the company’s deferral of revenue related to Windows 8.

Microsoft is making a big bet that the new operating system — a drastic change from previous versions — will boost sales of PC and other mobile devices, especially tablets. The once-dominant company is seeing big challenges from consumer interest in products that do not use Windows, especially from Apple and Google.

Thus, it is now wait and see, which made investors nervous. Microsoft’s stock was down over 3 percent in after-hours trading, to $28.58.

That’s no surprise given the news.

Said Microsoft:

“The Windows & Windows Live Division posted revenue of $3.24 billion, a 33% decrease from the prior year period. Adjusting for the impact of the Windows Upgrade Offer and pre-sales of Windows 8 to OEMs prior to general availability, Windows division non-GAAP revenue declined 9% for the first quarter.”

Windows had already seen a decline in sales of the key product, which was down nearly 13 percent in the last quarter.

Other divisions had mixed revenue results: Servers & Tools was up eight percent, the Business division had a two percent decline, the Online Services unit saw a nine percent rise and the Entertainment and Devices division was down one percent.

Here’s the full Q1 press release, as well as Microsoft’s financial statement and pretty slides (and I threw in the 10-Q for good measure). The company will have an earnings call at 2:30 pm PT about the results:

PressReleaseFY13Q1

FinancialStatementFY13Q1

SlidesFY13Q1

MSFT_FY13Q1_10Q

What Will Marissa Do?: Mayer Set to Reveal Her Strategy to Troops This Week in an "Act of Radical Transparency" (Internal Memo!)

Kara Swisher — Mon, 24 Sep 2012 00:49:06 +0000

On Friday, I began a series about the various and sundry things new Yahoo CEO Marissa Mayer was up to at the Silicon Valley Internet giant.

First up was a look at how she is zeroing in on improving its troubled search efforts and advertising platforms, two business arenas that will get more focus this week when Mayer unveils her plans to the employees of Yahoo at an all-hands meeting.

According to an internal memo Mayer sent out Friday, the confab is scheduled for Tuesday. It comes after two days of meetings with Yahoo’s board of directors last week, in which Mayer outlined the plans for she has come up with to turnaround the company.

[Special note to readers: I would, as usual, embed the entire memo below, but Yahoo's top execs -- most especially, newly installed general counsel Ron "Leaks Are 'Uncool'" Bell -- have worked themselves into quite a lather over the issue of late. Apparently, according to numerous sources, the company is using all kinds of leak-catching tech tools -- free smartphones aren't as free as you might think, if you catch my drift, Yahoos, and I would also advise turning up the music loud when whispering in the Sunnyvale HQ offices -- so I will only quote internal emails only in part going forward to thwart such silliness.]

Pressing on!

In the memo, titled “Board slides, strategy and goals,” Mayer talked about the meetings. There will be two this Tuesday, one in the morning and one later in the day, in order to accommodate Yahoo staffers internationally.

“In an act of radical transparency that will be a tradition moving forward,” Mayer promised that she will go over the slides — which are usually not shared widely — of her “strategy and vision” that she presented at the board meeting on Friday.

“We want to offer you transparency into what happens at the board level as well as guidance as to where the company is going,” Mayer noted.

Kudos to that! (And send all that transparency my way, please!)

Mayer also said in the memo that she will have another all-hands meeting on October 1, where she will begin “rolling out a new system and process for goals for the company,” including annual goals that will be tracked and graded — first on a company level, then to departments, teams and, finally, individuals.

That’s a good idea, of course, because tracking such things has not been a focus of Yahoo for a while now. Not surprisingly, it is very much a practice at Google, from whence Mayer came and where she has been liberally borrowing a wide variety of management concepts.

But she has a few of her own tricks up her sleeve too, according to many sources, in terms of the strategy.

As I previously wrote, Mayer is planning on doubling down on search, as well as advertising platforms. Expect more money spent in both places, as well as a redo of Yahoo’s long-rocky search partnership with Microsoft.

Also up for a refresh is both email and also the critically important Yahoo home page. Both are being redesigned substantially to focus on consumer experience. People who have seen the mock-ups describe them both as more social and as more of a dashboard approach for users than the traditional catch-all portal.

It’s all based around learning technology that Yahoo has been working on called CORE, or Content Optimization and Relevance Engine. There will be lots of linking out and an attempt to make Yahoo more of a platform for others to develop on top of.

It’s a little Facebook-like, said several sources, but more focused on content and other products that differentiate Yahoo. Mayer has decided to back 10 key arenas, such as its powerful Yahoo Finance and Yahoo Sports sites, as well as its Flickr photo offering.

Still, no redesign is set in stone yet, so we’ll see what Mayer has decided on.

It’s also not clear what the e-commerce focus will be, but it is also an area that Mayer has a lot of experience in. Also a big question: What the heck is Yahoo’s non-existent mobile strategy going to be?

In addition, Mayer has already ordered the removal of some ads from both Yahoo’s email service and also its home page, cutting them back to improve the consumer experience. That’s a dicey move since Yahoo makes a big chunk of change from those ads, especially on the home page.

No matter. “Everything she is doing is about the consumer experience,” said a source. “Nothing else matters to her, even if it might matter to the bottom line.”

So far, Wall Street has been wary of Mayer until they see a strategy — the stock has been sitting in the $15 range since she arrived. That said, the high-profile exec does have more leeway from investors, and — perhaps most importantly — from the board.

In fact, at her now weekly Friday meeting for employees, a big group of the directors appeared onstage in a show of support.

A purple show, apparently — all were wearing lavender Yahoo t-shirts with “BoD” stamped on them.

Awwwwww! It’s like a mostly all-boy band! One, by the way, that might get more members soon. Sources told me that director Dan Loeb has been on the hunt to add at least one more person to the group, focusing on landing a Silicon Valley star.

When he was waging his proxy battle on Yahoo he tried to recruit both SurveyMonkey and former Yahoo David Goldberg and also well-known entrepreneur Max Levchin of PayPal and Slide.

While Goldberg joining the Yahoo board is not happening — he just joined the board of the Washington Post — getting Levchin to sign on seems more likely, especially with the focus on attracting innovative talent to the company.

Levchin is definitely that, as are many others Loeb has apparently been trying to buttonhole of late.

From the Rubble of Google's Slide Shutdown Comes Prizes.org Crowdsourcing Apps

Liz Gannes — Mon, 24 Oct 2011 18:28:53 +0000

Prizes.org, the sole product of Slide that Google is not shutting down, today released mobile apps for Android and iOS. Built by Slide’s China-based team, Prizes.org is a crowdsourced platform for contests with cash prizes that launched in August.

Law Firm Won't Pursue SuperPoke Pets Shutdown Class Action Suit Against Google

Liz Gannes — Tue, 18 Oct 2011 19:47:02 +0000

As much as avid users of Slide’s SuperPoke Pets yelled, begged and left angry blog comments, a law firm that had been exploring a class action lawsuit over Google’s shutdown of their much-loved game has declined to take on the case.

Chicago-based class action specialist Freed & Weiss — which had been collecting complaints from SuperPoke Pets users upset about the loss of their virtual goods and carefully cared-for online pets — notified the users today that it thought its chances of winning were slim.

That’s because, though players invested much money in the game and had been previously assured that it wouldn’t shut down, Slide and Google’s terms of service seem to cover their actions. Plus, after all the outcry, Google agreed to offer a standalone app called SPP Lite that allows users to keep their pets alive with some limited functionality.

“We have appreciated hearing from many of you and, while this is unfair and unjust, there are just some situations where there is not a likelihood of recovery in the U.S. Court system and we have found that to be the case here,” Freed & Weiss said.

Another law firm, Edelson McGuire, appears to still be collecting complaints from SuperPoke Pets users.

Will RIM Not Disappoint Again This Quarter?

Kara Swisher — Thu, 15 Sep 2011 18:43:22 +0000

After a series of increasingly disappointing quarterly earnings announcements, Wall Street is hoping that Research in Motion will deliver better results today.

The Canadian phone maker — most famous for its iconic Blackberry devices — will be reporting its second-quarter earnings after the markets close later today.

Analysts are predicting earnings of 87 cents a share for the period, which is within RIM’s own guidance range of adjusted profit — between 75 cents and $1.05 per share.

Higher would be better, based on the hope that sales of its most recent smartphones with the Blackberry 7 operating system, and also its lackluster PlayBook tablet, will help its results after a downward slide that has been painful.

That’s been especially tough, since both Apple’s iOS and Google Android are surging ahead in the mobile market.

RIM hopes to also get a boost from the first phone using the QNX operating system it bought last year.

Google Officially Shuts Down the Neglected Aardvark

Liz Gannes — Fri, 02 Sep 2011 19:37:42 +0000

Google will close its social search tool Aardvark, which had been seemingly left untouched since being acquired in February 2010. The move comes as part of a larger housecleaning that includes cutting Google Labs and Slide. The Aardvark founders said in a blog post that they are excited that Google+ is already a bigger “place to share knowledge online” than vark.com was.

SuperPoke Pets Saga: What's the Long-Term Value of a Virtual Good?

Liz Gannes — Mon, 29 Aug 2011 23:47:49 +0000

Does an item purchased with virtual currency inside an online game have long-term value? Or is it more like a Halloween costume, relevant and exciting for the moment but unlikely to be reused? That’s the contentious argument going on right now between Google’s Slide and players of the Slide game SuperPoke Pets, which is scheduled to be shut down in the next six months.

The news we broke last week that Max Levchin, Slide and almost all Slide products would no longer be a part of Google just a year after being acquired was not particularly emotionally evocative for many readers. But for active users of SuperPoke Pets, it seemed lame, fraudulent, and evil — and they told us so in our comments section.

SPP fans left scores of angry comments in venues like our site and TechCrunch. They were particularly angry that SPP, which is a Tamagotchi-style game where users nurture pets, had enticed them to spend money buying in-game gold that will presumably be worthless once the game no longer exists.

Slide employees — who themselves are not particularly happy about getting shut down — tried to reassure SuperPoke fans with a user forum post this weekend that downplayed the long-term value of virtual goods. It’s an interesting line of argument that highlights the fact that expectations around virtual ownership of items within an online game are not firmly set. Should SPP users expect a refund or a transfer of value? Should they realize that a virtual game can be terminated by its owner at will?

Here’s the key part about the value of virtual goods:

The closest real-life analog to SPP items is probably a Halloween costume. You purchase it to dress up and enjoy the experience, but likely don’t wear that costume day in and day out, or for every Halloween thereafter. Unlike a costume, there are still months ahead for you to make the most of the items in your inventory and we are working on tools to help you export some of your SPP content/items to keep and access outside of SPP. We are still in the process of working out the details of what these tools might be and will update you as soon as we have more information to share.

(For whatever reason, the forum post is only available to players at SPP level six and above. My poor little frog is still at level one so I got the full text from a Google spokesperson.)

Part of the reason Google is shutting down the Slide apps is because they are not hugely popular. SuperPoke Pets has about 130,000 active monthly users, according to Facebook application analytics service AppData, though the game does not require registration with Facebook so that measure is probably low.

It’s possible that if SPP fans are loud and convincing enough, Google — which is in the process of launching its own games platform — will figure out a way to keep the game around. Asked for comment on that front, a Google spokesperson referred us back to the user forum post (which is printed in full below).

Posted: Aug 27, 2011 02:27 PMQuote | Reply

SPPers,

We understand that the last few days have been difficult for many of you. We are reading your posts and wanted to provide more information about several of the themes and topics we’ve seen emerge.

Since stopping active development on SPP, we’ve seen quite a bit of speculation about Slide turning off SPP altogether. We want you all to know that, until this week, we did not have a plan to shut down SPP. In our June announcement about the changes, you can see that at the time, we saw very little reason to turn off SPP and intended to keep it running for the foreseeable future.

Unfortunately, as all of us have experienced, the future is not very predictable. As you may have read in our recent Slide blog post or other articles, the Slide group will be splitting up to join other areas within Google. Unfortunately, this means that we will be shutting down almost all of our products, including SPP and several that we just launched. This is not something we anticipated or planned for when we made our announcements about SPP back in June.

Many people also brought up questions about the value of items on SPP and we want you to know that we have spent a lot of time thinking about this very topic. You can use and enjoy virtual items however much you want – and over the course of SPP, we’re sure that there are items you’ve used for hours, even months. While you can use SPP items in a number of different ways: trade, decoration, gifting, and collecting, one thing you can’t do is bring them home and keep them forever.

The closest real-life analog to SPP items is probably a Halloween costume. You purchase it to dress up and enjoy the experience, but likely don’t wear that costume day in and day out, or for every Halloween thereafter. Unlike a costume, there are still months ahead for you to make the most of the items in your inventory and we are working on tools to help you export some of your SPP content/items to keep and access outside of SPP. We are still in the process of working out the details of what these tools might be and will update you as soon as we have more information to share.

We know that the SPP community, and the friends you have made here, are incredibly important to many of you. We encourage you to transition the relationships you’ve built on SPP to an outside platform so that they may continue to grow and flourish. As an example, Nicole established a FB group for SPP users as a place where you can go to make these sorts of connections:http://www.facebook.com/groups/104602236311763/. I also anticipate that some of you will have groups of your own that you will wish to promote or invite your SPP friends to. We are also looking into whether we can find an existing public forum that might host SPP Community rooms so that you can continue your interactions there. If we are able to find something we can implement, we will communicate the details here. As I mentioned in my original post, we will not be shutting SPP down for about six months. One of our hopes is that this will provide you with plenty of time to re-establish these connections outside of SPP.

There is still a lot to plan and do as part of the SPP shut down, and as mentioned above, you will continue to hear from us. We are saddened by the eventual loss of SPP and committed to doing what we can to make this transition as smooth as it can be for you, the incredible SPP community.

Thank you,
The SPP Team

Exclusive: Max Levchin to Leave Google as Slide Is Shut Down

Liz Gannes — Fri, 26 Aug 2011 00:35:07 +0000

Slide, the social apps company that Google bought just over a year ago for about $200 million, will be dissolved, and its well-regarded leader Max Levchin will depart Google, sources close to the matter told AllThingsD.

Google confirmed the departure today.

“Max has decided to leave Slide and Google to pursue other opportunities, and we wish him the best,” said a Google spokesperson. “Most of the team from Slide will remain at Google to work on other opportunities.”

After being acquired, Slide had operated as an independent unit out of Google’s San Francisco office, maintaining existing apps like SuperPoke Pets and experimenting with new ones such as messaging app Disco and photo-sharing app Photovine, which was released only last week.

The apps, none of which were extremely popular, will be sunsetted over the next few months.

The news was announced to employees at an all-staff meeting in San Francisco this afternoon, sources said. A source said that some of the Slide team is expected to land at YouTube, which is also operated independently within Google. Slide has about 100 employees, with not too much attrition in the last year, said that source.

Although Slide as an independent start-up had not matched its lofty expectations and valuations — at as much as $500 million in a 2008 funding round — its acquisition brought Google some key assets: Social Web expertise at a time when it was dearly needed, and Levchin, who famously founded PayPal.

But that was last August. Since then, Google has entrusted its social efforts to two of its existing executives, Vic Gundotra and Bradley Horowitz, who led the team that created Google+. Levchin was left on the fringes with Slide as an autonomous subsidiary, reporting to Google co-founder Sergey Brin.

In addition, at the time Slide was bought, Google CEO Larry Page had not yet reassumed leadership of the company he co-founded. In April, Page consolidated and streamlined Google’s product structure into seven distinct units. And even though the social team may have been the natural fit for Slide, the two were not integrated.

In addition to Levchin, Slide head of product Jared Fliesler also plans to leave Google, and has accepted a position with former Slide colleague Keith Rabois at payments start-up Square, sources said. (Rabois had joined Google only very briefly after Slide was bought, before jumping ship to work with Twitter co-founder and creator Jack Dorsey at Square.)

Levchin has also been an active angel investor, is chairman of the board of Yelp, and — congrats to him and his wife — is expecting his second child next month.

Not-So-Chart-tastic Picture of Yahoo's Q2 Display Disaster

Kara Swisher — Tue, 19 Jul 2011 22:43:29 +0000

Here are the slides Yahoo released about its second quarter earnings, in which revenue was down due to an unexpected drop in growth in its display advertising business, especially in the critical U.S. market.

As you can see on Page 8 of the deck, year-over-year display sales rose only five percent in the quarter, compared to much more significant increases in previous quarters. With declines in all other revenue sectors, this was not a good thing.

The 10 percent decline in the Americas region, which you can see on Page 9, is the culprit, as Yahoo CEO Carol Bartz underlined in the conference call with Wall Street analysts today.

Paging Ross Levinsohn — leader of Yahoo’s Americas region and its ad efforts — stat!

YHOO_Q2_11EarningsPresentation_Final

Who's to Blame for Yahoo's Q2 Revenue Rout? The Line Forms Around Back…

Kara Swisher — Tue, 19 Jul 2011 21:02:54 +0000

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

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

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

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

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

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

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

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

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

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

Obvi! Neither are shareholders, Carol.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As I wrote then:

“CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars. In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.”

Now big is out! Moving on!

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

“It’s complex,” says Bartz.

You can say that again.

Yahoo Revenues Down Again in Q2, With Weakness in Search and U.S. Display Ad Sales

Kara Swisher — Tue, 19 Jul 2011 20:19:51 +0000

Yahoo turned in another flat performance in the second quarter, with $1.08 billion in revenue, which was slightly below Wall Street expectations.

Earnings per share were right on target, though, at 18 cents each, an increase of 18 percent. Net income was $237 million for the quarter.

Investors were expecting Yahoo to report revenue of $1.11 billion on earnings of 18 cents.

That means a revenue decline of five percent from a year ago, which Yahoo said was “primarily due to the revenue share related to the Search Agreement with Microsoft.”

More importantly, in a statement, Yahoo CEO Carol Bartz also pointed to changes in its display sales operations, a key business of Yahoo:

“We experienced softness in display revenue in the second half of the quarter due to comprehensive changes we have made in our sales organization to position ourselves for more rapid display growth in the future.”

Whatever the reason, it’s not good news for Yahoo, especially considering Google’s strong results last week. Then again, it’s better than the first quarter’s six percent drop in revenue for Yahoo.

That said, Yahoo stock was down between one and two percent in after-hours trading.

Here’s the full press release to peruse, before I begin liveblogging the earnings call at 2 pm PT, as well as a link to my post on its slide deck of the results:

YHOO_Q211PressRelease_Final

Google Elevates Social From the Search Results Ghetto (But Only When Deemed Worthy)

Liz Gannes — Thu, 17 Feb 2011 15:00:49 +0000

With all the bated breath over Google’s efforts to compete in social, anything the company releases is going to be carefully scrutinized. (Take that as fair warning: NetworkEffect is about to spend 500 words on a minor product launch.)

What Google is doing today is making some careful tweaks to weave social signals into search: Most notably, bringing social search results up from the bottom of the page and parsing links shared by friends.

Google has tried to bring in new blood to help it “get social,” most prominently hiring the PayPal and Slide founder Max Levchin by acquiring Slide. Today’s social search launch was put together by another serial entrepreneur who came into the company through an acquisition: Mike Cassidy. His last company, an online travel guide called Ruba, was sold to Google last May.

Cassidy was a significant get for Google, though he’s stayed under the radar till now. Prior to Ruba, Cassidy had founded and sold three previous companies: Xfire, Direct Hit and Stylus Innovation.

While his title at Google–product management director for search–doesn’t have the word “social” in it, Cassidy noted in a phone interview on Wednesday that Ruba was a social company; it was specifically focused on recommendations by friends. In fact, he said, an early name for Ruba, which was backed by Benchmark Capital and Draper Fisher Jurvetson, was “Friendstips.”

Back to Thursday’s launch: Google already has a “social search” product that turns up for a minority of queries in the No. 9 and 10 spots at the bottom of its results page for logged-in users who have connected their Google accounts to social services like Twitter.

Now those results will show up scattered throughout regular results. But that’s only for users who are logged in, and only when a social result is deemed relevant.

The other big change is Google will also now give higher ranking to URLs that are shared as links by friends on public sites like Twitter and Quora. Google will try to determine on a per-user and per-tweet basis if a link is relevant to a certain searcher based on which users shared it.

So, for instance, if an article was shared by a person you are friends with on multiple services, Google will think it’s probably more important to you. Or if a video has been shared by a lot of people, including your friends, there’s a good chance it will turn up high in your results on that topic.

Lastly, Google is tidying up some stuff so users can link social services to their Google accounts without displaying them for all to see on their public Google profiles.

Google’s search folks are not necessarily in alignment about the importance of social. Cassidy said Wednesday, “Recommendations from friends are some of the most powerful recommendations in the world. We’re trying to turbopower that. Google’s mission is organizing the world’s information, and this is an extension of that.”

But one of Google’s search scientists was recently quoted pooh-poohing the potential for social to change search. “Social is just one signal. It’s a tiny signal,” Amit Singhal told Bloomberg BusinessWeek.

Here’s a side-by-side comparison from Search Engine Land about what social signals Bing and Google used as of December. Since then, Bing has upped its special integration with Facebook to include pages “liked” by searchers’ friends.

Yahoo's Fourth Quarter "Encouraging," Says CEO; Street Says "Eh"

John Paczkowski — Tue, 25 Jan 2011 21:08:39 +0000

Investors hoping Yahoo might benefit from the same surge in online display advertising spending that drove Google to its recent big quarter are in luck–except for the big-quarter part.

Posting fourth-quarter earnings today after sacking one percent of its staff, the company reported net income of 24 cents per share on revenue of $1.21 billion. The Street doesn’t seem convinced, though. Yahoo shares are down 3.5 percent as I write this.

Analysts had been expecting earnings of 22 cents per share on $1.19 billion in net revenue–a big jump from the 11 cents per share the company reported in the same period last year, but a troubling decline from the $1.26 billion in net revenue that accompanied it. That said, display advertising did grow. For the current quarter, the company sees revenue in a range of $1.02 billion to $1.08 billion; analysts had been looking for $1.13 billion.

“We just completed a very encouraging quarter and year for Yahoo!, where we saw our plans to turn around the company gain momentum,” CEO Carol Bartz said in a canned statement. “For the year, operating income, margins, EPS, and return on invested capital doubled. Display advertising grew 17 percent. We completed the important North America Search transition to Microsoft on schedule and with high quality. We introduced new and updated products at a faster pace. And our content properties–like Yahoo! Sports and Yahoo! Finance–continued to innovate and extend their massive lead.”

Look for more coverage of the earnings call at BoomTown later this afternoon. Meanwhile, here’s the press release in full:

YHOO_Q410PressRelease_Final

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

[Image Credit: Byzantin3]

"They Failed": VC Fred Wilson Gets BoomTown's First Annual Someone-Had-to-Say-It Award

Kara Swisher — Mon, 29 Nov 2010 17:37:27 +0000

BoomTown has always enjoyed–although I have not always agreed with–the ruminations of Fred Wilson in his must-read blog, A VC.

Today, the New York venture investor–heard of Foursquare, Twitter?–penned one that was flatly on point, simply titled “Chasing Returns” about a potential crisis in start-up funding.

It was all due to a new class of investors too focused on chasing returns, noted Wilson, “and some of them do not understand what they are investing in.”

Rut-roh.

Perhaps dumb moneybags are not the greatest worry of our time–but dumber justifications of questionable success certainly should be, which Wilson also called out recently in an article in the New York Observer about the bubbly start-up scene there.

Said Wilson:

“It’s not all going great. You know, companies are failing. A couple of high-flying entrepreneurs came crashing to the ground recently. Justin Shaffer of Hot Potato and Sam Lessin of Drop.io–both of those companies essentially failed. Both of them ended up ‘selling’ their businesses to Facebook, but those were really just–Facebook wanted to hire those people, and they wrapped it up in a ‘sale.’ But those companies were unsuccessful. They failed. So there is failure out there–like, right in front of us. We can see it.”

Many quickly cried foul after Wilson’s remarks, but many more secretly shook their heads in agreement at the reality distortion field around entrepreneurs.

This has happened a lot lately in Silicon Valley, of course–as evidenced by a series of just-in-time saves of once high-flying start-ups (Slide being bought by Google comes to mind) sold as wins.

Indeed, painting failure as another form of success is one of the favorite and endearing canards of tech, showing an ability to bounce back from any negative and pivot into a new direction.

But most pivoting, as Loren Feldman of 1938 Media recently pointed out, is just another word for covering up misdirection.

Perhaps misdirection–as it should be in any world that thrives on innovation and entrepreneurial instincts–is all well and good, but it is only that way as long as it is identified as such when it occurs.

So, good for Wilson for truth-in-labeling when it comes to start-ups, investing and chasing returns these days.

Open Mobile, According to Sprint's Dan Hesse (We'll Ask Him More About It at D: Dive Into Mobile)

Kara Swisher — Wed, 10 Nov 2010 19:04:46 +0000

Here below is a very interesting slide put up by Sprint Nextel CEO Dan Hesse, who took to the stage at the Open Mobile Summit in San Francisco to talk about the latest trends in the arena.

In the “open continuum,” Hesse places his wireless carrier nearer to the middle, while competitors are closer to the closed end.

The most open “anything goes” side is uncharted territory.

Still, in a Q&A with BoomTown after his speech, Hesse noted that among the handset makers, Google was on that wilder end, while Apple sat on the other pole completely.

These are exactly the kinds of key topics Walt Mossberg and I will be discussing with Hesse and others at the D: Dive Into Mobile conference, which takes place December 6 and 7 in San Francisco.

Other speakers include Foursquare’s Dennis Crowley, Google’s Andy Rubin, Mike Lazaridis of Research in Motion and more.

You can get more information about the event here.

And here is Hesse’s slide (click on the image to make it larger):