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

Not more than a handful of business days after Facebook’s much ballyhooed IPO, and the noise is only getting worse.

One bright spot is that the downward plunge of the social networking giant’s shares has stopped and stabilized at $32.01. That’s up 3.2 percent today in a down market.

But that bright spot has not stopped the ever-louder Facebook fulminations that have begun to resound somewhat more seriously.

Such as a Reuters’ report yesterday that right in the middle of the social networking giant’s roadshow that Morgan Stanley and other Facebook underwriters reduced revenue forecasts, a last-minute change in outlook which could have contributed to Facebook’s first day stumbles on the Nasdaq. The change came shortly after Facebook amended its S-1 filing for the seventh time, a minor and opaque update further stating that the company was weak on mobile, but with little detail.

And that’s not all.

In an excellent analytical piece published earlier yesterday, Henry Blodget of Business Insider claims that a Facebook executive verbally told Morgan Stanley that the firm should lower its forecasts, a message he alleges was relayed to institutional investors, but not to retail investors. That could have dampened the price at which large and powerful firms were willing to pay for shares, severely limiting any potential opening day gains.

With Morgan Stanley switching down its forecast just days before the IPO, retail investors had no way of knowing that the big institutions weren’t going to be making the large day-one pops that they may have gotten before Facebook allegedly warned of its weakened financial outlook.

A Facebook spokeswoman told AllThingsD the company had no comment on the matter.

Perhaps silence will silence the critics eventually, but whatever the outcome, it’s a noisome mess right now, far from living up to what was the most anticipated tech IPO in recent history.

And it looks like it’s far from over.

As a result of the allegations, the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Massachusetts Secretary of State are all looking into the issues surrounding the IPO.

There’s also chatter that the Senate Banking Committee is looking into the matter. Although it’s in a preliminary stage, I confirmed as much: The SBC is holding staff briefings with Facebook, regulators and other stakeholders, a Democratic Senate Banking Committee aide told AllThingsD.

Morgan Stanley issued a statement on Tuesday in response to the agencies’ inquiries, claiming that it “followed the same procedures for the Facebook offering that it follows for all IPOs.” The procedures, Morgan Stanley claimed, are within the realm of compliance with regulatory rules. And after Facebook revised its S-1 on May 9, Morgan Stanley said, “a significant number of research analysts in the syndicate who were participating in investor education” — including Morgan Stanley — “reduced their earnings views to reflect their estimate of the impact of the new information. These revised views were taken into account in the pricing of the IPO.”

Finally, in the first of what will no doubt be many to come, at least two separate class-action lawsuits have been filed against Facebook on behalf of investors who lost money because of Facebook’s failed IPO. One of the suits, of course, names co-founder and CEO Mark Zuckerberg as a defendant.

Inevitable lawsuits aside, the larger question is who inside Facebook might take the fall. Eyes are beginning to land on David Ebersman, Facebook’s CFO, the former Genentech CFO who came to the company with high praise from those who knew him, both inside and outside of the company.

As Kara Swisher had previously reported in January, Ebersman played a key role in the lead-up to Facebook’s IPO, taking a firm pole position in dealing with underwriters at Morgan Stanley, JPMorgan Chase and Goldman Sachs at every step of the process.

Part of choosing Ebersman, sources told Swisher earlier this year, was to ensure that the IPO would be pulled off in as low-key a way as was possible; it was one of Zuckerberg’s main tenets, especially in light of the disastrous Groupon IPO.

While many are calling him the likely fall guy, sources close to the situation said his job is not now at risk and pushing him out over this would be a highly unlikely move for Facebook.

But now the IPO has come and gone, and he and the company’s IPO remain anything but low key. S&P Capital IQ initiated Facebook coverage with a “sell” opinion on Wednesday morning, setting a 12-month target price at $31. That’s far from the investor fervor leading up to Facebook’s Nasdaq debut.

In other words: Fasten your seatbelts, as it could be a bumpy week.

As AllThingsD reported several days ago they would, Yahoo and Alibaba Group have finally reached an agreement for the Silicon Valley Internet giant to sell back half its stake in the Chinese Web company in a $7 billion deal.

The taxable shares sale agreement, which is now being approved by both boards, is part of a larger and more complex arrangement, which will also include a multibillion-dollar stock buyback by Yahoo and an eventual IPO of Alibaba.

And, perhaps most importantly, it will bring to an end what could be the longest running global cat fight in Internet history, in which the long-time partners have bickered over the terms of their relationship for years now.

It has mostly been over how they could get to the transaction they should be announcing later tonight (or morning in Hong Kong, which it is there now). While it could fall apart at the last minute, that is highly unlikely at this point.

(Update: The Yahoo board has approved the deal unanimously, said sources, so it is done done.)

(Update 2: Yahoo and Alibaba both confirmed the deal in a joint press release, which is below.)

Thus, after many failed attempts to strike a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed, the pair have finally settled on a taxable deal, which could net Yahoo upwards of $4 billion.

The transaction values Alibaba at $35 billion and is subject to a number of funding issues that could change the value of the deal.

But here is the overall situation, as I previously reported:

Yahoo is set to 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 just $1 billion in 2005 — the company will use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while, so this could help boost shares significantly.

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

As part of the deal, sources said, medium-term incentives have been put in place for Alibaba to move forward with a public offering, which sources stressed is without 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.

Although there are no plans to go public as yet, the IPO incentive revolves around several terms, including the right to buy back half the remaining stake, which expires in December of 2015. As I previously reported, Yahoo will be required to sell back half of the 20 percent remaining stake upon IPO and the other half after that if Alibaba goes public in the time frame agreed to.

Lastly, the Alibaba voting rights for both Yahoo and SoftBank are much diminished in the new deal, according to sources, to under 50 percent.

Translation: Alibaba CEO Jack Ma is now in the driver’s seat completely.

Once close, the pair have been wrangling over the large Yahoo ownership, which 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.

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

He owns almost 6 percent of Yahoo.

The final decision to approve the deal was in the hands of a very new board of Yahoo, which has been drastically reshaped in recent weeks. It met to decide on the deal this weekend.

While the deal with Alibaba is finally 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.

It also puts Yahoo in a unique situation, in which it must sink or swim more largely based on the value of its troubled core business.

That could mean a lot of things, including the eventual sale of the company, whose most lucrative asset recently — its Alibaba holding — will matter much less.

As soon as I get the press release, I will post it here, but no one is commenting, despite the inevitable happy ending to this long-running story.

And here’s the press release, finally:

Yahoo! and Alibaba Reach Agreement on Comprehensive Plan for Alibaba Stake Agreement Realizes Significant Value, Immediate Liquidity and Path to Future Monetization

Yahoo! Board Increases Share Repurchase Plan by US$5 Billion

May 20, 2012 — Sunnyvale, California and Hangzhou, China – Yahoo! Inc. (NASDAQ: YHOO) and Alibaba Group Holding Limited today announced they have entered into a definitive agreement for a staged and comprehensive value realization plan for Yahoo!’s stake in Alibaba.

The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock.

The agreement also establishes a framework for Yahoo! to monetize its remaining interest in Alibaba in stages. First, at the time of an initial public offering (IPO) of Alibaba in the future, Alibaba will be required either to repurchase one-quarter of Yahoo!’s current stake at the IPO price or allow Yahoo! to sell those shares in the IPO. Second, following such an IPO, Yahoo! has registration rights and rights to marketing support from Alibaba to enable Yahoo! to dispose of its remaining shares, at times of Yahoo!’s choosing following a customary lock-up period.

This agreement is a result of extensive discussions between the two parties and a comprehensive review of both taxable and tax-efficient alternatives. Yahoo! and Alibaba believe this agreement to be the best path to align incentives and maximize value for shareholders of both companies and it paves the way for Alibaba to achieve future public market liquidity for all of Alibaba’s shareholders. For Yahoo!, the agreement provides for a staged exit over time, balancing near-term liquidity and return of cash to shareholders with the opportunity to participate in future value appreciation of Alibaba.

“Today’s agreement provides clarity for our shareholders on a substantial component of Yahoo!’s value and reaffirms the significance of our relationship with Alibaba,” said Ross Levinsohn, Interim CEO of Yahoo!. “We look forward to continued collaboration with the Alibaba team on business initiatives as we explore joint opportunities for growth and benefit from Alibaba’s future. I want to thank Jack Ma, Joe Tsai and the Alibaba team, as well as Tim Morse, Michael Callahan and our Yahoo! team for their dedication in achieving this successful outcome.”

“This transaction opens a new chapter in our relationship with Yahoo!,” said Jack Ma, Chairman and Chief Executive Officer of Alibaba Group. “I look forward to working with Ross Levinsohn and the Yahoo! team as Alibaba builds China’s leading e-commerce company. Yahoo!’s global audience reach will provide attractive partnership opportunities for Alibaba to explore markets outside of China. The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.”

“We look forward to delivering the proceeds of the near-term transaction to our shareholders, and to the further enhancement of value and the additional monetization in the future that this agreement enables,” said Timothy R. Morse, Executive Vice President and Chief Financial Officer of Yahoo!.

In addition to the share repurchase, the companies have also agreed to amend their existing technology and intellectual property licensing agreement. Among other things, this amendment will result in Yahoo! granting Alibaba a transitional license to continue to operate Yahoo! China under the Yahoo! brand for up to four years, while restrictions on Yahoo!’s ability to make other investments in China will be terminated. Alibaba will make an upfront lump sum royalty payment of US$550 million to Yahoo! and continuing royalty payments for up to four years. In addition, Alibaba will license certain patents to Yahoo!. Upon closing of the repurchase transaction, the Alibaba shareholders’ agreement will be amended so that the parties’ respective rights will be commensurate with the parties’ post-closing level of ownership in Alibaba. Yahoo! will continue to be represented on Alibaba’s board of directors with the right to appoint one of four existing directors.

Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction. While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction.

The transaction is subject to customary closing conditions. Alibaba will be required to close the repurchase with respect to at least one-quarter of Yahoo!’s current stake in Alibaba regardless of the amount of financing raised, and up to one-half of Yahoo!’s current stake if it obtains the requisite financing. Alibaba intends to finance the repurchase through a combination of its own cash resources, debt, equity and equity-linked financing. The transaction is expected to close within approximately six months.

UBS Investment Bank acted as lead financial advisor to Yahoo! and Allen & Company LLC and Goldman Sachs & Co. also served as financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP acted as lead legal counsel to Yahoo! and Weil, Gotshal & Manges LLP also acted as legal counsel. Munger, Tolles, & Olson LLP acted as legal counsel to the Yahoo! Board of Directors. Credit Suisse acted as lead financial advisor to Alibaba and Wachtell, Lipton, Rosen & Katz acted as lead legal counsel to Alibaba. Freshfields Bruckhaus Deringer LLP acted as counsel to Alibaba on certain financing and Hong Kong legal matters and Fenwick & West LLP acted as counsel to Alibaba on intellectual property matters.

It was a tepid debut for one of the largest and most closely watched initial public offerings. More than 30 brokerages and banks were involved in the offering, which saw a nearly 571 million shares change hands on Friday — a record for a stock debut.

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The review by the Financial Industry Regulatory Authority, or Finra, is at an early stage, the person said. It follows unusually heavy trading in shares of the online-coupon company in the run-up to its release of strong financial results.

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It’s here.

Facebook, the 900-million-strong social network that knows more about us than even our closest friends, will become a publicly traded company within the next hour.

Private equity dealmakers will celebrate alongside cadres of newly minted millionaire engineers in Menlo Park, Calif., while retail investors the world around will clamor amongst themselves, tooth and claw, for the chance to share in a mere fraction of the riches.

And yet, after a year of watching tech IPOs — Zynga, Groupon, LinkedIn, Yelp — let’s all admit that it kind of borders on anticlimactic.

We know we’ll most likely see a nice pop in the share price after Mark Zuckerberg rings in the Nasdaq bell remotely from Facebook’s spanking-new HQ in Silicon Valley.

From there, like a floating jump ball up for grabs, the social networking giant’s closing stock price is anyone’s guess — and by the looks of my Twitter feed, everyone’s guess. There’s already a site dedicated to tracking what price Facebook’s stock will settle at when the markets close, a page peppered with numbers posited by the digital elite.

Today is about the money. And yet it is also more than just sitting and watching the ticker tape roll by. For the first time, Zuckerberg’s vision of making the world a more open place will finally apply to his own company.

We got our first taste of it when the company filed its S-1. It’s where we saw that more than half of Facebook’s 900 million monthly visitors are visiting the site via mobile devices, a channel in which the company has yet to figure out a coherent or viable monetization strategy.

We saw that Zuckerberg retains a tight grip on the company’s future — tighter than most CEOs, akin to the likes of Google’s co-founders — holding voting rights on 57.1 percent of Facebook’s mighty class-B shares. He is so tied to his company that he is cited as a risk factor in Facebook’s S-1, of course.

And now we’re witnessing the first defectors from Facebook’s nacent advertising strategy, as with General Motors pulling its $10 million dollars in advertising on Facebook earlier this week, citing it as an ineffective use of the company’s massive marketing budget.

What we’ll soon see is Facebook’s less-pretty public profile, so to speak, with Zuckerberg holding court over earnings calls every quarter, taking heat from investors who expect returns. We’ll be given insight into how the company plans to monetize its different products, and how they actually fare.

Just as Facebook knows so very much about each of us, we, too, will begin to learn a lot more about Facebook.

And yet, through all of this, no matter what grim forecast Wall Street projects, no matter what executive decisions or company road maps the media decries, Zuckerberg’s message is clear — so much so that he made it the poster for the pre-IPO all-night hackathon:

“Stay focused and keep hacking.”

Good luck with that.

(Images: (top) Morin Uwole/Facebook; (bottom) Victor Luu/Facebook)

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.

Apparently the final reassurance analysts and investors were looking for was that the company is indeed still growing.

Despite taking several measures over the past couple of months in the wake of an awkward fourth-quarter earnings revision, Groupon has not been able to regain investor confidence and has watched its stock price slowly dwindle to half its IPO price of $20 a share.

Today, the company’s stock opened at $14.93 a share before settling at $12.17 at the close, up 3.7 percent.

At least two analysts were bullish on yesterday’s first-quarter results, upgrading Groupon’s stock to a buy.

Sterne Agee upgraded Groupon from neutral to a buy and set a price target of $20. In a note to investors, analysts Arvind Bhatia and Brett Strauser wrote that the strong first quarter “alleviated several concerns,” including Groupon’s ability to have operating leverage. An additional plus, they wrote, is that the stock is trading so far below its IPO price.

Likewise, Mark Mahaney from Citi wrote that “we’ll grab this deal,” and upgraded the stock to a buy with a $22 price target. Four factors drove his decision: 33 percent quarter-over-quarter revenue growth in North America, international margins turning positive for the first time, marketing spending declining for the fourth quarter in a row and the very low stock price.

As my colleague Ina Fried reported yesterday, Groupon’s first-quarter revenues topped the company’s prior forecast as well as analyst expectations, totaling $559.3 million during the period, compared with $295.5 million a year ago. Operating income was $39.6 million, including an expense of $28 million related to non-cash stock-based compensation.

The strong results helped overshadow the company’s previous follies, which included the financial revision in the fourth quarter due to higher than expected holiday returns and the disclosure that auditors had determined it had a material weakness in its financial processes.

In a conference call with analysts, Groupon’s CFO Jason Child, who is under fire over the gaffes, said: “There’s some specific tasks that we have implemented and are going to implement. We’ve certainly added some people, and have some more work there. We have 48 countries and so we do have accounting personnel and controllers in every single country.”

In addition, Groupon has taken several precautions over the past couple of months to ensure the mishaps won’t happen again.

For example, Groupon has hired Kal Raman to build out the company’s internal controls and processes as the SVP of Americas. He previously held executive roles at Amazon, eBay and Drugstore.com. Groupon also nominated two new members with accounting prowess to the board and has been working on its financial controls.

Child said that since being tripped by holiday returns, the company has implemented a more granular statistical model that maps returns on a weekly basis.

“From a process standpoint we are in good shape, and there’s some technology that is especially helpful with a company like ours,” he said. “We made a lot of progress this quarter, and will make a lot of progress next quarter, and hopefully in the next quarter or two, we’ve done all the steps necessary.”

Groupon’s auditors won’t review whether the company has rectified its financial processes until the end of the year, so even if the company moves faster the label will remain.

In a recent letter to shareholders, Groupon’s CEO Andrew Mason said he did not have regrets on moving too fast.

“Although there are risks in moving too fast, companies often don’t survive long enough to apologize for moving too slow,” Mason writes. “Perhaps more importantly, by moving quickly, we reached a scale that has helped us solidify our market leadership, and accumulated data that is enabling our future and helping us continuously improve the experience of our customers.”

Stern Agee analyst Arvind Bhatia initiated coverage on Facebook shares on Monday morning with a “buy” rating, setting a price target at $46 for the next 12 months. Bhatia’s take comes on the heels of a similar, though informal, coverage note issued to media last Friday from Wedbush Securities, where the firm targeted Facebook’s share price at $44.

Both targets are set squarely above Facebook’s estimated share price range of $28 to $35, and would value the company at close to $100 billion.

Bhatia’s report cites Facebook’s upheaval of the online ad industry, a harbinger of change similar to the likes of Google almost eight years previous. Taking into account Facebook’s massive 900 million user reach, steadily growing average revenue per user numbers and the company’s high — though as yet untested — hopes for mobile monetization, Bhatia’s outlook on the company is bullish.

Though some say it’s not just about ads. “If you look further into the future, I believe they want to compete directly with the likes of Google, Amazon, Apple, companies with diverse product portfolios,” Gartner Research VP Brian Blau told AllThingsD in an interview. “They have the users, and they’re doing well with advertising, but they just don’t have all the products that its other competitors do. At least, not yet.”

The fervor for Facebook’s stock is at an all-time high in light of the company kicking off its roadshow to potential investors this week, with Zuckerberg and CFO David Ebersman making pitches in person.

Though it doesn’t seem like investors need much convincing; the roadshow festivities began midday on Monday at the Sheraton Hotel in Manhattan, with more than 500 investors and analysts flooding in to get a peek at Zuck’s performance. An onlooker said the CEO looked “likeable and affable,” according to an article in The Wall Street Journal.

And no, there was no half-windsor around Zuck’s neck — he made the pitch in his trademark hoodie.

Since the company’s last earnings release in February, the videogame publisher’s stock has fallen 20 percent, and on Friday, it tumbled another 3.5 percent, or 55 cents, to trade at $15.12 a share.

In general, the market for game stocks are teeter-tottering, as the industry works through a massive transition from packaged goods sold at retail to digital games that are given away for free and distributed through Apple and Facebook.

Even pure plays like Zynga — which are focusing exclusively on mobile and social — aren’t immune, as investors question the free-to-play model and the dependence on third-party platforms. Zynga’s stock is off almost 20 percent since its IPO in December.

This afternoon, analysts are expecting EA to exceed the company’s internal guidance by earning 16 cents a share on revenues of $960 million. EA’s own estimates are calling for non-GAAP earnings of 10 to 20 cents a share on revenues of $925 to $975 million.

As a sign of the times, Wedbush analyst Michael Pachter revised his expectations down by $5 million due to U.K. games retailer Game Group going bankrupt during the quarter.

Otherwise, Pachter said that he’s expecting the company to report at the high end of the guidance, thanks to strong sales of Mass Effect 3, which went on sale during the quarter, and to a solid performance by the company’s online game, Star Wars: The Old Republic.

Other console titles shipped during the quarter include FIFA Street and Tiger Woods PGA Tour 13.

According to sources close to the situation, Facebook is anticipating getting approval from government regulators to officially distribute its S-1 public offering prospectus to investors within days, which would mean its road show could begin as early as next week.

As I reported back in January, the social networking giant is expected to go public in the second or third week of May, a timeline (get it?) which currently appears to be on track.

In addition — although some have speculated that its famous CEO and co-founder Mark Zuckerberg might not take a “hands-on” role in the high-profile process, having missed one pre-IPO meeting with Wall Street analysts and bankers (can you blame him?) — sources said he would be appearing before potential shareholders, and would be present at key meetings to help sell the company to them.

Of course, he will — although there was much speculation that the Silicon Valley superstar would bow out of any of the hubbub around the huge IPO, and that bankers were practically begging him to appear, sources said Zuckerberg is too key to all aspects of its business not to appear.

(No word as yet on whether he will don a tie, as he sometimes does, or if his usual hoodie will be Zuckerberg’s outfit of choice — although his sartorial choices on the road show are sure to get excessive media scrutiny.)

“Facebook is Mark Zuckerberg and Mark Zuckerberg is Facebook,” said one person with knowledge of the situation. “He’ll do his job as CEO, as he always does.”

Indeed, although he is often portrayed as shy and not a fan of the limelight, Zuckerberg has always stepped up — and rather enthusiastically — when a public appearance is needed, whether in times of trouble or touting for the eight-year-old company.

This is a touting-Facebook moment, of course, as it seeks to raise up to $10 billion in a blockbuster offering that could value the company at $75 billion or more. Filed in February, that will make it the biggest Internet IPO ever.

Also expected to play key roles in the road show are CFO David Ebersman and COO Sheryl Sandberg, as well as other top Facebook execs.

Whether they all can rev up the jets and get going on the road show depends on the Securities and Exchange Commission finally declaring Facebook’s preliminary prospectus of its business and finances “effective” or in legal compliance.

Facebook has updated the initial filing several times, with new financials as well as information about its purchase of photo-sharing site Instagram and its ever-nasty patent battle with Yahoo.

But, overall, the SEC process has been rather smooth for the company, and sources said it appears it will continue that way.

After the road show: A sales process in which investors ask their questions of management and then officially begin to place orders for Facebook stock.

Among the areas of likely concern are that Yahoo patent lawsuit and, most importantly, how Zuckerberg and others characterize the slowing of its explosive revenue growth in its most recent filing update.

Last week, Facebook said its revenue was $1.058 billion, up 46 percent for the year, but down 6 percent from the previous quarter. In the first quarter of 2012, its net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

After the road show, Facebook’s bankers will price the offering — which is widely expected to be massively oversubscribed — and then it will go public on the Nasdaq market, under the “FB” ticker.

The rest, as they say, will presumably be history — or, in fact, the future for Facebook in the public eye.

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.”

According to sources close to the situation, Demand Media was deep into discussions with a private equity firm to complete a deal that would have taken the online content company private, nearing a price that was double its current value.

But Demand abandoned the effort this past week — which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners to purchase the company for a price of up to $1.2 billion. That was due to a number of challenges, including complications related to its financing and the ability to retain executives in its aftermath.

The move on Demand by private investors is perhaps no surprise, and is part of a wider trend related to some Internet companies whose stocks have a depressed value relative to the worth of their assets.

Among companies having been and also being evaluated by private equity firms, whose business it is to turned the undervalued into a goldmine: Yahoo and AOL.

And also Demand, which is now worth only $605 million, a market cap that is off 65 percent since it went public in February 2011. Shares now trade at $7.25 each.

That depressed share price has been due to a number of issues, most especially changes to Google’s search algorithm to improve results. Called Panda, the changes at the search giant — a critical partner of Demand’s — has cut traffic to its major content sites and also called into question its ability to monetize its scaled editorial efforts.

Such a situation is nearly irresistible to PE firms — in this case, Lee, which approached Demand.

Several sources said that the board threw out a hefty number that it assumed would shut down any interest and the pair began talking with an initial offer to take the company private at $11.28 a share.

That equals close to $1 billion for Demand, which also has more than $100 million in cash. But sources said Lee and Demand also discussed the addition of a large loan as part of the ongoing discussions, for possible acquisitions related to a content roll-up strategy it had, which would bring the total up to $1.2 billion.

One source underscored that the board of the Santa Monica, Calif., company had no interest or intention to sell the business, but that the premium was large enough that it engaged.

The deal from Lee, which also included a strategy of splitting up the content arm from Demand’s lucrative domain-registar business.

There were also large cash-out provisions for major shareholders, as well as for CEO and co-founder Richard Rosenblatt.

Thus, the two sides engaged intensely in the last several weeks in crafting an agreement, although the devil would prove to be in the details.

One big issue is that taking Demand private was still a big financial commitment for Lee — which tried to engage some of its limited partners in the transaction — as well as other investors, including Silicon Valley’s Marc Andreessen.

That proved harder than Lee thought, said sources, with some balking at the firm’s ability to make a big enough score on the possible turnaround.

“It was hoped it would be a Skype situation, but there were worries,” said one source, referring to the blockbuster sale of the Internet telephony company by private investors to Microsoft for $8.5 billion last year. That deal was widely considered a PE home run, given the excessive premium paid for it.

Demand’s challenges increasingly worried the firm as it moved forward, sources said, causing it to reevaluate its earlier bid several times.

Also a worry: Retaining major talent, including Rosenblatt and others, after they sold large chunks of their equity.

After Lee asked for more time to complete the financing, Demand ended the talks last week.

Another source, as is typical in these endings, said it was the Lee that walked away (who knows and, really, who cares — both sides were engaged seriously).

One thing was true: “Demand was definitely at the altar, but it did not get to the vows,” said one source.

Another source noted that the board also determined that Demand’s situation was improving, and that new trends are showing that the bottom might be been reached. The company reports its first-quarter earnings on May 8, which is expected to show some traction related to its many challenges.

“There is nothing Lee could do that Demand could not do for itself,” said one person. “So throwing in the towel seemed premature for now.”

Lee declined to comment, as did Demand.

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

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

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

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

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

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

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

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

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

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

The bad news: As everyone who pays any attention to the company knows, the company’s stock got hammered. So Hastings’s Netflix holdings did, too.

His 4.4 percent stake in the company was worth around $437 million at the beginning of 2011, when NFLX was trading at $175. By the end of the year, the stock was worth $69, and Hastings was down to a mere $172 million.

Netflix stock has climbed back a bit and is now at $106, and that puts Hastings back at $265 million. But that news has a flip side, too: Late last year, Netflix gave Hastings a pay cut for 2012 and cut his stock awards for the year in half, to $1.5 million.

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).”

The firm, Millennium Technology Value Partners, paid about $10 million to acquire stock from about a dozen former employees of Facebook, according to people familiar with the matter.

Read the rest of this post on the original site »

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.

Groupon’s restatement is only the latest financial debacle for the company, which had to change the way it accounted for revenue before it went public, as well.

This time it seems investors are less willing to shake off the restatement, and are having a hard time buying that it was a simple miscalculation on the company’s part because of a higher number of returns during the holiday period.

The company said on Friday it had to increase its refund reserves due to offering more higher-priced deals, which are more likely to be refunded by customers.

In midmorning trading, the company’s stock is down $2.17, or 11.8 percent, to $16.20. On Friday, the stock tumbled about 7 percent in after-hours trading.

The change in revenue was significant.

Groupon lowered its fourth-quarter revenue by $14.3 million, and its net income by $22.6 million. The company, which is trying to prove that the daily deals model is sustainable, is now reporting a wider net loss of $64.9 million on revenue totaling $492 million.

On Friday, the company also reported that an independent auditor issued a statement that it had a “material weakness” in its financial controls. It has been working with an accounting firm for several months, and will issue a report on its controls by the end of the year.

Following the restatement, multiple lawyers have issued releases looking for any wrongdoing. Specifically, they are investigating whether Groupon knew about the refund spike or the material weakness when they filed their registration papers and went public.

Mark Mahaney, a Citigroup analyst, said that Groupon’s growth is “extremely impressive,” and that the company has established a clear platform potential. But, he added, “with hyper-growth comes unusual execution/organizational challenges. GRPN management and investors are learning this the hard way.”

Other companies in the daily deals space, like Amazon and Google, have the protection of operating within a larger company, affording them more leeway to make blunders. LivingSocial, which is the second-largest provider, is privately held and has no immediate plans to go public.

Mahaney reaffirmed his “neutral” rating and $24 price point.

In case you’ve missed the sandstorm, Eric Fehrnstrom, a top Romney adviser, said on Wednesday that if Romney wins the GOP nomination, the campaign will “hit a reset button” to take on President Obama in the fall.

Fehrnstrom then added, “It’s almost like an Etch A Sketch. You can kind of shake it up, and we start all over again.”

While Romney’s rivals have pounced on the comment — Newt Gingrich’s camp has even created a SketchyRomney app — Etch A Sketch fans have pounced on the venerable toy, buying it in droves on Amazon.com.

Politico reports that sales of the 1950’s relic shot up more than 2,000 percent on the e-commerce site, while Ohio Art Company, the maker of Etch A Sketch, saw its stock hit a 52-week high yesterday, before closing at $9.65, more than double its Wednesday closing price of $4.

Here at AllThingsD, we say: Why go for the plastic version, when you can play with a digital Etch A Sketch on your mobile appendages?

That’s right: Campaign platforms, errant Twitpics, awkward remarks — all erased with the shake of an iPad.

It’s a politician’s best friend.

For iPhone, there’s Etch A Sketch Premium, from Freeze Tag, Inc., a company that makes casual games for mobile devices and personal computers. It costs just 99 cents (or about 0.000001309367724577594 percent of the $75,609,012 Romney has raised to date).

Unlike the physical Etch A Sketch, users of this app can change the color of the toy’s frame, choose from a color palette when drawing, use predrawn shapes or a background (like Hangman), and share their drawings with friends via email, Facebook or a photo album. As with the original Etch A Sketch, you simply shake it to erase it.

But a smartphone screen is just too small for this kind of app, and the knobs of the Etch A Sketch appear to be cut off at the bottom. You can use your finger to draw, but that seems like Etch A Sketch sacrilege.

Fortunately, there’s an iPad app from the same company. This one costs $2.99, and is the real deal.

The Draw Something addicts out there can share their Etch A Sketch iPad drawings with friends over Wi-Fi. Or, users can draw alone, add photos from a photo album, use colorful stamps, share through Facebook and even access an iPod song library to set sketches to a soundtrack … like, maybe a campaign soundtrack?

For Android devices, there’s a free version of Freeze Tag’s Etch A Sketch with ads; and a 99-cent version without. There’s also the 99-cent Etch-a-Doodle app, which replicates the Etch A Sketch experience.

Those who would rather pay a more visible homage to Etch a Sketch can check out these retro red covers for mobile devices.

And if you’re feeling really ambitious, you can attempt to make a Kinect-a-Sketch, as these guys did, as seen in the video below:

(Photo courtesy of Flickr/The Children’s Museum of Indianapolis)

Details from the press release:

“Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.

Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.”

The money will come from Apple’s domestic cash pile, which allows the company to avoid the heavy tax hit it would face if it “repatriated” its overseas holdings.

My hunch is that CEO Tim Cook and CFO Peter Oppenheimer won’t have a whole lot more to say during their call, but we’ll check in, anyway. You never know! You can listen for yourself at this link, or follow along here for live coverage:

9:07 am: After some technical difficulties, we’re joining the call in progress. CFO Peter Oppenheimer is speaking.

Apple wants to, among other things, attract new investors. The dividend, as already disclosed, will be $2.65. The main intent is to offset the dilution expected from employee RSU.

We will expect first year’s dividend payments to be $10 billion, Oppenheimer says.

Commencing in fiscal year 2013, Apple will begin repurchasing shares, primarily from employee stock grant. Cash use to consume $4 billion in the first fiscal year.

That will eat up $45 billion in domestic cash over three years.

Now open for Q&A:

Barclays asks about the philosophy on dividend growth. He’s wondering if the $2.65 will get higher.

Oppenheimer: We’ll review the payments periodically with the board. Payments will be more than $2 billion a quarter, making it one of the highest dividend payers in the U.S. Still avoiding the tax hit from repatriating cash held outside the U.S. Sensitive issue there.

Barclays analyst is asking a follow-up. Can you reiterate confidence in future product pipeline?

Tim Cook is speaking. We had an incredible growth last quarter of 73 percent, despite the base on the growth being large. The pipeline is full of stuff. Our customers will be incredibly pleased with what they see.

Morgan Stanley question. She’s asking about international cash, almost $100 billion overseas. How does the board think about putting that to us?

Oppenheimer: Today, we’ve got plenty of U.S. cash to invest, pay dividends and buy back shares. Repatriating cash would incur significant taxes. We have expressed our views to Congress and the White House. We think there’s a significant disincentive. He didn’t answer the question, really.

Gene Munster of Piper asks about potential for stock splits.

Cook: We have looked at it. The current information we have would suggest there’s little support that it helps the stock. We are in a unique position, so this is something we continue to look at, and if we thought it were in the best interest of shareholders, we would do it.

Munster: Any color on iPad?

Cook: Record weekend, and we’re thrilled with it.

Goldman Sachs: How do you think about growth in repurchases versus growth in dividends? Which is more important?

Oppenheimer. We remain very confident in what we’re doing. We are squarely focused on achieving our potential in the business. We will continue to assess our plans periodically. Nothing further to say today.

Cross Research: How did you arrive at the numbers you announced today?

Oppenheimer: We opted to go with a hybrid approach after doing a lot of analysis and listening to input we were getting from the shareholders. Emphasis behind the dividend. Most cash is going there. $10 billion in first year is going out in dividends. He keeps repeating the “neutralize dilution from employee RSU.” We also want to maintain sufficient U.S. cash to take advantage of strategic opportunities from time to time.

I totally missed Shannon Cross’s second question.

Cook is speaking about using domestic cash versus overseas cash. Our emphasis will always be on creating innovative products. He says even with all this cash going out the door, the domestic war chest will be big enough to do whatever they need to do. Plus, they see it as good for shareholders.

Oppenheimer says there are 17.7 million RSU (restricted stock units) outstanding.

That’s it! We’re done.