Apple Inc.’s success selling consumer gadgets has pushed its share price above $500, cementing its place as the U.S.’s largest company, with a market capitalization of $475 billion. But its gargantuan size is making it difficult for Wall Street to get a big-picture view of the earnings and margins for other American corporations.

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According to sources close to the situation, the discussions between Yahoo and its Asian partners have hit a potentially deal-breaking impasse over the efficacy of the centerpiece of the complex negotiations — a cash-rich split-off — and several other issues.

Sources said talks have halted for now over an arrangement with China’s Alibaba Group and Japan’s SoftBank, designed to save the Silicon Valley Internet giant over $4 billion in U.S. taxes. The deal values Yahoo’s lucrative stakes in Alibaba and Yahoo Japan at around $17 billion.

Of course, such volatility is part of any complicated negotiation. This one is a doozy, and on a global scale.

Thus, progress could resume at any time and could manifest itself in a different manner, such as a taxable transaction.

Teams from all sides were just in Hong Kong this week in the latest round of discussions, which seems to have spurred the new issues, which include over-valuation.

“Getting to the promised land has been very hard,” said one person close to the situation, noting that there have been several increasingly challenging parts of the deal.

That includes all the frantic machinations around the talks, which have — to be fair — broken down significantly before, including around the holidays.

Those have gotten back on track, but sources on all sides noted there has been a toll as the agreements have gotten more advanced.

“The cumulative effect of all the disagreements of a deal already on the edge has not helped matters,” said one person.

In addition, as I have previously noted, time is brain, and circumstances at Yahoo and in Asian have shifted a great deal since the talks began in the Fall. Yahoo has a new CEO, Scott Thompson, and has just had an important board shake-up, even as the value of its Asian stake has increased.

It is also not clear if the problems are limited to just the part of the deal with Alibaba, or with both partners. But several sources on the Asian side said that Alibaba and SoftBank are aligned closely on completing a joint deal, for which Alibaba has been negotiating loans to complete.

Now, those sources are characterizing the talks as completely stopped, blaming Yahoo negotiators for suddenly shifting course on what they want from the arrangement.

“The cash-rich deal seems dead now,” said one source.

For its part, sources close to Yahoo said that it has not walked away from discussions, noting this might be a ploy on the part of its Asian partners, although they did acknowledge that there have been increasing difficulties coming to an agreement.

Still, they stressed that Yahoo was committed to trying to do some sort of deal, and the latest problems might only signal a temporary retrenchment. Yahoo is likely to make some sort of statement on the issue soon.

The collapse of talks is still sudden, since negotiations had been moving forward, if glacially, with definitive agreements in draft and contemplation of possible properties to include in the deal. That’s because the cash-rich split-off requires part of the agreement be made up of operating assets.

As you can see here, in a Wall Street Journal chart, it’s a pretty complicated deal:

And, in his goodbye letter upon announcing his pending departure as chairman of Yahoo, while publicly acknowledging them, Roy Bostock did note the possibility of the talks not working out because of that.

“We are also in active discussions with our partners in Asia regarding the possibility of restructuring our holdings in Alibaba Group and Yahoo! Japan. The complexity and unique nature of these transactions is significant. While we continue to devote significant resources to these discussions, we are not in a position at this time to provide further detail or to provide assurance that any transaction will be achieved.”

That will likely be a disappointment to investors, who have bid up shares in anticipation of such a deal occurring. Yahoo’s stock is now trading in the $16 range, well up from earlier this year.

(Update: Yahoo shares dropped significantly since my report, down more than 5 percent now, with Wall Street giving any end to the talks a thumbs-down.)

The situation could now land on the already heavy plate of Yahoo’s new leader, Thompson, who has been dealing with a number of pressing issues at the company since he arrived last month.

Welcome to the dollhouse, Scott!

More to come, of course.

And, for the record, no comments all around. (But I tried!)

In one of the odder things to happen in my journalism career, I was forwarded a flash analyst report by Wall Street’s Macquarie Capital on the news that AllThingsD.com broke yesterday (and foreshadowed before) about the shakeup of Yahoo’s board.

I cover the Silicon Valley Internet giant closely, obviously, and have had a lot of scoops on its machinations over the years. This was simply the latest, and turned out to be on on target (Phew!).

While that is presumably my job as a reporter, it was apparently of “concern” to Macquarie’s analyst.

Said the report:

One final note: it continues to concern us that one particular journalist, Kara Swisher, frequently seems to be privy to such precise information regarding YHOO. On January 9, almost a month prior to the actual release from the company, Kara wrote, “While some departures seem most obvious — longtime board members Vyomesh Joshi, Arthur Kern and Gary Wilson — the really interesting part will be the possible exit of Chairman Roy Bostock.” Yesterday she wrote, “expect a change in the Yahoo board composition, too, as early as this week.” And today at 3:38pm EST, she posted a story that “Yahoo will announce the impending departure of four of its longtime board members, including chairman Roy Bostock. The others headed out the door are Hewlett-Packard exec Vyomesh Joshi, Gary Wilson and Arthur Kern.” While we give much credit to Kara for her ability to obtain this information, we believe it reflects very poorly on YHOO’s ability to maneuver effectively outside the public spotlight.

While I appreciate the fist-bump, it’s unclear why it’s concerning for shareholders — whom these reports are created for — to know this information before Yahoo deigned to release the news or spoonfeeds any other information at investor events. After all, fair, complete and accurate information from anywhere in the tech news media could help them make better investment decisions.

And Yahoo also always operates in the public spotlight, even when it is outside it, as does every tech company. That’s especially true these days, in the vastly changed media environment, in which news moves faster and with more immediate impact.

In fact, I’m concerned that worrywart Wall Street doesn’t grok this — but I’m definitely not surprised, either.

AOL said it earned 23 cents a share for the fourth quarter on revenue of $576.8 million, compared to 60 cents per share on $596 million in the same quarter a year ago.

Wall Street analysts had expected the New York-based Internet company to earn 16 to 17 cents on revenue of $572 million.

While the results are still down significantly from a year ago, AOL’s stock has been rising — gaining more than 25 percent in the quarter — since CEO Tim Armstrong has improved advertising revenue.

That was up 10 percent in the quarter, the third consecutive quarterly increase.

Subscription revenue from its access business continued to fall — down 18 percent — although that was the lowest rate of decline in five years.

AOL also noted that it had encouraging improvements in certain areas of its business:

Video: AOL grew its videos, video views, video ad impressions and revenue at double-digit rates.

Brand Advertising: Project Devil advertisers, impressions and revenue grew at double-digit rates.

Local: Patch grew traffic, advertisers and ad impressions more than 100% year over year.

Traffic: Consumer usage was flat to Q3 2011, as growth in the Huffington Post Media Group sites offset declines at MapQuest and AIM.

But read for yourself — here are all kinds of charts and graphs from AOL:

AOL_Q4_2011_Earnings Release

AOL_Q4_2011_Earnings_Presentation

AOL_Q4_2011_Trending_Schedules

Yahoo will report its fourth quarter earnings tomorrow, after the markets close, which most expect to be lackluster compared to a year ago.

To call this report a surprise would be, well, wrong.

In fact, it will be the 13th quarter in which the Silicon Valley Internet giant has done worse that the previous year. (This has happened as Internet advertising has boomed for sites like Google and Facebook, as a point of reference.)

Welcome aboard, new CEO Scott Thompson! Now, what are you going to do about it?

Probably cut costs first, including staff, and try to quickly figure out an all-new, this-time-it’ll-take strategery about what to do to turnaround the much beleaguered Yahoo.

But, first, the depressing quarter to deliver again.

The estimates for that weak performance have a range, but the consensus of analysts is expecting revenue to be $1.19 billion on profits of 23 to 24 cents. If Yahoo has managed to rein in costs more than expected, some analysts are hoping for a slightly better report.

Still, all the indications are for more negative signs in user engagement, search share, display advertising stats and more.

Thus, we await the light at the end of the tunnel.

As Citigroup’s Mark Mahaney noted in his cheat-sheet analysis:

“Valuation remains intriguing, but we’re still waiting for convincing Top-Line Turnaround Story Proof. With new CEO Scott Thompson, we believe YHOO will be another wait-and-see turn-around story.”

Of course, much of the action is taking place elsewhere, with the company ferreting away at the deal to sell off a big stake in Yahoo’s Asian assets and also subtracting and adding new board members.

But tomorrow, it’s once more unto the Wall Street breach, dear friends, or close the wall up with our purple dread.

Until the results are in, here’s a recent video I did for WSJ.com’s online Digits show on the possible layoffs at Yahoo:

According to multiple sources, the long-anticipated public offering of Facebook is now likely to come in the second or third week of May.

That means that the company must file its IPO documents within the next month, given that the review by the Securities and Exchange Commission usually takes about three to four months.

That’s if there are no issues, of course, such as a turbulent market or thornier-than-usual questions from regulators that require amending the filing.

Groupon, for example, filed for its IPO in early June, but did not go public until five months later in November.

The usual caveat on the late-May timing (even though I called 143 people on this one): This IPO planning could all change, in a New York minute, to another month.

In any case, the Facebook IPO is expected to be one of the largest Web offerings ever — with some reports saying the company will be raising $10 billion on a $100 billion valuation. (The valuation and raise, sources tell me, will be much lower.)

That amount is presumably to match its huge consumer growth and revenue explosion. Users now number 800 million — a figure that is likely to hit one billion this year. And revenue, which was reportedly close to $4 billion in 2011, is expected to be higher by another third in 2012.

Facebook will need such oomph if it is to impress investors, although the social networking site’s leadership is still warning that its focus is products over dollars.

In an interview with The Wall Street Journal last week, for example, co-founder and CEO Mark Zuckerberg hedged the point, even as he sang his same familiar strategic tune of the last few years.

“The thing to take away isn’t that we don’t care [about business]. People for years were asking me why aren’t we trying to make more money,” he said. “I would say I’m trying to build a business for the long term and it was clearly the right strategy.”

While admirably I’ll-row-my-way in tone, Zuckerberg needs a public offering heft more than ever, as Facebook’s battles with rivals — most especially Google — escalate.

Just last week, the monocratically-inclined search giant ham-handedly shoved its own social networking service, Google+, into its results, in a move that could severely disadvantage Facebook.

Thus, into the Wall Street breach, to get a giant pile of dough to fight back!

But, unlike Google’s more kookified 2004 IPO, sources said Facebook’s is probably going to hew to a more traditional offering script.

That is likely to include a hefty consortium of irksome investment bankers — think firms like Goldman Sachs and Morgan Stanley on top of the filings, and a spate of smaller ones (Allen & Co.) below, and you have the approximately accurate idea.

And, while shot-caller-in-chief Zuckerberg will be the one key voice in the IPO, the man to watch has been and will be CFO David Ebersman.

The longtime Genentech exec, who came to Facebook in 2009, has been doing all the heavy lifting in preparation for the IPO, said sources, and will continue to do so.

Facebook declined to comment (but I would too, if I were them).

It’s 2012 and it’s time for a brand news obsession for me besides the mishegas of Yahoo — and the winner is: Facebook’s upcoming IPO.

Thus, I shall endeavor to scoop all deets great and small about the social networking site’s moving on up to a deluxe public company in the Wall Street sky, which is expected in the spring of this year.

From bankers battling for purchase to who’s selling what to the delightful back and forth with regulators to Google’s lobbing the inevitable screaming meanies at its rival during Facebook’s quiet period, this is going to be a good one.

And CEO and Co-founder Mark Zuckerberg — and his hoodie — are back in the brightest of spotlights!

Speaking of the need for PR, one of the unsung but critical parts of any company’s public offering process is the hiring of an outside communications firm to handle the deluge of media, rumors and other breathless attention Facebook is sure to get.

It’s a highly specific job, given the reporters a company will be dealing with — in this case, sharp-elbowed Wall Street reporters — are usually different than the ones the Silicon Valley start-up has mostly dealt with (the geeks!).

And the expected winner of that thankless job is likely to go to the Brunswick Group, which describes itself as an “international corporate communications partnership that helps businesses and other organizations address critical communications challenges.”

In other words: Will be putting out the endless wildfires sure to rage around tech’s hottest IPO since Google.

Brunswick is among a small group of high-powered strategic communications firms that compete for such high-profile IPO jobs, as well as mergers and acquisitions and other corporate battling.

Others include Sard Verbinnen & Co. (it has worked for Groupon board and Alibaba Group); Joele Frank, Wilkinson Brimmer Katcher (it has toiled for Hewlett-Packard) and Kekst and Company (now cat-wrangling the Yahoo drama).

It’s probably not a surprise that Brunswick won the deal, since it has worked with Facebook in the past, including on its controversial private offering with Goldman Sachs a year ago.

No surprise, everyone declined comment.

Thus, let the Hunger, oops, PR games begin!

The company’s stock dipped below $9 a share, and by midday, shares had fallen 29 cents to $8.90, nearing its all-time low of $8.75 a share.

Just last month, the largest social games company successfully sold 100 million shares at $10 apiece to raise $1 billion. On its second day of trading, the company’s stock  sank to what for now is its low before settling at $9.02 a share.

Since then, it has been trading fairly consistently, and there was no obvious explanation for today’s sell-off.

If anything the stock should be pushing higher on the release of its latest games. Typically, more games translates to more revenue for the company, which is focused on selling virtual goods in the free-to-play model.

This morning, Zynga announced its newest mobile game, a spinoff from its ultra-popular Words With Friends franchise. The game, called Scramble With Friends, challenges players to connect letters to spell as many words as possible before the clock runs out.

The game closely follows yesterday’s launch of Hidden Chronicles, which is the company’s first Facebook game in the popular “hidden objects” category, where players are challenged to find a number of items within a scattered and cluttered scene.

Still, Wall Street apparently isn’t impressed.

Based on intraday trading, the company’s market valuation dropped to $6.2 billion, about two-thirds of its IPO valuation of $10 billion.

Zynga isn’t the only stock market newbie trading lower today.

Groupon, the other hot Internet IPO of 2011, also sank. The company’s shares were down 90 cents, or almost 5 percent, to trade at $17.89.

Confidence in the stock was still reeling from two reports released this week. One surveyed merchants to find out how satisfied they were after running a deal. The other reported that revenues in November were weaker than expected across the entire daily deals industry.

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

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

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

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

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

Here we go!

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

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

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

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

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

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

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

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

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

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

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

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

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

7:09 am Q&A time already.

Congrats from the Wall Street analyst peanut gallery.

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

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

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

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

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

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

Roy — that’s who!

7:15 am: Another analyst asks about margins.

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

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

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

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

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

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

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

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

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

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

Thus:

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

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

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

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

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

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

“It’s a moot point,” he says.

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

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

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

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

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

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

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

He also loves mobile — which Yahoo has largely borked.

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

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

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

Thompson promises that he will be a “sponge.”

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

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

As I reported late last night, Yahoo said it had named PayPal President Scott Thompson as its new CEO. The exec is currently in charge of the large eBay online payments unit.

He’ll start next week, but there are staff conference calls today and also an all-hands meeting on Yahoo’s main Silicon Valley campus (meet at URLs, troops!) tomorrow.

Yahoo shares are down almost three percent on the news so far, as Wall Street has been hoping for a big sale of some sort and not another turnaround.

Yahoo will be holding a 7 am PT press conference about the move and presumably to swan around Thompson.

(Welcome, Scott! I hope you were informed — please do not listen to what co-founder Jerry Yang says on this important issue — that you are supposed to send all internal memos to me! Also, as one of my Twitter followers, Mike Dudas of Google just tweeted: “If Thompson leads companies as well as he grows a moustache, Yahoo made a great CEO choice!!” I concur.)

A Yahoo PR person confirmed the hire very cordially in a phone call early this morning and the Internet giant also put out a press release.

So did I, of a sort, last night. Given I am too tired to rewrite myself, here is what I had reported:

The company fired its last CEO, Carol Bartz, in September, and Yahoo has been run by the board and also by interim CEO Tim Morse, who had previously been its CFO.

After Bartz’s ouster, Yahoo said it was looking at a range of strategic options, including the possible sale of all or part of the company.

That was the focus at first, although Yahoo had simultaneously hired Heidrick & Struggles to look for a new CEO.

The company attracted two partial investment bids from private equity firms, Silver Lake and TPG Capital, but shareholders were unhappy with the low prices of these so-called PIPE — Private Investment in Public Equity — arrangements.

Yahoo then moved to try to strike a tax-advantaged deal with its long disgruntled Asian partners, China’s Alibaba Group and Japan’s SoftBank, to sell back parts of the large stakes it has long owned in Alibaba and Yahoo! Japan.

Those complex negotiations are still ongoing and look promising, which could yield Yahoo billions of dollars in capital to be given to investors, for stock buybacks or to invest in new initiatives.

Since then, the board — long considered one of the more cloddish in tech — has turned its attention to hiring a new CEO, in the hopes of trying once again to revive its flagging fortunes.

Thus, it began looking to hire someone with deep tech experience at a large public consumer Internet company in Silicon Valley.

That narrowed the field, with Yahoo looking at a range of choices with expertise in advertising, technology platforms and more.

There is a lot of that on the deep bench that eBay CEO John Donahoe has assembled at the online commerce giant, including Thompson.

Plus, he is a genuine Internet geek.

According to his eBay bio, Thompson became president of PayPal in early 2008, after serving as its CTO in charge of information technology, product development and architecture.

Before eBay, he worked at Inovant, a subsidiary of Visa formed to oversee global technology for the organization. He was also CIO of Barclays Global Investors and has worked at Coopers and Lybrand on information technology.

And here’s a tasty new wrinkle: Thompson recently “liked” Yahoo on his Facebook page, along with the decidedly more interesting Kickstarter and Splunk.

Again, Scott, thanks for the Facebook tip — I knew the social networking site could come in handy!

(Also, here is an interview I did with him post-announcement.)

And here is Yahoo’s official press release where Yahoo Chairman Roy Bostock says nice stuff about Thompson:

YHOO_News_2012_1_4_General

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

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

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

It’ll surely be happy holidays for billable hours!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The company filed documents with the Securities & Exchange Commission this morning, indicating that it intends to raise between $850 million and $1.15 billion in its public offering.

At the high end of the range, that would translate to roughly $150 million more than it had previously estimated it could raise.

The company is seeking to sell 100 million shares at $8.50 to $10 a share and will reserve 15 million additional shares for extra demand. It expects to trade on the Nasdaq under the ticker ZNGA.

Under the best circumstances, the company will be valued at nearly $7 billion based on 699.3 million shares outstanding. That falls below some of the rumored expectations that have been floating around over the past few weeks.

Still, at that value, it will come close to the public valuation of Electronic Arts, which hovers around $7.8 billion, but falls short of other game publishers, like Activision, which has a value of  $14 billion.

Zynga has made its riches off selling virtual goods in social games on Facebook. Some of its most recognizable titles include FarmVille, CityVille, Poker and Words With Friends.

Virtual goods often allow players to continue to play the game and level-up faster, such as an energy boost. They also can be decorative in nature, like an outfit for an avatar or seeds to plant on a farm. Of the roughly 230 million monthly active users, very few players ever bother making a purchase.

Since the beginning, the company has a very close relationship with Facebook, which has been contentious at times, especially since the platform started collecting a 30 percent tax on all virtual goods sold. More recently, the company has tried to expand to other platforms, including the launch of several games on mobile and Google+. It also has its own online game network in production.

The company’s IPO will be one of the largest tech offerings in recent memory.

In early November, Groupon raised $700 million including overallotments. It had originally sought to raise $750 million. Other recent tech IPOs include Angie’s List, Pandora and LinkedIn.

But some critics think Zynga is rushing its offering before a broad financial collapse. If it waited until reporting fourth-quarter results, it could paint a stronger growth story as it completes the busy holiday period.

The San Francisco company, which was founded in 2007, was named after Founder and CEO Mark Pincus’s dog named Zinga.

In 2010, Zynga recorded a profit of $27.9 million on revenues of $597.5 million. In the first nine months of 2011, it broke even on revenues of $828.9 million.

While its revenues continue to grow, the number of daily active users that play its games has fallen two quarters in a row and some critics question whether the company can keep up its aggressive growth.

In recent weeks, Pincus has come under harsh criticism for his heavy-handed leadership approach. But to his credit, he has overseen rapid growth, including the acquisition of dozens of smaller game studios. Today, his company has 2,500 employees.

At the mid-range of its expectations, Zynga will bring home proceeds of $889.4 million after selling shareholders take their winnings.

The primary purpose of the sale is to increase its visibility in the marketplace and create a market for its stock. Proceeds will go towards working capital, but also $83.6 million will be spent to satisfy tax withholding obligations related to stock of current and former employees. Additionally, it plans to use a portion of the proceeds for charitable causes through its Zynga.org initiative.

As part of the sale, the company will have three classes of shares. Class A stock will have one vote per share; Class B stock will have seven votes; and Class C will have 70 votes.

Pincus owns some Class B shares, and all of the company’s Class C shares. Following the offering, he will control 36.2 percent of the company’s voting power.

As Kara Swisher previously reported Pincus will not sell any shares in the offering.

No other executives have plans to sell stock, either. But a number of the company’s early investors will sell stock, including Institutional Venture Partners, Union Square Ventures, Foundry Venture Capital and Avalon Ventures. Other interesting names that made the list include Google, which will sell 1.7 million shares.

The company’s largest institutional holder, venture capital firm Kleiner Perkins Caufield & Byers, which owns 11 percent of the shares, will not sell any of its stock in the offering either.

What an amazing coincidence.

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

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

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

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

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

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

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

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

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

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

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

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

Hey, it could happen!

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

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

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

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

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

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

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

And anything other than that is just fog.

Demand Media beat Wall Street expectations in the third quarter, posting a loss of five cents a share. Investors had expected it to lose from four to six cents.

Revenue was up 25 percent to $85.1 million, compared to $65.4 million in the same period a year ago. Minus traffic acquisition costs, sales increased 26 percent to $78.1 million from $62.2 million.

The stock of the Santa Monica, Calif., social content company has suffered in the quarter due to worries about its traffic and growth, but it has recently bounced back after hitting all-time lows.

After losing almost nine percent today, in profit-taking ahead of earnings after a recent price surge, Demand shares rose over 17 percent in after-hours trading to $8.30.

Some more details, according to a Demand statement on the Q3 financial results:

Content & Media Revenue increased 27% to $50.7 million, compared with $39.8 million in Q310.

Traffic acquisition costs (TAC), which represent the portion of Content & Media revenue shared with Demand Media partners, of $3.4 million, or 6.7% of Content & Media revenue, compared with $3.2 million, or 7.9% of Content & Media revenue, in Q310.

Content & Media Revenue ex-TAC grew 29% to $47.4 million, from $36.7 million in Q310.

Registrar Revenue increased 20% to $30.7 million compared with $25.5 million in Q310.

In addition to its more high-profile content business, Demand also has a domain registry unit.

“We reported another strong quarter as we continue to build Demand Media’s foundation for long-term growth,” said Richard Rosenblatt, Chairman and CEO of Demand Media in the statement. “The Company is uniquely positioned to deliver data-driven professional content through its robust content publishing platform. We are now in the process of optimizing that platform while increasing our investment in video content and enhancing the quality, engagement and user experience of our sites.”

There will be a conference call at 2 pm PT today, which I will liveblog (as long as it is lively!).

Until then, enjoy the official Q3 earnings press release:

3Q11 Earnings ReleaseFINAL

Just last week, it seemed as if the dangerous riptide had finally turned for Demand Media, the social content company whose stock for the quarter bottomed out in mid-October, in the $5-a-share range.

It has now rebounded to close Friday at $7.76, with a market valuation of just over $651 million — still a far cry from a high of over $27 a share in the last year, but well below the target price of upward of $14 from Wall Street analysts.

That’s why there will be plenty of questions for CEO Richard Rosenblatt in a conference call scheduled for after the Santa Monica, Calif.-based Demand reports its third-quarter earnings, following the close of markets this afternoon.

Analysts are expecting Demand to lose four to six cents a share. Revenue is expected to be up.

One issue sure to be on the docket will be the traffic problems at its flagship eHow site, which stymied Demand in the quarter. The situation caused it to release a statement about the issue, “which the Company believes is temporary and was the result of an internal technical issue. The technical issue has recently been remediated.”

Assume you will hear more on that and other topics, including updates on the cost of its content and the continued impact on Demand of search-algorithm changes at Google, as well as how it is faring in attracting more lucrative advertising.

I will be covering the earnings and the analyst call, so tune in later today for answers.