Archive for May 3rd, 2008

Summary Of Today’s News: Negotiations between Yahoo and Microsoft, widely expected to result in a negotiated deal by Monday, fell apart today. There were a number of statements, all summarized below. Steve Gillmor also convened a special session of the Gillmor Gang at 7 pm to analyze the news - The transcript is still being created, but the recording is now up and live.

Listen to the special Microsoft/Yahoo Gillmor Gang here, with participation from Steve Gillmor, Michael Arrington, Doc Searls, Dan Farber, Dana Gardner, Robert Anderson, and Robert Scoble.

Today’s News (chronological):

  1. Breaking: Microsoft Withdraws Yahoo Bid; Walks Away From Deal: Microsoft withdraws their February 1 offer, won’t go above $33/share and Yahoo wants $37. The post also includes a letter from Microsoft CEO Steve Ballmer to Yahoo CEO Jerry Yang delivered today.
  2. Email From Steve Ballmer To All Microsoft Employees: Leaked email from Steve Ballmer to all Microsoft employees that we got our hands on. He explains the deal news to the troops.
  3. Yahoo’s Tough Week Ahead: Yahoo faces a bleak world next week; look for the stock price to tank. Do they have a backup deal with Google?
  4. Yahoo Responds: “The distraction of Microsoft’s unsolicited proposal now behind us”: Yahoo issues a press release suggesting relief that the pesky Microsoft distraction is behind them.
  5. Optionally, skip all the above and just read CNET’s cartoon summary of today’s happenings:

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Yahoo issued the following press release responding to the breakdown in today’s Microsoft negotiations (interesting that Chairman Roy Bostock is taking center stage here, not CEO Jerry Yang). As we said earlier, this is just the beginning of a very long week for Yahoo.


Yahoo! Issues Statement in Response to Microsoft

SUNNYVALE, Calif., May 03, 2008 (BUSINESS WIRE) — Roy Bostock, Chairman of Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company issued the following statement today in response to Microsoft Corporation’s announcement that it has withdrawn its proposal to acquire Yahoo!:

“We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making. Today, Yahoo! has:

– a refined strategic focus to drive enhanced volume and yield;

– reorganized to focus its efforts on its most promising products and services;

– invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and

– enhanced expense and resource management to support improved profitability.”

Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, “I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users.”

About Yahoo! Inc.

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more information, visit pressroom.yahoo.com.

Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

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Yahoo’s Tough Week Ahead

Written by on Saturday, May 3rd, 2008 in Ajax News.

At around 4:30 California time today news broke that Microsoft has formally withdrawn its offer to acquire Yahoo (see Ballmer’s email to Microsoft employees here).

Among other things, that ends a three month stock party where the market value of Yahoo jumped from about 26.2 billion to nearly $40 billion based on Microsoft’s offer to acquire Yahoo for $31/share on February 1.. That run up included a 7% gain in Yahoo’s stock price on Friday alone, based on market anticipation of a negotiated deal that would be announced on Monday.

That party began the day after Microsoft made an offer to acquire Yahoo for $31/share on February 1.

Here’s what to expect now that Microsoft has withdrawn their bid:

  • Google is still a wild card, and Yahoo may be sitting with them right now to try and iron out a search outsourcing deal. Of course, Yahoo has lost most of their negotiating leverage now that Microsoft is out of the picture.
  • Yahoo shares don’t trade until Monday; however, Yahoo Japan’s shares trade on the Tokyo Stock Market beginning at around 4:30 pm California time on Sunday. Yahoo Japan, which is 40% owned by Yahoo, saw a similar jump in share price around the Microsoft February 1 announcement. How it does tomorrow may be an indication of what will happen to Yahoo on Monday.
  • Yahoo shares will begin trading Monday morning at 7 am EST in off-hours trading. By the time the markets open at 9:30 EST, the fate of Yahoo’s stock will have largely been determined.
  • Look for a barrage of shareholder lawsuits against Yahoo next week.
  • If Yahoo gets down into the teens in stock price, look for private equity firms to start to take interest in the company.

Unless Yahoo pulls a very large rabbit out of a hat prior to trading on Monday, expect their share price to decline significantly. Yahoo has put in place a number of very expensive anti-takeover provisions and employee retention programs that the markets will factor in now that the Microsoft share price crutch has been removed. Also, their Q1 financial results, while above expectations, were not so materially positive as to offset the hit they are going to take.

In a nutshell, Yahoo’s scorched earth strategy worked. Now they have to live with their victory.

Google Wins

Google was the big winner in a Microsoft/Yahoo acquisition attempt, no matter what the outcome. But among the possible outcomes, a broken Yahoo and a frustrated Microsoft almost certainly result in increased market share for Google.

Don’t Count Microsoft Out Just Yet

There’s a reasonable chance that Yahoo tanks this week - really tanks. It’s not inconceivable that Microsoft could come right back to the table with a lower bid than the one they just pulled off the table. Don’t count Microsoft out yet - they may still get their win.

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Email From Steve Ballmer To All Microsoft Employees

Written by on Saturday, May 3rd, 2008 in Ajax News.

The following email was sent to all Microsoft employees from CEO Steve Ballmer at 5:17 pm PDT (see Breaking: Microsoft Withdraws Yahoo Bid; Walks Away From Deal):


From: Steve Ballmer
Date: May 3, 2008 5:17:30 PM PDT
To: “Microsoft - All Employees (QBDG)”
Subject: Withdrawal of Offer to Acquire Yahoo!

This afternoon I sent the attached letter [see update 2 here for letter to Yahoo] to Jerry Yang announcing that Microsoft has withdrawn its proposal to acquire Yahoo. We proposed the deal in the belief that a Microsoft-Yahoo merger would create a combined company with the resources and assets to win in the fast-growing market for advertising and online services.

Although the acquisition of Yahoo would have accelerated our ability to deliver on our strategy in advertising and online services, I remain confident that we can achieve our goals without Yahoo. We have a strategy in place to do so and we will continue to expand on this strategy and accelerate our progress.

Our strategy has three components:

· Deliver on the basics. We will continue to improve search relevance and build out our ad platform.

· Change the game through innovation. We will expand investments in engineering and deliver transformative tools and Web experiences.

· Expand our global scale and focus. We will pursue partnerships and investments to realize the competitive advantages that come with scale.

At the heart of our strategy is a commitment to bring the benefits of competition, choice, and innovation to everyone who uses the Internet—from consumers to content creators to advertisers.

We are 100 percent focused on executing on this strategy and we have made good progress in a very short time. We’ve improved search relevance dramatically, introduced compelling new search verticals, successfully integrated aQuantive, and added nearly 100 new publishers to our ad platform. In the last couple of months we’ve rolled out new versions of key products including Internet Explorer and Silverlight, and introduced new technologies like Live Mesh. We now have over 430 million active users of our Windows Live services worldwide. And we continue to add new technologies with acquisitions such as YaData, which brings leading-edge behavioral targeting technology, and Caligari, which gives us advanced 3D modeling capabilities that will help us continue to improve Virtual Earth.

Ultimately, our goal is to build the industry-leading business in search, online advertising, media, and social networking.

We are absolutely committed to being the leader in each of these areas. Now is the time to do what we have always done best—be tenacious, focus on the long term, innovate, and keep working hard.

I want to thank all of you for your patience during this process and for your dedication and hard work across all of our businesses. We asked that you remain focused on our goals through these cycles, and you have done this extremely well. We are committed to making the investments that will enable us to compete and, ultimately, lead in the online services and advertising businesses. Together, I know we will succeed.

Steve

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Breaking: Microsoft Walks

Written by on Saturday, May 3rd, 2008 in Ajax News.

Microsoft will announce shortly that they have pulled their offer to acquire Yahoo off the table. Talks between the two companies and their advisors broke down earlier today, according to a source with knowledge of the deal, after a failure to come to agreement on price and other terms.

[stay tuned, adding details]

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Morph Monkey Spreads Chlamydia On Facebook

Written by on Saturday, May 3rd, 2008 in Ajax News.

A new app from the American Social Health Association aims to spread Chlamydia on Facebook to raise awareness of the disease.

The Morph Monkey Facebook app looks fairly benign at the start. Users can select pictures of their friends to see what their combined child will look like. As the user goes to morph the images, a pop up box informs them that they’ve given their friend Chlamydia (video demo above).

It’s a clever way of spreading the message on Facebook, but I’m not sure how many people will be impressed by being tricked into running an app that is just a marketing tool with a health message. You can try it out here.

thanks to Michael Seibel for the tip

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Moshi Monsters: Neopets Meets Social Networking

Written by on Saturday, May 3rd, 2008 in Ajax News.

Moshi Monsters, from UK startup Mind Candy officially launched last week with a product that marries the ideas behind Neopets and Tamogotchi with a social network for kids.

Users adopt their own Monster and keep it happy by solving daily puzzles that are sent to each player. Monster owners can interact with their pets by tickling them, playing games, shopping, designing their rooms, and shortly by dressing them up. One core element being promoted for Moshi Monsters is the ability to build an emotional bond between the user and their Monster, which is achieved through flash animation and a complex behavioral engine. Monsters develop their own unique personalities depending on how well, or badly, they’ve been treated.

Players can connect and communicate with others through the Friends Tree, visits to other Monster rooms, Monster blogs, Newsfeeds, and a messaging system. The site is geared towards kids, so online safety is a top priority and the Moshi Monsters team monitors site activity to make sure it remains safe.

Now admittedly it sounds like Neopets or similar services with some social networking thrown in for good measure, but where Moshi Monsters stands out is with $10 million in backing from Index Ventures, Accel Partners, and Newmediaspark. Sure, money should never be the final judgement on any site, but well known VC firms think there’s something here worth investing in. I’m also no judge on what kids like (mine isn’t quite old enough yet to use this) so ultimately you (or your kids if you have any) can be the judge.

TechCrunch UK has more on the Moshi Monsters from when the site first launched in closed beta back in October 2007.

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Urgent Changes Are Needed To Facebook Messaging

Written by on Saturday, May 3rd, 2008 in Ajax News.

Facebook email, which they call messages, is becoming completely unusable as a personal or business productivity tool. When I first joined Facebook it was fine. I only had a few friends on the service, and people didn’t do much with it except to occasionally say hi.

But as Facebook usage has exploded, particularly where I live in the tech world, so has messaging. For many of my contacts Facebook messaging is the only way I stay in contact with them, and it is increasingly becoming the pitch platform of choice. Instead of emailing TechCrunch directly, entrepreneurs will add me as a friend on Facebook, and then send their pitch for a story.

To ignore these messages would kill off a rich source of information. But the product is so feature poor that all I can do is respond as fast as possible to Facebook messages with “please email this to me at TechCrunch” and move on.

For starters, simply opening emails has a serious lag time - Facebook as a whole has slowed down significantly as their growth has exploded, and it is most obvious with messaging. At this point I’ll open the inbox and then open the 5 or 10 top messages in new tabs - and come back later once they’ve loaded and read them.

Other things you can’t do with Facebook email: forward them, put them in folders, tag them, or archive them. You can’t search or sort them at all, so finding old messages is effectively impossible. If you are getting 20 or more new messages a day and can’t constantly watch for new ones, some will drop to the next page before you see them and be lost forever.

Advanced features are also lacking, of course. There is no POP or IMAP access to pull Facebook emails into other applications like Outlook or Mac Mail. And no way to send attachments. Finally, why not simply issue Facebook users a normal email address that they can use to receive outside messages? Users could choose to turn it on or not.

Facebook has made small changes over time to email. In August 2007 the started allowing people to send messages to outside email addresses. And in December 2007 they started forwarding messages in the notifications sent out to your normal email messages (prior to that you had to click on the message link).

But for the most part they’ve left the product static and focused on new products like chat and enhancing the news feed.

What would be ideal is for Facebook to simply add access to email via their API and let third parties build web and desktop mail applicaitons that can sort, search and otherwise manage messages. But that functionality doesn’t exist, and Facebook has shown little tolerance for third party applicaitons that solve user problems in innovative but unauthorized ways.

Something needs to be done, though. Facebook needs to fix email themselves, or allow third parties to do it for them. By “fix I mean add basic features, allow exporting of messages via standard protocols, and issue users a standard Facebook email address to receive outside messages.

I suspect, based on conversations I’ve had with Facebook insiders, that they are working on feature enhancements already. But based on their very closed approach to Facebook chat, it’s clear that they want as much activity and data to stay on their servers as possible. My hope is that they reconsider the approach, and let Facebook emails go free into the wild.

I am clearly a non-standard user of email, and most users won’t have the same level of frustration…yet. But eventually mainstream frustration will equal the levels I’m feeling now. It is far better to address this now, than later.

And…if Facebook got serious about email, they could very easily become a contender in that space in no time. And that may take the wind of out the sails of Yahoo and others trying to build their social networking future around their email products.

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Trackonomics

Written by on Saturday, May 3rd, 2008 in Ajax News.

 

icon for podpress  Standard Podcast [95:39m]: Play Now | Play in Popup | Download

Week Three of The Gillmor Gang on TechCrunch went as well as could be expected. After the reunion cattle call and last week’s Mesh interrogation of David Treadwell, the apparent news shifted back to the denouement of the Microsoft Yahoo acquisition,
now amusingly being called a merger by the Wall Street Journal and the Times.

When Times Bits editor Saul Hansell kicked off the Gang conversation around the advisability of the deal from Ballmer’s perspective, I quickly vectored back to Live Mesh and why it makes the deal make sense. Of course, Microsoft certainly knew about both projects and their timing when they announced the buyout strategy, and few others did. And just as most analysts handicapped the takeover as being about advertising, so too did most view Mesh as a synchronization play.

The latter is like Bill Clinton comparing the Obama campaign to Jesse Jackson’s campaigns, a casual put down by narrowing the focus to the least disruptive aspects of this year’s political fundamentals. Similarly, calling Mesh just another bigco chaining of the previous monopoly to the next one pigeonholes Redmond as the comfortable old shoe of convicted monopolist. In the political world, that’s called framing.

But look at the Yahoo deal in the context of Mesh and a simple but disruptive model emerges. Microsoft must do several hard things with the deal: Use its brute force to acquire the company, and use its openness and transparency to acquire (retain) Yahoo’s customers (I’ll go watch Twitter for a few seconds while you laugh at the idea of Microsoft openness and transparency).

Look, however, at Mesh not as a synchronization technology but as the political renderer for the architectural absorption of Yahoo. The conventional wisdom is that Mesh is Windows only for starters, that the Mac version will come “soon,” that the Web client doesn’t allow provisioning of the system. But what if Silverlight front ends appear this month for various strategic apps? Indeed, Loic Le Meur is already receiving support from Microsoft France for just such a rendering of his Seesmic video tool. Le Meur’s recent acquisition of Twitter rich client Twhirl is next.

What better way to test the sincerity and credibility of Mesh than to ask Microsoft when such Silverlight tools for managing Mesh will appear. If the answer is “we’re working on it,” then the marketplace’s response is “we’re waiting for it.” If Mesh is merely a synchronization grid, why not empower PC, Mac, and Linux machines at one fell swoop to explore the kinds of collaborative net-aware applications that can use a boost for off-line storage, intelligent caching, and richer display?

Yes, this a political request: We’re saying: If you’re in this to achieve trust, lead with it. And if Mesh is much more than synchronization, like say, an elastic mechanism for moving information flows based on user-contracted behavioral signals (gestures) then establishing those relationships at the browser layer would be akin to the classic Web 2.0 eyeball plays.

Today’s most classic such play is Twitter, which has built a hockey stick ramp up out of the most trivial of offerings. But who has married social graph (follow) with search (track) with swarming (XMPP gateways such as the real-time Twitter-to-Gtalk client) so aggressively that the expanding overlapping circles of affinity groups fueled by Track (a special keyword search function of the Gtalk implementation) are already pretty much invulnerable to cloning. Data portability aside, how do you transfer the subtleties of a viral social map from a system in constant use?

Don’t believe me? Who’s going to make us switch away from a real time feed of such high value that if we stop contributing we destroy its value not just for ourselves but for the rest of the network? Why have we not seen significant defections? There have been notorious resignations (Hugh MacLeod) that only underlined the traction by the speed of the return to the fold. And all manner of attacks on the social order of the community, whether personal or political doesn’t matter, and almost impossible to distinguish at that.

Where it took Facebook some 6 months to land in hot water hell with Beacon, Twitter experiences furious storms of battle testing on an hourly basis. Bot attacks are mounting as publishers and PR and PACs nail up exploits and dial them back to the point where they re-submerge below the radar. The nature of follow versus flow dictates a careful measuring of signal vs. noise calculation with every follow, or surrender to search engines which reduce the service down to an after-the-fact snipe hunt for conversations it might have been good to be in if only we knew about them at the time.

That’s why the Track function is the true driver of Twitter’s ongoing power, just as Technorati vanity searches powered the build out of the blogosphere. At any moment, anyone on the planet can signal to one of these hybrid affinity groups that they have a question, an idea, or an answer, harnessing the power of a community of self-selecting, swarming activists looking for the most efficient way to extract value from the infostream.

Tracking goes well beyond search because of the two-way nature of TwitterNet. It’s keyword driven, yes, a search for information swarming around that topic, but it’s more importantly a gesture to other nodes on the network. Tracking Gillmor and NewsGang triangulates not only gestures toward me but toward the content and issues generated by the shows, producing a social graph of real-time conversations that can be entered into, passed along via @messages to other trackers, and expanded over time by follows of the people discovered through this mechanism.

And when Track spam rears its aggressive head to challenge the effectiveness of this network, we’re faced with important decisions on how to preserve the open virality while drawing a line with bad actors who want to shut down the discussion of important issues as the All Rev. Wright All The Time cable networks have done. From this week’s Gang:

Le Meur: I follow the replies to me in public like most people do. It’s very easy to expand that as Steve pointed out. Because you can just start writing more and everyone tracking that will start showing that. For example I have a bot talking to me, I don’t know what it is, it’s kind of stupid but it says ‘hi Loic how are you today,’ you can tell it’s a bot. This is the first versions of spam using this. And I want it filtered. So that’s something we’re thinking about as well. And adding XMPP to it will allow you to filter that. Another way to think about filtering is I’m adding… Scoble are you still there? No he is gone. So he’s always talking about adding those 20,000 people on twitter. Getting one update every second. I added 6000. And it’s great because I can hear everybody talking because that’s what I want, it’s very exciting. But when Steve says something, I want to be notified in a better way. Out of 6000 people there are many people you want to get notified better. That’s something we’re fixing, getting groups of friends. There are many many ideas we can think of and we’re thinking about those.

Canter: Loic, you’ve got the resources and the ability to create parallel systems so that’s how the web works. You don’t rely just upon Twitter. You can have parallel systems with a DNS backbone to connect these infrastructures together so that not all your balls are in Evan Williams’ vise.

Scoble: that’s exactly what Twhirl’s doing. They’ve already accepted Twhirl and Friendfeed. So if Twitter goes down Friendfeed is still there and vice versa. So there’s already some redundancy coming into the infrastructure through these tools that are starting to hook up the various aggregators and messaging systems that are coming out.

Gillmor Gang 05.02.08

Luckily, and fundamentally I believe by design, Twitter has remained open to a free flow of real-time track-enabled data, and so far has not gated this via API licensing or metering constraints. Like Mesh, the only thing that could stop Twitter would be just such a futile effort at “locking down” the service, giving users an incentive to move and vendors the economics to build an alternative. As long as Mesh walks the walk, and Twitter talks the talk, there’s no way to stop them.

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Are You Ready For TomCruise.com? I Sure Am Ready.

Written by on Saturday, May 3rd, 2008 in Ajax News.

Hollywood Newsroom noted that Google ads are now popping up for searches on “Tom Cruise” that say “Official Tom Cruise Site. Stay Tuned for the Official Launch of TomCruise.com. Check it out!” or alternatively “Official Tom Cruise Site. The Countdown is On. TomCruise.com launches May 5th. Get the scoop!” and links to TomCruise.com.

Because it’s a Saturday and I’m interested in Tom Cruise in the same way people are interested in accident scenes as they drive by, I decided to dig a little.

The site currently shows a countdown clock that ends on 9 AM Monday morning (somebody please double check the math for me). The domain name was registered by an attorney, Benita Das, at the Los Angeles law firm Greenberg Glusker Fields Claman & Machtinger. Das is not listed as an attorney on the firm’s directory, but I did find a reference to her back in 2002. Is this one of the law firms that Tom Cruise uses? I have no idea. They do practice entertainment law, though.

The domain was first purchased on November 6, 1996, but very little was done with it until now. The last update to the whois information was April 28, 2008. My guess is that the law firm bought the domain name on Cruise’s behalf. That would explain why the attorney is the registered owner, at least for now.

Just yesterday Cruise was back on the Oprah Winfrey show promising to “strictly divide” talking about his absolutely insane personal causes, and film promotion. Which topic will be the focus on TomCruise.com? Who cares. This is likely the last time I’ll visit the site.

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