All Things Digital

Longtime Microsoft exec Yusuf Mehdi (pictured here) is taking over a big part of Microsoft’s online services portfolio–including marketing, online audience business development and product management for MSN and the search properties.

But Microsoft (MSFT) has yet to name an overall digital head for these online properties, which has been promised by Microsoft CEO Steve Ballmer since the departure of Kevin Johnson in late July.

Mehdi is essentially getting a part of the portfolio of Microsoft SVP Bill Veghte, who will now be primarily focused on Windows and Windows Live business groups.

Mehdi was previously the SVP for strategic partnerships under Johnson.

He is now part of a troika that includes Brian McAndrews, the SVP for the advertiser and publisher solutions group, and Satya Nadella, the SVP who heads engineering for Microsoft’s search, portal and advertising platform group. (Both are pictured here, left to right.)

Who will lead this three-headed beast is still unknown–both Mehdi and McAndrews have been considered the top internal candidates to lead the online properties group, which has been struggling for direction after Microsoft’s failed takeover of Yahoo (YHOO).

Yahoo’s shares have plummeted in recent days, as Wall Street has been hard hit, closing at just below $17 a share today, with a market cap of almost half of what Microsoft’s initial offer was early this year.

To stir things up and catch archrival Google (GOOG), Ballmer has reportedly been trying to recruit a superstar exec from outside the company, including Silicon Valley, to no avail.

Time waits for no man–but Microsoft CEO Steve Ballmer seems to be taking an awful lot of it in picking who will head the software giant’s long-foundering digital efforts.

It has been almost two months since Microsoft said it would find someone to helm the part of the business that was run by former exec Kevin Johnson, who left in July after the software giant’s bid for Yahoo failed.

A decision could come at any time, although Ballmer is reportedly intent on getting exactly the right person for the job.

But, by now, most inside the company had expected him to make the most obvious internal choice of SVP Brian McAndrews, who came to Microsoft (MSFT) via its $6 billion acquisition of aQuantive.

McAndrews now runs Microsoft’s Advertising and Publisher Solutions Group.

Longtime digital SVP of Strategic Partnerships Yusuf Mehdi has been seen as the No. 2 candidate. He could also be part of a team that includes both him and McAndrews.

Many sources have said they expect McAndrews to leave if he is not given the top digital post.

But sources also report that Ballmer remains more intent on hiring someone outside the company, with the idea that such a person could better re-energize Microsoft’s moribund Internet efforts and bring in a fresher perspective.

According to sources, his favored external pick has been former Yahoo (YHOO) COO Dan Rosensweig, who has turned down the offer.

Ballmer has also been interested in former Facebook top exec Owen Van Natta, who might be a dark horse in the race.

In addition, Ballmer has previously queried former AOL head Jon Miller, who was in line to be on the board of Yahoo until he was nixed due to a noncompete agreement with the online service’s owner, Time Warner (TWX). Miller told Ballmer he was not interested in the job.

“Ballmer is burning up the Rolodex and coming up empty,” said one person familiar with Microsoft. “But he is still looking outward.”

Other sources said Ballmer (pictured here) might now be considering a more pure-tech exec for the role, rather than a Web exec.

Microsoft’s culture is more technical than not, and such a leader might have an easier time leading the company’s Web efforts.

Yesterday, Valleywag had an intriguing report that well-regarded former Yahoo tech exec Qi Lu, who was its top search scientist, might be headed to Microsoft.

But Lu would be a more powerful weapon in Microsoft’s fight with archrival Google (GOOG) in the search arena than as the company’s overall digital leader.

Then again, nabbing someone like Li could be part of a larger team Ballmer might be contemplating, made up of both external and internal elements.

Time will tell, of course. How much time, though, is anyone’s guess.

There will be a lot of different reactions to the first of Microsoft’s newest series of commercials, featuring Founder Bill Gates playing straight man to comic Jerry Seinfeld.

Set up as a discount shoe-buying skit, Seinfeld helps Gates purchase a pair called “The Conquistador,” and for some Seinfeldesque reason, it’s churros all around.

Actually, it feels a lot like the frequent and excellent Microsoft internal spoof videos Gates does with various celebs.

I have always liked them a lot and I like this one too, as it is quirkily charming (or is it charmingly quirky?).

But I am not sure the Gates-Seinfeld kibitzing will really get a lot of people talking about Microsoft (MSFT) products, as is the marketing goal.

And they surely are no where near as spot-on as Apple’s famed PC-Mac guys commercials, which are memorable and witty and deliver the message that Apple (AAPL) products are better.

What might be more effective, of course, at least in the Internet arena, is for Microsoft to get off the stick and lay out its next Web strategy clearly, especially in the wake of its failed attempt to acquire Yahoo (YHOO), and name the digital chief it said it planned to.

Several sources with knowledge of the situation expect an internal choice to helm the part of the business that was run by former Microsoft exec Kevin Johnson, who left after the software giant’s bid for Yahoo failed.

Although an external star coming in would be CEO Steve Ballmer’s top choice, I would guess, top internal contenders are Brian McAndrews, who came to the company via its $6 billion aQuantive acquisition, and longtime exec Yusuf Mehdi, who was Johnson’s strategy guy.

(BoomTown votes for a combination of both to make it extra complex!)

In any case, if it is serious about taking on rival Google (GOOG) in the online ad space and becoming at least the No. 2 player in the market, Microsoft has to move sooner than later and definitely much faster and it has a lot of options.

With Yahoo’s stock circling the drain, closing yesterday at $17.75, will Microsoft think about another bid for even a part of the Internet company?

Or will it try, as it claims, to get truly serious about building its business organically with programs like Live Search cashback, a deeper focus on vertical search improvements in places like video, images and mapping, and more content on its MSN sites?

Or should it be aggressively looking around for other properties to purchase to bolster its Web assets, such as the company that owns the Ciao price comparison and online shopping sites in Europe, for which it just forked over $500 million?

Of course, Microsoft will likely keep trying all of these, although I hope not in the muddling way it has behaved for far too long.

Johnson was entirely right in his internally controversial concept that being one of the top players on the Web is key to Microsoft’s future, even more than its lucrative Windows software hegemony.

(If you want to read an interesting take as to why, don’t miss New York Times columnist Joe Nocera’s “Does Windows Still Matter?” post yesterday).

And with Google’s new foray into the browser business this week, Microsoft surely has to be certain that it does not lose in the one place it does dominate.

In other words, Microsoft has a lot of work ahead of it, well beyond amusing us with Gates doing a thankfully hands-free adjustment of his boxer shorts.

In any case, you should see that, so here’s the first Gates-Seinfeld commercial:

BoomTown is back from a seasick cruise vacation in the wilds of Alaska–official sightings: lots of icebergs, 16 glaciers, a passel of jellyfish and starfish, four lumberjacks, three orcas, two seals, one otter, no moose or bears and, yep, one Republican Vice Presidential candidate’s lovely house in Juneau–just in time for school.

Or, more precisely, a little schooling for some of the tech companies that I cover in a mildly obsessive-compulsive manner.

All of them, I predict, are in for a news-filled fall.

That’s right, more Facebook employee hijinks! More BMOC-battling between Microsoft and Google! More Yahoo trying its hardest not to look like so much of a loser (Keep trying, Jerry–release your inner head cheerleader!).

Thus, here is a rundown of what to expect and also what some of those companies need to focus on over the next several months.

Read more »

Once burnt, twice shy?

I suppose that’s the reason Microsoft is not loaded for bear and headed back down to Sunnyvale to make another play for Yahoo right now.

Not even after Jerry Yang orchestrated activist investor Carl Icahn’s defenestration, by inviting him on the board at Yahoo (YHOO), where he will be 100 percent silenced.

Not even after the stranger-than-fiction shareholder vote miscount (oops–we thought no meant yes!).

Not even after Yahoo stock’s consistent flirting-with-the-teens price.

Not even after its second-quarter results made it clear that it’ll be an uphill battle for Yahoo management to achieve the aggressive financial plans outlined when the Internet company was fending off Microsoft’s takeover bid.

So while opportunity is surely knocking for Microsoft (MSFT), especially if it wants to reach its stated goal of competing with Google (GOOG) in the online space, the software giant prefers not to answer the door right now.

Sources close to Microsoft’s thinking say the company is waiting for the right time, when Yahoo’s stock price is even lower and when Wall Street completely gives up on management, to figure out the next move.

Instead of acting, according to sources, and taking more flak for those actions, the whole brain trust up there is taking a breather and biding its time.

(In fact, many top Microsoft execs are on vacation, which is why August is a good time for Yang–who is himself headed to China for the Olympics–not to worry about a hostile attack.)

The strategy? Sitting in the grass–waiting, watching and making plans.

But, in truth, Microsoft cannot really make plans–except for the vague we’ll-keep-coming-and-coming in the online search and display business motto–until it decides the best way to reach its intended goals.

The first order of business, of course, remains the selection of a digital czar, which was promised by Microsoft CEO Steve Ballmer after top exec Kevin Johnson quit unexpectedly several weeks ago.

As BoomTown previously reported, the top inside contender is SVP Brian McAndrews, who came to Microsoft via its pricey $6 billion acquisition of aQuantive.

And Microsoft’s future-of-software guru Ray Ozzie remains a favorite choice of the troops.

But, sources said, Ballmer is still interested in a possible high-profile outsider coming in to shake things up.

The problem is, most such execs see the job for what it is–a potential tar baby that will only muck their careers up and produce no easy victories.

“Who wants the headache?,” said one outside exec who has been contacted by Microsoft. “While there might be upside there, the downside is much more significant.”

Thus, sitting very still for now might, indeed, be Microsoft’s best choice. It certainly is a lot less messy.

One thing is absolutely true: It is Microsoft CEO Steve Ballmer and only Ballmer who knows for sure whom he is most interested in to take over the dicey job of head of the software giant’s long-suffering online services business.

But there is a movement afoot among its developers and other execs at Microsoft (MSFT) to push for Chief Software Architect Ray Ozzie (pictured here), who replaced Founder Bill Gates in the job just over two years ago.

Ozzie’s role at Microsoft has been to think the big thoughts about where computing is going, and he has been integral to the company’s vision of providing “software plus services.”

Read more »

BoomTown was all busy trying to think of execs to replace Yahoo CEO Jerry Yang, as pressure mounts on him to right the troubled Internet company.

But now, Yang’s position feels safer than ever and it’s his nemesis–Microsoft– that needs a new leader for its long-stumbling online services business.

Microsoft (MSFT) was already cracking, according to sources, and had a wish list of internal and external candidates that CEO Steve Ballmer is now considering.

Read more »

BoomTown is flatly fascinated by the rather incredible memo Microsoft CEO Steve Ballmer penned to his troops yesterday, with news of the reorganization of its massive Platforms and Services Division and the departure of its president, Kevin Johnson.

In the memo, in a very rare public airing of its less-clean laundry, Ballmer actually casts Microsoft’s two major rivals, Apple and Google, in a somewhat positive light, while still vowing to best them.

It is not often that Ballmer or even Microsoft Founder Bill Gates mentions either company in public. More to the point, what neither typically does is acknowledge that they do anything right.

But Ballmer did so yesterday in the memo, perhaps a sign that Microsoft (MSFT) realizes it has trouble on its hands and needs to publicly declare tough enemies to pump itself up to fight.

Read more »

Oh, BoomTown loves a delicious irony.

And in this departure of Kevin Johnson, president of Platforms and Services Division, from Microsoft–a big-deal job, let it be said–to become CEO of the network infrastructure company, Juniper Networks, is what my grandmother liked to call a beaut.

Johnson, I might remind you, was the point person on the software giant’s failed takeover bid to acquire Yahoo (YHOO), which rejected him and the rest of the Microsoft (MSFT) team over and over again in a very public fashion.

But who will Johnson’s most immediate Internet neighbor be when he takes up residence, presumably, at Juniper’s Sunnyvale, California, headquarters at 1194 North Mathilda Ave.?

Why that would be Jerry Yang at Yahoo HQ, 701 First Avenue, a mere half-mile away (see the Google map–oops!–below; click on it to make it larger)!

In fact, despite all the wrangling, Johnson and Yang still actually have a great deal of regard for each other, so one hopes the pair can all look forward to long CEO walks and lovely lattes together in the future.

(Kevin, Jerry will be right over with the welcome wagon full of purple and yellow Yahoo swag.)

Here is the full memo Microsoft CEO Steve Ballmer sent out to the troops about the big changes in its organization, including the departure of Platforms and Services Division President Kevin Johnson, in which he addresses Apple, Yahoo, Google and more:

From: Steve Ballmer
Sent: Wednesday, July 23, 2008 4:30 PM
To: Microsoft–All Employees
Subject: FY09 Strategic Update

I also have news about an organizational change and a transition in our Senior Leadership Team.

Read more »

Kevin Johnson (pictured here), the point person for Microsoft’s failed bid to buy Yahoo, is leaving the company to run Juniper Networks.

As the president of its Platforms and Services Division, the smooth Johnson has been trying, without much success, to beef up the software giant’s efforts in the Web space, especially in the online advertising arena.

He and Microsoft have had a little problem with that, largely due to an immovable object called Google.

In an attempt to make an end run around the search behemoth, Johnson led Microsoft’s attempt to take over Yahoo, the #2 player in the search and search advertising space.

The six-month effort, according to many sources at Microsoft, has led to a great deal of unrest at the company, including ire aimed directly at Johnson because of his perceived influence on CEO Steve Ballmer.

That got worse as Microsoft’s various tactics to grab Yahoo and later just its search business have failed again and again.

Read more »

Could Ross Levinsohn and Jon Miller reinvent Yahoo (YHOO)? What about OpenTable’s Jeff Jordan? Or various and sundry Google (GOOG) or Microsoft (MSFT) execs?

It could happen.

That specific scenario of putting someone like the two former Internet execs (they ran Fox Interactive Media and AOL, respectively) in charge of the troubled Web giant is one of the many being bandied about, as Yahoo shares tumble and the company heads toward a potentially ugly annual meeting everyone involved desperately wants to avoid.

In fact, Yahoo’s board and major investors are talking today about various options for the company, including Yahoo’s receptivity to a sweetened deal with Microsoft and also other ways to pull the asset-rich company out of its stock doldrums.

It is not likely to be a very chummy meeting, of course, considering Yahoo’s stock (see this depressing chart to the right) has been drifting inexorably downward with nary a lifesaver in sight.

Yahoo shares sunk ever closer to $20 (it closed today at $20.66, down more than three percent)–a worrisome crossing of the digital Rubicon for the company, given that it makes Yahoo more vulnerable to all sorts of Wall Street machinations.

Besides allowing other large companies like News Corp. (NWS) and Comcast (CMCSA) to consider bids for Yahoo–both have been watching the situation very carefully, sources said–it also opens Yahoo up to attacks from more rapacious private equity investors.

And there is a lot of machinating already, of course, as I have found poking around, with more to come.

Like what?

Like Yahoo back in discussions with AOL once again. Sources close to the situation said that the idea of hooking the pair up have been revived, as Yahoo looks to strengthen itself and Time Warner (TWX) searches for any way to spin off a division it has never been able to juice up.

Of course, Microsoft has also been sniffing around the property too–and almost bought AOL several years ago–and would be unlikely to sit still and let Yahoo grab AOL’s most attractive asset, its Platform A online advertising unit.

(Memo to Time Warner CEO Jeff Bewkes: You’re known as a smooth deal-maker, so paste on that million-dollar smile and get dealing!)

And, more interestingly, are the moves to try to find another CEO and top leadership to come in and run the company instead of Yahoo CEO Jerry Yang and President Sue Decker.

(I had previously posted on possible picks for that job here.)

That could come in either a friendly or non-friendly approach, according to several people close to the situation.

Under the friendly scenario, Yang would voluntarily step aside–and even be upped to non-executive chairman status–while a new CEO and team would be put in place.

A less dulcet approach, which would require an aggressive move by Yahoo’s board–who make head-in-the-sand ostriches seem active–against Yang directly is less likely.

Still, many investors, increasing numbers of employees and even some Yahoo board members have lost confidence in Yang and Decker, who have been trying to set a new course for the company.

But does a new course require new leaders?

Levinsohn and Miller (pictured here, left to right), who now run an online-focused investment fund called Velocity Interactive, are two high-profile former Web execs mentioned most frequently by major Yahoo investors as candidates for that idea.

Sources said could either come in as board members or actually run the company for a time period, while searching for a new CEO, like OpenTable’s Jeff Jordan, Google’s Tim Armstrong or even Microsoft’s Kevin Johnson.

Such as plan could include additional investments by new investors and critical buy-in by current investors–including billionaire activist Carl Icahn, who is waging a proxy fight against Yahoo that is set to come to a head at the Aug. 1 annual meeting.

Most important would likely be cooperation from Microsoft too, which could offer to also buy some of Yahoo and also sweeten its search-ad deal.

It would also require a new plan for Yahoo, which will likely include job cuts and a more drastic refocusing of its business that perhaps only outsiders can do.

As its founder, not surprisingly, Yang has been slow to make the kinds of deep changes many think Yahoo requires to reinvent itself, and Decker has been part of the team that has gotten the company mired in its current state.

While this all sounds incredibly complex, all scenarios point in one inevitable direction: Massive change is coming to Yahoo in the next 30 days, one way or another.

Microsoft does not have a secret plot to buy Yahoo.

Maybe Microsoft CEO Steve Ballmer should be hovering in the wings, like a digital Simon Legree ready to pounce again on poor Yahoo CEO Jerry Yang.

But he’s not.

And still the hopeful, the suspicious and, most of all, the beaten-down Yahoo shareholders continue to jump on any utterance from the software giant, even woefully mistranslating interviews with its top execs, to make it so.

Yesterday, it was some apparently mistranslated words from a German story coming from Microsoft’s Kevin Johnson–the head of its Platforms & Services unit who has been one of the main execs driving the Yahoo bid–about the company ready to make a new one if management changes.

This kind of thing has happened a lot since Microsoft (MSFT) walked away from its takeover bid for Yahoo (YHOO) in May, put off by months of rejection from the Internet portal and smarting from Yahoo’s flirtation with archrival Google (GOOG)–worries that turned out to be totally worth the worry, in fact.

Thus, the feeling persists that Microsoft is still hovering in the wings with some fabulously clever ploy to grab Yahoo once the time is right, once Yahoo’s current bumbling management is swept aside, once Yahoo’s stock once again falls below the $20-per-share mark that prompted its last foray.

But, even though Yahoo’s stock price is nearing that scary mark, as near as BoomTown can tell and let me repeat again, Microsoft does not have a plan to buy Yahoo at the ready.

That is not to say that they should not, as I have written again and again, given Microsoft’s definitely stated goal to compete aggressively in the online ad business, both in the search and display arena.

To do that and fast–because there needs to be some urgency here as Google is now sprinting away in the search sector and has some traction in the display area–Microsoft needs to be considering buying up, if not Yahoo, then the third-ranked business in the space, which would be Time Warner’s (TWX) AOL.

As I wrote before, in a move that seems increasingly sensible and easy (plus Time Warner CEO Jeff Bewkes is someone clearly ready, willing and able to deal):

As for AOL–it’s a more likely scenario, given it would allow Microsoft to double down in the display space with the Time Warner division’s Platform A ad unit and also gain some other strong properties (such as in video search with Truveo, with widgetmaker Userplane, as well as in instant messaging).

It would also probably like to give the boot to Google, which now serves up AOL search ads (and which also holds a 5% stake in AOL).

Microsoft has been very close to buying AOL before, once even considering spinning its Internet properties and AOL into a newco, so it does know the lay of the land there.”

While I realize a purchase of AOL, which Microsoft has noodled on before and is clearly noodling on now, seems like a band-aid approach to the situation and does not up its search share, the company probably needs to make a very bold and definitive move to begin its long slog to becoming the No. 2 player in the online ad market.

Because as Yahoo dithers its way and tries to recover from the management crisis it is in, Microsoft does, in fact, have the clear opportunity to become the second most important player in online advertising.

And given the attractive and obvious growth rate in the market over the next decade, is it such a bad thing to come in second?

In fact, when asked in a recent interview in the Financial Times, Microsoft’s Ballmer said as much:

At the end of the day, this is about the ad platform. This is not about just any one of the applications. The most important application for the foreseeable future is search. It’s where you start things. It’s where you express intent. It is important.

I don’t think we can say, OK, well, we’re going to be in the ad platform business, and we’re going to do it just on the strength of non-search based assets. We have to be in the ad business, and we’ve got to have a good chunk. We don’t have to dominate, but we’d better have a darn good chunk of the search market over time, and we’re working away at it.”

But, Microsoft clearly needs to work harder and quicker.

Or as Ballmer also said in the FT interview:

We’re small; the other guys are big. There’s a market out there. We have only one way to go, and it’s up, baby, up, up, up, up, up!”

Sounds like a plan to me.

Billionaire activist investor Carl Icahn has asked for it, although he has gone all kittenish now, after realizing his scheme to get Microsoft (MSFT) to buy Yahoo (YHOO) was over, once Yahoo signed on with Google (GOOG) to outsource some of its search-ad business.

And then the New York Times’s Joe Nocera called for it in an eviscerating column this past weekend that articulated what an increasing number of people in Silicon Valley and Wall Street and, more importantly, within Yahoo have been thinking of late.

And that it is: Whether Yahoo CEO Jerry Yang (pictured here at D6) should step down in favor of another top executive to lead the troubled Internet company into the next era.

It’s the obvious question, of course, to ask whether the co-founder of Yahoo has what it takes to manage the company through what will doubtlessly be a very difficult year.

(Speaking of that, see this disturbing hiring freeze post by Peter Kafka of Silicon Alley Insider, which might spell trouble ahead at Yahoo.)

BoomTown asked Yang specifically why he was the right leader for Yahoo going forward at our sixth D: All Things Digital conference recently and–guess what?–he did not really have an answer to the question.

Let me for him, then: The main reason he is the right leader is due to his history, his obvious love for Yahoo and its employees and that his heart, as Yang said in his one and only passionate moment onstage, does bleed Yahoo purple.

Unfortunately, as important and touching as those things are, it’s probably not enough for the rough road ahead for Yahoo.

As Yahoo continues to be in limbo, pressure is sure to mount heavily on Yang, and it is not a stretch to imagine he will not remain in the top job at the troubled company for the long term.

So who would be good to replace him?

Read more »

So what will Microsoft’s (MSFT) next quarry be?

Facebook? AOL? A series of small Web 2.0 stars like Digg (probably too late, as Google is already first in line there again), Spot Runner and others?

That is, if there will be one after the Yahoo (YHOO) takeover debacle.

Or, if the software giant somehow screws up the courage and, despite the constant rejection, goes back again to try to scoop up Yahoo.

In a post Friday, BoomTown made the case that Microsoft was not going to do that, burned too many times and ready to move on for various reasons (regulatory problems, poisoned relations and sheer pique).

That is not to say that I think Microsoft should walk away. It should not, as I argued two weeks ago in a post titled “A Deal Must Be Done.”

As I wrote: “Because, if [Microsoft CEO Steve] Ballmer is serious about his contention, which he made fervently onstage at D6, that the software giant keeps ‘coming and coming and coming,’ it simply cannot make that attack from a piddling 9% market share in the online search business.”

No, indeed, and that’s why it should watch carefully as the price of Yahoo’s stock drops and what happens between Yahoo and billionaire activist investor Carl Icahn.

Icahn is waging a proxy war against Yahoo, which should come to a head at the company’s board meeting on Aug. 1.

So if Ballmer is serious about competing strongly in the search-ad market, he must keep Yahoo in mind, no matter the checkered history of their dealings so far.

And even, as several sources tell me, swallow the bile it must have had after Microsoft thought it won the search deal with Yahoo, at least until a June 8th meeting in which Yahoo offered the whole company or nothing.

Yahoo then turned around and signed with Microsoft archrival Google (GOOG) last week.

“They were uncorking the champagne last week on the Yahoo search deal and then it all went sideways to Google,” said one source. “Someone’s head will roll.”

The big head here, of course, is Platforms and Services Division President Kevin Johnson (pictured here), one of the big proponents of the various deals with Yahoo.

Now, he and others at Microsoft have to be scrambling for alternative schemes to figure out a way to stay in the game.

While some think Microsoft should stick more to its knitting and buy enterprise companies like SAP, Ballmer and Johnson have been adamant that online ads will be its next great business.

And, given the growth there, being No. 2 in the space is not the worst place to be.

In any case, many expect a bold step from Microsoft in the space now.

The obvious move is a splashy bid for Facebook. As before, Microsoft continues to send subtle signals of interest, now via third parties, to the social-networking site.

Not so fast, though.

As much as many at Facebook would like the sell out for a price tag in the $10 billion to $15 billion range, CEO and Founder Mark Zuckerberg remains uninterested and seems willing to continue resisting the pressure (see BoomTown’s take on that here).

As for AOL–it’s a more likely scenario, given it would allow Microsoft to double down in the display space with the Time Warner (TWX) division’s Platform A ad unit and also gain some other strong properties (such as in video search with Truveo, with widgetmaker Userplane, as well as in instant messaging).

It would also probably like to give the boot to Google, which now serves up AOL search ads (and which also holds a 5% stake in AOL).

Microsoft has been very close to buying AOL before, once even considering spinning its Internet properties and AOL into a newco, so it does know t