According to numerous sources, Yahoo has been shopping around Zimbra, the open-source email company it bought in late 2007 for $350 million.

Zimbra is only one of the many assets of Yahoo (YHOO) that are now on the block, including its personals business, its HotJobs online classified unit and many more to come, said sources.

The effort to unload Zimbra is yet another sign that the company is trying to slim down its diverse portfolio, even as it strives to redefine itself this week with a new, pricey marketing campaign that seeks to position Yahoo primarily as a consumer company.

As first reported by BoomTown last week, Yahoo will be introducing a massive branding campaign tomorrow on the second day of Advertising Week in New York.

The new focus Yahoo is aiming for with advertisers is to stress its huge size and scale with consumers. The troubled Internet giant is still one of the most trafficked sites on the Web.

And consumers will also be reminded of this. The Wall Street Journal wrote a follow-up story yesterday on the marketing effort, noting that the $100 million campaign’s tagline is “It’s You.”

Get it? The “Y” in Yahoo is the same as the one in You!

The details of the plan will be made public tomorrow at a press conference immediately after a keynote speech–titled “Yahoo’s Consumer Revolution…Round II”–that the company’s new CMO, Elisa Steele, is set to deliver at the Interactive Advertising Bureau’s MIXX conference.

The goal, said several sources at Yahoo, will be to stress Yahoo’s consumer business over all others, which are supported mostly via brand advertising, leaving more extraneous ones out in the cold.

Which is why Zimbra–like a lot of other Yahoo properties–is being shopped around by its top mergers and acquisitions exec, Greg Mrva and others.

(Mrva’s new job title should be: VP of un-mergers and de-acquisitions.)

Backed by Benchmark Capital, Redpoint Ventures and Accel Partners, Zimbra was an innovative start-up whose main business was to provide clients–including Comcast (CMCSA), many ISPs and a number of colleges–with white-label email software capabilities.

Yahoo bought the company to goose that business, whose main rival has been Google (GOOG)–along with using Zimbra technology to improve its massive consumer email offering, also under siege from Google.

That integration has gone slowly, and Yahoo now has less interest in selling email products to others.

But the price Yahoo would get, many think, would be significantly lower that what it paid for Zimbra.

Nonetheless, potential buyers include Comcast and Google, as well as private-equity investors.

In addition, it is not out of the question that its former venture investors could be interested in a classic Silicon Valley buyback.

Zimbra’s founder and CEO, Satish Dharmaraj, who left Yahoo earlier this year, is now working at Redpoint.

Here is a video interview I did with Dharmaraj in early 2008, after the Yahoo deal was struck:

Jim Bankoff–the well-regarded former AOL exec who runs an online sports news network called SB Nation–has nabbed $7 million in funding from investors to grow the company, including Comcast Interactive Capital, said sources.

There was also a Securities and Exchange Commission document filed on the transaction today, under the name Sportsblogs Inc., which you can see here.

The SEC filing noted that the money invested was $7.95 million. But sources said that the nearly million-dollar difference is for giving cash to early employees and founders and will not be used to fund SB Nation.

People familiar with the situation said SB Nation’s post-investment valuation, after this second round, will be $30 million and also include previous investors, such as Accel Partners and Allen & Co.

Its first round–which also included several prominent angel investors, such as former AOL exec Ted Leonsis and LinkedIn CEO Jeff Weiner–was $5 million.

SB Nation has used that investment to grow like gangbusters over the last year, especially since Bankoff arrived last fall as its chairman and CEO.

Depending on which survey service you reference, the site has between four and seven million unique visitors a month.

It has done distribution deals with Internet giants like Yahoo (YHOO) to goose that growth.

While it has been around since 2003, founded by DailyKos’s Markos Moulitsas and others, the Washington, D.C.-based start-up has been aiming more at the sweet spot of local sports pages, especially as newspapers have become weaker.

SB Nation also covers national sports, using a community network of blogs, analysis and news.

Comcast Interactive Capital, which is the venture arm of Comcast (CMCSA), will also get a board seat for David Zilberman.

Bankoff (pictured here) was a longtime AOL exec, ultimately in charge of programming and products there. He worked on such products as TMZ.com, Moviefone, MapQuest and Netscape, as well as its AIM and ICQ messaging offerings.

After he left the Time Warner (TWX) online unit, he became a senior adviser to Providence Equity Partners. Bankoff still has that role, but has been working full-time at SB Nation for a year.

A few weeks ago, when I was having breakfast with legendary Silicon Valley entrepreneur Marc Andreessen about his new venture fund, he talked about what he thought was critical to being successful as an Internet company.

Ticking off names, from Apple (AAPL) CEO Steve Jobs to Facebook CEO Mark Zuckerberg, Andreessen said he always favored technical entrepreneurs for one key reason: “You need someone who lives and breathes product.”

It’s a refrain I have heard a lot recently from a wide range of people in the sector, most especially when talking about two of the more challenging renovations of key Internet brands going on of late.

That would be: Yahoo and MySpace.

In recent days, the focus at both Yahoo (YHOO) and MySpace, a division of News Corp. (NWS), has been on cost cuts, management rejiggering and, of course, layoffs, as new leaders at each Web giant are trying mightily to push the reset button. (News Corp owns Dow Jones, which owns this Web site.)

No surprise, their efforts have gotten a lot of attention and have been the subject of a lot of coverage (here for Yahoo and here for MySpace).

But, as those clean-up efforts wrap up, both have to show a whole lot more than that if either is to truly succeed at their tasks–which is to make both services much more relevant and exciting in the fast-changing Web arena.

While Yahoo and MySpace remain huge Web properties–and Yahoo, in particular, is very profitable in comparison to most Internet outfits–the widespread perception across the digital sector for too long now is that they are both tired in some significant ways and in desperate need of innovation.

Their big tasks include an overhaul of product offerings and features, a refreshing of brand and, most importantly, a strategic rethink that will set them on a new course for the next several years.

This is not a new thing in the Internet space, which has seen once-popular companies fall by the wayside as their products have gotten dull and consumers weary.

AOL–the Time Warner (TWX) unit whose new CEO, Tim Armstrong, is trying to reinvigorate that iconic but deeply tarnished brand too–is the classic example of this problem. But there have been too many that either hobble along, get subsumed into a larger company or just wither and die.

Sudden death is not likely to be the case for either Yahoo or MySpace, but time is most definitely running out for the pair to show some true product pizzazz and a strategic road map.

At Yahoo, most of the glitter thus far has come from the personality and charms of CEO Carol Bartz (pictured here), who has been hard at work projecting an image of moxie and decisiveness in her efforts to get some momentum at the turmoil-plagued company.

Replacing former CEO and co-founder Jerry Yang, Bartz has largely been busy cutting staff, pruning products that she recently dubbed “space debris” and rounding out her executive staff.

She’s also been prepping a new branding campaign to accompany Yahoo’s overhauled front page, which is set for the fall.

But, as the famous Peggy Lee song (see video below) goes: “Is that all there is, is that all there is?/If that’s all there is my friends, then let’s keep dancing/Let’s break out the booze and have a ball/If that’s all there is.”

But breaking out the booze and having a ball is actually not such a bad idea. To my mind, instead of tweaking what is there and emphasizing what it has been, Yahoo now has the chance to just go for broke and boldly make some dramatic choices.

That is especially true if it forgoes a search and online advertising partnership with Microsoft (MSFT), since Yahoo is going to have to do more than just what it already does better.

Interestingly, it is Microsoft, with its well-reviewed new Bing search service, that seems the most aggressively innovative these days.

So, why not, for example, make a shocking move, say, into the premium online video space? Yahoo certainly could pick up some damaged goods, like Veoh and Joost, on the cheap.

But what about buying the early winner: Hulu?

While the three studios that are its joint owners (the fourth owner is Providence Equity Partners)–News Corp., Disney (DIS) and GE (GE) unit NBC Universal–don’t seem inclined to sell, many sources close to the company said they most certainly would for the right price and perhaps a stake in Yahoo too.

Yahoo has been one of Hulu’s many distribution partners, but that effort has been lackluster. As owner, it would surely point its vast traffic and tech resources at Hulu to good effect.

In this kind of scenario, Google (GOOG) and Comcast (CMCSA) are also contenders for Hulu, but it is only Yahoo that has the truly better record of being able to create, manage and distribute Web content.

Plus, you could call it: HuHoo or YaLu or, better still, HooLu.

There are lots of ideas along these lines for Yahoo, but the overarching idea is to dominate in areas its rivals do not.

For MySpace, which was the dominator until rival Facebook cleaned its clock and then some, it is both a crisis of identity, a broken consumer experience and technology that needs a major overhaul.

It is hard to say what MySpace is, except really noisy. While the music part of that is good, the idea of making it hip again seems well-nigh impossible.

But it could be useful as an entertainment hub where it is fun to be. News Corp. CEO Rupert Murdoch raised this concept recently, in fact, and it is a good one.

That’s because Facebook is aggressively un-fun, with a fascist design sensibility and a thick ethos of utility and enforced busy-ness. Whenever I use it, I always start to feel like I am 23 minutes late.

There really is no good overall and unified entertainment hub on the Web in a massive way–one that aggregates all kinds of interests. I would, for example, love a place where I could easily live in a “Gossip Girl” universe.

Best of all, such a direction moves MySpace well away from Facebook, where is needs to get pronto.

MySpace CEO Owen Van Natta (pictured here) said as much in a memo to employees yesterday:

“As I’ve said before, simplifying and unifying our site is fundamental to our success going forward. MySpace should feel like one platform–not 15 sites loosely stitched together. We consider our diverse content offering a strength but too many logos and disorganized verticals makes the site difficult to navigate and creates confusion about our brand identity. Our users don’t know if we’re a social portal, a music site, or an entertainment hub.”

In her own memo last week, Bartz also talked about the need for speed and definition of Yahoo:

“I’ve noticed that since the reorg, people seem like they’re waiting for something. I’m not sure if it’s a sugar-low or what, but we need to stop waiting and get moving. Good things do not come to those who wait, they come to those who make things happen.”

Actually, per Marc Andreessen, good things come to those who make things. Wonderful things, fun things, memorable things and, if you are Steve Jobs, just one more thing.

Let’s just hope in the case of Yahoo and MySpace, they don’t settle for just any thing.

Until they do that thing they do, here is a catchy video from the movie, “That Thing You Do”:

Was it more than a month ago that Google was rumored to be in “late-stage negotiations to acquire Twitter”?

Not so much late-stage, I guess, with a gestation period that seems interminable (and BoomTown has been there, so can speak from experience about interminable pregnancies).

In fact, I’m still waiting for the Google (GOOG) takeover news floated inaccurately back then to cross our desk at All Things Digital HQ, although it’s more likely Godot will show up first.

So I guess it should come as no surprise that it was time to fob yet another rumor that yet another moneybags of a company–this time, Apple (AAPL)–is in “late-stage negotiations to buy Twitter.”

You could set your broken-but-right-twice-a-day clock by it, in fact.

But despite very serious interest in Twitter by every company that can afford considering such a thing, getting across that late-stage line would require major investors in the microblogging service to be involved, and they are not as yet.

In fact, both Twitter co-founders, Evan Williams and Biz Stone, are in New York today to attend the 2009 “Time 100″ dinner, which fetes this year’s influential people honorees selected by the magazine. Which they are.

So, if they are in serious talks with Apple, they better grab that award and head on home tout de suite.

In point of fact, talks with Facebook last year were actually the only truly deep sale discussions that Twitter has been involved in, and those went south.

Oh, the very notion of Apple and Twitter is a Techmeme dream-ticket, sure to be chewed over for days on end. (I once considered doing a post that just said “AppleTwitterAppleTwitterAppleTwitter…” for 1,000 words to see how much idiotic traffic I would get.)

But given that it is too good to be true for now, rather than be on the edge of your seat about all these endless, alleged late-stage high jinks, here is a five-step list to cut out and keep when the rumors of “late-stage negotiations” with Microsoft (MSFT), News Corp. (NWS), Verizon (VZ), Yahoo (YHOO), Time Warner (TWX) online unit AOL, Comcast (CMCSA), Cisco (CSCO) and more inevitably show up.

1.) Belle of the Geek Ball

Everyone is indeed actually interested in buying Twitter and each has expressed a proper level of interest to the company’s execs–especially to over-contacted CEO Williams–about said interest.

And, because this is America, a bid for Twitter could come at any time and in any amount.

That’s why Apple has indeed said hello. Why Microsoft’s business development team has been busy formulating a valuation. Why Google’s M&A guy, David Lawee, has called into Twitter’s HQ many times with kind expressions of desire. And why News Corp. execs, including Rupert Murdoch himself, have murmured tweet nothings to the Twitter team.

Please note: This is not the same thing as “late-stage negotiations.” Not at all; so don’t believe such things, as you will see this one coming down the pike for miles (see Step #4 below).

If there ever were an Apple deal to be done, it would not be living in some tidy vacuum.

For example, does one imagine Google CEO Eric Schmidt–who is on the Apple board, much to the FTC’s chagrin, it seems–would decline to enter the fray? Oh, he’d be up to his conflicted eyebrows in it at this point.

(Full disclosure: ATD is also considering making a bid for Twitter, but only if I get to name who is called Chief Twit.)

2.) We Feel Pretty, Oh So Pretty

Twitter’s Williams, as well as Stone, do not really want to sell just yet, given the huge traffic over the last year, goosed even further by the whole Oprah-Ashton Kutcher axis of Tweetvil.

Twitter is growing and growing and growing. Does that mean it has peaked or is just crossing over into the mainstream?

I would say the latter and so would its investors and execs.

I have done a lot of reporting and have found that most of them would like a chance to ride this rocket ship and see if they can prevent it from being a shooting star by figuring out some viable, innovative and lucrative business plan.

“Twitter really could make a lot of money,” said one investor. “And we are not just making that up either.”

Well, phew, because I have been a little worried about that.

3.) We’re Living in a Material World, and I Am a Material Girl

That said, as Madonna sings, a pile of cash is a pile of cash and if one of the suitors makes a big move with $600 million or more in cash, it would be hard for Twitter to completely ignore such an offering.

But, in any case, there will be no late-stage negotiations with one player.

Instead, an epic free-for-all wrestling match to the death would break out among all of them, especially Google and Microsoft.

This will be great for me and all the other tech writers as it will be ugly, competitive and tailor-made for breathless reporting.

Google is the likely winner here, although Microsoft is quite intent on the possibilities of integrating Twitter technology with its business offerings.

Someone will, I can predict with certainty, lose an eye.

4.) All the Single Ladies…Cuz if You Liked It, Then You Should Have Put a Ring on It

And, even with that kind of offer–which I would take in a New York minute, as would some Twitter investors–there is a sense when you talk to Twitter’s founders and investors that they truly believe they are onto some very important interactive communications paradigm shift in the Internet arena with their start-up.

I would have to agree given that the real-time and status-update concepts that Twitter has perfectly touched on are a very important one.

Thus, Twitter would prefer to remain independent for now.

Whether Twitter will prevail or not is never assured, but it would be really a shame if it gave up before the story was over.

5.) And They Lived Happily Ever After

Let’s be honest: There is no real downside here for Twitter.

If the service turns out to be be a flash in the pan and it is not sold for big bucks, Twitter still has heralded a very important new era in the digital industry.

And, if it grows like crazy even more, better still.

Also, Stone got to go on “The Colbert Report” and Williams on “Oprah.”

Best of all, in a shameless plug, they will both be captive on stage with Walt Mossberg and me at the seventh D: All Things Digital conference exactly three weeks from today, where we can ask them about all this and more.

So, I am thrilled too.

Who says there are no happy endings?

Until that D7 interview, here is my recent video with Williams and Stone at Twitter’s funky San Francisco HQ:

While the “news” that Google was in “late-stage” talks to acquire Twitter, which TechCrunch reported last night, certainly sounds exciting, it isn’t accurate in any way, according to a number of sources BoomTown spoke to close to the situation.

In fact, Twitter and Google (GOOG) have simply been engaged in “some product-related discussions,” according to one source, around real-time search and the search giant better crawling the microblogging service.

Said a source close to Twitter: “There was a discussion with [Google executive Marissa Mayer's] group about real-time search and about product stuff. It was a couple weeks ago. It was very preliminary…and that was that.”

More importantly, said another source about the idea of an imminent acquisition or serious or even early talks: “Seriously, no negotiations, no deal, nada.”

So for all those Twitterers madly typing 140 characters and caught up in the grand idea of Twoogle, we return you to your regularly scheduled tweeting.

Of course, there has been a lot of analysis, put forth by many, including me, that Google should think about acquiring Twitter.

It is the microblogging service’s likeliest acquirer, in fact. And there is no question Twitter is being watched closely by Google.

But sources at Google stressed that a strong partnership–especially in light of the growing size of the Facebook social-networking site–is what the company is most interested in at this point in time.

That could change at any time, of course. Google or anyone else could plunk down more than $1 billion in cash, and I cannot imagine Twitter’s investors would or could resist. Nor should they.

And what if, for example, Microsoft (MSFT) offered some huge cash payday for Twitter? In that case, I am certain Google would jump into the faceoff, backing up a giant Brinks trunk to the door of Twitter’s San Francisco offices.

And the reaction such an idea has gotten with this round of rumors will surely be studied at Google.

But this is all just pure speculation and should be couched as that. And that does not mean there are talks going on now, as TechCrunch reported so firmly.

And that’s also true for a range of other companies–from Microsoft to Yahoo (YHOO) to News Corp. (NWS) to Time Warner (TWX) unit AOL to Cisco (CSCO) to Comcast (CMCSA) to the big telcos–that would also be interested in buying Twitter or partnering with it.

And Facebook already tried and failed to buy Twitter last year, which BoomTown chronicled in a post in November, for $500 million in cash and stock of the social-networking service.

Why? Because although Twitter is still small, with seven million users, it has a definite momentum in the red-hot real-time online status update space.

And while I give it a hard time for its utter lack of a business plan or revenue to speak of, the well-funded Twitter is also at the beginning of a long runway of possibility that could yield it a higher price later, if it so chose to sell at all.

Moreover, if Twitter’s investors and founders wanted to sell, they wouldn’t have taken a recent round at $230 million valuation, because it would imply a $750 million to $1 billion purchase price, and no one could pay that right now.

Even the mighty Google could not–which does not typically overpay for companies.

More likely, Google would surely get killed by investors for spending that much on a revenue-free company, especially since it is still getting beat up for the pricey YouTube deal it made when times were great.

Lastly, Twitter’s founders have expressed the desire to take the company out for a longer ride, even if some of its investors would love to cash out if offered a crazy price.

“Why would the company do something like this right now?” said a source close to Twitter, in a typical sentiment. “The company’s on a tear right now.”

In fact, last night in an appearance on “The Colbert Report,” Twitter co-founder Biz Stone explicitly said Twitter planned to be a “strong, profitable, independent company.”

While entrepreneurs have said this and then quickly sold out, it is not the case now for Twitter, unless it got some insane offer, said numerous sources.

TechCrunch, which slapped a loud headline on its first post, “Sources: Google in Late-Stage Talks to Buy Twitter,” then changed it to “Sources: Google in Talks to Acquire Twitter (Updated).”

What’s next? “Google and Twitter Have a Lovely Organic Lunch and Discuss Trading T-Shirts (Updated Update)”?

The TechCrunch report, penned by Michael Arrington, also added a let’s-just-cover-all-our-bases update at the bottom of the ever-changing post that then hedged the news it had just hyped.

This is not new for the tech blog, especially related to Google.

On July 28, 2008, TechCrunch reported: “Google In Final Negotiations To Acquire Digg For ‘Around $200 Million,’” and said there was a letter of intent signed.

While the pair did hold ultimately unsuccessful talks, they never got even close to final.

And on February 6, 2008, TechCrunch had a post with the headline, “Rumor: Is Google About to Buy Bebo For $1 Billion To $1.5 Billion? Or Will it Be MySpace?”

Hmm, not so much on the about to buy Bebo. In fact, Google was never in what could be described as serious talks, and Bebo was sold to AOL, the lone bidder, for $850 million a month later.

Thus, the third time is, no surprise, not a charm either.

Please see this disclosure related to me and Google.

You almost have to admire the shape-shifting–if not a wee bit slippery–stylings of Slide CEO Max Levchin.

The serial entrepreneur– whose current start-up has made him the massively-funded widget-king of Web 2.0–has signed distribution deals with Time Warner’s Warner Bros. unit, CBS and Comcast’s E! Entertainment channel to allow users of its new FunSpace Channels video service to look at clips from shows.

Slide’s other media partners in the new deal include Current Media, Hulu, Universal Music Group, as well as 236.com, Break Media, CollegeHumor, FUEL TV, Howcast Media, Video Detective and YouTube.

The FunSpace video service will recommend content based on how much users forward clips to others.

To make money, Slide will get a cut of ads sold by its media partners, according to a report in The Wall Street Journal.

Oh my, how incredibly traditional of Levchin (pictured below on a wacky magazine cover).

But it should probably come as no surprise that Levchin is singing a bit of a different tune these days, as the daunting task of actually building a sustainable business model and attracting long-term advertisers has dawned on him–and probably many other Web 2.0 wunderkinds.

“Television is a world advertisers love,” said Levchin in The Journal article–a quote in which you can almost hear the quarter drop and the connection made that trying to earn real money from sheep-throwing and SuperPoking is perhaps not the most stable of business plans.

Of course, it was only a year ago that the business model for the high-profile social-networking applications maker–loudly touted by him and others at the company–was centered around “user-initiated” ads and in consumers becoming “brand ambassadors” for products.

These kinds of unproven ad schemes seemed fanciful to me when I first heard about them, although they doubtless sounded great to the many investors who ponied up tens of millions of dollars in funding to give Slide an eye-popping and still-undeserved $550 million valuation.

At the time, I wrote:

Ah, brand ambassadors! Like perhaps being dispatched to a posting in the tenth ring of hell.

It seems, though, that the old canard about getting audiences to carry water for brands and loving it has found new life, as social networks and the widgets that live off them search for business models.

Now I am not against widgets, those small third-party applications that people can put on their Web pages on social networks like Facebook and MySpace, in general.

While there are now many too many, and most are simply features and not companies, some are actually helpful and substantive and introduce a plethora of innovation and features into a service like MySpace that the service itself would or could never have offered.

And I also think that these widget-makers need to find a way to make money, especially the very popular ones like Slide, if they are to stay around.”

That’s more true than ever before as the economy tightens and kooky experimentation is no longer tolerated.

In fact, Levchin noted in the article that Slide had dumped one of its typically fun but profitless widgets–a digital fortune cookie service.

Said Levchin to The Journal: “We asked ourselves, can they generate cash and are they going to be engaging to users a year from now?”

Um … no and no, which should have been obvious from the get-go about a lot of social-networking apps, which I had labeled juvenile and ultimately ephemeral.

While such goofy stuff has given Slide a lot of traffic–it attracts more than 160 million viewers a month–that has not necessarily translated into big revenues since much of the traffic is pretty low-rent and because the ads are limited by the big social-networking sites where Slide apps are popular.

One of the most striking things in the article was the contention that Slide expected $30 to $50 million in 2009 revenue, which is probably on the low side. To be fair, Levchin always told me he was not as focused on revenue generation as on growth.

But with this move, Levchin is now clearly focusing on revenue, and it’s long past time to do so.

Of course, with nuclear winter in advertising of all kinds approaching fast, let’s hope Slide still has a sheepskin or two around to keep warm until the thaw.

As an added plus, here is one of three interviews I did with Levchin last year, giving him somewhat of a hard time about revenue issues (and he gave back as good as he got):

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s an interview I did with TiVo President and CEO Tom Rogers about the iconic but often-struggling pioneer and leader in the digital video recorder market.

The video of the interview is in four parts, which will all be posted this week.

In this third part, Rogers talks about how TiVo (TIVO) is trying to become the “one-stop” interface for cable companies, such as Comcast, and the troubled state of the broadcast television industry.

The downward drift far from the it-can’t-drop-below-$20 barrier makes it clear that Wall Street is valuing the company at close to what it could sell its assets off for and not much more.

This obviously puts additional pressure on the already squashed-down Yahoo (YHOO) management to perform.

In fact, with all this pressure, you’d think Yahoo CEO Jerry Yang would have turned into a twin of the cursed Hope Diamond by now.

But Yahoo is not the only Web company getting bashed by the weak economy and continuing mortgage crisis. In a bruising market, shares of eBay (EBAY), Microsoft (MSFT), Amazon (AMZN) and Google (GOOG) have also been down about four to five percent this week in an already lackluster period this year.

In fact, on a year-to-date basis, it is Google that is off the most on a percentage basis (see chart below; click on the image to make it larger), with Amazon being the most hardy performer.

Nonetheless, it is not a particularly good situation for the whole sector or the smaller Web 2.0 players that have banked their futures on having an IPO or being slurped up by the bigger players.

Of course, Yahoo is the most vulnerable to attack because of the last year of turmoil, especially Yang, but also longtime board members, who are perhaps even more at risk.

As BoomTown wrote earlier this week, Yahoo execs must find a way to turn around its business and fast, clarifying its focus and streamlining its units, before someone does it for them.

That does not mean anything will happen though, because newly minted board member Carl Icahn can no longer be an activist as an insider and he only has two other possible allies on the board, who also recently joined as part of his cabal.

Thus, it is highly unlikely Icahn could force Yang to resign at this point, unless it was on Yang’s own steam.

While a lot of names for possible replacements have been bandied about and laughably unsubstantiated reports of a secret deal with Icahn for Yang to resign are floated, this is just wishful thinking for some unhappy investors.

Nonetheless, a change could be forced via yet another agitated outside investor, one smart observer noted to me, who could start another noisy circus and demand a split of the company (search to Microsoft, the content and communications assets to one of many companies like News Corp., Disney, Comcast).

Such a move would require a lot of energy, which is lacking in the market overall right now. In addition, tangling with Yahoo has already ground up Microsoft and Icahn, as well as disgruntled major investors like Gordon Crawford.

So, even in its decidedly prone state, taking on Yahoo once again is probably not for the faint of heart.

Oh, there had to be much, much gnashing of teeth in the corporate offices of the Time Warner Center in New York yesterday with news of the sale of DailyCandy to Comcast for $125 million.

Why?

Maybe because that tasty payment is going right into the hands of Bob Pittman’s Pilot Group Ventures, which bought the fashion and shopping newsletter business for $3 million in 2003.

Longtime media exec Pittman was the former star AOLer, whose nickname was Bob “Pitchman” for his smooth-as-silk selling and even more marked spinning skills.

But the Web 1.0 supernova fell quickly to earth, after the online service merged with Time Warner (TWX) in early 2001, in what is now considered one of the more significant world-class corporate disasters.

After being tossed out of AOL Time Warner in mid-2002, Pittman (pictured here), along with AOL head Steve Case, was blamed for the stock decline and other woes at the media giant by the Time Warner side, whose deep bitterness toward him has never really faded away.

Now, with Time Warner trying to make a deal to sell the AOL unit for up to $10 billion to Yahoo or Microsoft–despite it being valued at $20 billion only a few years ago–Pittman’s small but impressive score has got to grate.

“I have been associated with the start-up, turnaround or acceleration of many companies and major brands, and rarely have I seen the kind of creativity, commitment and passion I’ve seen day in and day out at DailyCandy,” said Pittman in a letter to DailyCandy staff yesterday about the sale. “And the results speak for themselves: Since we made our investment in 2003, subscriptions have grown from just over 200,000 to over 2.5 million.”

In the letter, Pittman said the company’s EBITDA was over $10 million this year on revenues of $25 million.

This is certainly different from the situation almost exactly six years ago when Pittman was driven out of the then-named AOL Time Warner on the proverbial rail.

If you want a taste of those once-grim times for Pittman, here is an excerpt from my book, “There Must Be a Pony in Here Somewhere: The AOL Time Warner Debacle and the Quest for a Digital Future,” which was published in 2003.

The section comes from Chapter Six, “Way, Way After the Goldrush,” as the deal imploded:

THERE’S NO BUSINESS LIKE NO BUSINESS

But while Time Warnerites rejoiced in their hope that the merger turmoil was finally over, the company’s troubles wouldn’t leave the front pages for a long time to come.

We’ll see if that has changed at all, after Time Warner announces its second quarter earnings later today.

On one of my many trips to Los Angeles (what can I say? I like to hang where LoRo* hangs), I dropped in to see Nick Grouf of Spot Runner.

As many might know, Spot Runner is an online-offline ad agency play that has gotten big funding and even bigger hype of late.

We’ll see how that goes. But Spot Runner actually seems to be tackling an underserved (and unexciting) market of local and national clients in need of cheap online ad solutions married to more traditional marketing venues to boost revenue.

Here’s my video interview with Grouf at Spot Runner’s offices on Wilshire Boulevard:

I met Grouf many years ago when he–along with Spot Runner partner David Waxman–founded PeoplePC and Firefly Networks.

Grouf sold the struggling PeoplePC–which hawked computers bundled with an online service–to Earthlink (ELNK) in 2002 for $10 million and assumption of $35 million in liabilities, in a Web 1.0 meltdown deal that followed a disastrous IPO.

He then started working for the Presidential campaign of Sen. John Kerry, helping figure out how to best and most cheaply place critical television ads–crunching all sorts of data about lots and lots of neighborhoods and towns and cities nationwide to figure it out.

What Grouf figured out, though, was that a system for doing so was nonexistent.

That experience turned into Spot Runner, which is essentially a do-it-yourself model that tries to iron out inefficiencies in the buying and selling of advertising and bridge the gap between the traditional and online ad markets.

Offering cheap ad templates, clients can make and place low-cost television and radio ads for small and national businesses, as well as political campaigns, and get analytics about the impact of the ads. Some ads cost as low as $500.

Spot Runner got a pile of cash to try to do that better, recently nabbing $51 million in funding to add to the $60 million already raised.

Investors include international media giants Daily Mail and General Trust (DMGT.L) and Grupo Televisa (TV), investment company Legg Mason Capital Management (LM) and luxury conglomerate Groupe Arnault/LVMH (MC.PA).

Spot Runner’s previous investors are Allen & Company, Battery Ventures, Comerica Bank (CMA), Lachlan Murdoch, Vivi Nevo, Capital Research and Management, CBS (CBS), Index Ventures, Interpublic Group (IPG), Tudor Investment Corporation and WPP.

Its board includes Index’s Danny Rimer and former AOL exec Bob Pittman.

All that money has given Spot Runner an eye-popping valuation upwards of $500 million.

This is its biggest burden, I think, setting expectations very high for what is still a little start-up.

And while there are rumors of both Microsoft and Google, as well as Comcast, being interested in acquiring the company, Grouf dismisses the speculation.

He says Spot Runner is more intent on using the money raised to buy companies and improve its offerings.

For example, it recently bought Weblistic, a local search listings creator, and hired former Microsoft exec Joanne Bradford.

Bradford, who was a VP and chief media officer of MSN Media Network, is executive vice president of National Marketing Services at Spot Runner, focusing on getting national advertisers to also think small and targeted.

Who knows whether the company will be able to overcome its hype, but time (and money) will tell.

(*And a free D6 bag for anyone who correctly identifies who I am referring to here, either by sending in a comment or an email to me at kara@allthingsd.com.)

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.

Yesterday, BoomTown wrote a piece about Yahoo’s worries about the scrutiny that the monopolistic combination of Yahoo Mail and Microsoft’s Hotmail would get if it merged with the software giant.

The issue–which has not gotten a lot of attention–is actually a major sticking point in the price negotiations going on this weekend between the companies, as Yahoo (YHOO) seeks solid downside protection, if the deal becomes mired in approval issues by governmental authorities due to email and instant messaging dominance on the Web.

But Microsoft (MSFT) does not want to pay more, of course. And so the legions of minions under increasingly-under-pressure–translation: more yelling than ever this week–CEO Steve Ballmer are hard at work this weekend on all-nighters to solve the problem, said several sources.

One solution is to spin off all the communications assets, said sources, into a separate company. In that case, the two brands would remain, so as not to inconvenience consumers, although all the back-end technologies to run the services would be merged.

The more drastic step is for Microsoft sell Hotmail to a third party, especially given that Yahoo Mail is considered a stronger brand. Hotmail has already been in the midst of a transition, including a recent name change to Windows Live Hotmail.

Microsoft’s mail offerings now include Hotmail and also Windows Live Mail. The latter offering would presumably remain at the merged company with its @live.com address.

But Hotmail is the candidate to be sold off (with the requisite marketing to try to port its users over to @live.com first).

And potential buyers? Well, not Google (GOOG), but there are many, including AOL (TWX), Comcast (CMCSA) and AT&T (T), as well as IAC/InterActiveCorp (IACI). As to price, that’s unclear, but it could be in the billions of dollars.

That’s another plus for Microsoft, which will obviously have to fork over more money if it wants to acquire Yahoo.

And, it is also priceless if Microsoft can minimize government interference in the deal, most especially any antitrust investigations related to its powerful email assets.

That must be a worry, since Microsoft and Yahoo completely dominate all email on the Internet. According to the most recent comScore (SCOR) figures, for example, Yahoo has 256 million users, while Microsoft has 255 million.

Google’s Gmail is a distant third with about 92 million users and AOL has about half that at 49 million.

The same domination is true in the instant messaging market, with Microsoft and Yahoo holding an 80% to 90% market share together.

Please see this disclosure related to me and Google.