BoomTown promised a Yahoo internal memo upon our return from vacation today and we will not let you down.

Thus, here’s a doozie Yahoo (YHOO) CEO Carol Bartz recently sent to her troops.

It’s actually from mid-August, although it took me this long to get my hands on it, as people at the company are justifiably a little memo-leaking shy after this missive that complains of the sugar-low mood of the staff.

One in a series of weekly Friday communications from her, some of which I have posted before, this one got a lot of attention internally, especially among the down-in-the-dumps engineering staff, who were less than pleased with the damn-the-torpedoes-stop-yer-whining tone of the memo.

Whatever the reaction, it is certainly a classic Bartz times 10–a definite back of the hand for those Yahoos who perhaps dwelled too much on whether or not they liked the recent search deal she struck with Microsoft (MSFT).

Here’s the basic gist of it: Fie on naysayers, stop bellyaching, Yahoo rocks and get back to work!

And here’s the memo–referencing the tough week, her knee surgery and the need to focus, people!!!–with the email address section omitted:

I’ve had one! All the work, all the explaining, all the opinions!

I wanted to crawl into a hole and eat chocolate (and of course my knee boo-boo made me feel even sorrier for myself). Making the search decision and driving this much change for us was hard, but it is done.

So I am out of the hole, ready to attack the future. We are Yahoo! 581 MILLION PEOPLE came to us last month. Our audience increased 1.9% month-over-month, faster than the overall Internet population (1.2%).

Our job is to keep growing that audience with a great homepage, great media properties, great communications products and a great search experience. Match that with a compelling advertiser program and voila! We are the largest media property on the Internet.

So get out of the sugar low–we have work to do. Stop staring at our navels, stop arguing with each other. Stop debate, debate, debate, and let’s focus on the competition.

Let’s focus on a great Yahoo! Our average user is just trying to get through the day…looking to find out what’s going on in the big world and their own world. They want their Internet site to be great, and to work. They don’t care about how or about deals. They care that we are a trusted dependable site.

That is our simple mission. Focus on it!!!

After a while–in a BoomTown mangling of the old cliché–if you are a nail, everything begins to look like a hammer.

So, it is probably inevitable that the next thing for much-beleaguered AOL staffers to start rumbling about is 2,000 people getting laid off next week, as was reported earlier this week by Silicon Alley Insider.

After all, the Time Warner (TWX) unit has a long history of whacking employees. So, it is easier to assume things will not be different under the regime of the latest CEO Tim Armstrong.

Except it’s not actually true that such massive cuts are in the offing, since–as many sources I spoke to said–Armstrong is only in the early part of figuring out what to do about the cost structure of AOL, after laying out a company strategy and rejiggering management recently.

While the end result of the cost-to-benefit analysis might, in all likelihood, mean layoffs of a chunk of its 7,000 employees–a larger number for its smaller operations.

And, after all, staff costs are one of the biggest line items in AOL’s budget–sources at the company said Armstrong will not rely on simply cutting jobs to craft a more attractive budget for its upcoming spinoff.

Still, there is obviously a lot of pressure on Armstrong to get the financials–which are still largely dependent on AOL’s declining, but money-generating, access business–looking pretty.

That access business did almost $2 billion in revenue last year–about half its sales–and it represented almost all its profits.

In contrast, AOL’s advertising business lagged, dropping hugely over the last several quarters.

Still, Armstrong has laid out a strategy that has included, in part:

Being a new kind of content giant, via a series of branded niche media sites, with about 500 full-time writers and editors and 1,500 freelancers; selling premium display advertising on these sites and strengthening its third-party self-service ad network business; finding a way to use its communications properties to redistribute traffic to other properties in a kind of virtuous circle.

There are also local, analytical and venture elements. But–for all intents and purposes–Armstrong’s plan is a content-and-advertising model, supported for now by the dwindling piles of cash from the access business.

That’s why, of course, costs are the next item on Armstrong’s to-do list.

“The cost structure is the last part of what was going to be dealt with, as Tim has told everyone,” said one person close to the situation about the former Google (GOOG) exec. “But, if it is slash-and-burn only, that would be pretty short-sighted.”

Perhaps, except that it is that exact tactic that has been business-as-usual at AOL for far too long.

SiliconANGLE blogger John Furrier found a supersweet television ad that eBay Internet phone unit Skype is running to goose its brand (see below).

The once-hottest-ever start-up–touted up and down Silicon Valley for its explosive growth back in 2003–is still a major global brand with a massive 405 million user accounts at the end of 2008.

In fact, Skype’s size makes media-overhyped Twitter seem, well, twee, by comparison. Twitter had only 9.8 million unique visitors in February, up impressively from 6.1 million in January.

But the hot-or-not comparisons between the two are interesting to think about.

First, as with Twitter, few pay anything for Skype’s communications services–essentially, it lets consumers make voice and video calls between computers or to other phones via voice over Internet protocol, or VOIP.

Second–although no one seems to care when it comes to Twitter as yet–monetization issues dog Skype, which actually had $550 million in revenue last year (see chart).

Still, right or wrong, many investors argue that Skype was a very bad acquisition for eBay (EBAY), which paid $2.6 billion for it in 2005 and there are consistent rumors that eBay is looking to unload the service.

That’s why it recently announced a plan to enter the corporate market, presumably to give Skype more heft.

Much like, for example, Twitter’s recent partnership with a new ExecTweets service, a compilation of business figures tweeting, which is sponsored by Microsoft (MSFT).

Lastly, of course, Skype is trying new branding to make it seem less shaggy, such as the video below, is part of that push.

As for Twitter, it remains as cute as ever and shows no signs of changing to try and please anyone.

Yet.

Here is the Skype ad:

And, as an added plus, here’s Twitter’s co-founder Ain’t-Nobody’s-Biz Stone in an interview about Twittermania, which is preciously what it degenerated into on San Francisco’s KQED Public Radio today:

Goodness gracious, make it stop!

You must know by now how much BoomTown loves internal Yahoo (YHOO) memos. But this is getting ridiculous.

It’s been like a flash flood after a long drought at Sunnyvale HQ today, as Yahoo CEO Carol Bartz turns on the fire hose of a whole lot of communicating.

A lot. A real lot.

“I know you guys have reorg fatigue,” wrote Bartz, in the latest email to employees about the management reorganization finally announced this morning.

Also memo fatigue at All Things Digital HQ, if you can believe it.

Okay, I give, Carol! Well, for now, until another juicy internal memo you aren’t handing out freely lands in my inbox, for example, such as one about a search deal with Microsoft (MSFT). I’d like one of those to go, please!

But, in a gesture of a leak-free peace (can the drop-kick bounty be suspended for just today?), I am posting this last memo about the management reorganization from Carol “Chatterbox” Bartz.

(Although, I wish she would stop insulting the press, as she does below again. We are just doing our job–and very accurately, as it turned out–yet the jibes continue. Which is odd, frankly, given that Bartz has had mostly glowing coverage in the media her entire career.)

But Bartz did seem to leave a little mystery in the email still, as if even more rearranging were to come.

Writes Bartz (my bolding):

“As soon as decisions were made, I wanted you to know about them–even if that means we don’t have all the details nailed down yet”.

Wait, are the deets all nailed by Bartz’s productive hammer or aren’t they?

At least, thankfully, the note is capitalized properly, unlike the quaint no-caps stylings of former CEO Jerry Yang.

In any case, if you just can’t get enough, here is Bartz’s reorg blog from this morning and her new management structure memo too.

And here is her entire email on the reorg to employees:

From: Carol Bartz
Reply-To: Carol Bartz
Date: Thu, 26 Feb 2009 09:02:49 -0800
To: “all-worldwide@yahoo-inc.com”
Subject: Our New Organization

Yahoos,

As I’ve gotten to know Yahoo! over the past several weeks, I’ve developed a point of view on how our organization should be structured to set us up for success.

Our goal is simple: to consistently deliver awesome consumer and advertiser experiences, everywhere in the world we do business. Delivering great customer experiences is everyone’s job at Yahoo!–and each part of our organization will have a clear role in making that happen every day.

The timing of this announcement is important. As soon as decisions were made, I wanted you to know about them–even if that means we don’t have all the details nailed down yet. Yes, there’s been a lot of speculation in the media over the past few days…that’s been a little frustrating, but I’m not willing to speak publicly about decisions before they’re final. Today, they are–so I’ll lay out our new organizational structure for you now.

I know you guys have reorg fatigue. Hang in there–our intention is to leave this structure in place for two to four years. We’ll continue to make adjustments as needed, but we expect this core structure to stay put.

The structure outlined below will enable us to make big improvements in our product quality and operational efficiency. Part of that is simplicity–I’m frankly amazed at how complicated some things are here! We’ll have much clearer decision making and accountability. Product and regional teams will share responsibility for revenue targets and expense management, but we’ll have one P&L, for which I’m accountable.

We will also be in a better position to really listen to and understand our customers–both consumers and advertisers. I think we’ve gotten into the habit of focusing internally too much and we sometimes forget who we’re here to serve. You’ll notice that our management structure puts a renewed focus on the customer, with stronger feedback loops across the company…and they all come through me.

Also, as you know, no organizational structure is a substitute for collaboration, communication and trust. We’ll all need to evolve our behavior a bit–as teams and as individuals – to make this structure work the way it’s designed.

So here’s the overview, with the roles that will report directly to me. As you’ll see, some of our leaders are still to be determined. I know you’ll
want more detail than what’s below–you can learn more on Backyard: http://backyard.yahoo.com/ourorg .

Products: We’ve combined Tech and Product groups under one roof, led by Ari Balogh as EVP Products & CTO. Ari’s charter is to deliver global products that enable extraordinary consumer and advertiser experiences. Ari’s direct reports now include one leader for each product group–we’ve taken care of the “two in a box” problem.

One important note: The Connected Life team has been integrated into various parts of the new organization. Our mobile strategy remains a key part of Yahoo!’s focus going forward and all of our product groups will own mobile innovations. After leading Connected Life for four years, Marco Boerries has resigned from the company to spend more time with his family in Europe. We thank Marco for his important contributions at Yahoo!.

Regions: There are now two: North America and International. As I’ve said before, international growth is critical for Yahoo!, which has become too reliant on its U.S. business over the years.

The regions deliver Yahoo!’s products, programming and services to consumers, partners and advertisers in local markets. They will partner closely with the newly formed Regional Solutions & Products group in Ari’s organization to help drive a significant shift in how Yahoo! develops products for different geographies. The goal is to have global platforms on which regional product offerings are based.

The North American region–comprised of the U.S. and Canada–is led by Hilary Schneider. The leader of our International region, to be hired soon, will be responsible for a cohesive Yahoo! global strategy and seizing our international growth opportunities. Until we determine who’ll lead the International region, Rose Tsou (Asia), Rich Riley (Europe) and Keith Nilsson (Emerging Markets) will continue to report to me.

Marketing: Elisa Steele will be joining Yahoo! as our Chief Marketing Officer (CMO), effective March 23. Elisa joins us from NetApp where she was SVP, Corporate Marketing. Previous to NetApp, she held executive positions in marketing at Sun Microsystems. Elisa will oversee our global marketing strategy and provide direction for our marketing function. She’ll bring together the various Yahoo! marketing teams that have been spread across the company. Reporting into Elisa will be Brand Marketing, Audience Marketing, Corporate Communications, Insights, Policy & Privacy, Community Affairs and related central teams. I’m delighted to have Elisa joining the team.

Customer Advocacy: As I said, we can do much better in hearing the voice of the customer across Yahoo!, and incorporating what we hear into all of our work day-to-day. We have opened a search for a leader, who will oversee Customer Care and Ad Operations globally with the goal of improving how we support Yahoo!’s users and advertisers. In the interim, these teams will continue to report to Hilary.

Service Engineering & Operations: This new team is responsible for delivering common technology services at scale, including application management and infrastructure. No matter how cool our products are, the customer’s experience won’t be great unless our applications consistently deliver. Note that we’re bringing Service Engineering together as one group because these engineers bring expertise that is best applied horizontally. Leading this organization is David Dibble, who joined Yahoo! in December. David’s team also will be accountable for delivering more effective corporate IT systems.

Corporate Functions: Blake Jorgensen will be leaving Yahoo! and I am searching for a new CFO. Blake will remain through a transition with his successor, and I want to thank Blake for all of his great contributions to Yahoo! over the past two years. Mike Callahan will continue to lead our Legal team, and David Windley leads our Human Resources function. Joel Jones joins the team as my Chief of Staff.

So that’s the high-level view. These changes are effective immediately, but we’ve got more work to do in filling out the structure of each group. In the short term, this transition will be challenging for many of our people. My executive staff will be working with their organizations as quickly as possible to create further clarity. For example, we’ll need to recast budgets and adjust work areas so we have the right people working side-by-side.

I want to thank all of you who’ve shared your ideas and views with me since I arrived. Several leaders across Yahoo! came together to design this new structure–I’ve been very impressed with their dedication to the right outcomes, particularly how they’ve embraced the need to eliminate the silos that have been a drag on this organization for so long.

I think this organizational structure has the potential to solve many of the issues you’ve helped me better understand. Of course, new issues will emerge. But I know we’ll be aligned and nimble in tackling them together.

This is a tremendous, proud company with a powerful brand, great products and a bright future. Now’s the time to get more focused than ever on delighting our users and advertisers. Let’s show them how great Yahoo! can be.

Carol

Yesterday, TechCrunch’s U.K. blogger Mike Butcher spun the tale of buyer’s remorse run amok with a report that Time Warner online unit AOL was “seriously considering selling Bebo, the social network it acquired for $850 million only a year ago,” citing poor performance and a bad advertising market.

Later, AOL went on the record saying “there is no truth to this rumor,” although Butcher–in a third update to his piece–insisted otherwise from his sources.

In my favorite hedge ever, Butcher noted: “I’m not saying Bebo is formally on the block, but I am saying that a sale is something under consideration.”

Well, actually, no.

What is true, which Butcher did do an excellent job outlining, is that AOL most certainly overestimated the prospects for Bebo as an advertising and growth vehicle, hoping that Bebo’s interesting new media offerings–like its “KateModern” online series–combined with a social network, were the magic bullet.

It did not hurt that Bebo was then being sold to advertisers by its very deft top exec Joanna Shields, who is now head of AOL’s People Networks.

Thus, AOL woefully overpaid for it, especially if you look back from the current dire economic environment and also now realize that social-networking advertising is a little bit harder to get going than promised (a shock, I know).

No inside sources you talk to at AOL or Time Warner (TWX) will deny any of this today, and Time Warner CEO Jeff Bewkes has even said so publicly.

This was not exactly a secret then either. As I wrote right after the sale last March:

What’s AOL getting for its $850 million in cash to purchase social-networking site, Bebo?

A very attractive social-networking service and a very experienced exec who has been running it.

But, perhaps more importantly for those who focus on pesky numbers, not a whole lot of revenue and negligible profits, judging financial information I got a gander at, courtesy of sources at several companies that looked at funding or buying Bebo.

And the rest of the overall outlook for Bebo? A small but growing business, with nice user engagement with strong page views and minutes spent per session, but little traction beyond Britain and Ireland, and too small a presence in the critical U.S. market.

(Bebo is also strong in New Zealand, but BoomTown does not have to point out that that country is not exactly the kind of game-changer that AOL CEO Randy Falco mentioned in his email to the troops about the purchase.)”

And in another post I did at the time:

Thus, I am still trying to figure out why AOL–which was built on the pillars of community, communications and connectivity–has consistently not been able to leverage its still-valuable assets.

I suppose it is sexier to do a big, splashy deal, of course, which takes focus away–for a while at least–of the essential need to take hits, while doing the slow block-and-tackle work it will require to really build a strong ad and social network.

Buying Bebo, the third-ranked social network, for so much and trying to turbocharge it is a very lofty goal, of course, but the real problem with the acquisition is that it feels like an answer in search of a question.

While Bebo President Joanna Shields–who will enter the AOL exec team as part of the deal–and the Birches have clearly built a very interesting property, the weight of Falco’s calling it a “game-changer” on which AOL’s future rides could turn out to be much too much for Bebo to carry.

That is, especially with that heavy bag of Time Warner cash it is also shouldering.”

That’s why it takes about two seconds these days to uncover much residual anger within both AOL and Time Warner about the huge slug of cash that the company handed over to get Bebo, which mostly went to its quirky founders (who, many sources told BoomTown, thought they were underpaid!).

But, even so, that does not mean Time Warner is going to pull yet another stupid Internet trick–remember this was the company that sold itself to AOL for a song back in 2000, in what is now considered one of the worst merger deals ever–and sell Bebo for bupkis.

In fact, spending even more effort, it has been trying to use Bebo as the main vehicle to renovate all its communications assets, including its unsung AIM and ICQ instant messaging properties.

The center of the People Networks, run by Shields, Bebo is the third leg of the “new” AOL, as it has been recently touted, with its Platform-A ad unit and new niche content studio called MediaGlow as the other parts of the stool.

Will it all work? Will Time Warner change its mind? Will Shields give up? Will even the AOL brand continue?

“Who knows?” is the right answer, of course. With Facebook, MySpace, Yahoo (YHOO), Microsoft (MSFT) and Google (GOOG), as well as Twitter and FriendFeed, all vying to be the consumer’s dashboard to the Web, no one actually does.

And, if Time Warner is truly interested in selling off AOL whole, as it has been trying to do mightily, you might wonder if it would suddenly change course and dismember it now, causing even more confusion, when it is already facing so many other more pressing complications–all for a lousy price in the current weak economic landscape?

I called it “insane” when AOL bought Bebo for so much last year. I’d be dubious if it would get crazier still.

But if you want to see Shields in action–be careful, as she apparently so persuasive she could probably sell a big bailout to a Republican–take a look at this video I did a while back before the AOL acquisition:

The move, to be announced internally later today, is not a big surprise, even though Yahoo paid $350 million for Zimbra in the fall of 2007.

Dharmaraj (pictured here) had previously stepped back from day-to-day leadership at the Yahoo communications and communities division, which is run by former Zimbra President and CTO Scott Dietzen.

But the departure of an innovative entrepreneur like Dharmaraj–although typical when big companies buy start-ups–is never a good thing, given that it’s more important than ever to keep innovative leaders at Yahoo.

New CEO Carol Bartz will have to tap internal leadership if she hopes to turn Yahoo (YHOO) into the kind of fresh opportunity she said it could be when she was hired earlier this month.

Yahoo introduced new email services recently, based on some of Zimbra’s technologies and concepts.

That has been important, since Yahoo Mail has always been a company bright spot and has remained the bigger provider of Web email to general consumers.

But most agree that Yahoo has allowed the Google (GOOG) mail offering, Gmail, to suck up all the oxygen in the room with more flashy features like threading of conversations while not serving up a strong response quickly enough in an arena Yahoo pioneered.

Zimbra vaulted its effort at differentiation from the hyped Google offering forward more quickly.

More importantly, it has strengthened Yahoo’s ability to make online email act more like a computer program than a Web page, which has been the main focus of late of Yahoo, Google, Time Warner (TWX) online unit AOL and Windows Live Hotmail from Microsoft (MSFT).

In addition, since Zimbra was designed with flexible and open Ajax programming tools, it made it easy for third-party developers to make many other applications that jack innovation from the outside, making the communications platform the center of the Web experience with video, search and other tools.

It’s not clear where Dharmaraj is going, but here is a video interview I did with him last year after Yahoo bought Zimbra:

This morning, AOL will launch an updated look for its Bebo social-networking property, with a new “social inbox” profile for its users.

The inbox, which you can see below in the old and new versions, essentially gives its users a one-stop destination, with aggregated social feeds from across the Web, multiple email accounts and media recommendations.

But, according to sources with knowledge of AOL’s plans, the online service is preparing a more radical series of announcements after the new year, well beyond its release today.

Interestingly, the changes to its social-networking and communications properties yet to be announced have been among the things that have impressed Yahoo (YHOO), whose execs have been briefed on the changes, as part of the never-ending talks with the Time Warner (TWX) about buying its AOL asset.

That includes offering AOL’s various social-networking tools–such as chat rooms, news feeds and instant messaging–to be easily embedded by any Web site. The service will be called “Site Social,” with plans to use AOL’s advertising platform to help monetize the offering.

In addition, the renovation of the Bebo profile pages will continue, with more innovative features, including the introduction of an interactive “timeline” that shows a person’s online “lifestream” in a scrolling fashion.

BoomTown has seen the timeline–in which events of any kind can be depicted, from your book club schedule to a trip to Hawaii.

While it looks like eye candy at first, it is also pretty useful–especially a mobile version. And it is definitely the most visually striking version of a news feed that is offered by competitors.

“It is part of a left brain/right brain strategy to improve our services, distinguishing them from the pack,” said one person familiar with the upcoming changes at AOL. “But we also have all these tools and want to reach out to publishers who need to socialize their sites and find it hard to do so.”

The move today to update Bebo, though, is strikingly similar to redesigns that have been recently rolled out by large Web players like Microsoft (MSFT) and Yahoo.

All are attempts to offer a competing product to popular social-networking sites like Facebook and News Corp. (NWS) unit MySpace, where users have flocked. (News Corp. is the owner of this Web site.)

Those two companies have also been making moves of late to allow consumers to aggregate their disparate piles of online information in through connective offerings that allow them to pool all kinds of Web content and communications in one place.

AOL is hoping its efforts will focus users more on Bebo, which it bought for $850 million in March. Bebo is one of the larger social networks, although it is not popular in the U.S. and lags behind the leaders like Facebook.

AOL execs are hoping to change that by changing the game, focusing on Bebo’s strong media offerings and making it the centerpiece of its social-networking and communications unit, run by former Bebo head Joanna Shields.

AOL’s People Networks unit, which includes Bebo, AIM and ICQ, has an overall audience of 92 million unduplicated users worldwide, said AOL, referencing a recent comScore (SCOR) survey.

“The current fragmented social networking environment makes keeping up-to-date with others increasingly difficult,” said Shields, who is now president of People Networks, in a press release statement. “By opening up our network to the most popular sites and allowing our users to pull in the best of the Internet, we are creating an environment where everyone can easily and effectively manage their online lives, no matter where the individual pieces reside.”

The launch companies for the new inbox include: Twitter, Flickr, Del.icio.us, YouTube, Gmail, Yahoo! Mail, as well as AOL-owned AIM and AOL Mail. In addition, all AOL and AIM users now can now log into Bebo using their credentials and create a profile.

Here’s more specific info, from the AOL press release:

Today’s enhancements to Bebo.com, the first in a series of scheduled releases for early 2009, include:

• Media Favorites: A new recommendations engine built on the foundations of Bebo’s Open Media Platform delivers the most relevant online entertainment (including video, music, groups and games) into one place. Media Favorites are based on users’ stated preferences and aggregated data such as: what their friends are watching and listening to and what people like them like, subject to appropriate privacy settings. This feed pulls in current Bebo content and group subscriptions, making it easy to get a quick snapshot of all personalized content. Bebo already boasts one of the most extensive online media offerings available, with programming from over 500 media companies including MTV, ESPN, CBS and the BBC.

And here are the before and after Bebo profiles (click on the images to make them larger and keep clicking to make them clearer):

OLD BEBO

NEW BEBO

As has been copiously reported here and all over, Yahoo and AOL have been engaged in never-ending talks about a possible deal to merge their flagging Internet businesses.

Now, sources tell me, the circle of executives at both companies interfacing with each other has been widened, for purposes of due diligence.

That chit-chatting includes Yahoo CEO Jerry Yang, who has been in New York several times recently [UPDATE: But not yesterday, in a story I had previously linked to here]–where AOL parent, Time Warner, is located–to meet once with its CEO, Jeff Bewkes, and see if they can actually complete the merger.

Now, all this frantic activity does not mean a deal will necessarily be struck. In fact, in typical Yahoo style, it is going very slowly and that is never a good thing in dealmaking.

But it is this kind of ramped-up blabbery that has many at both companies predicting–hoping, really–that a deal will go through, sooner or later, as soon as Time Warner and Yahoo can agree on a price.

Or, more precisely, a percentage, since Yahoo’s stock price has been falling like a particularly sharp knife of late.

Sources said Yahoo does not want Time Warner (TWX) to have any more than 25 percent of the new company in a trade for AOL’s assets–although that figure would be slightly more if the media giant throws in some of that “Harry Potter”-generated cash into the deal kitty.

Yahoo (YHOO) management, sources said, also think its assets are of significantly better quality than AOL’s, and it still has that powerful–although declining–share in the lucrative search market.

Thus, it does not want to pay the $8 to $10 billion price Time Warner wants, and it should not either. (Here is a good analysis on the price issue by Silicon Alley Insider’s Henry Blodget.)

But Yahoo shares closed yesterday at a troubling $14.58, down 73 cents, or almost five percent.

That means its market valuation also declined by many billion dollars very quickly. It is now at $20.2 billion.

These profound stock drops, said several sources, could spur Yahoo to act before it gets even worse, which is why talks have been more frequent in recent weeks.

While not the best state of mind, panic is always a good motivator, and both companies are surely desperate to turbocharge themselves in the face of tough competition and avoidable management mishaps in recent years.

The hope? That together the pair can do better than they have separately–by combining their advertising, content and communications assets, which are among the largest in the world.

In addition, the “new” Yahoo would be able to make massive cost cuts, including layoffs, under the cover of integration and starting off with a clean slate.

So who would emerge more powerful in a new set-up–AOL or Yahoo?

Here’s a short cheat list:

Content:

AOL and Yahoo have a similar range of content assets, with big sites in all the classic categories, like news, financial, sports and lifestyles. Yahoo’s content head is Scott Moore, while AOL’s is Bill Wilson (both pictured here, left to right).

As I wrote yesterday, I expect that the more dominant Yahoo will rule, slashing and burning most of the AOL-branded properties, keeping only interesting newer brands like sports blog FanHouse, celeb blog TMZ and the Engadget, Tuaw and JoyStiq tech blogs.

And while former Microsoftie Moore is the likely head of this behemoth, don’t count on the very adept Wilson, who is known as a skilled corporate player at AOL, to stick around without a big role in this arena.

Communications:

Again, advantage Yahoo, which has bigger calendaring, email and instant messaging assets, an area once overwhelmingly dominated by AOL. That was then, of course.

Still, AOL’s communications tools are used by a huge audience worldwide and the pair together would be a powerhouse. So much so, in fact, that this might be the one major regulatory hurdle any deal would face.

Advertising:

Again, Yahoo would probably dominate, having just hired well-known former Microsoft exec Joanne Bradford to head up U.S. advertising sales. AOL’s top ad exec is Lynda Clarizio, a former lawyer who is considered dogged but much less experienced than Bradford. (Both are pictured here, right to left.)

And, Yahoo does have its search ad business, however weakening, and a stronger graphical ad business, even if the sector will be most under siege in the current down economy.

Plus, AOL’s Advertising.com, while a major ad network, is more of a business subject to bruising competition and squeezed margins.

Community:

Tapan Bhat (pictured here) now rules community at Yahoo, as well as its homepage, having just inherited it from the departing Brad Garlinghouse.

But AOL has a savvy and voluble exec in Joanna Shields, who came recently via its Bebo social-networking acquisition. While AOL woefully overpaid for Bebo and got played into thinking that other bidders were more interested than they actually were, it was Shields (pictured here) who essentially did that playing.

Sign her up for a top exec role in the combined company pronto!

In all seriousness, there is room for both in the newco, as both AOL and Yahoo seriously bite in the social-networking space. They will surely need a lot more than Bhat and Shields if they want to become true players in Web 2.0’s hottest and probably most important trend.

Engineering:

Yahoo. I do not need to explain this, do I?

Okay: AOL has always been incompetent in the technical arena, since its beginning days, compared with Silicon Valley companies like Yahoo.

All yours, Ash Patel!

Management:

Now, it is here that it gets interesting.

Most feel the push by Yang to do an AOL deal–and make no mistake, it is being pushed by him most of all–is due to increased pressure from his board, as well as major investors, who have had just about enough of his leadership.

“There is no way Jerry stays on as CEO in a newco,” said one source about Yang (pictured here). “He’ll be kicked upstairs as chairman, and I will think [President Sue] Decker will also have to go eventually, since there will be a lot of resistance if she is named CEO.”

But, said other sources, these major management changes will not happen immediately, if at all, as it is too distracting in the wake of a deal and ruins the positive “story” that both companies will surely want to spin.

And spin they will! (Go, Tricia! Go, Jill!)

And while he has a reputation for sharkish political skills, especially compared to Yahoo’s very diplomatic U.S. head, Hilary Schneider, expect AOL President Ron Grant to be an important part of the transition, since he is good–almost too good–at cutting costs.

Most expect his boss, AOL CEO Randy Falco, not to be part of the new company, thereby separating him and Grant, who are nicknamed “Smithers and Burns” at AOL, after “The Simpsons” creepy duo.

Most likely, there will be a search for a top-level CEO to take over the combined company–someone of the stature of New Corp.’s No. 2 Peter Chernin or eBay’s former leader Meg Whitman (except now, she is apparently Sen. John McCain’s pick for Treasury Secretary, if the Republican Presidential candidate were to win the election).

“If this has any chance of working out, the board has to push restart on the leadership,” said one person close to the situation, who notes that this deal is Yang’s last chance to truly impact the future of the company he co-founded and preserve its legacy. “Everyone gets that, even Jerry.”

But I think the idea that Yang would leave if there were to be a merger of Yahoo with AOL is wishful thinking on the part of his critics.

He appears tome to be very committed to seeing his vision of turning around Yahoo through.

And those who have counted him out always seem to be the ones who have been typically wrong, such as Microsoft CEO Steve Ballmer and shareholder activist Carl Icahn.

Because, for all the turmoil at Yahoo, it’s Yang still calling the shots.