According to the latest data from comScore, which are the most widely regarded by Wall Street, Bing has not lost search market share in the U.S., as some recent reports had suggested.

The September qSearch report, which was released to clients today, shows the Microsoft (MSFT) search service with a 9.4 percent share, compared to 9.3 percent a month earlier.

Dominant search giant Google (GOOG) also saw a slight uptick to almost 65 percent. Yahoo (YHOO), which just began a $100 million marketing campaign, saw share drop a half-point to just under 19 percent.

Both the market shares of Ask and AOL remained constant at almost four percent and three percent, respectively.

The comScore (SCOR) data on Bing counter two earlier reports that showed declines.

Here is J.P. Morgan analyst Imran Khan on the new data, as well as a table from comScore (click on it to make it larger):

Search Market Share Trends: comScore Releases September 2009 Search Data

ComScore released September 2009 qSearch volume and market share data for the US. We note that this is only one data point and is not necessarily predictive of 3Q performance. Following are the data highlights:

* According to the data, total US core search volume increased 17.3% Y/Y in September, a slight decline from 19.2% Y/Y growth in August. The total 3Q Y/Y growth rate was 17.3% vs. 2Q’s 31.1% Y/Y growth.

* Google domestic core search market share was 64.9% in September, up slightly from 64.6% in August. Google grew September core search volume by 20.9% Y/Y, down slightly from 21.6% Y/Y growth in August. Google domestic core search volume growth of 21.1% Y/Y in 3Q, is below 2Q’s 37.7% Y/Y increase.

* Yahoo! domestic core search market share dropped to 18.8% in September from 19.3% in August. Yahoo! grew September core search volume by 9.0% Y/Y, down from 16.8% Y/Y growth in August. Yahoo!’s 3Q domestic core search volume growth of 11.6% Y/Y is below 2Q’s 27.1% Y/Y growth.

* Microsoft domestic core search market share was up at 9.4% in September vs. 9.3% in August. Microsoft grew September core search volume by 30.7% Y/Y, down slightly from 31.9% Y/Y growth in August. Microsoft domestic core search volume for 3Q was up 25.8% Y/Y, above 2Q’s 20.4% Y/Y growth.

* Ask Network domestic core search market share was flat M/M at 3.9%. Ask grew September core search volume by 6.1% Y/Y, down slightly from 6.7% Y/Y growth in August. Ask Network domestic core search volume was up by 4.5% Y/Y in 3Q vs. 15.6% Y/Y growth in 2Q.

* AOL September domestic core search market share was flat M/M at 3.0%. AOL September core search volume declined 13.5% Y/Y, a slight deceleration from August’s 17.6% Y/Y declines. AOL domestic core search volume was down 15.4% Y/Y in 3Q vs. 2Q’s 5.1% Y/Y decline.

In a risky but interesting move that has some at the company nervous and others excited, Yahoo is in the process of moving key development responsibility for its juggernaut Yahoo News unit to Taiwan.

Under the new system, product management, engineering and user interface design for the powerful Yahoo (YHOO) property will become the responsibility of staffers there.

Editorial employees for Yahoo News–which is the No. 1 news site on the Web with 48.4 unique monthly visitors, according to comScore data (SCOR)–will remain in the U.S., largely located at its Santa Monica, Calif., office.

Sources had alerted BoomTown to the change at Yahoo’s flagship content offering this week and many I spoke to about it were deeply worried about further separating key functions in the creation of Yahoo News.

“We are losing more and more of our ability to make quick changes and react to new technologies, which has worked pretty well so far, since we are #1,” said one staffer. “First, we all worked together across a room, then hundreds of miles away and now it is thousands.”

Previously, as was first reported here in February, the distributed and regional method of developing content was shifted to a central global product development organization, with product management, engineering and UI design centered at Yahoo’s Sunnyvale, Calif., HQ under CTO Ari Balogh.

The argument for the shift posits that centralizing the product development of a Yahoo media offering drives efficiencies, saves money, eliminates redundancies and accelerates growth across the world.

Those who do not like the idea think it is wrong to separate the development of a product from the programming because the two are intricately dependent and need to be tweaked delicately.

In addition, they argue, it makes Yahoo media offerings, which have been largely successful, less unique and more dull.

Well, tough tomatoes, because Yahoo confirmed the transition to me when I inquired about it. It was announced internally several weeks ago.

In an interview I did yesterday afternoon with Jeff Kinder, SVP of media products and solutions, who is spearheading the change, he said it was key that Yahoo News streamline how it makes its products in order to be more innovative and responsive on a global basis.

Before the shift to a global system, he pointed out that Yahoo had 26 different news products worldwide, using nine content management systems.

“This is part of building a global media platform,” said Kinder, who leads development of Yahoo’s anchor media properties, as well as its listings and regional products around the world.

Kinder said the staff in Taiwan was selected to take on Yahoo News because it had been creating top-level news products and was passionate about the arena.

Nonetheless, similar functions for other major Yahoo content categories–Sports, Finance and Entertainment–will remain in the United States.

In addition, he noted, with employees in Taiwan taking over these functions at Yahoo News, it would “free up some of the talent” in Silicon Valley to work on other critical content projects.

Kinder dismissed worries about any logjams in the ability of U.S.-based Yahoo News staffers to make changes to offerings, either for consumers or advertising partners, noting there were weekly calls between the teams and plenty of ways to communicate online.

But those worried about the change said the reason for the move was more to cut costs in the content arena, which–like many parts of Yahoo–has undergone layoffs and expense reductions.

Countered Kinder: “We are all driving to the same goal….This is not about cost savings, but about accelerating change and leveraging a global team.”

As a new weekly feature, BoomTown is calling all those who make cool graphs, charts and stats done prettily about tech to send them to me pronto.

I am–truth be told–a secret stats fanatic. A bargraphaholic. Yes, even a closet pie-charter.

Last week, it was graphs comparing app stats for the Apple (AAPL) iPhone and the Google Android smartphone.

This week, I decided to mash up two different and interesting surveys, both from comScore (SCOR), about the search market.

When you do this, you find that while the new Bing search engine from Microsoft (MSFT) is showing some impressive growth–up a half-point in July from June to an 8.9 percent share, as you see below (click on images to make them larger)–the software giant still has a long way to go to get some true love from consumers.

That’s because, according to an earlier report, while some think Google (GOOG) is just a habit, it turns out to be an obsessive one.

As you can see from another bunch of recent comScore data in the table below–comparing search penetration, share of searches and searches per searcher in the U.S. in June–even combining Microsoft and Yahoo (YHOO) is unimpressive compared to Google.

The search share for Google is much higher and its users do double the searches, even though penetration levels are closer among Google, Microsoft and Yahoo.

Plus, the Googley ways seem to prompt more loyalty, as the next table shows. In fact, even users of Microsoft and Yahoo sites conduct double their searches on Google.

And, while Microsoft search execs will tell you off the record that this kind of stickiness is hard to dislodge–sort of like gum on your sneaker–given Bing’s recent search gains, it’ll be interesting to see them try.

Please see this disclosure related to me and Google.

With upward of two-thirds of the search market, depending on what survey you use, one would not imagine that Google would worry too much about any kind of hookup of Microsoft and Yahoo.

Think again.

While several sources at Google (GOOG), even off the record, have professed to me that they are not that worried about any search and online advertising deal the pair have finally struck, others admit that a more robust rival will force the company to compete and innovate more aggressively.

“We take nothing for granted, because anyone can make a comeback,” said one person at Google, who points to Microsoft’s laudable efforts with its Bing search service. “Especially with Microsoft’s deep pockets and Yahoo’s talent in the advertising market.”

Sources close to the situation said Google will likely try to keep a low profile at first in opposing the deal announced today, positing that regulators have the same opinion about fewer competitors in the market as they did when opposing a similar Google-Yahoo search deal last year.

“Is Google siccing the dogs on this deal?” asked one person familiar with Google’s thinking. “Or will it wait for regulators to cast scrutiny on a deal that drops the number of competitors from three to two?”

Still, having three in the market has not been enough to lift the share of Yahoo or Microsoft very much in comparison to Google over the last several years.

According to a comScore (SCOR) report for June, for example, even combined, Microsoft (MSFT) and Yahoo (YHOO) have a share that is less than half that enjoyed by Google.

Microsoft accounted for 8.4 percent of the search market in the month, with Yahoo clocking in at 20 percent. Google grabbed the lion’s share at 65 percent.

And that dominance means a financial windfall–as volume means more queries means better search ads means better relevance in an ever-virtuous and very lucrative cycle.

It is a cycle Google would like to keep intact, so much so that it made what turned out to be a very risky move to block Microsoft when it was trying to take over Yahoo last year.

Regulators ended up raising federal eyebrows about the proposed Yahoo-Google search deal, which was less sweeping than the Micosoft-Yahoo one announced today.

Google dumped Yahoo in the end–although not before the company found itself front and center on antitrust radar screens.

And there it has remained, with Christine Varney, assistant attorney general for the Antitrust Division of the United States Department of Justice, having become Google’s most pointed critic.

She should be, given the Silicon Valley-born Yahoogle idea was an appalling reach by Google, as I wrote last April:

And while it might be a long-cherished dream of Google’s to take over Yahoo search–and also get the chance to return to the scene of the crime, since Google got its first big push from doing Yahoo search, before Yahoo wised up too late–there is simply no way this will be allowed by regulators nor should it.

Still, you have to almost admire the chutzpah of the search giant in making this move, if the sheer and unadulterated arrogance of it wasn’t so distracting.

Because, while Google has almost none of the obvious menacing aggression that characterized Microsoft when it thoroughly dominated tech (although all those beach bikes on its campus inexplicably creep me out a little bit), the company still cannot be allowed to have a monopolistic share of the market.

It is bad for advertisers, it is bad for consumers, it is bad for innovation, no matter how well-intentioned Google is.

And no matter how many flashy moves Google and Yahoo make, it is flat-out wrong for one player to so dominate such an important sector.

Anti-competitiveness would likely be Google’s first arrow in what will surely be an attempt to slow down, if not block, the deal.

And while advertisers are more disposed to have a stronger No. 2 player to counter Google’s growing power, the company might use the opportunity to shave the sharp edges of its ever-scarier reputation.

In a conference call early this morning about their deal, Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer tried to paint a picture of Google as a scary and dominating search giant.

But, as Google will surely offer up, if Microsoft and Yahoo combined is the underdog, it might not look like so much of a bully after all.

Please see this disclosure related to me and Google.

Unless there is some major glitch, there might finally be a search and online advertising deal struck between Yahoo and Microsoft at long last.

Top executives at Microsoft–including SVP of the Online Audience Business Group Yusuf Mehdi, search head Satya Nadella and top digital exec Qi Lu, as well as others–have all flown down to Silicon Valley from their Redmond, Wash., HQ today to iron out the remaining issues, which seem to have to do with the deployment of technology.

“It is an entourage,” joked one exec.

Microsoft CEO Steve Ballmer is also deeply involved in the talks, although he is not with the group.

If all goes well, the deal could be announced within the next week, sources at both companies said.

The most recent talks have been unusually close to the vest at both companies, and spokespeople for both Yahoo (YHOO) and Microsoft (MSFT) declined to comment on the issue.

And, of course, they should not, since there is no certainty any deal will be struck at all, especially since the pair have been down this road before, unsuccessfully.

In those cases, both sides have thought they were close, too, with fingers quickly pointing at each other for the failure of the discussions.

While BoomTown has gotten several different versions of terms of the latest deal, they all include Microsoft (MSFT) paying Yahoo (YHOO) several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo.

There is also a display advertising element to the deal, which would likely have Yahoo take the lead in selling premium advertising for the companies.

That they are so close is a good sign, although sources on both sides of the deal cautioned that it could just as easily come apart.

And, indeed, Microsoft and Yahoo have long argued the particulars of this deal, including over the rate for traffic-acquisition costs, the ability of Yahoo to have control over data and the simple fact that such an arrangement is exceedingly complex.

But, said one person close to the situation, “It is down to the short strokes, for sure, it is just a question if we can finally close this.”

That’s a good question, given the push-me-pull-you relationship between Yahoo and Microsoft over the last two years.

But both need each other, especially since they lag so far behind search market leader Google (GOOG).

Yahoo was even ready to strike a similar deal with Google in the midst of Microsoft’s hostile takeover attempt last year. That partnership failed due to regulatory concerns.

Talks between Microsoft and Yahoo have waxed and waned too, as I reported earlier this week.

When last we checked in, Yahoo CEO Carol Bartz and Microsoft’s Ballmer had a little private tete-a-tete about the deal, when both were attending the seventh D: All Things Digital conference in Southern California in late May.

Bartz and Ballmer also both acknowledged discussions in onstage interviews at D7, with Bartz even boldly stating that she was open to the deal if good and reliable data and “big boatloads of money” were forthcoming from Ballmer.

(You can see the video of her saying that here, while Ballmer is less colorful here.)

Since then, Microsoft did an aggressive launch of its new Bing search service, which has been an initial success.

The company has become more confident with the early success of Bing, which has garnered good reviews and small improvements in market share in surveys.

Sources at the software giant maintain that the improvement–via innovation and a huge marketing spend–has given Microsoft a bit of leverage against Yahoo, although the bets are still out on exactly how much sustained share Bing can garner.

Yahoo is aware, of course, that is can ill afford to lose search market share, although Bartz has been focused on beefing up Yahoo management and marketing.

Still, the companies have never given up on the talks, which began in March, although all the back and forth underscores a very real debate by both sides about whether joining together will benefit them both or not.

The possible pluses are clear: Huge technology cost-savings and cash for Yahoo and another weapon to fight archrival Google for Microsoft.

It needs as much firepower as it can get. A recent comScore (SCOR) report for June showed Google with a 65 percent share, Yahoo at 19.5 percent and Microsoft at just 8.4 percent.

The deal, if struck, could give a big boost to shares of both companies, which have been up a lot since the beginning of the year.

While sources at both sides stressed that this was in no way a merger, a deal would bind their fates together rather strongly.

There was a report earlier today by 24/7 Wall Street that a deal was “imminent.”

One source advised caution when asked about that word, although this person was more confident than ever.

In any case, if it does not work out, the source said, “this will be it…we will all finally go our separate ways and be done with it.”

Now what?

The party-all-night social-networking site that has been MySpace so far got a massive morning-after shock yesterday when 30 percent of its workforce–or 420 employees–was laid off.

And today, MySpace, which is still 1,000-strong, and its leaders have to face the cold, harsh light of day in the aftermath of the restructuring and get busy quickly figuring out a way to reinvigorate a brand that has suffered after a stunning rocket of a start many years ago.

That’s especially true since a report also just came out by market research outfit comScore (SCOR) showing that Facebook has surpassed MySpace in the key U.S. market as the top social-networking site.

So, based on many sources I have spoken to over the last week, here’s a rundown of the next steps MySpace will likely be taking and who’ll be making them.

MORE LAYOFFS?

“Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company,” said new CEO Owen Van Natta in a statement about the layoffs.

What he did not say was that cost-cutting via layoffs is almost always the first move in a turnaround.

These cuts have actually been long in coming, but it’s promising that they finally happened so quickly after Van Natta–along with COO Michael Jones and Chief Product Officer Jason Hirschhorn–were brought in by News Corp. (NWS) digital head Jon Miller to replace co-founder and CEO Chris DeWolfe.

(News Corp. owns MySpace, as well as Dow Jones, which owns this site.)

“The layoffs were a total reset,” said one source, who noted that unless MySpace’s advertising business falls off a cliff, which it is unlikely to do in the short term, more cuts in the U.S. will not be needed for now. That might not be true internationally, where MySpace has not performed as strongly.

At this point, MySpace is now about the same size as chief rival Facebook’s staff, which has been growing much more quickly (you can see my video tour of its new Silicon Valley HQ here).

Except for not making the move to new offices in Los Angeles, the Beverly Hills, Calif.-based MySpace is also not going to be closing offices elsewhere, as has been reported, most especially its San Francisco one.

In fact, Van Natta is traveling to visit all of them, his memo said, over the next several days.

LEADERSHIP

Despite the large number of layoffs and the departure of DeWolfe, most expect there to be very little change in the top ranks of MySpace leadership for the time being.

While Jeff Berman, MySpace’s president of sales and marketing, has been rumored to be on the bubble, multiple sources said he would be staying in his job.

He’ll continue to be aided by Angela Courtin, SVP of marketing, who is well-regarded.

The same is true of the other major question mark, co-founder Tom Anderson (pictured here), who has held the president title at the company and was in charge of its products.

Anderson does not have a new title yet and will no longer be in a key operational role, but many sources said his historical knowledge and his tight relationship with the MySpace community make it important that he remain at the company.

“Tom is clearly in touch with what has made MySpace special,” said one source. “And it is important that he remain to keep the culture alive.”

Also staying for now is Tom Andrus, who has been SVP of product management under Anderson and is now reporting to Hirschhorn. While initially upset by being supplanted so quickly by new execs, most sources told me that he is a solid and well-liked exec.

The same is said of Jason Oberfest, SVP of business development, who is also staying. So too, CTO Aber Whitcomb, whom many thought would be leaving.

The only major exec departure I could confirm was Fox Interactive Media CFO Ed McKenna, who was in charge of MySpace too. Sources said will be leaving the company as his function gets consolidated into higher corporate units at News Corp.

PRODUCT REHAUL

Lastly, most noted that MySpace cannot cut its way back to health, which is why sources said its execs are now beginning to engage in a major overhaul of the product itself.

While leadership had considered bringing in a separate new skunkworks-type team to do that, it has been decided that the current staff–helped by some outside consultants–will be doing a top-to-bottom redo of MySpace.

MySpace could use it. As you can see from the charts below from a poll that we did for the seventh D: All Things Digital conference recently–and where Walt Mossberg and I interviewed Van Natta and Miller onstage (see the highlights video below)–it has a lot to fix, including reengaging users, improving technology and differentiating itself from Facebook.

And, in fact, carving itself out as a different product than Facebook is one major aim because the offerings–while both are social networks–are quite different in approach. Facebook has evolved into more of a utility, while MySpace has made better inroads as an entertainment hub.

Whatever changes are made, most sources note that MySpace needs to try to remain true to its original frisky and fun start-up core, while innovating a next-generation product and continuing to goose its advertising business.

That also includes starting up renegotiations with Google (GOOG) about its search-advertising partnership, talks that are just getting started now (more on that soon).

Most of all, said one person, pointing to the long and painfully public struggle at Yahoo (YHOO), leadership has to stop the focus on MySpace being broken as soon as possible.

“MySpace needed to be shaken up, but it is still a very powerful brand and has huge traffic,” said the source. “Its management has to project a sense inside and outside that it is not only fixable, but also can lead again.”

As with Yahoo, Time Warner (TWX) online unit AOL and many others before it, that’s no easy task for MySpace, starting today.

In any case, here’s the highlights video of the Miller/Van Natta interview at D7:

And here are three not-so-upbeat poll charts about MySpace and how users think about it (click on them to make them larger):

]]> http://kara.allthingsd.com/20090617/myspace-after-the-layoffs-heres-whats-what-and-whats-next/feed/ 4 http://kara.allthingsd.com/20090610/bartz-uses-typical-tough-talk-to-pressure-microsoft-even-as-bing-shows-some-early-zing/ http://kara.allthingsd.com/20090610/bartz-uses-typical-tough-talk-to-pressure-microsoft-even-as-bing-shows-some-early-zing/#comments Wed, 10 Jun 2009 11:05:21 +0000 Kara Swisher http://kara.allthingsd.com/?p=14180

Well, what else is Yahoo CEO Carol Bartz going to do but talk smack?

Not at BoomTown–that was so two weeks ago!

About potential partner Microsoft, of course!

And, especially about its new Bing search engine.

And, most especially of all, since new stats from comScore (SCOR) yesterday showed that the new look and marketing push for Bing are showing promising initial signs.

According to a post by Digital Daily’s John Paczkowski, “Microsoft’s new search engine boosted its share of the search market to 11.1 percent from 9.1 percent in the last week. And it bolstered the software giant’s search penetration to 15.5 percent from 13.8 percent.”

Those results track on some other early surveys that indicate that Bing has been a good effort for the software giant, which is spending $100 million on marketing it alone.

That’s why, no surprise, No-Holds-Barred Bartz has been out on some kind of speaking tour recently, chatting up a storm about Yahoo (YHOO) and its sunny prospects.

In doing so, she has also thrown water on potential deals with Microsoft (MSFT), Bing and a few other errant issues like a possible hook-up with Time Warner (TWX) online unit AOL.

(Ixnay onway AOLWAY, by the way, say Bartz).

It is all, as anyone not just tuning in knows by now, part of the Internet company’s push-me-pull-you relationship with Microsoft, one that Bartz is taking to new levels.

At the seventh D: All Things Digital conference–exactly two weeks ago today, in fact–Bartz veered into more-positive waters about a Microsoft deal, in a lively onstage interview with me, saying that if Yahoo got a giant pile of money and good data that she was not against the sale of its search business.

And Bartz and Microsoft CEO Steve Ballmer also met while at D7, continuing ongoing partnership discussions.

Then, at an investor conference last week, she tacked negative and said she thought the prospects for the Silicon Valley icon would be “cleaner” without a Microsoft search and advertising deal.

Even better–or worse: “I personally think we would be better off if we never heard the word ‘Microsoft.’”

Those comments cleanly knocked five percent off of Yahoo shares.

Then, yesterday in an interview on Fox Business Network, while dinging any AOL merger deal–which had been discussed by her predecessor, Jerry Yang–as not happening “anytime in the forever future,” Bartz said Yahoo search was strong enough to fight for share with both Google (GOOG) and Microsoft.

And of the Bing gains in early surveys, she noted: “One day is one day…it does not a trend make.”

Well, Bartz hopes not!

That’s why she also carefully–and in an unusually modulated tone for her–kept the door open to Microsoft: “If you talk about search in general, you could partner with somebody.”

I don’t know about anyone else, but my head is spinning from all the public zig-zagging by Bartz (pictured here).

But, at the heart of it is one fact: When it comes to search, Yahoo has no true strategic alternative–except to spend on marketing and innovation, as much as Google and Microsoft can, to keep up.

Because, with Bing, Microsoft has finally presented a definite challenger to Yahoo’s search product that will likely improve with time.

With the intense marketing, Microsoft is betting it can make Bing stick with consumers for more than just one try.

The jury is still out on that, of course, but combined with the various search distribution deals both Microsoft and Google have grabbed away from Yahoo, it is more than quite possible that Yahoo could lose market share.

And, if that turns out to be more than one or two points, that could mean trouble–from investors, Wall Street, noisy media, to name a few of the most annoying–for Yahoo.

Thus, it is a dicey game of chicken that Bartz is playing, as one person close to the companies said quite succinctly: “She can ride it down or make the deal.”

My prediction: Bartz will keep up the tough talk, but–in the end–make a deal.

[T-shirt photo from Zazzle.com.]

]]> http://kara.allthingsd.com/20090610/bartz-uses-typical-tough-talk-to-pressure-microsoft-even-as-bing-shows-some-early-zing/feed/ 1 http://kara.allthingsd.com/20090410/yahoos-bartz-and-microsofts-ballmer-finally-talking-about-search-and-advertising-partnership/ http://kara.allthingsd.com/20090410/yahoos-bartz-and-microsofts-ballmer-finally-talking-about-search-and-advertising-partnership/#comments Fri, 10 Apr 2009 13:55:02 +0000 Kara Swisher http://kara.allthingsd.com/?p=12076

In early discussions that began in the last several weeks that apparently included a face-to-face meeting last week, Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer are finally talking about search and also advertising partnerships the companies could possibly strike, said several sources with knowledge of the situation.

According to a variety of sources, the talks between the pair (pictured here) and other execs at both companies are preliminary and wide-ranging, focused on what kind of commercial relationship Yahoo and Microsoft could have in the future.

But, cautioned sources close to Yahoo, the discussions are not about a renewed acquisition attempt by Microsoft and also might not result in any deal.

In any case, investors will likely cheer any kind of productive re-engagement between Yahoo (YHOO) and Microsoft (MSFT), which has been lacking since a tense takeover effort by the software giant went south last year after an ugly battle that soured relations between the two companies.

“It’s long past time,” said one outsider who had been told of the discussions. “With Google’s huge market share, these two need to work together and the problems they had should be put in the past.”

Both Yahoo and Microsoft declined to comment about the talks.

The change in leadership at Yahoo has helped, especially since Bartz–a Silicon Valley veteran with much deal experience–has none of the baggage from the takeover battle that previous management was carrying.

Microsoft seems to have also moved on, working on a massive redesign and relaunch of its search brand, under the internal name Kumo, an effort that has included the hiring a whole lot of talent in the arena, mainly from Yahoo, in fact.

That includes Qi Lu, a former Yahoo tech star, who is leading all of Microsoft’s online efforts.

All of this means that a relatively green-field approach is now possible.

Thus, sources said, the talks include many scenarios, such as one in which the companies swap online advertising assets and deliver services to each other.

In that interesting plan, Yahoo might take over all of Microsoft’s display and premium advertising business to sell along with its own, while Microsoft would run the search advertising business for the pair.

Such a deal, which plays to each company’s strengths, would bind the two closely together, even though they still compete on many other fronts in the Internet space.

It also joins their forces, creating a sale that is much more attractive to advertisers and allows for better competition against search powerhouse Google (GOOG).

And while Ballmer has publicly said repeatedly that Microsoft is interested in buying either Yahoo’s search advertising business or search outright, sources close to Yahoo said the company is still determined to maintain control of the important search business and the massive traffic and critical data it provides.

That is especially true, given that Yahoo is the No. 2 player, with a much larger share than third-place Microsoft. According to recent surveys, for example, Google has a 63 percent share, while Yahoo has 20.6 percent and Microsoft eight percent.

But it is also in Yahoo’s interest to move fast, since its search traffic could be declining soon.

According to a story by Dow Jones yesterday, citing a comScore (SCOR) report, recent toolbar distribution deals with computer makers Hewlett-Packard (HPQ) and Acer by Microsoft and Google respectively, will have a negative impact on Yahoo.

The story said that Yahoo “could lose up to 15% of its search traffic over the next 12-to-18 months after failing to renew deals with two computer makers, blows likely to hamper the Internet giant’s efforts to remain a viable competitor in search advertising.”

But even as he directs aggressive moves to put even more competitive pressure on Yahoo, Ballmer has been unusually deferential in giving Bartz a lot of time to come to the table.

Nonetheless, he cannot seem to stop talking about it either.

At a recent conference in mid-March, for example, Ballmer said:

“It’s really about getting the pooled volume, because you actually can improve your product faster if you have more users….If you have more advertisers, you can improve the product as well….There are returns to scale. And putting the scale together is valuable.”

But, in that interview, Ballmer also said that he had only talked to Bartz briefly since she was hired in January–congratulating her on the new job and mentioning that he’d love to talk about a deal.

And, at another meeting with Wall Street analysts earlier, he went even further:

“You all know that I would like to figure out how to pool somehow Microsoft and Yahoo. I’m not talking about doing an acquisition, blah, blah, blah, back to search deals, blah, blah, blah, I don’t know if anything is going to happen. I’ll short-circuit the whole conversation, but the fact of the matter is, these two guys [Microsoft and Yahoo] should somehow figure out how to get together and create more competition for this guy [Google]. And I’m hoping perhaps that that’s a reasonable conversation to have with new management at Yahoo as Carol comes onboard.”

In contrast, Bartz has played her hand very close to the vest so far, at least publicly, often discounting any effort to split up Yahoo.

In fact, at a Morgan Stanley (MS) tech conference in early March, she said:

“I am not going to negotiate with my 55,000 favorite friends….We’re going to negotiate as companies negotiate–and that’s privately. If something happens, you’ll know it then. Until then, there is no comment.”

(By the way, both Ballmer and Bartz have agreed to be interviewed onstage–separately, of course–at the D: All Things Digital conference in late May that Walt Mossberg and I run–so we will be sure to try to get one–not that they would give one!)

]]> http://kara.allthingsd.com/20090410/yahoos-bartz-and-microsofts-ballmer-finally-talking-about-search-and-advertising-partnership/feed/ 3 http://kara.allthingsd.com/20090408/my-ikid-ijacked-my-iphone-a-geek-parenting-tragedy/ http://kara.allthingsd.com/20090408/my-ikid-ijacked-my-iphone-a-geek-parenting-tragedy/#comments Wed, 08 Apr 2009 10:43:03 +0000 Kara Swisher http://kara.allthingsd.com/?p=11922

BoomTown is not proud of the problem.

Not at all.

But, after hearing the same situation described over and over again from many other parents like me, I am also not alone.

As it turns out, our almost-seven-year-old son, Louie, has morphed into an iJacker.

That would be of my iPhone, which I switched solely to recently after a longtime attachment to my BlackBerry.

That RIM (RIMM) mobile phone never turned into a CrackBerry for him, as Louie did not care much for its lovely keys for emailing that so captivated me.

But now he wants to grab my iPhone from my holster all the time, having become entranced by apps–lots and lots and lots of apps–that now litter the digital pages of my Apple (AAPL) device.

DizzyBeeFree and Super Monkey Ball. Touch Hockey and Paper Football. Finger Sprint and MoodPhone. Bounce On and Crazy Penguin Catapult. Lie Detector and Crazy Snowboard. Tic Tac Toe and Hangman. And iChess, iCheckers, iBowl.

Of course, there are also the bubble poppers and light sabers and more cowbells.

And, good lord, how did a “Race to Witch Mountain” app get on there?

So, I don’t need any stats to tell me that the iPhone, and the iPod touch too, have turned into gaming devices of great impact.

But there are stats, like yesterday’s from comScore (SCOR), showing that 12 out of the top 25 all-time iPhone apps are games. (See the chart below; click to make it larger.)

It’s easy to understand why. The ease of use, the small form factor, the great graphics in this mobile phone that is actually a powerful computer.

In fact, Louie hardly has any interest in the desktop computer anymore, or even a laptop. Although we limited his access to it, it’s moot, since he hardly ever uses it now that the iPhone is around.

Why? It is clear, most of all, that Louie loves the movement and the touch features, which turn the experience into a visceral one.

And, uh-oh–according to a post last week on the blog Blorge.com, “The industry patent watch reveals that Apple has filed patent applications that seek to patent certain user interface ideas for the iPhone, including the use of movement, vibration, and pleasure.”

Oh, this is not going to go well when Louie is a teenager.

Thus, aside from switching to a Microsoft (MSFT) Zune, what are our parenting tactics to stave off that day from coming sooner?

Well, obviously, as much as he might beg–and he does beg and wheedle and plead–Louie gets to use the iPhone sparingly, on short car trips mostly.

And he has to play not only the sillier games, but use ones like iChess or word games that require some brain power.

Lastly, Louie must be analog more than digital and playing inside and outside more than any of it.

There should be more rules, I know, but for now he seems just as riveted to baseball and kickball too, so I am not quite in the panic stage.

More the do-not-leave-the-iPhone-on-the-counter-if-I-ever-hope-to-see-it-again phase.

Louie’s almost-four-year-old brother, Alex, is less interested in games on the iPhone, as it turns out.

Instead, for him, the iPhone is a magical music video device on which I bring him old musical numbers.

Last night, it was “I Like to Be in America” from “West Side Story” and the night before, “Oh, What a Beautiful Morning” from “Oklahoma!”

He was as delighted and mesmerized, as I was when I first saw those classics on the television when I was a kid.

And, even seeing them on an iPhone, of that, I am proud.

But, to give you the full picture of the situation, here is a video interview I did of Louie in action with my hijacked iPhone (it is not pretty):

[ See post to watch video ]

]]> http://kara.allthingsd.com/20090408/my-ikid-ijacked-my-iphone-a-geek-parenting-tragedy/feed/ 6 http://kara.allthingsd.com/20090223/aol-socializes-even-more-with-new-lifestream/ http://kara.allthingsd.com/20090223/aol-socializes-even-more-with-new-lifestream/#comments Mon, 23 Feb 2009 14:00:11 +0000 Kara Swisher http://kara.allthingsd.com/?p=10152

As part of its ongoing rejiggering of its social-networking offerings, AOL is formally rolling out its expected Lifestream platform today, with a new “timeline” depicting a user’s online life in a streaming horizontal calendar called a Lifestory.

(See image above; click on it to make it larger.)

The moves are the latest made by AOL’s People Networks related to its Bebo social site, which this column previously reported about in December.

AOL is hoping its efforts will focus users more on Bebo, which it bought for $850 million in March, a high price that has been controversial both inside and outside Time Warner (TWX), which owns AOL.

While Bebo is one of the larger social networks, it is still not popular in the U.S. and lags well behind leaders like Facebook.

Lifestream will first be available on AOL’s Bebo and include updates from friends on Facebook, Myspace, YouTube, Flickr, Twitter and Del.icio.us. Lifestream can also be used by brands, celebrities, bands and companies.

Lifestory uses a zooming technology to look at various times, using text, music, videos and photos, and can be done with many contributors. It also includes a feature called Social Slider that allows a user to have more granular filtering control over who sees what in Lifestory.

AOL had previously launched other social-networking features, such as Social Inbox, a one-stop destination with aggregated social feeds from across the Web, multiple email accounts and media recommendations.

AOL also has an upcoming service called Site Social, with plans to use its advertising platform to help monetize the offering.

Many large Web portals like AOL have recently rolled out by large Web players like Microsoft (MSFT) and Yahoo (YHOO). All are attempts to offer a competing product to the most popular social-networking sites, Facebook and the 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 through connective offerings that allow them to pool all kinds of Web content and communications in one place.

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

Here are some screenshots of the AOL pages with the new features:

Moviefone Lifestory

VH1 Lifestory

Social Inbox

User Profile

User Profile 2

]]> http://kara.allthingsd.com/20090223/aol-socializes-even-more-with-new-lifestream/feed/ 2 http://kara.allthingsd.com/20090219/the-little-engine-that-could-yahoo-paid-search-adds-video-and-pictures-trying-for-more-clicks/ http://kara.allthingsd.com/20090219/the-little-engine-that-could-yahoo-paid-search-adds-video-and-pictures-trying-for-more-clicks/#comments Thu, 19 Feb 2009 10:44:30 +0000 Kara Swisher http://kara.allthingsd.com/?p=9987

Yesterday, Yahoo celebrated the fifth anniversary of the launch of its own search engine with some good news about its market share and by jazzing up its paid listings today with a plan to include pictures and video.

Will the “rich” ad search product work better, a digital little engine that could?

We’ll see, although it seems the troubled Internet company is already doing better without all the bells and whistles.

After years of declines, according to a new report from comScore, Yahoo’s share in the U.S. continued to scratch its way back slowly, from a low of 19.6 percent last June to 21 percent in January.

Better still, according to comScore (although not in other recent surveys like Nielsen), Google (GOOG) lost some juice, declining to 63 percent from 63.5 percent in December of 2008.

Microsoft (MSFT) search rose a tiny bit to 8.5 percent. But that’s still essentially pathetic for a company that is spending so much and trying all sorts of new iterations of its search product–from giving cash back to creating more niche search–to boost share.

For its part, Yahoo (YHOO) has decided to integrate images and video with its search ads, which have long been text-based. Yahoo has been working on various versions of this and other improvements to search for a year.

Both Google and Microsoft have tested similar versions, but have not launched them widely, for a variety of reasons.

Thus, it is Yahoo that will be first in a major rollout of what one company insider jokingly described to BoomTown as “a mutant marriage of search ads and display.”

Paid search, a business where advertisers pay for relevant links on a larger search page, has been largely dominated by Google, with Yahoo’s share one-seventh the size, even as it dominates in selling online graphical advertising called display.

But the display business has been hard hit in the weak economy as advertisers have pulled back drastically on banner advertisements and the like, and as evidenced by a decrease in that business that Yahoo announced in its most recent quarter.

Thus, the idea is now to apparently make paid search richer, giving it the cool-looking attributes of display and the more measurable qualities of paid listings.

But whether this yields better click-through rates on Yahoo–and, more to the point, fends off calls by investors to take a giant sum of money from Microsoft to hand over its search business–is still unclear.

Still, it’s nice to see Yahoo search–which also recently added a “search pad” for users to conduct online research more easily–trying to compete with a little more panache after, badly, copying Google for so long and with so little result.

In other words, after five years of losing, it’s about time for some new moves.

]]> http://kara.allthingsd.com/20090219/the-little-engine-that-could-yahoo-paid-search-adds-video-and-pictures-trying-for-more-clicks/feed/ 0 http://kara.allthingsd.com/20090130/miss-yahoogle-try-a-brown-bag-lunch-on-the-topic-today/ http://kara.allthingsd.com/20090130/miss-yahoogle-try-a-brown-bag-lunch-on-the-topic-today/#comments Fri, 30 Jan 2009 09:25:33 +0000 Kara Swisher http://kara.allthingsd.com/?p=9197

Today, for interested lawyers, the American Bar Association is hosting a “brown bag” lunch and discussion in Washington, D.C. on the now-scuttled Google/Yahoo deal.

Ominously titled: THE GOOGLE/YAHOO! AGREEMENT AND ITS IMPLICATIONS FOR FUTURE ANTITRUST ENFORCEMENT IN ONLINE ADVERTISING, the event will be held at noon until 1:30 pm EST at the law offices of Cadwalader, Wickersham & Taft at 1201 F Street NW. (Cadwalader worked for Microsoft on its failed Yahoo bid, by the way.)

Still, the gathering could not come at a more perfect time, given that comScore’s 2008 Digital Year In Review report, released yesterday, showed the power of Google (GOOG) at an all-time high, no matter how much Yahoo-chasing, lawyer-rattling and lobbying Microsoft (MSFT) has done.

According to Digital Daily’s John Paczkowski:

“Google began the year claiming 58.5 percent of all search queries and ended it with 63.5 percent. Moreover, of the 137 billion search queries conducted in the states last year, 85 billion were handled by Google. That means Google claimed nearly 90 percent of the total growth in search query volume for the year.”

In addition, Google was ranked as the top U.S. Internet property for 2008 and its influence even outpaced Internet growth. The U.S. Internet population grew four percent in 2008, while Google sites, such as the flagship Google, YouTube and Blogger, grew 12 percent.

Yahoo (YHOO) and Microsoft have both lagged far behind in the search market.

BoomTown’s translation of those scary-Google stats: The Justice Department Lawyer–Antitrust Division–Employment Act of, say, 2015.

Here’s the description of the event, so those lawyers can be ready when that particular rapture–for Microsoft, at least–takes place:

When Google and Yahoo! abandoned their proposed agreement last November, the Justice Department issued a statement identifying relevant antitrust markets and addressing the likelihood of anticompetitive effects.

Post Google/Yahoo!, the intersection of antitrust law, economics and online advertising technology continues to raise fascinating questions about how to analyze competition in this dynamic industry. During this round table, a distinguished panel will discuss the investigation and its implications for future antitrust enforcement in online advertising.

Participants will include: Aaron Hoag (Department of Justice Antitrust Division), David Gelfand (Cleary Gottlieb Steen & Hamilton LLP), Michael Weiner (Skadden, Arps, Slate, Meagher & Flom LLP), Marius Schwartz (Georgetown University & Bates White) and Jonathan Kanter (Cadwalader, Wickersham & Taft LLP). The program will be moderated by Paul Cuomo (Howrey LLP).

The round table portion of the program will last approximately 1 hour and will be followed by Q&A. There is no charge for brown bag programs.

To RSVP, please e-mail Dawn Carlucci at dawn.carlucci@cwt.com and indicate whether you plan to attend in person or by phone. A dial-in number for the program will be e-mailed to participants attending by phone in advance to the e-mail address provided. If you have any questions please contact Diane Odom at (312) 988-5702 (odomd@staff.abanet.org).

Recordings of this Brown Bag Program will be posted on the Section’s website Members Only area and are downloadable in an MP3 format, free of charge, at http://www.abanet.org/antitrust/at-bb/bb-audio.shtml.

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