[UPDATE: AOL confirmed our story below about Coleman's departure and Levick's appointment. See below.]

Platform-A President Greg Coleman–the former Yahoo advertising sales exec who came to AOL only three months ago–is leaving the company, sources said, as new CEO Tim Armstrong remakes his top staff in preparation to spin off the Time Warner (TWX) online unit.

Coleman was brought to AOL by former CEO Randy Falco in February, replacing Lynda Clarizio. But Falco was ousted two weeks after Coleman got there.

Armstrong, sources said, announced the moves to staff tonight, right after he told Coleman about his decision late today.

Coleman will be replaced by a Google ad exec, Jeff Levick, sources said, who had a close relationship with Armstrong when they were both working at Google (GOOG).

AOL said in a press release that Levick would become “President, Global Advertising and Strategy, a new and expanded role, in which he would be “responsible for Platform-A, AOL’s advertising business, as well as developing global revenue strategies.”

Levick will be the third major Google advertising exec to leave the company recently, after Armstrong himself and today’s departure of former DoubleClick boss David Rosenblatt.

Levick (pictured here) was a VP of industry development & marketing, the Americas. He has been at Google since 2001.

Also out: CFO Nisha Kumar, who came to AOL in early 2007 from Time Warner. She was told of the decision earlier, and there has been a search on for her replacement.

It is a time of much change at AOL. Yesterday, Time Warner reiterated its intent to spin off AOL in a regulatory filing, and to buy back the five percent stake Google owns.

Time Warner also had to deliver bad news about AOL’s disappearing ad revenue today in its quarterly earnings report. It was down 20 percent.

Its ad business has not been helped by the fact that AOL has seen a number of Platform-A heads roll over the last two years.

Coleman is an experienced online ad exec, who was at Yahoo (YHOO) for seven years, responsible for all advertising revenue worldwide. He came to Yahoo from Reader’s Digest.

But Coleman ran into Yahoo’s management buzzsaw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

But Yahoo’s ad business did grow strongly under him and former Yahoo ad exec Wenda Millard. She was also pushed out of Yahoo and just left her job as co-CEO of Martha Stewart Living Omnimedia.

Before AOL, Coleman had been running a Los Angeles-based start-up called NetSeer, which focuses on ad targeting.

While at AOL a short time, Coleman had busied himself reshuffling the staff there in several moves.

He has a three-year contract, sources said, which AOL will presumably have to pay out on.

Here is the official AOL press release:

JEFF LEVICK NAMED HEAD OF AOL GLOBAL ADVERTISING AND STRATEGY

New York, NY–April 30, 2009–AOL announced that Jeff Levick will join the company as President, Global Advertising and Strategy. In this new and expanded role, Levick will be responsible for Platform-A, AOL’s advertising business, as well as developing global revenue strategies. Levick comes to AOL from Google, where he was most recently VP of Industry Development and Marketing, The Americas. He will report directly to AOL Chairman and CEO Tim Armstrong.

“Our goal at AOL is to create great content and products, as well as make our advertising offerings the best in the industry for marketers and we are putting together the strategy to achieve that. I’m delighted that Jeff will be coming on board to lead this effort,” Armstrong said. “I’ve worked with Jeff for more than seven years at Google, and he is absolutely the right person to drive growth in our premium ad sales, dramatically scale our Advertising.com business, and further develop AOL’s research initiatives and consumer insights.”

“This is a perfect time to join AOL and I firmly believe that AOL’s best days are ahead of it,” said Levick. “The company has one of the largest and most engaged audiences on the Web, some of the best advertising technology in the business, and a powerful third-party network. There is great opportunity here for us to capture.”

As a result of this change, Greg Coleman will be leaving Platform-A, where he has served as President since early February 2009.

“In only a short time, Greg made a strong imprint on Platform-A’s sales organization–reorganizing and refocusing the team,” said Armstrong. “I appreciate his efforts and know that they will contribute to the work that lies ahead with Platform-A.”

Levick will officially join AOL in the coming weeks. At Google, Levick was responsible for business marketing activities for the Americas as well as sales development and strategy for all of the vertical industries covered by Google’s Americas sales organization. Levick joined Google in 2001 and has held various executive management positions in the company’s advertising sales organization in both North America and Europe.

Prior to joining Google, Levick served as a corporate attorney with a specialty in mergers and acquisitions at the international law firm of Katten Muchin Rosenman, and held roles at various online ventures in Chicago. He currently serves on the board of directors of Helium.com, the advisory board of the College of Communications at DePaul University and as an advisory board member of the global trade organization Search Engine Strategies (SES). Levick holds a J.D. from DePaul University and a bachelor’s degree from New York University, where he graduated cum laude.

That was fast.

Longtime–well, five years, which is a dog’s age at the search giant–Google sales exec Dennis Woodside (pictured here) will become VP, Americas Operations, replacing outgoing exec Tim Armstrong, who was named chairman and CEO of Time Warner (TWX) online unit AOL last week.

Woodside, 40, will start in the next few weeks, said Google (GOOG) in an internal communication about the appointment, as Armstrong transitions from Google to AOL. It is the key advertising sales job at Google.

Armstrong has already been hard at work at AOL, in fact, leading an employee rally today at its former HQ in Dulles, Viriginia, which included former AOL execs Steve Case and Ted Leonsis.

(And he will hold a similar meeting at AOL’s New York office tomorrow, BoomTown has been told. But let’s hope he does not roll out, say, former Time Warner CEO Jerry Levin, which would be taking this old-home-week stuff too far!)

While Woodside is a well-known exec within Google, his name was not as prominent in the speculation about which internal Googler would be named by CEO Eric Schmidt to replace the well-known Armstrong.

Wrote MediaMemo’s Peter Kafka last week, for example, when the Armstrong departure was announced:

“According to a (very informal) flash poll of Googlers, ex-Googlers and Google competitors I conducted last night, the answer should be obvious: David Rosenblatt, the former Doubleclick CEO, who now runs Google’s display business.”

Woodside will also have a slightly lesser title than Armstrong, who was a corporate SVP, was president of the America Operations and was also on Google’s powerful operating committee.

But that’s part of the changes, mentioned in a long statement by even bigger sales boss Omid Kordestani, SVP, Global Sales & Business Development, to whom Woodside will report (the key graph is the last one, although the golf dig is funny):

In the five and a half years that Dennis has been at Google (that’s over half our company’s lifetime) he’s brought incredible integrity and entrepreneurialism to everything he’s done. I remember Dennis setting off from Mountain View in 2005, a year and a half after he joined, to start our direct sales operations in Eastern Europe, which he quickly transformed into a substantial part of our business. He also set up our Inside Sales Operations in Dublin – again building it from scratch. In September 2006, he became our Vice President for the UK, Ireland and Benelux where he’s helped to create a first class team as well as establish very positive relationships with our big partners on both the advertiser and agency side, including 02, Marks & Spencer, Amazon and Omnicom.

Ever since I met Dennis in 2003, I have been impressed by his combination of entrepreneurialism and operational excellence. He’s never afraid to try new things and always ready to roll up his sleeves and pitch in–whether it means moving his desk to sit with the UK DSO team to see the operations first hand, or being the customers’ advocate internally to help product and engineering better understand market trends. Outside work he loves to do triathlons–though I would only recommend training with him if you don’t mind being out-run (if you are looking to beat him, try golf).

While we are all sorry to see Tim move on, change always brings new opportunities. We believe it’s now time not just to roll-out globally the best practices from the different regional sales teams–the Americas, EMEA and Asia Pacific–but also to tailor our business strategies more closely to the different situations we face in different countries (more mature versus less mature markets).

[UPDATED: H-P exec Todd Bradley has been a public company CEO, which I reflected below correctly.]

With Yahoo board Chairman Roy Bostock reportedly assuring investors and others that the company will have a CEO in place by the end of the year, it seems prudent for BoomTown to initiate an official Yahoo CEO Countdown.

After all, this column had a 100-Day No-Sacred-Cows Vision Quest to mark the time that Jerry Yang said he needed to give Yahoo a top-to-bottom look-see when he took over last summer as CEO.

Yang announced he was stepping down on Nov. 17, prompting the search for someone to lead Yahoo (YHOO) to the promised land where BoomTown countdowns are illegal.

But that’s not today, so here’s the 26-days-to-go update:

It looks like Yahoo has almost no chance to nab a top candidate, News Corp. (NWS) COO Peter Chernin. While Yang made nice and Bostock quickly lobbed in a call to get the well-known exec to come in and talk, several sources said Chernin declined even that.

Of course, moguls like Chernin are pros at not interviewing–one media player schooled me that you apparently never show interest in a job and only take it if a full offer is made, because if you don’t get it after chit-chatting, you look like a loser.

But I don’t think it is a slick feint on his part, even though Chernin is now engaged in contract renewal negotiations at News Corp. (which owns this Web site).

Consider: If you were Chernin, would you want to trade your powerful, well-paid, glamorous job in Hollywood and New York for what will surely be a slog of a job in Sunnyvale, and in a cubicle?

And Chernin has told many he is not interested in doing the job, although News Corp. would still love to do some sort of deal to combine its online assets, like MySpace, with Yahoo’s, as it almost did many times.

While Chernin did just take delivery on a Tesla, showing some clear geekiness, and he would be an exciting get for Yahoo, it’s the longest of shots.

The same is true for some other names that have been floated (by me!).

But several of the people are on the Yahoo board’s list too. And while things can change, it is more unlikely any of them will be the pick.

That includes former Yahoo COO Dan Rosensweig, who has a good life now as a media investor; former eBay exec and OpenTable CEO Jeff Jordan, who told his investors he does not want to be in the running and was sticking with the start-up’s IPO plans–if and when the economy recovers (although Yahoo could buy OpenTable and, thus, Jordan); former eBay (EBAY) CEO Meg Whitman, who could be running for governor of California; and former AOL CEO Jon Miller, who is not secretly buying Yahoo, but who could not be its leader anyway, since he is bound by a Time Warner (TWX) noncompete agreement until the end of March.

Another sticking point: The Yahoo board has limited the pool by a list of six criteria that it has drawn up, with the No. 1 being a CEO candidate has to have public company CEO experience.

If enforced, that nixes some folks, like Google (GOOG) exec Tim Armstrong. In addition, Yahoo President Sue Decker getting the nod is even more unlikely, for that and other reasons, according to many.

From my lists, that leaves DoubleClick head David Rosenblatt (his company is now owned by Google); Demand Media’s Richard Rosenblatt; former Viacom (VIA) head Tom Freston; former CNET CEO Shelby Bonnie; Hewlett-Packard (HPQ) exec Todd Bradley; and Juniper Networks (JNPR) CEO Kevin Johnson, who was the Microsoft exec who was key in the Yahoo takeover attempt there.

All have reasons not to either want or be able to take the Yahoo CEO job, so that means there could be a dark horse candidate. (I am now drawing up yet another list of qualified public CEO tech and media execs).

Here’s one: Yesterday, after it was announced he was stepping down from Microsoft (MSFT) in the wake of its hire of former Yahoo tech star Qi Lu as its online leader, I noted that I liked Brian McAndrews for the job.

Plus, the former CEO of aQuantive, which Microsoft bought for $6 billion last year, would be a delicious irony. But those who have talked to him told me McAndrews–who did want the digital head job at Microsoft and was left hanging by the software giant’s CEO Steve Ballmer–seems intent on taking time off now.

Alternatively, one of the two Yahoo board members, Maggie Wilderotter or John Chapple, both have the public company CEO checked off.

Personally, I am betting on one of them as CEO, although I believe it would be better if Yahoo picked a fresh outside choice.

So do a lot of execs remaining at Yahoo, most of whom visibly roll their eyes at the idea of a board member taking over, considering the record of the directors so far in guiding Yahoo’s fortunes.

That’s why the board–which definitely has not distinguished itself by any criteria so far in Yahoo’s long fall from grace–should try to get it right this time, as Yahoo can’t take any more of the way it has been running the show so far.

According to numerous sources inside and outside the company BoomTown has spoken to this week, board Chairman Roy Bostock (pictured here) has been asserting a new CEO will be named by the new year.

Only 28 more shopping days left until management clarity!

Well, maybe not so much.

Why?

Because there’s actually no “official” search committee that has been appointed by Yahoo’s board, sources said.

Instead, an informal group–with Bostock and board member Gary Wilson at the lead, with help from all the rest of the board–is conducting the effort jointly, along with exec search firm Heidrick & Struggles.

It’s almost like a Berkeley collective!

The board, though, has apparently made a list of six–I have no idea why that is the number chosen–clear criteria for the new leader of Yahoo (YHOO).

The first is that the candidate have “extensive” experience as the CEO of a public company. Another calls for media and advertising expertise. And mergers and acquisitions experience. Also strategic skills.

That’s a tall order, of course, to deliver on in such a short time.

In addition, the idea of bringing in at the same time a No. 1 and No. 2 exec has been considered, with one stronger in media and the other in product and technology.

It is hard to find an exec with skills in both, even in the best of situations.

Think pairing someone like News Corp. (NWS) COO Peter Chernin with Google (GOOG) exec Tim Armstrong or DoubleClick exec David Rosenblatt with, say, Yahoo CTO Ari Balogh and you get the concept.

But many who have spoken to board members at Yahoo said they get the distinct impression that they are leaning toward one of their own–former Nextel head John Chapple, former media exec Frank Biondi, Jr. or former Microsoft (MSFT) exec Maggie Wilderotter (pictured here).

That is due to wanting someone who has operational skills, but also can get things moving at Yahoo, while also being able to continue to work with Yang.

He will remain on the board and regain his title of Chief Yahoo. Sources said Bostock and other board members believe that Yang remains an important and beloved figure at Yahoo among the rank and file and needs to remain involved going forward.

Another key reason for wanting to pick an insider is that Bostock has also intimated that Yahoo was ready to do a deal at any time in the next week or so to merge with AOL–with or without a new CEO in place.

Consummating that might irk an outside candidate, who would have to manage the complex merger without input into its making, rather than a board member, who has been involved.

Talks between Yahoo and AOL have been never-ending and due diligence extensive, as this column has previously reported, although slower of late, because of the uncertainty around Yahoo leadership.

And the price–or, more specifically, the percentage–Yahoo has been willing to fork over to AOL owner Time Warner (TWX) has been the key sticking point, especially as Yahoo’s stock has waned in price.

Yahoo has long wanted to give Time Warner about 20 percent of the merged company, while Time Warner has wanted one-third. At current prices, that’s about $3 billion in value versus $5 billion.

But, if such a deal could finally be struck, it might be a dramatic and apt swan song move for Yang (pictured here), which could inject a bit of excitement into the mostly lackluster situation for both Yahoo and AOL.

Yang and others at Yahoo have also long felt that the company would have more leverage with Microsoft if it also controlled AOL–when and if it formally restarts its talks with the software giant about some sort of search deal.

Interestingly, many close to the situation said that there is still resistance among the “old guard” of the Yahoo board to doing a search deal at all.

New board member and activist shareholder Carl Icahn has loudly called for such a partnership with Microsoft.

But there is still extensive internal debate about whether it is wise to decouple search from Yahoo, many sources said, even if it brings in massive guaranteed revenues and allows Yahoo to cut costs in its engineering ranks.

Said one person close to the situation: “A lot of what has been going on is the board trying to figure out what kind of company does Yahoo aspire to be. That determines the type of person they bring in.”

When everyone else has been selling, it seems Carl Icahn has decided to throw good money after bad–as in nearly $1 billion bad–by buying almost seven million more Yahoo shares, according to a regulatory filing.

Why is he doing it? BoomTown is guessing that the billionaire investor thinks he can recoup some of his massive losses in Yahoo, as Jerry Yang prepares to step down, and the board, on which Icahn sits, names a new leader.

That’s why my guess is that the choice of a new CEO is likely to be sooner than later and much more Icahn-friendly.

That could point more clearly to perhaps one of two execs whom Icahn brought with him to the Yahoo (YHOO) board–either former media exec Frank Biondi Jr. or, more likely, former Nextel exec John Chapple.

Another theory is that Yahoo will pick a more low-key, tech-oriented outsider, an operational star who can get things turned around at Yahoo without a lot of fuss, similar to choices made for eBay (EBAY) in its pick of John Donahoe, and Mark Hurd at Hewlett-Packard (HPQ) recently.

One of the names being bandied about in that regard is HP exec Todd Bradley (pictured here).

Bradley is in charge of its massive Personal Systems group, a $28 billion annual business, which includes personal computers, mobile devices, technical workstations, digital televisions, personal storage solutions and Internet services.

Interestingly, another top HP exec, Vyomesh (VJ) Yoshi, who runs its Imaging and Printing group, is currently a director on the Yahoo board.

In any case, the purchase of 6.7 million more Yahoo shares for about $65 million by Icahn over the last several days is definitely a move to watch.

Icahn, who waged a proxy fight against the Internet giant, owns stock that has lost about $900 million in value since he bought about five percent of Yahoo earlier in the year.

That loss comes from his purchase of about 70 million shares in the spring, at about $25 a share, of Yahoo stock, right in the midst of its takeover battle with Microsoft.

Yahoo shares closed Friday at $10.58, up 33 cents.

With the new purchase, Icahn now owns about 5.4 percent of Yahoo, which–combined with three board seats–gives him a lot more clout over decision-making and in forcing the current board to make a CEO pick who will be more interested in doing some sort of deal with Microsoft (MSFT) quickly.

Icahn has long agitated for Yahoo to sell all or part of itself off to the software giant, a move that has been resisted by Yahoo leadership. Instead, Yang tried to pull off a deal with Google (GOOG), which failed.

But that leadership is about to change, as the board searches for a new CEO to replace Yang, who said he was ready to step down a few weeks ago.

Lots of names have been floated for the job–from News Corp. (NWS) COO Peter Chernin to DoubleClick head David Rosenblatt to Google exec Tim Armstrong, as well as former Yahoo COO Dan Rosensweig.

Most sources inside and outside the company do not expect its current president, Sue Decker, who is also up for the job, to be selected.

But many point to a current Yahoo board member as a quick choice, in order to get some key initiatives moving, such as a Microsoft deal or a merger with Time Warner (TWX) online unit, AOL.

That points to someone like Chapple (pictured here), who has been querying a range of midlevel Yahoo execs of late, presumably to get a lay of the land at the company for the board.

He or perhaps even board member Maggie Wilderotter could be picked as an interim CEO, in order to signal to investors that true change is on the way at Yahoo.

Whoever is chosen needs to move quickly said many I spoke to about the Yahoo CEO job.

Wrote one experienced Internet exec in an email to me, reflecting a very common sentiment:

“Whoever comes in is going to have one shot to define the product to the consumer in a way that differentiates it from the rest of the market and provides unique value. Their brand is fuzzy right now. And they’ll have to find a uniqueness in their ad sales so they are not relegated to being the also-ran.”

Well, with all the money riding on it, Carl Icahn certainly has to hope that does not become the case.

BoomTown might have been remiss in my post yesterday on top candidates for the Yahoo CEO job, after the news Monday that Jerry Yang is stepping down, by leaving out several key possibilities.

Yesterday’s roster included News Corp.’s Peter Chernin, Google’s Tim Armstrong, Kevin Johnson of Juniper Networks (JNPR) and also two Yahoo board members, among others. (The main internal candidate, Yahoo President Sue Decker, seems unlikely to get the nod.)

So here is an addendum to my initial list–all of whom are Yahoo (YHOO) outsiders.

Tom Freston:

Chernin is not the only media mogul whose name is being bandied about–the other prominent one is former Viacom head Tom Freston.

Freston apparently got shafted by the–let’s be polite here–disturbingly volatile founder of Viacom (VIA), Sumner Redstone, for not buying MySpace. In fact, News Corp. (NWS), which also owns this Web site, did. But Freston remains a well-respected and creative exec and has been dabbling in the Internet space since leaving Viacom.

Also, Oprah and Arianna love Freston–which is all I need to know.

Jeff Jordan:

Jeff Jordan, the former top eBay (EBAY) exec who is now the CEO of OpenTable, was also on the short list for COO at Facebook, a job that went to former Google exec Sheryl Sandberg.

While the restaurant reservations Web start-up has been headed for a public offering, that event has obviously been pushed out indefinitely by the econalypse, which might be just the impetus to convince Jordan that bussing tables all day is too dull.

Some speculate that Yahoo could buy OpenTable and get Jordan in the process.

Richard Rosenblatt:

Another interesting idea is Richard Rosenblatt of Demand Media, a company that Yahoo was sniffing around not too long ago.

The network of social-networking sites and apps maker is an innovative play in the space and might give Yahoo some much needed Web 2.0 DNA. Demand could still be bought by Yahoo, in order to put Rosenblatt into place.

(Rosenblatt, for those who do not remember, ran the company that owned MySpace, and he was key to selling it to News Corp.)

Also, Lance Armstrong likes Rosenblatt.

Shelby Bonnie:

A reader actually made the excellent suggestion of former CNET head Shelby Bonnie, who is now investing in start-ups. Bonnie is another steady exec–despite leaving CNET, now owned by CBS (CBS), under an options backdating controversy–and is well-liked in the Internet industry.

Yahoo would be a much bigger job than he has ever held, although he certainly has both tech and advertising experience online.

David Rosenblatt:

Lastly, especially if Yahoo is interested in an exec who has turnaround talent, there is probably no better a choice than DoubleClick CEO David Rosenblatt. An experienced online advertising exec, he is also sharply outspoken and knows how to get companies in line and fast.

He is also impossibly rich after Google (GOOG) bought DoubleClick out from under–wait for it–Yahoo recently. While he is still running the show for Google, after having decided to stay, Yahoo might present an interesting challenge for the very savvy Rosenblatt.

Please see this disclosure related to me and Google.

OK, now we’re cooking with gas at Yahoo’s annual meeting in San Jose, as various shareholders–mostly small ones–come to the microphones to give Yahoo a piece of their mind.

The room has filled up more, about one-third to one-half full, with the top Yahoo (YHOO) leadership arrayed at a table up front like an Italian wedding.

First up, longtime Yahoo activist shareholder Eric Jackson asked Yahoo Chairman Roy Bostock to step down, noted that Yahoo had overplayed its hand with the Microsoft bid, wondered about Yahoo President Sue Decker’s time problems (too many outside boards) and questioned the worth of Yahoo’s deal to sell an asset in Japan.

Yahoo, of course, did not agree with Jackson! At all!

“No,” said Bostock about stepping down, also noting that he was woefully underpaid for his board service, given all the activity over the last year related to Microsoft (MSFT).

Next up, a shareholder asked about Yahoo’s poor performance compared to Google (GOOG).

Yang’s answer: We’re trying!

Next, a shareholder supported Yang, noting that Yang did co-found the company. But then he kind of suggested Yang perhaps leave the company for a “cathartic” time.

The same shareholder also compared Bostock’s defense of Yahoo’s behavior with “a girlfriend who is trying to convince the world that she initiated the breakup.”

That made Yang smile.

Later, Bostock added: “I would not compare Yahoo’s relationship to Microsoft to a romantic one.”

The next question was related to China and Yahoo’s thorny history there. Yang had addressed the issue earlier and added that the company was working hard to improve its efforts related to human rights.

While one former employee and shareholder called Yahoo “rude” not to entertain more questions from investors, another shareholder called Microsoft “a green-tentacled monster,” I think, which provoked laughs and clapping.

A question was then asked about advertising and competing with Google-owned DoubleClick. Decker noted that Yahoo’s Web-based approach is better.

One shareholder noted the lack of women on the board (there is one), and a shareholder justifiably complained that only one-third of the directors did not show up and also not enough of the board owns stock, such as Ron Burkle (who was apparently in Europe at another commitment.)

Perhaps of everything that went on at the annual meeting, which was mostly nothing, perhaps that was the most salient point of all.

So while all the attention on who Microsoft is hunting next–after its latest parry at grabbing Yahoo’s search business was foiled once again–has settled on Time Warner’s AOL (see BoomTown’s post on that interest from Monday), it would be a mistake to assume that the software giant is not still aiming directly at Yahoo.

Why?

Because it must, and not only for the reason–to get control of its Yahoo’s #2 search business–that has been much focused on.

It’s also Yahoo’s (YHOO) strong display advertising business that Microsoft (MSFT) is clearly after.

It has been obvious that Microsoft needs to get hold of Yahoo’s search market share to even begin to compete with its archrival Google (GOOG) in the Web’s goose-that-laid-the-golden-egg search business.

But the future hope, according to numerous sources within the company, is to gain a foothold at Yahoo in order to someday take over its much more impressive and potentially more lucrative online display business, which includes ads like banners.

“This is not just about search,” said one source. “It is about scale in all aspects of a market that is going to be gigantic.”

In a way, it’s a reliable old Trojan Horse strategy, getting into Yahoo’s house in search and then moving onto display, an arena which many think will be the real moneymaker in the years ahead.

Right now, search rules in the online ad business, which totaled $21.2 billion in 2007, according to the Interactive Advertising Bureau.

Search advertising, which Google completely dominates, with Yahoo second and Microsoft third, accounts for 41 percent of that total.

Display accounts for 34 percent. In this space, Yahoo is king, while Google has been a minor player, despite its recent purchase of DoubleClick. Microsoft has been trying to muscle its way in too.

Many think the scaling and targeting technologies that are developing and that Google or Microsoft certainly can bring to the table–combined with the relationship business for which Yahoo is famous–is the next killer app to make display dominate.

Google, though it is trying to downplay its overall power of late, is aiming hard at doing in display what it has done in search, especially trying to use its powerful technology skills.

“We really feel we’re in a position to become the world’s largest display ads provider,” said Google’s SVP Jonathan Rosenberg in its first-quarter earnings call in April.

Obviously, Microsoft’s efforts in this arena would be greatly helped by being tightly integrated into Yahoo’s search business first.

So, while AOL’s (TWX) Platform A ad business is also attractive, it still only sits in the middle of the online ad food chain.

That’s why Microsoft is not likely to take its eyes off the real prize: Yahoo’s much tastier high-end display business.

Please see this disclosure related to me and Google.

With the sale of paidContent to the Guardian Media Group and the talks TechCrunch has been in with AOL, there certainly is a lot of hubbub around tech blogging sites of late.

One of the more interesting sites that has gone up over the last year is Silicon Alley Insider, which is headlined by former Internet analyst Henry Blodget (yes, that Henry Blodget).

But featuring Blodget’s speedy analysis of big trends, and news about Web and media players, with a sprinkling of reporting from its small team of writers, it’s been a sharp entrant into the sector.

Perhaps most compelling is that the site is backed by Web 1.0 entrepreneur Kevin Ryan, former CEO of DoubleClick (GOOG), who has nested SAI inside a network of new Web efforts at AlleyCorp.

Ryan founded what is essentially a Web 2.0 version of an incubator with former DoubleClick CTO Dwight Merriman.

While one can debate DoubleClick’s ads-in-your-digital-face strategy over its growth (it is now a division of Google), there is no question Ryan’s aggressive early efforts set the stage for the commercialization of the Web that continues today.

Now Ryan is trying to do the same for Web content on SAI. It just got a new small slug of funding; Blodget is also adding two new business sites to the mix.

What AlleyCorp all means is a bit eclectic. Ryan’s network of affiliated sites includes the content delivery network Panther Express, the 10gen apps development platform, a shopping engine called ShopWiki, the Music Nation independent music community and an online invitation-only, high-fashion sample sale site called Gilt Groupe.

Although SAI has a high profile, Gilt is perhaps the most intriguing of AlleyCorp’s sites since it is essentially an American copy of a highly successful European version.

Using the Web’s speed and the allure of an exclusive, limited sale of designer clothes, along with an Amazon-like shipping system, is perhaps the perfect mix of offline and online. It also has to potential to move into other e-commerce categories.

Here’s my video interview with Ryan about all this and more:

Millard (pictured here) went to MSLO after many years of building and running Yahoo’s (YHOO) ad business (previous to that stint, she worked at DoubleClick in its earliest days).

She was also recently made chairman of the Interactive Advertising Bureau, the prominent interactive ad trade group.

Nonetheless, Millard left Yahoo under a cloud, as she and the company parted on the way online ads should be sold going forward and then got into a bit of a tussle of just who left whom, especially with Yahoo President Sue Decker.

Without going into the complicated and conflicting details, some of which became personal and became very public, it was definitely not the way Yahoo should have rewarded Millard–who is well-liked and well-known in the ad industry–after years of loyal service.

As I wrote in a post on her Yahoo departure a year ago:

But I did have an idea about how cloddishly that Yahoo could handle Millard’s departure, in a vain attempt to make it look like they are on the ball in a time of management turmoil that seems only to roil and boil more as time goes on. The decimation of executive ranks there is like watching an online version of “Ten Little Indians,” or for you kids, “Hostel.”

And when you badly treat an employee who has worked pretty hard over the years for you as Yahoo did Millard, you have to wonder how in the world the company is going to attract top talent from the outside–let alone keep those valuable employees on the inside from bolting.

But Millard’s departure–which seems to be a case of her looking for and getting another job, all while Yahoo was also rejiggering its approach to ad sales–was handled with no grace and much confusion.”

Sounds like a bit of a broken record for Yahoo by now; as it turned out, Millard became one of the first in a long line of Yahoo execs to head for the exits.

Millard first went to MSLO as its president of media and got the top job (jointly with Merchandising President Robin Marino) after former President and CEO Susan Lyne stepped down.

There she will have to focus a lot on MSLO’s online business, which is probably its best bet for future growth.

The company needs it, as it has been clawing its way back to better results of late. MSLO stock has been dropping since 2007, all the way to close to $5 a share, although it seems to have stabliized more recently in the mid-$7 range.

It is a good thing–oh, I had to–that online advertising is a topic Millard knows well.

In fact, she actually likes talking about the block and tackle of figuring out how to properly use commercial messages within the online space.

At Yahoo and today, she was well known as a backer of brands over the holy algorithm and has often railed against treating online ads as if they were pork bellies–that is, commoditizing the business.

Here’s the video of her talking about it and more:

With the ad-outsourcing deal between Yahoo (YHOO) and Google (GOOG) finally announced–in a press release so parsed and careful, it makes me immediately suspect–one Microsoft (MSFT) source joked to me:

“Let loose the dogs of war.”

Translation: Bite me!

Indeed, even though the deal has not been announced, Microsoft is girding its considerable loins to battle even a minor deal.

(So will noisy activist groups, by the way, even those Microsoft is not paying for, as well as advertisers and marketers.)

The software giant had been honing its knives by giving Google a very hard time over the DoubleClick deal–such a difficult time that some Google execs still get visibly furious about Microsoft’s hardball tactics when asked about it.

Well, that’s going to be like a minor playground scuffle compared to the howitzers BoomTown expects Microsoft to unleash over this.

While I have never much liked Microsoft’s thuggish tendencies and think it’ll use particularly sneaky techniques here since it’s smarting over really blowing the attempted takeover of Yahoo, with true repercussions still to come, such pressure on a Yahoo-Google link-up is much deserved.

As I have written again and again, such a partnership–however small it is painted by the companies–is a dangerous and unwelcome development for the Internet.

As I wrote in 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.”

And the ability of Google to sidle its way into Yahoo and get even a tiny toehold in the company spells curtains for Yahoo, because it comes too late to do any true good.

As I have also written, the company should have gotten out of the search ad and even search business entirely and doubled down on its other stellar assets in software, services and content, as well as display advertising.

Now, operating from a position of considerable weakness, tarnished in the eyes of investors and seeing a troubling exodus of top talent, letting the powerful Google “help” it, as I have also written, reminds me of the old “Twilight Zone” episode called “To Serve Man” (see video below).

In other words, after getting pummeled into tenderness by Microsoft, Yahoo’s tastiest bits will eventually be gobbled up by Google, making the rest of Yahoo a serf to the Google empire.

And by taking Google’s too-hard-to-resist pile of cash, it’s enough to make anyone who admires what Yahoo once represented–excellence, independence and leadership in the Internet space–a little bit queasy.

Please see this disclosure related to me and Google.

All week, Yahoo’s investors have waited for the other shoe to drop–its much-hyped ad deal with Google (GOOG), in which Yahoo (YHOO) would outsource some of its online search-ad monetization business to the search giant.

But will that deal land with a thud instead?

Today, The Wall Street Journal reports that Google executives “are now divided over whether to pursue a search-advertising deal with Yahoo.”

Actually, that depends what you mean by divided, of course, and which Google execs are on which side.

According to sources BoomTown talked to at Google, while there is a lively debate going on at the Googleplex over the ramifications of such a deal, it is more likely than not that the search giant will cut some kind of limited and carefully crafted deal with Yahoo.

Sources said that the structure of the deal is critical, especially making it non-exclusive, limited and also low-key, given the scrutiny related to antitrust issues such an arrangement between the No. 1 and No. 2 companies in Web search will surely and deservedly bring from government regulators.

Some Google execs are very worried about calling further attention to the company in Washington, D.C., as the behemoth that it has actually become, something another behemoth–Microsoft (MSFT)–would surely love to have happen.

“Perceived concentration can be as bad as real concentration, which is not happening if we do a deal with Yahoo in the right way,” said one exec. “But that might be hard to explain clearly.”

While Google execs think that a properly structured deal will pass muster, they are also worried that it might not be worth the damage to the company’s image that might come with a bruising fight over the issue.

Google is still smarting over the brass-knuckle tactics Microsoft used in D.C. related to its DoubleClick deal, delaying its approval and causing Google a lot of money and time.

Already via that deal, its entry into the spectrum auction and its fight over copyright issues with media giant Viacom (VIA), Washington politicians and regulators can’t help but have the growing perception the Google is perhaps not as bouncy and fun and harmless as the company tries to project.

In truth, Google is still bouncy and fun (see its founders Larry Page and Sergey Brin on exercise balls here).

But harmless? Not so much.

In a previous post, I argued that such a Yahoo-Google hookup is a bad idea for consumers, advertisers and anyone interested in a competitive landscape.

I wrote: “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.”

In addition, some Google execs worry that since Yahoo is staying in the search business, while also outsourcing to Google, that it could gain valuable information about how Google operates.

That’s a no-no at Google, which has what some in Silicon Valley call a “black box” image. In other words, please don’t pay attention to the man behind the curtain.

The less-grand deal, of course, will not be as good news for Yahoo shareholders, since it will not bring in the billion-dollar baby in terms of increased cash flow that some analysts had been bandying about.

And Yahoo is under pressure to come up with a lot of hits now that Microsoft has walked away–for now, at least. Now, it must go it alone, but much damaged by the takeover effort.

During the heat of the deal, such a link-up was seen as a coup for Google, which always likes to stick it to Microsoft.

And it was also seen as a way for Yahoo to better monetize its search business, especially since its own efforts have been so lagging behind Google in size, scope and yield.

And, more importantly, it gave Yahoo an effective weapon in fending off Microsoft’s unsolicited takeover bid.

Well, it worked, it seems, as the talks between Google and Yahoo were the bone that stuck in the throat of Microsoft CEO Steve Ballmer, much mentioned in his kiss-off letter to Yahoo last weekend.

Ballmer wrote, in part: “We regard with particular concern your apparent planning to respond to a ‘hostile’ bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo undesirable to us for a number of reasons.”

I doubt the aggressive Ballmer will let such a deal pass without a lot of heckling and, of course, much, much worse.

Please see this disclosure related to me and Google. ]]> http://kara.allthingsd.com/20080508/googles-chilly-feet/feed/ 0