BoomTown went down to Silicon Valley’s most exclusive country club–also known as Stanford University–where Microsoft CEO Steve Ballmer took to the stage today for a talk at Memorial Auditorium for the Entrepreneurial Thought Leaders Seminar.

4:32 pm PDT: Ballmer was pretty much on time, delivering a rousing hello and some good words about being back. He had attended Stanford Business School many moons ago, before dropping out and joining Microsoft (MSFT). Good move, I’d say.

He offered anyone in the room jobs, if they were smart, and then gave out his email. Although he did leave out the pertinent fact that the software giant just laid off 3,000 workers earlier this week.

Well, that.

Then, Ballmer launched into his speech, which began with him talking about the “tough economy.”

The slide behind him was a picture of a glass half-empty or half-full, depending on your attitude, with the notes:

Economic “Reset”

Optimistic about the future.

4:40 pm: Ballmer then told his “entrepreneurial” story. There was a lovely picture of the young Ballmer with some hair. Not much, but some.

Lots of chatter about old computers ensued. Zzzzzzzz.

The early days of Microsoft were next, including how founder Bill Gates was worried about how Ballmer would bankrupt the nascent company by hiring more staff, a delightful story the pair told at our D: All Things Digital conference last year.

4:46 pm: Then the “emerging technology trends.”

Which are, according to Ballmer: many-core processing; screens everywhere; natural UI; all content digital.

Like All Things Digital! I always knew Steve and I were soul mates!

Because it is Microsoft, he moved into “software-powered experiences,” which means, according to Ballmer’s slide: a rich client + cloud, spans multiple devices and is persistent and personal.

“You world needs to be brought together,” said Ballmer. “You may not want to manage the cacophony of devices you deal with today.”

I may not. Or I may. Ballmer, may I?

4:55 pm: It was not a long or much of a content-rich speech. Ballmer wrapped up with the idea that “The Time Is Now.”

He noted that it is a great time for start-ups, with “all the right ingredients” that “dream big.”

What ingredients? What dreams? Ballmer was not saying much about his secret cooking tips for baking a tech behemoth.

4:57 pm: Time for questions from the students.

The first was about whether big- or small-company experience is better.

Both, said Ballmer. Depending on the problem. “You want to blend those things pretty well,” he said.

It is all about the ingredients! And blending. Also sifting, in my humble opinion.

The next question was about the state of the browser business.

Ballmer said it will get more innovative. We’re waiting!

The next was about what the main problem typically is with companies that have trouble making it.

“Too many companies can actually hang on for almost too long because there has been too much money funding these ideas,” said Ballmer.

Yes, we are soul mates!

5:04 pm: The next question was about the culture of a company from its start and how Ballmer has shaped Microsoft’s culture.

“I would say I have shaped Microsoft culture a lot,” he said. “Sometimes for the better, sometimes worse.”

Ballmer compares himself and Gates to “parents” of Microsoft.

That was very Iowa of him.

(As I said: soul mates!)

5:09 pm: The next question was about how he decided to leave Stanford Business School.

“They still have a spot for me if I want to go back and finish my MBA,” Ballmer joked.

But, he noted, it was not much of a risk to leave school.

When Ballmer did waver about going back to school, Gates convinced him to stay. Thank goodness, as he said he would have become an investment banker or a consultant.

The next question was about Google (GOOG), which was not named, I suppose for fear that it would set Ballmer off and there would be chairs a-flying.

“The No. 1 player [in search] is a lot bigger than us,” said Ballmer. “We are like a start-up.”

Well, a really, really, really rich start-up, which has been sued by the federal government for antitrust violations, and convicted.

5:14 pm: The next question was about ideas he might have missed.

Ballmer called himself “a mini-venture capitalist,” noting that figuring out what investments to make is tough.

He joked about the disastrous Microsoft Bob product. That always gets a laugh.

The next question was about how much attention Microsoft will give to cloud computing.

It gave him the chance to make a pun using the movie, “Three Men and a Baby,” noting that the “future is about three screens and a cloud.”

Ahahahahahahaha! Okay, not at all.

A question was asked about taking risks and tips for dealing with it.

“Valuable experience is valuable experience,” said Ballmer.

Say what? Is that a word puzzle? This is starting to feel like “Angels & Demons.”

Ballmer advised the students to “love doing the work that you’re doing.”

It is apparently all about the love at Microsoft. Who knew?

5:22 pm:

Two questions about consolidation, which is code for Yahoo (YHOO).

“I’m glad we went down the road,” said Ballmer, waxing nostalgic about the failed takeover attempt.

But he added he still thought a partnership of some sort between the pair is a good idea. “There may or may not be appropriate discussions,” said Ballmer.

There may. Or may not. Carol, may Steve?

Then there is some love for competitors, Facebook, even Apple (AAPL) for the iPhone.

Feel the love!

5:25 pm: The last question is about what he wished he had done if he could do it over.

He would have taken more computer science courses.

We are so not soul mates.

A major Yahoo investor yesterday told me that he liked what he saw so far from new Yahoo CEO Carol Bartz, but he still remained wary.

“I like the sizzle,” he said, referring to Bartz’s decisive take-no-prisoners style. “But I am still waiting to see if steak is there too.”

Well, Bartz handed over some tough news to chew on today, announcing Yahoo’s first-quarter earnings, which were just as weak as expected.

The company reported an eight-cent-per-share profit, down from 37 cents a year ago, a 78 percent drop.

Revenue in the quarter came in at $1.6 billion, a 13 percent decline from last year’s $1.8 billion.

And Yahoo (YHOO) also said it would cut five percent of its staff of 13,600, which means layoffs of close to 700 employees.

BoomTown liveblogged the Yahoo earnings conference call, with Bartz and outgoing CFO Blake Jorgensen.

(Bartz, well known for her ribald words and sassy phrases, lobbed several, and also tossed out a small F-bomb at the very end of the conference call, so read on to the bottom.)

2:04 p.m.: The call started off a few minutes late, but who can blame Yahoo, given the poor results? But Bartz finally came on the call with an upbeat tone.

“What an amazing and busy three months it’s been,” she said, outlining what she had learned so far on her whirlwind visits across the Yahoo empire and “deep dives” into the products and services of the troubled Internet giant.

“The most important takeaway was the importance of having a ‘Wow!’ experience,” concluded Bartz, who noted the definition of that particular enthusiasm was different, depending on who you were.

“Wow!” did not describe the earning results, to be sure.

But we pressed on.

2:08 p.m.: Bartz noted that Yahoo remained focused on investment and also renewed investment in the company.

She pointed to content, email, search and advertising as key building blocks of Yahoo and focused on three key goals:

1) Globalizing the Yahoo platform

2) Building “fantastic products” that deeply impact users

3) Investing in “industry-leading” online ad solutions

You know, getting back to basics of exactly what made Yahoo great before.

2:09 p.m.: Bartz complimented Yahoo CTO and Product head Ari Balogh, as well as other current Yahoo staff at the Silicon Valley-based company.

Then she announced that Yahoo had hired Jeff Russakow (pictured here) as its new customer advocacy head.

I am guessing he is now the key guy in charge of monitoring the “Wow!” level.

Russakow is currently VP of corporate strategy for Symantec, the online security software firm, which does not trumpet Yahoo! to me.

So, I wonder if Yahoo engineers should build a “Wow!” meter to help Jeff?

Bartz then noted that Yahoo has been and will continue to “slim down our portfolio,” while continuing in investing.

That would mean dumping the non-”Wow!”

2:11 p.m.: CFO Jorgensen hopped on, noting the “difficult economic environment.”

We noticed!

Jorgensen then proceeded to go through the unimpressive numbers for a while, in a voice that lulled me into a slight stupor. There was essentially no good news anywhere for Yahoo.

Then, he summed up and said goodbye, as he is leaving Yahoo soon and there will be a new CFO by the next quarter’s call. Jorgensen said he will be watching Yahoo “with interest.”

Blake! We hardly knew you! Call me anytime and we’ll chat and maybe have lunch (bring lots of internal memos!).

2:20 p.m.: Bartz complimented Jorgensen, although she did kind of “part ways” with him.

Then, finally, came a patented Bartzism, which is that special sassy phrase or ribald word, with her noting that users were looking for a “kick-ass” experience from Yahoo.

She obviously could not resist, which was a good instinct.

Bartz soon threw in a “freakin’” too.

Then, she non-answered anticipated questions about Yahoo’s talks with Microsoft over a search and advertising partnership by noting, “search is a very valuable asset for Yahoo.”

And that, she said, in a Forrest Gumpism, “is all we’re going to say about search today.”

Also, life is a box of chocolates.

2:25 p.m.: Bartz then discussed the economy, especially the impact on branded display advertising, which she said was not going to be killed off.

Brands were always important, she noted, and Yahoo could even help damaged brands revive themselves.

Like, um, maybe, Yahoo?

She closed the talking points part of the call on another upbeat note: “Let me say again how happy I am to be here.”

Us too, cuz Bartz is a definitely a live wire, as it later turned out.

(Bartz also announced an analysts day on Oct. 28.)

2:29 p.m.: Now began questions from said analysts (media folks are muted, of course).

The first was about ad price differences, which was dull.

The second, though, touched on the Microsoft (MSFT) talks, with someone essentially asking if Bartz was smart enough about search to be able to entertain an offer.

Well, what do you think she was going to say?

That’s right: “I am well versed enough in the search business to say it is critical to Yahoo.”

Bartz also noted that she thought advertisers prefer a combined search and display experience, which felt like she was channeling Yahoo EVP Hilary Schneider.

But Bartz also managed to keep the door open, saying–and I just know she had a mischievous smile while she said this–“Relative to anything else related to Microsoft, no comment.”

She was also not gaming the economy, noting that no one knows what will happen in the future.

“A wise person stays to the sides and lets the economists figure it out,” said Bartz.

As if!

2:33 p.m.: More questions were asked about costs and layoffs (sad!) and about ad inventory.

Bartz underscored the importance of its premium ad sales staff and placement over ad networks and randomness.

“Chanel does not want to end up next to Harley-Davidson. It kind of doesn’t work,” she asserted.

Well, it works for me! I mean, black leather and more black leather–what’s not to like?

2:39 p.m.: More about globalizing the Yahoo platform, which Bartz said would take a while.

“It’s not like flipping a switch,” she said. “This is work, this is not just words.”

Bartz also talked about how non-easy the current ad management systems at Yahoo are. Several times.

2:46 p.m.: A question then came about reinvestment, which was really about selling off stuff like the Asian assets.

No answers were forthcoming, although weak product groups are getting tossed off the good ship Yahoo quite quickly under Bartz.

More questions about the economy, the ad business and another attempt to find out about the Microsoft talks.

“Search is important,” to consumers and advertisers of Yahoo, Bartz underscored again, noting she was not going to fall for a “tricky” question.

Good lord, she’s a sharpie.

3:03 p.m.: Last up is a question about the investment in the global platform and the reorganization.

And, in the end, Bartz uttered the naughty word many had expected sooner.

It came when Bartz was on a roll about how engineers have been “scattered to the winds” at Yahoo and that there have been too many product managers overseeing things and annoying those windswept engineers.

She was dead right about this nagging issue at the company, as it has slowed down innovation and rollouts of key services and products.

“Nobody’s f#*king doing anything,” Bartz stated with apparent exasperation.

She tried to take it back quickly, adding, “I knew that would slip out some time.”

But Bartz should not take it back. Never ever.

In fact, most would agree that it was well past time that such an assessment should slip out of Yahoo.

Last week, the economy took a much needed breather from its toilet-circling behavior of late, with the stock market showing gains for several days running.

Who knows what today will bring, given all the volatility. But most of the big consumer-focused digital companies–I am using Yahoo (YHOO), Google (GOOG), Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN) as proxies for the sector–saw solid upticks over the last five days.

Yahoo shares rose close to four percent, Google was up just over five percent, Microsoft gained almost nine percent, while Amazon leaped 11.3 percent and Apple shot up 12.5 percent.

You could also feel the revelry from afar at the South by Southwest gathering that started this weekend in Austin, Texas, with lots of Web 2.0 partying and discussions of a Twitterific-Facebooktastic future.

Maybe happy days are here again, right?

Um, nope, just as when BoomTown wrote last September in a piece called: “Dear Web 2.0: It’s Still the Economy, Stupid!”

At the time, I wrote:

“Most companies in Web 2.0–despite their massive valuations over the last few years–-aren’t going to have the chance get frothy and light enough to become so poppable.

Instead, most will likely fizzle away quietly, with no exits in sight as the economy weakens and puts a vise grip on companies that cannot survive the very tough financial road ahead.”

Why? Well, because there still is no traction in sight for a true recovery and there will not be any for quite a while.

You need only to look at those big public companies and their stock market performance over the last six months, the true scoreboard, results that will iterate downward throughout the sector.

And, it has been exactly as the econalypse has advertised: Yahoo down 28.3 percent; Microsoft down almost 38 percent; Google dropping 25.2 percent; Amazon off 11.3 percent; and Apple dipping 31.6 percent.

And, of course, most expect that the next round of first-quarter earnings, coming around the end of April, to be weak overall for this group, given their reliance on consumer spending, advertising and general bonhomie that is surely lacking.

That, in turn, means few acquisitions and still no IPOs for Web 2.0 companies. Although only Facebook is likely to try for that gold ring, its prospects are still uneven at best, despite impressive audience growth at the social-networking site.

So, as I said before and will say again: It’s the economy, and Silicon Valley–as was true six months ago–is still not immune.

One bright light when it does manage to turn is that tech will likely see the first bounce, especially compared to pretty much all the other sectors of the economy.

Tech companies are relatively healthy with strong cash balance sheets and have shown a commitment to making cost cuts and layoffs that are long past due.

That’s all good. But, of course, the only thing that will send this all back into truly positive territory will be new products and innovations to introduce when the world is ready to spend again and grow.

As in: A lot more nose to the grindstone and a lot less party-hearty inanity.

I’ve been through the desert on a horse with no name/It felt good to be out of the rain/In the desert you can remember your name/’cause there ain’t no one for to give you no pain.

Actually, for Yahoo (YHOO), which is holding its big annual meeting of the company’s advertising sales staff in Indian Wells, Calif., maybe just a little pain since BoomTown is only a scant few miles away, as the crow flies, attending the Demo09 conference in Palm Desert.

Don’t worry, Yahoo PR, I will not crash the proceedings or be bribing the bartenders to get more leaks. But you Yahoos should still be careful with the wine in the hot tub anyway–as Carol says, loose lips sink ships!

The gathering–to which Yahoos were greeted at Palm Springs Airport by purple Yahoo-capped greeters and were ferried to the Marriott’s Renaissance Esmeralda Resort & Spa via limos, according to many Demo attendees who ran right into the phalanx–is being run by Yahoo sales head Joanne Bradford.

Bradford has the unenviable task of selling into the weak ad market and driving sales, despite a very troubled economy and a company trying to claw its way back to stability. And, of course, getting Yahoo’s much buffeted sales staff jazzed up to do so.

Bradford will be helped in inspiring Yahoo’s large sales staff with what is sure to be a cussing-good appearance by CEO Carol Bartz.

Just last week, Bartz announced a massive reorganization of the company’s management to streamline it and make decision-making quicker.

“She thinks it critical she be there to get the troops excited,” said a Yahoo in the know.

Ye-haw!

How much do I wish I were there to see that performance? Much! (Except for the part in which I would be thrown out on my keester by Bartz herself, despite my plan to disguise myself by wearing all the Yahoo swag I have collected over the years.)

Instead, I am riveted to the goings on here at Demo. Right now, for example, I am watching an it’s-always-darkest-before-the-dawn session with venture investors on the dire economic situation, and about to see a new “touch book” computer.

Video of that and more, of course, to come.

Here’s a chart from a not-entirely-unexpected story in The Wall Street Journal today chronicling how the “deepening recession is speeding up the shakeout in Silicon Valley, forcing droves of start-ups to shut down or sell themselves at fire-sale prices.”

You knew that was coming, didn’t you?

No really well-known Web 2.0 shooting stars are in the piece, although it really feels like a long time from when BoomTown penned a piece in September titled “Dear Web 2.0: It’s Still the Economy, Stupid!”

It still is, and here is a not-so-lovely pair of charts to show you why:

Microsoft CEO Steve Ballmer made an appearance at the three-day U.S. House of Representatives Democratic Caucus Retreat today to talk about innovation and, let’s be real, the very bad economy and the impact on businesses like the tech giant.

Held at the Kingsmill Resort in Williamsburg, Va., the confab has already seen an appearance by President Barack Obama yesterday and one by Vice President Joe Biden this morning. Ballmer got the lunch spot.

The annual gathering is more crucial this year, given the pressure to pass the massive economic stimulus package to try to revive the moribund economy.

Ballmer was not reassuring. “The bubble has burst,” said Ballmer. “We can no longer rely on consumption by refinancing our homes or inexpensive money to fuel economic growth, and that’s certainly had a huge impact.”

And also: “In my view, what we now have will be a fundamental economic reset.”

Microsoft (MSFT) should know all about that. The powerful company recently announced weak earnings, a foggy outlook and layoffs of 5,000 employees.

Here’s Ballmer’s speech to the group:

Well, I want to thank Jay, I want to thank the speaker and all of you for the opportunity to be here today and chat with you. It’s a real honor to have a chance to share some thoughts on the economy and on innovation, and hopefully spur some thoughts on how we all participate in restarting long term economic growth.

I’m going to make one thing clear up-front: I’m not going to claim to be an economist. On the other hand, I think it’s sort of the responsibility of every businessperson to really form a model of what’s going on in the economy, if you’re going to provide proper stewardship to your business; big company, small company, it’s important to have a model of what’s going on, and certainly have been thinking a lot about the economy in the context of how we think about and plan for the future of Microsoft.

For the past 25 years, the world has certainly enjoyed incredible, incredible global growth. Average incomes around the world grew at unprecedented rates, millions of people moved from out of poverty into the middle class for the very first time.

I thank you again for the opportunity. It’s been my pleasure.

Time Warner online unit AOL is cutting 700 employees due to the weak economy and the ensuing falloff in advertising revenue, but also because of recent structural changes made to refocus the once-mighty service.

AOL CEO Randy Falco sent a memo this afternoon to AOL staff about the layoffs and other cost cuts being made, confirming the moves.

The 10 percent reduction in workforce will take place over the next several quarters, with most of the U.S. layoffs to be completed by March. AOL has 7,000 employees world-wide, mostly located domestically.

AOL is also eliminating merit raises, just as Yahoo (YHOO) and other digital companies have done recently, and consolidating facilities.

While Time Warner (TWX) has been trying to sell AOL to Yahoo, the online unit has also been shifting its resources, as part of a long-term turnaround plan. It has focused the company on three parts: its Platform-A ad unit; its communications and social-networking arm, People Networks; and its recently launched MediaGlow content studio.

It has also been in the midst of splitting out its longtime access business, which has provided the bulk of AOL’s revenues and profits, which sources said has given its top execs insight into what its future business model should be.

Besides the layoffs and cost cuts, sources said AOL was also looking at paring its international business, which has never been particularly successful.

As part of its ongoing moves to make New York its main HQ, AOL will also be consolidating facilities in Silicon Valley, Los Angeles and at its original homestead in Dulles, Va., although not closing it completely.

Much as throughout the online advertising industry, AOL has seen drastic declines in growth. In a recent financial report, AOL said its ad business dropped almost 20 percent year over year.

And AOL’s worth has also declined, with Google (GOOG) recently writing down its 2005 investment of $1 billion in the online service, which valued it then at $20 billion. It is now valued at $5.5 billion.

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

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

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

Well, actually, no.

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

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

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

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

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

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

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

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

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

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

And in another post I did at the time:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Oh, a nice tiny surprise from Yahoo, as it reported its fourth-quarter results, which came in at 17 cents a share in adjusted earnings, compared to the 12 to 13 cents Wall Street was expecting.

“Despite the challenging economic environment, Yahoo! delivered adjusted operating cash flow above the midpoint of guidance for the fourth quarter,” said new Yahoo CEO Carol Bartz in the company’s official release. “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo!’s opportunities, and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”

But let’s experience Bartz Live and Unplugged at the fourth-quarter earnings conference call, including a Q&A in which–the company’s intro speaker noted at the top of the call–former Yahoo (YHOO) CEO and Co-Founder Jerry Yang might make an unexpected cameo appearance.

(He didn’t.)

2:08 p.m. PST:

It’s Carol’s show obviously, coming on first and foremost, with a little joke, after hearing all the typical caveats that must be uttered by Yahoo’s investor relations folks before the call begins.

“I should have understood all those risks before I took this job,” she chuckled.

Now that’s the understatement of the year!

Noting she has been on the job only eight days, meeting and greeting the folks of Yahoo, Bartz said she was impressed by the energy and “can-do” spirit of the company, noting that the product pipeline was fantastic.

Of course, products have never been the problem at Yahoo, as many have noted (including BoomTown many, many times). Execution has been the devil in the details!

Bartz obviously got this, but was not going to insult former management this time, as she did in her debut public conference with the press and analysts.

Right after she was hired in mid-January, Bartz noted that Yahoo and its assets, “frankly, could use a little management.”

But it is probably not a good idea to say that again with thus-far silent Jerry Yang sitting right next to her.

2:09 p.m. PST

A tiny bit of kissing up to Bartz by CFO Blake Jorgensen, who started to go over the numbers in great detail, putting the best face on a weakish performance overall, especially compared to previous years.

At the end, he said that Yahoo had performed well in 2008, considering the poor economy, and added guidance going forward was not great either, especially compared to a year ago.

Also, he warned Wall Street not to expect too much guidance for 2009, as Microsoft had also said last week in its own depressing earnings call.

2:20 p.m PST:

Back to can-do Carol Bartz, who began by pointing to all the various assets that Yahoo has–including its Build Your Own Search Service (BOSS) product and Yahoo News–all of which are strong products for advertisers, she said.

But Bartz also finally made the point that execution needs to improve, which she said was “addressable.”

Before the Q&A started, she answered some questions about the company she asked herself, before they could be asked by others. Apparently, now that Bartz is an “insider,” she knows better than anyone else!

Did she come to Yahoo to sell it? “No.”

Will she sell search? Bartz does not know yet, but noted “search is a very valuable part of [Yahoo's] business.”

She added that Yahoo search market share was three times the size of the third player, which Bartz curiously did not name, but which is–of course!–Microsoft–which wants very much to buy Yahoo’s search business.

Uh-oh, Microsoft (MSFT) CEO Steve Ballmer might not get his way so quickly!

2:26 p.m. PST:

The first question was about selling the company.

“I did not come to Yahoo to sell the company,” said Bartz again. “It’s too early to say more than that.”

The second question was about reports–in this column too!–about talks with Microsoft and Time Warner (TWX) unit AOL recently.

Bartz said Yahoo does not comment on reports that “come from nowhere.”

Sorry to disagree, but they did come from somewhere and were very well-sourced–just like the absolutely on-target post this column did of Bartz’s pending CEOship at Yahoo, before it was officially announced. But let’s just try to ignore that slight and move on–unless, of course, Bartz keeps up with what has become regular blog-bashing, which means a testy war of words and copious leaked memos to come!

The third question was about the management. Bartz said she plans on getting the lines of communication clearer, which she said she was really good at.

Kissing up to herself was a nice touch.

2:33 p.m. PST:

Next came a question about international business–which is the least of Yahoo’s worries, no matter what its execs say about the great products.

The next question was about guidance. No guidance, folks!

Now, one on the display business, with questions about the pressure on prices and on premium online advertising, which is Yahoo’s top business.

Jorgensen said Yahoo is trying to help advertisers, but that there has been and will continue to be a slowdown in advertising, due to the recession.

More on outlook, cost-cutting, etc. Jorgensen: More caution. Hey, analysts, we’re in a recession and I am not so sure how many ways he can say that.

So far, no Jerry Yang, which was starting to seem odd, since that Yahoo minion said he might be chatting away too.

But, as I said, it seems to be Carol’s show, which has been highly entertaining so far in her tenure, although she’d probably scowl at me sternly for saying that and pull out that cheap trick of insulting the press again.

Next up was a question to about various foreign assets and investments. Bartz will look into it! Jorgensen got in a good joke about her priority not being foreign tax issues.

The following question was about product innovation aimed at a younger demographic.

Bartz was on top of that too, pointing out that she has kids in their 20s.

First, she noted children do grow up, and that they will start to use Yahoo products like its finance offerings, as they move into the workforce and have less time to post dopey pictures on Facebook and throw digital sheep.

Also, young people are finicky, she added. They jumped from MySpace to Facebook, after all!

“Who knows what’s going to come next?,” she said, sounding like a typically exasperated parent. In other words, Yahoo will grab them when they grow up and prefer to be more dull!

2:43 p.m. PST:

The next question was about the timing of changes to come, which prompted Bartz to make another joke about buying the New York Times tomorrow! She was kidding, because the analyst asking the question suggested the troubled Yahoo buy the troubled media company in a recent report.

But, seriously folks, Bartz reiterated: “Gimme some time.”

Next, someone asked about the advertising sales force at Yahoo, which is a good question. Bartz is headed to a sales force meeting in a few weeks, she said, wherein she plans to have a beer with them and find out (once they are drunk and presumably easy to get blabbing).

Still, no Jerry Yang! Sigh. I suddenly desperately miss him and his lower-case ways.

The next question was on shareholder value, which has not been very valuable of late. Bartz noted that everything is on the table related to Yahoo’s businesses, but underscored how valuable the property is as a whole.

“This is not a company that needs to be pulled apart and left for the chickens,” said Bartz.

Apparently, this folksy little saying is from her Wisconsin upbringing. Scary poultry metaphor alert!

Bartz is asked about top assets at Yahoo.

She once again noted that Yahoo’s great products will save the day, from customization to integration of assets. “If we have strong products, we will attract the audience that just beats everything,” said Bartz.

A question about search and display being together, which is a sneaky way to ask about Microsoft, since that’s the great debate within Yahoo over whether to do a deal to outsource it or not.

Bartz made a confusing house metaphor, with search being the house, but it is completely lost on me. Is search the house or a living room or what?

“Whether we keep it or sell it, it’s an important asset,” Bartz then said, which was a clever way of saying exactly nothing.

2:55 p.m. PST:

A question on Yahoo brand, which Bartz basically said is about being the place people come every day. But she admitted there was too much complexity to that brand, although products are strong!

Next, someone asked a question about relevancy of Yahoo. “Our users don’t need constant change,” noted Bartz, who has a decent point about the jumpy nature of Web 2.0’s change-for-change’s-sake mantra.

Still–let’s be honest–Yahoo’s missed a key trend or two in recent years.

Next up was a question about ad prices and another on cost cuts. Jorgensen said that it’ll be more about efficiencies and perhaps some more outsourcing.

Bartz thanked the group for not being “too pushy” in their questions, which was an odd end note, since pushy should be the main job of analysts.

In fact, after listening to the call, I hope that Wall Street keeps up the pushy factor, as investors deserve a lot more answers from Bartz and Yahoo going forward.

It is not, as Bartz insisted in the conference call, a case of inside and outside perceptions being different. Yahoo does have strong products, but it still has gotten itself into its current mess all by itself, much of which has little to do with the weak economy.

That’s why I plan on being very pushy, asking about everything from what structural changes Bartz plans to make to how she envisions Yahoo’s business going forward to improving morale on a sustained basis to what she thinks she can do to make Yahoo the strongest it can be when the economy comes out of the recession.

And, not to get pushy or anything, but what happened to some words from the promised Jerry Yang?

Perhaps he fell victim to the vicious chickens of Wisconsin.

[Dear Yahoos: To get on board the Can-Do Carol Bartz Express, you can buy the "Yes We Can" t-shirt at Zazzle.com for just $23.40!]

Earlier today Microsoft decided it would drop the bomb early by moving its second-quarter earnings conference call with Wall Street analysts to 8 a.m. PST, instead of 2:30 p.m. PST.

Microsoft earlier reported a sharp decline in revenues and net income, as well as layoffs of up to 5,000 employees and other cost cuts.

BoomTown, naturally, had to liveblog the Microsoft (MSFT) event.

8 a.m. PST

Could not get into call, as everyone and their mother wanted into this disaster.

Finally, the call was connected at 8:06 a.m. right in the middle of the bad news being delivered by CFO Chris Liddell, which has already begun to sink into the stock market, causing it to–um–sink even farther.

Liddell’s New Zealand accent was vaguely comforting, but it still cannot put lipstick on this pig. Down, down, down. And did we mention down?

8:09 a.m. PST

The call got handed over to Investor Relations GM Bill Koefoed.

“Adding a bit more color,” he said curiously, as he started to talk about the darkly troubling trends in the PC market.

At least Xbox 360 consoles were doing well, with six million units sold in the quarter. Too bad, it’s not a moneymaker! Well, actually, it has been a money pit, but at least the kids like it!

8:18 a.m. PST

Back to Liddell and more unhappy news on the economy, which was why he said Microsoft is not going to give guidance going forward.

“The economy has obviously declined further than we expected,” said Liddell.

Too obviously!

8:23 a.m. PST

Next up was CEO Steve Ballmer, who was also trying his best to make the bad news sound a little less bad.

But, he noted that the the econalypse was a “once-in-a-lifetime set of economic conditions.”

You can say that again, and Ballmer did.

But he soon was underlining Microsoft’s product pipeline and his bullishness on the tech sector.

“We are prioritizing, we are focusing,” Ballmer said. “[But] the pause the economy is imposing on our business will be just that.”

8:31 a.m. PST

First question was about whether Microsoft had acted quickly enough to cut costs amid the carnage.

Liddell answered this one: Of course!

Ballmer added that fixed costs at Microsoft make it hard to make better margins when revenue is declining.

But cost-cutting has now become priority one.

The next one was about the layoffs, including costs of it and if contractors are impacted.

Nope, though they will be getting cut too, said Liddell. But the 5,000 jobs announced are all just Microsofties.

Ballmer then jumped in and noted that the company would also be adding jobs, with a net of 3,000 jobs cut.

The third question was about buyback of stock, which was slowing, as execs said earlier. Wall Street loves buybacks. Also, what about PC growth?

Capital preservation was more important than ever said Liddell, noting that merger and acquisition activity will be lower in the next quarter.

As to the PC market–”a continuing or slight deterioration,” said Liddell.

The fourth question: More about the PC market and where to reset it.

Noted Ballmer: “It’s dynamic.” Which, I think, translates to “I don’t know exactly.”

The fifth question was about layoffs and costs again.

Will Microsoft cut again? Or do increasing expenses on a relative basis mean that Ballmer anticipates a rebound?

“We’re not used to down markets,” said Ballmer. “[But] our model is not for a quick rebound.”

Instead, Ballmer repeated his assertion that this was a wholesale resetting of the economy, which will build back on a lower level.

8:45 a.m. PST

GAAP earnings question. Zzzzzzz.

Next one was on whether Microsoft should commit to more buybacks of its stock instead of doing less?

Wall Street loves buybacks!

Sorry, but Microsoft was going to be more liquid going forward, said Ballmer.

The next question went back to why guidance for expenses is higher year over year, if the outlook was so bad.

Liddell noted it was a change in “momentum” of spending, which was slower.

8:50 a.m. PST

The questioner wanted to know about the annuity business versus the more volatile consumer sector.

Obviously, said Liddell, Microsoft likes regular money coming over the transom, but that could also decline in the future.

Now a question for Ballmer on what Microsoft might divest.

“I like our portfolio,” said Ballmer flatly.

The last question was about Yahoo (YHOO) and Microsoft’s ongoing talks about an alliance of some sort! Finally!

“I don’t think I have anything to say about Yahoo,” said Ballmer, after he laughed a bit with the other execs.

As he has previously noted, he still wants a search deal, said Ballmer. But not acquisition, added Liddell.

Ballmer noted that Microsoft was not an M&A company, in general.

In other words, Microsoft was still not buying Yahoo.