News Corp. will officially announce its shaken-but-not-stirred digital lineup this morning, as former AOL head Jon Miller takes over as the media giant’s new chief digital officer.

And Peter Levinsohn–his predecessor at Fox Interactive Media, which Miller will inherit in a new form, along with a larger portfolio, all based in New York–will also officially take up his new post as the key digital exec at News Corp.’s film and television studios in California.

In the press release, the company said Miller “will be charged with driving digital strategy across News Corp. businesses.”

In a statement, News Corp. CEO Rupert Murdoch said: “Our focus moving forward is twofold: to enable our digital businesses to flourish as individual entities and to bolster the digital strategies of our core media properties by treating them as central to, and not separate from, the enterprise.”

The release went on to say that Miller will have sway over News Corp.’s standalone digital businesses, including MySpace, IGN Entertainment, Photobucket, as well as Jamba and the Hulu joint venture with NBC Universal, and will “collaborate with operational heads and digital executives through all lines of business around the globe to develop and refine digital efforts.”

Last Friday, BoomTown and others outlined the moves, part of Murdoch’s efforts to make significant changes related to how the company’s digital efforts are managed.

The shifts come in the wake of the previously announced upcoming departure of COO Peter Chernin, who was in charge of digital efforts at News Corp.

Miller (pictured here), whose noncompete agreement with Time Warner (TWX) from his AOL stint just ran out, will report directly to Murdoch. Besides the chief digital officer title, he will also be chairman and CEO of the newly created News Digital Media group.

Levinsohn, a longtime News Corp. exec, is also getting a significant new job as president of new media and digital distribution at the Fox studios, coordinating delivery of its film and television assets on all mobile and digital platforms.

It will be his task to create sustainable advertising and other business models in this fast-moving arena, as well as create innovative new content for those platforms.

In his new post, Levinsohn (pictured here) will report to Jim Gianopulos and Tom Rothman, co-chairmen and CEOs of Fox Filmed Entertainment.

News Corp. said that Levinsohn will oversee “Fox Filmed Entertainment’s entire content portfolio across all digital distribution channels, including Hulu and third party platforms in the broadband, mobile and gaming markets. He will direct all policy decisions regarding new usage and business models, content protection, and will further develop the studio’s original and derivative content businesses by working with creative talent, distributors and brands to bring short and long-form digital entertainment to audiences worldwide.”

It’s definitely a complex, challenging job–although a big opportunity–for the affable Levinsohn, who never sought the limelight as some who worked for him have, most especially MySpace CEO and co-founder Chris DeWolfe.

Both previous FIM heads, Ross Levinsohn and Peter Levinsohn, many sources said, had to deal with DeWolfe’s own sphere of influence within News Corp. (NWS), especially his close ties to Murdoch. Both FIM and MySpace are located in Beverly Hills, Calif.

As I previously wrote, relations between DeWolfe and both those execs could be described, at best, as tense.

Miller now inherits that relationship at the social-networking site. And he must also navigate the complexities of the global media giant, as well as figure out ongoing relationships with digital companies, such as Google (GOOG), Microsoft (MSFT), Yahoo (YHOO) and his former company, Time Warner (TWX) unit AOL.

The same, of course, goes for Levinsohn.

And, especially with the weak economy, which often slows innovation at large companies, it is likely the pair will end up having to work together closely if News Corp. is to have a cohesive and successful digital strategy under the new set-up going forward.

(News Corp. owns Dow Jones, which owns this Web site.)

Here’s the press release, after the jump:

News Corporation Establishes Digital Leadership Roles

Jonathan Miller named Chairman and Chief Executive Officer, Digital Media Group and Chief Digital Officer for News Corporation

Peter Levinsohn named President New Media and Digital Distribution, Fox Filmed Entertainment

New York, NY April 1, 2009–News Corporation Chairman and Chief Executive Officer Rupert Murdoch today announced the company has named former AOL CEO Jonathan Miller, Chairman and Chief Executive Officer, Digital Media Group and Chief Digital Officer for News Corporation. Based in New York and reporting directly to Mr. Murdoch, Mr. Miller, 52, will be charged with driving digital strategy across News Corp. businesses.

In this newly created role, Mr. Miller will direct News Corp.’s stand-alone digital businesses, including MySpace, IGN Entertainment, Photobucket, as well as Jamba and the Hulu joint venture with NBC Universal. He will also collaborate with operational heads and digital executives through all lines of business around the globe to develop and refine digital efforts.

“Our focus moving forward is twofold: to enable our digital businesses to flourish as individual entities and to bolster the digital strategies of our core media properties by treating them as central to, and not separate from, the enterprise,” Mr. Murdoch said. “With his strong background in media and entertainment, coupled with a deep understanding of the digital business, Jon Miller is–hands down–the best equipped executive to provide the vision, oversight and operational experience to truly transform our offerings.”

“’I'm fortunate to join the world’s most dynamic media company at a time when digital opportunities are shaping our business in new and exciting ways,” said Miller. “News Corporation has shown a unique ability to excel globally in all forms of media and I look forward to working with its leadership as we position the company for continued growth and innovation.”

Peter Levinsohn has been named to the new position of President New Media and Digital Distribution, Fox Filmed Entertainment, the unit that controls the company’s film and television content worldwide. He will report directly to Jim Gianopulos and Tom Rothman, chairmen and CEOs of Fox Filmed Entertainment.

Levinsohn will oversee Fox Filmed Entertainment’s entire content portfolio across all digital distribution channels, including Hulu and third party platforms in the broadband, mobile and gaming markets. He will direct all policy decisions regarding new usage and business models, content protection, and will further develop the studio’s original and derivative content businesses by working with creative talent, distributors and brands to bring short and long-form digital entertainment to audiences worldwide.

Mr. Murdoch said, “Peter Levinsohn did an extraordinary job running Fox Interactive Media, having steered MySpace’s trajectory to the world’s leading social media portal. He is the perfect executive to place at the heart of our global content business as we look to further exploit our movie and television properties over new and yet to be discovered platforms.”

“As one of the leading suppliers of content worldwide, we’ve made huge strides in giving consumers an array of choice when it comes to consuming digital content,” said Levinsohn. “I look forward to working with Jim and Tom and their teams to further our commitment to building distribution models that are both sustainable and durable over the long term.”

“With a newly minted portfolio that combines the absolute best in film and television entertainment, I’m thrilled to have Peter return to the studio to lead this very important initiative as we deepen our commitment to propel our digital businesses forward,” said Jim Gianopulos, co-chairman Fox Filmed Entertainment. Tom Rothman, co-chairman Fox Filmed Entertainment, said, “We look forward to leveraging Peter’s deep knowledge of emerging markets as we bolster our strategies to bring viewers new content built explicitly for these expanding platforms.”

Levinsohn, a 20-year News Corp. veteran, returns to the studio after running Fox Interactive Media, where he oversaw MySpace, IGN, Photobucket and FoxSports.com, among other web properties. Prior to Fox Interactive Media, Levinsohn held a number of senior positions at the company, including president of Fox Digital Media, and president of Worldwide Pay Television and Video on Demand for Fox Filmed Entertainment.

Mr. Miller was most recently a founding partner of Velocity Interactive Group, a digital media and communications investment firm. From 2002 to 2006, he served as Chairman and CEO of AOL, where he restructured the company’s core business lines, focusing on online advertising. Through his leadership, AOL delivered record annual profit growth of 21 percent and increased online advertising growth, the centerpiece of its new business model, by 46 percent. Previously, Miller was CEO and President of USA Information and Services, now IACI and Expedia (the company split in two in 2005), where he helped build industry-leading positions in such areas as online travel, ticketing, and electronic retailing.

Earlier in his career, Mr. Miller spent several years as Managing Director of Nickelodeon International, a unit of Viacom’s MTV Networks. He also served as the Chief Executive of Paramount’s first branded international channel, launching the Paramount Comedy Channel in London. He spent five years at NBA Entertainment where, as Vice President of Programming, he expanded the NBA’s TV production business as well as its overall brand image.

BoomTown has confirmed a report by Nikki Finke of Deadline Hollywood Daily that former AOL head Jon Miller is set to take over as digital head at News Corp., replacing Peter Levinsohn.

The move was also mentioned in a blog post by Miller’s partner in an investment company, Ross Levinsohn, who once held a smaller version of the job Miller is taking.

But Miller has not actually signed up for the job officially, since he is still under a noncompete agreement with Time Warner from his AOL stint. It runs out in three days, in fact.

As some might recall, Miller was barred from taking a board seat at Yahoo last year by Time Warner CEO Jeff Bewkes.

But sources said News Corp. is likely to announce Miller as head by Monday or Tuesday at the latest.

Once he does sign, which seems likely, Miller will become News Corp.’s chief digital officer, reporting directly to the media giant’s head, Rupert Murdoch. Based in New York, he will also be chairman and CEO of the newly created News Digital Media group.

Sources noted that this is a a different and larger platform for Miller, bigger than just the Fox Interactive Media job that Levinsohn held. It will go across all properties held by News Corp. across the globe.

“The idea is to mainstream the digital initiatives, which have been all over the company,” said one source close to the situation.

Levinsohn will move to another job within News Corp. (NWS) at the film and television studios, to coordinate delivery of its assets on mobile and digital platforms, sources said. It will be his task to create sustainable business models in this fast-moving arena.

News Corp. has, in fact, been searching for a new digital head for the past several months, talking to a number of well-known Internet execs, including Joost head Mike Volpi, former AOL exec Jim Bankoff and former Facebook exec Owen Van Natta.

The decision to rejigger News Corp.’s digital assets came after the announcement that President and COO Peter Chernin was leaving his job and has largely been pushed by Murdoch.

Previously, Chernin had been in charge of digital efforts at News Corp.

The search for the position was, in fact, conducted by well-known head tech and media headhunter Jim Citrin of Spencer Stuart.

Ironically, Miller is still essentially taking a job once held by his current partner, Ross Levinsohn, at the investment fund, Velocity Interactive Group. As I noted above, Levinsohn confirmed the Miller offer from News Corp. in a blog post called “Thunderclap.”

The move is a fascinating one, and one of many in the digital arena of late among its top execs. Former Google (GOOG) exec Tim Armstrong recently took over as CEO of the Time Warner (TWX) online unit AOL, for example.

Also, even though the job will cover all the the many News Corp. Web properties, even more compelling will be how Miller will deal with its largest and most prominent asset: social-networking giant MySpace.

More to the point, it will be riveting to see how he will handle managing MySpace co-founder and CEO Chris DeWolfe.

Both previous FIM heads, Ross Levinsohn and Peter Levinsohn, many sources said, had to deal with DeWolfe’s own sphere of influence within News Corp., especially his close ties to Murdoch. Both FIM and MySpace are located in Beverly Hills, Calif.

Relations between DeWolfe and both those execs could be described, at best, as tense.

But Miller, who is a much bigger Internet player in his own right, with a more powerful charge from Murdoch, certainly is likely to shift that balance of power.

More to come…

(News Corp. owns Dow Jones, which owns this Web site.)

Peter Chernin might be going from News Corp. But he’s not forgotten, at the least by our little tech Web site (see, Peter, we still like you, even if you’re–almost–no longer our boss!).

In fact, you can see him in action below in a video, talking about digital issues and more in a long interview I did with him onstage at the fifth D: All Things Digital conference in 2007.

Besides discussing the controversial acquisition attempt of Dow Jones by News Corp., Chernin also talked about the company’s experience with the social-networking site MySpace, its now successful joint venture with NBC Universal to create the Hulu online video service and the intersection of Hollywood and technology.

Chernin, with whom I have had several chats since then about the Web world, seemed to me to be intently and increasingly interested in the arena, especially since having purview over Fox Interactive Media as COO and President of News Corp. (NWS). He was also deeply involved in all the negotiations about digital issues related to the writers’ strike. (News Corp. is the owner of Dow Jones, which owns this Web site.)

And unlike a lot of Hollywood types, the 57-year-old Chernin has never been annoyingly disdainful (or, more to the point, deeply ignorant) about Silicon Valley, so I would not be surprised if he ended up in some prominent digital job as a next act.

While Chernin did pass on a chance to run Yahoo (YHOO)–he was a top choice of its board before it hired Carol Bartz–some more recent speculation, for example, has centered on other big tech jobs, even including potentially being a good candidate to take over at Apple (AAPL) if its ailing leader Steve Jobs ever decides to fully step aside.

Of course, all such chatter is premature given that he will not be out the door at the media giant–I wonder if I can get his luxe office on the Fox lot?–until the end of June.

Until then, here’s Chernin talking tech:

BoomTown likes charts, so here are two recent ones from comScore and Nielsen about online video usage for November of 2008.

The pair have different results. But, overall, it’s up big time, year over year (40 percent!), as viewers have really started to up their time spent watching videos on the Web and also the number of videos they watch.

Google (GOOG) property YouTube ruled, no surprise, at 40.3 percent share of videos, according to comScore, with little competition.

The next largest is a dwarf in comparison–News Corp. (NWS) unit Fox Interactive Media at 3.5 percent. (News Corp is the owner of this Web site.)

You can yammer all you like about cloud computing, but online video and its monetization is going to be the big story for 2009, because it is exactly where the audience is going.

Here are the charts (click on the images to make them larger).

And below the charts is the music video of the classic Buggles hit, “Video Killed the Radio Star”:

November 2008 comScore

November 2008 Nielsen

Buggles

And, no surprise, he is the No. 1 choice of most inside and outside Yahoo (YHOO) in the wake of the news late yesterday that current CEO and Co-Founder Jerry Yang is stepping down.

And why not? Chernin has the right resume: Experienced at running large and complex organizations; savvier than most in media about the Internet; able to make the kinds of dramatic decisions needed; and, perhaps best of all, signaling–via the Los Angeles Times–just this past week that he was open to leaving the powerful media and entertainment conglomerate for something new.

Well, Yahoo would certainly be new for Chernin, in terms of a corporate cleanup challenge, especially compared to figuring out how to make bank on plush toys from “The Simpsons.”

And, while the risks are many, if Chernin (pictured here) managed to turn around Yahoo, he could make a huge fortune too, given Yahoo shares have languished of late, much in the same way they did when former CEO Terry Semel came to Yahoo from Hollywood in 2001.

But it’s not altogether clear whether Chernin would actually leave his powerful perch at News Corp. (NWS)–which owns Dow Jones and owns this Web site. He has been ensconced there for a dozen years, building a huge reputation as a sharp exec (No, Peter, I am not kissing up, as I think Yahoo would wear even you down very, very quickly).

That’s even though many note he is not likely to take over as CEO from its iconic leader, Rupert Murdoch. The media mogul is widely expected to favor one of his own children to lead News Corp. next.

And the 57-year-old Chernin already makes close to $30 million in his current job, which is definitely challenging.

And, although Chernin has been involved in the News Corp.-owned MySpace and has had success backing the Hulu online video site, it is not nearly as hard as the five-year turnaround quagmire (plus no fabulous media mogul perks either) that Yahoo could turn out to be.

In addition, privately to other News Corp. execs, Chernin has regularly pooh-poohed a move to a digital company, even though he is always on the short list for a lot of big Internet jobs–such as the long-unfilled post as digital head at Microsoft (MSFT) more recently.

So, who else to take over from Yang, who will return to his job as Chief Yahoo after stepping down from the company as soon a search for a replacement CEO is successful?

Well, here is BoomTown’s own shortish list, based on asking a wide range of people inside and outside Yahoo, all of whom are important digital players in their own right.

INSIDE YAHOO

Sue Decker:

The current President of Yahoo is certainly being “considered” for the job, which is a polite term for not really being considered at all. While Decker is an intelligent and thoughtful exec, like a politician with a record, she has had her hand on the operating tiller at Yahoo for too long not to get deservedly blamed for its current situation.

In addition, she is radioactive to big investors, who have told the Yahoo board in no uncertain terms that she is a nonstarter.

Maggie Wilderotter:

The former Microsoft exec, who has also been a public company CEO, is an interesting idea floated by some, who think the Yahoo board might turn to one of its own directors, as a short-term solution to stabilize Yahoo.

Wilderotter has been much focused, said several Yahoo execs, on cost-cutting at Yahoo and certainly is not as tarnished, being a more current board member. But she is a largely unknown quantity in the Internet space and, most importantly, at Yahoo.

John Chapple:

The former CEO of Nextel is one of the two board members (former media Frank Biondi Jr. is the other) recently picked by Carl Icahn, when the activist shareholder was admitted on the board as part of the proxy fight settlement.

Chapple has, sources said, been conducting chats with Yahoo execs lately, perhaps as a way to get a lay of the land. If he got the job, it would be clear Icahn had won his Pyrrhic victory (and personal financial defeat) against Yang.

OUTSIDE YAHOO

Dan Rosensweig:

The very funny, but brash, former Yahoo COO is definitely a favorite within Yahoo’s ranks, except for those who don’t like him. But it’s clear Rosensweig does know and love Yahoo, is close to Yang and, ironically, enjoys a tight relationship with Microsoft CEO Steve Ballmer, who also wanted him for the digital head job.

Also, Rosensweig, who does have operating chops, has gotten some much needed time away from Yahoo, as a partner at the tony media investment firm, the Quadrangle Group.

Meg Whitman:

Another dreamy CEO choice, except she has already been a big company CEO at eBay (EBAY), has proved her mettle in building it to a powerhouse–despite the online auction site’s currently harder times–and has the giant fortune to prove it.

And, oh yes, she is likely to be using that pile of cash to run for governor of California, on the Republican ticket.

Jon Miller/Ross Levinsohn:

The Bobbsey Twins of the Internet, the pair are now having a very good time running their own investment company, the Velocity Group.

But, aside from some questioning whether he can make the quick decisions needed at Yahoo, Miller (pictured here on the right), the former head of AOL, does not want to leave his New York home and cannot take any job anyway until his noncompete with Time Warner (TWX) runs out in March.

And former Fox Interactive Media head Levinsohn likes Los Angeles, and probably is too fast a personality for Yahoo (his going there would be a shock to its system, but would be endlessly entertaining to me personally).

Tim Armstrong:

The top ad exec at Google (GOOG) certainly is an interesting idea, although has little of the product experience needed to run Yahoo. But he is a well-respected advertising figure–where Yahoo needs to shine–and could do well with a lot of strong execs under him.

He is also not on a CEO path at Google–paging, Larry Page!–and could be interested in proving he could run a company on his own.

Kevin Johnson:

The former Microsoft exec was supposed to be running Yahoo, if he and Ballmer pulled off their takeover attempt earlier this year. They did not, and Johnson then left Microsoft to run Juniper Networks (JNPR) in Silicon Valley, right up the road from Yahoo, in fact.

But Johnson is likely subject to a noncompete by Microsoft and a strong contract at Juniper too. Still, a very sharp exec, he definitely has the operating, political, technological and digital skills to take on Yahoo. Also, ironically, he and Yang really get along well and like each other, despite the takeover battle.

Of course, there are a lot of other ideas: Disney (DIS) online exec Steve Wadsworth; the outside-the-box choice of former Procter & Gamble (PG) marketing wizard Jim Stengel; Microsoft digital exec Yusuf Mehdi; CBS (CBS) digital head Quincy Smith (whose hyperactive dealmaking would likely lead to a mutant merger between CBS and Yahoo); and former Cisco (CSCO) and current Joost CEO Mike Volpi.

Please post suggestions below or, better yet, send tips to me at here.

Please see this disclosure related to me and Google.

The one truly interesting factoid in The Wall Street Journal’s piece about the efficacy (or lack thereof) of Facebook’s engagement ads today was this one about its results in the graphical ad business versus rival MySpace:

The company says 70 of the U.S.’s 100 largest advertisers have advertised on its site since 2007. But its share of total number of U.S. online display ad views was just 1.1 percent, according to market research firm comScore Inc., in its most recent report in June.

News Corp.’s Fox Interactive Media Unit, which includes rival MySpace.com, is the market leader with 15.9 percent of display-ad spending, according to comScore.”

This is what is known in the BoomTown lexicon as a classic What-chu-talkin-bout-Willis? moment.

That’s an especially astonishing number, because MySpace has been steadily losing audience leadership and, more importantly, the growth race to Facebook over the last year (see the Journal graph here).

Nonetheless, MySpace, the unit of News Corp. (NWS) that makes up much of FIM, seems to be making up for it in actually selling the ads needed to make social networking profitable.

And, while Facebook has been beefing up its ad sales force on Madison Avenue–it turns out that it is a media company, after all, and not a utility!–so has MySpace, mostly from ex-employees of Yahoo (YHOO), which still dominates the category, despite its numerous missteps.

Both Facebook and MySpace will, as will everyone in the graphical ad space, get hit hard by the econalypse in the advertising space online, of course.

But, given these stats, Facebook clearly has to start seriously upping its ad performance to at least match MySpace.

(This site, as well as The Wall Street Journal, are also owned by News Corp.)

Today comes news that jumping-on-prone California Attorney General Jerry Brown is thinking of climbing onto the federal government bandwagon heading right for the Googleplex in Mountain View, Calif., to stop the search giant’s online advertising deal with Yahoo.

Brown joins big advertisers, newspapers and whatever mudslingers Microsoft (MSFT) can gather (and, let it be said, Microsoft can sling a lot of slimy mud).

They are all are coalescing around the notion that Google cannot have even the slightest possibility of getting its big mitts into the innards of Yahoo (YHOO).

Even though its stock has suffered of late, in part due to the possibility of a tussle with the government, Google (GOOG) has consistently argued that the arrangement does not hinder competition.

Google has also insisted that it will move ahead with the deal–which was struck as a parry to Microsoft’s attempt to buy Yahoo and is set to begin next month–no matter what.

I actually believe Google execs when they say this because they have shown a strong streak of stubbornness on controversial issues–witness the company not backing down from the Viacom lawsuit–about which they believe they are in the right.

Still, while Google would by no means control a lot of Yahoo’s search ads, the fact that the pair together have an 80 percent share of the search market apparently frightens ordinary mortals outside the Google bubble.

Maybe–even though Google exhibits none of the thuggish behavior that so characterized Microsoft’s monopolistic hegemony–it should.

Because added to that, Google just keeps announcing more and more earth-girding moves, such as today’s O3b Networks.

This joint project with Liberty Global aims to deliver cheap Web connectivity to Africa and other emerging markets.

O3b stands for “other 3 billion” and it is an admirable effort, as well as a good idea for making Google even more globally ubiquitous as the way people access the Internet.

And also today, more proof of Google’s dominance, with comScore’s latest stats on video use on the Web in July.

No shock–Google properties, primarily YouTube, accounted for 44 percent of the 11.4 billion videos viewed in the month.

Fox Interactive Media was a distant second with 3.9 percent, while Microsoft sites clocked in at 2.5 percent, Yahoo at 2.4 percent, Hulu at 1 percent and AOL at 0.8 percent.

Users on Google sites watched an average of 54.7 videos each, compared to 11.7 videos for Disney and Viacom, the next closest in videos-watched numbers.

While a lot of the media companies have more ad-rich premium content than Google, it is still a picture of one huge giant and a lot of teeny pygmies in the video space.

You see the pattern here, don’t you? So do regulators.

One has to wonder exactly when Google will see it.

And in that spirit, here’s “Walk Away Renée,” done by a very talented singer (but not The Left Banke, which did it originally).

I found it on–of course!–YouTube:

Please see this disclosure related to me and Google.

BoomTown was all busy trying to think of execs to replace Yahoo CEO Jerry Yang, as pressure mounts on him to right the troubled Internet company.

But now, Yang’s position feels safer than ever and it’s his nemesis–Microsoft– that needs a new leader for its long-stumbling online services business.

Microsoft (MSFT) was already cracking, according to sources, and had a wish list of internal and external candidates that CEO Steve Ballmer is now considering.

Ballmer noted in his memo to company employees yesterday the departure of Platforms and Services President Kevin Johnson and the reorganization of that massive division, that he would “create a new senior lead position and will conduct a search that will span internal and external candidates.”

Many think, given the turbulence, that Ballmer will pick a trusted internal Microsoft veteran, especially since he probably should move quickly.

Sources said Brian McAndrews (pictured here), who came to Microsoft via the $6 billion aQuantive acquisition last year, is the leading insider for the job.

SVP Satya Nadella, who will run search, MSN and ad platform engineering efforts in a new reorg, is less likely.

But Strategic Partnerships Senior Vice President Yusuf Mehdi, a longtime exec who has previously led online businesses at Microsoft, is also in the mix, the possible dark horse due to his past experience. As strategy “wingman” to Johnson, he might want a more operational job again now that Johnson is gone. Mehdi is also well liked in Silicon Valley and in media circles.

More interesting perhaps is one of the top outside candidates on the list, former AOL head Jon Miller (pictured here), who is poised to be added to the–wait for it–Yahoo (YHOO) board, as part of its recent proxy fight settlement activist investor Carl Icahn.

Miller, who was bounced out of AOL unfairly several years ago, is now running an investment firm with former Fox Interactive Media head Ross Levinsohn.

(And, adding to the hijinks, Levinsohn was on Microsoft’s alternate board in its own abandoned proxy fight against Yahoo.)

Other execs on the list are also more experienced in the Web space, such as former CNET head Shelby Bonnie, who is currently working on a start up called PolticialBase.

Microsoft sources said someone like former Yahoo COO Dan Rosensweig–now in private equity at the Quadrangle Group–is also the type of exec the company is looking for. Of course, he is deeply loyal to Yahoo (and his name has also been bandied about as a possible future Yahoo CEO too).

Of course, the company’s fondest desire is probably to get an even bigger Web or media exec like News Corp.’s (NWS) Peter Chernin or former eBay (EBAY) head Meg Whitman. (News Corp. is the owner of Dow Jones and of this Web site.)

Having been around when Microsoft first dipped its toe in Internet waters back in the mid-1990s, I’m sorry to say that whoever the software giant picks has small shoes to fill.

After years and years of losses, while Google (GOOG) and Yahoo made bank and grabbed share, Microsoft has not.

In its recent quarterly report, for example, while revenues for the online business rose 24 percent to $838 million, losses from Platforms and Services doubled to $488 million.

Ouch! That’s gotta hurt.

Because of the continued inertia, Johnson’s large unit–which includes the powerful Windows division, as well as the online services business–will be reorganized into two parts.

The Windows and Windows Live online service will be one part and other will be made up of online advertising, search and MSN.

That division needs to bulk up the software giant’s efforts in the Web space, especially in the online advertising arena where Google now rules.

In an attempt to make an end run around the search behemoth, Microsoft tried to buy Yahoo, the No. 2 player in the search and search-advertising space, and then tried to grab only its search business–efforts that have so far yielded nothing.

In any case, this reorg of a previous reorg (Ballmer united the Windows and online services business three years ago) is a clear signal of the unrest and even a bit of chaos at Microsoft resulting from the Yahoo battle.

There is definitely a lot of ire aimed directly at Johnson (pictured here) as the key executive in charge of the effort besides Ballmer, because of his failure to make a deal.

Worse, the bid forced Yahoo into the arms of Microsoft archrival Google, via a controversial search-ad outsourcing deal.

Microsoft must obviously do something.

Its market share in the search market, for example, has persistently stayed under 10 percent, despite a range of efforts to differentiate itself.

Re-energizing Microsoft’s Web efforts is most definitely a thankless job.

And whether replacing Johnson and bringing in a new leader who can push the reset button will work this time is unclear, as are many things having to do with Microsoft’s Internet strategy right now.

Please see this disclosure related to me and Google.

“To trust Mr. Icahn and his board is really a bad choice.”

Oh. Phew. Thanks for warning everyone, Jerry, so that bullet could be dodged!

But, besides the quote begging the question of what makes Yang a good choice, which he must articulate rather than just diss his rivals, it lacks the necessary oomph that Yang needs to make his case more aggressively and definitively.

That’s especially true, if he is to stop Icahn from gaining the momentum he needs to win his proxy fight against Yahoo (YHOO).

As Microsoft (MSFT) should have done in its attempt at the Yahoo takeover, one has to remember to actually hit the target when you shoot.

So here’s a much better one to needle Icahn with, using an famous old ad tag line:

Where’s the beef?

Specifically, who’s going to mind the store if Icahn actually manages to win and makes good on his promise to fire Yang?

Because if there is one thing that is hurting Icahn’s chances, it is the worry among major Yahoo investors that he simply cannot run Yahoo, even for a short time.

So, of course, he is out beating the bushes for a suitable CEO.

“Carl has to have a management team that he announces soon, so people can see that there will stability if he wins,” said one investor source, in a typical sentiment I encountered. “Taking out a whole board and the top managers of a major public company is drastic.”

Indeed, which is why Icahn has been working feverishly, sources said, to attract someone to run Yahoo in the interim, in the event he wins his proxy battle and he seeks to strike a deal of some sort with Microsoft to buy part or all of Yahoo.

As BoomTown previously reported, Icahn is still attempting to entice former AOL (TWX) head Jon Miller, along former Fox (NWS) Interactive Media exec Ross Levinsohn, to take the job on a temporary basis, sources said.

Neither Miller nor Levinsohn, who now co-run an online-focused investment fund called Velocity Interactive, has agreed to do this yet, a risky move that might tarnish anyone who takes it on.

In addition, most suitable candidates for such a job would likely prefer to do it in a friendly fashion, working with Yang to transition him out of the CEO role.

Yang has acknowledged to several people that some investors, angry about the botched Microsoft takeover deal and the declining stock price, are seeking his ouster, as well as that of Yahoo President Sue Decker.

But Yang is definitely not resigning, as some stock-goosing hedge fund vultures were putting out earlier today.

In any case, Icahn, who has lost money in this activist bid, is working overtime to make that happen by convincing shareholders that he is the better choice to strike a more lucrative deal for Yahoo.

In fact, he underscored it earlier this week when both he and Microsoft released almost exact statements that they were talking and could work with each other. Both also noted that Microsoft did not feel it could work with current Yahoo leadership.