If a search and advertising partnership between Yahoo and Microsoft is ever struck, perhaps a little CEO-to-CEO note-passing should get some credit.

Yesterday, we wrote about the purple Post-It that Bartz passed to Ballmer via the makeup person in the D: All Things Digital Green Room.

Both Bartz and Ballmer were interviewed onstage at D7 this past week, and were asked about the talks, which ended yesterday in Carlsbad, Calif.

BoomTown also reported that Ballmer and Bartz, as well as key deal execs at both Yahoo (YHOO) and Microsoft (MSFT), had met in person once again about such a partnership at the conference.

Onstage, Ballmer dodged the question about meeting, joking about the sticky note Bartz had left for him.

That Post-It was stuck in a D7 program book that is kept by Dawn Griffith, our most excellent makeup person for all seven of the conferences.

Over the years, Griffith has asked all D7 speakers to sign programs next to their bios and Wall Street Journal-style dot drawings.

This year, Bartz and Ballmer shared a page in the book.

Bartz spoke on Wednesday morning and put the note below Ballmer’s picture, knowing he’d sign the program when getting his makeup done for his Thursday morning appearance.

And, not surprisingly for Bartz, it was a tough-love poem–although, thankfully, there is no cursing.

Here’s the image of the note (click on it once to make it larger), which reads:

“Steve,
Forget it
Won’t help
Ha
Carol”

BoomTown just could not resist making the obvious literary pun on the debut of Peter Kafka’s new daily blog, MediaMemo, on AllThingsD.com.

(He is pictured here.)

For those who were not dragooned into reading existentialist writers in college, I am referencing “Metamorphosis,” about a man who turns into a bug–except that the process is fraught with so much more meaning.

And thus it will be in Peter’s column, as the most excellent writer and reporter plunges into the topic–as he writes in his first explanatory post–of “the ongoing battle between the established media business and the technology that is reshaping it day by day.”

It is transformative, to say the least, from someone who will lead you through it with the kinds of standards, accuracy, great writing and insight that I hope you have come to expect from this site.

While Peter’s impending arrival to ATD was announced in mid-September, he actually debuts today and will be posting many times daily.

As I have previously written, Walt Mossberg and I have long wanted to bring in someone located on the East Coast and away from the echo chamber that Silicon Valley can be, because we both feel the ongoing digital revolution is taking place over a number of key industries all over this country and the world.

With extensive connections across the media, advertising, entertainment and tech sectors, Peter will be doing original reporting, getting scoops, doing interviews, making videos and providing much needed and clear-headed analysis that he is so well-known for.

Peter has been working at Silicon Alley Insider, most recently as its managing editor, since mid-2007. The first hire at the start-up tech business analysis site, he has focused on enterprise and beat reporting, as well as breaking news.

Previously, he spent 10 years as a reporter and editor at Forbes and Forbes.com covering media and technology. (You can read more of his bio here, along with his ethics statement.)

Walt and I are thrilled that Peter is coming onboard to join the rest of the strong ATD team, which includes: John Paczkowski, author of the rocking Digital Daily column, who formerly wrote the award-winning blog, “Good Morning Silicon Valley” at the San Jose Mercury News; and Wall Street Journal reporter Katherine Boehret, who writes the most excellent weekly Mossberg Solution column.

And we hope you will soon find–via following Peter regularly–why we are so very excited to welcome MediaMemo to the site.

Although we did not raid the offices of Silicon Alley Insider and “steal” Peter Kafka, as the fanciful SAI kingpin Henry Blodget alleges–had it been a raid, BoomTown would have properly hog-tied Blodget so he could not make such spurious allegations!–it is true that SAI’s current managing editor (pictured here) will be coming to work for us at AllThingD.com soon.

Indeed, Walt Mossberg and I, as well as the rest of the ATD team, are thrilled that Peter is coming onboard at the end of October. He will write a daily still-unnamed new media blog from New York City.

Walt and I have long wanted to bring in someone located on the East Coast and away from the echo chamber that Silicon Valley can be, because we both feel the ongoing digital revolution is taking place over a number of key industries all over this country and the world.

Peter was our first choice and has been on my must-read list since I began this blog. He is sharp, witty, confident and has the kind of reporting and writing chops that we think are key to giving readers high-quality, standards-based content they can trust.

With extensive connections across the media, advertising, entertainment and tech sectors, Peter will be doing original reporting, getting scoops, doing interviews, making videos and providing much needed and clear-headed analysis that he is so well known for.

Peter has worked at SAI since mid-2007. The first hire at the start-up tech business analysis site, he has focused on enterprise and beat reporting, as well as breaking news.

Previously, he spent 10 years as a reporter and editor at Forbes and Forbes.com covering media and technology. There he launched two tech columns, coordinated the video staff and represented Forbes on industry panels and in TV appearances for CNN, BBC and CNBC.

Peter was also a staff reporter with City Business in Minneapolis and a staff writer for the Minnesota Real Estate Journal in Bloomington from 1993 to 1997. Earlier, he was a stringer with the Milwaukee Journal and the Milwaukee Sentinel in Madison, Wis.

He holds a bachelor of arts from the University of Wisconsin and resides in Brooklyn, NY.

More importantly, Peter is a newly-minted father, which should give him more practice in prolonged sleep deprivation needed for his blogging.

He will begin at ATD on Oct. 27.

Along with Walt and me, Peter joins senior news editor John Paczkowski, author of the rocking Digital Daily column, who formerly wrote the award-winning blog, “Good Morning Silicon Valley” at the San Jose Mercury News, and Wall Street Journal reporter Katherine Boehret, who writes the most excellent weekly Mossberg Solution column.

We hope you are as thrilled as we are that Peter is coming soon to the ATD site.

(And if you want a little taste of Peter’s work, here’s a post he did yesterday on an appearance by Time Warner’s Jeff Bewkes at the Goldman Sachs media conference and another on Rupert Murdoch of News Corp. [News Corp. is the owner of Dow Jones and of this Web site].)

Unfortunately, due to issues too complicated to go into, we have to post all the D6 interviews in several 15-minute parts (I know, I know).

But–as many readers have requested–they will all be available in their entirety over the next two weeks in this column.

Kicking off the proceedings will be what most of the attendees at the conference told us they considered their favorite interview, which Walt Mossberg and I did with News Corp. Chairman and CEO Rupert Murdoch.

Full disclosure: News Corp. (NWS) owns Dow Jones, which owns this site and the conference.

Nonetheless, Walt and I treated Murdoch in the same way as we did all the others we interviewed and think we succeeded in being–someone has to say it–actually both fair and balanced.

The interview with one of media’s most powerful moguls was wide-ranging, including: talking about the takeover tussle between Yahoo (YHOO) and Microsoft (MSFT) (Murdoch was mystified as to why it got botched); the future of newspapers (not so pretty for most); what he will do with The Wall Street Journal (cut the number of editors, for sure); News Corp.’s MySpace (Murdoch does not use it or Facebook either); and, perhaps most interesting of all, his take on this season of presidential politics (Barack Obama?).

There was more, of course, but judge for yourself how Murdoch did.

Here’s Part 1 of 6, which covers the future of print media, including the News Corp.-owned Journal:

Here are the rest of the videos of the interview:

Part 2
Part 3
Part 4
Part 5
Part 6

Start stacking them up in your mind like your kid’s Legos and it gets interesting (click on the image to make it larger):

Please see this disclosure related to me and Google.

Finally.

But, I am sorry to say, probably much too late.

Still, it was nice to see a relatively bold statement from Yahoo (YHOO) leadership yesterday about its growth prospects and plans, a clearer statement of purpose it would have been much, much nicer to see a year ago.

And the assessment of Yahoo executives, who filed documents with regulators and will take its show on the road to visit shareholders this week?

No surprises for 2008 off guidance (whew!), strong gains in revenue and cash flow for 2009 and 2010 and a resulting share price closer to $40, $9 above the original $31 a share–the cash-and-stock offer is actually now worth about $29.50–offered by Microsoft (MSFT).

Yahoo had to do this, times being what they are–with the troubled Internet portal with the sterling brand name fighting off efforts by the software giant to buy it in an unsolicited bid. Thus, the prone Yahoo stood up for itself for reasons that look an awful lot like it was prettying itself up for the inevitable sale.

The goal? To justify its initial rejection of Microsoft, signal a decent quarter to deny the software giant a reason to drop its price or even exit and, most of all, to get an even better acquisition price, as prospects for alternatives dwindle.

So far, Microsoft has showed no indication that it would budge on price and some execs there even worry that the decline of Yahoo’s business is more significant than is apparent and Microsoft is paying too much.

Yahoo disagreed yesterday, outlining a blue-sky outlook for its future that is, of course, all about whether the current management could execute to reach very lofty goals. (See this Wall Street Journal chart.)

Looking over its estimates, I would say Yahoo’s glass is half-full in its happy display and video ad estimates and half-empty in its projections in the search arena, where Google (GOOG) dominates with increasing power. And it is all predicated on the fact that Yahoo must also streamline its costs.

An analyst, Mark Mahaney of Citi Investment Research, quoted in a Wall Street Journal article about the Yahoo numbers said it best: “Those are not easy numbers. We think it’s the most likely outcome that Microsoft buys Yahoo, and at a higher price than $31.”

(The Journal article also raises the uphappy prospect that the Alibaba Group, which Yahoo owns a 39% stake in, could use a sale to Microsoft to extricate itself from Yahoo’s arms, taking away one of the more attractive assets of Yahoo from the deal.)

Topics that were delved into via interviews were wide-ranging: “Sales Job: Will Consumers Spend to Go Green?” with Wal-Mart (WMT) President and CEO H. Lee Scott Jr.; “Living With Ed: The View From Hollywood” with Ed Begley Jr.; and “Green Deals: The Environmental Factor in Corporate Investments” with VC John Doerr.

I interviewed Doerr, as well The Journal’s Alan Murray, who was one of ECO:nomics’ hosts, and others for this video:

Well, it’s not. One show, which just did not work, is in no way representative of a trend, any more than the box-office failure of the movie “Snakes on a Plane” meant online marketing and hype was finished.

The Wall Street Journal’s excellent Jessica Vascellaro wrote a great piece today on the subject of online content creation, focusing on social-networking efforts, such as Bebo’s “KateModern,” an original online show from the creators of “lonelygirl15,” as well as stuff being made by MySpace and others.

The goal is to keep users more engaged. More importantly, it is to fight the continued audience attraction to user-generated videos on YouTube, which is owned by Google (GOOG). It dominates the online video market, as you can see from this chart below (click on it to make it larger).

BoomTown has written about the Bebo hit several times (including a video visit to Bebo’s HQ in London last summer and an interview with a “KateModern” producer in November, both seen below), as it represented the right way to start to develop original online content.

And that would not include pulling some failed television pilot out of a drawer, making it on the cheap, cutting it up into shorter segments and slapping it online.

Instead, true success–besides the material actually being good, which should be a given–requires the content to be interactive, pioneer new filming techniques and be made specifically for the medium, using its tools, rather than being shoehorned into it.

“KateModern,” for example, has been changeable by the second by its audience and the creators have moved the action along with startling speed.

But it still has someone professionally producing it. Set in East London, it follows a “troubled young art student named Kate and her three closest friends: an Australian wild-child named Charlie, a young entrepreneur named Tariq and a mischievous computer whiz-kid named Gavin.”

As The Journal’s Vascellaro correctly writes: “Past efforts by Web companies to turn themselves into online versions of television networks have been hampered by the difficulty in changing ingrained consumer habits–while people are happy to watch short video clips from time to time, few until recently saw the Web as a forum to follow regular episodes of series. For online-only shows, weak advertiser interest, subpar production quality and lack of promotional muscle were added hurdles.”

Indeed. But that will change quickly.

Here is our too-long video of the visit to Bebo and the interview with “KateModern” producer Pete Gibbons:

Re: Wacky–even by Google standards–stock market schemes

Google (GOOG) –let me get this straight–is apparently considering buying just under 20% of Yahoo (YHOO) shares at some elevated price, according to a post on TechCrunch yesterday, “although the goal isn’t so much to close the deal, which would almost certainly be opposed by U.S. regulatory agencies. But rather to throw another curve ball at the Yahoo Board…”

Excuse me for a second, as my brain just exploded. While I don’t doubt TechCrunch had a good source on this report, it just goes to show the level of kooky desperation and out-of-control emotion that Microsoft’s (MSFT) unsolicited bid for Yahoo has had on all the parties involved.

Were Google to actually take wacky advice like this, I would worry about more than its recent stock drop. Such a move is neither savvy nor effective (after all, Google cannot shimmy its way out of the fact that it just really just cannot have Yahoo, in whole or part, because of its huge market share in search and search advertising).

Why? It just makes me a little nervous if Google, a major U.S. corporation with lots and lots of government rules and regulations to follow, is contemplating “pretend” buying of shares of Yahoo to trip up rival Microsoft, as if it were a kid playing a stock market equivalent of Ding Dong Ditch (see helpful video below on how to do a successful DDD).

Quoting an anonymous adviser to the deal, the TechCrunch post noted: “It’s a relatively cheap way for Google to confuse the situation further, and, potentially delay or disrupt a Microsoft acquisition.”

Well, if $10 billion or more, along with inevitable shareholder lawsuits, is cheap, I guess so!

OK, not so much. But the scheme concocted by anonymous wheelers and dealers sure wins points for being interesting. And creative. I might even say: crazy like a fox.

But let’s just stick with crazy, shall we?

For a little better take on the situation, try the excellent (and, more importantly, accurate) analysis of the stock situation around the deal by The Wall Street Journal’s Matthew Karnitschnig of the Deal Journal blog posted yesterday too, which I post in its entirety below (also, a picture of what Microsoft might look like if it manages to swallow Yahoo whole):

Yahoo’s Deteriorating Defenses Against the Microsoft Bid

Like a coiled python eyeing its quarry, Microsoft appears content to wait for Yahoo to exhaust its defenses before moving in for the kill.

To understand Microsoft’s sanguine approach, look no further than Google’s share price. Until Microsoft made its offer for Yahoo on Jan. 31–-then valued at $44.6 billion–-Google and Yahoo were both down about 18% on the year. Yahoo has jumped about 50% since the offer; Google has fallen a further 16%.

Part of Google’s slide is connected to concern that a combined Microsoft/Yahoo would cost it business. Still, investors appear most worried about a decline in Google’s advertising revenue. Those concerns sent its shares to a nine-month low Tuesday.

One needn’t be a certified financial analyst to surmise that were it not for the Microsoft bid, Yahoo, which faces the same challenges in the marketplace as Google, also would be getting thrashed in the stock market.

If Yahoo shares suffered the same percentage decline as Google’s have since the Microsoft offer–not an unfair assumption considering Google stock rose 12% in the 12 months before the offer and Yahoo’s fell about 35%–then Yahoo would now be trading at about $16. That is about half of Microsoft’s original $31-a-share offer, which Yahoo dismissed as “undervalued.”

If Google’s stock keeps dropping, the Yahoo board might want to solicit a new valuation. Because if Microsoft does strike, the attack is likely to be unrelenting. Microsoft won’t crush any bones, but its objective is the same as the African python’s: to swallow its prey whole.

Please see this disclosure related to me and Google.

According to several execs who contacted me today, this is what Yahoo (YHOO) did in late 2006, when the troubled Internet portal was starting to suffer from drift and its stock was struggling. The solution was “Project Engage,” which was a combination of granting options and restricted stocks units (RSUs).

At the time, employees were given two of each kind, with the stock options and one RSU grant having a longer vesting timeframe (typically several years). The other RSU grant, which is essentially outright grant of stock, actually just vested on Feb. 2, which might explain some recent departures of top talent to new jobs.

Said one exec: “Everyone was just biding their time for the RSU to vest and the Microsoft bid just gives everyone an excuse to leave, because it is hard to imagine wanting to work for Yahoo if it gets forcibly taken over.”

The new Yahoo retention packages would again presumably help hold onto talent, if the deal does not go through, while the enhanced severance would give them a comfy escape route if Microsoft (MSFT) takes over.

As an added benefit to Yahoo, which is seeking to escape Microsoft’s embrace, it will make acquiring Yahoo even more pricey for Microsoft. In addition, if it wins Yahoo, the software giant will still have to hand out even more retention benefits to stave off an exodus.

In a follow-up to BoomTown’s story, Kevin Delaney of The Wall Street Journal has more details of the severance plan, which will cover all employees even if they are laid off due to a change of control at the company.

Yahoo CEO Jerry Yang alerted employees to the severance benefits plan in an email Friday, promising specific details would be available to staff today, the story said.

For those who do not know it, BoomTown is a closet–get it??–home renovation freak and once had a column in The Wall Street Journal called “Home Economics.” (Here is a link to my 2004 review of high-tech toilets, for example, with the unfortunate lede: “Is happiness a warm toilet seat?”)

Nonetheless, we press on, and “Home Economics” might even return here in a new video format, so get ready.

Until then, check out this sparkling MarketWatch video:

Back in July, I actually wrote a post about the head of News Corp. (owner of Dow Jones and this site) in which the first sentence was: “MySpace and Yahoo should merge.”

I was referencing a very interesting comment that Murdoch (pictured here) made in an interview in June of 2007 with Time’s Eric Pooley.

In it, he floated the idea of trading a 25% stake of Yahoo for MySpace.

As the Time article noted:

MySpace’s much smaller archrival, Facebook, is surging: what started as a narrower college site is broadening and accelerating. … But as MySpace showed signs of reaching saturation, Murdoch began very preliminary, exploratory talks about trading the site for 25% or more of Yahoo. ‘Terry Semel was enthusiastic about it,’ he says of the then Yahoo CEO. ‘We were looking to see if it was a good idea. I wasn’t sure.’ Now Semel is gone, and Murdoch needs to see what Yahoo will become under its new boss, co-founder Jerry Yang.”

And as I noted in my post:

In one fell swoop, Murdoch had confirmed the talks, but made it seem as if it was Yahoo’s execs who were desperate to do a deal (and you know Semel and Yang would never talk about how they felt about it), while also giving MySpace an instant valuation of $8 billion at today’s nearly $32 billion Yahoo valuation…

It is no small leap to imagine the sly Murdoch calculating that he should be thinking right about now about getting while the getting is good and the hype is at an all-time high.”

Well, nothing much seems to have changed with the news yesterday that News Corp. was interested in grabbing just under 20% stake in Yahoo in exchange for MySpace and News Corp.’s other online properties in its Fox Interactive Media group.

(The discussions were first reported on the blogs Silicon Alley Insider and TechCrunch.)

This is an unusual switcheroo, since, on Feb. 4, Murdoch had publicly said it was unlikely News Corp. would vie for Yahoo. “We are definitely not going to make a bid on Yahoo,” said Murdoch on a conference call with analysts.

It depends on your definition of “definitely” and “a bid for Yahoo,” I guess. Classic rope-a-dope that even Muhammad Ali would admire!

This time the idea is reportedly to value MySpace at $10 billion (which is actually $5 billion less than the $15 billion that Microsoft’s recent $240 million investment gave smaller MySpace rival Facebook).

Of course, such a Yahoo mash-up with News Corp. would likely be a hopelessly complex deal, especially compared to the cleaner and simpler giant-pile-of-cash-and-stock that Microsoft is offering that big shareholders are likely to prefer.

“The only one who would understand such a complicated News Corp./Yahoo tie-up is Murdoch,” said one large Yahoo investor. “It is too much to figure out and not enough clarity compared to Microsoft’s bid.”

In any case, according to The Wall Street Journal, Yahoo CEO Yang supped with Murdoch and News Corp.’s President Peter Chernin last week to talk about the idea.

Presumably, the thinking is the same as I noted more than six months ago:

To merge his massively popular social network with Yahoo’s still-powerful-despite-struggles ad and search empire would create a powerful media and technology giant that would have a lot of key elements for the next generation of Web interaction.

For Yahoo, which is in need of a dramatic move, this would deliver a smack to Google (which still has reportedly not completely closed its $900 million ad deal with MySpace), solve its inability to enter the social-networking space and boost its distribution network dramatically.

For MySpace, Murdoch gets to unload a service that is increasingly going to need a major dose of technology expertise and own a big chunk of what could be a drastically undervalued property.”

The more things change…

Please see this disclosure related to me and Google.

The Yahoo board meeting, via phone, went off today without a resolution, as BoomTown surmised in an earlier post today.

See this report on the telephonic meeting from our excellent reporting colleagues at The Wall Street Journal, Kevin Delaney and Matthew Karnitschnig.

As you can see, the breathless reporting that Yahoo’s fate was to be decided today was, shall we say, a bit premature, and Microsoft will have to wait a bit longer to claim its prize.

Of course, as we also noted, it is unlikely Yahoo will have many options other than Microsoft, given that none seem viable.

That includes the threat of doing a deal with Google to take over its search-ad business.

As BoomTown noted:

But the Google threat is just that, claim sources close to Microsoft–-a threat that is relatively empty given that it still carries with it all the monopoly issues related to Google’s dominance over the search market if struck. If Google takes over Yahoo’s search business, the thinking goes, it might as well buy the whole company, given that the regulatory headaches are the same.

Google will argue, of course, that an independent Yahoo is free to pick whatever partner it wants, if it decides to outsource its search-ad business, without noting that the pickings are pretty slim.”

And getting slimmer.

(And here’s a very good email Silicon Alley Insider’s Henry Blodget penned for Yahoo CEO Jerry Yang to send out to the troops, which would be a step in the right direction.)

Please see this disclosure related to me and Google.

Don’t miss a terrific Wall Street Journal profile of Yahoo’s new non-executive Chairman Roy Bostock, penned by the always excellent Kevin Delaney in today’s paper. The longtime ad exec definitely has his work cut out for him, given Microsoft’s unsolicited $31-per-share bid last week.

Delaney outlines the stakes for Bostock, who was installed only minutes before the Here’s-Johnny! call from Microsoft CEO Steve Ballmer, demanding to buy Yahoo for $44.6 billion or else. Bostock replaced former CEO Terry Semel, who got out of Dodge just in time. And, within minutes, Bostock apparently improved Yahoo.

Wrote Delaney:

Microsoft’s offer carried a 62% premium over Yahoo’s recent share price when it was extended. As Yahoo’s directors absorbed the offer that day, someone in the room joked that Mr. Bostock had been chairman for only half an hour and had already increased the company’s value more than 60%, says a person familiar with the matter.”

Well, that’s a plus. Kind of. OK, not so much.

(Here’s a post I did about all the Yahoo board members last week, ahead of its earnings call.)