BoomTown » Washington

MSN Head Greg Nelson Moves to MicroHoo Integration Role (Yahoo Picks Morrissey)

Kara Swisher — Thu, 19 Nov 2009 19:03:37 +0000

Greg Nelson (pictured here), who has had the thankless job of running MSN for Microsoft, has left that position and been given the even more thankless task of running the integration of the complex search and online advertising partnership struck by the software giant and Yahoo.

Microsoft (MSFT) sent out an internal email to staff about the move for the GM of MSN’s Global Media Group, which has already taken place.

MSN U.S. head Scott Moore is now reporting directly to MSN Corporate VP Erik Jorgensen. So will Brett Wayn, who has been working under Nelson on international coordination and who has taken over MSN’s international business on an interim basis.

Nelson’s counterpart at Yahoo (YHOO), according to sources, will be Mark Morrissey (pictured here), who is currently SVP of Products at the Internet giant.

The pair will have their hands full in what will ultimately be a two-year effort, sources estimate, to try to improve their competitive edge against Google (GOOG) in the search arena.

BoomTown’s title for the relationship: A Couple of White Geek Guys Sitting Around Arguing!

The role includes coordinating a massive shift of engineering talent from Yahoo to Microsoft, making sure ad systems are copacetic and most of all, smoothing over what is likely to be a number of bumps in the partnership.

To help make the frustrations less frustrating, there is a $50 million annual payment to Yahoo by Microsoft for three years, for unspecified “transition and implementation costs.”

At least 400 Yahoo employees will be hired by Microsoft, which will also provide funds for retention packages to keep 150 more Yahoos motivated during the transition.

The “Definitive Agreement” between the Silicon Valley company and the Redmond, Wash.-based Microsoft, which had been slated to be signed by Oct. 27, 2009, is about to be completed.

Then, as soon as regulatory approvals are in place, it will be showtime for Nelson and Morrissey.

Yahoo Hires Amber Allman as New D.C. Director of Public Affairs

Kara Swisher — Thu, 19 Nov 2009 05:18:59 +0000

Earlier today, BoomTown reported that Yahoo was poised to name a few new top execs at its Silicon Valley HQ.

But the company has also hired a new director of public affairs in the nation’s capital.

After I queried the company, Yahoo (YHOO) confirmed that it has tapped Amber Allman, a vice president at 463 Communications, for the job. She has extensive tech experience.

“We are very pleased that she is coming on board,” said Nina Blackwell, senior director of global public affairs, who will be Allman’s boss. “She will be a very valuable member of the team.

Yahoo’s last public affairs rep in D.C. was the most excellent Tracy Schmaler, who left Yahoo earlier this year.

At Yahoo, she worked on everything from human rights issues in China to the failed takeover attempt by Microsoft (MSFT) to Yahoo’s also-botched effort to do a search and advertising deal with search giant Google (GOOG).

Ironically, Schmaler is now deputy director, Office of Public Affairs, at the Justice Department, which is currently scrutinizing Yahoo’s search and ad partnership with Microsoft.

Ah, the revolving doors of Washington, D.C.!

Center for Digital Democracy's Jeff Chester Talks About MicroHoo and More!

Kara Swisher — Wed, 18 Nov 2009 16:55:03 +0000

While in Washington, D.C., BoomTown can’t just visit the policy wonks from Internet companies (such as my Facebook how-do-you-do here), so I hightailed it several hundred feet and directly across Connecticut Avenue NW to visit with Jeff Chester.

For those who don’t know him, Chester is the executive director of the Center for Digital Democracy, a nonprofit consumer advocacy group that works to promote privacy and protection online.

In other words, a professional–and much needed–thorn in the side of Facebook, Google (GOOG) and these days, MicroHoo.

That’s because, while advertisers and publishers are supportive of the massive search and online advertising deal between Microsoft (MSFT) and Yahoo (YHOO)–which now looks close to being launched–Chester has a more whoa-nelly attitude.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Chester right after the deal was announced. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Violations of consumer privacy by such unions or by Facebook’s efforts to use data to better deliver online ads or by any of the myriad ways such companies are honing their behavioral targeting skills worries Chester.

Thus, in patented D.C.-style, he hectors government agencies, politicians and the media to look more closely at such practices.

Here is my video interview with him about all this, which is well worth listening to, especially in an era when online powerhouses like Google are learning more and more about you, and not in a good way:

[ See post to watch video ]

Exclusive: Yahoo and Microsoft Poised to Finally Sign Definitive Search and Ad Agreement

Kara Swisher — Wed, 18 Nov 2009 08:01:27 +0000

Yahoo and Microsoft are poised to finally sign the definitive agreement that will govern the complex and far-reaching search and online advertising partnership they struck in late July, said sources close to the situation.

If all goes well, the various Microsoft and Yahoo execs–who have been ferreted away over the last weeks, busy dotting all the i’s and crossing all the t’s in the massive document–could even turn in their deal homework to their bosses for signature by the end of the week.

Yahoo (YHOO) officials declined to comment, while Microsoft (MSFT) has not gotten back to BoomTown as yet.

In any case, getting the definitive agreement in place is critical to making the high-profile MicroHoo deal a reality and, of course, getting the anti-Google (GOOG) party started.

So when the pair blew through a deadline to complete it in late October, there were eyebrows raised all over Wall Street and Silicon Valley.

When Yahoo filed an 8-K with the Securities and Exchange Commission in August, it noted that the “Definitive Agreement” between the Silicon Valley Internet company and the Redmond, Wash., software giant needs to be sketched out by Oct. 27, 2009.

But it is a monster document, which is why MicroHoo did not complete it in time. After that whiff, Yahoo said as much in another filing with the SEC:

“The Letter Agreement specified that the parties would execute definitive agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized.”

Added Microsoft similarly:

“We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details.”

Nonetheless, both companies have consistently said that they would be able to close this deal by early 2010.

Yahoo and Microsoft had already done a pretty hefty binding-agreement letter (here is a picture of Yahoo’s CEO Carol Bartz and Microsoft CEO Steve Ballmer holding it, in fact).

Also key: Getting approval for the deal from regulators in Washington, D.C., which, sources said, also seems to be on track.

With little opposition, Yahoo and Microsoft policy types have been chipping away on regulatory issues with federal regulators in Washington.

And, several sources said, those government approvals are now nearing completion at the Justice Department, even though the Federal Trade Commission might still ask for more assurances on privacy issues related to online advertising and consumer data.

International regulatory approval is another story, especially in Europe, which could further delay the implementation of the partnership, since it is unlikely the pair would move forward without clearance globally.

When that is done, the real game begins, as MicroHoo faces its the much more critical Tim Gunn acid test for the deal:

Making it work.

Kara Visits Facebook's Washington, D.C., Office and Talks Policy!

Kara Swisher — Tue, 17 Nov 2009 13:02:13 +0000

Yesterday, BoomTown paid a visit to the Washington, D.C., office of Facebook to meet its reps in the nation’s capital.

Perhaps not surprisingly, the social networking site has a very small staff–just a trio of on-the-young-side dudes–battening down the hatches from a funky office in a funky section of D.C., Dupont Circle, far from the tonier and lobbyist-rich K Street corridor.

In contrast, both Microsoft (MSFT) and Google (GOOG) have a massive D.C. presence, trying to influence policy.

Still, as many in government know–such as Sarah Palin this week–Facebook has become a key tool in the basic bag of political tricks, used for organizing, canvassing, communicating and, every now and then, inspiring.

But there is also a raft of thorny legislative issues for Facebook, especially related to privacy, an arena where the company has repeatedly shot itself in the foot (Beacon! TOS!).

The company’s relatively new D.C. staff will presumably be a little smoother going forward.

They include:

Director of Public Policy Tim Sparapani, most recently with the American Civil Liberties Union, who joined in the spring.

Adam Conner, who opened Facebook’s D.C. office and who worked for some pols when he was still a college student, showing them how to use social media.

And, most recently, joining as manager of public policy communications, Andrew Noyes, a former reporter for the National Journal (and the man in 17D who pinged me on a Virgin America flight last week to meet him and the other Facebook policy wonks).

Here’s a video of the interview, in which we discuss all the big issues, from privacy to data retention to how Washington’s view of tech still has not evolved much:

[ See post to watch video ]

It's Opposite Day: Yahoo Grabs a Microsoft Exec!

Kara Swisher — Thu, 08 Oct 2009 12:21:52 +0000

For a long time now, it has been Microsoft constantly raiding the Yahoo talent pool, as one top tech exec after another has left its Sunnyvale, Calif., HQ to join the Redmond, Wash.-based software giant.

As Digital Daily’s John Paczkowski noted in a post in March titled, “Microsoft Acquiring Yahoo One Employee at a Time”:

First, Sean Suchter, VP of search technology at Yahoo, left to become general manager of Microsoft’s Silicon Valley Search Technology Center. Then, Yahoo search scientist Qi Lu followed him, tapped as president of Microsoft’s Online Services Group. And, soon after that, Larry Heck, former VP of search & advertising sciences at Yahoo Labs, accepted a job in the R&D department of the software giant’s online services division. Now, Yahoo alum Jan Pedersen has joined them as well. Admittedly, Pedersen arrives at Microsoft by way of Amazon’s A9.com. But prior to that gig, he was chief scientist and VP, Search and Advertising Technology Group at Yahoo.

But Yahoo U.S. advertising sales head Joanne Bradford–who worked at Microsoft (MSFT) for many years–obviously knows how to play that game and has managed to grab one of the its top ad sales execs, Seth Dallaire.

Yahoo (YHOO) confirmed that Dallaire (pictured here) joined the company last week, as VP of mid-market sales, a newly-created role responsible for all mid-market sales efforts across search and display advertising.

Dallaire had been at Microsoft for seven years, most recently running its retail vertical and Midwest region. Previous to that, he ran business development partnerships at Amazon (AMZN).

Keas's Adam Bosworth Speaks About New Health Care Start-Up!

Kara Swisher — Wed, 07 Oct 2009 21:05:09 +0000

The former head of Google Health, Adam Bosworth, officially unveiled his much anticipated health-care start-up today at the Health 2.0 conference in San Francisco, showing off a site that will offer step-by-step and personalized “care plans,” as well as many kinds of online tools to better understand the data and tips on how to stay healthy.

Before he did so, BoomTown did a video interview with Bosworth this morning about Keas, which he founded with George Kassabgi.

As it turns out, Google Health is, in fact, one of Keas’s partners at launch, along with Microsoft HealthVault, Quest Diagnostics, Healthwise, DiabetesMine and Dr. Greene Pediatrics.

Bosworth said he hopes to attract many others to make innovative plans, much as developers make apps for smart phones.

It’s perfect timing, given the health-care debate now raging in Washington, which is about how people make health-care decisions–or, more precisely, how they usually do not.

Bosworth left the search giant in the fall of 2007 because he wanted to create a nimble and easy-to-use site to enable better engagement by consumers in their health care, especially around diet, exercise and how people manage long-term conditions, such as diabetes.

But, while a lot of people use the Web to get health information, they–as well as doctors–have been warier about using Internet tools to help them manage and understand their health.

Microsoft (MSFT), where Bosworth also worked for many years, released a health information management tool last week too, called My Health Info, although Keas is clearly much more robust and authoritative.

But Bosworth said the more, the healthier.

He also pointed out that he is working with Microsoft too, as well as Google (GOOG), given that the pair have the power to get big amounts of information about health care online.

Now, he added, sites like Keas will be key to allowing consumers to manage and interpret that mass of often confusing data.

Keas, which is backed by Atlas Ventures and Ignition Partners and has 25 staffers, is allowing free use of its care plans now, but will eventually charge for use of certain features.

Here’s the interview I did with Bosworth about all this and more, including the origin of the site’s unusual name:

[ See post to watch video ]

While Fanboys Breathlessly Await Steve Jobs's Apple iTab, They Should Probably Thank Bill Gates Too

Kara Swisher — Mon, 05 Oct 2009 15:10:54 +0000

Way back in the fall of 2001, when BoomTown was but a less-aged version of myself, I attended a keynote speech at the now-defunct Comdex show in Las Vegas, where Microsoft Chairman Bill Gates continued to bang the drum for one of his long-running obsessions: The tablet computer.

“The tablet takes cutting-edge PC technology and makes it available whenever you want it, which is why I’m already using a tablet as my everyday computer,” Gates said at the time to the audience gathered at the MGM Grand Garden Arena. “It’s a PC that is virtually without limits and within five years I predict it will be the most popular form of PC sold in America.”

Well, that did not happen.

But Gates did keep his promise about using a tablet–he kept on doing so and also harping on the topic all the time, with Microsoft even releasing a giant tabletop Surface several years ago and supporting multitouch in the coming Windows 7.

I recall Gates talking about the idea of how important the tablet is on innumerable occasions, more than any single concept I can recall.

It is ironic, then, that all the hype has suddenly and firmly coalesced around the particulars of the tablet that Apple (AAPL) will be unveiling in the coming months.

And now that CEO Steve Jobs is back fine-tuning the whole shebang, the obsession has moved into overdrive, punctuated only by endless stories about every single new app for the iPhone and fights over some of those new apps for the iPhone.

It’s a complete aside, but how ironic is it that Apple has somehow managed to make Google (GOOG)–the Skynet of the Internet–seem like a victim over this Google Voice shrillathon?

Back to the Apple tablet, which is playbook hype for iconic computer giant.

Besides being a secret project everyone in Silicon Valley seems to know about, the coming device is enjoying full-on breathless reportage of every single possible button and every possible feature, with every single bit of functionality parsed, dissected, masticated and spat back out.

But let’s be honest–in the end, this Apple tablet is probably going to be some kind of giant, sleeker, more glorified and doubtlessly niftier version of the iPod touch, called the iTab or the iPad or the iAmSoCoolAren’tI?, at three times the price.

Now, as it turns out, Microsoft (MSFT) is also at work on a table device, this time called the Courier.

This development became known recently after a demo video of it in use was somehow “leaked”–three guesses about which software giant in Redmond, Wash., put that out, and the first two don’t count!–to Gizmodo.

It seems to be some kind of tablet mixed with a journal mixed with a day planner, with a hinged two-page look. Digital writing and a stylus are involved, but also lots of touchscreen action.

Well, I say, good for Microsoft, and perhaps for Gates, who has now mostly disengaged himself from the day-to-day particulars of the behemoth he built, including the Courier.

Nonetheless, in all likelihood, Apple will still garner the most buzz in this tablet faceoff and will, more than likely, sell more.

A delicious irony, given that in their fascinating and long-running rivalry, it has usually been Jobs playing the hopeless dreamer and Gates the one who makes bank from the dreams of others.

No longer, which should make this round between Microsoft and Apple the most interesting of all.

Speaking of dreaming of dreams, it is always a good time to post the video of Susan Boyle singing “I Dreamed a Dream”:

The Microsoft Cougar Memo: It's Grrrrrrrrreat!

Kara Swisher — Wed, 23 Sep 2009 12:12:26 +0000

Last week, a cougar was reported to be roaming on the Redmond, Wash., campus of Microsoft, which led to all kinds of cutesy jokes about the new Snow Leopard operating system from Apple (AAPL).

No, BoomTown cannot make this stuff up!

Nor did I make up this original and very fine global alert that Microsoft Global Security sent last week, which assured employees of the software giant that “Microsoft Security will conduct frequent patrols of all wooded areas of the campus.”

That’s more than you can say about how the software giant handles hackers!

Here’s an image of the memo (click on it to see a large version):

Previously, TechFlash had the text of the second warning, which gives cougar-fighting tips.

They included:

“Stay calm. Talk to the cougar in a confident voice.”

“Do not run. Try to back away from the cougar slowly. Sudden movement or flight may trigger an instinctive attack. Do not turn your back on the cougar. Face the cougar and remain upright.”

And, most important of all: “Do all you can to enlarge your image. Don’t crouch down or try to hide. Pick up sticks or branches and wave them about.”

Which, if you think about it, is even better advice for Microsoft (MSFT) Bing execs–this means you, Yusuf!–in tangling with search archrival Google (GOOG).

Louie Swisher Hearts Redbox–But Hollywood Not So Much

Kara Swisher — Mon, 31 Aug 2009 22:10:02 +0000

If you want to get Hollywood movie studio types irked, mention Google (GOOG). And if you want them steamed, bringing up Netflix (NFLX) will usually work.

But if you want to see the tops of their heads blow off, Redbox is just the ticket.

Except not to their movies, it seems, if the major movie studio execs have their way in an ever-growing legal battle with the DVD-rental kiosk company.

Three of them have become embroiled in lawsuits with Redbox, even as the DVD market contracts.

Well, not for Redbox–which is located in Oakbrook Terrace, Ill., and is wholly owned by Bellevue, Wash.-based Coinstar (CSTR).

It is seeing strong rental growth due to its $1-a-night price for first-run movies, which the company distributes via its 15,000 freestanding machines in supermarkets and convenience stores, as well as in big chains like McDonald’s (MCD), Wal-Mart (WMT) and Walgreens (WAG).

Redbox is arguing that once it buys DVDs from the studios through wholesalers, it can charge any price it wants.

Studios beg to differ, claiming that bargain-basement pricing is hurting the market and that Redbox should not get the goods until after the first month of release of movies into the DVD market.

“These guys are simply grossly undervaluing our content,” said one studio source, in what is a typical sentiment. “We get the windowing model is changing, but we can’t just give these guys our stuff at a low, low price to essentially enable them to give it away…and that’s exactly what they wanted us to do.”

Thus, it’s a perfect set-up for legal high jinks about the issues of steep discounting, windowing and the price for premium content.

Redbox recently sued Warner Home Video, owned by Time Warner (TWX), for denying it the opportunity to buy DVDs without being required to wait a month or more to rent them out.

It has previously gone after NBC Universal’s Universal Studios Home Entertainment, owned by GE (GE) and 20th Century Fox, a unit of News Corp. (NWS), for similar release restrictions.

And while some studios are holding fast to fighting price declines represented by consumer-friendly, idiot-proof tech solutions like Redbox, others are not.

Redbox has inked deals with Sony (SNE), Lions Gate (LGF), Paramount, a unit of Viacom (VIA), and also gets movies from Disney (DIS).

It’s a fascinating case to watch–yet another wrinkle in the what-is-content-really-worth question that has been plaguing all traditional media.

Unfortunately for those companies, the kids seem to love it, as you will see from this video I did while renting movies at our local Safeway (SWY) with my seven-year-old son, Louie, at a small competitor to Redbox with about 1,400 outlets called DVDPlay.

We use both, but Louie–like a lot of consumers–is most definitely a fan of the Redbox method.

Here’s the video:

[ See post to watch video ]

[Full disclosure: News Corp. owns Dow Jones, which owns this site.]

Boola, Boola!: Yahoo Marketing Head's Cheerleading Memo Post-MicroHoo

Kara Swisher — Wed, 12 Aug 2009 20:07:13 +0000

BoomTown just got an interesting memo that Yahoo CMO Elisa Steele sent out to her staff immediately in the wake of the deal for Microsoft to take over Yahoo’s search technology business two weeks ago.

I render it unto you, dear readers, since it shows just how intent the top managers of Yahoo (YHOO) are, especially internally, in reassuring those concerned that Yahoo had not just gutted itself and how it can remain as innovative as ever.

Also amusing–for reasons I cannot understand, since it is an internal memo–is the use of the code name for Yahoo, which is called Yale, after the famous university in New Haven, Conn.

(By the way, “Boola, Boola” is one of Yale’s old football fight songs, which you can hear here.)

By the way, Microsoft (MSFT) was known as Cambridge, Mass.-based MIT, as you can see below.

Also some fun facts, showing the give-it-the-old-college-try mentality of Yahoo dealmakers:

In past merger talks, Time Warner (TWX) online unit AOL’s moniker has been Amherst College in Amherst, Mass.

And, when Yahoo was considering the Yahoogle deal, the code name for Google (GOOG) was Georgetown, after the Washington, D.C.-based university. That must really rankle at the MIT-stuffed search giant, since–as a graduate of Georgetown–I can tell you, tech is not exactly its forte.

Here’s the Steele memo:

From: Elisa Steele
To: Marketing-all@yahoo-inc.com
Sent: Wed Jul 29 05:11:52 2009
Subject: Announcement today.

Marketing Yahoos,

Yale is already the place where millions go to see what is happening with the people and things that matter to them most, but our aspirations have always been bigger than that. Our vision is to be at the center of people’s online lives, and the deal we announced with MIT earlier today will enable us to focus even more of our efforts on realizing it.

At the same time, our role as marketers has never been more critical. We must focus our energies on engaging our users and our partners, and on making sure that our brand initiatives continue unabated.

Our consumer marketing teams will keep driving more users to our leading audience properties, mobile experiences and applications. Our b2b team will continue communicating to marketers that as the world’s largest media company, Yale offers the most compelling and unique advertising proposition in the industry. The Insights team will continue delivering industry-leading research that helps speed the flow of dollars online. The Global Communications team will be answering lots of important questions from the media and influencer community about this deal (in addition to building buzz around the other amazing stuff we’re doing). The brand team will not stray at all from its mission, as it’s as relevant as ever. And, our regional marketing teams remain in place, partnering with our business leaders to execute our global marketing strategy.

In a nutshell, this is our opportunity to further establish Yale mindshare and preference with all of our audiences through world-class marketing. Our work is more important today than ever before as we communicate our brand position globally.

We are making decisions that we believe set the company up for continued success—and enable us to take back our rightful place in the market.

It’s an exciting new day at Yale, and I couldn’t be more optimistic about our future.

Elisa Steele
Executive Vice President &
Chief Marketing Officer
Yahoo!

And below, I have posted a video of the Yale Glee Club performing all the university’s fight songs in a delightful medley, so Yahoos can start practicing now:

Yahoo-Microsoft Regulatory Filings Start This Week: Let the Legal Game-Playing Begin!

Kara Swisher — Tue, 04 Aug 2009 10:01:32 +0000

After all the investor hubbub over the oh-no-they-didn’t deal between Yahoo and Microsoft starts to die down a bit, the pair are now embarking on the path that is the only way toward proving the efficacy of them joining together.

That would be getting a variety of state, federal and international regulators to say yes to the wide-ranging online advertising and search arrangement they announced last week so they can start making it work.

According to sources at both companies, a variety of filings will be made this week, including one to the Securities and Exchange Commission that should provide more details of the partnership.

When it was unveiled last Wednesday, the companies said Microsoft (MSFT) will run search technology for the two, while Yahoo (YHOO) will sell the premium search advertising.

That SEC filing could answer a number of questions some still have about the deal, such as whether there is a large break-up fee that Microsoft would pay Yahoo in case the deal is scuttled.

That’s just the outcome that Microsoft and Yahoo are trying to avoid.

“We think of it as an outreach effort to explain how we are creating a strong No. 2 to Google,” said one source close to the situation. “The main goal will be to show that a better competitor in the marketplace is a good thing.”

While the companies are prepping for opposition from Google (GOOG), sources close to the thinking at the dominant search company said it is more likely to be muted and indirect.

That’s especially true since a MicroHoo makes Google–currently under a lot more government scrutiny than ever before–look like less of a bully.

Thus, Google’s tactics would entail less direct statements and more pointing out the discrepancies between what Microsoft said when Google tried to get approval for a search deal with Yahoo last year and what it argues now.

“They will probably not be that obvious, but they will be there still,” said Microsoft CEO Steve Ballmer to me, in an off-hand remark at the software giant’s Financial Analyst Meeting last week.

It’s a game of legal chicken that Ballmer knows well.

Already, for example, Microsoft and Yahoo execs have been aggressively reaching out to major publishers and advertisers to get their staunch support.

That included calls immediately after the deal was announced last Wednesday to such execs as Martin Sorrell of the WPP Group (WPPGY) and Jeff Zucker, CEO of NBC Universal, a unit of GE (GE).

In Washington, D.C., both companies have legions of lawyers to try to make sure the Justice Department, which will review the case due to its antitrust implications, has all the information it might need.

And, more to the point, they want to avoid the debacle that took place when Yahoo and Google tried to get approval for their failed deal last year.

That deal was ended by Google after it became clear that Justice was going to fight it by arguing that top search companies hooking up hurt competition and stifled innovation.

In addition, there might be Congressional scrutiny, with possible hearings, similar to those held when the Yahoogle deal was pending, such as in the Senate Judiciary Antitrust Subcommittee.

And, of course, there are actually independent groups concerned and they have also been in contact with regulators.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Jeff Chester, executive director of the Center for Digital Democracy, a D.C.-based group that works to promote consumer privacy and protection online, in a statement last week. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Sources said Microsoft and Yahoo also plan to petition regulators in the European Union this week, which is likely to be most concerned about privacy issues involved in their union.

They will also be doing the same in other key countries worldwide, such as Korea, Taiwan and Brazil.

And, finally, given how involved state attorneys general became in beaching the Yahoo deal to partner with Google, they also will be starting outreach to key states, such as California, where Silicon Valley-based Yahoo is headquartered.

“Once again, it will be the Lawyer Employment Act of 2009,” joked one person close to the deal. “At least, that shows there is some economic benefit to this deal already.”

While we all wait in breathless regulatory anticipation, here are interviews I did at last year’s Senate hearings on Yahoogle, with lawyers from Google (David Drummond), Microsoft (Brad Smith) and Yahoo (Mike Callahan).

Incredibly, they are the very same lawyers who will be pretzeling themselves in entirely different shapes than they pretzeled themselves a year ago.

I would expect nothing less!

Here’s the video:

[ See post to watch video ]

Microsoft's Yusuf Mehdi Speaks: "Yahoo Has a Fantastic Opportunity"

Kara Swisher — Mon, 03 Aug 2009 20:12:38 +0000

BoomTown visited Microsoft HQ in Redmond, Wash., last week, right after the online advertising and search deal with Yahoo was struck.

While there, I interviewed a passel of Microsoft (MSFT) execs, including Online Audience Business SVP Yusuf Mehdi, who has been a key player in the many–and mostly disastrous–attempts that the software giant has made to form some sort of alliance with Yahoo (YHOO) over the years.

It finally stuck for Mehdi, who has been with Microsoft for closing in on two decades (although he still kind of looks like a teenager).

In this video interview with me, he talks about the deal, defending it as a “win-win”–what else is he going to say?–for both companies.

While Wall Street threw raspberries at the Silicon Valley icon for giving away its search technology business without an adequate payoff, Microsoft got kudos for grabbing a large piece of share that it could use in its ongoing battle with archrival Google (GOOG).

And that much is true–now, it is execs like Mehdi who are charged with using the new purchase to try to unseat Google’s dominance in search, which is a little bit of a harder job than doing a Yahoo deal.

Here’s the video:

[ See post to watch video ]

Steve Ballmer Unplugged: The Puppet Edition

Kara Swisher — Fri, 31 Jul 2009 22:21:52 +0000

BoomTown is spending the day at Microsoft (MSFT) HQ in Redmond, Wash., interviewing a passel of execs about the Yahoo online advertising and search partnership (videos to come soon!).

But, while here, I have not been able to resist trotting out this very funny puppet video by 1938 Media of sweat-stained Microsoft CEO Steve Ballmer gone wild, screaming about how he smoked Yahoo (YHOO) in the deal, to every Softie I see.

Because I am that sensitive.

Enjoy:

Live From Redmond: Microsoft's Lu Hearts ’Hoo, Plus Business Guy Elop and Server Guy Muglia

Kara Swisher — Thu, 30 Jul 2009 22:05:58 +0000

Isn’t it ironic that Yahoo once employed–and for a very long time–top search techie Qi Lu and here he was on stage today at the Financial Analyst Meeting at Microsoft HQ in Redmond, Wash., after having just scooped up that business for the software giant.

Lu, who is now president of the Online Services division at Microsoft (MSFT), was a key player in the deal that was announced yesterday between it and Yahoo (YHOO), under which Microsoft licensed Yahoo’s search technology for a decade.

Lu was not generous with the details, although he did say making the partnership work was his No. 2 priority after Microsoft’s own search business. No. 3 was being financially responsible.

Said Lu, in part: “First, search is our number–one priority…second, a big priority for us is implement the Yahoo partnership. It is a 10-year partnership. We’re absolutely committed in spirit, in everything we did to deliver the true economic values, consumer benefits, customer benefits for advertisers, publishers all around.”

Because of the scale it brings, Lu said that the deal has the potential to be lucrative, despite the fact that Wall Street thinks Yahoo sold out of its search technology too cheaply.

But he also tried to manage expectations. “And I keep telling my teams, we want to be brutally honest about where we are…and understand the hurdles we have to overcome,” said Lu.

Microsoft Business President Stephen Elop, who was on next, talked a lot about how Microsoft was dealing with the tough economy and its impact on the company’s software business.

He also gave updates about a range of its various products, including the upcoming Office 2010.

“Now, despite the difficult economic challenges, despite the end of a product cycle, what we believe, as evidenced by the strength of our annuity business, is that there’s incredible excitement out there in the market because of Office 2010,” said Elop. “So, at a time when we expect business productivity or business spending climate to improve, we are launching the most innovative wave of technology we have ever launched.”

Elop used the term “attach rate” to talk about the how users relate to Microsoft software, although I have often thought about how much I wanted to get a divorce from Microsoft Outlook.

After Elop, another business-type exec, Servers and Tools President Bob Muglia, who also had to deliver not-such-great news.

Said Muglia: “What we saw was that as the economy got soft, so did the customer buying, the business buying for servers, and starting around the middle of October into the end of our fiscal second quarter, and certainly through the entire part of our second fiscal half, this calendar year, we’ve seen a pretty dramatic decline in the server marketplace.”

And, after that, when he started talking annuity sales, virtualization and modular data centers–I’ll admit it–this is precisely the moment when I went out for an emergency cookie run.

After Q&A with Elop and Muglia, next up: CFO Chris Liddell (and his delightful New Zealand accent) to talk about–hopefully–Microsoft’s billion-dollar revenue miss in its most recent quarter.