According to sources close to the situation, AOL has been busy selecting the board for the company, which is still set to spin itself off by year’s end–even as it slows down a decision on a new search deal with either current partner Google or a more emboldened Microsoft.

AOL is using Spencer Stuart in the search for directors, led by well-known headhunter Jim Citrin, sources said, and the company has already settled on several outside candidates.

The final board is likely to have about 10 members, and up to a dozen.

At least one of those seats will go to CEO Tim Armstrong, with one or two more claimed by its current corporate owner, Time Warner (TWX).

AOL and Time Warner made their own wish list of potential directors earlier this year, but some people are also lobbying the company to join the board.

BoomTown is working on discovering all those names, but sources added that the candidates being looked at are a mix of personalities culled from the media, advertising and Web worlds.

Among the key attributes: More presumably fast-forward and innovative Silicon Valley types that can help burnish AOL’s tarnished tech cred.

Here are some of my picks:

Facebook COO Sheryl Sandberg, Guitar Hero CEO Dan Rosensweig, WordPress founder Matt Mullenweg (actually, AOL should buy the start-up), eBay (EBAY) CEO John Donahoe, LinkedIn Chairman Reid Hoffman or CEO Jeff Weiner, Juniper Networks (JNPR) CEO Kevin Johnson, Netflix (NFLX) CEO Reed Hastings, and former AOL iconic exec Ted Leonsis.

And, just for fun, News Corp. (NWS) digital don (and ousted former AOL head) Jon Miller or former Yahoo President Sue Decker.

(I might also add former AOL exec, Netscape co-founder and all-around entrepreneur Marc Andreessen, but if he joins another tech/Web board, he is going to get splinters.)

That’s because Armstrong has set a strategy centered around the turbocharging of online content, powered by a more flexible platform and paid for by goosing AOL’s graphical advertising business.

This puts the online icon–once a powerhouse and now not so much, having operated inside Time Warner since its merger early in this decade–in more serious competition with Yahoo (YHOO).

Yahoo now dominates content on the Web, with powerful news, sports and finance sites, and has recently been trying to reinvigorate its brand. This week, it launched a new marketing campaign with the motto, “It’s Y!ou.”

Yahoo also recently struck a search technology and advertising partnership with Microsoft (MSFT), which has now aimed its efforts at AOL.

According to sources, Microsoft execs have been aggressively courting AOL to switch its search business from Google (GOOG).

The search behemoth has long been AOL’s partner in what sources at both companies said has been a productive and lucrative relationship.

Armstrong is also a former top exec at Google, which many at the company hope will further cement its chances.

And while the renewal of that deal does not officially need to be struck until late next year, sources add that Google has already prepared and offered what it considers an attractive new deal for AOL.

But, much to Google’s chagrin, with a focus on the spinoff and preparations for some more cost-cutting in the months ahead, AOL has decided not to accept it yet and is not likely to anytime soon.

While hedging the situation in a recent video interview with MediaMemo’s Peter Kafka, Armstrong has also recently met with Microsoft execs, sources said, who have discussed a number of partnership options with him, including a tighter relationship with its MSN content properties.

“There’s no need to rush, especially since there is already a lot on AOL’s plate,” said one source close to the situation. “And, since it has options, AOL is going to take time considering them.”

(For more on Armstrong’s thinking, here’s a link to another video interview I did with Armstrong while both of us were in Germany today, in which he talked about the ad market and AOL’s strategy, but was cagey about being more specific.)

Please see this disclosure related to me and Google.

Here’s a video interview I did yesterday at the San Francisco event where Yahoo finally launched a lot of the new open and social elements that it has long said it was injecting into its most popular products.

BoomTown talked with the key movers of the initiatives: Ash Patel, Yahoo’s EVP of its Audience Product Division, and Tapan Bhat, its SVP of its Front Doors, Communities and Network Services.

(You can see screen shots and an official Yahoo video of the new features here.)

The initiatives Yahoo (YHOO) finally released into the wild have been long in the making, first discussed as just vaporware by Yahoo CEO Jerry Yang at last year’s Consumer Electronics Show in Las Vegas (see that video below too).

Yahoo also hosted a session at its Sunnyvale HQ about its open plans in the fall.

And, after the longest of gestation periods, they arrived yesterday, in an impressive rollout.

The changes include some very deft rejiggering of Yahoo Mail, called a “smarter inbox,” with a new dashboard welcome page, easier ways to make connections, more filtered views, updates and third-party apps integrated into the application.

I thought the changes to the mail product were the most interesting, especially given the hundreds of millions of people using the product. It’s an interesting choice for a social entry point, aiming to give nonsocial-networking types enough of a taste of it without inundating them.

Of particular note were the third-party applications, such as for WordPress and Flickr, that launch nicely right in the email program.

Also cool was one app from Xoopit that surfaces old photos and photo links lost in the musty archives of old emails.

Yahoo also debuted an enhanced version of the homepage (previously announced in September) and My Yahoo, as well as a new toolbar and socialization elements added to its popular media properties.

It remains to be seen how popular these changes will become, especially since many consumers already have their social-networking lives on Facebook or MySpace.

In addition, both Time Warner (TWX) online unit AOL and Microsoft (MSFT) have rolled out similar social and open changes to their sites recently, making it super-confusing for everyone.

But, better late than never, I always say, so here’s Bhat and Patel talking about Yahoo’s new stuff.

I had to load the video onto YouTube, as Brightcove had snafus (also below is Yang talking about the concepts at CES in January 2008):

Tapan Bhat and Ash Patel

Jerry Yang at January 2008 CES

Microsoft officially rolled out the next version of its Windows Live Services tonight, with a heavy emphasis on socializing its online offerings and giving users better tools to share all sorts of information from across the Web within them.

Microsoft (MSFT) said the changes–similar to those made by Yahoo (YHOO) and Time Warner (TWX) online unit AOL recently–would “begin rolling out to customers in the U.S. over the coming weeks and will be made available globally in 54 countries and in 48 languages by early 2009.”

You might call its the “Facebooking” of Windows Live, which is the brand name for Microsoft’s communications and other related online services aimed at consumers, especially because the much anticipated changes also include a new profile and a “What’s New” feed.

So, if imitation is the most sincere form of flattery, Facebook CEO Mark Zuckerberg should feel beloved by Microsoft, since both are direct borrows of two of the social-networking site’s most prominent features.

(See many screenshots of the newly refreshed Window Live services below.)

But don’t call it a social network, said Brian Hall, who is the general manager of the Windows Live unit, in a lovely breakfast interview with BoomTown yesterday.

“No one wants to sign up for another social network,” said Hall. “But everyone does want to be able to share and bring together all they do on the Web, and we want to make sure all our users can do that in the easiest way possible.”

(Sadly, the video I did with Hall–who is Seth Rogen lookalike, and I mean that in a good way–got eaten up in my new Flip MinoHD software, which was entirely due to my boneheadedness.)

But, in it, Hall underscored that Microsoft is now fully committed to opening Windows Live Services up to whatever consumers want to do with their online lives and wherever they want to do it.

And, indeed, the “next generation” of Windows Live will inject social elements into its Photo Gallery photo sharing, Hotmail email, Spaces groups and Messenger instant messaging offerings, as well as Microsoft’s calendar and mobile products.

The move will also more significantly integrate many third-party partners into the mix. Microsoft’s outside partners announced tonight include Flickr, LinkedIn, Pandora, Photobucket, Twitter, WordPress and Yelp. (See the full list below.)

Microsoft also announced alliances with Hewlett-Packard (HPQ) and China Telecom to deliver Windows Live services.

Microsoft says there are more than 460 million Windows Live customers (its instant messaging offering accounts for a bulk of this number and will see the most socializing impact), but is bowing to the obvious and inevitable trend of consumers creating and sharing all over the Internet.

But, said Hall, Microsoft is also sticking to its mantra of “software plus services” here, noting that consumers want the existing tools they use now regularly to become more social, rather than having to abandon them.

Microsoft is also launching its Windows Live Essentials, which are free widgets that can be used across a range of devices and places, such as personal computers, mobile phones and on Web sites.

Finally, to let users store all that content and information, Microsoft said it is also increasing its Windows Live SkyDrive online storage offering from 5GB to 25GB.

Here are the screenshots of the new Windows Live services (click on them to make them larger):

Windows Live Home Page

Windows Live Profile Page

Windows Live Messenger Page

Windows Live Web Activities Page

Windows Live Groups Page

Partner Integration for Windows Live

Blog
Blogkoll.se
Live Journal
Overblog
SixApart
Twitter*
Wordpress*

Reviews
11870.com
Amazon
Digg
Flixster*
Goodreads
Kaboodle
StumbleUpon*
Yelp*

Photo
Bilddagboken.se
Flickr*
Photobucket
Rock You
SmugMug

Music/Video
Last.fm
iLike
Break
Pandora
Seesmic
Veoh

Social Networking
Biip.no
Dada.net
Daum*
Dopplr
Faves
Friendster
Hevre
Hyves
Jeeran
Libero Community
Lokalisten
Mail.ru
Metroflog
Nettby
OleOle
Playahead
Qik
SlideShare
Studenti.it
TripIt, Inc.*
Yandex
YuKu
zoo.gr

OEM and Services Partners
HP
Lenovo

Telecommunications and Broadband Service Providers

China Telecom
Qwest

FrameIt Partners
Amlogic
iGala
Navteq
PanDigital
PhotoVu
RMI
Smartparts
ViewSonic

*Denotes First Set of Available Feed Partners

Earlier today, BoomTown posted a video of star venture capitalist John Doerr’s 10 tips to start-ups for surviving the econalypse that he ticked off at a roundtable in Silicon Valley on Wednesday.

Beside the words of wisdom from the Kleiner Perkins Caufield & Byers partner, I also trolled for advice from the panel of well-known entrepreneurs I moderated at VentureBeat’s “How to manage your start-up in the downturn” event.

Thus, here is the i-will-survive take from Jason Calacanis of Mahalo, Toni Schneider, chief executive of Automattic, the company that makes the WordPress blogging software, Nirav Tolia of Web 1.0’s Epinions and Max Levchin of Slide.

As an added bonus, Ram Shriram, one of Google’s first investors, also weighs in. And, of course, the inevitable blogger Robert Scoble gives his two cents (and also freaks me out once again!).

Here’s the video of the entrepreneurs, and below it, for your viewing pleasure, two versions of “I Will Survive” by Gloria Gaynor (the classic) and Cake (the weirdly good one):

Here’s a video of star VC John Doerr reciting his 10 tips for start-ups to follow in the economic downturn.

Doerr gave out the advice at VentureBeat’s “How to manage your start-up in the downturn” roundtable event, which took place at the Stanford Park Hotel in Palo Alto yesterday morning.

The Kleiner Perkins Caufield & Byers VC got a lot of attention for his list, which he culled from a survey of 18 of the companies his firm has invested in.

Doerr didn’t need a massive, noisy PowerPoint like Sequoia Capital to make his quick and clear points, which he delivered in four minutes flat.

Doerr was on an investors panel with Ram Shriram, one of Google’s first investors, Ron Conway, Kittu Kolluri of New Enterprise Associates and Matt Cohler of Benchmark Capital.

I moderated the second panel of entrepreneurs, including: Toni Schneider, chief executive of Automattic, the company that makes the WordPress blogging software; Max Levchin of Slide, Jason Calacanis of Mahalo; and Nirav Tolia of Web 1.0’s Epinions. Video of interviews with them and also Shriram to come later today!

But here’s Doerr reciting his 10 tips:

It will take place at the Stanford Park Hotel in Palo Alto from 8 a.m. to noon.

Toni Schneider, chief executive of Automattic (the company that makes the WordPress blogging software) will join Max Levchin of Slide, Jason Calacanis of Mahalo, O’Melveny & Myers’ Sam Zucker, and Nirav Tolia of Web 1.0’s Epinions.

Along with my group, for whom I am planning all sorts of verbal tortures (”Exactly how much do you make?”), there is also a panel of investors, moderated by VentureBeat’s Matt Marshall, which features: John Doerr of Kleiner Perkins Caufield & Byers; Ram Shriram, one of Google’s first investors, Ron Conway, Kittu Kolluri of New Enterprise Associates and Matt Cohler of Benchmark Capital.

Oh, it is sure to be a festival of Web 2.0 pondering.

Said Marshall in a post about the gathering:

One goal of this event is to provide context and advice for start-up CEOs and founders facing the recession. We’ve handpicked the speakers for their remarkable records and experiences in the previous downturn. …

While the Sequoia [Capital] ‘RIP Good Times’ presentation gave a broad overview of the economic problems facing the tech world, it provided mostly a macro analysis, and a general prescription for companies.

Now is the time to take the analysis one step further, and discuss the variety of situations we see among valley investors and their start-ups: How cleantech companies are different from Internet start-ups, and how under certain conditions, a profitable company may actually be poised for aggressive growth, hiring and M&A–and not necessarily ideal for cost cutting. We intend to explore all of this and more.

Given the fairly predictable ‘Silicon Valley is in circle-the-wagons mode’ story line we’ve been seeing so far in the media, this event is also the Valley’s opportunity to help dispel this myth and explain how the area’s start-ups are actually quite diverse and that there are a mix of strategies at play.”

The event is sold out, but it will be streamed live.

And, as usual, look for a shaky video report of the roundtable from me later!

Burda runs an annual digital conference in Munich called DLD (Digital, Life, Design), which a lot of U.S. tech types have gone to, including me, even though the media giant is best known for its old-line magazines about fashion, cooking and crafts.

But Burda has also been dipping into the digital sector a lot, especially via the tireless tech networking of the company’s Steffi Czerny and Marcel Reichart, who have established a high profile for the company among Silicon Valley denizens.

That was in evidence at Burda’s luncheon yesterday, which was crowded with a panoply of techies and hosted by Czerny, Maria Burda, the wife of CEO and owner Hubert Burda, and well-known Israeli investor Yossi Vardi.

Czerny has been taking Maria Burda (pictured here, she is also a famous German television star, better known as Maria Furtwängler) around the Valley on a learning tour this week to meet with companies like Ning, Mozilla, Facebook, and with venture capitalists. They are also here to attend Google’s Zeitgeist partners’ event, which starts today.

Here’s a video of yesterday’s luncheon, where I was asking everyone about the troubled economic situation and more.

It includes chats with Mullenweg and Seesmic’s Loic Le Meur, BillShrink’s Peter Pham, Facebook’s Brandee Barker and Randi Zuckerberg, Wired’s Steven Levy, Vardi and Burda and Czerny:

With all the Yahoo (YHOO) reorganization noise this past week–full of sound and fury, signifying nothing, if you want to go all literary!–BoomTown had little time to post our video on GigaOm’s Om Malik’s Structure 08 conference on Wednesday.

Held at the spanking new Mission Bay Conference Center in San Francisco, it was high-wonk, packed with CTOs and those involved in building the guts of the Internet and its infrastructure, whose jobs are becoming more complicated than ever as Internet usage booms.

Malik thinks this unprecedented growth is putting a lot of stress on the system, akin to the physical wear-and-tear our nation’s roads and bridges are under.

As he wrote: “The platforms on which we have done business for over a decade are starting to provide diminishing returns; the smart money, meanwhile, is seeking new platform structures.”

Thus, lots of talk about how to manage the potential crisis, such as the move toward cloud computing, databases in the sky and other stuff that is way, way over BoomTown’s head.

Nonetheless, we press on, because it is our solemn duty to understand dark fiber someday soon.

Here’s the video, including interviews with Malik, WordPress’s Raanan Bar-Cohen and NetSuite CEO Zach Nelson:

Project Granola?

Apparently, that’s the jokey nickname that’s been given by some in the company to Microsoft’s (MSFT) new online strategy, in the wake of its failed efforts to acquire Yahoo (YHOO) that ended in a big heap of mess this past weekend.

Now, sources tell BoomTown, it is all about “organic”–hence the image of a healthy handful of granola (except for the fact that, in my experience, nobody really likes granola after eating it as much as they think will before).

In any case, it is a word Microsoft folks have been slipping into the conversations with BoomTown over the past few days, so much so that I have started to feel like I was talking to execs from Whole Foods.

Now Microsoft’s greenness has gone public.

Case in point: Brian Hall, Windows Live General Manager, who trotted out the organic word in front of Merrill Lynch analysts yesterday, as reported by CNET’s Ina Fried, saying: “We’ve withdrawn the offer and moved on, and now are focused on how we grow as fast as possible organically.”

But what does organic mean exactly?

Two things, it seems.

First, stepping up spending on marketing, technology and research to try to find ways to differentiate from Google (GOOG) and get into the No. 2 spot now held by Yahoo.

Of course, that plan has not worked out so well as yet for the software giant, with Microsoft spending billions of dollars with no profits and little gain in online search or ad market share, while its archrival Google keeps growing stronger.

Even so, while in Korea today, Microsoft Chairman Bill Gates backed Microsoft CEO Steve Ballmer’s do-it-yourself path and his move to walk away from Yahoo.

“The key decisions on that will be made by Microsoft CEO Steve Ballmer, who took a look at Yahoo and decided that, on our own, he likes the stuff that we’re doing,” said Gates.

Gates also added what amounts to the second option for Microsoft. “I wouldn’t rule out some partnerships, but we don’t have anything imminent there,” he said.

While a return to Yahoo is a possibility, in fact, buying up Web 2.0 stars is likely to be a bigger focus of the company.

“Yahoo can twist,” said one source. “Microsoft has lots and lots of other options.”

According to sources close to the company, for example, Microsoft’s bankers had been putting out subtle signals to Facebook to see if it would be open to a full buyout.

Microsoft already invested $240 million in the hot social-networking site, an investment that gave Facebook its kooky $15 billion valuation.

And its execs have long told Facebook execs they wouldn’t mind a bigger bite–um, like all of it.

“We just wanted to gauge their interest, more than any real effort,” said another source, who expects Facebook to stick to its longish path to an eventual IPO.

But, as is no secret, Microsoft has selections all over Silicon Valley to help it improve its Internet chances.

Those would include buying bigger vertical sites in strong categories like autos or jobs or finance, and also scooping up smaller but fast-growing socially oriented sites like Digg, Meebo, Yelp or focusing on ad plays like Spot Runner (which just got another big dollop of funding).

There might even be some sense in spinning some of these and all Microsoft Web units off into a separate Internet company, which would be another way of integrating even bigger deals for properties like Time Warner’s (TWX) AOL or News Corp.’s (NWS) MySpace (which are longer shots, I think).

In a post I did in February right after Yahoo rebuffed Microsoft for the first time, I suggested such a course for the company.

As I wrote:

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of Larry and Sergey.”

And that, most of all, would be more like icing on the cake for Microsoft and be much more tasty than a bowl full of granola.

And, as Martha Stewart says: It’s a good thing.

Because this is the fast-moving Web and we are a bunch of hip, hopping hep cats, we’re doing some renovation to the AllThingsD.com site and also turbocharging the Voices section too.

The site is still powered by those lovely folks over at WordPress and keeps the amazing style created by the truly intelligent designers over at San Francisco’s Mule Design Studio. And it is still all free, all the time.

But, on Monday, as if by magic–the magic of our Web genius Adam Tow, that is–we will have moved the digital furniture around on our front page, adding our occasional Tech Top 10 every day by our own John Sullivan and also a featured daily video.

And we will be rearranging all the pieces–BoomTown, John Paczkowski’s Digital Daily, Walt Mossberg’s many columns (including Katherine Boehret’s Mossberg Solution) and Voices–to make it prettier and easier to use, in our ongoing attempts to give readers more, more, more.

And who doesn’t want more? Those grumpy folks who are never satisfied, that’s who (and you know who you are and so does BoomTown and how we wish you would just learn to live, live, live and join our noisy circus, which is what you know you want to do)!

We think even the glummest of the glum will like our new iteration of our Voices section–which we have admittedly not paid enough attention to since our spring launch. All that will change, as we try to provide you with new viewpoints from important players around the Internet every day.

Culling from the mountains of content from the Internet, we’ll be pointing to lots of tech and media posts, videos, graphs and cartoons from the most interesting and reliable sources to bring you information you need to know about.

No soulless algorithms here–we’ll try to choose the best stuff for our readers, to give them what they need to be fully informed, all with the kind of taste and high standards all Dow Jones properties aim for.

Plus, we will be soliciting and publishing more quality original blogs too–in text and video–from the top echelons of the digital industry, trying to bring the same sort of high-level debate and insights that we present annually at the D: All Things Digital conference.

What else? Well, we’ll be adding more information about our crack D and ATD staffs on the About Us pages.

And we’ll be bringing you extensive and sassy coverage by our team in 2008 from exciting upcoming tech and media industry events like the Consumer Electronics Show, MacWorld and Sundance, to name a few.

Of course, there is more stuff to come soon, but we’ll keep it to ourselves, as we don’t want this exciting news to turn into Geeks Gone Wild.

Well, maybe just a little bit–here’s that great Maria Sharapova “I Feel Pretty” video for Nike that we so love and for which we thank the universe for providing to us via the miracle of the Internet:

In the interest of time-saving, we will group them all here in one easy list that you can clip and save.

DEALS AFOOT?:

Yes, there is always a lot of sniffing around out there, especially given that a lot of Web 2.0 companies are more likely to be acquired than go public.

Do look for smaller ad networks to be bought up in the wake of a spate of bigger sales of late–DoubleClick to Google, aQuantive to Microsoft, Right Media and BlueLithium to Yahoo).

Now, it looks like AOL might get into the game again, after presciently grabbing Advertising.com way back in 2004 for $435 million. The new target, in a deal that a source close to the company said is “80% there,” is Quigo–the content-targeting ad network. The price? About $300 million.

Less likely for action are some other names being bandied about.

WordPress (the blogging software and hosting company AllThingsD.com uses), for example, has some suitors and is contemplating a sale after some offers. But don’t bet on it.

And RockYou is not being bought by, say, Yahoo–at least not this week. While rumors of wild valuations for the No. 2 maker of widgets on Facebook (Slide usually outranks it) have been bandied about, it has not had any significant talks with anyone.

GOOGLE GETS FRIENDLY (EXCEPT TO FACEBOOK):

As we wrote in a post yesterday, contrary to rumors, the Google project (codenamed Maka-Maka, doubtlessly by that wacky pair, Graham Spencer and Joe Kraus, pictured here, formerly of JotSpot and Excite, who worked on it) was imminent. As in now. Right now. This instant.

Officially named OpenSocial, it is a way to create a social graph over the Web that is open to third-party apps friendly and, as I wrote, is indeed both a “real attempted assault on the Facebook platform or more of a way to widely spread the gospel of social networking (and, thus, an assault on the Facebook platform).”

While Google has signed a bunch of prominent partners, it has yet to grab the No. 2 social-networking site Facebook (unlikely) and the No. 1 MySpace (much more likely, but don’t hold your breath). But it’s definitely a put-up-or-shut-up dare by the search giant, especially given Facebook’s professed love of openness.

Who knows if it will catch on, given that it is clear it is all in the hands of the apps developer community. If not, it will surely be a big black eye for Google, if it can’t motivate widely beyond search.

FACEBOOK IS A BIG BOY NOW:

It looks like former Yahoo Mike Murphy–who heads ad sales at Facebook (and is pictured here)–is finally getting his ducks in order with a new ad offering to be called SocialAds next week at its big confab in NYC.

Unlike the competition’s contextual ad programs, this will be squarely aimed at people’s self-expressed interests and demographics.

And, of course, Microsoft will be Facebook’s partner in serving the ads, for now at least. Good lord, it has bought and paid for this date many times over, so a fine time must be had by all!

I can’t tell you how thrilled we are that Facebook (and that nice boy Mark Zuckerberg) is finally putting some meat on its skinny little business model to take advantage of its fast-growing popularity.

But let’s keep in mind that it remains to be seen how lucrative this kind of ad network is and how scalable it is across the Web (and not just on Facebook).

It will also be interesting to see if the offering is truly innovative and different than existing solutions–or if it just serves up some dumb and useless ad for blood supplies, because you happen to be playing Vampire a little too much.

(We’re teasing, Mark, but not very much at all.)

OH, YES, THAT GPHONE:

More open verbiage from Google, which will roll out a mobile-phone operating system of software and services for a new kind of open cellphone sometime in this millennium (are you as sick of the speculation about the Gphone as I am?).

Since we’re talked out, here’s a much better Wall Street Journal Online video on the subject:

BOVINE UPDATE

Yahoo’s holy cows? Still sacred and going strong!

Please see this disclosure related to me and Google.