A Fortune piece by senior editor David Kirkpatrick said that in the end, Microsoft is almost surely going to end up owning Yahoo's search business. And "even what does seem like erratic behavior on the part of Microsoft CEO Steve Ballmer... points toward that inevitable conclusion."

And it's all because of Google. Kirkpatrick writes that Google drives Microsoft crazy for two reasons: it figured out how to make a ton of money in an entirely new way for the tech industry, and it became the most powerful tech company on the market as a result, taking the crown from Microsoft.

continued...

AllThingsD is reporting that Yahoo investor Gordon Crawford told Yahoo CEO Jerry Yang in a face-to-face meeting last week that he was seriously considering voting against Yahoo in the looming proxy fight. That puts Crawford on Microsoft's—and, obviously, Icahn's—side.

The report said that this means it doesn't look good for Yahoo's current board in the upcoming August 1st company meeting

Despite Yang's attempts to defend the company's current actions, "Crawford and his top analysts aggressively questioned Yang's assertions and pressed him on Yahoo's strategy going forward. And they indicated they had lost patience, as Yahoo shares have drifted downward in the wake of the collapse of Microsoft's takeover attempt."

CNET News took a fresh look at Yahoo's search results Thursday by Hitwise Intelligence and raises the question of whether Yahoo could survive "just fine" without its search engine.

Heather Hopkins, vice president of research for Hitwise, wrote in a blog entry that Yahoo's valuable sites would not necessarily fair poorly without Yahoo's search engine, the report said. To figure this out, she took the top 20 Yahoo properties and ranked them based on user traffic. (Yahoo Mail and the main Yahoo home page came way out on top with 37.5 percent and 30 percent, respectively.)

She then compared how they're each getting their traffic on the Web, and found that 14 of the 20 Yahoo sites get more traffic from Google than they do from Yahoo—even the top Yahoo Mail and Yahoo home page sites.

And the saga continues. Microsoft Corp on Monday said it would be willing to reopen talks to buy all or part of Yahoo, Reuters reports, but only if a new Yahoo board is elected—which is exactly what investor Carl Icahn has been pushing for.

Microsoft, "which broke off talks in early May to buy the Internet company for $47.5 billion, said it would resume discussions immediately if a new board were elected at Yahoo's August 1 stockholder meeting," the report said.

The article also said that Icahn and Microsoft CEO Steve Ballmer have been chatting it up over the past week, something that hadn't really happened in earnest until now. Ballmer told Icahn that he feared the current Yahoo board would mismanage the company if Microsoft took them over.

"You don't have to be Sherlock Holmes to realize there is no great comfort zone between the current Yahoo board and Microsoft," said Icahn in the report. "During this waiting period for regulatory approval, any acquirer—not just Microsoft&mdashwould want a steward they would feel comfortable with."

Ooh, this one must have hurt. Orbitz Worldwide said on Tuesday its Orbitz.com and ebookers.com websites have replaced Expedia as the travel agencies for Microsoft Corp's Internet arm MSN.com in the United States and the United Kingdom, Reuters reports. That's despite the fact that Microsoft started Expedia back in 1995.

The report said that Orbitz expects the change to bring an additional 3.5 million unique visitors per month via MSN's Travel portal. A Microsoft spokesman said the "company decided to switch to Orbitz because it preferred the travel site's features and customer service. 'Our customers are looking for innovative and differentiating experiences in travel,'" the spokesman said in the article.

Silicon Alley Insider is reporting that while at a meeting with about a dozen senior members of AOL's staff yesterday, Time Warner CEO Jeff Bewkes left at least one member of management with the impression that the company is for sale, a source close to the company said:

"Another person who attended the same meeting says Jeff did not say specifically that the company is for sale but merely said that 'everyone is talking to everyone' and that AOL might someday be sold (i.e., that nothing has really changed)."

The report said that regardless of what Bewkes said, a rapid sale wouldn't be surprising given the reports of Yahoo-AOL and Microsoft-AOL talks in recent weeks.

Following Henry Blodget's prediction that Yahoo CEO Jerry Yang and company president Sue Decker are "toast," Reuters is reporting that Microsoft Corp is preparing a new bid for Yahoo's search business, and has already approached other media companies about joining it in a deal that would effectively lead to Yahoo's breakup.

"By mid-day a CNBC report refuted the report of a new approach. Citing unnamed sources, CNBC said Microsoft has held no new talks and there are no negotiations, sending Yahoo's shares up 7 percent."

The Wall Street Journal said that the talks are in fact ongoing, but are preliminary and are unlikely to lead to a company split just yet. Of course, all of the companies involved have declined to comment.

The Silicon Alley Insider's Henry Blodget has analyzed a recent AllThingsD report, and has found the following:

- Yahoo's board is considering replacing CEO Jerry Yang and company president Sue Decker, who have both lost the confidence of investors and employees. "The nice way to do this (more likely) would be to allow Jerry to retire to non-executive Chairman. The harsh way (less likely) would be for the board to can him. Sue, meanwhile, is too linked to Jerry to survive."

- The "new mandate for the new CEO, whoever he or she is? Fire people. Specifically, make the harsh decisions Jerry has been unwilling to make because he's too close to the company and too nice a guy."

- As for the whole marger thing, Yahoo's again in talks with Time Warner again about buying all or part of AOL. And they're still receptive to some kind of deal with Microsoft.

On Thursday, Yahoo announced another broad corporate reorganization that it said would allow it to compete more effectively after the breakdown of merger and partnership talks with Microsoft, the New York Times reports:

"The shake-up, which has been anticipated for about a week, is the latest in a series of corporate realignments at the Internet company over the last 18 months. It comes amid a string of departures of senior executives and high-profile engineers and managers and a looming proxy battle for control of the company's board against Carl Icahn, the activist financier."

But the report said that analysts were skeptical that reorganization would be any more effective than any of the previous ones at restoring Yahoo's fortunes.

"It changes nothing," said Benjamin Schachter, a UBS Securities analyst. "Companies that are doing well, generally don't do reorgs. They significantly impact morale and show that the crux of the problem is the lack of execution. This is a management team that has not been able to execute."

Most folks following the industry know that YouTube is the most popular online video site, but it's a bit shocking to find out just how much. MediaPost is reporting that YouTube accounted for 75.43% of all U.S. visits in May 2008, according to new data from Hitwise. "Among a custom category of 63 online video websites, MySpaceTV received the second highest percentage of visits with 9.01%, followed by Google Video with 3.73%."

(YouTube is available on mobile via various carrier-and-WAP initiatives, but MySpaceTV so far isn't.)

To put the new numbers in perspective, the report said that online video accounted for just 1.14% of all U.S. Internet hits in May 2008, which is actually a slight decline from the year-ago period. However, people spent slightly more time on those online video sites than before.