Yahoo!

Yahoo! CEO Carol Bartz spoke with a group of reporters following the company's press conference, discussing the end of layoffs, the Microsoft deal, the Yahoo! Newspaper Consortium and Yahoo!'s role in enterprise business, paidContent reported.

On layoffs:

We have no more layoffs; we're done. That's it.

On the deal with Microsoft:

Everybody wants what I call a "pre-Lehman deal." They want the world. I was focused on three things from the Microsoft deal: I wanted ongoing revenue, which is important to funding our strategy; if I'd have gotten the money upfront, every $1 billion gives me $3 million in interest income. That's it. Because I give half to Obama. So I get about half a million. I get half a percent interest. That's $2.5 million. I don't have a balance-sheet problem; I have a strong balance sheet. What I need is revenue so I spend money. So, with the Microsoft deal, I got revenue and my expenses covered.

On business enterprise and consumers:

I don't think you have to choose which one should be the focus. (The enterprise and the consumer parts of Yahoo!) are two children and they both come to the dinner table. We couldn't run the consumer business at its scale without getting money from the ad business. So the fact is, we have some of the biggest data centers in the world. We serve up more mail, more photos than any other company. But that is informed by people buying ads against those services. It's not a separate focus.

Yahoo!'s latest attempt to join the world of social networking is the alpha launch of an English-language version of Yahoo! Meme, which is run by Yahoo! Southeast Asia, paidContent reports.

Yahoo! Meme allows users to post short entries, photos and videos to their pages, or memes. They can also follow other memes and repost entries from them, as well as tracking entries from memes they are following via one central dashboard, according to paidContent.

From Yahoo! Meme's About page:

Meme from Yahoo! hopes to be an efficient "memeplex." In other words, somewhere to multiply and distribute fragments of information. These fragments, or "memes," travel from one person to another and survive through their own merits or circumstances. They evolve, suffer mutations and some may even get to be very famous.

Memes have always run loose through the Internet, surviving all kinds of hazards: heavy rain, unstable Internet connections, heat waves or packed inboxes. We hope that here they will find a warm environment where they can live and reproduce freely.

Yahoo! acquired Arab online community Maktoob.com, and the two companies said they will combine efforts to offer Arabic-specific information and Arabic versions of Yahoo! Messenger and Yahoo! Mail, CNET reported.

Maktoob.com has more than 16.5 million users in countries including the United Arab Emirates, Jordan, Kuwait, Egypt and Saudi Arabia, and it claims that it reaches one-third of online people in the Arab world.

The two companies said they expect the transaction to be completed in the fourth quarter, after which Maktoob.com will become a wholly owned subsidiary of Yahoo!. Financial terms of the acquisition were not disclosed, according to CNET.

Yahoo! CEO Carol Bartz said in a statement:

Access to information and communications tools can positively impact people's lives in many ways and, with the acquisition of Maktoob.com and our investment in the region, the Arab world will soon get a Yahoo! experience in Arabic with relevant local language content, programming and services.

Maktoob.com general manager Ahmed Nassef added:

Internet users in the Arab world will have access to Yahoo!'s vast content portfolio, as well as world-class communications products, which will be available in Arabic for the first time. In addition, advertisers will be able to leverage the vast reach of the newly combined audiences to effectively market to consumers across the region.

Yahoo! purchased the OMG.com domain name for $80,000, Domain Name Wire reported.

Yahoo! runs celebrity gossip site omg!, and OMG is shorthand for "Oh my God."

Domain Name Wire added that LMK.com (LMK is shorthand for "let me know") sold for $58,500 this past week.

The $80,000 price tag seems like a bargain when compared with the $4.9 million Zappos.com (now owned by Amazon.com) paid for the Clothes.com domain.

Yahoo! filed details of its search and advertising agreement with Microsoft with the Securities and Exchange Commission, and Silicon Alley Insider fished out some of the highlights.

According to the SEC filing:

· The agreement must be finalized and executed by Oct. 27.

· An arbitration panel will moderate any disputes and set the pact's final language.

· The deal can be terminated by mutual consent by July 29, 2010, but Yahoo! can extend that date by six months if the necessary antitrust approvals aren't rubber-stamped by then.

· Yahoo! gets an 88% share for the first five years on Yahoo! properties, and then after five years, Microsoft has the option to kill Yahoo!'s sales exclusivity for premium-search advertisers. If it does, Yahoo!'s revenue-share rate will rise to 93% unless Yahoo! exercises its option to retain exclusivity, in which case it would drop to 83%. If Microsoft does not exercise that option, the rate will be 90%.

· Microsoft will pay Yahoo! $50 million annually for the first three years of the deal.

· Yahoo! can terminate the contract if the trailing 12-month average revenue per search of their combined queries in the United States falls below "a specified percentage" of Google's estimated RPS, or if the combined Yahoo!-Microsoft query market share falls below a specified point. Yahoo! can also cancel the deal after five years if the trailing 12-month average of Yahoo!'s U.S. RPS is less than a specified percentage of Google's RPS.

· If Microsoft tries to sell its search business, Yahoo! has the right of first refusal and right of last offer to buy it.

· Microsoft will hire at least 400 Yahoo! employees and pay them competitively, and the companies will also agree on a retention plan to keep those 400 and an additional 150 Yahoo! employees to help during the transition.

· The companies will swap worldwide patent cross-licenses.

Yahoo! CEO Carol Bartz stopped limping around her office long enough (she had replacement knee surgery three weeks ago) to give a long interview to The New York Times, in which she discussed the deal with Microsoft and her company's future away from the search business.

Bartz told the Times Yahoo! got out of the search business because it could no longer keep up with the investments Google and Microsoft were making in the sector, adding that the influx of resources from Microsoft would be used to strengthen Yahoo!'s display-ad, content and mobile-services technology.

Highlights of Bartz's question-and-answer session with the Times:

My first reaction when I got here was that I wouldn't even do a search deal, until I looked at our expense structure and our actual options and looked at what our prime job was, which is to grow audience.

On her statement at an industry conference that Microsoft would have to fork over "boatloads of cash" for Yahoo!'s search business:

I made a mistake. I was never interested in doing it for upfront money. That doesn't help me operate a business.

On her dealings with Microsoft president Steve Ballmer:

He called my first day. I told him: "Go away. I haven't even found the bathroom."

On Yahoo!'s investments in technology:

We are actually behind in investing. We should have invested more.

The New York Times' Bits Blog was all over Wednesday's agreement between Microsoft and Yahoo!, looking at the transaction from several angles. And Yahoo! CEO Carol Bartz and Microsoft CEO Steve Ballmer discussed the deal in detail with Fortune's Brainstorm: TECH.

On the deal's impact on Google, Bits Blog pointed out, "More bidders for the same supply should lead to higher prices. That means more money for Microsoft and also for Yahoo!, which will get 88% of the revenue from searches on its sites. But that doesn't mean that Google will lose anything. It still has the largest marketplace, the best advertising technology and, thus, the highest revenue per search. Even if Microsoft earns more, the bids on Google won't necessarily go down."

The Times added,"Even with the deal, the Microsoft-Yahoo! search operation will be dwarfed by Google—with a 28% market share in the United States, versus 65%—and will face an uphill struggle to try to wean people away from Google's simple white search page."

Advertisers were enthusiastic about the Microsoft-Yahoo! combination, with David Kenny, managing partner of VivaKi, the digital unit of Publicis Groupe, telling Bits Blog, "It's got a good interface, but the real question is audience and, obviously, getting Bing embedded inside of Yahoo! will give it a bigger audience," and Covario chief executive Russ Mann adding, "From what we can tell, we think this is going to be a very powerful combination," and saying ads for his clients on MSN and Bing regularly yielded higher conversion rates than on Yahoo! or Google, so he was pleased to see the Microsoft search engine expanding.

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The partnership between Yahoo! and Microsoft became official Wednesday morning, with Microsoft's Bing powering search functions on Yahoo! while Yahoo! becomes the exclusive worldwide relationship-sales force for premium-search advertisers for both companies.

Under terms of the 10-year agreement, Microsoft gains an exclusive 10-year license to Yahoo!'s core search technologies and the ability to integrate them into its existing Web-search platforms. Bing, meanwhile, will be the exclusive algorithmic-search and paid-search platform for Yahoo! sites.

Self-serve advertising for both companies will be fulfilled by Microsoft's AdCenter platform, and prices for all search ads will continue to be set by AdCenter's automated auction process, the two companies said, adding that each company will maintain its own separate display-advertising business and sales force.

Microsoft will pay traffic-acquisition costs to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!'s owned-and-operated sites during the first five years of the agreement, and it will guarantee Yahoo!'s O&O revenue per search in each country for the first 18 months following initial implementation in that country.

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Talks between Yahoo! and Microsoft to make the latter's Bing the search provider for the former reportedly resumed late last week after stalling over Yahoo!'s request for an upfront payment of several hundred million dollars and revenue guarantees that would total billions of dollars over the course of the deal, AdAge.com reported.

According to AdAge.com, Yahoo! would be allowed to sell search ads on Bing, as well as on its own site, which would give the company more search inventory to sell and make it a bigger player in the search sales front. Yahoo! would also immediately be able to save millions of dollars by not having to maintain its own search infrastructure.

But Yahoo! wants more revenue from searches that originate on Yahoo! and lead to a purchase, as well as for clicks on ads after a search for a brand name. Other points of contention included the amount of data Yahoo! would get and whether Bing would get any branding on Yahoo!, according to AdAge.com.

Tim Cadogan, CEO of ad-serving firm OpenX and former senior vice president of global advertising for Yahoo!, told AdAge.com:

As Bing grows, the first place Bing takes share from is not Google, but the other guys. So Yahoo! is going to lose share unless they have something radical planned.

Yahoo! will acquire Xoopit, a start-up that helps people to share content from their in-boxes with social-networking sites, and the company plans to add new photo features to Yahoo! Mail, CNET reported.

Financial terms were not disclosed, but earlier reports estimated the deal's value at around $20 million, according to CNET.

Yahoo! senior vice president Bryan Lamkin said on a company blog:

With the integration of Xoopit's platform technology and capabilities, the task of sending photos via email will be as easy as it should be, and sharing photo albums with friends and family members will also be a cinch. You'll be able to share your pictures among a group of friends or family like never before—combining pictures from numerous sources into a single album for a private group to view. And soon your inbox will become an organized photo index, as well. Just imagine having a tool that collects all the photos you've sent and received over the years into that scrapbook you've never had time to assemble.