Insider Chatter by Donna Bogatin

Everyone and their blogging uncle is touting he/she knows what is REALLY going on with Yahoo! REALLY? Given that it is a rare writer–old media or new–with the guts to quote any Yahoo! directly, the gab fest is but an amalgam of posturing, innuendo and andectotal one upmanship “citing” anonymous “people familiar with the situation” (WSJ).

Last week, A VC affirmed HE knew exactly how Yahooi! execs feel about the Microsoft situation. Today, Boomtown assures SHE knows where Yahoos! stand on the situation. How can two, third party individuals outside of the Yahoo corporation be so certain that THEY have the handle on the truth about the thousands of Yahoos? Simple: Each claims to have spoken to a handful of Yahoo employees, off the record, of course.

KARA SWISHER: Of course, many Yahoo employees are going to be thrilled with this show of strength. This past week, many had told me the big problem with Yahoo was that its leadership did not inspire them enough with visionary goals of big wins.

“They are so plodding, it creates no excitement to work for anything great,” said one employee to me, expressing a common sentiment. “So you just work 9-to-5 and collect your salary.”

Well, sticking it to Microsoft should certainly crank the excitement factor up to the max.

Sorry, Kara, I experienced Yahoo! excitement first hand this week, for the company and even for Jerry Yang, and I will name MY source: Paul Cushman, Director of Sales, Mobile.

Speaking on the “Titans” panel at the OMMA Mobile conference in New York City Thursday, Cushman underscored his appreciation for the executive level Yahoo! Mobile vision and support, citing Yang’s CES keynote. In the field, a Yahoo! in attendance expressed her confidence to me in Yahoo! management to do the right thing for the company and its employees.

What’s more, Cushman shared his disdain for Google (search),  NOT Microsoft (hug), hailing, “The last thing I want on my mobile device is millions of Google results.”

(ALSO SEE: MOBILE Visions? Microsoft, Yahoo, AOL Open Up: NOT Google! OMMA Report)

Fred Wilson also cites “a lot” of people inside Yahoo to affrim that he knows what Yahoos really want to do. What DO Yahoos really want according to the “A VC”s playbook? To “run their services the way that the CEOs of Union Square Ventures run their businesses”!

How uplifting? Yahoo disdain is to be reborn as Wilson’s own Union Square Ventures love! NOT REALLY–SEE MY REBUTTAL: Is Union Square Ventures Changing Exit Strategies?

Moral of the Yahoo! blogging story: Beware sticky peanut butter tales.

ALSO: Yahoo: Beware Google AND Embrace Microsoft! and Microsoft’s Yahoo Bid a Winner: Google Running Scared! and Henry Blodget Tech Ticker Puts Yahoo Finance at SEC Risk

MORE: How Web 2.0 Meetups Displaced the New York Software Industry and Why Silicon Alley VCs Should Do Blogging Due Diligence, Too and Fast Company Social Media Revolution NOT Off to the Races

UPDATE: Yahoo Refugees? Hillary Clinton To Restore American Dream for Silicon Valley

CONTACT DONNA BOGATIN

The GOOG fuel remains stubbornly 99% pure–online AdWords and AdSense–as the Googleplex has been ubable to extend the Google magic profitably offline. What about mobile? Is Eric Schmidt’s grand mobile ambition destined to fade away just as his dreams of personalized, GPS fueled, in-car radio “targeted” ads have?

(SEE: Google CEO In-Car Radio Ad Vision Fading)

Moreover, will a “seismic” consumer shift to smartphones provoke a reciprocal marketer “wave of change” towards mobile advertising? The Internet “titans” are gearing up for such a projected user and advertiser bonanza, according to views presented yesterday at the OMMA Mobile conference in New York City.

Google has been preaching that an “open” mobile world is the future of wireless. Nevertheless, while competitive peers Microsoft, Yahoo and AOL took to the open stage in midtown Manhattan, not a sole Googler showed up from the NYC Googleplex to join in an open wireless OMMA conversation. No surprise, the Googler in Chief’s feel good PR slogans rarely match what the (once) $200 billion market cap corporation does in the for-profit field, Android included.

The AOL spokesperson offered the most refreshing, real world “big guys” assessment yesterday of the mobile opportunity, circa today: Don’t expect any game-changing, exotic breakthroughs in the coming months, Jason Gruber indicated. While the mobile opportunity is not as “sexy” as it is made out ot be, it is nevertheless very real, he underscored.

“The reach is not there” now, though, Gruber said, noting that 35 million daily mobile Web users in the U.S. is not sufficient “scale.” Will hoped for increases in 3G handset penetration seal the mobile advertising deal? Not necessarily.

Speaking on the ”giant killers” panel, Barry Chu, of whilte label mobile search provider Medio Systems, shared that the futures of each of the entrepreneurial mobile ventures represented is dependent upon projected mobile “hockey stick” growth manifesting by no later than next year.

An eventual consumer uptake in mobile Web use will not immediately translate into advertising success, however. The Weather Channel sells integrated, cross-platform media buys, but is challenged by a lack of mobile-centric measurements, Louis Gump conveyed.

Gump made a personal plea for the industry to move “beyond the click” as a basis for valuing the worth of mobile advertising campaigns. Gump is optimistic that mobile marketers will be shown value through:

Raising awareness,
Increasing message association,
Enhancing brand favorability,
Building purchase consideration.

What about CPMs? I asked. The industry has not standardized around anything, including rate cards.

In preparing for the OMMA Mobile conference, Media Post’s Steve Smith underscored that he sought to address “head-on” the “questions and myths that continue to retard mobile marketing growth”:

Is there really not enough scale here?
Are CPMs really outlandish?
Is it really just a youth medium?
Is it just too hard to put together a mobile campaign and navigate the technology?

Unfortunately for the immediate future of the mobile industry, all of Smith’s supposed myths were upheld, intelligently, as real-world obstacles for the near term.

ALSO:  Google Killer Cuill? Ex-Googler Startups Pose NO Threat: FriendFeed, Howcast, Zillow and Why Silicon Alley VCs Should Do Blogging Due Diligence, Too and NYC Braces for Subway Cell Phone Rage: 5 million Yakkers Daily

PLUS: Google Apps Meets Les Miserables: Enterprise IT Team DREAMS Big and Yahoo: Beware Google AND Embrace Microsoft! and Google Execs Silent On NYC Print, Radio, TV Promises 

MORE: How Web 2.0 Meetups Displaced the New York Software Industry and Yahoos Rally: Beware Sticky Peanut Butter Tales

CONTACT DONNA BOGATIN

Google to the Yahoo rescue? Hardly. I have long underscored that Barry Diller sells IAC shareholders short by selling out Ask.com’s search advertising to Google.

In announcing the IAC plan to spin-off HSN, Ticketmaster, Interval and Lending Tress as four distinct publicly traded companies, Diller said his online advertising focused “Internet conglomerate,” of which Ask.com is a trophy property, will benefit from “standing on its own.” YES, but so would the competitive operations of Ask.com, far from competitor Google’s monopoly seeking hands.

Google is Ask’s prime competitor. While Google is a cheery proponent of coopetition, the only chance for an underdog to become the big dog is to rely on itself for its independent, proprietary future, rather than piggybacking on the success of the single, biggest, arch competitive rival. Yahoo has long understood the need to remain independent of Google and ought to continue to maintain the integrity of its core product offering, come what may.

My question for Diller last year was:

You indicated this morning that starting as the number five search engine is not a bad thing. Yesterday, you inferred that being the number four search advertising network may not be a good thing.  Why are you willing to share Ask’s monetization with competitor Google when you believe “if there is no other ad network than Google, then we are all in trouble.”

Diller told Wall Street:

As far as doing it ourselves, we thought originally and we continue to do work in this area. We do do it ourselves; we do all sorts of ad products inside Ask.com for ourselves, for our own account. But as far as the ad network business, there are, as you know, three players in it currently. I think there probably won’t be a fourth. At some point, I can’t say what will happen out of the growth of advertising in this area, but right now, I would much, much, much prefer to rent it. I think that we will be well-served by that, certainly for a period of time.

Diller’s short-term sell out to his search enemy weakens Ask.com long term and strengthens Google’s winning position, at the expense of contendor Ask.com.

Microsoft’s bid for Yahoo changes the market landscape, but does not render a Yahoo capitulation and amputation at the hands of Google a worthy option. Microsoft is being straightforward about its intentions towards Yahoo, buy and control. Google, as is its fashion, offers a friendly carrot to Yahoo, while seeking its Googley end goal of usurping search advertising share to eliminate a strong competitor and using Yahoo to hurt Microsoft, Eric Schmidt’s despised foe.

Yahoo seemingly has no shareholder value option at this time other than to succumb to new Microsoft ownership. Yahoo owned by Microsoft is NOT the end of the Yahoo brand world though. Microsoft wants Yahoo and needs it as a full partner in a mutually beneficial attack against Google. Google, on the other number one hand, only wants to use Yahoo to further consolidate its search monopoly grip on the Web, for its sole Google shareholder advantage.

Microsoft is NOT a Yahoo enemy, Google is.

MORE: Is Union Square Ventures Changing Exit Strategies? and Microsoft’s Yahoo Bid a Winner: Google Running Scared! and Yahoo Shareholder on Microsoft Bid: AOL, Time Warner All Over Again? and Google Execs Silent On NYC Print, Radio, TV Promises 

PLUS: LinkedIn To Mine User Data For Corporate Espionage

CONTACT DONNA BOGATIN

Robert Scoble hails HE is the one who knows what Google is really up to with Microsoft. Fred Wilson hails HE is the one who knows what Yahoo! should really be up to without Microsoft! 

Union Square Venture’s managing partner Fred Wilson has a message for Web 2.0 entrepreneurs: Sell out to Yahoo!, Google, AOL at your entrepreneurial peril! Odd then, that his own portfolio companies have sold out, under Wilson’s guidance, to the Web giants Wilson warns may cause young companies to “die a slow death.”

Where are Fred Wilson’s Union Square Venture’s portfolio companies del.icio.us, Feedburner, Tacoda today? Under the “consolidation” of Yahoo!, Google, AOL respectively, despite Wilson now saying “We don’t need or want consolidation of services on the Internet.” Since when though, in the Union Square Ventures playbook?

“Web services don’t get better under the ownership of big companies. They get worse,” Wilson declares now, point blank. Wilson also has declared an inexorable Google search monopoly, no need for Yahoo or Microsoft to even show up for the search game anymore, suggests Wilson.

Wilson also knows what is “the right thing” for Yahoo to do for every Internet constituency: Sell off its Web services because, according to Wilson, Yahoo execs would “all love to be running Web services the way that the CEOs of our portfolio companies run their businesses. But they can’t.”

Nice plug for Union Square Ventures, but how is the CEO of Wilson’s portfolio company Twitter doing in running HIS business lately! Moreover, if Wilson was really so passionately against lovely little Web services “languishing” under heavy corporate hands, why does he do his darndest to make sure such sell outs happen?

“Consolidation of ownership of web services is not a good thing for the Internet,” admonishes Wilson. Why then is his own Union Square Ventures helping spur such a purportedly ”bad” Internet along? 

What’s more, why is Wilson cheering a 100% consolidaition of search under one big $200 billion market cap corporate umbrella?

In cheering Union Square Venture’s portfolio company FeedBurner’s “consolidation” by corporate giant Google, Wilson underscored “It’s important to remember that starting companies and building businesses is ultimately about making money.”

Perhaps Wilson ought to remind his portfolio company Twitter of the lesson!

Despite Wilson’s current dire predictions for Web services that are “consolidated” by the likes of Yahoo! and Microsoft, Union Square Ventures applauded the sale of a portfolio company to AOL, underscoring how Tacoda is helped by the “consolidation”:

The combination of Tacoda’s seasoned management, technology, database, and experience with behavioral targeting and AOL Time Warner’s reach as a media company and (through Advertising .com) as an ad network, could become the foundation for creating the dominant display ad network on the internet.

Today, Wilson disses Yahoo!:

I suspect that many of Yahoo!’s best services will languish under Microsoft’s ownership and that users will leave. It’s happening already under Yahoo!’s ownership to services like Flickr and Delicious and MyBlogLog.

When Wilson helped push the “exit” of Union Square Venture’s portfolio company del.icio.us, thanks to Yahoo!, he sang a diiferent Web services Yahoo! “consolidation” tune:

Many of the users who contribute tags to Delicious do so because they believe they are making the internet more useful for everyone. We believe that Yahoo! understands this. The way they have handled the Flickr acquisition gives us comfort that Yahoo! will pursue Joshua’s vision of an open data architecture which will be the foundation for a whole new ecosystem of innovative web services.

“A VC” commentor Jeffrey McManus’ on Wilson’s about (Yahoo!) face:

   Why would an independent Yahoo want to spin off a bunch of competitors? By what measure has Flickr gotten worse under Yahoo?

Wilson clarifies? “it’s not that Flickr has gotten worse. it just hasn’t gotten better”

The bottom line for Wilson, today:

big companies buy small companies and the innovation stops

REALLY? Poor Union Square Ventures portfolio companies Twitter, Wesabe, Zynga….then? After all, how can Wilson advise “exits” to “big companies” Google, Yahoo!, Microsoft… if such “big” sell outs will stifle Web innovation?

ALSO: Twitter Crisis? From Mission Critical to Love Child! and Mint CEO on Web 2.0 Nonsense AND Who Needs Wesabe: INTERVIEW and Scrabulous At Risk? Zynga $10 million VC Game: Facebook Roulette 

PLUS: Microsoft’s Yahoo Bid a Winner: Google Running Scared! and Yahoo Shareholder on Microsoft Bid: AOL, Time Warner All Over Again? and Google Execs Silent On NYC Print, Radio, TV Promises 

PLUS: LinkedIn To Mine User Data For Corporate Espionage

CONTACT DONNA BOGATIN

“‘Y” is Steve Souders, Chief Performance Yahoo, ”jumping” to Google as of January 7? Henry Blodget wants to know! Despite dubbing himself a ”Silicon Alley Insider (SAI),” the Wall Street outsider marks the end of 2007 with a public plea for “insights” for 2008, from the public:

“From the outside, hard to see this as anything other than yet another long-term exec fleeing a sinking ship. Any insights appreciated.”

No problem, Henry (only hard for you, perhaps): Here goes. Unfortunately for your signature “Yahoo to Zero” style sensationalist headlines though, and contrary to the “outrageous conculsions” your SAI traffics in, the Souders move from Yahoo to competitor Google is undoubtedly outrageously non-dramatic.

Steve Souders, a seven year Yahoo veteran, conculdes a banner year: YSlow performance tool, “High Performance Web Sites” book, conference mainstay…most significantly, success in making performance a “prioity” at Yahoo.

What next? High performance engineers continually seek more challenging challenges. Rather than “fleeing a sinking ship,” as Blodget brandishes, Souder is seeking new waters for professional navigation. 

Souder is far from abandonning Yahoo, he leaves the company with his performance mission accomplished and a Yahoo performance team ready and able to carry on the performance roadmap Souder set underway for Yahoo in 2008.

Why NOT move to Google now? Souder changed the Yahoo developer culture to one that is perfomance-centric. For his own personal development, however, Souder will grow more by being at Google now, a company which has long differentiated itself by performance.

Souders is curious, in particular, about how Google achieves proprietary competitive performance advantage, especially via its “hardware topology.”

Why does Google want Souders? It is unlikely that Souders will unveil anything not allready in the public domain that can speed up Google.com even more.

Google is keen on Souders accomplishing his next performance objectives under the Google banner, especially given that Souders’ next big performance challenges complement the Google development roadmap.

If Souders had remained a Yahoo!, he would be tackling two big speed challenges in 2008: ad serving and mobile. What good timing for Google, given its DoubleClick and Android investments!

Souders has already made a comittment to “improve the performance of ads” because he deems ad serving to be “the slowest part” of a users’ Web experience. Souders wants to make sure “people don’t hate ads.”

How about mobile? How about “YSlow for mobile”? Souders believes the performance field is but at “the tip of the iceberg” and is keen on evangelizing faster mobile performance.

In 2008, Souders will have ample opportunity to make the world better for ad serving and mobile surfing, thank’s to Google’s (soon to be?) DoubleClick and Android.

Google, itself, however, has some some big challenges of its own coming up. SEE: Why Google Worship is a BAD Call in 2008

Google Knol: The End of Google.com, NOT Wikipedia and
2008 Social Media Warning: Beware Google AND Facebook and
Browser Flack: Will Google Ever Escape Microsoft Rule? and
There Is NO Google Apps Love in the Enterprise and
Lost On Google Maps! What Merry Christmas? and
Google Warning: How GOOG 411 Tricks Consumers and
Google Zeitgeist: $200 University Payola AdWords Scam and
How Google AdSense FAILS Better Business Bureau and
Google AdWords Plus Box: Local CPC Bidding War Unleashed! 

CONTACT DONNA BOGATIN

I had the pleasure of helping close the Kelsey Group Interactive Local Media Conference 2007 today in Los Angeles, participating in the final panel wrap-up and big picture local advertising opportunity analysis, along with Kevin Heisler, Executive Editor, Search Engine Watch.

Conference producer Peter Krasilovsky asked me to do a high-level overview of conference themes presented and key takeaways. The theme of my presentation: SMEs hold the keys to local’s future.

In the “National Advertisers Going Local Panel,“ Shawn Riegsecker, CEO, Centro, said the big local opportunity is still years away. I agree and believe SMEs are the current big stumbling blocks, for three principal reasons: SME Adoption Rates, SME Control Issues and SME Market Confusion.

SME ADOPTION RATES

The industry looks at the local opportunity glass as half full rather than as half empty. Conventional wisdom is that online local ad spend growth will inevitably catch up to online local media consumption. There are two fundamental flaws with that assumption however:

1) The majority of local merchants do no advertising whatsoever in any medium, online or off, and will continue to remain happily advertising-free.2) Getting SMEs online–one way or another–does not mean that they will stay online.

Matt Van Wagner of FindMeFaster shared case studies of his local search campaigns for small businesses which he described as “miserable failures.“ MerchantCircle claims it has more SMEs online than anyone else, 300,000. It also says it has contacted every single SME in the U.S., about 15 million. MerchantCircle then has a 2% conversion rate, and many accounts are not active.