Digital Media

Microsoft CEO Steve Ballmer once again publicly declared his interest in a Yahoo search deal, during a keynote speech at the 2009 Media Summit in New York.

And as with his past declarations of interest, Yahoo's stock responded. Yahoo climbed 4.84 percent to $14.07 a share in early morning trading.

Ballmer, according to a post in AllThingsD, had this to say about Yahoo and new CEO Carol Bartz:

I'm sure when it's appropriate, we'll have a chance to sit down and talk.

...Whether a deal gets done or not, who knows.

...There are a lot of things that are fairly compelling economically in trying to put our two search efforts together in a partnership.

AllThingsD points out as well that Bartz is also in New York this week.

Yahoo CEO Carol Bartz has one word for investors attempting to gather any information floating in the wind about whether Yahoo will, or won't, do a deal with Microsoft: chill.

Bartz, speaking Tuesday in San Francisco at her first investor conference since taking the helm as Yahoo CEO more than six weeks ago, relayed the same message she conveyed to Microsoft CEO Steve Ballmer.

"I said this to Mr. Ballmer, I will not negotiate with you and 30,000 of my closest friends. I will negotiate privately," said Bartz, adding to investors, "If something happens, you will know about it then." She made her remarks, which were available via audiocast, at the Morgan Stanley Technology Conference.

Regardless of any potential Microsoft deal, Bartz was adamant that Yahoo needs to retain access to its search data, because it is key to knowing what its users' intent is when conducting searches. That information assists Yahoo in delivering relevant ads to users, who would then potentially have a greater reason to click on the ad, which would result in a payment to Yahoo from the advertiser.

She noted that Yahoo's top 200 advertisers are looking for the Internet search pioneer to provide a combined one-stop shop of both paid performance ads and display ads.

Bartz added that in delivering the content that users seek, the traffic to Yahoo's sites will grow and advertisers will follow.

Mail is one area she is particularly excited about and noted that the company is gearing up to release a new version of its service.

"We have a billion e-mails passing through our servers every day. Mail is really important to us and that is why I'm excited about a new mail service," Bartz said.

But one area that Yahoo has held back on investing in extensively is Yahoo Maps. Although there is a maps feature on the site, it pales in comparison to the street views and satellite views found on Google.

Noted Bartz: "I don't use Yahoo Maps. I use Google Maps."

Whether Yahoo maps will be a feature Yahoo retains has yet to be seen. There is Yahoo's Wall of Shame, after all. Yahoo products that the company is contemplating fixing or ditching find their way to the wall.

Yahoo's tab in its efforts to fight off Microsoft last year ran $79 million, according to the company's filing Friday with the Securities and Exchange Commission.

Yahoo spent much of that bill on outside advisers who helped it weigh , which ranged from a total buyout bid for $33 a share to an eventual offer to acquire only Yahoo's search business. Yahoo rejected all of Microsoft's proposals.

Part of the $79 million bill was also attributed to hiring outside advisers for fighting off a proxy contest by activist shareholder Carl Icahn, who eventually settled with the company and received three seats on Yahoo's board.

A portion of the bill also went to Yahoo's outside advisers considering its controversial search agreement with Google, which ultimately ended with the companies walking away from the deal when federal antitrust regulators said it would challenge the deal.

For Yahoo, however, the true cost was much greater than just $79 million.

In the process, Yahoo founder and CEO Jerry Yang stepped down after enduring the brunt of shareholder anger and has since resumed his role as chief Yahoo. Sue Decker, who was Yahoo's president during the tumultuous year, lost out her bid to become the next CEO when Yahoo's board named former Autodesk chief Carol Bartz to oversee the troubled Internet company. And Yahoo saw an exodus of executives in June 2008.

When Yahoo's new CEO Carol Bartz met with company Chief Financial Officer Blake Jorgensen nearly two weeks ago, she delivered him a pink slip, sources said.

And while Bartz has not given any indications of a front-runner CFO replacement, the expectation is it will be a candidate from the outside and, hopefully, soon, said sources familiar with Yahoo's thinking.

"The CFO position will be her decision to make, not the board's. She'll have an opportunity to build her own management team," said one source.

Microsoft, meanwhile, does not expect Yahoo's CFO search, nor the time it will take for a new CFO to become familiar with the company, to slow down any potential of landing a search deal with the Internet pioneer, said one high-level Microsoft source.

After all, in the last go-around when Microsoft announced its , it was Yahoo's treasurer who was actively engaged in day-to-day discussions, not Jorgensen or Yahoo's then-president, Sue Decker, said the source.

"I thought it was a little out of the ordinary, but not unheard of," said the source, adding, "Yahoo's treasurer was the one who had their hands all around Yahoo's business and their numbers."

Such an arrangement made sense, noted another source, given Jorgensen, who , was there for only seven months when Microsoft made an unsolicited offer to buy the company.

Yahoo's treasurer is part of the corporate finance team that Decker created when she was Yahoo's CFO. The corporate finance team, as with other large companies, is responsible for building financial models to assess valuations and methods of payment for deals and mergers and acquisitions, which Yahoo's corporate business development team may consider, the source said.

As a result, whether Yahoo has a new CFO in place, the company can still move forward in vetting any deal that Microsoft may want to put forward. The treasurer, Ron Will, is still in place, despite the restructuring announced Thursday, a company spokesman said.

It makes sense that Bartz would look at swapping out Jorgensen for someone who she will self-select, said Umesh Ramakrishnan, vice chairman of executive search firm CTPartners.

"Given the fact that Yahoo continues to be under pressure from Microsoft, it shows that the financial aspects of Yahoo are just as important as the products," Ramakrishnan said.

Although Microsoft is interested in a search deal with Yahoo, the two companies are not engaged in any active conversations, said the Microsoft source.

"If an effort is accelerated to engage in talks, it will be because of the CEO, not the CFO," the source added.

Microsoft's CEO Steve Ballmer reiterated his interest in landing a search deal with Yahoo during a midyear strategic update with analysts Tuesday, according to a CNBC report.

But while Ballmer is apparently willing to re-engage in a dialogue with Yahoo regarding a potential search deal, the software giant has been "rebuffed and ignored" by Yahoo's new CEO, Carol Bartz, on any overtures it has made to initiate discussions, said a CNBC reporter, citing anonymous sources.

Yahoo was up 5 percent to $12.57 a share in pre-market trading.

Yahoo, meanwhile, apparently is operating without a top M&A executive, following the departure of Gerald Horkan, the company's senior vice president of corporate strategy, according to a report in The Wall Street Journal.

Horkan, who spent most of last year as Yahoo's dealmaker in Microsoft's failed bid to acquire the search company for as much as $33 a share, left Yahoo a few weeks ago and has not been replaced, the Journal reports.

Update January 8 at 12:44 p.m. PST: Added Yahoo's response.

A group of investors are reportedly putting together a buyout deal for Yahoo, which would call for Microsoft's financial backing, according to a report in TechCrunch.

Such an arrangement would call for the investment group to pay a premium of approximately 20 percent to Yahoo's current share price, which closed Wednesday at $13 a share, for the entire company.

The investment group would take Yahoo, which would have a $20 billion market cap under those terms, and simultaneously sell its search and marketing business to Microsoft under its previous terms presented in June, according to the report.

The software giant would not only buy these businesses from the investment group, but also provide much of the upfront financing the investors group would need to make the initial purchase. Microsoft would treat the funding as a loan to the investment group, which in turn would provide a fixed payment based on Yahoo's future cash flow, according to TechCrunch.

The report notes, however, that Microsoft has yet to agree to such a proposal.

Yahoo declined to comment on speculation about the deal.

Yahoo has sold its European comparison-shopping site Kelkoo to private-equity investors, according to a TechCrunch report.

Yahoo, which acquired Kelkoo for approximately 475 million euros ($579 million) four years ago, reportedly sold its wholly owned subsidiary for less than 100 million euros to U.K. private-equity firm Jamplant this holiday shopping season.

In a copy of an e-mail obtained by TechCrunch, Glen Drury, Kelkoo's managing director for the United Kingdom, had this to say about the organization's sale and rumors about its future. The "Toby" he mentions is apparently Toby Coppel, who heads up Europe for Yahoo, and "Laila," who co-signed the letter, is apparently Kelkoo's Laila Dahlen:

It has been since summer since I gave you update e-mail. I have waited because there are so many things nearing launch that I thought it best to wait till they had happened to give the update.

Firstly, I would like to end the speculation from the last few months about the future of Kelkoo. Both Toby and I have announced that we were exploring strategic options for the business. One of the options that Laila and I were exploring, in fact pushing for, was to find it a new home for Kelkoo. I am pleased to announce, today, that we have done just that!

The new owners of Kelkoo are a U.K.-based private-equity company called Jamplant, funded by several angel investors, and in their own words: "Jamplant Limited is very excited about the price comparison space, and being able to help Kelkoo continue its rapid growth.

Philip Smyth, chairman of Jamplant, believes that with our backing, Kelkoo should be able to accelerate its growth much faster as a standalone company. We are looking forward to working with the highly experienced and established management team at Kelkoo."

Laila and I are also very excited about this new phase in the history of Kelkoo, accelerating the growth strategies we have put in place over the last year, and exploring new opportunities for all of us.

One after another, venture capitalists are stating the obvious to the companies they've invested in: Now would be a very good time to keep your money under lock and key.

From Sequoia Capital, which has had parts of its dire economic presentation to its portfolio companies aired out in the press, as reported in VentureBeat and GigaOm, to angel investor Ron Conway in his letter to his portfolio companies, the message is clear and persistent: prepare for the worst.

M&A and IPOs Worldwide and Tech

(Credit: Thomson Reuters)

And that preparation, as Conway noted in his letter to portfolio companies, includes cutting marketing costs, general and administrative expenses and, yes, even layoffs if need be. Sequoia was a bit more dramatic in its message, reportedly using a tombstone with the engraved words "R.I.P. Good Times."

Faced with a tightening credit market and the markets in a virtual meltdown, the VCs that fund these start-ups are busy dishing out sage advice--and companies are taking it to heart much earlier in the game compared with the Internet bubble of 2000.

And for later-stage companies, the M&A route is virtually the only game in town. The IPO scene, in this bearish market, has virtually shut down, with only 44 tech initial public offerings out the door so far this year, compared with 215 deals last year, according to Thomson Reuters.

Start-ups that are fortunate to land another financing round should expect smaller rounds and ones with lower valuations for their company.

And while most tech companies are capital efficient, meaning they need little money to fund their operations, the hot investment area of "green tech" is not as fortunate, noted one venture capitalist.

"One area that is very affected and needs large sums of capital to take off is the novel energy ideas like solar, biofuels, and large-scale energy projects," noted venture capitalist Geoff Yang of Redpoint Ventures.

He added that businesses that plan to rely on the credit markets and finance markets to make their business models work are the ones that are at greatest risk in this current economic climate.

Click here for ongoing coverage from CNET News, 'Tough times for tech'

Autobytel is reducing its workforce by 35 percent and exploring a potential sale.

The online auto-marketer said Friday it has cut 75 positions and has hired RBC Capital Markets to explore strategic alternatives.

The company, which offers marketing services such as listing new and used cars for sale from dealers and manufacturers, has been struggling to reduce its cost structure and beef up revenue. Last year, Autobytel began a companywide cost-cutting program.

"While it is never easy to make a change of this magnitude, we believe our actions are necessary to bring the company more closely in line with our goals of reaching cash flow breakeven and achieving profitability," Jim Riesenbach, Autobytel's CEO, said in a statement.

Autobytel was up 6 percent in early morning trading to $1.06 a share.

Despite the recent turn of events, Autobytel has been one of the few online auto players to survive the dot-com meltdown at the start of the decade. In 2001, for example, the company acquired its former rival Autoweb for $15.6 million.

But advertising revenue has been dropping off. In the second quarter, the company reported revenue of about $19 million, down from $21.6 million a year ago.