Today, Google has begun testing a new look for Search Options. This offers more visual approach to this sidebar, including colors and graphics (oh my). As you can see in the screenshot, “Everything” (regular Google results), “News,” and “Blogs” are a few of the newly visual tabs. There is also a “More” area that shows other things like “Maps.”

Yes, these look quite a bit more like Yahoo search results.

But the most significant thing about this new look may be that it’s showing up as the default view for those seeing this test. Yes, it’s no longer as just an expandable option. Could this be the future of Google Search?

[thanks Kevin]

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Before there was an iPhone, Android and App Store, there was Yahoo! Go. Launched in 2006, Yahoo! Go was an application offered news, mail, weather, traffic, and Yahoo! search from a mobile device. Today, Yahoo is announcing that Yahoo! Go will be shutdown on January 12, 2010.

The app seemed to be ahead of it’s time when it launched but now is useless thanks to Yahoo creating prettier, more powerful, personal content-focused apps that specialize in products, such as Flickr, Yahoo Finance and Yahoo Messenger. Yahoo released three versions of Yahoo! Go but hasn’t released a new version in the past year. The last iteration of the app included a mobile widget platform and was available on select Nokia and Windows Mobile devices

The reasoning behind shutting down Go is simple, says Yahoo. As Yahoo unrolls individual apps in verticals and boosts its mobile site, Go was becoming obsolete. The team that was working on Go! will now be relocated to working on the mobile site product and various apps. Yahoo recently launched mobile apps for Flickr, and Yahoo Finance.

Earlier this year, Yahoo announced a revamped Yahoo Mobile, and rolled it out in April with a new iPhone app and browser support for more than 300 devices. Now Yahoo!’s mobile homepage is now available across more than 1,900 mobile devices in 32 countries. Yahoo Mobile combines mobile search, your email, IM, and social messaging streams, and personalized Yahoo content such as news, sports, stocks, and RSS feeds, which basically replaces Go.

Below is the email that will be sent to Yahoo Go users tomorrow:

Dear Yahoo! Go user,

Yahoo! Go will be discontinued on January 12, 2010, at 12:00 a.m. PST, so that we may focus on simplifying and enhancing your future mobile Web experiences. After this date, you will no longer be able to use Yahoo! Go 2.0 or 3.0 from your mobile phone.

We encourage you to visit the new mobile homepage from your mobile browser to access an even richer, more personalized Yahoo! experience.

We appreciate your support and thank you for using Yahoo! Mobile services.

For more information and customer support, please visit the help center from your PC.

The Yahoo! Mobile team

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Remember all that talk about Bing starting to fizzle in September? Well it didn’t happen, and now October numbers and Bing gained another half a point to reach 9.9 percent market share of U.S. searches, according to comScore’s qSearch service. Five months after launch, Bing has steadily gained two points of market share.

And it is keeping the pressure on, with deals to index realtime data streams from both Twitter and Facebook (Google also has a deal with Twitter, but not Facebook), a deal with Wolfram Alpha for nutrition and diet data, and the constant rollout of new features such as better video search.

The biggest loser in the search wars, however, continues to be Yahoo as it awaits approval to hand over search to Bing.  In a single month, Yahoo’s U.S. search share dropped 0.8 percent to 18 percent, and is down 3 percent since the beginning of the year.  Meanwhile, Google seems unfazed, gaining another half point itself in October to finish with 65.4 percent share.

Bing’s progress is encouraging (someone needs to compete with Google in search), but so far all Bing has shown is that it can take share away from its future partner Yahoo. Bing has yet to put a ding in Google’s share.  Perhaps it needs to do something radical, like cut deals with major news and media sites for exclusive rights to index their content.  Otherwise it will just keep eating away at Yahoo’s slice of pie, which it’s already been promised anyway.

U.S. Core Search Share, September 2009 (Source: comScore qSearch)

(Table below via JPMorgan analyst Imran Khan. Click to enlarge.)

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Yahoo hasn’t exactly seemed like the ideal place to work over the past couple of years. Besides just the Microsoft acquisition offer distraction (and subsequent search deal), and the CEO shuffle, the company has lost much of its sterling polish that it once had during the dot-com era. But what’s even more odd is that Raffel has worked at Yahoo before. It’s where he made a name for himself by helping to create Yahoo Pipes, the popular content mashup tool. But a few years ago, Raffel took off to work at Pioneers of the Inevitable, where he helped make Songbird, the open source desktop music player.

So why’d he come back to Yahoo at a time when others were pursuing him? It’s hard to say for sure, but one source believes Yahoo paid a significant amount of money to lure him back. Another source believes he was promised more resources and an easier time rising up the ladder than if he went to Google. Still, Yahoo over Google is not a choice that a lot of people seem to make these days. And one source is sure that Bradley Horowitz, a former Yahoo exec that is now at Google, would have obviously wanted to bring Raffel on board, and was likely pushing for it.

There’s another reason he may have went with Yahoo. Since returning in late August, Raffel has been serving as a senior product manager under Cody Simms, the senior director of product management for Yahoo Open Source (Y!OS), we hear. He’s apparently working on mainly off-network projects such as making the Yahoo authentication platform more seamless. That might not sound sexy, but the bigger picture may be involve Yahoo building out its own platform product to better connect Yahoo with the rest of the web. Yes, think Facebook Connect, Google Friend Connect, and the like. The chance to get into this hot space and play a critical role in building a “Yahoo Connect,” may have also enticed Raffel to come back, but that’s pure speculation at this point.

“He’s one of those rare product guys who is technical and can actually build stuff,” says one our sources. We’ll be watching what he’s building for Yahoo the second time around.

We’ve reached out to Raffel for comment, but have yet to hear back. We’ll update if we do.

[photo: flickr/sektordua]

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After two straight quarters of annual declines (aka, the Great Ad Recession of 2009), it looks like online advertising revenues stabilized in the third quarter. The combined online advertising revenues of Google, Yahoo, Microsoft, and AOL rose 1.2 percent to $8 billion. While the online advertising industry is not out of the woods yet, it might be stabilizing.

At least it is for Google, which was the only one of the four horsemen of Internet advertising to see its ad revenues rise in the quarter (up roughly $400 million from both last quarter and last year). Yahoo, AOL, and Microsoft were all down on both a sequential and annual basis. (All the individual company figures are in the table below).  Google benefits more from search advertising and is less exposed to display. The question now is whether display advertising will follow the recovery already being experienced by search advertising.

Since these four companies account for such a large portion of total Internet advertising, looking at their combined advertising revenue numbers serves as a good indicator of the health of the overall online advertising industry.  I like to keep track of the combined total every quarter

These numbers represent global advertising revenues, and include network revenues paid to affiliates through AdSense and Yahoo’s ad network. Google’s licensing revenues for Google Enterprise Apps have been stripped out. For Microsoft and AOL, I include only the advertising portions of their online revenues as reported in their quarterly earnings statements.  Microsoft restated revenues for its online division last quarter, largely due to the divestiture of Razorfish, so the overall numbers changed a bit from previous posts.

Below is a table with all the numbers:

Online Advertising Revenues (in millions)

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It appears that both Yahoo and Microsoft are duking it out to help power the technology for India’s Unique Identification project. Spearheaded by Indian tech czar and Infosys co-chairman Nanden Nilekani, the project aims to assign every Indian citizen with a unique identification number that will identify him or her, similar to a U.S. social security number.

This is no small task considering India’s population of 1.2 billion citizens. It will involve a powerful technology to assign the numbers and a vast database to organize each unique ID. That’s where Microsoft and Yahoo come in.

Earlier this year, Microsoft chairman Bill Gates expressed a strong interest in participating in the project, meeting Nilekani and assuring him that Microsoft would be able to assign the IDs swiftly.

This week Yahoo CEO Carol Bartz lobbied India’s Prime Minister Manmohan Singh to use Yahoo for the project, but Bartz says that there’s no commercial interest in the deal and Yahoo would help power the project on a non-profit basis. Bartz added that Yahoo would be the optimal choice because Yahoo has a major presence in India. The company claims that three out of four Indians access the Internet through Yahoo.

While Yahoo is vastly popular in India thanks to sites like Yahoo Cricket that appeal to the population, its hold may be slipping. Gmail recently overtook Yahoo Mail as the most trafficked email site and Yahoo was forced to shut down its Indian social network SpotM a few months ago, as Google’s Orkut and Facebook emerge as the dominant social networks in India.

It’s unclear if Microsoft has the same “non-profit” stance as Yahoo, but obviously both companies want a piece of a highly ambitious project that could be implemented in other emerging countries. And it looks like IBM is also throwing its hat into the ring as well, so it should be interesting to see which tech giant wins out.

Photo credit/Flickr/Voobie

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The latest person to jump ship is Utkarsh Srivastava, who has resigned from his position as Senior Research Scientist at Yahoo! Research to join micro-sharing sensation Twitter. Louis Gray caught wind of the new hire at Twitter early, keeping tabs on the company’s own Twitter list of employees.

Now Srivastava has confirmed the news by means of, evidently, a tweet.

Srivastava, a Ph.D graduate in Computer Science from Stanford University, did brief research stints at Microsoft and IBM before joining the Yahoo! Research team now more than 3 years ago.

During his tenure at the Internet giant, he became one of the original designers and developers of Pig, a high-level language for data processing over Hadoop. He is also one of the lead architects and developers of PNUTS, Yahoo!’s internal large-scale key-value store.

Like Gray said, a ton of data flows in and out of Twitter on a daily basis, and it’s precisely that gigantic data set that gives Twitter a competitive advantage and turns it into a potential moneymaker (it’s what interests investors so much). Hence, it makes all the sense in the world for the company to recruit data management specialists, although it’s not clear if Srivastava was hired to streamline current Twitter projects or rather to develop new ones.

Time will tell, 140 characters at a time.

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PHP was developed further and commercialized by Zend, but Lerdorf has maintained an ongoing involvement with the open source project. Lerdorf has worked at a number of companies since first developing PHP, but has spent a large part of his professional career with Yahoo and he had a strong association with the company. Lerdorf is one of a number of star engineers and developers who have left Yahoo in recent times, and the stable of notable and high-profile engineers at the company has whittled out.

Lerdorf has been more recently noted for his blog posts, such as his outline on his philosophy to developing PHP applications: The no-framework PHP framework.

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Turns out Ojjeh is actually no longer senior vice president and head of Yahoo!’s strategic data solutions group. The man apparently left the company a few weeks ago but hadn’t yet found the time to change his LinkedIn profile.

Bassel Ojjeh started his career in the software business as developer and later senior manager of Fox Software, which merged with Microsoft in 1992. Ojjeh stayed with the company for another 8 years and went on to co-found digiMine, which later morphed into Revenue Science and changed names again some time after to finally settle for AudienceScience (for now).

Ojjeh was one of the co-founders of data mining and warehousing solutions provider DMX Group, a company that was acquired by Yahoo in August 2004.

He became senior vice president and head of the new business unit (strategic data solutions group or SDS group), whose team members were responsible for combing through the dozens terabytes of data that Yahoo users generate on a daily basis by clicking links, weeding out the relevant bits, compressing and storing it.

Ojjeh told me he’ll be engaging in a couple more angel investments in the USA and the Middle East, and that he’s currently already set to start a new company.

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Last week Google launched the Music Onebox — a special new music search product that lets users stream songs in their entirety for free. Today, Yahoo Video is answering by improving its music video search offering. When you search for a song or artists, Yahoo will extract music videos of the most popular songs and albums for that artists or band. It appears that most of the songs are pulled from YouTube, Last.fm and other music sites.

So a search for U2 on Yahoo Video will show a list of the band’s albums, such as The Joshua Tree, and the music videos for popular songs, such as “Beautiful Day.” When you click on an album, you’ll see the music videos for all of the songs on the album. If you click on an album or song, it will show videos for the album or song in an overlay page.

Yahoo also recently made a similar upgrade to its image search, when it rolled out a travel image refiner.

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With 600 million unique visits per month, Yahoo sees a large amount of traffic to its sites. In order to maintain sites in the cloud, Yahoo uses Traffic Server, a piece of software initially acquired via Inktomi, to support this massive amount of traffic.

Tomorrow, Yahoo will be debuting an open source version of Traffic Server. The code is available through the Incubator project at the Apache Software Foundation.

Traffic Server enables the session management, authentication, configuration management, load balancing, and routing for an entire cloud computing stack. Yahoo says that with the open source version of Traffic Server, organizations can benefit from access to cached online content. In addition, Traffic Server enables faster responses to requests for stored Web objects, such as files, news articles or images.

The company’s global network of data centers allows Traffic Server to choose the closest servers to store and access cached content for increased speed. Traffic Server is capable of handling more than 30,000 requests per second per server and it currently serves more than 400 terabytes of data per day.

Yahoo is also announcing an update to the Yahoo Distribution of Hadoop which is now deployed extensively in Yahoo data centers worldwide. These include new features and bug fixes that continue to improve robustness, security, performance, and operability of Hadoop for ongoing large scale deployments.

Yahoo says that opening of code for Traffic Server and the distribution of Hadoop reinforces the technology company’s commitment to open source technologies. Yahoo has been the primary developer and investor to Apache’s Hadoop. In 2006, Hadoop founder Doug Cutting joined Yahoo to lead the project of developing the open-source software. Hadoop now provides the framework for many Yahoo properties including Yahoo Search, Yahoo Mail, and several content and ad services.

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At today’s Yahoo analyst event, Yahoo exec Bryan Lamkin shed some light on the company’s recent status update numbers. Yahoo launched its “status-casting” feature a few months ago, which added basic status updates to its Mail and Messenger products. In both Yahoo Mail and Messenger 10, you can update your status and all of your contacts who also use either of those two products can see your updates.

Today, Lamkin says that Yahoo is seeing 800 million status message updates per month through this new feature. AIM has been doing this for sometime now, so Yahoo’s status update feature isn’t new but the quantity of updates is certainly something worth noting. The integration of these status updates into mail and IM represents the merging of private and public messaging.

Lamkin also mentioned a few other noteworthy stats, some of which have been reported before. Yahoo mail alone drives 100 billion messages a month while Flickr users have uploaded more than 4 billion photos, growing at a rate of 100 million per month a month. Of those 4 billion photos, 130 million have been geotagged. Lamkin says that “Yahoo Mail delivers more photos in a week via the inbox than those that get uploaded to Facebook in one month.”

Yahoo Answers sees 30 million questions and answers per month, with users contributing 2.4 questions and answers per second. And there are currently 120 million members in Yahoo Groups across 10 million defined groups and activities. Plus, there are 15 billion messages sent every month across Yahoo Groups, showing the platform to be a place for massive communications.

While these numbers are certainly impressive, many of the status updates and photos are still locked inside Yahoo Mail. All of those photos, for instance are being shared on a one-to-one basis instead of a one-to-many, as is the case with other social media platforms. But the status updates are certainly an important new stream of data for Yahoo.

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Remember when Yahoo started to roll out its new homepage last summer? It’s been live for all users for about three months now, and today Yahoo’s annual Analyst Day, senior vice president Tapan Bhat gave an overview of how the redesigned homepage is performing. In the past three months, pageviews are up 9 percent, and time spent on the homepage is up 20 percent.

The whole focus of the redesign, and across Yahoo in general, says Bhat is to increase what he calls PageYield. The yield of a page on Yahoo is measure of how engaged consumers are with that page. (As opposed to PageRank, which is how Google scores pages on the Web in its search results). PageYield is a measure of how much time is spent on each Yahoo page and how many pageviews it gets, but also how much downstream traffic the page generates, and how often people come back.

Some of the big drivers of user engagement come from the ability to customize the homepage by adding applications and feeds from anywhere on the Web into the My Favorites column on the left-hand side. According to Yahoo consumer surveys, 75 percent of users love the applications area and 40 percent are using between 6 to 11 apps. Usage of that feature is up 8 percent over the past three months.

The other success story is the “Today” module on the homepage which targets news and other information to each user. Clickthrough rates on those stories are up a whopping 76 percent.

Simplifying the page has made it less cluttered and increased engagement with what’s left, which makes sense. The frontpage ad is also benefiting, seeing a 10 percent increase in clickthroughs since the redesign launched. Simpler is better. But Yahoo is still seeing a financial impact from reducing the number of total ads on that page.

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There isn’t much more to say about this right now. We’ve reached out to both Yahoo and OneRiot for comment and await their reply. The look of the Yahoo search results may look similar to the OneRiot/WebMynd Firefox plugin that adds real time results to the side of normal Google search results – it certainly makes sense to keep the results separated. See image below.

OneRiot has raised $27 million to date in venture capital.

Update: Yahoo’s response: “We can’t comment on rumor or speculation. Real-time search is important and we’re currently conducting several tests designed to discover if showing such content is useful to people using Yahoo! Search. Yahoo! is focused on creating the most innovative, easy-to-use and valuable search experience for people, and after these tests we will carefully evaluate whether we should integrate such results for everyone using Yahoo! Search.”

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It appears that Yahoo Mail is suffering from an outage. Complaints from Yahoo Mail users are all over Twitter. It’s unclear how extensive the outage is and what is causing the issue but we’ll report back when we find out.

Yahoo Mail is currently the No. 1 Web mail service with 300 million people using it worldwide, so even a smaller outage could result in a large amount of people not having access to their email accounts. Competitor Gmail also succumbed to a serious outage recently, leaving users with nearly eight hours of downtime.

Update: It appears that the outage isn’t system-wide but users are still complaining of the service being down. Coincidentally, Yahoo is shutting down Geocities today so perhaps they pulled the wrong plug?

Update 2: Yahoo posted this update on the Yahoo mail blog:

A small fraction of Yahoo! Mail users may have experienced intermittent email issues earlier today, October 26, but the problem has now been resolved. We believe this was an isolated incident. We apologize for any inconvenience this may have caused.

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It’s a very interesting idea, to say the least, and obviously you’re interested in it, as about 200 of you commented on it yesterday. So we’ve obtained Parker’s full slide deck from his presentation. Find the full presentation embedded below, definitely worth the read.

SP_Web2.0_FINAL_AsGiven

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Billionaire investor Carl Icahn is resigning from Yahoo’s board of directors. According to MarketWatch, he said “there was not a need at this time for an activist investor” at Yahoo anymore and that he’d rather focus on other companies. The subtext there being that either A) he feels that his work is done and he can move on now that the search deal with Microsoft is moving towards government approval, or B) he can make more money by trying to control some other company.

Icahn wrestled his way onto Yahoo’s board last year when Jerry Yang was still CEO. Initially, he wanted to try to revive Microsoft’s interest in acquiring Yahoo outright, but when it became clear Microsoft didn’t want to do that deal anymore, he supported the search deal as the best way to move forward.

It’s hard to determine whether Icahn is throwing in the towel on Bartz or this is actually a vote of confidence. If he really believes in where Bartz can take the company after the search deal is done, then you’d think he’d keep his board seat to have a stronger influence on the company’s direction. But Icahn has always been a transaction-oriented investor. He tries to push companies to do things that will move the stock in a big way, and then he takes his profits and he leaves.

More likely than not, Icahn doesn’t see another big shift he can push the company to take that will affect the stock in any major way. And with the stock price moving in the right direction, he probably doesn’t see the need to keep shaking the boat. It is much easier for him to just keep selling his shares (he sold almost $180 million worth in August alone) and move on. With the stock trading at $17, some of Icahn’s shares are still underwater, but he also bought a bunch at $10 last November. At this point, he’ll probably be happy just to get all of his initial investment back, which he is still far from doing.

(Photo by Sam Lustgarten)

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Its new “People In Photos” feature is long overdue. With it, you’ll be able to select a picture and start typing a person’s name, which will then scan your Flickr contacts to see who it should add as a tag to the picture. And like Facebook, you’ll be able to draw an outline around someone’s face to show exactly who they are in the picture.

But the reason this feature is even better than Facebook’s functionality is the opt-out and opt-in options. While most users love the people tagging for photos in Facebook, just about everyone wishes there were more options that allow you to opt-out of being tagged in certain photos. You can untag yourself, or block people from tagging you, but there isn’t a good case-by-case method of doing this.

Flickr is offering that by allowing you to opt-out of being tagged in individual photos. And once you opt-out, unlike Facebook, no one can put you back into that photo. You can also set who is able to tag you in photos. And you can set who is able to tag people in photos that you shared.

The stength Facebook has over Flickr is that you probably have many more contacts, or at the very least, actual friends on Facebook. Because Flickr relies on your Flickr contact list, it probably won’t be as useful as Facebook’s, at least at first. But this is a great incentive to get you adding more contacts on Flickr, and encouraging your friends to sign up.

Users have long been working around Flickr’s lag of people photo tagging by doing it manually in the tag section of pictures. Now it’s getting a whole lot better. Undoubtedly, some users will hate this feature, but they can opt-out entirely from being tagged.

When you’re tagged in a photo, it will show up in your recent activity stream. And Flickr has revamped users’ profiles to show pictures you’re tagged in.

[photo: flickr/spuz]

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Scott Dietzen joined Yahoo with the acquisition of open source email startup Zimbra, where he was President and CTO. Dietzen went on to replace Brad Garlinghouse, Yahoo’s former SVP of Communications & Communities, when he left the company in June 2008. He reported to Bryan Lamkin, the SVP of Applications who oversees the global strategy, development and performance for the products cited above.

Before Zimbra, the TechFellow Award winner was CTO of BEA Systems (now an Oracle company) where he was the principal architect of the technology strategy for the WebLogic product family.

So what’s next for him? Well for one thing he will be joining the Board of Directors of rPath, a venture-backed startup that develops solutions companies can use to automate application deployment and maintenance across physical, virtual and cloud environments. The company has posted a Q&A with Dietzen on its website which confirms the rumors of him having left Yahoo.

In the interview, Dietzen says he’s not thinking about what’s next yet, and that he considers himself to be on an open-ended sabbatical for now. He says he wants to ‘disconnect’ for a while to regain some work/life balance and spend more time with his family until he moves on to other things, which will most likely be a startup rather than a large corporation.

Another loss for Yahoo at the senior executive level, and a major one it is.

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Yahoo announced third quarter earnings today, showing net income more than tripling to $186 million, or $0.13 a share, nearly double analysts estimates of $0.07 a share.

This was definitely a financial achievement for Yahoo CEO Carol Bartz, but it was done almost entirely through cost cutting. Total operating expenses of $775 million was pared down by $169 million from a year ago. In comparison, net income rose $130 million from a year ago.

What investors really want to see is revenues go up again. Unfortunately, Yahoo’s total revenue was down 12 percent from last year to $1.6 billion. And revenues minus traffic acquisition costs (the money Yahoo shares with advertising partners) declined 14 percent to $1.1 billion. On the bright side, revenue were flat with the second quarter by both measures. On the conference call, Yahoo is characterizing revenues as “stabilizing.”

Yahoo’s advertising business was down on all counts. Search revenues declined 19 percent annually to $354 million. Display revenues were down 8 percent to $399 million from last year(but at least that was $6 million more than last quarter). And affiliate revenues were down 6 percent to $526 million

Below are my notes from the conference call Q&A:

Q; display, RPS [revenue per search]?

Tim Morse, CFO: $15M impact from ad quality, overall display grew, guaranteed side grew relatively strongly, things are starting to loosen up, ad dollars are starting to flow a little bit better.

In terms of results in search, tough to compare to Google, I’ve got to focus on Yahoo and what we . this quarter only down 1%. That feels to us like stabilization. RPS only being down slightly. Year over year queries grew double digit

Q: Impact of changed relationship with eBay

Time Morse, CFO: Extremely small.

Q: seeing TAC rates go up, do you have to guarantee more to keep that business intact?

Tim Morse, CFO: our focus is definitely on owned and operated. There is make whole provision for affiliates who leave to MSFT, there is no make whole provision if they go to another competitor. We do have to pay more. MSFT monetizes better. No question.

Q: Q on display, year over year trends, what needs to happen for it to get back on its feet

Morse: I think we are in a good position. We saw better yields this quarter. Economy starting to loosen up a bit, and brand spending coming back.

Q: Gross margins were flat year over year. Do you feel gross margins in net revenue basis can be flat on sustainable basis.

Morse: There is something changing in Yahoo, getting your hands dirty, reducing costs any way you can, that is rewarded at Yahoo now.

Q: Any changes that you’ve made in terms of enabling more rich media ads, how are sell-through rates.

Morse: nothing out of the ordinary to improve quality of the home page. We relaunched it.

Q: looking at guidance, doesn’t look like you are looking for improvement on any line. Is it a lack of visibility or conservatism?

Morse: You’ve got $15M impact going to $25M impact on revenue initiatives, s a little bit of a revenue drag. But we anticipate a good strength in display business because of seasonality. Search also does well in Q4. Perhaps a drag in fantasy sports, since we reduced fees to improve the experience.

Q: pageviews?

Morse: We grew pageviews 5% year over year. Mail was a little more than that, homepage was double digits, upper teens. Sports doing well. tough comps with some verticals, closed some properties. last Q 7% up YoY, this Q 5% up.

Added 200 people to headcount.

Q: Performance of premium end of the market Vs. non-premium end? Yahoo’s exposure to each?

Morse: We talk about them as guaranteed placements and non guaranteed. Guaranteed was stronger than non-guaranteed for the second straight quarter.

Q: What % of users are on the new homepage? What is difference in terms of user experience? What will you talk about next week on Analyst Day?

Morse: We won’t be giving 2010 guidance. Home page we are up in pageviews, still opt-in. rolled out in 8 countries total. A lot of operational metrics we are still sorting through.

Q: Can uyou give us color on mobile monetization? Are you factoring affiliate losses into Q4 guidance?

Morse: On Mobile, you’ve hot on a focus for our future. Have some new iPhone apps, Flickr. On 19 devices. As that becomes more established, monetization will improve.

In terms of affiliate losses for 4Q, no I am not factoring that in. I am assuming rather neutral.

Q: How much of cost savings from MSFT deal will be headcount related?

Morse: $650M of GAAP improvement in GAAP expenses, $425M of cash costs, the majority of which are headcount related.

Q: looks like search query growth accelerated, but monetization didn’t. Why?

Morse: Look at this sequentially, queries were up a little bit, RPS was down just a little. Search was down 1% QoQ, but comparing to a tougher 3Q last year.

Q: Branding campaign. What was the thinking? Were you losing audience to competitors? What response have you seen, attracted users?

Morse: It is very, very early. Some very encouraging input and early stats. We definitely expect this to translate into more users over time. It really is about revitalizing the company. Refreshing how people think bout Yahoo externally and internally. And returning to a normal level of brand spending. Just getting back to where we ought to be. Using this not just as an external catalyst but an internal catalyst too, identifying who were are and where we want to go. Will be an ongoing part of our cost structure.

Q: We are hearing that Right Media is being de-emphasized.

Morse: That is incorrect.

Q: Updates to outsourcing non-core businesses like dating or Hotjobs?

Morse: We are not going to comment on acquisitions or divestitures that are in process. Look at Xoopit, we want great technology , great people behind that technology, getting into new markets. That is what our acquisition and divestiture group is constantly doing.

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As Microsoft and Yahoo await government approval of their pending deal to join their two search businesses at the hip, the two companies received an important endorsement today from the world’s top advertisers.

In a letter today from the American Association of Advertising Agencies, and signed by the CEOs of the Publicis Groupe, WPP, Interpublic, and Omnicom, the advertisers gave their full support to the deal, urging “the Department of Justice to bring its antitrust review to a speedy conclusion.” The letter notes that the deal would strengthen Microsoft’s and Yahoo’s search advertising offerings, and thus would be good for competition.

Advertising agencies are wary of being beholden to an evermore powerful Google, and thus want to foster alternatives which might act as a counterweight. Most industry watchers expect the deal to pass DOJ scrutiny.

Below is a copy of the letter sent by the AAAA:

AMERICAN ASSOCIATION of ADVERTISING AGENCIES

Nancy Hill
President
Chief Executive Officer

October 19, 2009

Advertising is the fuel that powers the Internet. Most websites depend on online advertising to survive – it’s what allows them to offer consumers free content and services.

A very important form of online advertising is search advertising – the sponsored links that appear when a search engine answers a query. A healthy, competitive market for search and search advertising is crucial to the Internet’s future.

We believe that Yahoo! and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers.

These benefits are too important to wait for. As leading members of the advertising and marketing services industry, we urge the Department of Justice to bring its antitrust review to a speedy conclusion. This proposal enhances competition, and should be allowed to take effect as soon as possible.

Sincerely,
Nancy Hill,
President & CEO

Maurice Levy,
Chairman and CEO, Publicis Groupe

Michael I. Roth,
Chairman and CEO, Interpublic Group of Companies

Martin Sorrell,
CEO, WPP
John Wren,
President & CEO, Omnicom Group

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Earlier this month, a couple reports came out suggesting that Bing’s search market share took a hit in September. Hitwise reported that Bing’s share of U.S. searches was down 5 percent (in absolute terms, it was a half-point drop to 8.9 percent share). StatCounter marked an even steeper 12 percent decline (or a full 1.1 percent drop to 8.5 percent share). The headlines followed. But now comScore says all of that’s bunk.

Tonight it released its qSearch market share numbers, which are widely followed on Wall Street, and they show no decline for Bing in September. According to comScore, Bing’s U.S. search market share remained steady at 9.4 percent in September, up from 9.3 percent in August. That is not blowing the doors off of anything, but it is at least holding its own.

Meanwhile, Google’s share went up 0.3 point from August, to 64.9 percent share. The biggest loser was Yahoo, which was down 0.5 percent in absolute terms to 18.8 percent share.  Since the beginning of the year, Yahoo is down 2.2 percentage points in share, while Google is up 1.9 percent and Bing/Microsoft is up 0.9 percentage point.

Bing still has its work cut out for it, but the shine isn’t gone just yet.  Here are the numbers:

U.S. Core Search Share, September 2009 (Source: comScore qSearch)

(Table below via JPMorgan analyst Imran Khan. Click to enlarge.)

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The lawsuit (PDF) alleges that customers contracted for targeted ad placements through two products, “Sponsored Search” and “Content Match” (and predecessor products provided by Overture and GoTo.com) and that Yahoo! breached its contract with its customers by allowing Yahoo! ads to be displayed in spyware, domain name parking sites (bulk registration sites), pop-ups, pop-unders and typosquatting sites. According to the message, which is reproduced on a dedicated website about the case, plaintiffs brought claims for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.

Interesting tidbits about the lawsuit:

During the course of the Action, Yahoo! has produced over 1.5 million pages of documents and hundreds of gigabytes of data. Yahoo! employees testified at deposition. The plaintiffs or class representatives did much of the same. Yahoo! has apparently entered into the proposed settlement to avoid further expense, inconvenience and the burden of drawn-out litigation.

In addition, the Sunnyvale company has agreed to launch a new filtering option for ads, and to make some other modifications to the way it handles disclosures and click fraud investigations:

Yahoo! has agreed to develop and offer a new ad placement option that will enable Yahoo! Ad customers to control where their Yahoo! Ads appear. The Ad Placement Option will allow Yahoo! Ad customers to specify that their Sponsored Search ads should be displayed only on websites and other Internet properties owned or operated by Yahoo!, and the websites of certain “Premium” distribution partners. According to the docs, Yahoo! has agreed to make best efforts to launch the Ad Placement Option as early as the first quarter of 2010, but in no event later than September 30, 2010. Yahoo! will maintain the Ad Placement Option for at least two years from the date of its launch.

Yahoo! will post enhanced disclosures on the “Traffic Quality” portion of its website about where Yahoo! Ads may appear on the Internet. These disclosures will provide information about the Ad Placement Option, including a link to a Yahoo! webpage with instructions for using the Ad Placement Option. The company will also modify its click investigation request tool to allow advertisers to ask questions or request investigations regarding certain Yahoo! advertising partners. Yahoo! will also add language to the Traffic Quality section of Yahoo!’s website notifying advertisers that they can request investigations of partners.

As part of the settlement, Yahoo! has also agreed to pay pay a $20 refund to eligible Class members who are out of business (I’m sure they’ll be relieved). Claims forms must be submitted to the administrator by March 22, 2010.

One thing is for sure: the lawyers have won this case.

Yahoo! will pay the costs of notice and claims administration, as well as the plaintiffs’ attorneys’ fees and costs, and service awards to the Class Representatives. The attorneys’ fees amount up to $4,170,000, plus reimbursement of expenses of approximately $100,000, and for service awards to the three Class Representatives of $10,000 each. I’m convinced the lawyers are yodeling all the way to the bank.

For your reference: Google settled a similar case back in March 2006 for $90 million.

You can access the court documents here.

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Yahoo has just launched Yodel Studio, a site for you to yes, record yourself yodeling. The idea is for Yahoo users to remix the service’s signature sound for a chance at recognition, most notably, on Yahoo’s homepage which is visited by tens of millions of people each month. Yahoo is also pledging up to $130,000 for local and global charities on behalf of each yodel submitted.

So how do you do it? Well if you happen to be in New York City, London, or Mumbai, there are live events happening later today (NYC and London) and tomorrow (Mumbai). Professional recording booths will be set up and celebrities will be on hand to help you with your yodeling. People like Randy Jackson (from American Idol) and LeAnn Rimes will be in New York, along with Jewel, who apparently is one hell of a yodeler herself (watch the video below).

If you aren’t going to be in any of those cities, you have until November 8 to submit your yodel through this site. The recording is all done through the web browser and includes video. It also includes background tracks if you want to yodel along with generic rock or hip-hop beats.

The videos are already rolling in on the site. Wow. Feel free to post links to your yodeling in the comments, if you dare.

Obviously, this is a quirky part of Yahoo’s new It’s Y!ou marketing campaign. Will this bring Jerry back? That seems unlikely; if I heard all these people yodeling, I would run the other way as quickly as possible..

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Twitter has produced a vibrant ecosystem of third party applications thanks to the release of its API. If you take a look at Twitter app store oneforty, there are thousands of applications and sites that are using Twitter’s various APIs to build useful and innovative applications. Which is why Yahoo Meme, Yahoo’s microblogging tool that hopes to compete against Twitter and Tumblr, is releasing its own API for third party developer use. The problem: Yahoo Meme doesn’t have many users.

Yahoo is offering Meme’s open API built on top of the YQL (Yahoo Query Language) platform. The API features compliance with OAuth for access to user data. Yahoo meme lets users post their own content (including text, photos, videos, links and more) and repost the content of others with one-click publishing, allows users to follow other Meme users (via one-way connections, no friend authorization is required) and comment on their posts. Meme’s content limits are higher than Twitter’s—the limit is 2,000 characters.

And Yahoo says that they used Meme’s open APIs to build the mobile version of Meme for smartphones. Yahoo also shed some light on where Meme is being used; apparently, Meme is gaining a following in Brazil, China, the Philippines, India and Turkey. Yahoo initially rolled out Meme in Portuguese, then Spanish and then English most recently.

It’s interesting that Yahoo has been relatively quiet about Meme, launching new functionality without much fanfare or press outreach. Perhaps Yahoo wants to see if there is viral usage of Meme before pouring marketing dollars into the product.

But microblogging is definitely catching on and Yahoo seems to be trying to figure out what the right model is. SixApart is also a fairly big player trying to enter the microblogging space with the recent launch of TypePad Motion.

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