There were four announcements, lead by the formal unveiling of Livestand, Yahoo’s long-promised tablet news reader application. It competes with Flipboard, CNN’s Zite, AOL Editions, Taptu, Pulse and others.

Here is a quick summary of the four announcements:

• Livestand: Described as a “personalized living magazine,” it’s a mix of Yahoo’s own content and third party content. There will be ad-supported and subscription based content on Livestand. Irving also demo’d “living ads” for Livestand, which offered rich media interactivity.
• IntoNow is a tablet-based TV companion app. Yahoo said that in the past six months it has seen traffic “double” from tablets. According to the PR materials, “IntoNow identifies what people are watching, whether live or recorded; shows related content and personalized recommendations; and enables discussions with friends.”
• Yahoo Mail was also upgraded for iPad with more visual content and “personalized news, local weather, and Trending Now videos.”
• Yahoo Weather (for Android): Yahoo introduced a richer weather application for Android devices, with images from Flickr (tied to time and location)

Among the four apps, IntoNow is the most interesting from afar.

Before and after the main announcements and demos, there was considerable of discussion of various Yahoo technologies (“CORE”). It was Yahoo again asserting “hey, we’re a technology company.” Yahoo also showcased “fresh faces” from startups the company had acquired. There was also an interesting discussion of a new emphasis on “design” at Yahoo, which seemed to be taking a page from the Steve Jobs playbook.

Yahoo also spent time discussing social integration across its properties and apps. The company spoke in particular about myriad social tools now being rolled out for Yahoo News. My sense of many of these features is that they were a bit “forced” and cumbersome but Yahoo cited traffic stats to suggest they were working or would work to engage audiences.

I was asked by someone after the event was over, “does this move the needle?”

Whether or not Yahoo sees any traffic benefits from these apps, Yahoo is doing the right thing in seeking to re-establish momentum in mobile and build apps that associate its brand with innovation and “cool stuff” rather than simply management turmoil.

Speaking of which, to his credit, Blake Irving acknowledged the uncertainty about Yahoo’s future. But Irving also sought to put to rest a persistent issue that has dogged the company for the past several years. He rhetorically asked and answered the question “what is Yahoo?” He said, “Yahoo is the premier digital media company. Full stop.”

Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,072 million for the third quarter of 2011, a 5 percent decrease from the third quarter of 2010. Income from operations decreased 6 percent to $177 million in the third quarter of 2011, compared to $189 million in the third quarter of 2010. The year over year decreases were primarily due to the revenue share related to the Search Agreement with Microsoft.

Display ad revenue, Yahoo’s bread and butter, was also flat vs. a year ago.

On the search side, Yahoo again blamed Microsoft for some of the poor performance. However it also announced that the Microsoft “RPS” search revenue guarantee had been extended in North America through March of 2013. Financial analysts commented that this will make Yahoo more attractive to a prospective buyer. The company is currently shopping itself and there are a number of parties potentially interested.

Source: Mary Meeker/comScore

Yahoo’s lackluster financial performance for the past couple of years is a by-product of a number of factors including the economy and ongoing vision and leadership challenges. Through it all however the Yahoo brand has largely seemed to maintain its appeal among consumers and large advertisers. In the earnings press release Yahoo reminds us that it “is home to 10 number one properties globally and ranks among the top three in 21 categories worldwide.”

Yet the myriad internal reorganizations, the departure of numerous talented personnel and intensifying competition from Google and Facebook have taken a toll. Yahoo was once the leader and innovator in local and mobile — two now critical areas — but it ceded those leadership positions to Google. There are other examples, including of course search where it was once highly innovative and competitive and now largely sits on the sidelines.

The Yahoo brand, which has been one of the company’s chief assets, may be starting to suffer from the company’s drama and internal distractions, which have contributed to its inability to innovate at the level of its principal rivals.

While the brand’s strength is a function of myriad variables if the brand suffers Yahoo will likely see further deterioration in financial performance. As one example, if users abandon Yahoo Mail for GMail because Yahoo is no longer “cool” – just as users shed their AOL addresses in the past — Yahoo will see a decline of a major source of display ad impressions. Brand advertisers, interested in being associated with a “hipper” or more innovative source of impressions will shift some of their budget to Facebook. Google is also eating into Yahoo’s reputation and historical edge with display advertisers.

Once the brand loses its luster it becomes very hard to win users back. AOL is a great example. MySpace is an even more extreme case. While some companies have come back in the real world, IBM and Apple are prominent examples, there are almost no such examples of Internet companies that have fallen from grace and returned to their former glory.

Accordingly if Yahoo “loses it” it’s very unlikely that a private equity company or other strategic buyer will be able to “bring sexy back.”

CEO Carol Bartz is doing a good job of managing costs but there’s not really a growth story (save display). Outlook for 2011 is weaker than expected. Right now Yahoo shares are down in after-hours trading.

Overall revenue was negatively affected by the revenue sharing Yahoo now does with Microsoft vis-a-vis the search alliance. According to the earnings press release:

Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,205 million for the fourth quarter of 2010, a 4 percent decrease from the fourth quarter of 2009, primarily due to the revenue share with Microsoft. GAAP revenue was $1,525 million for the fourth quarter of 2010, a 12 percent decrease from the fourth quarter of 2009, primarily due to the required change in revenue presentation and the revenue share with Microsoft associated with the Search Agreement. For transitioned markets (U.S. and Canada in the fourth quarter), Yahoo! now reports revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. Excluding the impact of these two items as well as the divestitures of Zimbra and HotJobs and the exit of the paid inclusion business, revenue for the fourth quarter of 2010 increased 3 percent compared to the fourth quarter of 2009.

It may turn out that the search alliance in the end is a net negative for Yahoo (in several ways), though an overall positive for dominant partner Microsoft because of the additional reach it provides to advertisers.

Consistent with managing costs as a way to increase margins, Yahoo announced today that it was laying off 1 percent of its workforce.

I’m going to listen to the earnings call and report anything interesting.

Earnings call notes:

CEO Carol Bartz:

We’re a “premier digital media company.”

Bartz denies that Yahoo is “cutting its way to revenue growth; we’re investing for revenue growth.”

We don’t have SEO optimization for any of our sites, which is ridiculous. Content platform now makes sites more SEO friendly.

Engagement of early adopters with new mail beta is 50 percent higher than the “old” Yahoo Mail.

Yahoo is now about “content aggregation, curation and creation.” The company said it divested businesses not consistent with that mission.

Search transition proceeding abroad: algo will be transitioned by mid-year and paid by end of year outside US.

Bartz touts brand relationships with Yahoo in display: Wal-Mart, Toyota, Macys . . .

Bartz also points out that its stake in China’s Alibaba continues to gain in value. She points to other Asian successes: Yahoo Hong Kong, Yahoo Japan. She says that EMEA is doing much better than in the past.

She also talks about the new division heads (e.g., Ross Levinsohn) and her high expectations accordingly. They’re building out their teams. She then addresses layoffs as part of streamlining to support individual divisions and Yahoo’s overall mission.

Finance, sports and news remain leading properties.

Our focus in search is giving users “answers not links.” She reviews some of the product innovations (e.g., Yahoo Quick Apps) in search.

Mobile: we’ll release more of our popular products for mobile (emphasizes iOS and Android apps and HTML5 sites).

Original video content driving lots of minutes/views.

CFO Tim Morse:

He hits hard on good metrics: return on invested capital (doubled), EPS (doubled) and several others. “We’re proud of these exceptional 2010 results.”

Premium display grew, driven by impression growth.

Though he says Yahoo is going to experience “revenue headwinds” through 2011. Not going to see benefit of combined search market until later this year.

“We’re encouraged by search volume trends . . . ”

Our product team has done a great job toward our goal of “personalized content for every user.”

Our competitive advantage: “increasingly personalized world-class content.”

Whenever Morse and Bartz said the phrase “search alliance,” which they did many times, I  couldn’t stop thinking about Star Wars and the “rebel alliance.”

Click here to view the embedded video.

Yahoo would not comment on the new system, but the purpose behind it is to help Yahoo better track users around the web, so they can offer more tailored ads and offer advertisers better ad targeting options.

Y Connect allows users to register and log into web sites by clicking on a Yahoo button. After the user logs in, their activity on the web site can be shared with Yahoo. This shared data can be used for advertising purposes or to make Yahoo’s products better.

I do find it funny that this news came out slightly ahead of the major Facebook privacy breach the Wall Street Journal uncovered. The Wall Street Journal reported:

Many of the most popular applications, or “apps,” on the social-networking site Facebook Inc. have been transmitting identifying information—in effect, providing access to people’s names and, in some cases, their friends’ names—to dozens of advertising and Internet tracking companies, a Wall Street Journal investigation has found.

The issue affects tens of millions of Facebook app users, including people who set their profiles to Facebook’s strictest privacy settings. The practice breaks Facebook’s rules, and renews questions about its ability to keep identifiable information about its users’ activities secure.

Facebook responded basically saying it was a mistake and the press have “exaggerated” the issue but there was an issue:

Recently, it has come to our attention that several applications built on Facebook Platform were passing the User ID (UID), an identifier that we use within our APIs, in a manner that violated this policy. In most cases, developers did not intend to pass this information, but did so because of the technical details of how browsers work.

There is tons of coverage on the Facebook Privacy breach on Techmeme.

Yahoo says the content on its new ad portal is meant to inspire and educate advertisers. It features demos, articles, videos, and a “keynote video” featuring Seth Godin. Yahoo touts the new site as

… a leap forward in communicating and showcasing Yahoo!’s advertising solutions for mid-to-large tier advertisers and agencies, giving Yahoo! a powerful vehicle to drive B2B Marketing goals and re-establish the company as a thought leader in the industry.

Most importantly, the portal intends to foster a water-cooler environment for marketers, ad creatives, producers, publishers, and other advertising execs to be educated and inspired by Yahoo!-specific and industry-related content.

Yahoo has of course tried to buy other companies unsuccessfully in the past (most recently Foursquare, according to rumor) so it’s not clear it will happen. But this deal strikes me as a particularly good fit for Yahoo and could represent the company’s way in to a bona fide social network play that has long eluded it.

Google has been getting all the attention for the rumored Google Me and its bid to break into social gaming. But the success of that collective endeavor remains purely hypothetical at this point. CafeMom is already a success and could live side-by-side with Yahoo’s Shine brand.

CafeMom is relatively small by social networking standards, but it has a powerful audience that makes most of the major household purchase decisions in the US. From the CafeMom’s site:

As the #1 media property for moms, CafeMom reaches 6.7MM unique visitors per month on cafemom.com (comscore, May 2010) and 18MM+ unique visitors per month on CafeMom Plus (comscore, May 2010), a boutique network of sites that reach moms and parents. CafeMom also delivers engagement with more than 100MM pageviews and tens of millions of minutes of time spent per month on CafeMom.com.

BabyCenter and Glam might dispute the #1 media property characterization. Regardless it’s a marquee “mom property.” Yahoo’s own data show the power and importance of women online and moms in particular:

Women make roughly 85% of household buying decisions . . . 44% of women say they get information about products and brands on women’s lifestyle sites.

Granted CafeMom hasn’t got the “crossover appeal” of a Facebook but there are 82 million US moms (of all ages) according to the Census Bureau. And you can obviously see a great match between Yahoo’s display and brand advertisers (think Target) and the highly desirable, highly qualified CafeMom audience.

Yahoo will continue to have a career site (at least for the next three years) but it will be powered and populated by Monster:

Monster and Yahoo! have also entered into a three year commercial traffic agreement, to take effect upon the closing of the acquisition, in which Monster will become Yahoo!’s provider of career and job content on the Yahoo! homepage in the United States and Canada. The traffic agreement calls for performance based annual payments calculated by clicks and expressions of interest, subject to annual floors and ceilings. In addition, the traffic agreement provides Monster with an exclusive right for a period of time following the closing of the acquisition to negotiate similar traffic agreements with Yahoo! properties on a global basis, including countries in Europe, Asia and Latin America, subject to certain limitations.

The price is $225 million in cash (Yahoo acquired HotJobs for $436 million in 2002). PaidContent summarizes some additional terms (based on an SEC filing), including a non-compete between the two companies. The related, potential sale of Yahoo Small Business has reportedly been called off.

Given that Yahoo decided shortly after CEO Carol Bartz joined to outsource search, presumably a “core” asset, one is lead to wonder what will Yahoo retain as it moves forward, as the company seeks to reduce costs and boost margins.

Bartz’s remarks on the recent Yahoo Q4 earnings call may hold some clues. She identified the “homepage, mail, messenger, news, sports, finance and entertainment” as key areas. This is a relatively casual, top-of-mind list she rattled off during her opening comments, but it may indicate what Yahoo wants to “retain” for itself. Bartz added about 2009 as a whole, “We [ ] decided to close down products that didn’t drive engagement or proudly represent Yahoo.”

In addition, Bartz spent a great deal of time talking about Yahoo’s display advertising business and related technology. The emphasis is on attracting brand advertising dollars and delivering TV-scale (or larger) audiences to them:

[W]e are still ahead in the display game and we intend to keep it that way. Frankly our competition is television. That is where major advertisers spend most of their money and where we are taking share. As a result, video is becoming increasingly important . . .

But we are only getting started. Our recently announced partnerships with Group M and Electus expand our capabilities in this space . . . We give Electus massive reach but remember we are not trying to mimic traditional TV formats. We are about developing low cost, high quality web content for our users that is created in partnership with advertisers.

Even as Yahoo is shedding “non-core assets,” the company is thinking again about acquisitions. Here’s what Bartz had to say about that subject for 2010:

For us 2010 is about acquisitions and investments to make Yahoo! even stronger. We think about acquisitions in three buckets. The first are the small to medium acquisitions where we acquire important technology and the people behind it. The second is content related where we acquire a company for their audience, content or community. There are a lot of niche sites that have highly engaged users and specialty content that would fit well with our portfolio and our advertiser needs. Third is geographic, where we will make an acquisition to move into or strengthen markets like our deal with Maktoob . . .

So what is ahead for us this year? We are done looking inward. We are looking outward at the incredible opportunities ahead and we are focused on the following areas; Great experiences for our consumers including more social, mobile and video features and improved local content . . .

Now Apple is reportedly buying another tier one mobile ad network, Quattro Wireless, for $275 million. That immediately raises the question: What will Yahoo and Microsoft Do?

Yahoo already is a top mobile ad network and so is Microsoft — in both traffic and estimated revenues. Both rank in the top five in terms of monthly uniques, according to various sources.

In 2007 Microsoft acquired Screen Tonic (mainly for technology) and, last year, committed an estimated $500-$600 million in revenue guarantees to be the search and display ads partner for US carrier Verizon (89 million subscribers). Microsoft’s mobile MSN has 25 million (or more) users.

While Yahoo probably should further expand its reach and buy a mobile display ad network there’s a strong possibility that it will not, perhaps believing that it has all the reach and mobile display assets it needs already. Alternatively, then, a technology or platform buy might be in order. The company  recently lost a dynamic display (PC + mobile) ads technology partner in Teracent, when Google bought that company too.

Another possibility for Yahoo might be Mobclix, which operates one of just a few of nascent mobile ad exchanges. It could become the mobile companion to the PC-based Yahoo RightMedia Exchange.

Microsoft, for its part, will probably buy one of the remaining tier one mobile ad networks in the near term. That probably means Millennial Media or JumpTap. But there are a number of other platform, tool providers and so on that might be candidates as well.

While it will take a few years for big mobile ad revenues to show up and justify these prices, rest assured that the mobile internet will only continue to gain adoption. With 70 million users in the US today, poised to pass 100 million at some point this year, this market is real — and red hot.

Postscript: Quattro confirms Apple acquisition.

Yahoo!’s new Ad Interest Manager tool:

• Provides a central point where Yahoo! visitors can assert even greater control over their online experience.
• Gives visitors an unparalleled view into the information used to deliver interest-based advertising.
• Shows the visitor both Yahoo!’s educated guesses about their interests and a summary of observations, along with other information they have provided.
• Provides a list of specific interest categories that Yahoo! has placed a user into and lets people turn those categories off.
• Allows people who don’t want to see interest-based ads to turn them off entirely.

Google did something similar not long ago, creating a central place where users to indicate interests or opt-out of behavioral targeting altogether. Here’s what the Ad Interest Manager on Yahoo looks like, with a prominent “opt-out” button and vertical, interest category buttons that can be turned off or on:

A new survey from Synovate indicates that “32% of Americans say they would like this [behavioral targeting] technology if none of the data could identify them” but “35% of Americans aren’t convinced they couldn’t be individually identified so they aren’t interested in this technology at all.”

Some version of what Yahoo and Google have done, with a clear central dashboard like the above, will be required in the near term from the broader marketplace. It’s smart from several points of view.

For those who do indicate interests, presumably response rates to display advertising will be higher and/or the ads shown will have a greater impact. Most people probably will not interact with these pages but in those cases they provide a kind of cover against the criticisms of behavioral targeting that have been leveled by lawmakers and consumer groups.

I’m not trying to argue, however, that this is being done cynically to fend off regulation. Not at all. But I think that it potentially preempts the imposition of such a system from lawmakers, which have been gearing up to do so.

Now that Yahoo and Google have done this, I would expect Microsoft and AOL to follow (and probably Facebook and MySpace). Major publishers and ad networks that don’t take the initiative and offer something similar will have it forced upon them by regulators.

Here’s the new Spanish language mobile homepage, which mirrors the look and feel of the English-language version:

Here’s the PC version; note the tile ad en Espanol:

The ad below from the Spanish mobile site is in English but in short order we can probably expect Spanish-language ads, which is one of the big opportunities here that Yahoo is pursuing: