The takeaway: The site is losing traffic and money and no longer expects to get all of the $900 million it once counted on from a Google search deal. Also, the company really doesn’t know what to expect of the property going forward, except that it’s a work in progress.

So: Either digital media boss Jon Miller, MySpace CEO Owen Van Natta and the rest of the new team brought in this year to fix the site have an impossible task or expectations are now so low that even modest improvement will look like a huge victory.

Details from the earnings call, which I covered live this afternoon:

• Revenue was down 26 percent at Miller’s Digital Media Group (MySpace and a handful of other sites).
• That’s in part because conventional ad revenue is down and in part because search ad revenue is down.
• But isn’t Google (GOOG) supposed to be paying $900 million over three years in a search deal? Yes, but only if News Corp. (NWS) hits certain traffic/query guarantees, which isn’t happening anymore, says Murdoch.
• How much is MySpace going to miss by? This question occasions much confusion on the call. “I don’t know. But it will be a real figure,” Murdoch says. Then he throws out the number $300 million. His lieutenants suggest that it’s closer to 10 percent, or $90 million. I’ve since checked with News Corp. PR, which says the figure is “in the 100 [million] zone for the year.”
• So what’s the plan to fix all of this? “It’s a work in progress,” News Corp. officials say over and over during the call. Chase Carey, Murdoch’s new number two, uses the phrase at least three times in one answer.
• Any other color on overhaul plans? Nothing you haven’t heard before: The company is trying to become an entertainment portal instead of a social network. Carey: “We’re not trying to beat Facebook. We’re not trying to beat Twitter.”

(Disclosure: News Corp. owns Dow Jones, which owns this Web site).

And the first look at results from News Corp., which owns this Web site, seems similar. Revenue of $7.2 billion are in line with Wall Street’s expectations, and the company figured out how generate earnings of 22 cents a share, a nice bump from the 18 cents a share consensus.

Just as Time Warner reported this morning, News Corp.’s most valuable assets are its film studio and its cable TV business. Its broadcast TV business is wobbling, and its print business has been in decline for some time. A quick look at each sector:

• Movies: Operating income up due to yet another “Ice Age” movie, among other releases.
• TV: Fox’s local stations saw operating income drop 26 percent due to crummy advertising; the Fox broadcast network also dropped because programming costs increased and ad revenue dropped.
• Cable networks: Booming. Operating income up 41 percent, as News Corp. is able to extract increased fees from cable operators for the likes of Fox News Channel.
• Newspapers: Getting hammered. Operating income was a mere $25 million, a decrease of $109 million in the last year. You know why, but for the record: The Wall Street Journal saw ad revenue decline, though price increases boosted circulation revenue.
• MySpace/Web properties. News Corp. doesn’t offer much transparency here, but does say that “earnings contributions” from its Web unit dropped $22 million because of lower search and advertising revenue. Sure we’ll hear more about this during the call.

Beyond the macro take, News Corp. (NWS) is worth paying attention to because of Rupert Murdoch’s increasingly pugnacious stance toward what he calls the Internet’s “Philistine phase”–the one where just about everything on the Web is free. And because Murdoch almost always makes for entertaining earnings calls, where he frequently veers off script.

I’m covering the earnings call as it happens. All notes below are paraphrased unless I use quotes.

CFO David DeVoe notes the digital group (MySpace, etc.) is in “significant transition.” Revenue was down 26 percent at the unit. Says MySpace revenue goals will take longer than expected.

Rupert Murdoch:
Looking ahead, seeing “encouraging trends in most of our businesses.” Broadcast TV business appears to have hit bottom of cycle. Advertising pacing for December looks good. October flat, November up in midteens. Cable TV ads doing well. “Quite pleased” with momentum at film biz.

Cable now generates half of company’s operating income, which is “no accident.” Love those dual-revenue streams, especially when we can jack up affiliate fees.

Digital media group: Difficult to predict when we’ll see improved results, but overhaul has clearly helped it for long-term.

Newspapers: For what it’s worth, all of our newspaper and TV businesses are having a great November.

Very confident about short- and long-term future. Clearly in better shape than a year ago. But recovery is “still a little fragile.” [Note: Rupert is clearly sticking to his initial script this time.]

Q&A

Question: When will you start cutting shareholders some dividend checks?

Murdoch: Not thinking about it. We’re right to be sitting on this cash. We have a $2B debt repayment due next year, so pile isn’t as big as it looks.

Question: How does international cable market look?

Murdoch: For the most part, it’s a new growth area. Markets are relatively undeveloped. So they’re all growing double digits, 15, 18 percent on average. May start another 30 channels this year.

Next, there’s a question about retrans (getting paid for broadcast programming): How many renegotiations will we see in next few years? Murdoch offers a nonanswer, for the most part.

Question: You said affiliates fees were up 18 percent and that affiliates fees represent 70 percent of revenue. So that means cable ads are down, right?

David DeVoe: Yes, but I think they’ll be up a bit this quarter.

Question: How can MySpace search revenue be down? Isn’t Google (GOOG) kicking in a fixed amount through next year?

Murdoch: Quite simple. “We have not been making our minimum guarantees,” so our search revenue will not be what we’d expected.

Missed most of the M&A question and answer, but it Murdoch evidently said he wouldn’t rush into anything. That doesn’t mean that much.

Question: Can we get an update on The Wall Street Journal and the relationship with Amazon (AMZN) Kindle, other e-readers?

Murdoch: Oh. WSJ.com going well. Pricing up very strongly. Will be announcing some “extra developments” with it “if they haven’t been announced already, I’m not sure.” Kindle: Look, it’s a fantastic invention for reading books. It’s not great for newspapers. We’ve gotten them to charge $15/month for WSJ and give us $6.50, but that’s not a great deal for us. Half-a-dozen early-stage e-readers on market for Christmas, and we’ll be available on them provided they give us a good deal. But there’s much more advanced work going on.

Question: What’s the new strategy at MySpace?

Chase Carey: Obviously, we got spread a bit wide and thin. No focusing on heart of business being a social network focused around key content sites. “We’re not trying to beat Facebook. We’re not trying to beat Twitter.” Music, gaming, etc. Farthest along with music. “Clearly a work in progress. We’re still losing traffic.”

And now for some press Q&A. This usually makes Rupe a bit testy, which is fun:

Question: Any interest in NBC?

Murdoch: No. “When things come around, we kick the tires, but we’re not in any talks with anybody at the moment.”

Question: What’s up with MSNBC-Fox News truce, which appears to be broken? 

Murdoch: “We didn’t start this abuse, which we thought went way beyond…finally, we had to allow people to retaliate. When they stop we’ll stop.” 

Question: And is it good for you to have antagonistic relationship with the White House?

Murdoch: No.

Question: Bidding on Travel Channel?

Carey: We’re not going to comment on any specific properties [mumbles].

Question: How will Comcast-NBCU deal affect way you deal with Comcast (CMCSA)?

Murdoch: It won’t. We’ll be competitors with NBC as broadcasters and partners with Comcast when it comes to cable.

Question: What’s up with plans to erect some sort of paywall at all News Corp. newspaper sites in 2010?

Murdoch: “We’re all working very hard on this, but I wouldn’t promise that we’re going to meet that date…it’s a work in progress, and there’s a huge amount of work going on.”

Question: Is WSJ profitable?

Murdoch: “Yes. Barely. But Yes.” How did you do that? “We produced a better newspaper.”

Question: Please talk about digital/MySpace some more.

Carey: Going to repeat what I said already, basically. “We’re in state of transition…work in progress.” Can’t tell you what it will look like in 12 months because I don’t know. “Work in progress.” “Work in progress.”

Question: Google promised you $900 over three years. How far short will you fall?

Murdoch: “I don’t know. But it will be a real figure….It will certainly drop by $300M.” Carey or DeVoe corrects Murdoch, noting that it will be closer to 10 percent. I’ll ask News Corp. PR for a ruling and get back to you. UPDATE: Ruling from News Corp. PR–MySpace will be about $100M short on its Google payment for this year.

That’s the core of Twitter’s pitch, of course, and it has helped the microblogging service raise $155 million, a $1 billion valuation, and forge partnerships with Google (GOOG) and Microsoft (MSFT). Not surprisingly, investors are looking to place money on related bets, from search engines that parse real-time data to location-based social networks with real-time updates, and even real-time photo-sharing sites.

The newest entrant: Hot Potato, a buzzy start-up that’s supposed to let users converse about a particular event, whether they’re attending it in person or watching from afar. When it’s up and running, that is. The five-man crew doesn’t have users or a product just yet.

But that hasn’t prevented the Brooklyn, N.Y-based company from raising about $1 million, sources say, in a round led by First Round Capital and RRE Ventures. A group of smaller investors, including Betaworks, the incubator that specializes in real-time companies, and Ron Conway, the angel investor best known for his Google bet, are also backing the company.

Hot Potato is led by Justin Shaffer, an eight-year veteran of Major League Baseball Advanced Media, pro baseball’s well-regarded Web unit. Shaffer has recruited three other MLB.com employees (one of whom subsequently left to get an MBA at MIT) to join him.

Shaffer wouldn’t comment about his funding round, but was willing to discuss his start-up’s general plans. They are finishing an iPhone app and plan to submit it to Apple (AAPL) in the next few weeks, he said, and will open their doors once that’s approved.

The big idea is an interesting one. People are already using Facebook and Twitter to converse about events in real time–think about Barack Obama’s inauguration, or Balloon Boy, or last night’s Yankees-Angels game.

Shaffer’s critique of those platforms, though is that “they break at scale–there’s no good way to filter the chatter so that  you, your friends, and a group of strangers with something relevant to say can all connect. Hot Potato, he says, will offer a “curated stream” in real time of all the data coming out of the event in real time. What we’re really focused on doing is bringing together the entire audience of an event, whether they’re at the event or watching at home.”

Business model? TBD, of course. But there are a couple of obvious ways to go. For instance, Shaffer thinks people who opt-in to a particular conversation–say, about an NFL game or a U2 concert–would be okay with seeing “in-stream” ads, as long as they were relevant.

But that’s a problem that’s best tackled once the service is up and running. We’ll check back then.

But we’re not exactly right. New statistics from the Pew Internet Project indicate that 19 percent of U.S. Internet users are on the service on a regular basis. To spell out the obvious: One in five is a lot of people, but it’s not everyone.

This is worth remembering as Google (GOOG) and Microsoft (MSFT) move to integrate Twitter updates into search results: Those results come from a particular slice of Web users.

Here’s Pew’s breakdown of that slice, by gender, race and other demographic markers:

Pew says the average age of a Twitter user is 31 (MySpace, 26; Facebook, 33; LinkedIn, 39). And it has some other stats that are useful–and, if you use the service, evident.

For instance, Twitter and mobile are a peanut butter/chocolate combination–25 percent of Internet users with wireless access use the service, compared with eight percent of those who are tethered. And, not surprisingly, gadget junkies are Twitter junkies too: 39 percent of Web users with four or more Internet devices use the service, compared to 10 percent with one device.

The full report is embedded below:

PIP-Twitter-Fall-2009 –

Hi Peter,

My name is [Redacted] and I’m working with the ad:tech team on the social media outreach and promotion for ad:tech New York. ad:tech recognizes that you are a key influencer in the digital marketing community, and as such, I’d like to see if you are interested in a promotion exchange.

ad:tech will provide:

• Twitter announcement of your involvement with ad:tech New York to our 6,800+ followers.
• Your choice of: a free pass to the exhibit hall (valued at $35) or 35% off a full conference pass.

*If you are already registered or can’t make it to the event, you can offer it as a prize to your network, give it to a friend or client….It is completely transferrable.

We ask you provide:

• No less than 3 posts about ad:tech New York on Twitter, Facebook or your blog. Suggested postings: a session you’re interested in, why you like ad:tech, the exhibitors that you want to see or technologies that you are interested in learning about. What you share is up to you–it just needs to be posted by November 1.

Interested in writing a blog post and would like additional information on ad:tech? Quotes, photos, interviews, ideas, etc. will happily be offered with request.

To redeem the offer:
Share 3 posts about ad:tech, then email me, [X]@ad-tech.com, with links/screenshots by November 1.

• Tell me how you’d like ad:tech to promote your involvement with the event at the show.
• Let me know if you’d like the free expo pass or the 35% discount on the conference.

Please let me know if this is something that you are interested in or if you have any questions?

Thank you for your continued support of ad:tech. I hope to meet you in New York!

[Redacted]
Social Media Outreach
ad:tech

Well. Flattery is always a nice approach, so I’m pleased to hear about my influencer status. Also, it’s nice that the ad:tech team is willing to provide “ideas” for me upon request.

Alas, even if I wanted to take ad:tech up on its offer, the Dow Jones Code of Conduct would prevent me from doing so.

But this letter does generate two questions for me:

• Is my work nearly worthless? Or pretty valuable? Three posts is a little less than a day’s work for me. Ad:tech says that’s worth either $35 (a free expo pass) or up to $558 (35 percent of the highest price for an ad:tech conference pass). That’s a big swing!
• I know there are a lot of “social media experts” out there, because there are a lot of them following me on Twitter. But I don’t really know what they do. Is this it? That can’t be right. Can it?

Anyway, this kind of thing always makes we want to pull up a “Glengarry Glen Ross” clip. There isn’t a direct connection, mind you. Just a vibe.

Employees at MySpace have been waiting to find out who their new ad sales boss will be, as All Things Digital reported earlier this week.

And here she is: Nada Stirratt, who until today was running digital sales for Viacom’s (VIA) MTV Networks. (You can read her goodbye memo to MTV colleagues below.)

It looks as if MySpace CEO Owen Van Natta is assembling a team of MTV veterans at his company, which he’s in the process of overhauling.

In addition to Stirratt, MySpace has brought former digital guru Jason Hirschhorn over as chief product officer. And Courtney Holt, who runs MySpace Music, had run digital music for MTV before Chris DeWolfe, Van Natta’s predecessor, brought him on board last year. Viacom hasn’t named a replacement for Stirratt.

Next week could be Stirratt’s debut in front of the entire advertising sales staff of MySpace, who are set to gather at a new seaside resort about 20 miles south of Los Angeles to get a first glimpse of the fresh direction the company is preparing to take under its new management.

The struggling social networking site, HQed in Beverly Hills, has been trying to reboot its image, spur innovation in its product and most of all, pull itself out of a too-long slump, even as longtime rival, Palo Alto, Calif.-based Facebook, has seen explosive growth.

In late August, MySpace sales and marketing head Jeff Berman left the company as MySpace hired MediaLink, a New York- and Los Angeles-based media consultancy, to help get its ad sales business back on track.

That effort has been led by MediaLink President Wenda Millard, who is well known in the ad industry and was longtime leader of the ad sales force at Yahoo (YHOO).

Getting an experienced top ad exec in place will round out a recent spate of new hiring by MySpace, including a new CTO, Alex Maghen, who moved over from its MySpace Music joint venture, and a new CFO, Mark Rosenbaum.

This has been part of Van Natta’s wholesale flushing out of most of the top execs who worked under DeWolfe.

Now, with a new team of execs, the News Corp. (NWS) property is putting the finishing touches on a master plan, which will include a new redesign of its hopelessly messy interface and doubling down on a product strategy that will center on, said one source, “what we own,” namely, music and entertainment.

Music is the obvious key leverage point, the still-bright spot of MySpace, followed by adding big entertainment categories like movies, television, gaming, video and other pop culture arenas.

Once the rejiggered product is in place, it will be up to Stirratt to sell it to advertisers.

Until we see how she does in that key job, here’s her missive to MTVers:

From: Stirratt, Nada
To: MTVN Digital Advertising
Sent: Fri Oct 09 16:34:51 2009
Subject: Thank You for Everything

Hi Everybody–

It is with mixed emotions that I write to inform you that I will be leaving MTV Networks. I have accepted the job of Chief Revenue Officer at MySpace and will be starting there later in the month.

The past 3+ years have been such a wonderful experience and I thank you for the extraordinary work you all have done to make MTVNetworks Digital stand for a best-in-class sales organization unlike any other in the business. Truly. We rocked the industry with our innovation, ideas, relationships and results. And we had a ridiculous amount of fun along the way. So thank you for everything. And a special heartfelt thanks to my leadership team of Kevin, Brad, Jason and Heather: I have learned so much from each of you and will cherish your friendship.

Xo 
Nada

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

Unless the 400 or more people I follow on Twitter have all gone mute at the same time, I suspect that something’s wrong with Twitter, since I haven’t seen a new message for the last hour or so. A quick scan of Facebook–and Twitter’s own search engine–indicates that other people are seeing the same thing: We’re tweeting, it appears, but into a void. How meta!

Twitter’s status site, designed just for instances like these, has a message it says is 16 hours old: “We’re currently diagnosing the causes of an unplanned site outage that happened a few minutes ago. We are recovering from this issue now and apologize for the interruption in service.”

Twitter now acknowledges there is a current problem: “We are currently investigating a problem causing many users’ timelines to be delayed. We will update with status here shortly.”

I’m confident we’ll survive this crisis if we all band together. And perhaps go out for a walk–it’s really nice today in New York.

The semi-serious point here is that this stuff used to happen to Twitter all the time, and happens much less now. But the pressure is on Twitter–users are increasing, and so are expectations–to make these outages even less frequent.

Counterpoint: Even mighty Google (GOOG) is prone to this kind of thing.

The perennial, and obvious, solution is to incorporate ads into the service, but so far Twitter hasn’t tried it, except for very limited experiments.

The good news for Twitter and its investors is that the service’s user base is pretty receptive to advertising, in general terms, because it’s pretty receptive to just about everything on the Web.

So says research group Interpret LLC, which has a new study out today, conveniently enough. From the release:

Twitter users are twice as likely to review or rate products online (24% vs. 12%), visit company profiles (20% vs. 11%) and click on advertisements or sponsors (20% vs.9%) as those who only belong to traditional social networking websites like Facebook and MySpace. The data suggests that Twitter users uniquely demonstrate higher engagement with brands, not just with “tweets” they post.

These statistics are self-reported, and Interpret doesn’t say how big a sample its survey used, so take them with as much salt as you like. But they seem intuitively and directionally correct: Anyone willing to plug into the waves of information that Twitter pumps out is likely engaged all over the Web.

Note what the Interpret report doesn’t say: That Twitter users are eager to have ads inserted into the service itself.

Doesn’t matter. At some point, they’re unlikely to have a choice about that because it seems hard to imagine that Twitter can ever deliver on its investors’ sky-high expectations without generating some kind of money, somehow, from Madison avenue.

Which is exactly why Biz Stone and crew, who once made a point of expressing their derision for ads, now make a point of saying that ads may not be such a terrible thing, after all.

Unless I’m told otherwise, I’m only going to do this once. But for the record, Yahoo is going with the following spelling for its new slogan: “It Starts With Y!ou.” I don’t think that’s going to fly with consumers or copy editors, but we’ll see.

Also undetermined: Whether there will be any news unveiled at Yahoo’s press conference to roll out said slogan. But I’ll be here for you just in case. And in the meantime, you can find glimpses of the coming campaign at the bottom of this post.

The event begins: Boilerplate intro remarks from Yahoo (YHOO) CEO Carol Bartz, followed by CMO Elisa Steele. Steele shows off a Venn diagram that shows the intersection of “my world” and “the world.” Yahoo, apparently, is that intersection. “That’s where the yodel is.”

Steele reminds us that this is Yahoo’s first global marketing campaign. That’s old hat for Microsoft (MSFT) and something Google (GOOG) has never done. Ad campaigns will roll out in 10 countries, branding campaign will be in all territories.

Steele runs through some imagery that will be used in campaign. Yahoo users, apparently, comprise many races and creeds. But all of them are buff and/or skinny. Unless they’re pregnant. A video ad, meanwhile features an upgraded yodel.

OK. Time for Q&A:

Onstage: Bartz; Steele; EVP Hilary Schneider; Tapan Bhat, SVP Integrated Consumer Experiences; Penny Baldwin, SVP Global Integrated Marketing and Brand Management.

What’s the budget for the campaign?

Steele: “Over $100 million.”

Status of ad market? Also, what won’t you sell?

Schneider: Starting to see a stabilization. “Wouldn’t go so far as to say as we’re seeing a full recovery.”

Bartz: We’re still “bumping along the bottom.” Regarding sales, she dodges/reframes the question, talking about “focus” instead. “We’re just revisiting everything.” Is there anything you won’t sell? “Of course.” But no specifics. Will improve photo, video, “much, much better email.”

Please talk about the launch of Google Ad Exchange and its threat to you.

Schneider: “The reality is that the display marketplace is fragmented.” Our exchange (Right Media) is biggest, but it’s intuitive that there will be other exchanges. “We welcome Google.”

Why do a relaunch at all? Are consumers actually unhappy, or is it just advertisers and press and investors carping?

Bartz: “Advertisers follow consumers” and we need to “build circulation.” By doing this approach, “we get really good micro-insights for our advertisers.” She doesn’t explain how this will happen, though.

Steele: “Consumers want more from online advertising.” They’re asking for it.

What about video plans?

Bartz: “Video snacks” are crucial to consumers and advertisers. “A big emphasis” inside Yahoo. A “big cornerstone of our strategy.”

How long will campaign run? How will you measure success?

Steele: It’s funded for 15 months, and I expect it will run longer than that. Vague answers about management.

Some chat about search, which formally debuts today.

Will there be product-specific ads?

Steele: Launch of the campaign in each market will start with brand, and over time you’ll see more product ads, as “people get familiar with Yahoo again.”

One more time: Is Zimbra being shopped?

Bartz: No comment. But “what I will tell you is that Zimbra technology is very, very important to our mail system, and that’s one of the prime reasons that Yahoo bought Zimbra when it did…[but] the technology is already integrated into our system.”

How is this campaign different than other campaigns? You’ve had a lot of campaigns in the last 15 years.

Steele: I haven’t been here in past, but I’ve reviewed every campaign that has been done and this is radically different because it’s more than a campaign. Carol and Carol’s staff are all behind the concept of “you.” Everyone’s on board. “If this was just a marketing campaign or a slogan, then we’ve really failed.”

Bartz: This should remind you of the past, actually. That’s not a bad thing. On search: Search has evolved from the “10 blue links” days. She views background of search much like an Intel (INTC) chip, which everyone uses. But Dell’s (DELL) experience with that chip is different than HP’s (HPQ) experience, etc. Yahoo is stable at 19 percent of search business because users are on Yahoo and they like Yahoo search. “Yahoo search is great. It’s not Bing, it’s Yahoo search….What’s most important is that we drive upstream and provide a great experience, even though the plumbing is down here.”

Do users really like to customize their search (premise behind overhauled homepage)?

Bhat: Core group of 15 percent of users really into customization. Most other people say they want that but aren’t willing to do the work. So we’re doing incremental customization on the homepage. “This will be something that keeps growing over time.”

Will you be integrating text-messaging and other short messaging services into the homepage?

Bhat: Yes.

How is the antitrust scrutiny going (with regard to Microsoft search deal)?

Bartz: Just as we predicted. We stand by our original prediction that the deal will close early 2010.

Are we too obsessed about what’s new here?

Bartz: Yes. “People just decided to put a cloud over Yahoo’s head”…and decided that if we’re going to remove the cloud we had to show off something shiny and new. “If you get out of New York and Silicon Valley, everybody loves Yahoo.” I travel a lot and everyone loves it. “I just want to transport you guys out of this cynicism you’re in….Why are you so cynical? Why not be cynical about fricking Google? See…you got me…you got me pissed off.”

[Note. Some debate about whether Bartz used "fricking" instead of an actual curse. We'll go to tape later. Update: Apologies (and thanks to Business Insider's Nicholas Carlson, who shared his video with me). Bartz appears to have said "fricking" or "frigging" Google.]

[Sorry about interregnum there. Cursing got me wound up. Back to real-time.]

Where do you want to be in two years?

Bartz: Yahoo is the only site where you when you wake up in the morning and you want to know what’s going on everywhere about everything, you can find it one place. The company is unified around that spirit, “not about technology for technology’s sake, but about what that delivers.”

Why doesn’t Wall Street buy the Yahoo turnaround story even though Google has fared okay during this recession? 

Bartz: “Yahoo and Google are different companies. They are in different businesses…investors are somewhat like you guys, where they’re saying ‘let’s wait and see.’” About this direct comparison with Google: “We aren’t a comparable company. They aren’t us and we aren’t them.”

So whom would you like to be compared to?

Bartz: “Yahoo.” But the closest analog is AOL, actually. Google is a white page with a search box. We’re very personal. When you go to our page in India, it feels like India. Relevance is important. Personalization is important. That’s not Facebook’s strategy. That’s not Twitter. “Not to say we’re not part of the greater tech sector, and you’ve got to find some compares.” But Yahoo is unique. We’re doing okay with the world side; we have to work on the easy personalization that is the core of our product focus.

Please address the stock sale, Carol.

Bartz: “I didn’t sell anything.” I got restricted stock throughout the year; when it vests, it gets recorded as a sale. “I haven’t sold one penny of Yahoo stock. Thanks for asking, because it pissed me off when they said I sold. I wouldn’t do that.”

Q&A ends. More in a bit.

TechCrunch, which first reported the funding, says CEO Evan Williams informed his employees about the new deal at a recent companywide meeting. I’m told the round is all but finished: “If the money isn’t in the bank yet, it will be soon,” a source tells me.

No word on who has invested in the company in this go-round, but it’s almost certain Twitter was able to entice new backers to join its existing investors: Silicon Valley logic dictates that each successive funding round should attract new money.

In February, Twitter raised approximately $35 million in a round led by Benchmark Capital and Institutional Venture Partners that valued it at $250 million.

And just to spell this out–Twitter’s new investors, along with older investors who have reupped, believe the company will ultimately be worth much more than $1 billion. In order to get a return on their money, they will expect it to hit $3 billion or more.

Feel free to debate the merits of Twitter’s growth prospects, and its chances of creating a real business out of all of those 140 character messages its users create.

But in retrospect, this funding round seems obvious: Twitter’s founders have insisted that they want to build the company on their own instead of selling it to the likes of a Google (GOOG) or Microsoft (MSFT), and they’ve already turned down Facebook. And if they weren’t going to sell, raising yet more money to give the company time and resources to build out a real business is the logical choice.

Here are Williams and co-founder Biz Stone talking to Walt Mossberg and Kara Swisher at the D: All Things Digital conference in May. Discussion of the company’s future as a standalone business kicks in around the 31-minute mark.

]]> http://mediamemo.allthingsd.com/20090916/twitter-goes-for-broke-if-broke-means-a-lot-of-money-new-funding-round-at-1-billion-valuation/feed/ 2 http://mediamemo.allthingsd.com/20090911/twitter-gives-spam-apps-a-thumbs-down-ads-a-maybe/ http://mediamemo.allthingsd.com/20090911/twitter-gives-spam-apps-a-thumbs-down-ads-a-maybe/#comments Fri, 11 Sep 2009 10:00:05 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=10855 It’s one of those mysteries that are so deep, so mysterious, they may never be solved: When Twitter co-founder Biz Stone says the company would “like to leave the door open for advertising,” what exactly does he mean?

Twitter Kremlinologists are currently scouring Stone’s Delphic statement, contained in a blog post yesterday, announcing changes to the company’s Terms of Service.

My guess: Twitter would like to leave the door open for advertising. One day. Maybe. Possibly. You never know.

Or, as the company notes within the new TOS itself: “We’re leaving the door open for exploration in this area but we don’t have anything to announce.”

Okay. So maybe not quite so mysterious.

The rest of the new TOS seems similarly uneventful, and given that Twitter reserves the right to change any of it at any time–that’s boilerplate language for these things–methinks it’s hard to get worked up about any of this. It’s certainly hard to see a Facebook-style flare-up in the works.

Anyway, if you want to go really, really deep here, go nuts: Twitter has helpfully kept a copy of its old TOS up on the site (nice catch, ReadWriteWeb). So you can compare and contrast to your heart’s content.

One change that might actually be a tiny bit meaningful for run-of-the-mill users comes not from the TOS itself, but from Twitter’s new rules for developers who tap into its data stream to create their own Twitter-powered services.

The relevant language: “Get each user’s consent before sending Tweets or other messages on their behalf. A user authenticating with your application does not constitute consent to send a message.”

If you’ve ever played with a few Twitter apps, you know what Stone and company are  talking about here: You try out some app, give it your account name and password, and the next thing you know it has sent out a Tweet in your name that you didn’t approve.

It usually says something along the lines of “I’m using Fantasticapp and it’s changed my life. You should, too!”

Embarrassing, and/or annoying, but not the end of the world, obviously. And you might even put up with that kind of slippery behavior in another service. But Twitter is both so personal and so public that it needs to be explicit about banning this stuff.

]]> http://mediamemo.allthingsd.com/20090911/twitter-gives-spam-apps-a-thumbs-down-ads-a-maybe/feed/ 1 http://mediamemo.allthingsd.com/20090902/google-still-shuffling-sales-force-self-serve-exec-david-fischer-steps-aside/ http://mediamemo.allthingsd.com/20090902/google-still-shuffling-sales-force-self-serve-exec-david-fischer-steps-aside/#comments Wed, 02 Sep 2009 16:53:23 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=10660 Five months after Google (GOOG) sales boss Tim Armstrong left for Time Warner’s (TWX) AOL, his old company is still reshaping its sales group. The latest move: David Fischer, who ran the company’s core self-serve ad business, is going on sabbatical later this month and will return to a different post.

In a memo first published by Silicon Alley Insider, newish sales boss Nikesh Arora says he hasn’t found a successor for Fischer and will step into his shoes in the meantime.

There has been a steady stream of Googlers heading out of the company’s sales group. But while Fischer isn’t technically leaving, his move is still a big one: He was a well-regarded executive in a high-profile spot, formerly occupied by Sheryl Sandberg, who is now Facebook’s COO.

]]> http://mediamemo.allthingsd.com/20090902/google-still-shuffling-sales-force-self-serve-exec-david-fischer-steps-aside/feed/ 0 http://mediamemo.allthingsd.com/20090901/myspace-facebook-move-lots-of-display-ads-not-so-much-money/ http://mediamemo.allthingsd.com/20090901/myspace-facebook-move-lots-of-display-ads-not-so-much-money/#comments Tue, 01 Sep 2009 20:19:36 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=10601 Just how big are MySpace and Facebook? Big enough to account for nearly one in five of the display ads Web marketers buy in the U.S.

That factoid comes via Web-tracking service comScore (SCOR), which says the two sites accounted for 17.4 percent of the display ads in the U.S. market in July.

News Corp.’s (NWS) MySpace, in the midst of a turnaround effort, has a slight lead over Facebook–9.2 percent of the market versus 8.2 percent. That makes sense since MySpace has always been aggressive about loading up with ads, while Facebook has been fairly reticent, much to the dismay of the “when are you going to monetize?” crowd. (Click table to enlarge.)

That’s something you knew intuitively, of course. But interesting to see it in graphic form.

Another data point you already knew, but may still find worthwhile to see in black and white: Just how small the scraps are for the rest of much of the social network ad world. By comScore’s count, the next eight-biggest social networks command a collective 1.4 percent of the market. (By the way, ever heard of MocoSpace.com before? Do you know anyone who claims to be a user?)

Remember that we’re just talking about overall impressions, not dollars. And ad impressions on social networks are famously cheap, so this stat only tells part of the story. But it’s an important part. It illustrates the potential that the services have, even if they haven’t capitalized on it (not that they haven’t tried).

Meanwhile, here’s a bonus table from comScore laying out the top advertisers on social networks. No surprise to see the likes of AT&T (T) and Sprint (S) here. But perhaps it’s noteworthy that Verizon (VZ), the strongest U.S. telco, spends the least on social media impressions. Meanwhile, social network app makers/services like Zynga are spending heavily.

(News Corp. owns Dow Jones, which owns this Web site.)

]]> http://mediamemo.allthingsd.com/20090901/myspace-facebook-move-lots-of-display-ads-not-so-much-money/feed/ 1 http://mediamemo.allthingsd.com/20090827/apple-signs-off-on-spotify-when-will-big-music-play-along/ http://mediamemo.allthingsd.com/20090827/apple-signs-off-on-spotify-when-will-big-music-play-along/#comments Thu, 27 Aug 2009 21:11:41 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=10414 Spotify is the best music service you’ve never used. That’s because the much-hyped streaming music service is only available in Europe and for a select few in the U.S. who have either gotten sneak peeks or hacked their way into it.

The service took one step toward wider distribution today when Apple (AAPL) approved its iPhone app (for a glimpse of the app, see the video at the bottom of this post). But that won’t help U.S. users until the big music labels–Warner Music Group (WMG), Sony (SNE), EMI and Universal Music Group–agree to American distribution deals.

But before we get to that, let’s back up and explain what Spotify is: A streaming-music service that lets you listen to whatever you want whenever you want, as long as you have a Web connection. A free version comes with ads, and if you want to do away with those, you can pay for a subscription.

Does that sound familiar? It should. There are plenty of models like this available in the U.S. right now, from RealNetworks’s (RNWK) Rhapsody to MySpace Music, a joint venture owned by News Corp.’s (NWS) social network and the big labels. For various reasons, equivalent (and legal) models have been much harder to come by in Europe, which explains part of the appeal there. The other explanation is that Spotify works beautifully.

But don’t take my word for it. Ask Slate.com columnist Farhad Manjoo (“The best streaming music service in the world”). Or better yet, Facebook CEO Mark Zuckerberg (“Spotify is so good”).

Meanwhile, investors–primarily European ones–have been throwing money at Spotify, and the big music labels’ international arms are enthusiastic partners (and equity shareholders). And the company’s boosters have been pointing to a U.S. launch as early as the fourth quarter of this year.

So let’s assume this happens. What then? The problem with the digital music business, as company after company has found out, is that it’s a miserable business:

• Selling music by the track is a low-margin affair that only works if you have enormous scale–Apple sells some two billion songs a year.
• It’s been nearly impossible to get more than a few hundred thousand people to pay a monthly fee for music–ask Rhapsody or Best Buy’s (BBY) Napster, which have been slogging away at this for years without gaining any traction.
• And it’s been impossible to support a free service with advertising while ponying up big licensing fees to the labels–ask Imeem, et al.

So why will Spotify be any different? Depends on whom you ask. Some figure that it has the best chance of working as a mobile service and that since phone users aren’t used to the idea of getting all the music they can eat on their phones for free, they’ll pay up if given the chance. Others think the big labels have gotten wiser and/or more benevolent about their licensing fees and are willing to wring less out of Spotify at the start in the hope that it will pay off down the road.

Still others just shrug and figure it will work out somehow because…well, one of these days, someone has to figure out how to make this work. “Everybody loves the product,” says an industry executive familiar with the company’s plans. “And there’s a hope that the business model is realistic.”

I have heard rumbling that not all of the big labels are equally enthusiastic about a U.S. licensing deal. It’s unclear whether that’s due to something specific about the U.S. market or to internecine squabbles at particular labels. But Spotify will need at least three of the big four to play along. And then we can see just how realistic the model really is.

]]> http://mediamemo.allthingsd.com/20090827/apple-signs-off-on-spotify-when-will-big-music-play-along/feed/ 0