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  • Steven Woda

Daily Roundup for 2008-04-14

Yahoo’s resistance to a takeover by Microsoft looks foolhardy to some investors and Wall Street analysts. But the push-back may prove effective in the end—at least by forcing the suitor to cough up a few more bucks a share. Executives from Yahoo (YHOO) on Apr. 7 reiterated the reasons for their opposition. The $31-a-share offer, made public Feb. 1, "substantially undervalues" Yahoo, and its stock component is even less attractive in light of Microsoft’s (MSFT) slumping share price. "We have continued to launch new products and to take actions which leverage our scale, technology, people, and platforms as we execute on the strategy we publicly articulated," Yahoo Chief Executive Jerry Yang and Chairman Roy Bostock wrote.

Microsoft (MSFT) just dropped the bomb on Yahoo (YHOO). Microsoft CEO Steve Ballmer on Apr. 5 sent a letter giving Yahoo’s board three weeks before it initiates a proxy fight, including nomination of a new slate of directors likely to approve the deal.

There is an inherent tension between the tech and traditional companies when it comes to media. With some oversimplification, it can be summed up in one question: Is content the center of the online world, or are algorithms for search and targeted advertising? The old guard of media forever struggle with the degree to which they’re comfortable engaging with the newer players online. (To pick just one example: Viacom (VIA) sued YouTube (GOOG) over copyrights last year, while many other programming giants partnered with it.) But a variant of this tension also erupts inside some big online portals—Yahoo! (YHOO), AOL (TWX), and, most recently, Microsoft (MSFT)—which are media operations themselves, since they produce content and sell ads around it.

Facebook has a new friend—a big one with lots of e-commerce connections. The social networking site—with 34 million unique visitors in January, according to web measurement firm comScore Inc.—now works with technology from Inc. that makes it easier for Facebook participants to decide what to buy their friends and link to to find and purchase that digital camera or red sweater that suits a friend’s fancy.

THE e-commerce bandwagon bypassed millions of carpenters, massage therapists, lawyers and other service providers, mostly because it is impossible to drop an appointment into a shopping cart without unleashing a scheduling nightmare. Now that a set of Internet start-up companies has emerged to help solve this problem, though, small businesses could start using the Web as more than just an online brochure. And while the category is too new for analysts to handicap with much confidence, there are signs it could gain a significant following.

I had a conversation about communities with kara_k from the IdeaStorm team last week. We talked about traditional community sites like Friendster, Bebo, Facebook, Skyrock MySpace and LinkedIn. In that model, millions of folks are members and can connect with others there for different reasons.

Eric Litman is a longtime Washington area technology guy who calls himself an "Internet entrepreneur and evangelist." Litman was one of four founders of a well-known local Internet development company in the 1990s called Proxicom. Using proceeds from the sale of that company and other ventures, he is now running a technology investment firm out of Rockville called WashingtonVC. If you listen to him explain his vision for the future of technology, it sounds quite sweeping.

Yahoo Inc.’s last-ditch efforts to avoid a takeover by Microsoft Corp. appear to be setting the stage for a dramatic finale featuring a rich cast of Internet and media stars. Eager to frustrate Microsoft in any way possible, Internet search leader Google Inc. has already agreed to help out Yahoo by participating in an unusual test that will gauge how much more advertising Google can sell for its struggling rival.

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