In June this year, Yahoo’s CEO Carol Bartz said the company sold its search business to Microsoft because, according to a New York Times report, “Yahoo could no longer continue to match the level of investment Google and Microsoft were making in searching”, with plans to invest in the company’s display ad, content and mobile services technologies.

However, it is now praying for deliverance from the Justice Department that antitrust regulators approve the deal. There are also reports that the company’s executives are offloading their shares at a time when confidence in the company needs to be bolstered. But the big question is, what would happen to Yahoo if the deal is scotched?

Ms Bartz suggested in a bizarre interview that Yahoo isn’t a search engine company and denied it ever was one. She also said that she would have sold the company to Microsoft and, when asked what’s next for Yahoo, unbelievable as it may sound, she replied, “search isn’t what we’re after…I don’t wake up in the morning and say ‘Gosh, what am I going to search?’ That’s not what I do. I wake up and say, ‘What’s happening?’ And that’s really what Yahoo is. We really want to be the centre of peoples’ online lives.”

While it is understandable that Yahoo could no longer continue to fund search at the levels of Google and Microsoft, the Microsoft-Yahoo deal has stalled. According to Yahoo’s financial news site, US antitrust regulators have “requested more documents” in their probe of the Microsoft deal to provide search engine technology to Yahoo, with experts expecting it to get “close scrutiny from regulators”, but concluded it should eventually be approved but that it will take months.

Although these antitrust problems exist, Microsoft says that it is confident in its ability to persuade the regulators that more competition in the market is a good thing as that this deal will ensure that its race to catch up with Google has the “best interests of the market”.

Perhaps the deal is not so much in doubt, but what would happen if the antitrust regulators fail to approve the move? It would simply leave Yahoo, and particularly Ms Bartz, between a rock and a hard place with no alternative in place.

On the face of it, Justice Department interest in the deal is somewhat strange in that a merger of two companies’ technologies to compete with the market leader doesn’t really smack of antitrust. But perhaps the regulators just want to further the probe into the effects on advertisers? Anyway, some analysts believe the Justice Department will force both companies to put Yahoo’s search technology assets up for auction in order for the deal to go through.

Microsoft and Yahoo representatives have also said they were hopeful that the deal to challenge Google would close early next year, but with Google’s market share as much as 65% of the US market and up to 90% internationally, and with Yahoo’s about 19% in the US, the deal has a long way to go yet before it makes any real impact.

The antitrust probe is not the only problem affecting the company: executives are also offloading shares. With the furore about antitrust and Yahoo’s business model, it is claimed that that Carol Bartz and other Yahoo’s executives have sold out their shares. Ms Bartz sold $830,000 of Yahoo stock in March and a further $1.4m in June, or 46% of her share options, for almost $2 million.

All this comes on top of reports that Ms Bartz fired off an angry internal memo after it was disclosed that Yahoo shareholder Carl Icahn sold 12 million shares in the company. In the memo she told employees to “get out of the sugar low – we have work to do. Stop staring at our navels, stop arguing with each other. Stop debate, debate, debate, and let’s focus on the competition.”

And it’s not just Carol Bartz and Carl Icahn who are selling Yahoo shares. General Manager Mike Callahan also sold $1.35 million in shares the past year. As Yahoo investor Eric Jackson of Ironfire Capital remarked: “Two million already cashed out for Bartz is too much, too soon.” He added, “it doesn’t really fit with her ‘I didn’t need this job as I was retired’ image she portrays”.

Yahoo’s response was that Ms Bartz needed the money to pay a hefty tax bill. So, instead of building confidence in the company at this vital time and holding on to stock, Yahoo’s shareholders get to pay her taxes. But whatever rationale is attached to all this, it doesn’t exactly make Yahoo look like a very attractive investment at the moment.

The sale of these shares alone may well have left Yahoo’s investors wondering about Carol Bartz’s long-term loyalty and whether she still believes in the company. Maybe she cashed in her shares before the share price dips too low? Maybe other major shareholders will follow suit if Yahoo struggles and fails to turn its profitability around?

When you take a look at Yahoo’s finances, they are not looking that great. The Guardian recently published, “In its latest financial results, the company said that revenue for the past three months was down 13% from the same period last year to $1.5bn, while profit rose slightly to $141m…Bartz’s influence appears to have had little impact on the company’s bottom line so far…”

But doesn’t this sound all too familiar? With the banks now back to the bonus culture, thestreet.com commented on Yahoo’s executives, “…Every director and officer there seems to have a congenital affliction that is forcing them to withdraw as much compensation as they can from the shareholders…As a casual observer, I’m simply galled at this pigs-at-the-trough behaviour.”

All this negative press must have Google ready to roll out the tanks if Yahoo shows any further signs of tripping over its own bootlaces. Unlikely, but should this merger be blocked, what would become of the search engine that doesn’t do search?
Clouds hang over SE company that doesn’t do search

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The Iranian election in June this year has been used as a key source of analysis for the comparison between social and traditional media in providing up-to-the-minute reporting on world events.

The controversial presidential election held on in Iran June 12 this year saw incumbent Mahmoud Ahmadinejad win a landslide victory, but the result was associated with charges of voting fraud which led to weeks of post-election unrest and, according to reports, left at least thirty people dead during the street protests.

But what were the effects of the coverage by social against traditional media? According to Nielsen, the Iranian election was “yet another watershed moment in the ongoing evolution of news and media, further blurring the lines between being, reporting, and following the story.”

An initial Nielsen analysis of search results on the election found that: “Wikipedia emerged within the top two search results for 4/5 of the leading topics; at least one social media source emerged within the top 10 search results for every term; and in most cases, the social media sites emerged directly above a traditional, major news source.”

What this showed was a marked shift in online news, as this event highlighted, more than any other, that the Iranian election was a watershed moment for social media.

As Nielsen pointed out: “YouTube emerged within the top 10 search results for all search terms in the second week; Wikipedia remained within the top three search results in the second week for four of the five search terms; and Twitter emerges within the top 20 search results in week two – specifically, the Twitter results for Moussavi and Ahmadinejad…The conflict in Iran [is the]…most sophisticated example of how the world has changed for journalists, the media and increasingly active media consumers alike.”

So what did this “watershed” media moment signify? It certainly pointed to the fact that consumer-generated media by far eclipsed traditional news sources, with people accessing breaking news on Wikipedia and YouTube, rather than the New York Times or the BBC.

According to Mashable (see http://mashable.com/2009/06/14/new-media-iran/): “Twitter is by far the best social media tool for breaking news second-by-second information on what happening in Iran and that people across the globe were chatting about every news item.”

During the Iranian election, YouTube was the main distribution video channel, as locals posted vigorously on what was happening on the ground, and out there in the blogosphere they were far quicker in posting breaking news from Iran than traditional media, with Flickr positively overflowing with gruesome images of beatings and of the protests themselves.

According to The Web Ecology Project (see http://www.webecologyproject.org/), which focuses on data mining to analyse and understand culture on the web through quantitative research, the summary of its findings on the Iranian election was: “mashable is more influential than CNN; sockington is more influential than MCHammer; celebrities with higher follower totals foster more conversation than provide retweetable content; and that news outlets, regardless of follower count, influence large amounts of followers to republish their content to other users.”

With the seemingly unstoppable advance of Twitter, a report, “The Influentials: New Approaches for Analyzing Influence on Twitter”, talks about Twitter “simplifying extraneous features…and boils down its environment to people and content…but failed to identify the nuances of social interaction in the system, the analyses tended to focus on the ‘connections between users rather than the relationship of users, content, and platform’.”

It is a strange phenomenon in a way, given that the BBC had several correspondents in Iran at the time. However, there were “heavy restrictions” placed on the BBC and other news organisations, as reporters were not allowed to cover news the Iranian authorities regarded as off-limits. This impediment to reporting led to the BBC’s comment on the discussion about Iran: “The majority of messages on Twitter, both within Iran and abroad, are from Mousavi sympathisers — a factor we need to allow for.”

As an aside, a website I came across recently is a Twitter monitor called Monitter. It allows users to have multiple columns of keywords in order to monitor what is being posted on Twitter in real time. To follow major international breaking news stories, it is a favourite source for some in monitoring a situation as it happens.

According to Sacred Facts’ Twittering the Uprising? (see http://sambrook.typepad.com/sacredfacts/2009/06/twittering-the-uprising.html): “If you, as an average news consumer, relied on Twitter you might believe all sorts of things had happened, which simply hadn’t, running a high risk of being seriously misled about events on the ground. You might at best, have simply been confused. You probably wouldn’t have thought Ahmadinejad enjoys much popular support at all.”

Because of the restrictions placed on traditional media on the covering of the elections, social media proved to be a huge benefit in the vacuum of news coverage — as it was one of the few ways for the Iranian people to communicate with election-watchers in the West.

However, it is all very well for the general public to find its niche in reporting major news events, but for the BBC, what stood out in all this is that their journalists “exercise care and to check information before publishing it as fact”, thus it is still a much more reliable source of news dissemination than people’s news that is likely to post dubious “links, rumours and reports”.

Whilst provided additional, more personal channels and sources for people following this story, there is still no real place to dispose of traditional media just yet; it just needs to speed up its response to the social media phenomenon far more keenly.

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John Sylvester is the media director of V9 Design & Build (http://www.v9designbuild.com) and an expert in search engine optimization and web marketing strategies.

The effects of social reporting over traditional media

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