Guess what… Yahoo!’s back in play.

Today legendary activist investor, Carl Icahn, announced he had purchased approximately 3% of Yahoo!’s shares in a bid to take over the company. He has been buying shares for the past few weeks, apparently in the hopes of getting Microsoft back to the negotiating table. Icahn declared his stock purchases today because tomorrow is the deadline for nominating names to stand for Yahoo!’s Board of Directors at the company’s Annual General Meeting next month.

Icahn is taking an enormous gamble as there has been no signals from Microsoft it is interested in reopening negotiations with Yahoo!, having instead re-adopted the “Go it alone in search” stance. He has been known to take such gambles in the past, sometimes successfully, sometimes unsuccessfully.

Here’s an important tip about Carl Icahn. Icahn rarely buys with the intention of sticking around for the long-haul. Icahn is into buying big things, splitting them into smaller things and selling those smaller things as quickly as he can. Such is the life of a corporate raider, which is exactly how Carl Icahn does business.

Icahn has been a thorn in the sides of CEOs and Boards of Directors from Wall St. to the Silicon Valley over the years, most recently tangling with Richard Parsons and the Board at Time Warner in a bid to break the media giant into component pieces. As a major shareholder in the IAC/Interactive Group, the owner of Ask.com, Icahn was said to be instrumental in CEO Barry Diller’s decision to break the company into five separate units.

Like everyone else, Icahn knows that the Yahoo! - Google advertising deal poisoned Microsoft’s taste for Yahoo!. Icahn very likely sees a great deal of value in various aspects of Yahoo!’s multiple business ventures though it is not likely he sees a great deal of value in Yahoo! as a complete company. His sudden interest in Yahoo! could spell what many would consider the worst outcome for the search marketing community, the break-up of Yahoo!

It’s on… Team Metamend is taking on several challengers for the second annual Victoria Tech Community Floor Hockey Challenge, a fun filled tournament that lasts four weeks and tests the physical endurance of everyone involved. (We take our hockey seriously ’round these parts)

Our outward goal (aside from winning) is to raise money for various local charities while creating an environment in which local tech companies and workers can get together to meet and have a lot of fun. This year, we are playing to raise funds for The Mustard Seed Food Bank and the Boys & Girls Club Services of Greater Victoria.
Here’s a brief rundown of the schedule: (All games start at 6:30pm)
May 14: Reliable Controls vs. Metamend

May 21: Scheider Electric vs. Telus
May 22: Reliable Controls vs. Pareto Logic

May 28: Reliable Controls vs. Telus
May 29: Metamend vs. Patero Logic

June 4: Pareto Logic vs. Telus
June 5: Metamend vs. Schneider Electric

June 11: Metamend vs. Telus
June 12: Reliable Control vs. Schneider Electric

June 18: Schneider Electric vs. Pareto Logic
Anyone who hasn’t been to one of the exhibition games should come watch. It’s one of  the best free-tickets in town (though donations to either charity are very much welcome). The skill level is high and the tone is intense. You have to see it to actually believe it.

Best of luck (and enormous thanks) to all teams. We’ll see you on the floor.

Making a website search engine friendly is far less difficult today than it once was, partially because of standardization in the way websites are built and spidered, and partially because the search engines themselves are far better at accessing web documents than in previous years. Nevertheless, there are a number of small steps webmasters and search engine optimizers can take to make a website and the documents housed within it as search engine friendly as possible. The first place to start is site structure.

Have you ever wondered why the vast majority of houses and buildings look similar to each other? Unless your home or office was designed by a famous or ambitious architect, chances are it looks very much like many other structures in a five-mile radius. There’s a reason for that. The basic design works well for the environment in which it is deployed. For instance, most houses in Canada are built with brick except those on the seismically active Pacific coast where wood is the primary building material. Why wood? Aside from the fact BC has plentiful forests, wood is more flexible in an earthquake and more likely to remain standing while the Earth moves under our feet.

Similarly, the vast majority of websites follow a very simple file and server structure, one that website builders, search engines spiders and website visitors are familiar with. The structure resembles a three to four tiered pyramid with the HOME or INDEX page at the top and subsequent pages cascading and expanding the base of the pyramid below. Each level of the website is noted by the URL as part of the directory tree. Please note, the hierarchy of the pyramid is not necessarily symmetrical. Some levels may be far larger than others.

i.e.: metamend.com/ would represent the top or first level. metamend.com/ppc-management/ represents a second level, and metamend.com/ppc-management/ppc-assurance.html, represent a third.

This is the simplest format for a website file structure. Though simple and straight forward, even the most basic designs can present search engine optimization specialists with challenges that need to be worked through. What, for instance, do you do if the basic file structure doesn’t match the organizational tree needed to make sense of the client’s business, services or other determiners such as geographic locations?

One method of dealing with information organization issues is the use of sub-domains, i.e.: subdomain.metamend.com/. In certain circumstances, using a sub-domain presents a search-friendly (or at least search-neutral) solution. Sub-domains were once used to represent a distinctly different section of a website or business. For example, a resort/spa website might use sub-domains to display different packages to different nationalities. (i.e.: uk-travel.spa-URL.com or fr-voyager.spa-URL.com)

At one time SEOs would advise clients to limit their websites to three levels if possible. That’s still good advice however, search engine spiders are able to penetrate far multiple levels of a website to find information. Keeping the structure basic is the best way to guarantee free passage of spiders. Another is the creation and inclusion of a simple text-based sitemap.

Yahoo! might have wriggled free of Microsoft for the time being but it is now getting closer to Google than many PPC experts are comfortable with. Yahoo!’s overt flirtations with Google proved to be the ultimate poison pill that turned away Microsoft’s uninvited attentions.

Most in the search marketing community were rooting for a deal between Microsoft and Yahoo!, not because we love Microsoft or dislike Yahoo!, but because we felt that the combined forces of the two mega-firms would provide a truly capable competitor to Google. That didn’t happen. As it stands today, we’ve transited from a potential to create greater competition to the very real potential of seeing far less competition in the lucrative PPC marketplace.

On yesterday’s Webcology show on WebmasterRadio.fm, we explored the Post MicroHoo environment with Search Engine Watch Executive Editor Kevin Heisler and WorldBenefactor.com co-founder Greg Meyers. (Greg also publishes the blog SEMGeek.com).

It was an interesting conversation. Kevin covered the business ends of the equation and Greg passed out several tips on PPC bidding strategies his non-profit WorldBenefactors.com site is adopting in the post MicroHoo world.

I had wanted to get Metamend’s PPC Specialist Mark Johnstone on the show to share his thoughts on bidding strategies should Yahoo! and Google deepen their paid-search relationship. Unfortunately, (or fortunately, depending on how one looks at it), Mark was busy in a client conference call during the live show.

We’ll be doing a follow-up show when the dust settles, probably a couple of months or so into the future. In the meantime, please enjoy the warmth, wit and wisdom of yesterday’s Webcology.

Listen to the podcast:

Webmaster Radio
	Monetizing Paid Search Show: Webcology

Yesterday, YHOO opened at $23.28 per share and rose gently through the day to close at $24.37 per share. This morning, it opened far higher at $25.55 per share, instantly fell to $24.20 per share and then quickly rose to peak at $26.03, the point they trade at right now (12:10 pm-pacific).

This was NOT an expected outcome. When Microsoft CEO Steve Ballmer openly closed the door on a deal, observers anticipated immediate and extraordinary losses for Yahoo!’s shareholders. Though down from their Valentine’s Day peak of $29.98, YHOO is still trading well above their low of $19.18, the day Ballmer announced Microsoft’s acquisition attempt.

Donning my counter-intuitive thinking cap, (and opening this round of speculative writing), I’ve been trying to make sense of Yahoo!’s NASDAQ yo-yo act.

My first thoughts think there is a massive buyer out there snatching up blocks of stock as they become available. That could make sense given the public sense that Microsoft hasn’t really backed away from the deal. If Microsoft or an institution friendly to Microsoft was buying votes in the form of YHOO shares, we could be looking at a kinder and gentler type of hostile takeover bid. May 15, incidentally, is the last date a proxy-fight can be openly initiated before Yahoo!’s annual general meeting on July 3.

Similarly, perhaps there are a number of institutions and large buyers lining up to pick a piece of Yahoo!’s pocket in the event it becomes a target again.

In a dissimilar vein my second thought thinks there might be a large buyer friendly to Yahoo! shoring up share prices in the hopes of pacifying a greater Yahoo! shareholders revolt while deepening their own business arrangements around Yahoo!. Building on extremely shaky ground requires seismic shoring or the foundation will crack before the walls are built. Better to stabilize the platform before building a bigger structure.

I have a third thought but it’s just too wacky to be believed… Perhaps, just perhaps (like in an alternative universe where most of us would rather live but don’t…), regular investors are seeing value in Yahoo! shares. The only thing propping that theory up is the fact that many investment firms have moved YHOO from “sell” to “hold” status today.

The Microhoo drama remains one of the most interesting stories to watch. As things stand right now, it hardly looks like it’s over.

The question, which is probably meaningless to anyone living in the United States, South America, Europe, Asia, Africa, the Middle East and even most of Canada, involves the fate of a brand-character for a regional beer brewed and sold in British Columbia. Just above the article content, a banner ad asks, “Should the Kokanee Ranger Live or Die?“  Believe it or not, it is a rather important query ringing in the ears out here.

So here I am, sitting at the southern tip of a rather large but isolated island on the far-west coast of North America reading news published on a far less isolated island on the far-east coast of North America and I get confronted with a banner ad promoting a regional beer that has absolutely nothing to do with New York. Neat eh?

Well, it’s mostly neat but not entirely magical. By monitoring my IP address, the display advertising distribution company serving the New York Times selected an advertisement from its inventory that would likely match my desires or needs as a male Canadian consumer on the west coast. Canadians are known to enjoy their beer and British Columbians are known to drink pint after pint of that particular regional beer. Chances are I might be interested in that kind of beer as well, especially as I get a voting stake in the life-cycle of the Ranger, a beloved but bumbling character who protects BC’s beer supply from the ever-thirsty Sasquatch. (I kinda like the guy so I voted for his survival).

Speaking of survival, the advertisement serves as a reminder that Yahoo! has a far larger advertising footprint online than the simple PPC ads we associate with the enormous profits Google has enjoyed over the years. Yahoo! remains the dominant player in the display advertising market, even after Google’s acquisition of display ad-giant DoubleClick.

I would have liked to conclude this post noting the BC-based ad I saw this morning was served by Yahoo!. Unfortunately I can’t. The New York Times uses Google’s DoubleClick for its display advertising needs. Nevertheless, it is good to be reminded of such things. Yahoo!, while damaged and somewhat degraded after the three month Microsoft debacle is NOT down-and-out.

REDMOND, Wash., May 3 /PRNewswire-FirstCall/ — Microsoft Corp.
(Nasdaq: MSFT) today announced that it has withdrawn its proposal to
acquire Yahoo! Inc. (Nasdaq: YHOO).

The news came out of Redmond Washington early Saturday evening. Microsoft CEO Steve Ballmer announced that Microsoft was walking away from their attempt to acquire Yahoo!.

In a long letter (reproduced below) to Yahoo! CEO Jerry Yang, Ballmer outlines his decision and is clear about his disappointment with the outcome. Ballmer is less clear about his future intentions, leaving the door open for another acquisition attempt while falling back on Microsoft’s oft heard but unproven mantra, “We Can Do Search Ourselves”.

Over at Search Engine Land, Danny Sullivan has written a definitive analysis of the weekend’s events, (Leaving Las Yahoo: Microsoft’s $5 Billion Mistake?) and Yahoo!’s multiple options, including links to several other takes on Ballmer’s $50Billion Balk.

I don’t think this is exactly over yet. Tomorrow morning will give us a better idea what Yahoo! shareholders think as the markets are certain to react swiftly.

Steve Ballmer’s Letter to Jerry Yang:

May 3, 2008

Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our
decision to offer a 62 percent premium at that time reflected the strength of these convictions.

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

- First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

- Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

- In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

- This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

- It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.

Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Sincerely yours,
/s/ Steven A. Ballmer

Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

Given the lack of events last weekend, it’s hard to get all excited about the latest round of news, rumours and innuendo but I get paid to get excited about this sort of thing so here goes…

He’s gonna or he’s not. It’s come down to a the simplest of complex choices for Microsoft CEO Steve Ballmer. An emergency Microsoft Board of Directors meeting held yesterday gave Ballmer the absolute power to make a decision to move forward into hostile territory or retreat to the relative discomfort of his Redmond Washington office. The decision is expected to be announced this weekend, possibly as soon as this afternoon.

To further complicate Ballmer’s already complicated day, a Town Hall meeting has been called at Microsoft today where lay-offs are expected to hit some of the 75,000+ on-campus employees. Who gets hit and which departments are re-organized might offer important clues to Microsoft’s long-term planning.

Ballmer yesterday stated that Microsoft can go it alone and build its own online advertising platform. Unfortunately, that statement appears more bluster than brag as Microsoft has repeatedly tried to build an effective online advertising system to compete with its far larger rivals AdWords and Yahoo! Search Marketing. Though Microsoft owns the display advertising firm aQuantive, it is not seen as a serious challenger to Yahoo!’s Right Media or Google’s DoubleClick.

To further complicate matters, Yahoo! and Google have been making beautiful music together recently in the form of an advertising distribution deal between the two mega-firms. It actually looks as if Yahoo! could probably survive on its own. Perhaps it just took the push of a very real threat to shake Sunnyvale into action.

Everything is so fluid right now there is really no way to possibly predict the eventual outcome.

One thing is certain though. Microsoft and Yahoo! have both been damaged over the past four months. Though it might not look weakened on the surface, Microsoft will take an enormous hit if the Yahoo! deal does not get done. If Ballmer can’t pull this acquisition off, his tenure as CEO at the world’s largest software maker might come to an ignoble end. Microsoft has ended up with the short end of the stick far too many times when it comes to exploiting the potential of the Internet for fun, profit and long-term development. It’s Vista operating system has given commentators like myself five years of poking fun at Microsoft for not getting it together, while giving early adopters headaches and heartburn. In short, what should have been a major triumph has turned into a public embarrassment. Ballmer wears Microsoft’s public failures on his sleeve.

Even if Ballmer does end up pulling Yahoo! into Microsoft, he will face the herculean challenge of merging two uniquely different corporate cultures into one. Birkenstocks do not go nearly as well with pinstripes as one might suppose.

Today, an awful lot of money and prestige is on the line. Steve Ballmer is going to go hostile or he goes home. Time is of the essence and with Yahoo!’s Annual General Meeting sneaking up quickly, time is getting very tight indeed. Expect action…

The show is worth a listen for organizations that have yet to write or implement a disaster management plan. Facing the toughest challenge our 10-year old firm has ever faced, the Metamend team had a well thought-out road map to follow. When the administration put the plan to action early Sunday morning, every one of the staff knew what they had to do and set about doing it.

By Monday morning, we were each working from our home offices with a communications backbone in place and access to our common files reassigned and thus restored. By Tuesday, the team was as close to reclaiming its general working rhythm as possible. Looking back on a Friday morning, it is now possible to see beneficial sides to what could have otherwise been an unmitigated disaster.

From what I’ve gathered, the only client who noticed a difference between this week and last week was the one that shared the now shattered industrial complex our office used to be housed in. That’s a thankfully muted testimonial to the strength of our disaster management and recovery plan.

One interesting benefit our clients are almost certainly going to notice is that each of the staff is reporting the temptation to work longer hours. I’ve worked from home for almost four years now and can attest to the irresistible pull of the keyboard at both 7AM and 7PM. While a number of the Metamend team have long been known to work longer hours than others, almost all of us are reporting a 2 - 3 hour increase in actual work-time per day. While this might be seen as a sign of disaster driven over-compensation (the tendency to work harder in times of perceived emergency), it is more likely due to an increased ability to focus without the artificial boundaries imposed by a clock. Lunch gets pushed back to 3PM (when one’s body tells you to stop and eat) and work ends when dinner is served around 8ish.

Murray and David did a great job explaining the implementation of the disaster management plan and the stellar reputation management exercise the firm undertook in the early days following the fire. A previously recorded 16-minute interview with David on file at WebmasterRadio on Reputation Management as a search marketing service rounded out the hour.

Earlier today, Google announced the winners of the annual Anita Borg academic scholarships awarded to outstanding female leaders in technology. University of Victoria Ph.D. student Celina Gibbs was one of four Canadian women to achieve the scholarship.

Google established the scholarship program in 2003 to honour the groundbreaking work of Dr. Anita Borg, an early computer scientist who dedicated herself to increasing the participation of women in technology. 2008 is the first year women in Canadian universities could apply. The award is also now open to female computer science students in Europe, Australia and New Zealand.

Congratulations Celina.