AOL CEO Tim Armstrong (pictured) said in a memo to staff (below) that the company is looking to lose 2,500 workers, or a third of its total staff. He'll be forgoing his own 2009 bonus, and is offering executives up to nine months pay if they volunteer for buyouts, according to Business Insider. Interestingly, rank and filers are being offered a weaker deal than their recent colleagues over at Time Inc.; AOL will pay them three months severance, whereas Time Inc.-ers get that plus two weeks for every year of service. Apparently unions are nice things to have in situations like this.

As it prepares to offer shares to the public next month, AOL has been on a diet plan in other ways, too:

• After steady increases, ad revenue from a deal with Google started falling this year, according to Peter Kafka at All Things D. The deal provided $700 million in ad revenue last year, about one third of the total, but was off $42 million in the most recent quarter.
• AOL surrendered bustling celebrity-news site and cable network TMZ to Time Warner; Tim Armstrong said as recently as July that he hoped to "actively" discuss whether to retain TMZ with Time Warner and that "‘If the value of TMZ increases, it's a really good thing for us."
• AOL may sell MapQuest, according to Kara Swisher at All Things D.

Pic above by Yaniv Golan.

Armstrong's memo to staff:————-

AOLers –

"Employees First" is the way that we have run the company since April and that mantra is something I take very seriously because our company is a collection of people and our brands are the work of our teams. We started by working together to determine AOL's strategy, then the correct structure for the strategy, and, as we have discussed, we are now faced with making sure we have the correct cost structure for the strategy. You have seen daily and weekly updates on Project Everest and many of you have been involved in trying to align our resources to maximize AOL's opportunity.

AOL's cost structure is something we have worked on for the past four months, and we have spent hundreds of hours reviewing ways to fix the cost structure as well as the revenue growth engine. As we are coming to the conclusion of this work over the next few weeks, it is clear that we will need to have a significant reduction of costs at the company and across almost all functional areas and geographies. Headcount costs are going to be a majority of the cost reduction recommendations coming out of Project Everest.

As I mentioned in our last Project Everest update, the idea for a voluntary layoff was suggested and we agree that it is an option that gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs. Starting December 4th in the United States and ending a few days after we spin out from Time Warner, we will allow employees to choose a voluntary exit from AOL. Additionally, tomorrow we anticipate beginning the communication process for voluntary layoff programs in certain international locations. We will be looking for up to 2,500 volunteers. For context on the target volunteer number, over the next several months we will be looking to reduce approximately one-third of our overall workforce at the company. We will need to do an involuntary layoff if we do not reach the target numbers through the voluntary option.

The reduction in costs is aimed at making AOL competitive for the future of the Web and it will allow us to focus the company on growth in the non-access areas of the business. After the cost reductions, we will have a company that is aligned and structured to drive our strategy in a competitive way. The number of potential reductions isn't aimed at getting us through 2010; it is aimed at resetting AOL at the correct baseline for the future.

As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus. That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees. That plan is based on performance and overall company outcomes and it will be management's recommendation to the compensation committee of the Board to approve our performance-based bonus payouts for 2009. These are challenging times and today's news is difficult. But every day we are making changes and progress and we are on our way to re-engineering AOL for success. – TA

Eric Brown, Yahoo's new head of PR, just started work on Monday. He's ostensibly in charge of enforcing Bartz's edict to "dropkick to fucking Mars" any employees caught leaking things to the press. But before he does that, he'd like to tell you about his love for champagne, reading the Kindle in bed and his "couple of very close friends" that he frequently crashes with in Paris three or four times per year (sounds cozy!).

Kara Swisher at All Things D got Brown's companywide introduction email. This guy is going to be awesome.

—-From: Eric Brown (SVP Global Communications) Sent: Monday, July 06, 2009 6:00 PM Subject: It' s great to be here!

Global comms team,

Thank you so much for the wonderful intro materials you gave me. I' m going to spend quite a bit of time on the org charts, budgets, plans, and results package you compiled for me. But I' ve been especially thrilled with the personal profiles you sent my way. I' ve seen other people whose phobias are the same as mine: spiders and heights; enjoyed how many of you put Paris as your favorite place on Earth; and am impressed with how many amazing books this group has collectively read.

I must also admit to being slightly intimidated by all of you who put " bad grammar" as a pet peeve and will triple check this email to avoid any grammar infractions…

I know I have a Thursday group meeting with you, but thought the least I could do on day one is return the favor and complete my own handbook profile. So here goes…

Date I joined Yahoo!: today (6 July 2009), though I did spend two days at the senior leaders meeting in mid-June and thank all of you who were there for the warm welcome in Half Moon Bay.

What I do here: lead a team of amazing, intelligent, motivated people who put Yahoo! in the best light possible and tell our story in compelling ways that make users and advertisers around the world want to embrace Yahoo! heartily.

Where I grew up: Warsaw, Virginia– a tiny town about 90 minutes from Richmond, Virginia and 150 minutes from Washington, D.C. For those of you who are American history buffs, Warsaw is about 10 minutes from the birthplace of Robert E. Lee and 15 minutes from the birthplace of George Washington.

Where I live now: Sunnyvale, California. Can' t beat the commute.

College: William and Mary in Williamsburg, Virginia. BA in English. Loved lit crit. Senior honors thesis was on post-WWII masculinity in American society as represented by the works of Norman Mailer.

My first job: an internship for the U.S. Navy (my parents' employer-they were civilians) analyzing different process flow diagram software packages for a team creating warship defense systems. For the rest of high school and college, I had LOTS more fun as a waiter at dive restaurant called The Stagecoach. The food was ghastly; the people were amazing.

What I did before Yahoo!: I ran comms (PR, social media, internal comms, and exec comms) for NetApp, managing a global team of about 60+ people doing amazing enterprise and B2B work in 30+ companies worldwide. I' m very excited to learn " consumer" from all of you– and equally excited to share experiences from my almost 20 years in the business in return.

What I do when I' m not here: I love travel (had a super 3 days in the Blue Mountains outside Sydney two weekends ago), cooking (yes, seriously-cooking is very therapeutic and relaxing for me), and reading (though I haven' t picked up a Norman Mailer since my undergrad days).

If the Internet didn' t exist, what I' d be doing right now: teaching literature to high school students. I believe that at some point in my life, I have to return to society what it has given me. And I' d be a better teacher than firefighter or doctor!

Favorite place on Earth: Paris. I try to go there 3 or 4 times a year and have a couple of very close friends who are kind enough to let me crash with them. Second favorite is Hong Kong.

Proudest accomplishment: professionally– being part of the " inner counsel circle" for NetApp execs on a variety of comms and marketing issues (which I hope to be here at Yahoo! as well); personally– being a good friend, partner, and family member.

Favorite Yahoo! moment: there have only been 3 days of them so far-and all have been great. I felt very honored and lucky to be part of the Half Moon Bay leadership summit– and meeting people from all over Yahoo! there was inspiring.

Favorite book: someone who majored in literature can' t just name one, so I'll split them into categories… Favorite works of literature: The Scarlet Letter by Hawthorne, The Awakening by Kate Chopin, and To Kill a Mockingbird by Harper Lee. Favorite work that kindled my imagination: The Hobbit by Tolkien. Favorite works that make me laugh: anything by David Sedaris (the man is wicked funny).

Favorite movie: two– Moulin Rouge and Orlando– both visually stunning.

My first car: a Buick Skyhawk in a horrible shade of brown– the thing was so ratty that I had to add oil to it every other day so it wouldn' t break down– it made its last hurrah on a cross-country trip from Virginia to California and made it over the Rocky Mountains without any issues but then was quite unhappy crossing the Sierra Nevada range.

My next vacation destination: somehow I think I' m going to be very busy for the next few months so I' m not planning any big trips, though I have told a friend I' ll attend his 50th birthday party in Munich and from there I' ll try to drive to Vienna for a few days.

My hidden talent: navigating subway systems when everyone else insists on taking a taxi (the exception: Tokyo– because it is just too darned crowded).

My favorite online video: I like online videos to catch up on things that MTV no longer carries– like videos from Gus Gus (though I only see one of their videos on Yahoo! Music… )

My guiltiest pleasure: ice cream in bed with the Kindle (yes, just as Elisa put in her email)– the ice cream HAS to be Ben & Jerry's (LOVE being on this floor with the conference room names!) and my favorite is Peach Cobbler.

I have an intense fear of: spiders and heights– I even had a spider vacuum for a while so I didn't have to come near ‘ em or smash ‘ em– but then I was scared they'd survive the suction and electric shock and crawl back somewhere– so now they' re routinely smashed.

My biggest pet peeve: beating around the bush– tell me what you want me to know because I' m not telepathic and say it without a lot of metaphor or subtlety– if you really want me to know something, please make it crystal clear.

My best celebrity encounter: dinner with friends in the outdoor section of the Restaurant du Palais Royal in Paris on a gorgeous May evening– next to us was Tom Ford (at the height of his Gucci power)– I have never wanted to NOT eat so much in my life.

Something few people know about me: I abhor cava (sorry to those of you in Spain)– champagne is my favorite drink on Earth, prosecco will do in a pinch, and New World sparklings are hit and miss– but I universally detest cava.

Best for advice for working with me (yes, a little changed from what you all submitted): honesty really IS the best policy– unless I' m having a bad hair day in which case please just don' t say anything about that at all.

Thanks again for having me here– and we'll speak more on Thursday.

Best regards, Eric

The AP's Facebook and Twitter policies are less draconian than, say, Bloomberg's, but that's not saying much. They do sound, on the whole, reasonable, until you stop and ponder a few of the specifics.

For example, the organization says every comment on a staffer's Facebook profile should meet AP guidelines, because who can tell the difference between commenters and the original author??

It's a good idea to monitor your profile page to make sure material posted by others doesn't violate AP standards; any such material should be deleted.

And you, office supply assistant in the back! This applies to you too!

We cannot expect people outside the AP to know whether a posting on Facebook was made by someone who takes pictures, processes payroll checks or fixes satellite dishes.

Also, remember to distribute links fairly to the hundreds of members, and always be selling:

Link to member and customer sites instead and try to vary the links to spread the traffic around... It's a good idea to reference the AP in the promo language, i.e. Just how much geek can be chic? Test your fashion IQ with this interactive game (AP): http://bit.ly/BvAqv

Finally, no craven political posturing on social networks. That's what emails are for!

Memo below:

(Photo by Stephen Pruitt)

An internal memo about the new VP of Corporate Communications, Eric Brown, was obtained by Kara Swisher of All Things Digital. In it, Yahoo is careful to describe Brown's "bad habit of eating ice cream in bed while reading my Kindle and surfing the web."

Also, his "partner's name is Scot, he has a Pomeranian named Clio, a passion for cooking and travel." So adorable!

Less cuddly: Brown is tasked with enforcing his boss Carol Bartz's edict that anyone caught leaking information will get "dropkicked to fucking Mars."

Like former Autodesk honcho Bartz, veteran Wilson comes from a business software background, specifically storage company NetApp. Hopefully for his sake he developed a passion for "dropkicking" there.

Full Bartz Memo:

Marketing & Executive Teams,

I'm very pleased to announce that Eric Brown will be joining Yahoo! as Senior Vice President, Global Communications, reporting directly to me. In this critical role, Eric will oversee our Global Communications function, including public relations, product promotion, executive communications, public affairs, internal communications, corporate reputation management and social media outreach.

Eric is joining Yahoo! at a particularly pivotal time, as we update our corporate position and message, develop and execute a renewed global brand strategy and launch major new products and solutions. Eric will be tasked with more closely integrating the global communications team with broader marketing initiatives and the company's overall business strategy. A critical objective will be to set the communications agenda and drive Yahoo!'s message to our various constituencies–the media, analysts, consumers, employees, and key industry influencers who create buzz and can have a significant impact on how our brand is perceived.

Eric is a Silicon Valley communications veteran with 18 years of tech experience. Most recently, Eric and I collaborated at NetApp, where he spent the last nine years helping to transform the company into a multibillion dollar global enterprise. As Vice President of Corporate Relations, Eric managed a large global team and strategic communications program. He was the core communications executive responsible for the company's recent revamp of brand strategy and execution. He also played a significant communications role in helping the company gain recognition by Fortune magazine as the "Best Company to Work for in America" in 2009. Prior to NetApp, Eric was the head of PR for Adaptec responsible for B2B, brand and consumer communications, and held additional leadership positions in both corporate and agency environments.

On a personal note, Eric's partner's name is Scot, he has a Pomeranian named Clio, a passion for cooking and travel, and a self-described "bad habit of eating ice cream in bed while reading my Kindle and surfing the web."

Eric will join us in early July, so please join me in giving him a warm welcome. I look forward to his leadership contributions in this vitally important role at Yahoo!.

[All Things Digital]

Now the word is Koten may be out, too — not just of his office, but his job, too. When asked, Koten said he "planned on appearing for jury duty tomorrow." To avoid a leak, we hear managers are calling employees with the news that Mansueto Ventures CFO Mark Rosenberg is taking over temporarily. But we suspect Koten, a fan of both the B-52s and Aristotle's Rhetoric, is happiest while at sea.

After a late-night email sent by Koten urging his employees to interview him to "show some respect" got leaked earlier this month, Koten "had his assistants move all of his stuff into a cubicle outside his office," the tipster told us. Joe Mansueto, the founder of mutual-fund research firm Morningstar and owner of Fast Company and Inc., works from a cubicle. "After several years of working out of an office now seems a really weird time to become "a man of the people,'" our tipster notes.

Koten has an erratic reputation. One media veteran familiar with his career calls him "one of the unheralded geniuses of the magazine business" but also the "laziest man in the world." Legend has it that the devoted sailor once turned down a promotion at the Wall Street Journal that would have had him move from Chicago to New York because of the cost of berthing his boat. (He later made the move, and recently invited Mansueto Ventures employees to bring their children on board his boat for Take Your Children to Work Day.)

Media Business hailed him as one of the top innovators in the magazine business for FastCompany.com and FastCompany.tv. But the architect of those websites, Ed Sussman, was fired in October. FastCompany.tv star Robert Scoble inexplicably lasted through March, despite spending more of his time Twittering than videoblogging. Perhaps Fast Company can bring him back to do a remake of "I'm On a Boat"?

(Photo by rexhammock)

The email, which questioned why anyone who wasn't "orthodox" might take Good Friday off, is now circulating online, with this preface:

This is an email from one of the MD's in the Healthcare Group at Thomas Weisel Partners where I used to work. He is one of the most unpleasant people I've ever worked with.

Soden's email:
Always amusing to have someone with a "III" after their name lecture employees about the importance of hard work. According to Soden's profile on Thomas Weisel's website, he's not exactly keeping busy doing deals himself. Soden is providing endless entertainment for his workers, though, in the form of a fake Twitter account one prankster set up:

Here's a memo he sent to all staff at Mansueto, which also publishes Inc., the magazine Koten used to edit, last night:

From: John Koten
Sent: Thu 4/9/2009 11:49 PM
To: ALL MANSUETO
Subject: Thought for the day

I realize few of you want a life identical to mine. However, it does kind of amaze me that in the entire time we've been at 7 world trade center, not a single employee has ever directly asked me....how did you succeed in our business. How did you do it.

This surprises me for several reasons: one, because I think I could give an interesting answer. Two, because it's the subject matter we are supposed to be presenting our readers. Three, because it would impress me and show some respect.

It's a question I constantly asked people when I was young, including all of my bosses and every ceo I interviewed. I asked richard petty, I asked michael jackson, I aslked joe mansueto, I asked john delorean. I asked peter kann, I asked norman pearlstine. I asked john huey. It's a pretty easy question to remember.

And that's at least one tip you can have without ever even bothering to ask me.

Earlier in the day, Koten announced that employees' children visiting for Take Our Daughters/Sons to Work Day "are all going over to see the ceos [sic] boat." And then he sent this email:

From: John Koten
Sent: Thu 4/9/2009 6:56 PM
To: ALL MANSUETO
Subject: Sailing

One of my crew on panet claire is the best sailing instructor in New York. He will be happy to teach anyone sailing ir just take you out on my boat this summer. He also gives private lessons, can help you join the manhattan sailing club (free lessons). 800 bucks plus unlimited access to boats a few blocks from our office. Check it out at msc.org.

A tipster tells us Koten bought a boat last year and spent most of summer working on it.

The tipster adds that Koten suggested employees spend $800 on sailing lessons after two rounds of layoffs in September and January, and a move two weeks ago to force everyone to take two unpaid weeks of vacation, effectively cutting salaries by 5 percent. As for how Koten is "succeeding in our business"? Joe Mansueto, the owner of the company, the tipster says, writes a $2 million check every month to keep his magazines afloat.

Update: We heard from Koten!

That was a hilarious article today. I have no personal objection to any of it. However, joe mansueto wrote me from vacation to ask me to tell you that your loss numbers are way off and uninformed.

You are welcome to come over and chat with me, see our place, see my boat, etc.—any time.

I'll have some news you could break whenever you choose to come.

The style of this email confirms the authenticity of our tipster's leaked memo. It's interesting how Koten manages to reach the shift key to capitalize "I," but doesn't manage it on proper names, even his boss's. (Or he's just an iPhone or BlackBerry user who's grown overreliant on his phone's autocapitalization feature.) We also note that Mansueto didn't specify if our source's estimate of losses was high or low, just "way off."

A tipster shares this theory about the timing of Koten's email: booze. Koten is reportedly a Rangers fan, and gets drunk at games. The Rangers played last night. Ergo, drunken email. Koten says: "Yes, the Rangers made the playoffs last night, so I was pretty happy."

A Mansueto tipster confirms that Koten often shows up at the office at noon. One staffer notes that one of the rare occasions when Koten appeared at the office in the morning was when he announced the unpaid time off — after which he promptly left for a vacation in Jamaica.

(Photo by rexhammock)

Dennis,

The NYC Googlers in the Ad Sales department are grateful for your arrival. Wow, you could not have come sooner. The office was falling apart. Armstrong was running his many businesses and promoting the most incompetent early Googlers to high ranking positions. Please take note of a few problems.

* The vast majority of your team managers have NO direct advertising sales experience. Many come from agencies but those of us who have actually worked on the outside know that very few people successfully transition from agency to sales.
* What is the scoop with this HOI position? Are you kidding me? These people are quintessential middle management. Call in McKinsey amnd see what they think. Most HOIS with the exception of Dan Schock have never sold. Pavelko dresses terribly and has the single worst breath.
* What do the Vertical heads do? Have you ever heard some of them speak at conferences? So now you have the Vertical Head and the HOI and the team Manager....
* Let's discuss the team managers again. Are you kidding? Do you see the problem?
* Now you have gone and taken your BEST salespeople and put them on a display team. Have you heard how they have been treated? They actually no how to build relationshipss, sell and entertain but they are now overwhelmed by middle managers. What happened to the good old days of risk taking. Now it is death by meeting with spread sheets and bs.
* Please fix this mess sire. Please.
* BTW, what is with the stuttering Castelli. He was the Publisher at 3rd tier magazines but now he is heading the east coast? Have you heard him speak?He cannot get a word out. He has no visibility and barely understands the products. Have him take you through a deep dive.
* Agency? Are you kidding me? Do you see the problems? How many Ivy educated people does it take to call a customer? Trust me, customers are annoyed. They are not getting service they deserve. OSO is pathetic and GMS has not a clue. Every other major company has salespeople who know how to call the agency and customer. At Google, we discuss it first.

HELP us little man.

NYC

That figure covers copyright claims for past alleged infringement by Google — the search engine had to scan the books to add them to its special book search index — but not revenues authors can hypothetically earn if they opt into special deals with Google. Under the special arrangement, authors would get a cut of revenue from advertising sold next to Google "previews" of their books, and a cut of sales of special editions (e.g. online, library printing, etc.).

Authors have the right to opt out of these moneymaking schemes, and they would be wise to do so: Google Books overlord Ramsey Allington is said to be an unqualified train wreck of a manager, and Google failed at a similar sales effort for online video.

The Authors Guild didn't bother with such details in an email (see below) to members, nor did it explain how a purported $125 million settlement only includes $45 million in author and publisher payments; it offered instead a rosy summation of the lengthy settlement agreement.

If authors had any doubts about the weak and declining economics of their profession, their guild's crowing about such a paltry payout should put them to rest.

There's much to the good in this org chart. Ash Patel, a famously lazy old-time Yahoo mostly regarded for his time in the job, is nowhere to be seen in Yahoo's executive ranks, replaced by CTO Ari Balogh. He's still at Yahoo, but his new job is unclear. Hopefully he'll be out the door entirely soon. And CFO Blake Jorgensen, an ineffective hire made by former Yahoo president Sue Decker (he was her best man at her wedding), is also gone.

But there are too many holdovers. Michael Callahan, a general counsel who got founder Jerry Yang hauled in front of Congress and labeled a "moral pygmy" over Yahoo's outing of a Chinese dissident, whose own department generated a labor lawsuit by Yahoo's first black, female lawyer, and who blithely expressed optimism about a lucrative advertising deal with Google that antitrust cops end up shooting down, should not be holding his job. HR chief David Windley's faults are less public, but Yahoo insiders say they loathe him.

Finally, there's the new face Bartz has picked: Elisa Steele, Yahoo's latest chief marketing officer, who joines the company from NetApp. Like Bartz, Steele previously worked at Sun. For all the same reasons that people were dubious about Bartz's hire — she's a software and hardware saleswoman who's unfamiliar with Web products and online advertising — one might be skeptical of Steele's background. Instead of shoring up her weaknesses in those fields, Bartz has hired a clone.

For those who want to plow through Bartz's explanation of what that purple graphic means, here's her memo:

From: Carol Bartz
Reply-To: Carol Bartz
Date: Thu, 26 Feb 2009 09:02:49 -0800
To: "all-worldwide@yahoo-inc.com"
Subject: Our New Organization

Yahoos,

As I've gotten to know Yahoo! over the past several weeks, I've developed a
point of view on how our organization should be structured to set us up for
success.

Our goal is simple: to consistently deliver awesome consumer and advertiser
experiences, everywhere in the world we do business. Delivering great
customer experiences is everyone's job at Yahoo! – and each part of our
organization will have a clear role in making that happen every day.

The timing of this announcement is important. As soon as decisions were
made, I wanted you to know about them — even if that means we don't have
all the details nailed down yet. Yes, there's been a lot of speculation in
the media over the past few days … that's been a little frustrating, but I'm
not willing to speak publicly about decisions before they're final. Today,
they are — so I'll lay out our new organizational structure for you now.

I know you guys have reorg fatigue. Hang in there – our intention is to
leave this structure in place for two to four years. We'll continue to make
adjustments as needed, but we expect this core structure to stay put.

The structure outlined below will enable us to make big improvements in our
product quality and operational efficiency. Part of that is simplicity –
I'm frankly amazed at how complicated some things are here! We'll have much
clearer decision making and accountability. Product and regional teams will
share responsibility for revenue targets and expense management, but we'll
have one P&L, for which I'm accountable.

We will also be in a better position to really listen to and understand our
customers -both consumers and advertisers. I think we've gotten into the
habit of focusing internally too much and we sometimes forget who we're here
to serve. You'll notice that our management structure puts a renewed focus
on the customer, with stronger feedback loops across the company… and they
all come through me.

Also, as you know, no organizational structure is a substitute for
collaboration, communication and trust. We'll all need to evolve our
behavior a bit – as teams and as individuals – to make this structure work
the way it's designed.

So here's the overview, with the roles that will report directly to me. As
you'll see, some of our leaders are still to be determined. I know you'll
want more detail than what's below – you can learn more on Backyard:
http://backyard.yahoo.com/ourorg .

Products: We've combined Tech and Product groups under one roof, led by Ari
Balogh as EVP Products & CTO. Ari's charter is to deliver global products
that enable extraordinary consumer and advertiser experiences. Ari's direct
reports now include one leader for each product group – we've taken care of
the "two in a box" problem.

One important note: The Connected Life team has been integrated into various
parts of the new organization. Our mobile strategy remains a key part of
Yahoo!'s focus going forward and all of our product groups will own mobile
innovations. After leading Connected Life for four years, Marco Boerries has
resigned from the company to spend more time with his family in Europe. We
thank Marco for his important contributions at Yahoo!.

Regions: There are now two: North America and International. As I've said
before, international growth is critical for Yahoo!, which has become too
reliant on its U.S. business over the years.

The regions deliver Yahoo!'s products, programming and services to
consumers, partners and advertisers in local markets. They will partner
closely with the newly formed Regional Solutions & Products group in Ari's
organization to help drive a significant shift in how Yahoo! develops
products for different geographies. The goal is to have global platforms on
which regional product offerings are based.

The North American region — comprised of the U.S. and Canada – is led by
Hilary Schneider. The leader of our International region, to be hired soon,
will be responsible for a cohesive Yahoo! global strategy and seizing our
international growth opportunities. Until we determine who'll lead the
International region, Rose Tsou (Asia), Rich Riley (Europe) and Keith
Nilsson (Emerging Markets) will continue to report to me.

Marketing: Elisa Steele will be joining Yahoo! as our Chief Marketing
Officer (CMO), effective March 23. Elisa joins us from NetApp where she was
SVP, Corporate Marketing. Previous to NetApp, she held executive positions
in marketing at Sun Microsystems. Elisa will oversee our global marketing
strategy and provide direction for our marketing function. She'll bring
together the various Yahoo! marketing teams that have been spread across the
company. Reporting into Elisa will be Brand Marketing, Audience Marketing,
Corporate Communications, Insights, Policy & Privacy, Community Affairs and
related central teams. I'm delighted to have Elisa joining the team.

Customer Advocacy: As I said, we can do much better in hearing the voice of
the customer across Yahoo!, and incorporating what we hear into all of our
work day-to-day. We have opened a search for a leader, who will oversee
Customer Care and Ad Operations globally with the goal of improving how we
support Yahoo!'s users and advertisers. In the interim, these teams will
continue to report to Hilary.

Service Engineering & Operations: This new team is responsible for
delivering common technology services at scale, including application
management and infrastructure. No matter how cool our products are, the
customer's experience won't be great unless our applications consistently
deliver. Note that we're bringing Service Engineering together as one group
because these engineers bring expertise that is best applied horizontally.
Leading this organization is David Dibble, who joined Yahoo! in December.
David's team also will be accountable for delivering more effective
corporate IT systems.

Corporate Functions: Blake Jorgensen will be leaving Yahoo! and I am
searching for a new CFO. Blake will remain through a transition with his
successor, and I want to thank Blake for all of his great contributions to
Yahoo! over the past two years. Mike Callahan will continue to lead our
Legal team, and David Windley leads our Human Resources function. Joel
Jones joins the team as my Chief of Staff.

So that's the high-level view. These changes are effective immediately, but
we've got more work to do in filling out the structure of each group. In
the short term, this transition will be challenging for many of our people.
My executive staff will be working with their organizations as quickly as
possible to create further clarity. For example, we'll need to recast
budgets and adjust work areas so we have the right people working
side-by-side.

I want to thank all of you who've shared your ideas and views with me since
I arrived. Several leaders across Yahoo! came together to design this new
structure – I've been very impressed with their dedication to the right
outcomes, particularly how they've embraced the need to eliminate the silos
that have been a drag on this organization for so long.

I think this organizational structure has the potential to solve many of the
issues you've helped me better understand. Of course, new issues will
emerge. But I know we'll be aligned and nimble in tackling them together.

This is a tremendous, proud company with a powerful brand, great products
and a bright future. Now's the time to get more focused than ever on
delighting our users and advertisers. Let's show them how great Yahoo! can
be.

Carol

To all the Yahoos:

To: all-worldwide@yahoo-inc.com
From: jerry
Subject: over the weekend — joint microsoft/carl icahn proposal
yahoos,
on friday evening, our board received a search and restructuring proposal from microsoft and carl icahn.
in essence, this proposal would hand over to microsoft yahoo!’s search business and the rest of the business to carl icahn. our board rejected this for a number of reasons, that boil down to a determination that this deal would be disadvantageous to yahoo! stockholders. with our annual meeting quickly approaching on august 1, i want to give you an idea of what to expect over the coming days and weeks.
proposals and attacks by microsoft and carl icahn leading up to our meeting are likely to get even more contentious.
i know this could is distracting at the very least. but i know that we can count on all of you to continue to focus on what we do best — transforming the experiences of our users, advertisers, publishers and developers. i also realize that you, and our customers and partners, may have additional questions. to address these, below is a brief faq that should help.
please be assured that the board, the management team, and i are all focused on doing what’s best for the business and our stockholders. we are prepared to let our stockholders, not microsoft and carl icahn, decide what is in their best interests. and we look forward to the upcoming vote at our stockholder meeting.
thank you for your hard work and commitment to yahoo!.
jerry
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Questions and Answers for Employees
Is Yahoo!’s management now considering selling off search and splitting up the company?

• Microsoft and Carl Icahn made a joint proposal for restructuring Yahoo! which included the acquisition of Yahoo!’s search business by Microsoft.
• Yahoo!’s Board rejected the proposal, concluding that delivering our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders does not make sense.
• We remain committed to being a principal in algorithmic and paid search and believe that financial benefits from our announced agreement with Google will allow Yahoo! to advance its ability to compete in the convergence of display and search advertising by allowing us to accelerate investment in sponsored search, display and web search businesses in parallel.

Does Yahoo! believe that being a principal in both search and display is the best way to maximize stockholder value?

• We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry.
• Our strategies — including our recently announced agreement with Google — are specifically designed to capitalize on this convergence.

What exactly did Microsoft and Carl Icahn propose to Yahoo!?

• Microsoft and Carl Icahn jointly proposed a complex restructuring of Yahoo! that would include the acquisition of Yahoo!’s search business by Microsoft.
• The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! during the up to the one year it would take to gain regulatory approval for this deal.
• Yahoo!’s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.

As an employee, what can I do to support Yahoo! during this time?

• We ask that you continue to focus on what we do best — transforming the experiences of our users, advertisers, publishers and developers, all while enhancing our leadership position in the online marketplace.

Additional Customer / Partner Questions and Answers
With all the commotion surrounding the Microsoft/Icahn proposal, as a customer/partner — should I be concerned that Yahoo! is taking its eye off the ball?

• Yahoo! is very focused on continuing to provide its customers and partners with the high-quality level of service and attention that they have come to expect from all Yahoo! employees, including management.
• While this public volley can be challenging for everyone, it does nothing to change Yahoo!’s fundamental commitment to maintaining the highest standards of service.

Is Yahoo!’s management now considering selling off search and splitting up the company?

• Yahoo!’s Board rejected the joint Microsoft/Icahn restructuring proposal that would have included the acquisition of its search business by Microsoft.
• Yahoo! remains committed to being a principal in algorithmic and paid search and believes that the financial benefits of our announced agreement with Google will allow Yahoo! to advance its ability to compete in the convergence of display and search advertising by allowing us to accelerate investment in sponsored search, display and web search businesses in parallel.

What exactly did Microsoft and Carl Icahn propose to Yahoo!?

• Microsoft and Carl Icahn jointly proposed a complex restructuring of Yahoo! that would include the acquisition of Yahoo!’s search business by Microsoft.
• The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! during the up to the one year it would take to gain regulatory approval for this deal.
• Yahoo!’s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.

To all the Yahoos' bosses:

To: all-svps-and-above@yahoo-inc.com
From: jerry
Subject: joint microsoft/carl icahn proposal
leaders,
as you are aware by now, the board rejected a search and restructuring proposal that was brought jointly by microsoft and carl icahn. our board was given less than 24 hours to respond. we again made clear that we very much remain open to considering proposals to maximize stockholder value. i think you will agree that the opportunistic microsoft/icahn proposal is not the way to do that.
following this email to you, i will be sending an email to all yahoos which will include a brief q&a. for your use, below are a few talking points to help guide your discussions with your teams.
jerry
*********
Talking Points

• The last few months and weeks have certainly been challenging, and the waters are not likely to calm before our stockholder meeting on August 1.
• We cannot allow ourselves to be distracted by the back-and-forth with external parties.
• For this reason, it’s more critical than ever that we let our board and management focus on these external issues and keep our attention where it must be — delivering for our users, advertisers, publishers and developers.
• In this way, we each play a very significant role in the future of Yahoo!.
• This weekend the Yahoo! Board rejected a joint proposal that Microsoft and investor Carl Icahn sent on Friday evening and gave the Board less than 24 hours to respond.
• After reviewing the proposal with its legal and financial advisers, Yahoo!’s Board of Directors determined that accepting the proposal was not in the best interests of its stockholders.
• We did not believe that the joint Microsoft/Carl Icahn proposal had the best interests of Yahoo!’s stockholders in mind.
• Microsoft and Mr. Icahn are trying to dismantle the Company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders.
• Our Board is prepared to let stockholders, not Microsoft and Carl Icahn, decide what is in their best interests.

From: Barry Diller Sent: Monday, January 07, 2008 11:04 AM To: All IAC Subject: Doug Lebda to Lead IAC's Financial Services and Real Estate Businesses

Today IAC is announcing that Doug Lebda, IAC President and Chief Operating Officer, has been appointed Chairman and CEO of our Financial Services and Real Estate businesses, including LendingTree, HomeLoanCenter, GetSmart, RealEstate.com, Domania and iNest. A press release outlining the news, as well as details that we're not sharing externally - including the strategy behind these moves - can be found on our internal site, IAC Connect. Please visit IAC Connect and review the news.