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Posts Tagged ‘aol’

Newly independent Aol is still struggling with the fate of Bebo, the social network they acquired for $850 million in 2008.

No one argues that Aol overpaid for Bebo. And the social network has fallen from 22 million monthly unique visitors when it was acquired to just 14.6 million today (Comscore worldwide). But even so, Bebo clearly has some value on the open market.

Despite that value, Aol’s best financial option for Bebo will likely be to abandon it rather than sell it, say corporate tax experts we’ve spoken with.

Here’s why – complicated corporate tax rules will let Aol write off the full purchase price of Bebo if they declare it worthless and abandon the asset. With Aol’s effective tax rate of around 45%, that’s $380 million and change in their pocket in taxes that they’d be able to avoid.

A sale of Bebo would almost certainly be less attractive. If someone were to pay them $100 million for the service, which is optimistic, Aol could still offset the remaining $750 million as a tax loss. But it could only apply against long term capital gains, and Aol doesn’t have any to offset against. They’d have to carry that loss forward and hope for future gains to offset it against.

One corporate tax attorney we spoke with wouldn’t discuss Aol specifically, but did confirm the logic of the approach. Bryan Smith, a partner at Perkins Coie, says “Without getting into any specific facts or companies, it will often be more attractive for a U.S. corporation to simply shut down a subsidiary and claim a deduction for the worthlessness of the stock against ordinary income instead of selling the stock at a distressed price and taking a capital loss, which may only offset capital gains.”

If Aol were to abandon Bebo they couldn’t pull any of the assets of the company back into Aol, say the experts we’ve spoken with. Otherwise it becomes a non-taxable liquidation. If Aol had debt or preferred stock on the books with Bebo, though, they could pull out assets to offset that liability.

With the iPad hitting pre-order in two days and shipping in April, it’s important to think about when and why to buy the iPad. Based on our understanding of the product lifecycle and expected moves by Apple’s competitors, we foresee big changes in the ultraportable landscape with the ultraportable/netbook as we now know it mutating - or branching - into a new species of media oriented Win7 and Android devices. Here’s what we can expect.

April 3, 2010 - Big launch. Light crowds at the Apple Store. This isn’t huge-huge. It’s medium-huge and I don’t think you’re going to see an army of the pasty arriving at your local shop clamoring for iPads. This is Apple’s wait and see product, although I don’t doubt between 3-5 million won’t wait and see in 2010.

May-June 2010 - Chinese knock-offs will flood the market and we’ll see a nice collection of weird, mutated slates hitting the more esoteric sites. Nothing major and no big sellers.

Summer 2010 - Dell and HP release their devices. Dell’s is called the Mini 5 AKA the Streak and HP’s as of yet unamed. These guys will wait until the waters have been fully tested before they move with their devices.

Yahoo CEO Carol Bartz continued the to talk about Yahoo’s regrouping strategy at an advertising industry conference earlier this week.

She touched on the topics we covered in our post last week, The Steady, Efficient Decline Of Yahoo. Specifically, she’s counting on an improvement in the economy to drive Yahoo growth, and she claims to have made significant advances in display advertising tools, targeting and analytics. “People still have to display their brand in a more descriptive way than just keywords,” she told Advertising Age.

When asked if Yahoo was any different from AOL, she responded “Generally it’s not different, we’re just a lot bigger. The fact of the matter is, what they’re trying to do at AOL — and I shouldn’t speak for AOL, they’re very capable of speaking for themselves — but I think it’s like a mini Yahoo.”

AOL draws 110 million monthly unique U.S. visitors, says Comscore, compared to 164 million for Yahoo (January 2010).

Bartz also says Yahoo will be making acquisitions to drive content. “This year it’s about what technologies: Do we need to fill in the blanks, what analytics, what tools?” she said.

She added “Well just imagine whether it’s acquiring an audience — a group of female bloggers, or whether it’s acquiring some better analytics tools that help us guide campaigns with our partners, or whether it’s technology.”

And “social” says Bartz, doesn’t begin and end with Facebook: “You know, social is a word that has almost become too narrow. And I think with Facebook’s immense success, all of the sudden that’s the only definition of social. But if you think back to the finance chat rooms, [those] were the beginning of social and people could actually interact. … As we look at social we want people to be on the Yahoo site and have tweets come in and have their Facebook postings come in, so that it’s a very personal place to be that helps them understand what’s going on in their social world.”

In Bartz’s social world, it seems, people are reading Twitter and Facebook messages on Yahoo. But this patchwork strategy of taking a little of this, a little of that isn’t going to excite users and encourage them to spend much time on Yahoo. Despite their massive reach, time on site isn’t going anywhere.

But at least we know where Yahoo stands on things. Little or no product innovation, little or no risk taking. And like I said before, a long, slow, steady decline. And despite Bartz’s last words in the interview, copied below, there is nothing exciting or crazy going on at Yahoo.

For an industry that’s based on creativity and inspiring people, I don’t know why it’s so afraid. I don’t think it should be afraid to just try some crazy new stuff. But when I talk to people about online marketing, they just seem to freeze. … I thought this was going to be a much racier industry that wore black and got out there and rock and rolled and I see it being a little shier. I mean, I’m the crazy lady.

There’s been a lot of churn in AOL’s executive and employee ranks since Tim Armstrong became CEO. The latest exec to head for the door is 9-year veteran Mike Rich, who is the senior VP in charge of AOL Entertainment (which includes AOL Music, Moviefone, and AOL Television). He joins a growing list of the old guard departing the company (Bill Wilson, David Liu, Ted Cahall, Grant Cerny) in the wake of Armstrong’s new hires.

For instance, former Googler David Eun is now president of AOL Media and Studios. Under him, David Mason, the co-founder of recently acquired StudioNow has just ben promoted to senior VP of the AOL Content Platform. And recently hired former Google engineer Jeff Reynar will lead the engineering efforts for that Content Platform, which includes StudioNow and Seed.

When Armstrong brought Eun on board, he told me that he was done making changes in the top ranks, but AOL is in the midst of reducing its entire workforce by one third. The shuffle will continue.

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Mike Rich, Senior Vice President, AOL Entertainment

Many of us take the disaster readiness of servers and data centers for granted. But for IT admins from both small and large companies, being prepared for disaster and emergency situations is complicated and expensive issue. Google has made an announcement today for any enterprise users of Google Apps; assuring IT admins that the suite is now fully prepared for disaster recovery. Rajen Sheth, Senior Product Manager, Google Apps, tells us that as of recently, Google is prepared for disaster recovery for all of its products in the Google Apps suite, which include Gmail, Google Docs, Google Sites, Google Calendar, Google Talk and Google Video.

Google’s secret sauce is live and synchronous replication. So every action you take in Gmail is immediately replicated in two data centers at once, so that if one data center fails, Google will transfer data over to the other one. Traditionally, Google says, synchronous replication can be very expensive for companies. For example, the cost to back up 25GB of data with synchronous replication can range from $150 to $500+ in storage and maintenance costs per employee. Google says that exact price depends on a number of factors such as the number of times the data is replicated and the choice of service provider. Of course, Google replicates all the data multiple times, and the 25GB per employee for Gmail is backed up for free. And data from Google Docs, Google Sites, Google Docs, Google Calendar, Google Talk and Google Video, which encompass most of the applications in Google Apps, is also synchronously replicated for free.

The reason that Google can offer these services for free is because the tech giant already operates large data centers simultaneously for millions of users and also balances loads between data centers as needed. Google also claims that its high speed connections between data centers allows the company to replicate and transfer large amounts of data quickly from one server to another.

Google says synchronous replication is a more attractive option than the common practice that many small businesses take by backing up email by copying the data to a tape on a weekly or daily basis, which seems to be an arduous task. Larger companies opt for a storage area network (SAN) to back up data, which Google says is an expensive process.

Sheth declined to identify the timeline of when each app began to use the backup solution. Sheth did say that bringing all the apps together into replication was a complex process. Google Apps is currently being used by 2 million businesses with 20 million active users.

Photo Credit/Flickr/ClayIrving

Editor’s note: Richard Wong is a venture capitalist with Accel Partners, an investor in AdMob, GetJar, and SunRun, and a former mobile industry executive. In this guest post he argues that the fragmentation of mobile devices and platforms is here to stay, and offers some advice to entrepreneurs on how to deal with it.

Mobile data is on fire. Despite a few false starts, we are now in the midst of a transformative “Open Mobile 3rd Wave” (remember WAP, and J2ME?). We are just in the early swell of the wave; the iPhone itself is not even three years old, and thanks to continued improvements we’re now seeing in smart phones, mobile OS platforms and 3G/4G networks, the raw ingredients are just getting better every month.

Per the views of many mobile denizens and thought-leaders such as well-known internet analyst Mary Meeker of Morgan Stanley, I certainly believe there will emerge new industry-transforming Facebooks, Googles, and Yahoos in this mobile wave.

FRAGMENTATION & COMPLEXITY

However, a key topic discussed by us mobile geeks and startups is the challenge of mobile platform fragmentation. There is an alphabet soup of protocols, standards, and regional differences by country which can be daunting for any entrepreneur. Just look at the range of technologies on handset platforms alone, from iPhone to Android to Blackberry, and even new platforms announced in last 30 days, from WinMo7, to MeeGo, to Samsung Bada, as if we need more platforms to deal with . . .

THE MAGIC BULLET—IT DOESN’T EXIST

One of the worst myths floating around the blogosphere is the wait by some for a “unifying technology” that will make things “simpler and easier” to develop services and apps for the global mobile market.  At times, some have claimed that Java (J2ME) was the answer, then Flash Lite, then Webkit browsers, and most recently HTML5. While each solution has its merits, there will not be any unification anytime soon. Even as HTML5 richness has improved substantially, browser support will still vary and many, many phones will not support HTML5 for 7+ years.

Anyone who is waiting for a single silver bullet to solve fragmentation issues in mobile will be waiting a very long time, especially if they want to go after the global mobile opportunity. As such, it is important for mobile entrepreneurs to wade in and sort it out for themselves.  No one is going to flatten the industry such as Microsoft did in the PC-era to make it simple.

THE REALPOLITIK: COMMON STANDARDS  = COMMODITY STANDARDS FOR MANY

The realpolitik is that Mobile is truly global, and serves an extremely wide range of countries and users. There will naturally be a wide breadth of technologies, from CDMA vs GSM protocols, J2ME vs BREW, Mobile Apps vs Mobile Web, xHTML vs HDML, SMS vs MMS and others to serve this market.
Ask former execs of PSINet (bankrupt operator), AST (bankrupt PC maker) & Packard Bell (bankrupt PC maker) about the impact of the WINTEL “standard” on other PC industry players, and you’ll get a sense why Nokia, Motorola,Verizon, & Sprint aren’t rushing to follow their PC-era predecessors. Common standards = commodity standards for many players in this industry. Sadly, whether or not there is an elegant technical answer, it will be hard to drive any single set of worldwide standards given the different economic incentives of the many players, however good it would be for developers.

OK, SO AS A MOBILE ENTREPRENEUR WHAT DO YOU DO?

What do you do as a mobile entrepreneur in the face of this complexity?  If you’re going to be successful, the winning entrepreneurs in mobile will have to learn to navigate these waters.  There’s no simple shortcut. Several thoughts:

1. Don’t wait for the Magic Bullet.  The first step towards progress is acceptance of reality. I actually do believe that Webkit browsers, HTML5, continued progression of J2ME, Android and iPhone are all positive trends that will help make things easier for many developers, but none of them will be a single-threaded answer. There are too many markets where these solutions are insufficient. For example, India, one of the world’s fastest growing mobile markets is stilldominated by Nokia, which has 70%+ market share. I don’t think developing only for iPhones will be enough to dominate the India market given their < 5% share.
2. Bound The Problem & Get Down the User Learning Curve.  So, the critical next step is to limit the boundaries of the problem so you can actually solve it. Are you pursuing an enterprise app or a consumer app? Does your success require broad scale viral use, or is it perfectly good to have 2000 profitable users? Many developers focused on the consumer market are going to find that a blend of mobile web, and prototyping on iPhone-only or Android-only is the right first step and only then expand to broader platforms. Blackberry and WindowsMobile are similarly important in business applications. Rather than the costly efforts of chasing 4-5 platforms at once, focus in on the first one or two, prove your model, then expanding will help to bound the complexity.
3. Geography matters. That said, it turns out that there are major differences by country in the mobile ecosystem. Just as important as the use case, is which country/geography one is targeting first. In Europe, 3rd party retailers such as Carphone Warehouse play a major role, reducing the influence of operator controlled stores. In emerging markets, Nokia is still a major force to be reckoned with. In North America, iPhone is capturing a disproportionate profit share of the industry.  Look at the data sources I link to below and understand which handsets dominate which geography—it is very different by region.
4. Get a guide. It is difficult to explain the subtleties of the mobile ecosystem without a longer dialogue, but the good news is that there are quite a few battle-scarred mobile veterans around that can help you with the Cliff Notes on the industry. Find one to help you.
5. Resources To Tap Into.  Whether or not you agree with my opinions in this article, here are some great data sources to learn more.

• Admob Mobile Metrics—a good summary of trends in the mobile data ecosystem from the lens of Admob’s network. A good view of by-country handset types from their view.
• Chetan Sharma Consulting—Chetan, as an independent analyst publishes some great research on the trends in the mobile data space.
• Getjar Mobile Statistics—Getjar is the leading independent mobile app store, and publishes stats on download volumes, handset types, etc.
• Mobile Monday—great entrepreneur organized events getting the mobile community together in over 120+ cities around the world.  If you really are looking for a guide, this is a good place to start
• WURFL— wireless universal resource file—an open source project; a “config file that contains all info on every wireless device on earth”

DON’T WAIT

There’s an incredible startup and wealth-creating opportunity in this new arena of Open Mobile. The smartest entrepreneurs will not wait for these fragmentation issues to be solved but are figuring out now how to pick a use case, a core platform, and geography to bound their problem and get going. Once you have initial momentum, you can pick through these fragmentation landmines, and make a 2nd and 3rd step. Don’t wait for the unifying technology to solve these issues before diving in. Its going to be an exciting time to build great mobile companies this next 5-7 years. See you out there.

Reference Glossary

SMS – short message system otherwise known as text messaging

MMS – multimedia messaging system (originated as photo messaging from J-phone in Japan)

CDMA – code division multiplexing – pioneered and still very controlled by Qualcomm – Sprint, Verizon & MetroPCS use this protocol

GSM – Global System for Mobile, the standard in Europe and most of the world – AT&T & T-Mobile use this protocol

J2ME – Java Mobile Edition (often paired with class library profile called MIDP2)

BREW – Binary Runtime Environment for Wireless – a Qualcomm owned initiative as alternative to J2ME

XHTML – multi modality markup language

WML – the original markup language of the WAP Forum which allowed more efficient use of bandwith constrained mobile networks (i.e.. less chatty)

WURFL – wireless universal resource file – open source config file of wireless devices

MOMO – Mobile Monday community of mobile entrepreneurs supporting other mobile entrepreneurs

(@Rich_Wong is a Partner @Accel_Partners and works with mobile investements Admob and Getjar ( among others) and was previously an operating exec at mobile technology provider Openwave Systems. See www.accel.com/rpw_presos for additional data around the mobile ecosystem. Disclosure: Accel Partners is an investor in Admob, Amobee, Getjar, Mig33, Medio, MetroPCS, as referenced above)

In something of a surprise move AOL has sold Buy.at, the affiliate marketing network it bought in early 2008, to UK network Digital Window. AOL acquired Buy.at for a rumoured $150 million but although sale terms have again not been disclosed this time round it’s fair to say the price will be substantially less that that.

A week ago Google launched Google Buzz. And Google’s 175 million or so wordwide Gmail users (Comscore) suddenly had this new and noisy addition to their beloved inbox.

It’s been a rough week since then. Both for the Google Buzz team, and those 175 million Gmail users.

Google continues to tweak the product almost daily to deal with the incredible backlash. That’s not what this post is about.

Another thing this post isn’t about: the fact that Google was forced to launch the product earlier than they wanted to and didn’t have enough time to test the product properly. I’m sure when the dust settles they’ll talk about the process and where it went wrong, and what they’ll do to avoid a mess like that in the future. They messed up. They know they messed up. It’ll pass (see, for example, every interface and policy change ever pushed by Facebook).

What this post is about is the powerful urge companies often have to shoehorn a new product into an old one. To ease the uphill battle all new products face with getting early traction. It seems so easy to just force feed existing users on the new product. But in every example I can think of, those users tend to vomit that new product right back up.

Some users think they’ve been hit with a bait and switch. Others simply don’t like a big change to what they’re used to. And millions more are just clueless about what’s going on, and they get angry and confused.

Examples:

In 2006 AOL, fearing the rise of Digg, launched a product that was very similar. Instead of launching it on its own site, though, they simply redirected the Netscape portal to the new product. At the time Netscape.com was generating over 800 million monthly page views. The experiment was a failure, and in 2007 AOL moved the product to it’s own domain, Propeller.com. It turned out that Netscape users for the most part didn’t know about, or care about, Digg. They just wanted their familiar news portal.

In 2008 Yahoo launched their own Digg clone, Yahoo Buzz. It was sort of a stand alone product, but the big hook was that stories could be pushed to the Yahoo home page. Yahoo Buzz is still around (I just checked), but it certainly isn’t an interesting product and has never had high user engagement. Again, it turns out Yahoo users weren’t all that interested in Digg. And Digg users certainly weren’t going to start hanging out over at Yahoo.

Facebook’s Beacon product is another good example. It launched in 2007, and Facebook users were enraged to see their names and pictures being put on “social ads.” Many lawsuits and one heck of a great April Fools joke later, Beacon stands as Facebook’s biggest stumble to date.

On the other hand, if you take the Beacon product idea and start it fresh as a new company, thousands of people flock to join. Everyone knows what they’re signing up to. No one feels screwed over.

Buzz is starting to look like Google’s Beacon moment. Even the Canadians are taking shots at them now.

Google would have been far better off launching Buzz as a standalone application. Make it invite only to start, and every single one of the early adopters would be begging to get it. A couple of weeks later give them an option of adding Buzz to their Gmail flow, and most would probably do it and call Google brilliant for thinking that one up. Then slowly bring other users on board over time, as they hear about it and want in. Fast forward a year from now and tens of millions of people may happily be using Google Buzz in their Gmail.

But the idea of jumpstarting the process and building the Google social graph right now was too tempting to Google, and they pressed too hard. Maybe some other company, seeing the results, will avoid this mistake in the future.

Google Chrome and Firefox both throw up a malware warning for AOL’s Chinese portal (click at your own risk), and Google even warns people who run a search for ‘AOL China’ that the site may harm their computer, as you can tell from the screenshot above.

As far as I can tell, Internet Explorer 8 (with Protected Mode turned on), Bing and Yahoo Search don’t flag anything out of the ordinary with the website. Curiously, neither does AOL Search, which is powered by Google.

I continued to the site, which is located at both chinese.aol.com and cn.aol.com, and the warning message tells me the website is getting flagged because it contains elements from the site www.tq121.com.cn, which is said to appear to host malware. The URL www.tq121.com.cn earlier led me to weather.com.cn, but no warning messages pop up when visiting that site.

Digging a bit deeper, I found that the Safe Browsing Diagnostics page for chinese.aol.com reports the domain name tq121.com.cn to function as intermediary for distributing malware hosted at xzgfgh.8866.org. (Best not to visit any of those, obviously).

Looking at the Safe Browsing Diagnostics page for the latter URL turns up red flags for sited hosted on the network The Planet, a hosting company that is suffering from a couple of security issues of its own at the moment, as you can tell from similar warning messages appearing when visiting legacy domain domains.theplanet.com.

We’re sure that these are just pieces of a bigger puzzle, but it’s definitely worth reporting that a website owned by an Internet company the size of AOL appears to be used to distribute malware. And frankly, it’s worrying that Google and Firefox both raise warning flags while behemoths like Microsoft and Yahoo consider everything to be perfectly safe.

(Thanks for the tips, Michel Wester and Andrew Hartnett)

“The greatest trick Microsoft ever pulled was convincing Apple that Google didn’t exist.“

If Microsoft plays its cards right, that may be a statement we’re saying years from now.

What does that mean? Aside from being a riff on one of the best lines in movie history, what I mean by that is: imagine if Microsoft was able to convince Apple to make Bing the default search engine on the iPhone, rather than Google. Leading up to Apple’s press event last month, rumors were swirling about this possibility. As is always the case with Apple, it’s hard to know how legitimate those talks were or if they were just some ploy to get something else it wanted. But from Microsoft’s perspective, it should be more than wishful thinking.

While the iPhone may not control the overall mobile sphere in terms of sale, it does control mobile web browsing. And increasingly, that’s becoming a popular way for users to browse the web. Basically since its inception, stats have the iPhone at the top of the pile when it comes to mobile browsing share. Yes, as more and better Android phones become available Android can and probably will leapfrog it. But the fact is that the iPhone is going to remain a huge factor in web browsing going forward. And certainly, Microsoft won’t be able to cut a deal with Google to feature Bing on Android.

Other recent numbers have Google seeing 1.46 million impressions a month from the iPhone alone. Bing? It gets just 2,387 impressions from the iPhone. That’s pretty incredible.

So how much are those million and a half impression worth to Google? Apparently, north of $100 million a year via a revenue share with Google, Silicon Alley Insider reported today. For Microsoft to woo Apple away from Google, it’s going to have to cough up a lot of money. But I would argue that it’s definitely worth it. And Microsoft actually has a history of such maneuvers.

Remember, when Microsoft bought a tiny share of Facebook in 2007, everyone was up in arms over the extrapolated $15 billion valuation it gave Facebook. But the truth is, Facebook was never worth that much (at least not at the time) because Microsoft was never interested in purchasing it at that price, nor was anyone else. Instead, Microsoft was making a strategic investment to secure the rights to Facebook search and advertising. More importantly, its $240 million investment for less than 2% of the company insured that Google wouldn’t be able to cut a deal with the social networking giant.

And that deal worked out well for Microsoft. Who knows if Microsoft made any money off of it, but it doesn’t really matter. What matters is that thanks to that initial deal, Microsoft and Facebook just got done renegotiating a new one, which will now see Facebook take over its display ads, but give a larger role to Bing for web search. With Facebook surging past 400 million users, this search deal is key for Microsoft and it undoubtedly blunts the loss of the display ad business (which probably wasn’t doing all that great anyway). Again, more importantly, it means Google can’t cut a deal with the social network to power its search.

And Google loves those deals. Not only did it strike one with MySpace (that didn’t work out so well), it has ones with AOL and others. But the key one for it may be the deal with Mozilla to make Google the default search engine within the Firefox browser. Google is paying something like $75 million a year to Mozilla for this privilege (based on 2008 revenues). That’s relevant because it’s the same type of deal Google now has with Apple for the iPhone. And it’s the deal Microsoft needs to get.

Despite pouring resources into its online division, Microsoft continues to bleed money there. And despite some success for Bing this year following its launch, the recent numbers indicate that it’s stealing search share from soon-to-be-search-partner Yahoo (assuming the deal goes through), rather than Google. Top search billing on the iPhone would ensure Bing is eating into Google share instead. And for that reason, price really shouldn’t be an issue for Microsoft if it’s serious about Bing battling Google Search. This is biggest and best opening it has.

There are no shortage of people who believe that Google, Bing, Yahoo, and the others are now all basically on par with each other when it comes to search results. Certainly Microsoft and Yahoo believe that to be the case (while Google, of course, does not), but others do too. The problem, as Microsoft and Yahoo see it, is that users are simply used to Google so they keep going back to it rather than trying something new. That’s exactly why Yahoo is moving away from the backend of search and more towards prettying up results on the front-end to give users a better experience. Microsoft has an even easier way to prove this: cut the deal to make Bing the default engine on the iPhone. If users don’t start complaining, we’ll know it’s true.

And the Microsoft/Apple deal could go farther. As long as both sides are cutting a deal for the iPhone, why not cut one to make Bing the default engine on the iPad as well? And how about Safari for the Mac in general? Every little bit of share gained is a good thing for Bing. And if the iPad proves to be a huge success, it could end up being a lot more than a “little bit” of search share.

But would Apple do this — cut a deal with its longtime rival?

Absolutely, provided it too believed that Bing’s results were at least on par with Google’s. In fact, at this point, Apple might even prefer a deal with Microsoft over one with Google given the war brewing between the iPhone and Android. With every search done on an iPhone, Apple is simply giving Google more fuel to pump into Android.

Microsoft’s alternatives aren’t pretty.

It can hope and pray that that Google will rest on its laurels and let its search engine much wither in the way that Microsoft itself rested on its laurels when it had 90% market share with IE.

Or it can hope that Windows Mobile stages a dramatic turnaround (Windows Mobile 7 is expected to be unveiled at Mobile World Congress shortly) and becomes the dominant mobile device for searching the web, with Bing in tow.

I don’t see either happening.

Or Microsoft could keep pumping money into advertisements about Bing and watch as it continues to eat away at Yahoo’s search share. But Microsoft would likely get much more bang out of those bucks if it simply cut the deal with Apple. And the time seems right for that to happen, if it ever will.

Microsoft could play the role of the villain that gets its longtime nemesis to do exactly what it wants. And just imagine if that helps Microsoft pull its entire online division out of its funk, thus giving the giant the thing it needs to battle the likes of Apple and Google going forward. That would be Microsoft’s ultimate goal in pulling such a deal off, after all.

And then Microsoft can exit the negotiating room — and like that *poof* be gone.

[images and videos: MGM]