Highlights of IBM InterConnect 2017 Summary theCUBE

Highlights of IBM InterConnect 2017 with John Furrier @Furrier and Dave Vellante @dvellante

IBM Interconnect Playlist @theCUBE has all the video coverage from IBM Interconnect

From Dave:

Ginni when she took over, sorry, she was running strategy before she became CEO, I mean, IBM had a choice, they could go double down on infrastructure and go knock it out with Dell and EMC and HP, or they could go up the value chain. And my ongoing joke is Dell bought EMC, IBM buys some other company, and that to me underscores the differentiation in thinking. Oracle, I think, is a little different, but Oracle and IBM are somewhat similar, I think you’d agree, in that they’ve got a big SaaS portfolio, they’re trying to vertically integrate, they’re trying to drive high-value margin businesses. The difference is IBM’s much more services oriented than, say, an Oracle, and that’s still, as I say, a big challenge for IBM. But I’m more, I’m a bull on IBM.

From John:

IBM’s model of open source is very clear. If you look at what they’ve done with just Blockchain as a great example, they have mobilized their company, and they did it with Bluemix as well with the cloud, once they said, “We want to get in the cloud game,” once, “We want to do Blockchain,” they go open source at the core, then they get their entire brain trust workin’ on it. It’s not just a hand wave, some division, they’re kind of reorganizing on the fly, they’re kind of agile organization, which some may read as chaotic, but to me, I think that’s just good management practice in this day and age. They get an open source project, and they drive that home, and they have people contributing and giving that to the community, and then adding value on top and differentiating. It’s just classic 101, create some value, and create some differentiation with your products, and by the way, if you don’t want to use our products, build your own, or hey, use the open source code. That’s pretty much an over-simplified version of open source.

Bringing back the podcast: Silicon Valley Friday Show; 11 Years Ago I signed up for this blog

11 years ago I signed up for this blog.  Saw the notification and reminded me that I miss doing my podcast when I founded Podtech.net years ago.  So I’m bringing my Silicon Valley podcast back in celebration of WordPress.

Show Notes

SILICON VALLEY FRIDAYS  With John Furrier

Broadcast Date: 10/28/16

Host:  John Furrier @furrier

Guests:  

Jeff Frick  @jefffrick

Dave Vellante @dvellante

Mentioned in show:  

AT&T, Time Warner, Twitter, LinkedIn, Amazon, AWS, VMware, Shawn Price, Adrian Cockroft, Ignition Partners, David Richards, WanDisco, Sanjay Poonen, Google, Apple, ServiceNow, Andy Jassy, Pat Gelsinger, Oracle, Watson, IBM, IBM World of Watson, NFL, Bob Picciano, Quickbooks Connect, Tony Hawk, Shawn Price, Maggie Burke

CONTENT

Opening: Introduction / Welcome/Tease AT&T Buys Time Warner Earnings season Other news: Death of Shawn Price Adrian Cockroft to AWS Ignition Partners new office expanding in SV UK tech company has boardroom brawl founder wins stays in control Sanjay Poonen is COO at Vmware Twitter is shutting down Vine

Segment 1:   Prime Topic Earnings for big tech bellwethers – Google hits with mobile ads – Amazon misses but AWS just keeps rocking the house – Twitter back on track and carrying a chip on their shoulder and good for them – VMware retools with renewed cloud focus – Linkedin  – $960m rev for quarter up 23% – Apple down but still massive – AWS cost structure

Host:  TEASE NEXT SEGMENT – Up Next Tag:  AT&T and TimeWarner

Commercial break

Segment 2: AT&T Buys Time Warner Over the top content meets large network Consumption for NFL is an example New brands are emerging can this mega deal work? Scaling Content?  Very Hard

Host:  Transition – Thinking Out Loud segment coming up next

COMMERCIALS

Thinking Out Loud (1 or 2 soid points) AI is not just artificial it’s augmented Insight economy WoW and Quickbooks Connect

Wrap up:

out

• Show music composed and developed by Tyler Furrier

AWS Ten Year Birthday – Risky Bet to Winning Formula

When Amazon.com launched its first Web service 10 years ago today, offering storage in the cloud, people thought it was yet another crazy, profit-nuking idea from Chief Executive Jeff Bezos.

Why on Earth, investors and analysts griped, was a company still struggling with a marginally profitable retail business embarking on what looked like an entirely unrelated business: selling the storage and computing services it used in its own operations to other companies? In “Jeff Bezos’ Risky Bet,” an October 2006 BusinessWeek cover story that was the first major media account of Bezos’ thinking behind Amazon Web Services, one Wall Street analyst groused that new investments such as AWS were “probably more of a distraction than anything else.” Even Tim O’Reilly, the CEO of tech book publisher O’Reilly Media who recognized Bezos’ strategy early on, called Amazon a “dark horse” against the likes of Microsoft and Google.

From dark horse to Triple Crown winner

A decade later, that dark horse is nothing less than a Triple Crown winner. There’s scarcely a startup that hasn’t run on AWS, and it’s critical to the digital operations of every company from General Electric Co. to Netflix Inc., which runs all its massive streaming video on Amazon. The unlikely offspring of a retail company, AWS has managed to outmaneuver computing and Internet giants from Microsoft and Google to IBM and Oracle.

Now, the onetime distraction is Amazon’s key distinction in a consolidating group of technology giants. AWS grossed $7.9 billion in revenues last year, up 70 percent from 2014, a growth rate four times as fast as the retail operations. AWS could start to become even more of a revenue driver, too. Morgan Stanley estimates that revenues will grow to $12 billion this year and $16 billion in 2017.

What’s more, AWS has arguably become  Amazon’s new profit engine. Although the unit constitutes only 7 percent of Amazon’s overall revenues, its $1.9 billion in operating profit isn’t far off the $2.8 billion operating profit of the entire $99 billion retail business. No wonder that Ben Schachter, an analyst at Macquarie Securities, last year valued AWS at $75 billion, almost half as much as the rest of Amazon’s business.

Read more 

Thanks Kara Swisher for Covering The ANGLE — siliconANGLE.com

Thanks Kara for noticing the new blog yesterday and writing a post. We all at siliconANGLE look forward to diving deeper into the stories that you report.

siliconANGLE.com a new blog that is a collaboration between me and my friends.  A new model in blogging and developing stories and analysis.

SiliconANGLE.com

My New Blog – SiliconANGLE.com – The siliconANGLE Project

Introducing my new group blog  siliconANGLE.com.  Here is a post that explains why I’m moving my Furrier.org blog to SiliconAngle.com.

I’ve been thinking for sometime now about starting a new blog that is different than the current blogs out there today – one that adds something new, different, and interesting to the conversation.

I’m launching this new blog siliconANGLE in the effort to create a different approach to blogging and collaboration.  siliconANGLE.com is a blog that promotes quality content and quality people – “the Angle” on new and interesting things about the social web and new technology.

Silicon Angle hopes to leverage all the benefits of the ‘real time’ web and the growing user base of quality professionals out there who are blogging and twittering.  This blog is my hobby.  It’s not funded by venture capitalists or anyone else, so it probably won’t be as big and professional like CNET, GigaOm, Mashable, or Techcrunch.

My expectations are low, and I don’t look at this as competition with the big sites, but instead adding to them – I’ll link to them often.  I really want to know what I can add to this new blog and what features people would enjoy, need, or desire to see here.  All input is welcome, but most likely I can’t implement all of them by myself.

The goal is to create quality content, promote ideas, and create opportunities for people and companies.  We place the highest value on people that promote and create innovation, jobs, wealth, peace, and better global citizenship as well as to work for the intellectual and social achievement of society.

I’m looking forward to improving the site (yes it needs work if you have ideas then join and help make the site better), collaborating with new friend, working with other entrepreneurs, and  developing “The Angle” on new ideas and opportunities.

Subscribe Now or     Join The Group or    Request to be a Regular Contributor

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Background – Why I’m Doing This Now

My personal blog Furrier.org has been gaining traffic over the past year where I have been posting only my opinion. I’ve been approached by many of my friends who want to post on my blog and have quality conversations with me, but they don’t want to start a blog and deal with the hassles of blogging (believe me there are tons of hassles in blogging).  Fact is, most quality people think blogging is boring – unless it’s part of a group of peers.  I’m now going to take the approach of peer blogging and make that the core mission of the siliconANGLE project (this blog).  It will start with my friends and colleagues then include their friends and colleagues and so on.  It is for people who have something interesting and deep to say – content that complements the current blogosphere and twittersphere.

The purpose is to develop The Angle with interesting and important people, ideas, and conversations.

Why create siliconANGLE?  Do we need another blog?

Why create a blog when blogging seems to be so “yesterday”?  Well blogging compliments the real time web in a big way.  For me it’s about innovation and invention.  This blog will be focused on the positive trends in entrepreneurship and new invention around the social web and technology.

Over the past year I’ve guided a few other entrepreneurs and business executives to succeed based upon my knowledge and experience.  I’m looking to continue that and see if we can create a new approach to sharing experiences and knowledge to help others.  My goal is to create a global collaborative hub.

This is a self-funded project, and my expectation is to take it slow at first.  So I’m  looking for advice, guidance, and support.  Comment, email me, or join.

Silicon Angle Imperative – A Mandate To Create Positive Change

The mandate of siliconANGLE is to promote entrepreneurship, discovery, and invention to create sparks of innovation which will spawn new venture creation.   The siliconANGLE group is dedicated to recognizing those ‘rock stars’ that have something interesting to say or contribute.  We place the highest value on people that promote and create innovation, jobs, wealth, peace, and better global citizenship as well as to work for the intellectual and social achievement of society.

Old School Philosophy – Power of Quality

Back in the early days of blogging I realized that there is a powerful impact of publishing quality voices, ideas, opinion, and analysis of people creating new products, companies, and markets.  What I’ve found is that the power of publishing about quality ideas and quality people not only creates a good user experience, but also creates relationships that can create positive change – one that causes people to connect and collaborate.

As an entrepreneur I see the value in a blog that creates a collaborative peer-group atmosphere that takes the ‘real time’ news and information and turns it into quality content with ideas, commentary, analysis, and opinion – a conversation.  A conversation among peers and colleagues.

Positioning of siliconANGLE – Social Science Meets Computer Science

siliconANGLE is a place where computer science meets social science.  This blog will be a open place for quality people to post content about the changes going on around the world in context to social and technology change.  siliconANGLE is a place for people who want to blog without all the hassles of being a full time blogger.  It’s a collaborative hub of peers and colleagues.  Everyone is welcome to join, comment, and share links, but only individuals that have been vetted and approved can post.

We’ll be doing podcasts as well as blogging and twittering in topics such as news, trends, social media, infrastructure 2.0, politics, research and development, companies that are innovating, venture capital, startups, and places of innovation like Silicon Valley and international equivalents.  We will have a strong editorial policy to provide the best content from the most qualified people and this will include people from companies.  There is no church and state business model here.  The group will allow content from corporations on any topic as long as it’s relevant.  The overall mission is to promote quality and discourage useless information.  The goal is to provide signal not noise.

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Subscribe Now or     Join The Group or    Request to be a Regular Contributor

Teaser: Future of Blogging Economics – Blogging is Changing and For The Better

This is a teaser post. I am waiting to talk about this further, but to tease out the future of blogging economics I wanted to point out a great post worth reading. Blogging and social media is changing and is very relevant. Advertisers just don’t know how to engage with it.

Example quote from a smart blogger… “400 dedicated readers in a well-defined niche space, such as photography, beat the hell outta 40,000 drive-by users in an amorphous mob. Advertisers will want to reach those 400 people, because they know them, know what their interests are, and know that the ads served to them are going to the right people.”

This post is worth reading and really reading between the lines – in this post lies the answer to the “Future of Blogging Economics. More from me later on this topic (although I’ve been talking about this for 2 yrs).

Who Said Blogging Killed the Typewriter – My Cousin Tom Furrier – Typewriter Repair Featured in Boston Globe

My cousin Tom Furrier is featured in the Boston Globe today with his business as a typewriter repairman.  Who said blogging killed the typewriter.  Maybe he should go into blog repair 😉

Here is the link

http://link.brightcove.com/services/link/bcpid1185071465http://www.brightcove.com/channel.jsp?channel=16988910

There is still a demand for typewriter repairs, from those, young and old, who love the sound and feel of the machines to a number of businesses who keep them in regular use. Typewriter repairman Tom Furrier admits that he’s a dinosaur. He’s one of the few typewriter repairman in the Boston area who fixes typewriters only, and not those newfangled computers, faxes, and printers as well.

When Furrier first started fixing typewriters almost 30 years ago, no office was complete without the sound of clicking typewriters. The typewriter repairman was a common sight, making service calls to offices to fix gummy keys, broken springs, cracked rubber rollers, and busted return mechanisms.

Today? Furrier once went to a law office to fix a typewriter but the twentysomething receptionist didn’t know what a typewriter was. “She kept pointing to different boxes, saying, ‘Is that a typewriter?’ or ‘Is that one there?’ I told her ‘You’re standing right next to it.’ ”

But Furrier, who is also a typewriter collector and salesman, stays in business because typewriters are still used for forms, envelopes, and labels in law offices, town halls, hospitals, and funeral homes. “There are certain forms that still have to be typewritten and that are not computer-friendly, such as death and birth certificates,” says Furrier. “Every maternity ward has a typewriter, as well as funeral homes, which might seem strange in this day and age, but is good for me, of course.”

Furrier also fixes the typewriters of many writers who still tap out their drafts because they like the sound and the tactile experience.

“A lot of writers tell me that the sensory feedback from typing is different from the computer, and that typing slows down the thought process,” says Furrier, who also counts a local psychiatrist, physicians, and artists among his clientele. “Some doctors even recommend typewriters to their stroke victims, to help them build hand strength and eye coordination.”

It takes 30 minutes to an hour to fix most typewriters, and Furrier says a typewriter repairman can earn $40,000 to $50,000 a year. Furrier, who has a degree in forestry, says he wanted to work with his hands and finds great satisfaction from fixing a broken typewriter.

“I decided a long time ago that I was only going to fix typewriters – it’s typewriters or nothing,” says Furrier. “I like working with this old technology of motors, belts, pulleys, and levels.”

How does it feel to be a typewriter repairman in the age of computers? I get calls from all over the country, from people who want their typewriters fixed. Someone called me from Atlanta, which is a huge city with four million people, but not one typewriter repair shop. Another person was in Paris for the summer, and his Selectric broke, and he couldn’t find anyone in Paris to fix his typewriter, so he had to drive an hour and half outside the city to get it fixed. So we are a dying breed.

Up until the 1980s or so, there were millions of typewriters in offices all over the country. What happened to them all? Most are in landfills. Many offices just threw them in the Dumpsters. Some people did bring the machines home with them; a few workers told me that when they retired they were able to bring their typewriter home with them.

You have a lot of different typewriters in your shop, from portable electric Smith Coronas to IBM Selectrics. What’s your favorite typewriter? I like the older vintage manual typewriters, such as Royal, Olympia, Olivetti, Underwood, and Remington, and in particular, the really shiny, black lacquered machines from the 1930s. They have glass-topped keys with metal rings around them, which people love, because your fingers fit into them beautifully. They sell from $100 to $400.

Where do you get the typewriters that you sell at Cambridge Typewriters? The really nice, pristine stuff comes from collectors who pick up the machines at conventions. I also get typewriters from eBay and from people who are cleaning out their attic or homeowners who are downsizing.

And where do your typewriter parts come from? I have a graveyard in my basement, where I store tons and tons of old machines from every manufacturer. And there are supply houses that still make parts for newer machines, including ribbons.

What’s the oddest request you’ve ever gotten? One man used to come in every week and order a typewriter that could communicate with the dead. We’d tell him, “Yes, we ordered that, it’s on back order.”

I’ve seen earrings and necklaces that use typewriter keys for ornamentation. Do you sell typewriter parts to these jewelry artists? No. I don’t like to see nice machines cannibalized for jewelry. It bugs me.

People say they love the sound of a typewriter bell. Yes, the typewriter bell is a neat sound, and every brand has a different sound. When I do a repair, I always make sure the bell has a nice sustain to it. When the bell rings, it should fade out slowly. The Smith Corona has a loud distinctive bell, and the Royal has a nice pitch to it. But I don’t like the ring on a Remington machine.

Do you meet lots of people who don’t even know what a typewriter is? Surprisingly, typewriters are really popular now among teens and preteens who want to try typing on a typewriter. It’s a cool fad and they want to get that typewriter vibe.

Will typewriters ever make a comeback? No, I don’t think so, but I think there will always be a curiosity about typewriters. Typewriters will never go away completely – they’ll be around for a long, long time to come

Forget InterWebs Think InterClouds

I ran into this post by Cisco’s James Erquhart on Infra20.com titled – Is the Intercloud History Repeated?

James writes:  definitely some of the same elements are appearing in the Cloud Computing ecosphere that once helped build the Internet. Specifically, I see three key initiatives that have an analog in the Internet’s past:

1.  The rising importance of academia. Several initiatives are out there that show the increasing importance of the academic pursuit of cloud computing on the overall effort.

2.  Increasing interest in interoperability among cloud vendors. Surprisingly, vendors that stand to gain somewhat from cloud lock-in are admitting that customers are hesitant to move to the cloud for just that reason.

3.  Carrier interest in new service opportunities. The Internet represented huge business growth for telephone carriers in the early 90s, resulting in changing that designation to data network carriers.

Read the full post here.

Internet Traffic Explosion by 2015 – Next Phase is Rich Media for Infrastructure 2.0

The article today about Apple iPhone having video capabilities made me think about the scale of the net.  We have to see full scale global video by 2015.  However, first things first, we need an infrastructure revamp – Infrastructure 2.0.

We need to handle the traffic explosion. Here is a great deep review of the coming trend of Infrastructure 2.0 with info on the coming infrastructure revolution. The Impact of Video and Rich Media on the Internet — A ‘zettabyte’ by 2015 by the Discovery Institute.

The U.S. Internet of 2015 will be at least 50 times larger than it was in 2006. Internet growth at these levels will require a dramatic expansion of bandwidth, storage, and traffic management capabilities in core, edge, metro, and access networks. A recent Nemertes Research study estimates that these changes will entail a total new investment of some $137 billion in the worldwide Internet infrastructure by 2010. In the U.S., currently lagging Asia, the total new network investments will exceed $100 billion by 2012.

Technology remains the key engine of U.S. economic growth and its competitive edge. Policies that encourage investment and innovation in our digital and communications sectors should be among America’s highest national priorities.

New technologies are driving a deep transformation of the Internet’s capabilities and uses. We are entering a new phase. The first phase of the Internet, starting with Arpanet in 1969, was a small research project that linked together a few, and then a few thousand, scientists. They exchanged rudimentary messages and data. In the mid-1990s the second broad phase delivered the Internet to the masses with e-mail, graphical browsers, and the World Wide Web.

Today, the third phase is underway. Video over the Net portends innumerable consumer and commercial possibilities. This new medium will change every realm of communication and content. The broadcast petabyte flows of radio and television will branch out into narrowcast, multicast, mobilecast, and everycast streams. With real-time transactions and collaborations, rich images, video, and interactive virtual worlds, the Net’s current content of static text and pictures will swell to form exabyte rivers. We call this third phase of rich broadband content the Exaflood.

This Exaflood is coming. However, it will only be possible with a vast new infrastructure to match the vastness of the coming digital deluge. Building this new infrastructure will be very expensive, likely requiring some $137 billion in global new investment over the next two years alone and at least $50 billion in the U.S. Technology remains the key engine of U.S. economic growth and its competitive edge. Consummating a true broadband Internet will depend on smart communications law and an investment friendly economy.

The second phase of the Net was chiefly enabled by two broad technical advances: (1) new computer modems at the edge of the network and dramatic advances in fiber-optic communications in the core of the network, both of which supplied unprecedented physical connectivity; and (2) new logical concepts like the HTTP-based World Wide Web and software applications like the browser, which made the Net accessible to the masses.

Today, the third phase is likewise being driven by a combination of advances in physical connectivity and software innovation. Today’s residential cable modems now average more than 5 megabits per second, or 100 times faster than the 56-kilobit modems that mostly reigned at the outset of phase two. Many cable MSOs now offer 10- or even 15-megabit services. Meanwhile, the nation’s telecom companies are building a new generation of fiber-optic networks to neighborhoods and homes that will reach tens of millions of consumers in the next few years. These networks will offer an additional factor of 20 capacity increase initially and are massively scalable for the future. On the software side, user-friendly self-publishing applications have given rise to millions of blogs and myriad social networking communities. Media players and Flash applications enable the easy creation and dissemination of rich visual content.

PEAK IT – Big Trend in Enterprise Information Technology – IT Trend

Some are saying that the polarization of IT is changing back to one side.  You decide.  Right now I’m digging into this further.

Here is the paragraph to read.

Peak IT occurs in an organization when investments in automation and productivity tools are crowded out by rising operations and management expenses. The result is a downward spiral of increasing complexity and expense and shrinking productivity as expenses continue to increase and take a growing share of budgets.

If you can understand the following paragraph then go directly to the site (via the link) and read the detailed post on “Peak IT”.

Social Media Fallacies – What To Know If You’re Thinking of Social Media

Here is a great post by Jason Baer on the fallacies of social media. Social media is the email marketing of our web 2.0 everyone will do it but how is the question.  I’ve been doing it for years and I agree with this post.  I’ve added some of my comments in { } below.  Thanks Jason for a great post.

1. Social Media is Inexpensive

False. Done correctly, social media – even a simple reputation monitoring program – is a time intensive proposition that requires daily vigilance.

2. Social Media is Fast

False. Social media is by definition slow. Done correctly, social media is about developing meaningful relationships with customers and prospective customers in their natural habitat. You have to create content, be part of many communities, and proceed incrementally. Many successful social media programs take months (or even more than a year) to really germinate.

3. Social Media is “Viral Marketing”

False, in the same way that a square is also a rectangle, but a rectangle isn’t a square. Can a social media program go viral? Absolutely. But if you’re engaged in a social media program in an effort to go “viral” you’re not really engaged in social media at all. You’re engaged in an advertising and marketing campaign that uses the Web as its distribution platform.

{I will agree but add something here to Jason’s post:  the conversation is the advertising campaign and the social result of the conversation if done correctly is the definitive word on the topic – hence an ad-like message or effect}

4. Social Media results can’t be measured

False. Especially in comparison to many other communication programs like traditional PR, TV advertising, outdoor advertising and others, social media actually offers pretty solid metrics.  Can those results be tied back directly to sales, and therefore ROI? Probably not yet, but other than search and email (and maybe banners) where CAN you do that?

{I will add that the metrics are not online and this is the opportunity to bridge both offline and online experiences and benefits to users}

5. Social Media is optional

It doesn’t matter what the demographics of your customers are. It doesn’t matter what industry you’re in. Your customers and prospects are talking about you online. Your company needs to be part of that conversation. Today. Online is where many people do their talking, so that’s where you need to be.

6. Social media is hard

False. It’s not hard, it’s complicated.  It’s about having a strategy for making your company or organization more like a person and less like a machine. It’s about humanization.

If your customers and prospects feel like your company is more human and actually cares about them, they’ll want to be part of it….use technology to be yourself, and don’t overthink it.

Update: Thanks to Ben Smithson for point out the mistake in the title..

Silicon Valley in Trouble? I Don’t Think So – A New Model Will Arrive

Comparing Silicon Valley to Detroit is ridiculous, but Dan Lyons does bring up a big issue worth discussing – innovation problem. Silicon Valley is not setup for long term research in a way that made it what it is today. We are seeing institutional research vaporize in front of our eyes. Checking around it’s apparent that there is very little core and applied research going on. If there is research it is controlled by short term horizons like business profits and venture capital horizons. I’ve said before that we need a new approach.

I posted about this before about a new venture development paradigm that will emerge soon – one based upon open principles and collaboration.

Here is a snip of my post from last year – Silicon Valley – The Rebooting Meritocracy

Silicon Valley is a special place for entrepreneurship, and it continues to be. The issue is not that there is a wrench in the machine, but that the machine is broken. It’s rebooting.

One thing I love about Silicon Valley is that there are no handouts. It’s the ultimate entrepreneurial meritocracy. Change happens and it happens both from the bottom up (entrepreneurs) and the top down (capital market). The question is which force is driving the change.

Redistribution of wealth is upon us. The entrepreneurs and investors that move on this current market opportunity will capture the proverbial “chips on the table”. As an entrepreneur, I love this market. Opportunities are everywhere. Unlike the dot com bust, this tech (entrepreneurial) market never really crashed. Everywhere I look I see discounts and new opportunities. Smart money will move around, but in select places. Is the market scary? If you’re an incumbent it sure is scary.

Silicon Valley Web 2.0 is hurting, but not for the obvious reasons. A bigger force is at play here – massive redistribution of wealth is taking place. Some are scared, and some are welcoming the opportunity of possibly acquiring the wealth “on the table”. I think that Facebook and Twitter are great examples of what might be possible. Facebook will become the next Google. The only thing holding them up is that the ‘new revenue’ model that is soon to arrive at the “station”. When that “train” arrives (and it will) Facebook will say Goodbye to all the naysayers.

Research & Development Void?

The bigger picture is more long term and that’s all about research and development. Judy Estrin recently came out to talk about something really important – the innovation gap. Let me translate her thesis – we are screwed if we don’t have steady research unencumbered by short term agendas. Think how important institutions like Stanford, MIT, and SRI have been to Silicon Valley and entrepreneurship. Without these deep research institutions we would not have many innovations that created wealth – hello Ethernet; hello Apple; hello Cisco; hello Google, ..etc.

The lack of institutional research leaves a void in the Silicon Valley ecosystem. John Markoff postulates in his book “What the Dormouse Said” that the culture and research of the 60s drove the PC revolution. The question now is what revolution are we developing and where is the research? Will we miss the next important energy, medical, or tech breakthrough? Where is our modern day moonshot mandate?

Even top HP executives agree with me.  At HP, the concern reaches the very highest levels of the company. Shane Robison, HP’s chief strategy and technology officer, says he’d like to see the following: a permanent research-and-development tax credit, which would encourage tech companies to do more basic science research, which in turn would benefit everyone, not just the company that conducts the research; more government funding for basic science research; more spending on education; and changes in immigration laws to help foreign-born students who study in the United States to stay in this country afterward. “The technology industry is one of the crown jewels of our country,” Robison says. “It’s the one industry where we stand head and shoulders above the rest of the world. We need to protect that.”

My Version of Yahoo’s Turnaround Plan – Focus on Management Team and New Players

Boomtown has a post speculating that Carol is taking the :bull by the horns” and charging hard to make changes. First up an earnings call that will surely be a bad report.

In the NFL they talk about franchise players. In business and startups they talk about the management team. Here Yahoo has one clear short term goal – GET A TEAM. More importantly get some ‘franchise players’.

There are more than a few great and wacky ideas that Yahoo could do, but if were advising Carol I’d say focus on the management team first. Overhaul that team. Waive all the people not performing, get a great staff, trade for players who want to play for you, and sign some fresh new talent.

Remember Yahoo still has a great revenue stream and a massive user base. Get the management and players then make the big moves.

“Build It Because They Are There” – The Real Meaning of Cloud Connect – It’s About Getting Apps Up and Running

As I sit in the CloudConnect Event at the computer history museum (twitter stream here), I was wondering about how to talk about cloud computing and the meaning of all this.  It became clear to me when I saw the Paul Buchheit post today on “Communicating with Code”.

He writes (talking about his experience with the development of Gmail..)…“From that day until launch, every new feature went live immediately, and most new ideas were implemented as soon as possible. This resulted in a lot of churn — we re-wrote the frontend about six times and the backend three times by launch — but it meant that we had direct experience with all of the features. A lot of features seemed like great ideas, until we tried them. Other things seemed like they would be big problems or very confusing, but once they were in we forgot all about the theoretical problems.”….”The great thing about this process was that I didn’t need to sell anyone on my ideas. I would just write the code, release the feature, and watch the response. Usually, everyone (including me) would end up hating whatever it was (especially my ideas), but we always learned something from the experience, and we were able to quickly move on to other ideas.”

What we have here is a real time web waiting for real time code.  All of the discussion about cloud computing is really about rapid development,provisioning of resources..etc. – in the end a better product for users (hopefully).  Paul talks about this in his post -Gmail turned out pretty good.

Cloud computing allows developers the ability to get “stuff” up fast.  Speed and feedback is critical to success and more important than having some “hardened app” that no one wants.  This is only way to develop in the web today.  Success is about speed and product acceptance is dependent on that speed which drives relevance.  Build a great product and it will work.

The motto “build it they will come” is irrelevant.  Instead the motto today is “Build it because they are there already”.  Having a robust, easy to use, easy to provision, and reliable cloud and services will flow to users for critical feedback  The rest will take of itself.  The good apps and services will “come to us” – Welcome to Infrastructure 2.0.

discussion on twitter via tag #cloudconnect

Market Economics Work – How We Solved Our Gas Crisis – Hey Mom Look No Government

By Anton Wahlman

American memories are apparently becoming shorter and shorter. Various
misguided references to the alleged causes and cures of The Great
Depression aside, people don’t remember that we once upon a time, less
than 100 years ago, didn’t have a Federal Income Tax, that drugs were
legal (and then alcohol prohibited), and that inflation and interest
rates were double-digits less than 30 full years ago.

Among the most recent things to be completely forgotten are the high
gas prices, peaking in July 2008 with nationwide averages over $4 per
gallon and people in California paying $5 on occasion. Politicians and
pundits blamed this on “speculators” and called for the government to
“do something.” Toyota (TM) Priuses were selling at MSRP or higher.

Less than six months thereafter, gas prices had fallen by over 50%,
and Toyota Priuses now come with $750 rebates to make them move. Never
before did gasoline prices fall so far, so fast. Not even close.

What was the government program that fixed this economic problem? The
answer is none at all. The government didn’t lift a finger to solve
this problem. It let the market do its magic, curing the issue with
its own natural self-healing mechanism first described in Adam Smith’s
The Wealth of Nations [1776]. Sure, there was a lot of huffing and
puffing about what people suggested the government should do, but in
the end the government did nothing. The problem just went away. No
government intervention solved the problem.

Think about it: The one recent problem which the government left to
the free market to solve, got solved in record-short time. Contrast
this to the ever-ballooning demands for the government to “do
something” about the financial and economic crisis. The demands from
almost all ends of the political spectra suggest that we drop all
economic common sense and instead spend money we don’t have.

Think about it again: We got into this mess by borrowing too much,
spending too much, and making too many loans. What’s being proposed?
Let’s spend even more, borrow much more, and make even more loans.
It’s like an alcoholic trying to cure a whiskey bottle’s hangover by
drinking a whole case worth of whiskey the next morning. If there ever
were a more self-evident disaster outcome guaranteed, I can’t think of
one.

The free market cured the high gas problem in less than six months
without the government lifting a finger or spending a dollar.
Likewise, the free market would cure the imprudent debt bubble by
allowing it to be pierced, seeing prices falling, wages falling and
allowing bankruptcies and foreclosures to clean up the imprudent
investments into orderly liquidation. Adjusting wages to demand, would
guarantee full employment as with any other market price.

In a free market, the current recession would probably be cured within
a year or two, and it would allow the government to cut expenses
instead of increasing them. Only by dramatically cutting the size of
our government, so that we can eliminate the deficit and start paying
back the debt, can we restore sanity to our financial and monetary
equation, which includes saving the value of the dollar.

As it stands, we are on a path that will put us in Germany’s World War
I surrender rail car and its 1918-20 aftermath. We will be left with a
debt burden so great that the only way out will be massive inflation,
as we essentially default on government bonds. Germany was left with a
huge war debt after World War I, but because the debt was not
denominated in British Pounds or French Francs, Germany simply
inflated itself out of its obligations, causing dramatic
mis-allocation of resources, societal chaos, the rise of Hitler and
the bloodiest war (World War II) in its wake.

In our case today, the debt-explosion path that we will apparently be
pursuing, will most likely also mean a massive inflation when we
eventually print the money to pay off the bond buyers (read: The
Chinese). China has one of the soundest economies in the world today,
with low or nonexistent public and private debt, and high growth, but
it has invested its surpluses largely in U.S. government bonds.
Whoops! All that the Chinese worked for during the last decade, will
go up in smoke. And in the wake of the Chinese losing their savings
invested in U.S. government debt – another war? We are clearly playing
with fire, taking on all this debt to finance unprecedented levels of
government spending.

Recession Startups: Great Post On Innovation and Entrepreneurship – No Vacation for Entrepreneurs

I love this post from David Hornik.  I guess that I have an addiction because I love starting companies – I can’t help myself.  His real message is simple – many entrepreneur friends are starting companies in this market. Personally, I think that doing startups is like taking a vacation each startup is like a good journey.

The post is worth of a full posting here on Furrier.org.  Thanks David for a great post.

By the end of 2008, Venture Capital had been officially declared dead. Startups were laying people off so fast that even TechCrunch couldn’t manage to keep up. University Endowments and Foundations, the source of the “capital” in Venture Capital, were hemorrhaging so badly from their public company investments that many long-time believers in “alternative assets” declared a moratorium on Venture Capital. And the IPO market was a distant memory. Good times!

Welcome 2009. The public markets remain closed. Venture investors and the investors in venture investors remain “challenged.” Follow on financings have become increasingly difficult, in some instances impossible. And, while there may well be light at the end of the tunnel, it would appear that we haven’t gotten far enough down the tunnel yet to see that light.

So why am I optimistic about investing in 2009? Because entrepreneurship is an addiction, it isn’t a choice. Great entrepreneurs aren’t driven to create companies because it is easy, or because capital is plentiful, or because the public markets are swallowing anything the venture community will throw at them. Great entrepreneurs start companies because they can’t help themselves. They see a problem or a solution or white space or an opportunity and they have to do something about it.

Innovation doesn’t take a vacation during an economic downturn. Innovation is a constant. While the resources an entrepreneur may be able to bring to bear on a problem may vary with the economic climate, the desire — the need — to innovate never goes away. And Venture Capital is the fuel of that innovation. [1]

So I remain excited about the companies that will be started in 2009. There will be great companies started during this economic crisis. Some of them will be born out of the crisis itself. Others will simply be born during the crisis. But, rest assured, there will be important tech companies hatched in the next year or two. And I am certainly hoping to fund them.

Some of you reading this will say to yourselves “starting companies today is so inexpensive that we don’t need no stinkin’ VCs.” More power to you. I don’t mean to suggest that innovation will die without Venture Capital. There are many great ideas that can come to fruition without a meaningfully-large capital infusion. My hat is off to the 37 Signals and Smugmugs of this world. But for those ideas that require investment ahead of revenue to reach their full potential, Venture Capital remains an important resource for company building.

Cisco Buying Sun? – Cisco Announces It’s Move Into Server Business

NOTE:  Visit the siliconANGLE blog for a community of bloggers on Social Web and Technology Opinion and Analysis.  THANKS

This past October I posted about Cisco getting into servers and compute.  I broke the news quietly but only a few handful of insiders got the message (GigaOm reported early in March 2008).   Word has been circulating on the street for many months on this announcement and it will sure have an impact on Cisco’s partners. Now it’s been finally announced.

What is now being kicked around is Cisco’s move to buyout Sun Microsystems.

What do you think?  Should Cisco buy Sun and really get into the server business?

Obama’s Inauguration Speech – Alternative Version

By Anton Wahlman

My fellow Americans, change has arrived in Washington.  Not as much in
the area of foreign policy and homeland defense, because I realize
that my predecessor and distant cousin Dick Cheney had it right in the
hours and days following 9/11 when he set this great Republic on a war
footing to defeat the enemy and protect the homeland.  Seeing as I
would rather not have another 9/11 – or worse – on my watch, the
change will come primarily in the area of economic policy, where my
predecessor presided over many failures and set a dangerous course for
this country, particularly in the last year.

My new administration promises a clean break with the failed policies
of the past.  In the last eight years, government spending grew to new
heights, from $2 trillion per year to over $4 trillion this year.
This stratospheric rise in the growth of the US government’s burden on
the people is nothing less than a crime against our beloved
constitution and the intent of the Fathers of the 1776 Declaration of
Independence.  In recent times, the US government has failed to impose
on itself any of the restraints that have made this country so special
for so long.

To the contrary, the US government is now engaged in a long list of
activities and spending not authorized by our most fundamental
governing document.  Working with Congress, I will seek to restore the
US government to its constitutional limits in my first year in office.
What this means in practice is a rapid shut-down of all government
departments except the Departments of Justice, Defense and Homeland
Security.  This means that all these other unconstitutional creations
of the 20th century, such as the Departments of Education, Energy,
Commerce, Health and Human Affairs, Interior will all cease operations
in this glorious year of 2009.

The Federal government’s budget deficit, which the first time exceeds
$1 trillion, will also be eliminated this year.  Yet, I will also
abolish all of the destructive and unjust taxes that have mushroomed
over the last 95 years in particular: the income tax, the death tax,
the capital gains tax, the corporate tax and the dividend tax.  These
tax cuts will once again make the US economy competitive with the
countries around the world where economic growth and liberty has
recently exceeded our own.

My first budget, which I intend to deliver to Congress already this
afternoon in the hope of a speedy approval, will authorize total
Federal expenses of less than $1 trillion over the next year, which is
an amount ten times greater than President John F. Kennedy’s 1961
budget.  This will fund an efficient Federal judiciary, our military
defense, and the ongoing war against terrorism.

What the new budget will not do, because it is being returned to its
constitutional limitations, is to send checks – to anybody or
anything.  If you or your company has an addiction to receiving money
from the government, this will be the year when you sober up.  It will
not matter whether you are rich, poor or in-between – the time of
government spending money on you are now over.  Every single
government program providing services or sending out checks, will come
to an end.  You and your company will live in the freedom of keeping
what you earn and receive in voluntary help from your friends, family
and any charitable institutions, but the mirror image of this blessing
of freedom is that government will not support anybody or anything.  I
am breaking the back on welfare state dependency and entitlement by
going cold turkey on all recipients, large and small.

This restoration of the constitutional legitimacy of the US government
will be funded by a simple flat tax on US adults: At $1 trillion in
total annual Federal expenses, a number which may end up even lower,
it represents a flat $5,000 tax on each of our 200 million US adults.
There will no longer be any need to file an income tax return, keeping
any receipts, paying a tax preparer, or equivalent.  This flat $5,000
tax will be due in monthly installments of $417, equivalent of $13.70
per day.

I expect the impact on the economy from this simple flax tax to be
profound.  People will be able to work as much as they want, and
invest in any way they want, knowing that every incremental dollar
they earn will be theirs to keep.  All of the lost productivity
resulting from tax-avoidance and the administration associated with
corporate payrolls, will remain with us only in the form of an
unpleasant memory, similar to the memories of living behind the Iron
Curtain and Berlin Wall before 1989.  Small business will be able to
form without any bureaucratic hassle.  The entrepreneurial spirit will
be unshackled from all red tape, bureaucracy and tax disincentives.

My plan to cut over 75% of all Federal government expenses, and fund
the remainder with a flat $5,000 tax, will also help cure political
corruption in Washington DC.  Lobbyists come to us because we have
money to spend, and they seek to maximize their share of the pie.  My
cold turkey approach to restoring the US government to its
constitutionally legitimate size will make almost all lobbyists
obsolete: If the size of the pie is zero, there is nothing for which
you can lobby.

So in closing, I can say with confidence that the 75% or greater
reduction in size of the US government will bring about a rebirth of
the era of freedom, rugged individualism and self-reliance.  It will
allow the US government to focus on its constitutionally narrow
purpose of securing the property rights of our individual citizens,
and to protect our country from those who seek to do us harm.  This
focus will enable us to perform these duties better.  With this, I
salute our constitution, our Founders and our Declaration of
Independence.  Now let’s get on with it.  Thank you, and God Bless
America.

Dan Lyons: Calls Silicon Valley Press Corps Idiots – Compares Steve Jobs to Obama

I just read Dan Lyons story backpeddling from his ‘toolness’ on CNBC regarding Steve Jobs.  I find it funny that he is calling Steve Jobs the corporate version of Barak Obama and that he can’t do anything wrong.

Dan writes:  “The fact is, in the eyes of the media, Apple is the corporate equivalent of Barack Obama—a company that can do no wrong. Even in Silicon Valley, where much of the press corps are pretty much glorified cheerleaders (think of all those slobbering cover stories about the Google guys) Apple’s kid-gloves treatment stands out. Reporters don’t just overlook Apple’s faults; they’ll actually apologize for them, or rationalize them away. Ever seen reporters clapping and cheering at a press conference? Happens all the time at Apple events.”

Steve Jobs deserves the credit and respect sure he had the Yes We Can attitude but that was a decade ago.  Steve Jobs slogan is now “Yes We Did” and “We Continue To Do”.  Apple is a superior company because of the leadership of Steve and his team.  Barak is embarking on that path.  We will see how he does (so far it looks good).  Obama is far from “Yes We Did” slogan.

Dan has it so wrong on the media.  Steve Jobs gets rakes across the coals all the time not on his performance as a CEO and leader (since it is stellar) but on his privacy.

Here are some more “gems of toolness” from Dan Lyons … “Imagine what it might be like if the Church of Scientology went into the consumer electronics business, and you’d have a pretty good picture of how Apple operates.”…  “That’s what happened to the poor guy at CNBC. Sure, he got his share of “exclusive” 10-minute spots with Steve Jobs. You can find them on YouTube. They look like training videos for a correspondence course on bootlicking. Now, of course, the CNBC guy says he’s outraged. He sputters about how Apple has been irresponsible and “deplorable.” His pals at Apple won’t care. They’re already moving on to the next useful idiot. Among the Silicon Valley press corps there is no shortage of them.”

Entire Offer Letter For Carol Bartz New CEO of Yahoo

I would have taken the job for $500k and 2.5 million shares.  Well their email must have hit my spam folder. 🙂

Here is her offer:  I wish her the best of success.  I’ve been a big Yahoo fan and hope they can turn that ship around toward calmer waters.

January 13, 2009

Carol Bartz
701 First Avenue
Sunnyvale, CA 94089

Dear Carol:

On behalf of Yahoo! Inc. (the “Company”), I am pleased to offer you the position of Chief Executive Officer of the Company, reporting to the Company’s Board of Directors (the “Board”), with the authority and duties set forth in the Company’s By-laws. You will be appointed to the Board upon your commencement of employment and, subject to legal limitations, the Board will nominate you for reelection to the Board on an ongoing basis during the Term (as defined below) when your then term as a director expires. For purposes of this letter agreement (this “Agreement”), your first day of work at the Company, which shall be January 13, 2009, will be considered your “Employment Start Date”. Your employment with the Company will be subject to the terms of this Agreement for the period ending December 31, 2012 (the period commencing on your Employment Start Date and ending December 31, 2012, the “Term”) unless extended by the mutual written agreement of the Company and you or terminated earlier as provided herein. Notwithstanding the foregoing, certain provisions of this Agreement, as provided herein or implied by their terms (including but not limited to the Proprietary Agreement (as defined below)), will survive any termination of the Term or your employment. Certain terms used herein are defined in Appendix A hereto.

1. Compensation. Your starting annual base salary will be at the rate of one million dollars ($1,000,000) per annum, less applicable taxes and withholdings, paid in accordance with the Company’s normal payroll practices and subject to annual review for increase (“Base Salary”). You will also be eligible to receive an annual target bonus of two hundred percent (200%) of your annual Base Salary (“Target Bonus”) to be determined by the Compensation Committee of the Board (the “Compensation Committee”) in its discretion based on your performance and the Company’s performance for the relevant year. The bonus program will have a maximum bonus of two (2) times the annual Target Bonus. To the extent that the Company adopts a bonus program subject to Code Section 162(m), your bonus will be part of that program. Any bonus payment will be subject to applicable taxes and withholdings. To qualify for the bonus, you must remain continuously employed with the Company through the date that any bonus is approved by the Compensation Committee, subject to the provisions of this Agreement and the program. Bonuses, except as otherwise provided in any bonus or other plan adopted by the Compensation Committee, will be paid in the calendar year next following the fiscal year for which it is earned.

2. Inducement Stock Option Grant. As a part of the Company team, we strongly believe that ownership of the Company by our employees is an important factor to our success. Therefore, as part of your compensation, the Compensation Committee will grant you at its next scheduled meeting at which equity grants are to be made (currently scheduled for January 30, 2009) (the “Grant Meeting”) an option to purchase five million (5,000,000) shares of the Company’s common stock (the “Inducement Option”). The per share exercise price for the

Inducement Option will be the fair market value of a share of the Company’s common stock on the date of grant as determined by the Compensation Committee. The Inducement Option will be issued under, and be subject to, the terms and conditions of the Company’s 1995 Stock Plan, as amended (the “Plan”), and, to the extent not inconsistent herewith, the applicable notice of stock option grant and stock option agreement (including the price and share number adjustments therein). Vesting of the Inducement Option is contingent on your continued employment with the Company through each vesting date. The Inducement Option shall be exercisable for seven (7) years from the date of grant, subject to earlier termination as provided herein, in the Plan and the applicable notice of stock option grant and stock option agreement.

Except as otherwise provided herein, the shares subject to the Inducement Option will vest based on the attainment of average closing prices for the Company’s common stock as reported on the NASDAQ Global Select Market, or, if the Company’s common stock is no longer traded on the NASDAQ Global Select Market, the principal market on which the Company’s common stock is traded (the “Market”) for twenty (20) consecutive trading days after the Grant Meeting and prior to January 1, 2013 (or, if a Change in Control occurs prior to January 1, 2013, the price of the Company’s common stock on the Market immediately preceding the closing of the Change in Control (the “Change In Control Price”), even if such price is not maintained for twenty (20) consecutive trading days) (in either case, the “Average Price”) as follows: (i) one third (1/3) (equal to 1,666,667 shares) if the Average Price is equal to or greater than one hundred and fifty percent (150%) of the exercise price; (ii) an additional one sixth (1/6) (equal to 833,333 shares) if the Average Price is equal to or greater than one hundred and seventy-five percent (175%) of the exercise price; (iii) an additional one sixth (1/6) (equal to 833,334 shares) if the Average Price is equal to or greater than two hundred percent (200%) of the exercise price; (iv) an additional one twelfth (1/12) (equal to 416,666 shares) if the Average Price is equal to or greater than two hundred and twenty-five percent (225%) of the exercise price; (v) an additional one twelfth (1/12) (equal to 416,666 shares) if the Average Price is equal to or greater than two hundred and fifty percent (250%) of the exercise price; and (vi) an additional one sixth (1/6) (equal to 833,334 shares) if the Average Price is equal to or greater than three hundred percent (300%) of the exercise price (each such target price level shall be referred to as a “Vesting Level”). Furthermore, if: (i) an Open In Contemplation Event exists on December 31, 2012 as a result of a CIC Agreement entered into while you were employed by the Company; (ii) the related Change in Control contemplated by the CIC Agreement closes on or after January 1, 2013; and (iii) you are employed by the Company on the date of such closing or you were terminated by the Company without Cause or for Disability, you terminate for Good Reason or your employment is terminated as a result of your death between the signing of the CIC Agreement and closing of such related Change in Control, a special measurement of the Average Price shall be made based on the price of the Company’s common stock on the Market immediately preceding the closing of the Change in Control contemplated by the CIC Agreement, and, if an additional Vesting Level is attained, an additional portion of the Inducement Option shall vest at such time. If your employment terminates for any reason other than as specified above before the closing of the related Change in Control, or, if the obligation to close the Change in Control under the CIC Agreement terminates, the special measurement will not apply. Furthermore, the special measurement will be the only vesting measurement of the Inducement Option on or after January 1, 2013. Each Vesting Level will be equitably adjusted by the Compensation Committee at the same time as adjustments are made in

accordance with Section 16 of the Plan with regard to “Adjustments Upon Change in Capitalization, Corporate Transactions” in a manner similar to and subject to the same requirements as the exercise price under Section 16 of the Plan. Vesting shall occur only one time at each applicable Vesting Level.

The stock option grant agreement and notice of stock option grant will be substantially in the forms currently used under the Plan and filed with the Securities and Exchange Commission, as modified for the provisions hereof. Shares received upon the exercise of the Inducement Option must be held until January 1, 2013, except in the event of your earlier death or at or after a Change in Control.

3. Make-Up Grant. As a result of the forfeiture of equity grants and post-employment medical coverage at your current employer, the Compensation Committee will grant you at the Grant Meeting makeup equity (the “Make-Up Equity Grant”) and cash (“Make-Up Cash”) with an aggregate grant date value equal to ten million dollars ($10 million), payable twenty-five percent (25%) in cash and seventy-five percent (75%) in restricted stock measured based on the closing price of the Company’s common stock as of the grant date. The Make-Up Equity Grant will vest, and the Make-Up Cash will vest and be settled, in equal and proportionate quarterly installments during 2009 (with the final vesting on December 26, 2009) with payment of the cash within three (3) days of vesting.

The Make-Up Equity Grant and Make-Up Cash shall be subject to clawback (based on the closing price of the Company’s common stock at the time of vesting with respect to the Make-Up Equity Grant) if you are terminated by the Company for Cause or you terminate without Good Reason as follows: (i) one hundred percent (100%) if such termination occurs during 2009; (ii) seventy-five percent (75%) if such termination occurs during 2010; (iii) fifty percent (50%) if such termination occurs during 2011; and (iv) twenty-five percent (25%) if such termination occurs during 2012. Notwithstanding the foregoing, the clawback will only apply to the net after tax amount received by you (based on the full amount received by you, reduced by the shares and cash utilized to cover withholding or otherwise used by you to pay federal, state and local income tax obligations), except that in the first year of employment it shall include all amounts. In all other cases, there shall be no clawback.

The Make-Up Equity Grant restricted stock will be entitled to any dividends paid, provided that any cash dividends and any dividends of property payable with regard to unvested restricted stock shall remain forfeitable on the same basis as the restricted stock, and cash dividends will be paid out immediately following vesting. The Make-Up Equity Grant will be adjusted by the Compensation Committee at the same time as adjustments are made in accordance with Section 16 of the Plan with regard to “Adjustments Upon Change in Capitalization, Corporate Transactions” in a manner similar to and subject to the same requirements under Section 16 of the Plan. The Make-Up Equity Grant will be substantially in the form currently used by the Company and filed with the Securities and Exchange Commission for restricted stock grants, as modified for the provisions hereof.

4. Annual Grants. You shall be granted annual equity grants, with due regard for your position, at such time as grants are generally made to other senior executives of the Company, the amount and term of such grants being in the sole discretion of the Compensation Committee.

It is currently contemplated that the 2009 grants will be made in February 2009 and the Company will recommend a grant to you at that time of a grant date value of approximately eight million dollars ($8 million) based on the methodology utilized by the Company to value grants. Such annual grants shall be subject to the same terms and conditions as the standard awards generally granted to other senior executives, except as otherwise provided herein, and made when awards are generally made to other senior executives.

5. Benefits.

(a) Benefits. You will be eligible to participate in the benefit package available to senior Company executives upon satisfying eligibility conditions, including health insurance benefits (medical, dental and vision), life insurance, short term and long term disability, the Employee Stock Purchase Plan, 401(k) Plan, and Flexible Spending Plan (Healthcare Reimbursement Account and/or Dependent Care Reimbursement Account). Please refer to benefit plan documents for eligibility. Of course, the Company may change its benefits at any time. You will also be entitled to Post-Employment Health Coverage.

The Company will reimburse you for reasonable business expenses incurred in connection with your employment, upon presentation of appropriate documentation, in accordance with the Company’s expense reimbursement policies and you will be eligible to participate in the travel policy established by the Company generally for its senior management. The Company will also pay your legal, financial and other advisory fees incurred in connection with negotiating this Agreement up to a maximum of one hundred and fifty thousand dollars ($150,000) (based on your attorneys’ and advisors’ normal time charges).

(b) Paid Time Off. You will be entitled to four (4) weeks of vacation per year in accordance with the Company’s vacation policy, including as to usage, carryover and payment for unused vacation. In addition, the Company currently provides eligible employees with ten (10) paid holidays and two (2) personal floating holidays each year.

6. Termination of Employment. If your employment under this Agreement terminates, the provisions below will apply.

The Company may terminate your employment with or without Cause or for Disability. You may terminate your employment with or without Good Reason. Your employment will terminate upon your death, and your employment under the terms of this Agreement will terminate on December 31, 2012 (“Expiration”), unless you and the Company agree otherwise in writing or a Limited Automatic Extension occurs (in which case your employment under the terms of this Agreement will automatically terminate on the Extended Expiration Date, unless you and the Company agree otherwise in writing). Any continuation of employment after Expiration shall not be subject to the terms of this Agreement other than the provisions for Post-Employment Health Coverage, Section 6 (as specifically provided herein) and Sections 8 through 16 hereof, except to the extent otherwise agreed in writing. You shall, on a termination of employment, have the right to receive the termination benefits set forth below and continuation of your rights to indemnification and director’s and officer’s liability insurance with regard to your prior service with the Company, but no other rights to receive any amounts from

the Company or its affiliates. Termination of employment at or after Expiration shall not be treated as a termination without Cause or a termination for Good Reason, except to the extent specifically provided in this Section 6. Any equity grants made after Expiration shall not be subject to the provisions of this Agreement, provided that equity grants made prior to Expiration shall continue to be subject to the terms hereof.

Receipt on termination of employment (whether before or after Expiration) of any amounts, benefits or additional vesting or extended exercise periods (other than under equity awards granted after Expiration) beyond the Accrued Amounts and amounts, benefits, additional vesting or extended exercise periods which otherwise would be received on a termination by you without Good Reason (the “Standard Benefits”) shall require you to execute and deliver to the Company (with the period to revoke expiring without your revocation) within sixty (60) days of such termination a release in the form annexed hereto as Exhibit A (with such changes therein as reasonably requested by the Company to protect the enforceability of the release and the intent thereof) (the “Release”) and compliance with the last sentence of this paragraph. No amounts other than the Accrued Amounts and the Standard Benefits shall be paid prior to the effectiveness of the Release and no amounts that are “nonqualified deferred compensation” within the meaning of Section 409A shall be paid prior to the sixtieth (60^th) day following termination of employment, except as provided below. To the extent due on or prior to such sixtieth (60^th) day, such amounts shall be paid on the sixtieth (60^th) day, provided that the Make-Up Cash shall be paid, to the extent not previously vested and paid, on the first business day after the effectiveness of the Release. Upon any termination of employment, you shall promptly resign from the Board and all officerships, directorships or fiduciary positions with the Company and its affiliates.

Notwithstanding anything else herein, the timing of distributions of any “nonqualified deferred compensation” (within the meaning of Section 409A) that is part of the annual grants shall be set by the Compensation Committee at the time of the annual grants as part of the grant, and the provisions herein with regard to having the benefit of more favorable provisions of similar standard grants generally made to other senior executives or under the Change of Control Severance Plan or similar plan generally for senior executives shall not apply to equity awards that constitute “nonqualified deferred compensation” (within the meaning of Section 409A) to the extent necessary to avoid adverse taxation under Section 409A.

You shall receive the following amounts on a termination of employment prior to Expiration or, if applicable, at or prior to the Extended Expiration Date:

(a) Death, Disability, Termination Without Cause or Good Reason Termination.

(i) Accrued Amounts.

(ii) Pro Rata Bonus.

(iii) The Make-Up Equity Grant and Make-Up Cash shall fully vest and cease to be subject to clawback and the Make-Up Cash shall be paid, to the extent not previously vested and paid on the first business day after the effectiveness of a Release.

(iv) Pro Rata Treatment of the Inducement Option.

(v) Any equity grants made during the Term (other than the Make-Up Equity Grant and the Inducement Option) will be treated in accordance with their terms and as follows: (A) any vested options shall be exercisable during the applicable Exercise Period; and (B) any grants with time-based vesting criteria shall vest as provided in the applicable grant but at a minimum, pro rata (based on the relative number of months you were employed by the Company during the vesting measurement period to the number of months in the vesting measurement period) with any applicable performance-based vesting criteria for any open periods being established in the equity grant by the Compensation Committee as either remaining open until actual results are determined or paid at target, provided that with regard to the 2009 annual grant you shall be treated as having an additional twelve (12) months of employment in calculating the pro rata amount. Other than with regard to the Inducement Option and the Make-Up Equity Grant, if the standard grants generally made to other senior executives issued at the same time and of the same type as grants made to you during the Term contain terms that are more favorable to you, you will also have the benefit of any such more favorable terms for the related grant. If an award generally requires employment through a period to be received, the vesting measurement period shall be that employment period even if all or a portion of the award is measured over a shorter performance period.

(vi) Post-Employment Health Coverage.

(b) Additional Severance on Termination Without Cause or Good Reason Termination.

(i) If your employment is terminated by the Company without Cause or by you for Good Reason during the Term and (ii) and (iii) below do not apply, then in addition to the payment, benefits and treatment under Section 6(a) above, you shall receive an amount equal to your Base Salary and your Target Bonus, which amounts shall be paid in a lump sum on the sixtieth (60^th) day after termination of employment.

(ii) If your employment is terminated by the Company without Cause or by you for Good Reason upon or within two (2) years after a Change in Control that occurs during the Term (whether such termination occurs before or after Expiration) and (iii) below does not apply, then in addition to the payment, benefits and treatment under Section 6(a) above, you shall receive: (A) an amount equal to two (2) times the sum of your then Base Salary and Target Bonus, which shall be paid in a lump sum on the sixtieth (60^th) day following termination; and (B) in lieu of Section 6(a)(v) above with regard to vesting treatment of the 2009 grants, full vesting of the 2009 annual grants with, for any 2009 annual grant with performance vesting, performance vesting based on actual performance vesting for any closed periods and target levels for any open periods.

(iii) If after the execution of a CIC Agreement and prior to the earlier of termination of the obligations to close under such CIC Agreement or the two (2) year period after consummation of the related Change in Control contemplated by the CIC Agreement, your employment is terminated by the Company without Cause or by you for Good Reason, whether during the Term or thereafter, you shall receive: (A) if the Change in Control has occurred prior

to termination, the payment, benefits and treatment under Sections 6(a) and 6(b)(ii) above; and (B) if the Change in Control has not occurred prior to termination, the payment, benefits and treatment under Sections 6(a) and 6(b)(i) above upon termination of employment, and, if the related Change in Control contemplated by the CIC Agreement is consummated prior to termination of the obligations to close under the related CIC Agreement, you shall, in addition, receive the payment, benefits and treatment pursuant to Section 6(b)(ii) above, less the payment, benefits and treatment, as the case may be, under Section 6(b)(i) upon such Change in Control.

(iv) Other than with regard to the Inducement Option and the Make-Up Equity Grant, if the standard grants generally made to other senior executives issued at the same time and of the same type as grants made to you during the Term contain terms that are more favorable to you, you will also have the benefit of any such more favorable terms for the related grant.

(v) The right to exercise any vested options granted during the Term, including the Inducement Option, during the applicable Exercise Period.

(c) Termination for Cause or Without Good Reason.

(i) Accrued Amounts.

(ii) Post-Employment Health Coverage.

(d) Termination of Employment At or After Expiration Other Than By the Company for Cause.

(i) Accrued Amounts.

(ii) For any equity grants made during the Term (other than the Inducement Option and the Make-Up Equity Grant), vesting as provided in the applicable grant but at a minimum, pro rata vesting (based on the relative number of months you were employed by the Company during the vesting measurement period to the number of months in the vesting measurement period) of all equity awards, with any applicable performance-based vesting criteria for any open periods being established in the equity grant by the Compensation Committee as either remaining open until actual results are determined or paid at target, provided that with regard to the 2009 annual grant, you shall be treated as having an additional twelve (12) months of employment in calculating the pro rata amount. Other than with regard to the Inducement Option and the Make-Up Equity Grant, if the standard grants generally made to other senior executives issued at the same time and of the same type as grants made to you during the Term contain terms that are more favorable to you, you will also have the benefit of any such more favorable terms for the related grant. If an award generally requires employment through a period to be received, the vesting measurement period shall be that employment period even if all or a portion of the award is measured over a shorter performance period,

(iii) The right to exercise any vested options granted during the Term, including the Inducement Option, during the applicable Exercise Period.

(iv) Post-Employment Health Coverage.

(v) If Section 6(b)(ii) or (iii) applies, you shall receive any amounts due thereunder.

(e) Change in Control.

(i) If a Change in Control occurs during the Term or thereafter and the Company’s outstanding equity awards granted during the Term are continued, assumed or substituted, such grants shall be treated as provided in the applicable grant, but at a minimum, (A) performance targets that have not expired will continue (subject to adjustment of exercise prices and share numbers in accordance with the applicable plan and grant adjustment provisions consistent with Sections 2 and 3 hereof); and (B) equity awards granted during the Term (other than the Inducement Option and the Make-Up Equity Grant), will be treated in the same manner as other grants under the applicable plan generally made to other senior executives issued at the same time and in the same form, including, in such case, any better treatment under the Company’s Change in Control Employee Severance Plan or similar plan (to the extent such a plan exists and applies) applicable at the time of the Change in Control with regard to such grants, provided that for clarity, in no event shall the vesting of the Inducement Option be accelerated even if other grants are so treated or so covered under the Change in Control Employee Severance Plan or similar plan, and provided further that such treatment shall not provide for any treatment that would prevent the equity provisions set forth in Section 6(b)(ii)(B) above from applying if your employment was immediately terminated thereafter by the Company without Cause or by you for Good Reason.

(ii) If a Change in Control occurs during the Term or thereafter and (i) above is not applicable, then (A) the Inducement Option will vest or be forfeited, as the case may be, at the time of the Change in Control, to the extent not previously or thereupon vested, based on whether the Change In Control Price is at or in excess of the applicable Vesting Level; (B) the Make-Up Equity Grant and Make-Up Cash shall fully vest and cease to be subject to clawback and the Make-Up Cash shall be paid, to the extent not previously vested and paid, on the first business day after the effectiveness of a Release; and (C) equity awards granted during the Term (other than the Inducement Option and the Make-Up Equity Grant) will be treated in the same manner as other grants under the applicable plan generally made to other senior executives issued at the same time and in the same form, including in such case, any better treatment under the Company’s Change in Control Employee Severance Plan or similar plan (to the extent such a plan exists and applies) applicable at the time of the Change in Control with regard to such grants, provided that 2009 annual grants shall fully vest (based on actual performance vesting for closed periods and at target for open periods).

7. Parachute Payments. In the event that the payments and benefits provided to you herein or otherwise by the Company constitute “parachute payments” within the meaning of Code Section 280G and would, but for this provision, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then your payments and benefits shall be either (i) delivered in full or (ii) delivered as to such lesser extent, as you may elect, as would result in no portion of such amounts being subject to the Excise Tax, whichever of the foregoing results in the receipt by you on an after-tax basis of the greatest amount, notwithstanding that all of some

of the amounts may be taxable under Section 4999 of the Code. If a reduction is to occur pursuant to the prior sentence, unless an alternative election is permitted by, and does not result in taxation under, Section 409A and timely elected by you, the payments and benefits shall be cutback in the following order: any cash severance you are entitled to (starting with the last payment due), then other cash amounts that are parachute payments (starting with the last payment due), then any stock options that have exercise prices higher than the then fair market value price of the stock (based on the latest vesting tranches), then restricted stock and restricted stock units based on the last ones scheduled to be distributed and then other stock options based on the latest vesting tranches.

8. Proprietary Agreement. As an employee of the Company, it is likely that you will become knowledgeable about confidential and/or proprietary information related to the operations, products and services of the Company and its clients. To protect the interests of both the Company and its clients, all employees are required to read and sign an Employee Confidentiality and Assignment of Inventions Agreement (“Proprietary Agreement”) prior to beginning employment. A copy of this agreement is attached hereto as Exhibit B and is deemed to be part of this Agreement. An additional copy of the Proprietary Agreement is also enclosed with this Agreement. Upon signing this Agreement, you shall be deemed to sign such Proprietary Agreement. For our records, please also sign the copy attached hereto and return it along with your signed copy of this Agreement.

9. Proprietary Information Obligations Checklist. Similarly, you may have confidential or proprietary information from a prior employer that should not be used or disclosed to anyone at the Company. Therefore, the Company requests that you read, complete, and bring with you on your first day of employment, the enclosed Proprietary Information Obligations Checklist to this effect. In addition, the Company requests that you comply with any existing and/or continuing contractual obligations that you may have with your former employers. You represent to the Company that you are not subject to any agreement or other limitation that you would be in violation of by executing this Agreement, commencing work with the Company or performing your duties with the Company (recognizing that you are subject to confidentiality obligations with regard to your prior employer and the various boards you serve on).

10. Obligations.

(a) During your employment, you shall devote your full business efforts and time to the Company. The Company and you recognize that you are currently on several boards of directors of publicly traded companies and you agree that you shall reduce the number of boards of publicly traded companies on which you serve to one (1) board other than the Company, as soon as feasible in your good faith judgment and with recognition of your fiduciary duties to the Company and such companies. You shall not be precluded from engaging in appropriate civic, charitable or religious activities, from serving on the board of directors of other companies that are not competitors to the Company and that are approved by the Board, subject to Section 11 below, or from managing your and your family’s personal passive investments, as long as, in each case, the activities do not materially interfere or conflict with your responsibilities to, or your ability to perform your duties of employment by, the Company. Any outside activities must be in compliance with the Company’s Code of Ethics, including approval procedures.

(b) In the event of a restatement of financial results, the Compensation Committee will review all incentive awards for performance periods during the restated period (whether in cash or equity), and all equity grants vesting or paid based on achievement of performance goals or stock price related in whole or part to the restated financial period. If any such award would have been lower had the level of achievement of applicable financial goals been calculated based on such restated financial results or a grant not have vested or not been paid in the sole discretion of the Compensation Committee, the Compensation Committee may, if it determines appropriate in its sole discretion, to the extent permitted by applicable law, require the reimbursement by you of the incremental portion of the bonus in excess of that which would have been paid to you based on the restated financial results, unvest equity grants and require repayment of profits on equity that was vested or paid on such results and realized upon by you. You shall promptly comply with any such request of the Compensation Committee. This provision is in addition to, and not in lieu of, any requirements under the Sarbanes-Oxley Act or any plan or grant and shall apply notwithstanding anything to the contrary in the Plan, any applicable award agreement or any other provision of this Agreement.

11. Noncompetition During Employment. You agree that, during your employment with the Company you will not engage in, or have any direct or indirect interest in any person, firm, corporation or business (whether as an employee, officer, director, agent, security holder, creditor, consultant, partner or otherwise) that is competitive with the business of the Company, including, without limitation, any then-current activities relating to providing Internet navigational products or services and any then-current activities providing search, advertising services, e-mail, chat, e-commerce, instant messaging, content (e.g., music, video), ISP (e.g., connectivity, bandwidth or storage) or other Internet-based delivery or functionality. Notwithstanding the preceding sentence: (i) you may own not more than 1% of the securities of any company whose securities are publicly traded; and (ii) you shall not be prohibited from serving on the Board of Directors of Cisco Systems, Inc., subject to the above limits regarding the number of public board memberships, except in the event that Cisco Systems, Inc. is a direct competitor of the Company or otherwise a material fiduciary issue involving a fiduciary duty occurs; the parties acknowledging and agreeing that as of the date hereof, Cisco Systems, Inc. is not a direct competitor of the Company.

12. Cooperation. During the Term and thereafter, whether or not then employed by the Company, you agree to reasonably cooperate with and make yourself available on a continuing basis to the Company and its representatives and legal advisors in connection with any matters in which you are or were involved or any existing or future claims, investigations, administrative proceedings, lawsuits and other legal and business matters, as reasonably requested by the Company. You also agree that within five (5) business days of receipt (or more promptly if reasonably required by the circumstances) you shall send the Company copies of all correspondence (for example, but not limited to, subpoenas) received by you in connection with any legal proceedings involving or relating to the Company, unless you are expressly prohibited by law from so doing. You agree that you will not voluntarily cooperate with any third party in any actual or threatened claim, charge, or cause of action of any nature whatsoever against the Company and/or any of the Company’s subsidiaries and/or affiliates. You understand that nothing in this Agreement prevents you from cooperating with any government investigation.

13. Employment At-Will. Please understand that this Agreement does not constitute a contract of employment for any specific period of time, but will create an employment at-will relationship that may be terminated at any time by you or the Company, with or without Cause and with or without advance notice, provided that you shall give the Company at least thirty (30) days’ written notice of any voluntary resignation. The at-will nature of the employment relationship may not be modified or amended except by written agreement by the Board Chairman and you.

14. Code of Conduct and The Company Policies. The Company is committed to creating a positive work environment and conducting business ethically. As an employee of the Company, you will be expected to abide by the Company’s policies and procedures including, but not limited to, the Company’s Guide2Working@Yahoo! and the Company’s Code of Ethics. The Company requests that you review, sign and bring with you on your Employment Start Date, the enclosed Code of Ethics@Yahoo! and At Will Employment, Guide2Working@Yahoo! and Privacy Policy Acknowledgment Forms. For purposes of the Inducement Grant, the Make-Up Equity Grant and the annual grants made during the Term, the term “stock dividend” under Section 16 of the Plan shall include dividends or other distributions of the stock of the subsidiaries of the Company.

15. Indemnification. The Company and you shall enter into the Company’s standard form of indemnification agreement for executive officers. You shall be provided with director’s and officer’s liability insurance coverage to the same extent as other executive officers and as provided in such policies for executive officers serving as directors. Such coverage shall continue after your service with the Company ceases while you have continuing liability with regard to your actions or inactions on behalf of the Company on the same basis as coverage for other former officers and directors.

16. Non-Disparagement. You agree, other than with regard to employees in the good faith performance of your duties with the Company while employed by the Company, both during and for five (5) years after your employment with the Company terminates, not to knowingly disparage the Company or its officers, directors, employees or agents in any manner likely to be harmful to it or them or its or their business, business reputation or personal reputation. The Company will direct its Chairman, the Chief Yahoos and the named executive officers of the Company, other than in the good faith performance of their duties to the Company or in connection with their fiduciary duties to the Company and applicable law, both during and for five (5) years after your employment with the Company terminates, not to knowingly disparage you in any manner likely to be harmful to you or your business reputation or personal reputation. The foregoing shall not be violated by statements which are truthful, complete and made in good faith in response to any question, inquiry or request for information required by legal process or governmental inquiry.

17. Entire Agreement; Notice.

(a) This Agreement, including the exhibits hereto, constitute the entire agreement between you and the Company with respect to the subject matter hereof and supersede any and all prior or contemporaneous oral or written representations, understandings, agreements or communications between you and the Company concerning those subject matters. It may not be

terminated or modified orally but only by a writing executed by you and an authorized representative of the Board. This Agreement shall be interpreted under, and governed by, the laws of California without regard to its conflict of law provisions.

(b) Notices shall be delivered in writing either personally or by overnight delivery service and shall be deemed given on the date delivered if delivered personally or the day after the day sent if sent by overnight delivery service. Notices shall be delivered as follows (or such other address as the party shall notify the other by notice sent as aforesaid): (a) if to the Company, at the Company’s executive offices (attn: Chairman) with a copy to the General Counsel; and (b) if to you, at the last home address on file with the Company (with a copy to Gordon Davidson, Esq., Fenwick & West LLP, 801 California Street, Mountain View, California 94041).

18. General 409A Compliance; Income Tax Withholding.

(a) The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If you notify the Company (with specificity as to the reason therefor) that you believe that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause you to incur any additional tax or interest under Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with you, to the extent legally permitted and to the extent it is possible to timely reform the provision to avoid taxation under Section 409A, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Company of the applicable provision without violating the provisions of Section 409A. The Company shall have no liability to you with regard to any additional tax, penalties or interest you are required to pay pursuant to Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits which is nonqualified deferred compensation under Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If you are deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment that is considered deferred compensation under Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of you, and (ii) the date of your death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be

paid or reimbursed to you in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of your taxable year following the taxable year in which the expense occurred. Tax gross-up payments, if any, shall be made in any event no later than the end of the calendar year immediately following the calendar year in which you remit the related taxes, and reimbursement of expenses, if any, incurred due to a tax audit or litigation shall be made no later than the end of the calendar year immediately following the calendar year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following the calendar year in which the audit or litigation is completed.

(d) For purposes of Section 409A, your right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

(e) All payments hereunder shall be subject to applicable federal, state and local income tax withholding; provided that all equity grants shall provide for net share withholding at this minimum applicable statutory withholding rates upon exercise or settlement, as the case may be, unless otherwise agreed in writing by the parties.

19. Eligibility to Work in the United States. In order for the Company to comply with United States law, we ask that on your Employment Start Date you bring to the Company appropriate documentation to verify your authorization to work in the United States. The Company may not employ anyone who cannot provide documentation showing that they are legally authorized to work in the United States.

20. Accepting this Offer. This offer is contingent on you starting employment at the Company on or before the Employment Start Date specified above. To accept this offer, please sign this letter in the space provided below and return it, the signed Proprietary Agreement, and the signed Proprietary Information Obligations Checklist to the Executive Vice President, General Counsel and Secretary of the Company.

We look forward to your joining us and hope that you find your employment with the Company enjoyable and professionally rewarding.

Very truly yours,

/s/ Roy Bostock

Roy Bostock

Chairman of the Board

I accept this offer of employment with the Company and agree to the terms and conditions outlined in this Agreement.

/s/ Carol Bartz Signature		January 13, 2009 Date

Enclosures:
Employee Confidentiality And Assignment Of Inventions Agreement
Proprietary Information Obligations Checklist
Code of Ethics Acknowledgement
At-Will Employment, Guide2Working@Yahoo! and Privacy Policy Acknowledgment Form

APPENDIX A

DEFINITIONS

(1) “Accrued Amounts” shall mean: (i) any accrued but unpaid Base Salary through date of termination paid in accordance with normal payroll practices, unreimbursed business expenses incurred prior to the date of termination paid in accordance with Company policies and accrued but unused vacation time through the date of termination due in accordance with Company plan and policies paid within sixty (60) days following termination, unless earlier as required by law, (ii) other than a termination for Cause during the Term or resignation without Good Reason (except if otherwise provided in a Company plan), any unpaid Prior Year Bonus, and (iii) any other amounts and benefits you are entitled to receive under any employee benefit plan and programs paid in accordance with the terms and provisions of such plans and programs (the “Accrued Amounts”).

(2) “Cause” shall mean (i) repeated failure to attempt in good faith to perform your material duties and responsibilities after written notice of such failure; (ii) willful misconduct of a material nature (without regard to the size of the Company) with respect to the Company or in the performance of your duties; (iii) willful and material violation of the Company’s written policies regarding harassment or discrimination, or of any other material provision of the Company’s Code of Ethics or other similar policy; (iv) a willful and material breach of any restrictive covenant provision contained in any agreement between the Company and you; (v) indictment, conviction or plea of nolo contendere or guilty to a felony or crime of serious moral turpitude; or (vi) willful misconduct having or likely to have, in the good faith opinion of the Board, a material adverse impact on the Company, either economically or by reputation.

(3) “Change in Control” shall be deemed to have occurred if:

	(a)		any person or group of persons (as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) together with its affiliates, but excluding (i) the Company or any of its subsidiaries, (ii) any employee benefit plans of the Company or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company (individually a “Person” and collectively, “Persons”), is or becomes, directly or indirectly, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities;
	(b)		the consummation of a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or entity regardless of which entity is the survivor, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company,

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			such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or
	(c)		consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets, provided, however, that a sale of the Company’s search business shall not constitute a Change in Control.

(4) “CIC Agreement” shall mean an agreement that would result in a Change in Control if such agreement were consummated.

(5) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(6) “Disability” shall mean the inability of you to have performed your material duties to the Company due to a physical or mental injury, infirmity or incapacity for either a continuous period of ninety (90) days or one hundred eighty (180) days (including weekends and holidays) in any 365-day period. Notwithstanding the foregoing, in the event that as a result of earlier absence because of mental or physical incapacity you incur a “separation from service” within the meaning of such term under Section 409A, you shall on such date automatically be terminated from employment as a Disability termination.

(7) “Exercise Period” shall mean one (1) year after termination of employment or, with respect to any option vesting within ninety (90) days prior to the end of such one (1) year period, ninety (90) days from the applicable vesting date, but in no event beyond the end of the regular term of an award or termination of the grant’s exercisability as a result of an event other than termination of employment.

(8) “Extended Expiration Date” shall mean if a Limited Automatic Extension existed on Expiration, the earliest of (i) termination of your employment with the Company; (ii) if a Change in Control occurs prior to Expiration, two (2) years after the date thereof; or (iii) if an Open In Contemplation Event exists on Expiration, the earlier of the two (2) year period after the related Change in Control or termination of the obligations to close under the CIC Agreement creating the Open In Contemplation Event.

(9) “Good Reason” shall mean: (i) any material breach by the Company of the Agreement or the exhibits hereto; (ii) any material reduction of your authority, duties or responsibilities, provided that not being elected to the Board by the shareholders shall not be a Good Reason event so long as the Board nominates you for the Board if such nomination is permitted by applicable law; (iii) a material reduction by the Company in your Base Salary or Target Bonus target percentage; (iv) the relocation of the principal executive offices of the Company to a location more than fifty (50) miles from its location immediately prior to such relocation and such relocation increases the distance from your residence at the time of relocation to the executive office by a material amount; (v) a change of your position to something other than Chief Executive Officer of the Company (or its ultimate parent operating company in the event of a Change in Control); or (vi) a requirement that you report to a corporate officer or an employee instead of reporting directly to the Board (or its ultimate parent operating company board in the event of a Change in Control); provided, that the foregoing events shall not be deemed to constitute Good Reason unless you shall have notified the Board (or the ultimate

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board, as the case may be) in writing of the occurrence of such event(s) within sixty (60) days of such occurrence (or if on or following a Change in Control, within ninety (90) days) and the Board (or the ultimate board, as the case may be) shall have failed to have cured or remedied such event(s) within thirty (30) business days of its receipt of such written notice and termination occurs within one hundred (100) days of the event (or if on or following a Change in Control, within one hundred and eighty (180) days).

(10) “Limited Automatic Extension” shall mean that either (i) a Change in Control has occurred on or after January 1, 2011 or (ii) an Open In Contemplation Event exists on December 31, 2012.

(11) “Open In Contemplation Event” shall mean a CIC Agreement has been entered into but neither the related Change in Control event has occurred nor the obligations to close the Change in Control under the CIC Agreement have been terminated.

(12) “Post-Employment Health Coverage” shall mean you (including on behalf of your current spouse and any current children that would be eligible dependents if you were an active employee) are entitled to continue to participate in the Company’s health plans for your life following a termination of your employment, subject to the following terms and conditions:

	(a)		you pay the “full cost” of coverage for you and any eligible dependents, which is expected to be the COBRA premium (as adjusted for secondary status to Medicare after you attain age sixty-five (65));
	(b)		you shall no longer be eligible for the coverage hereunder if you commence employment with another employer that has a medical plan for which you are eligible under the general terms of the plan;
	(c)		upon your attainment of age sixty-five (65), this coverage shall only be available if you are unable to obtain a Medicare Gap policy (or to the extent necessary to cover your current spouse while you are married to him and he is unable to obtain a Medicare Gap policy and your current children who would be eligible for coverage under the plan if you were an active employee if they do not have other coverage); and
	(d)		upon your death, either prior to or after your coverage under this arrangement commences, your current spouse if you are married to him at the time of your death (if he does not then have other coverage or the ability to obtain a Medicare Gap policy) and your children who are eligible dependents at the time of your death (if they do not then have other coverage) shall have the right to this coverage respectively, for life in the case of your spouse and while they are eligible dependents in the case of your children, subject to the same conditions as above, but no coverage shall be provided for any future spouse or children of your spouse or any children or spouse of your children.

(13) “Pro Rata Treatment of the Inducement Option” shall mean vesting of a portion of the Inducement Option based on the actual stock prices in the period through December 31, 2012,

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with each tranche not vested as of the date of termination of employment multiplied by a fraction, the numerator of which is the sum of the number of full months of employment under this Agreement (with January 2009 considered a full month) plus twelve (12), but in no event greater than forty-eight (48), and the denominator of which is forty-eight (48) months. Each vested tranche (whether vested before or after termination) shall remain exercisable during the applicable Exercise Period.

(14) “Pro Rata Bonus” shall mean your annual bonus for the year of termination, if any, awarded by the Compensation Committee based on such year’s performance and the applicable criteria, if any, multiplied by a fraction, the numerator of which is the number of days you were employed during the year and the denominator of which is 365. The Pro Rata Bonus will be paid in the following calendar year when you would have received it if you had continued employment (subject to any bonus or other plan adopted by the Compensation Committee).

(15) “Prior Year Bonus” shall mean your actual bonus for the year prior to the year of termination, if any, awarded by the Compensation Committee based on such year’s performance and the applicable criteria, if any. Notwithstanding the foregoing, if your employment is terminated on December 31 of any year, such year shall be deemed completed and to be the year prior to the year of termination for purposes of this definition. The Prior Year Bonus will be paid in the calendar year of termination when you would have received it if you had continued employment (subject to any bonus or other plan adopted by the Compensation Committee).

(16) “Section 409A” shall mean Section 409A of the Code and the regulations and guidance promulgated thereunder.

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