AOL and Yahoo making Googlie eyes

As you read this, Yahoo’s stock may be soaring. Or maybe not. Wait ten minutes and check again.

Recent activity seems to reflect a Wall Street Journal report that AOL (remember the company that makes almost half of its US revenue by selling dial-up internet access?) and a bunch of high power venture vult… er, private equity firms “are exploring making an offer to buy Yahoo.”

Yahoo stock’s meteoric rise appears to have started before that report hit the stands, fueled no doubt by insider tea leaf reading and ESP. Or something else.

When I saw the headlines, I first remembered Microsoft’s failed attempt to take over Yahoo, back in December 2008. Microsoft offered more than $45 billion. Yahoo fought back, successfully shunned Microsoft’s advances and, under a new CEO, ultimately saw its market capitalization fall to less than $20 billion. As Kara Swisher reports in her BoomTown blog, three top Yahoo execs recently left for greener pastures, and CEO Carol Bartz is feeling the pressure.

To make things more interesting, AOL – remember, they’re the big fish swallowing $20 billion Yahoo – has a market cap of less than $3 billion.

Yahoo’s more than a dial-up internet portal, though, and its investments make a potential takeover a prickly proposition.

Start with business affiliations. The enemy-of-my-enemy-is-my-friend camp at Microsoft has forged an alliance with Yahoo in which Microsoft’s Bing drives Yahoo’s search. As a unified force, under a ten-year contract, Yahoo and Microsoft are taking on Google for search engine market share. (Details in my post earlier today.)

AOL’s search engine, though, is tied to Google, with a five year contract that started just last month.

Here’s where it gets complicated.

Yahoo owns 35% or so of Yahoo Japan. The majority shareholder of Yahoo Japan is SoftBank. (If you’ve been in the business for a while, you may recall that Masayoshi Son, the founder of SoftBank, once owned all of US magazine publisher Ziff-Davis.) That’s a bit, uh, touchy because Yahoo Japan recently joined with Google to corner Japan’s search advertising market place. Microsoft’s suing Yahoo Japan over the snub.

Contrariwise, Yahoo owns 40% of China’s Alibaba, the pre-eminent Asian online business-to-business site. Yesterday, Microsoft and Alibaba announced a grand plan to take over China’s number-one search engine Baidu, launching a new “shopping search engine” called Etao. You may recall that Google and the Chinese government had something of a, shall we say, falling out, which left Baidu with more than 70% of the search engine market in the Middle Kingdom.

Alibaba tried to buy back its 40% stake, but Yahoo wouldn’t sell, and relationships between the two are said to be sour. That’s the polite way to put it.

So Google-affiliated AOL’s rumored to be going after nine-times-larger Microsoft-affiliated Yahoo, which owns 35% of a Japanese company being sued by Microsoft and 40% of a possibly-alienated Chinese company that just started a new venture with Microsoft.

To make it more complicated, many people believe that Yahoo’s most significant assets (some would say “only” significant long-term assets) are its stakes in Yahoo Japan and Alibaba.

Keep that in mind as you follow the machinations of the stock market this week.

Pacman on Google

If you haven’t seen it already, go to Google.com and click Insert Coin. It should work for the next day or so.

Nostalgia – and what a great tribute to Pacman’s 30th.

Details on the Google blog.

Google’s burning Chinese bridges

Five days ago, I reported that Google was (finally!) getting some cojones dealing with China.

Now, I’m very, very happy to say that the Googlies have stopped dancing with the devil. They’re re-directing the google.cn address – that’s the Google address used inside China – to google.com.hk. That’s the Hong Kong version of the Google search engine.

You can see for yourself. Go ahead and type google.cn into your favorite web browser.

At this point, the Chinese government authorities are not blocking access to google.com.hk. So folks inside China who thought they were going to the censored google.cn are being automatically routed to an uncensored version of Google, in various Chinese languages.

The New York Times has a good overview.

UPDATE: Looks like the PRC authorities have started filtering search results from the Hong Kong site. Washington Post article here. This is getting more interesting by the minute.

Is Google getting cojones in China?

News from MSNBC that Google is finally showing some previously-blocked pictures in response to searches on Google.cn.

A week ago, the Financial Times reported that Google wass “99.9% certain” to close down its censored Chinese search engine.  Now, it appears as if the engine is still chugging along, with some of the old censorship gone.

It’s refreshing to see pictures of the “tank man” at Tiananmen Square, and a tiny trickle of information about Tibet, coming from the censored version of Google.

In response, Google’s stock took a hit, but it’s coming back. Good on ya, Google.

Google does its part to wean people off Internet Explorer 6

IE 6 is dangerous. You know it. I’ve been warning you about it since November 2006. Even Microsoft admits it. Now Google’s doing something about it.

In the wake of the Chinese attack on Google, the Googlies are starting to pull back support for Internet Explorer 6, beginning on March 1.

Quoth the Beeb:

Google has now said it is going to phase out support for the browser “starting with Google Docs and Google Sites”.

Rajen Sheth, Google Senior Product Manager puts it this way:

Many other companies have already stopped supporting older browsers like Microsoft Internet Explorer 6.0 as well as browsers that are not supported by their own manufacturers. We’re also going to begin phasing out our support, starting with Google Docs and Google Sites on March 1st. So while you’ll still be able to access these Google applications, newer features may not be available and some features may even stop working.

Thanks to HFP for the heads-up!

Larry and Sergey to sell $5,500,000,000 in stock over next five years

Yep, that’s 5.5 BILLION smackers.

I wondered why Google stock went down on Friday.

Brian Womack at Business Week reports:

Google Inc. founders Larry Page and Sergey Brin have adopted five-year trading plans to sell about 5 million shares each, reducing their combined ownership of stock outstanding to 15 percent from 18 percent… Based on today’s closing stock price, each would get about $2.75 billion from selling the shares.

Cool, eh? You could buy a whole lotta Egg McMuffins with that stack.

To look at it another way, they’re cashing out stock worth about 50% more than the Gross National Product of Haiti.

Chinese activist attacks based on Internet Explorer 0day?

Brian Krebs reports that the attacks on Chinese human rights activists that I talked about a couple of days ago – the attack that led Google to finally take a stand in support of basic human dignity over corporate profits – was made possible by my favorite security whipping boy, Internet Explorer.

Microsoft has confirmed the 0day hole in Security Advisory 979352.

It looks like the IE 0day is only part of the story, though. The attacks were made possible by a smorgasbord of 0day holes. Researchers are still looking at all of the problems.

The Washington Post (now without Krebs) says that the Google attack is much larger than originally thought:

Computer attacks on Google that the search giant said originated in China were part of a concerted political and corporate espionage effort that exploited security flaws in e-mail attachments to sneak into the networks of major financial, defense and technology companies and research institutions in the United States… At least 34 companies — including Yahoo, Symantec, Adobe, Northrop Grumman and Dow Chemical — were attacked, according to congressional and industry sources.

The bottom line for home users is pretty simple: the bad guys aren’t out to get you, and at the moment you don’t have anything to worry about. These are sophisticated, targeted attacks that haven’t yet made it out into the general population.

But remember who’s behind it, and why, OK?

Google starts to get its China, uh, stuff together

As a long-time Tibetan human rights supporter, it pleases me no end that Google seems to be having a change of heart.

Google lawyer David Drummond just posted this on the Official Google Blog:

In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google… we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists… we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers…

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

Maybe I can go back to believing in Google’s original vision.