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The poaching comes as CEO Steve Ballmer reiterated at Microsoft’s shareholder meeting Wednesday that it has no interest in buying all of Yahoo, though it remains open to a search partnership.

Microsoft confirmed Thursday that it has indeed hired Yahoo search executive Sean Suchter, following speculation this week that he would be joining the software maker after his departure from Yahoo was announced.

“We are very pleased to confirm that Sean Suchter will be joining Microsoft as the GM of our Silicon Valley Search Technology Center, working on Live Search,” Microsoft search head Satya Nadella said in a statement. Suchter, who starts work December 22, will report to Harry Shum, corporate vice president of Search Product Development.

Microsoft would not comment on a report that another former Yahoo search executive, Qi Lu, is under consideration to head Microsoft’s online efforts.

The updated comments service hooks into TypePad’s new profile system. Commenters with TypePad IDs get a place that collects all the comments they leave on all TypePad comment-enabled blogs, and users can add feeds from their accounts on Flickr, Twitter, Friendfeed, Digg, and about 45 other services. That makes the profile pages a lot more dynamic and interesting.

Six Apart’s paid, hosted blogging service, TypePad, is getting improved community features. The first thing most users will notice is a new blog commenting system. It has both a cleaner display of comments (with icons for the comments, WordPress-style), as well as a simpler comment entry interface. Users can also reply to particular comments and the system supports one level of threading.

The new system is certainly an improvement, and more than that it’s interesting to see Six Apart continue to spin core functionality out of its paid products and offer it to the world for free. Previously, of course, the company made Movable Type open source and free. The company clearly hopes that exposure to these products will make revenue-generating products more attractive. Whatever the motivation, these are serious and full-featured products, now available for nothing, and I’m cool with that.

The TypePad comment system can be embedded on non-TypePad blogs. The service can automatically install on WordPress.org, Blogger, and Tumblr sites. HTML code is provided to put the comment system on other blogs.

The new TypePad profiles collect all your commenting activities on TypePad-enabled blogs.

This new comment ecosystem is certainly an improvement over the previous version. But bloggers have other very good commenting systems to choose from. I favor Disqus, for instance. Although I do like the new TypePad system, I don’t see a reason to install it on my WordPress blog ProPRTips, (and actually, I couldn’t if I wanted to–users of WordPress.com-hosted blogs can’t get far enough under the hood to make the switch; bloggers using WordPress.org software hosted elsewhere can, however).

The new TypePad comments are a lot more attractive than before.

Of course, the blogosphere has erupted, adding fuel to the Bill Gates fire that might never extinguish. In fact, commenters on David Carnoy’s Crave article first reporting on this story have delivered some interesting takes on the issue.

But it gets better. Gates went on to say that there is an “inevitable lure of forbidden fruit” and “every now and then” she looks at her friends and says, “‘Ooh, I wouldn’t mind having that iPhone.’”

But he shouldn’t stop at that. Gates should paint over all the windows in his home with the colors in the Microsoft logo, and each night before the kids go to bed, he should read them stories about his rise in the tech business. And once they turn 18 and are prepared to enter the real world, they need to perform their final rite of passage: buy an iPod from the Apple Store, bring it home, and throw it in the fire as their entire family watches. If they succeed, they are officially a Gates. If not, they’ll need more intensive training.

It’s the same concept for Gates. He wants his kids to take sides, and by banning iPods and iPhones, he’s ensuring that they grow accustomed to Microsoft products. And if he’s smart, he’d ban the Wii, PlayStation 3, Android-based devices, the BlackBerry, Macs, Linux, Windows XP (Microsoft doesn’t want anyone to use that anymore, just ask Ballmer), Google, Yahoo, and every other product from a competitor.

In Gates’ defense, commenter David Dudley writes, “I don’t think it’s a confidence issue, they just don’t see a point in using their own cash to increase market share of a competitor. You certainly would not espouse Apple to use Dell servers in their internal infrastructure despite opinions of what is ’superior’ or otherwise, right?”

Check out Don’s Digital Home podcast, Twitter stream, and FriendFeed.

The argument could rage for hours. But I don’t think it’s as difficult an issue as some might think. If I were Bill Gates and I had three children running around my mansion, I’d ban all Apple products, Nintendo consoles and handhelds, Linux, and every single
Zune competitor. There’s something to be said about family loyalty.

“There are very few things that are on the banned list in our household,” Gates tells Vogue. “But iPods and iPhones are two things we don’t get for our kids.”

“That is kind of a pathetic insecurity that demonstrates just how little confidence Gates and wife have in the products that built their lives,” a commenter named ewlech wrote.

I don’t think this is any different than kids being asked to root for their professional athlete father’s sports team. Should Derek Jeter’s future children root for the Boston Red Sox? Should Tiger Woods’ two kids root for Phil Mickelson? Should Tom Coughlin’s kids root for the New England Patriots? Of course not. They should stay loyal to their fathers and be a fan for whichever team their fathers are on. Period.

Well, that’s at least what I would do if I were Bill Gates. I mean, hey, why would I be willing to allow my children to be brainwashed with competing products? My kids are mine alone to brainwash. So I agree with Bill and Melinda. iPods, iPhones, Wiis, and Linux should be banned from the Gates home.

Melinda Gates was recently interviewed in Vogue magazine and had some rather interesting things to say about her husband and the technology in her home.

According to Gates, both she and Bill have strict rules forbidding their children from having an
iPod or
iPhone.

Massachusetts Gov. Deval Patrick–a clean-energy industry backer–announced the funding and new company name at the Fourth Conference on Clean Energy here Tuesday.

Rather than build ethanol plants itself, Qteros plans to license its technology to ethanol producers which plan to diversify from corn ethanol into other feedstocks, said Frey.

“Using the Q Microbe as a keystone piece eliminates large amounts of capital, large amounts of cost, and makes the process economic,” said Qteros CEO William Frey who led BP’s biofuels business before joining the company.

(Credit:
Qteros )

The microbial approach to making ethanol, called consolidated bioprocessing, is a potential breakthrough in cellulosic ethanol production.

The basis of Qteros is the Q Microbe, a micro-organism discovered in the woods near the Quabbin Reservoir in western Massachusetts by University of Massachusetts professor and now Qteros chief scientist Susan Leschine.

By using microbes to make cellulosic ethanol, Qteros intends to streamline a multi-step process and entirely eliminate the use of expensive enzymes, which can account for roughly 30 percent of production costs.

Another company pursuing a similar path is Mascoma, a well-funded ethanol company spun out of the Dartmouth College. It, too, is developing micro-organisms to make ethanol without enyzmes, but its scientists are genetically engineering the microbes.

Qteros, formerly called SunEthanol, on Tuesday announced the $25 million series B round of funding, which was led by venture capital firm Venrock and Battery Ventures. Other investors were BP, Soros Fund Management, and first-round investors Long River Ventures and Camros Capital.

Many start-up biofuels firms are developing different methods for converting wood chips, grasses, and agriculture or forest residue into the liquid fuel ethanol, which is a gasoline additive.

The money it raised will be used for further product development and to build a pilot ethanol facility next year, using agriculture residues, sugar cane bagasse, and corn stover as feedstocks. After that, it intends to do a larger demonstration facility in 2010 and then operate a commercial-scale plant in 2011.

Qteros Executive Vice President Jef Sharp said that optimizing a naturally occurring microbe alllows Qteros to make ethanol “without the lengthy, expensive, and genetic engineering requirements of taking another bug to do it.”

BOSTON–Oil giant BP and George Soros’ investment firm are putting millions of dollars into a company that has isolated a microbe that can create ethanol.

The naturally occurring bug is able to efficiently produce ethanol from the cellulose in plants, according to Qteros. The company has spent the past year breeding different strains of the bug to enhance certain characteristics and make it more productive.

Second, give yourself until the end of the first quarter to decide whether it’s better to give the shareholders a quick fix by selling the search assets to Microsoft or to invest for the long run in search and search ads. Search ads were a bright spot last quarter, but you’re not going to catch up to Google, so this choice could go either way.

5. Pass on acquiring AOL.

Yahoo CEO Carol Bartz

On the other hand, you don’t have let robots rule the roost. Algorithms and efficiency can help with productivity and profit margins, but the display-ad market still needs the human touch when it comes to inking deals.

Welcome to your new job as Yahoo’s CEO.

2. Put Yahoo Open Strategy on steroids.

It sounds like you’ve done good work motivating employees without resorting to flogging, and it’s time to bring a dose of that to Yahoo. The company has plenty of talent, but it’s excruciating watching how slowly improvements arrive on the site. Not everything at Google should be reflexively copied, but there’s a lot of merit to their philosophy of release early and iterate often.

And AOL, while possessing respectable traffic, also has a lot of overlap with Yahoo–instant messaging, mail, an ad platform. You’d get some synergy, no doubt, but you’d also get an ocean of headaches trying to consolidate users on to a single system or maintaining both.

Sure, you’d get a pile of cash from Time Warner, but Yahoo has more problems with execution than cash flow, and being saddled with AOL would make execution vastly worse. Focus on the core you have.

So that’s how it looks from here. Nobody interviewed me for your job or showed me the real traffic statistics, though, so I won’t be wounded if you arrive at different conclusions. Just don’t take too long figuring it out.

If you had a $33 per share offer for the company on the plate right now, like during the good old days, this decision would be easier to make, but at this stage, it looks like the best option would be to sell the search business. So what to do?

Take Flickr, for example. The revamped new home page is finally worth visiting, but the photo pages themselves are relics that assume nobody has a monitor larger than 1024×768 pixels, and it took an outside service, Photophlow, to truly unlock Flickr’s social potential. If Yahoo doesn’t move faster, then the growth in Internet usage will happen at Facebook and Twitter instead of Yahoo.

1. Light a fire.

As you probably guessed by how rapidly Jerry Yang slipped to footnote status in yesterday’s stories, we’re all glad to see you and eager to move on to the next phase of the news cycle. And judging by the fact that Yahoo’s stock rose more than 2 percent to $12.41 today when most everybody else’s went down, the shareholders are extending you some goodwill, too.

(Credit:
Yahoo)

A perfect case in point is APT, your shiny new display-ad platform that can be used to by all manner of organizations in the online advertising realm. To make it work, and to foster its adoption by all the different constituents who can use it, you need both technical chops and people. Oh, and you need to get APT working broadly now, not at the end of 2009, and if you buy the argument that there’s synergy between display ads and search ads, you’d better have something to show for it pronto. Did I say something earlier about lighting a fire?

I know you requested some “breathing room” from us nattering nabobs while you chart a new course. But it’s just not in our nature to totally clam up. So forthwith, here’s some advice on what you can do with an Internet company that’s powerful if not meeting its potential.

Sure, you need to set priorities, but it’s a false dichotomy to argue Yahoo can only be one or the other. You sell ads, you build sophisticated Web sites.

Yahoo has done some of this work–dramatically altering the music site and scrapping Content Match advertising service in Europe are good examples–but don’t stop there. How many video sites does Yahoo need? Is consumer e-mail and business e-mail so different that you really need two separate online foundations, Yahoo Mail and Zimbra? The home page is getting applications, customization, and personalization–does My Yahoo really need to exist?

Luckily for you, the last administration did a lot of the heavy lifting to prepare for YOS, so Yahoo’s infrastructure for the new strategy is already in place, but it’s been painfully slow in arriving. So promote what you have heavily. Devote some of those precious pixels to showing off the new features, explain why we should all be registering profiles and subscribing to others’ update streams, point us to the application galleries to encourage the programmers, and let people sign up for the beta versions of the revamped sites.

It’s tough to make a big company nimble, so try to get the groups within the company to be nimble. At this stage, it’s better for a project to strike off in a new direction and then change course as necessary than it is to plan the right direction for months without ever going anywhere.

First, call up Steve Ballmer and tell him you’re open to discussions. You don’t have to describe yourself as a “motivated seller,” but make it clear you’re not freighted with the baggage that interfered with a clear-headed assessment of Microsoft’s offers in 2008.

Likewise, pare back the Web properties. Upper management deserves some of the blame for not getting Yahoo properties to perform up to snuff, but at this point, if a Yahoo property isn’t performing well, it’s time either to bid it adieu or to put it in maintenance mode awaiting some future when Yahoo has more resources to beef it up. Now is the time to figure the best properties and use them as the core of the new growth.

3. Media company? Technology company? Both!

With some exceptions, AOL is a step into the past, and building your audience organically through YOS is a better answer to achieving growth.

4. Sift the wheat from the chaff.

Not everyone likes Gmail, but Google is smart to try to solve the problems that afflict power users who live online and suffer information overload, because they’re a good predictor of what everybody else will be dealing with shortly. YOS is aimed at the right target, but get that trigger pulled.

You don’t need to become geek heaven like Google, but you need to get those pages loading as fast as possible, to expose APIs, to match ads with search terms. That takes technical chops.

6. Keep an open mind on Microsoft.

Yahoo has accumulated a lot of baggage over the years, both in employees and in Web properties. You don’t necessarily have to lay off another 1,520 people, but decision-makers who aren’t making decisions need to move on to new opportunities. You have the benefit of a clean slate, so use it to cut the bureaucracy.

YOS is an answer to Google that’s not a clone of Google. By offering existing Yahoo users more to do with Yahoo, by building social interactions into the major properties, by offering programmers access to a colossal audience, the strategy could help increase traffic and improve customer loyalty. It plays to Yahoo’s strengths: a big audience that wants a lot of things from Yahoo.

Of course, Yahoo has a lot of users, and many of them gripe when anything changes. But guess what? Stasis isn’t going to fix Yahoo. Growth will come through new designs, new features, and new users.

To: Carol Bartz

From: One member of the punditocracy

Subject: Rebuilding Yahoo

Best Buy is far from the only retailer struggling. Chief rival Circuit City was forced into bankruptcy and elected to close many of its stores last month, while regional electronics retailer Tweeter also shut its doors this month.

He added that the company aims to cut capital expenditures in half, and will scale back store openings.

For the third quarter of 2008, Best Buy reported earnings Tuesday of $52 million, or 13 cents per share, on revenue of $11.5 billion. Wall Street had been anticipating earnings of 24 cents per share and revenue of $11.09 billion. It’s a 77 percent drop from the same quarter a year ago, when the retailer reported earnings of $228 million, or 53 cents a share.

Best Buy CEO Brad Anderson put the industry landscape in stark terms.

Although Black Friday sales were better than expected, Best Buy’s third-quarter earnings brought another heaping of bad news for the embattled electronics retail industry.

This blog was corrected at 3:35 p.m. PT to clarify the number of Best Buy employees offered buyouts.

Anderson added that changes will be made to his company’s cost structure. To begin with, the company is offering voluntary buyouts to “nearly all” of its 4,000 corporate employees. If buyouts are not taken, he indicated there could be layoffs.

“The historic slowdown in the economy and its effect on our business over the past 90 days have been the most challenging consumer environment our company has ever faced,” he said in a statement. “We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace.”

Meanwhile, fellow Valley stalwart Yahoo is in danger of seeing its stock price dip below $10 for the first time since 2003, when the industry was still recovering from the aftermath of the tech bubble pop. Yahoo’s stock closed at $10.34, with a low point of $10.02. U.S. Securities and Exchange Commission filings recently revealed that the company has a $73 million bill resulting from failed negotiations with Microsoft over its acquisition bid, corporate raider Carl Icahn over his board takeover, and Google over a proposed search-ad deal.

CNET’s index of overall tech stocks was down nearly 5 percent at the end of trading Wednesday, reaching 1,048 points.

A parade of negative reports and estimates about ad spending in 2009 have led Wall Street analysts to cut their earnings estimates for Google, which can credit its explosive market valuation to its pioneering search-advertising technology.

In broader economic-downturn news, Treasury Secretary Henry Paulson announced earlier on Wednesday a change in direction for the $700 billion U.S. market bailout, putting more focus on consumer debt and home foreclosures than on sweeping rescues of ailing mortgage-backed securities.

Citigroup analyst Mark Mahaney characterized expectations for the fourth quarter of 2008 as “the weakest they have ever experienced,” trimming his estimates for Google’s earnings by 3 percent.

This post was expanded at 1:38 p.m. PT.

Also weighing on Google is the report that cell phone giant Verizon may be close to ditching Google as its default mobile-search provider in favor of Microsoft.

It was just more than a year ago, on November 1, 2007, that Google’s stock price climbed above $700 for the first time, reaching a high of $741 later that month and leading some analysts and bloggers to speculate that it could hit $1,000 in due time. But by mid-January, the once-unsinkable stock had fallen below $600 and has not yet recovered.

Microsoft had offered to buy Yahoo in a deal that ultimately would have valued the company at $33 per share. Yahoo rebuffed the offer, and, according to some, it may very well regret doing so now.

The Google-Yahoo search deal dissolved at Google’s behest, when antitrust regulators threatened legal action, and the company said “pressing ahead risked not only a protracted legal battle but also damage to relationships, with valued partners.” A jilted Yahoo publicly expressed dissatisfaction with the decision.

In a bad day for publicly traded tech companies, Google’s stock shares closed at $291 on Wednesday, marking the first time since 2005 that the Mountain View, Calif., dot-com’s stock price has slipped below the $300 mark. The $291 is a 6.57 percent drop for the stock.

DHS Undersecretary Robert Jamison said in a new blog post that “we must stay the course” and cybersecurity responsibility should not be reshuffled.

(Credit:
U.S. Department of Homeland Security)

On Saturday, Jamison responded to those criticisms on the department’s online “Leadership Journal.”

Jamison emphasized the progress the DHS has made, which he pointed out to members of the technology industry last week. The DHS has been developing its new intrusion detection system “Einstein 2,” which the CSIS cybersecurity commission has acknowledged as a positive step, and the department is continuing to work with the private sector.

DHS Undersecretary Robert Jamison

When asked whether the DHS is satisfied with Jamison’s leadership, DHS spokeswoman Amy Kudwa suggested the commission take the advice Jamison offers on the Leadership Journal:

“A reorganization of roles and responsibilities is the worst thing that could be done to improve our nation’s security posture against very real and increasingly sophisticated cyberthreats,” Jamison said. “We have moved beyond words on paper and debate, and are now driving real improvements to our security. We cannot afford to lose that momentum and interagency unity of effort.”

The CSIS cybersecurity commission has criticized Jamison himself for not providing clear leadership: “There really is no one in charge right now at DHS,” said commission member Paul Kurtz.

“Without question, it is a monumental task–one that requires interagency coordination and focus,” he said. “As a nation, we cannot afford to be distracted from this mission.”

At multiple hearings last week, members of a cybersecurity commission told Congress that the DHS is incapable of handling cybersecurity, and the responsibility should be moved to the White House. In addition, the commission specifically criticized the lack of leadership from the DHS, which amounts to a direct criticism of Jamison himself.

“The conclusion we reached is only the White House has the authority and oversight for cybersecurity,” James Lewis of the Center for Strategic and International Studies told Congress.

After a week of dealing with critics arguing that some agency other than the U.S. Department of Homeland Security should handle the nation’s cybersecurity efforts, Homeland Security has come to its own defense.

“I encourage them to actually spend some time with DHS discussing our plan before they finalize their conclusions and go public with their recommendations,” he wrote.

Typically we now see an “open core” freely available with “exclusive” or proprietary features only available when you pay. If you are trying to build a commercial business on top of an open source project, this is likely the right answer.

One of the biggest misconceptions in software is that open source equals free. The early commercial open-source vendors like MySQL and JBoss were able to build decent businesses on top of a license/support-only business model, but over time we’ve seen that approach become difficult to grow beyond a certain threshold.

Most open source vendors have tweaked their business models to include some kind of additional value only available as part of a subscription. This has brought various cries of derision suggesting that the code is no longer good as the community doesn’t get to do QA, along with welcoming arms from investors and developers who want to monetize the code.

From what I heard today, it’s a non-issue. Every CTO that spoke up (and it was a very open forum) said that they are happy to pay for proprietary extensions to open-source software, and criticized pure-play open-source vendors for not providing an obvious, compelling reason to pay: proprietary bits. (One actually said that we have built a great financial model…for SIs, not for ourselves.)

Selling support only has proven to be challenging–and will likely get even harder to do as cash-strapped companies will force their developers to maintain software instead of outlaying more cash.

And it turns out that CTOs want to pay for the additional value, as Matt Asay found out from the New York CTO Club:

I suspect that in 2009 it will start becoming clearer as to what you pay for and why you should. Redmonk analyst Michael Cote made the prediction that next year “it will be cool to pay for software” and I agree. It’s one thing to consume open-source software and quite another to pay for it.