VentureBeat

Here’s the latest action:
1. Data centers floating in the SF Bay?
2. CEO of search engine Ask goes to Redpoint
3. Xobni’s Outlook plugin enhanced
4. Microsoft dealmaker Bruce Jaffe to join startup life
5. Yahoo’s browser-based player now public
6. Readburner lets you see what’s shared on Google Reader
7. Nextreme keeps chips cool
8. Planting hairy plants may help prevent global warming?
9. Intel to launch WiMax PC card by June
10. LiveUniverse buying video sharing site Revver?
11. Terry Semel restarting investment company, Windsor Digital?

Data centers floating in the SF Bay? – Some of the stranger news we’ve heard, but apparently true. A Silicon Valley start-up called IDS (International Data Security) is planning to build up to 50 data centers on de-commissioned cargo ships, the first of them docked at Pier 50 in San Francisco. Image at left is an oil tanker in the Bay carrying some of these data centers, according to Silverback Migration Solutions. Apparently, this keeps the data center secure from “natural disasters” according to a company brochure, and the sea water helps cool the servers. Speaking of disasters, we recall a bad one two months ago when a tanker hit the bridge and spilled all kinds of oil. Are servers really going to be safer floating on the water? We couldn’t find too much information about this company, so still trying to confirm this one.
CEO of search engine Ask goes to Redpoint — IAC/InterActiveCorp’s Jim Safka becomes chief executive of IAC’s search engine, Ask.com, which has remained steady at around 4 percent market share since its controversial advertising campaign, a small bump up from 3 percent, but down from 5 percent several years ago. Safka will remain CEO of Primal Ventures, IAC’s investment arm. He replaces Jim Lanzone (pictured left), who joins Silicon Valley venture capital firm Redpoint Ventures as an entrepreneur-in-residence. More here.

Xobni’s Outlook plugin for better email processing gets upgrades, expands test group – The San Francisco company impressed us at launch. However, it had to shut off access, due in part to high demand. It has spent the last few months making a range of improvements, including faster data processing and design changes. Today, Xobni invited the more than 14,000 people on the company’s waiting list. Each person will be able to invite up to five more friends. Xobni is most popular among those needing to track of a lot of work email, as you’d expect: Sales and marketing people, and project managers. Users are clicking on the application an average of more than eleven times per day, and internal surveys show more than 90 percent of its users are happy, the company said. Enhancements include right click actions, adding pictures, drag and drop of files, copy and paste of text etc. See here for more.

Microsoft dealmaker Bruce Jaffe leaves for Valley startup life — Jaffe was part of the team that acquired advertising firm aQuantive and invested $240 million in Facebook. He’s been interviewing at jobs in Silicon Valley, but has instead decided to start his own company, according to Valleywag’s scoop. Marketwatch confirmes the news.

Yahoo Tech Ticker: A tech TV we may just watch — It’s a select group of pundits, as TechCrunch reports: Sarah Lacy is a BusinessWeek reporter with a book on Silicon Valley slated to hit shelves later this year (you can get it on Amazon, here). Henry Blodgett is a fallen analyst turned successful blogger at Silicon Alley Insider. Paul Kedrosky is an investor, entrepreneur, blogger, and talking head. These people know a lot, and their attitudes are just as sharp.

Yahoo’s second iteration of its browser-based player is now public — It lets you link to MP3s on any web page. Details here.
Readburner lets you see what is shared on Google Reader — Readburner is the latest meme-tracker, this time on what are the most popular items shared via Google’s RSS reader. See image at left, which showed that our own Eric Eldon’s piece today was the third most popular item shared as of 10:30pm Wed eve. Mashable has more.

Start-up Nextreme keeps chips cool — The Durham N.C company, a spinoff of research institute RTI International, says it lowers temperatures in the specific areas of chips that get too hot. Excess heat has caused chip giants like Intel and AMD to find alternative methods to speed up their processors, for example creating multi-cores chips. WSJ has more.

Wiki-style website to help speed up U.S. broadband access? – Analyst Drew Clark of Washington DC will launch BroadbandCensus.com later this month, letting people enter where they live, the price of their service and how happy they are with it. A speed test will measure connection quality — and put pressure on the federal government to improve service where it is poor.

Planting hairy plants may help prevent global warming — More here.

Intel to launch WiMax PC card by June – Details at GigaOm.

LiveUniverse buying video sharing site Revver in a stock swap? — That’s the rumor. Los Angeles’ LiveUniverse, run by former News Corp. exec Brad Greenspan, owns LiveVideo, and it apparently wants to add Revver to its network of video sites. Greenspan mentions taking a 30 percent stake in LiveLeak in his blog. LiveUniverse also bought video search site Flurl in Oct. 2006. Revver took $13 million over the last two years from venture firms Draper Fisher Jurvetson, Benture Partners, Draper Richards and William Randolph Hearst III.

Terry Semel restarting his old investment company, Windsor Digital? — Semel, who exited from Yahoo after that company’s anemic progress over the past couple of years, is reportedly joining up with former Yahoos Drew Buckley and Jeff Karish. PaidContent has the news.

Terry Semel, who was brought in to turnaround Yahoo after the Internet bust, has stepped down from the top job.

The former Hollywood exec looked like a master initially — when Yahoo’s revenue and profits surged after 2001. There’s no doubt Semel’s steady hand helped. Soon, however, it became clear Yahoo’s performance had more to do with the boom in Yahoo’s search business than with Semel’s guidance. As Google has left Yahoo further and further behind, shareholders like Eric Jackson have increased their criticism.

Jackson wrote this post for VentureBeat more than six months ago, demanding that the board fire Semel. We’re not sure if Jackson’s ensuing campaign has anything to do with Semel’s announced departure today, but his group has been relentless (here’s his blog).

Semel’s massive compensation became a target for criticism. He also appeared out of touch. Underling execs such as Brad Garlinghouse called out for action, producing the famous “Peanut Butter memo” about Yahoo’s malaise.

Jerry Yang, Yahoo’s co-founder, steps in as CEO.

Sue Decker, the former CFO, becomes president. Semel stays non-executive chairman.

Here are more details from Bloomberg news.

Round-up of the latest in Silicon Valley tech stuff:

Google-funded genetic start-up? — Anne Wojcicki, the biotech analyst who is reportedly engaged to Google co-founder Sergey Brin, has co-founded a Mountain View personal genetics startup, 23andMe, according to ValleyWag. According to the company’s site, it develops “tools and producing content to help people make sense of their genetic information. Our goal is to take advantage of new genotyping technologies and help consumers explore their genetics, informed by cutting edge science. We are now looking for talented, innovative individuals…”

How Yahoo blew it — In 2002, Yahoo was still bigger than Google, and was mulling over whether it should acquire the fast-growing company, but Yahoo chief exec Terry Semel choked, at least according to this Wired account by Fred Vogelstein:

“Five billion dollars, 7 billion, 10 billion. I don’t know what they’re really worth — and you don’t either,” he told his staff. “There’s no fucking way we’re going to do this!”

SearchMe launches yet another search engine — Palo Alto start-up, SearchMe has launched WikiSeek, which sounded useful when we first found out about it: It would index only Wikipedia sites, along with sites linked to by Wikipedia. Theoretically, that means only very useful links and little spam. We were let down, though, after trying a few searches. In at least this search, there was more spam than in Google’s equivalent search. We’ll see what else the two-year-old Palo Alto company comes up with; it has $5 million from Sequoia, and apparently it has more up its sleeve.

Moore’s Law intact after all? — Hewlett-Packard computer scientists say they’ve made elements of computer chips so small that they may enable an eightfold increase in the number of transistors on a chip, without making the transistors smaller, reports the Merc’s Therese Poletti. The scientists said their advance would equal a leap of three generations of Moore’s Law, a prediction formulated in 1964 by Intel co-founder Gordon Moore that forecast chip makers could double the number of transistors on a chip every couple of years. The validity of the law has been doubted recently, as we near the technical limits of making chips smaller.

Twilight Years for Silicon Valley legend — John Draper helped the young Apple co-founders with pranks, for example telling them how to create phone tones so they could make free long-distance calls. The WSJ embellishes, somewhat strangely, the story of his subsequent years (sub required).

Microsoft makes Windows Vista OS available for sale and download online — A first for Microsoft. Details.

How Myspace succeeded, in spite of itself – i.e, the bugs, crass design, disorder.

Recent troubles have engulfed Yahoo! with their sharp earnings miss relative to Google, delays on the Panama advertising platform roll-out, slowing growth rates, and low-level VP Brad Garlinghouse’s now infamous “Peanut Butter Manifesto” leaked to Kevin Delaney and Page One of the Wall Street Journal and highly critical of Yahoo!’s management. TechCrunch now says that Michael Marquez is leaving , Variety says David Katz has left, and Xie Wen left their China group last week.

Criticism has taken many forms. Some are saying that nothing is wrong at Yahoo! except for better monetizing its traffic, and others that Yahoo! needs to more dramatically upgrade the quality of its search and embrace “de-portalization” of itself. However, most of the criticism in the wake of the leak has been directed at Chairman and CEO Terry Semel. It really should be directed at Yahoo’s Board, which — to this point — has escaped any mention in press coverage of the tech giant.

Boards serve many functions but their most basic job is to hire and fire the CEO. It’s time for Yahoo!’s Board to fulfill its responsibility to its shareholders, users, and employees by firing Terry Semel and hiring someone else to get the company back on its footing.

In April 2001, Yahoo!’s Board hired Terry Semel. After the go-go days of the late ’90s and a relaxed culture under its first CEO, Tim Koogle, the Board chose a 24-year Hollywood power broker. Semel was to bring marketing and focus to the company and inimitable connections with the old media content providers that could be harnessed by Yahoo! He has overseen a dramatic turnaround in Yahoo!’s stock price from $4.05 at its nadir to $26.50 today.

Yet, chronic complaints about ’silos’ of competing groups after many acquisitions, lack of vision for where the company is going, some acquisition hits (e.g., Flickr, del.icio.us) but many misses (e.g., DialPad) and several notable bridesmaid non-moves (e.g., not doing deals with Facebook, MySpace, YouTube, or AOL), and general unease from within the ranks about where Yahoo! is going suggest that Terry Semel’s best days at Yahoo! are behind him. The company needs fresh eyes at the helm to avoid Yahoo! languishing only to be ignominiously acquired by a Microsoft or merged with an eBay down the road. Yahoo!’s shareholders, users, and employees deserve better and the Board should do its part.

Here is a short-list of what Yahoo’s Board needs to do now:

1. Fire Terry Semel. He’s lost his credibility to lead and he’s approaching 64 after 5 years in the job. There was a time for Tim Koogle to go, now is the time for Terry to go.

2. Hire a Credible Successor. Yahoo! employees and shareholders need to believe in this person. He/she must be able to clearly articulate a vision for where the company is going, fix the internal inefficiencies which exist, and drive a culture that ensures personal accountability. I recently suggested Susan Decker fits the bill. Vishesh Kumar of TheStreet.com has speculated to me that Jerry Yang might make a good fit. There are also many able external candidates.

3. Install a new “Presiding Director.” It’s admirable that Yahoo! took the step of creating the role of “Presiding Director” to constructively challenge its CEO and ensure sufficient debate on the Board. However, if I was Robert A. Kotick, the current “Presiding Director” who is also the full-time Chairman and CEO at Activision • brought in by Semel 2 years after Semel’s appointment and 20 years Semel’s junior • I would find it difficult to speak out in Board meetings against Semel. There is a natural deference to “the one who brought you to the dance.” A new approach is needed in this important role.

4. Demand that all Yahoo! Directors buy meaningful amounts of YHOO stock. Yahoo! requires all its executives to buy and hold 3000 shares of stock, and it suggests its Directors own 12,000 shares of stock. Yet, as mentioned in an earlier post, these can be as a result of generous stock options or grants from Yahoo! At the moment, all outside directors are well above 12,000, thanks to these options. The problem with grants and options is that they are treated as “found money.” Our research shows that companies where the outside Directors dig into their own pockets — putting “skin in the game” — and purchase meaningful amounts of stock enjoy significant returns compared to their industry returns in subsequent years.

5. 10-Year Term Limits for Yahoo! Directors. It’s inevitable that even the best Directors become a little stale in the saddle after a certain amount of time. You simply can’t continue to see the company with fresh eyes. The best Boards rotate in new talent in an orderly way. In the case of Yahoo!, two of its ten Directors just celebrated their tenth anniversary on the Board: Eric Hippeau and Arthur Kern. Yahoo! defends this in their governance policies by saying: “While term limits could help insure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of directors who over time have developed increasing insight into the Company and its operations and therefore provide an increasing contribution to the Board as a whole.” Yet, several respected scholars have found definitive evidence that tenure leads to an increased commitment to past decisions and a lack of willingness to try new approaches. Besides, Yahoo!’s board can always ask Messrs. Hippeau and Kern to come back from time to time as consultants to the board, so they can tap into their insight, if necessary. While they have served the company well, it’s time for some new blood.

6. Ask all Yahoo! Executives not to serve on other Non-Internet Boards. Although it symbolizes how well she is thought of by F500 companies, Yahoo! shareholders, employees, and users do not directly benefit from Susan Decker spending time each quarter as a Director for Costco and now Intel. Her professional time should be 100% focused on Yahoo!’s problems and solutions — not on reviewing the quarterly board packages for Costco and Intel. One response to this suggestion might be that serving on these boards is good for Ms. Decker, as it exposes her to new ideas and practices that she can bring back to Yahoo!, making her less insular. I respectfully disagree. In this post-SOX world, serving as a Director is a major time commitment and there are many able non-executives to fill the need. There are also many other ways that Susan Decker can stay abreast of new trends and practices in her current role without being a Director elsewhere, guarding against a closed-minded view of the world. There is also evidence, according in this study that executives serving on boards of other companies (like Costco) that are outside the “computer” industry are bad for the home company’s stock price.

It’s been over two weeks since the “Peanut Butter Manifesto” appeared in print for all to read. To this point, the Board and Yahoo! have remained silent on it. The Board needs to move swiftly to replace Terry Semel with someone else who can go through the necessary and difficult work of breaking down the internal silos that exist at Yahoo! and drive it through its next stage of growth. This is not a quick-fix. The new CEO will need time to facilitate this make-over.

However, Yahoo’s Board has two choices: (1) proactively move to get someone in place to do this necessary work or (2) wait for the many willing activist hedge funds (like Bill Ackman at Pershing Square, Bruce Sherman at Private Capital, Ralph Whitworth at Relational, Eric Knight at Knight Vinke, Eric Rosenfeld of Crescendo Partners, Barry Rosenstein at Jana, or Carl Ichan) to accumulate positions in Yahoo!’s stock above a certain threshold when they will dictate their terms to Yahoo! and change its Board composition themselves.