Hotmail walked away from several hundred million dollar offers from Microsoft.  It sounds like Yelp overplayed its hand:

Was it Yelp’s management, going behind the back of their superstar banker, George Boutros (right) of Credit Suisse? Was it a team-screwup, in which all parties agreed to use TechCrunch to try to jack the deal price up, only to watch the tactic blow up? Or was it George himself, who underestimated the resolve of his once- and future-client, Google, and wrecked a deal for his current client, Yelp?

via Did Yelp’s Star Banker George Boutros Just Screw Up The Google Deal? – yelp – Gawker.

Now go read hotmail’s story:

Sabeer went back to Microsoft and asked for $700 million. “You’re crazy,” the negotiators shouted, followed by a few expletives. “You’re out of your mind! You’ve blown it!”

But Sabeer knew those were only tactical outbursts. As a kid in Bangalore, he had watched family servants haggling over groceries at the bazaar. He knew every trick. At the bazaar, vendors would counter a low offer by saying, “Oh, I’m sorry, is that all you can pay? You must be very poor. I want to give you a few rupees out of my own pocket so you have enough money to pay.”

Tensions rose as Microsoft piled cash on the table. $200 million. $250 million.

Lesson?  Google is not Microsoft.

Digital Advertising: Who Gets the Highest Ad Rates Online? – Advertising Age – Digital.

Interesting article but on a pure eCPM basis, there are some sites that are monetizing at an order of magnitude greater than any of these sites.  The only problem is that they’re not at the scale of a Yahoo.com so total dollar amount won’t be as big.

This evolution makes sense to me.  I expect to see other big pubs doing the same thing-  launching internal ad networks and selling the ability to retarget their audiences which means buying and selling on the exchanges as they see fit:

CBS is launching its own internal ad network so it can service advertisers that want to buy demographics or remnant display advertising across CBS sites. The company said its internal ad-serving platform, Madison, can offer audiences based on demographics or online behaviors, within CBS properties.

Mr. Ashe said CBS will also pull its inventory from some, but not all, online ad exchanges.

via CBS Dumps All Ad Networks.

Social gamesmaker Playdom is profitable, with 2009 revenues that will surpass $50 million

via Playdom Is Profitable With $50 Million Revenues, Says CEO.

Their margins are slightly higher than what I thought they would be.  A typical offer might be 25 bucks for something valued at 40 bucks so the merchant is effectively giving a much steeper discount than people think.  The nature of this advertising business is not as performance-based as it might appear.  It’s not like a typical direct response channel where you run a few ads and do well if conversions are good.  Groupon is no doubt doing well now but I wonder how persistent their success will be.

The company says they are on track to generate $100 million in gross merchandise sales in 2010. They take a big cut of that for themselves, generally 30% – 50%.

via Groupon Valued At $250 million.

Haven’t been able to dive into the Google/Yelp readings but this from gigaom seems to sum it up nicely.

If Google does buy Yelp, what exactly does it get? It gets a local-social network with roughly 26 million users across the U.S., Canada and the UK. Yelp reportedly has 8.5 million reviews. This is a huge amount of content that Google can’t generate itself and which it is already leaning on pretty heavily on its Place Pages as part of its increasing focus on local.

As we’ve pointed out in the past, Google has a Vitamin S deficiency, S being social. For instance, when Google recently announced its “Favorite Places on Google” program it decided to tabulate them by “counting how many times people search for a business, look up directions to it, or click through to its web site.”

via Google May Buy Yelp: A Quick Analysis – GigaOM.

The one time that Google was tempted to tailor its results for a group was for a children’s search engine, Ms. Mayer said. The company passed on the idea.

“It was something appealing and fun,” she said. But then questions emerged, she said: “At what time does it taper off? At 12 or 16? And do you feel that you were duped, that we were hiding all kind of information from you?”

via Link by Link – The Trouble With Tailoring a Web Search – NYTimes.com.

SeeWhy funding news–

The company lets clients track and then immediately follow up with website visitors who leave while doing some specific action, such as completing a purchase.

SeeWhy Raises $2 Million More For Web Analytics | paidContent.

gold parties are booming, creating opportunities for aspiring entrepreneurs—and a new worry for regulators. Typically, small companies promote the parties through word of mouth or by advertising in communities likely to produce plenty of sellers. The companies provide a specialist to value sellers’ items, and pay the host a cut of about 10% of proceeds.

via Gold Is the New Tupperware, and You’re Invited to the Party – WSJ.com.

I think I’m the only person who hasn’t read this yet.  Saving it for the weekend!

Morgan Stanley: Mobile Internet Market Will Be Twice The Size of Desktop Internet.