There’s a new installment of the much-discussed battle between Yahoo! CEO Jerry Yang and major investor Carl Icahn. Recently, Yang and Yahoo! Chairman Roy Bostock sent a joint letter to shareholders to make their case for keeping the company’s current leadership team in the proxy fight.

The letter touted Yahoo’s recent deal with Google, saying that it “will generate approximately $250 to $450 million in incremental operating cash flow for Yahoo! in the first twelve months following implementation.” The letter positioned the deal thusly:

Under the agreement with Google, Yahoo! will continue to provide algorithmic and sponsored search results, but now will also have the ability to run sponsored search ads supplied by Google alongside Yahoo!’s search results. Advertisers will pay Google directly for each click on Google paid search results appearing on Yahoo!. Google will then pay us a fee (in industry jargon, traffic acquisition cost) based on revenue realized from click-throughs on ads supplied to Yahoo! by Google.

This carefully structured agreement strikes the right strategic balance, enhancing our financial results while advancing our strategic objectives of being the “starting point” for the most users on the Internet and offering such compelling value that advertisers will see us as the “must buy” in online advertising.

The letter also emphasized the non-exclusive nature of the agreement with Google, and outlined why it was a better deal that the one proposed by Microsoft. It said:

While Microsoft’s search-only hybrid proposal may have been helpful to Microsoft, our board and management concluded it would have had a significant adverse impact on Yahoo! strategically, leaving the Company without the operational control of search assets and technology we view as critical to our objective of becoming a leader in the converging search and display advertising business. The board and its advisers also carefully studied the financial impact of Microsoft’s proposal and concluded that it would have provided no meaningful improvement to our operating cash flow. In short, this proposal would have generated substantially less value for Yahoo! stockholders than Microsoft has suggested.

Finally, the letter took a direct swipe at Carl Icahn, and followed with:

Simply put, you can choose to vote for a slate of nominees with no articulated plan for the future of Yahoo!–and who now have essentially no alternative agenda to offer you–or you can choose to vote for your existing board of directors which has the independence, experience, knowledge and commitment to navigate the Company through the rapidly-changing Internet environment, execute on our strategic objectives and deliver value for Yahoo! and its stockholders.

Ouch! Internet marketing gurus are keeping their ears to the ground for more scuttlebutt on the scuffle.

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When it comes to promoting your business, there’s one type of marketing that money can’t buy: media coverage. When your company makes the news, you’re not only spreading the word about your products and services, but you’re gaining the implicit legitimacy that such news coverage brings.

There’s an old adage that goes something along the lines of, “I don’t care what the media says about me, as long as they spell my name right.” While this has an element of truth to it, the reality is that not all coverage is good coverage. To the greatest extent possible, you should control media reports about your company.

Most of the time, this means sending out press releases and being prepared to answer media inquiries. Other times, events dictate that you need to be a master in spin control. If you’re good at spin, you can transform a potentially embarrassing situation into a wealth of free publicity.

The manager of a Washington, D.C., gym recently did just that. Presumptive Democratic nominee Barack Obama has a membership in a gym network, and dropped into a new facility for a morning workout. Although his cadre of Secret Service agents was in tow, the person staffing the desk apparently asked him for his gym card. When he didn’t have it, she asked for his last name (presumably so she could verify his membership). After Obama gave his last name, she asked for his first name; only then did she (apparently) realize who he was and let him into the gym.

The gym manager masterfully parlayed a potentially embarrassing incident into favorable national media coverage, and his gym got the kind of publicity that most likely turned other gyms green with envy. Was a media contingent present, and was the incident planned? Who knows. Did the Obama campaign share the story with the media to reinforce the idea that their candidate is a “regular guy”? Maybe.

The bottom line? If you unexpectedly find yourself in the news, be on your toes; if you spin the story properly, you’ll get the kind of free advertising you can only dream of.

Check back tomorrow, when we’ll discuss using press releases to your advantage.

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Google is the undisputed leader in Internet marketing, advertising, and search, and the company has added one more product to their lineup that is designed to help AdWords users. Google Ad Planner employs user demographics to give advertisers suggestions about which sites are a good fit with the advertiser’s target audience. Google describes it this way:

Google Ad Planner is a free media planning tool that can help you identify websites your audience is likely to visit so you can make better-informed advertising decisions.

With Google Ad Planner, you can:

• Define audiences by demographics and interests.
• Search for websites relevant to your audience.
• Access aggregated statistics on the number of unique visitors, page views, and other data for millions of websites from over 40 countries.
• Create lists of websites where you’d like to advertise and store them in a media plan.
• Generate aggregated website statistics for your media plan.

There is some speculation about where Google is gathering this data. Some ascribe benign motives, while others are wondering if the Google Toolbar is gathering the stats.

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If you need to reach potential customers but don’t have a sizeable email marketing list, or if you’re ready to make a splash and expand your business, it makes sense to use an Internet marketing company’s opt-in email list.

Typically, Internet marketing companies maintain lists of millions of email addresses. However, not all email marketing services are alike. When evaluating your options, make sure that the company you choose to work with:

• Enables you to send a stand-alone email message
• Uses 100% opt-in, subscriber email lists
• Sends your message through their servers
• Has at least 50 categories of subscribers from which you can choose
• Allows you to geographically target your message to the U.S., Canada, the U.K. and/or worldwide
• Allows you to personalize your emails to the recipient

What kind of return can you expect? If the list is good, you should be able to get between 2,000 and 6,000 web visitors for every million emails you send. For this reason, it’s important to find an affordable service - but one that doesn’t sacrifice quality for quantity.

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Yahoo! may be an Internet marketing giant, but its recent deal with Google and its defensive posture with Microsoft have taken their toll - at least in the eyes of stock market analysts. The influential Thomas Weisel Partners is the latest to drop the target price of Yahoo! to $18 - a $10 drop.

Analysts cite a number of factors that predict low performance, including its emphasis on relying on old standards like email rather than pushing out Web 2.0 products like Flickr. There’s also deep concern about the company’s leadership - an issue that probably won’t begin to go away until the company’s August shareholders’ meeting.

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Yesterday, we talked about segmenting your email marketing list in order to tailor your message and generate better results. In order to create that message, though, you need to know more about the people on your list. Here are two suggestions to get you started:

First, you can invite email feedback about your company’s communication efforts. If you’re providing information via an e-newsletter, you can ask recipients to drop you a note and let you know if they find the information useful, and what you can do to improve. Although you can’t incorporate every suggestion a person sends in, there’s a good chance you will see some trends. When you do, it’s time to refine your message.

The second approach is to ask them to participate in an online survey. You can gather a goldmine of information by asking about their perception of your company and - most importantly - gathering demographic information. When you can match an email address with a given set of responses, you’ll easily be able to segment your email marketing list and develop a sound strategy that is sure to generate results.

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Yahoo! HotJobs introduced two new Internet advertising solutions that will make recruitment advertisers smile. According to Yahoo’s press release:

The first, Yahoo! HotJobs Smart Ads, is a platform that transforms job listings into highly relevant display ads that are tailored to active and passive job seekers across the Yahoo! Network, and the second, Premium Company Profiles, showcases company employment brands using rich media and company-specific content from the Yahoo! Network.

“For employers to remain cost effective and competitive in the evolving recruitment marketplace, they need solutions that leverage technology to efficiently connect them with the most relevant candidates,” said Jeff Kinder, senior vice president and general manager, Yahoo! HotJobs.

Leveraging Yahoo!’s leading display advertising technologies, users are identified and targeted by both the information they have supplied and their online behaviors.

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Names, names, names. Seemingly, everyone who does email marketing is hungry for an endless supply of email addresses so that they can grow their lists. But while email marketing is a numbers game, bigger isn’t always better. Here’s why.

Let’s say that you own an online clothing store for women, and are intent upon sending email marketing blasts to as many women as humanly possible. What kind of email message could you develop that would get the kind of response rate you desire? It would have to be a message that would appeal to twenty-somethings, to Baby Boomers, and to seniors. It would have to speak to those who identify with the music scene and to those who are entrenched in corporate America. In other words, it couldn’t say much of anything at all. When you can’t hit those hot buttons that make potential customers want to click and buy, your email marketing efforts will most likely end up in the trash.

Instead of an all-encompassing, massive list, consider dividing your list into niches and sending a highly tailored message to each niche. It takes work to split a huge list into subgroups, so if you’re just starting out, try keeping your lists separate. If you already have a huge list, start by weeding out those who don’t open your emails, and pare your list down to those who do. Perhaps you could send out an email to the women who don’t open your emails, asking them if they’d like to remain on your list. As for those who do open your emails, it’s time to figure out exactly who they are, and what their triggers are. We’ll discuss how to learn more about the people on your email marketing list tomorrow. In the meantime, start thinking about how you can wrestle an unwieldy list into nimble segments that will bring you better returns.

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The Yahoo-Microsoft chatter has temporarily subsided as the focus has shifted to the end of this week, when Microsoft co-founder Bill Gates will step away from the day-to-day operations of his company and spend more time on projects for the Bill & Melinda Gates Foundation.

Although Gates announced his retirement two years ago, many are speculating about the future of the behemoth. Gates will retain his role as Chairman, while CEO Steve Ballmer will head the daily operations of the company along with Chief Research and Strategy Officer Craig Mundie and Chief Software Architect Ray Ozzie.

While the future of Internet marketing isn’t at stake in the transition, it will be interesting to see if the new team will take the company in new directions.

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Yesterday we talked about the value of split testing your email marketing messages, and the importance of testing only one variable at a time. That’s only part of the equation, though. The other part is figuring out how to split your list so that you get reliable results.

The first rule of thumb is that you shouldn’t simply divide your list in half and send one half Offer A and the other half Offer B. If you find that Offer A has a 20 percent better response rate than Offer B, you will have wasted half your list on an underperforming email.

It’s much better to send your split test to a portion of your list, gauge the results, and then send out the better performing email to the remainder of your list. The question then becomes, how many names should you include in your test?

There’s no magic number, but it has to be enough to overcome any potential flukes. Using our example from yesterday, if scientists were testing the effectiveness of a drug and only had two patients in each group, they wouldn’t have enough data to know if the patients in Group A got better because the drug worked, or because of an unrelated factor. Generally speaking, an email test can be effective if you have between 50 and 100 names in each test group.

The other thing to keep in mind is that the names you select must be random and must come from the same list. If you send Offer A to people who made purchases within the past 30 days, and send Offer B to people who made purchases over 60 days ago, you won’t know whether the results came about as a result of the email variable or as a result of their buying behavior.

Once you send out your split test, you should know within a day or two which email is driving the desired results. Once you have that information, you can send that email to the rest of your list and know that you’re sending an offer with proven results.

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