LIVE Blogging: Microsoft Yahoo Press Conference

Below are the live notes from the press conference this morning with Microsoft and Yahoo. Please keep refreshing this page to view the latest notes until I note that the call has ended. Feel free to leave comments at any time.

8:33 AM - Larry Cohen, general manager corp comm - gives the info on who is on the call...he's doing normal corp comm announcements.

8:35 - Steve Ballmer, we're all very excited about this announcement and we see the next milestone is microsofts transformation and to invest very successfully in search and advertising. We've been engaged in discussions with yahoo for 18 months and we believe it's a great deal for Yahoo shareholders and get the Yahoo employees to be very excited about. Our companies share a vision and when we combine the 2 will offer a strong compelling piece for customers and employees. We are very committed to the deal. We believe this is the right time. This is a decision that I've thought long and hard about.

8:37 Kevin Johnson - the online ad industry is a very large industry and is forecasted to grow to $80 billion in the next 3 years and is a critical piece of monetization of consumer internet services. We've continued to execute against our plan with improved services. There are a few key dynamics in the online ad service -- there is scale economics in search and ad serving and the capital to support these services. This is a business where software matters and growing the capacity is critical to reaching scale. This is a business that requires massive capital investment and now you are seeing a lot of consolidation. He goes on to say that the industry is dominated by one player (google) and that a combined company will provide consumers with another alternative. He speaks to the efficiences to the deal - and notes the employee efficiencies (read my previous post for more here).

8:42 - Ray Ozzie - Starts by explaining the movement in the Web over the past ten years. The Web has evolved tremendously - search is such a major player and that search is currently just "10 blue links". And now he speaks about social relationships and how we communicate and interact with one another. Microsoft has played a big part of the evolution of the web. We can further accelerate the move to the social web with this acquisition. Moving forward, the combo will help us to deliver a broad range of new services to our customers that neither of us could have delivered on our own.

8:45 Chris Liddell - speaks about the specific numbers to the deal - they are all in the press release so I won't quote them here.

8:46 - Open questions: When you did the acquantive deal it seemed to reduce the need to make a deal like this? Ballmer: We need to build strength in all 3: consumers, publishers and advertisers. There were no consumers in the aquantive deal so yahoo brings this to us.

8:48 Open questions: Typically revenue synergies have been elusive - can you speak about the revenue synergies? Johnson: scale matters in driving yield of ad serving whether search related or not. Even when you look at just combining the two search platforms, the synergies are there and unlock more revenue -- scale matters. This woman from UBS just HOGGED the call.

8:52 Open questions: Any thoughts on this could be a more competitive process and is this a best and final offer? Liddell: we believe this is an attractive offer for Yahoo. Smith: any number of companies might have an interest in Yahoo, we've made a compelling offer. Media companies have been behind us to make this type of acquisition.

8:54 Open questions: One of the biggest challenges was Yahoo losing search market share, how do you stop losing the share? Johnson: clearly we think the synergy around R&D capability will help us drive breakthroughs in search. We can drive more innovation as well including the social media aspects and this positions us well.

8:56 Open questions: Couldn't you have simply expanded R&D instead of making an acquisition like this? Ballmer: any large integration process has risks, sure we could have hired engineers, but at the same time the market continues to grow, the leader continues to consolidate position. Johnson: employees in both companies have passion for the industry and the passion is the opportunity. We believe in this combination now more than ever.

8:59 Open questions: how are you thinking about the existing brands. Johnson: the yahoo brand is a great brand, we love the brand. we want to have clear integration principles and need execs from both to make it a thoughtful process with talent from both to see how it lands. Ballmer: this deal helps to move the windows user to be a live. there will be a windows live, and an office live, yahoo those are all powerful brands, exactly how we relate products like msn will be looked at.

9:00am - the call ended VERY abruptly!