9:56 A.M. (PDT)
The Apple store is down in anticipation of today’s event–always a good sign at an Apple affair. Inside the theater, there’s little decoration aside from the white Apple logo onstage.

10:00 A.M.
Lights dim. And it’s showtime! Jobs takes the stage; not looking like he’s won any competitive eating contests lately, he offers up the obligatory “reports of My Death Have Been Greatly Exaggerated” joke and then quickly moves on to the topic of the day: music.

10:02 A.M.
Jobs notes that there are now 65 million iTunes accounts with credit cards and that iTunes is the number one music distributor in the world.

“We’re adding something to iTunes today,” says Jobs. The first addition: HDTV shows. The second…wait for it: NBC is coming back to iTunes and bringing all its shows with them. And in HD.

10:10 A.M.
Jobs announces iTunes 8 and as expected, it includes HD support, an iPhoto-style browsing feature and the rumored “Genius” feature, which automatically creates playlists from songs in users’ iTunes libraries. Genius is an opt-in service. It collects media preferences from all participating iTunes users and algorithmically analyzes them to generate “Genius” playlists. The more you participate, the smarter Genius gets, says Jobs. It works with movies and TV too.

Jobs gives the audience a quick demonstration of the Genius feature and moves on to the iPod. He notes that the iPod has a 73.4 percent market share in the U.S. and that 90 percent of all cars in the U.S. offer iPod integration. Cumulative sales of the iPod since it was first announced are over 160 million.

10:15 A.M.
First iPod announcement: The 80GB iPod Classic has been upgraded to 120GB at the same $229 price point. Second: The new iPod nano–it’s the vertical device that’s been rumored. Very slick. “It’s the thinnest iPod we’ve ever made,” says Jobs. It’s got a new curved aluminum design, enhanced user interface, an accelerometer to put images into landscape mode, built-in Genius support, 24-hour battery life for music or four hours for video and a “shake-to-shuffle” feature that does what you’d expect. Jobs shakes his nano to demonstrate as it shuffles to a Dean Martin song. “Uh-oh. Now you guys know I listen to Dean Martin.”

10:24 A.M.
The new nano is apparently far more environmentally friendly than its predecessors. Jobs says it is the cleanest, most toxin-free iPod Apple has ever built. It comes in eight colors, in 8GB and 16GB models, and they’re shipping today.

10:30 A.M.
Jobs announces two new pairs of Apple headphones. The first features a robust cable controller that allows users to control volume, etc. The second is a better set of in-ear headphones. He quickly moves on to Apple’s new iPod Touch. It’s similar to its predecessor, but thinner, and features a better speaker, a better UI, Genius-support and built-in Nike+iPod support. It also features App Store–100 million apps have been downloaded from the App Store in the two months since it was launched.

10:39 A.M.
After a quick demo of the iPod Touch, Jobs invites Phil Shiller to the stage to demonstrate some new games. First up: “Spore Origins,” which truly looks just incredible. “My creature has eyes … but no brain,” says Schiller. The game uses the device’s accelerometer to steer spore creatures through the universe as they eat and get eaten.

10:43 A.M.
The next demo: Gameloft;s Real Soccer 2009. With an instant-replay feature, it seems pretty robust. Last up: EA’s “Need for Speed.” Also quite impressive from a graphics and game-play standpoint.

10:45 A.M.
Jobs returns to the stage and notes that the new iPod Touch’s environmental footprint is similar to the Nano’s. It’s got great battery life, App Store support, tons of games, 8GB, 16GB and 32GB models and starts shipping today,” he notes, adding that “we think it’s the funnest iPod ever” before introducing Apple’s newest iPod Touch commercial.

10:47 A.M.
Jobs announces iPod Touch 2.1 and iPhone 2.1. iPhone 2.1 resolves a number of issues that have been troubling the device. Reception issues, dropped calls, overlong backups–2.1 should remedy all these things. “iPhone 2.1 is a big update,” he says. “It fixes lots of bugs. You’ll get fewer call drops. You will get significantly improved battery life, for most customers. We have fixed a lot of bugs where if you have a lot of apps on the phone, you’re not going to get some of the crashes and other things that we’ve seen. Backing up to iTunes is dramatically faster. And so just a lot of bugs have been fixed.”

iPod Touch 2.1 available today. iPhone 2.1 available Friday. “This is our strongest iPod line-up ever,” says Jobs as he does at every event like this. He then welcome’s Jack Johnson to the stage.

10:57 A.M.
Jobs returns to the stage to thank Johnson. Seeing the two onstage together, it’s hard not to think about how thin Jobs looks next to the singer. He certainly seems healthy, though.

And … one more thing?

Apparently not. “Go out and buy some of these great products. Thanks for coming.” And that’s it. Time to download “Spore” for iPhone, I guess.

For the record, Apple (AAPL) is trading lower today, as of this writing.

Indeed, people close to Yahoo (YHOO) said that Yang and Co. greeted the withdrawal of Microsoft’s bid as a victory, with a celebratory exchange of high-fives. In a hopeful statement posted to the Yahoo blog in the wake of Microsoft CEO Steve Ballmer’s stink-bomb of a kiss-off letter, Yang looked toward the future with a beatific, albeit vacuous, grin stretched ear-to-ear.

… Has this experience changed us? Of course, it has. We’ve emerged a stronger, more focused company with an even greater sense of purpose. I’m so proud of how this company has come together, put the noise aside, and showed the world that we have the resolve and determination to thrive in challenging times.

… So, what’s next? With Microsoft’s withdrawal, we’ll be better able to focus our energy on growing our industry leadership and maximizing value for stockholders. We’ll continue to execute on our plan — making your Internet experience as personal, relevant, open and social as possible, serving advertisers so well they insist on working with us, and opening up Yahoo! in a way that developers dream of. And, we’ll also continue to pursue strategic opportunities that position us for long-term success.”

Yeah, good luck with that come tomorrow, Jerry. My guess is by market close, you’ll be “focusing your energy” on damage control for YHOO’s new 52-week low. Perhaps it’s time for another 100-day review of the company, seeing how ineffective that last one was. At this point, it seems the only so-called “sacred cow” you’re going to slaughter is your company’s share price …

But according to Yahoo CEO Jerry Yang, “head winds” are what the struggling search outfit is facing as it stumbles, umbrella blown inside-out, into 2008. Said Yang, “While we will continue to face head winds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009.” And with that as preface, Yahoo reported a 23% drop in fourth-quarter profit and announced the “realignment” of 1,000 jobs. It’s not yet clear how many of the 1,000 jobs to be “realigned” will be cut. We’ll find out in February. But 999 sounds about right.

“Rather than across-the-board cuts, we’ll make targeted reductions alongside targeted investment,” Yang said during a conference call with analysts yesterday. “We’re not tinkering around the edges. We’re making necessary decisions to streamline. … This sort of transition takes time. But we have the talent and the strong cash flow it takes to succeed.”

PREVIOUSLY:

• Time to Put Yourself on That Layoff List, Jerry?
• Let’s Open This Up for Questions. Yes, You, the Man in Black With the Large Scythe
• It’s the Great Pumpkin Jerry Yang!
• Raise the Yangtanic!
• Decker Rearranges Chairs on Yangtanic
• Look at It This Way: Now That Yahoo’s an ‘Ecosystem,’ the EPA Can Finally Declare It a Superfund Site

(Fail illustration with apologies to Uncov)

I’m still not sure why we added the exclamation point.”

–Yahoo! CEO Jerry Yang

Now how does Yahoo CEO Jerry Yang expect to create that “stronger culture of winning” that Yahoo so desperately needs with sad-sack pronouncements like those he made during a company conference in Half Moon Bay, Calif., yesterday? Being chief executive of Yahoo is “a lonely job,” said Yang. “It is a lonely job in the sense that you have to make some of the tough calls.”

And perhaps even slaughter a sacred cow or two. But that’s how you make the big money. Surely Yang, with a net worth of $1.9 billion, knows that.

We need to invest in areas that are most critical to our success and de-emphasize those that are underperforming or don’t match up with our priorities. There will be no sacred cows.”

–Yahoo CEO Jerry Yang, July 17

Jerry Yang’s abattoir slaughtered enough scared cows in Yahoo’s latest quarter to treat investors to a nice steak dinner. The Internet giant surprised Wall Street yesterday, reporting a 12% rise in revenue and an acceleration of growth in its third quarter, Yang’s first full one as chief executive. Net income fell 5%, to $151.3 million from $158.5 million in the same period a year earlier. Not great. But not bad either. “Wall Street’s expectations were so low that a slight improvement from that looks pretty good,” said analyst Jeffrey Lindsay, who is apparently raising his rating on Yahoo to “Eh” from “Pitiful.”

During a conference call to discuss earnings, Yang offered an update on his promised 100-day strategic review of Yahoo’s business. But sadly, it was about as inspired as Yahoo’s earnings. No grand strategic business shifts to speak of here. Just a bunch of blather that, frankly, reads like some boilerplate HR goal-setting document.

Over the past hundred days, we have thoroughly reviewed key aspects of the rapidly changing Internet marketplace, our company, our strategy and our culture to identify what we need to do to accelerate Yahoo!’s growth and create long-term value for our shareholders.

“As a result, we have made important decisions about our future. We have defined a vision of where we want to go. We have developed a set of objectives and strategies that we will follow and devised a rigorous framework that we will use to prioritize and make future choices.

“… The goal is to turn Yahoo into a company that powers and delights all of its communities by creating indispensable experiences. … The Yahoo we envision today is very different from the Yahoo of a year ago.”

The Yahoo we envision today is very different from the Yahoo of a year ago.

… OK. But so is the Yahoo envisioned by Google (dead and buried), which tomorrow is expected to post results showing it is growing nearly five times faster than Yahoo. How does Yang plan to compete with that?

Split up in such a way, Yahoo would be worth nearly $39 a share, or about 44% more than its current price–theoretically, anyway. “It appears that Yahoo will not take bold measures to right the ship,” Lindsay wrote. “We believe that Yahoo still has a potentially high intrinsic value. We believe, however, that to stop the inevitable slide into irrelevance, the management team must consider more radical actions and strategies.”

More radical than inviting 300 employees holding the title of vice-president or higher to a motivational event with Apple CEO Steve Jobs? Yes–sacred cow-slaughtering radical. Otherwise, you’ll be inviting Jobs back again next year, this time for a crowd of 600 VPs.

“We do not believe that Yahoo will alter its current course,” said Lindsay. “We believe that management is committed to a path of incremental revenue improvements which we believe will lock the company into a lower value trajectory.”