The board will have to conduct a search to show that it served shareholder interests, but the search show be a brief one and largely symbolic. Yahoo! cannot stand another change in leadership — particularly if it brings in a chief executive with no immediate experience with the portal firm’s “culture,” problems and strengths.

It is a wonder that Levinsohn was not elevated before the board picked Thompson. The temptation to add a leader who has run a successful company — the PayPal division of eBay (NASDAQ: EBAY) — may have been too great. It may have been considered a bad idea to choose someone, like Levinsohn, who worked for Carol Bartz, She was dismissed before Thompson was hired.

Levinsohn ran the interactive division of News Corp. (NASDAQ: NWSA), one of the largest media companies in the world. He was at the company when News Corp. bought MySpace, a decision the firm later regretted. But the decision was Rupert Murdoch’s; Levinsohn cannot be blamed for the mistake. Levinsohn also ran the digital businesses of CBS (NYSE: CBS) Sportsline and worked at HBO.

Levinsohn has had a long line of management positions at media companies, and his is the right kind of experience for Yahoo! He has overseen content and advertising operations, which by their natures involve working with engineers. Levinsohn also has worked in a venture capital operations as the leader of Fuse Capital, and he has M&A experience. That could prove critical as Yahoo! decides what to do with its stakes in Alibaba and Yahoo! Japan.

One reason Thompson appealed to the Yahoo! board is that advertising sales and search have become faltering sources of revenue at the portal. The board must have viewed Thompson’s e-commerce background as critical to help Yahoo! build its own e-commerce business. Of course, it does not require an e-commerce executive to be in charge an evolution to a new model at Yahoo! It does require someone who can hire or promote the right people and set a sensible strategy to move Yahoo! in a new direction.

Yahoo!’s board cannot afford to hire an outsider, particularly when it has someone highly qualified in house.

Douglas A. McIntyre

But both Amazon and Netflix face pretty tough competition from the likes of Walt Disney Co. (NYSE: DIS), Time Warner Inc. (NYSE: TWX) and its HBO network, CBS Corp. (NYSE: CBS) and its Showtime channel, and Viacom Inc. (NASDAQ: VIAB) and its Nickelodeon network, among others.

In its announcement today, Amazon said it will option one new project a month to add to its development list and to test with an audience. If the company picks up the option, the creator will receive a payment of $55,000 plus a share of merchandise licensing, royalties, and bonuses.

Like Netflix, Amazon’s streaming video offering needs a constant stream of good quality content. Licensing that content from the existing studios is getting more expensive as the studios get the idea that they can do it just as well or better, and keep more of the money.

Back in the early days of the World Wide Web, the mantra was, “Content is king.” But that content was generally static. Today’s streaming video and live Internet programming were a distant dream. But content is still king. The issue is whether that content can be licensed or created at a reasonable cost.

Amazon and Netflix are fighting an uphill battle here, and, as in all uphill battles, the odds favor the folks on the high ground.

Paul Ausick

ARM Holdings PLC (NASDAQ: ARMH) Raised to Neutral at JPMorgan.

Banco Santander (NYSE: STD) Added to Conviction Buy List at Goldman Sachs; Raised to Overweight at JPMorgan.

Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) maintained Buy but removed from Conviction Buy List at Goldman Sachs.

CafePress Inc. (NASDAQ: PRSS) Started as Buy at Janney

CBS Corporation (NYSE: CBS) named Bull of the Day at Zacks.

Dril-Quip, Inc. (NYSE: DRQ) named Bear of the Day at Zacks.

F5 Networks, Inc. (NASDAQ: FFIV) Started as Overweight at Morgan Stanley.

General Electric Co. (NYSE: GE) Reiterated Outperform with $22 target at Credit Suisse.

Groupon, Inc. (NASDAQ: GRPN) Raised to Overweight at Evercore.

Microsoft Corporation (NASDAQ: MSFT) Reiterated Buy with $39 target at Argus.

Nationstar Mortgage Holdings Inc. (NYSE: NSM) Started as Outperform with $20 target at Credit Suisse; Started as Outperform at Wells Fargo; Started as Buy with $18 target at BofA/ML.

priceline.com Incorporated (NASDAQ: PCLN) Reiterated Outperform and raised target to $811 at Credit Suisse.

Progressive Corp. (NYSE: PGR) Cut to Neutral at Citigroup.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) Reiterated Buy and raised target to $146 at BofA/ML.

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JON C. OGG

Video Metrix service showing that 181 million U.S. Internet users watched nearly 37 billion online content videos in March, while video ads topped 8 billion for the first time on record.

The ability to make profit in the online video and advertising business remains the Holy Grail for the industry. Video ads bring in much more based on CPMs than display ads do. And there is evidence that how much marketers will pay for Internet display has fallen, which makes the improvement of video revenue all the more important.

By far the most watched video site is YouTube, the viewership of which makes up most of the traffic for Google’s (NASDAQ: GOOG) video. Total unique visitors to Google video sites numbered more than 146 million in March. Those visitors watched nearly 16 billion videos during the month, and each visitor spent an average of 426 minutes on the Google sites over the course of March. But Google’s revenue from YouTube is so small that it is not even broken out in quarterly earnings figures. Google is still a company that makes its money from search dollars and not video views.

The same problem of low video ad volume is present among the next tier of sites based on traffic. Yahoo! (NASDAQ: YHOO) sites had 60 million unique visitors in March. Yahoo! management often says that video ads are essential to the company’s future, but, again, the portal firm will not say how much revenue this represents. That is probably because the figure is comparatively small. The same holds for Facebook, Viacom (NASDAQ: VIA) and Aol (NYSE: AOL). The management of each touts the importance of video ads. None gives concrete evidence that these ads are a large part of their revenues.

As a contrast, CBS (NYSE: CBS) had over $14 billion in revenue in 2011. Most of that came from its television business. Wall St. has pushed the company’s shares to all-time highs. Investors understand that broadcast and, to a growing extent, cable programs are the favored environment for video ads. So far, the size of online video activity has barely changed that.

Douglas A. McIntyre

News Corp.’s Fox Sports Network already operates 20 regional sports networks that reach 75% of US homes. But a national network, like ESPN’s, could increase News Corp.’s share of the cable subscription pie. ESPN charges the highest per-household subscription fee of any cable network according to SNL Kagan.

Fox’s broadcast network already carries National Football League games and Fox operates a national extreme-sports network named Fuel-TV. An unnamed source told The Wall Street Journal that if a new sports network does materialize it won’t happen until next year and Fox would likely convert one of its existing cable channels to the new network if and when it happens.

Though financial details were not disclosed, Letterman will not have to accept a lower salary, according to “The New York Times” Media Decoder. Meanwhile, according to earlier media reports, Ferguson may have doubled his current estimated $12.7 million annual salary as a result. The move would make him one of the highest-paid hosts in late night – almost as rich as Letterman’s estimated $28 million annual package.

Based on figures from multiple media sources, 24/7 Wall St. reviewed the estimated salaries of television’s late night hosts to identify the highest-paid entertainer in the business.

Read: The Highest-Paid Hosts on Late Night TV

According to Nielsen, while salaries continue to increase, viewership is shrinking. In fact, with the exception of ABC’s “Jimmy Kimmel Live!,” the viewership of every late-night show has fallen from last year. David Letterman and Jay Leno, the most popular and highest-paid hosts in the late night circuit, have together lost nearly half a million viewers. Still, their shows remain the two most popular on nighttime television. And at the end of the day, while not the only indicator of pay, popularity is the biggest factor in determining how much these hosts are going to make.

At the same time, the highest-paid host does not necessarily spell success for a network. Some of the most lucrative contracts in the late-night scene are for shows that are clearly not pulling their weight, and are based on expectations, rather than performance. After picking up estranged long-time NBC host Conan O’Brien and paying him an estimated $12 million a year, TBS has failed to see a return on investment. Compared to the same nine-month period a year ago, “Conan” has lost an average of more than 600,000 nightly viewers.

The case of O’Brien and TBS illustrates another major factor networks consider when determining hosts’ pay. O’Brien was expected to be the late night beachhead of TBS, much the same way that Comedy Central’s Jon Stewart and E! Network’s Chelsea Handler are for their networks. In many ways, they are more valuable to their respective networks because they disproportionately contribute to the network’s total viewership. This is one of the reasons Handler is paid more than double Jimmy Kimmel, despite the fact that she draws less than half the audience.

Another major factor in a host’s pay is highlighted by the Ferguson’s current salary and contract negotiation: length of service. Regardless of the final outcome, Ferguson already makes well more than Jimmy Fallon, who shares the same time slot. Fallon has only been a host since 2009, when he took over for O’Brien as the host of “Late Night.” Ferguson has been a host since 2005. Fallon’s viewership is well more than Ferguson’s, and his audience has declined less than “The Late Late Show,” which lost more than 300,000 average viewers last year. Despite all of this, Fallon makes $5 million per year, much less than Ferguson.

24/7 Wall St. examined a variety of sources, including TV Guide’s annual salary review, Forbes, the New York Times and the Wall Street Journal, to identify the salaries of the biggest late-night hosts on television. Average nightly viewership also was considered, along with the primetime ratings of their networks, as provided by ratings agency, Nielsen. 24/7 Wall St. excluded programs that do not feature year-round programing, and only included programs that air between 11:00 PM and 1:30 AM.

Apple’s late CEO, Steve Jobs, struck a deal with the publishers in early 2010, that shifted the retail sales model from a “wholesale” model, such as was in force with Amazon.com Inc. (NASDAQ: AMZN) to an “agency” model, under which Apple would receive 30% of the retail price based on a price for the e-book set by the publisher. The deal also included a requirement that none of the publishers sell e-books to any other company at a price lower than the publishers charged Apple.

Amazon had acquired e-books under the wholesale model, and sold them at a steep discount in order to drum up business for its Kindle e-readers. The publishers believed that such discounting would lead to a severe loss of revenue, in much the same way that Apple had chopped the revenue of the music companies.

According to the WSJ, the CEO of Barnes & Noble Inc. (NYSE: BKS) gave a deposition to the US DoJ “ in which he testified that abandoning the agency pricing model would effectively result in a single player gaining even more market share than it has today.”

The DoJ’s position is that the agency model is anti-competitive and results in higher prices for consumers. A settlement of the potential suit is possible, but no such deal is close according to the WSJ’s sources.

Paul Ausick

Yahoo!’s revenue fell 13% to $1.324 billion in the fourth quarter. Net income dropped 5% to $296 million. Even with its new CEO, almost no one who watches the company thinks there is a solution to the ongoing shrinkage of sales.

Yahoo! will somehow add cash, perhaps over $10 billion, to its balance sheet through the sale or spinoff of Yahoo! Japan and its stake in Alibaba. The means by which it will handle those transactions are still an open question because of tax issues and the difficulties of negotiations with the two Asian companies. Neither of them has to make a transaction with Yahoo! now.

MSN and Aol already have huge online audiences. They have to find ways to increase sales from these visitors, but there is no proof that combining with Yahoo! will do that.

Companies that lack the scale that they need to augment their traditional media sales with larger online ones would find Yahoo! an important acquisition. It would allow them to marry their old world TV or print sales with a larger online audience. CBS had 79 million unique visitors in December, according to research firm Comscore. Viacom’s digital properties had about the same number. Comcast (NASDAQ: CMCSA) had 50 million and Gannett (NYSE: GCI) had 44 million. None of these figures comes close to Yahoo!’s 176 million.

The troubles of traditional media are well understood. Public firms like CBS and Gannett face the erosion of television and print ad sales. Right now, their digital sales are insufficient to make up for that attrition. The chance to go to advertisers with packages that combine old media marketing with new may be their only chance to keep revenue advances — and happy shareholders.

Yahoo! has a market cap of $19 billion. Much of that is based on the value of Alibaba and Yahoo! Japan. Yahoo!’s core business may be worth less than $10 billion. That makes it an affordable purchase or merger candidate for most large traditional media companies, which have larger market values than Yahoo!.

The argument against a the ownership of Yahoo! by a traditional media company is that the older company would have no better chance to increase the portal’s revenue than MSN would. That is not true. Large advertisers continue to look for ways to reach huge audiences, some of which consume most media through traditional channels and some of which spend much of their time online. Yahoo!, in combination with a traditional media company, would offer the world’s largest marketers a chance to gain both through one firm.

Douglas A. McIntyre

Neil Ashe was the president of CBS (NYSE: CBS) Interactive before he moved to the job as president and CEO of Walmart’s Global eCommerce business. Walmart obviously has web operations outside America, but without a strong performance of the e-commerce business in its home country, its web division cannot succeed.

The choice of Ashe is a bit odd. He oversaw CBS Sports and News online, along with the tech site company CNET. He also ran the media firm’s overseas sites. The belief that stepping from content to e-commerce is likely to work is hard to explain.

The problem that Walmart has online is not directly related to who runs the e-commerce operations. Walmart’s U.S. store sales have not grown in the past year, and its U.S. revenue has barely increased. This is despite the fact that, after Amazon.com, Walmart’s sites are the second most visited e-commerce sites in America.

Walmart’s U.S. problems have been described as troubled in two ways. The first is that top merchandising executives at the company have done a poor job as they decide what inventory to put into their stores. The other is that Walmart’s price advantages are no longer substantial enough to keep customers from the decision to go to other retailers, like Target (NYSE: TGT). What Walmart cannot do with its bricks-and-mortar stores, it cannot accomplish online. An overall lack of demand cannot be made up by websites. Retailers like Best Buy (NYSE: BBY) and Barnes & Noble (NYSE: BKS) have already proven this.

Walmart’s new online CEO will have his hands tied no matter how skillful and experienced he is. Well over 95% of Walmart’s sales are made in its stores, and in the U.S., the traffic to those stores has slowed. An adroit e-commerce operation, hampered by the same prices and inventories, will not do better than Walmart’s primary business.

Douglas A. McIntyre

Walmart (NYSE: WMT) appoints a former CBS (NYSE: CBS) digital executive as head of its digital operations. (Reuters)

Disapproval of Congress hits an all-time high, according to a new Washington Post-ABC poll. (Reuters)

S&P downgrades the large eurozone bailout fund. (Reuters)

Auditors of Olympus are cleared of blame in the company’s financial scandal. (Reuters)

Samsung will make a $41 billion capital investment in the company this year. (Reuters)

Hackers compromise 24 million accounts at the Zappos division of Amazon.com (NASDAQ: AMZN). (Reuters)

Federal officials become more active in examining the role S&P played in the mortgage credit crisis. (WSJ)

EU banks create new ways to help bolster their balance sheets, but these may not improve their cash positions. (WSJ)

Bonuses fall at Morgan Stanley (NYSE: MS). (WSJ)

BMW and Volkswagen recall more than 500,000 vehicles. (WSJ)

More companies split the roles of chairman from CEO. (WSJ)

California hopes large IPOs will help its finances. (WSJ)

Nigerian unions halt strikes as the government agrees to again underwrite fuel prices. (WSJ)

Moody’s (NYSE: MDO) says it will review the status of its ratings of eurozone finances. (WSJ)

European Central Bank President Mario Draghi says the region’s problems are “very grave.” (WSJ)

Airbus will book double Boeing’s (NYSE: BA) orders this year, but the difference in revenue will be smaller. (WSJ)

U.S. companies continue to invest much more in machinery than labor. (WSJ)

Apple (NASDAQ: AAPL) likely will produce new textbook systems optimized for the iPad. (WSJ)

CBS Sports website will open its operations so that app developers can offer fantasy sports software. (WSJ)

Executive perks tend to rise as CEOs get closer to retirement. (WSJ)

Private equity firms could get more scrutiny of leverage and tax approaches. (WSJ)

Iron ore prices fall along with demand. (WSJ)

Starbucks (NASDAQ: SBUX) card payment programs increase sales. (WSJ)

Research In Motion (NASDAQ: RIMM) continues to have trouble adding features to its PlayBook tablet PC. (NYT)

Italy’s prime minister asks Germany to do more to lower loan costs because he worries about a voter revolt. (FT)

Saudi Arabia says its price target for oil rose to $100 to offset spending in the country. (FT)

The European Automobile Manufacturers Association says the region’s car sales fell 5.8% in December, with much of the brunt of the drop taken by Fiat, Peugeot Citroen and Renault. (Bloomberg)

Douglas A. McIntyre