The default strategy for many start-ups is to plan to be acquired by Google or Microsoft. But the M&A scene is much more complex than that. Jordan, Edmiston Group Co-President Tolman Geffs, speaking today at IAB’s Annual Leadership Meeting in Carlsbad, California, joked that Google is set to buy Oregon, Washington and Canada “just to mess with Microsoft.”

Speaking more seriously, he noted that “we don’t need Google and Microsoft to buy everything.” Incumbent specialist firms would find higher value in a number of areas. These include marketing analytics, consumer data, cable and entertainment, Web delivery, infrastructure, major agencies, large display ad networks and performance advertising (such as Demand Media).

Geffs noted there is currently a vibrant deal environment, with 178 deals made in the second half of 2009 worth $13.3 billion. This was a major change from a “dead” first half when just 129 deals were completed, he said.

Still, there has only been a “partial recovery from previous levels for online plays. Classifieds is the only sector of advertising that was down,” he said. Especially hot areas include online media, interactive marketing, video and infrastructure plays.

A real “head scratcher” for Geffs is the $1 billion+ committed by Google ($750 million) and Apple ($275 million) for two mobile ad networks: AdMob and Quattro Wireless. “That’s the entire forecast for 2012 mobile ad revenue” he said, noting that the high prices have led to a stunning $211 million worth of investment in nine other mobile ad nets by VCs.

In fact, Geffs questions whether mobile is even a good ad medium. “They help consumers complete tasks,” he noted. But “is this a great promotional medium?”

Geffs, former president of IBS, a TV station Web site builder and advertising provider, is also critical of “vertically integrated” models that rely on content aggregation and search, such as Citysearch and ReachLocal. Costs are too high.

ReachLocal, for instance, is a vertically integrated play that only leaves 7 percent of its revenues to support its product and platform, after spending 55 percent on consumer traffic and 38 percent on sales and marketing.

He’s more excited about local companies that solve a problem and keep content, audience and sales costs low, such as Outside.in, Datasphere, Triton Media, MerchantCircle, Manta, Yelp and Angie’s List. “We are big fans,” he said.

Zvents, the events lister, is reporting 35 percent year over year growth with over eight million unique visitors, largely due to its powering events for 285 local media brands, including  major newspapers and the NBC owned-and-operated TV stations.

CEO Ethan Stock cites Quantcast data showing Zvents Media Network as the 250^th most used net on the Web, ahead of Citysearch (#267) and Local.com (#291). “We’re a very large local property by any measure,” he says.

The company, which has raised $32 million over its five year history, also claims it has been averaging 12,000 monthly event listers. These use the site to promote a wide range of local events and activities, including live music, performing arts, sporting events and community activities.

Of those listers, roughly 1200, or 10 percent, are now boosting their presence by taking out ads via self–serve – a percentage that Stock thinks will climb to 20 percent in 2010. The company also sells regional and national accounts via telemarketing and national sales, with top categories including major concert promoters, sports teams, casinos and  home and garden events.

High end shopping, with its sales-oriented events, such as Williams Sonoma cooking demonstrations, are also becoming more important to Zvents bottom line.  “There is a significant segment of consumers who perceive shopping as entertainment,” says Stock.

The key to the company’s future in local, however, is to stay away from the trap of focusing on directory-type advertising. Instead, Zvents will stay focused on events and shopping, he says, which have the most highly motivated advertisers. “They are also relatively concentrated in terms of the volume of advertising.”

Indeed, the company’s focus on events and advertising puts it most in competition with social sites such as Facebook and Google, rather than local sites such as Citysearch and Yelp, who may be more directory oriented, says Stock. Other events oriented companies include Eventful, and “new city guide” players such as Center’d and American Towns.

In hindsight, the company’s initial focus on teaming with newspapers “look like a very smart choice,” adds Stock. While newspapers are commonly disparaged in today’s climate for their declining circulation and advertising, “they have high repeat traffic. Much more than national partners.” Top Zvents newspaper partners include SFGate, the Denver Post, Seattle PI, Boston.com, the Dallas Morning News, the Atlanta Journal Constitution, New York Daily News, and the Orange County Register.

Stock also sees a major boost coming from renewed efforts in local from national partners such as AT&T’s Yellowpages.com, which has been an investor in the company ; and from MSN, where Zvents listings will be showing up in Bing, and trigger Instant Answers via Silverlight search.

Scott Moore, who is back at Microsoft as GM and executive producer of the U.S. content business after four years at Yahoo, told paidContent he had been hoping to launch an ad-supported local news/info service. Apparently, Microsoft seemed like a safer bet.

Spot Runner announced that it is laying off 115 people, or less than 30 percent of its staff. It confirmed that a big chunk of the layoffs are coming from its local sales division, formerly known as Weblistic.

Company officials say they are getting mean and lean for the recession, but that Spot Runner has significant cash in the bank. They also say they will continue to support local search initiatives, but that the company is going to focus harder on its core video business. The layoffs, which follow earlier layoffs of 50 staffers in August, have been hinted at for several weeks.

Weblistic was purchased in March 2008 for $22 million worth of Spot Runner options. At that time, major synergies were envisioned with Spot Runner’s national advertising franchisee sales (i.e., Coldwell Banker, 24 Hour Fitness), video and display ad production, and media placement. But it isn’t apparent that there turned out to be much synergy between these units.

In some ways, the company seems to have been lurching from one strategy to the next, with local ad sales just the latest of many efforts as the company positioned itself for an ultimate exit. The dominance of Google in a local SMB space that seemed primed to have many other channels (Yahoo, Ask, Superpages, Yellowpages.com, etc.) seems to have hurt the company’s prospects to be profitable as a search reseller. As a reseller, Spot Runner doesn’t receive any discounts on Google purchases.

Spot Runner was rumored to be in talks with Microsoft last year, with a hefty Microsoft offer said to have been rejected. A Spot Runner spokesperson says they are simply “unconfirmed rumors.”

In the meantime, “alternative strategies” are being pursued for Weblistic, which had been scaled for massive sales, with at least 30 engineers. At the very least, the layoffs will enable the division to be “right sized” for profitability.

The Weblistic layoffs may have implications beyond Spot Runner. People will be closely watching the prospects of other companies in the space, including ReachLocal, WebVisible and Marchex.

This just in: Microsoft’s flagship search engine unveiled a new home page interface that will include rotating background images with embedded “hot spots” that direct users into various vertical searches when moused over.

This is essentially a visually driven discovery engine for various topics of interest. Live Search now more explicitly blends search and discovery — a classic interplay in online media. No word on whether it will be targeted in any way toward specific users (behaviorally, contextually, socially) as some popular discovery engines, like StumbleUpon, do.

It very well could, as the LiveSearch blog repeatedly states that this is a “starting point” (perhaps double meaning of a search engine home page and a foundation for more product development).

“We think the new design is a great start,” it reads, “but there’s more to come, with lots of interesting directions that we’ll be exploring in our next releases of the home page.” (My money is on video integration.)

This comes one day after Google Maps’ redesign, but is a decidedly more aggressive transformation (and not exactly a parallel product). More notable, it follows a recent line of moves by Microsoft to differentiate itself among core search engine competitors.

The thought is that it isn’t going to gain market share on Google by just doing the same thing (search box, 10 blue link SERPS, etc.). This transformation recently has included its Cashback program, Search & Give and its acquisition of Powerset, and we’ll likely see many more as Microsoft pushes hard on differentiation.

As speculated, Microsoft today announced the acquisition of natural language search technology developer Powerset. The acquisition is hoped to help Microsoft better serve search results, based on a natural language analysis of user queries, and better index of Web content.

These parallel goals come with the assertion that current search algorithms fall short in determining user intent by contextually matching individual words or phrases, rather than a deeper level of context around entire Web pages.

From the Live Search Blog:

These problems exist because search engines today primarily match words in a search to words on a webpage. We can solve these problems by working to understand the intent behind each search and the concepts and meaning embedded in a webpage. Doing so, we can innovate in the quality of the search results, in the flexibility with which searchers can phrase their queries, and in the search user experience. We will use knowledge extracted from webpages to improve the result descriptions and provide new tools to help customers search better.

This falls into the category of Microsoft’s recent efforts to differentiate Live Search from Google and Yahoo!, which lead the company in search market share. The general direction of this strategy was examined in a past interview with Microsoft Chief Advertising Strategist Mike Galgon, and recent moves to this effect include its CashBack and Search & Give programs launched over the past couple of months.

In related news, natural language search company Peer39 received $11.7 million from Canaan Venture Partners, Dawntreader Ventures and JP Morgan. The company is essentially an ad network that differentiates itself with ad placements that take into account natural language content in and around Web pages, such as user reviews.

This can come in handy in additional layers of context such as whether a page’s “tone” is positive or negative — a useful placement metric for some brand or product advertisers. The company claims it’s on track to hit a billion impressions by year-end, and that its advertisers are seeing 4X clickthrough rate improvements over previous placements methods.

Generally speaking, these products carry part of the concept behind the anticipated semantic Web — already being pegged by some as “Web 3.0″ (sigh).

Is there room for a new, locally oriented social network if it is more practical than Facebook, MySpace, Bebo, LinkedIn, et al? That’s what Norwest Partners and Keynote Ventures are betting $6.5 million on with the launch this week of Center’d, formerly known as FatDoor.

The service is headed up by former Yahoo! Marketplaces head Jennifer Dulski and former Microsoft Virtual Earth exec Chandu Thota (hence a mapping orientation). Former Intuit President Bill Harris sits on the board.

Currently in soft launch, or “first draft,” the service is sort of women focused and bent on helping friends get together locally. “People, Places and Plans” is the tag. Historically speaking, its first iteration, FatDoor, is now considered a false start. It had most of the money, and some hot tech, but no plan.

As currently conceived, Center’d allows friends to get things done that they’d normally do via their e-mail lists and round robin calling. Friends can pick a place, pick a time, pick service providers, send invites, host and communicate.

For instance, Friends can form unique groups (i.e., “Theater Group”), plug in variable information (i.e., “Oh! Calcutta”), and even figure out who brings what to a pre-show tailgate party or share babysitters. Birthday parties, road trips and concerts are other types of possible events that might be aided by the site.

The site goes quite a bit beyond its initial concept of “Location Date,” and it goes beyond Evite too. Beyond events and plans, friends can also use the service to stake out future events, as listings of local events are crawled from the Web a la Zvents or Eventful. More importantly, users can tag and review “shared places” that they like.

Center’d also has very nice mapping integrated, so one may zoom in or out of specific areas with real ease, with various categories highlighted. Yelp reviews have also been brought in. The site may also integrate with sites like Fandango, ServiceMagic and Matchpoint. There is a lot going on with this site.

Eventually, the site is also planning to integrate payment processing, which would be at least one revenue generator in addition to Google AdSense. Payment processing would make it easier to plan events and, more importantly, not stick one person with the bill for 27 tickets, which Dulski says is the size of a typical social group.

“Getting people to the site isn’t enough,” says Dulski. That’s the ultimate shortcoming of all the local search sites, she feels.

While there may be Facebook fatigue among the digerati, social networks really haven’t hit their stride among ordinary folk, insists Dulski. “People aren’t using other tools very actively,” she says. In fact, the site is exhibiting this weekend at the National PTA meeting in San Diego. Similar non-digerati events will be targeted during the launch phase and beyond.

She also notes that while Center’d has been created as a unique platform onto itself, apps are also being created for Facebook and Open Social.

What to make of all this? The site is well executed, if overly busy. It appears to be an outstanding laboratory for social apps. But really, is it more than a Facebook app? I guess the idea is that events and plans will be the new driver, in much the same way that news and mail drove traffic in the Web’s first iterations. Ultimately, there are hopes that enough people can be aggregated to branch out more widely to other apps, and allow the site to be supported by ads and, more intriguingly, by transactions.

It would be fine with me if it all worked out. I hope it does. But every city guide that ever launched thought that plans and events would be core features for them. Ultimately, what you had was a bunch of overworked Yahoo! and Microsoft workers who knew that they worked around the clock, but imagined that a lot of people go out all the time.

Do I relate to it personally? My own primary friends group has 12 people in it. We get things started on e-mail. When things get serious, we hit the phones. Last Christmas, we finally hit on a Web-based tool that helps us with an important task: sharing our good times.

But you know what? It isn’t a social network. It is a photo sharing site called Shutterfly. It will be a wake-up call to me if an extended planning site is what ultimately gets people “center’d.”

In a new WashingtonPost.com video, Microsoft CEO Steve Ballmer talks on a wide variety of topics, including the future of print. “In the next 10 years, the world of media companies will be turned upside down,” he says. “There will be no newspapers or magazines delivered in paper form. Everything will be delivered in electronic form.”

Microsoft today expanded Search & Give, a program that rewards searches in the form of money sent to a preferred charity. After a user signs up for the program, a penny is donated for every search to a choice of about 100,000 schools and 900,000 charities.

The max is 500 searches per user per month, meaning the most each user can donate is $5 per month. But this can add up if enough people use it. Microsoft claims a quarter of a million dollars was generated in trials of the program for charities like the ASPCA (society for prevention of cruelty to animals) and Doctors Without Borders. FAQs on the program can be found here.

This comes weeks after Microsoft’s launch of Cashback, which offers cash rewards to online shoppers who purchase items through the new system. As we wrote at that launch, Microsoft is clearly on a path to differentiate Live Search to a degree that attempts to outweigh the search loyalties and general habits that keep people using Google.

These types of incentives could be the right formula. We’ll see how much impact they can have on search market share.

There has not been all that much fresh coverage of the rumor, reported earlier this week, that Microsoft may acquire Yell Group, the U.K.-based international publisher with operations in the United Kingdom, the United States, Spain and Latin America. We have not been able to pick up much to support the rumor, though circumstances might suggest that Yell is poised to make some kind of significant move to generate cash without further driving down its share price. The company took a hit after it announced its earnings last week (along with a dividend cut), and gained a little back on the Microsoft rumor. At this writing, the stock is trading down by about 2 percent.

Here is a bit more discussion on ClickZ regarding the rumor that Microsoft may acquire Yell. The focus here is on Yellowbook.com, which has been a second tier player in the U.S. IYP space, but has recently revamped and is growing usage rapidly, albeit from a small base. One key difference is the veteran leadership of Pat Marshall, who helped found Superpages.com back in the IYP pioneer days, and joined Yell last year to lead efforts to make Yellowbook.com a more competitive digital platform.

This article reports on a recent BNP Paribas report that suggests Yell might sell off its U.S. and Latin American operations (with Carlos Slim’s Telmex being the likely buyer of the latter) to avoid violating debt covenants. No mention is made of the prospects of a Microsoft acquisition.

This article reveals, ironically enough, that Yell and Microsoft were both voted into the top 10 U.K. companies to work for.