The appellate decision overturned all monetary awards against Yahoo! Inc. and reduced the monetary award against Yahoo! Mexico to $172,500. Yahoo! Mexico was awarded $2.6 million in the original judgment, and this award was confirmed by the appellate decision. The plaintiffs may appeal this decision.

The litigation began in November 2011. Plaintiffs were Worldwide Directories and Ideas Interactivas. The case arose from the termination of a joint venture agreement between Yahoo de Mexico and Ideas Interactivas. In roughly 2002, the companies agreed to jointly produce online and print yellow pages: “Yahoo! Paginas Utiles.”

The project was initially successful and the parties sought to expand the deal to other countries and regions, including Central America, Australia and Japan. However in 2005, Yahoo decided to end the deal.

The contract was supposed to run through 2009. As a result of the termination of the relationship Ideas Interactivas said it was forced into bankruptcy. Worldwide Directories and Ideas Interactivas sued in 2011 for breach of contract and lost profits.

The lower court (49th Civil Court of Mexico) entered a preliminary judgment in favor of plaintiffs for $2.75 billion against Yahoo and Yahoo de Mexico on November 28, 2012. The judgment represented a substantial chunk of Yahoo’s cash-on-hand. It was also more than Yahoo’s Q4 revenue.

Thus the legal victory is a significant one for Yahoo as it seeks to use its cash for operations and acquisitions.

It’s a big bet and the type of high-impact acquisition that Marissa Mayer has wanted to make since becoming CEO of Yahoo. Why buy Tumblr? The reasons are almost self-evident.

Yahoo is a media/content company whose primary revenue source is display advertising. Tumblr is a massive user-generated content machine with a huge audience and page views (read: inventory). It’s a top 50 comScore property and has lots of SEO value.

According to Tumblr and comScore:

• There are 45 billion posts and over 100 million blogs hosted by Tumblr
• There were 29 million Tumblr uniques in March
• There were nearly 7 billion page views in march
• 47 percent of Tumblr users are in the coveted 18 – 34 year old age category
• Roughly 35 percent of Tumblr uniques earn over $100K

Tumblr also has significant mobile usage.

GigaOm’s Om Malik suggests that Facebook might try and swoop in to spoil the party. Facebook, too, needs younger users, hence its Instagram acquisition.

Talks could also break down, as happened in the recent case of video site Daily Motion, which Yahoo was also trying to buy. However, the failure of that acquisition was due to the intervention of the French government.

Beyond gaining a huge (probably new) audience and massive page views, buying Tumblr would also represent something that has long eluded Yahoo: the capture of a significant social-media property.

Postscript by Barry Schwartz: Yahoo has sent out an invitation to the press to attend a special press event this Monday. The event is being held in New York City at 5PM EDT and the rumors around this event are to announce the rumored Tumblr acquisition. The invite read, “Join us as we share something special.”

Later in the day at roughly 5 pm US Eastern time, Apple said that its App Store saw its 50 billionth app download. This had been long anticipated. And, it’s quite a milestone. However, Google partly stole Apple’s thunder with its own announcement of nearly the same number of downloads earlier in the day.

This afternoon, the following image appeared on Apple‘s homepage:

Consumers spend about 80 percent of their time on mobile devices with apps and about 20 percent with the mobile Web, according to both Nielsen and comScore. Google was initially skeptical of apps and biased toward the mobile Web but quickly jumped on the “appwagon” and embraced the phenomenon.

Still, Google’s Chrome and Android boss Sundar Pichai spoke at length during the keynote about continuing to develop the Web and the mobile Web, in particular. Regardless, Google has now all but erased any app-related advantage that Apple’s iOS once held over Android.

Last year’s event saw the introduction of the hugely popular Nexus 7 tablet, the Android “Jelly Bean” OS update (with Google Now) the Google “Q” streaming media hub (a dud) and Google Glass skydiving (amazing). It’s going to be all but impossible to “one-up” last year. Consequently, Google has decided not to try.

Earlier this week, Google Chrome/Android boss Sundar Pichai was managing expectations. He told Wired that the show wouldn’t see any major (hardware or OS) announcements:

It’s not a time when we have much in the way of launches of new products or a new operating system. Both on Android and Chrome, we’re going to focus this I/O on all of the kinds of things we’re doing for developers, so that they can write better things. We will show how Google services are doing amazing things on top of these two platforms.

Nexus Device Upgrades

Despite Pichai’s remarks, it’s likely there will be some upgrades to the Nexus 7 tablet and possibly Nexus 4 smartphone. One rumor is that the Nexus 4 will get a memory upgrade (32GB) and LTE support, which is currently missing. The Nexus 7 is supposed to get at least a couple of new hardware features too: a higher resolution screen and rear-facing camera.

Some outlets have also suggested we might see a price drop from the already-reasonable price of $199 to $149. However, Google might pull an Apple and drop the price of the first generation Nexus 7 while maintaining $199 for the newer device.

Finally, there are rumors that the Nexus 10 (made by Samsung) might get a cellphone-service option. Samsung has brought cell service to its own 8-inch Galaxy Note already, so it may also offer it for the Nexus 10. It’s not clear how many people would want to use the 10-inch device as a phone, although they could just use the data plan.

Google Maps UI Changes

As reported last week, Google Maps is also likely to get a significant UI refresh and overhaul. That will probably be announced at I/O. In addition to changing the look and navigation on Maps, Google is also making them more social, enabling users to filter local results by their Google+ circles.

The new UI appears to be a least partly drawn from or inspired by the UI being used in Google’s Hotel Finder product. Below is a screenshot of what the new Maps UI is supposed to look like.

Android: Key Lime Pie Vs. Jelly Bean 4.3

We could see the next incremental upgrade of Android Jelly Bean, currently in version 4.2. That would mean Jelly Bean 4.3. However the next major change slated for Android is Key Lime Pie (Android 5). That might also be previewed at I/O.

While Key Lime Pie would be more “newsworthy” and make a bigger splash, it would also potentially exacerbate Android’s fragmentation problem. Most users aren’t on Jelly Bean yet. Gingerbread, which is Android 2.3, is still the most widely used version of the operating system, followed by Ice Cream Sandwich (Android 4).

Google Subscription Music Service

Google Play already allows users to buy music. However, one of the more significant announcements likely to come out of I/O is a new Google subscription music service, being characterized as a challenge to Pandora and Spotify (Apple is also poised to launch a streaming music service).

Google reportedly already has deals in place with three of the major music labels. According to the Wall Street Journal:

Google has signed deals with Universal Music Group, Sony Music Entertainment and Warner Music Group to give people unlimited access to certain libraries of their songs for a fee…

Multi-Player Gaming

Google may also be preparing to launch a gaming hub, including multi-player experiences “similar to Apple’s Game Center,” says Wired. It may be called “Google Play Games” or “Google Game Center.”

This gaming rumor has been called the “most credible” of the collection of rumors leading up to I/O. There’s a great deal more information and anticipated features of the new gaming hub on the Android Police blog.

Google’s Missing Wallet

There was also supposed to be the announcement of a physical payment card for Google Wallet to broaden its reach and appeal. However, at the last minute, that was apparently scuttled by the company (CEO Larry Page, in particular). That’s according to AllThingsD last week.

More or less simultaneously, news came out that Google Wallet lead Osama Bedier was leaving the company.

Google had seen the introduction of a physical card as a way to reach a more mainstream user base for its Google Wallet service. It’s not clear whether the card is dead or just on hold.

PayPal has a physical card; however, it’s not clear how widely used it is.

Babble On Google

Finally, there are rumors of a new unified and cross-platform messaging service from Google called “Babel” (or maybe just Hangouts 2.0).  It will supposedly combine and integrate all of Google’s existing messaging services into a single product that will be available across operating systems and clients: iOS, Chrome and Android.

There’s more detail on its potential features and capabilities on Pocket-lint.

Below is an image (via Wikipedia) of Pieter Bruegel’s celebrated 16th Century painting The Tower of Babel, which has nothing to do with the anticipated Google messaging product, except the name potentially.

Postscript: See Live Blog: The Google I/O 2013 Opening Keynote and all our related coverage in our Google I/O 2013 area.

Of the two ads posted below, the basketball-themed spot is much better, although still heavy handed.

In a blog post Microsoft compares the experience of opening an Office doc in a Microsoft web app vs. on Google Docs. The company argues that Google Docs creates uncertainty and unpredictability because formatting often cannot be read. That has proven true for me in situations involving heavily formatted PPT slides.

In the Basketball ad Schneider’s character, representing Google Docs, is totally incompetent on the court and forces his team to be “less productive” and “work harder.”

Office is a huge cash cow for Microsoft and one of its two core profit centers — the other being Windows. There’s no comparison currently between Office’s market share and that of Google Docs. However, Microsoft has seen some high profile defections from Office and Exchange Server in the past year, as a number of municipalities,  government agencies and private companies shift to Google to save money.

Redmond has certainly started an online discussion about these ads among the pundit class. Whether they will have a real-world impact is another matter.

As others have pointed out, the irony is that these ads were posted using YouTube.

Home had 500,000 downloads as of April 21. So the number has doubled in a few weeks. Facebook also said the profile of users adopting Home was becoming “more normal” with each passing week. (It’s not clear what “less normal” would mean in this context.)

The Facebook Home app/launcher has been heavily maligned by users on Google Play. As of late yesterday or early today an update is out, which offers a number of performance improvements and bug fixes.

A coming-soon update, based on user feedback, adds new features such as an improved “dock” to enable people to more quickly access their favorite Android apps. One of the more consistent and prominent complaints about Facebook Home 1.0 was that it makes accessing other Android apps more difficult.

Source: Facebook Q1 earnings slides

Facebook Home is apparently having the desired effect on users. Home increases engagement (time spent, Likes, comments) by 25 percent. Facebook is already the most heavily used mobile app in the US. It far exceeds time spent with other mobile apps.

Home was originally released for the Samsung Galaxy S3, Samsung Galaxy Note 2, HTC One X and HTC One X+. Support has now been added for the HTC One, as well as “unofficial support” for the Samsung Galaxy S4.

In contrast to Facebook Home, the “Facebook Phone” HTC First appears to be struggling for adoption. Its price was slashed by AT&T in the US from $99 to $0.99 suggesting that AT&T thinks the radical price reduction is necessary to move units. The First has only been on the market one month.

The WSJ describes one of the two smartphones as a having a 3-D screen:

One of the devices is a high-end smartphone featuring a screen that allows for 3-D images without glasses, these people said. Using retina-tracking technology, images on the smartphone would seem to float above the screen like a hologram and appear three-dimensional at all angles, they said. Users may be able to navigate through content using just their eyes, two of the people said.

Lots has already been written and speculated about Amazon’s smartphones and broader hardware ambitions (including a video-streaming Apple-TV-like set-top box).

Amazon’s Kindle Fire tablets are the second best-selling devices after the iPad, and the best-selling Android tablets in the US by a significant margin. This is true despite the fact that Google’s Nexus 7 is generally a superior device.

While it very much remains to be seen what Amazon releases — specs, and especially pricing, matter — the Amazon and Kindle brands clearly carry weight, and Amazon’s channel and access to consumers give the company a megaphone to promote the handsets. Thus, Amazon’s smartphones can be expected to gain consumer notice at a minimum.

Assuming there are, in fact, two Amazon smartphones in the works, my suspicion is that one is for budget-minded consumers and one (the 3-D screen version) is a higher-end model designed to compete with competitors’ “flagship” devices.

Because Amazon operates a “forked” version of Android and has its own app store, Amazon smartphone success would not be a happy thing for Google or the “Android ecosystem.”

Considerable research has already established that smartphone owners use their devices heavily during offline shopping and “pre-shopping” activities. Now, Google is out with new sponsored research that reinforces the message and adds a few new insights. The study’s insights come through both surveys and observation.

The research primarily focuses on a sub-category of smartphone users it calls “smartphone shoppers,” which represent 79 percent of the total smartphone population. These are people who use their devices as “shopping assistants” at least monthly if not weekly or more frequently.

Google found that these “smartphone shoppers” rely heavily on their devices to conduct research and obtain product and store-related information. However, this is true across the board, not just in “high consideration” categories (e.g., appliances). They also use them for “pre-shopping” activities such as finding store hours and location information, promotions and product inventory.

The top in-store smartphone activities are the following:

1. Price comparisons
2. Finding offers and promotions
3. Finding locations of other stores
4. Finding hours

One of the perhaps counter-intuitive findings of the study — based on the notion that smartphone shoppers are just doing aggressive price comparisons — is that heavier smartphone shoppers buy more, with higher average basket sizes.

Another very interesting, but not surprising, finding is that “one in three” smartphone shoppers will turn to their devices for information in stores rather than asking employees. This makes sense for many reasons; among them: store employees may be unavailable or poorly trained or informed.

The research also discovered that smartphone shoppers prefer mobile sites to apps by almost two to one. This flies in the face of all the data that show roughly 80 percent of mobile time spent on mobile devices is with apps. However, Google also reports (in a somewhat self-serving way) that search is heavily used by in-store smartphone shoppers. Indeed, Google says it’s the most-used information-finding tool.

Below is the list of top sources used by in-store smartphone shoppers:

1. Search — 82 percent
2. Store websites — 62 percent
3. Brand websites — 50 percent
4. Store apps — 21 percent
5. Deal sites — 20 percent

Mobile websites are more “accessible” to in-store shoppers. If users don’t already have a retailer app installed on their phones it’s unlikely they’re going to install one on the spot (without some incentive). And, search is arguably the fastest way to get product or store information when users don’t have a known alternative resource.

There are other, category-specific findings available in the main report (.pdf).

The “gestalt” of the study is that smartphones are heavily relied upon by consumers in shopping, both in-stores and during pre-shopping research. And there are a wide range of implications for retailers about how to use mobile that go well beyond advertising. For example, retailers can and must envision their sites and apps being used by shoppers in stores and treat them like a sales and customer service aid, not just an e-commerce tool. In fact e-commerce is a low, secondary-use case here.

The consumer story to date around in-store mobile usage has mostly been about Amazon, “showrooming” and price matching. But it’s a great deal more complex and nuanced, as this report starts to suggest.

It’s imperative that retailers of all types and categories now (right now) address not only the threat but also the opportunity of in-store smartphone usage.

When the new Gmail app for iOS was released May 6, immediately, inflammatory headlines appeared, suggesting that Google was “taking over the iPhone.” However, that’s not exactly the case.

Users of the new Gmail app have the (default) option to go directly to the native versions of YouTube and Google Maps, as well as open Chrome via links in email. Previously, such links would have opened the browser embedded within Gmail or linked out to the Safari browser. In other words, users now can access the superior app experience vs. the mobile Web experience that would have occurred previously.

Many writers have focused on the idea that this change is designed to keep people within Google’s iOS universe longer. That’s true; it’s both a self-serving move and user-experience upgrade simultaneously. (As an aside, I wasn’t able to find any data about the ratio of Gmail users who rely primarily on the Gmail app vs. the native iOS mail app for Gmail.)

Those who don’t like the change can turn off the Google apps. It’s a simple process, but one that is somewhat buried at the same time. Within the Gmail app, users go to the upper left “three bars” button and then the gears/settings button and then select “Google apps.” Thereafter, Chrome, Maps and YouTube linking can be turned off.

However, as with most default settings, the majority of users are unlikely to make any changes.

The new Gmail app also introduced the ability to selectively sign out of individual Google accounts. Previously, there was only a global sign in or out capability.

In a related move, Google is encouraging iOS developers to use Chrome as a default browser for their apps when mobile Web content is accessed:

As an iOS app developer, when your users want to access web content, you currently have two options: create your own in-app web browser frame, or send users away from your app to a browser.

With Chrome’s OpenInChromeController class with x-callback, users can open a web page in Chrome and then return to your app with just one tap.

The incentive for the developer to adopt Chrome is that users will be reminded to come back to the app in question through “x-callback.”

Google and its branded apps dominate the Android user experience. But the same isn’t true on the iPhone and iPad. There, Google is merely one more developer. These moves, when taken together, are a bid for more centrality and attention on iOS.

In much the same way, Google Now for iOS, which was introduced two weeks ago, tries to get iPhone and iPad users to spend more time with Google’s search app. Google is also reportedly in the process of introducing Google Now for OS X.

In the US market, iOS is arguably more strategic than Android is to Google. According to an analysis performed by investment firm Piper Jaffray, iOS devices drove 69 percent of mobile Web traffic in April compared with Android’s 26.5 percent. StatCounter portrays the traffic ratio as much closer: 54 percent iOS to 40 percent Android (with just under 6 percent other).

So, while Android is selling more devices; in the US, at least, the iOS audience is driving considerably more traffic to publishers.

That report had some truly striking findings. Chief among them: 46 percent of survey respondents said they relied exclusively on their mobile devices to conduct online research across a range of purchase categories. In other words: no PC usage.

The principal finding of the Q1 insights report is that more of the network’s  brand advertising clients are using what it calls “geo-precise” targeting than a year ago. The percentage more than doubled.

While advertisers using xAd are already going to be more “location savvy” than others using more conventional ad networks, this shift to greater geo-precision reflects increasing sophistication among mobile advertisers about the use of location.

Among other findings, xAd also compared the top-spending mobile advertising categories of 2012 with Q1 2013. Financial services and telecom (carriers) top both lists.

The report includes comScore data, which shows the top US cities by smartphone and tablet penetration. These lists are somewhat surprising. Houston and Dallas have the highest smartphone penetration and Salt Lake City the highest tablet penetration. I’m quite skeptical of the accuracy of these particular data.

Finally, the xAd report compares ad performance on its network with mobile industry benchmarks. As one would expect, xAd says ads on its network do better than standard mobile search and display ads (as measured by CTR I believe).

One should see this in the context of how location or geotargeting increases ad relevance and improves performance of mobile advertising accordingly. In the Mobile Path to Purchase study, “location, offline offers and promotions” were found to be the top drivers of consumer response and engagement.