AOL said it earned 23 cents a share for the fourth quarter on revenue of $576.8 million, compared to 60 cents per share on $596 million in the same quarter a year ago.

Wall Street analysts had expected the New York-based Internet company to earn 16 to 17 cents on revenue of $572 million.

While the results are still down significantly from a year ago, AOL’s stock has been rising — gaining more than 25 percent in the quarter — since CEO Tim Armstrong has improved advertising revenue.

That was up 10 percent in the quarter, the third consecutive quarterly increase.

Subscription revenue from its access business continued to fall — down 18 percent — although that was the lowest rate of decline in five years.

AOL also noted that it had encouraging improvements in certain areas of its business:

Video: AOL grew its videos, video views, video ad impressions and revenue at double-digit rates.

Brand Advertising: Project Devil advertisers, impressions and revenue grew at double-digit rates.

Local: Patch grew traffic, advertisers and ad impressions more than 100% year over year.

Traffic: Consumer usage was flat to Q3 2011, as growth in the Huffington Post Media Group sites offset declines at MapQuest and AIM.

But read for yourself — here are all kinds of charts and graphs from AOL:

AOL_Q4_2011_Earnings Release

AOL_Q4_2011_Earnings_Presentation

AOL_Q4_2011_Trending_Schedules

Microsoft made the announcement at the annual meeting of the Clinton Global Initiative, the philanthropic organization run by former President Bill Clinton. The meeting is getting underway today in New York.

The problem Microsoft is trying to solve is sometimes called “digital exclusion.” Think about how much you rely on day-to-day access to the Internet at home to do your job, and then imagine your life without it, or with only spotty access. There are lots of families with school-age children who are at a disadvantage because they don’t have access at home, or because their families can’t afford computers or the monthly fee for broadband.

Lacking that access has a lot of long-term economic repercussions, none of them good. Without access, kids don’t perform as well in school, because they don’t have the Internet to help them with homework. And while there are usually other socioeconomic forces to consider in these cases, having not done well in school, these children have a greater tendency to not finish high school; therefore they don’t go on to college, and later on have a harder time finding meaningful work.

There have been lots of attempts to count all these unconnected households. The FCC estimates that there are 100 million people in the U.S. without access to broadband. Some lack access because of where they live, while others simply can’t afford it. Within that number, there is thought to be some 9.5 million school-age kids who are effectively “digitally excluded.”

The irony, of course — at least to anyone who remembers how Bill Clinton’s Justice Department so vigorously pursued Microsoft through the courts during the 1990s — is how friendly Clinton and Microsoft co-founder Bill Gates seem to have become in public. The photo is from Gates’s appearance with Clinton at last year’s CGI meeting.

HP has announced to the world that it plans to stop selling its TouchPad tablets and other hardware running the webOS software it got after spending $1.2 billion to acquire Palm last year. Yet it wants to keep the webOS software, guessing, perhaps correctly, that there’s some revenue-generating business to be made of it yet, maybe in patents. Meanwhile, the hardware side of webOS is, after disappointing sales, being shut down, just maybe to be reanimated under the umbrella of the soon-to-be spun out PC business. And it’s building one last run of the heavily discounted TouchPad, to rid itself of parts it has already paid for. It’s complicated!

As it happens, a pair of internal HP memos — which were leaked to PreCentral.net, a site devoted to the Pre, the first smartphone to run webOS — appear to outline how the webOS split is going to go down.

According to the memos, the webOS software business — that is, the bit that HP still wants — is being moved inside HP’s Office of Strategy and Technology, or OS&T, which is headed up by Shane Robison, HP’s executive vice president and chief strategy and technology officer. One of the two memos was written by him.

And what of the webOS hardware group? It will remain within the Personal Systems Group, which is HP’s formal name for the personal computer business it says it wants to spin off as a separate company.

It’s not the first time that the hardware and software halves of what used to be Palm have been split into separate entities. Students of the history of Palm well remember the strange odyssey that began in 2002, when Palm — less than two years after spinning out of its prior parent, 3Com — split into two companies: A hardware company called PalmOne, and a software company called PalmSource.

The idea was that the two halves of the business had different agendas. The software business saw opportunities in licensing the PalmOS to numerous hardware manufacturers. In time, several companies took out licenses: Handspring, launched by Palm’s original founders Jeff Hawkins and Donna Dubinsky, was the original licensee, and others followed. Sony made a bunch of handhelds sold under the Clie brand; IBM sold something called the WorkPad; Garmin made a GPS-enabled PDA that could also help keep you from getting lost. Eventually a company called Access bought it and still operates it to this day.

Meanwhile, the hardware business soldiered on under the name PalmOne. In 2003, it acquired Handspring, bringing back its original founders, and in 2005 it bought back the rights to use the Palm name. Then, in 2007, came the big investment from Elevation Partners, the creation of webOS and, well, you know how that turned out.

Of course I have something to say about the news yesterday that AOL would be a key investor in a new early-stage venture fund being started by TechCrunch’s perpetually petulant editor Michael Arrington — with a big, fat and decidedly greasy assist from a panoply of Silicon Valley’s most powerful VC firms and angel investors.

Arrington has previously called me “chief whiner” — oooh, buuuurn, although fair enough, since I have compared him to an egomaniac turtle named Yertle in the past — about my nagging him over the importance of upholding standards of fairness and ethics in journalism.

So as not to let him down, let me begin the whining.

First, my initial reaction when I first heard about the deal: Ugh. Sigh. Hopelessly corrupt. Now 100 percent more icky! A giant, greedy, Silicon Valley pig pile.

I was upset.

By early evening, after my kids told me to chillax, my dark mood had changed to accept that the transaction — however profoundly distasteful to me — was part and parcel of the insidious log-rolling, back-scratching ecosystem that has happened in every other center of power in the universe since the beginning of time.

And so it goes in Silicon Valley.

In fact, the creation of a $20 million investment kitty that Arrington has dubbed CrunchFund is simply the formalization of a long-standing arrangement that has already been going on since he founded his popular tech blog.

That is to say, in which the basic standards of journalism are first warped by calling it newfangled truth-telling and then endlessly corroded by using a wily and unusually aggressive combination of favors and threats to extract, from start-ups and VCs in need of press, both exclusive access and information.

And now, inevitably, money.

This could have been a lot cleaner, of course, by Arrington simply resigning from TechCrunch, becoming a VC and perhaps starting a new blog where his agenda is much clearer, from which he could huff and puff away as he does with much entertaining gusto at real and (mostly) imagined slights.

There is certainly precedent for VCs blogging, including Fred Wilson, Brad Feld and Ben Horowitz. And, despite my criticisms about ethics, it is clear that Arrington is a talented writer whose unique voice would be even stronger if it was truly seen as separate from what has become a news organization.

But because of his obvious need to be the center of attention — requiring the ermine kingmaker mantle and foisting his patented I’m-here-to-tell-it-like-it-is attitude on us all — that appears to be impossible.

(By the way, I await Arrington’s usual inane rant about the fictional conflicts of interest related to my gay Google marriage anytime now in 3 … 2 … 1, always and purposefully leaving out the pertinent facts that I can only wed one person, get no financial benefit and am also a prominent critic of the scary search behemoth, while he can make a badillion questionable and grossly tangled investments.)

Personal annoyances aside, what’s most interesting here is the group of Silicon Valley power players who lined up to bow and scrape and then hand over a small pile of dough to the blogger who would be king.

They include: Sequoia Capital, Redpoint Ventures, Kleiner Perkins, Greylock Partners, Austin Ventures and Accel Partners, as well as individual investments from partners at Benchmark Capital and Andreessen Horowitz, entrepreneur Kevin Rose and DST Global’s Yuri Milner. And, of course, the inevitable Arrington BFF Ron Conway.

Holy googa mooga, that would be, well, everyone, except Ashton Kutcher and Justin Timberlake (who will surely appear soon enough).

As one person also pointed out to me, I don’t recall this many competing VCs investing in one company, let alone another venture fund.

It goes without saying that the reasons they all decided to jump in this fetid pool with abandon are quite varied, if all entirely compromised.

One investor told me — off the record, naturally — that he thought it would be an interesting experiment to see what happened and so he wanted in, especially since everyone else was doing it.

Another well-known VC said that there is no downside to being financially affiliated, especially in attracting talent to its start-ups, with Arrington and, by extension, TechCrunch.

The well-respected Reid Hoffman of Greylock was the only one brave enough to talk on the record, explaining the reasoning pretty clearly:

“Techcrunch will get some real deal flow from entrepreneurs that we would otherwise not see, because they have established a prominent position as the SV/Tech industry information feed. As many tech entrepreneurs read it — both within Silicon Valley and globally — and view the information news feed to be their target for announcing themselves to the world, Crunchfund will have access to deal flow to these diverse and early stage companies. Some of these companies will be the kind of early stage companies with billion-dollar potential that Greylock invests in.”

There you have it: No one can afford to be out of the deal flow in these times, even if it means cutting corners.

While TechCrunch’s owner, AOL, said Arrington will no longer be managing editor, with only writing duties at the site he dominates and with no editorial control, Hoffman’s use of TechCrunch for CrunchFund was accurate, because in the eyes of many they are interchangeable.

That’s due to the fact that Arrington still breaks or is clearly the source for important stories on the site and, more importantly, is the big swinging dude who attracts all the eager entrepreneurs to the party. He is the fulcrum of that site, even as it has grown.

And so it will remain, I am guessing, no matter how much AOL insists it will not be so, because the easy questions pile up quickly:

Will Arrington keep doing what are clearly news stories, for example, even though he protesteth too much — as he did in the New York Times yesterday — that he is not a journalist?

And, if so, is it right for him to do so given his insider status, creating a nonparity of sourcing and crystal clear conflicts of interest?

Most of all, can he resist his palpable love of news-breaking and scoops, even if he gets them in ever more unseemly ways?

As if to make it all pretty, Arrington told reporters yesterday that he has put a clause in his limited partnership agreement so he can report on anything he likes, and in any way, about his investors and their companies, however confidential, except those he invests in.

O joyous day! Freedom of the press is preserved and our sacred First Amendment can breathe a sigh of relief, now that it is enshrined in an unholy blogger-VC LP agreement.

After pausing for a moment so that Thomas Jefferson and Edward R. Murrow can stop spinning in their graves, you can go down this road for many increasingly bumpy miles, which only becomes more twisted and confusing as it continues.

I finally talked to one investor in CrunchFund, who said simply and honestly: “It’s not that much money, so who cares?”

Indeed, who does care anymore about crossing what had long been very bright lines in journalism and, if you want to get all cosmic, in life?

Obviously, most of all, not AOL, or its CEO Tim Armstrong, or its head of content, Arianna Huffington. The pair, for whatever reason, decided to make a startling exception for Arrington from a rule that explicitly bars reporters at its media units from investing in the companies they cover.

That happened after he recently did a complete 180 from a previous decision to stop investing and jumped right back in, leaving Armstrong and Huffington to clean up the ethical mess.

They only made it worse, with their decision to throw journalism under the bus by letting Arrington do as he pleased, while touting how important it was for other content sites at AOL to remain more pure.

In the spirit of full disclosure, these kinds of ethical lapses are endemic these days in journalism. Case in point: The appalling phone-hacking controversy taking place at News Corp.’s News International unit in Britain.

While I cannot speak for Dow Jones, I can say that the behavior in another News Corp. property certainly takes its toll on those who adhere to higher standards at the company, especially when it comes to morale.

Thus, I can imagine how others feel at AOL — including those you-know-who-you-are silent ones at TechCrunch — who can’t and, more to the point, wouldn’t make the deals Arrington has been allowed to get away with.

It is not a good feeling, I can assure you.

And, while I have not spoken to her about it, I’d imagine that Huffington cannot be thrilled to be pushing for better journalism at AOL and trying to burnish her cred by hiring some top reporters, while also having to deal with this.

That’s okay, because Armstrong was perfectly willing to do the awkward pretzel-twist needed to explain away the controversial situation, also in an interview with the Times:

“TechCrunch is a different property and they have different standards. We have a traditional understanding of journalism with the exception of TechCrunch, which is different but is transparent about it.”

In this case, Tim, I am sorry to inform you that transparency is a complete canard and is more likely to end up covering up a lot more transgressions than it ever will reveal.

And, essentially and lazily sloughing it off by saying, “That’s just Mike being Mike,” is not going to cut it, at least not with me.

Not that any amount of tsk-tsking about it matters, I suppose, as Arrington finally gets his fervent Pinocchio-on-a-star wish to be a real-boy VC, can add yet another tainted buck to the pile of billions his venture pals already have, and just call it another typical day in Silicon Valley.

Still, when you are the designated whiner-in-chief, it is pretty much all one can do.

In a bold and definitive move, AOL is paying $315 million, mostly in cash, to buy the Huffington Post, one of the Web’s most prominent news and opinion sites.

As part of the deal, Huffington Post co-founder Arianna Huffington (pictured here)–who was derided by some when she co-founded the left-leaning site in 2005 with investor and well-known communications exec Kenneth Lerer–will become president and editor in chief of the Huffington Post Media Group within AOL.

The deal was signed late this afternoon, and the board of directors of each company and shareholders of the privately held Huffington Post have approved the transaction.

In an exclusive video interview BoomTown conducted earlier today in Dallas, just before Super Bowl XLV, both Armstrong and Huffington were jovial that the whirlwind deal, begun in November, actually worked out so quickly.

Perhaps giddy, they hit upon a common motto:

“One plus one equals 11.”

Get it? One and one next to each other is the number 11!

Let’s move on, shall we?

AOL said it is expected to close in the late-first or early-second quarter of 2011.

Once culminated, it will put Huffington in charge of all AOL content and other properties, including well-known names such as Engadget, Moviefone, MapQuest and TechCrunch.

She said she plans to move to New York from Los Angeles, although she will also maintain her longtime Brentwood home there.

And content for all these sites will be integrated deeply into the Huffington Post, giving it a huge new infusion of editorial material.

More to the point, the flashy acquisition–which essentially came together in less than two weeks in January–will become the linchpin of AOL CEO Tim Armstrong’s aggressive, if risky, strategy to focus the long-troubled company as a content and advertising powerhouse.

For AOL, the deal gives it a popular branded site that is very good at generating lots of page views and impressions very efficiently–which is the company’s whole thrust these days.

That means lots more ad inventory to sell and an injection of content talent, giving AOL the scale it desperately needs.

The move also obviously gives AOL a much-needed editorial identity and cohesion, which it doesn’t really have.

In fact, many think AOL needs a rallying point to bring clarity to its hodgepodge of recent acquisitions that all center on the notion that a strong company has yet to emerge in the premium content space.

Here is a mock-up of the front page of AOL tonight (click on it to make it larger):

While it all makes for a riveting narrative by the charming Armstrong, AOL still has not delivered the business turnaround promised after its spinoff from Time Warner in 2009.

Wall Street, which has given Armstrong a lot of rope, has become more impatient of late to see results–especially more robust increases in its display advertising business, as its access business dies off–after AOL spun off from Time Warner in 2009.

In its quarterly report last week, AOL reported earnings of 61 cents a share on revenue of $596 million.

But, as MediaMemo’s Peter Kafka wrote:

The bigger picture is that Armstrong’s turnaround is still in progress. Ad revenue was down 29 percent in the last quarter, although that number is worse than it looks. A big chunk of the decline comes from moves AOL has intentionally made that will cut revenue in the short run in return for more profitable sales down the road.

A more representative data set for Armstrong are his display ad sales, which are down 14 percent overall and eight percent in the U.S..

The bad news is that the rest of the Web ad industry is well into rebound mode; the good news is that AOL has trained Wall Street to expect numbers like these. If you’re waiting to see positive sales numbers, Armstrong said during AOL’s earnings call this morning, wait until the second half of this year.

In any case, the move is a good one for the Huffington Post since it will vault it to the next level of growth.

Other companies, such as Yahoo and NBC Universal, had looked at the company as a purchase target, and many expected it to eventually sell out to a larger company.

Sources close to the Huffington Post said that that outcome seemed the most likely, and the recent expansion of the site and its audience made it a good time to do a deal now.

Talks with Yahoo last year went nowhere, sources said, but Armstrong was not as slow to act.

Indeed, the actual deal happened quickly, said Armstrong and Huffington in a video interview with BoomTown earlier today (which you can see here).

The pair started talking in early November of last year at the Quadrangle Conference in New York and continued their discussions through the holidays.

Armstrong made the official offer to Huffington by phone in January, while she was at the World Economic Forum in Davos, Switzerland, and he was snowed in in New York.

Five time multiple to the Huffington Post’s upward of $60 million in expected revenue for the coming year, and nearly 10 times the $31 million for 2010, the offer was accepted quickly.

AOL used cash for $300 million of the purchase and $15 million in stock for the rest.

“The idea of turning a fire hose of traffic onto our content made enormous sense,” said one person close to the situation. “Everything is changing so fast, it seemed like the time was right.”

An IPO was also considered for the Huffington Post, sources said. But since the site only recently moved into profitability–although barely–such an event would have been farther out.

That’s despite the fact that the Huffington Post has seen fast-growing traffic and influence, spurred in part by Huffington’s larger-than-life persona in both the mainstream media and blogosphere.

The wide-ranging site–which has added a number of content areas in recent years beyond its flagship political offering–currently has almost 26 million unique monthly visitors, according to recent stats, moving in close range to established news organizations such as the New York Times.

That kind of success seemed unlikely when the Huffington Post launched on May 9, 2005, positioning itself as as a liberal counterweight to the popular right-leaning Drudge Report.

But the Huffington Post’s heady mix of celebrity bloggers, personality and voice, as well as aggressive curation of links from other sites, quickly caught on.

To fund its efforts, the New York-based online media company has raised $37 million from angel investors such as Lerer–the largest individual shareholder, followed closely by Huffington–and venture firms such as Greycroft Partners, Softbank Capital and Oak Investment Partners.

The growth has not been without controversy around issues such as lack of payments to bloggers who contribute and accusations that the site uses too much content from other Web sources when linking.

And Huffington herself has also been a lightning rod, which has been both positive and negative for the site.

But, there is no question she is one of the Web’s most prominent players, along with writing books, appearing on television frequently and being a fixture at high-profile events in New York, Los Angeles and Washington, D.C.

That includes a never-ending panoply of parties that feature a potent mix of movie stars, corporate poo-bahs, glad-handing politicians and lots of journalists from all over the media.

In fact, full disclosure, I was at one of those parties this past weekend for actor Colin Firth and others involved in the making of the Oscar-nominated film “The King’s Speech.” (Apropos of nothing, actor Helena Bonham Carter is as smart as you would expect, but much more delicate.)

As part of the AOL deal, CEO Eric Hippeau–who has been integral to professionalizing the business and will be joining Lerer Ventures–and Chief Revenue Officer Greg Coleman will leave the Huffington Post.

Ironically, Coleman was replaced by Armstrong as head of ad sales at AOL after he took over as CEO. Coleman got a big payout and will now apparently get another.

But the rest of the 200 Huffington Post employees are moving over to AOL with Huffington, who Armstrong hopes will be the company’s ace in the content hole going forward.

There are likely to be changes to come too at AOL, within weeks, especially in its content-side management and site staffs.

AOL provided some quotes in support of the deal from prominent Internet figures who know Huffington well.

“Arianna is one of the preeminent authors and editors of our time, and Tim has a remarkable track record of business success,” said Facebook COO Sheryl Sandberg. “Bringing them together creates tremendous potential for AOL.”

And Twitter co-founder Biz Stone said:

“Editorial vision and leadership are essential in order to transmute our shared cacophony of voices into a valuable dialogue. Arianna’s expertise, empathy, and entrepreneurial enthusiasm forms a kind of alchemy turning mere words and phrases into powerful expressions of humanity.”

Inter-Internet harmony: How sweet!

Here is the official press release, with all the details, but there is also an 8 am ET AOL conference call tomorrow:

AOL AGREES TO ACQUIRE THE HUFFINGTON POST

Acquisition Will Solidify AOL’s Strategy of Creating a Premier Content Network With Local, National and International Reach

Arianna Huffington To Lead Newly Formed The Huffington Post Media Group Which Will Integrate All Huffington Post and AOL Content, Including News, Tech, Women, Local, Multicultural, Entertainment, Video, Community, and More

The New Combined Media Group Will Reach 117 Million Americans and 270 Million Globally

Group Uniquely Positioned To Redefine the Future of Brand Advertising and Marketing For an Engaged and Influential Audience

New York, NY–February 7, 2011–AOL Inc. [NYSE:AOL] announced today that it has entered into a definitive agreement to acquire The Huffington Post, the influential and rapidly growing news, analysis, and lifestyle website founded in 2005, which now counts nearly 25 million unique monthly visitors*.

The transaction will create a premier global, national, local, and hyper-local content group for the digital age–leveraged across online, mobile, tablet, and video platforms. The combination of AOL’s infrastructure and scale with The Huffington Post’s pioneering approach to news and innovative community building among a broad and sophisticated audience will mark a seminal moment in the evolution of digital journalism and online engagement.

The new group will have a combined base of 117 million unique visitors a month in the United States and 270 million around the world**. Following the close of this transaction, AOL will accelerate its strategy to deliver a scaled and differentiated array of premium news, analysis, and entertainment produced by thousands of writers, editors, reporters, and videographers around the globe.

As part of the transaction, Arianna Huffington, The Huffington Post’s co-founder and editor-in-chief, will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and more.

“The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers,” said Tim Armstrong, Chairman and CEO of AOL. “Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.”

Armstrong continued, “Arianna is a singularly passionate and dedicated champion of innovative journalistic engagement, and a master of the art of using new media to illuminate, entertain and enhance the national conversation. Arianna is a remarkable person and she will continue to create remarkable outcomes for the combined company.”

“This is truly a merger of visions and a perfect fit for us,” said Huffington. “The Huffington Post will continue on the same path we have been on for the last six years–though now at light speed–by combining with AOL. Our readers will still be able to come to the Huffington Post at the same URL, and find all the same content they’ve grown to love, plus a lot more–more local, more tech, more entertainment, more finance, and lots more video. We are fusing a legendary and powerful new media brand with a vibrant, innovative news organization, known for its distinctive voice, a highly engaged audience, an expertise in community-building, and a track record for demystifying the news and putting flesh and blood on the data while drawing our audience into the conversation.”

Huffington continued, “By uniting AOL and The Huffington Post, we are creating one of the largest destinations for smart content and community on the Internet. And we intend to keep making it better and better.”

Kenneth Lerer, The Huffington Post’s Co-Founder and Chairman, said, “The Huffington Post team has created a potent brand with the proven track record of knowing how to grow traffic, inform and entertain its readers and build a one-of-a-kind online community. Add that to the powerful scale and resources of AOL and you have the perfect combination for today and the future. Together these two companies will be a premier online content provider. From local citizen reporting through AOL’s Patch, to The Huffington Post’s national reporting on politics, business and culture, consumers will have access to everything they want whenever they want it.”

AOL has agreed to purchase The Huffington Post for $315 million, approximately $300 million of which will be paid in cash funded from cash on hand. The Huffington Post is privately owned by its two cofounders, as well as a group of investors. The proposed transaction is subject to customary closing conditions, including receipt of government approvals. The boards of directors of each company and shareholders of The Huffington Post have approved the transaction. The transaction is expected to close in the late first- or early second-quarter 2011.

The Huffington Post over-indexes on educated, affluent users, reaching the key decision makers in C-suites around the globe. The Huffington Post speaks to this influential audience via a host of prominent voices on its group blog. Among those who have blogged on The Huffington Post are: President Barack Obama, Secretary of State Hillary Clinton, Mayor Michael Bloomberg, Larry Page, Diane Sawyer, Buzz Aldrin, Nora Ephron, Bill Maher, Madeleine Albright, Robert Redford, Katie Couric, Neil Young, Rahm Emanuel, Mia Farrow, Senator Russ Feingold, Senator Al Franken, Ari Emanuel, Harry Shearer, Senator John Kerry, Representative Nancy Pelosi, Madonna, Lawrence Summers, Jamie Lee Curtis, Ryan Reynolds, Craig Newmark, Alec Baldwin, Aaron Sorkin, Natalie Portman, Scarlett Johansson, Russell Simmons, Sean Penn, Bill Gates, Norman Lear, Charlie Rose, Elizabeth Warren, Tavis Smiley, Sheryl Sandberg, George Clooney, and former President Bill Clinton. And the audience speaks back, generating four million comments a month***.

The Huffington Post’s affluent, influential audience, that is growing at a rate of 22 percent (December 2009 vs. December 2010)****, when combined with AOL’s massive scale, video offerings and local expertise, will represent an incredibly desirable demographic for a broad range of advertising partners across the board.

And here is Armstrong’s internal memo to the AOL staff:

AOLers,

We are taking another major step in the comeback of AOL. Today we are announcing that we have agreed to acquire The Huffington Post, one of the most exciting, influential, and fastest growing properties on the Internet. We believe in brands, quality journalism, and the positive role of communities in the world–The Huffington Post shares our values and the combination of the two companies will create the premier global and local media company on the Internet.

Co-founded six years ago by Arianna Huffington and Ken Lerer, The Huffington Post has grown to become an industry leader–one of the Web’s most popular and innovative sources of online news, commentary, and information. Arianna and team have created a brand and a destination that focuses on the consumer experience. By combining The Huffington Post with AOL’s network of sites, thriving video offerings, local expertise and enormous reach, we will create a company that is laser-focused on serving our audiences across every platform imaginable–social, local, video, mobile and tablet.

The Huffington Post is core to our strategy and our 80:80:80 focus–80% of domestic spending is done by women, 80% of commerce happens locally and 80% of considered purchases are driven by influencers. The influencer part of the strategy is important and will be potent.

The Huffington Post is a strong influencer brand and it attracts a valuable audience, including a great focus on women’s content. In addition, Arianna Huffington is a world-renowned expert on women’s topics and issues, and has enabled The Huffington Post to grow rapidly by continually developing new audiences.

In the local area, the combination of the two companies will create a scaled connection between global and local communities on one platform. This will create a new way for people to get local and global information in a timely and entertaining way.

The Huffington Post will join the family of AOL Brands that are destinations for an influencer audience, brands like TechCrunch, Engadget, AutoBlog, and Moviefone. Uniquely, The Huffington Post is the platform for influential people–the people that drive trends, commerce, politics, entertainment, news, and information. Adding this strategic platform to our already strong network of sites, including the AOL homepage, has the potential to make AOL the most influential company in the content space.

Arianna Huffington is one of the most successful entrepreneurs in the Internet space and someone that is even more successful in building communities and relationships in every corner of the globe. The Huffington Post and Arianna have created a company that has partnered with the most successful and well-known leaders in all aspects of society that touch important topics to give consumers direct access to the most influential decision makers and community leaders.

This acquisition will create a high-quality and diverse digital ecosystem encompassing local, national and international news, politics, entertainment, technology, fashion, sports, health, personal finance, green, lifestyle, the arts and more. This deal will combine the amazing talent at AOL with the innovative and talented staff of The Huffington Post. Here are just a few high-level points around what this deal brings to market:

* Together, AOL and The Huffington Post will have 117MM unduplicated domestic monthly UVs, and ~270MM monthly UVs worldwide (according to comScore Dec 2010).

* The Huffington Post is one of the fastest growing web properties on the Internet. It grew 22% last year–that’s faster than Twitter, which grew 18% – and 15x as quickly as the Internet grew last year (comScore Dec ’09-’10).

* Both AOL and The Huffington Post count powerful, affluent users among their top loyal visitors, significantly over-indexing in $100K+ income users.

* AOL passed Hulu in unique viewers on video in the fourth quarter of 2010; video views on AOL are up 400 percent year-over-year.

* Between AOL’s innovative Project Devil ad unit, engaging users for 27 seconds longer than traditional display ads, and The Huffington Post’s highly-vocal community, with 4MM+ comments per month, we will marry attention-grabbing content and brand experiences for both advertisers and consumers.

In the local area, the combination of the two companies will create a premier global/local syndication network at scale. This will create a new way for people to get local and global information in a timely, informative and entertaining way.

To maximize the strategic advantage of this great deal, we will be creating a new group at AOL called The Huffington Post Media Group. Within this group will be AOL Media, AOL Local & Mapping, AOL Search and our new friends at The Huffington Post. We will continue operating the towns structure, AOL.com and HuffingtonPost.com.

I’m thrilled to announce that Arianna Huffington will join AOL’s executive team as President and Editor in Chief of The Huffington Post Media Group. We have asked Jon Brod to lead the overall operational integration on the AOL side of the combined entities. Jon will lead the local group integration and work closely with David Eun and the teams in AOL Media. We will work quickly with The Huffington Post to create a combined organizational design to coincide with the deal closing. While we wait for the required regulatory reviews to be completed and the transaction to close before implementing the design, we will move very quickly to plan the details of the integration of the two companies. To this end, we will announce the new organizational structure as soon as possible.

In the meantime, we will continue creating great content and products for our consumers within the town structure and stay laser-focused on the aggressive goals we have set for our winter luge. We are on the right track and will continue our weekly operating cadence and town structure to drive successful results against our company goals.

Here’s a special message for all of you we taped to welcome The Huffington Post and Arianna to our AOL Family:

http://today.office.aol.com/company-news/2011/02/aol-agrees-buy-huffington-post

And of course we wanted to welcome Arianna to our “You’ve Got” video of the day–check her out on AOL.com.

We will be holding a company all hands meeting to address your questions related to today’s exciting news. We will video conference from our New York office on the 6th Floor at 9:30 AM ET and will be joined by Arianna Huffington and key executives from her organization. We will also be holding a call for our west coast offices at 2:00 PM ET and for our Patch offices at 2:45 PM ET. See below for meeting info (conference rooms will be sent out shortly).

AOL is playing to win…and The Huffington Post and AOL will occupy a unique place in the future of the Internet. Let’s go get it done.

–TA

(More full disclosure: As has been previously reported by MediaMemo, All Things Digital had the briefest and most preliminary of discussions with Armstrong about moving to AOL last year, while exploring several other options. All’s well that ended well: We stayed at Dow Jones, which is owned by News Corp.)

For back story, Twitter has for the last year sold access to its “Firehose” real-time stream of every tweet to companies like Google and Microsoft. It gives other developers access to a random sampling of tweets (a.k.a. the “Gardenhose” and “Spritzer.”) Then in November it gave Gnip permission to sell more precise sampler products like the Decahose (10 percent of tweets for $5,000 per month).

But many companies, especially social media monitors, would rather get just the relevant tweets from the total data set. With Gnip’s Power Track they’ll be able to avoid Twitter’s polling rate limits and get exactly what they want, for a fee.

As for the actual Twitter users slaving away to produce those 140 character updates? No, they don’t get a cut.

This story was updated to correct Power Track pricing.

The company will soon give all users the option to use Facebook entirely over HTTPS, and recommends they do so if they use public Internet access points. It will also show members social captchas for authentication–where they must identify a few of their Facebook friends’ faces–whenever suspicious activity is detected on an account.

Facebook warned in a blog post that using HTTPS will slow down the site and isn’t compatible with all features, including some externally developed Facebook applications. It will roll out HTTPS access “slowly over the next few weeks” via its settings page, the company said.

Facebook still faces other ongoing security problems, such as spam, virus messages and wall posts. CTO Bret Taylor said yesterday the company had cut platform spam by 95 percent in 2010, but I believe he was referring to notifications and posts from applications, especially social games. Meanwhile, Facebook CEO Mark Zuckerberg’s public fan page was apparently hacked into yesterday and has since been taken down.

Please see the disclosure about Facebook in my ethics statement.

I have a 3GS iPhone. Is there a way to connect it to the Internet cable found in hotel and motel rooms?

A:

Not that I know of. But you can do this indirectly by creating your own Wi-Fi network from the wired connection in the room. There are two ways to do this.

One possibility is to carry a small portable router. These are small devices that plug into the wired connection and propagate a Wi-Fi signal in the hotel room that the iPhone (or other devices, like laptops and tablets) can use. A second option is to plug a laptop into the physical connection and use it as a Wi-Fi base station by setting up what’s called an “ad hoc” or computer-to-computer Wi-Fi connection. Steps for doing this, which can be a bit techie, differ depending on whether you use a PC or Mac.

Q:

I have been struggling with a hard drive space shortage for at least a year. I have deleted duplicate emails. I have deleted videos and word files and put them on a stand alone hard drive. Do you have any other suggestions?

A:

If you don’t want to, or can’t, replace your laptop, and don’t want to be tethered to your external hard disk, you might look into buying a new, larger, internal hard disk.

Many stores and consultants can sell and install larger hard disks, and even transfer the data from your old one.

Q:

I have thousands of photos on my computer and external hard drives. I’m in the process of trying to organize them on one hard drive and noticed that there are many duplicates between the different devices. Is there one program that you recommend that reliably detects and allows the removal of duplicate files?

A:

You might try using Google’s Picasa to sweep the drives, locate the photos, and display them.

The program has a feature that can avoid importing duplicates. Once imported, if there are still duplicates, Picasa offers methods to hide or actually delete them from your disk. Information on this is at http://bit.ly/8YKTzy.

You can find Mossberg’s Mailbox, and my other columns, online for free at the new All Things Digital website, http://walt.allthingsd.com.

At a very first glance, some of the new rules imposed by the feds might seem like they require the new company to offer up programming to any online player that wants to pay up.

And technically, they do. But the new rules have plenty of conditions and limits. So the bottom line is you’re not much more likely to get access to “30 Rock” via YouTube, or CNBC via iTunes, then you were before.

The new FCC and DOJ rules do give, say, Google the ability to buy access to some of NBC U shows or channels. But it would require Comcast’s competitors to do the same thing, first.

That is: Unless the people who are reluctant to put their stuff online because they don’t want to upset Comcast go ahead and put their stuff online, Comcast doesn’t have to, either. So it’s theoretically possible, but not probable.

And if it happens, it will happen haltingly. If Viacom sells someone online access to its MTV lineup of reality shows, that might require Comcast to offer up its reality show lineup on Bravo. But it wouldn’t entitle an online outlet to the police procedurals on USA.

The government also gives the option to, say, Netflix, to set up shop as another cable operator, and buy access to all of NBC Universal’s programming. But it would have to buy all of it–just like Time Warner Cable and Cablevision do when they make a carriage deal for NBC U’s shows.

And again, Comcast wouldn’t have to do that unless its peers did. Which means that if Netflix really wanted to set up shop as a direct competitor of the cable guys, it can do so. But it would have to operate exactly like the cable guys, just like the satellite guys did when they entered the market a couple of decades ago.

So if Netflix, or Apple or whoever really wants to offer a full suite of cable programming, at cable prices, it could. But that would be very, very expensive: Analyst Rich Greenfield estimates that the bill for NBC U’s programming alone would run a new entrant $1 billion a year.

Just as, or even more, important, is that those kind of bundled, take-it-or-leave-it deals are exactly the kind of thing that the cord-cutting crowd complains about.

They don’t want to have to pay for USA and Bravo and Syfy and MSNBC–they want to pick and choose channels, or shows. And pay a lot less.

“I don’t think cord-cutting was a major focus” of negotiations, Comcast EVP David Cohen said during a press conference this afternoon. And that may be true!

But the net result reads very much as if Comcast wanted to make sure the government didn’t force it to break its business model. And if that was the case, it got what it wanted.

It has given wireless carriers in the country the ability to intercept messages sent over its BlackBerry Messenger (BBM) service and BlackBerry Internet Service (BIS) if requested by the government. “The lawful access capability now available to RIM’s carrier partners meets the standard required by the government of India for all consumer messaging services offered in the Indian marketplace,” RIM said in a customer update.

Well, not quite.

The Indian government also wants access to communications sent over RIM’s corporate service. The company hasn’t yet provided that and continues to argue that it’s impossible to do so.

“No changes can be made to the security architecture for BlackBerry Enterprise Server customers since, contrary to any rumors, the security architecture is the same around the world and RIM truly has no ability to provide its customers’ encryption keys,” RIM explained in its customer update.

In other words, the solution RIM has provided is a partial one. It still hasn’t met one of the Indian government’s key demands. Will this concession on BBM and BIS be enough to mollify it?

However, those ready to throw away their MiFi should remember that there’s an important caveat: Because the CDMA network doesn’t handle voice and data at the same time, the hotspot works only when you aren’t talking on your iPhone.

If a call comes in while people are connected to the iPhone-created hotspot, data access ends until the call is done.

Meanwhile, it’s worth noting that Boy Genius Report says that the hotspot may not remain a Verizon exclusive. The enthusiast site says that the next version of the iPhone operating system will add support for the hotspot feature. However, to actually be used in such a manner, hotspot capability will also have to be enabled by one’s wireless carrier.

AT&T iPhone customers will certainly remember that the iPhone supported tethering to a computer well before the company enabled the feature for its customers.

An AT&T representative said the company is “exploring” the possibility of such a feature but declined to comment further.

I am considering buying an iPad, but am wondering if I should wait for the second edition which is rumored to be coming soon. What do you advise?

A:

I regard the current, original iPad as an excellent product, and can’t say you’d go wrong with it. But while Apple is famously secretive, I’d be surprised if there isn’t a new model announced in the next few months that will have added or improved features. There’s wide speculation, for instance, it will gain a camera or two. The company has a long history of improving its products, and, in the case of the iPad, must keep making it better to deal with a host of coming tablet rivals. So, if you can wait a few months, I’d do so.

Q:

I see that many of the newer wireless routers with attractive features do not support printer sharing. Does that mean you cannot connect a printer via Ethernet cable to the router and be able to access that printer through the wireless network? Why do so many of the newer routers not support printer sharing?

A:

In the context you seem to be using it, the term “printer sharing” referred to plugging in an otherwise non-networkable printer via USB to a router, which would then make the printer usable over the network. I presume that this feature has declined in popularity as more home printers now have wired or wireless networking built in, and the latest Windows and Mac operating systems make it much easier to share even a printer without its own network features through the computer’s connection to the network. If the printer has wired networking built in, you should be able to plug it into one of the Ethernet jacks on most wireless routers and make it usable on your wireless network.

Q:

I have an almost two-year-old MacBook Pro. The hard drive is nearly full, and I wondered if you knew of any tricks to free up some space. I’m particularly interested in cost-effective fixes.

A:

One useful free utility for freeing up space on a Mac is called Monolingual, and is available at http://bit.ly/dqTCSC. This little utility allows you to remove all the obscure files on a Mac that allow the computer to operate in languages you can’t read or don’t use. For instance, if you only speak and read English, you can erase the files that enable the computer to run in, say, Albanian and Portuguese. Its maker says this can free up hundreds of megabytes of space. I have tried it and it works. Of course, whether you have a Windows PC or a Mac, you can free up space in many other ways, such as by deleting files and programs you don’t use, archiving or deleting old email, and removing temporary browser files.

Email mossberg@wsj.com.

I can’t remember a year during which computer security stories jumped so readily from the tech and business pages to the front page.

The year 2010 was bookended by two such cases. It opened with Google’s disclosure that it had come under attack in China, an apparent attempt to penetrate the Gmail accounts of certain activists and journalists.

It ended with the WikiLeaks affair, which stemmed from the alleged theft by an Army private of classified documents stored on a government network.

And let’s not forget in mid-year came the story, as fascinating as it was sobering, of Stuxnet, a computer worm developed by parties unknown–although the smart money is on Israel–that penetrated and ultimately damaged equipment used in the Iranian nuclear program.

Computer hacking–which has for too long evoked images in the public mind-set of teenagers in basements taking digital joyrides–has finally revealed itself to everyone for what it has long been for those in the know: The domain of espionage, sabotage and possibly warfare.

In Google’s case, the attacks upon its systems raised questions about where it draws the line with authorities in Beijing about such matters as freedom of speech. When the attack was first disclosed, Google publicly mulled shutting down its operations in China.

Then in protest, it stopped censoring its search results, giving mainland Chinese access to the same search results available to residents of Hong Kong. Beijing responded by blocking access to Google’s site.

Finally, Google and China came to a new agreement, and Google appeared the loser in the battle of wills.

Computer security is one of those things that companies and governments say they take seriously, but never really seem to get a grip on, judging by the results.

In any case, there is no firewall or software in existence that could have prevented Bradley Manning from stealing the documents that he is alleged to have given to WikiLeaks. As a low-level Army intelligence analyst, he was a trusted insider who had access to this material in the course of his day-to-day job.

So, it was not technology that failed. The failure was one of internal policies that allowed him access to data not relevant to his position.

Any employee of a midsize company can see how wrong that is. Human-resources documents are limited only to those who work in that department. The same is true of people who work in the legal office, business development department and so on.

But it apparently didn’t occur to anyone in government to limit the access to what became the WikiLeaks cache to people who worked only for or closely with the State Department.

If it turns out that thousands of companies are better at protecting their business secrets than the U.S. government is, then it’s not for nothing that the Central Intelligence Agency task force investigating the WikiLeaks affair bears the initials “WTF.”

Something similar was true of Stuxnet. One of the reasons the attackers, whoever they are, succeeded was that they used several so-called “zero day” vulnerabilities in Windows.

These are undocumented weaknesses that hackers save up for special occasions as a way to open a back door into a computer and then insert a troublemaking payload, like a worm. Zero day exploits are a fact of life, and once spotted in the world, they’re usually patched.

The Stuxnet attackers used as many as four zero day exploits as a way to get their worm into targeted computers. Microsoft, to its credit, made short work of fixing them once they came to light.

Even so, the Stuxnet worm burrowed its way from Windows machines into industrial control computers known as SCADA systems, which are widely used to run factories, power plants, pipelines and all sorts of other infrastructure essential to modern life.

The worm was designed to find a specific target: The systems controlling a set of as many as 1,000 centrifuges at the uranium enrichment facility in Natanz, and make them spin faster than they were supposed to.

The ability to attack industrial computers and cause them to do things they’re not supposed to do has been a lingering fear among security experts for years. Researchers at the U.S. Department of Energy in 2007 looked at the potential for attacks on SCADA systems and proved that it was possible to seize control of an electrical generator and then make it destroy itself.

They also found that many of these systems are connected to the Internet for what seem like good reasons: Convenience and cost savings. But these connections have also opened them up to the same kind of attacks that rattled the Iranian facility in Natanz.

Another Stuxnet-like worm, the thinking goes, could be used to bring down a power grid, or poison drinking water, or shut down an oil or gas pipeline. The good news is that such an attack is expensive–Stuxnet, by one estimate, cost $10 million to create–and requires a lot of specialized insider knowledge.

The bad news is that the Stuxnet source code is circulating in the wild for anyone to study. And as the WikiLeaks case shows, there are often insiders willing to take part in criminal schemes.

The other bad news? Securing these systems won’t come cheap.

If history is any judge, there will likely be a barrage of computer security companies that try to spin these incidents into opportunities to make a sales pitch. That’s what security companies do, after all.

But they usually miss the point. How can you plan for a vulnerability you’ve never seen? How can you stop an otherwise trusted insider from abusing their access to sensitive information? Both are fundamentally difficult problems for which there are no easy answers.

Spending money on last year’s security vulnerabilities is like preparing to fight the last war: Circumstances inevitably change, and they certainly will in 2011. New kinds of attacks will arise, and they will catch their targets by surprise.

And the public, like the CIA, will reasonably ask, “WTF?”

The unvarnished fact is that the networked society to which we’ve become accustomed in the last several years has a soft, vulnerable underbelly.

And the more we rely upon it, the more people with a combination of advanced technical skills and repugnant motivations are going to look for ways to turn it against us.

Some will do so as a means of making a personal profit. Others may see it as a way of advancing a political or ideological agenda.

But others will want to use theirs skills to do serious harm to innocent people on a large scale.

And the events of 2010 point the way to a world where that’s a more realistic scenario than it ever was before.

The release of funds follows a number of denial-of-service attacks earlier this week that were aimed at the document-leaking site’s providers. Most of the providers are now refusing to work with WikiLeaks after the U.S. government accused it of being in possession of documents that were provided in violation of U.S. law.

Yesterday, WikiLeak’s founder Julian Assange was arrested and denied bail in London. He’s accused of sexual misconduct in Sweden.

While PayPal is releasing the residual funds to WikiLeaks, it is not reinstating the ability for it to receive donations.

PayPal was caught up in a brief media storm this morning, after PayPal’s VP of Platform Osama Bedier gave the impression at LeWeb in Paris that PayPal had cut off access to WikiLeaks because of direct pressure by the U.S. government.

PayPal now wants to set the record straight, and says that it reviewed its policies regarding WikiLeaks after the U.S. Department of State publicized a letter stating that WikiLeaks may be in possession of documents that were provided in violation of U.S. law. The letter was published, and not sent to PayPal directly.

“PayPal was not contacted by any government organization in the U.S. or abroad. We restricted the account based on our Acceptable Use Policy review,” writes PayPal’s General Counsel John Muller. “Ultimately, our difficult decision was based on a belief that the WikiLeaks website was encouraging sources to release classified material, which is likely a violation of law by the source.”

Further, the company disclosed that twice before–in 2008 and 2009–PayPal reviewed and restricted the account associated with WikiLeaks “for reasons unrelated to our Acceptable Use Policy. As soon as proper information was received from the account holder, the restrictions were lifted.”

PayPal has been one of many providers that have been the victim of computer attacks, where servers were inundated with traffic. A spokesperson told us that it mostly affected the company’s blog site, and did not directly affect its payments services.

Other affected companies include MasterCard and Swiss bank PostFinance, The Wall Street Journal reports. No one is yet claiming responsibility for the attacks, but some say they are being organized by the ad hoc “Operation Payback.”

“We as members of Congress are never inclined to censor testimony in open congressional hearings,” Rep. Zachary Space, an Ohio Democrat, said when introducing the professor, Eben Moglen. “But Congress tries to foster highest level of decorum. I would ask you to avoid personal attacks against any companies or company employees.”

The hearing focused on the possibility of legislation requiring data companies and Web browser makers to provide a “do not track” tool allowing people to opt out of having their Web surfing tracked.

In written remarks submitted before the hearing, Mr. Moglen did not mention “do not track” but talked generally about online privacy. He criticized Facebook Inc. extensively, describing the social networking site’s privacy settings as “mere deception.” Facebook “has uncontrolled access to everybody’s data, regardless of the so-called ‘privacy settings,’” he wrote.

Read the rest of this post on the original site

The social version of Pulse will be available only for iPad for now, and is to be released this afternoon at 3 pm PT.

Palo Alto, Calif.-based Alphonso Labs, which makes Pulse, recently stopped charging for its apps and raised $800,000 in venture funding. CEO Akshay Kothari came up to San Francisco today and showed me the new iPad app.

The new Pulse for iPad gives users three feeds of Facebook information: Friends’ status updates, friends’ shared links and a historial look at the user’s own Facebook wall. In keeping with Pulse’s design, items are image driven and easily swipe-able, and expand into a second panel when users tap on them (see screenshots). Users can add comments or “Like” statuses and shared links as they would on Facebook, but this is more of an alternate way to consume content than a full-featured Facebook client.

As with other content feeds, Pulse caches the 25 most recent Facebook updates in each category, so a user who goes somewhere without Internet access could continue to read the content there.

As Alphonso grows from being some young folks with an interesting design approach into a real company, it is exploring closer relationships with publishers like the Huffington Post. “We don’t want to be a company that makes a news reader,” said Kothari. “We want to help people discover awesome content.”

Kothari added that with the influx of new users since Pulse went free two weeks ago, Alphonso is looking to improve content discovery by mining user data to show a “most-emailed” story list across all feeds.

He said his aim is to get away from the hierarchical structure of Web sites–where one must return to the homepage before moving on–and help people scan quickly through potential reading material. Ultimately, Kothari said, recommendations will be done through a balanced combination of machine and social factors.

Further reading: Earlier this year, Pulse was mentioned as an example app by Steve Jobs, then yanked from the App Store due to complaints about content usage by the New York Times. The app was quickly reinstated and Alphonso has an open dialogue with the Times about how best to send it new readers and subscribers, according to Kothari.

It would seem, then, that RIM is on target to provide India’s Home Ministry with a solution that will allow it to “lawfully” monitor BlackBerry services by the January 31 deadline the two parties have agreed on.

According to RIM, that’s not the case at all. In fact, says the company, it has no plans to make any changes to the security architecture for BlackBerry Enterprise Server customers since A) it professes to maintain a consistent global standard for lawful access requirements and doesn’t make specific deals with individual countries and B) it couldn’t provide its customers’ BES encryption keys to curious governments even if it wanted to.

“RIM has once again found it necessary to address certain media reports in India containing inaccurate and misleading statements and information based on unsubstantiated claims from unnamed sources,” the company said in a statement given to me. “Our customers can be reassured that the BlackBerry Enterprise Solution continues to be the gold standard for security-conscious organizations in India and worldwide. All our discussions with the Government of India have been and continue to be productive and fully consistent with the four core principles we follow in addressing lawful access matters around the world. Any suggestion to the contrary is false.”

Despite that rather terse rejoinder, RIM says its negotiations with India are moving forward. “Our discussions with the Government in India have been and continue to be productive and we fully expect the matter to be satisfactorily resolved,” said a spokesperson.

That’s an unprecedented move in the ongoing fight between cable providers, broadcasters and networks over programming fees. And the news was a big deal for the digerati and people contemplating the future of video.

But it doesn’t seem to have registered in the broader world, and you have to work hard to find any mention of the story in old-media news outlets. And even Cablevision, which uses any ammo it can in the PR fight against Fox and News Corp. (which also owns this site), hasn’t said much about it.

Here, for instance, is Cablevision’s newest message to its customers. If you fast forward to the 1:35 mark, you’ll find a two-sentence description of the Web blackout. But hard to believe many Cablevision customers will be sticking around to hear this one:

At the very least, blacking out part of the Web sounds scary. So why is Cablevision so (relatively) quiet on this?

Two theories, which are not mutually exclusive:

• It’s not worth complaining about because this stuff doesn’t really resonate with consumers–at least, not in the way that losing access to NFL games and play-off baseball does. No one spent Saturday evening or Sunday afternoon in a bar because they couldn’t watch “Glee” on Hulu.
• It’s not worth complaining about because Cablevision and News Corp. are actually on the same ideological page when it comes to this stuff. Neither side is really that happy about free TV shows on the Web. The only real difference the two sides have is about money: News Corp. wants to get more of it for its programming, while Cablevision wants to pay less.

On a related note: I still don’t understand why News Corp./Fox backed off so quickly on Saturday, once news of the blackout got out.

There’s no official reason, but there were mutterings about the technical difficulty of cutting off access to Cablevision TV subscribers while leaving Cablevision’s Internet-only subs alone. But hard to believe that News Corp. didn’t think that one through in advance. Same goes for any “optics”-related reason–the whole point of a move like this was to generate publicity, right?

EARLIER:
One new twist in the Cablevision-News Corp. fight: News Corp. has cut off Cablevision subscribers’ access to its shows on Hulu, the video site joint venture, as well as on its own Fox.com.

Here’s a screenshot from Fortune.com columnist Seth Weintraub, taken this afternoon when he tried to watch a Fox show on the site, which is co-owned by News Corp., Disney’s ABC and GE’s NBC Universal:

News Corp.’s comment, via Fox Networks PR guy Scott Grogin: “Fox.com and Fox content on hulu is unavailable to Cablevision subscribers.”

And here’s Hulu PR rep Elisa Schreiber:

Unfortunately, we were put in a position of needing to block Fox content on Hulu in order to remain neutral during contract negotiations between Fox and Cablevision. This only includes Fox content. All other Hulu content is accessible to Cablevision internet subscribers. We regret the impact on Cablevision customers and look forward to returning Fox content to those users as soon as possible.

This is an important escalation from News Corp. (which owns this Web site) in its fight to extract more dollars from its cable partners.

In the past, cable subscribers who couldn’t get Fox shows during fee disputes were still able to watch some of them via Hulu. I know that News Corp. has discussed shutting off access to the site during past fee fights, but as far as I know this is the first time they’ve actually done it.

It’s also a logical move, at least from News Corp.’s perspective.

If it’s trying to increase the pain felt by Cablevision and its subscribers, it may as well use every tool it has. And in the past, the Web has been used against programmers like Fox in these fights: Last year, when Time Warner Cable was fighting with News Corp., it prepared a video showing customers how to find their favorite shows on sites like Hulu.

But while the move is certain to rile up the digerati (astonished industry executive to me, over the phone, just now: “That is crazy!) I’m not sure how much real impact it will have in the fight.

News Corp.’s most valuable weapon is access to the Phillies-Giants playoff game tonight, and the New York Giants-Detroit Lions game tomorrow.

Both are scheduled to air on Fox, and many of Cablevision’s three million subscribers who live in the New York area will holler loudly if they can’t see them. But they wouldn’t be able to see them on Hulu or Fox.com, anyway.

Instead, those sites are used to show reruns of Fox broadcast shows. That means Cablevision subs can’t see Sunday night’s episode of “The Simpsons” on Monday, but that’s not the same kind of impact.

The deadline for compliance had been Oct. 31, but India’s Home Ministry has extended it to give RIM (RIMM) a bit more time to provide a solution that would allow it to “lawfully” intercept encrypted corporate information. The new deadline: January 31. Evidently, the two parties have settled on a solution; RIM just needs more time to implement it–at least that’s what these minutes from a recent Home Ministry meeting suggest.

“RIM would be asked to adhere to the timeline of January 2011 to give the final solution wherein lawful access for BlackBerry messenger will not involve the overseas data path. Intelligence Bureau (IB) and National Technical Research Organisation (NTRO), which had attended the discussions, found that the solutions offered by RIM (for BlackBerry messenger) are prime-facie agreeable. The timelines of January 2011 were also agreeable.”

That bit about lawful access not involving an overseas data path seems to suggest that RIM has, at the very least, agreed to host a server in India. What it’s planning to do beyond that remains to be seen. Company execs continue to insist that there’s no technical solution to allow lawful access to its BlackBerry Enterprise Service. This is the second time RIM has won a reprieve from the Indian government. It seems doubtful there will be a third.

Just how, exactly, RIM (RIMM) reached compliance isn’t exactly clear. The company refuses to discuss its deal with the UAE, claiming its terms are confidential. But according to the TRA, it’s the result of “positive engagement and collaboration” with the company, so my guess is it got what it wanted: An arrangement that will give it access to BlackBerry data.

Meanwhile, RIM’s services will continue uninterrupted as it prepares for the UAE launch of the Torch and Curve model in the weeks ahead.