Please see this disclosure related to me and Google.

There certainly is a lot of noisy swirl of late around the escalating fight between Google and some traditional media companies over content online.

The loudest voice in this fight has clearly been News Corp. (NWS) kingpin Rupert Murdoch, who seemingly has not met a television interviewer of late he did not regale with tales of Google’s nefariousness.

Part of what he is saying is surely justified–it’s definitely a crisis for the news business.

And in Murdoch’s mind, the blame should largely fall on Google (GOOG), which he believes is profiting from expensive content others have created and that the search giant is not paying for to such a warped and massive degree that it makes a mockery of fair use.

In Silicon Valley style, Google defends itself by saying it sends valuable Web traffic to News Corp. and other sites, so perhaps a hand-written thank-you note is really the proper response.

That missive is definitely not in the mail from Murdoch, who instead has sent a series of poison-pen letters to Google.

Most notable is that he has threatened to “de-index” at least some of his content assets–which are not insubstantial–from the now-inevitable crawlers sent out by the search giant.

These are, of course, vintage tactics from the Global Media Mogul Playbook: Causing a public hubbub and spooking perceived enemies by threatening drastic action and implying dire consequences, while simultaneously dealmaking behind the scenes.

Trying mightily to make the stakes more dramatic, News Corp. has pulled Microsoft (MSFT) into the fray as a possible white knight–if you live long enough, you do see it all–for publishers.

Under this scenario, the software giant would fork over some sum of money to get News Corp. and perhaps other key content companies, such as Associated Press, exclusively and prominently featured on its Bing search site.

The reward, presumably, would be increased searching on Bing for the stuff consumers could now not find on Google.

BoomTown reported earlier this week that, in fact, Microsoft was unlikely to hand over any kind of king’s ransom to publishers.

As I wrote:

While a spate of reports has Microsoft execs girding the globe offering gobs of cash to content companies to block Google and favor its Bing search service, sources close to the situation caution that it is extremely unlikely that the software giant would pay giant sums for that pricey privilege, which many inside the company think will not help it gain much search share.

“While there is a lot of mutual interest, it’s doubtful Microsoft is going to pay to ‘rent’ a corpus of content that it does not own,” said one source close to the situation. “The economics are not there for anyone.”

In other words, this wrestling match is not about whether Google or Microsoft will serve up links to content online, but about how much–or not at all–they are willing to pay for doing so.

So, what’s really happening here? Here are five possibilities to consider, each of which is true in part:

1. Murdoch really means it.

In this scenario, Murdoch and others, like AP’s Tom Curley, truly believe that Google–like that creepy salt-seeking alien from “Star Trek”–is sucking the life out of the media industry by making bank from its news content, but not giving back nearly enough in return.

Of course, a lot of these companies have willingly done distribution deals with Google over the years.

But now they don’t like it because the increasing money being made by Google, even as their revenue has suffered, has developed into a growing problem.

Which is simply this: There is a lot more money to be made in searching for content than in making content.

This realization has to shake content czars like Murdoch to the core, but it is indeed the situation they find themselves in.

Murdoch makes a fair point in that journalism costs money to make and it used to have a solid economic system under it until Google and others on the Web disaggregated it wholly.

Thus, online aggregators become “tapeworms,” as The Wall Street Journal Managing Editor Robert Thomson quipped.

Thomson also, on a recent panel at the Web 2.0 conference, said to Google’s front page head, Marissa Mayer, that she “unintentionally encourages promiscuity.”

Ouch. That remark, which was was quite striking if you were there to hear Thomson say it, said volumes more.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

2. Murdoch really means to create a lot of confusion, in order to shake down Google.

Well, it would not be the first time Murdoch and many others of his ilk have used public sharp elbows and saber-rattling to get what they want.

Except in this case, the algorithm experts over at Google know precisely–down to the tenth decimal–how much linking to News Corp. makes for them.

And it is not much, especially when looking at the vast sea of data Google serves up.

Its money-making is widely dissipated, from searches for vacation information to mapping to car-buying to health. While news-finding definitely is part of the mix, it is not at the center of the Borg.

Ironically–and oddly left out of this debate–it is Yahoo (YHOO) that has a lot of power in this arena, with massive content sites that shoot traffic all over the Web (including to this site).

But, what Google cannot and never can quantify–although I have seen co-founder Larry Page try once or twice–is the impact of public perception on the company, which has slowly morphed from being a benign, brightly-colored digital, librarian-like helper to a scary, answer-to-no-one, evil-doing monster.

The company’s growing influence over what people see and do not see on the Web is palpably frightening to publishers, advertisers and anyone who wants to be digitally discovered.

Bad luck for Google: Creating and then attacking bogeymen is a Murdoch talent, bar none.

3. Murdoch really means to create a lot of confusion, in order to shake down Microsoft.

Also obvious is the full-scale obsession Microsoft has with Google. While the software giant’s execs try to hide it, their panic over the success of Google has been tough on the once dominant tech company, which has struggled in the Internet arena.

Worse still, Google rakes in the dough, while Microsoft, um, does not.

Finally, this year, Microsoft has created–with no small amount of much needed innovation–Bing, a laudable effort that is starting to show some traction.

While Bing still has a very small market share compared with Google–by a factor of seven to one–it definitely has some momentum.

And, after much turmoil, Microsoft finally did a deft and relatively inexpensive deal to join with Yahoo in a search and advertising partnership to give them both more heft, which will surely help matters.

More important, one of the ways Bing has differentiated itself is via product innovations and intense focus on search niches, such as health.

In this topic area, for example, Bing has struck a not-expensive content licensing arrangement with the Mayo Clinic in order to better feature content.

This is smart business and offers consumers something better and different.

But overpaying big media publishers for the same thing, even if they de-indexed Google at the same time, is not smart, unless it is for really niche things like special financial information.

And even then, there are so many other sources of information out there, it would not take Google long to mount a similar offering, even in the face of some kind of OPEC of News consortium.

Even more–how much do consumers love OPECs of any kind? Not much!

Sources at Microsoft agree:

“If it was everyone, that might become interesting. But even that has issues, since Microsoft is not interested in having exclusive news for a temporary period of time by overpaying for it. It’s essentially a marketing expense, and there are a lot better ways to spend that money to win market share than giving it to publishers.”

Finally, Microsoft has been to the Murdoch party before too, having been part of talks to fold News Corp.-owned social networking site MySpace into Yahoo, had Microsoft prevailed in its attempt to acquire it.

Microsoft missed that pricey bullet and might be more inclined to grow Bing the old-fashioned way–via innovation, marketing and product improvements–rather than just using up too much of its energy trying to mess with Google.

4. A deal will be made.

My not-too-surprising prediction is that in the end, News Corp. and others will probably strike some kind of lesser deal with Microsoft–although it will tout the heck out of it–while taking some of its content behind a pay wall and thereby de-indexing it from Google.

More damaging would be if AP, which actually provides the most used news content online, removes its links completely from Google, because–unlike the premium content from other publishers–this is the bread and butter of consumer usage of content.

As to promotional material or links to television shows and movies from publishers like News Corp.? Well, it would seem the most self-destructive form of pique to remove those links from any of the top search engines.

That said, even if it really pissed me off for publishers to do so, I would probably switch to another search engine to find information on “Glee” if forced to. That’s how much I love those singing kids and Jane Lynch!

Finally, Murdoch has also threatened to challenge the fair use doctrine–which allows others to use copyrighted content within limits, as Google and many others do (such as this site).

While some think that is a bridge too far, it might be Murdoch’s best argument of all. Why should Google make a fortune on the content of others, even if only listing it? Doesn’t the sheer volume of what the search giant vacuums up make its reliance on fair use as a defense pretty ridiculous?

You can be sure Murdoch has his many lawyers and lobbyists all over this one, as does Google.

5. The truth is out there.

In perhaps his most strident television interview, with his Sky News Australia service (which you can see below–oh, the irony–on Google’s YouTube), Murdoch said about those who use Google to find News Corp. content:

“They don’t suddenly become loyal readers of our content. We’d rather have fewer people coming to our Web site but paying.”

That really is the honest truth in all this hubbub: Murdoch and other publishers have to find a way to get a some pool of dedicated online readers to pay enough to be able to then provide them with content that will keep them coming back for more.

That’s a business that Google truly cannot help or hinder, really.

And more to the point, it is also a business that Rupert Murdoch does seem to know a thing or two about.

While it might be a dream of publishers–hard hit by the digital tsunami and blaming Google for the crisis–Microsoft is not likely to fork over the big bucks they’d need for exclusive indexing of their content.

“Microsoft isn’t the monopoly guy anymore,” joked one source close to ongoing talks between Microsoft and publishers, especially News Corp. (NWS) and Associated Press. “So, it’s not going to be the bank for publishers.”

While a spate of reports has Microsoft (MSFT) execs girding the globe offering gobs of cash to content companies to block Google (GOOG) and favor its Bing search service, sources close to the situation caution that it is extremely unlikely that the software giant would pay giant sums for that pricey privilege, which many inside the company think will not help it gain much search share.

“While there is a lot of mutual interest, it’s doubtful Microsoft is going to pay to ‘rent’ a corpus of content that it does not own,” said one source close to the situation. “The economics are not there for anyone.”

Nonetheless, that has not stopped AP and News Corp. from aggressive public agitating recently about how their content has been treated online, accusing Google of a wide range of crimes against them and threatening to “de-index” their content from the search giant.

For example, News Corp. CEO Rupert Murdoch–who has been on what seems like a televised campaign against the search giant–accused Google of pilfering stories from his publishing properties.

Presumably, by yanking Google’s access to them and offering them to Microsoft, balance will be restored in The Force.

Except, not so fast, since such a deal would end up costing Microsoft a fortune, which is why several sources said its execs don’t seem to be keen on doing that without getting a lot in return.

The swirl of chatter about it, these sources said, is coming from publishers–who initiated the very early-stage talks–who are keen on playing Microsoft and Google against each other in hopes the warring tech titans will loosen their fat wallets to battle each other.

News Corp., for instance, has been looking for ways to replace the three-year, $900 million (or less) Google/MySpace search deal that expires next year. The publisher has been talking to Microsoft about some sort of exclusivity since this summer, but News Corp. executives also say they’re happy to work with Google if Google is willing to pay up. But what would either company really be buying?

Another source used YouTube as an example of Google getting a mass of videos, when it paid $1.65 billion in 2006 for the online video company.

“That made sense, since Google got all that content to use,” said the source. “But it is hard to see publishers getting the advertising economics and revenue they want from Microsoft for lending their content out, even exclusively.”

Still a third source noted that the only way such a deal could be envisioned by Microsoft is if a majority of publishers was able to band together to block Google from indexing their sites.

“If it was everyone, that might become interesting,” said the source. “But even that has issues, since Microsoft is not interested in having exclusive news for a temporary period of time by overpaying for it.”

Added the source, noting how much money Microsoft has lost in its online efforts so far:

“It’s essentially a marketing expense, and there are a lot better ways to spend that money to win market share than giving it to publishers.”

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

Please see this disclosure related to me and Google.

In fact, reps from Google and the AP linked up in Manhattan on Wednesday to discuss the deal, which expires at the end of this year, people familiar with the meeting tell me. This timing makes sense since Google (GOOG) had flown in many of its top brass to New York for a series of internal meetings this week.

But that would come as a surprise to anyone who took Curley’s words, delivered after a speech in Hong Kong on Tuesday, at face value.

Here are Curley’s comments, recorded by an attendee at the Hong Kong meeting and transcribed by Zachary Seward at Nieman Journalism Lab:

Someone asked Curley if Microsoft was willing to accept the AP’s demands. “They have said very strongly that they would,” Curley responded. A bit earlier, he said of Microsoft, “They know how to have a conversation.” And what about Google? “I’m not talking about Google,” he said. “We haven’t talked. We haven’t talked. We haven’t talked with them in any serious way.”

AP spokesman Paul Colford says he has nothing to add to Curley’s comments. But I’ll try to make a case on his behalf: Maybe this is one of those “depends on what the meaning of the word ‘is’ is” situations whereby Curley doesn’t consider the talks the two sides have been having to be “talks.” Alternate proposal: Maybe Curley is going for “truthiness” instead of “truth.”

I guess that’s possible. The recurring story I’ve heard from sources on both sides of the negotiations, which have been going on for months, is that they’re not moving very far.

The problem: The AP has a list of demands, which start with more money and move on from there, including assurances that its copy will receive better treatment than secondary outlets. And Google hasn’t expressed much interest in changing the existing agreement. The company is “quite happy” with the deal it has now, Google CEO Eric Schmidt told reporters on Wednesday.

I understand why Curley would want to play up his talks with other portals, as well as the notion that he’s willing to pull his cooperative out of the world’s biggest traffic generator. Per above, I don’t think those are particularly effective tactics, but I understand them. But that’s different from creating an alternative reality altogether.

Schmidt added a bit of nuance to that message today, noting that the company had been surprised to see its European business bounce back as quickly as it has. Here’s my transcript of his opening statement.

We are clearly seeing aspects of recovery, and what is notable is that we’re seeing aspects of recovery not just in the United States but in Europe. I had been in error in assuming that there would be a lag, that it would the U.S. first and Europe second. Asia, of course, was never significantly hit in the first place.

So that means from a Google perspective that…we never stopped hiring, but we told our team internally and again, we’ve said to many other people that we are increasing our hiring rate and our investment rate in anticipation of a recovery.

Schmidt and Google co-founder Sergey Brin covered a lot of ground in the hour-plus press conference, and I’ll try to go back and break out out some of the other highlights. A few items worth noting in summary:

• Brin expressed contrition over recent Gmail outages and said the company was working both to prevent future failures and to react more quickly if and when they do happen. But he reiterated the argument, common among cloud-computing fans, that conventional email systems fail much more frequently.
• Schmidt repeatedly defended the proposed settlement Google had reached with authors and publishers regarding its book archive. Recurring theme: It’s not a perfect settlement, but it’s workable.
• Schmidt stressed the importance of porting Google’s Chrome browser to Apple’s Mac platform and said this would happen within months.
• Schmidt said Google was working on ways to help publishers sell their work on the Web (via one-offs or subscription). But he said he had no interest in promoting one publisher’s results over another, as Associated Press officials had recently suggested: “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.”
• Schmidt, who’d previously noted that he expected Google to start making an acquisition per month, said that these would likely be small, five-to-ten-person companies. He added that it was unlikely the company would be in the market for something the size of a YouTube acquisition, which cost Google $1.65 billion. Translation: Don’t expect us to pony up billions for Twitter.

Earlier: My live coverage of the press conference:

Google (GOOG) co-founder Sergey Brin is sitting down with about a dozen reporters in Google’s New York City headquarters for a Q&A session. Tune in for live coverage. This should be a wide-ranging conversation, which I’ll attempt to cover live as well as I can. Please consider everything below to be a paraphrase unless it’s in quotes.

Brin is joined by Google CEO Eric Schmidt. Brin gives an unofficial intro.

Schmidt adds his own informal introduction.

Schmidt: We’re here because we have a global sales meeting in New York, and we’re winding that up right now. A series of internal talks, and the mood was “very, very positive.” We told them that “the worst is behind us” (which Schmidt has said before). We’re seeing recovery not just in the U.S., but in Europe as well. I had been in error in thinking it would be U.S. first, then Europe second. Asia is less important, obviously. We’re increasing our hiring rate and investment rate in an anticipation of a recovery.

Brin discusses some tweaks to search. Do you feel that Microsoft’s innovations with Bing will cause you to accelerate your innovations?

Brin: Competition is healthy. Microsoft (MSFT) has made its contributions. So has Cuill. Many of the tweaks in Bing we’d already seen from Microsoft Live earlier in the year.

Schmidt: I agree!

But do you think Bing is really different? Or just a rebranding.

Brin: [Demurs]

Schmidt: You guys should judge us and our competitors. We’ve been criticized for having a self-referential view of the world. But I’d argue that our success so far proves that’s been a good strategy.

Please talk about Android and other mobile plans.

Brin: We started with Android because it was a problem for us, as an end-user and a developer, that phones lacked powerful browsers and the ability to install powerful apps. I think Android has addressed this very well, but it has also pushed the market. It has pushed Apple (AAPL) with the iPhone and RIM (RIMM) and Windows Mobile. I’m pretty excited about the future; they’re getting increasingly capable browsers, and you can now write native applications across five platforms that will cover most smart phones. I think that having the software platform has freed the hardware makers from spending time on that, and they can rejuvenate their efforts on hardware.

Please talk about enterprise efforts.

Brin: We started in enterprise, like mobile, to address our own needs. When we started with mail in ’04, Web email was like a toy. We really focused on something that would work in an enterprise and then made it available to consumers. We feel we’re farther ahead (than competitors) both in email and in collaborative document-editing. We’re moving toward eventually having everything (all our applications) available everywhere. “I just think the cloud model is a better model….I do think this install-less model of a cloud is better….It’s definitely made me more productive.”

More on enterprise from Brin: We’ve been successful with both SMB [small and medium business] and increasingly with enterprise. We’ve got a big implementation with Genetech (DNA), and in Washington D.C. We’re specifically adding features for enterprise. That’s part of the Postini acquisition–to add some of those email features for enterprises. You’d be surprised to hear some of the things businesses ask for.

Please talk about recent Gmail outages.

Brin: Certainly we’re not happy with any outages. With those outages we’re at the “three nines” level, which is not where we want to be. Targeting “four nines” by end of quarter. We’ll let you know how we do. Focusing not only on outages, which we don’t like, but recovery time. Second outage could have been resolved in five or ten minutes, but we made errors in handling it, and it extended over an hour. But if you look at a typical enterprise today, those outages tend to add up to more than even these kinds of outages that we had in Q3. Also, we’re working on the number of people affected by outages. Trying to group people into pods so that if one goes down it doesn’t affect others.

You’re adding more complexity to search. It’s more confusing than it ever was. Same thing with site links. Is that an issue (it is for Danny Sullivan)?

Brin: I’d like to see all the options, available in all the corpuses. We don’t have all the same options in each offering. In terms of the links and snippets that we’re offering, we’re trying to experiment with that.

On Google book deal: If the judge asked you why he shouldn’t be concerned by the concentration of Google’s power, what would you say?

Schmidt: It’s an error to answer a theoretical question from a journalist. But anyway, we won’t get that kind of question. With respect to book search, we were doing something that we thought was appropriate. We were sued, and after three years of discussion, we’ve come to a settlement. This is perfectly normal. From our perspective, this is a settlement we like, it’s a settlement we think they’ll like, and we’ll hear what the court says, within minutes. Let me reframe your question: There’s nothing particularly exclusive about what we’re doing. The rights registry we’re doing is for the benefit of orphan works. “It’s not a particularly good business for us. We’re going it because we think it’s the right thing to do.” We don’t think the settlement is perfect, but we think it’s good.

What are plans to expand book search?

Schmidt: We’re already huge. There are millions of books that have never been read, and we’re going to deliver readers to those books.

Brin: We want as many works as possible in some form, because that’s of tremendous value.

Schmidt: This doesn’t cover all international books, all books in the world. [Some disagreement about this between Brin and Schmidt]. It will take time to get the registry up and running, so for the near future I think that’s all we can achieve.

Back to the economy, please.

Schmidt: We’ve tried for a while to figure out if Google is an accurate predictor of the economy, and we can’t prove it. If we could, we’d brag about it. Last early in the year we saw a decline in U.K., which surprised us. From our perspective, the low point was somewhere in the spring. Which is why I said worst was behind us in May, June. We noticed a recovery “June-ish.” The conventional wisdom is that U.S. recessions are 18-24 months. Bernanke sees a recovery too, which we agree with. Conventional wisdom was that Europe would lag by three-five months, which we’re not seeing. Europe is not one country, and it varies a great deal depending on which country we’re in. I won’t go in to specifics but it’s the obvious stuff–the countries that didn’t have a big bump did not have a big fall. More on being a leading indicator: Obviously we’re a leading indicator in advertising.

Brin: And we’re good indicator for consumer spending, and you can see for yourself by looking at Google trends.

It seems as if Chrome isn’t having the impact with consumers that you would like.

Brin: [Starts, then stopped by Schmidt]

Schmidt: Some of your premise about Chrome is incorrect, in terms of adoption, and we’re going to get that message out.

Brin: It’s actually exceeding our benchmarks.

Schmidt: I see a lot of Macs in this room, and a lot of very sophisticated people are using Macs now and we need to get a version of Chrome out for that, which we’ll have in a couple of months. Key to browser strength is speed. In general, we announced Chrome OS and Chromium product. Everything is linked together: Cloud, chrome, etc.

At one point do Android and the Chrome OS come together or not come together?

Schmidt: Current definition of use platforms has to do with use patterns. Android for mobile, delivered via telecom store, heavily integrated with telco offerings, like our Verizon (VZ) deal, which we’re enormously excited about. The analog for Chrome is that it’s designed for a 10, 12-inch form factor. They both use Linux, etc. But they’re designed for different uses. [Netbooks?] May be some overlap there.

Is Google being too nice? Is there a rethinking of relationships with aggrieved groups?

Schmidt: In many ways we’ve always wanted to be this Google as opposed to the way we were perceived a few years ago. We’re particularly proud of the way we’re working with advertising agencies, which is very important to us. With the media industry, we’re having success with YouTube and YouTube monetization, and we’ll have more on that coming forward….”We have always wanted to have these partnerships….We’re learning how to do them in a way that they win, too.”

Brin: People can now differentiate between us and the Internet.

Schmidt: Google is an innovator. The Internet is causing collisions. Innovation plus collisions equals opportunity. For instance, the fact that Verizon has embraced most of the open principles that we put forth five years ago is shocking. “It’s pretty amazing. This is Verizon. It’s not some itty-bitty telecom start-up.”

Are you uncomfortable with Google employees’ sense of entitlement? [Per new Ken Auletta book]

Brin: [Refers to layoffs--Schmidt corrects him: "We did not have layoffs."] [Addendum: Schmidt was talking about Google closing engineering offices in Phoenix and other locations; Google did have layoffs last winter.] You’re right:

What do you think about publishers requiring pay walls, and how will you help surface that.

Schmidt: We’re starting with that YouTube. Overall, “there’s clearly a market for free content, and that market is the size of the Internet.” Also a market for subscription/paid. The analogy I would offer is TV. We all grew up with “free” TV. Now almost everyone pays for cable, and some people pay for pay-per-view, “which is ridiculously expensive,” but people will pay for particular events, like boxing. I think all three of those uses will emerge. We’re working on payment models, subscriptions, to enable that.

But what about surfacing paid content in search [this comes from WSJ.com editor Alan Murray]? Will you factor the desire of someone to pay for content into results?

Schmidt: We’re not going to use the price you use as our ranking in results. That’s not going to be our signal. But we’ll incorporate the price people are paying for your content into results. But I’m not going to answer this precisely because I don’t want to discuss how we produce results. The most interesting improvement you could make is that to the degree that we have more of the marketplace data available, we could take that information and reflect some of that in our rankings.

The AP CEO said Google or Microsoft might be willing to pay a premium for an advance look at the news.

Schmidt: We have a deal with the AP, and I don’t want to talk about any specifics of any deal. I don’t think that’s proper. “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.” We are staying out of the media business. “You guys are very good at it, and we’re not.”

[Apologies for tech error; I missed the specific question and part of the following exchange, but the subject is entitlement.]

Brin: We cut down on snacks, etc. to “reset expectations” regarding entitlement.

Schmidt: “Google pays very well. Google is clearly a growth company. People at Google don’t work for those reasons at Google. We don’t want them to come to work for Google for those reasons. We want people to come to Google to change the world. Life is short.” The tightening in the last year has been good for this, by the way, the controls put into place by Patrick Pichette, who is our hero, have been very helpful.

Please talk about M&A plans and goal of one acquisition per month.

Schmidt: That’s been our historic pattern. I think we will be buying small companies–five, ten people. That’s where some of our best stuff has been. One day Larry and Sergey bought Android, and I didn’t even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. “And I said, ‘for how much, Sergey?’ And it turned out to be a few million.”

Would you buy a YouTube?

Schmidt: Is there another one to buy? The problem with that size of acquisition is that you have to make your money back. I think that DoubleClick and YouTube will be two of our best acquisitions. DoubleClick is already close to paying back, and YouTube will get there soon. But bear in mind that any major acquisition now will involve a regulatory review, because of our size and because our competitors will make sure of that.

[Sorry, missed another question]

Do you anticipate making large upfront commitments for new or renewed search deals [as you did with MySpace and AOL]?

Schmidt: I’d rather not comment on search deals. We are in discussions with both of those companies. “Some of our best friends are in those companies.”

[Missed yet another one]

What will new tablet machines [like Apple's] mean for you? And to content producers?

Brin: Hardware is getting amazing with regard to cost. Used to be that display was expensive. Now that’s cheap, and so are chips, etc. Now, the main cost is broadband connection, or cellular, or however you get to the Internet. That’s why wide broadband availability is important to us. Think about how much you spend on access costs compared to the amount you spend on your handset. The phone cost is negligible.

Schmidt: Not sure how to answer question. We provide the infrastructure below what you’re talking about [touch interfaces, etc.]. Kindle is a good example. Don’t think about current one, think about one two or three years out. I think there will be many kinds of things like Kindles, and that’s a material change in the way people will interact with hardware, media.

Brin: I think it’s better if hardware isn’t locked down to specific platforms.

[Long exchange between Schmidt and Danny Sullivan that I'll have to pick up later]

Should Google be required to lease servers and access to Google checkout numbers to deal with “lock-in” issues that broke up the telcos?

Schmidt: Google Checkout isn’t interesting. But I think your analogy is wrong and that there are no data to support your theses.

[I missed the next question on the book settlement about orphan works, etc.]

Schmidt: A lot of these complaints are being made by people who don’t want a solution.

What are the reasonable book settlement proposals you’ve seen?

Schmidt: Goal is to get all the books to everyone and to get all the authors compensated properly. Some of the proposals make sense to me, but I don’t want to characterize them. Not a perfect solution, but the best one we can do.

How will book settlement affect international users?

Brin: It won’t. We’d love settlements that work across a range of countries.

Why won’t you be like Microsoft with regard to antitrust?

Schmidt: Many reasons. Culture, for one. Another reason is that majority of users are one click away from moving away from us. Third: If we went into an “evil room” and had an “evil light” shined on us, and we then behaved in an “evil way” we would be destroyed….There is a fundamental trust between Google and its users.”

Schmidt walks through “ludicrous” thought experiment whereby Chrome takes 80 percent of market share and then tries to lock consumers in, noting that it wouldn’t work due to open source.

Do you think you’ll take another stab at moving into radio, print?

Brin: We are quite optimistic on the TV front. Radio and print didn’t pan out as well as we thought initially. One of the reasons is that those mediums are moving online and consumers are moving online and the publishers/producers want to work with us there. “We were kind of at the dock where the ship had already left.” But TV is quite similar to the Web in terms, potentially, of measurability, so we’re excited about those prospects.

Is page rank broken? People are gaming it, etc.

Brin: No. We have to continually develop. Part of the issue is span, but the main issue is that everything changes. We’re doing a much better job of ranking than we did a decade ago. If we just rested on our laurels with what we wrote in paper from 1998, we’d be in big trouble.

Interesting, given the recent flap over Google Voice for iPhone, which Apple (AAPL) hasn’t yet allowed into its iTunes App Store because it “appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voice mail.”

How is Vonage’s (VG) app different? Its features and functionality are certainly very similar to those of Google Voice.

Apple won’t say, but the company did tell the Associated Press that Vonage’s app falls under the same category as other VoIP applications that have already been approved for the iPhone.

Quite a bit!

Job One has been overhauling MySpace, which is still very much a work in progress. But Miller’s full plate includes lots of other tasks too. Like trying to convince Google (GOOG) or Microsoft (MSFT) to pony up for a big search deal to replace the Google/MySpace deal that expires next year.

Equally difficult job: Trying to figure how to get consumers to pay for some of the content News Corp. currently provides for free on the Web.

The Los Angeles Times advances that part of the story this morning with a report that Miller is “believed to have met” with rival publishers–including those from the New York Times (NYT), Washington Post Co. (WPO), Hearst and Tribune Co.–about creating a consortium to charge for online news.

I believe it. My understanding is that while Murdoch has been vocal about his intent to start charging consumers to read his stuff, the more sober assessment within News Corp. (which owns this Web site) is that charging for news will only work if there is a critical mass of publishers trying to do it together. How many would that be? “Enough people so that it matters,” a News Corp. exec tells me.

Whether you could actually get enough big publishers to work together (something that start-up Journalism Online is trying to do, in its own way; so for that matter, is the Associated Press) is an open question, of course. And then there are the inevitable antitrust issues.

But I think the most practical problem for News Corp., and everyone else who works in the news business, is that from the consumer’s perspective, very little of the stuff we produce is worth paying for. That doesn’t mean you can’t figure out how to sell specialized bits of content (a la The Wall Street Journal or Consumer Reports). But a great deal of the stuff we make can be found all over the Web, with little to distinguish it, and the model that used to support this content–near-monopolies on eyeballs and ad dollars–has disappeared. Pay wall or no, that’s going to have change going forward.