Simulmedia founder and CEO Dave Morgan told an industry conference today that Rep. Rick Boucher, the Virginia Democrat who has become the loudest voice in Congress in the advertising/privacy fight, is prepping a bill that will force publishers to let Web surfers “opt in” before they’re served with any third-party tracking cookies.

Not a huge surprise: Boucher laid out the case for the bill last week at a Congressional hearing. It’s unclear just exactly what that would mean for the business: Could Google (GOOG) not send cookies out if you, say, played a YouTube video embedded on a third-party site (like the one the White House runs)?

But right now the details of the proposed bill don’t matter: The industry has already started arguing against it via promotions that explain just how valuable Web advertising is to the country (and by extension, the targeting/tracking that cookies enable it). From MediaFlect’s Dorian Benkoil:

“Congress’ position is that consumers are not appropriately aware of what is being done on their machines, and the use of cookies delivered by a third party is something consumers have not been appropriately informed of,” said Morgan, who oversees privacy initiatives for the Internet Advertising Bureau [and who] was in Washington last week talking to FTC officials and congressional staff, he said. “Congress’ default position is that that will require an opt-in,” to serve a third-party cookie.

That’s a perfectly sensible position from a consumer’s perspective: Why should advertisers and their proxies track what you’re doing on the Web without your consent? But from the advertising/publisher perspective, an opt-in plan means a plan no one will ever agree to, which means no more cookies/tracking, period, which means Web advertising becomes as imprecise and clumsy as good-old TV and print ads.

Which is why the Web guys prefer a bill that allows surfers to opt out–or preferably, no bill at all.

I still like my Solomon-like solution, which I’ve thrown out before: Let consumers opt in, but give them a reward for doing so.

It doesn’t have to be much–consumers say they care about privacy, but in reality, they’re very happy to trade personal info for trinkets and geegaws. Maybe you get “privacy points” every time you visit a site for the first time and sign away your right to complain about tracking. And if you earn enough you get a bag of Cheetos, etc. Sure we can work something out.

[Image credit: rpongsaj]

According the latest meme to sweep the digerati over the last several days, here are the words that should make the brainiac satraps over at Google very, very nervous: “See what’s happening–right now.”

That’s the motto right below the box on Twitter’s search engine–a page that looks awfully familiar to anyone who uses the Internet, since it is essentially a light-blue-colored rip-off of Google’s “I’m Feeling Lucky” mantra.

But, posits the new theory, it’s Google (GOOG) that should perhaps not be feeling so lucky when it comes to Twitter search because it is becoming the place for what is now being called “real-time” search.

Yesterday there was a Silicon Alley Insider piece alarmingly titled “Google Next Victim Of Creative Destruction?” by former AOLer John Borthwick–who should know a thing or two about the topic, given that he was a top exec at the once-vaunted online service as it imploded.

In it, relating a presentation to AOL execs in their heyday by the well-known management author, Clay Christensen, here’s Borthwick’s money quote:

[Christensen] said time and time again disruptive business confuse adjacent innovation for disruptive innovation. They think they are still disrupting when they are just innovating on the same theme that they began with. As a consequence they miss the grass roots challenger–the real disruptor to their business. The company who is disrupting their business doesn’t look relevant to the billion dollar franchise, it’s often scrappy and unpolished, it looks like a sideline business, and often its business model is TBD. With the AOL story now unraveled–I now see search as fragmenting and Twitter search doing to Google what broadband did to AOL.”

Having written an entire book about the disaster that became AOL, I would have to disagree a lot with Borthwick that the innovation of broadband killed the company.

For example, I would have started with AOL’s ponzi-scheme of an advertising business model, gross mismanagement, greed, backstabbing between Time Warner (TWX) and AOL after the merger and a complete noninterest in innovation in AOL’s later years as the key reasons for its demise, before I even got to broadband.

That aside, Borthwick does go on to make an interesting argument I have been hearing a lot of late among the digerati: that Twitter’s search results–and not its often-inane tweets–are its real treasure.

An investor in a start-up called Summize that was acquired by Twitter and is now its search engine, Borthwick correctly focuses on some interesting splintering off of two key search areas, video and real-time search.

Google already owns plain-vanilla search in a game-over way, with a disturbing share that just keeps getting bigger and bigger.

And, given Google’s ownership of YouTube and the fact that the online video service massively dominates the online video market, the search giant effectively owns video search. (One might note that it has been, heretofore ineffectively, hard at work trying to monetize it.)

But it is Twitter, as it quickly increases its user base from one million to three million to six million–and, doubtlessly, millions more now–that is the king of real-time search, which is to say, search that is done as news events unfold (the plane in the Hudson River, an earthquake, the Super Bowl, whatever) or other ongoing topics of the day.

Thus, while Google essentially controls the pages of about everything on the Internet, Twitter owns the social conversation online.

Writes Borthwick:

Imagine you are in line waiting for coffee and you hear people chattering about a plane landing on the Hudson. You go back to your desk and search Google for plane on the Hudson–today–weeks after the event, Google is replete with results–but the DAY of the incident there was nothing on the topic to be found on Google. Yet at http://search.twitter.com the conversations are right there in front of you. The same holds for any topical issues–lipstick on pig?–for real time questions, real time branding analysis, tracking a new product launch–on pretty much any subject if you want to know whats happening now, search.twitter.com will come up with a superior result set.”

Unfortunately, after that, except just stating that Google will inevitably fall over and die, because of the Twitter effect, Borthwick provides absolutely no explanation of what possible business model could make real-time search that kind of killer.

Will it be a text-based online advertising model like Google’s AdSense? Or are people who Twitter and search Twitter not as open to such ads when they are conversing?

Or could Twitter sell the analytics from these social searches to big brands, so they can do a deep dive into consumer behavior? Or is the bulk of that chatter–like, say, “Cheetos are yummy, but messy”–completely useless to them?

Does Twitter winning in real-time search mean no one wants regular Web search anymore? Or can both co-exist and be lucrative?

“Who knows?” is probably a better answer to all of this at this point, given how nascent and small the Twitter audience–save for in the noisy echo chamber of Silicon Valley and the media, where it looms large–still is.

That’s not to say I don’t use Twitter search more and more or that it’s probably a whole lot easier to monetize the start-up’s search than the content of its 140 characters.

Said a Twitter insider who is watching its search business grow a lot and notes that it is much bigger than people realize: “The search results are distinct to anything out there.”

That is true, and I would also say it is extremely useful too (even though bigger will inevitably make it less so, as there will be more dreck to slog through).

That’s why Facebook, as first reported here, made that $500 million run at Twitter and also why it opened its APIs on status this week to slow Twitter’s growth and cut its momentum a bit.

But Facebook also made the move to help itself. After all, many more young people–for all Twitter’s buzz–use its status update (ask some–I did), so it is in Facebook’s interest to keep it that way.

Of course, Google could also try to kill Twitter, by starting its own real-time search service, although that is the kind of innovative and viral thing that big companies usually cannot pull off as easily or deftly.

And it would come as no surprise if Google made an even larger bid for Twitter, given its interest in owning all search.

Or not, if Twitter can’t find a way to make real and sustained money from any of its many interesting parts, like search.

I, for one, hope it does, since it’d be nice to see someone tweet, um, tweak, the mighty Google for once, even if it does not have murder in mind.

Please see this disclosure related to me and Google.