I am here at Yahoo HQ in Sunnyvale, Calif., to check out “Product Runway,” which is the Silicon Valley Internet giant’s attempt to show that it can still innovate.

First and foremost is the launch of Livestand, a personalized news reader that is similar to Flipboard and a variety of other rivals, including — soon — Google.

It’s Yahoo’s attempt to present a business-as-usual feel — amidst a long and agonizing and very public strategic overview that might also include the sale of the company (or not!), in the wake of the recent firing of its last CEO, Carol Bartz.

It has caused a lot of trauma inside Yahoo, which can’t help with innovation.

But we press on!

In other words, despite the three-ring circus going on outside, Yahoo wants you to know it is still hard at work.

We begin:

10:35 am: As the strains of U2 die out, Yahoo Chief Product Officer Blake Irving takes the stage, which is actually set up in the company’s cafeteria. I can smell lunch being made nearby and I am hungry.

Apt — Yahoo certainly needs to show off a lot of cool stuff or its fate will be cooked.

No pressure, Blake!

“Personally, I am more bullish on Yahoo today,” he said. “What is Yahoo? Simple. It’s the premier digital media company. Period. Stop.”

Oh, if it were only that easy.

10:46 am: Irving pulls out his favorite slide, which looks like a chemistry test. It lists the various elements of the product strategy, with things like personalization, mobile, premium.

Now to Livestand, which is available on the Apple iTunes app store right now.

Don’t all rush at once!

Irving notes that Livestand is more than just an app — it is a platform.

In other words, Yahoo wants to help publishers publish online. Kind of a Facebook of content.

If Yahoo can pull it off, that is. (And, of course, unless Facebook decides to do the same.)

10:50 am: Livestand is an HTML5 “personalized living magazine.”

“This is the way Web pages are going to look,” declares Irving. Which is to say, heavy on photos, swoopy navigation, a television screen-like interface.

Irving uses the example of Surfer magazine, which is a good idea since waves always look pretty. Especially in a video-in-frame with Kelly Slater in Hawaii.

But, in essence, for anyone who has used Flipboard for years now, none of this is entirely different.

10:54 am: The look of what would be the Yahoo News page is actually much more interesting, since it is clearly a whole lot better than the Web page.

Irving also shows off a “living ad” — in this case, an unusually snuggly couple on a couch. It is cool, but creepy.

When launched, the ad has tap points. Irving — naughtily declaring about what is an ad, “I’ll tap that” — taps the lady’s butt, which would also have been my move. We learn about the jeans, of course.

10:58 am: Irving then shows off the ability to add feeds.

Next, something called “Cocktails.” First up, a developer tool called Yahoo Mojito and Yahoo Manhattan, which is a hosting service. The company will open-source both the technologies in 2012.

Irving brings up Mike Kerns, VP of Personalization & Social, who came to Yahoo when it bought the innovative sports fan site called Citizen Sports.

“We like to ship sh#t,” he notes. I like Mike Kerns immediately.

Kerns intros C.O.R.E. No, it is not a secret government organization that takes out fussy bloggers, who might be more critical than Yahoo execs would like.

In fact, it stands for “content optimization relevance engine.” Of course it does.

Simply put, C.O.R.E. is trying to link the right content or whatever to the right consumers and who likes what. Ladies like this, dudes like this. Apparently, “men of multiple ages” enjoy stories about golden chicken.

11:11 am: Kerns is moving on to social, especially its integration with Facebook. While much touted, sources tell me it has gone slower than expected in terms of use, but that it is improving.

Kerns talks about the idea of matching content to conversations to interests and, well, you know — the now exhausting world of modern media consumption.

The world in which you can no longer simply read an article and enjoy it — you must comment, share, discuss, parse, tweet.

Does anyone remember when you read something cool and just kept it to yourself?

Forget it, pal! It is a full-information society now and you better get on board and start poking your friends about every little thing.

(Personally, I plan on becoming a hermit in 3 … 2 … 1.)

11:18 am: Now Tim Parsey, who is Yahoo’s design head. He is hands down the most delightful exec the company has had in a while, mostly because he loves to smirk adorkably.

He shows off Yahoo’s first original design, which was a dull list. And then another really bad logo. But Parsey loves it! It’s kitschy!

Smirk attack!

Parsey moves into what has to happen now, which is to deliver a much more emotional experience and a much better designed one. He uses words like “humanism.”

Say what? He is right — Yahoo has for too long completely ignored design as an important part of the experience.

That’s why Flipboard was so quickly touted — it was pretty and fun. And it is why everyone is simply forced to love Apple products.

11:22 am: Parsey even has a code for it, called REM — for rational, emotional and meaningful.

He shows off a weather app. People take photos and they can be used in the app. Then Yahoo Mail for the iPad, whic is also handsome with photos and video. Livestand, also pretty.

“Great way to differentiate,” says Parsey. He calls it “one Yahoo!” Indeed.

11:35 am: I’ll admit it. After Parsey-fest, I zoned out for a sec when IntoNow dude, Adam Cahan, comes up.

Donut emergency!

Back to IntoNow, it’s the television indexing service that Yahoo bought in April.

Essentially, more ways to watch the media — in this case, video — and do 53 other things at the very same time. Memo to humanity: We will all be paying continuous partial attention for the rest of eternity.

Like I said: Hermitage!

11:41 am: Product dude Irving is back, making a point that, despite all the public mishegas, Yahoo has been busy at innovating.

A redo of email, better search, social “Facebar” with Facebook, Flickr for Google Android.

Irving is correct — Yahoo’s engineers have been hard at work and deserve kudos for doing so, even with attrition issues, stock declines and questions about the company’s very future being debated daily.

The problem is that too many of these improvements are mostly incremental and essentially table stakes for tech companies, most of whom have introed many more significant innovations in the same time frame as Yahoo has.

Google did Android, Google+ (as well as some notable failures). Microsoft did Kinect, Windows Phone, Windows 8. Amazon did Kindle Fire. Facebook did a range of major updates, as it has grown like a weed.

And there’s Apple. You might have heard of the iPhone and the iPad.

You get my point. Yahoo’s Product Runway today is well done, but what it really needs to be is just the beginning of a take-off.

11:48 am: Now Q&A time.

The first question is what took so long to get Livestand out, the second is why should people use Livestand since Flipboard and others have already been around for a dog’s age.

I ask about design — mostly because I want Parsey to use the word “delicious” a lot — and also about all the turmoil around the company and its impact on product creation. (I decide not to mention that Yahoo blew its acquisition of the bookmarking site, Delicious, and then sold it.)

Parsey delivers on the delicious scale, noting that Yahoo must have one design experience and yet has a lot of different interfaces. In other words, it cannot be Apple, but it can feel a lot more cohesive.

Irving talks a little bit around the obvious elephant in the room — the future of Yahoo — noting that the product staff was trying to focus and forget the storm going on outside.

“We have dreams about what this company can be,” says Irving.

You and me both, brother.

12:04 pm: More questions that are too detailed for my tastes, since they have delivered lunch and I can see it and I am ravenous.

As Parsey might say: It looks deliiiiiccccious.

Now, let’s hope Yahoo can do even more tasty stuff.

Anso Labs is helmed by Jesse Andrews, the former lead architect at Flock, the Web-browser company that was recently acquired by Zynga, and Soo Choi, a former exec at Booz Allen Hamilton. Anso Labs is best known for its work on the cloud computing front with NASA, the U.S. space agency.

The move takes place against the backdrop of a surge in consolidation in the cloud computing and data center business. Last week, Time Warner Cable dropped $230 million for NaviSite. And on Jan. 28, Verizon acquired Terremark for $1.4 billion. That one-two punch in data center deal-making has led to persistent speculation that other data center companies, Rackspace among them, will be rolled up by larger companies–like Hewlett-Packard, Dell or Cisco Systems–that are eager to add cloud services to their portfolio.

Ask Rackspace executives about this–and I have–and they’ll tell you they’re not thinking about that. Rather than being rolled up by someone else, they’re focused on rolling up the assets they want to grow, and to remain independent. Late last year Rackspace acquired Cloudkick, a start-up focused on building cloud monitoring tools.

Rackspace did $629 million in revenue in 2009, and is expected to show annual sales of about $775 million when it reports fourth-quarter earnings tomorrow. It has 100,000 customers, and while many of them are small- and medium-size businesses, larger enterprise customers like Coca-Cola, Target and Vodaphone are tapping Rackspace for Web hosting and to run their cloud applications.

Rackspace wants Anso Labs for its expertise and devotion to OpenStack, an open-source cloud computing software project backed by Rackspace, Dell, Citrix, Cisco and Canonical, the company behind the Ubuntu flavor of Linux.

Rackspace wants to create a bunch of inter-operable cloud services so that customers can move workload from one cloud service provider to another at will, giving them increased flexibility. It’s comparable in some ways to vCloud from VMware and Eucalyptus.

The event, at the Marriott Copley Place downtown, is just getting under way. I won’t bore you with every detail, but will post whenever things get interesting.

In the meantime, enjoy this take on Angry Birds for the BlackBerry.

Update, 10:17 am ET: The intro is still going on. RIM Vice President Alec Taylor is talking about the Cuban Missile Crisis for some reason. However, RIM was nice enough to pass out slides for the whole day. Here are some of the highlights:

BlackBerry Mobile Voice System
Launching in early 2011, this is an update to RIM’s effort to unify the desk and mobile phone, offering a single identity, voiceover Wi-Fi calling, a single voicemail box, dialing office extensions and more. RIM says the new version will support more types of business phone systems.

Other features coming later this year include automatic hand-off from Wi-Fi to mobile networks, a “move call from desk” feature and more.

BlackBerry Balance
A new effort to support mixing personal and corporate data on the BlackBerry. RIM is adding features such as the ability for IT to choose to wipe only corporate information from a device or to limit users from cutting work data and pasting it into a personal application or email. Other features include warnings when sending emails or calendar invites outside of the organization, the ability to encrypt media cards and options for preventing access to work data by third-party applications.

BlackBerry client for Microsoft SharePoint
Launching in early 2011, this will bring data from Microsoft’s portal software directly to BlackBerry handhelds. It will work with both the 2007 and 2010 versions of SharePoint and integrates into a number of BlackBerry programs, including E-mail, calendar, Documents To Go and the browser.

PlayBook
As for the forthcoming tablet, RIM says it will ship with 1GB of memory, have 16GB, 32GB or 64GB of flash memory, include a 3-megapixel front-facing and 5-megapixel rear-facing camera and have micro USB and Micro HDMI ports. (I can’t remember if they have said all of that before.) The slides say only that it will ship this quarter and will be “competitively priced,” reiterating past company positioning.

According to the slides, the company also plans to talk about cloud-based device management and changes to allow one BlackBerry server to support multiple corporations.

10:35 am ET: The Cuban Missile Crisis is apparently over, and VP Pete Devenyi is now outlining the company’s business product road map and making the pitch for its strategy.

“We really do have a great story,” he says, noting that the enterprise is different from the “arms race” of the consumer market.

“It’s not just about the number of apps in App world,” he says, noting that businesses can and are building programs just for use within the corporation. Some businesses, he says, have hundreds of internal apps, none of which show up in the public storefront. BlackBerry, he says, also allows businesses better control than rivals over what programs are on a worker’s device. For example, Devenyi says, when workers change groups within a company, the programs they have access to can be updated automatically with programs deleted and added from their devices.

“That kind of power is power that no one else has,” he says. “We don’t read about that much.”

10:43 am: In addition to both the paid BlackBerry Enterprise Server and the slimmed-down free “Express” version of the server, RIM plans to launch an email system aimed directly at small-to-midsize businesses–MDaemon Messaging Server, BlackBerry Edition. The idea is to give smaller businesses a full email server that has full BlackBerry support. The product stems from an acquisition RIM made a year or two ago and offers what RIM says are features similar to Microsoft’s Exchange Server but at a fraction of the price.

The company is also launching “very, very soon” a modest update to its flagship server product, BlackBerry Enterprise Server 5.0.3. It will add more support for employee-owned devices (including the BlackBerry Balance feature described earlier), support for encrypted attachments and certification for Microsoft’s Office Communications Server 2007 R2 and the latest version, known as Lync 2010.

11:18 am: RIM is launching yet another server this year, known as the BlackBerry Enterprise Application Middleware (BEAM). BEAM, which companies would have to buy in addition to their BlackBerry email server, aims to streamline enterprise content for use on a BlackBerry. ‘What that results in is a much more efficient application than you would otherwise have,” Devenyi says. It’s in beta now, he adds.

11:25 am: BlackBerry is launching its equivalent of Find My Phone, known as BlackBerry Protect, which will allow individuals to remotely wipe or post a message if a device is lost. Protect will launch later this year, Devenyi says.

Finally, the company is talking about a number of changes it is making to the core BlackBerry Enterprise Server so that it can run via the cloud. Launching later this year, RIM will have the ability for its server product to be remotely hosted and support more than one business. It’s not clear yet if this will be RIM offering BlackBerry as a cloud-based service or if this is a product for hosting partners, though it sounds more like the latter.

11:32 am: Devenyi told Mobilized that the company is just showing the architectural changes it is making, not saying how it will bring the cloud-based capabilities to market. “We’re still working through a number of those details ourselves.” Devenyi said. “It could be both, but we are not announcing.”

11:42 am: On to the PlayBook finally. Senior Product manager Ryan Bidan gives the spiel. He says there is a lot that the company isn’t ready to share. Addressing concerns around battery life, Bidan notes the PlayBook has a 5300-miliamp battery, but doesn’t give specifics on how much battery life that will translate to.

“We’ll have good battery life,” he says. “Don’t worry about the battery life.”

Other details:
Software updates will be pushed down to the device on an ongoing basis. There will be a version of App World on the device for downloading developer-created programs.

And with that, the formal part of the event is over.

It’s nice to hear enthusiasm on the part of Linkin Park band member Mike Shinoda about an innovative-for-the-music-industry effort to give fans a chance to be part of the iconic Grammy-winning rock band.

That’s because most artists or content creators–while making all the right sounds about the Internet’s impact on their business–often privately cringe at the ongoing flood of user-generated material that has drastically changed the industry.

Not Shinoda, who is certain he will find some real talent via a new online contest, called “Linkin Park, Featuring You,” that gives anyone an opportunity to collaborate with the band to produce an original song based on some of the tracks from the forthcoming single “The Catalyst.”

The song is on Linkin Park’s next album, “A Thousand Suns,” to be released September 14.

“We looked at it as both risky and fun to save a spot on the record that could be just anything,” he said in an interview with BoomTown earlier this week. “It’s creative, lets the fans be heard and, of course, is a great way to promote the album.”

Of course it is, but Shinoda said he is not expecting to have to put any bad-quality music on the record just to sell more music.

“The album could not be any more sacred to us and this is certainly an X-factor, which is kind of a move against the grain for us,” he said. “But the Internet has actually given a lot more people a chance to be heard and, as it has turned out, amateurs are so much better than we ever expected.”

So far, Shinoda said, he has just sampled a few dozen of the thousands of submissions so far, either selecting randomly or via a popularity ranking system the contest uses. He said he’s also using a range of people who are part of the Linkin Park team to filter material.

But, ultimately, Shinoda and his bandmates (pictured here) will pick the winning submission, with either the song to be included on the band’s new album or the winner to be invited to perform with the band on a song on the upcoming record. Either way, a pretty good prize for an aspiring musician.

Shinoda said he is hoping to hear a lot of different sounds from electronic music to keyboards to guitars and even horns (“No one has submitted a horn version so far,” he laughed. “But I hope someone does.”)

Linkin Park is using a group of Internet companies to carry out the massive user-generated effort, including: MySpace Music (platform, promotion and direct fan messaging); Indaba Music (hosting the MySpace application that allows musicians to auto-syndicate their remixes on MySpace); Top Spin Media (using their email for a song widget to deliver audio stems to all participants); and Ning (the back end to Linkin Park’s Web site, where they are also distributing the audio stems to push back to the contest)

There have been remix contests online done before, such as Snoop Dogg’s “That Tree” Remix Contest, which had 8,000 entries and generated a lot of fan interest.

But this effort is clearly more ambitious, perhaps because Shinoda is clearly a techie, with an ongoing interest in filling the Linkin Park Web site with puzzles, games and other interactive features.

In fact, Linkin Park had already conducted a smaller contest for fans to submit designs for characters used in a game the band released in April, called “8-Bit Rebellion,” for the Apple (AAPL) iPod touch, iPhone and iPad. And, after the game was completed by a player, it unlocked a new song, “Blackbirds.”

Shinoda said the band hopes to do even more digitally, trying to involve and engage fans in ways that they never would have tried before.

“There is a huge unknown factor and this is not something we would have done five years ago,’ he said of the latest collaboration contest. “But I am not afraid of my fans being good at music, even if it turns out they are better than me.”

Until a winner is selected, here’s a most excellent music video of my favorite Linkin Park song, “Shadow of the Day,” because I wish I had written the perfect and simple line, “Sometimes beginnings aren’t so simple/Sometimes goodbye’s the only way” (maybe some fan will write something as good):

And here’s a blog post by Sam Wick, SVP of marketing at MySpace Music, about its partnership with Linkin Park:

Linkin Park Wants To Put You on Their New Album

Linkin Park is arguably one of the biggest rock acts in the world with more than seven million fans on MySpace and iLike, two Grammy wins and a boatload of accolades from the music community. So, needless to say, we were more than a little excited to help the band launch their next album, “A Thousand Suns.”

This is a band that’s almost as passionate about social media and technology as they are about the music they create–and they came to MySpace, because we have a proven track record of successfully architecting custom album campaigns that uniquely marry music to innovation on a global scale. With this in mind, we knew we had to do something that not only raises global awareness of the new album, but really plays into the intimate artist-to-fan connection that Linkin Park has been cultivating on our platform for years. And so “Linkin Park, Featuring You” was born–a multi-phase program that each of our 30 territories across the world are rolling out locally.

Linkin Park, Featuring You begins on MySpace with a music application that allows fans to create their own original version of the band’s new single “The Catalyst” and ends with the rare opportunity for one worthy fan to have his or her song stripped onto the next album. SERIOUS. To make this happen, Linkin Park and MySpace Music brought together Topspin Media, Ning and Indaba Music–a true technology trifecta–to allow fans to interact and play with the music before it is even released. Again, SERIOUS.

Mike Shinoda of Linkin Park has this message to share with his fans on MySpace and across the Web:

“In the lifetime of Linkin Park, the evolution of community and music technology has blurred the line between artist and fan. With the release of our new album we want to push it even further and so we are making a commitment to our fans that is a first of its kind: We are blindly dedicating a spot on our new album to something unknown. That space is reserved for you and we’re confident that you will create something that we can be proud to include on “A Thousand Suns.” This is not just a “fan-remix” contest; we want to collaborate with you. This effort is made possible by the global 360 music platform of MySpace, and the dedication and talent of our incredible fans. Thank you. We look forward to hearing your submissions.”

Here’s how it works: By installing the Indaba Music-powered app on MySpace, fans have access to five stems from “The Catalyst” that they can use to re-arrange and re-imagine the song using either their own Digital Audio Workstation or with Indaba’s free, Web-based software. Once submitted, users can vote for their favorite versions and help the band in their quest to identify new talent and ultimately pick a winner.

“Linkin Park, Featuring You” is just the beginning of a much larger partnership between the band and MySpace Music that will provide Linkin Park fans with recognition worldwide with access to live shows, exclusive content and premieres as well as opportunities to connect and interact with the band in ways that only MySpace Music can offer.

Be sure to get your entries in by July 25th and don’t forget to spread the word about the contest to your friends around the world–and go buy the new single on August 2nd.

The post, written by two YouTube PR folk, purports to be a bit “myth-busting” about the site’s business model and financial status. But it’s really a series of assertions with little data to back up the claims, many of which we’ve heard before.

So really, the big takeaway here is that the Google folks are feeling ever more confident about YouTube’s prospects, enough to do some public chest-beating. But not enough to actually talk about those prospects in concrete terms.

For instance, YouTube says that estimates that the site can sell ads against only three percent to five percent of its video inventory, first asserted in a well-reported Wall Street Journal piece a year ago, are “old and wrong.” But the company won’t say what percentage of the site it does sell.

Likewise, the company says that analysts’ attempts to peg its bandwidth and hosting costs are off the mark, but doesn’t say what the real numbers are. Nor does it address the amount that YouTube has to pay content providers, either through upfront fees or revenue splits, for their clips.

And the most meaningful boast, I think, is one the company more-or-less made last week: “We are at a point where growth is definitely good for our bottom line, not bad.”

So when will Google finally start coming clean and offering up real data about the site’s performance? Got me. But here’s one indicator to watch for: What the company tells investors.

In Google’s 10-Q, for instance, YouTube is usually described as a black hole that has yet to generate signficant revenue; the company noted the same thing in its most recent quarterly report. A new 10-Q, for the quarter the Google just reported, should be out soon. Let’s see what Google has to say about YouTube in an audited filing.

For free.

Which says quite a bit about the competitive pressures Microsoft (MSFT) is feeling right now, particularly from Google (GOOG), which first challenged Office two years ago and is now taking on Windows as well. “The fact that Microsoft is developing it at all is a response to Google,” said analyst Matt Rosoff of Directions On Microsoft. “This is a move that they probably wouldn’t have made if they didn’t have to, but there is enough competition bubbling up that they thought they needed a response.”

And a measured response that trumps Google’s offerings, which Office Web Apps will do on a few levels. First, it’s free of user-separation anxiety. Companies attached to Outlook, Word and whatnot will find in Office Web Apps the same familiar interfaces and functionality. No need to grudgingly replicate the Office experience as Google recently had to do with it Outlook synchronization tool for Apps, because Office Web Apps is Office.

Second, Microsoft’s approach offers enterprise an on-premises hosting option. Which means companies that aren’t comfortable running the suite on Microsoft’s remote data centers can run it on their own servers. And, as Gartner (IT) fellow Tom Austin notes, that could do much to distinguish it from Google Apps in the marketplace. “The hybrid hosting model removes a barrier to entry that Google cannot remove, so it is somewhat of a big thing,” Austin told Digital Daily.

“Interesting question is whether this hybrid hosting model is the Lockheed Prop-jet Electra of the era. Lockheed brought out a propjet at the same time Boeing and Douglas were coming out with turbojets (the 707 and DC-8 respectively). Boeing and Douglas won out, of course, but it didn’t help that the Electras had a problem with staying in the air….I am not saying that Microsoft Cloud-Office offering is a prop-jet Electra. I am saying firms will likely opt out of choosing the hybrid model because it’s less effective (like the electra).”

The service is laying off the majority of its employees, and CEO Mike Volpi (pictured right) is out, replaced by Matt Zelesko, who had been SVP of engineering. The Joost.com portal site will stay open, but best to think of it as an ad for the company’s hosting and distribution services, which it will try to sell to cable companies and the like.

A Joost spokesperson declined to say how deep the layoffs will be; but I’m told that the company, which had more than 100 employees last fall, will be down to a couple dozen after the cuts are done. In a post on Joost’s Web site, Volpi said the company “will say goodbye to many of our colleagues and friends.”

This isn’t a shock: Joost’s fate has been the subject of whisper and rumors for the last year or more. The service made an initial splash in 2007 by raising $45 million from the founders of Skype and an array of high-profile investors and media companies, including Sequoia Capital and Viacom (VIA), and was initially supposed to deliver copyrighted content via a peer-to-peer distribution system and a player that users downloaded to their desktops.

But YouTube, and later Hulu, conditioned users to watch video via their browsers, and Joost’s software never caught on. By last fall, the company had retooled and began offering video via the browser like everyone else, but it has never been able to generate a significant audience. In November, a month after the company launched its Web browser, it said it was attracting 2.1 million unique users world-wide, a fraction of YouTube’s audience, and well behind rivals like Hulu, MetaCafe, Veoh and DailyMotion.

Here’s the service’s unique visitor count, per Comscore (SCOR); Joost’s unique viewer count, which is the more relevant metric for video sites, is considerably smaller (click to enlarge):

Joost has been a frequent candidate for buyout rumors, and the company hasn’t gone out of its way to deny them. The supposed buyers would be cable companies like Comcast (CMCSA) Time Warner Cable (TWC) or telcos like AT&T (T) and Verizon (VZ), which would presumably use Joost’s technical team to help build out their own Web video plays.

But some of the cable guys and telcos insist that they’re fine with the people they have. And if they do want to buy a video player, they have plenty of options: Just about all of Joost’s peers have been on the block, formally or informally, for the past few months.

JOOST TO PROVIDE WHITE LABEL ONLINE VIDEO PLATFORM

NEW YORK AND LONDON – June 30, 2009 – Joost, the online video startup, announced today that, along with Joost.com, it will focus on providing white label online video platforms for media companies, including cable and satellite providers, broadcasters and video aggregators. This technology and service offering will support content owners’ efforts to build comprehensive branded environments online.

Media companies around the world are embracing internet-based video portals as a key path to distribute their premium video, but building a world-class video portal is increasingly difficult and expensive. Joost will focus on this issue and provide the market with a cost-effective, end-to-end solution for media companies to publish video under their own brands.

As a part of this new direction, Joost will reorganize and restructure its business. A core team in New York and London will work on providing these solutions, as well as operating and supporting Joost.com and its associated video applications. Joost also will wind down operations in its Leiden development center.

Matt Zelesko, currently SVP of Engineering at Joost, will take over as CEO while continuing to lead the engineering organization. Stacey Seltzer, currently SVP of international business development and content acquisition at Joost, will run the business operations. Mike Volpi has stepped down as CEO of Joost but will remain actively involved as Chairman of the Board.

Joost plans to make its white label video platform commercially available to media companies around the world. This offering will provide a solution for companies looking to build a branded experience for their content on their own site as well as other sites and platforms in their distribution networks.

My story about EMI’s lawsuit against Web music start-up Grooveshark elicited this email from Ben Patterson, who runs indie Web music distributor DashGo, about his experience with the service.

I think Patterson’s remarks are useful because they spell out Grooveshark’s business plan, or at least part of it: Charge labels to promote their acts on the service’s search engine. And I think it’s also helpful to hear an obvious but little-voiced argument about the “free Web music = valuable promotion” thesis: It works best when the act or label is playing along. With Ben’s permission, I’m publishing his entire email.

I’ll caveat this by saying they are nice guys and big music fans and I’m always rooting for new music services that work for bands and music fans alike.

Back in 2007 DashGo signed a deal with Grooveshark that basically amounted to a digital download service delivered via P2P. Users who used Grooveshark’s P2P service to search for songs would be presented with a download / buy link and the revenue would be split between fan hosting the file, Grooveshark and the band.

A couple months later we got a nice packet–a t-shirt, letter and wax-sealed, yes, wax-sealed, envelope with a check for $0.59 in royalties. (Coconut Records “West Coast” I think)

Then I didn’t hear much for 6 months. No checks, no real action. At the end of 2008, they reached out and told me about their new music search engine at listen.grooveshark.com–basically Seeqpod / Songza / all other stream song aggregators…not what we licensed for, but not egregious enough to get huffy.

Of course, that was before they offered to sell me advertising for my bands as the default search keyword. For $0.05 per search, I could make the default phrase “DashGo Band Name” instead of “Search here.” I had to ask–am I getting paid per play? No of course not. Because “[they] are not profitable and can’t afford to share that advertising revenue.” So I’m paying, not even for a play, but for a search term on a service where they have users and can sell ads ONLY because people can listen to music, and because it’s free, what incentive is there EVER to buy the song?

So we don’t deliver there anymore.

I’ll tell you why all these free streaming music services are broken–because they rely on music advertising to pay the rent but give away the advertisers product. If I got free McDonald’s and Budweiser by watching the Super Bowl, why would I buy the food? As an advertiser, why would I pay a CPC to advertise streaming music and promote listens when the per stream rate a existing subscription services is AT BEST $0.02 per play?

It sucks to get sued. I’m sorry Grooveshark, but really..what did you expect? You’re soliciting labels and bands to pay your bandwidth, rent and operating costs and giving away the product.

While I’ve got this soapbox out, let me preach one more gospel; offering free music accessible via a search engine is NOT promotional if the band hasn’t opted in.

If a user SEARCHES for the music and listens to it for free in an environment where someone ELSE has posted the music and the band doesn’t have the option to ask for an email address or even pitch a tour or merch or actual album; then the service is just ripping off the band by giving free content to someone who asked for it–not promoting it to a new fan or adding a filter that helps expose and distinguish music.

[Image credit: Mrs. Logic]

Why the discrepancy? RampRate says Credit Suisse vastly overestimated YouTube’s bandwidth, storage, and data center costs. Worse, it failed to account for Google’s peering agreements, which significantly reduce Internet transit costs by exchanging traffic locally with other large networks. RampRate figures Google (GOOG) pays for about 27 percent of YouTube’s bandwidth. It trades for the remaining 73 percent through peering deals.

Beyond this, Google finds savings in other ways. It’s likely able to negotiate a lower rate for 27 percent of YouTube bandwidth it pays for simply by virtue of the sheer amount of business it’s able to bring to the table. And it keeps hosting costs low by maintaining servers in out-of-the-way locations. Says RampRate, “Regardless of what you may hear, YouTube costs are a fraction of any other company running similar operations. Most of Google’s bandwidth is free or near-free; its hardware is cost-optimized; and its data center costs are mostly committed or sunk.”

If that’s the case, why didn’t Google take issue with Credit Suisse’s (CS) projections? Why does it allow this perception of YouTube as money pit to persist? Well, silence is golden, is it not? “Any appearance of profits leads to more draconian revenue share demands from partners and additional lawsuits from owners of unlicensed content,” Ramprate explains. “An apparent loss deters this behavior, making it eminently advisable for Google to let rumors of YouTube’s losses grow and compound….

“The trail for this strategy was blazed long before YouTube. Apple’s poor-mouthing of iTunes served it exceptionally well for years in holding back the tide of higher revenue share demands (even as labels privately suspected the service was much more profitable than reported). The apparent stability and maturity of the business finally culminated in recent price increases. Google can only hope that its run with YouTube lasts as long as Apple’s luxury of $.99 pricing.”