Today it became clear that SOPA, at least in its current form, will never get that far. Word came from the White House today that the administration, while sympathetic to the cause of curbing online piracy, will support neither the SOPA bill nor its companion bill — known as PIPA — in the Senate.

Responding to a petition, the White House announced in a blog post today that Obama will not “support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.”

Basically, what it comes down to is this: Piracy is bad, but approaches like SOPA are bad solutions that would potentially hurt the free-flowing, vibrant Internet we’ve all come to rely on for so many things. As the statement reads: “Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small.”

That aligns pretty closely with a statement that Secretary of State Hilary Clinton made in a recent speech in The Hague, in which she said that governments must fight the theft of intellectual property, “without compromising the global network, its dynamism or our principles.”

On top of that, some of the technical proposals in the bill — meant to remedy the piracy problem — go too far in tinkering, and might perhaps mess up the basic plumbing of the Internet itself. Doing so would probably create unforseen Internet security problems, the White House argues.

Any bill that does aim to clamp down on piracy should be “narrowly targeted,” and cover only “activity clearly prohibited under existing U.S. laws.” That’s also a pretty clear statement that the Administration sees SOPA, as currently written, to be vastly over-broad in its legislative intent.

Additionally, there are also reports that Eric Cantor — the Virginia Republican who everyone knows is the real power broker in the House of Representatives — says the SOPA bill won’t come to the House floor for a vote anytime soon, unless there are some significant changes to it.

Somehow, I find it encouraging that opposing SOPA — or at least calling for changes to it — was the issue on which Obama and Cantor, who can’t seem to agree on anything, found they had some room for common ground. Could this signify a badly needed thaw in bipartisan relations in Washington?

Arriving at Silicon Valley’s Computer History Museum, in the heart of the tech industry, with the leader of the free world talking jobs and digital, you might expect fantastic wireless access.

You might, but not so much if you are a “local” reporter and can’t jack into the extra-secret-special wireless link the national White House press corps apparently has reserved for itself. (They also get a lovely noshing buffet, whilst we tech reporters have been instructed not to touch the pineapple and scones or else!)

Famished for coffee and carbs, we’re left with glomming onto the museum’s slowish wireless service — there are lotsa geeks here today jamming up the lines — and every now and then getting some juice from Google. The search giant blankets the Mountain View, Calif. area near its HQ with free Wi-Fi, but it fades in and out.

I am now reconsidering the antitrust investigations that the Obama administration is conducting against Google, as long as its signal is good enough to check Twitter.

So this liveblog of President Barack Obama’s LinkedIn Town Hall — which will center on jobs and is titled, “Putting America Back to Work” — could be glacial with not much news, much like what I am expecting from the event itself.

I’d certainly like to work, as long as the wireless does! (Plus, limited power outlets in the room, so it’s every reporter for herself!)

But bygones, while we await the Prez!

10:18 am: One thing that made me flee Washington, D.C., when I worked for the Washington Post, was all the rigmarole that surrounded the appearance of and access to politicians.

I get it, the security and all, and am all for it on a general safety level. But, no matter how you slice it, it hinders any kind of movement or genuine interaction, like being stuck at a really dull opera. All the world’s a stage and we are all merely waiting in traffic.

In contrast, and one of the joys of Silicon Valley, is that anyone can get up right up into the grill of the various billionaire potentates littering the landscape, engage in a debate and get a possibly real answer.

Thus, I am hoping for a lot here from LinkedIn CEO Jeff Weiner, who is going to moderate the hour-long session with the President.

By the way, while he is busy running the business-focused social networking site, Weiner is looking good in a fancy suit, almost as if he could be Secretary of the Internet. I’d vote for him.

10:28 am: Some painless but hip music is playing now, as we wait, wait, wait for Obama, who is set to begin in 30 minutes.

I wonder if the President is ever early. Wouldn’t that freak the peeps out?

(Obviously, I am bored, so I shall now go monitor Twitter to catch up on the latest in the new bad-marriage-or-not cat fight between Brad Pitt and his ex, Jennifer Aniston — as if we need him to tell us Angelina Jolie is more interesting. Frankly, Angie’s midday snack is more interesting than Jen.)

There is now what appears to be a Secret Service dude next to me, giving me a hairy eyeball. If I am jailed over my wireless protest, please give generously to my defense fund.

Free the Internet! Free the Internet!

10:35 am: Finally, the production guy is up giving out the rules. Turn off the cellphones, no making noise.

The head Secret Service guy then takes the stage. No getting out of your seat. No sudden movements. And no crossing the blue line in the front row.

“All joking aside,” he says, he will take you down. He also notes that if the President moves toward you to shake your hand, “do not move toward him.”

I love Secret Service agents — especially when played by Clint Eastwood — and wish I had one to give a few people in tech a little smackadoo on my behalf. And not only if they moved toward me!

10:47 am: This little frisson of excitement is followed by more waiting, as the final seats are filled up in the room, which is an unusually (and welcome) multi-racial and gender-balanced crowd for Silicon Valley.

Various White House aides skitter back and forth like nervous ground squirrels — I would imagine their life is one big effort to avoid any gaffe — so the Prez must be near.

I am actually looking forward to seeing him, as I never have in person and am looking forward to seeing the famous Obama charm and techie cred.

Indeed, he is probably the most fast-forward tech president there has ever been. That said, buffeted by more serious issues facing the nation, his administration has delivered on few — by which I mean none — of its promises around the digitization of the U.S.

Our high-speed broadband, for example, is still woefully slow, inordinately expensive and not easily available nationwide.

And I will not even go into the need for increased focus on math and science education or the importance of our broken visa policies.

But the topic today is jobs, which is an arena where Silicon Valley and tech shines in the U.S., even as manufacturing of it has mostly moved overseas. How tech can help improve in the creation of jobs will be issue No. 1 here.

10:55 am: Total silence with five minutes to go. I need the President around to quiet my kids.

Now, LinkedIn Chairman and VC Reid Hoffman comes in, so the event is probably about to begin.

And, indeed, Weiner emerges to cheers, to give a little speech on “changing the way we work … and connecting talent to opportunity.”

11:01 am: Then, the session starts right on time with President Obama.

He begins with a rote speech on jobs, which is nonetheless the most important issue he faces going into next year’s election.

11:14 am: Ah, wireless glitch! Back!

President Obama is inexplicably in the middle of a Medicare question, which gives him an opportunity to talk about the need for the rich to pay more taxes.

And pass his American Jobs Act, of course.

11:17 am: More on proposing legislation for retraining workers, such as the questioner’s mom.

Now to a group of email questions. The first is about when small businesses are going to get a break from onerous regulations and taxes.

President Obama says since he has been in office, he has cut taxes 16 times for those who create a business.

But he is not going to apologize for some regulations, such as those for the financial industry over the mortgage crisis.

“There are some regulations that have outlived their usefulness,” he says, but others not so much.

11:24 am: The next question is from a Chicago IT employee. Except she is not employed.

She is asking a question about keeping her skills up and what programs are needed.

“The best thing we can do for you is that the unemployment rate goes down,” said President Obama, but also adds that making it easy to go to school while waiting on a job is also important.

“Just looking at you, I can tell you are going to do great,” he tells her in an awkward effort at reassurance.

Thanks, Barack, but she needs a job!

11:28 am: A veteran is asking a question about transitioning out of the military.

Obama launches into a story of a medical technician who faced all kinds of experiences, but had to start over again with new classes when out of the military. He suggests some level of credentialing based on experience.

11:33 am: Obama gets to pick out someone from the crowd and manages to pick out a dude who is a former Googler — although he only says that he works down the street — and is out of work by choice.

He asks: “Will you please raise my taxes?

A plant? I wish!

President Obama asks the name of the start-up. “A search engine,” says the ex-Googler-in-disguise, who is Doug Edwards, an early marketing exec there who actually wrote a book on being an ex-Googler.

“That worked out well for you,” kids President Obama.

Everyone likes a rich-guy joke!

He is soon onto the idea that we’re all dang lucky and declares he does not want it to turn the debate over taxes into a rich-poor war.

Bottom line, he notes that we have to raise taxes on the very wealthy. Frankly, if we raised taxes on a bunch of folks in this room, it would help a lot.

11:42 am: A teach-training question, especially math and science teachers.

President Obama is all for it.

He is meaning well here, but all he seems to offer is a lot of bromides about the importance of education and errant related anecdotes.

Like one from IBM, where the company hires the kids in the program at the end.

President Obama wants students to see a direct connection between learning and jobs.

Then, he kind of says it again. Gosh, he can talk. How does the well-fed and wirelessly connected White House press corp take it? Lotsa donuts, I would imagine.

President Obama also wants us to turn off the electronics and video games for kids, too, thereby instantly losing the votes of my two sons!

Another laid-off guy is up at the mic. He had 22 years in IT management and is disheartened.

He wants a statement of encouragement from the CEO of America.

President Obama assures him that his track record of success gives him a leg up, but that the problem is the economy and the global meltdown, too.

It’s systemic, apparently.

“The problem is not you, the problem is the economy as a whole,” says President Obama.

That was the last question. Weiner, who has been sitting quietly (I know it was hard, Jeff, but good job), thanks the President and tells him that this is a big issue.

President does his thanks, too, for being able to speak, although not really that much was actually said.

And then a genuine moment, finally, of clarity.

“Look, we’re going through a very tough time, but we have gone through tougher times before,” he says. “But the trajectory we are going on is one that is more open, more linked …”

He talks about the need for being ready to take advantage of that opportunity.

“Things have gotten so ideologically driven, putting party above country,” he adds, that nothing is getting done. That’s why the people, the voters, have to demand leadership from their elected officials.

Or, presumably, fire them and let them try to find another job, too.

It might turn out to be the best idea yet, if these pols don’t agree on something and quick.

Some employees are alleging they were duped via complicated legalese and double-talk in employment contracts about how their shares would be handled upon termination or voluntary departure from the Internet telephony giant.

That matters, since Skype was recently sold to Microsoft for $8.5 billion, well above previous valuations. Thus, those who were, as a Skype PR person said, not in it to win it, um, lost.

Dramatic stuff, to be sure. But, even with all the fervor around the employment contract issue, the handwringing about what it means for compensation issues in Silicon Valley and a whole big dose of how private equity companies (in this case, a firm that had bought Skype called Silver Lake) are evil, it’s struck me as little more than an insider read-the-legally-obtuse-contract dispute.

And, although I love Reuters’ Felix Salmon’s epic tsk-tsking posts, that’s why I like to see real documents as proof of what people knew and when.

Apparently, a lot and rather clearly from this PowerPoint that was given to employees of Skype as of December 2009 as part of its changing ownership, after Silver Lake and other investors bought it from eBay.

While it’s not proof of what employees got it — typically, it is standard HR policy to hand this stuff out to everyone — and who read it (no accounting for slaggards!), it is pretty clear on what happens upon leaving Skype, either by a firing or quitting.

On the eighth slide, as you can see above, it says, in part:

“Good Leaver”: someone who gets fired without “Cause”

* Gets the fair-market value of their currently vested options

“Bad Leaver”: someone who resigns, or is fired for “Cause”

* Skype buys back their options at the lower of fair-market value or strike price

* This provision lapses post-IPO

It seems pretty buyer-beware clear, but check it out for yourself:

Skype – Employee Presentation

Would it surprise you to know that BoomTown doesn’t really care anymore if TechCrunch editor Michael Arrington sidelines as a blogger while he makes investments in tech companies his tech news site covers?

In a post yesterday, titled “An Update to My Investment Policy,” Arrington made his seemingly cogent arguments that plenty of disclosure made it all “fine,” took one of his typical look-at-me swipes at anyone who dared to question this logic (apparently, we’re crappy “direct” competitors, so we haters have no standing to comment!) and presumably went on his merry investing way.

While I was first irked–because it was an appalling show to many of us cranky standards-insisting whiners–I soon realized Arrington had made a good argument about who he is and, frankly, who he has always been.

In other words, it’s a kind of there-he-goes-again thing, vaguely icky but hardly surprising and completely genuine.

Meanwhile, his new boss, AOL content head Arianna Huffington, pointed me to his post in an email.

When I asked her for an on-the-record comment, as usual, she politely and quickly complied, writing in support of Arrington:

“TechCrunch is committed to transparency. Michael has written about the guidelines he follows–that he rarely writes about companies in which he is an investor, and that, when he does, he clearly discloses this information. The same rules apply when TechCrunch’s writers cover these companies.”

Hold the phone.

Because while I kind of understand where Arrington is coming from, what I don’t understand is how this kind of convenient and on-the-fly rule-making can govern a much larger company whose strongly and repeatedly stated goal by Huffington herself is to create quality journalism.

Since I believed Huffington–whom I like very much as an Internet figure and as a friend–I was confused at what the rules for the whole of AOL content were now.

That’s why I sent her a long new list of questions to answer, which are:

1) What are, if any, the ethical guidelines about making investments for the editorial staff at HuffPo media group properties?

2) Since Arrington now seems to have permission to do so from you, can other editors at AOL properties do the same–that is, make very adjacent investments to what their site covers, as long as they disclose it? For example, can an editor who runs the entertainment site make investments in entertainment companies she/he has coverage responsibility over? (By the way, did you give him permission to make these investments? Did he ask?)

3) Is there anyone who polices what is fair coverage of competitors–i.e. companies competing with companies your editors invest in?

4) If an editor makes investments in a company and someone who works for them writes about that company, does that editor have to recuse himself from the story? Is that even possible?

5) Since you just fired someone for what you called an ethical breach–asking freelancers to work for free and also seemingly defending an attempt to curry favor with an advertiser/client–why is this not an ethical breach?

I had a lot more questions, still unanswered by Huffington, but you can see where this is going.

Simply put, does AOL, which is touting itself as a 21st-century media company, need to have 21st-century rules of the road? Or perhaps not so much?

UPDATE: Now, it is a real clown circus at AOL, with the company declaring that editorial personnel cannot make investments, except Arrington!

“As a rule, in order to avoid conflicts of interests, AOL Huffington Post Media Group editors, writers, and reporters may not have a financial interest in a company or industry that they regularly cover,” AOL said in a statement to Business Insider today, even though I nicely asked for a comment on the issue yesterday. “Arrington operates from a unique position.”

And how! Where do I get such a faboo ethical hall pass from Content Principal Huffington?

I suppose I should go all slouching-towards-Bethlehem here, and wring my hands over this unusual ruling, but what’s the use?

As you might have read: “The best lack all conviction, while the worst are full of passionate intensity.”

How did this all start, especially since I feel like this ridiculous tempest in a Silicon Valley teapot over Arrington’s investment-making might actually be my fault a little bit?

Here’s why:

On Tuesday night around 10 pm (just when I start getting revved up), I wrote a testy email to Arrington’s bosses at AOL–Huffington and CEO Tim Armstrong–as well as the Internet portal’s sharp PR head, asking for a response about what seemed to me to be a glaring conflict of interest at TechCrunch related to new investment activity by Arrington and the site’s coverage of those particular companies he had invested in.

It was all disclosed, of course, but it still felt, as I said, icky.

And, given the recent and loudly stated goal of promoting quality journalism by Huffington–including the recent dismissal of AOL’s Moviefone site editor over what the company considered ethical lapses–it seemed pertinent to ask.

Mostly because I don’t think they actually knew much–if at all–about Arrington’s increasing investing action. Armstrong said as much in an email to me, and Huffington assured me they were going to check it out tout de suite.

But rather than the answer I was waiting on, up popped Arrington’s missive yesterday, which I assume came after his bosses asked for some info on this.

In it, he explained his controversial decision to go back into investing again, in what is clearly a more significant manner.

It was a practice he had abandoned years earlier, apparently after being pecked by detractors for it.

But, dear readers, no more! Let Arrington be Arrington!

And that seems to be a talented blogger with a flare for the dramatic, with a clearly sharply-honed news nose and sassy writing skills, but a scribe who much prefers to be a playah than just an observer and chronicler of that play.

And, after more reflection, I thought: Well, maybe it is a better idea for Arrington to go play with all the boys in Silicon Valley, which would probably be more fun than taking flack for lack of traditional journalistic ethics he never ascribed to in the first place.

I once jokingly nicknamed Arrington Yertle the Turtle after the Dr. Seuss book on one dubious king of one small pond in Sala-Ma-Sond, after he went particularly nuts on the topic of news-embargo breaking.

That diatribe on how he saw news rules–which is to say, there aren’t any that bind him–was vintage Arrington, too. And, after reading his latest post, I suddenly realized that it’s pointless to give a turtle a hard time for not being a fish.

But Huffington is another story. She has put herself in word and deed right into the center of the debate on where news is going on the Web, especially after AOL paid $315 million for her Huffington Post news and opinion site.

Huffington has certainly taken a lot of hits over the years as the HuffPo has grown, some deserved, but she has clearly led an impressive effort.

In fact, I think the cute-kitten and celebrity-loving angle played up by her detractors to dismiss her is silliness, because she and the Huffington Post are clearly more than that and are obviously having a major impact on the future direction of content in the digital age.

But that power she has sought also gives her a responsibility to say exactly what that means on a real and granular and consistent level, beyond the platitudes of wanting to make great journalism that she declares all the time now.

In other words, very specifically: What does Arianna Huffington stand for in regards to journalism? What are her rules and standards and codes? And, perhaps more importantly, what does she not stand up for?

These are questions I hope Huffington–who is really good at smacking back at criticism, too (See: the New York Times’ Bill Keller)–will address in one of her patented blog-xplosions and many times over, too.

Until then, here’s a link to my very long and very detailed ethics disclosure on All Things Digital, which is exactly how our little site thinks it should be in the digital age.

In short, besides signing the Dow Jones Code of Conduct–standard at The Wall Street Journal and other DJ publications–all our editorial staff is required to also pen their own in-plain-English personal and detailed account of disclosures that are pertinent to their job.

(You can read an extensive interview with me on the subject, in fact, which was posted here by Two Bananas Marketing, this week.)

My ATD disclosure is probably the most detailed of all of them, since I gay-married Megan Smith a dozen years ago. She later became a VP at Google, which I cover from time to time, especially related to other companies I focus on more, such as Yahoo.

Most of the time, if you care to read my posts on Google, I am probably tougher and snarkier than not, mostly because I know the search giant from its earliest days.

And, even though I once wrote extensively for the Journal about Google since its founding and before Megan arrived there, I thought it wise to lay it all out in detailed detail.

(By the way, if you want to try to tweak me by asking what News Corp.-owned Fox News’ ethics rules are, I don’t know, as ATD belongs to Dow Jones, which has had them forever. I will say, though, that Roger Ailes often freaks me out.)

In any case, as Arrington preaches, the more disclosure the better, and perhaps I should say even more so here, given the current swirl, by noting explicitly that I garner exactly no financial benefits from my relationship with Megan.

That might seem odd, because she certainly earns more. But I don’t know how much nor do I ask, since we have separate bank accounts and she always pays up–well, almost always–when half the bills are due. While it sounds painfully un-romantic, we only spend overall what each of us can afford equally in an exact 50-50 split.

In addition, I also legally signed away all rights to inheritance–although I had no such marriage rights in the first place, being gay–of Megan’s assets, which are in a trust for her relatives and our sons (for when they are too old to have any fun).

More to the point, I believe this makes me the only person to marry an exec at a hot Silicon Valley company with no prospect of any gold-digging.

Thus, I clearly would make the worst investor ever–not that I ever invest in tech or plan to while I am a reporter covering the sector.

Thank god, I suppose, that Michael Arrington is there to take up the slack.

Yesterday, in a major policy speech in Washington, D.C., Secretary of State Hillary Clinton jumped on the Internet bandwagon again, unveiling a $25 million government investment for entrepreneurs to allow dissidents to thwart “thugs, hackers and censors.”

Since that’s about the amount a third-string social photo-sharing site gets while walking down University Avenue in Palo Alto, Calif., from venture capitalists with bags of money to spend, let me just say the money is, well, underwhelming.

Luckily, Clinton’s speech–the latest chapter of the Obama administration’s “Internet Freedom Agenda”–was much better.

In fact, it was a sobering look at the situation, replete with all its conflicts and compromises, including some related to the State Department of late (hello, WikiLeaks!).

While more of a gimmick, Clinton outlined what she called a “venture capital-style approach” to stopping governments from closing down digital communications platforms.

In Egypt, that has included the whole dang Internet after times got tough and protesters tweeted too much.

Even still, said Clinton, such efforts–however effective now–were ultimately useless.

“Those who clamp down on Internet freedom may be able to hold back the full expression of their people’s yearnings for a while, but not forever,” she said.

Still, even though Facebook and Twitter have been lauded as critical tools in the reform protests in the Mideast, those Luddite strongmen did manage to put up a very good fight in shutting them down.

But Clinton advocated pressing on. Along with the seed funding for firewall-piercing and evading technologies, she also announced the creation of a new coordinator for cyber issues and the fact that the State Department had just begun to tweet in Arabic and Farsi and would soon be doing so in Chinese, Hindi and Russian.

All very nice steps, but the overall arrival of the long-promised global “strategy for cyberspace,” which has gotten bogged down in politics, is still to come.

In fact, a GOP-fueled criticism of the State Department was also released yesterday, designed to muck up Clinton’s speech, about how another $30 million in digital investments was being spent or, more precisely, being spent badly.

Clinton answered critics:

“Some have criticized us for not pouring funding into a single technology–but there is no silver bullet in the struggle against Internet repression. There’s no ‘app’ for that.”

Well, actually, since there is an app that turns your Apple iPhone into a hand massager, there certainly should be.

Speaking of that, Clinton was deft at dealing with the obvious delta between pressing for Internet freedom, even as U.S. government lawyers were whacking away at WikiLeaks–and, by association, Twitter itself.

Clinton noted the release of a mass of classified State Department documents “began with an act of theft,” arguing that this was the real issue.

She went on to further argue:

“I said that the WikiLeaks incident began with a theft, just as if it had been executed by smuggling papers in a briefcase. The fact that WikiLeaks used the Internet is not the reason we criticized its actions. WikiLeaks does not challenge our commitment to Internet freedom.”

Actually, the issue is that the Internet, once it really gets going, doesn’t really want to be controlled by anyone.

Kind of like humanity.

Or as Clinton so correctly noted about the various protests taking place abroad:

“In each case, people protested because of deep frustrations with the political and economic conditions of their lives. They stood and marched and chanted and the authorities tracked and blocked and arrested them. The Internet did not do any of those things; people did.”

In any case, judge for yourself: Here’s the video of the speech at George Washington University from the State Department’s Web site, as well as the full text below:

Thank you all very much and good afternoon. It is a pleasure, once again, to be back on the campus of the George Washington University, a place that I have spent quite a bit of time in all different settings over the last now nearly 20 years. I’d like especially to thank President Knapp and Provost Lerman, because this is a great opportunity for me to address such a significant issue, and one which deserves the attention of citizens, governments, and I know is drawing that attention. And perhaps today in my remarks, we can begin a much more vigorous debate that will respond to the needs that we have been watching in real time on our television sets.

A few minutes after midnight on January 28th, the Internet went dark across Egypt. During the previous four days, hundreds of thousands of Egyptians had marched to demand a new government. And the world, on TVs, laptops, cell phones, and smart phones, had followed every single step. Pictures and videos from Egypt flooded the web. On Facebook and Twitter, journalists posted on-the-spot reports. Protestors coordinated their next moves. And citizens of all stripes shared their hopes and fears about this pivotal moment in the history of their country.

Millions worldwide answered in real time, “You are not alone and we are with you.” Then the government pulled the plug. Cell phone service was cut off, TV satellite signals were jammed, and Internet access was blocked for nearly the entire population. The government did not want the people to communicate with each other and it did not want the press to communicate with the public. It certainly did not want the world to watch.

The events in Egypt recalled another protest movement 18 months earlier in Iran, when thousands marched after disputed elections. Their protestors also used websites to organize. A video taken by cell phone showed a young woman named Neda killed by a member of the paramilitary forces, and within hours, that video was being watched by people everywhere.

The Iranian authorities used technology as well. The Revolutionary Guard stalked members of the Green Movement by tracking their online profiles. And like Egypt, for a time, the government shut down the internet and mobile networks altogether. After the authorities raided homes, attacked university dorms, made mass arrests, tortured and fired shots into crowds, the protests ended.

In Egypt, however, the story ended differently. The protests continued despite the internet shutdown. People organized marches through flyers and word of mouth and used dial-up modems and fax machines to communicate with the world. After five days, the government relented and Egypt came back online. The authorities then sought to use the Internet to control the protests by ordering mobile companies to send out pro-government text messages, and by arresting bloggers and those who organized the protests online. But 18 days after the protests began, the government failed and the president resigned.

What happened in Egypt and what happened in Iran, which this week is once again using violence against protestors seeking basic freedoms, was about a great deal more than the internet. In each case, people protested because of deep frustrations with the political and economic conditions of their lives. They stood and marched and chanted and the authorities tracked and blocked and arrested them. The Internet did not do any of those things; people did. In both of these countries, the ways that citizens and the authorities used the Internet reflected the power of connection technologies on the one hand as an accelerant of political, social, and economic change, and on the other hand as a means to stifle or extinguish that change.

There is a debate currently underway in some circles about whether the Internet is a force for liberation or repression. But I think that debate is largely beside the point. Egypt isn’t inspiring people because they communicated using Twitter. It is inspiring because people came together and persisted in demanding a better future. Iran isn’t awful because the authorities used Facebook to shadow and capture members of the opposition. Iran is awful because it is a government that routinely violates the rights of its people.

So it is our values that cause these actions to inspire or outrage us, our sense of human dignity, the rights that flow from it, and the principles that ground it. And it is these values that ought to drive us to think about the road ahead. Two billion people are now online, nearly a third of humankind. We hail from every corner of the world, live under every form of government, and subscribe to every system of beliefs. And increasingly, we are turning to the Internet to conduct important aspects of our lives.

The Internet has become the public space of the 21st century–the world’s town square, classroom, marketplace, coffeehouse, and nightclub. We all shape and are shaped by what happens there, all 2 billion of us and counting. And that presents a challenge. To maintain an Internet that delivers the greatest possible benefits to the world, we need to have a serious conversation about the principles that will guide us, what rules exist and should not exist and why, what behaviors should be encouraged or discouraged and how.

The goal is not to tell people how to use the Internet any more than we ought to tell people how to use any public square, whether it’s Tahrir Square or Times Square. The value of these spaces derives from the variety of activities people can pursue in them, from holding a rally to selling their vegetables, to having a private conversation. These spaces provide an open platform, and so does the Internet. It does not serve any particular agenda, and it never should. But if people around the world are going come together every day online and have a safe and productive experience, we need a shared vision to guide us.

One year ago, I offered a starting point for that vision by calling for a global commitment to Internet freedom, to protect human rights online as we do offline. The rights of individuals to express their views freely, petition their leaders, worship according to their beliefs–these rights are universal, whether they are exercised in a public square or on an individual blog. The freedoms to assemble and associate also apply in cyberspace. In our time, people are as likely to come together to pursue common interests online as in a church or a labor hall.

Together, the freedoms of expression, assembly, and association online comprise what I’ve called the freedom to connect. The United States supports this freedom for people everywhere, and we have called on other nations to do the same. Because we want people to have the chance to exercise this freedom. We also support expanding the number of people who have access to the Internet. And because the Internet must work evenly and reliably for it to have value, we support the multi-stakeholder system that governs the internet today, which has consistently kept it up and running through all manner of interruptions across networks, borders, and regions.

In the year since my speech, people worldwide have continued to use the Internet to solve shared problems and expose public corruption, from the people in Russia who tracked wildfires online and organized a volunteer firefighting squad, to the children in Syria who used Facebook to reveal abuse by their teachers, to the Internet campaign in China that helps parents find their missing children.

At the same time, the Internet continues to be restrained in a myriad of ways. In China, the government censors content and redirects search requests to error pages. In Burma, independent news sites have been taken down with distributed denial of service attacks. In Cuba, the government is trying to create a national intranet, while not allowing their citizens to access the global internet. In Vietnam, bloggers who criticize the government are arrested and abused. In Iran, the authorities block opposition and media websites, target social media, and steal identifying information about their own people in order to hunt them down.

These actions reflect a landscape that is complex and combustible, and sure to become more so in the coming years as billions of more people connect to the Internet. The choices we make today will determine what the Internet looks like in the future. Businesses have to choose whether and how to enter markets where internet freedom is limited. People have to choose how to act online, what information to share and with whom, which ideas to voice and how to voice them. Governments have to choose to live up to their commitments to protect free expression, assembly, and association.

For the United States, the choice is clear. On the spectrum of Internet freedom, we place ourselves on the side of openness. Now, we recognize that an open Internet comes with challenges. It calls for ground rules to protect against wrongdoing and harm. And Internet freedom raises tensions, like all freedoms do. But we believe the benefits far exceed the costs.

And today, I’d like to discuss several of the challenges we must confront as we seek to protect and defend a free and open Internet. Now, I’m the first to say that neither I nor the United States Government has all the answers. We’re not sure we have all the questions. But we are committed to asking the questions, to helping lead a conversation, and to defending not just universal principles but the interests of our people and our partners.

The first challenge is achieving both liberty and security. Liberty and security are often presented as equal and opposite; the more you have of one, the less you have of the other. In fact, I believe they make it each other possible. Without security, liberty is fragile. Without liberty, security is oppressive. The challenge is finding the proper measure: enough security to enable our freedoms, but not so much or so little as to endanger them.

Finding this proper measure for the Internet is critical because the qualities that make the internet a force for unprecedented progress–its openness, its leveling effect, its reach and speed–also enable wrongdoing on an unprecedented scale. Terrorists and extremist groups use the Internet to recruit members, and plot and carry out attacks. Human traffickers use the Internet to find and lure new victims into modern-day slavery. Child pornographers use the Internet to exploit children. Hackers break into financial institutions, cell phone networks, and personal email accounts.

So we need successful strategies for combating these threats and more without constricting the openness that is the Internet’s greatest attribute. The United States is aggressively tracking and deterring criminals and terrorists online. We are investing in our nation’s cyber-security, both to prevent cyber-incidents and to lessen their impact. We are cooperating with other countries to fight transnational crime in cyberspace. The United States Government invests in helping other nations build their own law enforcement capacity. We have also ratified the Budapest Cybercrime Convention, which sets out the steps countries must take to ensure that the internet is not misused by criminals and terrorists while still protecting the liberties of our own citizens.

In our vigorous effort to prevent attacks or apprehend criminals, we retain a commitment to human rights and fundamental freedoms. The United States is determined to stop terrorism and criminal activity online and offline, and in both spheres we are committed to pursuing these goals in accordance with our laws and values.

Now, others have taken a different approach. Security is often invoked as a justification for harsh crackdowns on freedom. Now, this tactic is not new to the digital age, but it has new resonance as the internet has given governments new capacities for tracking and punishing human rights advocates and political dissidents. Governments that arrest bloggers, pry into the peaceful activities of their citizens, and limit their access to the Internet may claim to be seeking security. In fact, they may even mean it as they define it. But they are taking the wrong path. Those who clamp down on Internet freedom may be able to hold back the full expression of their people’s yearnings for a while, but not forever.

The second challenge is protecting both transparency and confidentiality. The Internet’s strong culture of transparency derives from its power to make information of all kinds available instantly. But in addition to being a public space, the Internet is also a channel for private communications. And for that to continue, there must be protection for confidential communication online. Think of all the ways in which people and organizations rely on confidential communications to do their jobs. Businesses hold confidential conversations when they’re developing new products to stay ahead of their competitors. Journalists keep the details of some sources confidential to protect them from exposure or retribution. And governments also rely on confidential communication online as well as offline. The existence of connection technologies may make it harder to maintain confidentiality, but it does not alter the need for it.

Now, I know that government confidentiality has been a topic of debate during the past few months because of WikiLeaks, but it’s been a false debate in many ways. Fundamentally, the WikiLeaks incident began with an act of theft. Government documents were stolen, just the same as if they had been smuggled out in a briefcase. Some have suggested that this theft was justified because governments have a responsibility to conduct all of our work out in the open in the full view of our citizens. I respectfully disagree. The United States could neither provide for our citizens’ security nor promote the cause of human rights and democracy around the world if we had to make public every step of our efforts. Confidential communication gives our government the opportunity to do work that could not be done otherwise.

Consider our work with former Soviet states to secure loose nuclear material. By keeping the details confidential, we make it less likely that terrorists or criminals will find the nuclear material and steal it for their own purposes. Or consider the content of the documents that WikiLeaks made public. Without commenting on the authenticity of any particular documents, we can observe that many of the cables released by WikiLeaks relate to human rights work carried on around the world. Our diplomats closely collaborate with activists, journalists, and citizens to challenge the misdeeds of oppressive governments. It is dangerous work. By publishing diplomatic cables, WikiLeaks exposed people to even greater risk.

For operations like these, confidentiality is essential, especially in the Internet age when dangerous information can be sent around the world with the click of a keystroke. But of course, governments also have a duty to be transparent. We govern with the consent of the people, and that consent must be informed to be meaningful. So we must be judicious about when we close off our work to the public, and we must review our standards frequently to make sure they are rigorous. In the United States, we have laws designed to ensure that the government makes its work open to the people, and the Obama Administration has also launched an unprecedented initiative to put government data online, to encourage citizen participation, and to generally increase the openness of government.

The U.S. Government’s ability to protect America, to secure the liberties of our people, and to support the rights and freedoms of others around the world depends on maintaining a balance between what’s public and what should and must remain out of the public domain. The scale should and will always be tipped in favor of openness, but tipping the scale over completely serves no one’s interests. Let me be clear. I said that the WikiLeaks incident began with a theft, just as if it had been executed by smuggling papers in a briefcase. The fact that WikiLeaks used the Internet is not the reason we criticized its actions. WikiLeaks does not challenge our commitment to Internet freedom.

And one final word on this matter: There were reports in the days following these leaks that the United States Government intervened to coerce private companies to deny service to WikiLeaks. That is not the case. Now, some politicians and pundits publicly called for companies to disassociate from WikiLeaks, while others criticized them for doing so. Public officials are part of our country’s public debates, but there is a line between expressing views and coercing conduct. Business decisions that private companies may have taken to enforce their own values or policies regarding WikiLeaks were not at the direction of the Obama Administration.

A third challenge is protecting free expression while fostering tolerance and civility. I don’t need to tell this audience that the Internet is home to every kind of speech–false, offensive, incendiary, innovative, truthful, and beautiful.

The multitude of opinions and ideas that crowd the Internet is both a result of its openness and a reflection of our human diversity. Online, everyone has a voice. And the Universal Declaration of Human Rights protects the freedom of expression for all. But what we say has consequences. Hateful or defamatory words can inflame hostilities, deepen divisions, and provoke violence. On the Internet, this power is heightened. Intolerant speech is often amplified and impossible to retract. Of course, the Internet also provides a unique space for people to bridge their differences and build trust and understanding.

Some take the view that, to encourage tolerance, some hateful ideas must be silenced by governments. We believe that efforts to curb the content of speech rarely succeed and often become an excuse to violate freedom of expression. Instead, as it has historically been proven time and time again, the better answer to offensive speech is more speech. People can and should speak out against intolerance and hatred. By exposing ideas to debate, those with merit tend to be strengthened, while weak and false ideas tend to fade away; perhaps not instantly, but eventually.

Now, this approach does not immediately discredit every hateful idea or convince every bigot to reverse his thinking. But we have determined as a society that it is far more effective than any other alternative approach. Deleting writing, blocking content, arresting speakers–these actions suppress words, but they do not touch the underlying ideas. They simply drive people with those ideas to the fringes, where their convictions can deepen, unchallenged.

Last summer, Hannah Rosenthal, the U.S. Special Envoy to Monitor and Combat Anti-Semitism, made a trip to Dachau and Auschwitz with a delegation of American imams and Muslim leaders. Many of them had previously denied the Holocaust, and none of them had ever denounced Holocaust denial. But by visiting the concentration camps, they displayed a willingness to consider a different view. And the trip had a real impact. They prayed together, and they signed messages of peace, and many of those messages in the visitors books were written in Arabic. At the end of the trip, they read a statement that they wrote and signed together condemning without reservation Holocaust denial and all other forms of anti-Semitism.

The marketplace of ideas worked. Now, these leaders had not been arrested for their previous stance or ordered to remain silent. Their mosques were not shut down. The state did not compel them with force. Others appealed to them with facts. And their speech was dealt with through the speech of others.

The United States does restrict certain kinds of speech in accordance with the rule of law and our international obligations. We have rules about libel and slander, defamation, and speech that incites imminent violence. But we enforce these rules transparently, and citizens have the right to appeal how they are applied. And we don’t restrict speech even if the majority of people find it offensive. History, after all, is full of examples of ideas that were banned for reasons that we now see as wrong. People were punished for denying the divine right of kings, or suggesting that people should be treated equally regardless of race, gender, or religion. These restrictions might have reflected the dominant view at the time, and variations on these restrictions are still in force in places around the world.

But when it comes to online speech, the United States has chosen not to depart from our time-tested principles. We urge our people to speak with civility, to recognize the power and reach that their words can have online. We’ve seen in our own country tragic examples of how online bullying can have terrible consequences. Those of us in government should lead by example, in the tone we set and the ideas we champion. But leadership also means empowering people to make their own choices, rather than intervening and taking those choices away. We protect free speech with the force of law, and we appeal to the force of reason to win out over hate.

Now, these three large principles are not always easy to advance at once. They raise tensions, and they pose challenges. But we do not have to choose among them. Liberty and security, transparency and confidentiality, freedom of expression and tolerance–these all make up the foundation of a free, open, and secure society as well as a free, open, and secure internet where universal human rights are respected, and which provides a space for greater progress and prosperity over the long run.

Now, some countries are trying a different approach, abridging rights online and working to erect permanent walls between different activities–economic exchanges, political discussions, religious expressions, and social interactions. They want to keep what they like and suppress what they don’t. But this is no easy task. Search engines connect businesses to new customers, and they also attract users because they deliver and organize news and information. Social networking sites aren’t only places where friends share photos; they also share political views and build support for social causes or reach out to professional contacts to collaborate on new business opportunities.

Walls that divide the Internet, that block political content, or ban broad categories of expression, or allow certain forms of peaceful assembly but prohibit others, or intimidate people from expressing their ideas are far easier to erect than to maintain. Not just because people using human ingenuity find ways around them and through them but because there isn’t an economic Internet and a social Internet and a political Internet; there’s just the Internet. And maintaining barriers that attempt to change this reality entails a variety of costs–moral, political, and economic. Countries may be able to absorb these costs for a time, but we believe they are unsustainable in the long run. There are opportunity costs for trying to be open for business but closed for free expression–costs to a nation’s education system, its political stability, its social mobility, and its economic potential.

When countries curtail Internet freedom, they place limits on their economic future. Their young people don’t have full access to the conversations and debates happening in the world or exposure to the kind of free inquiry that spurs people to question old ways of doing and invent new ones. And barring criticism of officials makes governments more susceptible to corruption, which create economic distortions with long-term effects. Freedom of thought and the level playing field made possible by the rule of law are part of what fuels innovation economies.

So it;s not surprising that the European-American Business Council, a group of more than 70 companies, made a strong public support statement last week for Internet freedom. If you invest in countries with aggressive censorship and surveillance policies, your website could be shut down without warning, your servers hacked by the government, your designs stolen, or your staff threatened with arrest or expulsion for failing to comply with a politically motivated order. The risks to your bottom line and to your integrity will at some point outweigh the potential rewards, especially if there are market opportunities elsewhere.

Now, some have pointed to a few countries, particularly China, that appears to stand out as an exception, a place where Internet censorship is high and economic growth is strong. Clearly, many businesses are willing to endure restrictive internet policies to gain access to those markets, and in the short term, even perhaps in the medium term, those governments may succeed in maintaining a segmented internet. But those restrictions will have long-term costs that threaten one day to become a noose that restrains growth and development.

There are political costs as well. Consider Tunisia, where online economic activity was an important part of the country’s ties with Europe while online censorship was on par with China and Iran, the effort to divide the economic internet from the “everything else” Internet in Tunisia could not be sustained. People, especially young people, found ways to use connection technologies to organize and share grievances, which, as we know, helped fuel a movement that led to revolutionary change. In Syria, too, the government is trying to negotiate a non-negotiable contradiction. Just last week, it lifted a ban on Facebook and YouTube for the first time in three years, and yesterday they convicted a teenage girl of espionage and sentenced her to five years in prison for the political opinions she expressed on her blog.

This, too, is unsustainable. The demand for access to platforms of expression cannot be satisfied when using them lands you in prison. We believe that governments who have erected barriers to Internet freedom, whether they’re technical filters or censorship regimes or attacks on those who exercise their rights to expression and assembly online, will eventually find themselves boxed in. They will face a dictator’s dilemma and will have to choose between letting the walls fall or paying the price to keep them standing, which means both doubling down on a losing hand by resorting to greater oppression and enduring the escalating opportunity cost of missing out on the ideas that have been blocked and people who have been disappeared.

I urge countries everywhere instead to join us in the bet we have made, a bet that an open internet will lead to stronger, more prosperous countries. At its core, it’s an extension of the bet that the United States has been making for more than 200 years, that open societies give rise to the most lasting progress, that the rule of law is the firmest foundation for justice and peace, and that innovation thrives where ideas of all kinds are aired and explored. This is not a bet on computers or mobile phones. It’s a bet on people. We’re confident that together with those partners in government and people around the world who are making the same bet by hewing to universal rights that underpin open societies, we’ll preserve the internet as an open space for all. And that will pay long-term gains for our shared progress and prosperity. The United States will continue to promote an Internet where people’s rights are protected and that it is open to innovation, interoperable all over the world, secure enough to hold people’s trust, and reliable enough to support their work.

In the past year, we have welcomed the emergence of a global coalition of countries, businesses, civil society groups, and digital activists seeking to advance these goals. We have found strong partners in several governments worldwide, and we’ve been encouraged by the work of the Global Network Initiative, which brings together companies, academics, and NGOs to work together to solve the challenges we are facing, like how to handle government requests for censorship or how to decide whether to sell technologies that could be used to violate rights or how to handle privacy issues in the context of cloud computing. We need strong corporate partners that have made principled, meaningful commitments to internet freedom as we work together to advance this common cause.

We realize that in order to be meaningful, online freedoms must carry over into real-world activism. That’s why we are working through our Civil Society 2.0 initiative to connect NGOs and advocates with technology and training that will magnify their impact. We are also committed to continuing our conversation with people everywhere around the world. Last week, you may have heard, we launched Twitter feeds in Arabic and Farsi, adding to the ones we already have in French and Spanish. We’ll start similar ones in Chinese, Russian, and Hindi. This is enabling us to have real-time, two-way conversations with people wherever there is a connection that governments do not block.

Our commitment to internet freedom is a commitment to the rights of people, and we are matching that with our actions. Monitoring and responding to threats to internet freedom has become part of the daily work of our diplomats and development experts. They are working to advance internet freedom on the ground at our embassies and missions around the world. The United States continues to help people in oppressive internet environments get around filters, stay one step ahead of the censors, the hackers, and the thugs who beat them up or imprison them for what they say online.

While the rights we seek to protect and support are clear, the various ways that these rights are violated are increasingly complex. I know some have criticized us for not pouring funding into a single technology, but we believe there is no silver bullet in the struggle against internet repression. There’s no app for that. Start working, those of you out there. And accordingly, we are taking a comprehensive and innovative approach, one that matches our diplomacy with technology, secure distribution networks for tools, and direct support for those on the front lines.

In the last three years, we have awarded more than $20 million in competitive grants through an open process, including interagency evaluation by technical and policy experts to support a burgeoning group of technologists and activists working at the cutting edge of the fight against internet repression. This year, we will award more than $25 million in additional funding. We are taking a venture capital-style approach, supporting a portfolio of technologies, tools, and training, and adapting as more users shift to mobile devices. We have our ear to the ground, talking to digital activists about where they need help, and our diversified approach means we’re able to adapt the range of threats that they face. We support multiple tools, so if repressive governments figure out how to target one, others are available. And we invest in the cutting edge because we know that repressive governments are constantly innovating their methods of oppression and we intend to stay ahead of them.

Likewise, we are leading the push to strengthen cyber security and online innovation, building capacity in developing countries, championing open and interoperable standards and enhancing international cooperation to respond to cyber threats. Deputy Secretary of Defense Lynn gave a speech on this issue just yesterday. All these efforts build on a decade of work to sustain an Internet that is open, secure, and reliable. And in the coming year, the Administration will complete an international strategy for cyberspace, charting the course to continue this work into the future.

This is a foreign policy priority for us, one that will only increase in importance in the coming years. That’s why I’ve created the Office of the Coordinator for Cyber Issues, to enhance our work on cyber security and other issues and facilitate cooperation across the State Department and with other government agencies. I’ve named Christopher Painter, formerly senior director for cyber security at the National Security Council and a leader in the field for 20 years, to head this new office.

The dramatic increase in internet users during the past 10 years has been remarkable to witness. But that was just the opening act. In the next 20 years, nearly 5 billion people will join the network. It is those users who will decide the future.

So we are playing for the long game. Unlike much of what happens online, progress on this front will be measured in years, not seconds. The course we chart today will determine whether those who follow us will get the chance to experience the freedom, security, and prosperity of an open Internet.

As we look ahead, let us remember that Internet freedom isn’t about any one particular activity online. It’s about ensuring that the Internet remains a space where activities of all kinds can take place, from grand, ground-breaking, historic campaigns to the small, ordinary acts that people engage in every day.

We want to keep the Iternet open for the protestor using social media to organize a march in Egypt; the college student emailing her family photos of her semester abroad; the lawyer in Vietnam blogging to expose corruption; the teenager in the United States who is bullied and finds words of support online; for the small business owner in Kenya using mobile banking to manage her profits; the philosopher in China reading academic journals for her dissertation; the scientist in Brazil sharing data in real time with colleagues overseas; and the billions and billions of interactions with the Internet every single day as people communicate with loved ones, follow the news, do their jobs, and participate in the debates shaping their world.

Internet freedom is about defending the space in which all these things occur so that it remains not just for the students here today, but your successors and all who come after you. This is one of the grand challenges of our time. We are engaged in a vigorous effort against those who we have always stood against, who wish to stifle and repress, to come forward with their version of reality and to accept none other. We enlist your help on behalf of this struggle. It’s a struggle for human rights, it’s a struggle for human freedom, and it’s a struggle for human dignity.

Thank you all very much.

So many people have asked Napier about the possibility that Rackspace might be taken out, it’s not hard to detect that his answer is well rehearsed. Rackspace is not for sale, he says, and he won’t comment on any approaches by larger companies it may be fielding. But he clearly doesn’t mind the speculation.

The market certainly is working on the assumption that an acquisition is coming. I talked with Napier on Friday, the day after Rackspace reported quarterly earnings that grew 50 percent over the same period in 2009, which was enough to send Rackspace shares up by more than $3, or more than 8 percent, closing at $40.07–more than twice what it traded for a year ago.

Rackspace will be a giant all its own, Napier insists, before it gets taken out by one of the lumbering tech giants that might like to drop a few billion dollars to absorb it. Ask him Rackspace’s chances of being acquired in the next several months, and he insists the company is not for sale. It sure sounds like he means it, as the growth opportunity that lies before him is just so good. But it’s also clear that he enjoys being in the position of being asked.

It’s a nice sentiment, but organic growth is only going to get you so far. Rackspace will cross the billion-dollar mark in revenue for the first time this year, and it has only $105 million in cash, so the only acquisitions Rackspace can make without going into a debt are small ones like the one last week of Anso Labs that NewEnterprise reported exclusively. The smart money says we’ll get a chance to see how serious Napier is about remaining independent before the end of the year.

NewEnterprise: Let’s talk about your business against the backdrop of the industry you’re in. In the last few weeks we’ve seen both NaviSite and Terremark acquired by larger companies. Clearly there’s some consolidation going on in the Web hosting and cloud services hosting business.

Napier: There is a shift in technology market around cloud. The market is shifting from one where companies do things themselves to buying technology as a service. We think of it as a world that’s going from buying inputs to buying outputs. We think this is a nascent trend and we’re in the first game of a seven-game series. On a macro basis we see this as the biggest growth opportunity in technology. Our strategy is to win the most valuable segment, which we believe is going to be the service segment. So if you look at how the market is developing, you have players like Amazon that’s offering a do-it-yourself cloud. For people who want the lowest price, and can do the work themselves, Amazon is an incredible pick. What we’re focused on is trying to be a service leader. We want to serve companies that want to run a critical app and who want us to run it for them and take accountability for it so they can sleep well at night. Over the past six quarters or so we’ve found ourselves in a crazy good spot. The growth opportunity ahead of us is expanding.

Let’s talk about growth. You don’t have all much cash on the balance sheet, about $105 million or so. You can grow organically, or you can acquire. You’ve made some small acquisitions recently. Is that going to continue?

We are an organic growth company. We have been since inception. The acquisitions we’ve done have been about technology and talent to improve our portfolio and the way we serve customers. We will remain an organic growth company. There are, I think, really two kinds of companies. Those that can grow organically and those that can’t, and so they grow by acquisition. Some companies are good at growing through acquisition. We’re just not. We’re organic growth folks here, so we’re going to stick to that. But we’ll still buy technology, capabilities and talent that we think is critical. As to the consolidation that’s taking place in the industry, it’s a great validation of the growth opportunity. There are some legacy tech and telecom companies that are behind and are trying to buy their way into the game. There was a similar wave of consolidation eight years ago and a lot of our competitors got taken out.

So let me ask the question you’re getting a lot lately. I’ve had three conversations with different people who have each picked three different large technology companies they think should acquire Rackspace. Have you been approached by anyone?

We have a policy not to comment on anything like that all. What I will tell you is that we’re not for sale. We feel like we have a tiger by the tail. I’ve been lucky to be at the company for 11 years and I think the next 11 years look better than the last. We’re not building the company to flip it. We think the market opportunity is such that new giants are going to emerge, and we want to be one of those giants.

Absent a scenario that someone shows up with eight or 10 billion in cash to buy your company, what are your strategic priorities for the year?

There’s a couple. We are making big investments in our product and service portfolio. That’s one. And then number two, we think we have a chance to improve the fundamental economics of our business model. As we make these investments, we’ll add more services and capabilities on top of our basic compute service. This drives up the average revenue for our basic compute which creates better outcomes for our customers and increases our economics. It’s a virtuous cycle. Our average revenue per server has increased for six consecutive quarters.

What are your biggest costs, and what kind of gross margin do you tend to run?

I think of them as investments, but I know that’s just semantics. Our no. 1 investment is technology and the Rackers [employees] that serve our customers. So if you look at the cost of revenue line, a year ago it was 31.5 percent. As of the end of 2010 it was 31.1 percent. We made some improvement. But we’re more focused right now on developing customer loyalty than we are in driving efficiency. It’s early in the game, and anytime a market is going through a period of rapid growth like this, it’s all about winning as many loyal and profitable customers as we can. When the growth slows down someday we’ll focus more on improving efficiencies throughout the business. Even so, in 2010 we grew faster, increased our margin and and improved our return on capital. Those are all difficult things, and we pulled it off.

Facebook is not necessarily targeting Google specifically, but it’s an obvious omission. The social networking giant said ad providers can join the list if they agree to certain restrictions on advertising, which include a commitment to never utilize Facebook user data.

Facebook and Google have warred over transmitting user data in the past, with a back-and-forth over exporting user email addresses turning nasty in public last fall.

Facebook will start enforcing the whitelist ad provider policy starting Feb. 28. At that point, app developers who run Google ads–which seems a natural thing to do, given so many publishers use Google ads on other platforms–will have to shut them off and find another provider.

A spokesperson for Facebook said, “We are continuing to work with various ad providers and will add them to the list as they sign the terms. Note that the policy doesn’t go into effect for a few more weeks.” Meanwhile, a spokesperson for Google declined to comment.

The CEO of an approved ad provider commented that Facebook’s efforts to “restore control and authority of how third-party companies work within its platform” make sense and are generally good for users. (And also good for him, with Google out of the hunt!)

Image via Flickr user bulliver.

Please see the disclosure about Facebook in my ethics statement.

But its statement contained a new characterization from CEO John Chambers about the circumstances Cisco finds itself in. Gone was talk of temporary air pockets that emerged in November when Cisco’s outlook turned suddenly, and unexpectedly, sour. Now it’s in a “period of transition.”

One that’s far from over, apparently. Having reported the hard numbers, it saved the bad news, in particular its outlook, for the conference call. And it wasn’t pretty. It fell to CFO Frank Calderoni to deliver the bad news. While Cisco forecast revenue to grow at a rate of 4 to 6 percent in the third quarter over the same period in 2010, profits were forecast at 35 to 38 cents a share, well below the consensus of 39 cents. Gross margins for the full year will be in the 62 to 63 percent range, down from 64 percent in 2010.

Chambers noted weaknesses both in Cisco’s switching business, where sales declined by 7 percent, and in sales to government customers, saying he expected that segment to be problematic during the next several quarters. Sales of set-top boxes were also weak. Summing it up, Chambers said: “I think we will look back on this period of time and wish we could have avoided it and yet it will make us stronger in the long run.”

There was good news. Cisco will pay its first dividend this year, somewhere in the range of 1 to 2 percent.

And then there’s Cisco’s cash position, which stands at $40.2 billion, though only $3 billion or so of it is inside the U.S.

Chambers used the subject to once again complain about U.S. tax policy regarding cash held overseas. “We have a tax policy that is just broken,” he said.

CEO John Chambers said in a company statement that the quarter “played out as we expected” and that the company is “going through a period of transition as we move aggressively in the market with our architectural strategy….Simply put, we are owning our evolution and the next generation of industry leadership.”

That’s a change from the “air pockets” phrase Chambers used to describe the surprise downward in Cisco’s guidance when it last reported earnings in November, and the stock has yet to recover from the drop that resulted. More as I go through the numbers.

4:38 pm: Chambers: Our routing architecture is in the best shape in its history.

Chambers: We are in the middle of a major product transition with dramatically higher price performance advantages. With this in mind we did see our switching revenue decline 7 percent.

4:41 pm: Chambers: We are seeing pricing pressures on our Catalyst portfolio. This is where our competitors are targeting us and this is where we intend to own our evolution.

We are moving very aggressively to prevent any future erosion of our product share.

Services revenue increase 18 percent year over year.

International bookings are okay. Italy was the only country to see a fall.

Enterprise solid. Grew 10 percent year over year. Public sector grew 7 percent. U.S. public sector orders grew 9 percent. [He thinks orders will worsen in this sector in the coming quarters.]

Set-top business declined.

4:44 pm: Initial customer and industry feedback to Videoscape is being received well

4:45 pm: Chambers: There were a number of areas where we are pleased with our progress.

Guidance coming up.

4:47 pm: Q3 revenue 4 to 6 percent year over year.

Q4: 8-11 percent increase year over year.

4:48 pm: As I look, stock is now trading down nearly 4 percent after-hours.

Frank Calderoni, Cisco CFO is now on the call.

Calderoni: There are multiple product transitions in areas such as switching, which, although expected, are happening faster than expected.

4:56 pm: Cash and equivalents: $40.2 billion. Cash flow from operations: $2.6 billion

4:58 pm: Calderoni says Cisco would issue a dividend in fiscal 2011 with a yield in the 1 to 2 percent range.

4:58 pm: Shares now down about 6 percent.

More guidance coming up from Calderoni.

5:00 pm: Q3, we exepect revenue growth of 4 to 6 percent year on year.

That’s with one less week this year than last year.

Q3 we expect non-GAAP operation 23 to 24 percent

EPS 35 to 38 cents per share.

In Q4 we expect 8 to 11 percent growth in revenue year over year.

FY11 will be mid to lower end of 9 to 12 percent given in previous guidance.

5:03 pm: John Chambers is back on the call.

Enterprise orders growth good. Grew high 20 percent range.

Shares are down 9 percent on that “lower range” guidance for the full year.

We believe we are not losing market share with developed-world governments.

This growth will be severely challenged in the next several quarters, and will grow in the low single digit.

5:11 pm: We believe the growth in enterprise will balance out the challenges in government business.

5:12 pm: Decrease in gross margins was affected by several factors.

He says the company has started something called a working group to study the decline in gross margins. What does that mean?

5:17 pm: Shares are within sight of trading down 10 percent after hours.

5:18 pm: Chambers: I think we will look back on this period of time and wish we could have avoided it, but it will make us stronger.

Q&A about to start. Should be interesting.

5:20 pm: Chambers: Bookings were comfortably above the revenues. In terms of momentum in switching I would expect them to be positive.

5:39 pm: Chambers is now talking about tax policy. Echoing a point he’s made repeatedly about bringing cash that’s held overseas into the U.S. He think the taxes are too high.

5:39 pm: Cash in the U.S. is $3.1 billion versus total cash holdings of more than $40 billion. Calderoni is talking about the $3 billion debt offering. He said Cisco has about $3 billion in long term debt that’s coming due soon, and that the debt it’s issuing will carry a lower rate.

I’m going to close this early because I have to make another meeting. I’ll be posting more on Cisco earnings shortly.

The policy is effective immediately and is intended to ensure that average data users aren’t negatively affected by the inordinate data consumption of just a few users. Says Verizon, “If you use an extraordinary amount of data and fall within the top 5 percent of Verizon Wireless data users we may reduce your data throughput speeds periodically for the remainder of your then current and immediately following billing cycle to ensure high quality network performance for other users at locations and times of peak demand.”

What constitutes an “extraordinary amount of data”? Verizon doesn’t say, but I’m sure its subscribers will know it when they hit it, because their speeds will drop for almost two billing cycles.

And to think that just a few weeks ago, Verizon was talking up its plan to offer iPhone buyers a $30 unlimited data plan. Evidently it applies to the amount of data only, not the rate at which it’s downloaded.

Verizon says the shift in policy has nothing to do with the looming debut of the iPhone (“There’s nothing magic about the timing.”), which is widely known to tax carrier networks. But the timing here makes it hard to believe. This is Verizon bracing itself for the iPhone data deluge.

And buying some new ones as well.

The company spent $5.16 million trying to influence policy in Washington, according to the Lobbying Disclosure Act Database.

That’s 28 percent more than the $4.03 million it spent last year, but then Google’s interests on Capitol Hill these days are quite a bit more extensive than they once were. Where once there were competition and privacy issues and little else, there are now privacy, data security, patent reform, copyright, renewable energy and tax reform issues, among other things.

Oh. And rivals with differing interests and bigger lobbying spends. Microsoft, for example, which ended the year with a $6.91 million lobbying spend to Google’s $5.16 million.

PREVIOUSLY:

• What Tech Companies Are Spending in Washington

After reminding the nation that “South Korean homes now have greater Internet access than we do,” he went on to call for a national wireless broadband network.

Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans. This isn’t just about–(applause)–this isn’t about faster Internet or fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.

It’s the latest attempt by Obama to try to solve the difficult problem of broadband penetration in America. In many places, most of them rural areas with low population density, cable and telco companies can’t make back the investments required to build out network infrastructure, and so they don’t build at all. As I’ve said here before, for Americans in those places, the options for participating in the digital culture the rest of us take for granted are few, and it often means the difference between participating and not in so much of the daily discourse that occurs online.

Part of the answer lies in taking back some radio spectrum that’s used for other things. In June, Obama signed a memorandum calling for the freeing up of certain radio frequency spectrum in the 500 MHz range. This is a block of spectrum largely owned by TV broadcasters for free over-the-air TV transmission. Broadcasters have been under pressure–and so far they are resisting–to voluntarily give those licenses up so that the spectrum can be re-auctioned off.

Julius Genachowski, chairman of the Federal Communications Commission, essentially telegraphed that this is going to be the commission’s major policy priority in comments at the Consumer Electronics Show in Las Vegas earlier this month. He has said he’d like to offer broadcasters incentives to give up their spectrum, but this would require a new law passed by Congress, and those in Congress have their own ideas about how this should be done. You can expect a lot of debate about this in Washington this year, but probably not a lot of progress.

Taylor said Facebook will emphasize HTML5 development in order to have maximum impact across fragmented mobile platforms for both his company and those who build on the Facebook platform.

HTML5–which is the new browser standard that gives Web applications capabilities on par with native applications–Taylor said, “might be a little ahead of that curve, but that’s where we’re putting a huge amount of investment in the next year.”

Already, said Taylor, 125 million of Facebook’s 200 million-plus mobile users are using HTML5-capable devices like the iPhone and Android.

Even so, when Facebook introduces a new feature, it has to implement it across seven different versions: facebook.com, m.facebook.com, touch.facebook.com, its iPhone app, Android app, BlackBerry app and custom integrations for other handset OSs.

Facebook wants to reduce that friction for its own sake and its developers’ as well. The company’s first step toward this goal was its single sign-on for mobile apps introduced last year, which has already had significant impact on developers like Flixster, Taylor said.

Facebook’s HTML5 push brings it into step with Google, which has put a major emphasis on Web apps despite its own Android mobile OS. But even so, the two companies have had major success with native apps, when they’ve chosen to build them. Facebook has the No. 1 free iPhone app of all time, while Google Mobile for iPhone is No. 3. (Coming in second is Pandora’s streaming radio.)

“Mobile devices are inherently social,” said Taylor, noting that he feels that the combination of mobile, social and location will be an especially fruitful area for products like Facebook Places and Foursquare.

Taylor said Facebook is likely to create its own “high-quality location database”–which would compete with start-ups like SimpleGeo–though it’s not something the company has specific plans for yet.

Addressing start-ups wary of Facebook competing with their products by making them a part of its platform, Taylor said, “Our philosophy has always been to build products into Facebook that are generally useful, which is why we built location into the platform. We felt like it would have a really big impact for developers if they could all leverage a common location infrastructure.”

Facebook’s platform focus in 2010 was about improving user experience, Taylor said, and he considers that effort a success. He said Facebook reduced spam (a.k.a. unwanted posts about games like FarmVille and other applications) by 95 percent last year through policy simplifications.

Though it shut down ways for applications to recruit users, it wasn’t like Facebook prevented games from growing, said Taylor, citing the fantastic ascent of Zynga’s CityVille, which grew to 100 million users in 40 days, compared with the four years it took Facebook itself to reach that number.

Please see the disclosure about Facebook in my ethics statement.

ON THE CREEPY LINE
“There is what I call the creepy line.The Google policy on a lot of things is to get right up to the creepy line and not cross it.”
–October 2010

ON BRAIN IMPLANTS, WHICH WOULD CROSS THE CREEPY LINE
“I would argue that implanting something in your brain is beyond the creepy line–at least for the moment, until the technology gets better. As far as I know, we do not have a medical lab working on implants … As far as I know.”
–October 2010

ON PRIVACY:
“Streetview, we drive exactly once. So you can just move, right?”
–October 2010

ON CARS:
“It’s a bug that cars were invented before computers.”
–September 2010

ON THE BORG:
“What we’re really doing is building an augmented version of humanity, building computers to help humans do the things they don’t do well better.”
–September 2010

ON EXTENDING GOOGLE’S MISSION TO YOUR BRAIN:
“With your permission, you give us more information about you, about your friends, and we can improve the quality of our searches. We don’t need you to type at all. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
–September 2010

ON YOUR FACEBOOK PHOTOS
“Show us 14 photos of yourself and we can identify who you are. You think you don’t have 14 photos of yourself on the internet? You’ve got Facebook photos!”
–August 2010

ON FINANCE:
“One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”
–March 2010

ON YOUR NEEDS:
“I actually think most people don’t want Google to answer their questions. They want Google to tell them what they should be doing next.”
–August 2010

ON PRIVACY:
“If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”
–December 2009

ON M&A AND “ADULT SUPERVISION”:
“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.”
–October 2009

ON ‘DON’T BE EVIL’
“‘Don’t be evil’ is misunderstood. We don’t have an ‘Evilmeter’ we can sort of apply–you know–what is good and what is evil….The rule allows for conversation. I thought when I joined the company this was crap…it must be a joke. I was sitting in a room in [the] first six months…talking about some advertising…and someone said that it is evil. It stopped the product. It’s a cultural rule, a way of forcing the conversation especially in areas that are ambiguous.”
–June 2008

ON THE ‘EVILMETER’:
“We actually did an evil scale and decided not to serve [China] at all was worse evil.”
– Jan. 2006

ON EVIL:
“Evil is what Sergey says is evil.”
–-December 2002

ON IDIOTS:
“People are surprised to find out that an awful lot of people think that they’re idiots.”
–Date Unknown

ON RUNNING GOOGLE:
“Day-to-day adult supervision no longer needed!”
–-January 2011

In 2010 CEO Steve Jobs retained his $1 annual salary and some 5.5 million shares of Apple stock as well. “Since rejoining the company in 1997, Mr. Jobs has not sold any of his shares of the Company’s stock,” the filing reads. “Mr. Jobs holds no unvested equity awards. The Company recognizes that Mr. Jobs’s level of stock ownership significantly aligns his interests with shareholders’ interests.”

COO Tim Cook earned $59.1 million for the fiscal year, thanks to a $5 million bonus and $52.3 million in stock awards. Quite a spike from the $1.64 million he earned in 2009, but well-deserved given his performance, particularly when he filled in for Jobs during his medical leave of absence.

Included in the proxy statement is a shareholder proposal asking Apple to adopt a CEO-succession-planning policy and appended beneath it is a strongly worded statement from the company opposing it. “The Company recognizes that a highly talented and experienced management team, not just the CEO, is critical to Apple’s success,” it reads. “Accordingly, the Board already implements many of the proposed actions and maintains a comprehensive succession plan throughout the organization. While the Board strongly supports the concept of succession planning, it recommends a vote against [the proposal].”

Why?

Evidently, the board feels a written succession plan would give Apple’s rivals unfair advantage by publicizing its objectives and plans. It also fears that identifying potential successors to Jobs would invite other companies to recruit those people away from Apple. Finally, the board feels that its directors and Apple’s leadership can handle succession planning on their own. “The Company takes succession planning seriously, and the board has adopted a comprehensive process to ensure continuity and maintain the superior quality of its management team,” Apple said in the filing. “This process also allows flexibility to adjust to unanticipated changes in the market.”

Plus, Steve doesn’t like talking about it.

Now we have a full text of the actual rules, weighing in at a voluminous 194 heavily footnoted pages, which just became public on the FCC’s Web site. As with some of the other documents relating to this, I’ve uploaded this one to Scribd and embedded it below. This is the document that corporate lawyers, lawmakers and other policy wonks at think tanks and trade associations will be combing through in the coming weeks and months in hopes of either watering down or strengthening the rules, depending on your point of view. Others will be looking through this text for provisions they can challenge in court. And congressional Republicans have already promised to hold hearings next year and will probably try to find a way to legislate these rules out of existence.

FCC-10-201A1

Earlier this week, the Knight Digital Media Center penned a post on the full disclosure policy of All Things Digital.

Titled “Transparency for Journalists: AllThingsD Shows What It Can Look Like,” it’s a very nice review of what we do on the site.

“What I like about these statements is that they aren’t cookie-cutter corpspeak or legalese. They’re human–and even humorous–revelations,” wrote Amy Gahran. “Each writer gets to decide which topics she or he wants to cover, and how. This can get pretty personal, and that’s a good thing. “

We think so too at ATD, which is why you should check in with a whole new bunch of full disclosures we have posted recently, since adding a half-dozen new staffers.

You can click in from our About Us page to read a disclosure penned by each person on the site with editorial responsibilities.

It’s important to us to have them there, as we feel that being transparent and honest to readers is the first step in our commitment to fairness, accuracy and ethical standards.

The Knight story had some good advice at the bottom of its report for crafting a solid disclosure policy:

Publish your key disclosures in one place.

By publishing the ethics statements as static pages, they’re not only easier for readers to find–they’re easier for search engines to index and rank. Transparency is not just about disclosure, but about visibility (which in the online age entails findability). If you dole out disclosures in dribs and drabs, buried within specific articles or posts, you’re less likely to gain the visibility needed to make transparency effective.

Leave what to disclose up to the individual.

The most effective transparency statements are personal, not cookie-cutter. Don’t require journalists to disclose information that they would prefer to keep private. But similarly, don’t prohibit them from sharing whatever personal information or context they wish to offer. Ultimately, these disclosures are about people, not organizations. Editors and managers can supply examples and encourage good judgment–but if a writer really thinks it’s important to let readers know that he votes Republican, vacations in Brazil, volunteers as an abortion clinic escort, loathes cilantro, or has a favorite Beatle, that’s his business.

Make it easy for journalists to update their statements.

Life goes on–which means life circumstances, current concerns, and personal views constantly evolve. New issues always come up, so a journalists’ transparency statement should be a living document that the journalist can modify at will. Make sure your content management system makes this easy. It’s not a good idea to edit this document daily (that could make you look obsessed with what others think), but it should be revisited at least annually or every few months.

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.”

The strategy is expected to be unveiled in a report being issued by the U.S. Commerce Department in coming weeks, these people said. The report isn’t yet final and could change, these people said.

In a related move, the White House has created a special task force that is expected to help transform the Commerce Department recommendations into policy, these people said. The White House task force, set up three weeks ago, is led by Cameron Kerry, the brother of Sen. John Kerry (D., Mass.) and Commerce Department general counsel, and Christopher Schroeder, assistant attorney general at the Department of Justice.

The initiatives would mark a turning point in Internet policy. Recent administrations typically steered away from Internet regulations out of concern for stifling innovation. But the increasingly central role of personal information in the Internet economy helped spark government action, according to people familiar with the situation.

Read the rest of this post on the original site

In 2000, his team dropped the hammer on the Hack SDMI challenge by demonstrating how easy it was to crack the decidedly mediocre Secure Digital Music Initiative.

Dragged into the Sony BMG CD copy-protection scandal in 2005, he discovered that Sony’s “fix” for the Digital Rights Management rootkit it used to protect some new music CDs furthered inflamed an already bad situation.

And then, of course, there were Felten’s various investigations into electronic voting machines, the most notorious being the one that revealed Diebold’s machines could be opened with a standard office furniture key. “The access panel door on a Diebold AccuVote-TS voting machine–the door that protects the memory card that stores the votes, and is the main barrier to the injection of a virus–can be opened with a standard key that is widely available on the Internet,” Felten wrote at the time. “The exact same key is used widely in office furniture, electronic equipment, jukeboxes, and hotel minibars.”

Thank God for Felten, right?

And thank God the FTC has seen fit to hire him. There’s a lot of good he can do there. As Felten described it, “My main job will be to advise the FTC leadership on technology policy issues. My goals are use my technical expertise and knowledge of the tech world to help the FTC make the best decisions on tech topics, and to contribute to building up the agency’s technical capabilities.”

Said FTC Chairman Jon Leibowitz, “Ed is extraordinarily respected in the technology community, and his background and knowledge make him an outstanding choice to serve as the agency’s first Chief Technologist. He’s going to add unparalleled expertise on high-technology markets and computer security.”

“As you can see from the unedited interview, my comments were made during a fairly long back and forth on privacy. I clearly misspoke. If you are worried about Street View and want your house removed please contact Google and we will remove it.”

– Google CEO Eric Schmidt on his suggestion that folks concerned about the company’s Street View service “just move“

PREVIOUSLY:

• Google CEO’s Advice to the Street-View Shy: The Video
• Schmidt: Don’t Like Google Street View Photographing Your House? Then Move.

• Google CEO’s Advice to the Street-View Shy: The Video
• Google CEO Apologizes For Street View Quip

“The problem with Google is that Eric Schmidt is creepy….The industry is filled with eccentric CEOs–billionaires who, say, wear a wardrobe that consists of nothing but identical black shirts and Levi’s 501 jeans, or who dress as a samurai warrior, including swords, at their home. But Schmidt doesn’t seem eccentric (or at least not merely so). He seems creepy.”

– John Gruber, Daring Fireball

Google CEO Eric Schmidt says the company’s “policy is to get right up to the creepy line and not cross it.” And while that may be true of Google, it’s clearly not true of Schmidt, who lately has been happily high stepping across the creepy line like the grand marshal of the Tone-Deaf Technocrat Parade.

In the past year alone he has:

• Addressed criticisms of Google’s stance on privacy by saying, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”
• Claimed people want Google to “tell them what they should be doing next.”
• Said of Google, “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
• Said this: “One day we had a conversation where we figured we could just try to predict the stock market. And then we decided it was illegal. So we stopped doing that.”
• Suggested name changes to protect adults from the Web’s record of their youthful indiscretions.
• Said this: “What we’re really doing is building an augmented version of humanity, building computers to help humans do the things they don’t do well better.”

Nice selection of remarks with which to begin a Bartlett’s Unsettling Quotations From Powerful CEOs, right?

And Schmidt’s far from done. Appearing on CNN’s “Parker Spitzer” program last week, he said that people who don’t like Google’s Street View cars taking pictures of their homes and businesses “can just move” afterward to protect their privacy. Ironically, he said this on the very day that Google admitted those cars captured more than just fragments of personal payload data.

Interestingly, CNN has since edited that quote out of Schmidt’s segment. Did Google ask CNN to remove it? Who knows. Perhaps the company has finally realized that Schmidt’s penchant for indulging in this sort of pedantic dorkery doesn’t do much for its public image.

Freaking people out with asinine power-tripping pronouncements might be great fun for Schmidt, but it isn’t a wise PR strategy, particularly when Google is a company about which the public and government are increasingly concerned.

Schmidt really should know this.

Actually, it’s hard to believe he doesn’t.

Which is just…creepy.

UPDATE: Here’s Google’s official comment on Schmidt’s “just move” remark as given MarketWatch: “The point Eric was making is that our Street View service provides only a static picture in time, and doesn’t provide real-time imagery or provide any information about where people are. Of course, we also allow users to request that their home be removed from Street View.”

UPDATE: CNN says Google did not ask that Schmidt’s remark be removed from the broadcast version of the show. “Producers routinely make editorial decisions about what sound bites to include in their shows,” a spokesperson told me via e-mail. “In this case, the clip was posted on cnn.com and disseminated to other media outlets and was widely available.”

How did BoomTown miss this one from Next Media Animation, the Taiwan-based CGI news unit that creates works of lunatic genius.

In this episode, released earlier this week (and following in the stumbling steps of Lindsay Lohan and Snooki), it’s time for Google (GOOG) to get the treatment, and it’s a doozy, complete with CEO Eric Schmidt growing devil horns.

Also making an appearance in the search giant’s moment, my new favorite word, coined from Schmidt’s recent policy flirtation with Verizon (VZ): Schminternet!

Enjoy:

Please see this disclosure related to me and Google.

Jared Cohen (pictured here), who has gained fame as the State Department’s social networking phenom and the youngest member of its policy planning staff, is considering taking a job at Google in a strategic policy role, said sources close to the situation.

Cohen has been in discussions with Google very recently about going there, those sources said, although it is not a done deal.

In other words, the revolving door between Washington, D.C., and Silicon Valley keeps on turning, especially Googlers.

Katie Jacobs Stanton, who worked for both Google (GOOG) and Yahoo (YHOO), recently left a job at the State Department to return to California to head international efforts for Twitter.

Google’s top policy wonk, Andrew McLaughlin, serves as deputy chief technology officer.

Sonal Shah, who worked at Google.org, is now director of the White House’s new Office of Social Innovation and Civic Participation.

And Sumit Agarwal, who was head of Google’s mobile product management, became the deputy assistant secretary of defense for outreach and social media in the Office of the Assistant Secretary of Defense.

Coincidentally, for their Twitter-as-statecraft fame, the 28-year-old Cohen, along with Alec Ross, a senior adviser for innovation at the State Department, got the full New York Times magazine profile treatment earlier this month in a piece titled “Digital Diplomacy.”

Wrote Jesse Lichtenstein:

“Their Twitter posts have become an integral part of a new State Department effort to bring diplomacy into the digital age, by using widely available technologies to reach out to citizens, companies and other nonstate actors. Ross and Cohen’s style of engagement–perhaps best described as a cross between social-networking culture and foreign-policy arcana–reflects the hybrid nature of this approach…They are the public face of a cause with an important-sounding name: 21st-century statecraft.”

If it sounds a lot twee in a policy wonk way, it definitely is, which should fit in well at Google, which could use a few friendlier faces to show off in Washington, where some regulators are eyeballing the search giant’s growing power closely.

In the piece, Cohen is seen as playing the organizer of a private dinner Secretary Hillary Clinton had with some Silicon Valley power players, including Google CEO Eric Schmidt, earlier this year.

He and Ross have also been leading technology delegations abroad to places like Iraq, Haiti, Russia and the Congo, chock full of Internet leaders.

Cohen, who attended Stanford University and was also a Rhodes scholar, was actually appointed by the Bush administration’s secretary of state, Condoleezza Rice.

He is also the author of a book, “Children of Jihad: A Young American’s Travels Among the Youth of the Middle East.”

Google and Cohen both declined to comment.

But to give you an idea of their close relationship, here is a video of Cohen and Ross in a conversation with Schmidt at the the Googleplex in Mountain View, Calif., in March: