MySpace is trading most of the assets of its Fox Audience Network to the Rubicon Project in exchange for a significant equity minority stake, according to sources close to the situation.

Under the deal, which is nearly complete with a signed term sheet, MySpace will hand over a number of parts of FAN, including most of its 300 employees.

FAN–after a number of attempts to spin off from News Corp. (NWS), which owns the advertising network and MySpace–was recently spun into the social networking site after the departure of its top exec, Adam Bain, to Twitter.

But News Corp. and MySpace management decided it made less sense to keep most of FAN within MySpace, which is in the midst of a massive overhaul of the troubled service that will debut in a few weeks. MySpace will keep parts of FAN related to user data, said sources.

Both companies are based in the Los Angeles area. Rubicon is one of three big “yield optimizers,” which aim to help publishers manage their relationship with advertising networks so they get the highest possible dollar for the ad space. It competes with PubMatic and AdMeld.

A variety of rumors have swirled around FAN and a number of ad companies over the last several months. One recently in AdExchanger.com had Rubicon being folded into MySpace.

Not so. Instead, this deal is similar to one that News Corp. did in January of this year with Flixster, spinning its Rotten Tomatoes movie-review unit into the San Francisco social movie site for a large minority stake in the combined entity.

Several companies were looking at the pieces of FAN, sources said, but Rubicon was the cleanest option.

It’s a save all around. Sources said Rubicon had hired boutique investment bank Allen & Co. to look at a variety of alternatives for it and also had been reshuffling its staff.

BoomTown has calls in to both companies and am awaiting official comment.

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

Google announced plans to buy DoubleClick for $3 billion three years ago and finally closed on the deal a year later. Now the search giant has finally overhauled the display advertising company to its liking. Get ready for big stuff.

That’s the translation behind Google’s announcement this morning that it has upgraded its ad-serving platforms for publishers, by combining two related businesses: Its home-grown Google Ad Manager and Doubleclick’s Dart system.

Google’s statement (full text below) doesn’t have a lot of details, and those that are there won’t mean much if you’re not in the ad tech world.

If you are, the news that Google has fully integrated DoubleClick with its infrastructure will be meaningful because you can expect innovations and features to start rolling out in future weeks and months. Neal Mohan, Google’s VP of product management, says his team has already invested “thousands and thousands of engineering hours” in the upgrade.

In the near term, Google’s announcement also has a direct impact on start-ups like Rubicon and PubMatic, whose core business is built on helping publishers sell their inventory to multiple ad networks.

Google (GOOG) has more or less ignored that business for some time, but now the company is boasting that it can handle those duties in addition to a suite of other services. Translation: That’s a cute business you guys have built over there. We’ll be taking it now.

Perhaps it’s not a coincidence, then, that Rubicon made an oblique announcement last week that was more or less an attack on Google.

Here’s the full text of Google’s announcement:

Google releases its next-generation ad serving platform for publishers

Key points

• Google announces upgraded ad serving platform, DoubleClick for Publishers (DFP)
• Part of a full suite of products to help publishers maximize online advertising revenues
• New DoubleClick logo unveiled

Today, as part of its efforts to help online publishers maximize advertising revenues from their website content, Google announced its upgraded ad serving platform for publishers–DoubleClick for Publishers (DFP).

DFP is a single platform that upgrades and will replace Google’s existing ad serving products: DoubleClick’s DART for Publishers and Google Ad Manager. The upgraded DFP combines Google’s technology and infrastructure with DoubleClick’s display advertising and ad serving experience.

For larger online publishers, managing, delivering and measuring the performance of ads can be a hugely complicated process. Major online publishers (including social networks, entertainment sites, portals and news sites) use ad serving to manage the complex process of how and when the ads they have sold appear on their websites.

Neal Mohan, Vice President of Product Management at Google, said:

“Google wants to help online publishers make the most money possible from their content. The upgraded DFP is part of our suite of products that are designed to help online publishers maximize their advertising revenues. Ad serving is the machinery that powers the online advertising world, so improving that technology can put a lot of money in publishers’ pockets. This upgraded platform is another major milestone in our continuing investment in the display advertising ecosystem.”

The upgraded DFP is part of Google’s suite of products–also including AdSense and the DoubleClick Ad Exchange–to help online publishers maximize their advertising revenues across all their ad space, whatever their size and however they choose to sell their ad space.

It includes a wide variety of key features that will help enable publishers to get the most value out of their online content:

• A new interface that has been completely redesigned to save time and reduce errors.
• Far more detailed reporting and forecasting data to help publishers understand  where their revenue is coming from and what ads are most valuable.
• Sophisticated algorithms that automatically improve ad performance and delivery.
• A new, open, public API which enables publishers to build and integrate their own apps with DFP, or integrate apps created for DFP by a growing third-party developer community (apps under development today include sales, order management and workflow tools).
• Integration with the new DoubleClick Ad Exchange’s “dynamic allocation” feature, which maximizes revenue by enabling publishers to open up their ad space to bids from multiple ad networks. Dynamic allocation is described in this document [pdf].

DFP comes in two flavors, tailored for different publishers’ needs:

• DFP–for larger online publishers, to which current DART for Publishers customers will be upgraded over the next year.
• DFP Small Business–a simple, free version designed for growing online publishers, to which we will be migrating Google Ad Manager customers.

To reflect Google’s continued investment in DoubleClick’s products and the central role of DoubleClick’s technology products within Google’s display advertising business, Google is also today unveiling some changes to the DoubleClick logos–including typset changes, incorporating a new “by Google” theme, and retiring the “DART” brand.

The Citigroup (C) analyst spoke with PubMatic and the Rubicon Project, two “optimization” firms that help publishers manage inventory they hand over to ad networks. And both say they’re seeing continued upticks in sales and demand.

Pubmatic, for instance, says pricing has increased every month this year, and Rubicon says that they’re seeing demand from–believe it or not–travel and auto advertisers. Just as encouraging, buyers are actually making “longer-term” plans, which was unheard of in the darkest days of 2008 and 2009.

Both firms also reiterate the conventional wisdom that we’ve been hearing for the past 12 months: The money that is being spent is increasingly going to “performance-based” ads, which are paid for only when someone interacts with them. That’s another data point in favor of Google (GOOG), whose core product is performance-based.

Again: Things were so lousy a year ago and through the spring of 2009 that it’s prudent to take these kinds of data in stride.

And if you really want to be half-empty about it, you can note that the inventory Rubicon and Pubmatic sell is the cheapest real estate publishers have to offer. Which means it’s hard to say how various sites’ high-end real estate–the stuff they sell themselves–is doing.

We’ll get a better sense of that in about a month or so, during Q3 earnings season, when we get color from Web publishers like Time Warner’s (TWX) AOL and the New York Times (NYT).

But, as I said, this is supposed to be an optimistic post.

Also joining the company is Josh Wetzel, former head of biz dev for Ebay’s (EBAY) Shopping.com unit.

No surprise to see a Google (GOOG) ad sales veteran leave, as there has been a lot of churn as the company reorgs that group in the wake of sales boss Tim Armstrong’s departure to run Time Warner’s (TWX) AOL. And Rutledge’s old boss, former DoubleClick CEO David Rosenblatt, left Google in April; Rutledge’s LinkedIn page says he left his old company in May.

But one observer says it’s already here: Ad optimization firm PubMatic reports that prices for ad network inventory it sees have increased 35 percent since the beginning of the year.

The firm’s data make for a hopeful chart (click to enlarge):

But these numbers could be less meaningful than they look. The most important thing to keep in mind here is that Pubmatic is only tracking prices for ad-network inventory. And if low-priced ad networks are taking market share from display ads, as is likely the case, then these numbers won’t do much good for  publishers–perhaps like the very one producing this site–who specialize in big, premium ad buys.

And the other obvious point to make here is that Pubmatic’s data are only about pricing, not volume, so they don’t really tell us whether advertisers are spending more, or less, than they used to.

But for what it’s worth, I made my own informal channel-check with two big publishers who do specialize in branded ads yesterday, and they told me things had picked up recently, as well: They differed on the degree of enthusiasm for the remainder of the year, but both cited demand from entertainment advertisers, as well as for advertisers of consumer packaged goods.

So maybe Pubmatic’s numbers are at least directionally accurate. That’d be nice, right?

In the old days, this might have qualified as news. But for the past year or so, Zenith Optimedia, along with just about every other ad forecaster, has been revising its forecasts downward every couple of months as the reality of the financial meltdown sinks in. So it’s hard to get worked up about this stuff.

More stuff you pretty much knew already: Online advertising is doing better than traditional ads.

Citigroup (C) analyst Mark Mahaney summarizes his chat with the CEOs of PubMatic and the Rubicon Project, which help online publishers sell inventory through ad networks. Their takeaway is that while pricing for online display ads has dropped dramatically in the past couple quarters–by as much as 50 percent in some cases–overall spending should remain flat this year. And as we all know, that’s the new up.

If you’d like to see concrete numbers from the ad market, hang tight until Thursday, when we’ll get earnings reports from two companies at the opposite end of the media spectrum: Gannett (GCI) and Google (GOOG).

That odd bit of cognitive dissonance surfaced yesterday, when the DVD rental company said it hadn’t been able to buy Web ads at a discount at the end of 2008. Hard to tell if it’s meaningful–does this mean the slowdown hasn’t been as great as people think, or is it just a statistical anomaly?–but it is interesting.

The details: During the company’s Q4 earnings call, CEO Reed Hastings told analysts that Netflix “didn’t see any benefits” from lower online ad pricing during the last three months of last year.

That’s odd, since Netflix (NFLX) buys more online ad inventory than just about everyone. Last year, when Nielsen Online was providing monthly reports about top advertisers on the Web, Netflix routinely made the Top 10 list, along with a handful or mortgage and finance companies. (Surely you’ve been annoyed by the company’s omnipresent pop-under ads). So if anything, its leverage should have increased in the past few months.

That prompted a follow-up question along those lines. Transcript via Seeking Alpha:

Youssef Squali–Jefferies & Co.

Barry, just a quick clarification, I think you said in your answer to a question that was posed before that you have not seen any benefit from lower ad rates in Q4. I’m just trying to reconcile that. Everything that we’re hearing from ad players out there, online ad players that at least on the CPM side and particularly on non-premium inventory where you guys seem to spend a lot of money, we’ve seen double digit declines year-on-year. Given the fact that you’re one of the top 20 online advertisers out there how can you not see a benefit?

Netflix CFO Barry McCarthy

You know, I put the question to our chief marketing officer in almost exactly the same tone and he reminded me that we already buy at low rates in mostly the remnant market so what must be happening is that the trickle down affect hasn’t yet hit the remnants space which is already incredibly discounted.”

It’d be great to think that remnant space–the cheap inventory Web sites usually hand over to ad networks or Google (GOOG) when they can’t sell it on their own–hasn’t come down significantly, but that’s not what I hear anecdotally, and that’s not what a barrage of reports has indicated.

The graph below, for instance, comes from ad optimization company PubMatic, which just reported “dramatic” drops in pricing over the last year. We’re likely to hear more of the same from Yahoo (YHOO) today. Anyone want to explain why Netflix hasn’t seen a benefit from those fire sales?

Following is a summary of company presentations and what the judges had to say:

• Spottt: Phil Kaplan, of Ask Pud and F***ed Company fame, presenting. Begins with a bit of history, recalling the ill-starred LinkExchange and its premature death at the hands of Microsoft. Spottt is essentially LinkExchange reborn. LinkExchange founder Tony Hsieh is even an adviser. Same deal as LinkExchange as well: one-for-one ad swap, with no paid ads. (No points for innovation here.)
• Clickable: “Online advertising made simple.” My God, what a cliche. That said, the company does seem to offer a compelling solution for managing search-advertising campaigns across multiple networks. Offers analytics tools to monitor revenue, return and conversion rates. Another tool gauges the relative success of your campaigns and offers suggestions for improving them. Seems to me a compelling proposition for the harried ad manager or small publisher.
• GotStatus: Offers a complement to Google Analytics. Systems-management tools that monitor server-side applications in the same way Google Analytics monitors browser data. Tracks metrics like new account creation, database size, etc.
• PubMatic: Offers a new service that helps publishers run the highest-paid ads from the top ad networks. Sounds like an engaging presentation for the ad-management folks in the room, but I’m finding it a bit tedious–greatly improved by the latest Smodcast.
• ZocDoc: A service that helps folks to book appointments with local doctors and dentists that accept their insurance. ZocDoc taps into the schedules of participating doctors to maintain an up-to-date schedule of available appointments. Revenue model: Doctors pay to join the service in the hopes of filling empty appointments. ZocDoc is now live with 2 percent of the dentists in Manhattan. 2 percent of the dentists in Manhattan? There’s a metric to build a marketing campaign on. “Using ZocDoc is simple. Just type in your zip code and ailment/disease/injury and then select a medical practitioner from our list of 2 percent of the dentists in Manhattan.”

Judges panel:

Get ready for the next Kawasaki-Dyson slug-fest…

Kawasaki likes Spottt, apparently because “it’s the only one I can really understand.” Bemoans the fact that he didn’t sign on to be an adviser to LinkExchange when he had the chance.

Dyson (who doesn’t understand Spottt’s business model) likes Clickable and ZocDoc. Wonders about ratings fraud and liability issues. Founders say company is committed to making sure the feedback is fair. Offers practitioner the chance to respond to negative feedback and says it will delete feedback that is inaccurate. Seems a simplistic and untenable way to handle this issue.

Kawasaki jumps in and says he’d never use a site like ZocDoc. Asks Dyson if she were to travel to NYC and suddenly need a doctor would she actually use a site like this to find one, or would she call a local friend or ask a hotel concierge. “I just don’t see it,” he says. “You search this site and you’re like, “Oh look, Dr. Molly Adams, she looks nice, I’ll ask her to operate on my heart.’ “

Founders parry and say service is good for illnesses that people might not want to tell others about. “You might ask your friend for an optometrist recommendation, but you might not ask them for someone who could diagnose the rash on your butt.”

Kawasaki: “Sure I would. I’d call Jason (Calacanis); he’s had plenty of rashes.”

(Kawasaki and Dyson are literally saving today’s judges panels.)

ZocDoc question from audience: Is it pay-for-play like 1-800-dentist? Answer: We always put the patient first. ( So is it or is it not a pay-for-play site?)

Kawasaki suggests ZocDoc generalize their business and become a platform that could be licensed and used to create similar services in other sectors. A salesforce.com model. Dyson agrees, but says it’s important to start small, prove your concept and then build out. She adds that she hopes the company has retained good legal counsel to help protect its business model.

Aww, tender moment. Presenting company announces that this is Roelof Botha’s birthday and leads audience in “Happy Birthday Roelof.” Afterward, Botha describes the moment as one of his most humiliating. Dyson suggests he use ZocDoc to find a good psychologist.