Whether he is walking the halls of Nokia’s headquarters in Espoo, Finland, or even just buying groceries at the market, Nokia’s chief executive is constantly flooded with suggestions for how the company should regain lost ground.

Elop recalled being at dinner just over a week ago and being approached by three young people who wanted to share their suggestions.

“The three of them couldn’t quite agree on what the right strategy was, but they clearly each had an opinion,” Elop said.

For his part, Elop has deeply considered three possibilities for its high-end smartphone business–sticking with plans to develop around MeeGo (a mobile version of Linux), shifting to Android or adopting Microsoft’s Windows Phone.

Without tipping his hand, Elop spoke with Mobilized last week about the pros and cons of the various options. The interview came before releasing his big “burning platform” memo and literally as the final decision was being made.

For Elop, it came down to which approach would offer enough differentiation and yet would also be part of an ecosystem that would be large enough to attract developers, advertisers, carriers and all the other partners.

“It’s not just differentiation but sustainable differentiation,” Elop said. He also said that as big as Nokia is, it can’t afford to go it alone.

It is also critically important to Elop that the company be more competitive in the United States. Although the company ships more phones worldwide than any other company, its presence in North America is basically nonexistent. And yet, he said, the U.S. is where the pace is set for the high end of the market.

“We need to be in the United States in one way, shape or form,” Elop said. “We have to have a viable way to reopen doors.”

So where did that leave the various options?

Although MeeGo left plenty of room for differentiation, that option would also mean trying to be unique at the same time, as the company would have to convince others to build on the platform.

“For it to be a valid ecosystem, that also implies other [phone makers]–our competitors–would be attracted to it as well,” Elop said. “That’s one of the things that give it critical mass and credibility.”

Although Elop didn’t say so in our interview, his comments in this week’s memo suggest that his confidence there was low.

“We thought MeeGo would be a platform for winning high-end smartphones,” Elop said in his memo to staff. “However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.”

As for Android and Windows Phone, Elop said Nokia could offer a significant boost to either ecosystem.

“Android is growing very nicely; it has significant market share,” he said. “The combination of Android’s existing market share plus the market share that Nokia could bring to the Android ecosystem is a very large number and would signal a very substantial shift in the dynamics of the mobile operating system market.”

As for Redmond’s operating system, Elop said it is early days.

“Windows Phone is in its early formative stages in terms of getting customer traction and so forth. It’s a beautiful product and I say that as someone who is competing with it.”

However, that may not be the case much longer. While Elop was still leaving all doors open when he spoke with Mobilized a week ago, the options appear to have narrowed significantly in recent days. His memo on Tuesday appeared to rule out MeeGo as the best option, while a tweet from Google’s Vic Gundotra suggests Android is out and a tie-up with WIndows Phone is Elop’s final choice.

But, no matter what decision gets made at the high end, Elop said that the company probably needs a separate strategy at the low end of the market, where there is intense competition from Chinese phone makers building phones around low-cost chips from MediaTek.

Friday’s investor meeting will also address other aspects of the company, including its services strategy, its plans for its Navteq navigation unit and its plans to leverage its huge patent portfolio. The announcement also comes just ahead of the cell phone industry’s big trade show, Mobile World Congress, which gets going on Sunday in Barcelona.

Mobilized is here in London and will have live coverage of the meeting, which kicks off at 11 am local time. That’s 3 am PT, so set those alarm clocks early.

(Click on the “CC” button in the embedded video to see English subtitles, and if that doesn’t work try going directly to the YouTube page.)

Ghonim, who leads marketing for Google in the Middle East and North Africa, said in a later interview that he was the administrator of the Facebook page “We are all Khaled Said” (named after the young man killed by Egyptian police officers last year) that helped organize Egyptian youth.

Ghonim said he was blindfolded throughout his imprisonment but was not tortured. The Egyptian government did not confirm its role in Ghonim’s disappearance until yesterday.

Ghonim told an interviewer from the Egyptian channel Dream TV, “I tricked my employer so I could attend the protests in Egypt,” according to a translation.

Nearly 300 people have been killed in the protests. Ghonim urged viewers, “Please everybody, this is not a time to settle scores, this is a time to build our country.”

A cellphone recording of the second interview, sans subtitles, is here:

Video streaming by Ustream

Then again, it’s been headed that way for quite some time–it’s just that News Corp. (which also owns this Web site) is now being that much more forthright about it. News Corp. COO Chase Carey said today that the company is “actively engaged” in discussions about “strategic alternatives”.

Which is exactly what the company said a few weeks ago, shortly after laying off several hundred workers.

The only difference today was that Carey said it in an earnings call, not via a public relations proxy, and it seemed clear from his tone that the company is done with the social network.

When an analyst asked about his projections for Myspace’s losses for the remainder of the year, you could hear the surprise in his voice, when he reiterated that the “focus is on strategic options.” And asked again about timing for a decision, he said that the company was “actively engaged” in discussions.

That is: Make us an offer.

For the record, News Corp.’s $275 million charge on its digital operations, announced today, breaks down this way: $107 million of that is for the restructuring, and the remaining $168 million is a writedown, presumably focused on Myspace.

And for those who care, costs for the Daily are being assigned to News Corp.’s publishing group: $7 million of the $30 million it has spent so far were assigned to this quarter.

EARLIER:

It’s an all-News Corp. kind of day around here. Jumping on the company’s earnings call, where we’re certain to hear about the just-launched Daily tablet newspaper, along with details about the company’s $275 million writedown on its digital businesses.

(Once again: News Corp. also owns this Web site. I don’t think we’ll get mentioned during the call, though.)

4:34 pm: And we’re off. Here’s the link to News Corp.’s earnings release, so you can play along at home.

4:35 pm: On the call: COO Chase Carey and CFO Dave DeVoe. No Rupert Murdoch, which is odd since he appeared happy to answer questions this morning during the Daily unveiling.

4:36 pm: Carey on that digital charge. Also included in that number, if I understood him correctly: Losses from sale of Jamba, FAN digital display network.

4:39 pm: Now time for some context: Cable is doing nicely, as it always does for News Corp. Ad sales up 17 percent, affiliate fees up 11 percent. And that includes the one-month blackout we had with EchoStar, which cost us about $30. million.

4:39 pm: Film: We’re down, but part of that is because we had a great quarter a year ago, comparatively. But “Black Swan” is great!

4:40 pm: TV: Up, due in part because of political ads. NFL ratings and prices are up, which is good because the World Series wasn’t as good as it could have been.

4:41 pm: [If you're interested in News Corp.'s satellite business, I'll direct you to the earnings report. Back shortly.]

4:42 pm: Publishing: Down from last year. Advertising is up across the board, but Harper Collins is down, and we invested in the Daily [so that $30 million charge is *not* included in the $275 million?]

4:43 pm: “Other”: Pretty much Myspace at this point, which is a mess. A loss of $156 million, which is $31 million worse than last year. Myspace results are “worse than our expectations.”

[Apologies, that was DeVoe.THIS is Carey:]

4:44 pm: Ad markets up at all our cable businesses, but we’re not dependent on that, because we have this great revenue stream from subscriber fees.

Fox News beat all other news networks combined. It’s the No. 4 channel in basic cable. All our affiliate deals are coming up, and we’re going to get a lot more from the cable and satellite guys for the rights to that channel.

4:47 pm: Ad market strong for broadcast, too. “Absolutely thrilled” with “American Idol”‘s performance. Fox Sports doing great, too. NFL was best ever, and Super Bowl will be great. NASCAR may be down a bit, though.

And don’t forget that we’re now starting to get paid by cable guys for our Fox broadcast, too, which they used to get for free. “We’ll be taking this business to a whole new level of profitability.” Will generate $1 billion annual operating income in a couple of years.

4:50 pm: [Satellite talk, which makes me drowsy yet again.]

4:51 pm: TV studios doing great. Making a pile from “Modern Family” reruns. “Glee” a money maker, too.

Film studios not as strong this year, but that’s the nature of the business.

And don’t forget “Avatar” 2 and 3!

4:52 pm: On the Daily: Rupert is still giving briefings on this as we speak–exactly the kind of thing we should be doing.

On Myspace: Completed “rebuild” of business, and “right-sized it.” And “now is the right time for News Corp. to consider strategic options for the business…and we’re “evaluating strategic alternatives.”

Time for Q&A: First question was about retrans fees, which I missed. But retrans worth “hundreds of millions of dollars.” Carey says.

Q: Color on ad market, please.

Carey: “It’s really good, solid growth” across all platforms. Print not as much as TV, but everything’s strong.

Q: What do you think of TV Everywhere?

Carey: “I prefer to call it “authentication.” But “it’s a good thing…it’s struggled to get going” because cable systems have been resistant. But “at the end of the day, success has got to be built on making it a good experience for consumers or they’ll find another way….At the end of the day, consumers are going to migrate” to good experiences. “It hasn’t gotten very far.”

Q: More on authentication, please.

Carey: I don’t think that the right way to do this is to say, “You can watch something on cablecompany.com or Fox.com”–you should be able to watch it when you want, where you want.

[A lot of "you know"s in Carey's last answer.]

Q: Please talk about how you will monetize Fox content. Disney just did a Netflix deal, and most of that value comes from ABC content. What do you think about doing something similar, and making old shows available online, and do you think “Modern Family”‘s value has decreased because of online exposure, as Turner said?

A: Two different values–delayed access to current content, and library content, which is what Netflix is doing. Netflix is competing for library rights, generally. We’re a buyer–at FX–and as buyer, I wouldn’t want to pay a lot of money for syndicated TV and have it also show up at 20 million homes at Netflix. In general, TV businesses have been selling their product too cheaply. “We need to make sure we’re getting fair value for our product, no matter what the distribution channel is.”

5:06 pm: Q: What about moving up windows, etc. for video on demand?

Carey: Creating an early window “is very important for us.” Getting that window properly priced is important, and I think you’ll see people moving forward with it in the first half of this year.

[Sorry missed a question, and next one is about satellites. Even Carey is yawning as he answers.]

Q: What are your expectations for Myspace losses for the year “or earnings”?

“Focus is on strategic options” [as in, who cares? We're selling this dog. Do you have a dollar?]

Q: How does Hulu fit into your vision about monetizing content at Fox, etc.? Also, what’s up with TV syndication dollars? Still strong? If so, why?

A: “Hulu…they’ve done a great job.” Glad they’d doing subscriptions. And “I think the digital marketplace is going to continue to evolve…not going to speak for their strategy” etc. [i.e., non-answer].”

Meanwhile, “TV continues to prove itself…as second to none” in terms of value to consumers, advertisers.

Q: What are economics of the Daily? When will you break even, and what does it mean for newspaper strategy in general?

Carey: “The Daily is not a newspaper. It’s a news product” so don’t think about it as part of our newspaper business, or part of our television business.

By the way, we should do that with all brands and content. Not ruling out the Web, but for us, the digital play is figuring out how to leverage “the content brands that we have.” And digital is great because “for a pretty modest investment” you can create great stuff.

Five hours into our launch, I won’t talk about breaking even.

DeVoe: Like we said, we spent $30 million so far, and another $500 thousand a week going forward.

Q: Your prices and subscriptions for digital are based on household, not per connected device – ie, charge familes more, single people less. Wouldn’t that cut down on piracy, too?

Carey: DirectTV does charge per box, actually, and I think cable guys are doing that too, based on number of TVs. But “I’m not sure there’s a lot of upside” in that for cable networks, etc.

[Apologies, have to duck out of this for a few minutes]

[Back now, thanks]

5:30 pm: Sigh. Another Sky question!

5:31 pm: Color on timing of Myspace decision, and premium VOD launch?

Carey: Actively engaged in Myspace discussions now.

Finished. Apologies for multitasking during this one. Need an extra pair of hands, eyes, ears and another mouth today.

An in-app payment option was supposed to be released last quarter, but Google delayed the launch in order to get more feedback from developers, who had been very busy at the end of the year with Christmas app development and sales, according to Chu.

(Meanwhile, start-ups like Zong are already offering in-app payments for Android, but Chu said he’d prefer developers to wait until Google can get its own version out to provide a consistent user experience.)

In-app payments are important because they enable developers to sell virtual goods and premium features, both major potential sources of mobile revenue in addition to paid apps and advertising.

Android has a ways to go to convince developers that its app platform is on par with Apple’s iPhone, especially in terms of monetization. “We are not happy with the payout purchases in Android Market,” Chu said.

Google has been slow to form partnerships with carriers, and so far has done so only with T-Mobile USA and AT&T, but Chu said this is currently a major area of investment.

Asked whether carriers get too large a cut, Chu said that carriers deserve a share of the profits since they significantly subsidize the cost of phones.

Chu acknowledged problems with Android Market’s initial approach, mentioning Google has made changes, such as taking a more active approach to removing bad apps, and reducing the refund window (the length of time customers have to return paid apps) from 24 hours to 15 minutes.

Chu said his team is actively working on products to improve Android Market merchandising and app discovery with better search and lists, as well as an improved ranking system.

Google is open to feedback about changing the refund window, said Chu, but it will draw a hard line about refunds for virtual goods. Not gonna happen, he said.

The move is a response to a call by the Federal Trade Commission for a “do not track” mechanism to let users decide not to allow advertising cookies to track their online movements for the purposes of personalizing the ads they see on the Web.

The Keep My Opt-Outs add-on installs easily enough in Chrome, though a few people who have installed it are complaining of problems with the Chrome browser in comments on the add-on’s Web site.

Given Chrome’s relatively small share of the browser market, on its face this is a marginal move. Google however says there will be more to come. It wants to make its add-on available for other browsers and will share the code with the rest of the world on an open-source basis.

The Street was looking for $6.06 billion and $8.09 a share.

Also, importantly, a shake-up at the top. From the release:

* Starting from April 4, Larry Page, Google Co-Founder, will take charge of Google’s day-to-day operations as Chief Executive Officer.
* Sergey Brin, Google Co-Founder, will devote his energy to strategic projects, in particular working on new products.
* Eric Schmidt will assume the role of Executive Chairman, focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership–all of which are increasingly important given Google’s global reach. Internally, he will continue to act as an advisor to Larry and Sergey.

Here’s the full text of Schmidt’s statement explaining the move:

When I joined Google in 2001 I never imagined—even in my wildest dreams—that we would get as far, as fast as we have today. Search has quite literally changed people’s lives—increasing the collective sum of the world’s knowledge and revolutionizing advertising in the process. And our emerging businesses—display, Android, YouTube and Chrome—are on fire. Of course, like any successful organization we’ve had our fair share of good luck, but the entire team—now over 24,000 Googlers globally—deserves most of the credit.

And as our results today show, the outlook is bright. But as Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time how best to simplify our management structure and speed up decision making—and over the holidays we decided now was the right moment to make some changes to the way we are structured.

For the last 10 years, we have all been equally involved in making decisions. This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.

Larry will now lead product development and technology strategy, his greatest strengths, and starting from April 4 he will take charge of our day-to-day operations as Google’s Chief Executive Officer. In this new role I know he will merge Google’s technology and business vision brilliantly. I am enormously proud of my last decade as CEO, and I am certain that the next 10 years under Larry will be even better! Larry, in my clear opinion, is ready to lead.

Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be Co-Founder. He’s an innovator and entrepreneur to the core, and this role suits him perfectly.

As Executive Chairman, I will focus wherever I can add the greatest value: externally, on the deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership that are increasingly important given Google’s global reach; and internally as an advisor to Larry and Sergey.

We are confident that this focus will serve Google and our users well in the future. Larry, Sergey and I have worked exceptionally closely together for over a decade—and we anticipate working together for a long time to come. As friends, co-workers and computer scientists we have a lot in common, most important of all a profound belief in the potential for technology to make the world a better place. We love Google—our people, our products and most of all the opportunity we have to improve the lives of millions of people around the world.

His shorter comment, via Twitter:

Here, again, is a cheat sheet from Citi’s Mark Mahaney, so you can play along at home:

All the security attention paid in recent years to securing the Windows desktop and the applications running on it have paid off a little, Cisco found, making it harder for computer scammers to successfully carry off their intended crimes on that platform. The trouble is they’re now starting to focus more attention on mobile devices, including Apple’s iPhone and iPad, and devices running Google’s Android operating system, Cisco said.

Meanwhile, the overall global volume of spam, which often contains troublemaking links that are used to deliver attacks, decreased for the first time ever in 2010. Even so, spam still increased in some developed countries where broadband connections are multiplying. In the United Kingdom, spam volume nearly doubled, while the volume in France went up 115 percent. The U.S. saw a slight decline–11.1 trillion messages down from 11.3 trillion in 2009. Spam in Brazil, China and Turkey also declined. Some of the decline can be attributed to last year’s arrest by FBI agents in Milwaukee of a Russian accused of being the “king of spam,” and to the shutdown of a few botnets used by scammers to send spam.

One thing about Cisco’s report that’s likely to draw some attention is its finding that the raw number of vulnerabilities on Apple products appear to be growing. Apple users are usually pretty sensitive about this topic, and any comparison of the Mac to Windows on the security front tends to make them grind their teeth and pound out annoyed comments on tech blogs. I know because I’ve done the same teeth-grinding and have in the past criticized other reports for similar findings.

Here Cisco is addressing vulnerabilities that Apple has itself documented and patched in software updates. One thing that’s not clear to me–though it sure looks like it–is whether Cisco is combining vulnerabilities found on both iOS (iPhone and iPad) and OS X (the Mac). The data it’s using is from its IntelliShield service, which tracks vulnerabilities and security incidents, and shows that over five years Apple’s vulnerabilities rose, from less than 200 in 2006 to more than 350 in 2010. That rate was higher than Microsoft and Hewlett-Packard and Cisco itself, the report found, though it goes on to say that Apple has worked harder than most other vendors to protect its users. Security is one of the reasons Apple imposes such strict rules on what’s available in the App store, though people still jailbreak their phones.

Another trend Cisco found is something called “money muling.” Tom Gillis, VP and general manager of Cisco’s Security business unit, describes money muling as using unsuspecting people who are attracted by “work at home” spam messages and Web ads to participate in money laundering by moving small amounts of money into bank accounts, just a few thousand dollars at a time. He says the operations around this are becoming increasingly elaborate, and criminals will devote a lot of effort to developing it this year.

I talked with Gillis about the report and other security trends that Cisco found. Here are a few highlights from our conversation:

NewEnterprise: So you’re seeing fewer attacks on Windows and more on mobile devices. Is that simply because there are more of them?

Tom Gillis: It’s the simple fact that there’s this new class of mobile device coming into the enterprise that used to be a phone and now it’s a computer, and it can access enterprise information. So what we’re seeing is that the raw number, but not the severity, is down on Windows. Part of this is that Windows 7 was a very good release on Microsoft’s part from a security standpoint. And we’ve got these new devices coming into the enterprise, and so we’re seeing a shift in focus of attacks on these mobile devices. They’re vulnerable to attack and they’re relevant in the enterprise. Two years ago this would have been too small a population to be meaningful.

What kind of attacks are you seeing?

It varies. In some cases there’s a little “phone home” code in a free gaming app. Pretty gentle stuff so far. But as people start using smartphones to access sensitive information we need to start thinking about security considerations on these devices. There’s a larger theme here that the whole nature of attacks is changing dramatically. The fact that spam volumes dropped at all is a big tell. For 10 years this has only gone up. We’re not forecasting a steady decline in spam, but the fact that it slowed down at all is an indicator of the shift in the way that attackers are using email. The attacks are more targeted and personal, for one thing.

Can’t some of this decrease be attributed to some of the arrests that happened last year?

It can. There’s been a handful of arrests. And they went after not only the botnet operators but other parts of the spam value chain. There are firms and entities that build botnets of compromised machines that relay the spam, and then there are other firms and entities that rent time on those botnets that do the merchandising. The biggest category is selling fake pharmaceuticals. Some of these fake pharma operations were shut down and the people associated with them arrested. It’s not an easy thing to do, because they’re global, they move around, and so to make an arrest in this space is a huge accomplishment.

So what is the thinking now about securing the mobile device?

We think there are two ways to make mobile devices work in the enterprise. The flood of devices into the enterprise is huge, and everyone wants to use them to check their email and access corporate directories and other fundamental things. There needs to be some kind of software on the end point–the phone or device. It will have to be light. You can’t have some kind of antivirus suite running on the phone. It would be a little piece of software that’s on all the time that knows when you’re behind the corporate firewall and when you’re not, and manages your connection accordingly. We bought a company called ScanSafe that has 40 data centers around the world. When you’re outside the firewall it connects to you the nearest data center and enforces your corporate policies, but all you as the user know is that it just works. This notion of being on or off the corporate network goes away. And we can do all kinds of scanning for security, independent of the device that’s being used.

This year we also saw the Stuxnet attacks, which we now know for certain were carried out against the Iranian nuclear program. Clearly this is a new kind of attack that can be mounted against industrial control systems via computer networks. Is Cisco researching this?

Massively. Often these types of attacks are targeted against Cisco’s biggest enterprise customers. Who buys Cisco’s infrastructure? The biggest banks in the world, the defense contractors. If the goal of an attacker is to disrupt an economy, their targets will be our customers, and they’re demanding a response from us. I like to call it global threat correlation, but it comes down to taking huge samples of network traffic and picking out good traffic from the bad. Cisco has a good advantage here because our equipment is so widely deployed around the world. As we start measuring traffic we can develop reputation data on every publicly routable IP address on the Internet. As we start putting telemetry info into that equipment–and the customer can choose to enable it or not, and it’s turned off by default. But people turn it on because it helps them against the unknown kind of attacks that are popping up. If a Web server says its a Web server, but you just saw it sending spam three minutes ago, there’s a pretty good chance it’s part of a botnet. Once you know that you know that, you can start to mount a pretty good defense. We’re putting a lot of energy into developing that, and it’s proven to be pretty robust.

It was canceled by Nokia. It’s not clear why, but sources tell The Wall Street Journal that the company feared it wouldn’t get enough marketing and subsidy support from AT&T. A surprising move for Nokia, which desperately needs to step up its game in the U.S. smartphone market, where it’s often viewed as a laggard. And it’s a major disappointment for Nokia employees in the U.S., who’ve been looking for a serious U.S. smartphone deal to be in place by this summer.

The official comment from Nokia: “We are working hard with our U.S. carrier partners to bring meaningful smartphone solutions to market that are compelling consumer experiences, have strong operator support and a thriving ecosystem. As in any business, plans can change and deliberate decisions must be made to enable clear focus on bringing the right products to market at the right time.”

(Image courtesy of PocketNow)

The 3DS will be available in the U.S. on March 27 for a competitively priced $249.99. The handheld game player’s big selling point is that it offers 3-D without the need for special glasses. The device will come in Cosmo Black or Aqua Blue. Prices will vary outside the U.S.

At an event today in New York, Nintendo revealed more of the device’s capabilities, and many of them sound like features found on the iPhone and many other smartphones.

Apple’s ability to turn its MP3 players and phones into portable gaming devices has been a competitive threat to Nintendo, which with the 3DS release looks like it is willing to recognize.

For example, the new 3DS has an online store, called the eShop, where users will be able to download games. It also has three cameras and a built-in gyro, so the device can be tilted and turned to affect game play. It will also have location-based features, where users can elect to receive new content from Nintendo or other 3DS users as they travel around. The feature can connect to Wi-Fi hotspots when in sleep mode to collect this content or to function as a pedometer, which counts a user’s steps.

Additionally, users can take pictures with the camera, or listen to music and surf the Web on an Internet browser, which will come soon in a system upgrade. Users will also be able to play with one another by exchanging a simple code. About 30 games are expected to be available by June for the device.

It’s some of these more nuanced features that could make the device more competitive, but it’s the 3-D interactivity that Nintendo is really pushing, and so far consumers have not gravitated to 3-D as a reason to upgrade a TV, so it’s unclear whether it will be a draw for the 3DS.

Nintendo’s enthusiasm for 3-D also suffered a blow when it issued a warning that it is not healthy for kids under the age of 6 to view 3-D images. Nintendo says the impact from that should be minimal because the 3-D effect can be ratcheted up or down, and even turned off completely.

For a while recently, it looked like Yahoo shares might start pulling out of their longtime $16 range, boosted by various and sundry rumors about the sale of its Asian assets and other machinations.

But, as worries about its next earnings call in less than a week coalesce, the Internet giant’s stock has settled right around its 50-day moving average of $16.59, closing down 1.85 percent at $16.50 yesterday.

That’s not bad given the stock has a 52-week low of $12.94 (and a 52-week high of $19.12).

But, it did not stop Morgan Stanley from downgrading Yahoo shares on Monday and cutting its revenue and earnings estimates.

The reason? “Deteriorating fundamentals” and a belief that “users will increasingly consume media/content on Facebook vs. Yahoo!”

You think? (As Yahoo has found, it appears that the kids love to social network!)

Thus, despite a healthy valuation for those Asian assets in the Alibaba Group and Yahoo! Japan and some speculation about the sale of them–the lack of any revenue growth in Yahoo’s core U.S. market is still the big drag on the Silicon Valley icon.

Because of that, there has also been increased short seller activity recently, which means all eyes will be on Yahoo’s fourth-quarter earnings release next Tuesday, Jan. 25.

Currently, Wall Street analysts expect higher earnings of 22 cents a share on revenue of $1.19 billion for Yahoo.

That revenue number is lower than a year ago, due to a weakening display advertising business and declines in search ad revenue at the company.

And it will not help if Google, as expected tomorrow, turns in a blow-out quarter, especially if it shows strength in its own display business.

So, after its continued lackluster revenue in the last quarter, top executive turnover in its media business and layoffs in December, investors are going to be expecting some long-promised sign of turnaround from Yahoo CEO Carol Bartz.

Whether she can finally start to deliver on that or not next week remains to be seen.

SnagFilms, the online video distribution site for professional documentaries, has nabbed $10 million in funding from Comcast’s investment arm and New Enterprise Associates, and will also now be distributing fictional independent film releases.

That and the new investment giving SnagFilms a valuation of $50 million should be big news at the 11th Sundance Film Festival, the famous independent film gathering opening in Park City, Utah, on Thursday.

And SnagFilms also announced that well-known industry exec Bingham Ray is joining the start-up to spearhead its distribution of fictional narrative and foreign-produced independent films.

The service, unlike the subscription-based video giant Netflix, currently distributes free non-fiction documentary films with advertising, as well as offers rental streaming and purchase options.

And it is profitable, said Ted Leonsis, the former AOL exec who is the founder and has been the driving investor in SnagFilms.

“It was always my personal frustration as a backer of documentaries that you could not get distribution far and wide,” he said in an interview earlier today.

He noted that while Netflix is really now focused on big studio fare, “what we’ve discovered is a big supply of independent video that has never seen light of day, but that has a big audience.”

SnagFilms’ strategy is to give broader reach to these films, which often don’t even have a theatrical opening–or, if they do, are very small.

Along with its site, which digitizes the films and adds advertising to them, SnagFilms also encourages Web sites and others to grab films and create a “virtual movie theater.” (You can see my effort below.)

It also has video-on-demand deals with Comcast, Verizon and more, as well as purchase options with Apple’s iTunes and others.

Earlier this month, SnagFilms also launched an impressive and free iPad full-movie-watching app.

SnagFilms also owns a popular news site called indieWIRE, which covers the independent film market, and the new funding will also be used to expand it.

That market has been in need of a boost of some kind, since it has been struggling as financing has dried up for the production of quality documentaries and outside-the-Hollywood-machine movies.

It has long been hoped that the Internet would perhaps save and strengthen the genre, with its supposed long-tail magic.

But the going has been slow. Currently, SnagFilms has 2,000 films in its online library, although Leonsis said the aim is to use the new funds to get 10,000 films on the service as soon as possible.

“We’re trying to build a beachhead in the independent film world,” he said of SnagFilms, which currently has about 40 employees in Washington, D.C., and New York. “We think we have a niche and video is the killer app on Web now.”

Leonsis, who has backed such notable documentaries as “The Rape of Nanking,” said NEA’s Peter Barris will join the board, along with existing investor Steve Case.

Case and Leonsis, of course, were the dynamic duo of AOL’s glory days.

So, I am rooting for another win in an arena that needs it.

Thus, here’s my own movie palace online and also the official press release from SnagFilms:

Watch more free documentaries

Industry Powerhouses NEA and Comcast Invest in SnagFilms

$10 million in new funding to distribute documentaries and fictional independent films on all digital platforms and devices, globally

Washington D.C.–January 17, 2011 – SnagFilms announced today it has received $10 million in growth capital from new investors New Enterprise Associates (NEA) and Comcast Interactive Capital (CIC). Existing investors, including Ted Leonsis (SnagFilms’ Founder) and Steve Case, also participated. The financing will be used to expand its distribution of independent films–including, for the first time, fictional independent releases–across all digital platforms and devices, and on a global basis.

SnagFilms is a leader in distributing free, ad-supported titles from a library of over 2,000 non-fiction films. Last year, SnagFilms entered the transactional world with launches of video on demand channels on Comcast and Verizon FiOS, as well as titles for sale through the Apple’s iTunes store. Earlier this month, SnagFilms debuted its iPad application with the largest collection of award-winning U.S. films offered free to iPad users.

“As a profitable company with substantial private investors, SnagFilms didn’t need to raise outside capital,” said company founder Ted Leonsis. “However, we saw overwhelming strategic value in involving NEA, a pioneer and leading venture capital firm, and CIC, the investment arm of Comcast. SnagFilms is very well-financed and uniquely positioned now to bring the full array of independent films–fiction and non-fiction, U.S. and foreign–to global audiences on all platforms and devices. We’ve amassed a library of 2,000 documentaries since our launch, and we’re now building distribution opportunities for tens of thousands of independent films in both categories. That’s great news for film fans and for filmmakers.”

“SnagFilms is perfectly positioned to fuse technology and content in a manner that has marked many of the transformational industry leaders we have helped build in the past,” said NEA Managing General Partner Peter Barris, who joins the Company’s Board of Directors. “New devices and digital platforms will allow consumers unprecedented access to quality content, and SnagFilms will be there to delight them. We are pleased to be able to invest in SnagFilms at this time, and to help them add fictional indie films to their expertise with documentaries–and to take both genres to the full swath of digital platforms and devices.” Among many other investments, Barris serves on the board of Groupon as its first VC investor.

“We are excited about the new opportunities SnagFilms creates, especially for independent filmmakers who historically could not get distribution,” said David Horowitz, Managing Director of Comcast Interactive Capital. “This investment reflects our view that consumers are demanding a diverse selection of high-quality content that can be watched on any platform or device.”

SnagFilms also announced that industry veteran Bingham Ray will join the Company to help guide its entry into distribution of fictional narrative and foreign-produced independent films. Ray, former President of United Artists, October Films and Kimmel Entertainment, and honored for Lifetime Achievement by the Gotham Awards, has deep experience in the acquisition, marketing and distribution of motion pictures, including “Hotel Rwanda,” “Bowling for Columbine,” “Secrets & Lies,” “War Room,” “High Art,” “Last Days” and “Breaking the Waves.”

“Bingham has been an advocate for filmmakers throughout his career,” noted Rick Allen, SnagFilms CEO. “His record of successful distribution on traditional platforms provides a strategic sense and depth of relationships that will be invaluable as we extend our model into a broader array of films. Bingham will be a key member of our large presence at the Sundance Film Festival this week and beyond.”

“I’ve been a big fan of SnagFilms from their earliest days, and am truly thrilled to be part of the team as they expand the service, bringing more filmmakers to bigger audiences on a wider array of platforms,” said Ray. “This is the future of our business.”

“SnagFilms plus Bingham Ray is a great combination,” said Tom Bernard, co-president and co-founder of Sony Pictures Classics. “Bingham knows the indie world as well as anyone alive and is admired for his experience and for always delivering for filmmakers. He’ll be a big asset to SnagFilms’ expansion.”

In addition, SnagFilms intends to use its new growth capital to expand its indieWIRE unit, now in its 15th year as the leading web source of news, reviews and analysis of independent film.

“indieWIRE’s traffic is now ten times what it was when we purchased it two and a half years ago,” Allen said. “Before the Academy Awards are announced later this month, you’ll see new editor-in-chief Dana Harris add ongoing features to our coverage of the indie world, and exciting new blogs to our Network, like the recently-added blog The Playlist.”

About SnagFilms

SnagFilms features free ad-supported viewing of more than 2,000 award-winning titles from some of the greatest names in documentary film. All films are shareable across the web. Since its launch in July 2008, SnagFilms’ library has been featured on over 2 billion web pageviews, with more than 325 million minutes of SnagFilms titles streamed across over more than 100,000 affiliated sites and webpages, including through partners such as Aol, Comcast, Hulu, the Starbucks Digital Network, IMDb, the Miami Herald, hundreds of non-profits, special interest sites and blogs. SnagFilms also offers selected titles via VOD (with Comcast and FiOS), on iTunes and through a new free application for the iPad.

OVGuide has twice named SnagFilms a Top Site and MovieMaker Magazine named SnagFilms to its annual list of “50 Best Websites for Moviemakers.”

The San Francisco-based company has accumulated 550,000 iPhone downloads and 300,000 monthly Web site visitors, and has just released an Android app. It launched only last year.

Foodspotting is competing with the likes of Yelp, which is known for restaurant reviews but also includes all sorts of local businesses. However, Foodspotting allows only positive reviews of food, with the idea that a user would show up at a restaurant or in a neighborhood and glance at the app to quickly zero in on the best dishes to order.

Check out this recent NetworkEffect post on the bountiful competition in the sharing-pictures-of-food sector.

Foodspotting had just raised $750,000 from Felicis Ventures, 500 Startups and High Line Venture Partners in July 2010.

We have a video interview with Foodspotting CEO Alexa Andrzejewski that I’ll post later on, but unfortunately the press embargo on this announcement was broken before I’d encoded the video. In our interview, Andrzejewski justified how such a seemingly narrow project, especially in such a competitive market, could have broad appeal.

“The next generation of Windows is going to evolve on new hardware,” said Windows unit President Steven Sinofsky.

Before the demo though, Sinofsky traced the history of Windows, noting that from 1992 through Windows Vista the system requirements increased significantly from one version to the next. With Windows 7, though, Microsoft held most technical requirements steady and even lowered some of them.

As for the demo of the new stuff, Sinofsky began with a few caveats.

“We are calling this a technology demonstration,” he said, cautioning it wouldn’t show any new user face stuff or address pricing, timing, etc.

Sinofsky said it is too soon to talk about what requirements will be for the next version of Windows, but said the company is keenly aware of the need to have Windows running on ever-smaller devices.

Update 1:25 pm Microsoft has three demos and it is saving Windows on ARM for last. It’s starting by hoeing off some new PCs running on the current version of Windows–Windows 7.

The second demo will be an update of touch input on Microsoft’s tabletop Surface computer, and the final one will show Windows running on ARM.

1:33 pm The next-generation Surface is thinner and uses infrared cameras inside the screen’s pixels instead of a big projector, allowing for devices that can be either a tabletop or mounted vertically. It will be cheaper as well, though Microsoft doesn’t say how much the machines will cost. First-generation Surface machines had a price tag in the thousands of dollars.

On to the chip demos.

Microsoft starts by showing a development board using a next-generation Intel design running Quicken.

Okay, nod to Intel complete.

Next up is Office running on an ARM chip. This demo is on Microsoft Word and has it printing to an Epson printer. Microsoft shows demos of chips from Qualcomm, Nvidia and Texas Instruments.

On the Nvidia machine, Microsoft shows hardware, accelerated browsing in IE9 running on a Tegra 2 processor, as well as running PowerPoint and an “Iron Man” movie preview.

1:48 pm Asked by Mobilized what work still needs to take place to make Windows on ARM a reality, Sinofsky says that it is the case that programs compiled for x86 processors won’t immediately run on ARM chips, but said the company isn’t ready to talk about the programming model. He does say it is unlikely Microsoft would use virtualization to make old programs, suggesting there will be some work for developers.

Sinfosky says that Microsoft has done the work to enable Windows to run and create a framework for third parties to build software and device drivers.

As for the timing, Sinofsky doesn’t give a date, but does reiterate that Microsoft these days aims to have a new release of Windows every 24 months to 36 months. “I don’t think it’s that long away,” he says. He notes some people want Windows releases faster while other large customers would rather have more time between releases. “Somewhere [around] 24 to 36 months between releases seems about right.”

The ARM compatibility will go into the next release of Windows, but Sinofsky takes time to point out to Mobilized that once again, he isn’t calling it Windows 8.

“This is the next generation of Windows,” he says.

I recently had a chance to sit down with Ask.com President Doug Leeds, who was particularly high on the company’s efforts in mobile: A new iPhone app that includes the Q&A feature has been downloaded 250,000 times since being released in November.

(It might be premature to say mobile is the future of Ask, considering it has yet to launch apps on other mobile platforms.)

Refocusing Ask around Q&A on both the Web and mobile has already had an impact, even if it’s not fully rolled out. Leeds said 60 percent of Ask queries are in the form of a question now, up from 28 percent last year.

Questions are more monetizable than queries, he attested, because users stay on an Ask.com page rather than clicking to zoom off elsewhere on the Web. Ask has found that users who have their questions answered are 50 percent more likely to click on an ad.

Social search offers Ask.com a way to differentiate itself from the competition. Leeds said the company’s brand has long been a second-choice search engine: A huge percentage of Ask users go to Ask after Google fails to answer their query. That may not sound like something to brag about, but it’s made the company profitable, with consistent traffic as the sixth-largest U.S. site, at 90 million monthly visitors.

Ask doesn’t seem to get a lot of love within the halls of its owner, IAC, so it’s especially important for the company to grow its revenue, if not its traffic. Ask is hiring back 30 of the 150 positions it cut, for a total of 270 employees, said Leeds, who described the layoffs as a removal of satellite offices in order to consolidate operations at its Oakland, Calif., headquarters.

Leeds said that Ask has found social search works especially well on mobile, where, for instance, users can ask a question verbally using the free Ask.com iPhone app with speech recognition, put the phone back in their pocket and wait for a notification saying that a real person has answered the question.

The median answer time for questions posed to the Ask community is approaching five minutes. That’s eons in search time, but the fact that the answer is created within those five minutes matters, said Leeds.

According to a Harris Interactive survey of mobile users sponsored by Ask, 66 percent of respondents said timeliness matters more when they’re not in front of their computer, and 40 percent of smartphone users said they’re more influenced by users’ opinions given within the last 24 hours than those from a month ago.

To be clear, Ask has not completely converted to social. Only 20 percent of visits are currently exposed to community Q&A, and only after users say they want to ask a question or a search has failed to produce results. That’s because Ask doesn’t want to overtax its human question answerers, said Leeds. The majority of Ask user questions are answered through a machine process of extracting information from multiple Web pages (similar to the word definitions, flight status information and real-time weather you’ll get at the top of the search results page if you look for such things on Google or Bing).

To recruit and retain question answerers, Ask has a promotion going where it donates 10 cents per answer to Susan G. Komen for the Cure. “Altruism is the best incentive,” said Leeds. “We don’t want it to be a game; we want it to be useful.” Today, 65 percent of questions asked through community Q&A get accurately routed to an answerer.

Next for Ask is a “nearby” feature of its iPhone app that will launch early next year. The ideal question, said Leeds, would be “Why is there a crowd over there?” Or users could ask about the current state of traffic on roads, crowding in a particular restaurant or whether they should be worried about that smoke they’re smelling in the air. Of course, for this to work well, Ask will need much deeper penetration than 250,000 iPhone users.

As it tries to get social, another limitation for Ask is it doesn’t have much of an existing membership system. Unlike, say, Yahoo, where users are virtually always logged in, Ask has never had a portfolio of products, just search. The company introduced a revamped log-in system in July, but it will have to get many more users to sign in before it can make use of personalization, social connections and network effects to get questions answered. (Hmm…isn’t this what Facebook Connect does?)

The service runs on Sonic Solutions’ RoxioNow platform, and the companies are working on a rollout to make the services available on portable media players, mobile phones and high-definition televisions under a multiyear agreement. Plans for the service were first announced in June.

Read the rest of this post on the original site »

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.”

Although Andy Rubin’s keynote at D: Dive into Mobile is scheduled for just before dinner, expect to hear a lot of talk about dessert. On the menu are Froyo, Gingerbread and perhaps even a hint of Honeycomb.

Google did release a couple of tasty treats already on Monday–announcing plans for the Samsung co-developed Nexus S as well as the release of Android 2.3 (Gingerbread). But I hear the cookie jar isn’t quite empty yet.

In between sugary snacks, Kara Swisher and Walt Mossberg will pepper Rubin on the many issues facing Android and the wireless industry. Mobilized will have live coverage of the session at this spot beginning around 6:45 pm PT.

Liveblog

6:37 pm: The crowd is still settling into their seats here at the Ritz-Carlton San Francisco, the swanky home to the inaugural D: Dive Into Mobile.

6:40 pm: Lights dim. Kara Swisher and Walt Mossberg take the stage. “My husband, Walt Mossberg, and I would like to welcome you to this intimate dinner,” Swisher quips.

6:42 pm: Ironically, the crowd was asked to silence their mobile devices, but Kara says they should just feel free to leave them on.

6:44 pm: It’s Rubin time (and he has brought a satchel of goodies with him).

Rubin is asked about the Nexus One and why it didn’t shake up the business model. “We bit off a little more than we can chew.” Rubin says that they were hoping for a model more like that in Europe, where people can pick a phone and then separately pick service, typically at retail stores like Carphone Warehouse. “We were trying to do that model in the U.S. and only do it online.”

6:46 pm: Kara: So have you given up on that business model?

Rubin: With Nexus S, which is the thing we announced today, we still have that notion of an unlocked phone. But we are not selling it ourselves, but through traditional channels, in this case Best Buy.

6:48 pm: Walt: How is Android doing?

Rubin: Android started as an eight-person start-up. “During that time at Google we obviously staffed up.” Now there are 172 different phone models using Android after the OS was launched two years ago with one, the T-Mobile G1.

Rubin credits the quality of the software and the open nature of it.

6:49 pm: Walt: I notice more and more they are taking on the personality of the carrier, not Google, not the handset maker. There are lots of what I would call craplets. Verizon, for example, swapped out Google for Bing. Is there a danger it is being taken over?

Rubin: That’s the nature of open. That’s actually a feature of Android.

He takes a swipe at Windows Mobile, saying that the alternative is a commoditized world where all the phones have to have a start menu in one place and all the icons have to be tiles.

6:54 pm: Kara: Do you consider yourself the Microsoft of phones in that regard?

Rubin: No. We’re probably more like the Linux of phones, and that’s a true statement.

Walt: You mean hard to get drivers for, only for geeks, no real consumer would buy it?

Rubin: No, I think we’ve already proven that wrong. Bad analogy.

6:55 pm: Discussion about all the crapware that comes on many phones.

Rubin: The consumers are voting and the consumers are voicing their opinions.

6:56 pm: Rubin has some relatively nice things to say about the iPhone.

“I think everybody is embracing the iPhone. They are pretty open.”

Rubin says that most developers actually are having a pretty easy time getting their apps approved by Apple.

6:57 pm: Kara: How do you consider Apple as a competitor?

Certainly they make great products, Rubin says–robust, solid, good user experiences. A lot of consistency across applications. More recently I see them getting involved in the other end of the spectrum–services like a bookstore, the app store.

6:59 pm: Walt: What about Apple’s massive data center? That’s another area of competition for you guys.

Rubin talks about the power of Google’s ad-based model, which allows the core advertising to fund all kinds of applications.

Walt: Do you think Apple has the DNA to do this?

Rubin: “My assumption is Apple is a company that learns from its mistakes.”

7:01 pm: Kara and Walt: Are you profitable? Is Android profitable? Does Android make any money?

Rubin: We’re making money on the advertising that’s generated through Android.

Walt: Are you profitable if it was broken out as a separate business?

Rubin: Yes. [Wow. I'm curious about the math, but maybe if you add all the searches on Android-based devices.]

There’s no way I would have ever been profitable as a start-up. I probably wouldn’t have made it as a separate company.

7:06 pm: Walt: How do you see the rest of the competition beyond Apple?

Rubin: I don’t think it’s ever going to be just two [Apple and Android]. There’s a lot of innovation and a lot of ideas out there.

Rubin says there is a fundamental advantage to Android and iPhone since they are new and designed from the ground up.

He notes even Windows Phone 7 has legacy code from the original Windows Mobile from way back when.

“You just have this package of stuff that was invented before the Internet,” Rubin says. “When the architects built that product, they didn’t have the Internet in mind.”

7:08 pm: Walt: Is there anything you do like about Windows Phone 7?

Rubin: It was a big bet. They struck upon that notion of the centerpiece of the main tiles. It’s a good 1.0 product. It does look different and it does look unique. It’s solid. I’m not the predictor of being successful.

He says if he were to give advice to Microsoft, he would suggest that it give more freedom to carriers and phone makers so the devices don’t look the same.

Kara: Have you gone to Finland to woo Nokia?

Rubin: I haven’t been to Finland.

Walt: Forget Finland, have you tried to convince Nokia?

Rubin just laughs (a-ha).

7:12 pm: Kara: The discussions with Nokia–talk about them in detail.

Rubin: The company has new leadership [referring to CEO Stephen Elop]. They are evaluating lots of alternatives. I’m open-minded and a big proponent of Android.

Rubin again declines to talk about any meetings he may have had.

7:14 pm: What about the challenge of iconic products like RIM?

Rubin: Talks about the challenge of legacy and points out Motorola had that problem when it became overly dependent on the Razr. Then, “they bet the company on Android,” he points out.

Rubin said RIM is doing the right things–acquiring assets like QNX and DataViz to build a more modern operating system.

7:16 pm: Walt points out that RIM will be here Tuesday–PlayBook tablet in hand.

7:16 pm: Back to the discussion about persuading companies to use Android.

Rubin: If it’s good–and we all believe that it’s good–everybody can use it.

“You don’t need to be a partner of Google to run Android.”

7:17 pm: Walt asks about tablets. Are they exciting to you? Are they important to you? Can they replace laptops for some people?

Rubin: I think what is going on in tablets is interesting. It’s fundamentally changing the model of computing interaction.

It is much more physical. You touch it. You feel it.

7:19 pm: What changes in the paradigm? It’s not a laptop. It’s not a phone.

Rubin points out that we used to have PDAs, but the cellphone eventually replaced it. The tablet is a sort of in-between device so the use case is less clear. You might definitely have it on the couch, but maybe not on the subway.

7:21 pm: Walt: What makes it more interesting and more immersive? There is something different there?

Rubin: If you do a good job, what you’ve done is make it a reflex. Like a car. You learn how to drive and you can drive almost any car. You don’t get distracted by things. That’s the result of many, many years of evolution. That’s true of any consumer product. They become almost like second nature for you.

7:24 pm: Kara and Walt ask about privacy.

Rubin: There is nothing in open source Android OS that sends keystrokes or what applications you use to Google.

He encourages people to look at the source code.

Walt: There are Google services that do collect certain things?

Rubin: Yes, like on other platforms. But he encourages people to read the company’s privacy policy.

7:27 pm: How do you overcome the perception that Google wants to collect more information than the others?

I think you just have to be transparent. You have open source–be inspectable. Any other interpretation is either FUD or just people who don’t understand.

7:28 pm: On to the goodie bag. Rubin pulls out a Nexus S. Says it is his personal device.

Kara: Oh good. She grabs it and pulls it close to her.

Now Rubin is showing the features, screen, etc. He’s talking about the Near Field Communications technology that is actually printed inside the back of the case. NFC allows a phone to scan specially printed tags.

Walt: Is that what sends all the information back to Google?

Rubin: Laughs. Goes back to demoing NFC and showing the Nexus S scanning a tag, which sends a URL for a video of the Nexus S to the phone, which then starts playing.

7:31 pm: Rubin talks about the applications: Buying coffee, getting coupons.

What we are hoping is third-party developers create a lot of cool apps. Devices can also use NFC to exchange contact info between two devices as well, kind of like beaming in the old Palm days.

7:32 pm: Rubin is talking abut the Nexus strategy.

To give a “Pure Google” phone. Google works with the hardware maker to take maximum advantage of Android’s features.

7:35 pm: What’s new with Gingerbread?

We added a garbage collector. Added broader voice over Internet Protocol support. Can cut, copy and paste without a trackball.

7:36 pm: Walt: What about video calling? I know there are third-party apps that do that. It seems like a natural thing that it belongs in the phone function.

Kara: FaceGoog or GoogleTime.

Rubin: There’s a whole bunch of software engineers hitting their keyboards back in Mountain View. If consumers want it, we’ll add it. [He strongly hints that it is coming, points out there already is Google video chat for PC.]

7:38 pm: Rubin reaches into his bag of tricks again. Pulls out a prototype Motorola tablet to show a forthcoming version of Google’s mobile map application.

7:38 pm: Shows the improved 3-D abilities and new panning and zooming options. What we are showing off here is some pretty cool performance.

“It will be available for cellphones in a matter of days,” Rubin says.

What allows the new presentation is that maps are no longer a series of tiles, but rather vector graphics.

7:40 pm: Vector data is smaller and more efficient, so users can load data in case they go offline. “You could load a whole state,” Rubin says.

This app runs on Android only for now, though it will work on tablets and phones.

Walt: What about PCs?

Rubin: That would be a natural extension.

7:41 pm: What version of Android is running on that tablet?

Rubin: Honeycomb [the next version of Android, due out some time next year]. There are no buttons on the Motorola tablet. He’s showing his personal email again.

7:43 pm: More on Honeycomb: We added new APIs to Honeycomb that allow an application to split its views to multiple views. On a a tablet they can be side by side, while on a phone they might be one after the other.

7:46 pm: On to Q&A.

7:46 pm: What about the Chrome OS team? What’s the delineation between the two?

Rubin: That’s a good question. Google was born on the Web. “I don’t think it would be doing its job unless it reinvested in the Web.”

But evolution of the Web had stagnated a bit, prompting Chrome. “It’s kind of slowed down a bit.”

Apps vs. Web?

There’s no need to argue. We’re doing both, Rubin says.

7:50 pm: What are the plans for the Android team to focus on the enterprise?

We did a little bit, Rubin says, but he likens it to baby steps. Support for VPN and some secure browsing. Gingerbread has some added features like remote wipe. Each release you will see more and more.

7:51 pm: App discovery. What are your plans?

Rubin: This is all evolving. The Android market is evolving as well. Gingerbread allows “related applications.” We are always adding features.

As a search company, if we can’t help you discover apps, I think we have a problem. We should be very easily able to organize a few hundred-thousand apps.

7:53 pm: Question about mobile payments; What is Andy Rubin’s vision? Groupon?

Rubin: I think there is a lot of opportunity. It is not an opportunity that is going to be seized by one company. Today Android does carrier billing integration, so you can put apps on your carrier bill. Creates an efficient micropayment option.

With Nexus S having added gyroscope capability, can see things from even within a store. Should help make, for example, better coupon apps.

7:57 pm: Android on TVs?

Rubin: That’s exactly what Google TV is. It is Android running on a set-top box. The first versions of that are running an Intel processor.

Have demonstrated the same app can run on both a three-inch screen or a flat-panel TV.

People are building all kinds of things. Refrigerators, ovens, automotive. Rubin says the nice thing about open source is that he and Google don’t have to be involved in every use. “We knew what to do to make it scale as widely as possible.”

7:58 pm: Question about carrier data plans and pricing.

Rubin: Average usage on an Android phone is 440MB a month. Rubin points out we are at a bandwidth crunch, but that it tends to be a cycle. New networks tend not to be overwhelmed by demand at first, but then the demands grow. Then new networks come along.

How should OEMs try to differentiate?

Rubin: I think HTC has done a really good job with Sense. Motorola has Blur. People are really differentiated.

Rubin says he often hears complaints about fragmentation. “Fragmentation” is the wrong word. Different phones do things differently, but that’s differentiation. Basically the apps are still compatible, Rubin says.

8:04 pm: Is Android too clunky? Will we see a sea change where Android really gets more user friendly?

Rubin: I would probably characterize Android today as an enthusiast product for early adopters–or wives of tech enthusiasts.

8:05 pm: Rubin says the company made some concessions that led to “geeking it out.” But then there are apps that offer easier customization and personalization.

8:07 pm: Walt points out places where it requires an extra step to do things like compose an email, while the iPhone does it in a single step.

Rubin: Yep. We get it. You will see the fruits of that investment in the tablets first and then in the phones. It’s going to get better. Honeycomb will be a good start

8:08 pm: Applause and they exit stage. ‘Night.