Oh dear, here it comes round again, like a bout of the flu–the indefatigable narrative about how Microsoft is headed downhill at an alarming speed, how CEO Steve Ballmer is about to get the boot and how it is all really, really true since the echo chamber of tech keeps repeating it.

Over the past two weeks, for example, I have gotten numerous “tips” that all these things are about to happen. Except when I go to check them out by doing some actual reporting, they turn out to be more chatter than reality, more barstool musing than concrete, and without much in the way of those pesky facts.

Today, we get yet another from the Olympic champion of traffic-goosing headlines on blogs, Henry Blodget of Silicon Alley Insider, in what is quite a humdinger of a title: “The Odds Are Increasing That Microsoft’s Business Will Collapse.”

Holy Guacamole! Really?

You mean the Microsoft that still–despite all the Google Apps machinations–has a hammerlock on the enterprise software market? The company with a badillion dollars in cash in the bank? The one that can lose more than $700 million in its Online Services division and not blink an eye?

Actually, the headline is the most exciting part of the whole article that follows, which hedges mightily as it also dredges up old news about Microsoft’s business challenges.

The short version: The Internet is everything that’s not good for Microsoft; Apple (AAPL) is rocking the mobile market; Google (GOOG) is disrupting all over the place; and, natch, the oncoming cloud-computing incursion is worse than the Smoke Monster from “Lost” for Microsoft’s cash-generating Windows and Office businesses.

All true in a very broad-brush way. But, of course, Blodget pulls a complete on-one-hand-on-the-other at the end, although he cannot resist a final over-the-top statement:

Right now, the investors are concluding that Microsoft will gradually become the equivalent of a technology utility–a boring but necessary provider of the software that runs the world’s business community. A smaller, more optimistic crowd is still arguing that, one day, Microsoft will be able to turn its fortunes around, and fight its way back into an industry leadership position.

What almost no one is talking about is a third possibility, one that becomes more likely by the day: The possibility that, a couple of years down the road, Microsoft’s business may just completely collapse.

Here’s the simple and less flashy situation:

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

But can you imagine anyone not mocking a likely headline-to-come about the search giant: “Search: If That’s All There Is, My Friend, Then Let’s Keep Surfing (to Oblivion!)”?

That’s why–at this point–I can see no need for panic to set in about Microsoft. Next year, perhaps. Five years, with no change and not listening to the obvious, definitely.

As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

You have to give Yahoo an A for effort, if perhaps the ultimate grade in its ongoing quest to buy hot mobile social network Foursquare is an F.

While Foursquare founder Dennis Crowley–who controls a large chunk of the shares of the start-up–has so far turned down several $100 million-plus offers from Yahoo, sources said the company’s newish head of mergers and acquisitions, Andrew Siegel, is back in New York today still trying to convince him to sell.

So far, especially because the effort has dragged on for a while and Yahoo (YHOO) has not made an overwhelmingly massive show of financial might, Crowley appears to have develop a case of cold feet about marrying the Internet giant.

Sources said Foursquare has so far turned down Yahoo flat.

Meanwhile, two powerful venture firms–Andreessen Horowitz and Khosla Ventures–are putting lucrative new funding deals on the table, trying to entice Foursquare to remain independent and turbocharge its fast-growing status-update service.

Other big firms have dropped out of the race, although sources said more are now sniffing around, including free-spending Russian moneybags, Digital Sky Technologies, which has already sunk copious funds into social networking giant Facebook and games powerhouse Zynga.

Their selling point is freedom, the ability to sell for more later and perhaps a more modest payout for talent, including Crowley, by buying some of their common shares. Their valuation is hovering around $100 million.

“Why sell now, when they are on a roll no one is going to catch them for a year at least,” said one person involved in talks with Foursquare. “There is a lot of benefit in waiting to cash in totally.”

Foursquare has grown dramatically, from 50,000 users less than a year ago to closing in on one million soon.

Despite negligible revenue, Foursquare raised $1.35 million last August, valuing it at $6 million.

Foursquare’s VCs include O’Reilly AlphaTech Ventures and Union Square Ventures, as well as a spate of well-known angel investors.

The choice for Crowley: Take the big pile of money from Yahoo–which is offering all cash, giving Crowley a huge windfall–and run, or double down with VCs.

“Yahoo should just pay a huge premium and scare away the VCs to become relevant among the cool kids again,” said one person close to the situation. “”In my mind, it’s a litmus test for Yahoo.”

Yahoo is well known in the tech space for hemming and hawing over acquisitions. Dithering over price and copyright issues, it famously lost a nearly completed purchase of YouTube to Google (GOOG), which swooped in with a bigger and cleaner offer almost overnight.

A similar scenario played out when Yahoo tried to buy Facebook when it was very small. Facebook not only remained independent but is considered to have surpassed the once mighty company in innovation and consumer appeal.

In addition, as many big companies have, Yahoo has bungled purchases of hot start-ups before, such as Flickr, the pioneering online photo service.

But CEO Carol Bartz has recently made some significant noise about Yahoo starting to engage in some aggressive M&A to attract talent and inject innovation into the company.

Internally, sources said she has told staff that Yahoo has to start engaging externally and with force.

She has mentioned mobile start-ups specifically, and Foursquare is indeed among the hottest in the space, offering its growing base of users an ability to “check in” from a variety of places.

The location-based services arena is heating up, with multiple competitors to Foursquare, such as Gowalla, as well as recent efforts by Facebook and Twitter to enter the space in a big way.

Still, Foursquare is the start-up of the moment among the digerati, striking deals with a wide range of partners, as well as tech giants like Microsoft (MSFT).

Thus, it has attracted a lot of look-sees, from AOL (AOL), Twitter and Google, although none have made a serious effort to buy Foursquare.

Even Facebook has contemplated the start-up, although it is more likely to try replicating its own version of Foursquare, which is could announce at its F8 developers event next week.

Twitter also indicated at its own conference this past week that it will continue to offer similar location features.

The challenge for Foursquare’s Crowley is in the timing, and deciding if he can look such a large gift horse in the mouth.

He sold a similar location service called Dodgeball to Google in 2005, but left the search giant on bad terms two years later. Dodgeball was closed down by Google in early 2009.

At the time, Crowley called the experience of being at a large company “incredibly frustrating,” while Google sources said Crowley was a bit of a frustration to them.

Translation: No tears were shed on either side by his leaving.

In any case, he rebounded with Foursquare and is now being pursued again in the throw-caution-to-the-wind manner some entrepreneurs enjoy.

“It’s an insane offer, in a lot ways, but big enough that we all have to take it seriously,” said one person close to Foursquare.

Insane is what some think Yahoo has to be.

“Yahoo needs to kneecap everyone near Foursquare,” said one with knowledge of the situation. “This is a strategic purchase, not one based on any metric of revenue or users, so it’s just as crazy at $100 million as at $150 million.”

Well, a little crazier, but you get the point.

Yahoo declined to comment, and I have an email into Foursquare, which has yet to respond.

Silicon Alley Insider first wrote about Yahoo’s interest in Foursquare about two weeks ago.

But if you’ve got an offer, you can go ahead and contact Allen & Company, the media banker hired by Associated Content late last year.

Associated Content looks and acts a lot like Demand Media, the Santa Monica-based “content mill” that’s drawn a lot of attention in the last year or so–though both companies bristle when you compare the two. It’s also thematically related to AOL CEO Tim Armstrong’s push to automate the production of content at that company.

That’s why Armstrong worked very hard to buy Associated Content last summer, as Silicon Alley Insider reported. I’m told a deal in the $90 million range was all but done, but ultimately nixed by Time Warner (TWX) CEO Jeff Bewkes, who wanted Armstrong to buy stuff on his own dime after AOL (AOL) spun out from the media giant.

AOL is free and clear now, but it doesn’t have a bankroll for big acquisitions. Earlier this year, the company spent $36.5 million on video platform StudioNow, but AOL execs have said they can’t and won’t spend any more than that on acquisitions for some time.

So if Associated Content, which is backed by Canaan Partners*, Softbank and Armstrong himself, wants an exit in the near term, it will have to look elsewhere.

Like where? Prior to bringing on Allen, the company flirted with Yahoo (YHOO), which has yet to do much M&A in the Carol Bartz era, but will one day. And sources says CEO Patrick Keane has even chatted to Demand Media, his company’s chief rival, about the possibility of a combination.

Another possible route: Conventional media outlets, some of which are already using the start-up to help fill their Web pages with cheap content.

Alternately, the company can stay solo and hope its story becomes more attractive as time goes on. People close to Associated Content say it’s on a $15 million run rate, up from $4 million earlier in the year. ComScore pegs the company’s audience at 10 million unique visitors (though as usual in these cases, the company says it has many more, and Quantcast puts the number at 20 million).

Associated Content declined to comment.

*An earlier version of this article incorrectly described Polaris as an investor in Associated Content.

While AOL denied a report last week suggesting that CTO Ted Cahall is leaving, he actually is, um, leaving.

Oops!

Sources at AOL said the company thought Cahall (pictured here) was staying when it issued a statement saying he was not leaving. Cahall apparently had other plans.

AOL (AOL) CEO Tim Armstrong wrote a memo to employees this morning about Cahall’s departure and the search for a new CTO:

Ted Cahall took on the role of CTO after I had asked him to move into that position from a broader business role at the company. Ted is the person who drove the complete replacement of our publishing systems and took AOL deeper into open-source technology, among many other accomplishments. We all owe him a debt of gratitude for the work he has done. Ted has decided to move back into the business side of technology and feels it’s the right time to move on from AOL. Ted has been a strong leader at AOL and agreed to transition the company to a new CTO. We are aggressively searching for a new CTO and we believe AOL is a very attractive opportunity for the right candidate.

Perhaps to defocus from the CTO-is-not-leaving-oh-yes-he-is snafu, AOL is also announcing the acquisition of StudioNow, a video creation and distribution platform, as well as the opening of a new tech center in New York, helmed by Jeff Reynar.

Silicon Alley Insider reported last week that AOL had hired the former Google (GOOG) and Microsoft (MSFT) exec as “head of technology.”

Reynar’s new title is actually Head of Technology for Engineering and Products in New York.

Got it?

AOL said it would pay $36.5 million in cash and stock–with cash paid out over “multiple years”–for the Nashville-based StudioNow, its first official acquisition since spinning off from Time Warner (TWX) last year, for integration with its Seed.com content management system.

Here’s the press release on the StudioNow deal, as well as the one about Jeff Reynar below it:

AOL ACQUIRES PREMIER ONLINE VIDEO PLATFORM STUDIONOW INC.

Transaction Will Allow AOL to Integrate StudioNow’s Video Creation and Distribution Platform into Seed.com

StudioNow Will Continue to Develop Existing Business

New York, NY, January 25, 2010–AOL Inc. (NYSE: AOL) today announced that it has acquired StudioNow Inc., the premier online platform for quality video creation and distribution. The acquisition will allow AOL to integrate a fully functional video creation platform into its newly-launched content management system, Seed.com. StudioNow will also continue to develop its existing business as a provider of online video creation, management, storage and syndication services to commercial companies.

The acquisition of StudioNow closed on January 22 and was valued at $36.5 million in cash and stock with a portion of the cash paid out over multiple years.

“The successful combination of a talented team, innovative technology, seasoned/professional video creators and strong client service has rapidly established StudioNow as a leader in online video creation and syndication. Those strengths bring AOL significant strategic benefits and we’re delighted that StudioNow is joining the AOL family,” said Tim Armstrong, AOL CEO and Chairman. “Premium original video creation is a fundamental part of AOL’s strategy to offer consumers world-class, stimulating content at scale and the integration of StudioNow into Seed.com will enable us to increase our video content/offerings significantly.”

Founded in January 2007 with headquarters in Nashville, TN, StudioNow partners with blue chip, mid-sized and local companies to create, store, and manage content and syndicate it to online video channels and portals. The company connects clients with its more than 3,000 freelance filmmakers, editors, animators, voice talent and writers/producers to create quality, professional video at an affordable price. In 2009, StudioNow was selected for inclusion on the AlwaysOn Global 250 Top Private Companies List, which honors private, emerging technology companies which create new business opportunities in high-growth markets.

“StudioNow and AOL share a passionate commitment to high-quality content, services and technology and that makes us a natural fit for this new partnership,” said StudioNow’s co-founder and CEO David Mason. “This new chapter for StudioNow presents a tremendous opportunity for our growing professional creative network to reach new audiences, diversify their assignments and increase their income as the number of projects coming from the numerous AOL properties will create a surge in video assignments.”

AOL’s newly launched content management system, Seed.com assigns, buys and distributes work for all of AOL’s properties in order to meet consumer demand for relevant content in areas including entertainment, news and sports, lifestyle, technology, money and finance, among others. Seed.com allows talented professional contributors to be seen, heard and read on AOL’s more than 80 premium branded and niche content sites. Seed.com will harness StudioNow’s technology platform and national network of more than 3000 creative professionals to develop and produce quality, professional video at the request of AOL editors in a way that is rapid, efficient and scalable.

AOL also expects to leverage StudioNow’s technology and resources to complement the ongoing work of its in-house studios, both for AOL productions, which creates original video programming like AOL Sessions, Unscripted, Moviefone Minute and the Engadget Show, and for its branded advertising and content partners.

“The distributed production capabilities offered by StudioNow, combined with our in-house production studio and video resources, help position AOL to capitalize even more fully on the projected growth of video as it establishes itself as a key form of brand advertising in the digital space,” said Armstrong.

eMarketer projects that U.S. online video advertising spending will increase from $734 million in 2008 to $5.2 billion by 2014. This growth will far outpace any other online format, with a compounded annual growth rate of approximately 39% between 2008 and 2014.[1]

AOL NAMES JEFF REYNAR
TO LEAD NEW TECHNOLOGY CENTER IN NEW YORK

New York, NY, January 25, 2010–AOL Inc. (NYSE: AOL) today announced that Jeff Reynar has joined the company as Head of Technology for Engineering and Products in New York. In this new role, Reynar will build out and manage AOL’s New York Technology Center and will focus on innovation for AOL’s content business and lead AOL’s engineering efforts in New York.

Reynar, 40, is the co-founder of DBT Labs, a company that built a social search service, where he was chief technology officer. Prior to DBT Labs, Reynar spent four-and-a-half years at Google, first as a product manager and then as an engineering manager. He was responsible for co-founding and leading an internal startup team focused on new approaches to search including Google Squared, an experimental search tool that gathers facts from the Web and presents them in an organized collection, and Google Blog Search, among other innovations. Reynar also led the Search UI team in New York that was responsible for much of the search results page on google.com. He previously spent nearly five years at Microsoft where he was a lead program manager on the Authoring Services team that was responsible for Word.

“Jeff is a hands-on technology leader who is experienced in software engineering, people and product management as well as applied research. AOL was founded on a belief that behind great consumer experiences is great engineering, and Jeff is precisely the type of all-star we need to identify, recruit and foster talent as we build out our New York Technology Center,” said AOL CEO and Chairman, Tim Armstrong.

“This is an incredible opportunity to build a team in New York that will work on products that reach tens of millions of consumers,” said Reynar. “AOL’s strategy–content, advertising and communications–presents enormous opportunities. I’m excited by the prospect of finding engineers here and bringing new, young engineering talent to New York City to develop products that will make a tangible difference to consumers. New York is the media capital of the world and bringing more engineering into the content business will make the Internet even more useful than it is today.”

As AOL focuses on building world-class platforms for the Web, the company is expanding its engineering talent with the announcement of the New York Technology Center. The company is also launching a search for a new global Chief Technology Officer. Ted Cahall, the company’s current CTO, has decided to move on from AOL and will be transitioning the company to a new CTO. Currently the company has engineering and product development hubs in Dulles, Virginia; Mountain View and San Francisco, California; Bangalore, India; Dublin, Ireland, and Tel Aviv, Israel as well as a few additional remote locations in other parts of the U.S. and is aggressively expanding engineering at these centers.

“We want to be known as a place where world-class engineering drives world-class results for our company and the consumers and partners we serve,” said Armstrong. “That’s why we are expanding our technology organization and making it easier for us to maximize geographically-centered teams focused on specific products and hire world-class engineering resources in multiple locations across the globe. The result will be a global technology organization focused on innovation and execution on a global scale.”

Reynar is a graduate of the University of Delaware, and received his Ph.D. in Computer and Information Science from the University of Pennsylvania.

Separately today, AOL announced an acquisition focused on accelerating the company’s investment in content technology and platforms. The acquisition of StudioNow Inc., the premier online platform for quality video creation and distribution, will allow AOL to integrate a fully functional video creation platform into its newly-launched content management system, Seed.com.

Hard times? Sure, for mere mortals. But at Google, things are back to normal: The company signaled months ago that it has made it through the recession without much problem. And if that wasn’t clear enough, the company underscored the point by embarking on a serious shopping spree, which hasn’t ended.

Wall Street has gotten the message. It expects serious numbers when the search giant hands in its earnings report card this afternoon. As Silicon Alley Insider notes, analysts are expecting double-digit revenue growth from Google (GOOG) for the first time in a year.

Per Citigroup’s (C) Mark Mahaney, here’s a detailed breakdown of Wall Street’s expectations (click to enlarge):

Once Google reports, there will be plenty to talk about beyond its core financials, of course: Competition from Microsoft (MSFT) Bing, plans for mobile (Android, NexusOne, AdMob), YouTube’s profit potential, etc. I’ll be covering both the initial numbers and the subsequent analyst call, starting at 4 pm Eastern.

Yahoo has hired a new head of mergers and acquisitions–former General Electric (GE) M&A exec Andrew Siegel, who will now be VP of corporate development.

Yahoo (YHOO) CFO Tim Morse dropped the news with exactly no details about that title in an interview with The Wall Street Journal about the Silicon Valley Internet giant’s third-quarter earnings.

Another question apparently not answered was what exactly is the status of its current top M&A exec, Greg Mrva–who has had the title Siegel has now posted on his LinkedIn profile–as well as that of VP of mergers and acquisitions more recently.

In other words: Where the heck is Greg?

BoomTown was considering a search party–get it?–if Yahoo hadn’t outsourced that to Microsoft (MSFT). Thus, Plan B: Mrva milk cartons!

On Facebook, Mrva is still listed as being in the Yahoo network, although there was a report floated recently by Silicon Alley Insider that he was asked by Morse to leave his M&A job at Yahoo and find a new one at the company.

Whatever the situation–either Mrva running it with Siegel or being hipchecked out by him–helming M&A at Yahoo can’t be a fun job right now, given that the company has been looking to sell quite a few of its assets, including its Zimbra open-source email business, its personals unit, its HotJobs online classified business and many more to come, said sources.

In fact, in a recent post, BoomTown wrote: “Mrva’s new job title should be: VP of un-mergers and de-acquisitions.”

The effort to unload big swathes of Yahoo is part of an aim by new management to slim down its diverse portfolio, even as it strives to redefine itself with a new, pricey marketing campaign that seeks to position the company primarily as a consumer offering.

Mrva has been the main exec shopping Yahoo properties around, according to many sources, a job that will now apparently be Siegel’s.

Yahoo CEO Carol Bartz has said the company is also looking for acquisitions, mostly small, so perhaps there will be more to do for the company’s dealmakers than running an Internet garage sale.

I contacted Yahoo to find out what’s up with Siegel and Mrva, a well-liked exec in Silicon Valley, and also have reached out to him. When either responds with anything of note, I will update here.

In a memo first published by Silicon Alley Insider, newish sales boss Nikesh Arora says he hasn’t found a successor for Fischer and will step into his shoes in the meantime.

There has been a steady stream of Googlers heading out of the company’s sales group. But while Fischer isn’t technically leaving, his move is still a big one: He was a well-regarded executive in a high-profile spot, formerly occupied by Sheryl Sandberg, who is now Facebook’s COO.

The app offers many of the features offered in its standalone GPS devices, including navigation help, trip-planning tools and multi-language support. “True, it’s not the first app offering turn-by-turn driving instructions for the iPhone 3G or iPhone 3GS–but it is from TomTom, an industry heavyweight that is finally delivering on years of rumor and speculation,” Thomas Ricker of Engadget writes.

On Silicon Alley Insider, Dan Frommer calls it “the $100 iPhone app you might actually buy,” adding, “Assuming you use it for more than 10 months, the one-time fee will end up being a better purchase than other similar apps, which run as $10 per month subscriptions.”

Read the rest of this post on the original site

In a post from co-founder Biz Stone, the company counsels users that, with the exception of a single account, none of their personal information seems to have been exposed as a result of the hack. But before establishing that, Stone goes out of his way to explain that Twitter’s security problems are Twitter’s security problems, not cloud computing’s security problems or Google’s (GOOG) security problems.

This attack had nothing to do with any vulnerability in Google Apps which we continue to use. This is more about Twitter being in enough of a spotlight that folks who work here can become targets. In fact, around the same time, Evan’s wife’s personal email was hacked and from there, the hacker was able to gain access to some of Evan’s personal accounts such as Amazon and PayPal but not email. This isn’t about any flaw in web apps, it speaks to the importance of following good personal security guidelines such as choosing strong passwords.

That last line seems directed at the likes of analysts like yours truly, who suggested this morning that the hack would raise concerns about the security of services that place work data on shared servers accessed via the Web. (Though the Twitter guys did seem to like my underwear-drawer metaphor. Cool!)

Stone then goes on to rattle a sword, gently but pointedly, at Web sites that have published stuff pilfered by the hacker.

We are in touch with our legal counsel about what this theft means for Twitter, the hacker, and anyone who accepts and subsequently shares or publishes these stolen documents. We’re not sure yet exactly what the implications are for folks who choose to get involved at this point but when we learn more and are able to share more, we will.

Note that while it’s easy enough to find this stuff on the Web, only a handful of mainstream Web sites, including TechCrunch, Gawker and Silicon Alley Insider, have published it, and most of what they have published is banal. I’ve asked all three sites for a response to Twitter’s response.

In the meantime, TechCrunch’s Mike Arrington, who has promised to publish more, announces in a new post that he is in the midst of “negotiations” with Twitter’s lawyers about his plans. Happy to hear from a First Amendment specialist, but I don’t think Twitter has a case against Web publishers here; the issue is an ethical one, not a legal one.

UPDATE: Here’s Gawker Editor-in-Chief Gabriel Snyder’s “bring it on” retort:

It’s hilarious to see Twitter, which has become a conduit for real-time, unauthorized information from places like the New York Times’ internal meetings, now get prissy about corporate privacy. Ev Williams seems to have learned a lot about the mores of the institutional elite during his stay in Sun Valley. As for Twitter coming after us for publishing the docs, the only thing I’m upset about is that the leaker didn’t come to us with them first.

No, not really.

While an earlier version of the story went on to include a graph depicting BloodCopy’s Web traffic and several theories that might explain Gawker Media’s purchase of a vampire-themed blog, the Alley Insider post has since been revised. It now explains that the news site was snookered by a “PR firm contracted by Gawker [that] sent us a release with the news.”

Said news is actually part of a promotional campaign for “True Blood,” the vampire show entering its second season on Time Warner’s (TWX) HBO .

More details about BloodCopy, the fake blog that HBO runs to promote the show, as well as other marketing stunts the cable network has rolled out, are available here. But if you don’t have time to read a whole blog post, do be aware that this anti-vampire rights group is a fake. So is this pro-vampire rights group. And so is this synthetic blood beverage.

Disclosures! I used to work for Alley Insider, whose parent company just raised a bunch of money, which makes me happy.

The Times is still struggling to figure out how to adapt its business model to the Web era. But it seems to have have embarked on a campaign against after sites that lift too much of its content–a strategy that chairman Arthur Sulzberger Jr. alluded to in a speech last week.

The Times has already had reached out to aggregators Newser, the Huffington Post and Silicon Alley Insider to complain about various incidents. In the case of Newser, it sent a boilerplate letter threatening legal action.

The latest example: Apartment Therapy, a New York-based design/consumption blog network, says the paper has sent it a takedown notice, citing the Digital Millennium Copyright Act, demanding that the site remove “all the pictures we’ve blogged from them in 2009.”

In a post, co-founder Maxwell Gillingham-Ryan complains that the Times doesn’t understand that his sites reprint the paper’s photos because they think they’re great.

“We’ll fully admit to loving their pictures, but we’ve been very conscious to never take too much from them, only blogging a visual “taste” of an article and then pushing readers to get the rest on their site. In other words, our editorial policy has been to quote, not appropriate, just like we were all taught in high school.”

Times spokeswoman Catherine Mathis declined to comment.

I can already hear the blogosphere getting ready to denounce the paper for “not getting” the “culture” of the Web, where everybody reposts everyone else’s work, and everyone in the “link-based economy” benefits. But like the Newser incident earlier this year, this one seems pretty clear: The paper doesn’t want other people–or at least commercial sites–using its photos without permission.

Tim Armstrong was considered a star inside and outside of Google, and his former company worked hard to keep the sales executive on the reservation.

But now that’s he’s bolted for Time Warner (TWX), who will replace him?

Google CEO Eric Schmidt has already promised to name a successor “in the coming weeks,” and he’s narrowed the field by declaring it will be an internal candidate.

Who might that be? According to a (very informal) flash poll of Googlers, ex-Googlers and Google competitors I conducted last night, the answer should be obvious: David Rosenblatt (pictured), the former Doubleclick CEO, who now runs Google’s display business.

A sampling of the responses: “The only choice,” “I would assume they will work hard on Rosenblatt, who may not do it,” “Shoe-in,” etc.

The flip side of the conventional wisdom is that Rosenblatt, who came aboard a year ago when Google (GOOG) completed its $3.1 billion purchase of DoubleClick, may be leaving, and will leave if he doesn’t get Armstrong’s job.

For more Rosenblatt testimonials, consult this Silicon Alley Insider article, where the blog’s readers anointed the executive as the best choice to run Yahoo (YHOO).

But what if Schmidt, like Yahoo’s board, decides to ignore the Rosenblatt fan club?

My respondents have plenty of other suggestions. And unlike Rosenblatt, most of these other would-be candidates were brought on by Armstrong, which may or may not count for something. In no particular order:

Jeff Levick, VP, industry development & marketing, the Americas. Googler since 2001.

Tom Phillips, director of search and analytics; former head of Doubleclick integration; former head of Google print ads. Googler since 2006.

Eileen Naughton, director, media platforms; former head of East Coast sales. Googler since 2007.

Penry Price, VP, North American ad sales. Googler since 2004.

David Fischer, VP, global online sales. Googler since 2002.

Nikesh Arora, president, European, Middle East and African markets. Googler since 2004.

Joan Braddi, VP search services. Googler since 2000.

All right, readers–your turn to weigh in. Who do you want filling Armstrong’s large shoes? And who do you think Google will actually pick?

If you feel strongly enough to register using your real name, please leave a comment below. If you want to do this sotto voce, you can reach me directly at peter@allthingsd.com.

And if you want to be completely anonymous, which is understandable but less useful to me (I won’t have any way of reaching you for follow-up), you can use the blind tip box here. I’ll update this post or craft a new one as I gather more string.

Earlier today, Silicon Alley Insider reported that layoffs at AOL, which had been announced in January, were finally taking place.

Actually, said an AOL insider, about 10 percent of the layoffs, or 70 people, have been let go since the announcement. The pace just got ratcheted up today, adding another 300 to the pyre at the troubled Time Warner (TWX) online division.

But, said several sources, the slashing of staff might go well beyond what has been announced, as AOL continues to drill down on its three-pronged strategy: social networking and communications (People Networks), content (MediaGlow) and advertising (Platform-A).

That’s no surprise since AOL’s options have landed, to say the least, in that dreaded rock-and-hard place.

The interest by Yahoo (YHOO) in merging with AOL, for example, has waxed and waned–it’s waned right now, sources said, though not completely–and there seem to be no true suitors on the horizon.

And new Platform-A head (and former Yahoo sales exec) Greg Coleman–whose business has to drive revenue growth–cannot perform miracles in such a weak environment, no matter what cool new products and offerings either People Networks head Joanna Shields or MediaGlow President Bill Wilson create.

Thus, with the ever-weakening economy, there is still fat to be cut out, especially since Time Warner CEO Jeff Bewkes either has to sell AOL off or make it work a whole lot better.

And working better likely means more cuts–and a whole lot more of them.

That’s caused a lot of people inside AOL and also a wider circle at Time Warner to increasingly point the finger of blame at AOL CEO Randy Falco, wondering if and when he will suffer too.

“Why Randy Falco gets to keep his job is a mystery to a lot of people,” said one top exec at another division.

While one might look at, say, the media giant’s magazine division and ask the same of its head, Ann Moore, the more obvious answer is that times are tough all over and not just at Time Warner.

Said an AOL insider who does not like Falco’s leadership, but was sympathetic: “He probably should have pushed to sell it off more when times were better, but that was being run by corporate, so now he just has to deal with a weak economy and an online property whose value has been declining for a long time.”

In any case, for now, there’s no joy in Mudville. When the domestic layoffs are done by the end of this month, a source said, the company will turn to international firings (it’s harder to dump folks in Europe, apparently).

But, as another baseball maxim goes: At least when it comes to cuts at AOL, it’s never over until it’s over.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Writes Borthwick:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Please see this disclosure related to me and Google.

Second thing: I learned this via Twitter this afternoon, via fellow Twitterer Dave Martin, who was “re-tweeting” information he’d picked up via the Chicago CBS TV station’s Twitter account, which was passing along information it had received from CBS News.

Similarly, I am learning, via Twitter, that this amazing picture from Twitterer Janis Krums, who posted it to Twitpic, is the “first” photo of the airplane in the water. No idea if that’s true–was someone monitoring all news outlets simultaneously before they reached this conclusion?–but it is an extraordinary photo.

In the old days, this image might have taken hours or even days to make it to cable news–think of those terrible videos that people shot with their home cameras during the first few minutes of 9/11. Today Krums was being interviewed on MSNBC 34 minutes after he posted the photo, says Dan Frommer at Silicon Alley Insider.

So: Did Twitter “break” news today? Did “citizen journalists” really ”beat” the bad-old MSM? It’d be great if we could skip that debate. Because it will be as boring as the one we had last month after the terrorist attacks in Mumbai.

So let’s get it over with quickly: I learned that there was a plane in the water via Twitter, via a whole lot of people who live and work on the west side of Manhattan. But the people who told me what had happened after that, and the ones who are telling me why the plane ended up in the water in the first place–those are people who have full-time jobs as journalists. Like the six people who contributed to this excellent report for the New York Times (NYT) Web site.

So I plan on relying on those folks for my news for as long as there’s a business to support them. But I’ll be using Twitter and the Web to augment that coverage–to tell me something very quickly, or to pass along news gleaned from news reports in the first place. See? Easy. Now I’m going to listen to WNYC, the local NPR station, which has been going wall-to-wall with this story all afternoon.

Over at Mini-Microsoft, the Redmond insiders who frequent the site’s comments are incredulous over the layoff rumors, insisting that they are baseless. Costs will be cut, they say, but they will be cut through attrition and reduction in open headcount. “For the last time folks–THERE ARE NO LAYOFFS HAPPENINGS IN JANUARY,” writes one Mini-Microsoft commenter. “Beyond Jan…well we dont have a crystal ball–but if the economy doesn’t improve and the company misses targets–it would get uglier for everyone–from no raises/no bonuses to (maybe) cutbacks/layoffs… but then, those are the rules of the game in corporate America.”

One rumor that has yet to materialize, though: A cheap version of the phone priced at $99. Instead, Wal-Mart (WMT) will sell the phones at about the same price that everyone else does–the black 8GB iPhone 3G model will go for $197 and the 16GB black or white model will be at $297.

What will this do for Apple’s (AAPL) iPhone sales? Dan Frommer at Silicon Alley Insider does the math:

If each Wal-Mart store gets an average 200 iPhones as inventory, that’s 500,000 iPhone shipments Apple can recognize this quarter. Even if each store gets an average 100 iPhones, that will nicely pad this quarter’s numbers. (And if for some reason Apple waits until next quarter to recognize the shipments, they’ll help during a seasonally slow March quarter.)”

Amazon notes on its Web site that “due to heavy customer demand, Kindle is sold out.” Amazon advises ordering now, though, “to reserve a place in line,” noting that orders will be filled on a first come, first served basis. The site says that the Kindle usually ships “in 11-13 weeks.” Silicon Alley Insider notes that the long wait suggests that those who order now could actually end up with Kindle 2.0, which is expected to launch in Q1.

Maybe Oprah bought them all.

Read the rest of this post

A year ago, the conventional wisdom said that the online advertising market would still grow in an economic slump because online ads were cheaper and more effective.

And they are. But if the slump is big enough– like the one we’re in now–then all bets are off.

Which is why there’s no longer any conventional wisdom about the future of online ads. Two data points, and one anecdote:

• J.P. Morgan (JPM) Internet analyst Imran Khan has reduced his projections for ad growth for the second time since September. But he’s still projecting growth. In fact, Khan sees overall spending, fueled by search ads on Google (GOOG) and Yahoo (YHOO), growing 13 percent in 2009, down from a previous projection of 19 percent. But he thinks display ads will fare much worse, noting U.S. spending on display will only grow six percent in 2009, down from his earlier forecast of 16 percent.
• Ad network optimizer The Rubicon Project reports that the average price for an online ad at “thousands of sites and 270 ad networks” dropped 11 percent in the last quarter. But since it can also find evidence of prices increasing at some sites–news and reference sites, for instance, increased prices 36 percent–Rubicon argues that things aren’t so bad after all.
• Gawker Media publisher Nick Denton thinks everyone who doesn’t see misery next year is delusional, period. The man behind sites like Gawker, Gizmodo and Valleywag happily offered this insight at the Silicon Alley Insider/Founder’s Club event last week, which was packed with digital movers and shakers. All of them should be terrified, he said, charmingly: “Anyone who isn’t prepared for ads to go down 40 percent is crazy.” Obligatory disclaimer here: Denton is always seeing doom just around the corner. But he’s very convincing.

Want a (slightly) more upbeat spin? Here’s Khan’s executive summary:

* Overall ad budgets continue to weaken. Since we reduced our estimates on September 4th, we have seen a further slowdown in the economy, particularly in the last two weeks of the third quarter. Weakness continued into October and spread from the US and UK throughout continental Europe and Asia. Additionally, dollar strength was greater than expected which will further depress growth rates. We are now basing estimates on a $1.25 exchange rate vs. our prior base of $1.40. Our updated model calls for total online global advertising growth of 25% in F’08 and 13% in F’09 vs. our prior estimates of 28% and 19% Y/Y growth respectively.

* Deterioration of display advertising is more pronounced than expected. Our channel checks are showing that sell-through is declining. Additionally, so far CPMs for premium inventory are flat to slightly down. Looking forward, we think CPMs will remain depressed and sell-through rates will worsen.  As a result, we are lowering our F’08 and F’09 domestic display estimates to $7.95B (11 percent Y/Y growth) and $8.45B (6% growth) from $8.15B (14% Y/Y growth) and $9.43B (16 percent growth). We are now modeling F’08 global display ad growth of 14% Y/Y vs. our prior estimate of 16% growth.

* Search performance held up in 3Q but we expect ad budget cuts to bleed through. We continue to see performance-based advertising holding up better than banner advertising. Long tail advertisers continue to allocate additional dollars to search. However, keyword price inflation is moderating. Additionally, we think marketing spend pullback in some segments including travel, telecom, autos, and retail is worsening. As such, we are lowering our domestic F’08 and F’09 search growth estimates to 23.4% Y/Y and 17.3%, respectively, from 27.4% and 25.5% Y/Y growth. We are modeling F’08 global search ad growth of 34% vs. our prior estimate of 36% Y/Y growth.”

BoomTown just could not resist making the obvious literary pun on the debut of Peter Kafka’s new daily blog, MediaMemo, on AllThingsD.com.

(He is pictured here.)

For those who were not dragooned into reading existentialist writers in college, I am referencing “Metamorphosis,” about a man who turns into a bug–except that the process is fraught with so much more meaning.

And thus it will be in Peter’s column, as the most excellent writer and reporter plunges into the topic–as he writes in his first explanatory post–of “the ongoing battle between the established media business and the technology that is reshaping it day by day.”

It is transformative, to say the least, from someone who will lead you through it with the kinds of standards, accuracy, great writing and insight that I hope you have come to expect from this site.

While Peter’s impending arrival to ATD was announced in mid-September, he actually debuts today and will be posting many times daily.

As I have previously written, Walt Mossberg and I have long wanted to bring in someone located on the East Coast and away from the echo chamber that Silicon Valley can be, because we both feel the ongoing digital revolution is taking place over a number of key industries all over this country and the world.

With extensive connections across the media, advertising, entertainment and tech sectors, Peter will be doing original reporting, getting scoops, doing interviews, making videos and providing much needed and clear-headed analysis that he is so well-known for.

Peter has been working at Silicon Alley Insider, most recently as its managing editor, since mid-2007. The first hire at the start-up tech business analysis site, he has focused on enterprise and beat reporting, as well as breaking news.

Previously, he spent 10 years as a reporter and editor at Forbes and Forbes.com covering media and technology. (You can read more of his bio here, along with his ethics statement.)

Walt and I are thrilled that Peter is coming onboard to join the rest of the strong ATD team, which includes: John Paczkowski, author of the rocking Digital Daily column, who formerly wrote the award-winning blog, “Good Morning Silicon Valley” at the San Jose Mercury News; and Wall Street Journal reporter Katherine Boehret, who writes the most excellent weekly Mossberg Solution column.

And we hope you will soon find–via following Peter regularly–why we are so very excited to welcome MediaMemo to the site.

Silicon Alley Insider’s Henry Blodget sounds an important horn again, namely, outlining in graphically ugly detail why graphical advertising-based online businesses are in big trouble.

In his post, Blodget shows some convincing graphs about past performance trends, including the years after the first bubble burst, from 2000 to 2002, which could augur what is to come for the display business.

That means uh-oh for companies like Yahoo (YHOO), CNET (CNET) and all the many start-ups like Facebook that are focused on display ads as their main revenue source.

Search advertising, he notes, seems to be in better shape to face off the stiff winds to come, although most of that money goes to the dominant Google (GOOG) in this arena.

Money quote:

How do we know online display ad spending will fall? Because by Q2 of this year it had already slowed sharply–to mid-single-digit growth–and that was before things even began to get bad.

According to IAB, the growth of non-search online ad spending (display, classifieds, lead-gen) was 14% in Q1 and 5% in Q2. 5%! That’s before the horrific fall-off in consumer spending in September. We’ll be lucky if non-search spending is up year-over-year in Q3. By Q4, it will almost certainly be negative.

Blodget is predicting a 10 percent decline next year and more in 2010, which is–considering that the entire economy is in trouble this time–probably conservative to me.

As to all those start-ups who have been telling me Advertising, of course as their business plan, it might be time to get another plan for what is to come.

Today, BoomTown will be spending the whole day–complete with lunch!–at Yahoo’s Sunnyvale, Calif., HQ to visit various and sundry execs in charge of a wide range of products.

Why? Well, as interested as I am in all of Yahoo’s always messy corporate and stock machinations, it’s just as important to get a handle on exactly what actual products and services the company is working on to get out of its quandary.

That’s important because Yahoo’s prospects have gotten so bogged down of late that even the possibility of an overpriced deal to buy Time Warner (TWX) online unit AOL, including its access business, whacked its stock yesterday.

Yahoo (YHOO) shares dropped to $12.65 yesterday, down 84 cent or 6.2 percent, partly due to the weaker market, but also because of the rumor that Yahoo was possibly going to pay too much for AOL.

That too much would be $8 to $10 billion.

The report by Silicon Alley Insider’s Henry Blodget, which included an odd Yahoo-labeled 18-wheeler semi-truck sighted near AOL, turned out to be not so solid and was later refuted by Blodget himself.

Nonetheless, it was a point well taken from the bad reaction that few think a merger is a good idea at anything other than low, low prices.

Why? Well, for one, the uncertain immediate future for the graphical ad business–big earners at AOL and Yahoo–going forward.

Other key issues: AOL’s growing weakness. Its revenue (half of which comes from the ISP business, by the way) and also its operating income are down.

Even the less stellar performance of Yahoo of late looks good in comparison.

Of course, the pair are still talking in that lugubrious way, as has been reported previously here.

And, if forced to bet, I would suspect there will be a deal done eventually.

But, as they say, god–or the devil, as the case may be–is in the details.

Until then, as I hope to see today at Yahoo, both it and AOL have got to get busy making their standalone businesses shine a lot better than they do now.