After what started out as one of Web 2.0′s most frothy deals and soon became a contentious relationship, several sources said that Google and MySpace are moving close to signing a new agreement, in which the search giant would remain the provider of search and online advertising technology for the social networking site.

But, said sources, this deal is a lot different from the one signed four years back when the News Corp. (NWS) unit was flying high and Google (GOOG) forked over $900 million in guaranteed payments to stave off a competitive effort from Microsoft (MSFT).

This time, because MySpace’s traffic has declined so precipitously over these years, the new deal has no giant guaranteed payments and not even any of the bells and whistles the recent renewed and expanded search deal AOL (AOL) struck with Google has.

“It is a different time and MySpace is in a much different place,” said one source close to the situation. “This is a realistic deal.”

Sources stressed the deal with Google was not complete, although it could be struck within weeks.

Sources said Microsoft (MSFT), which had been in talks with MySpace too, has largely dropped out, although it certainly could put forward another offer at any time.

But, said sources, the search volume from MySpace is not as valuable to Microsoft’s Bing search service and it would have to pay MySpace more since it does not monetize as well as Google.

Another bidder, Yahoo (YHOO), sources said, was not considered a factor in the competition, although it could also still make a better bid.

Google and MySpace continued their talks about renewing the deal after their original contract ended at the end of July, agreeing to two one-month extensions.

The hope is, if struck, a new Google deal will perform better, given MySpace will launch a soup-to-nuts renovation of its site, codenamed Futura, in mid-October.

Before that, the Beverly Hills, Calif., company, which has undergone much management turmoil over the last year, has been dribbling out some of these new features.

That has included new profiles and also the ability to synch status updates on its site with Facebook.

Yes, the very social networking giant whose total decimation of MySpace in the consumer space has been at the heart of its problems in making its original Google deal as lucrative as was once hoped.

MySpace declined to comment on the status of its negotiations, and Google has not yet returned a query about the deal discussions.

Please see this disclosure related to me and Google.

After a very long and decidedly strange funding journey, Foursquare has finally officially landed a new round of $20 million in venture funding, with Silicon Valley’s Andreessen Horowitz leading the new investment.

BoomTown reported last week that the new deal, which puts Foursquare at $95 million pre-money valuation, was in the bag.

Interestingly, it is only the second round for the New York-based social location start-up and includes its current investors, Union Square Ventures and O’Reilly AlphaTech Ventures.

Ironically, Andreessen Horowitz had walked away from earlier investment talks because of the excessive hype and indecision around the race to fund Foursquare.

But in an interview this afternoon with me, partner Ben Horowitz said that once Foursquare became firmer in its determination to build the company rather than selling it, his firm was all in.

“Basically, Foursquare made an important decision on the future of their company to build it into a really significant, independent business,” said Horowitz. “It’s a big step and we’re thrilled to back them in doing that.”

Indeed, the wrapping-up of what has been a very convoluted funding process comes after a series of missteps and switchbacks over what’s next for Foursquare, which allows users to “check in” from various places.

Among the twists: Serious but failed acquisition talks with both Facebook and Yahoo (YHOO), as well as a messy beauty pageant of other big VC firms, mostly in Silicon Valley, including Khosla Ventures, Accel Partners and Institutional Venture Partners.

The overhyped interest is because Foursquare and many others like it have seen strong growth and much innovation, although it is not clear yet if that will translate into solid businesses.

Still, Foursquare hit one million users in April and is now approaching 1.8 million, adding about 15,000 users per day. It uses a variety of game techniques and other features, such as the awarding of digital badges, to hold user interest.

And though small, it is trying to work with major brands, most notably Starbucks (SBUX), on a variety of marketing deals.

That requires money, especially given increased competition as everyone girds to race ahead first.

Foursquare’s original $1.35 million funding was raised from Union Square Ventures and O’Reilly AlphaTech Ventures, as well as some well-known angel investors, such as Twitter co-founder Jack Dorsey, Kevin Rose of Digg and Ron Conway.

Foursquare’s current investors also recently gave it a bridge investment.

Thus, Foursquare needed bigger funding, a process that soon became unusually complicated, in part because of indecision by CEO Dennis Crowley and in part because of some very public deal-making.

In fact, that’s what initially scotched very advanced funding talks between Foursquare and Andreessen Horowitz. The high-profile Silicon Valley firm–helmed by Internet icon Marc Andreessen and his longtime business partner, Horowitz–smacked Foursquare hard after those discussions and talks with other firms were leaked to the media.

In an exclusive interview with me in April, Horowitz took the unusual step of talking publicly about VC frustrations that are typical in deals around hot companies.

At the time, Horowitz acted as if he were checking out of Foursquare.

“We withdrew our funding offer to Foursquare and we are out,” he said in an interview with BoomTown then. “This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in.”

At the same time, Horowitz left the door open. “If the process was changed, we still like the company,” he said then. “But since it has been long and undefined, it is prone to manipulation.”

That sentiment obviously changed, said Horowitz.

“A lot of the problems we were worried about were the result of their ambivalence on what to do, and so we were almost a distraction until they could decide,” he said. “Since they got clarity, it has been a very efficient process.”

Horowitz will become a Foursquare board observer and what he characterizes as a “CEO coach” to Crowley.

But he stressed that so far, the leadership of Foursquare was doing very well.

“I think they are clearly best of breed and very far of ahead of everyone else in what is a very complex business to get right,” Horowitz said. “There are definitely competitors large and small, but this company has a lot of experience and data atop a big vision.”

We’ll see, of course! And as hard a time as I have given him, Crowley–who sold his last company, Dodgeball, to Google (GOOG), which ended not so well–is definitely on another roll.

Until then, here are the blog posts by Horowitz and Crowley on the deal:

Why Andreessen Horowitz Invested in Foursquare

They say he’s a grinder
fly ass rhyma’
With a CEO’s mind bra’
–Kinfolk Kia Shine

Today we are extremely excited to announce that we are investing in Foursquare, a service that mixes social, locative, and gaming elements to encourage people to explore cities in which they live.

Here are the three reasons we invested.

1. A great Founder/CEO: Dennis Crowley

We prefer founding CEOs. In particular, we think the keeper of the product vision should run the company whenever possible because the toughest and most important decisions in technology companies are always about product strategy.

The only thing better than the CEO being the keeper of the vision is the CEO being the creator of the vision. In Foursquare’s case, Dennis not only created the vision for the company, but for the entire product category. Beyond that, he is very clearly the thought leader in the market. This is not at all surprising as he has been working on the problem for a decade and has highly refined his thinking through that period.

As importantly, Dennis embodies the kind of leadership that I described in Notes on Leadership. He’s the kind of leader that great technical minds will be excited to follow: visionary, righteous, and competent. I am really excited to work with Dennis to help him on his path from being a great leader to a great Chief Executive of an incredibly important company.

2. A killer product

When you look at the numbers, you’ll see that Foursquare is growing faster than Twitter did at this stage. In particular, their growth has been explosive over the past few months–they just hit 1 million users in April and now they’re approaching 1.8 million, adding around 15,000 users per day. It’s easy to see that people absolutely love the product. Less obvious to the competitors and pundits are the reasons why people love the product so much. I often hear people attribute Foursquare’s success entirely to check-ins or other easy-to-understand product features. It reminds me of the early days of Zynga when people thought the secret sauce behind Mafia Wars and Farmville were that those games were web-based.

It turns out Zynga games are wildly successful because Zynga has mastered the art of connecting friends via games–and they work incredibly hard behind the scenes to deliver what at face value looks very easy. How many times have you heard someone say, “I could have built Farmville in a weekend”?

Foursquare is very similar in that a lot of hard work behind the scenes goes into delivering a product that users love. Dennis and team have identified over a dozen different dimensions of the Foursquare product that must interact with each other in precisely optimal ways to achieve user delight. Years and years of research and sweat equity went into cracking the code, and the results are magical.

3. A gigantic market

At a macro level, over 4.6B people have mobile phones and there are 1.7B people on the Internet. Already, over 200M people worldwide have smart phones and that number is headed north fast. Foursquare might not win the entire smart phone market (some people don’t even like to leave their house), but it will capture a huge portion of it because it’s incredibly fun and addicting.

As importantly, we are very excited about Foursquare’s ability to make money in a way where all parties win: users, merchants, venue owners, brand advertisers, and more. In fact, users have been so excited about the product that they’ve actually been signing up local businesses to run promotions for Foursquare’s mayors and active users. This natural enthusiasm is happening even before Foursquare has added specific product features to help businesses run campaigns. As a result, major brands such as The Wall Street Journal, The New York Times, Zagat, Bravo TV, Starbucks, C-SPAN, Marc Jacobs and over 10,000 businesses are currently working with Foursquare to build customer loyalty and drive traffic. Not many companies have their users turn into their sales force, and it’s definitely a good sign that this is happening around Foursquare.

We are excited to be on this journey with our good friends at Foursquare.

We’re just getting started…

Hey all–

It’s been quite the year for foursquare. Last year at this time, Naveen and I–tired of working around my kitchen table–borrowed a desk from our friends at Curbed.com and Hard Candy Shell. Two months later we brought on our first hire (Harry!) and a few weeks after closed on our first round of financing: $1.35m from Union Square Ventures, O’Reilly AlphaTech Ventures and a handful of angels. Back then, our office looked like this.

Fast forward a year: We’re now 27 people strong. We can’t fit any more desks or chairs in our office so we’re borrowing cubes from our neighbors downstairs. We’re about to hit 1.8 million users and we’re seeing Super Swarms happen all over the world (Indonesia, you crazy!). In short, it’s been an amazing year for foursquare. A huge thank you to anyone that’s ever unlocked a Newbie badge!

And with that, we’re excited to announce that we’ve raised another round of capital. Today we closed on a $20m Series B round with Union Square Ventures, O’Reilly AlphaTech Ventures and our newest partner, Andreessen Horowitz. We’re thrilled to have the continued support of our original investors and additional support and expertise from the team at Andreessen Horowitz.

The two big names behind Andreessen Horowitz–Marc Andreessen and Ben Horowitz–are each legends in Silicon Valley. They know better than anyone how to transform startups into successful organizations. As we continue to rapidly expand to take advantage of the opportunities in front of us, Ben and Marc’s expertise in growing companies will be invaluable.

With this new round of financing, our main priority will be to expand our organization to supplement the amazing core team we’ve assembled already (know any great engineers? send them our way!). We’re hoping to build a world-class engineering organization, based primarily in our headquarters in the New York City to help us develop the next generation of mobile + social + local products that will excite our users and provide unique value for local merchants. The new investment capital will also help fund the infrastructure needed to house our team (we’re finally getting a new office!) and support our growing audience of nearly 2m users.

It’s been a crazy year for us and we’re expecting the next 12 months to be even more of an adventure. Look forward to more great product from us soon…we’re really just getting started.

–@dens and the rest of team foursquare

Correcting yet another too-early rumor, sources tell BoomTown that–as has been previously reported many times in many places–Microsoft and Apple are in long-term talks about adding the Bing search service as a prominent option on the iPhone and not as a replacement of Google.

Currently, Google (GOOG) is the default search on the popular mobile device, although you can easily go into its settings and switch the search option to Yahoo (YHOO). Few consumers do, though.

Microsoft (MSFT) has been angling to be added to the search options for a long time, but has wanted to do so in a way that makes the choice more visible.

And it is probably a good idea to give users of the iPhone more choice in a wide range of services.

But, whether Apple would make Microsoft’s Bing the default or whether it would simply allow iPhone users more of a choice among search services is unclear.

In addition, Microsoft wants to make its Bing mapping more integrated with the Apple (AAPL) iPhone.

“Being an option is what’s on the table,” said one source briefed on the talks. “That’s all for now, although who knows where it could lead?”

But, cautioned several sources, talks are not complete, even though the software giant is eager to be able to announce such a deal at Apple’s upcoming developers conference on June 7.

Microsoft execs have been nervous about completing such a deal, especially because Apple is notoriously secretive and is known to end talks due to leaks.

That said, relations between Apple and Google have become increasingly tense, as their product offerings–especially in the mobile arena–have become competitive.

Google was one of Apple’s principal partners on the iPhone upon its launch and its services are prominent on the device.

But, as the device has evolved, sources say Apple has been considering a number of search options, as well as mapping, for the iPhone.

Google execs have been anticipating this, of course, especially as the search giant has pushed development of its Android mobile operating system.

In fact, a recent developers conference that Google had in San Francisco, its top execs spent a lot of time publicly attacking Apple.

Thus, it is likely that its top-level placement on the iPhone and other Apple products will diminish.

While being an option is not the same as completely replacing Google, it would give Bing a well-known platform to show off its technology to consumers.

Microsoft would like to hip-check Google off of the iPhone, of course.

But like rumors that it would pay News Corp. (NWS) to “de-index” its content from Google and display it prominently on Bing, the notion is premature.

No, Facebook is not in serious talks to buy Foursquare. Yet.

No, Microsoft is not poised to snap up the social location start-up, beyond a cursory should-we-look query to itself. Yet.

No, there is no longer a crazy bidding war going on among major venture players in Silicon Valley, all waiting with bated breath for Foursquare founder and CEO Dennis Crowley to make a decision about which of them he will deign to take a big pile of money from.

In fact, Andreessen Horowitz partner Ben Horowitz was entirely correct when he told BoomTown in an interview earlier this week that his firm was dropping out of the race to fund the company:

“This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in.”

Interesting indeed, although cloddish is probably a better word for what the simple process of deciding on funding versus selling has turned into.

New York-based Foursquare, which hit one million users yesterday and is unprofitable, lets its users “check in” from a variety of locations.

It’s an innovative and entertaining concept and a lot of fun, unless you are among those trying to do a deal with Foursquare.

From VCs to Facebook to Yahoo (YHOO)–the only serious bid to acquire Foursquare so far–sources close to every single player mentioned in the hubbub around the start-up expressed stupefaction about the confusion Crowley’s endless Hamlet act has resulted in.

And, in no small measure, annoyance too.

“It’s hard to make rivals all agree on one thing,” said one person close to the situation. “But this just became a pig pile.”

Indeed, that was the impetus for Horowitz speaking on the record about the experience of dealing with Foursquare, a move that was unprecedented.

“If the process was changed, we still like the company,” said Horowitz. “But since it has been long and undefined, it is prone to manipulation.”

While some have suggested that this was just sour grapes on the part of Andreessen Horowitz because Foursquare decided to pass on a lower funding offer it made, others involved–including rival VCs–applauded the move.

“Foursquare is being just as vague and unclear to us, which I think means they don’t know what they want,” said one VC, who has been considering funding it. “No one minds losing out to someone else, as much as feeling like you’re being played.”

The game got another boost today by rumors that Facebook is intently interested in buying Foursquare and delayed its announcement of location features at its f8 conference Wednesday because the social networking site did not want to scotch the impending deal.

Actually, no.

What is true is that Crowley has been to visit Facebook execs, including CEO Mark Zuckerberg, and there were only cursory discussions about a range of possible ways to work together, including a plan to federate third-party location services at the social networking giant.

Also, why not meet?

“It’s was a free look,” said one person with knowledge of the chitchat, the kind that happen all the time between Facebook and companies. “You always say yes when people want to talk, because you can learn a lot.”

As to a purchase: Unlikely at the price of $100 million-plus that Yahoo offered, if ever.

“Yahoo needs a solution in the mobile location and local space, because they have nothing,” said another source of the build-or-buy decision. “Facebook has all the tools it needs, as well as 500 million users used to updating their statuses, so what Foursquare is doing is not hard to replicate.”

As for Microsoft (MSFT), sources said, it, as well as companies like Nokia (NOK), simply have had their interest piqued by all the noise surrounding Foursquare.

That is also typical around hot start-ups, and perhaps more so with Microsoft, since it recently signed a deal with Foursquare to integrate its customer data with the Bing search service’s map apps.

So what’s left? Well, Silicon Valley VCs, of course, who are always interested in a deal.

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

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

New VC valuations have hovered from $50 million to $80 million.

But both Accel Partners and Redpoint Ventures, sources said, do not have active talks going on with Foursquare.

One wild card: Free-spending Russian moneybags Digital Sky Technologies, which has already sunk copious funds into Facebook and games powerhouse Zynga.

For certain, after Andreessen Horowitz pulled out, the last one standing seems to be Gideon Yu of Khosla Ventures.

And while the eager firm has made an offer, sources said, it has yet to hear back from Foursquare, which is taking its sweet time mulling things over, which can’t make Yu happy either.

In other words, mangling the old Eagles song, “Hotel California”: You can check in any time you like, but you can never leave.

So while Crowley searches for the most lucrative exit, let’s enjoy the Eagles classic in this video:

EAGLES – HOTEL CALIFORNIA
Uploaded by hushhush112. – Music videos, artist interviews, concerts and more.

“On entering the Chinese market…[Google] clearly stated that it would respect Chinese law,” Ministry of Commerce spokesman Yao Jian said Tuesday. “We hope that whether Google Inc continues operating in China or makes other choices, it will respect Chinese legal regulations….Even if it pulls out, it should handle things according to the rules and appropriately handle remaining issues.”

It’s not clear just what these “remaining issues” are–perhaps some sort of formal notification of withdrawal and the forfeiture of Google’s Internet Content Provider license, which is evidently up for renewal this month. In any event, the rhetoric seems to suggest that Beijing assumes Google (GOOG) will be following through on its “new approach to China” threat relatively soon.

PREVIOUSLY:

• Beijing to Google’s China Partners: Nice Site You Got There. Shame if Something Happened to It.
• China: We Are in Talks With Google. Also, We Are Not in Talks With Google.
• Chinese Scientists Recalibrate Google’s Evil Scale
• Chinese Schools Tied to Attacks on Google? Where’d You Read That, Mad Magazine?
• World War WAN: Google Hack Traced to Schools in China
• Nearly a Month After Debut, Google’s “New” Approach to China Still a Lot Like the Old One
• Google CEO: Ask Not What Google Can Do for China–Ask What China Can Do for Google
• China on “Google Farce”: Our Internet Is Open
• China to Google: No Worries, We Were Planning to Clone Those Android Phones Anyway
• U.S. State Department to Complain to China About Google Hack. Not That China’s Going to Listen.
• Microsoft: “Don’t Be Evil” Is Google’s Motto, Not Ours
• What’s the Chinese Word for Bing? Google Threatens to Leave China.

According to China Unicom Chairman Chang Xiaobing, the two companies are discussing plans to debut a Wi-Fi-enabled version of the iPhone, something they couldn’t do previously because of a government regulation prohibiting the sale of Wi-Fi devices that don’t support China’s Wired Authentication and Privacy Infrastructure wireless standard.

Evidently, Beijing has recently revised that regulation and now permits the sale of Wi-Fi phones in the country as long as they also support WAPI, and this change has reignited talks between the two companies.

“I know that in the market there is hope we will offer an iPhone with Wi-Fi,” Xiaobing told reporters attending the annual session of the National People’s Congress. “We have been holding talks with Apple in this area.”

Whether the talks go anywhere is another question. As Dan Butterfield observes at iPhonAsia, an iPhone that supports two different wireless standards would require Apple (AAPL) to customize the device for the Chinese market, something it has been loath to do in the past.

“It runs against Apple’s DNA to build a special model iPhone solely for one market…even if that market is China,” Butterfield writes.

“But,” adds Butterfield, “…never say never! The current model iPhone for China Unicom is already a special production run (no WiFi chip + many ‘for China’ apps preloaded). If China Unicom commits to a sufficiently large iPhone pre-purchase, then Apple may entertain the idea of a WAPI/WiFi iPhone.”

Over the weekend, Vice Minister Miao Wei of China’s Ministry of Industry and Information Technology told Xinhua, the state-run news agency, that “[Google] never informed the ministry that it was planning to withdraw from China, [nor has it] filed reports over alleged Internet regulation and cyberattacks to the ministry or requests for negotiations.”

Odd to hear, considering Google’s rather definitive Jan. 12 announcement that it will stop censoring its Chinese search site and may withdraw from the country altogether. More so given the comments of another MIIT minister just a day earlier. On Friday, Li Yizhong told reporters attending the National People’s Congress that the ministry is in talks with Google about its plans to operate an unfiltered search engine in China.

Sources close to the situation confirm that this is the case: Google (GOOG) has been in private talks with Beijing, though not formally. Of course, though nearly two months have passed since Google first said it would stop censoring search results in China, queries to Google.cn continue to return censored results.

As I noted here a month ago, “we are no longer willing to continue censoring our results” is about as definitive a statement as they come. Is Google going to follow through or not? Why all the mystery and dawdling?

Could it be that Google is now backing off its initial threat? Because, as Yahoo CEO Carol Bartz suggested last week, that threat seems increasingly empty the longer this thing drags out. “It looked to me like it was more of a statement than an action,” she told CNBC. “If they wanted to pull out, they should have pulled out.”

Reached for comment, Google offered none beyond this now typical refrain: “Thanks for reaching out, but as you might suspect, we will not be commenting on any discussions with the Chinese Government.”

PREVIOUSLY:

• Chinese Scientists Recalibrate Google’s Evil Scale
• Chinese Schools Tied to Attacks on Google? Where’d You Read That, Mad Magazine?
• World War WAN: Google Hack Traced to Schools in China
• Nearly a Month After Debut, Google’s “New” Approach to China Still a Lot Like the Old One
• Google CEO: Ask Not What Google Can Do for China–Ask What China Can Do for Google
• China on “Google Farce”: Our Internet Is Open
• China to Google: No Worries, We Were Planning to Clone Those Android Phones Anyway
• U.S. State Department to Complain to China About Google Hack. Not That China’s Going to Listen.
• Microsoft: “Don’t Be Evil” Is Google’s Motto, Not Ours
• What’s the Chinese Word for Bing? Google Threatens to Leave China.

A thankless task given that China’s unwavering stance on Internet censorship was reiterated today by Chinese Foreign Ministry spokesman Qin Gang. “Google’s statement from January 12 is groundless, and we are firmly opposed to it,” Qin told reporters. “China administers its Internet according to law, and this position will not change.”

As I said, a thankless task. Increasingly, it seems that Google (GOOG) is going to make good on its more-than-a-month-old threat to shut down operations in China rather than continue to filter search results in the country. Unless the company has reconsidered. As I wrote last week:

China is the world’s largest Internet market. But in order to operate in China, foreign businesses must abide by laws restricting Internet content, and Google has said publicly that it will no longer do so….“We are no longer willing to continue censoring our results on Google.cn…”

If that’s truly the case…why are censored results still appearing on Google.cn? Is the moral high ground the company claimed a month ago proving just a bit too high?

PREVIOUSLY:

• Chinese Schools Tied to Attacks on Google? Where’d You Read That, Mad Magazine?
• World War WAN: Google Hack Traced to Schools in China
• Nearly a Month After Debut, Google’s “New” Approach to China Still a Lot Like the Old One
• Google CEO: Ask Not What Google Can Do for China–Ask What China Can Do for Google
• China on “Google Farce”: Our Internet Is Open
• China to Google: No Worries, We Were Planning to Clone Those Android Phones Anyway
• U.S. State Department to Complain to China About Google Hack. Not That China’s Going to Listen.
• Microsoft: “Don’t Be Evil” Is Google’s Motto, Not Ours
• What’s the Chinese Word for Bing? Google Threatens to Leave China.

Last night, Trulia sent me a small pile of information about the fast-growth year the real estate search and information site had in 2009, despite the near-complete collapse of the U.S. housing market.

You can read all the stats below in Trulia’s press release–62.3 million unique monthly visitors, visits up 45 percent, page views up 105 percent and one million inquiries sent by home buyers to real estate agents via the San Francisco start-up, which was founded in 2005 by CEO Pete Flint and COO Sami Inkinen.

BoomTown also had a short chit-chat interview about the site’s prospects for the coming year with Flint, whose last success was as part of the team that sold travel site lastminute.com to Travelocity for $1.1 billion in 2005.

“We want to be the first billion-dollar real estate site,” he said, referring to Trulia’s valuation and not its annual revenue.

Currently, Trulia seems to be valued at about $150 million, having raised $33 million overall, with investors that include high-profile Silicon Valley venture firms Accel Partners and Sequoia Capital.

Getting from here to there is definitely going to be a long slog, but Flint said that the “mass of confusion about real estate” will be a key factor in growing the site’s traffic and engagement over time.

Trulia allows people to search for a range of data about homes for sale in particular zip codes or cities nationwide. Its business and that of its competitors are largely based on advertising, selling subscription services and lead generation.

Flint (pictured here) said Trulia execs started focusing on revenue about 18 months ago and should achieve profitability by the middle of this year, after which the company is “poised for significant profitability.”

To goose that in 2010, Flint said the site would focus on three key areas: Expanding local content, such as blogs and information about the local community; mobile apps; and perhaps most importantly, launching a rentals offering.

“We are not about checking out what a neighbor’s house looks like, but on buyer intent and monetization,” said Flint, taking a not-so-veiled swipe at Trulia’s clearest competitor–the larger and better funded Zillow, located in Seattle.

Still, while he predicted that the overall real estate market would remain flat over the next few years, he noted that it was probably a winners-take-all game for the big and innovative niche sites like Trulia and Zillow.

Flint added that he doubts big Internet giants could easily compete, since their focus is so dispersed.

Thus, he would not comment on my recent report that Google (GOOG) and Trulia have been “in on-again, off-again acquisition talks…rumors about Google’s interest in the real estate search market–and specifically in Trulia–have been rebounding around Silicon Valley for the last year.”

“We are going to focus on being a big independent company,” said Flint.

Guess those talks are off again.

In the meantime, here is the Trulia press release:

SMARTER SEARCH AND PERSONALIZATION KEY TO TRULIA’S OUTSTANDING GROWTH AND INCREASED MOMENTUM IN 2009

Mobile and Rich Property & Local Data Provides Enhanced Consumer Experience

SAN FRANCISCO, January 6, 2010–Trulia.com (www.trulia.com ), smart real estate search to help you make better decisions, focused 2009 on providing users with the most relevant and consumer centric experience. As a result, Trulia grew to become one of the Top 5 Real Estate sites on the web according to Hitwise Rankings (November 2009). Last year was Trulia’s largest ever with a total of 62.3 million unique monthly visitors searching for homes, market insights and participating on Trulia Voices.

During the past year, millions of consumers came to Trulia to make sense of the real estate market, spending more time than ever looking at properties and price trend information. Consumer engagement reached record levels: visits grew by more than 45%, total page views grew by 105% and property views grew by more than 130%, according to internal data. On Trulia Voices, consumer questions doubled year over year. Along with increased engagement on Trulia, consumer interest in homes exploded, with nearly 1 million home buyer inquiries sent to real estate agents in 2009.

During the past year, Trulia focused on four key areas for product innovation and enhancements: smarter search, personalization, rich property & local data and mobile. Here is a recap of the key initiatives and highlights from the past 12 months.

SMARTER SEARCH

Price Reduction–A search tool that allows home buyers, sellers, agents, investors and real estate junkies to search for price reductions on Trulia. Users have the ability to receive real-time email updates when homes in their search area have been reduced, or filter their search by the percentage reduced or date of the price reduction.

Compare It!–Allows consumers to compare up to five different properties side-by-side. Users can see all the key attributes of each listing and then eliminate the properties they don’t like and save the ones they do like for future reference. Users can compare key attributes, like price per square foot to the size of the lot, and make educated decisions on what property suits them best.

PERSONALIZATION

MyTrulia–significant enhancements have been added to MyTrulia to make home searches more relevant for every individual home buyer. From saved searches to email alerts, Trulia will immediately notify users if a property they are interested in changes price or is sold. If a similar property comes on the market, Trulia will also notify users of the new home. Trulia also introduced “checklist” to help keep track of all things related to your home buying process and helps you make sense of the entire process.

Local Newsfeed–Trulia’s homepage provide consumers with a snapshot of activity in the neighborhoods they are most interested in tracking with a quick-glance. When a user comes to Trulia, the homepage is updated with price reductions, upcoming open houses, new homes on the market and market data such as average list prices, sales data, foreclosure information and more–only in the areas relevant to that user.

RICH PROPERTY DATA AND DETAILS

Home Price History & Data–Trulia’s product detail pages now includes each homes price history, including sold transactions, listing prices and price reductions. Trulia also added school information and rankings, crime data, competitive mortgage offerings; with a click of a button you can also see all the restaurants, grocery stores, banks and gas stations nearby any individual home.

Neighborhood Coverage–Trulia increased its neighborhood coverage by more than 300%. The expanded coverage improves property search and map displays to help consumers search for and compare neighborhoods, view and track neighborhood market trends, receive advice from local market experts through blogs and Q&A, and find local real estate professionals.

MOBILE

iPhone and iPod touch–the updated Trulia application offers more than 3.5 million homes for sale and has been downloaded more than 300,000 times by real estate enthusiasts, engaged buyers and sellers and real estate agents. The update adds significant new features:

Dynamic Maps–Visual searchers can toggle the map to find homes in areas they most desire. Once the area is defined in the map, a new set of homes that match their criteria is delivered.

Price Reduction Search–With a touch of a button, users can now search for all price reduced homes in their area.

Bigger, Unlimited Pictures–Taking advantage of the fantastic screens on the iPhone and iPod touch, the bigger photos provide searchers with a realistic view of the property.

Augmented Reality Browser Integration–Trulia has integrated with the Layar Mobile Augmented Reality Browser to overlay listings on top of the mobile phone’s camera view. The app allows you to scan all the properties available around you while you look at the actual buildings through your screen.

Trulia for all smartphones–Trulia has also launched a mobile version of its website, m.trulia.com, which delivers all the power and functionality of the web site in a format optimized for mobile handsets. The mobile website works on all mobile handsets from the Blackberry to the Plam Pre and all devices with a web browser, including the iPhone and iPod Touch. Users can search homes for sale, view extensive property details, find price reductions or upcoming open houses, utilize their MyTrulia account, and the Trulia Voices community.

“We dedicated 2009 to delivering a great consumer experience. Looking back on the engagement data makes me believe we are delivering on what the consumer wants. Consumers have told us over and over that they are looking for a real estate site that can deliver relevant and personalized results,” said Pete Flint, CEO and co-founder Trulia.com. “Mobile and local information will be two areas of focus for the coming year. The world is becoming more mobile and real estate information on the go is a very natural combination. On the weekends, 5 to 10 percent of our overall traffic comes from mobile handsets. Deep local information, data and insights is also key to consumers interested in real estate and we will introduce more data and local knowledge during the next year.”

Please see this disclosure related to me and Google.

Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to help power music offerings on the giant portal.

While sources at both companies cautioned that the talks are still early, Microsoft (MSFT)–which has its own music site that it programs with original and partnered content–execs are interested in goosing it.

That’s because MSN Music consistently ranks substantially lower than other big online music properties in terms of traffic, while MySpace Music is always near the top.

Sources said Microsoft execs don’t think they can do as good a job as MySpace is doing and don’t see the point in striking needed but complex deals with music labels, which the News Corp. (NWS) property already has.

In an April report by comScore (SCOR), for example, MySpace Music was No. 2, just behind AOL Music, with 27.4 million unique monthly visitors. MSN Music was No. 6 with just 7.4 million.

Nonetheless, music is an area MSN cannot lag so badly in, given that entertainment is one of the key categories it is focusing on as it preps for a major renovation of the portal.

As BoomTown wrote in mid-July about a wide variety of changes coming to MSN:

MSN, Microsoft’s online portal, is also preparing a major redo of what U.S. and, possibly, international consumers will see, as it doubles down on five key content verticals, while cutting back on others.

In a new focus that will start to be apparent in the next month, MSN will heavily add to its News, Sports, Finance, Lifestyle and Entertainment offerings, weaving more data from [its search service] Bing into the mix.

“It’s a decision to make it so MSN does less better,” said one source close to the situation. “So there will be a focus of attention on a smaller number of categories in which we can be either #1 or #2 in, rather than #4 or #5.”

It is not clear exactly what the financial terms would be in any tie-up between MSN and MySpace, which could include licensing of content and other services related to music.

But such a deal is not unusual–MSN’s sports site is powered by Fox Sports, which is another News Corp. property.

And such a partnership would also key into concepts that MySpace CEO Owen Van Natta outlined in a recent interview onstage at the Web 2.0 conference.

Key among them was boosting music and entertainment overall and making them the prime focus in the site’s efforts at reinvigorating itself, as well as expanding distribution of MySpace.

In fact, MySpace recently bought social music service iLike to expand its distribution all over the Web, for example–including on Facebook, the longtime social networking rival from which MySpace is now trying mightily to differentiate itself.

In his appearance, Van Natta also unveiled a music video hub, the ability by users to buy music using Apple (AAPL) iTunes, and a set of better analytical tools–called MySpace Music Artist Dashboard–to help artists figure out how to best work with fans.

But MySpace needs more than these, and a link with Microsoft would provide it with a traffic gusher, since MSN’s main page remains one of the most trafficked sites on the Web.

If such a distribution partnership were struck, it would also raise the question of what will happen regarding MySpace’s negotiations with Google (GOOG) over renewal of their search deal, which expires next summer.

Dissatisfaction over the pricey three-year deal has been expressed by both sides; their mutual grumbling is one of the biggest open secrets in Silicon Valley.

Doing a search deal with Bing is the obvious and only alternative, although few expect any agreement to be as rich as the one MySpace did with Google in 2006 for $900 million.

Interestingly, it was recently reported that both Google and Facebook were bolstering music search and sales offerings, and Google’s apparently includes the use of the iLike player.

In other words: This could get really complicated.

Execs at both MySpace and Microsoft I reached out to declined to comment.

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

In a stunning one-two punch, Microsoft will announce separate nonexclusive deals today with both Facebook and Twitter to integrate their real-time feeds of status updates into the Bing search service.

According to sources, Microsoft (MSFT) digital head Qi Lu will announce the deal onstage in a few hours at the Web 2.0 Summit.

BoomTown reported earlier today that the Microsoft data-mining deal with Twitter was poised to be announced.

But the addition of Facebook raises the stakes considerably because it has the largest pool of status updates, despite all the hype around Twitter. Facebook has previously stated that it has 40 million updates a day, on average, from its 300 million-plus audience.

Twitter has been talking to Google (GOOG) about a similar arrangement, and, according to sources, so has Facebook.

But the deal is a definite blow to the dominant search engine, since–for the first time–data will be available on Bing that are not available on Google.

Neither of the services is expected to be up and running for weeks, if not months. But there is the possibility of a demo today by Qi Lu of what it will look like.

What’s interesting about the deals, which have been in the works for several weeks, is that they will be very different.

Much of what is posted on Twitter is public by design, while Facebook users prefer the closed nature of the service to disperse a wide variety of personal information only to their friends, and they want to control it.

Thus, sources said, not all Facebook updates will be included in the real-time feed to be searched by Bing, but only those its users choose to make available to the wider public. Facebook will apparently provide users with a number of new tools to do so.

BoomTown first reported several weeks ago that Twitter was in advanced talks with both the search rivals about such a real-time search arrangement.

When asked about the talks onstage at Web 2.0 yesterday, Twitter CEO Evan Williams turned coy, according to numerous reports, joking “Whose deals?”

But, in fact, the San Francisco-based microblogging service was very much engaged in dealmaking aimed at gaining more visibility for the billions of tweets from its 54 million monthly users.

And so was Facebook, and it is probably a little irksome to Twitter that the rival social networking site will steal some of the thunder over the deal, which is sure to break out in the blogosphere today.

The two services represent the hugest trove of real-time and content-sharing information, generated from their massive data streams.

The deals with Microsoft might include a payment of several million dollars to both Facebook and Twitter, along with various revenue-sharing proposals that would give them a piece of the advertising revenue made from search results.

Doing these kinds of data deals with big search players does make a lot of sense, since it would be hard for both companies to turbocharge their own search engines without running into the big cash-laden guns at both Google and Microsoft, which recently launched the Bing search service.

Being deeply integrated into big search services would give both companies an even huger footprint.

Microsoft did a small experiment this past summer by integrating Twitter data into search results, starting with tweets of bloggers like me.

And the company provides search services to the Silicon Valley-based Facebook, part of a major investment deal it made several years ago.

Both Microsoft and Google had separately contemplated buying Twitter and Facebook in deals that never materialized.

But, if they both strike data deals with Twitter and Facebook, they will get the next best thing–an ability to offer all that real-time information to the masses from its most innovative sources.

Later this afternoon, BoomTown will be front and center–well, I will probably get seated on the far side and way back–for a speech to be delivered by Microsoft CEO Steve Ballmer at Stanford University’s Memorial Auditorium on innovation and entrepreneurship. Part of the Entrepreneurial Thought Leaders Seminar, it is aimed at students there who are looking for some advice from tech’s big dogs.

Ballmer is, of course, all that, with a blustery bark and an occasional bite.

Of course, he’s probably channeling a more charming demeanor in another meeting sources say he plans to have with Yahoo CEO Carol Bartz on this visit to Silicon Valley.

The second since Bartz took over Yahoo in January, it’s about whether or not the pair should make nice after a long period of useless acrimony, and strike a significant search and advertising partnership.

Many close to the discussions, which have been going on seriously since late March between small teams from both companies, said that how the pair get along and whether they can actually pull the trigger together is all that matters.

Rapport is key, especially since such a deal has been exceedingly complex to figure out.

The latest idea is one in which Yahoo (YHOO) would take over both search and display advertising sales and Microsoft (MSFT) would run the tech for both behind the scenes.

It’s not clear if trading other assets–-such as content–-or a large investment in Yahoo by Microsoft are being considered too.

If struck, such a deal would be a major shift for both companies in their business focus and would also tether them tightly together to better compete with Google (GOOG), which overwhelmingly dominates the lucrative search market.

Still, sources said, there is a lot keeping Microsoft and Yahoo apart, most especially a profound wariness over controlling key technologies and tense history between them.

In addition, execs on both sides–such as Microsoft digital head and former Yahoo tech exec Qi Lu–are treading carefully about every item, unsure of how so many ties would be handled.

“Could we fire Microsoft if they did not perform?” asked one Yahoo exec. “Or would we be stuck without control over our destiny, if it all went south?”

For her part, sources who have spoken to Bartz about the recent discussions with Microsoft said, she has remained resolute in not giving up too much power to Microsoft.

Microsoft is also gun-shy after its disastrous takeover attempt of Yahoo failed last year–with Ballmer loath to make another such epic mistake in trying to turn around the software giant’s lackluster digital efforts.

“He simply does not want to look stupid again,” said one Microsoft source. “So it weighs on whether he has the guts to put himself out there.”

That’s ironic, of course, since his Stanford speech today is on entrepreneurialism and innovation, which always require an ability to use failure as a way to move forward.

The question is, can Ballmer walk that talk?

Microsoft and Yahoo have been busily ferreting away on talks about search and advertising partnership possibilities in what one person close to the situation described as “hot and heavy.”

But exactly how hot and how heavy depends on which side you are talking to, with Yahoo seeking to play it a bit cooler and Microsoft, according to many sources, aggressively interested in striking a deal.

Nonetheless, sources within Yahoo (YHOO) said that the company is also eager to make what could be a lucrative arrangement with Microsoft (MSFT), which could come sooner than some expect.

Yahoo is not likely to talk about its Microsoft discussions when it announces first-quarter earnings tomorrow.

Yahoo and Microsoft spokesmen declined comment after being queried by BoomTown tonight.

But their execs are talking more, nonetheless, said numerous sources.

In fact, several sources said, Microsoft executives–including a key M&A and strategy exec, Charles Songhurst, and digital head Qi Lu–have been in Silicon Valley recently in talks with Yahoo execs.

Li, who used to work at Yahoo as a top tech exec in search before moving to Microsoft, is playing a key role in the discussions, said several sources.

About two weeks ago, BoomTown first reported that the star-crossed pair were trying to make another go at coming together in the business relationship.

Both Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer, I reported, had even met in person in Silicon Valley.

That meeting went well, said many, and several Yahoo sources said a deal could come, especially if Microsoft and Yahoo can settle disputes over a number of issues.

Those include the size of the large revenue guarantee and payment Microsoft would make in exchange for selling Yahoo’s search ads, and perhaps more, related to search.

In that deal, Yahoo might take over sales of display ads for the pair.

Whether the pair can come to an agreement is anyone’s guess, though, given all the drama between the companies over the last 18 months.

Talks between the pair have “flamed in and out,” said many people at both companies, due to a range of thorny items.

Yahoo is very interested in getting a high TAC rate–basically, a payout to Yahoo on each search query–for example, and also wants to make sure it has rights to all the data related to search.

That’s because some within Yahoo are insistent that search and display need to be closely married together and that it would be dangerous for Yahoo to split them up by outsourcing some of that business to Microsoft.

That said, Yahoo could also save enormous amounts of money it spends on search if Microsoft took over some of the business.

Many point to last summer’s botched offer from Microsoft to Yahoo via current Yahoo board member Carl Icahn, who was fighting with Yahoo at the time in a proxy war, as a way to think about various parts of the discussion.

But, warned the sources, the new talks are different and focus intently on keeping Yahoo independent.

In any case, that search deal offer then included:

– $1 billion for Yahoo’s search business and a five-year guarantee of $2.3 billion in search ad revenue, with an option to renew for another five years at a $1.6 billion minimum

– An offer by Microsoft to buy $3.9 billion of Yahoo shares, and lend the company $2.8 billion at a five percent interest rate, by taking over a part of its debt. The money would be used to give a special dividend to shareholders

– An agreement to raise the TAC rate to 85 percent from the former offer of 70 percent, for three years, and to 75 percent after that

That misbegotten and overly complex offer also included a time constraint, a spinoff of Yahoo’s Asian assets and Icahn getting control of Yahoo in the mix, which is ironic since he is now a Yahoo insider.

In other words, a lot of water has flowed under the Yahoo-Microsoft bridge.

It has to, as many think it important that the two are partnered closely together in search and display advertising, even though they still compete on many other fronts in the Internet space.

By joining their forces, they might create a sale that is much more attractive to advertisers and allows for better competition against search powerhouse Google (GOOG).

This is especially true given that Yahoo is the No. 2 player in search, for example, with a much larger share than third-place Microsoft. According to recent surveys, Google has a 63 percent share, while Yahoo has 20.6 percent and Microsoft eight percent.

But it is also in Yahoo’s interest to move fast, since its search traffic could be declining soon, according to some analysts.