I’m betting it is. Jackson was a global icon and his funeral will purportedly be a star-studded affair. But I just don’t think this will compare to the two events that have already tested the Web’s capacity this year alone: Barack Obama’s inauguration and news of Jackson’s death.

Recall that Obama’s first speech as president managed to get most people to stop using Google (GOOG)–voluntarily. And Jackson’s death was a news event that pretty much everyone wanted to hear more about, at least for a couple seconds.

But on the Web at least, Jackson was old news by last week. And my hunch is that anyone who truly wants to watch today’s event will do so on a TV.

But if do you want to watch it on your laptop, try one of these outlets:

TMZ (of course)

CNN.com (partnering with Facebook again, a la the Obama event).

E! Online

ABC News

Fox News

Hulu

MySpace

CBS News

Want to watch in the company of others? Cinedigm will be screening the event, for free, at the theater chain’s screens in 31 states. Details here.

I’ve seen stories touting big traffic spikes at Time Warner’s (TWX) TMZ, which broke the story; Wikipedia, which apparently was flooded with Wikipedians squabbling over the details of Jackson’s demise; and Gawker, which lives for this sort of thing. At some point, the man-bites-dog story will be a site that doesn’t report a huge spike in Jackson traffic.

In any case, here’s the latest one I’ve seen: Yahoo (YHOO) boasting that Jackson’s demise has been its good fortune. Here are the data, per Yahoo PR:

Yahoo! News:
· Yahoo! News set a record in unique visitors with 16.4 million UV’s in a day. Our previous record was on election day when we had 15.1 million visitors.
· Yahoo! News had 4 million visitors come to the site between 3-4 pm, setting an hourly record.
· Yahoo! News recorded 175 million page views yesterday, our 4th highest day after the Inauguration and Hurricane Ike.

Front Page:
· On our front page, the story “Michael Jackson rushed to hospital” was the highest clicking story in our history. It generated a whopping 800,000 clicks within 10 minutes and news of his death saw 560,000 clicks in 10 minutes. Also, the news area on our front page experienced five times the amount of traffic it normally receives.

Yahoo! Music
· Yahoo! Music’s blog post on Michael Jackson has generated 21K comments in under a day.

UPDATE: Here’s some boasting from CBS’s (CBS) Web group. Happy to keep adding to this if anyone else wants to do a little chest-beating.

· Since the news broke, Last.fm saw a huge surge in users streaming music tracks by Jackson. On average, users were streaming 43,000 Jackson tracks per hour. The Michael Jackson artist page has received heavy traffic with more than 30 page impressions per second as fans log on to pay their respects to the pop icon. The traffic for the artist page continues to increase, and the site continues to see more than 45 times the normal traffic.

· TheInsider.com reported record traffic for June 25, with an increase that was close to double compared to the previous week. Prior to yesterday, the record for high traffic was held on May 5 when the site shared revealing photos of former Miss California Carrie Prejean.

· Within 12 hours of the announcement, CBS.com saw 100% aggregate growth over the same day last year as fans turn to CBS.com for breaking news about the tragedy, as well as to link to CBSNews.com and THE EARLY SHOW for their streaming coverage.

· CBSNews.com traffic tripled during the hour in which Jackson’s death was officially announced (3 p.m. PACIFIC/6 p.m. EASTERN) on June 25 as people turned to the site to learn more about the circumstances involving his death.

And yes, this is the third Michael Jackson post I’ve written today. Which gives me an opportunity to embed a third Michael Jackson video. This one is the intro to the “Jackson 5ive” animated series from the 1970s, procured by our eagle-eyed Beth Callaghan. Enjoy.

[Image credit: Library of Congress]

We’ve already seen the requisite “Twitter is down” stories, but in my experience, the service seemed to hold up reasonably well, and certainly it performed exponentially better than it would have just a year ago when it was a fraction of its current size.

And after the first crush of users started to slow Twitter down, the service calmly went into triage mode, disabling the search bar on the homepage that few people use anyway. Later that evening things were back to normal.

This seems to have been the pattern across the Web: Sites and services struggled with the initial burst of traffic–roughly from 5:30 pm through 7:30 pm Eastern time–then regained their footing. I’m told that AOL’s AIM service, for instance, had an outage around 5:30 pm Eastern that was likely related to Jackson chatter, but it was back up again shortly after that.

Meanwhile, the BBC has tallied up other services that had slowdowns or outages:

• Google (GOOG)
• Time Warner’s TMZ (TWX), which broke the story
• Time Warner’s AOL, which put the TMZ story on its front page within a couple of minutes of its initial publication
• Time Warner’s CNN, which was much more cautious about the story, and only reported that Jackson had been hospitalized until non-TMZ sources confirmed the story
• Yahoo (YHOO)
• MSNBC

I assume the list is longer than that, so feel free to add others in comments below. But I spent a lot of time surfing to various sites yesterday evening and was struck by how well many of them held up.

The good/bad news: Media fragmentation means that Michael Jackson is likely the last global icon, so we’re unlikely to see a repeat of this. If you want to get really macabre, you can think up other events that might put the Web under strain all over the world, but that’s no fun.

This is, though:

[Image credit: Eccentric Scholar]

Except…I have this nagging concern.

Like a lot of you, I first learned about Michael Jackson’s death Thursday via Twitter. But at the time, I wasn’t convinced I was learning about it.

I saw tweet after tweet on my BlackBerry declaring the superstar dead. I was mobile, and my Web browser wasn’t working, so my Twitter stream was my only source of information, and I was grateful for it.

But in the first hour the story broke, I was never sure what the source of the information was. And so I never knew whether I should believe it.

Turns out that some of the Twitterers I followed had seen a report, first published at 5:20 Eastern time by TMZ.com, Time Warner’s (TWX) gossip powerhouse. But even if they linked to TMZ, I couldn’t tell that at a glance because they used URL-shorteners like bit.ly that obscured the Web addresses.

And many other Twitterers didn’t bother to explain where they’d heard the information at all. It was just fact. They were right, of course. But were they sure?

In some folks’ eyes, these qualms I have about accuracy and sourcing make me an old media dinosaur. So says a pal who’s worked as a reporter at three big, prestigious old media outlets. Here’s a bit of a missive he sent me via Facebook:

Twitter delivered the news first and fastest. Yes, it was from tmz; but who actually went to tmz.com? I didn’t. I read it on Twitter… and stayed there to read more. Did I turn on CNN? No. Just read the tweets.

This is really bad for old media: Twitter is the water cooler. It is the center of the conversation. Almost every media outlet wants to be the center of a conversation. They’re suddenly failing.

But I don’t think it’s that binary. Twitter and old media are complementary, and the former certainly has less value without the latter.

I eventually got to a Web browser and looked around the Web for other sources confirming Jackson’s death. When I couldn’t find them, I came back to Twitter.

At 6:15 Eastern time, the Los Angeles Times reported that Jackson was dead, citing its own sources. After that I knew that Twitter would primarily be repeating the LAT’s report and those that followed it, so I bailed.

That worked out well. Staying clear of Twitter for a while Thursday night meant I didn’t have to read about Jeff Goldblum’s death. Which never happened, of course. But that didn’t stop Twitter users from repeating the story, over and over.

In an interesting and innovative move compared to what has typically been less-than-hip online programming over the years, Microsoft’s MSN service is debuting a slick new celebrity site called Wonderwall today–created, designed and produced by a Hollywood company run by former Yahoo media chief and well-known television exec Lloyd Braun.

Using an unusual horizontal design with a scrolling “wall,” a plethora of pictures and a deeply visual sensibility, it’s definitely a laudable risk for Microsoft as the company seeks to continue to push itself into the online content business, despite a lackluster record.

The site, by BermanBraun Interactive, which is being launched right before the Grammy Awards, will aggregate content from a variety of partners, but also use a small staff of editors to differentiate it and give it “voice.” BermanBraun will operate Wonderwall for MSN.

Last week, in yet another sign that it is upping the content ante at MSN, Microsoft hired Yahoo’s most recent media head Scott Moore, who used to work at Microsoft (MSFT).

“We are investing more than ever in content,” said MSN GM Rob Bennett. “With Wonderwall, we are creating an offering to attract and retain new audiences, using content that is already at the core of MSN.”

But unlike other MSN sites, there is more subtle MSN branding on Wonderwall, although Microsoft’s search will be an important part of the site. MSN will promote Wonderwall across the service and will also give it an external marketing push.

To make money, Microsoft and BermanBraun are jointly selling the advertising for Wonderwall, which also has a partnership with MediaVest, to bring major brands to the site.

One obstacle is the huge amount of competition in the Internet space, from AOL-backed TMZ to Perez Hilton to omg! from Yahoo (YHOO), which is currently the most-trafficked celebrity site (and, ironically, was pushed through Yahoo by Braun and Moore).

But the interest in this pop culture category is obvious–celeb-focused online programming has grown strongly.

Celeb news-obsessed BoomTown accounts for much of that traffic (How much do we love following the hijinks of Britney? Much!).

So, I hightailed it to the Santa Monica offices of BermanBraun yesterday to have a look-see at Wonderwall and do some video interviews.

Overall, I was struck by the site’s arresting visual design, particularly the easily interactive wall, which has what I can only call an “iPhone” feel combined with a flipping-through-a-magazine tone (see above; click on image to make it larger).

With more touchscreen technology moving to personal computers, you can easily see Wonderwall being manipulated by hand.

And it makes great use of linking out, another plus, without excessively pointing to only Microsoft sites.

One problem: No true ability for users to interact on Wonderwall, via comments or other social-networking tools, which Braun said are coming soon, along with videos being able to be played in the main wall.

But overall, it raises the stakes in the celeb market and gives users a new interface without straying too far.

Here’s my video interview with Braun, along with another below it with his partner, former Fox and Paramount exec Gail Berman, and also Wonderwall’s top creators–all talking about Wonderwall.

(And, as an added bonus at the bottom, Oasis singing their hit, “Wonderwall.”)

Lloyd Braun:

Gail Berman and Wonderwall Staff:

Oasis:

As has been copiously reported here and all over, Yahoo and AOL have been engaged in never-ending talks about a possible deal to merge their flagging Internet businesses.

Now, sources tell me, the circle of executives at both companies interfacing with each other has been widened, for purposes of due diligence.

That chit-chatting includes Yahoo CEO Jerry Yang, who has been in New York several times recently [UPDATE: But not yesterday, in a story I had previously linked to here]–where AOL parent, Time Warner, is located–to meet once with its CEO, Jeff Bewkes, and see if they can actually complete the merger.

Now, all this frantic activity does not mean a deal will necessarily be struck. In fact, in typical Yahoo style, it is going very slowly and that is never a good thing in dealmaking.

But it is this kind of ramped-up blabbery that has many at both companies predicting–hoping, really–that a deal will go through, sooner or later, as soon as Time Warner and Yahoo can agree on a price.

Or, more precisely, a percentage, since Yahoo’s stock price has been falling like a particularly sharp knife of late.

Sources said Yahoo does not want Time Warner (TWX) to have any more than 25 percent of the new company in a trade for AOL’s assets–although that figure would be slightly more if the media giant throws in some of that “Harry Potter”-generated cash into the deal kitty.

Yahoo (YHOO) management, sources said, also think its assets are of significantly better quality than AOL’s, and it still has that powerful–although declining–share in the lucrative search market.

Thus, it does not want to pay the $8 to $10 billion price Time Warner wants, and it should not either. (Here is a good analysis on the price issue by Silicon Alley Insider’s Henry Blodget.)

But Yahoo shares closed yesterday at a troubling $14.58, down 73 cents, or almost five percent.

That means its market valuation also declined by many billion dollars very quickly. It is now at $20.2 billion.

These profound stock drops, said several sources, could spur Yahoo to act before it gets even worse, which is why talks have been more frequent in recent weeks.

While not the best state of mind, panic is always a good motivator, and both companies are surely desperate to turbocharge themselves in the face of tough competition and avoidable management mishaps in recent years.

The hope? That together the pair can do better than they have separately–by combining their advertising, content and communications assets, which are among the largest in the world.

In addition, the “new” Yahoo would be able to make massive cost cuts, including layoffs, under the cover of integration and starting off with a clean slate.

So who would emerge more powerful in a new set-up–AOL or Yahoo?

Here’s a short cheat list:

Content:

AOL and Yahoo have a similar range of content assets, with big sites in all the classic categories, like news, financial, sports and lifestyles. Yahoo’s content head is Scott Moore, while AOL’s is Bill Wilson (both pictured here, left to right).

As I wrote yesterday, I expect that the more dominant Yahoo will rule, slashing and burning most of the AOL-branded properties, keeping only interesting newer brands like sports blog FanHouse, celeb blog TMZ and the Engadget, Tuaw and JoyStiq tech blogs.

And while former Microsoftie Moore is the likely head of this behemoth, don’t count on the very adept Wilson, who is known as a skilled corporate player at AOL, to stick around without a big role in this arena.

Communications:

Again, advantage Yahoo, which has bigger calendaring, email and instant messaging assets, an area once overwhelmingly dominated by AOL. That was then, of course.

Still, AOL’s communications tools are used by a huge audience worldwide and the pair together would be a powerhouse. So much so, in fact, that this might be the one major regulatory hurdle any deal would face.

Advertising:

Again, Yahoo would probably dominate, having just hired well-known former Microsoft exec Joanne Bradford to head up U.S. advertising sales. AOL’s top ad exec is Lynda Clarizio, a former lawyer who is considered dogged but much less experienced than Bradford. (Both are pictured here, right to left.)

And, Yahoo does have its search ad business, however weakening, and a stronger graphical ad business, even if the sector will be most under siege in the current down economy.

Plus, AOL’s Advertising.com, while a major ad network, is more of a business subject to bruising competition and squeezed margins.

Community:

Tapan Bhat (pictured here) now rules community at Yahoo, as well as its homepage, having just inherited it from the departing Brad Garlinghouse.

But AOL has a savvy and voluble exec in Joanna Shields, who came recently via its Bebo social-networking acquisition. While AOL woefully overpaid for Bebo and got played into thinking that other bidders were more interested than they actually were, it was Shields (pictured here) who essentially did that playing.

Sign her up for a top exec role in the combined company pronto!

In all seriousness, there is room for both in the newco, as both AOL and Yahoo seriously bite in the social-networking space. They will surely need a lot more than Bhat and Shields if they want to become true players in Web 2.0′s hottest and probably most important trend.

Engineering:

Yahoo. I do not need to explain this, do I?

Okay: AOL has always been incompetent in the technical arena, since its beginning days, compared with Silicon Valley companies like Yahoo.

All yours, Ash Patel!

Management:

Now, it is here that it gets interesting.

Most feel the push by Yang to do an AOL deal–and make no mistake, it is being pushed by him most of all–is due to increased pressure from his board, as well as major investors, who have had just about enough of his leadership.

“There is no way Jerry stays on as CEO in a newco,” said one source about Yang (pictured here). “He’ll be kicked upstairs as chairman, and I will think [President Sue] Decker will also have to go eventually, since there will be a lot of resistance if she is named CEO.”

But, said other sources, these major management changes will not happen immediately, if at all, as it is too distracting in the wake of a deal and ruins the positive “story” that both companies will surely want to spin.

And spin they will! (Go, Tricia! Go, Jill!)

And while he has a reputation for sharkish political skills, especially compared to Yahoo’s very diplomatic U.S. head, Hilary Schneider, expect AOL President Ron Grant to be an important part of the transition, since he is good–almost too good–at cutting costs.

Most expect his boss, AOL CEO Randy Falco, not to be part of the new company, thereby separating him and Grant, who are nicknamed “Smithers and Burns” at AOL, after “The Simpsons” creepy duo.

Most likely, there will be a search for a top-level CEO to take over the combined company–someone of the stature of New Corp.’s No. 2 Peter Chernin or eBay’s former leader Meg Whitman (except now, she is apparently Sen. John McCain’s pick for Treasury Secretary, if the Republican Presidential candidate were to win the election).

“If this has any chance of working out, the board has to push restart on the leadership,” said one person close to the situation, who notes that this deal is Yang’s last chance to truly impact the future of the company he co-founded and preserve its legacy. “Everyone gets that, even Jerry.”

But I think the idea that Yang would leave if there were to be a merger of Yahoo with AOL is wishful thinking on the part of his critics.

He appears tome to be very committed to seeing his vision of turning around Yahoo through.

And those who have counted him out always seem to be the ones who have been typically wrong, such as Microsoft CEO Steve Ballmer and shareholder activist Carl Icahn.

Because, for all the turmoil at Yahoo, it’s Yang still calling the shots.

Back in the first season of “Saturday Night Live,” one running catchphrase uttered by Chevy Chase would always crack the then-12-year-old BoomTown right up: “This breaking news just in: Generalissimo Francisco Franco is still dead.”

It’s that same kind of extreme déjà vu I feel with the continuing drip-drip-drip of the news-less news that Time Warner’s AOL and Yahoo are still talking about a merger.

Both Silicon Alley Insider’s (and soon-to-be AllThingsD.com blogger) Peter Kafka and I wrote extensively about the talks on in mid-September, noting that the discussions centered around merging AOL’s content, advertising and software assets with Yahoo (minus the access business).

There were the price issues–Yahoo wanted to pay between $6 and $8 billion, while Time Warner has long wanted $10 billion–as well as the worries about integration (East Coasties versus West Coasties) and email dominance monopoly problems.

As I wrote on Sept. 23, for example:

That support will be especially important if Yahoo tries to buy AOL, which it is again strongly considering as a way to bolster its ad business, international portfolio and email and content offerings.

Several sources I have spoken to recently have said that Yahoo leadership is very interested in doing such a deal, although not at the $10 billion price tag that Time Warner wants. (Think half and add a little more.)

In addition, there are some daunting regulatory and integration issues–AOL and Yahoo email and messaging combo would be a giant in the space, and the HQs of the companies are on opposite coasts.

But, the deal would give Yahoo some more experienced executives it needs and make it more attractive to others who might not consider going to Yahoo in its present state.

Yang had been pinging a lot of execs over the last year and has had little uptake.

But a stronger and more flexible Yahoo–i.e., it knows it has to change dramatically–would surely be more enticing, especially in a down economy.”

Now comes yet another story yesterday from TechCrunch that the talks are–wait for it–still on.

The story recounted similar details and added even older ideas from previously reported AOL-Yahoo talks (some multi-billion-dollar cash infusion from Time Warner, for example).

And, said TechCrunch, it could happen this month!

Good gracious–October is, like, a really long month. And, if not October, I guess November is good or maybe December. Hey, what about 2009?

Actually, what everyone really would like to know is what the heck is taking Time Warner (TWX) and Yahoo (YHOO) so long, hashing over the same issues (price mostly), especially if it is such a stellar idea?

And, with the economy crashing all around and Yahoo’s and Time Warner’s stock hitting five-year lows, one has to wonder what, exactly, the pair are waiting for?

A more fortuitous reading of the entrails? A sign from the heavens? Better winds?

Well, I hate to inform Time Warner CEO Jeff Bewkes and Yahoo CEO Jerry Yang, but the tide is not turning anytime soon, and both their companies are getting weaker by the minute.

I once called the pairing of AOL and Yahoo a little like leaning two drunks against each other to keep them from toppling over.

Looking back, I will admit that was a little harsh.

Given the stakes now, though–and especially if Yahoo has to abandon its controversial search ad outsourcing deal with Google (GOOG)–it makes sense to combine forces.

In the online ad space, for example, Yahoo and AOL mostly complement each other. The same is true in email and communications tools. And, while Bebo is not the prize Time Warner touted it as, despite paying a king’s ransom for it, Yahoo has no social-networking property.

The only area of true overlap is in content. Here, based on many sources, I would imagine if a deal is ever struck that Yahoo will slash and burn most of AOL-branded properties, keeping only interesting newer brands like sports blog FanHouse, celeb blog TMZ and the Engadget, Tuaw and JoyStiq tech blogs.

And, in fact, if the pair even gets its act together–this or next week would be great for us–it will give them the much-needed impetus to start making the massive cuts needed at both Web outfits for a long time now.

In that regard, look for an AOL exec like its President Ron Grant to be buttonholed to swing that particular ax.

Yahoo, with its less confrontational culture, has never been good at that kind of thing. For all its many flaws, it is a talent AOL will surely bring to the party.

If, of course, Yahoo and AOL ever manage to throw one before they become too much like Generalissimo Franco.

You know: Still dead.

Yesterday, BoomTown was hanging in Hollywood at ContentNext’s EconCeleb’s conference, where I did an onstage interview with legendary editor Bonnie Fuller about the massive impact of the Internet on celebrity journalism.

With its instant ability to deliver news, video and more, sites like TMZ, PerezHilton, The Superficial and Yahoo’s (YHOO) omg! have become massive drivers of traffic on the Internet and–despite the saturation–the arena is still growing fast, especially among women users.

But for those not in the know about Fuller’s impact on how celebrity journalism has developed to its current power, she is the reason–more than any other modern editor–humanity now knows every move made by the unholy trio of Paris, Lindsay and, most of all, Britney.

As founding editor of US Weekly (with stints at Cosmopolitan, Marie Claire and other mags), and as the editorial director of the parent company of Star magazine, Fuller’s various editorial innovations–celebrities are just like us!–are now commonplace.

And like a lot of old media stars, Fuller is now working on her own new celeb-focused digital and media company, which she says is aimed at women 20 to 40 years old, plunging headlong into the Web arena.

Here’s my video interview with her in an alcove of the Roosevelt Hotel on Hollywood Boulevard, where we discuss what she is up to and where online celebrity coverage is going (Britney 24-7!):

But–as many readers have requested–they will all be available in their entirety over the next weeks in this column.

Here’s Part 1 of 4 of an interview I did with Time Warner’s CEO, Jeff Bewkes.

(I will be posting one video part of the discussion with Bewkes every day this week through Thursday.)

As you will see, Bewkes is a live wire, sassing me about the hard time I was giving him about the rough road AOL has had as a Time Warner (TWX) property.

This video of the interview opens with a very funny spoof video Bewkes brought along using Time Warner’s TMZ unit, followed by his remarks on the continued impact of the rocky merger with AOL, the purchase of the Bebo social-networking site and how to best use content online.

Everybody remain calm.

While it might have looked like it was the rapture for major Internet players yesterday–what with everyone and his mother getting sucked up into the Yahoo-Microsoft takeover tussle and disappearing into the ether of confusion that now reigns over the situation–it is best to keep moving toward the light of harsh reality for illumination.

And the reality in three parts, addressing the trifecta of big news yesterday, is:

I DO NOT LIKE MONOPOLIES, I DO NOT LIKE THEM, JERRY-I-AM

Google (GOOG) and Yahoo (YHOO) will not and, more importantly, cannot make any significant search-ad deal in any way longer than the two-week test they announced to terrific fanfare yesterday.

It is a regulatory no-no of such an obvious nature, that Microsoft (MSFT) has to prove almost nothing to win on the merits of the fact that Google dominates the arena with such power that it cannot be linked with anyone else.

But it is a nice image of one Silicon Valley company coming to the rescue of another, helping to show how Yahoo could be better monetized and, therefore, be worth more.

(Although irony-alert: Outside of Yahoo’s own self-inflicted wounds, it is Google that is most responsible for knocking Yahoo’s teeth out in the search and search ad game.)

So, any further hook-up between the two seems sure to become the Justice Department Lawyer Employment Act of 2008, the likes of which we have not seen since Microsoft got its turn at being deservedly whacked for being a monopolist back in the last century.

Let’s face it, outside of those who cannot seem to shake the annoying Kumbaya mentality over at Google, a Yahoo-Google partnership is simply fantastical, like some out-of-control Dr. Seuss ditty.

They could not, would not with a goat. They would not, could not on a boat. They will not share an algorithm, they will not, will not, Jerry-I-Am.

TROUBLE AHEAD, TROUBLE BEHIND

In a post I did just before the heating up of the AOL-Yahoo talks was reported yesterday, I had written:

“Yahoo is still ferreting away with execs from Time Warner and its AOL unit–you know, that rat’s-nest of a deal in which AOL, Time Warner investment dollars and, oh, some old fishing rod of former exec Don Logan’s is thrown into Yahoo for a 20% stake, along with perhaps a dollop of Google involvement for added complexity.”

And, maybe it is just me, or–except for the fine fishing rod–is anyone else a little worried about the potential disaster of an AOL-Yahoo mashup?

As someone who wrote two–count ‘em, two!–books on AOL, including a very detailed narrative of the horrific AOL merger with Time Warner (TWX) a few years back, a union from which both sides have never adequately recovered, I am plenty worried.

From a Time Warner perspective, I get it. It allows the company to unload the lodestone of AOL from around its neck and finally give it some value.

I might point out that Time Warner had ample opportunity to so do over the years (more on that, tomorrow!).

And its inability to make much of the online unit must be disappointing to its new CEO Jeff Bewkes, who hated the original AOL merger more than most.

While Time Warner and AOL like to point to the success of Advertising.com, and there are some various bright spots here and there (Truveo, TMZ, Userplane), its online ad business is still not dominant enough and other parts woefully behind the efforts of others.

And its recent $850 million cash purchase of the very nice, but distant-third Bebo social-networking site reeked of desperation rather than the aspiration it was meant to be. With MySpace and Facebook battling for the big numbers, only help from a large traffic site like Yahoo might work.

That’s not to say that some of its deeply underutilized assets, like AIM, would not be a good add to Yahoo. But the benefit to Yahoo–except as a way to try to escape from or shake down Microsoft for more money–seems negligible.

Lastly, given that it would be a stock transaction without the need for a shareholder vote, I cannot imagine that a large number of them would not freak out at the uncertainty of an AOL-Yahoo merger versus a solid number from Microsoft.

RUPE-A-DOPE

How jaw-dropping are the rascally wiles of Rupert Murdoch of News Corp. (owner of this site)?

First, he cozies up to Yahoo CEO Jerry Yang like a White Knight, but gets caught up in the fact that Yahoo does not want him to have too much power.

Then, Murdoch heads on up to Redmond to play footsie with Microsoft CEO Steve Ballmer, intrigued by the possibility of offloading MySpace and getting a better trade for it.

You just know he’s going to end up with the whole thing and Yang and Ballmer will be left scratching their heads over what just happened.

But, seriously, I am not entirely clear why Microsoft is also adding this level of complexity, even if it would give it a partner to add more money and assets to the deal.

I get the addition of MySpace might be nice. And so would some investment dollars from News Corp. (NWS).

And, most of all, I see how delicious it might be for Microsoft to be able to fire Google as News Corp.’s ad partner for MySpace (a firing, I suspect, Google might actually welcome, given its public complaints about the difficulty of monetizing social networking).

But I am not sure why Microsoft won’t just man-up and fork over a few more dollars to its original offer, which would end this circus pretty quickly.

My guess is that the deal-making fervor has gone to its head and it cannot just be seen as giving in to Yahoo’s exertions to show it really, truly could be worth more.

Ballmer should just deliver that need from Yahoo and do the deal.

And, for good measure, he might just consult Proverbs 16:18: “Pride goes before destruction, a haughty spirit before a fall.”

GETTING READY FOR THE RAPTURE

Finally, for those who want to rock out on the rapture, here is singer-songwriter Jill Sobule, singing about it onstage at D5 last May:

Please see this disclosure related to me and Google.

No longer a “popwreck,” as the TMZ (TWX) celebrity site calls her so lovingly, her first words on the show are: “Can we have sex and then go shopping?” BoomTown loves poetic irony.

Here’s another snippet:

I had previously posted a piece about the site in May, because I consider it one of the really great content sites on the Internet–using a nice blend of text, video, audio and a laser focus on intense reporting on its topic to yield a whole new kind of media that is Web born and bred.

Here’s my tour of TMZ’s new studio on Sunset Boulevard in West Hollywood, right across from the trendy Hyde club (of course!):

Sure, that topic is to chronicle All Things Britney, Lindsay and Paris, but who cares? What TMZ proves, with its ever-growing audience of millions and millions, is that the Internet requires much more than simply porting of offline content online to succeed.

That kind of stuff has been simply lazy on the part of Hollywood and, really, all traditional media, which still have a very hard time creating new kinds of online content of any lasting kind.

TMZ, to my mind, should be a road map for what works well.

And now, in an interesting move, TMZ’s fare is also on television, with a recently launched syndicated show–heading backward into old media from new media.

Entering the crowded celebrity entertainment television field will doubtlessly be a tougher challenge, and the jury is still out on its success. But I like the chutzpah of TMZ’s efforts.

The brainchild of Harvey Levin and Jim Paratore, who came to the Web from longtime television backgrounds, the site made its bones by breaking stories about the antics of naughty celebs like Mel Gibson, Alec Baldwin and all those girls behaving badly.

Rather than kissing up to the celebrity culture, TMZ’s tougher stance has, well, distinguished it from a lot of others.

TMZ.com is owned by Time Warner. It was launched in 2005 jointly by its Telepictures and AOL units in an unusual–for Time Warner, at least–cooperative effort.

I did video interviews with Levin and Paratore too.