• Viacom complains that YouTube employees “sneered at rights holders as ‘copyright bastards’ and ‘a-holes.’”
• Google retorts that Viacom can’t complain about this language, and it quotes numerous Viacom execs to make its point. Sample outbursts include, “fuck you, you Google bastards,” “bastards at Google are harassing me,” and the eloquent “fuck those mother fuckers.”

PaidContent has more from the unsealed documents and points to email showing how badly Viacom wanted to own YouTube:

MTVN CEO Judy McGrath telling M&A execs: “Help us get YouTube. We cannot see it go to Fox/NBC” and “I want to own YouTube. I think it’s critical asnd if it goes to a competitior!!!!!!!!!!!!!!!!! Even if we have to buy it with a partner to keep it below the line.” Then-Viacom CEO Tom Freston:“If we get UTube… I wanna run it.” McGrath: “You’ll have to kill me to get to it first.”

Hell hath no fury like a corporate suitor scorned.

During last week’s Google TV demo at Google I/O live TV was showing on the giant screen behind the stage. Among the news items the audience saw was footage of Pakistani protesters up in arms about a Facebook page promoting “Everyone Draw Mohammed Day.” Google CEO Eric Schmidt says that censorship of YouTube and Facebook in Pakistan is primarily political and intended to appease domestic audiences.

Half a world away in Europe, Google has stopped destroying private WiFi data that it was previously inadvertently collecting but then stopped collecting. It began to destroy the personal data but some European governments objected. Others meanwhile had sought the data’s destruction. According to the Financial Times:

Google halted the global deletion of collected private WiFi data on Friday following confusion over what it should do with the material.

The move came after several European governments asked the internet company to delete the data while others called for a halt.

Privacy International, a UK pressure group, threatened Google with a police complaint if the company did not stop destroying the data by Monday.

Privacy International argued that privacy authorities were wrong to ask for the data to be destroyed as it might be needed as evidence for criminal investigations.

Along similar lines, the NY Times published an article this weekend that took a sweeping look at Google’s relationship with US regulators and the anti-trust question:

Google has managed to squeak by most regulatory reviews. On Friday, the Federal Trade Commission approved Google’s $750 million acquisition of AdMob, a mobile advertising start-up. Staff members had initially planned to oppose the purchase, even saying in a statement that the deal “raised serious antitrust issues.” . . . At the same time, Google’s own missteps have prompted a new round of scrutiny. This month, it admitted that its camera-equipped cars, which drive around photographing the world’s neighborhoods for Street View images within Google Maps, had inadvertently collected fragments of communications from people using unsecured WiFi networks. Privacy advocates howled, while the F.T.C. and regulators in Europe said they were looking into the matter.

Despite anti-trust scrutiny Google’s acquisitions continue unabated. And M&A activity that captures smaller companies is unlikely to draw much FTC/DOJ notice. Accordingly Google has acquired or hired the group behind the social travel site Ruba. Travel has long been a vertical that Google has been interested in. We’re likely to see more pronounced travel tools and features in Google Maps and perhaps a dedicated site in the future.

On the Google vs. Apple front, Apple CEO Steve Jobs is set to do a keynote at the upcoming Apple developer event (in the very building Google just did their event). Emails allegedly from Steve Jobs himself promise that Apple will answer Google and Android 2.2 (Froyo).

Turning finally to social media, Pew Research Center’s Project for Excellence in Journalism conducted a detailed analysis of social media platforms and news content vs. traditional news outlets. Here’s the breakdown of the content and categories of coverage appearing on these sites:

In addition Pew said that each social media site had a “different personality” in terms of the content shared there and the nature of the sharing:

The stories and issues that gain traction in social media differ substantially from those that lead in the mainstream press. But they also differ greatly from each other. Of the 29 weeks that we tracked on all three social platforms, blogs, Twitter and YouTube shared the same top story just once. That was the week of June 15-19, when the protests that followed the Iranian elections led on all three.

Each social media platform also seems to have its own personality and function. In the year studied, bloggers gravitated toward stories that elicited emotion, concerned individual or group rights or triggered ideological passion. Often these were stories that people could personalize and then share in the social forum — at times in highly partisan language. And unlike in some other types of media, the partisanship here does not lean strongly to one side or the other. Even on stories like the Tea Party protests, Sarah Palin and public support for Obama both conservative and liberal voices come through strongly.

On Twitter, by contrast, technology is a major focus — with a heavy prominence for Twitter itself — while politics plays a much smaller role. The mission is primarily about passing along important — often breaking — information in a way that unifies or assumes shared values within the Twitter community . . .

Social media’s 900 pound gorilla Facebook was previously the beneficiary of major investment from Russia’s Digital Sky Technologies (DST). DST also invested heavily in social gaming company Zynga. But DST CEO Yuri Milner says these are the beginning of a wave of investment in internet firms that have “disruptive” potential wherever they may be around the globe.

Source: Time Warner earnings release

In addition, Time Warner yesterday confirmed the long-expected intention to sell or spin off the AOL unit. The precise form of the separation hasn’t yet been chosen but the “announcement” came in Time Warner’s 10Q filing with the US SEC in which the company said the following:

During 2008, the Company announced that it had begun separating the AOL Access Services and Global Web Services businesses, as a means of enhancing the operational focus and strategic options available for each of these businesses. The Company continues to review its strategic alternatives with respect to AOL. Although the Company’s Board of Directors has not made any decision, the Company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions. Based on the results of the Company’s review, future market conditions or the availability of more favorable strategic opportunities that may arise before a transaction is completed, the Company may decide to pursue an alternative other than a spin-off with respect to either or both of AOL’s businesses.

Today AOL announced that Google VP Jeff Levick will join the company as President, Global Advertising and Strategy (Platform A), replacing Greg Coleman who was previously at Yahoo. We’re speculating but Levick could be the first of several execs that Armstrong might bring over from Google in the same way that Sheryl Sandberg brought a number of Googlers to Facebook after she took the number two job there.

AOL CEO Tim Armstrong also said in a recent interview that he wants to simplify AOL’s lineup of brands as well as bring renewed focus to the user experience at the portal. Speaking of brands, once again Armstrong’s former employer Google is the world’s top brand according to Brandz top 100 Most Valuable Global Brands survey.

In other Google news, DoublClick CEO David Rosenblatt, who became Google’s president of global display advertising after the acquisition announced that he will leave the company in mid May. The New York Times reflects investor concern about Rosenblatt’s departure as well as the loss of other senior execs, such as Amstrong and Levick. Display advertising is one of the three or four key strategic growth areas Google identified on its most recent earnings call.

On the Yahoo earnings call a week ago, CEO Carol Bartz announced another round of layoffs (the third in 12 months). Those layoffs have begun in the US and India (although Yahoo plans more hires in India too). Apparently the Flickr team is being hit especially “hard” by the reorganization. However Flickr is one of Yahoo’s great assets and it would both be unfortunate and a strategic mistake if the product were to be compromised by the personnel moves.

Less strategic than Flickr, Yahoo is discussing the sale of Yahoo Personals to IAC, which owns Match.com. IAC itself reported a loss yesterday, as it announced the acquisition of restaurant site and popular iPhone app Urbanspoon. IAC could also become a suitor for AOL. IAC CEO Barry Diller expressed interest in the portal in an interview, though he says a combination of IAC and AOL would be “complicated”:

We talk with AOL a lot, and there’s a lot of common relationships there. We’re, I think, the seventh- or eighth-largest Internet network, and I think AOL is one or two slots behind us. There’s a really good idea for a combination there, but it’s complicated to do. It’s inside Time Warner, which wants to get rid of it. It’s hard to engineer because of its legacy. But, industrially, it makes sense.

• Former Googler Douglas Bowman, who resigned from Google due to Google being too data centric has taken a job at Twitter, according to TechCrunch.
• Priti Choksi, a director of strategic partner development at Google has moved to Facebook, according to VentureBeat.
• Well-known Greg Linden is Leaving Microsoft after Microsoft has “dismantled” Live Labs.
• Brad Williams, Yahoo Inc.’s head of communications has left the company. Rumors say he was fired. More on this at the Wall Street Journal.
• Yahoo hired former Adobe executive, Bryan Lamkin, to lead up the applications group according to News.com.
• Former AOL executive, Mike Jones, will become the COO of MySpace according to TechCrunc.
• Yahoo is reportedly hiring up to 150 people in India.

“A significant issue for content providers is whether or not what Google provides becomes a substitute for going to the actual content providers site. When that tension becomes too great, people seek legal solutions to it.”

Google News itself only offers snippets of news articles, a photo, and then links to the content provider:

The ads on the right only appear on search results pages in Google News. In cases where the news content is actually hosted on Google, like the story below, there are no ads to be found.

It would be a mistake to predict how the publishers and, perhaps more importantly, their lawyers feel about this, but using Baron’s comments as a yardstick, Google is probably in good shape — they are not showing ads in situations where Google is a substitute for the content provider.

There were some bold predictions this week at the OMMA Behavioral conference in New York. According to MediaPost, Jeff Hirsch of Audience Science told the conference that behavioral targeting will surpass search ad spending by 2020.

Well, just last week Danny Sullivan surveyed the major engines about BT and they’re all reluctant to do it. As far back as 2007, Google said that it’s not ready to go too deep on behavioral targeting of ads, and more recently we covered the various legal issues associated with behavioral targeting. 2020 is a long way away, but it would seem that BT also has a long way to go.

If Microsoft and Yahoo eventually do find a way to join forces, don’t expect it to be a cure-all for Microsoft’s search and Internet struggles. Speaking this week at a Goldman Sachs conference, Microsoft CFO Chris Liddell said that “Yahoo doesn’t have the magic solution. No one should think it will transform the industry.” Liddell also added fuel to the fire about Kumo.com, saying the current Live.com brand hasn’t caught on with searchers and may be replaced.

And finally, Google talked about its data center plans at the same Goldman Sachs conference. We’ve reported before about Google delaying the construction of data centers in places like North Carolina and Oklahoma. Alan Eustance, Google’s senior VP for engineering, said this week that the facilities will eventually be built:

“We will build those data centers. There’s no doubt that over the life of the company we will need that computation. None of those sites have been shelved.”

The U.S. economy will “continually see a problem — potentially with Google” because it already “has acquired a monopoly in Internet online advertising,” she said.

Reportedly she believes that Google “lawfully” obtained its monopoly.

While one might make a plausible argument that Google’s search dominance rises to that level; it’s not the case in other areas of online advertising. Varney doesn’t seem to distinguish between search and these other areas. This question of whether Google is a “monopoly” when “the competition is a click away” is a subtle and complex one, though many Google critics might argue there’s nothing subtle or complex about it.

In that same June discussion, according to Bloomberg, Varney said “there will be companies that will begin to allege that Google is discriminating” against them by “not allowing their products to interoperate with Google’s products.”

One of those companies is TradeComet.com LLC, which now claims that Google mainpulated AdWords pricing to prevent it from gaining exposure for a competitive product the company was trying to market, SourceTool.com. In a press release the CEO describes what happened as follows:

Google raised my prices by 10,000 percent, which strangled our business, virtually overnight. Citing an ambiguous quality score determined by a secretive algorithm to justify the price increase, Google refused to consider reductions even after SourceTool.com invested the company’s savings to make the changes that Google said would rectify the supposed problems. As a result of Google flexing its monopolistic muscle, SourceTool.com currently averages about one percent of the traffic it previously had and is no longer a competitively viable business.”

The Wall Street Journal also has some additional background, including the fact that the company is using Microsoft’s outside attorneys, Cadwalader, Wickersham & Taft, to prosecute the litigation — although Microsoft and the attorneys deny Redmond is involved in any way.

While similar suits in the past have failed against Google, the search engine’s market share is larger today and there’s a new environment that might give this litigation somewhat more potential than in the past when Google was a smaller player. Still, absent specific evidence that supports the charge that Google was manipulating AdWords pricing to harm SourceTool, it’s unlikely this ligitation can succeed.

The press release, however, suggests opportunism on the part of both the company and the law firm: marketing by lawsuit.

On the patent front, Google has decided that it’s going to take a more aggressive approach to intellectual property lawsuits, which are filed all the time against the search engine. According to Bloomberg it has drawn something of a line in the sand and will be fighting patent suits rather than settling them. There’s an entire industry consisting of firms often called “patent trolls” that buy patents from individuals or small companies and then seek to obtain settlements or licensing fees from larger companies with more established businesses.

Now a legal victory for Google involving StreetView. One of the privacy/trespass cases filed against the company by a couple with the surname “Boring” has been dismissed. The couple claimed a number of laws were violated and that they sustained damages when Google’s StreetView van/car came up their private driveway and posted the resulting images on Google Maps. Fatally for their lawsuit, apparently, the couple never asked Google to remove the pictures.

According to Eric Goldman’s report on the court’s decision:

The court says that the plaintiffs did not allege facts supporting that the intrusion was substantial and highly offensive. To reinforce the point that perhaps the plaintiffs didn’t experience much harm, the court points out that the plaintiffs didn’t take advantage of Google’s opt out procedure, plus they drew public attention to themselves by suing and by not redacting or suppressing their contact info in the court filings.

Meanwhile, in Sunnyvale, Yahoo is defending a claim (not yet a lawsuit) before the US EEOC by a former in-house attorney that Yahoo discriminated against her after she returned from maternity leave (she’s also African American). A long article on Law.com goes into some of the claims and details. Yahoo claims substandard performance and she claims that her race and/or status as a mother were responsible for discriminatory treatment.

I’m not commenting on the merits of this particular case but speaking as someone who practiced employment discrimination law for several years, I can say that employment claims are challenging because plaintiffs often feel that they’ve been singled out but there are also frequently performance issues involved. It’s rarely true that plaintiffs’ claims have absolutely no merit or that the only explanation for the termination or discriminatory treatment is the plaintiff’s status.

If the plaintiff can show any evidence of discrimination such cases tend to settle.

As the recession drags on we can probably expect more lawsuits, as people look to the courts for (lost) revenue or income that they can’t gain directly from the market.

It’s a “on the one hand, on the other hand” sort of analysis, but interesting to consider how deeply the ranks of Yahoo would have been cut and how many of its initiatives subsumed had the deal happened. It’s also interesting to contemplate how much the Yahoo brand and search assets would have helped Microsoft — undoubtedly they would have.

New Yahoo CEO Carol Bartz has indicated that she will consider a Microsoft deal but that she’s in no rush to do one.

Speaking of comments from Carol Bartz, MySpace CEO Chris DeWolfe responded to Bartz’s off-the-cuff remark on the most recent Yahoo earnings call about “finicky” social networking users and the assertion that Facebook had now taken over from MySpace as the leading social network (which is true globally). TechCrunch has a brief interview (and video) with DeWolfe. (But those looking for “red meat” won’t find it; DeWolfe is gracious to Bartz.)

In other Yahoo news, the company is reportedly discontinuing its “Yahoo Briefcase” online storage service, even as the rumored GDrive online storage service from Google appears to be readying or launch. Microsoft offers Skydrive as part of its Windows Live suite of online services. There are a number of third party services as well (e.g., Box.net). AOL shuttered its XDrive online storage service awhile ago.

The closure of Briefcase (or XDrive) illustrates one of the potential problems with “cloud computing” and netbook reliance on internet-based services. Users have to be able to count on these services and their continued existence. Otherwise, no one will trust that they can rely on them and won’t use them. Lack of usage is what’s causing them to close.

Back to social networking: Facebook is hiring a lot of salespeople according to Silicon Alley Insider’s posting of a number of Facebook job openings at various locations. As a general matter, Facebook ad revenues are lagging way behind consumer usage growth. I suspect that Facebook COO Sheryl Sandberg may be driving this initiative. Even though self-service “made” Google, they still recognized the critical importance of sales and customer service for larger agency and advertiser accounts.

Now back again to Yahoo: according to AllThingsD, former Yahoo media chief Scott Moore (looking like a younger Mickey Rourke in the picture) is going back to Microsoft to head up its US-based content initiatives. Formerly Moore was publisher of MSNBC and Slate (which is now owned by the Washington Post).

Moore isn’t the only one Microsoft is hiring. The company will keep hiring in “key areas” according to comments made by Steve Ballmer on the recent Microsoft earnings call and reported at TechFlash. Search is one of those key areas:

“We’re going to continue to invest in important areas of opportunity for the company,” Ballmer said. “So even while we take out up to 5,000 jobs, we will also be adding a few thousand jobs back in the areas like search, where we continue to see incredible opportunity to do good work.”

That brings us back to where we started, a Yahoo-Microsoft deal. It’s probably unlikely but if Microsoft is able to buy the Yahoo search business it probably won’t need to make all those hires.

Yahoo may have been hit hard by the weakness in online display advertising. And new CEO Carol Bartz will be on the hot seat as financial analysts probe about a potential deal with Microsoft and whether the company will layoff more employees.

Bartz is trying to impose some discipline and get tough on press leakers, which have feed Kara Swisher at AllThingsD so faithfully and regularly. Swisher reports on Bartz’s address to Yahoo in which she threatens to fire those leaking internal memos:

At her first all-hands meeting, Bartz said, according to one report others have since confirmed to BoomTown, that she would “drop-kick to f***ing Mars” employees who leak to the press.

That threat sent little shivers up BoomTown’s spine too, which is why it must have taken so long for her first-week missive to Yahoo (YHOO) staff worldwide to get to my inbox.

Last week, Yahoo rival Google reported strong earnings (especially under the circumstances). And Search Biz, as usual, has a bunch of Google-related items.

The LA Times offers a lengthy article on how Google is set to ramp up lobbying and other political efforts to push its agenda through the labyrinth of Washington policy makers. It sees the new administration and a Democratic Congress as potential allies. Previously Wired reported on how the search engine was outmaneuvered by Microsoft, which was able to indirectly exercise influence and thwart the Google-Yahoo paid search deal by promoting the specter of a Google search monopoly.

As an interesting side note, the Times offers data in the article on Google’s political contributions to the candidates:

The company’s political action committee gave 57% of its $264,000 in contributions during the 2008 campaign cycle to Democrats, and 43% to Republicans. Google also had a presence at both parties’ national conventions last summer.

But Google’s employees left little doubt whom they supported. They contributed $782,964 to Obama’s campaign and $20,800 to John McCain’s, according to the nonpartisan Center for Responsive Politics. Googlers also donated $166,000 for Obama’s inauguration.

Google will likely benefit directly and indirectly from the proposal to target some of the Obama/Congressional economic stimulus package at technology initiatives. The NY Times reports:

The $825 billion stimulus plan presented this month by House Democrats called for $37 billion in spending in three high-tech areas: $20 billion to computerize medical records, $11 billion to create smarter electrical grids and $6 billion to expand high-speed Internet access in rural and underserved communities.

Google Health would be a direct beneficiary of the first effort, while it’s “smart grid” initiative would also be implicated. And any expansion of Internet access in rural areas would pay indirect dividends to Google by enabling more internet users.

In a somewhat related piece, TechCrunch discusses how the Obama administration will use technology in new and more extensive ways that predecessors.

Google Watch blogger Clint Boulton argues (citing a NY Review of Books article) that Google’s Book Search settlement and publisher agreement has potential anti-trust implications:

Google has monopoly potential for Book Search just as it has a potential monopoly. Potential does not equal actuality though I always argue that Google already has a search monopoly because of its size and lack of serious challengers (sorry Yahoo, Microsoft).

Next, AP reports on the generally negative reactions on Wall Street to Google’s earnings related announcement that it would allow employees to swap their current, largely “underwater” stock options for those at current market value. That would allow those employees to reap the benefits of any gains in Google’s stock going forward.

Did Google even need to be so magnanimous at a time when many people are simply happy to have a job?

“While we agree with management that it is in shareholders’ interests to keep Google employees motivated and retain the company’s focus on growth, we question the necessity of the (repricing) program given the current employment environment,” ThinkEquity analyst William Morrison wrote in a research report.

The move has raised concern among some analysts that other companies will feel the need to similarly reprice options. But employees, whose options would otherwise be worthless, must have cheered the move.

Speaking of employees cheering, Google has fallen from the best place to work to number four, according to Fortune’s 100 Best Places to Work 2009 (via ResourceShelf). For those wondering, Build-a-Bear Workshop comes in at number 94. Microsoft for its part is number 38.

Last week Redmond announced that it would lay off 5,000 employees over the next year or so. Two who will be leaving the company in the very near term are Microsoft subsidiary Fast Search & Transfer’s CEO John Lervik and Chris Early, general manager of Games for Windows Live. VentureBeat speculates on the future of the Windows Live gaming group as a result of Early’s imminent departure.

The final item is another sensational (as in exaggerated) story in the Guardian about how Google plans to make “PCs history,” a reference to Google’s rumored “GDrive” initiative:

The Google Drive, or “GDrive”, could kill off the desktop computer, which relies on a powerful hard drive. Instead a user’s personal files and operating system could be stored on Google’s own servers and accessed via the internet.

That’s not exactly correct, but “could computing” and online storage will help support sales of low-cost and increasingly popular “netbooks” and other mobile Internet devices that don’t need lots of memory or software running on them to be functional. Microsoft claimed that netbook sales hurt revenues last quarter.

Yahoo CEO contenders: Decker vs. Bartz? CNET and AllThingsD are discussing potential Yahoo CEO appointments. AllThingsD reports that Autodesk Executive Chairperson and former CEO Carol Bartz is a strong candidate for the position, according to the usual unnamed “insiders.” The Wall Street Journal also suggests that Bartz is one of the top candidates if not the leading one.

Meanwhile, CNET says that current Yahoo number two Sue Decker is also a very strong candidate to get the job:

A number of industry players and major Yahoo investors had discounted Decker as a viable CEO candidate for the struggling Internet search pioneer, following Microsoft’s failed buyout bid of $33 a share for the company. Yahoo, which had traded at roughly $19 a share before the initial bid became public last January, closed Wednesday at $12.71 a share.

But one source familiar with the search noted: “She has always been a strong candidate.”

And at least one influential Microsoft source noted that Decker is well regarded at the software giant, even though the companies weren’t able to strike a buyout, or partial deal for just the search business.

For Yahoo, naming Decker as CEO could potentially bode well for its efforts to quickly reignite talks with Microsoft, given that an outside hire would need time to analyze the different aspects of Yahoo’s businesses before holding discussions to potentially sell off parts of the company.

MSFT: Yahoo deal a ‘thing of the past.’ If the idea behind a potential Decker appointment is a restart of the Microsoft negotiations, Microsoft CEO Steve Ballmer speaking from the CES show in Las Vegas tried to put the acquisition speculation to rest:

“You certainly shouldn’t think we’ll go back after Yahoo,” Ballmer told interviewer Brian Sullivan. We may try to do other kinds of partnerships with them, but acquisition is a thing of the past.”

While the acquisition is no longer of interest to Microsoft, this report in the Register argues that Microsoft is still quite interested in a search deal.

New brand for Live Search? The Seattle PI discusses the potential rebranding of Microsoft’s online services. This is a very long-standing issue. There’s Microsoft, Live and MSN. At one point it appeared that all the online services would migrate to Live and MSN would be killed, but that didn’t happen. The company recently trademarked Kumo but it’s not clear whether and exactly how it will be used.

I’ve had several conversations about branding and rebranding with Microsoft and the company has been considering the issue for quite some time. Here’s what Danny argued in his recent “tough love for Microsoft search” post:

Can you imagine going into a war, calling upon people to support your cause, but not knowing the name of your country? Or having a name that people simply couldn’t identify with your cause?

Make no mistake; Microsoft is in a search war with Google. It’s a serious one, with billions of dollars at stake, and it’s flying multiple flags that no one recognizes. The company spent over a decade building up the MSN brand, only to decide in late 2005 that “Live” would be its flagship brand. The failure of that brand to take off is widely recognized by many inside and outside Microsoft . . .

To this day, when I write about Live Search, I often preface with Microsoft to make it “Microsoft Live Search,” so that new readers will understand that this is the Microsoft search product. Live Search alone could be owned by anyone. Back when it was still called Windows Live Search, I was writing “Microsoft Windows Live Search.” It was absurd (and frighteningly, might be returning again).

While a new or consolidated Microsoft search brand might re-introduce people to the product or offer an opportunity to get attention, the experience is what ultimately counts.

MSN a lewd site? The Chinese government appears to think so. Apparently, community areas on the MSN China portal contain “lewd pictures” that “go against public morality or harm children’s psychological health.” No examples or definitions were provided so it’s not clear what qualifies as “lewd” in China. However MSN will be compelled to comply with the censorship request. Google has apparently already done so to a significant degree.

Microsoft grabs Yahoo Korea exec. Microsoft has hired Kim James Woo to run its South Korea operation. Woo had been in charge of Yahoo Korea and Overture Korea.

AOL makes executive changes. Back in the US, AOL has done some reorganizing and reshuffling of product responsibilities following the departure of Kevin Conroy, who was AOL’s EVP of products. The details are at paidcontent.

Google not going to buy newspaper publishers. Finally, Google’s Eric Schmidt laments the decline of newspaper publishing. But even as he expresses support and sympathy for the industry he says Google won’t be buying any newspaper publishers:

How about just buying [newspapers]?

The good news is we could purchase them. We have the cash. But I don’t think our purchasing a newspaper would solve the business problems. It would help solidify the ownership structure, but it doesn’t solve the underlying problem in the business. Until we can answer that question we’re in this uncomfortable conversation.

I think the solution is tighter integration. In other words, we can do this without making an acquisition. The term I’ve been using is ‘merge without merging.’ The Web allows you to do that, where you can get the Web systems of both organizations fairly well integrated, and you don’t have to do it on exclusive basis.

If not buy, how about just pump some cash into them, the way Microsoft famously once did with Apple?

There are no current plans to do that. The necessary criteria to get us to make that decision are not currently in place.

Every so often people argue that Google should buy newspapers or print yellow pages. While there are some hypothetical benefits to those ideas, they make no sense from a financial or “cultural” perspective.

On the economy/search ads front, IAC chief Barry Diller told an investor conference in Arizona that he sees search advertising surviving better than traditional advertising, and potentially thriving, but that CPC ad revenue among his own stable of sites (Ask.com, Citysearch, etc.) are dropping 5% to 7% year-over-year.

Meanwhile, eMarketer on Tuesday asked if search advertising’s growth will be lost in the noise of all the other poor economic numbers. Yes, search ad spending’s growth rate was down in 2008, but it still grew 21% over 2007. Says eMarketer senior analyst David Hallerman: “Search ad spending may not be recession-proof, but it is proving to be recession-resistant.” Hallerman also says that the need for accountability in ad spending makes search ad spending more attractive than traditional and other forms of advertising.

Making money appears to be the prime focus at Google HQ these days (as Barry Schwartz noted about a month ago), and Google Blogoscoped today has a list of which Google products actually affect the company’s revenues. Of the 88 Google products listed (Yes, 88, which in and of itself makes the list stunning to scroll through), only about 25% are believed to be making the company any money at the moment.

On that note, there’s more from the BBC about Google’s business and its impact on the company’s famed “20% time.” We reported a couple months ago that internal changes at Google would mean major changes to 20% time. In a series of video reports, the BBC addressed that topic with webspam chief Matt Cutts (who has become the de facto face and voice of Google when the world’s media come calling). In its report, Google’s focus in 2009, Cutts says 20% time is still around, but it’s changed:

“You’re not going to do as many crazy, outlandish ideas, but it’s important to keep that spirit…. We won’t tackle as many crazy things, but we will tackle ambitious projects nonetheless.”

In a second video report, Can Google still innovate?, Cutts talks about the Android operating system, Google Chrome, and a few other things Google has been doing recently.

And finally, the Software Development Times blog shared a rumor this week that Google may be developing its own router. They cite “multiple sources, including one inside Cisco.” Why? SD Times theorizes that Google wants to find its own solution to handling the ever-increasing amount of Internet traffic. BNET Technology contacted Google about the rumor, and got the standard line, “It’s our policy not to comment on rumor or speculation.” BNET also points out that’s the same reply Google gave for years when asked if the company was developing its own web browser.

First up, we’ll hit the rumor mill. The Mini-Microsoft blog is getting and posting a lot of comments purportedly left by Microsoft employees who are being warned/told that job cuts are coming on January 15, 2009. Some of the comments are just things heard on the grapevine, while others are from people specifically told in meetings that they have “four weeks left.” The blog appears to be written by a MSFT employee, and most of the comments are pretty obviously from company employees. If the rumors turn out to be true, Microsoft would be following in the footsteps of Yahoo, who just did a big round of layoffs earlier this month, and Google’s cutbacks of its contractor workforce.

Meanwhile, more gloom-and-doom over the search ad business and its ability to survive the current economic downturn. On the Barron’s Tech Trader Daily blog Friday there was talk from one stock analyst that search ads aren’t necessarily better positioned then other types of advertising; this analysts expects “CPC pricing and the density/volume of clicks to decline,” and that this could impact Google particularly hard.

But we all know that Google has been going out of its way in recent months to monetize anything and everything they can. Silicon Alley Insider explains who’s behind this: new CFO Patrick Pichette. SAI calls him Google’s “secret revenue weapon,” and says he’s “taking on a lot of the low-hanging fruit” to help boost the company’s revenues.

The Wall Street Journal is getting really good at writing headline-bait these days, and the latest is a Jeremy Liew piece titled Will the Recession Kill Web 2.0? Liew believes big companies like Google and Yahoo are already fully-monetized (or close to it), and that three types of startups wil benefit as ad buyers look for quality and certainty: “companies with large audiences, companies that sell direct-response advertising, and companies that offer valuable niche content.”

If you’re in the mood for a good thought-piece, head over to ZDNet for a discussion of how Google, Microsoft, and Yahoo could be the Internet version of Ford, GM, and Chrysler.

Tangled webs, anyone? Computerworld reports that Mozilla CEO John Lilly admits his company’s relationship with Google is “more complicated” ever since Google Chrome was launched a few months ago. Despite the complications, Lilly says he’s confident Mozilla can continue to build on its success — namely, a 24% increase in market share in 2008.

Finally… in light of our Friday piece on YouTube’s success with music videos, interesting to see that Warner Brothers is pulling videos by its artists off of YouTube after contract talks broke down. That should only help Universal Music’s videos, which we said on Friday are already bringing in “tens of millions of dollars.”