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So Microsoft is buying aQuantive, an online ad company, for $6-billion in its largest acquisition to date — the largest since the $1.4-billion purchase of Great Plains Software in 2001, as far as I can tell. Is aQuantive, which I had never heard of until this morning, worth twice as much as Google paid for Doubleclick not too long ago? Hard to say. Paying twice a company’s market cap is pretty huge. Obviously, the beast from Redmond can afford it, since it probably generates $6-billion in free cash flow every couple of months. But does this remind anyone of the big optical-networking acquisition frenzy of the late 1990s, with Nortel and JDS Uniphase and that whole crew? Just asking.

Update:

ZDNet has some background on aQuantive, in which the only name I recognize is Razorfish, a legendary money-sucking dot-com bubble company that eventually got acquired after the bubble popped. Just for the record, the company’s revenue last year was $442-million, which makes Microsoft’s bid almost 14 times revenue. My friend Paul Kedrosky warns of the dreaded “winner’s curse” that often comes into play in auction-style scenarios. And Ashkan Karbasfrooshan, who knows a thing or two about online advertising, argues that aQuantive is well worth twice what Google paid for Doubleclick.

I know that $4-billion is a big number. And yes, I know that’s how much Apple’s shares fell during the blog scandal known as “Applegate,” in which Ryan Block of Engadget ran an internal Apple memo saying the iPhone and Leopard would be delayed (for which Ryan has apologized). And I know that it may have been an attempt by someone to game the stock, as my friend Paul Kedrosky — who is wise in the ways of the stock-market force — has suggested.

But I still think it’s the proverbial tempest in a stock-pot. Could someone theoretically have lost money if they traded on Ryan’s post? Theoretically — in the same way they would have “lost” money if they had sold Apple two weeks ago or a month ago, and in the same way that they “lost” money if they bought Yahoo stock hoping Microsoft was going to buy it after the New York Post rumour from awhile back. Anyone who sold on the Engadget news is a momentum trader, and/or a nervous Nellie, and therefore deserves whatever they got. The stock was back where it began within an hour of the rumour, and Engadget’s fake memo post only survived uncorrected for a matter of minutes. That’s hardly a capital crime.

The fact is — as Howard Lindzon of Wallstrip (how’s that takeover deal going, Howard?) points out in the comments section over at TechCrunch — stocks go up and down every day, in some cases by large amounts, based on rumours and trader talk and (in some cases) the weather. Day traders can make and lose lots of money on those gyrations, but for the most part it is noise.

The fact that Engadget’s fake memo moved Apple so much is an indication to me of just how volatile the stock is, another sign that expectations are getting overdone. And as Mike Arrington suggested, anyone — blogger or “real” journalist — would have done exactly what Ryan did. The difference is that traditional journalists likely wouldn’t have corrected it so quickly.

I didn’t get a chance to write about this yesterday when it broke, but I think it’s pretty amazing (if true) that ClubPenguin is talking with Sony about getting acquired for somewhere in the neighbourhood of $500-million or so (TechCrunch says $500-million, but PaidContent says that the price is closer to $450-million). Om Malik has some details here. Either way, those are pretty amazing sums of money for a company that has only really been around for a year or so. As my Globe and Mail colleague Barrie McKenna wrote in a story last fall, the company was started by a couple of guys in the relatively sleepy (at least when I was there last) resort town of Kelowna, B.C.

Parents with kids, the founders deliberately chose not to include advertising on the site, and in fact haven’t advertised the site either — growth has been entirely through word-of-mouth. Judging by the speed with which it spread through my family, from eight-year-old daughter to friends and cousins, it is the childhood equivalent of Facebook (as is its cousin Webkinz, also a Canadian success story aimed at kids, which Om says Disney has looked at).

Two big questions remain: Can ClubPenguin keep growing at a rate fast enough that it makes $500-million look like a good deal? And can the company find a partner that has the same philosophy about marketing to kids?

I know this is kind of a stretch, but stay with me while I try to pull a couple of threads together from things that are going on right now: We’ve got the launch of Truemors, the Digg-style rumour site that Guy Kawasaki set up — which seems to have been over-run with spam and the equivalent of graffiti (what Second Lifers call “griefing”), and may be burying critical posts.

Then there’s MySpace News, which some argue is a ghost town, and others say merely needs some work. And there’s Newsvine, which some argue isn’t as successful as it could be (and I would agree). And finally, there is the sad tale of how Derek Powazek and his wife were pushed out of the wonderful photo community/magazine they founded called JPG. What do all of these have in common? Community. I know that’s an overused word, but I think it is the key to the success or failure of virtually every online venture that tries to get “users” involved in some way.

Why isn’t MySpace News taking off? Because as Tony Hung suggests, it either isn’t appealing to the community or it isn’t making it easy for them to use it. Why isn’t Newsvine as successful as it could be? In part because the community isn’t as big a part of the picture as it should be. What is the secret to Digg’s success, and the thing that Truemors needs to find? A community. And what could kill JPG magazine? The loss of a loyal community.

It’s not enough to set up a cool site and say “Hey — look at my cool site! Come on over and form a community!” And it’s not enough to start with a community based around other things, such as MySpace, and then bolt on some other function and expect them to take to it immediately. It doesn’t work that way. And yes, there has to be moderation of some kind, but that path is pretty rocky too, as Digg has found out.

Facebook is (at least so far) a good example of a site that had a community, nurtured that community and may have some success in expanding into other things — but it is not easy. Far from it, as this essay by Cory Doctorow explains. In fact, it just might be the hardest thing of all. And I just came across a great post on how to manage a community by Matt Haughey, who runs one of the best there is: Metafilter (hat tip to Kottke for the link).

I don’t want to be accused of yelling “Fire!” in a crowded theatre or anything, but I thought I should probably warn any of you who might be interested that tickets for the mesh conference are going quickly, and we will likely be sold out soon. The big event is coming up in a little over two weeks — May 30th and 31st at the MaRS Discovery District in Toronto.

There’s plenty of info at the mesh website on the speakers we have lined up (people like Mike Arrington of TechCrunch, Jim Buckmaster of Craigslist, Christine Herron of the Omidyar Network, Mike Masnick of Techdirt, Rachel Sklar of The Huffington Post, Austin Hill of Gifter.org and Akoha and others too numerous to mention).

The full schedule is available here. If you want to get a glimpse of just how much fun we all had last year, take a look at this page. And if you want to get a ticket, the ticket window is over here.

So MySpace is launching branded news and entertainment video channels, according to a press release from the social-networking behemoth. The site has signed deals with the New York Times, Reuters and National Geographic to offer news content (National Geographic does news?) as well as with other content owners to offer channels such as The Daily Reel — which compiles links to the best of online video — Kush TV (including the Family Values Tour with alt-punk band Korn) and VBS-TV, from the creators of Vice magazine.

The big question, of course, is whether anyone will actually watch any of this stuff. And something that isn’t mentioned in the release is whether MySpace users will have to go to the MySpace Video page to see the content from these branded channels, or will they and others be able to embed or share the links on their pages and elsewhere? As Quincy Smith of CBS pointed out recently, you have to take the content to where people are, not force them to come to where your content is. That’s why he said that CBS’s Innertube project should have been renamed “CBS.com/NoOneComesHere.”

If MySpace doesn’t want its new video channels to become the same kind of online ghost town that its MySpace News seems to be turning into, it might want to give that kind of thing a little thought.

It’s just a mild breeze, says Gavin O’Reilly of the World Newspaper Association:

“Don’t believe all you’re being told about the death of the press: more people all over the world are reading newspapers. What’s more, they’re still a powerful medium for advertising,” he says in a piece for The Independent. In other words, just ignore the dramatic declines in readership and the stories of newspapers laying off thousands of people or putting themselves up for sale. Just a flesh wound.

“The chorus of disapproval for newspapers has become a global trend. These days it is nearly impossible to find a media analyst who actually reads a newspaper or who can see anything other than doom and gloom for the industry.

I can present a different perspective. Let’s start with circulations, which continue to grow – and not just in India and China. Paid circulation grew globally by 1.9 per cent in 2006, with sales of 510.4 million copies a day.”

Wow — 1.9 per cent growth. Woo-hoo! Time to get out the party hats.

Laurent Haug, a very smart guy and part of the brain trust behind the LIFT conference in Geneva, has written a great post on his blog about finding balance in social media, and how he thinks that we are beginning to do that — in other words, stepping back from the “all users are created equal” view that has driven some of the commentary around sites like Wikipedia and Digg and acknowledging that some people actually might have skills or qualifications that make them more valuable. Not exactly a revelation for some, perhaps (yes, I mean you Seth) but still worth saying. As Laurent puts it at one point:

“Kicking out the experts was not the answer. We do not all contribute the same value. Somebody who has carved violins all his life should have more editing power than me on Wikipedia’s Stradivarius page.”

Laurent goes on to talk about how he sees social media and online communities that generate content being made up of three necessary groups: the users, content creators who are “needed to scale the system to a dimension where it starts to matter;” the drivers, who “build the community framework,” and the experts, who “bring credibility to the whole edifice by sharing their extensive knowledge.” Go read the whole thing.

Gabe Rivera — creator of Techmeme, the site bloggers love and/or hate (depending on whether they are on it or not — keeps his cards pretty close to his chest when it comes to the site and how it functions. And he doesn’t exactly spill the beans in a surprise interview with Beet.tv. But it’s still interesting to see and hear him discuss how it works. He also hints about doing some hiring, and possibly launching some new Techmeme spinoffs.

[youtube https://www.youtube.com/watch?v=K8mLrPPJph8&w=425&h=350]

So Mike Arrington announces some of the new advisors on the “panel of experts” for the TechCrunch20 conference that he and Jason Calacanis have started up as a kind of anti-DEMO conference. And the first thing that some people — like Ben Metcalfe and I, and Tony Hung at Deep Jive Interests, for example — think when we look at the list is: What the F? MC Hammer is on this panel? What’s he an expert on?

Ben makes some good points, I think (points whose value is only slightly decreased by the fact that he consistently misspells the name “Michael” as “Micheal”). The Hammer — or to use his real name, Stanley Kirk Durell — seems to have done very little that qualifies him for a role on a panel of Web 2.0 startup experts. Yes, he is reportedly working with a music-based startup, but is that really all it takes to get on the panel of experts? Then Nick Denton at Valleywag weighs in with the “tokenism” card, at which point Karoli lashes out at the Wag for picking on Hammer — and then Nick and Mike take shots back and forth at each other in Karoli’s comment section. Nick says Karoli has missed the whole point, and Mike says he’s race-baiting. Is he? Who knows. But one thing occurred to me while I was reading this whole sordid tale: It would be a lot easier to argue that Hammer isn’t a token black guy if he had actually accomplished anything in the last decade that justified his presence on the panel. Just saying.

This has to be the single weirdest journalism story I’ve come across in weeks — and yet at the same time, it makes a kind of terrible, brilliant sense: A news website that covers the city of Pasadena has hired two writers in India to cover the city council in that California town, despite the fact that they are thousands of miles away and have likely never been to Pasadena. James Macpherson, editor and publisher of the Pasadena Now website, hired one reporter who lives in Mumbai and will be paid $12,000 a year, and another who works in Bangalore for $7,200. He will send them copy and have them edit and write it and then file it to him working in Pasadena.

“A lot of the routine stuff we do can be done by really talented people in another time zone at much lower wages,” said Macpherson, 51, who used to run a clothing business with manufacturing help from Vietnam and India.

And these aren’t just Indian workers that Macpherson is trying to turn into journalists. One of the reporters that responded to his Craigslist ad is a former student at the UC Berkeley graduate school of journalism. The L.A. Times story notes that Pasadena city council broadcasts its meetings on the Web, and since India is 12.5 hours ahead of LA, the new journalists will be able to file reports while their boss sleeps.

Terrible? Brilliant? Stupid? Perhaps a little of all three. As Editor & Publisher notes, Reuters already has staffers in India rewriting press releases. My friend Neil Sanderson has more.