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If you only read certain blogs or publications today — or press releases from both Microsoft and Yahoo — you would think that something truly revolutionary had been announced, with the news that Microsoft’s MSN Messenger (or Windows Live Messenger or whatever we’re supposed to call it nowadays) will inter-operate with Yahoo’s instant messaging client as part of a limited beta. Thankfully, however, there are people with memories that last longer than a week or two, like Elinor Mills of CNet and Alec Saunders of Iotum and Stowe Boyd of, well… Stowe Boyd.

Is the fact that Yahoo and Microsoft’s IM clients will work together something to celebrate? Yes. The walled gardens of instant messaging have existed for too long, just like early phone systems that would only handle calls to users of the same network. But this deal was announced about nine months ago, as CNet points out, so it’s hard to get excited about it all over again. In addition, the two companies go out of their way not to mention the fact that their systems still won’t work with IM applications from anyone else — including, of course, AOL’s AIM and Google’s GTalk.

Those two companies are working on their own federation deal as part of their $1-billion partnership, and GTalk already works with open-source instant messaging apps such as the Jabber client. Why don’t Yahoo and Microsoft support open-source too? Because they likely see that as helping Google, or diluting whatever strengths they feel they have as a result of keeping users in a kind of IM roach motel.

Obviously, companies can do whatever they want with their applications, and co-operate with whomever they wish to co-operate with. Unlike my friend Stowe, I would hesitate to recommend that the government force them to open up their networks. But just because they choose to do that doesn’t mean as users that we have to congratulate them for it. I will continue to use GTalk or Trillian or Meebo or any other app that lets me inter-operate with everyone.

Update:

According to the latest numbers, Google Talk is at the very bottom of the list as far as IM clients go. Does that surprise anyone? Not me. It’s only been around for less than a year, for one thing, and it doesn’t inter-operate with MSN or Yahoo (because they don’t want to, not because Google doesn’t want to). I still like the way it integrates with Gmail, and I like the fact that it supports the Jabber standard, despite what my comment-writing fan says below. Open standards are better — period.

Like my fellow Rocketboom soap-opera fan Mark Evans, I too am glad to see the video-blog-cast back after the turmoil of the past couple of weeks surrounding the departure of host Amanda Congdon. It’s too bad that Andrew Baron and the Rocketboom team couldn’t make their self-imposed deadline of Monday, but I guess that’s showbiz.

I thought Andrew and new host Joanne Colan did a nice job of handling the changeover, making light of the storm in the blogosphere by having Joanne show up in a catcher’s mask and have tomatoes thrown at her. And I thought she did a great show, with some light-hearted street interview and even some Spanish thrown in just for fun. I will lapse into sexism just for a moment to say that Joanne is easy on the eyes, as they say, and as Mark points out the British accent doesn’t hurt either. All in all, a nice comeback after all that has happened.

And in case all the back-and-forth of the past couple of weeks isn’t enough for you, Jeff Jarvis has given his blog over to a guest post from a music exec with some advice for the Rocketboom gang. And a CNet interview with Amanda shows that there is still a ton of bad blood between the two sides — with Amanda continuing to say she was pushed out, and that Andrew wanted to strip her of any duties apart from hosting. In other words, sounds like there’s still plenty of work left for the lawyers.

I don’t want to get into the whole debate over how big “click fraud” is — with some estimates as high as 14 per cent of all online pay-per-click advertising (in which Google and Yahoo are the leading players), and Eric Schmidt of Google arguing that the problem is self-correcting (something Mark Cuban takes issue with). Google is also trying to settle click-fraud related lawsuits.

I do think it’s interesting to watch the markets, including the black and grey markets, find ways of profiting despite Google’s restrictions on click fraud — which can involve either paying people to click on your ads (if you run a website), or paying people to click on your competitor’s ads (if you’re an advertiser who wants to drive up your competitor’s costs). When it comes to the former, there are stories popping up all over about offshore “click farms” where impoverished families in India make money by clicking ads — the 21st-century equivalent of stuffing envelopes.

And a reader named Mike just sent me a link to something he came across at the Blogging Stocks blog: auctions on eBay that sell the services of click-fraud artists. As the post describes it, there are half a dozen auctions with titles like “5 Google Adsense Ads Clicks Hits Each day for 5 Days” (Buy It Now for $1.99) that advertise how they “Don’t deal with worthless hits/clicks. These are real people clicking on your Adsense ads. Real money flowing into your Adsense account.”

They advertise how they arrange it so that multiple clicks don’t come from the same IP address in a 24-hour period, since that would trip Google’s fraud filters. No doubt some of them will be found out anyway, but others will spring up — it’s like Whack-A-Mole. And of course there’s always ClickMonkeys.

Could pay-per-click be on its way out, as my friend Scott Karp has argued? And if so, what replaces it — cost-per-action? No doubt fraudsters will find a way of gaming that too. For what it’s worth, my friend Markus from PlentyofFish, who knows a lot about online advertising, says there’s a lot of hype about click fraud, and security consultant Bruce Schneier has some thoughts at Wired News.

<update :

Google has responded on its official blog to the post about Eric Schmidt’s “let it happen” comments (hat tip to John Battelle).

Like my old-media colleague Mark Evans, I’m skeptical of the somewhat boosterish (to put it mildly) headlines about the growth of MySpace, and how it is now supposedly a larger Internet property than Yahoo, according to figures from Internet traffic-tracking firm Hitwise. And yet, the numbers from Comscore/Media Metrix and Nielsen/NetRatings don’t show anything like that — at least not when it comes to unique visitors.

According to a statement from Hitwise about methodology, the company uses a “network-centric” measuring process, in which traffic data is collected directly from ISPs using the company’s proprietary software. Other tracking services such as Comscore and Nielsen measure traffic based on software that users install (Alexa uses this method as well), phone surveys and/or through software trackers installed at websites directly. Naturally, Hitwise says its way is better.

The Hitwise release about MySpace (which was just for the first two weeks of July) didn’t give specific numbers for the social-networking service. Instead, it said that MySpace’s “market share of visits” was higher than Yahoo’s at 4.46 per cent. It’s not clear what that phrase refers to, but it appears to be a lot closer to raw hits than it is to unique visitors. Part of the problem seems to be that Hitwise only tracked Yahoo’s email domain, and left out its search and portal properties. According to Yahoo, it had 129 million unique visitors in June (for Yahoo’s search, email and web properties), and MySpace had 52 million.

I hate to rehash something that I thought we had all hoisted aboard during the first Web bubble, but raw traffic is a crappy measure of anything (and MySpace.com has been criticized for having a design that boosts page-hit counts). That’s why unique visitors and other metrics get used more often. Unfortunately, that doesn’t stop newspapers — and blogs, unfortunately — from trumpeting the “XYZ Corp. is the biggest!” headlines whenever there’s a slow news day.

For an interesting look at the differences between Hitwise numbers and those from ComScore/Media Metrix and Nielsen/Net Ratings, check out this comment from Flickr founder Stewart Butterfield on a recent post at Paul Kedrosky’s blog.

Mike Urlocker, who used to be a technology analyst and is now a consultant specializing in disruption and its effects on various industries, has a couple of interesting Q & A sessions up on his blog at ondisruption.com (he did one with me awhile back on the future of newspapers, but these are far more interesting). In the first one, longtime analyst and author and now venture capitalist Andy Kessler has a discussion about how technology is disrupting — or could disrupt — the medical field. Fascinating stuff.

“Doctors are human and don’t scale. Get them out of the equation and you have a business that can get smaller, cheaper, faster, just like everything else silicon valley touches. Consumers can do their own tests, and then only see specialists when they need them. (No pun on the NYSE, but same concept!)”

And the second Q & A is with Pip Coburn, also a former technology analyst and now venture capitalist, who writes a widely-followed bi-weekly newsletter called Waypoints. He has just written a book on disruption called The Change Function: Why Some Technologies Take Off And Others Crash And Burn and he spoke with Mike about a variety of things, including what he is following now that he finds particularly interesting.

“Watching YouTube.com — the video in which scientists dropped mentos into diet coke. Hard for folks who haven’t seen it yet but this is compelling content by almost anyone’s standard…. So-called user generated content is tremendously under appreciated by the investment world but videos like this have created “ah-hah” moments.”

Some great stuff there, Mike.

Kudos to Corsin Camichel for spotting what appears to be signs of Google’s much-awaited Gdrive “in the wild” as the network types like to say. It seems a little odd that he would find details of the network-storage service (apparently codenamed “Platypus”) by putting the extension “index.html” on the address of Google’s online word processing product, Writely.com — but then again, maybe that’s not as weird as it seems at first.

There are a couple of reasons to suspect that Gdrive is actually going to make an appearance. One is fairly obvious, and it is that the company mentioned the service during a presentation to analysts back in March. Another is that networked storage seems like a natural fit for the company — and certainly a lot more natural than a comparative shopping service (Froogle) or a web-clipping service (Google Notebook) or a social networking tool (Orkut).

For one thing, Google is already providing tons of networked storage for users of Gmail, where everyone gets two-and-a-half gigabytes (and climbing) worth of disk space for their mail, or for using as a Linux filesystem as some geeks have done. And Web-based software — such as Writely.com and Google Spreadsheets and whatever presentation service they’re going to launch or buy — means going down that road even further. Gdrive could have all those Word documents and spreadsheets and email, and all your pictures from the new Picasa Web Albums, and now your health info even.

Networked storage is also crying out for a simple solution. Lots of companies (as TechCrunch has pointed out) are going after that market, but none of them have the scale or deep pockets or established services that Google has. I’ve tried Mozy and Streamload and several others and they were all fine — and some of the services such as OmniDrive.com have interesting features, such as the ability to write documents to the server on the fly as you use them, just like a regular hard drive — but I still think this one is Google’s to lose.

Marshall Kirkpatrick at TechCrunch seems less than pleased with the feverish speculation whenever a Google product seems about to launch, but I think this one is a no-brainer, and a potential game-changer.

Update:

Nik Cubrilovic, who is a smart fellow, says in the comments on the TechCrunch post that Platypus or Gdrive appears to be an internal Google service, although it could be rolled out to the public at some point (and the comments at the analysts’ presentation day lead one to believe that is in the cards). Would you use something like Gdrive? Would companies use it?

Paul Graham is a smart guy with loads of experience — not just in Web technology, which he knows from the programming side, but in business as well, which he knows from the venture capital side — and so it’s worth paying attention to what he has to say about Web 2.0. He was interviewed by British journalist Ian Delaney, who is writing a book on Web 2.0, and agreed on the condition that he could post the interview to his site, which he did. Here are some excerpts:

“If you create a web-based startup that becomes massively popular, you can probably figure out a way to make money from it. Just about every massively popular site has. The idea of building something popular then figuring out how to make money from it was born in the Bubble. It sounds irresponsible, but it works. Requiring founders to have a carefully worked out plan for making money is not hard-headed business sense. It’s what hackers call “premature optimization.” The really important thing is to make something people want.”

So does Graham think that Web 2.0 is a bubble?

“No, I don’t think this is a bubble. The companies the VCs are investing in now are nowhere near as laughable as the ones they were funding in 1999. A lot of those seemed like deliberate parodies. Certainly there is a lot of hype. For example, there are a lot of sites using cheesy “Web 2.0” design elements to seem cool. All those fades and “Betas” and giant fonts are going to look very dated in a few years. But cheesy design doesn’t make a bubble. The measure of a bubble is investment, and that’s still under control.”

And what about the term Web 2.0 — is it all just hype with a cheesy name, or is it a real thing?

“Web 2.0” is a weird phrase. It began as the name of a conference, but the people organizing the conference didn’t really know what they meant by it. Mostly they thought it sounded catchy. However, “Web 2.0” has since taken on a meaning. There are some interesting new trends on the Web, and it’s the nature of a phrase like that to adhere to them. It’s kind of like they printed the name on a sticky label, threw it on the floor, and it stuck on the heel of a guy passing by. The name is a little fake, but the guy is real.

It’s tough to come up with something that has been declared either dead, broken or irrelevant as many times as Wikipedia.org (okay, the Bush presidency comes close, but that’s in a different category altogether). Nick Carr alone has probably rung the funeral bells for the open-source encyclopedia at least a half a dozen times by now. The latest death knell, however, comes from the Washington Post, where Frank Ahrens uses the death of disgraced Enron chairman Ken Lay as a hook to hang his column on.

There’s no question the activity on Wikipedia following Ken Lay’s death was fascinating to watch, and is worth writing about, as Reuters did. First, it said he died of “an apparent suicide,” then “an apparent heart attack or suicide” and then that it was “yet to be determined.” An entry was posted that said “the guilt of ruining so many lives finally [sic] led him to his suicide,” but it was quickly removed and replaced with “the cause was a ‘massive coronary’ heart attack.” Someone wrote about speculation that the coronary was “due to the amount of stress put on him by the Enron trial,” but that was removed too.

Ahrens tells us that this is a sign of Wikipedia’s greatest weakness, which is presumably the openness that allows anyone to edit an entry (although the rest of the column is somewhat muddled, so it’s hard to follow his point exactly). But I would agree with Kent Newsome that in fact the process functioned as it should — mistakes were entered, and were quickly corrected, just as they are in wire stories carried on news services such as… well, Reuters.com.

Anyone who has watched a newswire report on a breaking story take shape over the course of a day has seen much worse than Wikipedia went through, and newswires are staffed (presumably) by rigorously trained and experienced journalists. In other words: nice punch, Frank — but that straw man wasn’t really up to the challenge.

Does one red paper clip equal a house? It does if you give it a year, and a lot of trades back and forth, and some word of mouth marketing that starts on the blogosphere and moves into the so-called “mainstream media.” Kyle MacDonald of Montreal, who decided in a moment of boredom to try and trade his way up from a red paper clip to a house, got his wish last week when the mayor of tiny Kipling, Saskatchewan offered him a house in return for a role in a movie with Corbin Bernson (a role that will go to the winner of an American Idol-style contest).

I like the red paper clip story for a bunch of reasons. For one thing, it’s just plain weird, and I like that. I also think there’s a lot of power in what some call “lateral thinking” or ideas that come out of the blue, like Kyle’s. And I think it’s an amazing testament to his own innate marketing ability that he was able to pull the thing off, and a testament to the power of blogs to “seed” ideas — even weird ones — that are in turn picked up by the regular old media.

But on a deeper level, as Kyle has also pointed out, the red paper clip idea is about what I like to call the theory of economic relativity. As Einstein reportedly said, relativity is easy to understand: put your hand on a hot stove for a minute and it seems like an hour, but sit beside a pretty girl for an hour and it seems like a minute. That’s relativity. And it affects our economic behaviour too. Is a walk-on role in a movie worth the same as a KISS snow globe? It is to Corbin Bernson, who has been in lots of movies but has a passion for collecting snow globes.

Now that he has his house, it will be interesting to see what Kyle does next. One of the first things he is doing is having what he’s calling the largest housewarming party in Saskatchewan — inviting anyone in the world who wants to come for a giant Labour Day party. If I wasn’t busy, I would think about going.

I can’t quite remember how I wound up there — I think I was following a thread through the blogosphere about Dave Winer’s brief set-to with Firefox developer Blake Ross at Gnomedex — but I came across Boris Mann’s blog a little while back, and he mentioned that one of the highlights of Gnomedex was a presentation by Ethan Kaplan, who blogs at a site called blackrimglasses.com. Ethan was talking about the music business and the Web, since he is the director of technology at Warner Brothers Records.

I’ve had a soft spot for blackrimglasses for awhile now, ever since Ethan (who I didn’t realize worked for Warner Bros.) wrote something I liked a lot about how to remake a newsroom. And what Warner Brothers has been doing with a band it represents called Head Automatica is at least as great a disruption of the traditional process as what Ethan proposed for newspapers. The result can be seen at headautomatica.com.

According to Boris, the site uses the “hall of fame” module for Drupal (a website publishing platform) to allow fans to effectively create the band’s website for it on the fly. There are the usual news releases from the band, and dates for tours, but there is also a user forum prominently displayed on the front page, a Digg.com-style news section that allows fans to vote stories that mention the band up or down, and sections for photos and videos.

All fans have to do is tag things they post to their blogs with HA and they are picked up automatically, and there are prizes that can be won for the best material. Very smart. And in case you’re interested, Head Automatica is quite listenable as well — sort of like early Elvis Costello mixed with some Strokes and maybe some Dandy Warhols.

I realize there are plenty of people out there who either don’t know or don’t care about the video-blog known as Rocketboom or the sordid tale of Amanda Congdon’s sudden departure as host — or who believe, like my friend Stuart, that the fuss over it is a sign that the Web 2.0 bubble is about to pop. But there must be plenty who do care, because the posts I’ve written about it over the past few days have produced traffic levels on this blog that are orders of magnitude larger than I have ever seen before. And not just from the U.S., but from Singapore, Italy, Great Britain, Germany, Israel and Finland.

But I’m not interested in writing about it because of the traffic (honest). I’m interested because as several people have pointed out, this is the kind of thing that happens all the time — creative differences between producer and host, controlling shareholder and employee, manager and talent, or however you want to describe it — but we hardly ever hear about it except in Variety magazine or years later in some tell-all book. Is it just sordid gossip and dirty-laundry airing? Maybe. But it’s also, as Jason Calacanis has noted, a hard-core lesson in how to handle a creative business, and a small startup, and it is all being played out in public.

To that end (and yes, also because it’s the weekend and I’m bored), I watched this video clip of Rocketboom founder Andrew Baron speaking here in Toronto at Eli Singer’s Casecamp, in which he spends almost half an hour talking about the events of the past few weeks, including the morning he woke up to find an email with a link to Amanda’s tearful farewell video.

For what it’s worth, he is not defensive at all, nor does he make Amanda out to be a bad person — but he does make it clear that she pulled the trigger and (as far as he is concerned) misrepresented what was happening behind the scenes. It’s also interesting to hear his thoughts about how to handle it — how he wanted to tell his side of the story right away but his sister told him not to, how he tried to come up with a plan to keep the show going, how he went through several different scenarios and which ones he rejected. Fascinating stuff.

Update:

Bryce Johnson of Chicken Test says he took the video down because Andrew asked him to, but he has since put it back up. I’m glad Andrew reconsidered, because I thought he told his side of the story in a very honest and engaging way. Oh yes — and if you feel the need to go back and relive some of those past shows with Amanda, they are here. And just to set the record straight, Andrew has also posted a brief note about his contributions to the show here.

Bloggers talk a lot about how they do it for the love or whatever, but at the same time there’s a lot of interest in how (or if) you can generate a little income from a blog. There’s Google’s AdSense, of course, which I run here on my blog mostly out of interest — since I think I’ve made a grand total of about $3.15 (U.S.) in the past month — and there are things like BlogAds.com and Text Link Ads, (those hyperlink ads that pretend to be links but are really ads inserted into the body of a blog post, which I despise with a passion bordering on the pathological) and AdBrite.com and Industry Brains and so on.

eBay is getting in on the action — or trying to — with its recently announced (okay, it was about a month ago) eBay AdContext program, which looks a lot like a fancier version of Google’s AdSense, and even has a Flash module, which would presumably work better with MySpace blogs. It links to auctions that are relevant to the context in your post, and the blogger gets a cut of any transactions. But will bloggers take to it? Some say they want to try it out, others say they aren’t so sure.

One of the most interesting solutions I’ve seen in awhile is called MeCommerce, from a company called Good Storm (and no, I have not been compensated for this post, in case any PayPerPost critics are reading this). The coolest thing about it is how it integrates into the sidebar of your blog, can be customized to fit into your theme, and allows readers to make a transaction without even leaving the widget, or your blog. Click on the item, fill in the details and away you go — and the whole thing is verified by VeriSign. There’s a good example on the blog of co-founder Marc Scheff (who also turns out to be a gifted artist).

Will MeCommerce take off? Hard to say. It’s an elegant solution, but the products it offers so far are relatively limited (books, CDs, DVDs and T-shirts). There’s some more info on it in the comments section of this TechCrunch post, and the Motley Fool wrote about it too.

Someone over at The Deal, a site that tracks venture capital activity, sent me their latest scoop: a move by Google to enter the health field in a major way is in the works (although as the site points out, “the product is in developmental stages now and there is no certainty that it will be launched”), with something codenamed Google Health Scrapbook. This would gogo well beyond the Google Co-op targeted search-functions that were revealed earlier this year.

According to The Deal, Google executives have already met with WebMD in New York to bring them in as a partner for the new service (with plans for other partners in the future), and the company has also been talking with Intuit, the software company, which has a program that lets users keep track of their medical expenses. The idea appears to be that users would be able to log in with their Google account information and do things such as adding a new medical provider, tracking their medical records or even paying their medical bills.

The Deal says that Google Health Scrapbook would also provide information about hospitals such as the frequency that a hospital performs a specific type of procedure. And the person in charge of the rollout appears to be Missy Krasner, a project manager who joined Google earlier this year and before that was a senior official in the U.S. Office of the National Coordinator for Health Information Technology.

Search results and even email might be one thing, but are consumers prepared to have a Web giant like Google track and maintain their entire health records? I think health information and tax data are the two hotspots for many people, and it’s a bit of a stretch to think that they would want to send all that over the Web just because Google says it’s going to add value to it somehow. It will be interesting to see how this one flies — or if it flies. More comment at Inside Google and Google Blogoscoped.

There are a number of themes going on in the Digg vs. New York Times discussion that has reared its head again. The latest trigger was numbers from Hitwise that tend to deflate the earlier “Digg is as big as the NYT” meme, which I wrote about here. While the Alexa figures from the original TechCrunch post tended to suggest that Digg’s traffic was getting close to that of the Times, the Hitwise numbers are far less impressive.

One of the obvious takeaways is that Alexa numbers are flawed in many respects, in part because they rely on users who have installed a toolbar, and other built-in biases. Rightly or wrongly, many Web watchers either take Alexa numbers with a huge shaker of salt, or dismiss them altogether. Is Hitwise.com better, or ComScore Media Metrix, or Neilsen/Net Ratings? I’m sure they all have their flaws — some because of the technology they use, some because they rely on what people say rather than what they actually do, and some because of the inherent difficulty of getting a handle on something like Web traffic.

One common reaction to the issue has been to scoff at the idea that something like Digg could take the place of the New York Times — and it’s quite reasonable to scoff at this idea, since no one in their right mind (including Kevin Rose and other Digg types, I would wager) would ever make such a ridiculous claim. My friend Rob Hyndman, who like me is a newspaper addict, is quite right that nothing will ever take the place of the New York Times.

But I also agree with my former old-media colleague Om Malik — that is is foolish to dismiss Digg as a toy that has no relevance whatsoever. Replace the NYT? No. Change it, and other traditional media? Already happening.

America Online — what a long, strange trip it’s been. One of the first to make the jump from the old bulletin board days to the new visual Web, back when Netscape was just a toy that Mark Andreesen came up with at university, America Online was like the Google of its time. Sure, it was annoying, and it blanketed the globe in free signup disks, but for many people just getting used to the Internet it was friendly and safe; the “You’ve got mail!” tagline became so famous it became a movie. Then AOL hit the peak — it effectively acquired one of the largest media companies in the world for hundreds of billions of dollars.

Since then, it’s been pretty much downhill all the way. The bubble burst within minutes of the Time Warner deal being signed, the market value of the two companies disappeared like a ghost in the night, and TW has spent the past few years trying desperately to figure out what the hell to do with AOL — as millions of people have deserted the once mighty service. According to the latest figures, more than 15 million people have signed off and never signed on again since 2001 (although AOL still has 18 million left). The company has taken down much of the “walled garden” approach that it became famous for, but it hasn’t helped all that much.

Now there are reports that Time Warner is considering radical surgery: namely, making all (or virtually all) of the service’s content free, with the hope that increased traffic and advertising-related strategies will compensate for the loss of revenue. But will it? That’s a multibillion-dollar question. According to one estimate, TW could be giving up in the range of $2-billion in revenue by going free. Can it make enough deals that bring in new dollars to fill that hole? Maybe the real question is whether the company has any real choice.

The only other option is to spin the thing off and hope someone else wants it (at one point, there was talk that founder Steve Case might), or watch it continue to shrink until someone puts a bullet in its head. More coverage in the Washington Post and Fortune magazine, which notes that there is already a company pursuing the strategy AOL has in mind — it’s called Yahoo.