Hey Google — You’ve got AOL!

According to a blizzard of reports, starting with the Wall Street Journal and now including the New York Times, the Washington Post, and Reuters, Google is close to a deal to take a five-per-cent stake in America Online for $1-billion (U.S.). This, of course, is only the latest in a series of rumours about what’s going to happen to AOL – first Microsoft was close to a deal to buy the whole enchilada, then Google’s’s name was brought up, then Microsoft was seen as being back on top.

At one point, the speculation was that Time Warner CEO Dick Parsons was trying to get the takeover rumours going so that he could cut a better deal with Google, which AOL uses to power its search results. Then AOL founder Steve Case came out with his impassioned plea to split up the company – the same thing Carl Icahn seems to want to do – in an op-ed piece in the Washington Post, which I wrote about, and which was hilariously satirized in a commentary piece here.

Most analysts seem to think that Google taking a piece of AOL – if only so that Microsoft or Yahoo don’t get it – makes sense. The former walled wasteland… er, garden is estimated to account for about 11 per cent of Google’s annual search revenue, and that wouldn’t be a good thing to give up. And it’s only a billion, right? Pocket change for a company with a market value of almost $130-billion.

Update:

Several people, including O’Reilly Radar and John Battelle, have noticed a potentially ominous sentence in the New York Times piece: “Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.” Don’t jump the shark, says Battelle. Henry Blodget says it’s a good deal for Google, and a bad one for Microsoft. And Rafat over at paidcontent.org has a nice roundup of the various twists and turns this story has taken.

Google Music — what’s the big deal?

With all the attention Google has gotten for its new music search, you would think the company was going to compete with iTunes.com, or Napster.com — or that Larry and Sergey had set up their own music label. It isn’t the Google Music Store that some have been talking about, and you can’t even click on a link and listen to a streaming web clip of a song. So Google searches for things and then links to them — what’s the big deal about that?

Maybe at some point Google will be able to index audio files and link to them — although that would no doubt become a legal quagmire. Mike over at TechDirt is already speculating about the existing music search getting the company in trouble because it links to lyrics, and the RIAA a music publisher just finished shutting down PearLyrics.com (although there is some reason for hope there, apparently — more details here). In any case, Google Music seems a little thin to be getting so excited about.

Apparently I’m in good company. Fred Wilson of A VC doesn’t think much of it either (Fred, I tried to link to your post directly but the link didn’t work).

The campaign for a two-tier Internet

Can you hear that sound? It’s the sound of the telecom troops stepping up their lobbying effort on Capitol Hill in Washingon, and on Parliament Hill in Ottawa. And the subject of this effort? The “need” for a two-tiered Internet. The telcos don’t call it that, of course, but that’s what it will amount to. As Rob Hyndman points out, this “war on net neutrality” could be the issue of the year for the tech sector.

As so eloquently stated by AT&T CEO Ed “Google better pay for access to our pipes” Whitacre and BellSouth CTO Bill “pay up or watch your download crawl” Smith, telcos in the U.S. and Canada want the ability to structure their networks so that their own applications and data — streaming video to your cellphone, for example — work faster and better than others. (Om Malik notes that the FCC seems to favour the telcos).

Remember the idea of a “common carrier,” where phone companies provided networks that anyone could make use of, in return for regulated rates of return? That’s history. It’s easy to see why the telcos are making this pitch — they don’t get the nice rates of return any more, and their legacy business is being eaten away by low-cost VOIP services, so you can see why they’d want to rig their networks for their own benefit. But that doesn’t mean they should be allowed to.

For an eloquent explanation of why losing “network neutrality” would be bad, see Vint “father of the Internet” Cerf’s submission here. And Canadian columnist and technology-law expert Michael Geist has written a nice column on the subject.

Google going to the Opera? Unlikely

Everyone loves a hot rumour, especially about a takeover involving Google — and the hot rumour du jour is that the search company is going to buy Opera, the upstart browser maker. That’s according to Pierre Chappaz, former head of Yahoo Europe, who mentioned it on his French blog (thanks to Om for providing a link to the translated page).

Makes for a great rumour, doesn’t it? Opera is cool, and buying it would re-fuel rumours that Google wants to get into the browser business and go up against Microsoft and Internet Exploder. Unfortunately, it doesn’t really make any sense. Not that buying it would be hard for a company with a market cap of more than $123-billion — the price tag would be a rounding error.

But why? Google hasn’t made a habit of just buying things for the sake of buying things. And as others have noted, Google is pretty close to the Firefox community. Why not just partner with or fund Opera if Google wants to do a deal — like for Larry Page’s Google smart-phone? On a related note, whatever happened to those rumours that Google was about to buy Riya?

Content creator or slave?

Henry Blodget, the guy many people blame (rightly or wrongly) for convincing them to invest during the dot-com bubble, wades into the “content creators vs. exploited masses” debate with a recent post on his blog Internet Outsider. Henry says that one of topics of conversation at a recent think-tank gathering was about aggregators like del.icio.us and Google and how they exploit those whose blogs or links or sites they aggregate.

The former brokerage analyst says that as far as he’s concerned, “All those people who built del.icio.us into what it is did so because they wanted to, and because it was useful, and that “similar, non-financial motivations drive the vast majority of unpaid bloggers (22 million and counting), blog commenters (100 million?), letters-to-the-editor writers, MySpace citizens, chat board participants, expounders, opiners, self-deemed experts, whiners, bar-stool philosophers, and assorted windbags (billions) that express themselves every day the world around.”

Most of these people, Henry says, “aren’t doing it for the money. And if someone else is making money off them, while enabling them to do what they love to do — and do of their own free will — well, then, more power to them). I would have to agree, as I’ve mentioned before.

Feedburner gets even better

I’ve always liked Feedburner.com, and now I like it even more. Let’s face it, most people (including me) are consuming Web content through RSS feeds — whether they read them through NetNewsWire, Bloglines.com, Feeddemon, Newsgator.com, Yahoo’s new RSS mail add-on or (heaven forbid) Google’s ugly “web clips.” I wonder how many people actually go to websites any more, rather than just reading what journalists call “the wire.”

As far as I can tell, Feedburner was one of the first companies to see that this was going to take off — and that people were going to need a way to produce a feed without having to worry about whether it was RSS .90 or RSS 2.0 or Atom or whatever. They’ve added some new features called FeedFlare (hat tip to TechCrunch, as usual) that beef up your feed — adding links to send an item by email, send an email to the author, search for links in technorati.com, tag it with del.icio.us and see how many comments there are.

Feedburner hasn’t just been catering to blogs and micro-publishers either. They’ve also been doing deals with major old-world publishers, including the Houston Chronicle, and they just announced a partnership with Reuters, one of the largest news organizations in the world. It’s a smart move for Feedburner, and I would argue a smart move for the Chronicle and Reuters too.

For more, take a look at what Fred Wilson has to say (he loves it), and Read/Write Web too. And congrats to Brad Feld, an investor in Feedburner.

Is opening up becoming contagious?

I don’t want to add to the “echo chamber” that some have complained about in tech-blogging circles — which is a real risk given the number of blogs tech.memeorandum.com has commenting on the news — but I think it’s interesting that Amazon seems to have decided to open up its Alexa API for no apparent reason.

In other words, there doesn’t seem to have been any pressure to do so, nor is Amazon.com in financial trouble or under severe competitive threat — although it’s true that the company is no longer growing as quickly as it used to. That means it has decided that “opening the kimono,” as Fred Wilson likes to call it, is worth doing for some other reason (Fred calls Alexa “Amazon’s hidden jewel.”)

In all likelihood, it’s because Amazon has seen the spread of Google’s search, not to mention Google Maps, and Google Earth, and Flickr and so on, and realized that an open API likely creates more value — in the longer term — than a closed one. Let’s hope so. Because if there is one lesson that companies can learn from “Web 2.0,” it is that. Paul Kedrosky wonders why the Amazon announcement is news, and maybe it isn’t really. But it is still important.

Update:

Richard MacManus at Read/Write Web has more. And Cynthia Brumfield of IPDemocracy makes an important point (which others have made as well), which is that it isn’t just the open API, but the quality of the index that counts. And Danny Sullivan of SearchEngineWatch is underwhelmed by the news.

Newspapers — adapt or die

As a newspaper guy — although one who is trying his best to get with the Web 2.0 program — I have a close personal interest in what the industry is going through right now, thanks to a combination of its own inaction and arrogance, combined with a tidal wave of blogs and Craigslist.org and podcasts and so on. Finding intelligent comment about and analysis of what is going on is a real treat, and as always Jeff Jarvis’s Buzzmachine.com is one of the places I often go.

Jeff pointed me to what I thought was an interesting post by Peter Rip, a managing partner at Leapfrog Ventures, who writes a blog about the venture capital business and technology. Peter used to work at Knight-Ridder on the technology side, and in his post he says newspapers are like mainframes used to be in the 1980s when the personal computer was transforming the world.

It makes sense. Newspapers are large and expensive and centralized and dominant (okay, not so dominant), and require specialized tools and skills (okay, not so specialized). And they are being threatened by a phenomenon that consists of “small pieces, loosely joined” – blogs and social bookmarking sites and ad hoc news networks and so on, who are “unbundling” the pieces that make up a newspaper, whether it’s classifieds or stock listings or news stories themselves (or the columnists, for that matter).

An interesting perspective — and a warning. Some, such as the Toronto Star’s David Olive, see this transformation as having a potential upside as well — provided newspapers handle it properly. And Scott Rosenberg at Salon has some thoughts too. And just to come full circle, I’ll let Mr. Jarvis have the last word.

Yahoo makes another smart move

So just a few days after gobbling up del.icio.us, Yahoo has formed a partnership with Six Apart, whose Moveable Type was one of the early leaders in the blog software game — more flexible and sophisticated than Blogger.com. According to the release, Yahoo will be offering Moveable Type to small businesses for running blogs, but Jeremy says anyone can use it.

A nice deal for Six Apart’s Ben and Mena Trott (and Anil Dash), who have expanded MT into hosted solutions such as Typepad and now also own LiveJournal. I moved my blog to Typepad from Blogger a year or so ago and found it easy to set up and use, although I have since moved on to using a version of WordPress that I host myself on a server at home. I like the openness and flexibility of WordPress, and I’ve been trying out the hosted version too, at WordPress.com. Coincidentally enough, Dave says that Yahoo will be offering WordPress too soon.

Anyway, another smart move for Yahoo I think. Maybe it’s difficult to see how the del.icio.us purchase makes sense financially, but I think it and this deal are signs that Yahoo gets it — or is getting it. And more than one person has pointed out that many of the moves it’s making are ones that you would figure Google either could be or should be making.