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Two things strike me about the deal between Microsoft and Universal Music, which will see the record company get a cut of every Zune player the software giant (theoretically) sells. The first is that such an arrangement is an obvious sign that Microsoft is desperate, and the second is that it’s an obvious sign that the major record labels are not just desperate but creatively bankrupt.

It seems clear that the record labels see Microsoft’s Zune launch as a key chance to make up for the boatloads of cash they’ve missed out on with Apple and iTunes (and their inability to get a government-mandated levy on portable devices). And the fact that Microsoft is willing to go along with their demands for a cut of the sales proceeds is a sign of how desperate the software company is to get some support for Zune, although it’s certainly not getting much support from some music fans.

I’m going to go along with Om Malik’s take on this one, which is that if you look at the amount of money Universal is likely to make from their Microsoft deal, it’s probably about the same as selling a single extra song to all the people who have bought an iPod. As Om puts it: “If the music industry cannot sell one additional song to consumers (and has to blackmail for more money) then, you as a business, have lost grip over your core competency.”

George Scriban at Global Nerdy has some similar thoughts.

Muhammad Saleem over at Mu Life — a great new blogger I’ve recently discovered who focuses on social media — posted something about how Digg and Netscape had the news that Donald Rumsfeld had resigned long before Google News (long in this case being 20 minutes). His post was noticed and linked to by Steve Rubel at Micropersuasion and by Jeremiah Owyang, among others.

As I pointed out to Muhammad and Steve, however, it looks to me like Comedy Central actually broke the news a full 35 minutes before either Digg or Netscape got to it. If anything could reinforce how disrupted the journalism business has become, it’s the fact that a comedy channel can break news — which may not be all that surprising, considering that surveys show many younger people get their news from Jon Stewart’s Daily Show.

Of course, as Matt Sparkes notes on his blog, Digg and Netscape didn’t “break” the Rumsfeld news — they were simply the first to link to the Associated Press story. That’s not really the same thing. So it’s not really fair for Muhammad to title his post “Why Socially Driven News Is Better.” Faster, maybe — but not necessarily better.

That doesn’t mean Digg and Netscape and similar tools aren’t still a threat to newspapers, mind you, since in many cases newspapers just print the Associated Press stories too. And that is becoming harder and harder to justify.

After the amazing Diet Coke-Mentos video from the guys at Eepybird.com exploded onto the scene thanks to YouTube (and later Revver), there was a sharp divide between the reaction from Mentos and Coca-Cola. The Italian company that makes Mentos saw it as free advertising and immediately wanted to do something with the Eepybird team — saying they probably got $10-million worth of free viral advertising from the clip. Coke effectively looked down its nose and sniffed.

A little while ago I wrote that Coke appeared to have finally grabbed a clue, because they were involved in an online contest with the Eepybird guys (also on Revver, as someone from the video site points out in my comments). As it turns out, though, it sounds more like they were dragged kicking and screaming (or whining) into clue-land, according to this story at MediaPost.

John Stichweh, director of global interactive marketing, cast doubt on whether the company thinks engagement is a goal worth pursuing. The measurement that really matters, he said, is sales. “How many more cases of Coke am I selling? I don’t know,” he said at the Ad:Tech conference in New York.

According to the story, the Coke exec also questioned whether doing interactive or “user-generated” advertising was any cheaper than a multimillion-dollar ad campaign in traditional media, saying that online campaigns are cheaper up front but “there is a cost element in terms of internal labor.”

I guess he’s got a point — if by “internal labor” you mean paying someone to run around at headquarters pulling people’s heads out of the sand and showing them how to click on the “most popular” link at YouTube.

I don’t want to be a gigantic wet blanket or anything, but looking at the top of Techmeme right now makes me despair for the future of the human race. Okay — that might be a bit of an exaggeration. But seriously, do we really need to get that excited about the fact that the latest and greatest upgrade to Microsoft’s 15-year-old operating system has been sent to the place where they burn it onto CDs or whatever?

But of course, saying that isn’t cool enough, so we have to use an acronym and say that it’s “gone RTM” (for Released To Manufacturing”) or “gone gold” or whatever the heck they call it. And for all the bitching and moaning about Google getting love for every Web 2.0 release it does, there seems to be an awful lot of blogger love out in Microsoft-land right now.

“Breaking news!” one site proclaims breathlessly. “VISTA IS GOLDEN!” another one hyperventilates. Not to be outdone, someone pulls out this humdinger: “A new era of desktop computing is upon us.” Sweet Jesus. And a week or two ago there was a similar landslide of links at the top of Techmeme that were all about — yes — the cool new packaging for Vista.

Come on, people. This is embarrassing.

My friend Rob Hyndman, lawyer/advisor to geeks and startups and a fellow organizer of the mesh conference, has decided that organizing one conference just isn’t enough, so he and some like-minded friends — including Stuart MacDonald (another mesh stalwart), camp veteran David Crow and serial entrepreneur Austin Hill — are starting a Toronto version of Startup Camp, to help startups get together and share info about what to do (and hopefully what not to do). More details will likely become available on Rob’s blog.

Okay, someone explain this to me: Intel, a company that makes microprocessors, is backing and selling — but not profiting from — a suite of “Enterprise 2.0” software for companies that includes blogging software (Typepad), a wiki (Socialtext), and RSS feed software (Simplefeed and Newsgator), called Suite Two.

Is the microchip giant hoping that a little Web 2.0 pixie dust will get sprinkled on it, just like Level 3 seems to be? It’s obviously not in it to make any money, since it has already stated that it doesn’t intend to make any from the venture. So it must be hoping that companies will need to upgrade their machines to dual-core monsters to run all that Enterprise 2.0 gee-whizzery, right? Please.

The whole point of these kinds of software is that they are lighter and more versatile — and cheaper — than traditional ways of doing business with employees and customers. So why would Intel want to bundle them up and charge an arm and a leg for them? More to the point, why would anyone go for that deal?

The implication is that big companies are so slow-moving and dim-witted that they need the Intel name to get them comfortable with anything new, and are willing to pay through the nose for it. Unfortunately, that’s probably not far from the truth in a lot of cases. And meanwhile, Intel the plumber gets to look all cool by hanging with the hip Web 2.0 crowd.

Update:

Josh Bancroft, who works at Intel, has a great overview on his blog Tiny Screenfuls.

Steve Rubel over at Micropersuasion has a brief interview he did with Megaphone Mark Cuban, billionaire media mogul and owner of the Dallas Mavericks, in which the two talked about things like the “Long Tail” of the Web (and Mark’s own coinage — the “vert ramp” — and how it affects new media. As is his wont, Mark shot from the hip about what the future holds and where advertisers should be putting their money, saying:

I think most blogs, vlogs , podcasts, broadband TV shows that sneak out of the Long Tail, my blog included, will have a tough time staying out and earning more than minimum wage for their efforts.

He also said that advertisers will inevitably “work with aggregators,” and that therefore “those who host the Long Tailers will get paid, those who create for the Long Tail rarely will.” Kind of a bleak view, but hey — Mark has a billion or two and you don’t. The big risk, he says, is the “inevitable saturation of ad inventory” in new media and the Web.

Steve and Mark went on to talk about high-definition, which Cuban — being the founder and CEO of HDNet.com — not surprisingly sees as the future. He also asks whether anyone thinks that “all those LCDs hanging on walls will be connected to computers anytime soon or show Internet video? They won’t.”

I think he’s probably wrong, especially with Google Video looking at putting YouTube content on mobiles and elsewhere — and with Xbox offering gamers the ability to download video to their TVs — but maybe that’s just me. Could Mark be one of the broadcast types my friend Stuart talks about here?

In other words, the Long Tail is largely crap; those who create it will starve; advertisers should pay attention to HD; and anyone who thinks TVs will show Internet video anytime soon is an idiot. Classic Cuban.

If you’ve never come across Startup Review before, it’s a blog written by Nisan Gabbay, who until recently was an analyst with the venture capital group Sierra Ventures. Instead of short posts or gossip about startups, he does an in-depth case study of a company such as Craigslist every week or two, based on interviews and research. Since many of these companies are pretty well known, there aren’t that many earth-shattering insights, but they are very useful nonetheless.

His latest is on Facebook, which is reportedly looking at acquisition offers from Yahoo and others in the $1-billion range, and has already reportedly turned down an offer in the $750-million range. Nisan gives us a good overview of how Facebook capitalized on a pre-existing, real-world community in order to grow quickly:

Facebook created a high utility online service for enabling pre-existing social behaviors within an offline community. This makes for an interesting lesson learned: it’s easier to piggyback off a pre-existing community with offline behaviors that drive online service usage.

He also notes that Facebook created the conditions for such an online community to grow in a relatively sheltered and secure environment, since the site was restricted to college students and others with a .edu address. The company has since lifted that restriction, which has drawn some criticism from those who thought it should have stuck to its original plan, but has also increased the popularity of the site.

If anyone is going to be around the York University’s Schulich School of Business on Wednesday night, and wants to hear a rousing debate (hopefully) on the future of media and the Web, it just so happens that I’m part of a panel discussion on that very topic.

The panel has been organized by my friend and former Globe colleague Richard Bloom, who is finishing up his MBA at Schulich with a focus on arts and media managment. The donnybrook discussion starts at 5:30 and runs until 7:00 and my co-panelists are former National Post writer Mark Evans (now vice-president of operations with b5media) and Tomer Strolight, who runs Torstar Digital.

So CBS wants to find and buy the next YouTube before it gets big. Gee, I wonder why no one else has thought of that? Way to go, CBS. And so they’ve hired a guy who at the age of 35 is described as a “veteran” of the industry, and of the takeover game. Why — because he helped advise Viacom to buy Neopets? Wow. That’s rocket surgery for sure.

What Quincy Smith seems to have picked up during his time on The Street is the ability to say a whole bunch of really great sounding phrases that actually mean diddly-squat. Here’s a great one that PaidContent highlighted:

The important thing is that we get confidence internally on a set interactive strategy that will immediately change and be organic as we grow. From there we can think about how we can execute on this as a team.

Did you get that? In other words, it’s important to get confident — internally, of course, as opposed to externally — and to set a strategy. Wouldn’t it be better to get confident after deciding on a strategy? Never mind. Because that strategy is going to “immediately change” anyway. And, it’s going to be organic, which as we all know is the best kind of strategy to have.

And then, of course, after getting confident and having the strategy (the organic one that immediately changes) then it’s time to think about how to execute. Not actually execute — which is a fancy word Wall Street types use when they really mean “do” — but just think about it for awhile.

In other words *we don’t have a clue what we’re doing.” Or phrased differently: “I’d better come up with something good, or it’s back to hedge-fund land.”

As with any self-respecting blogger, I hate to say anything positive about Microsoft because they are synonymous with evil (just kidding!), but I must admit that the latest update to Virtual Earth — or whatever we’re supposed to be calling it nowadays, which is probably Windows Live Web Search Satellite Virtual 3-D Planet — is pretty damn cool.

I read about it over at Search Engine Watch and had to download it and check it out, based on the pics that Danny Sullivan put up, with full 3-D rendering — in better than Half-Life 2 detail — of downtown San Francisco and a bunch of other major cities. Microsoft even tipped its Stetson towards the Great White North by putting up a few buildings in Calgary and Vancouver, although apart from three or four major office towers, everything else is 2-D.

Best of all, cyberspace wouldn’t be cyberspace without advertising, right? So there are virtual billboards hovering here and there over office buildings and stadiums and whatnot, large enough that if they were in real life they would block out the sun. Is anyone going to want to advertise inside Virtual Earth? I would bet they are falling over themselves to do so. What if you’re checking out the city you’re moving to? There’s an ad for a real estate broker.

All we need now are those floating billboards with video commercials on them from Blade Runner (video is coming soon, Microsoft says). Oh, and maybe an add-on pack that would let you race cars (but not like this stupid thing Microsoft tried to pull) or hunt virtual bad guys down the streets of your favourite city. I can see it now: Grand Theft Auto — Vancouver.

(cross-posted from my media blog)

CNet has reported that Topix, the local-media network controlled by some of the major U.S. newspaper chains, has raised another $15-million in financing. According to the story, Gannett and Tribune each own 33.7 per cent, and McClatchy (which was bought by Knight Ridder last year) owns 11.9 per cent. Together, the newspaper companies own about 80 per cent of the company.

Topix says that it will use the money to add more staff and put some more cash into marketing, something that it definitely needs to do. Although it has climbed in the rankings, it really needs to get its name more known as the source for local news — and promote some of its unique tools, such as the ability to comment on stories, links to blogs that are mixed in with the news feeds and a great search engine.

Unfortunately, the site is going up against Google News and Yahoo News on the one hand and sites like Digg on the other, and even its new funding might not be enough to turn the tide. As PaidContent points out, the site hasn’t exactly been able to integrate its tools and content with its newspaper owners so far, at least not in any meaningful way, and time is quickly running out.

I’m just throwing this out there — not because I know anything (because I don’t), and not because I have any ulterior motives (I don’t even have any posterior motives), but just because it occurred to me, and the more I thought about it the more it seemed to make sense. I guess I’m posting it here because I want to see if anyone agrees with me. Even if you don’t, feel free to let me know.

I think Mike Arrington should merge his burgeoning global TechCrunch empire with Om Malik’s growing gigaom.com network. Why? Well, the benefits would be obvious, I think — more sites and more readers equals a bigger player when it comes to advertising space, and that’s the name of the game when you’re trying to build what amounts to an online magazine business.

I guess what got me started thinking about it was when I noticed that Mike’s blogs, including TechCrunch and MobileCrunch, linked to Om’s blog when he had a post about something, and Om has done the same thing with Mike — which makes sense, since they cover things that overlap a lot of the time, and they also know each other and are friends. Mike has even given a boost to Om’s Widgets Live conference.

And then I got thinking about how little overlap there really is between the two: Mike does Web 2.0 services and gadgets and that kind of thing, while Om concentrates on telecom and broadband stuff and some mobile coverage. Why not join forces and have something that covers all of those things better than anyone? Then Mike could get closer to his recently-stated wish of having more page views that CNet.

In newspaper boardrooms across the United States, the news that Google wants to get into the print advertising business is probably causing a mix of emotions — a combination of those old favourites, fear and greed. Fear because newspapers are afraid that Google might somehow make it even less profitable to run a paper than it already is, and greed because Google is so ridiculously successful that it’s natural to wonder whether some of that might spill over.

Forgotten by many in their excitement to board the Google party train, however (typical newspaper guy: “Does this mean we all get Segways and free candy?”) is the fact that the search behemoth has already tried this particular strategy once, and more or less… well, failed. Google ran a trial project involving a couple of dozen high-profile magazines, and before too long it became obvious that it just wasn’t working. Google said it was just an experiment, and that it learned a lot.

Why didn’t it work? Mike Masnick at Techdirt had a few clues: For one thing, Google doesn’t really bring any kind of competitive edge to the print advertising game the way it does to Internet search-related advertising, where its giant algorithm machine spins a web that drags Internet surfers in like flies and practically forces them to click on ads whether they want to or not. In magazines (and newspapers), there’s no algorithm-powered search, and no search-related ads.

If nothing else, meanwhile, Google’s desire to move into newspaper ads — which it apparently thinks are a better fit than magazines — is yet another signal of its unquenchable thirst for ad inventory of any kind, so that it can keep growing at those triple-digit rates the stock market is so enamoured with. And let’s face it: the newspaper business needs all the help it can get. Although Scott Karp of Publishing 2.0 points out that one of the unintended consequences of the Google experiment could be that it only reinforces how disconnected and hard to measure print advertising really is.

To me, one of the most important developments of the past few years from a Web 2.0 perspective was RSS, the “really simple syndication” format that allowed any blogger and in fact any website period to become their own newswire, just like Associated Press or Canada News Wire. Sure, it’s plumbing, but it’s important plumbing. Which is why it’s important that we decide what people are allowed to do with RSS feeds and what they’re not.

For example, taking all of someone’s feed and putting it on a website and then selling ads around it is clearly wrong, it seems to me. This is called “scraping,” and it is flat-out stealing. Then there’s taking someone’s full feed and putting it on a site but not selling ads around it, and pointing people to the originating blog, which is kind of what Top Ten Sources got in trouble for awhile back (more on that here). That’s in kind of a grey area.

Then there’s what Robert Scoble is doing, which is using the “share” feature in Google’s Reader (which I also use) to highlight certain items in the feeds that he reads. Google gives you what amounts to an instant blog, or at least a distinct URL, where all your shared items show up (mine is here) and they are the full items from anyone who has a full-text feed.

That got someone named Andy Beard — whose website says he is involved in keyword research and affiliate marketing — kind of upset, because he said RSS is meant to be private and therefore Scoble was helping to ruin RSS. This makes no sense whatsover, of course, since RSS is by its nature a syndication mechanism. But in the comments on Scoble’s post, it became clear that others, including Duncan Riley of b5 media, think what he is doing is stealing.

To Scoble, however (and to me as well), it seems more like helping — since a link to a post in Scoble’s shared items is almost certain to drive people to the blog in question. Is that not a good thing? And there are no ads in the reader blog, so he can’t be accused of making money from it. And it isn’t a full feed, although it is full-text posts.

As Techdirt has written before, this seems like someone complaining because someone else made their content more valuable (be sure to check the back and forth between Mike Masnick of Techdirt and Jason Calacanis of Netscape in the comments on the Techdirt post). And Fred Von Lohmann of the EFF and others have pointed out that publishing an RSS feed implies a license to reuse that content.