TechCrunch’s report on AOL’s “sunsetting” of Xdrive, AOL Pictures, MyMobile and Bluestring spread like wildfire yesterday, at a time when the future of its ownership hangs in the balance.

Are these latest actions in anticipation of an AOL sale? Actually AOL’s been trimming for some time. Who hasn’t, given the state of the economy. You just haven’t noticed.

About 50 products including a video download service, a 10-foot UI experience (Internet in the living room), AIM phone line, and Tegic, have been “sunset”, we’re told.

Here’s AOL EVP Kevin Conroy’s memo to employees, dated July 14, from TechCrunch, which we also independently verified:

There was a time at AOL when the strengths of our aggregate portfolio of products more than compensated for the weakness of an underperforming product. The realities of the industry and market shifts in online advertising no longer make that possible. Simply put, every product makes a direct impact on our bottom line. With two quarters behind us, it is fair to say that results across the AOL products team have been mixed.

Personal Media: Bluestring, Xdrive and AOL Pictures will be sunset. These consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation.

We’ve always wondered whether AOL had too many irons in the fire. Yesterday’s TechCrunch scoop is just the latest in a long string of trimming actions that are not only considered rational given the state of the economy, but also in line with others considering the industry-wide belt-tightening. Even Google has dialed back spending like “drunken sailors” to borrow Bernstein’s Jeff Lindsay’s words.

Arrington further speculates on Conroy’s future. We’re hearing from sources that Kevin’s not leaving any time soon. Rumors of his departure have dogged Conroy for years. Still not true. Conroy, who has been responsible for e-mail, software products, radio, video, Apple-related products and mobile, will continue to do so. Nothing changes.

The memo follows on the heels of TechCrunch’s reporting earlier yesterday about budget cuts at AOL’s blogs division, with some bloggers being told to stop working for a couple of weeks. Before you hyperventilate — Engadget won’t be affected.

Also, an AOL source tells us that the budget trimming does not reflect a cut back in blogs, but mainly affected its stable of freelancers and was designed to meet budgets that shot past projections.

From the memo to blog staffers:

The most important point I want to make is that the Weblogs budget is
NOT being cut. Rather, our situation is one in which, over the past
several months, our post rates and costs have increased significantly
faster than expected. As such, we are now in a position of
significantly exceeding our 2008 budget unless we take measures to
slow down our posting costs until we can get back into line with our
budget.

It’s really that simple, and there is absolutely nothing grave about
the situation. In fact, the Weblogs budget has increased
significantly in each of the past two years, and we expect it to
increase again in 2009. Why? — because our business is thriving both
in terms of Revenue and traffic, which bodes very well for our future.

It seems Time Warner’s ongoing discussions with Yahoo and separately with Microsoft over an AOL deal has now amplified every move the Internet unit makes.

Keep an eye on:

• DVDs getting more, not less, retail floor space. (Pali Research) (subscription required)
• Fox reaches deal to invest in digital cinema. (Reuters)
• Once media-shy Taliban go hi-tech in propaganda war. (Reuters)

(Photo: Reuters / AOL CEO Randy Falco)

Microsoft’s president of platforms and services Kevin Johnson, who spearheaded the company’s pursuit of Yahoo, plans to bolt for the top job at nearby Juniper in a move that deals a setback to the software giant’s online chase after Google.

AllThingsD’s Kara Swisher comes up with a shortlist of candidates from her sources that include a roster of insiders, led by aQuantive’s Brian McAndrews, with SVP Satya Nadella, who will run search, MSN and ad platform engineering efforts in a new reorg, and Strategic Partnerships SVP Yusuf Mehdi, who has previously led online businesses at Microsoft, considered long shots.

Heading the list of external candidates is former AOL Chief Jon Miller, who also happens to be a candidate for Yahoo’s board after activist investor Carl Icahn settled with Yahoo this week.

For a guy who was unceremoniously ejected out of Time Warner, Miller, now a partner at tech investment firm Velocity Interactive Group, is emerging as the prettiest girl at the dance.

(AllThingsD)

Keep an eye on:

• NBC, Fox sue video-sharing service Redlasso for copyright infringement. (Reuters)
• Google launches Knol, a wiki with bylines. (Reuters)
• Barack Obama losing his YouTube mojo? (Silicon Alley Insider)

(Photo: Reuters)

Clicks-and-mortar, PC-to-TV, T-Commerce. These are technology industry ideas that are resuscitated every couple of years only to fade into obsolescence.

In the case of the latter, T-Commerce, or Television Commerce,  the ability to click a remote and buy something that has appeared on television has seen its fair share of restarts over the last two to three decades. Big players from Time Warner to Barry Diller have tried it and failed. Forrester’s Josh Bernoff once called the concept buying “Jennifer Aniston’s sweater.”

Now digital video recorder technology maker TiVo and online retailer Amazon.com are the latest to give it a go. The idea is the same — Watch, Click, Buy. The experience might even be easier this time around. For starters, consumers are starting to get comfortable with the idea of interacting with on-screen cues, like clicking on ads on TiVo to watch, say, a longer BMW commercial. Consumers are also pretty comfortable with shopping on Amazon these days.

Making all this work this time around could be the conversations advertisers have with program producers. Branded entertainment or product placement — Ford sponsoring NBC’s “Knight Rider”, for example – is commonplace these days. It’s not hard to see how collaboration among TiVo, advertisers and programmers could make this work.

Enabling screen overlays during a program to hawk what’s on the show would require nothing more than a deeper conversation between advertisers, programmers and networks, TiVo’s director of broadband services Evan Young tells us. These conversations are going on, he says. 

The only catch? TiVo’s only got about 4 million subscribers and the company tell the New York Times its growth is no longer really in that business anymore. Problem is that’s where most of their revenue is generated.

(New York Times)

Keep an eye on:

• Apple summer outlook light, plugs upcoming new product launches. (Reuters)
• New York AG may sue Comcast over Net child porn. (Reuters)
• YouTube divorcee crushed in court. (Gawker)
• XM narrows losses, still awaiting FCC decision on merger. (Reuters)
• Time Warner Cable, Verizon duel to the death in New York. (WSJ)

(Photo: Reuters)

Not hugely surprising, but CBS commissioned a study showing that watching full-length shows online won’t destroy television viewership, and it will attract a younger audience.

The study of 50,000 people, commissioned by the network and conducted by Magid Media Labs, polled viewers who have watched full episodes of CBS shows across the company’s partners in the CBS Audience Network.

The findings:

• Median age of online viewers: 38
• 35 percent of online watchers say they are now more likely to watch CBS on TV after finding shows online.
• About 46 percent say they only or mostly watch online.
• Half of respondents recalled the brand of an ad they saw during the online show.
• About 18 percent of those who remembered an ad that they saw during the online show said it played a role in their choosing to buy something. That number rose to 31 percent for consumer packaged goods.

In other words, TV networks have nothing to lose. The cable networks, which rely on affiliate fees from cable operators, on the other hand …

(Photo: Reuters)

Is Yahoo letting the fox in the hen house or did activist investor Carl Icahn settle after eyeing weakness in his campaign?

Whatever the case, Yahoo’s settlement with Icahn, who had planned to run a rival board slate but now gets three board seats including himself and possibly former AOL Chief Jon Miller, averts what was expected to be a bloody battle on Aug. 1.

Miller, who was pushed out of the Time Warner division, was responsible for turning the subscriber-losing AOL into an Internet company after dismantling its walled garden.

Left unanswered: What will Microsoft say later today? Did Icahn get assurances from the software giant that it would be willing to negotiate any deal with Yahoo in the new board configuration?

(Reuters )

Keep an eye on:

• Macrumors.com founder Dr. Arnold Kim quits medical practice to blog full time. (NYTimes)
• Facebook to get redesign to give users more control. (Reuters)
• Batman smashes Spider-Man’s weekend box office record. (Reuters)

We can spend a lot of time analyzing how Yahoo really feels about Carl Icahn and his rival slate. But this, found at the top of Yahoo’s latest proxy filing and its homepage, says it all.

(Photo: Yahoo)

A growing list of non-starters to connect PCs-to-TVs in recent years hasn’t stopped more from trying. Amazon and TiVo are making another run at the idea.

Amazon hopes rejiggering its digital movies download service to add a streaming feature for some 40,000 movies will be the trick to lure viewers, the New York Times reports. Lucky owners of Sony’s Bravia line of TVs will also now be able to access the Amazon’s Video On Demand service directly from their TV without linking up to computers.

Separately, TiVo — which has a separate deal with Amazon to let customers view films and shows downloaded from Amazon’s Unbox store directly on TVs — landed a deal to get YouTube videos on the boobtube.

Add to that list recent developments including Netflix’s launch of a small set-top box that lets its subscribers stream a limited selection of films over the Internet directly to TVs and a deal announced this week to do the same over Microsoft’s Xbox 360 game console.

Seems this is a concept that may yet have legs (or may be the equivalent of a tech/media industry zombie).

Keep an eye on:

• MySpace China aims to double headcount after 1 year and target urban professionals. (Reuters)
• There’s little interest in buying AOL, but that hasn’t stopped Time Warner from shopping it. (NYTimes)
• Former AOL’ers launch documentary film site SnagFilms. (Reuters)

(Photo: Amazon CEO Jeff Bezos, Reuters)

Time Warner’s talks with Yahoo and separately with Microsoft have taken on renewed urgency as a pivotal Yahoo annual shareholders meeting approaches, a source tells us.

But are the discussions earnest or is AOL being used as a pawn in an increasingly ugly battle that will ultimately lead to a linkup of Microsoft and Yahoo? It’s hard to tell at this point as a steady stream news, punctuated by public accusations of “misleading” statements come from Microsoft, Yahoo and billionaire investor Carl Icahn, make handicapping the outcome difficult.

Icahn, who holds a 5 percent stake in Yahoo, has waged a proxy battle to remove Yahoo’s board and has aligned himself with Microsoft to seal a deal.

Some on Wall Street, including Bernstein Research’s Jeff Lindsay have sung the praises of AOL’s stock and cash deal for Yahoo, which in April was believed to be worth as much as $37.01 per share. But when asked, most industry and financial analysts hold firm a belief that Yahoo is still Microsoft’s to lose.

Ignoring signals that there will be no deals with AOL before Yahoo’s Aug. 1 shareholders meeting, Time Warner appears intent on pressing its case with the potential suitors perhaps eyeing an opportunity — especially after this past weekend’s fallout between Microsoft/Carl Icahn and Yahoo.

Keep an eye on:

• Rival New York Newspapers the Daily News and New York Post are considering some type of collaboration, in an effort to cut millions in annual costs. (New York Times)
• Paramount Pictures abandoned efforts to secure about $400 million in film financing through Deutsche Bank. (Reuters)
• Every song from Metallica’s upcoming album “Death Magnetic” will be available for gamers to download and play on “Guitar Hero III” and its sequel “Guitar Hero World Tour” on its release day. (Billboard)
• Wall Street Journal to raise price to $2. (Reuters)

(Photo: Reuters)

Google and Viacom reached a late night accord on safeguarding the anonymity of Google YouTube viewers. Google will no longer have to hand over the user names and IP addresses of its viewers.

But what of the scuffle around the viewership data of Google and YouTube’s own employees? CNET’s Greg Sandoval reported last week the negotiations stalled on Google’s unwillingness to turn over information on its own employees, citing unnamed sources.

In other words, how would Viacom’s $1 billion copyright infringement suit against Google turn out if the data showed YouTube co-founder Chad Hurley viewing and uploading “Colbert Report” videos?

No word on this yet.

(Reuters)

Keep an eye on:

• Microsoft says the Xbox 360 will outsell Sony’s PS3 over the lifetime of the consoles. (Reuters)
• Provigil: the drug of choice for Silicon Valley entrepreneurs. (TechCrunch)
• Carl Icahn to Yahoo’s Jerry Yang: “‘I like you, but I have to get rid of you.” (NYTimes)
• AOL launches personal finance site Walletpop. (Reuters)
• Netflix subscribers can soon watch streamed movies over the Xbox 360. (Reuters)

(Photo: Reuters / Andrew Winning / Protesters take part in an Amnesty International demonstration in Belfast (2008))

James Murdoch, heir apparent to the News Corp empire, leapfrogged dad Rupert on the annual Guardian list of top 100 most powerful people in media.

James — who oversees the media empire’s Europe and Asia assets including British newspapers The Sun, Times, Sunday Times and News of the World – first suprised detractors by turning around BSkyB.

What we didn’t know was he’s also a black belt in karate. What we do know is he, like Rupert, rarely flinches from a fight. Ask the BBC, or Virgin Media. Like another mogul, Microsoft founder Bill Gates, he also dropped out of Harvard.

In this year’s Guardian list, James makes it to no. 2 behind Google co-founders Sergey Brin and Larry Page, and ahead of his dad at No. 5.
(Photo: Reuters)