MediaFile

The secret is out: What Microsoft wants is Yahoo’s search business. Reuters has reported that the deal now under discussion would have…

1). Microsoft buy the search operation.

2). Yahoo sell off its Asian assets.

3). Microsoft buy a chunk of what remains of Yahoo.

Microsoft and Yahoo representatives declined to comment on the Reuters report. But clearly these talks are all about search.

And that really shouldn’t come as a surprise. After all, search is crushing all other types of advertising in terms of growth and Google is threatening to run away with market share, leaving Microsoft and all others in the dust.

At the moment, Yahoo is a distant second to Google in search in the United States, and Microsoft is third. Together they would have around 30 percent U.S. share, which still leaves them behind Google, but at least keeps them somewhat in the game.

However, to keep things sufficiently complicated, Yahoo and Google are still talking about a possible search advertising deal, creating what columnist Therese Poletti calls a “bizarre triangle.”

Tired of all those commercials? Don’t have a DVR? Fox reckons it has something for you. Forget the name (they’re calling it Remote Free TV) and concentrate on the concept: a big tentpole drama with half the normal commercials and promotional time.

Fox will first try out this idea with “Fringe,” an FBI, mystery, science-fiction, thriller, supernatural drama from J.J. Abrams that’s rolling out this fall.  Come midseason, it will do the commercial shrinking thing with ”Dollhouse” from Joss Whedon, who was behind teen supernatural hit “Buffy the Vampire Slayer.”

Fox Entertainment Chairman Peter Liguori — after calling his network scrappy and populist — told advertisers at the upfront that he refused to let things get boring. “We’re the number one network. We’re the rebel innovators.”

The economy might be in trouble but advertisers and publishers at the Online Publisher Association’s Forum for the Future were still upbeat today about the prospects for online advertising.

“The first thing people need to do is to decaffeinate some of those expectations (about the economic outlook),” Rapt CEO Tom Chavez said during a State of Advertising panel discussion at the OPA’s meeting in London.

As more people move online, the market will grow despite economic doldrums. Carline Little, CEO of Washingtonpost.Newsweek Interactive conceded a “recession is going to hit any advertising-supported media but as people move online, we’ll see increases – but not as big as we saw four or five years ago. ”

Much has been made about ABC, Fox, NBC and CBS taking a low-key approach to their upfront presentations this year. Still, ABC brought out Jimmy Kimmel for a few jokes in a reminder of what these events were like in past years.

Here are a few of Kimmel’s better lines for advertisers:

- This year, as you’ve noticed, we scaled back a lot. There’s no party, no food. ABC may be the worst date ever. We expect you to put out and we’re not even buying you a drink.

- We’ve decided to concentrate less on the afterparty and more on shows that aren’t ‘Cavemen.’

Why have prime-time network TV advertising prices been so strong in the scatter market — up in the double digits — after a rather lackluster upfront in 2007?

ABC’s head of sales, Mike Shaw, offered a few answers for the discrepancy between the shorter term scatter market and the longer term upfronts.  But he said a lot of it can be blamed on networks selling advertising too cheaply in last year’s upfront.

Shaw said he’d rather see a far smaller gap in prices between the two markets. “I’d like to see less of a swing in the pendulum between the upfront market and the scatter,” he told reporters after ABC unveiled a very modest 2008-09 schedule.

Instead of a big, crazy upfront presentation at Radio City, NBC Universal this year invited advertisers and media to its Experience at 30 Rockefeller Center. Here’s a guided tour:

First off, you’re greeted by a TV screen featuring clips from NBC stars like Tina Fey and Brian Williams, who make some jokes and ham it up and basically tell you to move along, which you were really going to do anyway since you’re just standing there in the hallway.

There really isn’t a lot to see in the first few rooms (promotional videos, etc) except that walking around are a bunch of people dressed in all black with, if you can picture it, video screens on their chests.

As the Microsoft-Yahoo will-they-won’t-they? saga drags on, Google’s role in any future talks becomes more apparent.

On Thursday Google CEO Eric Schmidt said a two-week trial selling search advertisements on rival Yahoo last month had given the companies good reason to discuss cooperation, but there was no deal yet.

That isn’t great news for some in the online advertising world.  As commentators have pointed out, a Google-Yahoo partnership (Yahoogle? Yoogle? Gahoo?) could concentrate too much power with just one team. This has led to some folk to paint Microsoft as the little guy. Yes, the same Microsoft, which is a Monopoly 101 case study for first-year economics college students.

Youtube video we wish existed: Sumner Redstone rocking out on “Rock Band” to the Beastie Boys’ “Sabotage” or Bon Jovi’s “Wanted Dead or Alive.”

In the meantime we can assume that Viacom’s octogenarian executive chairman is rockin’ today after the media conglomerate said its first quarter profit rose 33 percent on strong sales of the “Rock Band” video game and higher advertising revenue at MTV Networks. Revenue rose 15 percent to $3.1 billion, beating analysts’ estimate of $3 billion.

It gets even better in the Viacom executive suite, at least for today — its film “Iron Man” kicks off the summer blockbuster season to positive reviews, including that of tough Wall Street Journal reviewer Joe Morgenstern who said it had “exhilarating” action and “scintillating” comedy.

Quarter after quarter, analysts and the financial press keep pressing advertising executives about the economy and spending. For good reason, too, since corporations often take scissors to advertising budgets during downturns.

Thing is, the chief executives of the big ad holding companies so far have given very much the same answer during conference calls and interviews: everyone is worried, nobody is cutting spending.

Interpublic CEO Michael Roth is no exception. Here’s what he said on Wednesday about the economy/spending issue during his company’s earnings call:

Hold on to your hats, it’s time for the upfronts!

Or maybe it’s “hold your horses” instead. We forgot for a moment that this year the annual advertising bonanza is supposed to be a bit more subdued.

Still, CBS chief executive Les Moonves sounded fairly pumped up about the presentation on May 14, telling analysts that he felt “truly excited about this year’s show because it clearly showcases the way we are refining our media assets and updating our programming to match the needs of today’s market.”

Advertising prices, he said during CBS’s earnings conference call, have been up in the double digits in the scatter market, leading him to forecast a “healthy upfront selling season.”