MySpace, the online social network (can we still call it that now that it has ducked out of the Facebook/Twitter competition?), appears to be pursuing what I’ll call the “two-pronged news strategy.” You get used to it when you cover media and technology. For those of you who don’t enjoy this privilege, it goes like this:

• Pick a news outlet that you like and whisper things to them about what you’re doing. It doesn’t have to be interesting, it just has to be exclusive. If you’re in public relations, you don’t even have to know that someone in your company is doing this. It works well for you.
• Let the rest of the press read the story and bombard your telephone and e-mail with messages demanding to know if it’s true. Score a big hit on the news cycle. Because you either decline to comment or only want to talk “on background,” it heightens the air of mystery — and newsworthiness.
• The official announcement of the news, which will always resemble 90 percent or more of what you read in the first round of anonymously sourced stories, will get just as much attention as that first round. It’s a 2-for-1 deal that is irresistible to many companies.

I don’t know that MySpace is doing this, and wouldn’t be able to confirm it if I asked. It could just be that the reporters who get the breaking news have great sources and the reporter asked smart questions that would yield good answers. I’ll let you judge.

The first example comes from Kara Swisher, tech blogger at AllThingsD, which is MySpace’s cousin in the News Corp family. She reports:

Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to help power music offerings on the giant portal. …

Sources said Microsoft execs don’t think they can do as good a job as MySpace is doing and don’t see the point in striking needed but complex deals with music labels, which the News Corp. (NWS) property already has.

MySpace, Swisher adds, would get a “gusher” of traffic. I asked MySpace whether we could talk about this. From spokeswoman: “Off the record I can’t comment.” OK.

The second example is this story in The Telegraph from Monday:

Facebook and MySpace are in talks about sharing content across both sites, according to senior figures at the two companies. The move could potentially see MySpace music and video footage being shared on Facebook via its Connect platform, which allows people to log into third party sites using their Facebook ID.

Sheryl Sandberg, Facebook’s chief operating officer, told The Telegraph: “Facebook is focussing on building the best technology which helps people share content, while at MySpace they are focussing on more a content-led strategy. We would like to have their content, as we already do with many other sites, shared across our network because it is good for our users.

On this one, MySpace CEO and former Facebook executive Owen Van Natta confirmed the talks on the record. But I’m in the position of only being able to refer you to that article.

On the record, MySpace wouldn’t comment. I suspect that the comments will come later when we rewrite the Telegraph’s story along with the rest of the press corps.

MySpace is looking to buy Web music service iLike for around $20 million according to several blogs. iLike co-founder Hadi Partovi declined to comment when we asked him and MySpace’s PR team also declined to share details.

All Things Digital has the latest details of the deal which they say is around $13.5 million in cash, with a $6 million earn out for the founders which include Hadi’s twin brother Ali who is CEO. Official confirmation of an agreement is being held up by “thorny tax issues” according to All Things Digital’s sources.

The news makes some sense because as MySpace is fast losing ground to Facebook in the social networking arena. MySpace’s owner, News Corp, has indicated that it sees the site becoming more of an entertainment portal.

In fact according to our sources MySpace Music, the joint venture between MySpace and the major music companies, is one of the few parts of MySpace that’s doing well — at least in terms of popularity and usage.

iLike, which was once the darling of the the digital music start-up world, has ended up struggling like many others, as the industry tries to find a new profitable model for the distribution of recorded music over the Web. iLike has one huge advantage — it is default music application/platform on Facebook. It also has corporate backing from Ticketmaster.

But rather like its host Facebook, iLike’s popularity has yet to translate into meaningful dollars leading to what some of the blogs are terming a ‘fire sale’ of its assets.

AllThingsD also had details of other potential bidders which the blog said included Activision and Microsoft.

(Photo: News Corp CEO Rupert Murdoch and MySpace founder Chris DeWolfe in 2007/Reuters)

Tech bloggers love to write about Apple, for better or for worse. The secretive nature of the company means a lot of those blogs are speculative and light on sources, yet  we still all love to read them because the house that Steve built is indeed both a fascinating and hugely successful company.

The latest round of speculation is around Apple’s planned September keynote event which sources have told AllThingsDigital is due to take place on Wednesday,  Sept 9 in San Francisco. There has been a huge amount of speculation around whether Apple will unveil a new tablet device but sources tell the blogs there will be “no discussion whatsoever” of the such a device.

AllThingsDigital’s John Paczkowski isn’t giving up though saying: “Too bad. It’s looking more and more like we’ll have to wait until 2010 for that.”

It’s now expected that Apple will debut a new social version of its iTunes media player and unveil new versions of its iPod.

The other big question is whether Steve Jobs will make his first appearance since returning to work after his liver transplant.

Keep an eye on:

• News Corp’s Star TV overhauls Asia unit to focus on India (Reuters)
• Dreamworks closes deal with Indian investors Reliance (NYTimes)
• Apple investigating reports of exploding iPhones-EU (Reuters)

(Photo: Reuters)

It’s taken a while but YouTube is officially pushing back at the various estimates on how much money it costs parent Google by satisfying our collective hunger for million of video clips every day. Google paid $1.65 billion for YouTube in 2006, when it bought the site from Chad Hurley and former CTO Steve Chen (pictured).

Various YouTube executives we’ve spoken to privately over the last year have bristled at the idea that they are an expensive experiment for Google without a clear profit-making business model. Google CEO Eric Schmidt took the first step in a change of communications strategy in an group interview with reporters at the Sun Valley conference two weeks ago, and to more listeners on the Google earnings call on Thursday. His central point was that everyone’s favorite video site is on the path to profitability.

On Monday, two of YouTube’s PR executives hit back at some of the myths about YouTube’s business with a blog titled “YouTube myth busting.” These include claims that it only features short-form, grainy user-generated content when in fact it has deals with Hollywood partners and features HD content. They also said more than 70 percent of AdAge Top 100 marketers ran campaigns on YouTube in 2008.

But two disputed myths that raised the hackles of the tech blogosphere were related to 1) estimates of YouTube’s cost structure and 2) the “oft-cited” stat that YouTube only monetizes 3-5 percent of the site, which the PR execs said was “old and wrong.” The bloggers wanted some numbers and they didn’t get any from this YouTube’s blog

Here’s Henry Blodget of Business Insider:

Enough already. We’re glad that YouTube has not turned out to be a disaster. (We weren’t among those who thought it would be). But we can’t stand this attitude. If Google is tired of people “picking any number to fit any theory,” then they should just publish the facts.

Peter Kafka of AllThings Digital calls it ‘modest boasting‘:

So really, the big takeaway here is that the Google folks are feeling ever more confident about YouTube’s prospects, enough to do some public chest-beating. But not enough to actually talk about those prospects in concrete terms. YouTube says that estimates that the site can sell ads against only three percent to five percent of its video inventory, first asserted in a well-reported Wall Street Journal piece a year ago, are “old and wrong.” But the company won’t say what percentage of the site it does sell.

Paid Content thinks it’s “myth-spinning” by YouTube and wasn’t convinced either:

The only interesting part comes here: “The truth is that all our infrastructure is built from scratch, which means models that use standard industry pricing are too high when it comes to bandwidth and similar costs. We are at a point where growth is definitely good for our bottom line, not bad.” Which gives credit to this analysis by RampRate last month, which said the costs of video delivery for YouTube are a lot lower than what analysts have previously estimated.

(Photo: Reuters)

We’ve had two months to ruminate, speculate and analyze about who will take over as Yahoo chief executive after co-founder Jerry Yang who decided 18 months in the hotseat was enough for him.

Carol Bartz, former chief executive of Autodesk, was appointed CEO on Tuesday after her name had been floated ”on sources” a few days earlier in various reports.

Yahoo shares were flat on Wednesday morning and most Wall Street analysts viewed the appointment as a positive as it clears the way for Yahoo to do some sort of merger/outsourcing deal with Microsoft.

Bartz, a director at Cisco, also got a glowing endorsement from Cisco chief John Chambers, according to the New York Times:

“She’s the best player in the draft,” said John Chambers, the chief executive of Cisco Systems, where Ms. Bartz has served as a board member since 1996. Mr. Chambers said Ms. Bartz often challenged him on strategic decisions, like mergers and acquisitions, to make sure they had been thought through well. And Ms. Bartz is not afraid to speak her mind, he said.

“You always know where she stands,” Mr. Chambers said. “You may not always like it.”

But more importantly what does the blogosphere think of Bartz?

From AllThings Digital:

Yahoo, “frankly, could use a little management.” Uttering those words Tuesday afternoon during a conference call to discuss her appointment as CEO of Yahoo (YHOO), Carol Bartz ushered in a new era at the company.

Known for occasionally opening Autodesk executive staff meetings with a “Tell me why I shouldn’t fire the whole lot of you,” she’s no milquetoast. She’s a cancer survivor. And she’s the person who rebuilt Autodesk, after putting down a rebellion of programmers bent on undermining her.

TechCrunch:

Bartz is a capable manager. She led Autodesk for 14 years between 1992 and 2006, keeping it from the PC software graveyard by focusing on CAD software for architects and builders. Autodesk, however, is an old-school software company. It is not exactly a great training ground for running an online advertising business attached to the most popular destinations on the Web. And as far as applications go, they are all Web apps and Yahoo gives them away for free. Bartz is most definitely an ally of founder and outgoing CEO Jerry Yang. They both sit on Cisco’s board. But it gets better. She also sits on Intel’s board with [outgoing] Yahoo president Susan Decker. In other words, she is has close ties with existing management. (Decker, though, wanted the CEO job as well).

Silicon Alley Insider:

The more we learn about Yahoo’s new CEO Carol Bartz, the more we like. Based on anecdotes we’ve heard from Valley execs and Autodesk investors, Carol’s own introduction on yesterday’s conference call, and stories in the press, she appears to have exactly the philosophy that Yahoo needs right now.

Carol’s biggest weakness is still a lack of experience in the consumer Internet business. But if she gives the job 100% of her attention, she’ll get up to speed fast.

Keep an eye on:

• EchoStar welcomes U.S. Patent Office decision to rexamine patent infringement claim involving TiVo’s software (Reuters).
• AT&T Wireless upsets some customers by sending mass text messages for American Idol, which it sponsors (New York Times)
• A task force created by 49 state attorneys general finds that the online threat to children is overblown (New York Times)

Have you ever watched pigeons almost take flight as someone approaches, but after a brief flapping of wings decide to sit tight? That was the sense we got from reading the stories that knocked down the latest rumor about who will buy Internet search company Yahoo.

Here’s the story, posted by Michael Arrington’s TechCrunch blog:

Interest in troubled Internet giant Yahoo has not waned, it just took a break for the holidays.

A group of well known Silicon Valley executives and top investment bankers are putting together a Yahoo takeover deal that would be financed largely from debt supplied by Microsoft, we’ve learned from sources with knowledge of the proposed transaction.

Under the terms of the proposed deal, the investment group would make a takeover bid for Yahoo at a relatively low premium of around 20% to its current price of around $13 per share, valuing the company at just over $20 billion.

Nuh-uh, says Kara Swisher of Dow Jones’s All Things D blog:

[When] you actually talk to sources at the wallet itself-that would be the money-laden Microsoft — they scoff at the notion that they would help others buy Yahoo (YHOO), in order to get at its search business.

“We can deal directly with Yahoo, which is moving through a process to get a new CEO, and when the time is right, we will deal with their leadership,” said a source close to Microsoft’s thinking. “Getting involved in some convoluted deal with others in control…it’s idiotic.”

Why pigeons? Usually, upon stimulus, all those birds will fly away at once. When a plausible story looks like it’s ready to break, reporters will start flying around in a bunch too. In this case, Bloomberg flew, but it looks like the rest of the flock held off:

Microsoft Corp. isn’t holding talks to finance a new bid for Yahoo! Inc., a person familiar with Microsoft’s plans said, responding to a blog report.

Now for more literary imagery: Swisher elsewhere in her blog entry on the TechCrunch story recalled how at The Washington Post (and at most other news outlets), this is what they call a trial balloon. Float the balloon, see how many people shoot at it, then decide on further action based on the public opinion. Since this balloon lasted mere minutes, expect to see more of them dotting the horizon soon; someone seems to be trying to figure out what to do with a reasonable amount of cash and a canister full of helium.

Keep an eye on

• The Boston Globe is a New York Times newspaper (for now). That means it does what the Times does. This week, that means running ads on its front page to bring in a few more ducats. (The Boston Globe)
• Disney’s ABC outsources some of its overseas news reporting to the BBC because that kind of coverage is expensive. The Hollywood Reporter tactfully calls this an expanded “news partnership.” (The Hollywood Reporter)
• Disney likes boys. (The Wall Street Journal)

(Photo: Reuters)

Walt Mossberg, the world’s most powerful technology product reviewer, opened the final session of the D: All Things Digital conference with an angry tirade against the s-s-s-low state of broadband in the United States.

“WE ARE VERY SLOW,” Mossberg complained of U.S. Internet access speeds.

The target of 61-year-old Uncle Walt’s wrath was Kevin Martin, 42, the boyish-looking chairman of the Federal Communications Commission, who was punished on-stage before an audience of high-tech industry insiders.

Mossberg: “You are the head of the FCC. How have you allowed this to happen? I AM DEAD SERIOUS. HOW HAVE YOU ALLOWED THIS TO HAPPEN?

Martin: “I am not sure I am solely responsible. I am also not sure the charts capture the whole story. I think you do have to put in the context some of the demographics of the United States and some of the countries we are competing against.

Mossberg: Does that explain why we pay $12.50 per megabit in the United States as opposed to $3.09 in Japan and $3.70 in France? Why are we paying four times as much?

Martin: Yes it does. Because it costs a lot more to build out in more rural areas and people who live further apart… We have a history of averaging some of the cost to make it affordable for people in Montana.

Martin should have seen it coming. Mossberg has been on a crusade over slow broadband speeds for some time, including a call to stop calling slower-speed DSL “broadband.” It’s just one of the many things that annoy him about how computer and consumer electronics industries treat their consumers. Other pet peeves include junk programs pre-installed by PC makers Mossberg calls craplets and any device that doesn’t aspire to Apple-scale product design genius.

Here are the stats that Mossberg and Martin were debating:

(Photos: Reuters)