MediaFile

from Commentaries:

Revolution?

Video compression technology can be interesting, really.

On2 CEO on Beet TVMost people forget how online video worked before YouTube popularized the embedded Flash video player. Remember the frustration of making sure you had the right video player to play this or that web video? It was YouTube that popularized giving people one-click access to videos.

On Wednesday, Google said it had agreed to acquire On2 Technologies, a maker of video compression technology, in a deal that could have sweeping effects for how video works on the web. The Internet search leader has a bland blog post about how it intends to use On2 to innovate in how video working on the Web, but it isn't at all clear how far it Google is ready to go.

On2 stock chart before and after Google offerThere's lots of speculation that Google may choose to open source, or give away, On2's video compression technology, undercutting royalty-bearing video compression technologies in use across the Web. That could undermine Adobe and its widely used Flash player, Microsoft, with its Silverlight alternative, not to mention Apple Inc and RealNetworks. Dan Frommer at Silicon Alley Insider spells out how far-reaching the Google gambit could be.  As a counterpoint, Dan Rayburn of StreamingMedia.com argues the Google move is no big deal.

Google is only paying $106.5 million in stock for the American Stock Exchange listed-firm based in Clifton Park, New York. Because the deal involves two public companies, there's an outside chance that a competitor may want to mount a rival bid. The On2 board would have to consider a richer bid for fiduciary reasons. Google might have more on its hands that it bargained for.

(Images: Beet.tvGoogle Finance)

Microsoft-Yahoo provide a closer look at ad deal

By most accounts, the 88 percent revenue share Yahoo will collect from its advertising partnership with Microsoft is a pretty darn good number. Obviously, 90 percent is even better. And that’s exactly the share of revenue that Microsoft will pay Yahoo in the second half of their 10-year deal, according to a regulatory filing.******The filing casts more light on the details of the partnership. It also seemed to give a lift to Yahoo, whose stock rose slightly in early trade.******Here are five other key points from the filing …*** *** At least 400 Yahoo staffers will join Microsoft. The two companies will select an extra 150 employees to help with Yahoo’s transition to Microsoft’s search technology.

*** A definitive agreement is due to be signed by October 27, or they head for an arbitration panel.

*** Microsoft is paying Yahoo about $50 million a year during the first three years of the deal to help with transition costs.

*** The deal is limited to web sites, applications and “other online digital properties designed for use and consumption on personal computers.” But Yahoo can receive Microsoft mapping and mobile search if it wants.

*** Yahoo can kill the deal if the Yahoo and Microsoft’s share of the U.S. query market falls below a certain level. Either party can terminate the deal due to repeated material breaches of the agreement.

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***If you want more information on these provisions, or others, have a look here.******Keep an eye on:***

    *** What’s the Wall Street Journal’s policy when it comes to story embargoes? PaidContent has the latest rundown (paidContent.org)

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    *** Google is doing a little wheeling and dealing. It is buying On2 Technologies, and has sold its Google Radio Automation business (Reuters)

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    *** Sirius XM Radio’s stock has been on a run this week. Seems that investors are looking past what will likely be quarterly loss and focussing instead on new initiatives like “cash for clunkers” (Reuters)

    *** Looking for a less expensive digital book reader? Sony’s hoping to please (Reuters)

    ***

***(Photo: Reuters)

Judge will get proposal to rid world of physical books

Here’s an idea: Everyone, or at least whoever wants to, gives up their books. The books are taken to a warehouse and stored there. In return the the book owner gets access to scanned copies on Google.

A federal judge has given permission for The Media Exchange Company, Inc. to put that proposal forward, as part of a settlement in Google’s deal with publishers to make millions of books available online.

The Media Exchange Company, represented by the St. Louis, Missouri, law firm of Riezman Berger, says it is putting forward the idea on behalf of book owners.

Barry Diller’s take on Microsoft, Yahoo and more

Few in the media business know dealmaking better than Barry Diller.

So it comes as little surprise that the head of IAC/Interactive was asked about both the Microsoft-Yahoo deal and the AOL separation during an earnings conference call today. He sounded upbeat on both situations.

Here are some excepts:

Microsoft-Yahoo:

One significant thing that happened is we’re not going have to talk about whether or not it’s going to happen anymore [Ed -Amen to that!]. Look, Microsoft will be able to report a greater share in terms of search and get — at least in some minds of the talkers — into being up there in competing terms with Google. And Yahoo doesn’t have to spend anymore money on search. As far as being able to execute, that is very complicated.

For us, I think that the significance is we want, need, must have at least two competitive forces, big competitive forces… I want to have two players out there wanting to get our incremental business, which is, of course, of real value to the companies.

Google Voice app rejected for iPhone

Apple has rejected Google’s application to place its  nifty Google Voice phone call and voice mail app on the iPhone, the latest twist in the closely-watched relationship between the Silicon Valley giants.

In a statement, Google said it submitted its App Store application six weeks ago, but that Apple failed to approve it. Apple declined to comment.

In addition, GV Mobile — a third-party Google Voice iPhone app — has been removed from the App Store, accordingto developer Sean Kovacs. He said Apple informed him that his app duplicates iPhone features.

from DealZone:

AOL then and now

Anyone want to take a shot at what's behind Time Warner's repurchase of a 5 percent stake in AOL held by Google? Time Warner sold the stake in December 2005 for $1 billion. Now, it has bought it back for $238 million -- a nice job of selling high and buying low. Time Warner plans to spin off AOL by the end of the year.

The 2005 deal implied a chunky price tag of $20 billion for AOL. While it may not be exactly apples to apples, the repurchase implies a value of about $5.7 billion.

Brigantine Advisors analyst Colin Gillis said the implied $5.7 billion represents a "floor valuation " as AOL moves toward a spinoff. If that's true, then Google not only overpaid, but undersold.

iPhone Mystery: Why did Apple kill Google’s app?

Google prides itself on its unique culture of innovation and product design.

But when it comes to Google products for the iPhone, it’s Apple that calls the shots.

At least that’s how it appeared this week following a surprisingly candid blog post from a Google product manager introducing Latitude for the iPhone – Google’s product that allows people to see the locations of their friends on a map.

Instead of releasing Latitude as an iPhone app, or incorporating the Latitude functionality into the iPhone’s existing Maps application, Google introduced Latitude as a browser-based service that can only be used within the iPhone’s Safari Web browser.

How many phones is too many?

Most people have one phone or handheld device for work, and maybe another one for play. But how about 14?

That’s how many devices Google’s vice president of engineering Vic Gundotra has. They make it “very hard to get through the airport,” he joked.

We asked him and other executives in the mobile advertising industry what devices they use, after about an hour of a panel discussion on where mobile advertising is going at the Fortune Brainstorm: TECH conference.

YouTube’s mythbusters: When blogs attack

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.

With Apple, Microsoft ahead, this is no time for vacation

Get ready for another big week of earnings, with Apple, Microsoft and Yahoo the highlights (at least in our world).

Interestingly, talk about both Microsoft and Apple has been pretty positive ahead of their quarterly results, despite the rancid economy. When it comes to Apple, whose stock has been among the best performers in tech this year, the chatter is about the new iPhone, which it launched in June to big fanfare.

“I think the key is that core consumer demand is there,” Hudson Square Research analyst Daniel Ernst said in a recent Reuters story. “There are lines for $400 phones. Clearly they’re well positioned, and when the PC market comes back, we believe they’re going to take significant share.”