This could get fun.

Internet regulators just voted to relax the rules that govern top level domain names — you know, the .edu or .com or .org that you type into your Web browser. Basically, the Internet Corporation for Assigned Names and Numbers, or Icann, decided it would allow all sorts of new top level domain names to come into existence.

What does that mean? If your name is Keith Richards then you could try to get the .KeithRichards or .Guitar domain name. Well, you could if you’re the real Keith Richards and had a few extra bucks sitting around. It seems that applying for domain names isn’t cheap.

That’s one reason that Icann Chairman Peter Dengate Thrush figures there won’t be too many regular folks lining up for domain names under the new rules.

Here’s what he said on a conference call:

We don’t expect there to be thousands of applications. First of all, the cost is going to be at least $100,000. But also to be a successful applicant for a new top level domain, you’re going to have to show that you’ve got the capacity to run an Internet registry, which may eventually have to hold millions of domain names. So you’re going to have to be a reasonably serious business — in most cases — or a community of businesses to put forward an application.

So where will all the applications come from?

We’re hoping for a broad range, and expecting a broad range of applicants. We’re expecting indigenous communities to be interested in protecting aspects of their indigenous language and culture. We’re expecting businesses to come forward. One of the board members today in this discussion refered to the likelihood of there being applications for vanity names. You may see .smith, for example, so all the Smiths of the world would have a place. We’ve been threatened that the Irish will get behind a Dennis Jennings top level domain.

We expect to see things such as .perfume and .wine and .silk and all sorts of commodity names coming forward, which will then be taken up by the people who deal in those particular goods and services in all sorts of inventive ways.

A few possible domain names immediately spring to mind, like .news or .sports or .blog or .sex (if they allow it). But it’ll be interesting to see what other names catch hold.

(Photo: Reuters)

Those of you who missed him in Morocco caught up with Microsoft CEO Steve Ballmer in Milan after Yahoo reported better than expected results, even though they fell short of stellar.

No surprise, he’s standing firm on the $44 billion offer and promises to stick by a threat to go directly to shareholders if Yahoo rejects the offer by the Saturday deadline.

Bloomberg also reports that Ballmer is willing to walk away from the deal. “We are prepared to go forward without a merger with Yahoo,” Ballmer says.

Yahoo’s Jerry Yang wouldn’t mind so much. We’re not so sure Yahoo shareholders would agree.

(Reuters) (Bloomberg)

Keep an eye on:

• Apple buys chip maker PA Semi for $278 million in cash possibly, for the iPhone. (Forbes)
• Rupert Murdoch revives media ownership debate. (NYT )
• Chinese lawyers sue CNN over “goons” comment: paper (Reuters)

(Photo: Reuters)

We weren’t expecting huge surprises during Yahoo’s earnings conference call, but CEO Jerry Yang was spectacularly vague about the Internet company’s plans vis-a-vis Microsoft or any other potential tie-ups — with Google, Time Warner’s AOL or News Corp — that Yahoo has been working on.

At the very start of the call, Yang essentially said “Don’t go there” to analysts and investors, reminding them about the purpose of the call.

“I’d like to remind you that today’s call is about our Q1 results, so please direct your questions to the quarter if possible,” Yang said.

When he touched on Microsoft — referring to it as three months of “uncertainty” — it was to reiterate the same line: “Our board and management are committed to choosing a path to maximize shareholder value.”

At the same time, Yang was bent on convincing analysts and investors that, despite an unchanged revenue forecast for the year, Yahoo deserves a higher price than the $43 billion cash-and-stock deal that Microsoft has offered. Is that because Yahoo piggybacked on gains from a stake in China’s Alibaba.com to a higher quarterly profit? Or because Yang said Yahoo’s “strategies and investments are beginning to pay off”?

Not that analysts or investors were convinced. Most continue to believe that Yahoo’s earnings are unlikely to put pressure on Microsoft on raise its bid.

Microsoft CEO Steve Ballmer, meanwhile, said before the earnings, “I wish Yahoo all the success with its results, but it doesn’t affect the value of Yahoo to Microsoft.”

So where does that leave Yahoo now? Wednesday might offer some clues, when Yahoo’s two-week test on outsourcing search advertising to Google ends. Or it may not. Yahoo chairman Sue Decker already swatted hopes on the call, saying it’s “premature” to speculate on what sort of deal the two might strike.

Photo: Yahoo CEO Jerry Yang (Reuters)

Yahoo’s surprise three-year forecast announcement on Tuesday lays out why the Internet giant has refused to budge from its belief that Microsoft’s bid severely undervalues the company.

The Sunnyvale, Calif. company believes it can nearly double its operating cash flow to $3.7 billion and boost revenue, excluding payments to affiliates, to $8.8 billion. Built into the forecast is an expectation of $1.9 billion of additional revenue over three years in display video advertising revenue, outpacing market growth rates, Yahoo said.

It also reaffirmed previously issued first quarter and full year 2008 forecasts.

Yahoo Chairman Roy Bostock:
“We are pleased to share with the market more details about our business and our expectations for Yahoo!’s financial performance, which provided context for our board’s unanimous rejection of Microsoft’s unsolicited proposal. Yahoo! represents a truly unique strategic platform within our industry. The board of directors and management will continue to work closely together to ensure that any strategic path we pursue capitalizes on that uniqueness and value in a way that maximizes the benefit to our stockholders.”

Your move Microsoft.

(Reuters)

Keep an eye on:

• In case investors wondered why the New York Times settled with dissident shareholders, look no further than its February monthly report, which showed a 6.6 percent ad revenue decline. (Reuters)
• EBay has set up its own affiliate network to encourage Web sites to drive traffic to its eBay and Half.com Web sites, reducing its reliance on ValueClick’s network. (Reuters)
• Slate, the online news and opinion magazine owned by The Washington Post Co, plans to join a bustling business news market with an analysis and commentary site. (Reuters )
• Retail data suggest a lousy quarter for Apple’s MP3 players. (AlleyInsider)

(Photo: Reuters)

The ink has barely dried on AOL’s $850 million proposed purchase of Bebo, but reports of another deal are already percolating. AllThingsD’s Kara Swisher reports AOL is seriously considering buying New York-based widget-maker KickApps for $90 million.

KickApps makes widgets to order for a broad range of companies, such as a car search widget for Autobytel and a social community for Time Warner’s CW TV network’s “Gossip Girl,” Swisher says.

Investors Softbank Capital, Prism VentureWorks and Spark Capital and others have dropped $17 million into KickApps.

The bigger question is whether parent company Time Warner is prettying up AOL for a sale or taking another go at finding its place in a world defined by Google and other bigger rivals. At this point, we’re thinking probably both as Time Warner mulls its options.

AOL wasn’t immediately reachable. KickApps declined comment.

Update: A source familiar with AOL’s plans tells us a deal is “very unlikely.” 

(AllThingsD)

Keep an eye on:

• Clear channel outlines its concession wishes for merger partners XM and Sirius satellite radio. (Orbitcast)
• Bebo’s Joanna Shields speaks: competitive bids, why AOL, dodges on Yahoo ad deal question. (paidContent)
• San Diego-based Sony Online Entertainment will now be overseen by Kazuo Hirai, the president of Sony Computer Entertainment, in a move that probably should’ve happened five years ago. (GigaOm)

(Photo: KickApps.com)

Media titans John Malone and Barry Diller knew they had their fair share of disagreements over the years, but like many couples heading to divorce, they apparently needed someone else to tell them that.

Enter Wall Street Journal reporter Jessica Vascellaro.

The media industry read with rapt interest her story in October that put in plain language how much tension had built up between the two over their partnership in IAC/InterActiveCorp. 

But as the two moguls duke it out in Delaware court this week, they keep invoking that story, day after day, as the moment that sent their relationship past the point of no return. 

Diller apparently understood the story as grounds to endorse a control structure for a spin-off of IAC businesses that would dilute the grip of Malone’s Liberty Media over the units. And that is what brought them to court today.
 
“It was kind of a verification in his mind they had gone over a significant line and the possibility of doing a transaction beneficial to both sides was becoming highly unlikely,” IAC Vice Chairman Victor Kaufman said when asked by Liberty’s lawyers.
 
IAC’s lawyers made liberal use of the story as well, asking Liberty CEO Greg Maffei whether he orchestrated the original interviews with himself and a usually press-shy Malone to send a message to Diller. They asked Maffei whether he tried to influence that story by flying the New York-based reporter out to Denver and talking up his views of Diller over several hours of travel time.
 
Maffei rebuffed that idea, saying  he didn’t come up with the idea for the flight, that there were other people on the plane and most of the time they spent playing the card game “Oh, Heck”:
 
[We asked Dow Jones about the flight. Here’s their statement: “The Wall Street Journal attempted to reimburse Liberty for the flight, but the company subsequently returned the check. In keeping with our guidelines, we still intend to reimburse Liberty. We stand by the fairness and accuracy of our story.”]
 
After it appeared, Malone said he had already guessed Diller’s reaction:
“I thought Barry’s not going to like this when he sees it. (Did you call Diller?) I should have but I did not. Because when I read it, it came across not the way I would have liked it to come across. 
    
In the end I did call. It was roughly two months later. (Apparently Diller told Malone of his one share, one vote plan during that call)”

(Photo: Reuters / Maffei in Sun Valley 2007)

Not that anyone was suspicious, but in case you’re wondering Disney isn’t buying AOL .

Iger blurted that out in response to BusinessWeek editor John Byrne’s question on stage at the McGraw-Hill Media Summit in New York on Wednesday.

Byrne: “Can we expect Disney to make another big acquisition? Would you think about AOL for example?”

“No,” Iger jumped in, drawing some chuckles in the audience. “We don’t want to comment on specific acquisitions, although I just did.”

“We have a very strong balance sheet, cash flow is strong and we will buy something if we feel it will add value. We have the wherewithal to do that, but it’s not a necessity.”

In case there was any doubt in the audience, Iger didn’t comment one last time: “If I were to poll this audience, they’d come to the same conclusion: Disney is not going to buy AOL.”

That’s the kind of “no comment” I appreciate.

(Photo: Reuters)

Too little too late, at least for 2008. Hollywood’s long awaited decision to back a winner in the single next-generation DVD wars didn’t come fast enough to stem a further decline in DVD sales this year, according to Pali Research’s Richard Greenfield.Greenfield now expects consumer spending on DVDs to fall 4 to 5 percent this year, compared to a 2 percent decline in 2007, despite an anticipated tripling of Blu-ray DVD sales this year. Blu-ray won’t start slowing the decline until 2009-2010.Slowing sales of older titles, Wal-Mart’s decision to clean up its aisles by eliminating “dump bins” of discounted titles, and anticipated Internet service bandwidth increases that could boost piracy of video are also expected to pressure sales of physical media.Perhaps there is still time for DVD and Blu-ray to make nice with consumers. Sony’s U.S. chief said consumers prefer physical discs to Internet delivery, and that it could take a decade before downloading hits its stride.(Photos: Reuters / This is what they do to pirated DVDs in Bucharest.)

Is Digg.com for sale?Even though founder Kevin Rose told CNET last month that the answer is “no”, today the answer appears to be “yes”.According to TechCrunch, Google and Microsoft may be prepared to fight over the popular Web site, which lets readers recommend articles to others.Digg has been working with investment bank Allen & Co, and is pitching big tech and media companies on a sale. It is even prepared to take less than the $300 million suggested late last year, TechCrunch said.Four companies, including Internet giants Google and Microsoft, are in heavy due diligence with Digg. The other two are media or news companies, TechCrunch said, adding that Google will likely bid $200-$225 million, which Digg would likely accept. Is Barry Diller’s IAC interested?TechCrunch expects a bidding war between Microsoft and Google.It wouldn’t be the first time they have butt heads over Digg. Last summer, Microsoft became the exclusive provider of display and contextual advertising on Digg.com, replacing Google.Then again, Silicon Alley Insider suggests that any offer over $100 million might be too much.Update: Digg CEO Jay Adelson speaks out on the company’s blog:

Normally our policy is to not comment about things like this, but this morning’s rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate.Sorry to burst any drama theories, but they aren’t true. We remain focused on improving Digg and rolling out great features.

Alleyinsider’s Peter Kafka remains a bit skeptical over Adelson’s comments.(TechCrunch )Keep an eye on:

• Microsoft’s Steve Ballmer pledged the company would gain share against Google in online advertising and Web searching, even if it’s his “last breath” at the company. (Reuters)
• The board of National Public Radio its said chief executive, Ken Stern, was leaving after less than 18 months “by mutual agreement.” (NYT)

(Photo: Digg.com founder Kevin Rose, Digg.com)