Yahoo and Microsoft Gang up Against Google

YaSoft or MicroHoo? Yahoo and Microsoft have reached agreement on a long-awaited web search partnership that will unite the two companies against market leader Google.

Under the no-cash deal, Yahoo will use Microsoft's new Bing search engine on its own sites, while Yahoo will act as the exclusive global sales force for the companies' premium search advertisers.

According to research firm ComScore, Google has a 65 per cent share of the lucrative search market. The combined forces of Yahoo and Microsoft will have a 30 per cent market share.

Yahoo, which last year turned down a $US47.5 billion takeover bid from Microsoft, said it stood to gain about $US500 million in annual operating income and $US200 million in capital expenditure savings through the agreement with the software giant.

Yahoo also estimated the deal would provide it with a $US275 million benefit to annual operating cash flow.

"This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of internet innovation and development," Yahoo chief executive Carol Bartz said in a statement.

The partnership, Microsoft said, "will improve the Web search experience for users and advertisers, and deliver sustained innovation to the industry."

Microsoft chief executive Steve Ballmer said the deal will enable Bing to better compete against Goggle, as well as attract more users and advertisers.

"Through this agreement with Yahoo, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company," Ballmer said.

"This agreement gives us the scale and resources to create the future of search."

The agreement, which has a 10-year term, will be subject to review by US regulatory authorities, the companies said.

It is restricted to internet search and related advertising revenue, while the pair would retain full autonomy on other properties and products such as email, instant messaging and display advertising.

Calling the link-up a "significant opportunity," Yahoo chairman Roy Bostock said the company's board backed it with its "full and unanimous support."

"Microsoft is an industry innovator in search, and it is a great opportunity for us to focus our investments in other areas critical to our future," he said.

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No Merger For Microsoft And Yahoo, Microsoft Can't Pay

MIGUEL HELFT and ANDREW ROSS SORKIN

Microsoft said Saturday that it was abandoning its blockbuster bid to acquire Yahoo after it raised its offer by $5 billion but Yahoo rejected it as still too low.

The about-face followed a meeting on Saturday morning in Seattle between Microsoft’s chief executive, Steven A. Ballmer, and Yahoo’s chief and co-founder, Jerry Yang, according to a person familiar with the talks.

At the meeting, which also included Yahoo’s other founder, David Filo, and a Microsoft president who oversees its online unit, Kevin Johnson, Mr. Ballmer increased Microsoft’s offer to $33 a share, or a total of about $47.5 billion, from $29.40 a share. Mr. Yang told Mr. Ballmer that Yahoo would not accept an offer below $37 a share, this person said.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Mr. Ballmer said in a statement. “After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.”

A person close to Yahoo said the price was not the only stumbling block. The person said Yahoo was also concerned that the deal could be blocked by regulators and wanted a higher offer, in part, as a hedge against that risk.

Microsoft’s decision to walk away casts a cloud of uncertainty over Yahoo and its shareholders. The breakdown in the talks is likely to send Yahoo’s shares plunging, and Mr. Yang and his team will have to decide how to placate investors.

The company has been exploring alternatives to a marriage with Microsoft, including a partnership in search advertising with its arch rival, Google, which could lift Yahoo’s profit and perhaps its stock price. Yahoo has also discussed possible mergers with the AOL unit of Time Warner and the MySpace unit of the News Corporation. The MySpace talks have not been active of late.

But both remaining options pose challenges. A Google partnership would be likely to attract scrutiny from regulators because of Google’s dominance over online search and advertising, while AOL and Yahoo have many overlapping businesses and technologies, making a merger difficult.

In a statement issued late Saturday, Mr. Yang said, “With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history.”

Reactions inside Yahoo are likely to be mixed. Several senior executives favored selling to Microsoft and said in recent days that they were hoping to see a deal happen. Yet other executives were high-fiving each other for defeating Microsoft’s bid, people close to the company said.

While its stock may fall on Monday, Yahoo’s management was encouraged by discussions with its largest investors in which they urged management to not accept $33 a share, these people said. For Mr. Yang, Microsoft’s withdrawal is considered a “personal victory,” according to one person who spoke with him.

Microsoft has spent years and billions of dollars trying to build an online business. Yet it has steadily lost ground to Google in the search business and has failed to gain significant momentum with advertisers.

Microsoft’s decision to abandon its pursuit of Yahoo is not necessarily the last chapter in the three-month-old saga. If Yahoo’s shares fall significantly, the company will be under intense pressure to act, and may choose to resume negotiations.

Earlier this year, under intense shareholder pressure, BEA Systems did just that, agreeing to a takeover by Oracle soon after Oracle dropped an unsolicited offer it had made for BEA.

“This seems like a very strong but serious negotiating tactic,” said Jonathan Miller, the former chairman and chief executive of AOL. “It will be up to Yahoo to come back to the negotiating table.”

Microsoft had threatened to pursue a hostile takeover if it could not come to an agreement with Yahoo’s management. That could have involved an appeal directly to Yahoo’s shareholders and an effort to remove members of Yahoo’s board of directors.

In a letter to Mr. Yang sent on Saturday afternoon, Mr. Ballmer wrote: “It is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest.”

He added: “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft.” Mr. Ballmer took particular aim at Yahoo’s discussions of a partnership with Google, noting that it would “make an acquisition of Yahoo undesirable to us for a number of reasons.”

Microsoft’s decision to abandon its bid is likely to raise questions among investors about the judgment of both Microsoft and Yahoo.

When Microsoft made its initial bid, it said Yahoo was an important part of its strategy to take on Google. Its choice to withdraw, after threatening to force a shareholder vote, may prompt its shareholders to doubt its resolve. At the same time, many Microsoft shareholders who did not want the company to bid for Yahoo may be relieved and send shares of Microsoft higher on Monday.

For Yahoo’s shareholders, the abandoned bid may create even more uncertainty over the company’s management. Many Yahoo shareholders would have preferred that the company accept the offer of about $47.5 billion, which was roughly 70 percent higher than the company’s market value at the end of January.

Over the last three months, the companies had infrequent talks, according to people involved in the negotiations from the start who were not authorized to be quoted by name.

Frustrated by the lack of discussions, Microsoft sent a threatening letter to Yahoo on April 5 suggesting that Microsoft would try to force a shareholder vote to circumvent Yahoo’s management if the companies could not reach an agreement within three weeks. At the same time, Microsoft began seeking a partner for its bid, holding talks with the News Corporation, controlled by Rupert Murdoch, as well as AOL. Both of those companies had been holding concurrent negotiations with Yahoo about their own partnerships.

On April 15, Microsoft and Yahoo held a secret meeting in Portland, Ore., in which the companies discussed “social issues” — like who would run the Yahoo unit if it were folded into Microsoft — but no decisions were made.

Three days later, bankers for Microsoft and Yahoo held a conference call in which Yahoo’s bankers suggested that $40 a share would be a “slam dunk” that would get the deal done. A week later, Microsoft’s deadline passed without Microsoft proceeding with a proxy contest as it had threatened. Microsoft decided that it would still try to seek a friendly deal and that a hostile bid could impair the value of Yahoo.

Last Tuesday, three days after the deadline, Mr. Ballmer and Mr. Yang had several telephone conversations as Yahoo sought to reach a deal to keep Microsoft from turning hostile. In those talks, Mr. Yang overruled his bankers, telling Mr. Ballmer that Microsoft did not have to go as high as $40 a share to get a deal done, and suggested that they begin negotiations.

The next day, Microsoft and Yahoo began talks in earnest, pulling in dozens of bankers and lawyers to try to reach a deal. Mr. Ballmer flew to Yahoo’s headquarters in Sunnyvale, Calif., where Mr. Yang said Yahoo would be willing to accept nothing lower than $38 a share. Each dollar per share is equal to about $1.4 billion.

Microsoft pushed back, saying it would pay no more than $33 a share. The talks culminated in a final meeting on Saturday in which Mr. Yang flew to Seattle to meet with Mr. Ballmer. Mr. Ballmer stuck to his $33 price, and Mr. Yang said Yahoo’s board would accept $37 a share. Hours later, Mr. Ballmer sent Mr. Yang the letter saying Microsoft would withdraw its bid.

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Friendsters, Southeast Asia's Top Social Networking Website

LING WOO LIU

If they recall it at all, most Americans probably remember Friendster as the also-ran of social networking sites. Although the site had a head start when it launched in 2002, its founders squandered their lead when software glitches and slow access times prompted users to flee to the now hugely popular MySpace and Facebook. Friendster seemed destined for the scrap heap, remembered mainly as the company with the smiley-face logo whose owners in 2003 turned down a $30 million buyout offer from Google.

But Friendster never died — it just moved. Thanks largely to an accident of geography, it's become Southeast Asia's top social networking site. Asia is home to three-quarters of Friendster's 58 million users, compared to 17% in the U.S., and it's the source of 89% of the site's traffic, compared to just 8% from North America. While its bigger rivals MySpace and Facebook are just discovering the land across the Pacific, Friendster is already the most-visited web site in the Philippines and Indonesia, and the second most-visited site in Malaysia and Singapore, according to rankings from web tracker Alexa. In 2006, Friendster hired a 20-person engineering team in the Philippines, and last September, it opened a sales office in Singapore. Friendster's second life came almost by accident. The company started in Mountain View, California, before moving its headquarters two years ago to San Francisco, "the most Asian of U.S. cities," says Friendster president Kent Lindstrom. As a result, thousands of early adopters were Asian-American Californians who formed a nucleus that quickly expanded across the Pacific as users invited friends and relatives in Asia to join the network. Until last fall, Friendster was available only in English, but that didn't impede its growth in Southeast Asia, where colonial history has left high English proficiency and romanized Asian languages. Still, the site's new home across the Pacific came as a surprise to management. "We never envisioned it'd be growing like this," says Lindstrom.

Friendster's international reach has become a competitive advantage, for the company as well as for users. Five months after releasing her first album, Malaysian pop singer Karen Kong uploaded a video of a recent concert performance onto her Friendster page last summer, attracting two million viewers, mostly from Malaysia, Singapore, Brunei, the Philippines and Indonesia. Her manager, Fred Chong, says that even though the record label created an expensive web site for the artist, Kong's Friendster profile is "way more powerful than any official page," attracting up to 800,000 page views per month. With more than 150,000 friends linked to her page, Kong has the biggest following of any Friendster user. "Her profile just exploded," says Chong. "For us, it's been a miracle."

Friendster's trying to pull off another miracle. It's reaching out to the 210 million Internet users in China, where the company's user base is already "in the hundreds of thousands," Lindstrom says. Last September, the company began rolling out foreign language capabilities: traditional Chinese for Hong Kong, Taiwan and other Chinese communities around the world, followed by simplified Chinese for mainland China, Spanish, Japanese and Korean. Unlike MySpace, which has launched separate, localized sites for different countries, Friendster is keeping all of its worldwide users on one multilingual site, according to Lindstrom, whose own Friendster profile shows pictures of him in Tiananmen Square and on the Great Wall.

Friendster may have a tough time staying ahead of its wealthier American rivals, which are starting to look to Asia for growth, as well as formidable local competitors such as Shanghai-based 51.com, which already has 90 million subscribers, and Xiaonei, a Chinese replica of Facebook. Less than 10% of visitors to MySpace and Facebook live in Asia, according to June 2007 figures from Internet research company comScore, but that is set to change. MySpace now operates separate sites in Japan and China, and has plans to launch sites in several more countries this year, including South Korea and India. Though Facebook has yet to release foreign-language versions of its site, comScore data shows the number of Asian visitors to its main site spiked more than 3,000% between August 2006 and August 2007.

The privately-owned Friendster, which is operating on $25 million in venture capital, says it's not intimidated by these billion-dollar giants. "We're not surprised that people are competing in our space," says David Jones, vice president of marketing at Friendster. "That's validation of the industry we helped create." And the Americans who've written them off? "Most of the world is outside the U.S.," says Lindstrom. "We're very globally focused." Stiffer competition in Asia is surely on the way, but until then, Friendster has plenty of reasons to smile.

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Electricity From Renewable Energy, Google New Goal

Google said Tuesday it will invest in developing ways to create electricity from renewable energy sources that will be cheaper than the electricity produced from coal.

Google Co-founder Larry Page said in 2008, the company plans to spend tens of millions of dollars on research and development and other related investments in renewable energy. Currently, coal supplies 40 percent of the world's electricity, according to Google.

"We have gained expertise in designing and building large-scale, energy-intensive facilities by building efficient data centers," said Page in the statement. "We want to apply the same creativity and innovation to the challenge of generating renewable electricity at globally significant scale, and produce it cheaper than from coal."

Page said Google's goal is to produce one gigawatt of renewable energy capacity that is cheaper than coal.

"We are optimistic this can be done in years, not decades," he said, adding that one gigawatt can power a city the size of San Francisco.

Page said that if Google meets that goal and large-scale renewable deployments are cheaper than coal, then the world could meet a large part of its electricity needs from renewable energy sources and significantly reduce carbon emissions. "We expect this would be a good business for us as well," he said.

Google.org, Google's philanthropic arm, will invest in the initiative, known as RE.

Google.org is now working with two companies on renewable energy technologies: eSolar, a California-based company specializing in solar thermal power that replaces the fuel in a traditional power plant with heat produced from solar energy; and Makani Power, a California-based company developing technologies to harness the wind for energy.

Google said Tuesday's announcement is just the latest step in its commitment to a clean and green energy future.

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EU To Critically Review Google's DoubleClick Deal

The European Commission will open a four-month, in-depth review of Google's plans to buy rival DoubleClick for US$3.1 ($4.18) billion, a source familiar with the situation said yesterday.

Google, which stores data on the internet-surfing habits of consumers, wants to buy DoubleClick to increase its clout in tailoring advertisements to consumer activities.

Both companies are involved in the sale of on-line ads, although their business models differ.

Google has already proposed alterations, and the deadline had been extended to Nov. 13 so the changes could be vetted by customers and competitors.

Google competition counsel Julia Holtz has said that in response to third-party concerns the company had committed to the Commission that it would keep certain DoubleClick business practices unchanged.

An in-depth probe will last an additional 90 working days and does not necessarily mean there would be more changes required in the transaction.

Critics have also raised questions about what effect the deal might have on privacy, but the Commission has said privacy by itself is not part of a competition review.

Google has by far the strongest position in Web searching in Europe. The acquisition has drawn vehement opposition from competitors such as Microsoft Corp and Yahoo Inc.

The European Commission is working closely with the US Federal Trade Commission, which has been reviewing the case since May.

In the United States, there has been one congressional hearing on the deal and Republicans are pressuring for more.

Google's purchase is part of a rapid consolidation in the internet ad industry that includes Microsoft's US$6 ($8.10) billion acquisition of aQuantive Inc, home to the largest interactive ad agency.

Yahoo bought BlueLithium for US$300 million and Time Warner Inc's AOL unit bought Tacoda.

Both of the acquired companies use cookie technology to record web surfing habits of consumers so advertisers can target ads based on the information.

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What Google GPhone Means For Apple, MS, Open Source, Enterprises

Jon Brodkin and Brad Reed

What, no GPhone? That was the reaction from numerous commentators after Google unveiled its long-anticipated mobile phone plan on November 5. Yet what Google and partners such as T-Mobile, Motorola and Sprint Nextel of the newly formed Open Handset Alliance are doing will have broad impacts on wireless technology.

At the moment, Google is not releasing any mobile devices on its own. Rather, it has collaborated with several technology and wireless companies to develop Android, an open source platform that can be used by third-party developers to create applications for mobile devices. Although Andy Rubin, Google's director of mobile platforms, won't comment on the company's future plans to create a mobile phone of its own, he does note that "if you were to build a GPhone, you'd build it out of this [Android] platform."

Even without a GPhone, Android is fascinating in its own right. Here's a look at what Android means for the wireless market, for the enterprise, for open source, for Apple and Microsoft, and of course, what it means for Google.

What Android means for the wireless market

Because Android is an open source platform, it will allow users to connect to any network they choose, and will also let them add whatever applications they want. Van Baker, a research vice president at Gartner, says if the platform is successful and becomes widely adopted, it could pressure the major carriers to loosen their grip on their wireless devices. Thus, he says, companies such as Verizon might think twice before they disable Bluetooth on their handsets if they know their customers can easily switch to another carrier that will allow them to do as they please.

Dylan Schiemann, CEO of Web applications developer SitePath, also thinks that Android could go a long way toward prodding carriers to open their devices to more third-party applications.

"The mobile carriers always want to control everything, but they're showing signs of backing off on that," he says. "Carriers have enjoyed a long period where they've controlled what you put on a phone, and where they've charged you for what you put on your phone. If the Android platform works, it could change that dynamic."

While AT&T has yet to publicly comment on the Android announcement, Verizon has given it a warm reception. Jeffrey Nelson, Verizon's executive director of corporate communications, says Verizon "welcomes the support of Google, handset makers and others for our goal of providing more open development of applications on mobile handsets" and that "the highly competitive wireless industry is demonstrating that neither legislation nor regulation is required to produce innovation."

What Android means for the enterprise

Some analysts say the enterprise impact will be minimal, because Google is making a consumer play with Android. But consumers like to bring popular devices to the office, and end up using them for both work and play.

"If it's successful and people have it, it will come into businesses and we'll adapt to it," says CTO Dave Leonard of Infocrossing, an IT outsourcing provider in New Jersey.

It's hard for IT departments to decide whether to support Google's Android, because it's a platform for developing phones, rather than a phone itself, says Ken Dulaney, a Gartner analyst. Each IT department is likely to pick one type of Android-powered phone to support and not support others, because they don't want to risk lack of interoperability, he says.

A better approach, argues Dan Kohn, COO of the Linux Foundation, is to pick one set of standards that IT will support for calendaring, e-mail applications, VPN and so on, and tell users they can use any mobile phone compatible with those standards.

What Android means for Google

Since Google makes most of its money from its AdSense ad distribution network, it has an interest in giving mobile phone users broad access to the Web. If more people have access to Google on their desktops and mobile devices, then advertisers will pay more for ad space.

Google Chairman and CEO Eric Schmidt ambitiously describes Google's target market: the entire universe of cell phone users.

"There are at least three billion mobile users in the world today, and there are more mobile phones worldwide than there are Internet users or landline phones," Schmidt says. "Getting people access to info is Google's core mission and mobile phones have to be part of that."

Implied in that mission is that Google, in turn, gains access to consumers of advertising.

"Google is enabling advertising in a very real way in the handset world," says Frank Dickson, co-founder and chief research officer of Multimedia Intelligence. "You're going to see a whole host of advertising-supported applications being ... delivered ... into the handset. Google is the most efficient provider of advertising in the online world."

What Android means for open source and Linux

Linux already has a major presence on mobile phones, but the entrance of Google and the Open Handset Alliance -- which has 34 member organizations worldwide -- adds to the momentum.

"We're a huge believer in diversity of options on mobile phones," Kohn of the Linux Foundation says. "Linux is already an important, growing presence there. I think having the Google software as an additional open source option is only going to accelerate that adoption."

Today's mobile operating systems include the open source Symbian and the proprietary Windows Mobile. Kohn's key concern is enabling interoperability, so that Web applications designed for one open source phone work well on others. "Although there are a huge number of mobile phones using Linux today, there tends not to be great interoperability between them," he says.

While Kohn welcomes Google's presence, he thinks further crowding of the Linux mobile landscape might confuse matters. There's already the LiMo Foundation, which makes a Linux platform for mobile phones; the Consumer Electronics Linux Forum; and the Mobile Linux Initiative.

"We have so many darn acronyms and different consortiums at this point, that I'd actually hope to see a little consolidation," Kohn says."

What Android means for Microsoft

Nothing -- but only if you believe Microsoft.

"We already have an alliance around Windows Mobile, with 160 wireless operators in 55 countries and with 48 device makers," Scott Rockfeld, a mobile communications group product manager at Microsoft, says in a Computerworld story. "Nothing new and revolutionary was announced" with Android, Rockfeld said. "It was ho-hum compared to what we've done for the last five years with Windows Mobile."

But an open source development platform backed by a name like Google could eat into Microsoft's market share, Dickson argues.

"They're struggling because the Microsoft model is licensed software," he says. "When you start licensing software for US$20 or US$40 on a handset that costs US$100 to manufacture, that's quite a hit."

Forrester wireless analyst Charles Golvin says Microsoft should take an approach similar to the one Google is taking with Android. "Competitors like Yahoo and even Microsoft stand to benefit should they embrace this approach," Golvin says. "The impact will build slowly over time as initially the devices using this platform will form a very small percentage of the market."

What Android means for Apple

Apple's iPhone will survive Google's wireless initiative unscathed, partly because Apple's focus is hardware rather than software, and partly because it commands only a small portion of the mobile phone market to begin with, Dickson says.

"Apple is a fraction of a percent of the global market share in handsets," Dickson says. "They're just not that big. ... Because of the size of Apple I don't see a large impact on Apple. I see Apple still providing innovative hardware solutions coupled with well-performing software."

Apple has little need to join Google's open source initiative, according to research issued by financial services company Piper Jaffray.

"While Apple is a closed system, it does allow developers to build applications for the iPhone. We believe that Android will give many phone makers their first access to software with full Web-browsing functionality, which the iPhone already offers," states a research note issued just after Google's announcement. "Apple is confident that its iPhone operating system is a compelling one, and developers will want to build applications for the iPhone.

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Google Adds MySpace To The OpenSocial fold

Google has recruited MySpace to join the OpenSocial fold, after announcing plans to implement a standard programming interface for building social apps online.

Mashable claims the two have been secretly working on the project all along.

OpenSocial's API standards are designed to evolve with contribution from the open source community, and as new features are developed by its partners.

MySpace joins Engage.com, Friendster, hi5, Hyves, imeem, LinkedIn, Ning, Oracle, orkut, Plaxo, Salesforce.com, Six Apart, Tianji, Viadeo, and XING as founding partners in OpenSocial.

Despite Google's assertion that it would be happy to work with Facebook, Fortune divulges that the popular social networking site was not invited to the OpenSocial party.

Meanwhile, a Hitwise graph shows the overall traffic market share of the OpenSocial collective to be more than five times greater than Facebook.

But it may not be TKO just yet. In mid-October, Facebook released a cryptic invitation for the unveiling of a new ad platform this November 6th. According to John Battelle, it's a contender for AdWords.

In an earlier development last week, after the Microsoft-Facebook deal, Google unveiled plans to take Facebook head-on.

Codenamed "Maka-Maka," according to TechCrunch, Google plans to add a social matrix atop its applications, from Gmail to Google Maps. Google will also incorporate "activity feeds" (a la Facebook's "news feeds"), using the same engine that powers Google Reader.

And like Facebook, the search giant plans to open its back-end to developers — starting with social network Orkut, and ultimately spreading to all things Google. It's even taking it a step further by making those third-party apps compatible with non-Google parts of the web, such as competing social networks.

At Maka-Maka's core, Google sees the entire web as its playing field, instead of limiting social features and user apps to a closed-in social network.

It must first, however, work to match what Facebook has built. In the six months since Facebook originally opened its back-end, over 4,000 third-party apps have landed on the site.

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Online Ad Revenue Continuity, End In Sight?

Paul Thomasch

Companies will spend a record $31 billion this year to advertise everything from toothpaste to home loans on the internet, supporting countless news sites, social networks, video exchanges and blogs.

But some media veterans worry that expectations for online advertising may be getting out-sized.

Increasingly, they say, too much media depends on advertising as the only source of revenue. With new players from software makers to cable operators also trying to cash in, the dollars simply may not stretch far enough.

"I'm getting to the point where I feel like every answer to every business development pitch is 'We're going to be advertiser supported'," said Beth Comstock, president of Integrated Media at NBC Universal, which this year set up a fund to invest in media and digital companies.

"It's just not going to be possible," she said at a recent advertising conference. "There are not going to be enough advertising dollars in the marketplace. No matter how clever we are, no matter what the format is."

NBC Universal's television networks, cable channels and websites compete for advertising dollars with everything from niche blogs to big media peers like Time Warner and Walt Disney. In addition fast-growing internet companies like Google are snatching up advertising budgets.

But new rivals are entering the market. Comcast, the largest US cable operator, expects at least $1 billion in online advertising in the next five to six years.

Verizon Communications and AT&T are looking at advertising opportunities on their video and wireless services, while startups like social network Facebook are seen as a new frontier for web marketing.

Even Microsoft has made a bold move into advertising with its purchase of web marketing firm aQuantive.

The money flow

Until recently, the focus was squarely on how much money is moving into online advertising, rather than whether too many companies are making a grab for it.

There is little doubt today that a hefty portion of advertising dollars will shift to the internet from TV, radio, print and elsewhere in the coming years. ZenithOptimedia forecasts that online ads worldwide will rise 28 per cent in 2007, while the rest of the market grows at 3.7 per cent.

Next year, ZenithOptimedia forecasts it to rise by 21 per cent, and climb another 13 per cent to $43 billion in 2009.

At that point, Web advertising would represent almost 10 per cent of the $495 billion spent on advertising worldwide - yet would trail spending on newspapers, magazines, and TV.

"There are billion of dollars that can still move," said Craig Lambert, Chief Digital Director of Colangelo, an integrated marketing agency based in Darien, Connecticut.

"Is there enough money flowing to support the businesses out there? I'd guess there is, just because there's so much money that has always been spent on TV and print," he added.

Big sites get big bucks


Others also take the position that there should be sufficient advertising money to spread around.

Jeff Brooks, Chief Executive of digital and direct marketing agency Euro RSCG 4D, sees a "huge gap" between the amount of time people spend on digital media and the amount of advertising money it attracts.

"The thrust of ad spending online, while dramatic in its growth quarter over quarter, still represents a disproportionately small percentage of total advertising dollars," he said.

The catch, according to some, is that much of the money flowing toward the internet is concentrated on a few dozen of the most popular sites. That has left smaller, less well-known sites at a severe disadvantage when it comes to attracting advertising money and surviving.

In the United States, the top 50 websites accounted for more than 90 per cent of the revenue from online ads in the first half of 2007, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. The top 10 sites accounted for 70 per cent of the revenue.

All the while, the number of websites continues to grow, creating more competition for audiences - and advertisers - who can also choose among video games, movies, TV, portable music and every other type of media entertainment.

"It's not like the old days, when it was 'if you build it, they will come,"' said Jonathan Sackett, Chief Digital Officer at Arnold Worldwide, a Boston-based advertising agency. "Now if you build it, they probably won't."

One alternative for websites would be to bank on subscriptions rather than advertising revenue, but few existing outlets have been successful with that model.

The reason is that unless the site offers extraordinary content, people simply refuse to pay for it, said Mark Miller, president of RMG Connect, an advertising and marketing agency.

"If Warren Buffett wanted to put out his own subscription newsletter online, well, I'm sure he'd get a bucketful of people to subscribe to it," Miller said.

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Random House To Join Google Book-Search Project

Georgina Prodhan

Random House, the world's biggest book publisher, is considering joining a book-search project run by Google, once considered an arch-enemy by the paper publishing industry.

The two parties are talking to one another about the less controversial part of Google's book-scanning project, its partner program, sources with knowledge of the matter told Reuters at this week's Frankfurt Book Fair.

Google has agreements with more than 10,000 publishers, large and small, who give their books to Google to be scanned in full. Google then makes them partially available - according to agreements with each publisher - for online readers.

It also works with 27 academic and reference library partners to gain access to out-of-print works.

But part of the library project has proved controversial and thrown Google into legal dispute with US publishers as Google also scans works from its US library partners that are still in copyright without asking the publishers first.

Random House, a unit of German media group Bertelsmann, has until now held out and not joined the publisher partner program, which can help boost book sales, especially of publishers' so-called backlists of older titles.

When asked this week whether the parties were close to an agreement, a Random House spokesman said: "Random House continues to have periodic constructive conversations with Google on issues of mutual relevance."

Google declined to comment.

Random House, as a member of the American Association of Publishers, says it continues to support a US copyright case filed against Google in 2005 and funded by the association.

The lawsuit - brought by Penguin, Pearson,, McGraw-Hill, Wiley and Simon & Schuster - aims to stop Google from scanning in-copyright works it gets from its library partners without explicit permission from publishers.

The Bookseller trade magazine reported on Thursday that Random House was "close to healing its rift with Google".

Cultural monopoly

Google has so far digitised the full texts of more than 1 million books. The total number of books in the world is unknown but global library collective WorldCat has more than 91 million bibliographic records in its database, the biggest of its kind.

Google has come some way toward pacifying its critics since causing a furore after it launched the project in 2004 amid fears, most vociferous in Europe, that Google would gain something close to a monopoly of world culture.

Google now works with 27 libraries worldwide, up from seven a year ago, and its book search is available in 11 languages Oxford University's Bodleian Library and Japan's Keio University library.

The company, which does not charge or pay its publisher partners, gains depth and authority for its internet search engine by making not only web pages but also books searchable.

It has already integrated book results into its US search engine and is beginning to do so in Europe.

Google does include advertising on its partner program book-search pages, with its publisher partners getting most of the advertising revenue.

It has no current plans to do so on its library search pages while it still improving them, for example by including links to Google Maps to show where the action in a book is taking place or adding braille layers for the visually impaired.

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Could This Be The End Of Yahoo! ???

Eric Auchard

As Yahoo Inc approaches the end of a 100-day strategic review, financial analysts want drastic action or even a sale of the company, although many are bracing for business as usual.

Chief Executive Jerry Yang raised hopes that major change might be in store, telling investors shortly after he took the helm of the internet media company in July that nothing was a "sacred cow."

Since then Yahoo has embarked on a series of modest acquisitions to enhance key businesses such as advertising and collaboration software, while shuttering marginal services and further reorganising management of its central ad sales force.

But nothing so far resembles the radical surgery many financial analysts argue is indispensable.

Some critics say Yahoo should exit the web search business and partner with market leader Google Inc.

Barring that, they say Yahoo should sell itself to a deep- pocketed partner such as eBay, Microsoft, News Corp or AT&T Inc to create a new internet behemoth to compete with far faster growing Google.

"There is only one type of Yahoo shareholder right now: One willing to overlook short-term performance with the belief that Yahoo is worth more to an acquirer," RBC Capital Markets analyst Jordan Rohan said in a telephone interview.

So when Yahoo reports third-quarter results tomorrow, investors are likely to look past the numbers to see if Yang has made any hard decisions during the last 100 days.

This partly reflects the easy bar analysts believe Yahoo set for results this quarter, amid ongoing web search market share losses to Google. But there is also concern the crown jewel of its ad business - banner display sales to brand advertisers - has deteriorated recently and faces further challenges ahead.

"We can't see in any of the outside metrics where Yahoo is making any headway in turning around its core businesses," Bernstein analyst Jeffrey Lindsay said in a phone interview.

Analysts expect Yahoo revenue to grow 10 per cent to $1.24 billion ($NZ1.57bn) from a year ago, while earnings are expected to slide around 28 per cent to 8 cents a share, on average, according to Reuters Estimates.

Google is expected to report later this week that it grew five times faster than Yahoo in that period.

A low bar

"This is the lowest bar that a major internet company has ever set given all the positive news coming from elsewhere in the sector," Rohan said, referring to Yahoo.

Goldman Sachs analyst Anthony Noto advises investors to stay out.

"We believe that the stock may still be a value trap given that there is meaningful risk to our current 2008 estimates and beyond given the ongoing strategic review and the dynamic industry trends," Noto wrote to investors on Thursday.

Bernstein's Lindsay says that, in the battle with Google's automation of web search advertising, Yahoo's focus on brand advertising sold by humans cannot keep pace in either expenses or margins with Google's largely computerised system.

His solution: Further automation of Yahoo's ad sales and to reduce the company's total head count by a sharp 25 per cent.

"In the internet's first decade, ads were sold as they have always been, by sales force over a round of golf," Lindsay wrote earlier this week. "Google changed all that with ... self-service."

Lindsay fears Yahoo is losing valuable time in the market by not making tough decisions to outsource search to Google, cut jobs and move more quickly to automate brand ad sales.

He calculates Yahoo is worth $39 per share if it was broken up and sold in parts, well above its combined value now of $25. If it took the more radical steps he has proposed, the break-up value could shoot up to $45, Lindsay believes.

Yahoo shares traded up 3 per cent at $28.50 in Nasdaq trading on Friday afternoon.

"We think an incremental strategy is not only risky, but virtually guarantees that Yahoo will remain mired in mediocrity - where the best hope is a take-out by a deep-pocketed partner," Lindsay said.

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Google Releases Its Fifth Generation Search Appliance

Google has rolled out the fifth generation of its yellow Google search appliance, which give enterprise content systems secure search capabilities.

"When we launched the first Google search appliance five years ago, we had a vision to make search inside of business as simple and effective as searching on Google.com," said Dave Girouard, Google Enterprise boss in a statement.

"By combining Google's deep knowledge in search with more understanding and control for environments behind the firewall, we are helping businesses keep pace with the velocity of information."

The yellow rack-mount has come of age, according to Google's spin doctors, and now happily searches across 220 file formats and almost anything you can connect to server.

The fifth birthday announcement included talk of 'significant performance increases' in the SAML(Security Assertion Markup Language) -based authentication API (Application Programming Interface).

A new site has been rolled out for Google Enterprise Labs, which gives yellow-box-users a heads-up on new technologies, like DIY KeyMatch to pick particular pages for search terms.

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Google And IBM Set To Promote Software Development In Universities

Google and IBM have teamed up to offer a curriculum and support for software development on large-scale distributed computing systems, with six US universities signing up so far.

The program is designed to help students and researchers get experience working on Internet-scale applications, the companies said. The relatively new form of parallel computing, sometimes called cloud computing, hasn't yet caught on in university settings, said Colleen Haikes, an IBM spokeswoman.

"Right now, although the technique is being used in industry, it's not being taught in universities," she said.

IBM and Google are providing hardware, software and services to add to university resources, the two companies said.

The University of Washington signed up with the program late last year. This year, five more schools, including the Massachusetts Institute of Technology, Stanford University and the University of Maryland, have joined the program. The two companies expect to expand the program to other universities in the future.

The program focuses on parallel computing techniques that take computational tasks and break them into hundreds or thousands of smaller pieces to run across many servers at the same time. The techniques allow Web applications such as search, social networking and mobile commerce to run quickly, the companies said in a press release.

IBM and Google have dedicated a cluster of several hundred computers, including PCs donated by Google and IBM BladeCenter and other servers, and the companies expect the cluster to grow to more than 1,600 processors.

The companies call these clusters "cloud" computing. A cloud is a collection of machines that can serve as a host for a variety of applications, including interactive Web 2.0 applications. Clouds support a broader set of applications than do traditional computing grids, because they allow various kinds of middleware to be hosted on virtual machines distributed across the cloud, Haikes said.

IBM and Google have created several resources for the program, including the following:

* A cluster of processors running an open-source version of Google's published computing infrastructure, including MapReduce and GFS from Apache's Hadoop project, a software platform that lets one easily write and run applications that process vast amounts of data.

* A Creative Commons-licensed curriculum on parallel computing developed by Google and the University of Washington.

* Open-source software designed by IBM to help students develop programs for clusters running Hadoop. The software works with Eclipse, an open-source development platform.

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Google Closing Gap With Chinese Rival Search Engine 'Baidu'

Web search leader Google says it is closing the gap with rival Baidu in China, after years of trying to increase market share in the world's second-largest internet arena.

Google has gained more market share in China after it announced its partnership with Sina, a major Chinese internet portal. It has also recently formed another partnership with popular website Tianya.cn.

"We are closing up the gap with them (Baidu)," said Rebecca Kuei, Google's head of sales and business development for Taiwan and Hong Kong, declining to give specific figures.

Baidu led China's market in the second quarter with a 58.1 per cent share, but rising only about 1 percentage point from the previous quarter's 57 per cent, while Google gained a 22.8 per cent market share, up around 4 percentage points from the previous quarter, according to Analysys International.

With over 162 million web users, China is the world's largest internet market, after the United States.

Google will continue to use similar business strategies throughout Asia to partner with major local internet firms to expand in the region, Kuei said, since many users in Asia still prefer to use local search engines.

In Taiwan, Google has partnerships with PC Home Online and Yam.com, while in South Korea it works closely with Daum Communications Corp.

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8 Quick Tips For Power Users Of Google Reader

I already told you many times I switched to Google Reader. There was not much convincing required and I can vouch easily that I read three times more feeds now in one third the time since I use Google Reader. So I thought I would tell you how I use Google Reader productively.

Here is the smart way I use to read feeds, primarily by using keyboard shortcuts. Probably you do it anyway. But it should be useful for new Google readers…

1. Increase vertical screen reading area - Press F11 and the browser goes full screen to remove unnecessary toolbars and menus. Lots of space is increased on top and bottom of the browser to increase vertical reading area.

2. Increase horizontal reading area - Remove the Google Reader sidebar to gather even more reading space. Press U and behold as articles now fill the screen. Now lesser scrolling and a higher chance you can read the whole article in one go. Of course you could combine that with a high resolution screen, larger monitor to fit in even longer articles.

3. Switch to Read All Items - This the classical River of news approach. Press GA. I do not need to click each feed and check out their articles. Instead I see all of them one after the other as fast as I can. I keep the default setting “Sort by newest” so I can quickly keep going from latest to older articles I want to read. In settings, set your starting page to All Items, you can get started right away.

4. Switch to Expanded View - I like to quickly glance through all the articles text. Press 1. If you need to see the headlines only for even quicker overview - Press 2.

5. Start Browsing fast - Now I want to quickly skip from one article to another till I reach an article I like to read further into. There are 3 ways to do this. In expanded view - You can skip from article to article - Press J to go forward, press K to go back. Alternatively you might want to skip from one screen view to another instead of one article to another - Press Space key to go forward, Shift+Space to go back. In listed view - Use N to go forward and P to go back.

In the settings I have opted to mark items as read when I scroll past them in expanded view. very useful. I have also selected to “only list updated” subscriptions in the sidebar, which removes clutter in the sidebar as blogs are read. This is another great feature that works automatically. I feel limited by the pause every 20 posts…I hope Google can fix this.

6. Star it, Share it, Tag it, Read it - After I reach an article I would like to refer later, there are 5 things I can do (In listed view I need to expand it first - press O). Now I can either star it for future reference - Press S (much like gmail, later you can see all starred items together). Or I can share it with others on a link blog - Press Shift+S, like the Robert Scoble link blog (which I recommended earlier). Or I can tag it - press T, add tags to organize your selections for further review. Or I can open it a new Firefox tab and read the full article - Press V (if it is a partial feed, or I just like the blog view, or I intend to comment). Or mark as unread - Press M (may need it sometimes).

7. Refresh - After you have pressed J enough times, you might just find that there are no more new items to read. So Press R and refresh the new items. Google Reader might have caught up more new items by now.

8. Check your Starred Items - Press GS to visit your starred items list. Your entire effort of the reading session is now consolidated in your starred items. Maybe you want to read these articles in details, or blog about them. As you skip through them, Press S to unstar them, or Shift+S to unshare them.
Style Variations

# Read Your favorite blog - Press U. Google reader sidebar is back. Now you can click on the blog you want to read and continue as usual. Click “List all” to see all your subscribed blogs.

# Mark all as read - Coming after a long vacation, you might not want to read thousands of feed articles. Press 2. Click “mark all as read”. Done

# View Old articles - Since you are set to view new articles, Click “Show All” to see all the articles.

# Got Lost - go to the google reader homepage. Press GH.
Advanced Techniques

# Shift to Auto-sort - this works by prioritizing subscriptions with fewer items. It will help you read more blogs with lesser posts before you decide to read those hundred posts on few larger blogs.

# Rename Subscriptions - Many blogs you subscribe to might have long titles (keyword stuffed SEO and all!). While you are reading the blog, click “feed settings” on top and rename the title to something small which fits in the Google sidebar.

# Bulk Edit Feeds - Go to manage subscriptions on the bottom of the Reader sidebar - and a power edit screen comes to play. Delete multiple feeds, categorize into folders, manage tags.

#Smart Ways to Subscribe - Drag this bookmarklet to your browser toolbar. When you want to subscribe any blog, click it. Of course you can locate the feed url and add it from the sidebar too.

# Import Your Feeds Easily - You need not subscribe all your feeds again when switching to Google Reader. Export OPML from your previous news aggregator, and import it via Import subscriptions (via manage subscriptions)

I hope you liked this article and it will help you use Google Reader better. I am sure many of you do this already… Share your Reader tip.

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Goobuntu - Google Version Of Linux, In The Making

Google is preparing its own distribution of Linux for the desktop, in a possible bid to take on Microsoft in its core business - desktop software.

A version of the increasingly popular Ubuntu desktop Linux distribution, based on Debian and the Gnome desktop, it is known internally as 'Goobuntu'.

Google has confirmed it is working on a desktop linux project called Goobuntu, but declined to supply further details, including what the project is for.

It's possible that it's just one of the toys Googleplex engineers play with on Fridays, when they get time off from buffing the search engine code or filtering out entries about Tiananmen Square.

It could be for wider deployments on the company's own desktops, as an alternative to Microsoft, but still for internal use only.

But it's possible Google plans to distribute it to the general public, as a free alternative to Windows.

Google has already demonstrated an interest in building a presence on the desktop. At CES Las Vegas this month, it announced the Google Pack, a collection of desktop software bundled together for easy downloading.

The pack includes many apps which compete directly with the Windows bundle, such as Google Talk, Google Desktop, Mozilla Firefox, the Trillian instant messenger client, RealPlayer, and Picasa photo management.

Going the whole hog and distributing a complete desktop software suite would merely be another step down the same path.

However, entering the desktop software world would be a huge step. Making Goobuntu as easy to use as XP will require a lot more development. It's unlikely to be ready for showtime any time soon, and it's possible Google itself hasn't finalised where the project should go.

Whatever Google's intentions, the input of Google engineers and developers, writing new features and fixing bugs, will be a huge boost to the Ubuntu project.

Ubuntu, funded by the South African internet multimillionaire and occasional cosmonaut Mark Shuttleworth, is already emerging as a leader in the desktop Linux world.

It has built considerable momentum in the Linux community, and is starting to appear more widely. Shuttleworth is seeking to persuade white-box PC manufacturers to start shipping machines with Ubuntu preinstalled.

It is top of the Distrowatch download chart, is installed on up to six million computers, and doubling every eight months, according to estimates from Shuttleworth's company, Canonical.

It has spawned a number of different offshoots, including Xubuntu, Kubuntu and Edubuntu (for schools).

The word Ubuntu means "humanity to others" in several African languages, including Zulu and Xhosa. It's one of the founding principles of post-apartheid South Africa. The origin of the word 'Goobuntu' is not clear, though it does not appear in online Zulu dictionaries.

The Goobuntu.com domain has been registered in the past couple of days, though presumably not by Google. It now redirects to a Cuban portal. Perhaps Google will have to think of a new name for the system before they launch it to the wider public.

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Add (Special) Comments On Google News Soon

Google News is getting an interesting feature this week, they are rolling out an experimental feature that lets people or organizations who are part of a news story add a comment to the news. Users of the U.S. version of Google News will now be able to comment on a story, that is assuming they're somehow involved in it. The process is not for everyone, and in fact requires a lengthy verification process of sending off your comment and credentials to a special Google e-mail address, and later verifying your identity via domain name and an e-mail follow-up from Google staff. If you pass the test, your comment will show up alongside the article.
Philipp Lenssen over at Google Blogoscoped has spotted two examples (1, 2) of these comments in the wild. They show up underneath the story description with the person's real name and title.
Will this work? Yahoo tried out a somewhat similar feature with forums dedicated to each story, but shut it down late last year when the amount of spam and off-topic conversation became overwhelming. There were plans to bring it back earlier this year, but the feature remains defunct. Google's approach is almost entirely on the other side of the spectrum, keeping comments tied down to experts.
My only questions are who on Google's end will be doing moderation, whether or not they're capable of those editorial decisions, and if they'll be able to handle the onslaught of incoming e-mail. I also question if going to Google first instead of the story's source for things like corrections or comments is really the best way to add context to a story. While Google may be linking to the content, keeping the system too closed might keep the real story from coming out.

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Science Direct-ly into Google/Google Scholar

ScienceDirect (SD) is a compendium of scientific, technical, and medical (STM) literature from Reed Elsevier, one of the world's largest publishers. SD, most often made available on a subscription or licensing basis to large institutions like universities, biopharmaceuticals, and other research or health related companies, claims to contain approximately "25% of the world's science, technology and medicine full text and bibliographic information." SD is an expensive, and often contentious product in Higher Education due to high year-on-year pricing increases, but it is a highly desirable one, nonetheless.
It was therefore notable when its absence from Google Scholar, Google's search interface for scholarly-related material, was realized. Scholar has become tremendously popular for focussed searches in the scholarly literature among not only academics and students, but seekers of health information and other science-based data. Elsevier has long supported its own search interface for scholarly literature, Scopus, and it was no surprise to many that they avoided inclusion. However, they doubtless lost eyeballs as more and more of this traffic migrated to the freely available Scholar product.
Elsevier has now undertaken to have the majority of its SD journals (those for which it holds or can obtain the copyrights) crawled and indexed by Google. Both Google and Google Scholar are slowly incorporating an increasing amount of this content, and these data will be appearing in search results for Google and Google Scholar.
Ale de Vries, the SD product manager, informs me in an email:
About Google/Google Scholar: we're making good progress. As you may be aware, we did a pilot with some journals on SD first, and now we are working to get them all indexed. We're making good progress there - it's a lot of content to be crawled, but going along nicely. Both Google Scholar and main Google are gradually covering more and more of our journals.
This is notable for a wide range of reasons. One of the most prominent is that Elsevier clearly feels comfortable with having its core intellectual property crawled and analyzed by Google to augment discovery. In contrast to the various European newspaper publisher-related lawsuits, Elsevier has clearly felt that even with the basic, essential tools available today - robot exclusions, sitemaps, and business agreements - their ability to execute business strategy is unimpeded by encouraging greater content exposure.
While this type of scholarly literature is often more opaque to the public than publisher- or library-based digitization programs, it is at least as important, if not more so, in relation to the number and relevance of a wide variety of searches in the critically important fields of science, technology, and health. Google's ability to index this massive quantity of information will provide it with benefits that are significant; obviously Elsevier will profit as well.
For Google, as with its Books program, the gains to indexing the world's STM information revolve around not merely that data itself, but the linkages it can form between that data and the other information to which it has access, including geospatial information, data from books, historical/timeline data, biographical data, government documents, and so forth. Clearly the rewards from this mass of material for searchers are tremendous, almost overwhelming.
Both information seekers and publishers bear the responsibility of remembering that the Lens of Google through which we increasingly seek the world is only one lens, albeit one with further and further vision.

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YouTube Make Moves to Pacify The Thai King

In an attempt to pacify the Thai King, paving the way to the ban on the website being lifted, YouTube is likely to remove all video clips deemed insulting to Thailand's king.

The popular video-sharing site, owned by Internet giant Google, has been blocked to Thai users since early April, when clips showing digitally-altered images of revered King Bhumibol Adulyadej began appearing.

Asked whether Google would remove the clips, Vissanu Meeyo, a spokesman for the information ministry, said: "It is likely."

He was responding to reports on the Bangkok Post newspaper's website that the information minister has received a letter from Google's vice president vowing to delete all clips considered offensive to the monarch.

Vissanu told AFP that information minister Sitthichai Pookaiyaudoom would hold a press conference on Friday to disclose the details.

Thailand's army-backed government had considered suing YouTube over charges of lese majeste -- insulting the monarchy -- a serious crime here that carries up to 15 years in prison.

The government, which came to power after a September coup, has been blocking YouTube since the first clip showing the king next to a photograph of feet, considered deeply offensive in Thailand, appeared in April.

The number of clips lampooning the king mushroomed after news spread around the world that Thailand had reacted by banning YouTube.

Thailand's 79-year-old king, almost universally adored by Thais, is the world's longest-reigning monarch, and one of the few who is still protected by tough laws that prohibit any insult against the royal family.

The YouTube ban came a week after a Thai court jailed a Swiss man for 10 years for insulting the monarch by vandalising his portraits.

But the king later pardoned the man, who was then deported from Thailand.

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Google Increasing Gmail Storage To Infinity Plus One Soon

Google announced today that soon customers of their Gmail service will have their storage size increased to "infinity plus one." The announcement comes shortly after Yahoo's announcement that their Yahoo mail customers would be given unlimited storage.

Greg Tomkins, an engineer at Google, is credited with coming up with the "infinity plus one" idea. "I was out in the yard when my kids ran up to me yelling at each other. My son said to my daughter, 'I hate you to infinity.' She replied, 'I hate you to infinity plus one.' And right then I knew I had the solution to competing with unlimited storage," said Tomkins.

He continued saying that his son's idea about putting "dragons and Pokémon" on the Gmail pages didn't go over as well with management.

Tomkins also said that they would be using new RAID technologies which allow them to store copies of e-mail in parallel universes. This means that if their servers crash they will be able to recover your data from another universe where they haven't.

"Once your Yahoo e-mail box is full, you'll be able to transfer it to Gmail and add one more message," said Tomkins. "Those Yahoos will have a hard time beating that."

When contacted about the Google announcement, a Yahoo representative said, "We will be making an announcement shortly about our million-trillion-billion infinity storage," and added, "Neener, neener, neener."

Not to be left out of the storage bonanza, a Hotmail representative said that while they "can't offer unlimited storage, they can delete all your e-mail at random intervals in conjunction with their Live OneCare service, to make sure you never run out of space."

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