The likely big winner in all of this: Baidu, which currently controls more than 50 percent of the Chinese search market to Google’s roughly 30 percent. So, how much value may Google be handing over to Baidu? (NSDQ: BIDU) One measure: In the two months since Google first issued its China manifesto, Baidu has gained nearly $13 billion in market value (Its stock is up a whopping 42 percent, completely reversing a 10 percent drop during the prior two months). By contrast, Google has lost about $7 billion in market value (its stock down nearly 7 percent), while the S&P 500 has been flat.

(via Google Finance)

Related

• Google In China: More Fallout
• Google May Shut Down Operations In China
• ... And Google Was Just Gaining Some Ground In China
• Is Google Finally Ready To Make Its China Move?

—Counting clips: Viacom (NYSE: VIA) claims Google has reproduced and distributed for viewing on YouTube 62,637 video clìps that infringe its copyrights. Those clips, it says, were viewed more than 507 million times.

—Aspiring to Kazaa: In Feb. 2005, YouTube’s goals were to “aim high” and be considered at the level of Napster, Kazaa, and BitTorrent in terms of the number of users and buzz. In April 2005, Karim wrote his co-founders, “It’s all ‘bout da videos, yo. We’ll be an excellent acquisition target once we’re huge.” Also in April 2005, Hurley appeared concerned about the presence of a South Park clip on YouTube and questioned whether it should be left on the site because “it’s copyrighted material.”

—Screw the ISP: But Chen told the other founders that he was unconcerned about the copyright issue. “We got a complaint from someone that we were violating their user agreement. I think it may be because we’re hosting copyrighted content. instead of taking it down—I’m not about to take down content because our ISP is giving us sh-t—we should just investigate moving http://www.youtube.com…”

—Keeping copyright bastards at bay: By June 2005, Hurley was looking for a way to circumvent the copyright problem: “So, away to avoid the copyright bastards might be to remove the ‘No copyrighted or obscene material’ line and let the users moderate the videos themselves. legally, this would probably be better for us, as we’ll make the case we can review all videos and tell them if they’re concerned they have the tools to do it themselves.”

—Google stock price: On November 13, 2006, the closing date of the transaction, Google Class A common stock closed at a price of $481.03; at that price the 3,659,770 shares issued and issuable in connection with Google’s acquisition of YouTube were worth an aggregate $1.77 billion. 12.5 percent of the equity issued and issuable pursuant to Google’s acquisition of YouTube was placed in escrow to secure indemnification obligations.

—YouTube’s payday: As a result of Google’s acquisition of YouTube, Hurley received Google shares worth approximately $334 million at the November 13, 2006 closing price. Co-Founder Steve Chen received $301 million, while Jawed Karim received $66 million. Sequoia Capital, which provided $9 million in funding for YouTube and was its largest venture capital investor, received Google shares worth approximately $516 million at the November 13, 2006 closing price. Artis Capital, which invested $3 million in YouTube, got Google shares worth approximately $85 million.

—Lawsuit money: In a July 10, 2005 e-mail to Hurley and Chen, Karim said he had found a copyrighted video, adding: “Ordinarily I’d say reject it, but I agree with Steve [Chen], let’s ease up on our strict policies for now. So let’s just leave copyrighted stuff there if it’s news clips. I still think we should reject some other things tho. . .” Hurley replied, “Ok man, save your meal money for some lawsuits! ;) no really, I guess we’ll just see what happens.”

—Sarcasm creeps in: A few days later, Chen sent an explosive e-mail to Hurley and Karim saying: “Jawad, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site, because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.” The same day, July 19, Chen sent a stinging and sarcastic message to Karim, cc’ing Hurley: “Why don’t i just put up 20 videos of pornography and obviously copyrighted materials, and then link them from the front page. What were you thinking?”

—Steal this movie: Clearly, Chen’s worries only went so far. In a July 29, 2005 e-mail about competing video websites, he wrote to Hurley and Karim, “Steal it!” To which Hurley responded: “Hmm, steal the movies?” Chen replìed: “We have to keep in mind that we need to attract traffic. How much traffic will we get from personal videos? Remember, the only reason why our traffic surged was due to a video of this type. . . .  viral videos will tend to be THOSE type of videos.”

—Hurley’s qualms: While Chen appeared to lose some of his compunctions about posting copyrighted material, Hurley’s qualms only grew: “We need to start being diligent about rejecting copyrighted/inappropriate content. We are getting serious traffic and attention now, I don’t want this to be killed by a potentially bad experience of a network exec or someone visiting us. Like there is a CNN clip of the shuttle clip on the site today, if the boys from Turner would come to the site, they might be pissed? These guys are the ones that will buy us for big money, so lets make them happy. We can then roll a lot of this work into a flagging system soon.” 

—Get big, then remove: By August, an early solution had been forged among YouTube’s founders. Hurley: “Let’s remove stuff like movies/tv shows. Let’s keep short news clips for now.  We can become stricter over time, just not overnight. Like the CNN space shuttle clip, I like. We can remove it once we’re bigger and better known, but for now that clip is fine.” Chen replìed, “Sounds good.”

Related

• YouTube-Viacom, Part One: Google Says Viacom 'Covertly' Put Its Own Clips On YouTube
• Nuggets From The Viacom-YouTube Court Filings

—The secret trips to Kinko’s: Viacom uploaded “thousands” of its own clips to YouTube in order to market its content, using its own employees and as well as an “army of third-party marketing agents” to do so, Google says. In order not to be linked back to Viacom, the “agents” used YouTube usernames like MysticalGirl8, Demansr, GossipGirl40 and Snackboard. Viacom employees, meanwhile, went to non-company locations—like Kinko’s—to upload clips in order to avoid detection. Google says that “Viacom’s efforts to hide the source of the content it caused to be posted on YouTube were too good” and in fact some of the clips Viacom is now suing YouTube for hosting were actually uploaded by the company.

—Back turning: Viacom also purposefully decided not to take down “thousands upon thousands” of clips from the site, even when it would have been easy to do so, Google says. For instance, when at one point Viacom found 316 clips from South Park on the site, it decided to take down only one and “pass” on the others.

—Viacom tried to buy a “pirate” site: Google also says that while Viacom has described YouTube as a ‘pirate’ site, it in fact tried, unsuccessfully, to buy it in July 2006 because the company’s “best minds” decided that it would be a “transformative acquisition.” The company also tried to negotiate a content-partnership agreement with YouTube but was unable to do so.

Related

• YouTube-Viacom, Part Two: YouTube Founders' E-Mails Show Struggles Over Copyrighted Works

—On Google’s China problem: Wales likened Google’s position up ‘til recently (agreeing to censor results in order to make in-roads) to how businesses regarded “apartheid South Africa” in the 80s - a reluctant embrace, but involvement nonetheless. “I know Larry and Sergei and they’re a little bit naive. They are idealistic and very, very wealthy - and quite young. They don’t need another few billion from China.” So now Wales, whose Wikipedia there was blocked for a time, ‘very strongly supports Google” in what may be a principled retreat from China.

—What’s eating traditional media?: “There are things communities do better than the traditional model ... The best of the political bloggers are easily the equal of the opinion columnists at the New York Times (NYSE: NYT). I don’t see the added value there and question whether a newspaper should be paying large sums of money for that anymore. The traditional newspaper publishing cycle doesn’t really work that well online. In the newspaper business, we’re selling the stale bread, which is the print paper, and giving away the fresh bread for free (online).”

—Wrong kind of cutbacks?: “The basic nuts and bolts of traditional journalism is something we’re not seeing being replaced by communities. Large segments have basically been cut out - that’s a mistake because there is a demand for that information. A lot of the moves that have been made have been cuts in the wrong areas.

The NYT says the service—with the apropos name ‘Google TV’—is being developed in conjunction with Sony (NYSE: SNE) and Intel; (NSDQ: INTC) the testing, meanwhile, is being done with the Dish Network.

What’s still not clear is how advanced the whole effort is. The WSJ noted that the program was “limited to a very small number of (Google’s) employees and their families”—implying that it wouldn’t come to market very soon—and as I pointed out last week there have been rumors that Google was working on an app platform for set-top boxes as far back as November 2007.

Google declined to comment on the most recent report.

Related

• What Does Google Have In Store For The Set-Top Box?

Google’s application was denied because of “a likelihood of confusion” with a trademark held by Integra Telecom’s ‘Nexus’ brand, reports MarketWatch. That didn’t stop Sprint (NYSE: S) from announcing today that a version of the Nexus One will be available soon for its network. Just yesterday, Google said a compatible version was available for AT&T (NYSE: T) and Rogers in Canada.

The relationship Google has with Sprint sounds similar how it works with T-Mobile, compared to the completely unlocked phones being sold for AT&T’s or Rogers’ networks. For instance, the Nexus One is still only be available directly at google.com/phone (and not in Sprint stores), but it may come with a discounted price. Currently, a version of the Nexus One for AT&T’s network costs $529, while a discounted version for T-Mobile’s network costs only $179 with a two-year contract. A pricing plan for the device has not yet been announced.

As for the trademark snafu, Google will have to submit further evidence in support of its application, according to last week’s ruling. In a statement, a Google spokeswoman said: “We continue to claim rights to the Nexus One trademark in the United States, and plan to respond to the office action from the U.S. Patent Trademark Office.” A spokesman for Integra did not immediately respond to a request for comment.

Related

• Why Google Phone Sales Will Still Lag After Coming To AT&T, Rogers

YouTube has steadily tried to find the right mix of ad models since Google bought it for $1.65 billion over three years ago. At various times, YouTube experimented with a mix of overlays and pre-rolls, even betting on post-rolls, which were seen as less annoying to viewers, at one point. Through it all, overlays have remained popular. But in general, the video site has found that there is no silver bullet that would lead to profitability, so it has opted for for a variety of tools.

Meanwhile, Google has also been trying to find ways of making its $3.1 billion purchase of DoubleClick work as well. In a series of initiatives starting last fall, Google began ramping up its focus on the display ad sales platform by integrating it more closely with AdSense and AdWords. YouTube is already pretty central to Google’s display goals and the company expects a lot more tweaking of the strategy over the next few months, whether or not display spending strengthens.

Related

• YouTube Brings Ads To Its Mobile Site
• Google Gives DoubleClick An Upgrade; Increased Focus On Smaller Online Pubs

TechCrunch reports that the number of applications has nearly doubled from 16,000 in just three months. Other figures were provided by third-party developer AndroLib, which said it was only six months ago when Google’s Android Market had 10,000 applications.

Google’s Android Market growth has not been as fast or furious as Apple’s App Store. In fact, Apple (NSDQ: AAPL) said in January that it had more than 140,000 applications, or almost twice as more as Google (NSDQ: GOOG).

But with major support for the Google Android platform coming from many handset makers and carriers, that number should increase even more. In December, Flurry a mobile-application analytics firm, forecasted that the Android Market could have as many as 150,000 apps by the end of 2010. But in fact, the Market could be close to achieving that as soon as September if it continues doubling in size every three months. Of course, the App Store is unlikely to stay constant, and could have many more apps by the end of the year.

TechCrunch said Google declined to say what percentage of apps in the market are paid versus free, but AndroLib estimated that the ratio is about 39 percent paid vs. 61 percent free.http://www.mobilecrunch.com/2010/03/16/google-android-market-now-serving-30000-apps/

Related

• Google's Android Market On Track To Hit 150,000 Apps By Next Year

The phone will be sold at www.google.com/phone and will cost $529, a hefty price tag considering the $179 subsidized version available with a T-Mobile contract. While common sense may lead you to believe that sales will increase with the availability on other carriers, the uptake of the well-received device will likely continue to be low. Rather than teaming up with a carrier to get sales and marketing support—and a subsidy—Google has opted to sell the phones directly to consumers. Without that backing, it’s easy to see that the device will lag behind others. After all, why would a consumer opt to pay $529 for an unlocked Nexus One on the AT&T network when an iPhone costs as little as $99?

In the first 74 days of the device being on sale, Google sold roughly 135,000 devices, compared to 1 million first generation iPhones and 1.05 million Droids. While those comparisons are not accurate because those phones were sold with carrier support, you can see how difficult it is—even for Google—to break the traditional way business is done in the wireless industry. Other companies, such as Nokia (NYSE: NOK), have tried selling unlocked devices in the U.S. in the past with little to no success.

Those sales figures were reported today by Flurry, which says it can make reliable estimates about total handset sales because applications embedded with Flurry’s analytics tools have been downloaded to more than 80 percent of all iPhone and Android devices.

As I’ve written before, consumers are only likely to change their behavior if they perceive a better value somewhere else, and right now it’s not clear what you get when you buy a phone directly from Google. However, this is not a sign that Google is failing. Last month, Google’s CEO Eric Schmidt said it was shipping 60,000 Android devices a day—which could work out to be 22 million this year alone.

Related

• What It Means That Google Is Shipping 60,000 Android Phones A Day
• Google May Find Out That Consumers Like To Buy Cellphones The Old Fashioned Way

Related

• Spring Design Says Alex E-Reader With Android Will Ship In April

1) Simple data plans, more powerful mobile browsers, and better smartphones are driving usage of the mobile internet. Specifics: Google alone has seen mobile search traffic jump five-fold over the last two years and there are now 50 million active users of Google’s mobile maps.

2) Google will invest in mobile apps. Executives showed off Google’s new mobile product search as well as ‘Goggles,’ which lets people search by taking a picture from their phones.

And 3) Google’s goal is to make mobile advertising easy. As an example, engineering VP Vic Gundotra demonstrated how an advertiser could target mobile phones simply by selecting a different radio button on a website.

Now for the hard parts, which came up during the question and answer session. Will mobile searches take away share from desktop ones? Answer: No (Think of a person going out to lunch who pulls out his or her phone on the way to make a search, Gundotra said).

As for the importance of the AdMob acquisition—which is in regulatory limbo—Gundotra said he was limited in what he could say but did mention that the mobile ad network space is “highly competitive as (Apple’s) acquisition of Quattro demonstrates.” And when it comes to Apple’s lawsuit against Google partner HTC, Google’s Mario Queiroz said that while Google wasn’t a party in the suit, “we stand behind the Android operating system and the partners who (we) have worked very closely (with) to develop it.”

CFO Patrick Pichette implied in response to yet another question that the company would maintain its Android business in China even if it shut down its search business in that country, as is widely expected. “China is another great market in which Android should flourish,” he said.

Class dismissed.

—We now start with mobile centric app, not a desktop centric one.
—I am v worried abt loss of deep reading. Right now all it is all about short form.
—People who live online think differently, they are not as nationalistic or rigid. Possible to reach them with right message.

—Even now, tanks trump Internet, but people have long memories. they will speak eventually.
—Schmidt reacts to MSFT: “Oh Microsoft (NSDQ: MSFT), such a stellar company” rather derisively.
—People who are complaining about us are in minority & that will stay for many many years.

Google, meanwhile, continues to insist that it will no longer censor its search results in China—a position it first took two months ago. The two sides are in ongoing discussions—although considering the public stands Google and the Chinese government have taken it doesn’t seem like any sort of compromise is possible.

Any move by Google to stop censoring its results in China will likely lead to a shutdown of its search service there, although the consensus is that the company will probably be able to maintain its other operations in the country.

Expect some sort of formal announcement by Google soon. Google CEO Eric Schmidt said this week that a resolution was coming—and the WSJ cites sources who say that Google may stop filtering its results “within weeks.”

Related

• Google In China: More Fallout
• Google May Shut Down Operations In China

It was the carrier’s goal to use Wayfinder to provide directions to both drivers and pedestrians, while overlaying location-based advertising to alert users to nearby restaurants or shops. The carrier planned to start embedding mapping applications on devices this summer with a location-based advertising trial coming soon after. But according to a report in a Swedish publication, Vodafone has decided to close down the whole operation, Engadget reports.

Clearly, the market has gotten a lot more complicated since Vodafone’s acquisition. Google (NSDQ: GOOG) and Nokia (NYSE: NOK) both started offering free maps with turn-by-turn navigtation services on phones, and much more entrenched competitors, like TomTom and Garmin, are struggling because of it. Vodafone’s Anna Cloke tells Engadget: “We could not charge for something that others gave away for free.”

Related

• Google Rolls Out Navigation To More Android Devices; Will Other Smartphones Follow?
• Vodafone To Use Wayfinder For Location Based Advertising
• Vodafone's Wayfinder Purchase Maps Out a Future For Mobile Applications
• Vodafone To Buy Swedish Navigational Software Firm Wayfinder For $30 Million
• Nokia Says Free Ovi Navigation Driving A Download Every Second
• Nokia Follows Google Down Free-GPS Route In Drive Against TomTom

But its latest smartphones coming have a series of enhancements that it hopes will make it more competitive. The phones will run the latest version of the open source operating system, “Symbian^3,” which was demonstrated yesterday to reporters in San Francisco. David Rivas, Nokia’s VP of Technology Management, said the new version includes significant usability and performance improvements that may drum up more interest in its products in the U.S., reports The New York Times.

The software, which was first on display at Mobile World Congress last month in Spain, won’t be ready for prime time until the end of March, and it could be another four to six months until there’s actual devices for sale.

But the review in The New York Times sounds promising. It said the home screen is cordoned off into different customizable segments. The segments may include a calendar block that shows appointments, a Facebook block, or a contact block that has pictures from people in your address book. In essence, the user interface moves away from being a series of icons, which is found on BlackBerry devices and iPhones, and makes it more interactive.

It also becomes way more finger friendly, by integrating multi-touch and larger areas that can be tapped with a finger rather than a stylus. There’s also multi-tasking capabilities, meaning that it can run more than one application at the same time (a feature not present on the iPhone). In videos demonstrating the phones, it looks a bit like how Microsoft made the Windows Mobile operating system a lot more finger-friendly and graphics-rich in the 6.5 update. However, it still ended up having to ditch that and start over from scratch for Windows Phone 7. The big question is whether Nokia (NYSE: NOK) and Symbian can make a good enough experience that can go head-to-head with feature-rich devices being released by Apple (NSDQ: AAPL), Google (NSDQ: GOOG), Palm (NSDQ: PALM) and Microsoft (NSDQ: MSFT). Although to be clear, Nokia’s entire strategy does not rest on Symbian, but also a Linux-based operating system called MeeGo (a combination of its own Maemo OS and Intel’s Moblin).

Perhaps, that’s why Rivas promised that Symbian^4 phones, due out at the end of this year, will “raise the bar” even higher.

Related

• Nokia Unveils Smartphones For The Masses
• What's Palm's Next Move?
• The Buzz Among App Developers At This Year's MWC May Surprise You

Essentially, the app clocks how long it takes to download and upload data to the phone. The release of the two apps come just days before the Commission is set to release its new national broadband plan on March 16, which will heavily stress the need for mobile data networks.

The FCC says it may use the data collected from the apps to “analyze coverage and quality on a geographic basis in the U.S.” That means, it may start to have its own information to fact-check the data that carriers give them. While the random tests conducted by random citizens probably can not be considered scientific, it may do just what the Commission intends—make citizens more aware of the speeds they are getting.

When conducting the test on a Google (NSDQ: GOOG) Nexus One on T-Mobile’s network in Seattle, results indicated that the 3G network performance was .29 mbps down and .35 mbps up. Tests by an iPhone in Los Angeles and a Verizon Wireless Droid in Seattle blew those results away. The iPhone registered 3G speeds of 1.35 mbps down and .21 mbps up. Verizon’s Droid clocked in at 1.71 mbps down and .82 mbps up.

The tools are also available at Broadband.gov for measuring fixed broadband connections, although to test mine, I just turned WiFi on in my phone. In the future, Digiphile.com reports that the FCC says it will make additional broadband testing apps available for consumer use.

The public posturing of News Corp-vs-Google and AOL-poaching-execs-from-Google aside, there is a lot at stake here. Between News Corp.‘s MySpace deal and AOL deal, those are the two biggest third-party deals Google has on the search side, and both are being talked about separately by the parties here, a source told us. Also, both AOL and MySpace deals are expiring this year.

The biggest absentee from the conference: Microsoft (NSDQ: MSFT). Early on during the planning of this conference, MSFT CEO Steve Ballmer was supposed to speak but it didn’t come through. One could argue that with the MSFT-Yahoo (NSDQ: YHOO) deal now in implementation stage, it could be that its hands are full with any “smaller” third party search deals, and that both AOL and MySpace deal will probably go to Google again, though on radically different—read reduced—terms than when they were first done.

The MySpace-Google three year deal, done at the height of MySpace’s popularity, is expiring in August, about six months from now, so likely a bit further along in renegotiations, than the AOL-Google deal, which is expiring later in December.

Glaser did not hint at what he might do next, but instead, he stuck to his usual routine of talking fast and making as many points as possible in his time allotted. One theme in particular was exceedingly clear: he believes closed operating systems are a threat to the mobile industry. In the words of Ben Franklin, he said: “We must all hang together, or assuredly we shall all hang separately.”

Glaser, who remains the chairman of Real Networks, said the digital media and wireless industries are at an inflection point, and the greatest opportunity is still in front of us. By 2013, he said the install base of smartphones and so-called “superphones” is expected to exceed the install base of PCs. He provided eight ways a superphone is different than a smartphone, but essentially what you need to know is this: superphones run applications. (His slides are here.)

He said with those “super” abilities, mobile has a great potential, but if Apple (NSDQ: AAPL) gets its way, the wireless industry could end up like the MP3 industry. The other option is for things to go the way of the PC, which he considers more horizontal. “As of today, Apple is the clear winner. It’s incredible what they’ve been able to do in a vertical paradigm,” he said. “But if that’s the way the industry pans out, we’ll have a much slower pace of innovation, and there will be a tremendous loss in value creation. It’s incumbent for those who don’t want that—carriers, handset-makers, etc.—to work together. Otherwise verticals will stand.”

Of course, there’s plenty of challenges in making horizontal work. Verticals, where one company is responsible for making sure that all the services work on the phone, is easier. As an example, Glaser mentioned Google’s Nexus One, which the company is marketing and selling on its own without a ton of help from the handset-maker and no help from the carrier. Glaser said he couldn’t get the phone to work until he realized he was putting the SIM card in backwards. While that’s human error, he said: “The Nexus One Google (NSDQ: GOOG) experiment is a proof point of that….It’s a lot harder to make horizontal easier.”

In light of that, you see a lot of verticals developing in mobile. Microsoft’s Windows Phone 7 will integrate Xbox, Bing and Outlook. Google’s Android does a better job of integrating Gmail, Maps and Search, and Apple is the ultimate example. So, what is the solution to getting horizontal to work in mobile? Glaser suggests that the carriers might be able to play a role, but “it’s not preordained. The PC went horizontal and the MP3 player went vertical. It’s an open question.”

The Next Mobile Revolution

Google announced it was buying AdMob in early November and said at the time it expected the purchase to close within “the next several months.” Soon afterwards, there were reports that the FTC was reviewing the deal, and in December, Google said it had received a “second request” from the FTC—meaning that regulatory officials wanted more information about the buy and that it would therefore not be closing right away.

The consensus was that the deal would close in February—although there have been no updates from either the FTC or Google. Here’s Google statement: “We’re continuing to talk with the FTC and provide the information that they’ve asked for, but we’re not going to discuss the details of that process.  We’re confident that they’ll conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes.”

Related

• Google To Acquire Mobile Ad Network AdMob For $750 Million In Stock
• Sources Say FTC Is Reviewing Google's Acquisition Of AdMob
• Google's Acquisition Of AdMob Delayed Pending Further FTC Review

YouTube had started testing ads on the mobile site in August 2008 and YouTube’s Taylor Cascino says those tests showed “strong results related to click-throughs, user experience and brand awareness.”

YouTube says that traffic to its mobile site grew 160 percent over the last year—and says that bringing ads to the mobile site will “immediately provide one of the largest audiences for a mobile ad campaign anywhere on the web.”

As a reader points out, the other metric YouTube provides is less impressive; the company says “tens of millions of videos” are now being viewed on the mobile site each day. When YouTube started testing one-and-a-half years ago, it said users were watching “hundreds of millions” of YouTube videos each month on their phones. Not clear how different those two stats are.

As for the web version, Google said last summer that it was now getting “well over a billion views a day.” Analysts have said that growth—as well as monetization efforts, like the new mobile ads—could lead to YouTube boosting Google’s bottom line for the first time this year.

Related

• YouTube Starts Testing Out Mobile Ads
• YouTube Tests New Recommendation Systems To Get Visitors To Watch More Clips
• YouTube Praises Itself On Its Google Birthday
• Analyst: YouTube To Help Google's Bottom Line This Year