On tap this shortened work week, Bill Gates and Steve Jobs will make a joint appearance in a discussion at the WSJ and Walt Mossberg’s annual D: All Things Digital conference.

A few years ago, these two on the same stage would have been a bigger deal. But these days Apple is no longer Microsoft’s biggest threat, Google is.

Above: All Things D’s John Paczkowski points out that many are now labeling Google the new evil empire.

Microsoft has turned most of its attention to the increasing competition from Google in the race to put everything online.

Apple now defines themselves primarily by their core competency as a producer of high end hardware with more user-friendly interfaces. Apple knows what it’s good at and they’re cool. It’s a lot cheaper to buy a Zune or a PC but wouldn’t you rather have an iPod or a MacBook?

Microsoft’s core software business is no longer the cash-cow it was because they were too slow to experiment with new online alternatives. Google Docs for is a good low-cost alternative to MS Office that Microsoft has been extremely slow to match.

Above: Search Market Share for Google has grown more than 10% over the past year.

Microsoft has the advantage of a massive user-base but they will need to embrace openness and create new revenue streams to stay competitive. This is what let them to buy AQNT for what was probably more than they’re worth. But buyouts are not enough.

Open-source software and online alternatives continue to slowly eat up market share. Unless Microsoft allows users of their products the flexibility of these other platforms and embraces interaction more will leave.

Above: A comparative chart of share by service (if anyone has newer data drop us a line)

The bottom line is that Microsoft behaves like an old company while Google behaves in many ways like a true web 2.0 brand. Google embraces feedback and most of Amy Jo Kim’s 5 Mechanics of Online Communities.

Users respond to this and Google reacts making its products better as a result. Rather than react to web 2.0 by purchasing new media companies, Microsoft should unbutton the top button and behave like the new media company they seem to want to be.

There were a lot of cool new TVs and displays showcased at SID 2007 this week, most notably Sony’s new ultra thin OLED display which has become one of the top videos on YouTube.

Above: Sony shows off their new display technology

Sony’s display uses a combination of EL (electroluminescent) and TFT (thin film transistor) technologies to creat a 3mm thick 160 x 120 pixel resolution flexible display.

Electroluminescent technology, which is often used as a back light on watches and alarm clocks gives the image a brightness and image quality that the most advanced TVs can’t match.

Not to be outdone, Samsung exhibited a 40″ LED backlit TV which won SID Display of the Year, and the largest mass-production LCD TV, a 70-inch behemoth that incorporates proprietary technology called McFI to double the number of frames per second for a better picture.

Samsung and L.G. Philips separately released A4 sized e-paper displays, the largest of their kind which are more or less what they sound - paper-thin displays which can be used to make things like this:

Above: Images of The SEIKO Electronic Ink watch for women courtesy of E Ink Corporation.

The full list of SID Display of the Year award winners is here.

Paul McCartney debuted his Dance Tonight music video on YouTube ahead of the release of his new album. It has received more than 220,000 views and more than a thousand comments in two days.

Above: McCartney’s video is directed by Michel Gondry and features Natalie Portman.

Videos from last week’s Personal Democracy forum are now up on the PDF’s blip.tv channel. This is your chance to see Tom Friedman call the Bush administration braindead if you haven’t already.

Click To Play

Above: Lawrence Lessig speaks at PDF2007

These have been around for a little while but for those of you who still prefer the PC to the Mac, we leave you with these videos written and directed by Laurie McGuinness.

Above: Money.

Above: Music

$3 Billion for DoubleClick (GOOG). $6 Billion for aQuantive (MSFT). With the news that Google is spending $100 Million on FeedBurner, are we getting maybe, a little ahead of ourselves here?

I’m as excited about new media as anyone and DoubleClick and AQNT are great companies that will fit great into Google and Microsoft strategically, but really. Those valuations?

At those prices, the $5 Million (plus probable incentives) CBS paid for Wallstrip is barely significant.

On the day of the deal, Wallstrip created this video featuring Quincy Smith, head of CBS Interactive.

Over at SeekingAlpha, The question Scott Carp raises in reference to the Wallstrip deal is, why can’t big media companies (which Google and Microsoft can also now be considered) do this themselves?

For $6 Billion dollars, why couldn’t Microsoft build its own agency relevant to its products? All they would have had to do is lure a few hundred of the smartest people away from other agencies by paying them somewhere in the neighborhood of the $2.85 million they spent on each of AQNT’s 2,106 employees.

FeedBurner’s syndication platform is good and growing fast, but what’s to say Google if they spent a few million couldn’t come up with a better product on their own - and what’s to say that RSS advertising will be worth so much?

Consumer preferences change fast and FeedBurner is not the only horse in that race. Web 2.0 is built on continuous innovation. So why are new media companies following the old school model of buying ideas?

Google has a company full of geniuses and already runs an impressive distribution system, why not extend it on their own.

Poking around for new videos to watch, I stumbled across WeDigTV.com, which features interactive game shows like The Price Is Right. They use Flash layovers to create an interactive experience, allowing users to play along.

What I found most interesting on the site, though, was their simple explanation of why they need to serve ads. This has been an argument that I’m tired of having. Greedy consumers want more and more content for free, without any understanding of the costs associated with producing and distributing that content. The good folks at WeDigTV.com ’splained it real good:

Why We Are Running Advertisements.

Our adventures within the world of TV rights and i-show development have taught us one important lesson. That rights, celebrities and development don’t come for free!

If we want to build the most popular broadband entertainment site on the planet we will need to give the small guy a big voice. Essentially this means hugging the big guys from time to time. We hope you understand.

Put simply, we are running advertisements so as to ensure the constant stream of famous i-show formats for you to enjoy.

More hugs = more i-shows = more fun

Hopefully people will start to understand how it is that all this great content finds its way onto any of our screens, and might add a little into the value exchange equation before it becomes financially impossible to be a content producer (see: Music Industry).

This week Google announced a test program to embed AdSense ad units into their Google Video player, rounding out their click-to-play video ad and video sponsorship offerings.

Contextually targeted text ads with video content seems to be the newest fad in video, replacing some of the short lived buzz about Flash layovers from the likes of VideoEgg or Pointroll’s TickerBoy, and the recently announced Adjustables.com. Google is the 800 lb. gorilla, driven by the popularity of the AdSense platform, but new competition from start-ups like ScanScout will at least make the space interesting.

Whether or not text ads in a media player prove to be an effective marketing tool will remain to be seen, but its cost-per-click and ease of implementation should certainly help drive some pretty quick adoption - or at least, testing - of this new opportunity.

And I couldn’t be happier. The boundaries between editorial church and advertising state have essentially been honored when it comes to news, and most people have been blissfully ignorant when it comes to product placement, integration and other marketing driven content.

Advertainment, aka branded entertainment, has been touted as a very big opportunity for online video. Personally, I want my entertainment to come from entertainment and content people, not a marketing department brainstorming session. Sitcom about the Geico Caveman? Shoot me.

But there may be a light (no, a Bud Light) at the end of this tunnel. According to a recent report in AdAge, Bud.TV continues to hemorrhage users. Bud isn’t integrated directly into most of their content, instead acting as their own presenting sponsor. Putting content behind an age-verification wall isn’t helping, especially since most of the content is essentially appropriate for all ages. Some of it is even pretty entertaining. We can only assume they had hoped to become another player in the content syndication game. But you can’t aggregate an audience of 18 year olds when you don’t let them view the content.

Regardless of the business strategy, I’m glad to see that the novelty of such ventures is wearing off. Now that people are starting to see what good content is all about, and how easily they can find it, maybe they’ll start to be less tolerant of advertisers meddling in the plotlines of their entertainment. Maybe pre-roll isn’t such a bad option after all.

Speaking to reporters in London, CEO Eric Schmidt discussed Google’s lofty search ambitions - prompting Drudge and many in the Blogosphere to cry Big Brother.

According to a Financial Times article this morning, Schmidt discussed the need to gather personal information in order to offer even more user-specific results.

“We cannot even answer the most basic questions because we don’t know enough about you. That is the most important aspect of Google’s expansion…The goal is to enable Google users to be able to ask the question such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’ ”

In addition to Google’s expanding product library, the company clearly sees its future as being the company in contextual advertising space. Their ambitions are to get more relevant in search as well as to offer ads that people actually want.

Google plays such a large role in daily life that concerns like this are to be expected. The question is, and has always been how much privacy are people willing to give up for better service?

Google is constantly talking about its search in terms of the network effect - the more people the more powerful the results - or as Schmidt puts it, “the sum of what the world thinks is the truth.”

Now that Google has enlisted most of the world their natural next step is to get more local. The closer they can get to the end user, the better service they can offer, but how personal will we let them get?

Online communities, web 2.0 and the two-way mass media conversation phenomenon have changed the way we communicate. This will become an even bigger deal as we get closer to cross-platform convergence and people start to have these conversations via their living room TVs.

The best framework I have come across for building a successful online community is Amy Jo Kim’s 5 Mechanics of compelling video games, which is a pretty good way to build a functioning online community. Thanks to Matt Lewis of Townhall.com for bringing these up at PDF2007.

The full deck of Kim’s presentation at Etech ‘06 is available here.

1. Collecting: The best games allow you to add things to your collection. Social networking sites allow you to collect friends which gives people bragging rights - as well as displaying their values and personality - For instance adding Barack Obama makes a statement about what that member believes.

Points: Earning points gives a user credibility and can drive user loyalty. EBay’s feedback rating is a good example of this. As are the video rating systems employed by YouTube and other sites.

Feedback: Online communities are all about two way exchanges and the community will speak up when they like or don’t like something. Feedback allows users generating or viewing content to interact with each other further customizing the experience of content creation and distribution.

Exchanges: The more interaction that takes place the stronger the community and things like myspace comments both strengthen a user’s credibility - if people are posting comments thing that user must be cool, and strengthens the bonds between users of the site.

Customization: When users personalize a site it increases engagement by creating an interface that works best for the user and tailors users’ web image to reflect the way they view themselves.

The images above are courtesy of Amy Jo Kim and ShuffleBrain. 

Regardless of what a company’s online presence currently is, those looking to increase engagement would be wise to implement as many of these mechanics as they can. They increase the viral nature of an online presence and all of the successful web 2.0 brand names incorporate these to some extent.

All the excitement talent and capital flowing into online video related companies can make it tough to put things in perspective. Following a week of major news and industry events it is a good time to take stock of where we really are now, and where we’re headed.

At PDF2007, Andrew Rasiej and Micah Sifry issued a call to 2008 presidential candidates to endorse six “very specific technology policy goals.” These also work as a great framework for considering the industry issues that exist at this early stage in new media.

As we move toward an age of advanced interactivity and the whatever you want whenever you want it information economy, where are we now, where will we wind up and what is needed to get us there?

The PDF Goals (full version here) along with my thoughts are as follows -

    1. Declare the Internet a public good in the same way we think of water, electricity, highways, or public education.

Thoughts: The internet is valuable to nearly every aspect of life in the developed world. But is the internet a commodity or a universal need, or both? And how do we best serve the needs of the different organizations of people using it?

Declaring the internet a public good would help get the internet into places where it currently is not - spreading information and empowering new groups of individuals who don’t currently have a high speed connection in the home. But to do so would require regulation and a greater level of federal involvement than most people want.

    2. Commit to providing affordable high-speed wireless Internet access nationwide. Do this by creating an Internet Innovation and Investment Fund with a minimal budget of $20 billion (half of what we spend on highways in a single year)

Thoughts: At the Future of Broadband Conference last week I spoke with some folks from the NCTA about the current state of U.S. broadband networks. While we have massive dark fiber networks in some of our major cities, rural areas are lagging behind and it is clear that the U.S. could be doing a lot better.

According to a OECD report, the U.S. now has about 59 million broadband subscribers representing about 19 of every 100 people. While the metric is odd (households is probably a better one and that number is closer to 50%) the study is important because it places the U.S. right in the middle of the pack when it comes to broadband adoption.

Government spending would bring broadband infrastructure to places where major NSPs won’t invest (think of the IIIF as a sort of Tennessee Valley Authority for the 21st century.) This would speed broadband adoption to bring poor parts of the U.S. in line with the rest of the country and the U.S. as a whole in line with the rest of the developed world.

    3. Declare a “Net Neutrality” standard forbidding Internet service providers from discriminating among content based on origin, application or type.

Thoughts: Net Neutrality has a certain fairness appeal to it but internet infrastructure costs money to build and maintain. Businesses have more at stake in the event of network failures, and as we become more internet dependent certain organizations will demand higher-priority access than others.

As we move toward wider use of VOIP, and emergency services become more dependent on IP communication, it is imperative that they not be hindered by net congestion. It is more important that people have access when dialing 911 than it is when watching Fios TV. As networks get smarter, there will be new ways to prioritize efficiently and fairly.

    4. Instead of “No Child Left Behind,” our goal should be “Every Child Connected.” The digital divide in our country is worse than it was 10 years ago before our schools were wired.

Thoughts: When I first heard this my immediate thought was to dismiss it as a throw-away catch phrase replacing another throw-away catch phrase, but the concept is actually right on.

The internet is a terrific learning tool - it provides easy access to information not available offline in most places. It has replaced libraries as the place most kids go for information not only because it has more information but because it has made that info more current and simpler to navigate.

One of the greatest arguments for government intervention in facilitating the advancement of the internet is the advancement of education. It is an advantage for any child growing up to have a broadband connection in their home.

This is even more true in the developing world, 60 Minutes on Sunday had a great piece on Nicholas Negroponte’s one laptop per child project which is worth watching. View it here.

    5. Commit to building a Connected Democracy where it becomes commonplace for local as well as national government proceedings to be heard by anyone any time and over time.

Thoughts: The democratization of media is here for good and ease of access to information should be used to make Washington more accessible.

The development of long tail distribution is the result of years of media segmentation since the origination of cable television. Now that the cost of broadcasting to many users has also been diminished we should find ways to use this to our political advantage. While private companies continue to seek the rights to broadcast important government events and proceedings, the government should not give up its rights to online distribution.

It remains to be seen how many people will actually engage in politics no matter how local the process is made. The explosion of online video and web 2.0 is driving self-sustaining communities that hold huge potential in creating new political discourse. This discourse needs to be supported in every way possible by the government.

    6. Create a National Tech Corps, because as our country becomes more reliant on 21st century communications to maintain and build our economy we need to protect our communications infrastructure.

Thoughts: There will no doubt be a greater need for technically skilled individuals in emergency response but do we really need a national corps of them? It is an interesting idea, but we already have specialized technically skilled people in every emergency response organization.

A new governmental organization would create an unneeded layer of bureaucracy. Creating guidelines and standards for unified operation in the event of an emergency is where government can make the biggest impact.

Conclusions: Internet technology will move from the computer to other screens in the next few years. The development of IPTV and Rich Internet Applications will make it possible to do everything done online on a mobile device or on the TV in your living room, while turning it into a two-way experience.

Internet technology will start to even the playing field between the poor and the wealthy and between the west and developing nations by providing new educational and revenue opportunities for them.

The role of Governments should be limited to facilitating development of international standards, speeding broadband adoption and making technology more widely available in the places it is not.