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Q: With Ozzie taking over as chief software architect, Microsoft is talking more about how to take the plunge in software services. So where do you see the chief obstacle preventing them from turning this into a success? They’ve got all the developers in the world.
Benioff: I am not the CEO of Microsoft so I don’t really know. You’d have to ask them why they haven’t delivered on the vision. We’re not unique in saying that it’s the end of software. That’s our phrase, but Microsoft has not delivered on the promise. They haven’t used their power to innovate in the way that others have.

Microsoft has been slow to adopt the multitenant architecture. The company is prepping Dynamics CRM 4, also known as CRM Live, to go after Salesforce.com, as well as bringing other products in the Dynamics family into a hosted, multitenant environment. Phil Wainewright pointed out in his ZDNet blog post, Microsoft hasn’t publicly put services fully at the forefront of its strategy:

Following is a portion of the full interview:

Q: But what I’m asking today is whether you have changed your opinion. Do you think that Microsoft is still a dinosaur?
Benioff:I think Microsoft is still a dinosaur. More than ever, it tries to hold onto its monopolistic position around technology that they hold, whether it’s SQL Server, whether it’s NT, whether it’s Windows, whether it’s Office–these are their cash cows they don’t want slaughtered.

Q: In 2005 you said that Microsoft was a dinosaur facing the obsolescence of a technology and a business model. Fast-forward to 2008 and Microsoft just had a big event in Las Vegas, where Chief Software Architect Ray Ozzie got up onstage and articulated a vision that had a lot of similarities to what you’re talking about vis a vis platform as a service, such as its SQL Server data services. So, has your opinion changed?
Benioff: No. If we had waited for Microsoft to create any of those, nothing would be created yet. Look at the whole software service phenomenon. Where are they? I think Microsoft is still a dinosaur.

Publicly, Microsoft talks up the merits of its ’software-plus-services’ strategy. In my view, the message is bunkum, even though it reflects the reality of Microsoft’s business today: mostly software, with a few early-stage service offerings. But Microsoft has its message back-to-front. Until Microsoft reverses the software-plus-services mantra and puts services at the forefront of its vision, it will continue to disappoint.
I know many people want to believe Microsoft still remains in charge of its destiny and won’t let cloud rivals walk all over it. But time after time, history shows that it’s fresh startups, not incumbent giants, that gain leadership in new technologies and markets. I guess we’re just wired to expect those who wield power to stay in place. But the truth is that, at times of change, it takes a change of leader to adapt to the new circumstances.
Recent pronouncements by chief strategy officer Ray Ozzie suggest that, despite the public bluster, Microsoft’s top brass already secretly realize that they must put services, not software, at the center of their worldview (the world of the mesh, Ozzie calls it).

(Credit:
Dan Farber/CNET News)

But, if you listen to Ozzie carefully, he is sending clear signals that point to software services and synchronization across all devices, online and offline. It’s not a pure services model, because users do want to work offline at times. Even Salesforce.com and Google recognize the hybrid working model with their efforts to provide offline access.

Q:Right, but we’re talking about SQL Server. We’re talking about their software-as-a-service strategy, and so on. Can we consider those monopolistic?
Benioff: Well, not in the same way, of course. But the point is that they’re trying to hold onto their past more than trying to create their future. This has been the great failing of Microsoft over the last 10 years. I haven’t seen the level of innovation from them that we see from other vendors.

During the interview Benioff said of Microsoft, “…there is no acknowledgment to some of the core tenets of this new paradigm.” He is not overly impressed by Microsoft’s newfound and aggressive focus on the Web as a platform, as driven by Chief Software Architect Ray Ozzie.

His braggadocio has garnered Salesforce.com loads of attention since its inception nine years ago. What’s somewhat mystifying is how competitors have stood by while Salesforce.com heads toward $1 billion in revenue for its next fiscal year, ending January 31, 2009.

Google is doing really well with Gmail. I think that’s why now you will see Microsoft have to respond with a multitenant e-mail solution. They have Hotmail, but not Hotmail for business per se. They’re definitely going to have to do that.

Charlie Cooper and I interviewed Salesforce.com CEO Marc Benioff last week. Following is part of the exchange, where I asked Benioff for his thoughts on Microsoft. He has called Microsoft a dinosaur, incapable of innovation, and a monopolist.

Salesforce.com CEO Marc Benioff

Q: But are those cash cows monopolies?
Benioff: Well, I think one was ruled a monopoly.

Q: As the concept of the platform as a service becomes more of a reality over the next decade, do you think that Microsoft has an opportunity to be one of the big platforms?
Benioff: The evidence is that history, more or less, will repeat itself because there is no acknowledgment to some of the core tenants of this new paradigm. I think only in the cases where they will be dragged, kicking and screaming, and I think the best example probably is Gmail.

Microsoft’s oligarchs and other large software companies recognize that the shift to the cloud is a critical path. Benioff better run even faster, before the dinosaurs catch up a la Jurassic Park. You can bet that if the dinosaurs start to close in, he will run into the arms of one of the older dinosaurs, including Microsoft, or the new breed, such as Google.

Disparaging large competitors is part of Benioff’s marketing offensive. He has taken shots at SAP, Oracle, Siebel, and others, dismissing them as 20th century fossils who are making feeble attempts to adapt to Web and cloud computing.

Yet another legal obstacle for Web monitoring is the Communications Act, which says companies engaged in “transmitting” communications shall not “divulge” those contents.

At least three wiretapping-related federal laws restrict what broadband providers can do: the Electronic Communications Privacy Act of 1986 (ECPA); the Communications Act of 1934; and the Cable TV Privacy Act of 1984. The cable privacy law is the most restrictive and applies only to cable broadband providers–meaning, thanks to a law written when the Apple Macintosh was new, they’re at a competitive disadvantage to AT&T and Verizon.

There’s one final legal twist that could imperil NebuAd and similar companies that conduct deep packet inspection. The way they work is to perform a Carnivore-like interception of all customers’ Web browsing. Then Web traffic with NebuAd’s opt-out cookie is discarded.

One irony of this situation is that broadband providers are seeking to do precisely what companies like Google and Yahoo have done for many years: monitor what users are doing and display relevant advertisements. But cultural expectations are different. And by an accident of history, or a quirk of fate, those laws don’t apply to Google and Yahoo and other Web sites. They single out Internet service providers.

It’s unclear how many providers are performing Web monitoring for advertising, not least because all of the companies providing deep packet inspection are highly secretive.

The problem for broadband providers is that intercepting customers’ Web browsing, analyzing the protocols to see what’s going on, and reviewing the packets’ contents starts to look a lot like wiretapping. And there are federal and state laws, complete with civil and criminal sanctions, that broadly prohibit wiretapping.

CDT’s comments allege that broadband providers do “not appear to be adequately disclosing this involvement” and suggests that the Electronic Communications Privacy Act regulates the practice. They also suggest that the FTC “should address” advertising-related monitoring and require affirmative consent from customers instead of an opt-out mechanism. In its privacy principles, the FTC said “companies should obtain affirmative express consent from affected consumers” before substantially changing privacy policies.

Another possible threat to broadband providers is the Federal Trade Commission, which can file lawsuits alleging unfair or deceptive business practices. The FTC has posed suggested guidelines for behavioral advertising after convening a workshop last fall, and the Center for Democracy and Technology filed comments with the agency last month raising questions about NebuAd and its peers. (Disclaimer: I spoke at last fall’s workshop.)

What that means in practice is that, if you’ve chosen to opt-out through your Internet provider, the contents of your communications are nevertheless continually disclosed to a third party–even if for a microsecond–which is exactly what federal privacy laws seem to prohibit.

Embarq talks about “preference advertising” in its privacy policy and confirmed it has tested NebuAd “in one of our markets,” but added that “we are not currently using those tools and have not decided whether to move forward with them.” Rivals to NebuAd include Front Porch of Sonora, Calif., and U.K.-based Phorm.

But other laws apply to all Internet providers. ECPA says, in general, that “a person or entity providing an electronic communication service to the public shall not intentionally divulge the contents of any communication.” Two exceptions to that general rule allow monitoring that is a “necessary incident” to providing the service and monitoring with a user’s “lawful consent.”

Because deep packet inspection can, barring the use of encryption, monitor everything that a customer does online, a broadband provider is in the enviable position of being able to know exactly what each customer is doing. The odds of successful monetization are high. But so are the legal risks.

News.com’s Anne Broache contributed to this report

The stakes are high. The advertising industry is moving toward behavioral targeting, meaning compiling dossiers (anonymized or not) on individuals and using those to display targeted ads. Theoretically, this benefits everyone: Internet users see ads that match their interests, and advertisers sell more products.

NebuAd refused to disclose what advertising networks–such as DoubleClick or Microsoft’s Aquantive–it uses, or what broadband providers it counts as customers. So did Phorm and Front Porch (which said it could not arrange an interview).

In interviews with News.com over the last few days, privacy advocates and attorneys pointed to a collection of federal laws–written in the 1980s when broadband services were merely a pipe dream–that combine to create a treacherous legal landscape for broadband providers that plan to conduct Web monitoring.

Translation: Obtaining “lawful consent” may mean more than sending e-mail notifying customers that the terms of service have changed. At the least it means that an opt-in process is less risky, legally speaking, than an opt-out one.

In the past, the FTC has taken a relatively strict view of informed consent. In its lawsuit filed against Odysseus Marketing, the FTC argued that it was unlawful for a company not “to adequately disclose” to customers that it was sharing information with third parties. The case ended in a settlement.

One corner of this ecosystem that hasn’t managed to cash in on advertising is, by some measurements, the largest: broadband providers. So it may have been inevitable that they would seek additional revenue by monitoring their customers’ online activities and creating behavioral profiles that could yield hyper-relevant ads.

It’s “a problem for cable providers because the very collection of personal information is prohibited without consent,” said Al Gidari, a partner at Perkins Coie in Seattle, whose clients include Google and broadband providers. “It’s plainly a problem for Charter. I’m amazed we haven’t seen a class action lawsuit on this.”

Online advertising has ballooned into a roughly $45 billion-a-year business, to the benefit of Google, Yahoo, ad networks, and innumerable speciality and hobbyist Web sites.

Three federal laws, three legal hurdles

“They have to worry about it more,” said Gidari, the attorney at Perkins Coie, referring to cable operators. “Their rules are much more restrictive. They have the obligation to give notice to their customers before they disclose information. They have the obligation not to collect information without prior consent…Cable operators have the most exposure in doing this.”

“The question is whether or not a third party like this can track usage for things other than for routine maintenance of a network–they are entitled to do that,” said Barry Steinhardt, director of the ACLU’s Technology and Liberty Program. “But where you’re actually tracking the content of what users do, there are serious questions there about the Electronic Communications Privacy Act and the cable laws.”

For their part, cable providers insist that they’re following the law. Charter tells us it is “confident” that “all legal requirements” have been met. Wide Open West, a cable operator in the Midwest that’s using NebuAd’s hardware, said: “We feel that the service and our use of it is in compliance with current regulations.”

“Do (broadband providers) think they own that data? If they own that data, there are no limits on what can be done with it? Can they give it to an employer? Can they give it to a credit bureau? Can they give it to a potential landlord?” –Barry Steinhardt, ACLU’s Technology and Liberty Program

Steinhardt added: “I think Congressman (Edward) Markey is exactly right to raise this issue. The implications here are profound…Do (broadband providers) think they own that data? If they own that data, there are no limits on what can be done with it? Can they give it to an employer? Can they give it to a credit bureau? Can they give it to a potential landlord?”

The only problem with this practice is that it may not be entirely, well, legal. The first warning sign came last week when two members of the U.S. Congress sent a letter to Charter Communications, a large cable provider, raising “substantial questions” about the legality of deep packet inspection and asking the company to hold off. (See our Q&A with a Charter executive.)

The 2003 In Re Pharmatrak decision from the U.S. Court of Appeals for the 1st Circuit offers a glimpse of how judges view consent. The court ruled in a case involving Web tracking “that it makes more sense to place the burden of showing consent on the party seeking the benefit of the exception.” The judges approvingly cited a second case, which said “consent can only be implied when the surrounding circumstances convincingly show that the party knew about and consented to the interception.”

When asked why it won’t disclose that information, NebuAd told us in e-mail: “We would like to respect the trust and relationship that already exists between an ISP and their end customer. We want to stress that we do not publicly discuss our ISP partner relationships because of the direct relationship that already exists between an ISP and their customers. Our belief is that our ISP partners have a direct, trusted relationship with their customers; and communication, public or otherwise, should be directly from our ISP partner to their end customer.” NebuAd does provide an opt-out mechanism through browser cookies.

The cable privacy law is unusually onerous because it requires the “prior written or electronic consent of the subscriber” before any personally identifiable information can be collected. What that means is sending a postcard or e-mail telling customers that they can opt-out (which is what cable providers are doing so far) may not be good enough.

Wide Open West is using technology from Redwood City, Calif.-based NebuAd, as it discloses in its privacy policy. Charter and (reportedly) Knology are experimenting with it, too. CenturyTel told us that “we are doing business” with NebuAd and that it did a trial of NebuAd’s technology in one of its markets late last year.

Having played with YouTube on some of these devices, we’ll say this: Yes, it’s cool to have access to YouTube on your TV or on your phone–but you may actually come away a bit disappointed in the end. Because YouTube has such a social component–sharing cool or funny videos with your friends–the experience can often be a bit isolating when viewed on a device without ready access to your e-mail, instant messaging, or social network of choice. You know the feeling: a million channels to watch, and nothin’s on.

YouTube videos will be coming to high-end TiVo DVRs soon. In a brief announcement, TiVo said that YouTube video access would be available on the company’s latest TiVo HD and TiVo Series3 models “later this year.” (Owners of older Series2 TiVos look to be out of luck.) On-screen access to YouTube videos joins a host of other Internet-delivered entertainment options on TiVo, including Amazon Unbox video rentals, Rhapsody’s subscription music service, access to Photobucket and Picasa photo galleries, TiVoCast Web videos, podcasts, and Internet radio. While ancillary to TiVo’s primary mission of recording and playing back TV shows, the inclusion of such Web-friendly features helps the company delineate its products from the wide range of “free” DVRs that are available from local cable operators. (Disclaimer: CNET is one of several content partners that provides videos to TiVo’s TiVoCast service.)

(Credit:
CNET)

As for YouTube, its appearance on TiVo may be the first of many new venues. The TiVo news was timed to coincide with YouTube’s announcement that it’s expanding its APIs to allow third parties more direct access to the service. That said, YouTube is already available on quite a few home and mobile gadgets. Aside from the high-profile Apple TV, you can also find YouTube on your TV with the Netgear Digital Entertainer HD–as well as any product with a full-function (Flash-enabled) Web browser, such as the
Nintendo Wii and
Sony PlayStation 3. In the handheld world, the once unique YouTube offering on the iPhone has since been joined by phones from Helio and the Nokia N810 Internet Tablet. Also, the new Skyfire browser promises to bring YouTube (and any other Flash video site) to a wide range of Windows Mobile phones.

YouTube will be available on Series3 TiVos later this year

This is an ad, right?

There’s the name too. Real IKEA product names never make sense. They always seem to resemble a fair to middling Scrabble hand–for example, KLIPPAN or LYCKSELE. LEKO is far too meaningful.

(Credit: Flickr/OiMax)

So what kind of
car are you going to get next? Perhaps, I might tempt your credulity by asking you to consider a new eco-car called the LEKO.

Looks like a perfect car dealership, no?

My bet is that they’re making their flat packs smaller so that they fit in more cars. Or that they’re buying VW.

Yes, the car according to IKEA.

If IKEA made a car, the doors might not fit quite perfectly into the body. Then you’d really have to work hard to use those tiny screwdrivers to make sure the engine didn’t wobble. And just imagine the number of screws it would take to put in the cup holder.

Or is IKEA simply trying to amuse French people into doing good?

The LEKO (L’eco, get it?), allegedly has the backing of the World Wildlife Fund in France. Which might mean the fund has put money into the creation or that the car will have plastic panda-skin seats.

A Toyota? No, an IKEA.

However, just to complicate your purchasing decision, I will also tell you that April 1-7 is Sustainable Development Week in France. And here is the Web site to prove it.

A strange Web site has appeared, roulez-leko.com, on which a very relaxed, modern, eco-friendly chap, allegedly the great car designer Christophe Grozs, stands next to an apparent car draped with the word LEKO and the tagline “la voiture selon IKEA.”

Now that you’re enthused, I don’t want you groaning when I tell you that the LEKO will launch on April 1–the day when all silly adverts have their 15 hours of fame.

It also will save you untold (because unspecified) amounts of money on your expenditure. And it is humongously eco-friendly.

So will you soon be able to take the world’s smartest car (it appears to be convertible into a coupe or a convertible) home in a flatpack?

The software giant said Monday that it’s acquiring Danger, the Palo Alto, Calif.-based maker of the T-Mobile Sidekick for an undisclosed amount.

On the plus side, Danger actually is agreeing to be bought by Microsoft, unlike Yahoo, which formally rebuffed Microsoft’s bid Monday.

Updated at 11 a.m. PST with Microsoft comments and more background on Danger.

Although both companies use others to manufacture their devices, Danger gets its money primarily by getting a cut of the monthly service for its phones, while Microsoft gets its money licensing the operating system to phone makers.

Danger was started by Andy Rubin, who later left the company to launch another mobile start-up, which was acquired by Google. Since then, Rubin has been leading the development of Google’s Android open-source mobile platform, which is gaining attention at the Mobile World Congress in Barcelona, Spain, this week.

Horn said Microsoft will look at ways of bringing the two businesses–and the two operating systems–more closely together.

Microsoft’s acquisition brings a halt to Danger’s plans to go public. In December, the privately held company had filed its preliminary paperwork for an initial public offering.

The challenge for Microsoft, though, is that Danger has its own operating system, distinct from Windows Mobile, as well as completely different way of doing business than Microsoft.

Danger’s two other co-founders, Matt Hershenson and Joe Britt, have remained at the company, heading its technical teams. Britt has prior experience of being gobbled by Microsoft, having been at WebTV when Microsoft bought that company. Danger has 294 workers in total, according to the company.

Horn said Microsoft has already spoken with Motorola and Sharp, the two companies that make phones for Danger. Both, he noted, already also make Windows Mobile phones.

“The addition of Danger serves as a perfect complement to our existing software and services, and also strengthens our dedication to improving mobile experiences centered around individuals and what they like,” Microsoft entertainment unit President Robbie Bach said in a statement.

Although Danger’s business model is different from Windows Mobile, Horn said that Microsoft already licenses some of its mobile Windows Live software for a monthly fee.

Update: In a telephone interview, Microsoft General Manager Scott Horn said the company isn’t ready to announce its specific plans for Danger, but said the company plans to continue operating its existing Sidekick business.

T-Mobile Sidekick Slide

Danger’s Sidekick brings many of the same abilities as business-oriented smartphones–Web browsing, e-mail, and instant messaging–but it does so in a way that has been more popular with executives’ kids than with businesspeople themselves.

Microsoft apparently is serious about the consumer cell phone business.

(Credit:
Corinne Schulze/CNET Networks)

Samsung Electronics has agreed to sell its investment stake in Symbian to mobile phone maker Nokia, according to a Reuters report.

In June, Nokia announced plans to acquire the remaining stake in smartphone software developer Symbian that it didn’t already own. Nokia, by having full ownership of Symbian, wants to beat back the competition from Apple’s
iPhone and other competitors by accelerating its product development and serve as an open-source operating system platform for other handset makers, wireless carriers, and software developers.

Nokia, according to the Reuters report on Tuesday, will pay $410 million for its Symbian stake.

According to a report in TechCrunch, eBay has hired Deutsche Bank to handle a sale of its Web site discovery service StumbleUpon, which it acquired a little over a year ago for roughly $75 million.

eBay’s tie-up with StumbleUpon may be about to tumble.

StumbleUpon currently has more than 6 million registered users.

In July, StumbleUpon had 1.3 million worldwide visitors and 25 million page views. Twelve months earlier, the service attracted 4.4 million visitors and 31 million page views (ComScore).

StumbleUpon takes a gander at the Web sites that people have visited and makes recommendations about other sites and videos that they may like.

According to the report:

In the report, TechCrunch cites a source who says that eBay is hoping to use Deutsche Bank to land the “right buyer,” though the asking price is unknown and uncertainty exists whether the online retailing giant will be able to get what it paid, or will have to run the proverbial blue light special.

Security firm MessageLabs recorded a 52 percent increase in suspicious DNS traffic between July and August, “indicating that the online underworld is poised to launch targeted attacks in coming weeks,” the firm said in a statement released early on Thursday.

Kaminsky mentioned a DNS-related incident with China Netcom (possibly the incident reported by the ZD Net Zero Day blog), but said it wasn’t clear that it was due to the vulnerability he found. “There are other scenarios that I can’t, unfortunately, get into,” he added.

Those stats only show part of the problem–researchers aren’t able to scan the traffic going to servers used for directing e-mail and corporate Web browser traffic, and thus are missing the stats on attempts to find unpatched systems via those alternative modes, Kaminsky said.

Dan Kaminsky

“The good news is that there are hundreds of millions of users protected against these attacks. The bad news is it’s not everybody,” he said.

“People are sweeping the Internet looking for vulnerable systems,” he said. “What they have in store, we don’t know.”

A fatal flaw with the DNS (Domain Name System) is being exploited in Internet attacks and more attacks are likely, the security researcher who discovered the flaw said on Thursday.

Those developments forced Kaminsky to go public with some details about his finding in a conference call with journalists on July 24. Then he talked more about it at Black Hat in Las Vegas two weeks ago, reporting that 70 percent of Fortune 500 companies have tested and patched mail servers successfully, while 61 percent have patched non-mail servers.

Basically, the problem exists in the DNS system, which translates Web addresses into numerical IP addresses and serves as the phone book for the Internet. An attacker exploiting the vulnerability could redirect Web surfers to malicious sites, even if the surfers typed in the legitimate Web address. For example, someone could type in the address for a bank and end up at a site that looks like the bank site but is a fake site set up to grab sensitive information like passwords.

To be fair, some of that suspicious traffic is due to security researchers gathering statistics, according to Kaminsky. But there’s no way to tell how much of it is for research purposes, he said.

Meanwhile, people can use test code to find out if their systems are safe at Doxpara.com.

“I do think we are going to see attacks. I think we have been seeing attacks already going on in the field,” said Dan Kaminsky, director of penetration testing for IOActive, who warned the industry about the DNS vulnerability nearly five months ago. “We’re doing everything we can to mitigate and reduce its incidence.”

Kaminsky first warned security software vendors about the problem in a secret meeting at Microsoft headquarters in March so they could start writing patches to address the problem. On July 8, he went public with the information, but not the details, of the flaw, at the same time Microsoft, Cisco, and other vendors released their patches in an unprecedented, synchronized multivendor effort.

“The most important thing for people to patch are the name servers that back up their mail servers,” he said.

Kaminsky planned to release details about the vulnerability during a talk he was scheduled to give at the Black Hat security conference a month later in order to give people more time to patch their systems. But within a few weeks, security bloggers were speculating about and leaking technical details of the vulnerability. A few days later there was exploit code reported in the wild.

(Credit:
Declan McCullagh/CNET News)

Facebook has not yet issued an official statement on the ComScore statistics.

But an apparent leveling in traffic doesn’t equal mass account deletion. “Coolness factor” always fades; now it’s up to Facebook to prove it can stay relevant and useful in its post-expansion era. Remember when instant-messaging client adoption was soaring and people were IMing each other just for the heck of it? We’re all still IMing, but it’s no longer a novelty, it’s a utility. (”Utility,” by the way, appears to be one of Facebook founder Mark Zuckerberg’s favorite words.)

And there are a few very important points to keep in mind when it comes to dealing with statistics. First, the ComScore numbers only point to U.S. traffic. It’s clear that Facebook is aware that some of its best opportunities for growth lie overseas, as the company has launched a translation project to offer its site in foreign languages and hence appeal to a bigger base abroad. None of that international growth (in both English- and non-English-speaking regions) is reflected in the numbers.

The argument makes sense. For many there was an initial novelty to keeping in touch with faraway friends and classmates, wasting time at the office with games and other developer-created applications, and voyeuristically sifting through online photo albums all on a single destination site. Me, I’ve grown tired of the Scrabulous gaming application on Facebook–it’s way more fun to play word games in person.

Earlier this week, the U.K. arm of audience measurement firm Nielsen reported that traffic from several social-networking sites, including Facebook, had dipped from December 2007 to January 2008. Now, numbers from ComScore (reported Friday on TechCrunch), suggest that Facebook’s U.S. traffic may be in trouble as well. Graphs show unique visitors reaching a plateau, and with a small dip between December (34.7 million unique visitors) and January 2008 (33.9).

It’s inevitable that the explosive expansion that Facebook experienced in 2007 can’t possibly go on forever. And since no hot new destination has popped up to potentially suck away Facebook traffic, the obvious conclusion is to blame it on social-networking fatigue. Facebook, one could say, is a trend and users have simply grown tired of it.

Either way, this shouldn’t induce doomsday prophecies. Facebook’s traffic may indeed be leveling off, something that should naturally happen after any site’s phase of frenetic growth. Now it’s up to the site to prove that it can stay relevant and useful to the base that it’s already built up.

Then there’s the fact that some say you just can’t rely on Web metrics. Many a new-media property, among them Major League Baseball’s MLB.com, has complained that it’s been tough to roll in ad dollars because traffic measurement firms like ComScore and Nielsen Online don’t report numbers accurately. The Interactive Advertising Bureau (IAB), which represents more than 300 digital publishers including CNET Networks (publisher of News.com), has asked those two firms to undergo an audit (currently in process) to explore discrepancies between their metrics and IAB members’ internal server logs.

There’s been a lot of buzz this week about Facebook’s traffic leveling off or declining, and naturally, it’s been accompanied by schadenfreude over the fact that the hottest start-up in Silicon Valley may soon be losing its laurels.

Blog chatter, unsurprisingly, is at a fever pitch.

Google and Yahoo have been discussing a partnership under which Google would supply some text ads alongside Yahoo search results; both companies expressed satisfaction with a limited two-week test. However, an announcement of the partnership between the online rivals has been delayed more than once.

Google Chief Executive Eric Schmidt, speaking to reporters at a Google Zeitgeist event in the U.K., said he’s meeting with co-founders Larry Page and Sergey Brin on the matter, according to the Times Online. “After this press conference the three of us will meet and decide what our response is,” Schmidt said.

Google’s top brass are meeting Monday to figure out a response to how Microsoft’s new overtures toward Yahoo affect Google’s potential ad deal with Yahoo.

Microsoft attempted to acquire Yahoo but now is considering a more limited acquisition of only part of Yahoo, the company said.

Google’s top executives have said they’d like to offer Yahoo a helping hand in their travails to fend off Microsoft, then activist shareholder Carl Icahn, and now Microsoft again. And Brin went one step further, saying he’d give Yahoo CEO Jerry Yang refuge within Google if he’s ousted from the Internet pioneer, according to press accounts.

“Jerry is very talented, and if he wants to work at Google, we’d be very excited to have him, but I don’t think that’s going to happen,” Brin said, according to the BBC.