Rupert Murdoch is pointing a gun to Google’s head, and Microsoft is helping him pull back the trigger. For the past few weeks, Murdoch and his officers at News Corp. have been very vocal about their distaste for Google and their desire to lead other media companies in a boycott of sorts.

Murdoch keeps threatening to stop letting Google index the WSJ.com and his other media sites, and wants other news sites to join him in this self-imposed silence. The folks at Microsoft’s Bing think this is a great idea. Not only that, but the FT reports that Microsoft is in fact in discussions with News Corp. and other publishers about the possibility of paying them to remove their sites from Google’s search index. This report comes on the heels of a meeting in Europe where Bing dangled the prospect of premium spots in search results to publishers and outright money for search R&D.

Microsoft is not afraid to buy search market share, which is what it’s doing with the Yahoo search deal and even its Cashback program. But with these latest talks, it is literally trying to buy the news, or at least exclusive access to the news.

Bing can’t buy all the news, it can only buy certain brands. If Bing can somehow become the only place you can find news results and working links to the Wall Street Journal and other top papers such as the New York Times, the Washington Post, and the LA Times, for instance, that would be a big reason to switch for a lot of folks. But it’s not clear how much Bing would have to pay the news companies of the world for them to give up all the traffic Google sends them in return for a fraction of that traffic and some cash.

Even Google couldn’t afford to strike such deals. Says Murdoch, of Google, “If they were to pay everybody for everything they took from every newspaper in the world, and every magazine, they wouldn’t have any profits left.”

In order to actually make a dent in Google’s market share, Bing would have to pay such exorbitant sums to so many different news companies that it would be difficult to recoup its investment. Bing certainly get some marketing buzz out of any such move, but that’s about it.

The big problem with a search engine trying to buy market share by buying parts of the news is that information spreads so quickly these days, exclusives last about 30 seconds. That information will end up on a site that is indexed by Google. Or the same news will be broken by someone else on the Web before the WSJ.com even gets to it.

Exclusive indexing goes against the Web’s inherent openness. Companies that try to curtail that openness don’t last long on the Web.

Image via PhotoXpress.

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Yesterday, Twitter changed its organizing question from “What Are You Doing?” to “What’s Happening?” But if you want to know what’s really happening now, check out Hot Potato, a startup launching right now at our Realtime CrunchUp. Hot Potato is releasing an iPhone app which lets you create a stream of conversations around events based both on your location and what your friends are doing.

Hot Potato is a micro-messaging app that organizes the conversation stream by events. For Hot Potato, an event can be anything that is happening right now: a basketball game, concert, party, street fair, buying a new car, or even just two friends on a bike ride. An event is whatever is happening that people want to share.

The app uses the GPS in your iPhone to show you events people are talking about near you. If you are at a concert, you can see what other people (who also have the app) are saying about it. You can “check in” to places just like with Foursquare, but you can also post a note or photo. All the notes and photos about a particular event are collected on the same page, which is also available on the Web.

Hot Potato uses events as its primary filter, and adds a social and geo layers on top. You sign in with your Facebook account so you can connect with existing friends easily. You can also add your Twitter account. When you send out a note or put up a photo, it can be shared on Facebook, Tweeted out, or shared via email with a link back to the original content. The link goes back to a Hot Potato website where all the links are hosted. Or you can simply share your Hot Potato status (attending, watching, following).

So you can talk about something that is happening to you, share some pictures, and pass it along. Other Hot Potato users can chime in, and you can see what is happening around you. Hot Potato is yet another example of a location app that marries social networks with the real world. You’re at an event. Someone you follow is at the same event. And you find each other through Hot Potato. Or who knows, maybe you meet someone new—because you are both at the same place at the same time and talking about it on Hot Potato.

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Ever since Google started talking about its Google Chrome OS, developers, competitors, and observers have been wondering why Google needs two operating systems: Android and Chrome OS. At today’s chrome OS briefing, Google was asked whether Chrome OS would support Android apps. The answer is no.

Of course, as Michael pointed out during the Q&A, Steve Jobs said the same thing when he launched the iPhone without apps, and then when he was ready, it was all about the apps. But Google had a good response: they want to make web apps work well on Chrome OS and therefore will only be focusing on those. Later on Sergey Brin touched on the same theme when he said, “Call us dumb businessmen, but . . . we believe the Web platform is a much simpler way.”

Here’s the initial exchange from MG’s live notes:

Q: So Android’s marketplace is key – what about Android apps on Chrome?

SP: Currently we’re only working with web apps. The iPhone was a bit different because THEY made their own native apps. We’re not doing that, we’re doing all web apps for Chrome OS. Netbooks are a better size for web apps.

And here is what Sergey said to a different question at the end of the session:

Call us dumb businessmen, but we really focus on user needs rather than think about strategies relative to other companies and whatnot

We believe the web platform is a much simpler way, where the machines are essentially stateless, more cache-like, but can still be performant. And yet much easier and simpler for individuals to use. Since that is a very important need in the market right now, that is what we are trying to fill.

Rather than support Android apps and other sorts of apps, there is only one kind of app Google is interested in: the Web app. Chrome OS is all about making Web apps the only apps you will ever need. Which kind of makes you wonder how long we’ll need Android apps, or iPhone apps for that matter, because you know it is only a matter of time before a phone comes out running on Chrome OS.

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Still not sure why Google is building its own operating system? It created this animated video to try to explain why the Web needs a new OS, and why that OS should be Chrome. Google just showed the video at its Chrome OS press event which MG is liveblogging.

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Remember the flurry of new features Bing rolled out last week?  Bing announced Wolfram Alpha results for nutrition searches, more in-depth weather results, enhanced hover previews, better maps, and turned MSN Video into Bing Videos. Well, it turns out it is also quietly launched another feature which highlights the latest posts from news sites.

If you do a search for “TechCrunch” or “New York Times,” for instance, underneath the summary information and deep links there are the three latest headlines under “Latest posts.”

This format is similar to when you search for certain widely-followed Twitter users and you get their latest Tweets. It’s part of Bing’s obsession with providing realtime results. Just as the recent broader integration of Twitter into search results brings the latest conversations into search, showing the latest headlines for news sites shows readers what’s breaking on the site without having to click through. Funny that it doesn’t work for the “Associated Press.”

Just to be clear, this is different than searching for a topic which is in the news and getting news results at the top in the form of headlines, which all search engines do. The “Latest posts” appear when you do a search for a specific news site. You’d think it would work for any blog with a feed, but it doesn’t seem to come up for many smaller blogs I tried.

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Microsoft announced the availability of Silverlight 4 in beta at its Professional Developers Conference (PDC) today. Some of the new features include more fluid animations, Webcam, microphone and printing support, 200 percent faster start times than Silverlight 3, deep zoom and multi-touch support and more. It now also supports Google Chrome, even though it’s just a rounding error of a browser.

One of the big capabilities of Silverlight 4 is its ability to take rich-media experiences outside the browser in client apps which will compete with Adobe AIR. The non-browser apps fully support HTML, allowing tight integration with content from the Web. It also supports notifications.

During one demo, Microsoft showed what a Silverlight version of Facebook might look like. Using Facebook’s APIs, Microsoft created a demo app which was completely reskinned, complete with news feed, contacts, and photos. Cycling through photos in the Silverlight Facebook app, for instance, was much faster than doing it in the browser. Although I’m not sure we’re oing to start to see a whole bunch of Facebook desktop apps like we do with Twitter, but the it was a good demo.

Some screenshots below of what Facebook would look like as a Silverlight app. They show a reskinned stream view, a people view, Facebook photos, and a grid view.

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Media on the Web is going from a solo affair to a shared experience. We are seeing this in everything from CNN live news videos enabled with Facebook chat to Meebo Rooms and Tiny Chat. Today, a new startup from Los Angeles called Qlipso is launching its own virtual rooms where friends can share videos and play Flash games with each other.

The service is in private beta and requires a Windows-only download for the avatars (there’s also a Web app without the avatars). You can get one of 1,000 invites here. Click on “Get Started” and ignore the beta key request. Send an email to the contact listed (betsy) and put “TechCrunch Invite” in the subject line.

You sign in with Facebook Connect and can invite up to eight friends to share any Flash-based media. Once inside the virtual room, you can interact via text chat, video chat, voice-chat, or videogame-quality avatars. The integration with Facebook Connect makes it easy to invite friends via a message in your news feed. It also supports MySpace, AIM, and MSN Messenger.

The Qlipso download adds a plug-in to your browser which identifies Flash media whenever you are surfing the Web and places a share button next to it. When you click teh share button, it launches the app and lets you see which of your contacts are online so you can invite them in.

Qlipso is aiming the service at media sites which might want to incorporate the experience to make the consumption of their videos and games more social and interactive. When a group of people are watching a video, Qlipso can recommend other videos in the left-hand column to keep the group of friends in the room longer. The service brings in elements of virtual worlds with the avatars which can move realistically and perform tricks like flips and throwing tomatoes at the screen.

The startup is a sponsor of our Realtime Crunchup this Friday and will be demoing the service at the event.

Here’s a video:

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We’re just two days away from our Realtime CrunchUp in San Francisco. The CrunchUp agenda is chock full of goodness. Since our first event back in July, the momentum around realtime has accelerated. We find ourselves awash in realtime streams of data, and these realtime streams are becoming the new center of attention on the Web. During the conference we’ll be drilling down into what’s next for realtime in terms of making this stream manageable, adding new tributaries to the stream such as geolocation data, and building businesses on top of it.

As if the amazing lineup of speakers (from Twitter, Facebook, Google, Microsoft, Foursquare, Seesmic, Brizzly, Hot Potato, Tweetmeme, DailyBooth) and startup product launch demos were not enough to drop everything right now and buy a ticket, I am going to give you one more reason. We’ll be giving away a half-day sailing excursion to one lucky ticket holder at the event.

Event sponsor ekoVenture, which is an OpenTable for active travel, is providing the half-day sailing trip in conjunction with OCSC SAILING. The winner can take five friends on a high-performance vessel in San Francisco Bay, with a professional skipper and instructor on board. The trip is worth $750, which is almost twice as much as a ticket.

And remember, you can justify taking a half-day off to go sailing as a “team-building” activity.

I love this kind of sponsorship because not only is it an awesome giveaway, but it highlights what the sponsor does in a very effective way. There are still a few sponsorship spots left for start-ups and brands to reach both conference and networking attendees. Please contact Heather Harde or Jeanne Logozo to learn more about sponsorship packages and custom opportunities.

Also, as we announced already, anyone who buys a ticket can opt-in to pitch your own realtime product on-stage.

Friday, November 20, 2009
Main Agenda: 9 am – 5:45 pm
After Party with StartUp Demo Tables: 5:45 – 7:30 pm

InterContinental Hotel
Grand Ballroom, 3rd floor
888 Howard Street, San Francisco CA

GET CRUNCHUP TICKETS NOW, courtesy of Eventbrite
$395 all-inclusive pass through midnight pst, Wednesday, November 18
$495 through November 20, subject to availability

Enter for a chance to *RealTime Pitch from the Audience*.
Purchase a CrunchUp pass and enter the RealTime Pitch. Two CrunchUp attendees (subject to opt out, of course) will be randomly selected Friday morning at the conference and will have 5 minutes each to pitch their start-up to attendees as part of our main agenda demo sessions, at 11:45 am and 2:00 pm.

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Old habits die hard. Rupert Murdoch believes that the future of the newspaper business is subscriptions—electronic subscriptions. He’s done with giving away his news for free on the Web and to search engines like Google. Instead thinks that Kindle-like tablet computers can save the media industry. It’s a notion that’s been floated before: an entire newsstand in a color tablet which delivers electronic versions of any newspaper or magazine you want for a monthly subscription of $15 to $19 a month.

It’s got to work, otherwise, he warns from his soapbox, “Newspapers will go out of business. All newspapers.” In an interview on his own Fox Business (embedded below), he explains his thinking:

ALEXIS GLICK: ARE YOU CONVINCED IT IS GOING TO WORK?

RUPERT MURDOCH: WE TEST MARKETED IT AND PEOPLE I THINK UNDERSTAND THAT IT’S PERFECTLY FAIR THAT THEY ARE GOING TO PAY FOR IT. IF IT DOESN’T, THE NEWSPAPERS WILL GO OUT OF BUSINESS. ALL NEWSPAPERS. THERE IS JUST NOT ENOUGH ADVERTISING TO GO AROUND FOR ALL THE SITES ON THE INTERNET. THE NUMBER OF SITES AND AVAILABILITY OF ADVERTISING ON THE INTERNET, THE AVAILABILITY DOUBLES AND TRIPLES EVERY YEAR BUT THE AMOUNT OF REAL MONEY GOES UP 10 OR 15% A YEAR. THE PRICE OF IT KEEPS COMING DOWN.

Forget for a moment that news websites will be perfectly readable on these newfangled tablets everyone keeps talking about. So Murdoch still has the problem of “>”leading” all of his media competitors into the promised land of subscription tablets by walling off their websites from readers. And also set aside the fact that newspapers and magazines are already available for paid download on Amazon’s Kindle, and that those subscription revenues are still miniscule. A full-color tablet with access to an entire newsstand’s worth of magazines and newspapers for a single bundled price would be a better deal and better experience than buying subscriptions a la carté from the Kindle.

But in the face of free content readable via a browser, the subscription model will be challenged. Even setting aside competition from newer media sites and blogs with lower cost structures and lean staffs, there is no way to completely wall off news from every traditional news organization. At the very least, the weakest newspapers and magazines with the lowest readership and share of attention will find that they are better off remaining free and selling Web ads than taking crumbs from the new electronic subscrtiption pie. (Presumably the subscription revenue will be divvied up based on demand, with the most popular titles getting the largest portion).

Apparently, Murdoch also has no interest in simply playing Bing off of Google and making the search engines pay for the right to index his news either. Asked whether he was “moving towards an exclusive deal” with the “aggregators and the Googles of the world” to make them “pay for News Corp. content,” Murdoch replied:

NO, NO, NO. I DON’T KNOW THAT THEY CAN AFFORD TO DO THAT. IF THEY WERE TO PAY EVERYBODY FOR EVERYTHING THEY TOOK FROM EVERY NEWSPAPER IN THE WORLD, AND EVERY MAGAZINE, THEY WOULDN’T HAVE ANY PROFITS LEFT.

You got that? Even if he were to sell his news to Google, which he is not, Google doesn’t have enough money to buy it. Either that, or Murdoch is negotiating in public as Google’s search deal with MySpace comes up for renewal.

Video and partial transcript below:

Transcript excerpt via Fox Business News

ALEXIS GLICK: YOU HAVE MADE A LOT OF NEWS ABOUT AGGREGATORS AND GOOGLES OF THE WORLD AND WHETHER THEY SHOULD PAY FOR NEWS CORP. CONTENT. ARE YOU MOVING TOWARD EXCLUSIVE DEAL WITH THEM?

RUPERT MURDOCH: NO, NO, NO. I DON’T KNOW THAT THEY CAN AFFORD TO DO THAT. IF THEY WERE TO PAY EVERYBODY FOR EVERYTHING THEY TOOK FROM EVERY NEWSPAPER IN THE WORLD, AND EVERY MAGAZINE, THEY WOULDN’T HAVE ANY PROFITS LEFT. THEY HAVE DEVISED A BRILLIANT SEARCH ENGINE THAT SCRAPES ALL OF THE MATERIAL PUBLISHED IN THE WORLD, AND ON THE BACK OF THAT THEY SELL SEARCH, BUT THEY DON’T PAY FOR THE RAW MATERIAL. WE HAVE TO DO SOMETHING ABOUT THAT. WE CAN PUBLISH OUR PAPERS ELECTRONICALLY, AND OTHERS CAN TOO, AND PEOPLE CAN STILL GO TO A SEARCH ENGINE IF THEY WANT TO FIND OUT SOMETHING, NOT NEWS PERHAPS, BUT THEY SEE TERMS THAT NEWS REFERS TO IN NEWSPAPER STORIES AND MAGAZINES THEY CAN EITHER GO TO GOOGLE OR MICROSOFT OR WHOEVER. THEY’LL STILL HAVE A VERY GOOD BUSINESS.

ALEXIS GLICK: YOU ENVISION A WORLD THEN WITH A TABLET, A HANDHELD DEVICE OR SOMETHING OF THAT NATURE WHERE YOU CAN OFFER A FINANCIAL MARKETPLACE OR A SUPERMARKET FULL OF MEDIA CONTENT AND DATA ON A MULTI-TIERED SYSTEM?

RUPERT MURDOCH: YES.

ALEXIS GLICK: HOW DOES THAT WORK?

RUPERT MURDOCH: WELL, YOU’D BE ABLE TO GET ON IT, AS WOULD BE TRANSMITTED TO IT, A TABLET. TRANSMITTED THROUGH THE AIR OR OVER WI-FI. A REASONABLE SIZE, ATTRACTIVE TABLET IN FULL COLOR AND YOU COULD READ A NEWSPAPER ON IT. YOU PRESS A BUTTON WHEN YOU WANT IT OR IF YOU WANT TO PLAY EXTRA, MORE THAN THAT, BUT IF IT COSTS $15 OR $19 A MONTH, IF YOU WANTED TRAVEL MAGAZINES OR SOMETHING YOU CAN ORDER THEM UP AND HAVE THEM.

ALEXIS GLICK: ON THE TABLET, IF I PAY THE MAXIMUM AMOUNT I CAN HAVE ANYTHING I WANT?

RUPERT MURDOCH: ANY CONTENT. BOOKS, ANYTHING AT ALL. YOU JUST HAVE TO PAY. THAT’S THE FUTURE. IT COSTS A FORTUNE. THE NEWSPAPER INDUSTRY – THE NEWS INDUSTRY, PUT IT THAT WAY. LET’S NOT TALK ABOUT PAPER. THE NEWS INDUSTRY SPENDS A FORTUNE IN COLLECTING THE NEWS. IT NEEDS TO BE PAID FOR IT. THERE IS NOT ENOUGH ADVERTISING TO GO AROUND. IT’S ALRIGHT ON CABLE TELEVISION BECAUSE IT GETS PAID BY THE CABLE SUPPLIERS, MONEY, WHICH, OF COURSE, GETS PASSED ON TO THE PUBLIC. AS WELL AS SUPPLEMENTED BY SOME ADVERTISING AND IT HAS TO BE THE SAME WITH OTHER FORMS OF NEWS.

ALEXIS GLICK: ARE YOU CONVINCED IT IS GOING TO WORK?

RUPERT MURDOCH: SURE.

ALEXIS GLICK: WHY?

RUPERT MURDOCH: WE TEST MARKETED IT AND PEOPLE I THINK UNDERSTAND THAT IT’S PERFECTLY FAIR THAT THEY ARE GOING TO PAY FOR IT. IF IT DOESN’T, THE NEWSPAPERS WILL GO OUT OF BUSINESS. ALL NEWSPAPERS. THERE IS JUST NOT ENOUGH ADVERTISING TO GO AROUND FOR ALL THE SITES ON THE INTERNET. THE NUMBER OF SITES AND AVAILABILITY OF ADVERTISING ON THE INTERNET, THE AVAILABILITY DOUBLES AND TRIPLES EVERY YEAR BUT THE AMOUNT OF REAL MONEY GOES UP 10 OR 15% A YEAR. THE PRICE OF IT KEEPS COMING DOWN.

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Have you ever wanted to be a Wall Street analyst or come up with your own discounted cash flow model for a publicly traded company? Me neither, but I like the idea of tweaking a few variables in a company’s business model and seeing how that might change a its stock price. A new site launching today called Trefis lets you do just that.

Started by three engineers and math whizzes from MIT and Cornell (Manish Jhunjhunwala, Adam Donovan, and Cem Ozkaynak) who did time at McKinsey and UBS bank, Trefis breaks down a stock price by the contribution of a company’s major products and businesses. For instance, 51.3 percent of Apple’s stock price is attributed to the iPhone, 25.5 percent to the Macintosh, and only 7.7 percent to iTunes and iPhone apps. Don’t agree? You can change the underlying assumptions by simply dragging lines on charts forecasting the future price of the iPhone, its market share going out to 2016, and so forth.  Every time you change an assumption, the price target changes accordingly.

Underlying each stock price breakdown is a traditional discounted cash flow model created by Trefis.  At launch, the site has models for Apple, Google, Microsoft, Yahoo, HP, Netflix, Intel, the New York Times, and others.  You change the models all you like by playing around with the underlying assumptions, then save and share your model.  The way the site is set up, you don’t need to create a model for every variable which might affect a stock.  If you have a strong opinion about the iPhone’s future market share and nothing else, you can just create a model about that component, along with comments explaining your reasoning.

There is a social element to Trefis in that you can follow other people, and they can follow you.  Over time, the founders of Trefis hope to be able to create a marketplace between investors and experts in particular fields, who might charge subscription fees for access to their models.

Trefis raised $550,000 in an angel round in November, 2008, during the depths of the financial crisis.  The round was led by Timothy Weller, CFO of Enernoc and former CFO of Akamai, Bob Johnson of the MIT corporation, and Semyon Dukach, former president of the MIT Blackjack team.

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Remember all that talk about Bing starting to fizzle in September? Well it didn’t happen, and now October numbers and Bing gained another half a point to reach 9.9 percent market share of U.S. searches, according to comScore’s qSearch service. Five months after launch, Bing has steadily gained two points of market share.

And it is keeping the pressure on, with deals to index realtime data streams from both Twitter and Facebook (Google also has a deal with Twitter, but not Facebook), a deal with Wolfram Alpha for nutrition and diet data, and the constant rollout of new features such as better video search.

The biggest loser in the search wars, however, continues to be Yahoo as it awaits approval to hand over search to Bing.  In a single month, Yahoo’s U.S. search share dropped 0.8 percent to 18 percent, and is down 3 percent since the beginning of the year.  Meanwhile, Google seems unfazed, gaining another half point itself in October to finish with 65.4 percent share.

Bing’s progress is encouraging (someone needs to compete with Google in search), but so far all Bing has shown is that it can take share away from its future partner Yahoo. Bing has yet to put a ding in Google’s share.  Perhaps it needs to do something radical, like cut deals with major news and media sites for exclusive rights to index their content.  Otherwise it will just keep eating away at Yahoo’s slice of pie, which it’s already been promised anyway.

U.S. Core Search Share, September 2009 (Source: comScore qSearch)

(Table below via JPMorgan analyst Imran Khan. Click to enlarge.)

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