Facebook is much more than a social network. Twitter is much more than an information network or serendipity engine. Each represent a dashboard for your attention, a foundation for conversations and collaboration, and a matrix for your social graph and contextual relationships. In other words, Facebook and Twitter essentially represent the entrée to the future of the social Web as each strive to host, what Facebook founder Mark Zuckerberg, and others, refer to as our personal social operating system (OS).

What Windows is to PCs and OS X is to Macs, Facebook and Twitter are to our social architecture and enterprise. Certainly there’s a David and Goliath element here depending on which company you immediately view as Microsoft or Apple. However, Mac and Windows are simply operating systems, not networks per se, and that’s where the metaphor of an OS breaks down. Either way, there is the perception that there is a competition between Facebook and Twitter for your attention and your network.

The following post is by guest author Edo Segal (@edosegal), an entrepreneur who has launched and sold several companies, including Relegence to AOL. Today, he runs his Incubator/Investment vehicle Futurity Ventures, which recently launched a new search engine for wisdom.

Media scarcity is dead. In the future my son will have a flash drive that he will pay $29 for that will have the capacity to hold all movies and music ever released by a major label, studio or tv/cable network. It will take 30 seconds to clone the data over the network to a friend who will pay $14.99 for a device with double capacity a year later. How does the media industry survive such a coming disruption?

For many of us that have been in this game for a while, the word “convergence” harbors some shameful vibes. It conjures up many false hopes, dashed dreams and misfires. Nevertheless, I would contend that convergence is upon us and it has arrived from an unexpected delivery man: Steve Jobs. Apple has created a media consumption experience that has reduced friction to such a point that soon the consumer will not know if he is buying music, a movie or a game. The notion of App is changing. The lines between these different forms of media are quickly blurring and soon will be completely artificial. Already these distinctions are merely fossilized conventions that stem from consumers’ discovery habits. As those evolve, like learning that it is easier to go to Amazon and search to find a product than going to aisle 9 at the store. The coming confusion of the consumption experience where a user won’t care or know if what they are buying is a movie, a game or a music track presents vast opportunity.

No one disputes that Silicon Valley is the global capital of the tech world. But this wasn’t always so. It is the Valley’s dynamism and networks which have given it an unassailable advantage. Silicon Valley has simply left rivals like Boston’s Route 128 in the dust.

I mentioned a little bit about my first Columbus Day in California in a previous column. But I didn’t tell you the whole story. I was invited to three amazing events on the night of October 12. Venture capital firm Alsop-Louie—known as one of the wackier and unconventional VC firms—invited me to their legendary Columbus Day party. On that same evening I had an invite from Henry Chesbrough, Executive Director of the Center for Open Innovation at the University of California-Berkeley to attend a dinner party for his forum. Down in Silicon Valley I also had an invite to speak at an event with India’s former Minister of Disinvestment, Arun Shorie—the guy who was once in charge of privatizing the country’s moribund nationalized firms and who is as close as you can get to financial royalty in India.

It was a really hard decision which one to pick. And I found myself wondering, where else in the world would I have to face such a decision? The answer is nowhere. Silicon Valley, which has expanded to embrace the entire Bay Area as an engine of entrepreneurship and innovation, is a unique place of powerful and concurrent overlapping networks. As a new arrival to Silicon Valley and San Francisco, I had read about this and did believe it. But it was hard to understand to what degree these types of concentric circles of connections were pervasive in the Valley. I am now studying how some of these networks develop and their influence on success rates in entrepreneurship.

Google released a new mobile navigation app today and GPS navigation companies such as Garmin And TomTom saw their shares take a plunge. The announcement shaved $1.2 billion off of Garmin’s market cap alone. Its shares are down more than 16 percent so far today to $31.60. TomTom’s shares are down 21 percent to $8.11.

And this is just for an Android app. But Google could very well make it available to other phones as well, and that is what has investors worried. GPS navigation apps are among the most expensive, and most lucrative, of all mobile apps.

After months of negotiations and holding both off at bay, Twitter now has agreements with both Bing and Google to give them access to its full feed of public Tweets. Both search engines have been yearning to drink directly from Twitter’s the realtime firehose of micro-messages and all that they carry. A rudimentary version of Bing’s Twitter search is already live, and it will soon add public Facebook updates to its search results as well.

While financial terms of the deals were not disclosed, full access to Twitter’s data stream is very valuable to both search engines. Depending on how much Twitter was able squeeze out of Google and Bing for these licensing deals, they are likely to provide its first major source of revenue. (Imagine, if they have to pay by the Tweet).

Yesterday at the Web 2.0 Summit, Morgan Stanley Internet analyst Mary Meeker did her annual data dump slide presentation, this year focusing on the growth prospects of the mobile Web. As usual, there were 3 or 4 slides that really captured the trends she was talking about, particularly the ones around iPhone adoption and how that phone in particular is catapulting mobile Web usage into the mainstream.

You can see her full slide show below (all 68 of them), but let me pull out the three iPhone slides that helps put its growth into perspective. The first one above shows the growth of data traffic on AT&T’s mobile network. It is 50 times higher than it was just three years ago. I added two arrows to show when the first iPhone launched in June, 2007 and the iPhone 3G in July 2008.

AT&T saw massive pops in data usage following those two launches as consumers discovered the unadulterated mobile Web for the first time

Are you still confused about the latest twists in the AP’s copyright infringement case against artist Shepard Fairey for his use of an AP photograph as the inspiration for his famous Obama Hope poster? Just watch this Attack of the Show video in which TechCrunch’s Jason Kincaid explains how Fairey was caught lying about which image he used (a story Jason broke on Friday, even beating the AP), but still thinks he has a fair use case.

What this very public fight with Shepard Fairey boils down to, explains Jason at the end of the interview, is that if the AP “can take him down, everyone else will be scared to use AP material.” (Video after the jump).

Update: Earlier today, the AP filed an amended complaint with the court, noting the change in Shepard’s story. It also added his licensing company, Obey Clothing, as a defendant, suggesting it has evidence that he did indeed profit from the image at some point.

In the third quarter of 2009, we saw a slight rebound in venture funding from earlier in the year. But which venture capital firms were the most active in the quarter? One of my favorite new tables in our latest TechCrunch Trends report, which is based on company data we collect in CrunchBase, is the ranking of the most active venture capital firms.

We’ve reproduced that ranking below in two interactive tables which show the top 25 most active VC firms in both the third quarter of 2009 and the most active year-to-date. (You can see a list of the top 100 most-active VC firms in the quarter ). The rankings are based on the number of deals each firm participated in during each time period. Draper Fisher Jurvetson tops both lists, with 17 deals in the third quarter, and 34 year to date. Then it was followed, for the quarter, by Sequoia (12 deals), Kleiner Perkins (11 deals), NEA (9 deals), and Benchmark (8 deals). The top ten for the year-to-date rankings show many of the same firms, although they move around a little.

As Microsoft and Yahoo await government approval of their pending deal to join their two search businesses at the hip, the two companies received an important endorsement today from the world’s top advertisers.

In a letter today from the American Association of Advertising Agencies, and signed by the CEOs of the Publicis Groupe, WPP, Interpublic, and Omnicom, the advertisers gave their full support to the deal, urging “the Department of Justice to bring its antitrust review to a speedy conclusion.” The letter notes that the deal would strengthen Microsoft’s and Yahoo’s search advertising offerings, and thus would be good for competition.

I went to a birthday party this weekend where I ran into a Facebook guy, a smart guy who asked me to go off the record. In fact, the whole party was supposed to be off the record. So I ignored the off the record part by insisting that I already knew the thing I was being told, and then I told him on the record what I thought was about to happen for Facebook. This being my usual m.o. which is to insist on not being NDAed except for things I don’t really want to talk about anyway, like the next version of Office.

That way, I can just make up what I want to have happen, never breaking any confidence and yet at the same time painting as plausible picture of assumed reality that it is hard to deny or in fact slow down. So here’s what I told the Facebook guy: the company has at most 3 months window to absorb FriendFeed and open the Everyone News Feed, and if that’s true (again, making all this up) then the messaging about how that’s going to work must begin immediately, like in two weeks. Then I went home and saw MG Siegler’s post and Scoble’s remake of Frenzy on FriendFeed.

OK, so I was off by two weeks. The noise about the death of FriendFeed is already off the charts, and the proof is in the lack of rejoinder from the FriendFeed team. As in: of course FriendFeed is not dead, and here’s what we’re going to do to remake Facebook in the next few weeks. Actually, that is indeed the message from Twitter, what with Lists and ReTweets and the return of Track just as soon as, well, sometime next year or so. No need for FriendFeed real soon now, because these Lists will soon be carved up and meshed together into an authority stream by the 3rd party developers.

The following is an excerpt from Adam L. Penenberg’s new book, Viral Loop: From Facebook To Twitter, How Today’s Smartest Businesses Grow Themselves.

Simply by designing your product the right way, you can build an insanely fast-growing business from scratch. No advertising or marketing budget, no need for a sales force, and venture capitalists will flock to throw money at you.

Many of the most successful Web 2.0 companies, including MySpace, YouTube, eBay, Flickr and rising stars like Twitter are prime examples of a “viral loop”—to use it, you have to spread it. The result: Never before has there been the potential to create wealth this fast, on this scale, and starting with so little.

In Viral Loop, Penenberg tells the fascinating story of the entrepreneurs who first harnessed the unprecedented potential of viral loops to create the successful online businesses—some worth billions of dollars—that we have all grown to rely on. The trick is that they created something people really want, so much so that their customers happily spread the word about their product for them.
One such business was Hotmail. After their 20th venture capitalist meeting, Sabeer Bhatia and Jack Smith, former hardware engineers at Apple who first came up with the idea for webmail, finally raised seed money from famed VC firm, Draper Fisher Jurvetson.

Editor’s note: This is a guest post by Vivek Wadhwa, an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Executive in Residence at Duke University. Follow him on Twitter at @vwadhwa.

I spent Columbus Day in Sunnyvale, fittingly, meeting with a roomful of new arrivals. Well, relatively new. They were Indians living in Silicon Valley. The event was organized by the Think India Foundation, a think-tank that seeks to solve problems which Indians face. When introducing the topic of skilled immigration, the discussion moderator, Sand Hill Group founder M.R. Rangaswami asked the obvious question. How many planned to return to India? I was shocked to see more than three-quarters of the audience raise their hands.

Does the world really need another URL shortener? Apparently, the U.S. government thinks so. It just launched http://go.usa.gov as a link shortening service for government employees. It shortens links from any .gov, .mil, or .si.edu site.

For instance, http://go.usa.gov/llX takes you to a page on Nasa’s site with some nice satellite imagery showing the Fall colors in Wisconsin. And http://go.usa.gov/liO is a link to www.Recovery.gov (I think you save two characters n that one). The idea is that if you see one of these short links you know it is coming from a government employee, which doesn’t exactly make it official but is supposed to make it more trustworthy.

More evidence that venture exits and fund raising are related. We already know that venture exits were anemic in the third quarter of 2009, and now the National Venture Capital Association has released data on how much money venture funds themselves were able to raise. It was not a lot in historical terms.

According to the NCVA’s data, venture funds raised $1.6 billion in the third quarter, down 82 percent from a year ago and down 21 percent from last quarter. What’s more is that about $1 billion of that was accounted for by one VC firm, Khosla Ventures. Although, the NCVA only notes Khosla’s bigger $750 million fund, so it is not clear if it is including its smaller seed fund as well in these figures.

Kids these days. It seems like they’re writing HTML before they learn how to talk. And a lot of them are starting companies before they graduate from high school. Here’s a list of some of our favorite teen entrepreneurs. And please keep in mind that there are lots of startups we’ve yet to hear about. So if you are a young entrepreneur, make sure to leave a comment below and add your bio and startup information to CrunchBase.

The list:

The Associated Press is yapping again about the “exploitation of news” by search engines, news aggregators and, well, the Internet itself. The CEO of the AP, Tom Curley, told a media industry powwow in Beijing:

We will no longer tolerate the disconnect between people who devote themselves — at great human and economic cost — to gathering news of public interest and those who profit from it without supporting it.

I am temporarily lifting our ban on AP stories to make a point. The remarks seemed to be directed at Google, among others. But if you follow the link above, it will take you to an AP article hosted on Google. Is Google stealing it? No, Google already licenses stories from the AP, so it is already “supporting it.”

What’s really behind all the bluster is that the AP is in the midst of renegotiating a new licensing deal with Google, and is using vague public threats to try to get more money out of them. It’s really kind of sad.

As long as advertisers pay for clicks, there will be click fraud. And the more people combat it, the more sophisticated the attacks become to get around the defenses that advertisers, search engines, and others put in place. But a recent click fraud ring discovered by click-fraud monitoring service Anchor Intelligence suggests that the practice is evolving to a scale never seen before.

Anchor Intelligence identified a click fraud ring being run out of China which involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. That money was never paid out and the ring has now dissipated (or moved onto another scam), but who knows how long the ring was in operation before Anchor noticed. The operation was called DormRing1 because it was centered in dorms at technical universities in China such as the Shanghai Technology Institute.

“We have seen 200 fraud rings,” says Anchor VP Richard Sim, “and this one by far trumps them all. I think it is indicative of how sophisticated the click fraud is getting. We are seeing the sheer scale and size of these rings growing.”

WIth the rise of Web phones like the iPhone, Android, Blackberry, and Palm (Verizon’s CEO says that 40% of its new phone sales are such smartphones), mobile advertising promises to be a huge growth area. The Kelsey Group, a market research firm, projects that the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013.

Of course, that is just an educated guess which will turn out wrong. But there is no doubt that mobile advertising will be much bigger in four years, perhaps even ten to 20 times bigger than it is today. Where will all of that mobile ad money go to? Here I think the Kelsey group is more on target. It projects that mobile search will go from 24 percent of the total mobile ad market last year to 73 percent of the much larger pie in 2013, according to a recent research note put out by Citi analyst Mark Mahaney, which is where I’m getting all of these numbers.

Today, the Federal Trade Commission made good on its threat promise to change the way it regulates endorsements from bloggers by releasing its final revisions to the guidance it gives advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act. Last May, we reviewed the proposed FTC guidelines that will now change the disclosure rules around paid endorsements and testimonials, and thus how brands use online endorsements in their marketing, advertising, and communications programs.

This amendment marks the first time in 29 years since The Guides were last updated in 1980.

As a result of the evolving level of influence inherent in the social Web, and web in general, the notice incorporates several amendments to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in advertising and blogging, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. Fines for violating the new rule will run up to $11,000 per incident.

Schools try to keep up with the current technology trends, especially in Silicon Valley, the home of technology innovation. You would think that schools in Silicon Valley would be the most up to date on technology—with the latest computers, projectors, drawing boards—but coming from a first hand perspective, as a student at a local school, it’s the complete opposite. I go to a high school where there are no technology classes that even teach students the basics of web development, or video production, or anything of that matter.

Our school just upgraded our computer labs to brand new computers, Windows XP machines, that of course, block Facebook, YouTube, and all those other good “time wasting” sites. Just this year, all the teachers computers got connected to projectors so that teachers can show presentations, documents, etc. Also this year, our school finally got WiFi, but it is password protected and not open to students.