Yahoo Scrambles, Scrabble Scraps, Chertoff Coaxes

Unwilling to believe that resistance to a Microsoft takeover is futile, Yahoo is throwing a lot of strategies at the wall to see what sticks.

Its latest effort is a trial advertising partnership with Google — a two-week test of its AdSense service. Yahoo plans to run Google ads alongside up to 3 percent of the search results generated on Yahoo Web properties in the U.S.

Microsoft general counsel Brad Smith immediately protested that a Yahoo and Google tie-up would create a competitive imbalance, and he reportedly said so with a straight face. Meanwhile, rumors continue to fly about other possible Yahoo rescue plans — including a possible linkup with AOL.

Listen to the podcast (9:38 minutes).

Scrabble Scraps With Scrabulous

Scrabulous has grown into one of the most popular games on Facebook, but it also has run into some trouble from the makers of the board-game version of Scrabble.

Now Scrabulous is facing some new competition online — from Scrabble. But not in North America. Are you confused yet?

See, Mattel owns the rights to market Scrabble, so it launched an online version of the game to compete with Scrabulous, which it’s also seeking to shut down as an unauthorized impostor. But Hasbro has the rights to market Scrabble in the United States and Canada, and it hasn’t launched an online version, so Americans and Canadians are stuck with the unauthorized impostor — which Hasbro also is trying to shut down. It’s just that Mattel is trying harder.

And if you happen to spell both “unauthorized” and “impostor,” you’ll get 132 points.

Cyber Cooperation

A well-crafted cyberattack could hurt the U.S. just as badly as 9/11. Homeland Security Secretary Michael Chertoff issued that warning at the RSA Security Conference, where he called on the private sector to help beef up America’s IT defenses.

DHS is launching what Chertoff called “a reverse Manhattan project” to secure the Web — that is, a project designed to establish the ultimate defense rather than create the ultimate offense. One of the project’s goals is to reduce the number of outside access points to U.S. government systems from a few thousand to about 50.

Chertoff wants federal agencies to raise their threat detection and response capabilities to a minimum baseline level, and he wants to see the federal government develop an early warning system to help neutralize impending attacks.

Not Enough Visas

As usual, the feds got way more H-1B visa applications than they’re willing to dole out, and they’ll soon hold a lottery to determine who gets the precious pieces of paper. H-1B visas allow skilled workers from foreign countries to work in the United States for three years. Of this year’s batch, 20,000 are reserved for people with advanced degrees. An additional 65,000 are for the general pool of applicants — those are the ones that will be handed out via the lottery system.

Technology leaders complain there aren’t enough H-1B visas to fill the industry’s needs and keep the U.S. competitive.

The government is reluctant to raise the figure, though, because it doesn’t want to appear to be giving foreigners jobs that ought to go to Americans. Bill Gates told Congress last month that H-1B actually creates more U.S. jobs, with Microsoft hiring an average of four new employees for every H-1B engineer it brings aboard.

Costly Cybercrime

Financial losses tied to cybercrime reached record levels in 2007, according to the FBI’s annual report.

The Bureau’s Internet Crime Complaint Center logged about 207,000 cases over the course of the year. Of those, about 90,000 — or $240 million worth — were referred to law enforcement agencies for follow-up. That’s an increase of $40 million, or 20 percent, from the previous year.

Theft connected to Internet-based auctions remained the most common complaint. Among the shenanigans growing in popularity are the sale of exotic — often illegal — pets; checking account scams; and online dating fraud.

The Refugee Experience

As a means of raising awareness and lowering evil-ness, Google is teaming with the United Nations to shine a spotlight on the plight of refugees.

Google will incorporate content such as photos, text and YouTube videos into its Google Earth and Google Maps applications. The content will highlight the conditions displaced people are living in, along with the humanitarian efforts the United Nations is undertaking to help them.

Initially, the program will focus attention on Chad, Iraq, Darfur and Colombia, giving users an emotional understanding of what it’s like to be a refugee.

E-Commerce Bucks Trend

Sure, the economy’s tanking, but that doesn’t mean e-commerce is in the same leaky boat. Online sales will continue to climb upward in 2008, rising 17 percent to $204 billion and accounting for 7 percent of total retail sales, according to Forrester Research.

Apparel, computers and cars will be the largest online sales categories this year, with bargains and convenience driving more consumers to the Web. Search engine marketing will continue to be the most effective way for retailers to reach new customers. Ninety percent of retailers use pay-for-performance search placement, and 79 percent said they will make this tactic an even greater priority this year.

Companies are also using offline marketing tactics to drive customers to the Web, with catalogs and direct mail taking priority over TV and newspaper advertising.

Rivalry Gets Ugly

With all the triple-play and quadruple play packages that media service providers are pushing lately, the market is becoming a hot, crowded and very stressful place. Tempers are very short, and running an ad that mocks a competitor can get you sued fast.

That what Verizon has done to Time Warner Cable for running a TV commercial that cast Verizon’s fiber-optic FiOS service in a bad light. Verizon called it false advertising, claiming its depiction of FiOS TV service installation in one’s home as an ordeal was, essentially, a pack of lies.

Verizon FiOS TV does not require extra hardware like a satellite dish, and it can be bundled with other services, the company insists. Verizon says the false ads could make potential customers favor another provider, and once they’ve signed on to a competitor, they’re pretty much lost forever.

It’s suing for damages and possibly holding its breath until it turns blue.

Lesson Learned?

Most of the world was ready to write off the SCO Group as a learning experience when along came Stephen Norris Capital Partners to rescue the firm from an otherwise inevitable demise.

The death watchers who were disappointed by that 11th hour reprieve can now get back to their celebration. SNCP has decided that it would rather buy up the cast-off assets of SCO than to try to actually run it as a business.

Now, one might argue that a business plan based on suing companies over royalties for a product you don’t really own might actually work, but Norris just wants whatever scraps are left over.

The result is that SCO’s reorganization plan, now in bankruptcy court, is likely to morph into a liquidation plan. And that’s when SNCP gets to fight with Novell over who gets Darl McBride’s office chair.A wise man once said, “It’s a long way to the top if you want to rock and roll.”

He later died in the back seat of a car after a night of heavy drinking, but by all accounts he was right about the rock and roll thing. Apple knows it’s true — in order to make it to the top of the pack, iTunes had to beat retail monstrosity Wal-Mart.

But now, iTunes has ascended to the position of No. 1 music retailer in the U.S., according to data from NPD. Apple says iTunes has 50 million customers and has sold 4 billion songs to date, and NPD says it claims a 19 percent share of the market.

Flight of Frustration

Planning on flying around Europe in the future? You may want to bring some earplugs and perhaps a billy club.

The European Commission has officially given airlines operating on the continent the go-ahead to allow cell phone use mid-flight.

Under the new rules, airlines that want to offer the service will have to basically build miniature cell towers into their planes and have them connect with the general phone network through a satellite uplink, so it’ll likely be a couple months before passengers will be able to actually use cell phones in the sky.

I know some of you out there think this is a good thing, but personally I’m hoping that in-flight cell phones go the same way as the metric system, Vegemite, socialized healthcare, and other things that just don’t catch on stateside.

Also in this episode: Smaller, cheaper notebooks carve niche; Motorola taps ex-AT&T exec as chairman.

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