Time Warner Inc. (NYSE:TWX) subsidiary and one of the biggest Digg copycats that I have seen thus far, Propeller has relaunched into a lamer version than it’s 1.0 version.  When the site relaunched this morning, Propeller got rid of the Digg-like voting scheme, but the site is now telling their users to “Prop It,” also known as voting for stories to make it to the homepage.  The site is now using a scale of 1-10 for their stories.

Members of the new Propeller can create groups too.  Some of the most recently created groups are Firefox, Offbeat, Britney Spears, StumbleUpon, Jovial’s Group, Make Money Online, google, Organization, 90210, and Autos. 

Propeller categories include Arts/Entertainment, Business/Finance, Family, Humor, News, Science/Technology, Sports, and Style.  When a story makes it to the homepage of Propeller, they appear on the homepages of AOL and AOL News too. 

The biggest flaw that the new Propeller has right now is that they are giving their community too much power.  Spammers will be having a party with that ability.  The new Propeller site is pretty ugly too.  Simpletons using the site will not be able to tell what part of the site is a text ad and what part is actually content.  I really think that this site needs a major design overhaul.

The concept of Propeller first started on Netscape.com.  The idea was led by Jason Calacanis.  Calacanis hired several top users on Digg, Reddit, Flickr, and Newsvine to drive the top stories on Netscape.com.  Kevin Rose, founder of Digg called out Calacanis for doing this, but later the two ended their feud.  The voting idea was killed off of Netscape.com and then later moved to Propeller.   

Any thoughts on the new Propeller?  Comment away.

Related Links:
Propeller
TechCrunch

This past weekend, Yahoo! Inc. (NASDAQ:YHOO) turned down another offer from Microsoft Corporation (NASDAQ:MSFT).  In the meantime, Time Warner Inc. (NYSE:TWX) is looking for a buyer to sell off the AOL LLC.  Executives at Microsoft, Yahoo!, and Time Warner have all hinted that there is a renewed interest in selling AOL.

“I don’t see why anyone would make a move now with all the pieces on the chess board where they are,” stated Richard Greenfield, an analyst at Pali Capital that covers Time Warner.  Greenfield added that Time Warner will have a tough time because AOL’s value is declining.

If Microsoft or Yahoo! decides that they are interested in buying AOL, things might become slightly tough from a paperwork standpoint because Google Inc. (NASDAQ:GOOG) bought $1 billion worth of shares in AOL (5% of the company) around December 2005.  AOL search is also powered by Google.  As a major shareholder, Google will have a large influence on whether AOL gets sold or not. 

Whoever ends up buying AOL will instantly have access to one of the top three used instant messaging platforms.  AOL’s AIM has well over 40 million users.  And that can be huge for advertising.  We all know how the big three search engines (Yahoo!/Microsoft/Google) are hungry to advertise since they’ve all bought digital advertising companies for a combined price of roughly $10 billion.

Related Links:
NYT

Twitter; The service known for being wildly popular and highly unstable has been all the rage in the blogosphere and with technophiles. Yet it’s flimsy infrastructure can’t handle the stress of it’s popularity. AOL is about to release the new version of AIM. I was given a preview of the new functionality by Gregory Cypes, Lead Engineer for OpenAIM, on his laptop here at GSPEast and was told it would be public in the next 15 minutes.

Now you have the ability to hook in to your various social networks and applications from your AIM client. The Pulse2 team and myself have all used AIM as our main chat client for years. Before there was twitter we were updating out status as Away messages. Everything that Twitter has tried to be we recognized the functionality in AIM from years before. Now with the new AIM we have the ability to update all of your status on all of your various social networks via your single aim client.

So my question to Twitter is why continue to stumble forward with your flimsy infrastructure and just team up with AIM? AIM has been around for over a decade and they’re already doing what you are. The cool factor fades fast for a service that can’t work reliably… especially in light of a possible competitor.

To be fair- Yesterday Twitter was able to stay up during WWDC for a majority of the time and before such an event would have obliterated the service for hours. Yet the point still remains that Twitter has an uphill battle to develop a solid service, where as AIM has the technology and the means to do it better, faster, and with a much larger existing userbase. In many ways, they already are. Twitter should take notice.

Time Warner Inc. (NYSE:TWX) subsidiary, AOL LLC is announcing that they are acquiring Sphere tomorrow. Sphere is a service that is best known for finding related content and blog posts to specific articles and placing links to them in a widget form. You can find Sphere’s widgets on Pulse 2.0, The New York Times, The Wall Street Journal, GigaOM and TechCrunch.

The rumor is that Sphere will be selling for $25 million. Tony Conrad, the CEO of Sphere is serious and professional about his San Francisco, Calif.-based company. How do I know this? Because he personally e-mailed me to make sure that it was working perfectly on Pulse 2.0.

“Hi Amit - my apologies for the long wait to get the contextual widget code snippet. We got a bit slammed following Web 2.0 but have finally built a plug-in that works in WordPress Self Hosted blogs. Since you’re running WordPress (a great choice!) we wanted to put you in front of the queue to try out our new SphereIt Contextual Widget Plug-in for WordPress,” wrote Tony in the e-mail he sent me around January 2007.

Best customer service I’ve seen yet in the world of Web 2.0. Congratulations Tony, the Sphere team, and AOL!

Bill Wilson, an EVP of AOL Programming will be overseeing Sphere’s integration into AOL content properties. AOL content properities include Weblogs Inc., Finance, and Entertainment. Sphere will not be changing its brand. Sphere took in $3.5 million in funding across two rounds of funding.

I’m wondering if there’s a way to integrate Sphere with AOL Instant Messenger. I’m guessing that Sphere will be plugged into Weblogs Inc. blog network following the acquisition.

Disclaimer: Sphere is one of my most favorite startups of it’s time.

Information Sources:
[1] GigaOM:  Personal Note: Conrad Got Mailed by Om Malik
[2] TechCrunch:  AOL Buys Sphere’s Blog Content Engine by Michael Arrington
[3] Sphere blog: Our New Address @ AOL.COM by Tony Conrad

Frank P. Quattron has had somewhat of a tumultuous history. While the former Credit Suisse First Boston executive has earned over $200 million, he sent an e-mail to employees recommending to delete e-mails related to the buying of promising IPO stocks.

Despite wrongdoings, Quattron is back and advising the fastest growing search engine company through his company, Qatalyst. As Microsoft and Yahoo! are disagreeing over an acquisition price, Google has been brought into the mix to help Yahoo! out with advertisement outsourcing.

Quattron has been with Google since the beginning. In the late 90’s when Google was developing, Quattron was one of the first investment bankers to meet with them. Quattron was even hired to advise the company when it filed for it’s IPO in 2004 around the same time he was convicted.

Google also has an interest in Yahoo!’s discussion to merge with AOL since Google controls $1 billion worth of the Internet pioneer company. If the Google and Yahoo! ad outsourcing deal works out, Yahoo! may not agree to Microsoft’s offer.

Information Source:
[1] The New York Times Dealbook: Google C.E.O. Taps Quattrone as Adviser in Yahoo Battle by Andrew Ross Sorkin
[2] New York Magazine: Stock-Market Clash by Henry Blodget

Yahoo! Inc. has become the apple of every company’s eye. Microsoft, News Corp., AOL, Google, and Legg Mason are all interested in a deal with Yahoo!

AOL, subsidiary of Time Warner Inc. (NYSE:TWX)
Time Warner’s AOL LLC is looking to repurchase some of Yahoo!’s shares above Microsoft’s offer of $31 per share and essentially AOL would be folded into Yahoo! The deal would make AOL valued at $10 billion and the dial-up access business wouldn’t be included.

Microsoft Corporation (NASDAQ:MSFT) and News Corporation (NYSE:NWS.A)
Microsoft and News Corp. are planning to launch a joint bid together to buy Yahoo! While this partnership is not official yet, a Wall Street Journal source confirms that discussions are serious. If acquired, this would combine some of the Internet’s hottest properties such as Live.com, MSN.com, Yahoo.com, and MySpace.com. Yahoo! confirmed 3 days ago that they are interested in an acquisition if the deal is higher than what Microsoft had to offer.

Google Inc. (NASDAQ:GOOG)
Yahoo! is launching a new advertising platform called AMP! but wants Google to be part of the action. Yahoo! is talking to Google about outsourcing ad search sales to them. This deal was made official yesterday in the form of a short-term test. Google would handle a limited percentage of Yahoo!’s web search queries. This test will be used to determine the feasibility of a longer term search-ad outsourcing agreement. It is in Google’s interest to work out this deal in the longer run to make Yahoo! less susceptible for a Microsoft acquisition.

Legg Mason Inc. (NYSE:LM)
Asset Management company, Legg Mason owns a large percentage of Yahoo! As a shareholder, it is in Legg Mason’s interest to capitalize as much as possible from any potential deal. CEO of Microsoft, Steve Ballmer wrote a letter telling Yahoo! that if they do not respond, then he’ll work directly with the shareholders. Legg Mason is only ready to support Yahoo!’s independence if the bid remains to be as low as it is now.

What happens to Yahoo! is anyone’s guess. Nobody said that running the #1 Internet property was easy.

Information Source:
[1] Wall Street Journal: News Corp., AOL Pursue Yahoo Deals by Matthew Karnitschnig, Kevin J. Delaney, and Merissa Marr

“Competition in the marketplace generally protects consumers and I have no reason to believe that this won’t happen here,” stated Justice Department Antitrust Chief, Thomas Barnett.

Sirius Satellite Radio Inc. (NASDAQ:SIRI) has received the approval it needs to purchase XM Satellite Radio (Public, NASDAQ:XMSR) for $4.59 billion. The Justice Department has given both companies antitrust clearance on the basis that consumers have choices. This includes audio on mobile phones and other personal digital music players. There is still one hurdle left: the FCC. Both companies have to get approval from the Federal Communications Commission.

CEO of Mel Karmazin made a promise to the government that if both companies were to combine, they would give consumers options such making certain channels available “a la carte.” And consumers would be able to block adult content and receive refunds for channels that they don’t want. This promise made by Karmazin may influence the FCC decision.

Sirius and XM Satellite radio charge roughly $13 per month to subscribe to their services. If both companies merge, the monthly price for their services is undisclosed.

Earlier this month, AOL made it clear that XM will not be power AIM Radio or Winamp starting on May 1st. This partnership break is related to AOL’s shift in advertising effort. AOL Radio will now be powered by CBS. CBS Radio will be taking over the advertising sales for AOL and will be splitting revenues.

Going forward, I think AOL Radio is going to suck. I was just comparing XM Radio’s channel listings with CBS Radio. XM stations are unique and have more interesting options compared to CBS. AOL wasn’t making much money from the XM Satellite Radio deal so it may have made sense for them to switch. I have a feeling that I may not be the only one that is going to stop listening to AOL Radio though.

Information Sources:
[1] Engadget: XM / Sirius merger approved! by Nilay Patel
[2] Washington Post: AOL, CBS Team Up For Radio, Advertising by Cecilia Kang

“Gizmoz has enjoyed widespread adoption by consumers, advertisers and media partners over the last year, and with a number of exciting new products, programs and partnerships underway, the company is poised for significant expansion in 2008,” stated Eyal Gever, CEO/Founder of Gizmoz. “As we move forward on a number of key initiatives, building cross platform synergies into our service is at the top of the list. To pursue our strategy, Asia will be key. This financing will play an important role in helping us develop unique offerings for this market.”

Today Gizmoz, a social network that allows users to make 3D faces sync with their voices has raised $6.5 million. This is Gizmoz second round of funding, led by DoCoMo Capital. Other investors of this round includes Benchmark Capital, ngi capital inc., and Columbia Capital.

Gizmoz plans on using this round of funding to introduce their services around Asia, starting in Japan.

“Japan represents a large and strategic market for the company. Gizmoz’s offerings come at an opportune time in the development of Japan’s extensive mobile ecosystem, and they should feed the strong desire of Japanese consumers to embrace innovative content enhanced by Gizmoz’s technology,” stated Nobuyuki Akimoto, President and CEO of DoCoMo Capital.

AIM users may have also noticed on the start page that Gizmoz has signed a deal with AOL. AOL Instant Messenger, the most used messaging system in the U.S. can now create AIM Gizmoz Expressions and connect it to their account. Gizmoz previously advertised for Taco Bell and has a Facebook Application called In Your Face. Gizmoz widgets can be embedded in Hi5, Bebo, Orkut, and MySpace pages as well.

Competitors include JibJab and Blabberize. Gizmoz was started in 2003 and has offices in Menlo Park, Calif. and Israel.

Facebook, the $15 billion social network is supposedly tinkering around with an instant messaging service within their platform.  If this isn’t a challenge to Google and AOL, I don’t know what is.  Google’s social network, Orkut has a feature to connect Google Talk within the social network as well.  And now that AOL owns Bebo, it won’t be long until AIM is integrated into that social network as well.

TechCrunch also pointed out that this will not be good for the instant messaging applications built around Facebook such as Social.IM.  Facebook already has a wall, a message system, a poking system, and thousands of applications to probe a reaction from your friends.  Will an instant messaging system make a huge impact?  I doubt it.

Yahoo! Messenger, AOL Instant Messenger, Windows Live Messenger, and Google Talk are the oligopoly players in the messaging space.  Taking these players on is definitely a David and Goliath situation.  But if there’s anything I learned while writing about Web 2.0 companies is not to underestimate the underdog.  Perhaps Facebook has a steady slingshot.