The London Telegraph (link: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/17/cnaol117.xml) says Yahoo's merger talks with AOL have improved after Yahoo advisers held talks with the Time Warner company last week, although the paper warns that Google's 5 percent ownership of AOL could be a stumbling block to an AOL-Yahoo deal. The Silicon Alley Insider says AOL and Yahoo should merge, but the problem with that deal is that it wouldn't yield a viable alternative to a Microsoft takeover. AOL has some valuable assets--AIM, ICQ, mail, premium properties, MapQuest--but it has no place in the current portal wars, which is why combining its …

In rejecting Microsoft last week, Yahoo CEO Jerry Yang cited the company's investments in Alibaba and Yahoo Japan as one of the reasons Microsoft's offer of $31 per share "substantially undervalues" the company. Yahoo has investments worth $13.8 billion in Alibaba.com Corp., a Chinese trading site, and Yahoo Japan, accounting for nearly one-third of Microsoft's offer. Analysts say those assets could balloon to $15.9 billion by the end of the year. Indeed, "Yahoo's stronger position in Asia is one of the rationales for Microsoft's takeover bid," said Ivan Li, an analyst at Kim Eng Securities (HK) Ltd. …

Ad Age asks advertising execs how the media biz would react to a recession. Typically, when consumers cut back on spending, so do marketers, but digital marketing may be a game changer, as marketers turn to more measurable media like the Internet. That doesn't mean Web spending would be unaffected by a recession, but Bryan Weiner, CEO of digital agency 360i, says marketers won't be cutting cut back on search and email, because these tactics drive the best return on investment. Search, he adds, is less a marketing expense than direct cost of goods sold--which is …

Lookout, here come Google video ads--and on Google search, no less, a development that few thought would ever happen. Google on Thursday began testing not just videos ads, but also ads with images, maps and other interactive features. Marissa Mayer, Google vice president of products and user experience, said the change marks the search engine's evolution into a true aggregator and organizer of the Web's information. She adds that text ads aren't as effective on pages containing images and video, because users' eyes naturally gravitate toward those features. This raises the interesting question of whether video …

Since it depends whom you ask, the Motley Fool asks three Web industry critics what they think about Facebook's post-Microsoft $15 billion valuation. The first, Anders Bylund, says Facebook would be "worthless" as a public stock because the company is spending more than it's making. For example, the CEO Mark Zuckerberg is putting $200 million behind data center upgrades and new hires next year, when the company only made $150 million total last year. Fool critic Rick Aristotle Munarriz pegs Facebook's value at $3 billion, though he says that sum could fall by half if growth stalls …

One look at Google usage on Apple's iPhone, and you understand why the search giant is moving into the mobile market. On Wednesday, the company revealed that it's seen 50 times more searches on Apple's smartphone than any other mobile handset. If the trend continues-- if handset makers follow Apple's lead in making Web access easy--its estimated the number of mobile searches will overtake PC-based Internet searches within the next several years. How much does Google make from mobile searches? Google doesn't break out those numbers but the business is growing "above expectations." Data from …

A new online video study from Nielson Online shows that men tend to be more interested in user-generated video sites like YouTube, while women prefer streams of network TV shows. Men and women also tend to view videos at different times, too. The data comes from Nielsen's new online measurement service, VideoCensus. The study finds that women 18-34 were almost twice as likely as men in the same age group to stream TV programs on sites like Hulu.com. Nielsen offers no analysis of the data. However, men 18-34 were more than twice as likely to watch short-form …

For years, the Mobile World Congress has issued the promise that the mobile Web will one day be more like the traditional Internet that we access from our PCs. But GigaOm notes there's too much variation in operating systems and end devices, which makes it hard for developers to build applications for a mobile phone. In other words, a shakeout needs to occur, a leader needs to emerge. But there's a greater problem, here: according to Wikipedia, U.S. smartphone (loosely described as a phone with PC-like functionality) penetration is only expected to hit 10 percent this year. …