Analysts may have "overshot reality" when it comes to the bold predictions around mobile advertising, but The Wall Street Journal says that ads sent via text message are starting to catch on, at least. Marketers say that SMS messages have their advantages: Text ads lend an interactivity to marketers' campaigns that's easily measured, and almost all cell phones can send and receive them. Consumers also choose to receive text messages, which addresses some marketers' concerns about compromising user privacy. Marketers are also starting to combine content with their text messages. For example, Coors Brewing Co. recently sent NFL draft updates …

Should Microsoft and Yahoo throw in the towel and outsource search to Google? TechCrunch's Michael Arrington responds to that question with an emphatic "No," claiming that, "an absolute monopoly in search would be a disaster for the Internet." But more than that, Arrington said it's too early to declare the search wars over, because there are so many new areas that have yet to be conquered. "To think that search has reached its pinnacle today is like saying aircraft were perfected before World War I," he said. For example, semantic search, video search, image search, and niche search still need …

Web 2.0 sites like YouTube and Facebook may have brought about significant changes in the way people interact online, but they're widespread use hasn't translated into revenue. Add to that the looming possibility of a U.S. recession, and the good times may soon be over for Silicon Valley venture capitalists and entrepreneurs. "These are challenging macro-economic conditions," admits Shawn Hardin, chief executive of Flock, a social Web browser. Venture capitalist Roger Lee adds, "There is going to be a shake-out here in the next year or two," meaning many of these Web 2.0 companies will start to disappear as …

The browser wars are set for their next phase, reports The New York Times just a few days before the release of Firefox 3.0, the latest iteration of The Mozilla Foundation's popular Web browser. Firefox may be No.2, but it's still the underdog by a wide margin, as Microsoft still corners 75% of the browser market with Internet Explorer. Safari, Apple's Web browser that's built into its line of Macintosh computers as well as its iPhone handset, is third. Experts say the winner of the next phase of the browser wars will be the one that innovates best. "The …

You probably noticed that we didn't hear much from Bill Gates during Microsoft's three-month pursuit of Yahoo. Sources tell BoomTown's Kara Swisher this is because the Microsoft chairman never cared much for the deal, always preferring a partial transaction that would land the software giant Yahoo's search business. But Gates opted to leave the matter in the trusted hands of friend and colleague Steve Ballmer, the Microsoft CEO, who finally pulled the plug on the deal three weeks ago when it became clear that a proxy fight was the only means by which he could achieve a Microsoft-Yahoo union. Swisher …

Google responded to Viacom's $1 billion copyright infringement lawsuit against YouTube, saying the suit threatens how hundreds of millions of people exchange all kinds of information over the Internet. Viacom wants compensation for the unauthorized viewing of its content on YouTube, pointing out that the video-sharing site has profited from its unauthorized distribution. Google's lawyers filed the claim in U.S. District Court in Manhattan in response to Viacom's original claim that there's been "an explosion of copyright infringement" by YouTube and others on the Web. They added that YouTube "goes far beyond its legal obligations in assisting content owners …