The media industry is in the middle of a massive change, thanks to the ubiquitous presence of broadband everywhere. Fast pipes are enabling niche networks, venture capitalists are investing in new media properties. The online video market resembles an old fashioned bubble, and companies are sprouting up like mushrooms after a fresh monsoon. All of this is predicated on one business model: advertising. Google bet $1.65 billion in chips on YouTube, betting that it can profit from this shift to online video. Their confidence is understandable: Google now accounts for 25% of all online advertising dollars. We have a special report on the future of advertising in this online world.

• Robert Young writes about Google, YouTube and the Future of Video Advertising.
• Liz Gannes surveys the start-up scene and asks the question: Where’s the AdSense of Audio & Video?
• Om Malik & Niall Kennedy discuss the likely mergers in the online media space in their latest podsession, Start-Up Buyers’ Guide.

How many of you remember Paul Young and his smash hit – Come Back & Stay? The song is playing on the stereo, as I wistfully remember my week in New York, or as I like to call it home away from home. There was no place better to turn 40, in company of friends who have no connection to technology (with a couple of exceptions.) These are not technophobes, but folks who couldn’t care less about technology, and this whole 2.0 thing.

Funny, none of them knew about Digg, Web 2.0 or all these cool things we seem to be building in Silicon Valley. It was a big reality check, for most of them have not used Skype or Vonage and frankly didn’t care about these offerings. And here we are already talking about VoIP 2.0 – the cool mash-ups of web, mobile and voice. (We discuss these topics in our latest PodSession which is available for download here.)

Some new apps have inspired a big yawn, while others like GrandCentral got enthusiastic thumbs up from me, but others remain skeptical. I see it as a voice mail aggregator; others want it to be more than that, thus the difference of opinion.

Jeff Pulver, the grand daddy of VoIP is miffed at the negativity, and does a smack down of the naysayer brigade, led by yours truly. He says customers decide the future, not bloggers. True enough! Polls suggest that nearly 50% are not really all that keen on some of these new apps. More apps are waiting in the wings. Watch out for reviews of Truphone and Fring later this week.

Jennifer Simpson of Yankee Group thinks that the “new and unique contextual applications for voice that will be a draw for the technologically advanced consumer over the next five years and challenge telecom, mobile and cable companies to provide comparable voice services.” VoIP in gaming and shopping should be hot, she predicts.

PS: An abridged version of this post was sent as the GigaOM Weekly email newsletter, that is published every Sunday.

Michael Arrington, who edits TechCrunch, invited me to his TalkCrunch podcast. Our initial plan was to do a talk about the start ups we like and why. Robert Scoble joined the party, and the conversation became a little fluid, and a tad long. But it was fun.

We discussed everything from some new start ups Scoble likes, the new VoIP players and why many of them still don’t address the usability question. And then we talked Digg, and why it just might be newspaper industry’s best friend, especially if it can expand from its techie roots. Warning: Skip the first three minutes, because we were just comparing notes. Or you can indulge us.

Given all the attention being devoted to Web-based applications, and all the hoopla around the web-desktop hybrid apps, I got together with Niall Kennedy to record the latest episode of Om & Niall PodSesssions, to ruminate on the question: are desktop applications are really dead. We don’t think they are, mostly because the beefier desktops (and notebooks) mean that you can do a lot of cool things with the processing power at our disposal now. You can download the podcast here, and while you are waiting for the file download to finish, take this easy poll. Paul Kedrosky disagrees with Mike Rundle’s response in the comments section.

This past week, while I was away in London, there was a frenzy of activity around the “instant messaging” client. Microsoft introduced its Microsoft Live Messenger Beta which is some rudimentary form cross talks with Yahoo Messenger. Yahoo opened up its IM and introduced new ways to add widgets to its client. Skype and Paypal did a bit of integration. In other words, all the moves that do nothing but add more bulk to the aging IM client(s).

Back in 2004, when I wrote The Incredible Importance of Instant Messenger, I pointed out that it is going to be a way to get some traction in the VoIP business, and hopefully will help the companies fight off the challenge from upstarts like Skype. More than two years later, most IM clients have VoIP calling. But they have a lot more than that.

I am with Jason when he says that AOL needs to put AIM on a diet. Most IM companies are forgetting that IM is a very personal tool whose emphasis is on instant communication. Everything else comes in the way. The more features that companies - the big three - cram into their products, the more they run the risk of alienating their user base, which frankly might migrate to newer IM options such as the MySpace built in IM.

“If all your friends are on Myspace and with the click of a button you can add 100 of your friends to Myspace IM, why bother with AOL IM anymore?,” writes Rich Greenfield, an analyst with Pali Capital in a note to his clients, and asks. “If AIM e-mail has not really worked, what are the odds that AIM extensions such as AIM Pages or AIM Phoneline will succeed?”

I agree. Those are separate properties and not to be pushed into AIM. It is time for not just AIM but to all other IM companies to rethink their approach. With this on my mind, it was pretty nice to invite Seth Sternberg co-founder and CEO of browser-based instant messaging company Meebo to join Niall and me on our weekly podsession. One of the things he said stuck in my mind - and I paraphrase - in this feature race, none of the companies are actually including things what users want - a quick and easy way to communicate. (You can hear Seth and us debate on our podsession by downloading it from here.)

Niall and I met with Matt Mullenweg, lead developer of open source project, WordPress, and founder of Automattic, this week and asked him about his experiences with starting, building and scaling WordPress.com and Akismet, the spam plug-in which is often coming to the rescue to most bloggers. Matt, outlined his way of doing things, and pointed out that WordPress.com now has 200,000 users.

You can hear it all here. Having a guest on our podsession is something we will do sporadically. Niall has his take here. Also, I forgot to blog about last week’s podsession, the International Next Net. Here is the link for the podsession.

At E3, the game confab in Los Angeles, the big news this week was new consoles and online gaming. In this week’s PodSession, we look the impact of online gaming on broadband, and demand for high-speed connections. We also talk about the current state of the video game industry as well as the new demand created for servers, networking gear, software, and home connectivity as new devices make their way into the home. The new consoles are increasing demand for high definition televisions and always-on broadband connections. We also look at how the WiFi connected portable devices will impact the future in this week’s PodSession.

This week’s PodSession is about eBay shopping for partners. This is inspired by recent buzz about eBay looking to take on Google with new allies such as Microsoft and/or Yahoo.

EBay is voicing its concern with its checkbook and looking for new preferred advertising partners and cross-promotional opportunities. Should eBay be afraid of Google? How many management consultants did it take for eBay to wake up and realize its business direction? Is anyone safe from the growing power of Google over search and commerce?

Here are five things we suggest they do instead of mucking around with half-baked alliances.

1. Come up with eBay 2.0 and figure out a role for the company in the digital future.
2. Focus on core strengths. Buy Intuit (Quicken) to give eBay buyers and sellers accounting features.
3. Focus of the company should be Paypal and turning it into Citibank of online world. (Very Very Important.)
4. Figure out a way to get into shareware sales business. Perhaps acquire eSellerate. This is where Ebay can put its heft to good use.
5. Get into digital media sales. The recent Skype-EMI deal could be a good start.

This is just for starters. In the very near future, I am going to write a five-day series on eBay’s strategy and what they can do to grow even bigger. Funnily enough, Skype might be part of that strategy, though not as eBay might have thought. And the best part - all the advise is going to be free. McKinsey not required. I am sure one of you can even cook-up a nice PowerPoint presentation as well.

Anyway more here in week’s PodSession which is 20 minutes in length, a 9 MB download.

Om and Niall PodSessions‘ latest session is up. We are discussing video’s big move to the move. I decided to talk about all the stuff - streaming versus downloads and other such things in this podsession. I was going to blog it, but got busy with other stuff. You can keep up with all my online video coverage here.

ABC recently announced streams of its popular shows will be available online for free. Fox will offer its programming online as well, including web-only episodes of popular shows such as Family Guy. Smaller players such as Rocketboom deliver content created especially for online viewing and syndicated through partnerships with companies such as TiVo.

Filling in the middle is the iTunes video store and its single purchase and subscription offerings. Are large content producers merely experimenting with online distribution or is this a trend that is here to stay? What’s driving viewer numbers from all over the production spectrum from two guys on their couch to two news anchors behind a desk? Can online video distribution be profitable for large publishers?

This and more on in the latest podsession, which is 20 minutes long, a 9 MB download. Get it in iTunes or subscribe to our feed.

Our latest podsession is about location based services, and their impact on privacy. Though there is a lot of excitement about free wifi, nothing in the world is free, as we point out in this week’s podsession. We also look at the impact of LBS from mobile operators in this edition as well.

As Niall writes, “Is all this mobile tracking too close for comfort? Are there any applications we would like to provide with our location data in an on-demand or always-on format? Are you willing to give up information about your every click and your wireless location in exchange for free Internet access?”

The latest PodSession, You’re being watched - Geolocation and privacy is 12 minutes long, a 6 MB download.

PS: Earlier this week it was suggested that we should shorten the length of the podsession, and we have. What do you think? If this doesn’t make sense for you, we will switch back to out 20-minute format.

CTIA just concluded, and as expected it was all about wireless broadband. And why not - too much money is tied into the wireless data networks and companies need to figure out how to monetize that.

We talk about Wireless broadband networks - EV-DO, HSDPA, and new applications - in this week’s PodSession. We look at the forthcoming EVDO Rev A and what it means for not only the users but also for the carriers.
The latest version of EV-DO, revision A, promises up download speeds up to 3.1 Mb/s, upload speeds as fast as 1.8 Mb/s, and latency as low as 50ms.

HSDPA is a competing standard for GSM networks. It is capable of download speeds up to 3.6 Mb/s and uploads of 384 Kb/s. HSDPA allows simultaneous voice and data and can downgrade to older UMTS when a newer network is not available. But HSDPA is woefully behind, not just in US but also in Europe.

Also, you Mac lovers, Novatel Wireless is about to introduce a new Express Card version of EVDO modem, probably by next month. This and other juicy stuff in this week’s podsession, which is 22 minutes long, a 10 MB download.

Are podcasts hot or not? Charlene Li, an analyst at Forrester Research, in her controversial report says its not. She points out that a mere one percent of online households are regularly downloading and listening to podcasts. That number will be around 700,000 in 2006, she predicts. (Those who disagree with her point to The Diffusion Group report.)

I think its easy to work yourself into a lather over Li’s report, but I see it as a glass half full. Sure it is a highly fragmented market, but still, that’s a large pool of listeners and certainly larger than the number of users on most Web 2.0 start-ups.

If you look at the iTunes podcast page by popularity, you see more and more mainstream fare, like ESPN Radio. People know NPR or ESPN and are comfortable with downloading familiar or favorite shows, aka time-shifted radio posing as podcasts. I have argued about this before, but Don Dodge does a better job of explaining the problems with podcasts.

I do a weekly podcast with Niall Kennedy and one thing I know - it is hard work. You really need to bring a value proposition to the table, and hope that listeners like it. We will soon touch 700 listeners, and given the feedback we get, they actually listen to the weekly show. For me, that’s pretty darn good. Who cares if they add upto only 0.1% of all podcast listeners!

Update: James Enck: On demand radio is going great guns in Europe and in UK. He points to BBC data. Maybe we should stop calling them podcasts?

Another week, another Podsession. This week, Niall and I ask the dreaded question: Are portals back in fashion? After all, despite what you may say, the launch of Google Finance, is the latest of many steps the search company has taken towards a full blown portal.

Niall liked the new Google Finance, especially the chart overlays and integration with other Google products. I found the new product lacking a few of my favorite features from Yahoo! Finance such as institutional holdings and insider trading. But also listen to why I was so negative on the GFinance.

A search company executive recently told Niall that Google averages 15 searches per user per month. A search engine can focus on growing its user base of searchers or increasing the number of searchers per user. The introduction of auxiliary features such as Google Finance add new launchpads of search activity across Google properties that results in highly targeted and high-revenue advertising.

Meanwhile, the new kids on the block, folks like Netvibes, (which received $1 million in funding this week) are turning the portal concept on its head. I would say, this week’s PodSession, is lively, and combative. The podcast is 19 minutes long, a 9 MB download.

I am Lifeblogging the VoN show. No words, just photos. Check out the super booth for Open Source Asterisk. On to Flickr for photos.

On the eve of VoN - The Voice over The Net trade show, Niall Kennedy and I got together to discuss the the future of Voice on the Net, mobile platforms and how the web 2.0 world doesn’t really incorporate the other two elements of the “next net” in their product strategies. We talk about when it makes sense for Web apps to add voice or mobile capabilities? What are the costs and benefits?

Are so called “web 2.0″ companies just shinier versions of existing applications? Is anyone actually pushing the envelope and inventing entirely new industries? IP-based voice applications have already changed the way we think about communicating online. Mobile phones are now common tools of daily communication with relatively fast data connections with always-on access to the Web and focused data. Why are we not seeing more integration of voice and mobile into new web applications?

We are encouraging that start-ups walk through the halls of focused gatherings such as VON or CTIA to gather new ideas about product integration across multiple mediums and devices. This week’s PodSession, VoIP and mobile integration, is 23 minutes long, a 11 MB download.

AT&T chief executive Ed Whitacre, affectionately referred to as “King Ed” by me, and “Mr. T” by others has always been of the school of thought that breaking up Ma Bell back in 1984 was a mistake. He has done his best to rectify that by gobbling up three out of seven Baby Bells - Ameritech, Pacific Bell, and more recently BellSouth - and merging them with his SBC. Of course along the way he picked up the remnants of a proud company called AT&T.

His splashiest move came last move when Mr. T bought BellSouth for $67 billion in cash, and about $22 billion in proportionate debt. Result, a giant phone company, the biggest in the world with over 71 million access lines, 54 million wireless customers, 9.5 million broadband lines and over $98 billion in sales.

I got together with Niall earlier this week and tried to do an analysis of the deal, its impact on Verizon and cable providers. Of course there are implications for start-ups, especially those in the telecom space. What it means for network neutrality, Yahoo and Google. Hopefully you can tune in.

This week’s PodSession, Return of Ma Bell is 21 minutes long. You can download it here. PS: guys there is a big surprise at the end of the podcast!

Technologies such as JavaScript and Flash are changing the way we interact with content online. In this week’s PodSession Niall and I discuss the latest trends in the world of rich interactions. Are these technologies interaction too complicated for the average person to grasp? When should you add such technologies to your web page or corporate intranet? Why are there not more implementations and examples online? Is there a talent shortage?

This week’s podsession is 25 minutes long, a 11.7 MB download. A full transcript is available here. Listen to the podcast via iTunes or subscribe to our feed!