You could forgive Chris Moore of Redpoint Ventures for feeling a little pleased with himself today. Moore was the man who backed Right Media with a sizeable $12m solo investment back in 2005. He isn’t saying what kind of stake that money bought. Typically, though, investors in a first round of venture funding would look for around 20 per cent. If that is what Redpoint bought, that stake has just turned into $170m with Yahoo’s agreement to acquire the company.

So why the sudden flurry of deals in the online advertising business? When I caught up with Moore earlier today, he put it down to a fundamental change in the advertising landscape:

"What we’re seeing now is a shift in the online advertising space away from a very search-centric viewpoint. Search inventory only accounts for 3-5 per cent of aggregate page views on the Web. There has been an explosion of other inventory, around social media."

As Yahoo showed in its latest quarterly earnings, capitalising on that mass of inventory, much of it linked to email and other types of user-generated content, is not easy. One way to try to raise the value of this high-volume, low-priced ad space is to channel it through an online exchange like Right Media, which matches buyers and sellers of advertising space in the sort of open, transparent system familiar from the financial markets.

In this new world of online classified advertising, says Moore, "there is no silver bullet" that compares with the keyword-driven systems that have made the search business so efficient. Rather, he predicts, advertisers will have to tap into a range of different targetting mechanisms,  finding a blend that best suits their particular needs. Different ad networks and online salesforces will master different techniques for analysing and understanding the online audience: no one company will have a lock on all the data and methods, as happens in the search world.

If he’s right, then an exchange, or some other clearing mechanism, seems a necessary utility in this new online classified world. If you can’t maximise the value of all your inventory, why not turn it over to a market for someone else who can?

Of course, that does not by itself justify Yahoo paying such a big premium for Right Media (more than four times the implied value for the company when it first bought a stake last October.) Until now, Terry Semel has been put off by the risk of over-paying: he could have had Facebook last year for $1bn but balked at the price. Now, with Google gearing up to move into the online classified market, he has clearly decided to throw that earlier caution to the wind.

Some people tiptoe around controversy. Others embrace it wholeheartedly. That certainly seems to be the case with iYogi, an Indian startup specialising in providing remote tech support for US computer users. Rather than downplay the fact that its computer brainiacs are sitting in New Delhi rather than New York iYogi has based its business model on it.

On Wednesday, iYogi closed a $3m investment round with partners including Canaan Partners and Silcon Valley Bank. The round was the second Indian investment for Canaan, which opened an office an India last year. Their other Indian investment is BharatMatrimony, a ‘dating site’ for Indian couples looking for arranged marriages. It seems Canaan may be onto something here.

Buried in Microsoft’s latest quarterly earnings is some surprisingly positive news about efforts to turn around the struggling online services division. Sure, this is long overdue (see Site under construction, please return next year.) The gap with Google is still getting bigger. But at least it shows that not all hope is lost.

Apparently, Microsoft’s online advertising revenue rose 23 per cent in the latest three months. The display business grew in line with the market as a whole.

More importantly, Microsoft’s AdCenter is finally starting to click. According to Chris Liddell, chief financial officer, Microsoft is now generating higher revenue per search from AdCenter than it was getting a year ago when it relied on Yahoo’s platform (though that statement demands to be qualified. Yahoo’s monetisation engine was performing woefully at the time. Also, Microsoft was giving some of the revenues to Yahoo, so it wasn’t getting 100 cents on each dollar of advertising sold, unlike now.)

There have been other slightly more positive signs in recent weeks. An alarming slide in Microsoft’s share of the search business, which took hold late last year, seems to have been halted.

Microsoft still faces a huge uphill task if it is to get anywhere near to even thinking about catching up with Google. But at least it’s a start.

Rupert Murdoch’s wife Wendi may be on the board of MySpace China, but the way the new venture’s CEO tells it, the famously interventionist News Corp mogul will play next to no role in how it is run.

Local executives will be in full control of MySpace China’s operations, technology development and marketing, insisted CEO Luo Chuan on Thursday, ahead of the launch of a beta test version of the www.myspace.cn site.

Mr Luo says local management authority is the key to avoiding the setbacks suffered by other internet multinationals in China such as Ebay, Google, Microsoft and Amazon. While licencing MySpace’s technology and brand, the Beijing-based venture - a late entrant to a highly competitive market - will tailor its socialising service to Chinese tastes.

Since MySpace China is being coy about how big News Corp’s stake is (other investors include IDG and China Broadband Capital Partners) it is hard to know how seriously to take its talk of autonomy. Mr Luo did say MySpace founders Chris DeWolfe and Tom Anderson were alongside Wendy on the board.

But Mr Murdoch, deeply disappointed by his failure to build a significant media business in China despite years of trying, may be willing to take a hands-off approach.

"We have to make MySpace a very Chinese site," he said when he revealed MySpace’s ambitions in the country last year. "I have sent my wife across there because she understands the language."

You thought time had moved on and the inanities of the dotcom days were all in the past? You thought wrong. Not only are consumer internet companies once again being valued on the number of eyeballs they can attract: there still isn’t any agreement on how to count those eyeballs in first place.

In the age of Google and pay-per-click advertising, this might come as a surprise. After all, the Web is meant to be the ultimate performance-driven medium, a place where you can find small niche audiences and track the effectiveness of ads in real time.

That’s what Randall Rothenberg thought before he took over recently as the head of the Interactive Advertising Bureau. Instead, as he says in this scathing letter to audience measurement companies ComScore and Nielsen NetRatings, the science of counting eyeballs online has in some respects moved on little since the dotcom days:

We in the marketing-media ecosystem have spent too many years trying to clear up the residue of flawed media-research methodologies. We simply cannot let the internet, the most accountable medium ever invented, fall into the same bad customs that have hindered older media and angered advertisers for decades.

The target of his ire is the practice of estimating audience size based on representative panels of internet surfers. That technique was invented for radio 70 years ago: surely there must be a more accurate measurement system for an interactive medium like the internet?

ComScore had already preempted this tirade with research of its own claiming that the alterntive is even worse. This involves planting "cookies" on users’ computers, then using these unique identifiers to calculate how many different visitors come to a website in any given month. The trouble is, some internet users clean out their cookies frequently, so they are counted each time they return to a site as a new visitor. ComScore calculated that counting server log files like this could inflate an audience count by as much as two and a half times.

Following Mr Rothenberg’s challenge, both companies say they are ready to talk about a compromise (this is NetRatings’ response.)

This will not be universally welcomed. The IAB, after all, claims to represent Websites that carry the vast majority of online advertising in the US. Its complaint is that panel measurement greatly understates audience size - "by 2x to 3x magnitudes in some cases," as Mr Rothenberg put it. If the online publishers succeed in strong-arming the measurement companies into boosting the numbers, it could end up costing advertisers more money.

Those in search of the latest trends in technology and what it will mean for their businesses have converged on the Gartner Symposium/ITxpo: Emerging Trends in San Francisco this week.
The conference has been built around eight mega-trends identified by Gartner analysts, including the globalisation of supply and demand, the commoditisation of the tech sector, the virtualisation of IT and the socialising of technology.
Martin Reynolds, Gartner vice president, gave me his thoughts on the consumerisation of IT.
He showed how his non-work cellphone could access his office emails with the help of the latest version of Microsoft Exchange Server. It allowed a port to be safely opened to the company’s network that would satisfy the security concerns of the IT department.
He sees consumer-focused companies such as Apple, Google and Sony having a big effect on enterprise IT. The Apple iPhone when it comes out is not expected to be able to connect to business email systems in the way that a Blackberry can. Mr Reynolds said he did not think it would have virtual private network (VPN) software. This would challenge IT when influential executives turned up at work and demanded connectivity to the company network.
Google was doing its best to disintermediate IT, said Mr Reynolds, with its browser-based applications and its provision of a vast infrastructure for users.
He feels Google and others, such as Yahoo, Microsoft, Sony and Amazon, could challenge IT departments and traditional infrastructure providers by offering spare capacity on their own online networks to enterprises.
IT departments need to adjust to some new realities, he said.
"IT is no longer about how we run the computers, it’s about how we make the business better, how do I increase revenues rather than how do I decrease costs."

The list of British websites successful in the US cannot be a long one, but cheapflights.com says it figures right at the top.

David Soskin, chief executive, who is in San Francisco for the ad:tech conference, told us unique visitors had now reached around 3m a month, meaning the US site, less than five years old, was now as popular as cheapflights.co.uk, founded in 1996.

According to the Hitwise research firm, the price comparison service for flights and travel was number 13 in its Travel - Agents category for March in the US.

Mr Soskin and Hugo Burge, his vice chairman and head of international development, put cheapflights in the hot category of “vertical search”, as opposed to the horizontal, general search offered by Google.

They have hired a US manager and head of marketing from another vertical play – the Monster.com jobs site - and are working on a plan to rollout in every major flights market over the next five years.

“The UK has had the most competitive flights market in the world, the US has the most brutally competitive internet market on the planet,” said Mr Soskin.

“Our thought has always been: if cheapflights can grow in the US and be profitable – and we are extremely profitable – then other markets should be more straightforward.”

Cheapflights has a Google-style pay-per-click model that has put it consistently in the black since Mr Soskin took charge in 2000.

But 2007 could be a breakout year for a company that has lived within modest means to date. It is considering an IPO, which could value it at around $400m, and will also look at any investment interest from private equity.

The cash injection is necessary, the management team believes, to push cheapflights onto the even shorter list of British websites successful on a global scale.

The Web 2.0 version of presidential elections is gaining momentum.

Yahoo!, The Huffington Post and Slate have announced plans for two online-only presidential debates for the 2008 campaign. They will take place after Labor Day, with one featuring Democratic candidates and the other Republican ones.

The debates will not be online typed chats with dodgy spellings. They will be simulcast live in video on all three sites, viewers will be able to ask questions in real time, while some will have theirs featured as uploaded videos.

Charlie Rose, the public television presenter, will moderate.

“I am proud to host the first ever online only debate, which will reach and engage the voting audience in a whole new way,” he said.

Candidates and their supporters have already been using the latest Web tools to reach and engage in new ways. MySpace pages abound, there have been YouTube political ads, appearances in the SecondLife virtual world, while John Edwards uses Twitter to update followers on his whereabouts.

Despite Sony trumpeting PlayStation 3 sales in Europe this week, the next-generation console has still to catch fire in the US.

Official March sales figures just out from the NPD Group show 130,000 PS3s were sold here, compared to 199,000 units of Microsoft’s Xbox 360 and 259,000 Nintendo Wiis.

That means only 1.2m were sold in the four-and-a-half months since launch, compared to 2.1m Wiis over the same period. The Xbox 360 had a year’s head start and has cumulative sales of 5.3m.

A lack of compelling games at launch and the high $599 price tag are blamed for the PS3’s poor showing to date and Sony is now considering a price cut.

Sony can take comfort from the continuing strength of its PlayStation 2 – 280,000 sold last month, 38m lifetime to date, and helped in March by the release of God of War II, the top-selling software across all platforms with 833,000 units shifted.

The 360 platform was boosted with sales of 394,000 of the latest Tom Clancy’s Ghost Recon, in second place overall, and Guitar Hero 2, in third with 291,000, despite being on sale for only five days of the period.

Nintendo’s handheld DS was the best-selling console overall in March, with 508,000 units sold, but the industry as a whole is seeing an encouraging start to the year with first quarter revenues of $3.3bn up 54 per cent on a year ago.

Software vendors beware. The UK’s small to medium-sized businesses appear to have the most lax attitudes in Europe to using illegal software. According to a new study by the Business Software Alliance, 41 per cent of UK SMEs believe there is no risk from using pirated software. “No risk” in this case, means they fear no risk of either prosecution or computer problems that pirate programs might cause.

The rest of Europe appears to be more law-abiding. Only 7 per cent of French SMEs believe illegal software is risk-free. This rises to 10 per cent in the Netherlands, 18 per cent in Germany, 21 per cent in Italy and 26 per cent in Spain.

Even in Russia, commonly seen as a Mecca of software piracy, only 9 per cent of companies believed there was no risk. Russian companies most commonly felt there was a great risk of legal prosecution or criminal charges from using pirate software.

Actual piracy rates tell a slightly different story. The latest research from the BSA shows that in 2005, 27 per cent of UK software was pirated. This is lower than the global average of 35 per cent, and far below Russia, where 83 per cent of software is illegal. 

In other words, Russians may use illegal software, but know its wrong, while in the UK ignorance is bliss.

The BSA couldn’t explain the UK’s freebooting attitude, but said that clearly a lot more work needed to be done to educate companies and tighten up software ownership laws. Perhaps a few more software-related prosecutions coming up?