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This week's hodgepodge of articles I found interesting includes news that could impact the Microsoft-Yahoo courtship, online streaming music, digital thieves and young entrepreneurs.

Yahoo-Google Pact May Be Close

The Wall Street Journal is reporting that Yahoo and Google may be close to an agreement that would have Google serve search advertising for Yahoo.

The move is certain to attract antitrust attention, but beyond that, I think such a deal should spook Yahoo shareholders as it would, in my opinion, send a clear signal that Yahoo, for all intents and purposes, has failed to revitalize its search advertising business.

Even though Yahoo is ambivalent about being acquired by Microsoft if the price isn't high enough, joining forces with its biggest competitor (in part because it might have implications for the Microsoft deal) is not a wise move.

In other words, Yahoo's management apparently does not know that the enemy of your enemy is rarely your friend.

Online music services could pay $100 million in royalties

ASCAP, the American Society of Composers, Authors and Publishers, has won a significant court case against AOL, RealNetworks and Yahoo that could eventually require these internet companies to pay up to $100m in royalties to songwriters and publishers who holds rights to music they streamed.

The US District Court for the Southern District of New York decided that these rights holders are owed 2.5% of the "music-use-adjusted revenue" generated by these services dating from July 1, 2002. It also provides that a non-exclusive blanket license be provided under the same terms through December 31, 2009.

Comments made by the general counsel for RealNetworks indicate that the company will look to negotiate the amount of past royalties due and it won't be surprising if RealNetworks and its co-defendants end up paying less than $100m.

While the usual suspects will cry foul and provide the same tired complaints that such royalty rates will prevent companies from offering streaming music online, the ruling is yet another validation that, as far as the law is concerned, intellectual property rights holders do have rights.

In a statement issued by ASCAP, ASCAP CEO John A. LoFrumento remarked:

"The Court's finding represents a major step toward proper valuation of the music contributions of songwriters, composers and publishers to these types of online businesses -- many of which have built much of their success on the foundation of the creative works of others. It is critical that these organizations share a reasonable portion of their sizable revenues with those of us whose content attracts audiences and, ultimately, helps to make their businesses viable."

Closet socialists will roll their eyes, but common sense is common sense.

Controversial Pro-IP Act sails through Judiciary Committee

The Pro-IP Act, "a legislative proposal which aims to impose stronger penalties for copyright infringement," was approved by the House Judiciary Committee.

As reported by Ars Technica:

"The bill would create a new position for a federal copyright enforcement czar, establish a new copyright enforcement division within the Department of Justice, and would also permit law enforcement agents to seize property from perpetrators of copyright infringement."

To be sure, this is draconian legislation that could be abused and I don't like it.

But that said, I'm not surprised that something like this has emerged.

I have pointed out that the rampant culture of copyright infringement was likely lead to draconian measures and an Orwellian internet. And I recently elaborated on my belief that consumers who find digital theft to be morally acceptable will eventually reap what they sow.

When your unethical actions create an opportunity for overzealous politicians to increase their power, they will usually take whatever they can get. For Americans, it just might be their computers.

Entrepreneurs and Tech Startups: Who's Doing What When?

When most people think of the average technology entrepreneur, they think of young, precocious wunderkinds fueled by Red Bull building "The Next Big Thing" at 3 am in their dorm rooms.

In other words, a picture of a 20-something like Sean Fanning and Mark Zuckerberg appears instead of a picture of a balding, grey-haired "old guy."

But according to a study by Ewing Marion Kauffman Foundation and researchers at Duke and Harvard universities, the latter is more representative of the average technology startup founder.

The study found that the median age of US-born tech startup founders was 39 and that only 1% of them were teenagers.

And while dropouts like Bill Gates and Michael Dell get all the attention, 92% of US-born startup founders had at least a bachelor's degree and nearly a third held master's degrees.

According to the study, those degrees are key. According to Robert Litan, VP of Research and Policy at the Kauffman Foundation:

"Probably the most compelling fact in the study is that advanced education is critical to the success of tech startups."

In addition to education, "experience [is] also a key factor." Vivek Wadhwa, the lead research of the study, noted:

"That a large number of U.S.-born tech founders have worked in business for many years also is important in understanding the supply of tech entrepreneurs."

While the fact that education and experience play a measurable role in entrepreneurship and tech startup success should be common knowledge (it's certainly common sense), that the wunderkind entrepreneur is still the face of Silicon Valley and that education and experience are often played down highlights but two of the myths/illusions that Silicon Valley thrives on.

Drama 2.0

Published 2 May, 2008 by Drama 2.0

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