This week’s The Web Week in Review is a hodgepodge of news.

Google Profit Beats Wall St. Forecast

I was personally expecting Google to disappoint Wall Street in its earnings report on Thursday but I was wrong. The company reported strong earnings revenue growth and profits that beat analyst expectations.

Google’s earnings report all but destroyed the credibility of comScore’s measurement of paid clicks. Previously, comScore had reported a decline in paid click and some, myself included, expected that this would reflect in the company’s earnings report.

Of course, Google’s stock is still down quite a ways from its November high and the questions about its vulnerability to the economy will continue to be assessed in future quarters.

I still believe that Google will not go unscathed by the economy at large and think the next several quarters are still dangerous. I also believe that in the long-run, the problem of click fraud poses a significant threat to Google’s dominant revenue stream.

In the meantime, Google’s strength despite the pessimistic predictions has raised a more interesting question – will Yahoo also report a surprisingly strong quarter when it announces its earnings on April 22?

If it does, Microsoft’s job of convincing Yahoo to take the money and run will get a whole lot more difficult.

Blockbuster sued over Facebook ad feature

Somebody beat me to it. The first lawsuit over Facebook’s Beacon has been filed in Texas.

Cathryn Elaine Harris has filed a lawsuit against Beacon partner Blockbuster which claims that Blockbuster shared her personal information with Facebook as part of Beacon in violation of the Video Privacy Protection Act. This act forbids video stores from disclosing a customer’s video rental data.

Harris’ attorneys are seeking class action status.

When Beacon launched, it forced Facebook users to opt-out of data sharing with partner sites but the lawsuit alleges that Beacon partners are still transmitting private information to Facebook as even though it this information is not being displayed publicly on Facebook without user consent.

Blockbuster has denied the allegations and Facebook has not yet commented.

The lawsuit highlights the fact that companies who are eager to test out “innovative” new social media marketing platforms that rely on the personal information of users might want to think twice about serving as guinea pigs.

In the case of Beacon, some observers noted the potential for legal problems right off the bat and thus it would not have been unreasonable for attorneys at the companies that participated in Beacon’s launch to have considered the implications before the companies agreed to participate.

Wealthy buyers go online to make big savings

You don’t get rich by blowing your cash and a new “survey of affluence and wealth” by Harrison Group on behalf of American Express Publishing finds that high-end shoppers are using the internet to save big money – $35b a year.

As shouldn’t be surprising, the survey indicates that the use of the internet to make purchasing decisions is a widespread phenomenon today:

The study found that 70 per cent of those surveyed use the internet to identify, price and compare, and sometimes buy important fashion and home purchases online.”

At the same time, however, it found that “Ninety-nine per cent of high-end bricks and mortar shoppers are high-end web shoppers as well,” highlighting how important it is for certain retailers to have a presence in multiple channels.

MySpace Offers Site Designed for Korea

MySpace continues its international expansion and has targeted the highly-sophisticated and lucrative South Korean market.

MySpace appears to have followed the smart strategy for going global – working with local expertise, performing localization beyond translation and developing new tools that it believes cater to the local culture.

Even so, I think MySpace will have a difficult time in this market. There is already strong competition in the social networking market in South Korea.

Cyworld, for instance, which is operated by  SK Communications, already reportedly counts as much as 90% of South Koreans in their 20s as members and has what I believe to be a much more compelling product for the local market.

As such, I’m skeptical that MySpace will be able to become a dominant player but because of its strategy and diversification, it doesn’t necessarily need to.

Microsoft acquires Farecast

At a time when decent exits are getting harder for startups and VCs to come by, Seattle-based Farecast has managed to do quite well. It has been acquired by Microsoft for a rumored $115 million.

Farecast’s early investors apparently did well. Matt McIlwain of Madrona Venture Group, Farecast’s first institutional investor, called his firm’s return from the acquisition “very nice” and likened it, in baseball terms, to a “double or triple.

Farecast, which provides predictions for airfare prices and offers a Fare Guard service that enables consumers to purchase protection against airfare increases, seems like an odd fit for Microsoft as noted by the Seattle Post Intelligencer. It will be interesting to see what Microsoft does with it.

Celebrity Music Throwdown Part 2: Will Smith and PluggedIn

I recently asked if every celebrity needed his or her own social network. Perhaps the question needs to be expanded – does every celebrity need his or her own internet startup?

More celebrities are jumping on the new media bandwagon and starting their own internet ventures. From Will Farrell’s to MC Hammer’s DanceJam, it appears that the internet is increasingly catching the eye of celebrities.

Will Smith is the latest to get into the fray. His production and management company, Overbrook Entertainment, is backing PluggedIn, which “wants to be the preeminent online repository for high-definition music videos on the Web and a new place for artists to plant their online flag.

If it sounds a little bit like YouTube and MySpace, you’re not the only one pointing out the fact that PluggedIn is going to be competing with some heavy competition.

PluggedIn’s CEO Jeff Somers thinks the company can compete, stating:

We think what will separate us from what is out there today is an unbelievable high-quality viewing experience, matched with in-depth content and community tools.

It still sounds like YouTube, MySpace and a few dozen other funded startups. as such, I’m skeptical about PluggedIn’s chances.

Microsoft 1, blogosphere 0

I’ve published several posts about blogging and the blogosphere this week and couldn’t help but include this article in The Web Week in Review as it indicates that the blogosphere faces another serious challenge – a lack of a sense of humor.

Microsoft’s internal sales video is clearly a good-natured spoof but that didn’t stop bloggers, including those at some of the more prominent technology blogs, from posting criticisms which were clearly based on the assumption that the video was serious.

It appears that Comedy 2.0 is needed. For those interested in watching a real video that looks like a spoof, click here.

Flickr Quells Video Fears With Free Doughnuts

How do you deal with a community that revolts against a new feature? Buy doughnuts.

That’s exactly what Flickr did after a “We Demand Donuts” group became popular following Flickr’s release of new video feature that some Flickr users worried would bring “YouTube junk” to the photo sharing service.

While Flickr’s response is certainly “whimsical” and appears to show that the people at Flickr genuinely care about their passionate users, one has to wonder if the community whining that takes place so often in Web 2.0 hasn’t gone a little bit too far.

At some point I think it will be time to take away the doughnuts and tell spoiled users to “grow up.”