When Digg’s Lead Architect Joe Stump took the stage at the Facebook Developer Conference in San Francisco earlier today, something in one of his screen shots caught our attention. He was there to show how users will soon be able to log in to Digg without an account via their Facebook credentials (the new Facebook Connect product). But also included prominently in the screen, but not mentioned by Stump, was an option to log in via OpenID.

Digg founder Kevin Rose promised OpenID integration at a conference in early 2007, but the company has been silent on it since then. Like many other companies, they seemed to enjoy the positive press that the announcement made but were unwilling to schedule the development time to actually implement it.

Facebook Connect isn’t slated to go live until the Fall, and we assume they’ll push OpenID at the same time. We asked OpenID’s David Recordan what he knew - he said he noticed the same thing we did but doesn’t have any additional information on when or if Digg would finally implement the single sign-on solution. We also have an email in to Digg for comment.

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Microsoft has just announced a major reorganization of its Platforms & Services Division. It will now be split into two groups (Windows/Windows Live and Online Services) which will both report to Steve Ballmer.

Kevin Johnson, who used to head the Platforms & Services Division, will soon be leaving the company. Steven Sinofsky, Jon DeVaan and Bill Veghte will be in charge of the newly created Windows/Windows Live group. Microsoft has not yet chosen a leader for the Online Services group.

The full press release is below.

Microsoft Announces Reorganization of Windows and Online Services Business

Platforms & Services Division to Split Into Two Groups and Report to CEO Steve Ballmer.

REDMOND, Wash. — July 23, 2008 — Microsoft Corp. today announced that the Platforms & Services Division (PSD) will be split into two groups: Windows/Windows Live and Online Services, with both groups reporting directly to CEO Steve Ballmer. Microsoft also announced that PSD President Kevin Johnson will be leaving the company. Johnson will work to ensure a smooth transition.

“Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas,” Ballmer said. “It has been a pleasure to work with Kevin, and we wish him well in the future.”

Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live. The Windows organization recently announced strong annual sales, with more than 180 million copies of Windows Vista sold globally, and it has driven more than 100 million installs of its Windows Live suite. The organization’s innovation pipeline includes a new version of Windows Internet Explorer, the next version of Windows and the next generation of the Windows Live product suite.

In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search that will span internal and external candidates. In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft’s search, MSN and ad platform engineering efforts. Microsoft recently announced a strategy to redefine search through innovations in the user experience and business models. As an example, the company’s cashback search program, announced in May, is already generating strong momentum among online shoppers and advertisers.

In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS). APS has great momentum, having signed more than 100 new publisher deals in the past year. McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.

“Our Windows business is firing on all cylinders,” Ballmer said. “We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future.”

“Microsoft is a special place and presents opportunity to so many,” Johnson said. “I have been so fortunate to have experienced 16 amazing years of building Microsoft’s business, learning from great leaders in the company and working with phenomenally talented people.”

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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Rumors have been propagating through several popular Mac blogs that Apple will be releasing a red iPhone 3G model for the holiday season. The release will be well-timed, considering the initial iPhone hype will start to slow, and people will be opening up their wallets more for the holiday season. (Photo via MacBlogz)

The red iPhone will presumably be sold as part of the (PRODUCT) RED campaign, a charitable organization that donates money to the Global Fund to fight AIDS in Africa. Apple has released several products for this campaign previously, including (PRODUCT) RED iTunes gift cards, a red 8GB iPod Nano, and a red 1GB iPod Shuffle.

Read more about (PRODUCT) RED and the iPhone 3G at CrunchGear, including an extensive review of the iPhone 3G .

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Today at the f8 conference Benjamin Ling revealed that Facebook will be releasing a Cocoa framework for the iPhone that will allow application developers to integrate with Facebook Connect. The framework is expected to be released sometime in the fall, and will take the form of an SDK that can be used by developers of iPhone applications. Facebook Connect allows applications to integrate the facebook platform and the identity of users into their own applications.

Currently Facebook Connect is only available for web applications, but the announcement of an iPhone SDK is the first signs that Facebook are considering both mobile and desktop platforms as part of their platform vision.

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The TechCrunch team is on site at the Facebook Developer conference, and we’ll be live blogging the news. Mark Zuckerberg’s Keynote starts at 1:30 pm PST.

David Glazer (Director of Engineering, Friend Connect) is here in the audience (which is about 1500 people), it looks like he will announce something. Perhaps they are announcing some kind of agreement

Facebook’s press release is here.

Live Coverage

2:49 PM: That’s it. The show is over.

2:48 PM: Great Apps can integrate with users just like native Facebook apps, and they get early access to features. The Great Apps program is in alpha stage and the first two partners are iLike and Causes. There will be a strong enforcement system with all apps, and they will disable apps that are a problem. Over the last year they’ve disabled apps for violation of privacy or other policies. They take this very seriously, he says.

2:47 PM: The second announcement is the Facebook Great Apps Program (Top Tier program). They embody all ten of the guiding principles, and they advance the mission of Facebook.

2:46 PM: They’re announcing two new programs: a verification program is first - this is the lower tier of the two programs. Starting in September they will invite apps that are secure, respectful and transparent to apply to be verified. Trusted apps get a special badge in the directory and app page.

2:44 PM: They have partnerships with partners to help developer (Microsoft), host and scale. They are launching a new developer website that gives all the information needed for a quick start. He says 1000 apps have been submitted to the Facebook fund. They are announcing a new competition today. $2M will be given out over the next two months. Facebook will select 25 finalists who will each get 25k. Users will vote on finalists who will each get 250k.

2:43 PM: He says they must keep the ecosystem safe for users and fair for developers. A year ago equal distribution became overwhelming to users, then they made restrictive changes that hurt apps. Going forward they will have different rules. They are announcing several programs to help app developers. Get Started Quickly tools like adding easy FBML tags.

2:42 PM: He says that they’ve learned a lot in the last year, as they’ve had lots of challenges. Facebook is listening to the community. They’re trying to partner more closely with developers. He says they are making organizational changes that let developers incorporate feedback during the dev process, and they’re creating full time community management organization

2:40 PM: “Security is a big part of it, apps can’t share information with other users unless they obey privacy settings. Apps must also be respectful of the users attention and time. Don’t make users invite 20 friends before you use the app, or spam friends without them knowing. Apps must be very transparent. Users should get what they expect when they click, not an interstitial ad. Design is also important - clean design is a must. And apps must be fast loading and responsive. As the apps get faster, users use them more. Apps need to focus on being robust and scaling properly as they grow.”

2:39 PM: “Building trustworthy applications is important because we live in an ecosystem with network effects. If users leave, everyone suffers. Apps must be safe and trusted.”

2:37 PM: He says apps must be useful. The carpool app is great example, which lets users find carpool buddies. “Apps must also be expressive”- The graffiti app that lets users draw on friends profiles, is a good example. Finally, meaningful apps must be engaging. He says Playfish makes games that are highly engaging. Facebook users have played over 900 million minutes of Playfish games. That’s about 1800 years.

2:35 PM: Benjamin is announcing “guiding principles for great applications” which are based on dialog with community. It’s based on three pillars: meaningful, trustworthy and well designed. The best apps make use of the social graph. Applications must be social. A good example is the Lil Green Patch app, which helps users fight global warming by interacting with other users.

2:33 PM: Benjamin Ling, Director of Platform Program Management is now on stage talking about the “State of Platform.” He says that over $200m has been invested in Facebook apps, $34m this week alone. Additionally, 13 different ad networks have launched that pay out tens of millions of dollars to app developers. He says, “venture capital, ad networks, developers and academics are the ecosystem that makes Facebook platform a success.”

2:32 PM: Mark wraps things up, that appears to be the end of the announcements.

2:31 PM: Zuckerberg asked all Facebook employees who work on platform to stand up, then asked all app developers to stand up.

2:29 PM: “Give people the power to share and make the world more open and connected.” - Facebook’s mission statement

2:28 PM: To recap, he’s talked about new profiles and the highlighting of the news feed, the second item is Facebook Connect. The new profile launched Monday, he says. Facebook Connect will launch developer keys starting today - there will be a beta period.

2:26 PM: That’s it for launch partners. Mark is back on stage.

2:25 PM: A new site will have a “my friends” tab that shows reviews by friends in various cities.

2:23 PM: Mike Philips from Citysearch is taking the stage. He says they are launching a new site, where sharing information is a big piece. They are integrating with Facebook Connect. When a user looks for a hotel, restaurant, etc., Citysearch already has lots of reviews and data, but not a way to link up reviews from friends.

2:22 PM: When you login to comment, users can sign in via Movable Type or Facebook. If you sign in with Facebook, it will display changes - light blue boxes outline your friend’s comments.

2:20 PM: David Recordon from Six Apart just took the stage. They are releasing a plugin for Movable Type that allows people to comment using their Facebook profiles. Users can decide to profiles or keep them private.

2:17 PM: Digg is now allowing people to sign into Digg via Facebook or OpenID. There is no requirement to sign up for a Digg account.

2:15 PM: Launch partners are now coming on stage. First up is Digg by Joe Stump.

2:13 PM: Facebook Connect can show you which of your Facebook friends are also on the outside service, so you can link up with them there too. They are also allowing people to leave comments and requests on third party sites.

2:12 PM: Facebook Connect will let applications share data with Facebook. Users can bring Facebook friends with them to outside sites.

2:11 PM: Mark is now talking about Facebook Connect.

2:10 PM: He says he wants Facebook to be the platform and tools provider, but let apps do anything social they want.

2:08 PM: Mark says we are going to see the decentralization of social networking into apps on the web. Things will decentralize further, apps can run anywhere on the web, not just on social network platforms. They will all work together, just be decentralized.

2:05 PM: People (including us) are writing wall posts for Mark since he has his profile live on stage, but it looks like he’s actually using a fake profile, it shows just 8 friends.

2:03 PM: Mark is now showing a live demo of the new home page.

2:02 PM: Mark says they haven’t completely gotten rid of app boxes, they’re added a tab for them. Some apps really need them. Users can also add tabs for individual apps.

1:59 PM: He says the apps that leverage the news feed the best will be the ones that succeed.

1:58 PM: “The most important part of the profile is the wall and the news feed, which have now been merged. They also give developers an incentive to build apps that let users share a lot of information. This is a lot better than an application box, which people don’t interact with as much.”

1:56 PM: Mark is now talking about the new profile pages and how it fits in with their current goals.

1:54 PM: Mark says that over the last year Facebook hasn’t done enough to reward applications that provide a lot of long term value, and they haven’t punished the ones abusing the system.

1:53 PM: Mark is talking about lessons Facebook has learned. He says that they released the platform as quickly as possible, it wasn’t fully baked yet, and they didn’t anticipate the huge adoption.

1:52 PM: Mark says the most powerful tool on Facebook today is the News Feed. Traffic went up by 50% when they first launched news feed in late 2006.

1:51 PM: Mark is now talking about the social graph, a concept he introduced at the first f8 conference.

1:49 PM: LivingSocial just announced they received $5M in Funding, Flixster received $6M from Allen and Company, and Zynga got $29M from Kleiner Perkins Caufield & Byers. Zuckerberg says, “There has been more than $200 million invested in the ecosystem.”

1:47 PM: David Glazer (Director of Engineering, Friend Connect) is here in the audience, it looks like he will announce something. Perhaps they are announcing some kind of agreement

1:45 PM: “We’re opening up the translation tool to allow apps to be translated as well…We now have more than 400k developers building on top of the platform. The developer community is spread around the world. More than half are outside of the US.

1:43 PM: Mark is now talking about opening up Facebook for translations made by users. They started with Spanish and French, and now the site is available in over 60 languages.

1:41 PM: Mark is looking back over the last year and says it’s been pretty crazy. Over 24 million people were using Facebook a year ago - today they are at 90 million people.

1:38 PM: Mark says its time to take the Facebook platform to the next level. On a recent vacation he realized (1) they want to build a product that really lets you connect with people, and (2) they want to extend the concept of presence, have more open connections and share more. They want to make the world a more open place

“The most important information is only available if people share it, and have the power and the tools to do so”

1:35 PM: Mark takes the stage and welcomes the crowd.

1:30 PM: Still waiting for Mark Zuckerberg to take the stage.

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Facebook just issued the press release for today’s F8 conference. The release is below, with the most important points bolded.:

SAN FRANCISCO, Calif. – Facebook f8 Conference, July 23, 2008 – Facebook today introduced the latest advancements to Facebook Platform during its annual f8 developer conference, calling on its more than 400,000 developers to connect their Websites with Facebook through Facebook Connect, extend their applications to dozens of languages worldwide, and make use of new developer resources to help them succeed.

“We opened Facebook Platform with a belief that community innovation can give people the tools, and the power, to share and communicate in ways that Facebook can’t build on its own. We’re humbled by what our developer community has accomplished,” said Mark Zuckerberg, founder and CEO of Facebook. “We’re confident that the changes we’re presenting today help developers build more meaningful social applications that enable users to share more information.”

Facebook earlier this week released its new site design for users to preview and test, which is being gradually rolled out to Facebook’s more than 90 million active users over the coming weeks. The changes announced today, along with those launched earlier this week, leverage Facebook’s powerful feed system to give developers a new way to gain visibility and help users share and discover more information.

Leveraging the Power of Feeds

“Across the Web, content creation has become easier and more immediate, resulting in a continuous stream of information through what we call ‘feeds’,” said Zuckerberg. “The power of feeds on Facebook is their ability to move you into a world where you receive relevant information in a social context wherever you are on the Web.”

The new site design emphasizes dynamic content and surfaces the most recent and relevant information and activity through feeds, both on News Feed and the Wall. For developers, the new site design enables even deeper integration within the profile for their applications. By taking advantage of the improvements with feeds on Facebook and the other new features, developers can more efficiently distribute their applications and gain more ways to engage meaningfully with users.

“We’re confident that the new profile and integration points will give entrepreneurs and developers even greater opportunities to build their businesses and deliver on the promise of Facebook Platform,” said Ben Ling, director of platform program management, Facebook. “One goal of the new site design is to align Facebook Platform with users’ interests who will see a new class of applications emerge that provide deeper engagement and a better experience.”

Making the Web More Social with Facebook Connect

Facebook announced that 24 Web sites and applications have joined its efforts to make the Web more open and connected through Facebook Connect. A developer ‘sandbox’ is now available so developers worldwide can start working with Facebook Connect.

Facebook believes that enabling users to take their identity and friends with them around the Web, while trusting that their privacy is protected, makes the Web more open and connected. Facebook Connect allows users to bring their Facebook account information, friends and privacy to any third party website, desktop application or device.

Digg, Six Apart, and Citysearch were featured live during Zuckerberg’s keynote today demonstrating their planned implementations of Facebook Connect. Facebook Connect will be generally available to users in the fall.

“Digg surfaces the best content on the Web as voted on by its community of 26 million,” said Kevin Rose, founder of Digg. “Facebook Connect will help us promote more conversations on Digg by giving Facebook’s 90 million users an opportunity to sign-in to Digg with their Facebook accounts and become part of the active Digg community. This allows both Facebook and Digg users to more easily share the content they care about with the people they care about.”

With Facebook Connect, users benefit from the following features:

• Trusted Authentication – easily authenticate into partner sites using their Facebook account

• Real Identity – leverage their real identity across the Web in a trusted environment

• Friend Linking – take their friends with them wherever they go, enabling trusted social context anywhere on the Web

• Dynamic Privacy – assurance that the same privacy settings users have set up on Facebook will follow them wherever they decide to login throughout the Web

• Social Distribution – share actions on partner sites with their friends back on Facebook through feeds Additional planned participants at launch include: Amiando, CBS.com, CNET, CollegeHumor, Disney-ABC Television Group, Evite, Flock, Hulu, Kongregate, Loopt, Plaxo, Radar, Red Bull, Seesmic, Socialthing!, StumbleUpon, The Insider, Twitter, Uber, Vimeo and Xobni.

Expanding Facebook Platform Internationally

As a result of the worldwide success of Facebook’s translation system, the company has opened up the Translation Application to any developer using Facebook Platform. Beginning today, any Facebook developer can make their application available in any of the 20 languages that are currently available on Facebook, with 69 more coming soon.

Developers can now access the Translation Application to either translate their applications themselves, or open up translation of their application to Facebook users around the world, who will work together to define it in their native languages.

This innovative approach combines the passion of Facebook users with technologies that are systematic and manageable. The Translation Application enables developers to get high-quality, fully-translated applications in front of users, no matter where they live or what language they speak – much faster than ever before, and without ever having to pick up a dictionary.

“Through Facebook’s international platform, the possibilities are endless for both developers and users,” said Chamath Palihapitiya, vice president of growth, Facebook. “With no language barriers to break through, developers can take the stage with an even larger audience of users from all over the world, and users will have access to even more great applications than ever before built by the world’s best developers.”

Helping Developers Succeed

When Facebook Platform launched in 2007, it gave developers the opportunity to create applications that are deeply social and meaningful to users. More than 400,000 developers and entrepreneurs from 160 countries have signed up and developed applications. For the next phase of Platform, Facebook has focused on ensuring that developers have the resources and incentives they need to build applications that deliver on the vision of Facebook Platform.

Facebook launched four new and expanded developer programs and resources:

1) Great Apps Program Facebook’s Great Apps program rewards applications that deliver value to users and advance the Facebook Platform vision. Great Apps embody Facebook’s guiding principles for social applications through their meaningful, trustworthy and well-designed user experiences. Great Apps will gain greater visibility on Facebook, earlier access to new features and more feedback from Facebook. Facebook will open the Great Apps selection process to developers in September.

Facebook is excited to announce iLike and Causes as the inaugural Great Apps. “Facebook Platform provided iLike with an unprecedented opportunity to become one of the world’s leading online music services in just over a year,” said Ali Partovi, CEO of iLike. “I’m delighted that Facebook is committed to recognizing the apps that are most appreciated by users. We expect the Great Apps program to have a very positive impact on the entire Facebook Platform ecosystem.”

“The Causes application enables socially-conscious Facebook users to unlock the power of their social network in order to raise money and awareness for the causes they care about,” said Sean Parker, chairman and co-founder of Causes. “With more than 100,000 causes created by 12 million Facebook users, we’ve had remarkable success building user trust and value on Facebook and we’re excited to join the Great Apps program.”

2) Application Verification Facebook is introducing the Application Verification program which is designed to offer extra assurances to help users identify applications they can trust — applications that are secure, respectful and transparent, and have demonstrated commitment to compliance with Platform policies. Verified applications will benefit from added visibility on Facebook. The program is a complement to Facebook’s ongoing policy enforcement to keep the Platform ecosystem robust, and will be open to developers in September.

3) Expanded fbFund Competition In an effort to grow the Facebook ecosystem, fbFund was introduced last year to provide resources to developers, by eliminating some of the challenges of starting a company. As part of a new competition, Facebook will award nearly $10 million in non-recourse grants to the top 25 applications. In addition to the Facebook judging committee, this year users will test applications and vote on their favorites after the first round deadline of August 29, 2008.

Winners from the first fbFund competition were announced today and include: ConnectedWeddings, CourseFeed by Classtop, GoalCamp, HotBerry, J2Play, LuckyCal, MyListo, Podclass, Trazzler, and Zimride Carpool App.

4) New Developer Website Facebook is introducing a new website for Facebook Platform. Improvements include better navigation and cleaner access to the blog, wiki and forum to encourage community involvement. Facebook will also start highlighting social, meaningful and trustworthy application case studies.

For additional information on the announcements made today at f8, please visit the f8 Press Page at: www.facebook.com/f808Press.

About Facebook Founded in February 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. Anyone can sign up for Facebook and interact with the people they know in a trusted environment. Facebook is a privately-held company and is headquartered in Palo Alto, Calif.

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After years of ceding the upper hand in online travel to booking sites like Kayak and Orbitz, American Airlines is about to fight back. According to the CEO of a competing travel site, American Airlines is about to pull its airline listings out of Kayak and is considering doing the same with Orbitz. If it does so, other airlines such as Continental and Northwest may follow suit.

Airlines don’t like the booking sites because they have to pay them a referral fee for every ticket they sell, as opposed to capturing the full fare when travelers book on their individual sites. Even though that only amounts to a few dollars per ticket, every dollar counts to the troubled airlines—especially now with fuel prices going sky-high and the consumer spending going down.

American Airlines has a particular beef with Kayak because it tends to show AA flights through its partnership with Orbitz instead of directly from American. That means American has to pay a double tax, once to Kayak and once to Orbitz. (The deal between Kayak and Orbitz, charges the competing CEO, was meant to drive up traffic numbers on Kayak as it was potentially seeking an IPO prior to raising $200 million instead last December).

The decision to sever ties with Kayak supposedly has already been made. The only question is whether Orbitz can salvage its relationship with the airline. This should strengthen competing travel sites, especially newer ones that link directly to the airlines like Mobissimo and Yapta.

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Today Google has launched Knol, its Wikipedia alternative that holds authors accountable for the articles they write. Each article is created by a team of authors who receive attribution, and are allowed to take part in a rev-share for AdSense ads on their page. Other users can submit changes, but they have to be approved by the article’s original authors before they go live on the site (it’s basically a moderated Wikipedia).

Google says that it will allow multiple people to create Knols on the same subject. Knol allows users to rate and review Knols, and will likely include ranking as part of search results so we don’t have to sift through countless articles on the same topics. You can see an example article (a Knol that tells you how to write Knols) here.

The big news here is that by assigning ownership and allowing authors to include AdSense ads on their articles, Google is effectively offering a monetary incentive to create good content. In theory, the best articles will get the most attention, and in turn the most revenue.

Unfortunately, this plan may backfire on Google. We’re going to start seeing a flurry of articles on the most popular content - expect to see dozens of biographies on Barack Obama and John McCain in the next few days. For these popular subjects the system should work well - a few lucky (and hopefully credible) articles will rise to the top, and the rest will fade away. But for less popular topics there won’t be any incentive for anyone to write anything.

Wikipedia works well because it’s almost like a charitable organization. Everyone contributes what they can in the hopes of furthering the world’s knowledge. Knol’s community will likely be far more concerned with earning money than the general welfare, which may hurt both its credibility and the amount of participation it sees from the community.

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MySpace’s upcoming music joint venture with 3 of the 4 major labels, first announced in April, will launch in September (EMI is still a holdout, but from what we hear they may be ready to fold soon). Chris DeWolfe, CEO of MySpace, mentioned that date and gave other details about the joint venture in an interview today with Adam Lashinsky at the Fortune Brainstorm conference in Half Moon Bay, CA.

Afterward, he told TechCrunch Co-Editor Erick Schonfeld, who is attending the event, that MySpace Music will be a combination music store/subscription service, with unlimited playbacks of full tracks, but for free. The revenue model will be advertising and paid downloads. Advertisers are already lining up, with some eight-figure deals being negotiated.

This is the first time a launch date has publicly been revealed. MySpace is counting on the music store as a new growth business - and bringing in the major labels as equity partners helps ensure their long term buy-in. The seemingly successful Hulu business model which brought in News Corp and other content owners last year will set the example.

Music almost certainly plays a part of MySpace’s continued dominance of Facebook in the U.S. Market. Facebook continues to rely on iLike for music - MySpace, by contrast, has already had a deep music offering and hosts pages for 5 million artists. MySpace says that 65% of their users embed music on their MySpace pages, and over 5 billion songs are streamed on MySpace each month.

There are still a lot of details that need to be explained about the MySpace music venture, and we still eagerly await announcement about the CEO of the new venture.

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Google CEO Eric Schmidt is on stage right now at Fortune’s Brainstorm conference being interviewed by Fortune’s David Kirkpatrick. Here are my notes live:

Q: What is Google’s next great revenue stream?

Schmidt: How about text ads?

Q: The biggest knock against Google is that it is a one-product company. how do you respond to that?

Schmidt: Google is a one-product company. It is called Google. We think about features, not products. People usually talk about text ads when they say that. While the vast majority of our revenues comes from text ads, there is no single large category of text ads or geography. It is well diversified. We serve text ads against content that is not searchable.

Q: We select for people who share our values. We don’t value experience very much. We also select for people who want to work with other people. Because it is collaborative.

Q: But you are known for saying that it is hard to manage larger groups?

Schmidt: If you look at the history of software development, all the interesting things that have been built have been built by two people. It is the nature of software technology.

Q: Isn’t working in larger teams going to be necessary?

Schmidt: this is an unsolved problem. You start small, then you have big projects. You follow a traditional S Curve, but the time you have become like this you are entirely predictable {talks about 20 percent time as driving creativity and helping to recruit top technical people]. It serves as pressure cooker release valve.

Q: Almost every challenge you have has to do with scale. I hear more people saying I don’t feel safe that Google should have so much information about me.

Schmidt: Because of the way technology works, all the technology companies are aggregating information about people. It is a political debate. Countries differ on this question. England has the largest number of closed circuit cameras by a factor of ten, but they also let you sue the papers if you feel you are defamed.

We get into constant problems with some prosecutor who subpoenas information we don’t want to give them, and we resist it. Which is why we don’t fully operate in China. Our argument is that information is not available in your domain. So countries are now trying to rewrite their laws to say this information cannot be available anywhere on the Internet.

Q&A from audience:

Q: What about mobile?

Schmidt: Our wireless initiative was a perfect outcome. It was the cost of an outcome. I am on the board of Apple. Last night I was in Palo Alto and there was a line outside. It shows the device is a step forward. IPhone’s competitors all have dec A phone is GPS, a camera, a computer, and a browser. The Phone is tehfirst one with a really functional browser. We show full ads, so that is a huge for revenues/

The new category of apps that have not come out yet really is a breakthrough. One winner of the Android apps, it looks around, names the buildings it sees and tells you what is happening inside of them. That is a really interesting product. In mobile there are a lot od product that have that WOW factor, because of the use of GPS.

I think all the most interesting next-generation social apps will be mobile.

Q: [Sam Whitmore asks if Google does any work for the government related to the Patriot Act]

Schmidt: Regarding the Patriot Act or any of the three-letter organizations, absolutely not. We do provide the federal government with some search and other services through our [government] sales group.

Q: enterprise plans?

Schmidt:
The easiest for us to enter the enterprise is to address high pain levels like e-mail, messaging, calendaring.We have something like a million companies using these services, mostly small. My view is that it will be a many-year process, but we will create tools that will eventually go to the top.

[Interview is over].

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Comscore has just released the latest data on Facebook growth patterns, which clearly show that Facebook’s recent push to expand abroad has paid off. The site has seen extremely high growth rates across Latin America, The Middle East, and the Asia Pacific. Europe, which accounts for a much larger user base, continues to grow at a steady clip as well.

North America still accounts for nearly 40% of Facebook’s monthly growth, but its rate remains fairly constant, hovering at an increase of around 47,000 uniques over the last seven months.

Earlier this year Facebook finally managed to catch up to MySpace’s total unique visitors, largely on account of its rapid global expansion (MySpace continues to dominate in the US market).

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Slide was not too happy when Facebook temporarily pulled one of its most popular applications, Top Friends, from the social networking site for exposing too much profile information to people who were not friends.

Ahead of today’s F8 developer conference, I asked Slide CEO Max Levchin what Facebook could do to make developers’ lives easier. Not surprisingly, he’d like to see clearer rules about what is and is not allowed, as well as more formal, contractual partnerships between Facebook and app developers. (Facebook is expected to announce a tiered partner system today, and Slide may not qualify as one of the “preferred” partners because of the issues that led to Facebook’s police action).

Slide’s VP of Strategy, Keith Rabois, goes even further. He warns that if Facebook keeps shifting the foundation on top of which app companies are built it will threaten their viability. This might all sound like sour grapes, but coming from the biggest provider of apps on Facebook it does carry some weight.

Levchin, who was one the co-foudners of PayPal, also thinks that Facebook needs a universal payment system so that developers can start charging for apps like they can on the iPhone. The question is whether anyone would ever want to pay for a Facebook app.

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Thought this might be interesting for the jet-setters in the Web 2.0 world. Monster Cable, the makers of cable, just sent us the new Beats by Dr. Dre, a pair of noise-canceling “studio” headphones aimed at the mid-range audio consumer. At $349, these are priced at exactly the same point as the Bose QuietComfort 3 which I’ve used for over a year now. I’ve been wearing the Beats for the past hour and found them on par with the QC3s in terms of noise reduction. They have very crisp bass and a nice separation as well.

Best of all the, the Beats use AAA batteries instead of the QC3’s battery pack, which means you’re not stuck if you forget to recharge. I’ll be taking a flight tomorrow and I’ll bring these along to test - I’m just about sold on the QC3s when it comes to noise reduction but I’m game to try these out in a real-world scenario. Look for a full review next week but until then pop over to CG to look at some more photos.

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V-Enable, a voice-enabled mobile 411 system, conducted a study by taking a random sampling of 20,000 searches in major metropolitan areas from customers of several V-Enable partner carriers including Alltel and MetroPCS. The findings clearly represent interesting trends caused by the recession. For one thing, people are eating more pizza! The results for the top restaurant searches for the period between October 2007 and June 2008 are:

1. Pizza Hut
2. McDonald’s
3. Domino’s Pizza
4. Starbucks
5. Papa John’s Pizza
6. Little Caesars Pizza
7. Taco Bell
8. Burger King
9. Wendy’s
10. Denny’s

Sit-down restaurants like Olive Garden, Applebee’s and Red Lobster, have dropped off the list, while recession-proof comfort food like Pizza Hut and Domino’s shoot to the top of the list. 380% more searches for Pizza Hut have been conducted during the period, and searches for Domino’s Pizza have increased 980%. High gas prices are keeping people at home ordering in, and they are opting for cheaper alternatives. Financial analysts have explored this area extensively, and have deemed several of these restaurant chains “recession-proof stocks.”

There are several other search-related economic indicators from V-Enable. U-Haul, a company that was never on any top 50 list, jumped to #23 in general search, possibly because of a rise in foreclosures. Macy’s dropped from #17 to #49 in retail, a direct correlation to the fact that people just don’t have the discretionary income that they used to. Motel 6 has never showed up on a top 50 list, but they are now #37 in general search, quite possibly because travelers can’t afford the costly alternatives. Mobile search happens in real-time and is unaffected by SEO, making these statistics arguably more reflective of consumer sentiment than web search.

V-Enable is a mobile information system, where users can speak the name of a restaurant or residential listing and receive location and contact information. The company also has live operators working behind the scenes so that users can call and get human assistance, if necessary. V-Enable sent us similar retail statistics in December. The company is backed by $10.1 million over 3 rounds from Siemens Mobile Acceleration Corporation, Sorrento Ventures, SoftBank Capital and Palisades Ventures.

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Today is definitely Facebook day as they hold their second annual F8 developers conference in San Francisco. Last year they released their developer platform, which led competitors to hurriedly release their own competing offerings. What’s in store for tomorrow? We’ve made our predictions, and CEO Mark Zuckerberg takes the stage at 1:30 to make his keynote, and workshops will follow all day after that. The full schedule is here.

Some of the news is breaking early. For example, we will almost certainly see the Facebook payments platform launch in some form, for example - Facebook desperately wants to find a way to help application developers make money beyond advertising, and the iPhone App Store has shown that people are willing to pay for quality applications.

Even more certain is the launch of Facebook Connect, which will allow third party services to authenticate Facebook users and merge profile data into their offerings. Digg will be one of their launch partners, and will show off the new product on stage, say our sources. However, neither CEO Jay Adelson or Founder Kevin Rose will attend the event.

We’ve also heard from sources that Facebook will announce a tiering system for applications, confirming what Boomtown wrote earlier today. Five to ten top tier apps, which have proven themselves trustworthy and which create as good or better a user experience as what Facebook is able to create itself, will be named in the near future. iLike (music) and Causes (charity) will be announced tomorrow, and more will come soon. We heard that Flixster (movies) was on the short list but was bumped at the last minute - perhaps due to their MySpace partnership announced yesterday.

Other apps will be grouped into a middle tier, where most of them will fall, and a bottom “unwashed masses” tier for untrustworthy or spammy apps that have little user value. Each tier will have different rules for engaging with users, particularly around invites, messaging and entry into the news feed.

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Robert Scoble caused a stir yesterday with a post on how tech bloggers are failing our readers. We all chase the same stories, get spun like a top by the PR machine, and can’t sustain a conversation about a single topic for more than a few days before we all rush to the next shiny object.

I caught him on video at the Fortune Brainstorm conference. He pines for the old days of blogging, before comments were taken over by trolls. He seems to think the trolls all came from Digg and should go back there. More likely, it is just a sign that blogging is attracting a bigger audience

The problem is, as he put it in his post:

Our commenting systems really suck. . . . Only the most motivated will leave comments. That’s usually someone with an axe to grind. That’s cause we’ve failed you. We haven’t moderated jerks out of our commenting system so now no normal person would go close to anything resembling a modern commenting system.

It’s not only that. There was a time when a good idea (like a cheap Web tablet) would be chewed on for a month by the blogosphere, going back and forth between different bloggers, and getting refined along the way. We’re all slaves to the news cycle now, talking about the same thing for a day or two, and then moving on. But does it have to be this way?

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Glam Media has hired Michael Adair, most recently Google’s head of North American sales finance, as their new VP Corporate Development and Finance. Prior to Google Adair was an investment banker at Lehman Brothers and he has an MBA from Harvard. He’ll be responsible for making investments and acquisitions on behalf of Glam.

Glam, a women-focused advertising network, raised a massive $85 million round of financing earlier this year - bringing their total capital raised to over $115 million. A lot of that money was reportedly taken off the table by Glam’s founders, but the company clearly has the cash and stock currency to make acquisitions.

Presumably Adair’s deep finance and banking experience will help him make those acquisitions and investments as Glam gears up to compete with Sugar Inc. and other competitors.

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The medical industry is one that thrives on innovation and evolution. New procedures, medicines, diseases, and theories are released practically every day. In such an environment, the need for a website to reflect and allow for documentation is apparent.

MedPedia is a new project, currently in development, that will offer an online collaborative medical encyclopedia for use by the general public. In order to keep the content accurate and up-to-date, content editors and creators have to have an MD or a PhD. Several highly-esteemed medical colleges will be contributing content to MedPedia, including Harvard Medical School, Stanford School of Medicine, UC Berkeley School of Public Health, and University of Michigan Medical School. Medpedia is also receiving support from the National Institutes of Health (NIH), the Centers for Disease Control (CDC), the Federal Drug Administration (FDA) and many other government research groups. The content from these organizations will then be edited by MedPedia’s community of medical professionals.

MedPedia is currently in closed beta with a live preview site, where contributors can apply to be included, and users can submit feedback and suggestions. They plan on opening up their beta in late 2008.

The site will feature content about diseases, anatomy, procedures, medications and medical facilities in two ways. The topic front page will be written in easy-to-understand language for the general public, but there will also be a more technical page where medical professionals can discuss more in-depth with a clinical tone. With more than 30,000 known diseases and conditions, more than 10,000 drugs prescribed each year, thousands of medical procedures being performed and millions of medical facilities around the world, they have their work cut out for them.

There is obvious competition with established medical resource sites like WebMD and MayoClinic. Those sites have done really well, but there’s always room for disruptive technology like this. Look at what Wikipedia did to Britannica, a 250-year old encyclopedia publisher. The advantage MedPedia has is its large range of medical professionals who create content based on their specialties, rather than having several in-house doctors creating content on a range of topics they aren’t formally familiar with.

This system is advantageous both to MedPedia and the medical professionals. MedPedia benefits from their knowledge and experience, and the doctors are able to promote themselves in their specific field of expertise. MedPedia contributors will also be able to form committees and boards in specific areas like “Childhood Obesity” and “Skin Cancer.” Each professional that specializes in that field will be able to join the committee (five of whom will make up the board) and will oversee the content generated and edited in that field.

MedPedia was founded by James Currier, a seasoned Silicon Valley entrepreneur. Currier founded Tickle, a quiz and personal test site in 1999, which sold to Monster in 2004 for about $94 million (though it recently lost a hefty portion of its staff and was said to be shutting down). After taking some time off to spend with his family, he started an incubator called Ooga Labs. He got the idea for MedPedia when he found himself constantly searching for medical information online, like if his three-year old son needed to go to the emergency room for a fever.

The Advisory Board includes Gilbert S. Omenn, M.D., Ph.D., Professor University of Michigan Medical School; Linda Hawes Clever, M.D., M.A.C.P., Clinical Professor University of California San Francisco (UCSF) Medical School; Joseph B. Martin, M.D., Ph.D., former Dean of the Faculty of Medicine at Harvard University; and Mitch Kapor, philanthropist and founder of Lotus Development Corporation, designer of Lotus 1-2-3, Chair of Board of Directors for Linden Lab (creator of Second Life), Chair of Mozilla Corporation, and a member of the Advisory Board for the Wikimedia Foundation.

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Social gaming network Zynga just got some serious funding. It raised $29 million in a B round led by Kleiner Perkins. (IVP and prior investors Union Square Ventures, Foundry Group and Avalon Ventures also participated in the round). The company is also announcing the acquisition of YoVille, a virtual-world app for Facebook with 150,000 daily active users. And, along with the cash, new Kleiner partner Bing Gordon is taking a board seat and an operating role at the startup.

Bing recently left Electronic Arts, where he was the chief creative officer and one of its founding executives. But he was already an informal adviser to Zynga, and helped bring the deal to Kleiner. Zynga CEO Mark Pincus says:

He is super-involved in product strategy, brings the gaming DNA to us, and is an amazing CEO coach. He’s already stopped us from doing stupid things.

Like what?

Stupid things like build a PC downloadable MMO game that would cost anywhere from $5 million to $30 million, and would be free to play with virtual goods.

That’s a dig at other gaming startups. Zynga specializes in casual games you can play with your friends on social networks. Some of its hits include Texas Hold’Em (with four million hands of poker played daily), Attack, and Scramble. Al told, they attract 2.9 daily active users across Facebook, MySpace, and other social networks. On Facebook alone, Zynga’s games have 1.6 million daily active users (right behind Slide, RockYou, and SA Ventures).

The company raised $10 million just last January, and Pincus claims he still has all of that money in the bank and is cash-flow positive with 80 employees. But he feels the stakes are about to get higher as the worlds of casual social gaming and online video games collide. That means he will have to spend more money on both production values and marketing. Pincus tells me:

I think in 18 months these games are going to be highly graphical and immersive. You will be able to jump in and have a casual experience of today, and if you want to go deeper you will be able to.

As it becomes harder to get viral growth, you will need marketing.

Zynga uses its most popular games as a distribution mechansim for new games by cross-promoting them. But Zynga is not alone in trying to build a social gaming network. Competitor SGN raised $$15 million last May, and counts Jeff Bezos as an investor. Both are trying to disrupt the current gaming giants (like EA) with lower development costs, lower marketing and distribution costs, and more social gameplay.

Pincus wants to keep his player acquisition costs low, but add in some of the deeper engagement that online multiplayer games enjoy. He is building some of these games now. But he no doubt will do more buying of small fry gaming app startups. (Playfish looks like bait in this area).

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Chris Saad, a co-founder of the Data Portability project has posted that tomorrow at OSCON a new Open Data Web Foundation will be announced by David Recordon and others.

The goal of the new foundation is to set out the actual data specifications, legal structures around data portability and in helping to evangelize set formats. Saad says that the initiative is different to the Data Portability project in that it is details oriented around specific technology and legal implementations rather than the broader evangelizing effort that has come out of Data Portability:

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