Twitter, the micro-blogging platform, has been in the news quite a bit lately (in particular for VC funding and rescuing a US blogger). This has helped drive US Internet visits up further to the increasingly popular service. Year on year, Internet visits to Twitter.com are up 8 fold. In the past three months, visits have more than doubled and traffic continues to climb, up 60% in the past month.

After a spasm of irrational exuberance pushed shares of Netflix to new highs over the past few weeks investors abruptly reversed course late Monday, hammering the shares in after-hours trading after the company's Q1 earnings report included lower-than-hoped for guidance for the rest of the year. After officially closing up almost 2% on the day, the shares plunged more than 14% in the after-hours market, losing $5.52 a piece. The company shaved 1 cent off the upper end of its projected full-year EPS to $1.29, quickly deflating a bubble of expectation that had lifted the shares by nearly 50% over the past year.

Pity the poor regulator who, someday soon, will be faced with evaluating some proposed combination of all or parts of Microsoft, Yahoo, AOL and/or News Corp. (is there anyone else left?). What yardstick would you even apply? Someday, they're all going to be in the same combination of the content creation/distribution business, online advertising, applications development and platforms and social networking anyway. It's really only a question of how they get there and when, not whether or even should they. Trying to come to grips with that through the keyhole of any one deal or company is probably not a formula for a coherent regulatory framework for the future of the digital media industry.

There is an art to sucking up. Done too blatantly it will backfire. Done too weakly, you won't get what you want. The perfect suck up contains the following elements:

• Credibility. No matter how good your suck up, if you don't meet the requirements for placement, a job, an interview, whatever, it won't matter, so you need to show why you deserve what you're asking for.

Or is the Google CEO crazy like a fox? He certainly has been talking some crazy smack lately about Microsoft's proposed acquisition of Yahoo, as in this recent exchange in Portfolio in which me suggests that a Microsoft/Yahoo combo might "break the Internet":

Redmond, Wash. - Microsoft (NASD: MSFT) today announced plans to acquire Rapt Inc., a provider of advertising yield management solutions for digital media publishers for undisclosed sum. The deal helps Microsoft build up its arsenal in the escalating arms race with Google (NASD: GOOG), which currently is building up its own "digital dashboard" for advertisers, which Rapt now will do for Microsoft.

New York - Despite concerns about the recession and a cyclical slowdown, the video game industry continues to grow in 2008. Monthly video game sales statistics from the NPD Group show that video game industry sales were up 34 percent to $1.3 billion, year over year, according to VentureBeat.

San Francisco - iBloks, a company which creates rich media ads, is in the process of raising a third funding round of up to $2.1 million from Maveron Equity Partners and MEP Associates, according to the website VentureBeat.

New York - AOL (NYSE: TWX) announced today that it has entered into an agreement to acquire Bebo, a social media network, for $850 million in cash. Bebo is particularly strong outside the United States, especially in Britain, and has a global membership of more than 40 million.

Rumors are circulating once again that Digg.com is up for sale, this time naming Google and Microsoft as likely bidders for the company. And while these may just be rumors, it makes sense why both would be interested – Microsoft already has an advertising deal in place with Digg and Google is already an inadvertent partner (and could also certainly sell advertising on the website).

Microsoft announced this week that they are going after the holy grail of advertising: integrated ROI measurement and tracking. The big problem with online ROI measurement that Microsoft is targeting is the inability to assign quantifiable value to brand advertising, e.g. banner ads, and which results in disproportionate value being assigned to search advertising — the “last click” which typically leads to a measurable actions like a purchase.

Yahoo! Search attracts a younger audience than Google. I promised a post with figures to back up my claim (sorry I am a day late - forgot it was Valentine's Day!). The following charts show the percentage of visits from each age group to Yahoo! Search and Google.com.

Microsoft’s offer to purchase Yahoo! raises many questions regarding the potential impact upon the industry overall. One area where the combined entity would have a particular strength is the availability of online display ad inventory throughout their network of properties. For the week ending Jan. 26th, 2008, the market share of all Internet visits for Yahoo! properties was 13.2% and 2.3% for MSN (for chart, please see Bill's blog post).

Here's a quick analysis of one of the biggest stories in digital media and entertainment so far this year - Microsoft’s (NASD: MSFT) $44.6 billion offer for Yahoo! (NASD: YHOO). Strategically, it makes a lot of sense, but, in the world of M&A, there is a big difference between theory and practice. If the acquisition gets the nod of approval from anti-trust authorities as well as the shareholders, don’t expect Microsoft/Yahoo to become a lean mean online advertising machine overnight. Both companies are faced with their own fair share of challenges and it will take time for these companies, combined or not, to get their act together and catch up with Google (NASD: GOOG).