Google and Yahoo are apparently negotiating with the Justice Department to remove its objections to the two companies’ controversial search advertising deal.

As originally planned, the deal would essentially see Google serve up ads for Yahoo search results. Many – from advertisers and publishers to politicians – have expressed concerns that the upshot will be less competition and higher ad prices.

The Justice Department is evidently looking at capping the volume of Google ads Yahoo could show, imposing price constraints to prevent price hikes, and other initiatives to allow a deal to go ahead that would preserve competition.

Source: Michael Arrington, “Will A Volume Cap Make The Yahoo/Google Deal Work?” TechCrunch, October 14, 2008

Ad network Federated Media is hoping to endear itself to small- and medium-sized businesses (SMBs) with a pair of initiatives aimed to make it easier for SMBs to advertise online.

Firstly, FM is extending its self-serve ad platform to SMBs, which will give them access to FM’s premium content, and give them more control over their ad campaigns.

Secondly, FM is launching its ‘Online Marketing Idea Exchange’, a virtual community for business owners to discuss advertising issues with each other and ask developers, vendors and FM questions.

Source: Douglas Quenqua, “FM Unveils Tools to Bring in Small Advertisers”, The ClickZ Network, October 8, 2008

According to eMarketer, Motion Picture Association of America (MPAA) members – namely the main movie studios in the U.S. - spent $754 million on online advertising in 2007. By 2012 they are expected to spend a whopping $2.4 billion.

The online channel represented approximately 5 percent of all film advertising in 2007. eMarketer expects this percentage to rise to 13.2 percent by 2012.

A lot of online promotion for a given film involves creating profiles in the major social networks, such as Facebook and MySpace, creating a YouTube channel, developing a dedicated website, and investing in a plethora of other promotional initiatives.

Source: eMarketer, “How Movies Are Moving Online”, eMarketer, September 10, 2008

Skype 4.0 is due for release any day now. According to Josh Silverman, president of the eBay owned Internet phone division, this new version of Skype will feature a dramatic redesign and better integrate audio calls, video calls, file-sharing and text chat.

Among the new features will be having the “call” and “video call” icons beside each user’s name to make video calls easier. The new version will also feature records of previous communications beside each user’s name to make it easier to view past conversations.

Of course, commercial considerations are likely to be the main driver behind the revamp. Since eBay bought the company in 2005, Skype has grown dramatically in terms of both users (now 309 million) and revenues (now $126 million). Even so, it seems that eBay may have spent too much on its acquisition, having bought Skype for $2.6 billion and needing to take a huge write-down on the purchase in 2007.

Consequently, the company hopes the redesign will more effectively channel more users to the paid Skype services. For example, future initiatives as part of the Skype 4.0 revamp will include making it easier to use PayPal to send money via Skype, and access to Skype Prime. Skype Prime will involve third parties providing paid services via Skype, for which eBay will receive a commission.

Source: Brad Stone, “A Redesign at Skype”, The New York Times, June 17, 2008