Kara came out swinging this week over Meg Whitman’s insistence that the Skype acquisition by eBay should be put in her “win” column. Whitman, former CEO of eBay (EBAY), is running for governor of California, and Kara had her spin detector set to maximum. Speaking of dystopia, Kara covered the release of Ken Auletta’s new book, “Googled: The End of the World as We Know It.” Auletta posits that Google (GOOG) is more Spock than Kirk and lacks important emotional intelligence. He made similar accusations about another subject of his recent works: Microsoft (MSFT). Insert sarcastic gasp here. Kara rounded out the week with a flight aboard the airship “Broadband,” aka Virgin America. It seems as though Facebook is everywhere these days, and on this day in particular, Facebook was just a few rows behind her in the person of a PR guy from the company. The moral is that maybe the greatest thing about that speedy in-flight Internet is farming out the awkward seatmate talk to your email inbox. Kara did get an invitation to Facebook’s Washington, D.C., offices out of the deal.

Digital Daily opened the week with an invasion of droids. No, John wasn’t stuck in front of an Xbox playing Terminator; he was covering the release of the first 100,000 units of Motorola’s (MOT) newest iPhone competitor. John also covered Apple’s (AAPL) opening of a “significant store” in New York this week, which may shed light on the company’s future retail strategy. John sees potential for the newest store to serve as jai-alai palace, should the whole iPhone thing not work out. And just in case Kara’s story about Google’s lack of feeling wasn’t frightening enough, John brought us a look into the search giant’s designs on the software space occupied by Microsoft Office. While Google claims to have no plans for domination of office productivity, it sure seems like it would like to paint the whole cloud Chrome.

Peter gave us the cold hard facts about the projected costs of the coming AOL spinoff, as he began the week in somber tone. In a filing with the Securities and Exchange Commission, AOL estimates losses will run to nearly $200 million and end employment for up to 1,000 people. Nothing gets Peter up from that kind of low quite like a good session with “The Office,” and this week’s episode was just too good to pass up. The team at Dunder Mifflin did a little Wall Street Journal paywall pole-vault right on screen. Commentary on recent “Murdochian” events or not, Peter thinks it’s just good TV. MediaMemo covered the pending AOL spinoff from the other end this week and addressed the biggest problem in the room head on: AOL is going to enter a space it hasn’t filled since the days when the sound of “you’ve got mail” meant you were high tech. Google runs the yard now, which will make it harder for AOL’s old dog to play with the comparatively young pups.

Most people think bigger is better, but in the strange world of tech columnists, small reigns supreme. Walt’s Personal Technology column this week covered three new laptops with some very sleek features to please the holiday consumer. New offerings from Toshiba, HP (HPQ) and Lenovo came under the Mossberg microscope, and all were pronounced impressive, if a bit pricy. Walt’s semifavorite is the Lenovo, but his preference for the slim, light design admittedly came at the heavy expense of limited battery life. The trip to Mossberg’s Mailbox this week yielded answers on pressing questions from potential Motorola Droid owners, a person hoping to make the move from a Palm (PALM) PDA to an iPhone, and from an older computer user thinking about making the switch to Apple’s new bigger-screened iMac. Over at The Mossberg Solution, Katie reviewed the new BlackBerry Bold from Research in Motion (RIM), which seemed to have 10 percent more features and a similar reduction in size. The newest model wasn’t quite as Bold as its predecessors, Katie found. Many features originally reserved for this higher-end model have been passed down to the rest of the product range. Her advice: have a look at the Tour or Curve 8900 before going Bold.

Tune in next week to get the 30,000-foot view on the wide world of tech from the road-ready AllThingsD team. Let’s hope we can get Wi-Fi on that flight too.

The company has once again achieved top rank among Internet search engines and portals in the American Consumer Satisfaction Index, the seventh time it has done so in eight years. This year Google (GOOG) received 86 points, out of a possible 100, besting Yahoo’s (YHOO) 77 points, Microsoft’s (MSFT) 75, Ask.com’s 74 and AOL’s 70.

That’s a nice lead and one Google should have no trouble maintaining if it stays its course. This, in spite of Microsoft’s new search effort, Bing, and its “boatloads of value” search deal with Yahoo.

Though the latest ACSI scores don’t reflect either (they were complied prior to Bing’s launch and the Microsoft-Yahoo announcement) Larry Freed, president and CEO of ForeSee Results, which compiles the rankings, doesn’t see them doing much to undermine Google. As Freed notes, Google is unquestionably king of search and the only competition in ACSI’s search category is for second place.

“Where will Bing’s market share come from? From Yahoo and MSN initially and maybe from Ask.com, though Ask is a niche player with stable customer satisfaction and market share,” Freed said. “It seems unlikely that customers will actually leave Google in enough numbers to allow Bing to seriously challenge Google’s market dominance, given Google’s extremely high customer satisfaction.”

Freed adds: “People are happy with Google, so why would they switch? They might switch if Bing is better, and that’s a tall order considering Google is the second-highest scoring ACSI service-sector company, behind Newegg.com. Bing has been called a search engine war ‘game changer,’ but Google’s game will be very hard to change at this point. If anyone can do it, it’s the combined resources and market share of Yahoo and MSN.”

Worldwide spending on Internet advertising declined by five percent in the second quarter of this year, slipping to $13.9 billion from $14.7 billion, according to research firm IDC. That’s the second consecutive quarter that revenue has dropped year-over-year, and IDC expects it to do so again in the current quarter.

“We think the industry will continue to see losses in the third and fourth quarters, but the growth rates–or the loss rates, if you will–will eventually begin to improve,” IDC analyst Karsten Weide said in a statement. “We believe the industry may have to wait until mid-2010 until we see real growth again.”

That’s a bit long to wait. Still, it’s nice to hear things will turn around some day, because the hits the online advertising industry has taken have been brutal. In this last quarter, classified advertising fell 17 percent and display advertising 12 percent, dragging Monster.com (MWW), Yahoo (YHOO), AOL and others with them. Only Google (GOOG) remained unscathed, posting low single-digit growth.

Typical.

Still, both figures exceeded the estimates of analysts, who had expected earnings of 37 cents on revenue of $6.97 billion, according to Thomson Reuters.

Revenue at the conglomerate’s studio, Warner Bros., fell nine percent to $2.3 billion despite some surprise box office hits like “The Hangover.” Meanwhile, revenue at the Time Warner (TWX) networks division was up five percent to almost $3 billion, despite a three percent drop in ad revenue.

And what of AOL? Time Warner’s soon-to-be-spun-off Internet division continued to be an albatross hung round the company’s neck. Its revenue dropped 24 percent to $804 million, dragged down by weak advertising and a continued decline in subscribers. Operating income fell 28 percent to $165 million. (See table below; click to enlarge.)

In a statement, CEO Jeff Bewkes said that Time Warner is “on track to spin off AOL to our stockholders around the end of the year. Separating AOL will benefit both companies–enabling Time Warner to concentrate fully on our core content businesses and improving AOL’s operational and strategic flexibility.”

Let’s hope so.

Now, according to a regulatory filing, Google (GOOG) has gone and sold its share back to Time Warner (TWX) for $283 million, about a quarter of what it originally paid. Which means that in four years, AOL’s value has declined from an estimated $20 billion to an estimated $5.7 billion.

What an amazing loss of value.

According to the filing, AOL, which will be spun off by Time Warner later this year, made $678 million of the $2 billion in advertising revenue it collected in 2008 from its search advertising partnership with Google. Quite a chunk. AOL CEO Tim Armstrong best hope he’s able to renew that partnership when it expires at the end of 2010.

Yahoo-AOL would not happen anytime in the forever future. Yahoo is a much stronger property in a different direction and there’s no sense confusing all of that.

– Yahoo (YHOO) CEO Carol Bartz about a hook-up with the Time Warner (TWX) online unit.

To date, the company–which makes the leading open-source ad serving software, catering to about 30,000 Web publishers on 100,000 Web sites–has raised $30.8 million. “We raised $15.5 million at the end of 2007 and still had a chunk of that left, so we didn’t have to raise money,” OpenX CEO (and former Yahoo Senior VP) Tim Cadogan told The Deal. “But if it’s generally true that it makes sense to raise money when you don’t need it, in this environment, it is triply true.”

Quadruply true when you’re competing with the likes of Google’s (GOOG) Double Click and Yahoo’s (YHOO) Right Media, which dominate the Internet advertising market in which OpenX plays.

According to BoomTown’s reliable sources, the elusive Microsoft (MSFT)-Yahoo (YHOO) deal is making “meaningful” progress. Accordingly, BoomTown wondered whether Microsoft CEO Steve Ballmer planned on visiting Carol Bartz, Yahoo CEO, on his trip to the Bay Area this week or if the proximity of Stanford to Yahoo was just chance, given that Stanford was his main destination. At least one of his reasons for being in the area was to give a talk at Stanford’s Memorial Auditorium for the Entrepreneurial Thought Leaders Seminar. BoomTown liveblogged the session and attempted to determine Ballmer’s soul-mate status. Given some of the acquisition rumors flying around this week, BoomTown decided to conduct a little experiment. Would the same sort of “Brangelina”-esque mystique apply as well to the combination of two incredibly hot tech companies? Would it create the same hysteria, and sell as many magazines (figuratively speaking)? (Non) results on BoomTown.

MediaMemo had a Kindle-ish kind of week. Amazon (AMZN) unveiled the latest iteration of the device on Wednesday in New York, and MediaMemo was there to liveblog the whole thing, including the crazy demo, during which the location’s facilities prevented Jeff Bezos from demoing pretty much anything. Also, Bezos forget to mention the fact that Amazon will be conducting a Kindle pilot program at six colleges starting this fall. Forget about getting your hands on one, though–only five students per school will be carrying their textbooks around in a Kindle instead of a backpack. MediaMemo’s advice for cash-strapped students once the devices do become available? Wait three years until the price drops. $489 is a lot to shell out on a student’s budget.

News Corp.’s (NWS) Rupert Murdoch had some news this week during the company’s earnings call (besides earnings)–he believes that while the state of the economy is still dire, “the worst Is over.” He also noted that although he plans to extend WSJ’s online pay model to his strongest properties soon, News Corp. will not be selling any of its content via the Kindle, as some of its competitors will. All this and more on MediaMemo.

On Thursday, Digital Daily liveblogged a press event hosted by Google (GOOG) in advance of its annual shareholder meeting. Some of the topics covered? Time Warner’s (TWX) AOL, the econalypse, YouTube, netbooks, China, antitrust issues and the Apple (AAPL) Board. CEO Eric Schmidt was most forthcoming about the Federal Trade Commission’s just-opened inquiry into Google and Apple’s overlapping boards: When asked if he’d resign from the board, he replied that the thought “hasn’t crossed his mind.” Elsewhere, Oracle (ORCL) CEO Larry Ellison probably ruined a few people’s mornings over at IBM (IBM) and HP (HPQ) when he told a Reuters reporter that part of his plan for Sun (JAVA) is to create an integrated hardware and software solution, effectively making their competition a little bit steeper. As such, it will be extra interesting to see how the little matter of Sun and a possible violation of the Foreign Corrupt Practices Act plays itself out in the courts. Details on Digital Daily.

Over in Personal Technology, Walt Mossberg reviewed Quickoffice, a program that brings some full-fledged word processing capabilities to the iPhone, but has its limitations. In Mossberg’s Mailbox, Walt answered questions about using Macs and PCs together on the same home network, backing up and transferring Outlook Express data and whether it’s possible to find a GPS program for the iPhone that will speak its directions. In the Mossberg Solution this week, Katie Boehret reviewed the Sidekick LX and found it a little out of touch with its market. More in-depth discussion, of course, on the section of the site containing Walt’s columns.

More next week. RIP Dom Deluise.

In advance of its shareholder meeting today, Google is holding a press event at its Mountain View, Calif., campus with CEO Eric Schmidt presiding. Also on hand: Dave Drummond, senior vice president of corporate development; Susan Wojcicki, vice president for product management, Kent Walker, general counsel, and Marissa Mayer, vice president, search products and user experience.

Hot topics of the day: Google’s and Apple’s interlocking boards, YouTube and the company’s thoughts on the econalypse, AOL and netbooks.

This liveblog paraphrases most questions and answers. It is not, in other words, a verbatim transcript of the event.

A theme of the meeting is the just-opened inquiry by the Federal Trade Commission into Apple’s and Google’s interlocking boards. Schmidt gets right into the topic with a joke: Looks like we’re at a legal deposition. He adds that he doesn’t believe Google (GOOG) views Apple (AAPL) as a primary competitor. If there are issues that are competitive during a board meeting, he will recuse himself, he says, just as he has regarding the iPhone.

Would Schmidt consider resigning from the Apple board?

Schmidt: “Hasn’t crossed my mind.” Ken Walker adds: “The law is clear that there is safe harbor for companies that don’t have overlapping revenues, and we’re comfortable with that position.”

Regarding the recession, are there any signs that we’re at the bottom?

Schmidt: “We don’t yet see a change.”

As Google gets bigger and faces more antitrust scrutiny, does this change how the company approaches partnerships?

Schmidt: Information is incredibly important, and we should expect governments around the world to pay attention to what we do and hold us to the principles we’ve articulated. Internally we tell our employees to pay attention, there are consequences to mistakes they make.

In the last few years, we’ve worked harder to anticipate the concerns of people affected by the power of the Internet. In my biased judgment, we’re getting better at anticipating those concerns.

We are more careful about when and how we do things that are raising the concerns of any party, but that care doesn’t stop us from doing those things.

Is there anything you haven’t done because of that?

Schmidt: I can’t think of a specific.

What do you think of the long-time monetization potential of social networks?

Susan Wojcicki: “We’ve been learning a lot about monetizing social inventory. And we believe there are ways to monetizie it over time, but those ways are different from search.”

Why did Google decide to sell its stake in AOL?

Schmidt: “We love AOL….We also like money… and look, we sent our best guy over there to run it,” he says referring to Tim Armstrong who recently left Google for AOL.

When will YouTube be profitable?

Schmidt: YouTube will eventually be a successful product and business. We don’t know how long that will take. But YouTube is a huge traffic phenomenon. (Wojicki jumps in to note that that traffic is attracting a lot of advertiser interest, so there is monetization going on. She adds that Google is adding new ad formats to the site, prerolls and click-to-buy ads on music videos.)

How does Google continue innovating given the cost-cutting measures it recently implemented?

Schmidt Innovation is a cultural value at Google, so this hasn’t really been an issue. Cutbacks were more efficiency-related, a move to stay lean but nimble in the midst of a recession.

What’s your take on the balance between Android being an open platform and the trade-offs the company needs to make with handset makers?

Schmidt: “On the one hand, you benefit by having free access; on the other hand there is some sacrifice of stability. We are doing our best to achieve stability without exercising too much control.”

What about China?

Dave Drummond: It’s an “ongoing challenge” to operate there. YouTube is blocked. There is a government preference for local business that makes things very difficult. That said, “we think we’re doing well there.”

Schmidt: “We will continue to do business in China….We would like YouTube unblocked.”

How do you respond to critics who argue that Google is the new Microsoft (MSFT)?

Schmidt: “They obviously don’t remember the old Microsoft.”

In recent public forums you’ve been asked about acquisitions and you’ve said the price isn’t right right now. Has there been any change in that opinion?

Schmidt: No change. There’s simply just not a lot of activity out there now.

What are your thoughts on netbooks?

Schmidt: “The netbook phenomenon looks very real. It looks like it will be a significant element of growth in the PC industry over the next few years.” Schmidt further notes that Google is obviously interested in the market given its business. “Watch the space,” he concludes.