Kara and the Boomtown blog were in New York this week and started the party early with Bob Pittman–well known media and Web exec. Kara wasn’t dancing on the tables, but did admit that Pittman’s new venture, a top-shelf tequila, was plenty tasty. BoomTown went straight from the sauce to the nose candy in a short interview with Ford’s (F) social media guru, Scott Monty. While Monty might have been using cocaine as a metaphor for a new kind of marketing that changes consumption of all other marketing, Weekend Update gets his subtext. As if BoomTown didn’t have enough hardcore “cred,” Kara headed off to fabulous Las Vegas for the annual meeting of the blogs at BlogWorld. Nothing that happens in Vegas this weekend will stay there–not with thousands of bloggers roaming the Strip in search of a new meme to latch on to.

Digital Daily trapped a Snow Leopard early in the week. John reported on Apple’s (APPL) admission that the Snow Leopard version of OS X occasionally overdelivers on its promise to free-up disk space. In certain circumstances, the furry filcher can sneak in and make off with all your user data. If it was data loss you were looking for though, no one beats the good folks at Danger who, up until recently, housed all kinds of personal data associated with the Sidekick line of smart phones. The Microsoft (MSFT) subsidiary permanently lost contact, calendar and other personal data associated with many accounts. Weekend Update thinks that Sidekick users were given fair warning, though; the company name is, after all, Danger. John rounded out the week with something unusual–good economic news from the tech sector: Intel (INTC), Google (GOOG), IBM (IBM) and AMD (AMD) were all feeling a little more flush than their prognosticators had predicted, each beating their admittedly dismal forecasts by at least a little.

MediaMemo followed up on some important stories, beginning the week with Twitter’s spam problem. Peter reported that the Web’s biggest microblogging pipeline updated its tools for trapping the flotsam and jetsam. Twitter is reportedly in talks with several leading search engines that want to feed on all that delicious real-time data. Peter also updated the readers on the tough times over at Condé Nast. This round of cuts was a little closer to the magazine publisher’s crown jewels than last week’s cuts and closings, with the layoff of at least six staffers from Vogue. Peter closed out the week with a cheeky little open letter to the Federal Trade Commission. He asked some important questions regarding the FTC’s recent obsession with bloggers and disclosure. He seems to think that most serious bloggers don’t like to sell their credibility for tiny discounts to obscure events.

Walt and Katie were all over Windows 7 this week, with help on all fronts for those making “the switch.” Before he got to that, though, Walt spent some personal tech time with some supersmart phones. He elevated Motorola’s (MOT) CLIQ and RIM’s (RIMM) BlackBerry Storm2 to the level of potential iPhone killer and praised their updated features and power as mobile computers rather than simply phones. Mossberg’s Mailbox heralded the beginning of the Windows 7 flood and was chock full of questions about upgrading and replacing some of the functionality that was built into Vista. The Great One also offered thoughts on installing Windows 7 on a virtual machine running in OS X, but couldn’t speak to the boot camp option until Apple releases more info…and the proper drivers.

Katie tested PC Mover from LapLink as an all-in-one option for moving precious data to Windows 7. While she praised the $15 program’s efficiency, she thought it was a little sleazy that it also tried to get her to purchase other programs while it had her data in its clutches. All went well, and the moral of the story is that this one-trick pony upgrade assistant was worth the minimal price tag.

Breaking News: Weekend Update is getting intermittent reports that Kara may have been kidnapped from BlogWorld by a roving band of mommybloggers in white robes, all slowly chanting “mon-eh-tize” as they piled into their Honda minivans. They may or may not have sealed her into a 30 foot-wide, saucer-shaped balloon, which could be floating westward toward the Bay Area.

If we get her back, you can look forward to another fully staffed, fully loaded week at AllThingsD.

This past July, Google CEO Eric Schmidt left Apple’s board presumably for the same reason. The cozy relationship between the companies, which increasingly compete in the cellphone and operating systems markets, had led the FTC to question whether close ties between their boards of directors violate antitrust laws. With Schmidt gone from Apple’s board room and Levinson gone from Google’s, it would seem there’s no longer reason for the FTC to do so.

“Art has been a key part of Google’s success these past five years, offering unvarnished advice and vital counsel on every big issue and opportunity Google has faced,” Schmidt said in a statement. “Though he leaves as a member of our Board, Art will always have a special place at Google.”

Though not nearly as special as his place at Apple, where his remaining board seat and true allegiances clearly lie.

UPDATE:Levinson’s resignation from Apple’s board appears to have appeased the FTC. “Google, Apple, and Mr. Levinson should be commended for recognizing that overlapping board members between competing companies raise serious antitrust issues and for their willingness to resolve our concerns without the need for litigation,” FTC chairman Jon Leibowitz said in a statement. “Beyond this matter, we will continue to monitor companies that share board members and take enforcement actions where appropriate.”

On a trip to Seattle, BoomTown visited the headquarters of the Pet Holdings empire, which includes Lolcats (icanhascheezburger.com), Fail Blog and now, Emails From Crazy People. While there, Kara filmed a video with Ben Huh, CEO of the (profitable!) company. There is obviously a method to Huh’s wackiness.

Elsewhere in Seattle, BoomTown got some of the lowdown on the machinations in the wake of the Yahoo-Microsoft deal. Satya Nadella and Yusuf Mehdi are just two of the Microsoft (MSFT) execs charged with leveraging the deal to knock Google (GOOG) out of its number one spot. They each sat down in front of the Flip camera to share their thoughts.

BoomTown also noted the beginning of the Yahoo-Microsoft regulatory filings this week and provided the full document of Yahoo’s (YHOO) 8-K to the Securities and Exchange Commission about the deal. To think: this is only the tip of the MicroHoo iceberg.

If you were one of the many wondering about Twitter’s high-profile outage this week, don’t worry–Kara provided a handy translation of the co-founder Biz Stone’s blog post about the whole matter. If you weren’t wondering at all, you’re not alone–Kara’s mother and older son, Louie, think the whole thing is a waste of time.

Google CEO Eric Schmidt’s resignation from Apple’s (AAPL) board of directors was just some of the news on Digital Daily this week. In some of the other news, the FTC responded with a “nice try, but we’ll continue our investigation anyway.” Better news for Apple, then, that it claims 32 percent of operating profits in the handset industry, even though it’s only the fifth-largest handset vendor.

In the not-so-good department on Digital Daily this week, NewsCorp. (NWS) (which owns the Wall Street Journal and this Web site) reported a 32.5 percent drop in fiscal-year-adjusted operating income–largely because of its “red-hot” social network, MySpace. Elsewhere, Cisco (CSCO) reported a 46 percent drop in quarterly profit while still beating the Street’s estimates, and Vonage (VG) recorded a second-quarter profit of $2.3 million while losing 89,000 net subscribers in the same quarter.

On Personal Tech, Walt Mossberg reviewed a new netbook from Toshiba this week great battery life and a winning keyboard, among other things. On the Mossberg Solution, Katie Boehret reviewed the Wii MotionPlus remote accessory, an add-on to the Wii remote that includes a gyroscope and allows for more precision and sensitivity in gameplay. Walt responded to readers on Mossberg’s Mailbox, answering emails about buying a new no-frills laptop, switching ISPs and moving contacts emails without too much pain, and discerning the minimum system requirements for Windows 7.

Walt went into a little more detail about Windows 7 on his MossBlog. Unfortunately, he discovered that more detail does not equal more clarity when it comes to a Windows 7 upgrade. At his request, Microsoft sent along a handy chart meant to simplify all aspects of the matter for readers. It is an astoundingly, even comically, complicated document. The company has promised to send a newer, simpler one. Stay tuned.

More next week.

In a statement issued this afternoon, the FTC applauded the move, but said the two companies are foolish if they think it will simply abandon its inquiry as a result.

“We have been investigating the Google/Apple interlocking directorates issue for some time and commend them for recognizing that sharing directors raises competitive issues, as Google and Apple increasingly compete with each other,” said Bureau of Competition Director Richard Feinstein. “We will continue to investigate remaining interlocking directorates between the companies.”

In other words, Schmidt’s departure was a nice start, but the Commission still worries that Google (GOOG) director Arthur Levinson’s presence on Apple’s (AAPL) board–as well as that of Google advisers Bill Campbell and Al Gore–might lead to conflicts of interest or unfair business practices.

So who’ll be the next to leave: Levinson or Gore?

“Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors. Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead.”

–Apple CEO Steve Jobs, August 2006

“Apple is one of the companies in the world that I most admire. I’m really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing.”

–Google CEO Eric Schmidt, August 2006

Asked earlier this year if he would resign from Apple’s board in the face of Federal Trade Commission scrutiny of the close ties between the two companies’ boards of directors, Google CEO Eric Schmidt replied simply, “It hasn’t crossed my mind.”

Well, apparently it has now.

Citing the growing overlap of the two companies’ businesses, Schmidt is giving up his seat on Apple’s board, which he has held since August 2006.

“Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” said Steve Jobs, Apple’s CEO. “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”

“I have very much enjoyed my time on the Apple board,” Schmidt said in a statement of his own. “It’s a fantastic company. But as Apple explained today we’ve agreed it makes sense for me to step down now.”

A wise move. Schmidt’s boardroom role was already reduced because of competitive issues between the iPhone and Android and between Safari and Chrome. Given the obvious competitive issues between the Mac and Google operating systems, it is inevitable that his board involvement would shrink again. Had he retained his seat, Schmidt would have likely spent more time standing outside Apple’s boardroom than in it.

So why bother? Better to step down and avoid the appearance of impropriety, especially when regulators seem to be singling Google (GOOG) out for all manner of scrutiny. Certainly, Apple (AAPL) must be relieved to have the guy with the FTC target on his back out of the boardroom.

And relations between the two companies must have been a bit strained by this Google Voice for iPhone debacle.

Fun for the whole family — especially if your family is the Russian mafia …

Ugly stuff peddled by ugly people — people whom Pricewert went to great efforts to protect. According to the FTC, the ISP advertises its services in the “darkest corners of the Internet” and “actively shields its criminal clientele by either ignoring take-down requests issued by the online security community or shifting its criminal clients to other internet protocol addresses controlled by Pricewert so that they may evade detection.”

Good thing then that a Federal Judge in San Jose, California has ordered the company’s upstream internet providers and data centers to pull the plug on it. “Anything bad on the Internet, they were involved in it,” FTC Chairman Jonathan Leibowitz told Security Fix. “We’re very proud, because in one fell swoop we’ve gone after a big facilitator of some of the utterly worst conduct.”

You know the ones I’m talking about, I’m sure. They’ve been occurring since 2007 and go something like this: “This is the second notice that the factory warranty on your vehicle is about to expire.” Hang up and the machine calls you again later. Transfer to a “warranty specialist” and ask to be taken off the call list and you’re either hung up on or, in my case, given an 800 number to call that turns out to be a phone sex line.

In complaints filed in United States District Court in Chicago, the agency accuses telemarketer Voice Touch and warranty outfit Transcontinental Warranty of deceptive sales practices and violating telemarketing rules with their relentless prerecorded sales pitches for extended vehicle warranties. Among the companies’ numerous violations: dialing every number in a given area code, including those listed in the National Do Not Call Registry; robocalling 911 emergency centers; regularly spoofing call recipients by transmitting phony Caller ID information so that call they can’t identify the originating number; and pressuring consumers into purchasing bogus extended service contracts for their cars.

“This is one of the most aggressive telemarketing schemes the FTC has ever encountered,” chairman Jon Leibowitz said in a statement. “I’m not sure which is worse, the abusive telemarketing tactics of these companies or the way they try to deceive people once they get them on the phone.”

Right on. One question though: If this is the most aggressive telemarketing scheme the FTC has ever encountered, why did it take the agency two years and 30,000 complaints to finally jump into action?

Anyway…

The FTC has asked for temporary restraining orders to halt the illegal robocalls, an asset freeze on both defendants and a permanent injunction that would force them to disgorge their ill-gotten gains.

UPDATE: A federal judge has issued temporary restraining orders against the companies halting their “robo-dialer harassment.” He has also frozen their assets until a May 29 hearing on the FTC’s request for a preliminary injunction.

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.

The Federal Trade Commission may worry about the ties between the Google (GOOG) and Apple (AAPL) boards, but Google CEO Eric Schmidt clearly doesn’t share its concern. “I don’t think Google sees Apple as a primary competitor,” he said during a luncheon with reporters ahead of the company’s annual shareholder meeting. “We encourage people to be on other companies’ boards. In my case, if there are issues that are competitive I would recuse myself. I think it’s been well established that I recuse myself in areas of the iPhone.”

Asked directly if he would resign from Apple’s board in the face of FTC scrutiny, Schmidt bristled–”Why would you ask that question?”–and then said simply, “It hasn’t crossed my mind.”

Ironic, yeah?

It’s not certain why WSGR prepared the presentation, but the document obviously applies to the close ties between Apple (AAPL) and Google (GOOG) and, if nothing else, offers insight into the “interlocking directorates” provision of the Clayton Antitrust Act of 1914 and just why the FTC might be concerned that the companies may be in violation of antitrust law by sharing four board members and advisers between them: Google CEO Eric Schmidt, Genentech (DNA) CEO Art Levinson, Intuit (INTU) chairman Bill Campbell and former vice president Al Gore.

According to the WSGR presentation, the Clayton Act stipulates that a person cannot serve as director or officer of two or more competing companies when the two are engaged in U.S. or foreign competition; each has $25,319,000 in aggregate capital, surplus, and undivided profits; and at least one has two percent in overlapping sales (note: while that $25 million figure was correct at the time the deck was prepared, it has since risen to $26,161,000). Now, Apple and Google clearly both meet the “aggregate capital, surplus, and undivided profits” condition. They probably don’t meet the second, but it’s conceivable that they might in the future as Google’s Android platform rises to challenge Apple’s iPhone in the mobile phone software and services market.

And if and when they should? Well, that leads to what WSGR describes as “occasion of sin”– a theological term that refers to circumstances that by their very nature lead to sin.

In other words, inevitable sin. And competition between the two companies is no absolution, either. As the presentation explains, there is “no safe harbor for de minimus competition.” Given the obvious overlaps between Google and Apple–between both products and directors–the two companies would seem to be heading for some sort of confrontation with the FTC. Especially if, as sources say, Google CEO Eric Schmidt has no intention of resigning from Apple’s board–even in the face of increasing government scrutiny of the company.

UPDATE: WSGR tells me the document was prepared for an internal training session. It had no explanation for why the firm published it on the Web.

UPDATE: As Danny Sullivan notes in the comments, Google has removed the cached version of the document — rather expeditiously. However, there’s still a cached version available over at Microsoft.

Clayton Act Section 8 Interlocking Directorates – Free Legal Forms

“Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors. Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead.”

–Apple CEO Steve Jobs, Aug. 2006

“Apple is one of the companies in the world that I most admire. I’m really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing.”

–Google CEO Eric Schmidt, Aug. 2006

He had a good run of it, but Google CEO Eric Schmidt’s stint as an Apple director may be coming to an end.

Now that the Federal Trade Commission is investigating whether the close ties between Apple’s and Google’s boards of directors violate antitrust laws, Schmidt’s seat on the former’s board, which he has held since August 2006, seems more trouble than its worth.

People briefed on the matter tell the New York Times that the FTC is concerned that Schmidt’s presence on Apple’s board–as well as that of Google director Arthur Levinson and Google advisers Bill Campbell and Al Gore–might lead to the conflicts of interest or unfair business practices. And that seems a reasonable concern; certainly those sorts of things sometimes occur when a coterie of people hold influence over several major firms simultaneously.

While Google (GOOG) and Apple (AAPL) compete in a number of areas–browsers and mobile operating systems–the two have also worked together closely to bring a number of Google services to the iPhone. They also share a common enemy in Microsoft (MSFT).

So it’s not surprising to hear that the FTC is raising an eyebrow over the cozy relationship between the companies–especially, given its previous interest in Google and the opinions of U.S. antitrust chief Christine Varney, who recently described the company as a monopolist.

Nor will it be surprising when Schmidt resigns from Apple’s board, if this inquiry goes further. That’s typically what happens in these situations when things start heading toward a longer investigation.

So, given the amount of antitrust scrutiny currently leveled at Google, it’s almost certainly what will happen here.

The deal was designed precisely to meet the terms of antitrust laws in the United States because we knew people would raise these questions. We spent months and months working with Yahoo to come up with a good deal. We’re very committed to the deal.”

– Google CEO Eric Schmidt, Sept. 18, 2008

Apparently Google would rather abandon its proposed advertising partnership with Yahoo than have the government dictate its terms. This morning Google walked away from the deal saying it’s not in the company’s best interests to risk the protracted legal battle brewing over it. This, not a week after Google and Yahoo submitted a revised, diminished version of the pact that the companies had hoped would appease regulators. “Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners,” Google chief counsel David Drummond wrote in a post to the Google Blog. “That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.”

Seems Google (GOOG) wasn’t quite as committed to working with Yahoo as CEO Eric Schmidt suggested. But you know, time is money in Google’s business, and this deal was taking up a lot of it.

A tough break for Yahoo (YHOO), which expected the deal to generate between $250 million to $450 million in incremental operating cash flow in its first year. In a statement, the company said it was “disappointed that Google has elected to withdraw from the agreement rather than defend it in court.”

What’s Yahoo CEO Jerry Yang going to do now? Wait by the phone for a call from Steve Ballmer? I wonder what sort of terms he’d offer Yahoo today? Not nearly as good as those offered this past summer, I suspect.

Statements from both companies, and the Department of Justice, after the jump …

From the official Google blog:

Ending our agreement with Yahoo!

In June we announced an advertising agreement with Yahoo! that gave Yahoo! the option of using Google to provide ads on its websites (and its publisher partners’ sites) in the U.S. and Canada. At the same time, both companies agreed to delay implementation of the agreement to give regulators the chance to review it. While this wasn’t legally necessary, we thought it was the right thing to do because Google and Yahoo! have been successful in online advertising and we realized that any cooperation between us would attract attention.

We’re of course disappointed that this deal won’t be moving ahead. But we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on. Google’s continued success depends on staying focused on what we do best: creating useful products for our users and partners.

From the Yahoo Press Room:

Yahoo! Announces Termination of Services Agreement by Google

SUNNYVALE, Calif., Nov 05, 2008 — Yahoo! Inc. (Nasdaq: YHOO), a leading global Internet company, today announced that Google has terminated the advertising services agreement the companies announced in June. Yahoo! continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court. Google notified Yahoo! of its refusal to move forward with implementation of the agreement following indication from the Department of Justice that it would seek to block it, despite Yahoo!’s proposed revisions to address the DOJ’s concerns.

Going forward, Yahoo! plans to continue to provide the cutting-edge advances in products, platforms and services that the industry needs and expects, and intends to be the destination of choice for advertisers and publishers who want to reach one of the largest and most engaged populations of consumers on the web.

From the Department of Justice:

Yahoo! Inc. and Google Inc. Abandon Their Advertising Agreement

WASHINGTON — Yahoo! Inc. and Google Inc. abandoned their advertising agreement after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the implementation of the agreement. The Department said that, if implemented, the agreement between these two companies accounting for 90 percent or more of each relevant market would likely harm competition in the markets for Internet search advertising and Internet search syndication.

The Department’s investigation revealed that Internet search advertising and Internet search syndication are each relevant antitrust markets and that Google is by far the largest provider of such services, with shares of more than 70 percent in both markets. Yahoo! is by far Google’s most significant competitor in both markets, with combined market shares of 90 percent and 95 percent in the search advertising and search syndication markets, respectively. Yahoo! provides an alternative to Google for many advertisers and syndication partners, and Yahoo! recently had begun making significant investments in order to compete more effectively against Google, including the 2007 introduction of its Panama search advertising platform. Had the companies implemented their arrangement, Yahoo!’s competition likely would have been blunted immediately with respect to the search pages that Yahoo! chose to fill with ads sold by Google rather than its own ads, and Yahoo! would have had significantly reduced incentives to invest in areas of its search advertising business where outsourcing ads to Google made financial sense for Yahoo!