Once the darling of web TV, Joost is apparently struggling and according to James Ashton at The Times, is planning a retreat after failing to attract enough users and worthwhile broadcasting rights. Ashton claims that Joost is set to refocus its ambitions from global domination, to just the US market.

Joost launched last year and enjoyed a monumental wave of popularity and hype courtesy of it being ‘The Next Big Thing’ from Skype founders Niklas Zennstrom and Janus Friis. With A-list backing it didn’t have to try hard to stir up a major buzz, but what it needed to do was follow through the very astute viral and seeding process with quality content that users would want to watch. I’ve played extensively with Joost and while it’s a nice, slick piece of software and is fun to play with from that perspective, there simply isn’t the content that can keep you glued to your screen.

The Web TV market is burgeoning. According to a new report published this week, the web-based TV viewing audience is growing steadily and now nearly one in ten of all broadcast and cable TV shows in the US are being viewed online. The authors of the report, the Convergence Consulting Group estimate that 9 per cent of all full-episode TV viewing was done online in 2007, 50 per cent more than in 2006 and expects that to grow to 14 per cent in 2008, 19 per cent in 2009 and almost a quarter of all viewing in 2010.

The consumer demand is there - and of the tens of web TV services to be launched in the past year, the stand out winners have been BBC’s iPlayer in the UK and News Corp/NBC’s Hulu in America. The secret to their success? Rights and access to content that is at least as good as what is available on traditional television.

So what now for Joost? unless it’s happy to become a niche player in the US, it will need to imminently align very closely with a major content owner. And for the rest of the market? well in the UK at least, nobody has yet taken on the challenge of convincing the marketing and advertising community of the opportunities and effectiveness of web TV as a channel to carry their messages - whoever manages to align themselves first as the leader and expert on web TV advertising stands to gain big-time.

Yahoo! has responded bluntly to Microsoft’s three-week deadline to accept its $42 billion offer via a defiant open letter issued today saying the offer did not represent good value for Yahoo! shareholders, but that the company would be open to a better deal.

So why is Microsoft so keen on Yahoo still? Well its stock price has slipped more than 15 per cent since the start of the year an in a tightening market, search is one particular sector that is still thriving.

So that’s why the sector is so interesting - but what about Google, and if Microsoft and Yahoo! get together, do they really stand a chance? According to the latest stats from Nielsen, Google retains a 59 per cent share of all searches compared with 18 per cent for Yahoo! and 11 per cent for MSN.

Just because on their own, Yahoo! and Microsoft have failed to take make any impact on Google’s dominance, does not mean that if they get together they will miraculously make inroads. In fact, the cultures of the two companies are so vastly different that any alignment of the two businesses will take a long time to achieve and will struggle to become seemless. The real benefits of Microsoft and Yahoo! coming together will be beyond search, in terms of all the content and other services the two companies own, but that doesn’t address the sweet-spot that is search.

We’ll have to wait and see what Microsoft’s next move is, and if a hostile takeover attempt may be on the cards. Regardless, in the search sector both Microsoft and Yahoo will continue to struggle against Google. The secret to Google’s success has always been its simplicity and the fact that it was always a search engine and everything else has been built around that core, winning formula. Hard as they may try, Microsoft and Yahoo will always be coming at search from the perspective of a portal and content owner and making search the core of what they do is far easier said than done.

Google endured a second straight month of poor growth in paid search clicks, and that has brought out the usual scaremongers (the same that were predicting the end of social networks earlier this year when traffic growth plateaued) are saying it’s bad news for the market and showing that fears of a recession have truly hit online revenues.

Lets take a look at the facts:

1. The actual figures from Comscore show a 3% year-on-year rise during February in paid search clicks. The slowdown comes after Google began implementing a new system to cut down accidental clicks on paid search listings

2. Google’s move to stamp out irrelevant clicks is good news for the long term as it will increase the relevance of paid search and make it an even more efficient format.

So is the (non)recession having an impact? Well, traditionally in a time of recession marketing spend gets cut back to tried and tested methods that deliver strong and measurable ROI, such as direct marketing. Search marketing falls into that same category and certainly many of the people I’ve spoken to in the first quarter of this year can see certain aspects of their budgets being cut if times get tighter, but search isn’t one of them.

But beyond what Google has done, and all the scaremongering, there are still some changes afoot. Paid search costs continue to inflate and speaking to some search marketing firms, they are beginning to find - and some scared to find - that clients are looking more seriously at natural search, and increasing their investment in search engine optimization.

There is an ongoing threat to the paid search market - not to its existence, but to the way it’s used - there has for some time been a growing school of thought that natural search delivers better quality leads to your site and Google’s latest moves can be seen, in part at least to be a clear attempt to arrest that movement and safeguard the quality of clicks on paid search. The short-term blip is nothing to worry about - a blip is all it is - and if there is a recession, it’s not search that should be worried about budgets.

Beleaguered British broadcaster ITV is peddling fast to catch up with the rest of the digital world by announcing a deal this morning with Bebo to show its ITV2 programming on the social network. The move comes as ITV struggles with a decline in global content revenues and Michael Grade is increasingly waking up to online as the new distribution channel, but anything ITV has produced in terms of its online video player thus far lags so far behind rival BBC’s iPlayer.

The Bebo deal is interesting on a number of fronts - it’s cheap and arguably quick to deploy as a bandage measure to help stem ITV’s hemorrhaging younger viewers - an increasing number of which are getting all the broadcast content they want online and on-demand. Secondly, given that ITV owns Friends Reunited, you have to ask why it chose someone else’s social network as a digital route to market…

Despite insisting he is ahead of where he expected to be, ITV’s shares have fallen more than 20 per cent since the start of the year as Michael Grade struggles to turn the corporation’s fortunes around, and to clearly articulate the corporation’s digital strategy. Let’s hope when it is finally revealed it is not ‘digital on ice’… and in the meantime Holly Willoughby can continue to keep ITV’s weekend end up, but for how much longer?

So the bloated festive season draws in and a year of plotting and future-proof strategies look to be falling into place, the world must now wait until Jan 2nd to see how things will begin to shake out in the media world, 2008 billed to be the big year for social media, Internet TV, and traditional media players sinking or swimming.

This post will address one of those issues: how and where News Corp goes from here. With Dow Jones under its belt Murdoch has the green light to change the landscape for newspaper publishers and online media again for good, and it’s just a matter of time (rumour has it end January, about the same time as the UK government will rule on what News Corp will have to do about it’s stake in broadcaster ITV) until WSJ online is freed up. That whole side of the business will play itself out, but for News Corp, it’s just the starting point and it will take most of 2008 to get all the building blocks in place. So rivals have a little time to get in on the act - and will need to before it’s too late. Next on the agenda for News Corp is rumoured to be the video gaming world domination - but is there anything in that?

In any case we have a US election to look forward to and at the moment it’s all wide open. It will be interesting to see how things have changed since Bush’s victory and will change beyond the end of next year.

MTV is to release the new Jackass movie entirely online on 19 December in a partnership with Blockbuster. Beyond milking the Jackass franchise for as much as it’s worth (and well beyond its sell-by date - those guys were only ever REALLY funny before they got rich) it’s an interesting move for Blockbuster which finds itself on the back-foot, trying to catch up with the web TV boom and the impact on-demand TV will continue to have on its retail presence footfall.

It’s also a big deal for Paramount in general as it tries to understand more about online as a distribution channel, rather than relying on the old tape and DVD models. Hollywood has been slow carve out the online opportunities in its favour - even slower than the music industry - but the fact remains that media audiences are fragmenting and online TV services like Joost, Veoh, Babelgum and Vuze continue to swell their viewer numbers. The challenge for the online TV services is to attract the advertisers as the medium wrongly retains a ‘cutting edge’ scepticism among the major media players.

A lot of loose ends began to come together at News Corp on Friday as Rupert Murdoch shuffled execs ahead of the imminent announcement of the Dow Jones takeover completion and, more importantly his son announced he would stand down as CEO of BSkyB to take on the job of running News Corp’s European and Asian operations.

The implication of Murdoch Jr’s move is vital for the rest of the media industry, particularly in the digital space. It has become increasingly obvious, as James Murdoch has won over his early critics, that he is responsible for his father’s significant moves in the digital media space. In fact in the early days Rupert Murdoch was largely reticent about the web and its impact, but his son’s influence has helped move News Corp well and truly into the digital space.

The digital media industry must beware that News Corp is pushing ahead with its aggressive digital media strategy, the next stage of which will be the announcement of the removal of the WSJ.com payment barrier, and media rivals such as the Financial Times and CNN will need to respond.

At Google’s Zeitgeist conference earlier this year, James Murdoch hinted at his vision of the changing nature of media and the interconnectedness of the growing number of media channels. It might not be the most inspirational speech ever given, but it gives an indication of Murdoch Jr’s appreciation for the digital world and in light of Friday’s moves, indicates this is just the beginning of a major push from News Corp.

Online display advertising and online sponsorship will hold up advertising market and take the lion’s share of ever-increasing online spends. That bold assertion is the key finding of a report from Convera, a US-based vertical search firm. It cuts clearly against the rest of the industry consensus that paid search and social media will take a greater share of the online budget.

So what’s the real beef? Well as CPM and PPC costs continue to swell, they occupy very specific niches. CPM for brand awareness and paid search for leads. But social networks lilke Facebook, MySpace and Bebo are all carving out ever larger slices of the online spend as marketers begin to understand how they can make them work to generate quality leads that are more likely to become paying customers.

Will publishers earn more from display ads and sponsorships in 2008? The larger players, namely portals such as MSN, AOL and Tiscali will continue to cream revenue off channel sponsorships. But as social networks account for an increasing volume of overall Internet traffic (and in November accounted for over 5 per cent of UK internet traffic, overtaking webmail sites) the money will shift in line with where the lion’s share of the available advertising inventory is, meaning publishers will need to become more creative and go beyond simple display and sponsorship opportunities that were the bread and butter of the glory days of 2000.

There was supposedly some good news for troubled broadcasters out of the Reuters Media Summit in New York late this week when a report from consultancy Bain & Co claimed that for the next four years, time spent watching television will rise faster than leisure time spent on the Internet.

Good news for major broadcasters on both sides of the pond as in the UK ITV continues to struggle for ratings while in the US CBS is skating on very thin ice if the US does fall into an economic recession. CBS alone generates 70 per cent of its revenue from advertising.

The saviour for broadcasters, according to the Bain & Co report is the growth of video-on demand and digital video recorders. In principal, this assertion seems to make sense, but ad-skipping on digitally recorded shows and a departure from linear TV scheduling is having a profound impact on ad sales. This is evidenced by the fact that TV networks such as CBS have inflated the costs of advertising during major live events - the only time seemingly the audience is as captive as it was a decade ago. The cost of a 30-second ad at Super Bowl XLI last February exceeded $2.5m for a 30-second slot and the Arizona showdown in 2008 is already on course to blow that out of the water.

The challenge for broadcasters has to be to look at how on-demand can work as a stronger proposition, rather than continue to resist it. IPTV services, such as the UK’s Tiscali TV and BT Vision theoretically could provide much more sophisticated and targeted advertising opportunities, the broadcasters and media buying agencies simply need to start working together more effectively.