Buzz Bruggeman is staying at the house, attending the local Office 2.0 conference tomorrow. Tonight he came in saying “this is the coolest swag I’ve ever gotten.”

When Buzz says that you know that he got something very cool.

And, indeed, he was proudly showing off his new iPod Nano, which he got for attending the Office 2.0 conference. It has notes and stuff on it too.

But, don’t despair, the rest of us all get something too: Google is launching “docs and spreadsheets.” Oh, and the conference team is publishing a bunch of Office 2.0 Podcasts. I wonder, does Microsoft hear the Google engine roaring to life?

Microsoft has Mini. Apple has “masked.” What’s funnier is that over on Masked comments a Dell blogger (who isn’t anonymous) shows up to try to improve Dell’s image. I say “kudos” to Dell. That’s the way to do be part of the conversation.

I don’t like anonymous blogs, but Apple deserves a raft of them. Apple’s PR department has employees freaked out about having conversations with customers in public.

Here’s a question for Apple’s PR: what happens when only anonymous employees can blog? Hint: your PR will be controlled by anonymous people!

One thing for the anonymous bloggers, though: you better hope that no one can figure out who you are through your IP addresses. You also better hope that Apple doesn’t hire HP’s investigators.

I would rather play it straight. If you’re a corporate employee, tell your boss you’re going to write a blog and if he or she doesn’t like that, then I’d find another job (or another boss) before posting again. It’s not worth your career.

I wouldn’t work someplace that didn’t let every employee blog, and blog openly. But that’s just me.

What if the “crazy folk” who bought YouTube were actually at Microsoft? What would that have caused? I’ve been thinking about that while driving Patrick home. Now Maryam is driving and I get to write you my thoughts from HWY 1 near Pacifica. Hopefully we don’t go over Devil’s Slide, although that’d probably make LayZ happy.

Anyway, what if?

Last year I was at Google’s Zeitgeist conference. That’s where Google’s best customers (er, advertisers with big bucks) showed up. Later I was at MSN’s similar deal. I met advertising buyers from Kraft. Procter and Gamble. GM. And lots of other big companies.

What could have Microsoft done with YouTube?

Used it as a wedge to get into Google’s search and charge per click advertising.

Huh?

Well, one buyer from one of these big companies could buy hundreds of millions of dollars of advertising.

Now how much of GM’s media mix in 2010 will be done in online advertising? Let’s pick a number out of the air and say 55%. That’s not unreasonable, is it? After all, someone who is willing to watch a video is a better advertising candidate than someone who’ll just read text.

Why do I say that? Well, past behavior. Is TV advertising more effective or newspaper? I tend to remember that advertisers will pay millions for a one minute SuperBowl ad but the San Jose Mercury News doesn’t even charge $100,000 for a full page. Yeah, not quite a fair comparison, but a TV ad is often more persuasive than a newspaper one, especially for things like cars.

Anyway, it’s pretty clear that billions are gonna be spent on video services like YouTube. Now, imagine that one of these ad buyers comes into a Microsoft salesperson’s office.

“Hi, I’d like to buy $100 million worth of ads on YouTube for these keywords.”

“Oh, that’s awesome. Hey, did you know we’re running a promotion where you can also get those keywords over on our Microsoft Advertiser Points program too for a minimal investment?”

Now, why does that matter? Well, see, once you build a relationship with an ad buyer, getting him or her to also put those same ads on Xbox, Live.com search, MS-sponsored blogs, and other places, is real easy.

Let’s turn it around and look at decisions bloggers will have to make over the next few years. Which ad system should I run if I were to use one? Well, of course I’ll go with the one that has the most advertising.

So, if Microsoft had bought YouTube, they would have built relationships with advertisers, would have gotten those advertisers to also put their stuff on Microsoft’s blogad programs, which would have gotten me to chose Microsoft’s advertising bar instead of Google’s.

Ahh, so that’s what Google is getting with its $1.6 billion. It is building a moat around its advertising sales force and saying “you can’t get your hands on our advertisers.”

It also told every blogger and videoblogger in the world “deal with us, we’re gonna make sure the best advertisers stick with us.”

Heheh, and it gave Eric Schmidt another way to poke Bill Gates in the ribs. What could be better than that?

UPDATE: Todd Bishop of the Seattle PI also wrote about this and did some analysis. Looks like Microsoft thought the price was too high. That’s been the strategy lately. Don’t buy best-of-breed — copy those — and buy stuff that’s more reasonably priced. Thing is, a copy of YouTube won’t have the audience (Microsoft still thinks it can build a big audience by cloning the technology. Hey Steve Ballmer, that strategy won’t work! You can’t clone the Beatles — this is NOT a technology-only play!)

No audience, no way to get advertisers to join your ecosystem.

Update: Christopher Coulter just called this the “GooTube” merger. Heheh.

Wow, Google just sent me a press release that says it’s true. It has acquired YouTube for $1.65 billion in stock (update: sorry for the typo, I said millions earlier). Here’s the press release — congrats to everyone involved, and thanks to Google’s PR department for getting all journalists and bloggers this info at the same time. Great improvement over last press release.

TechMeme is going crazy about this news.

Will this work out for Google? I think it will. First of all, it makes Google a more interesting company to watch. Second of all, it makes it very clear to advertisers that Google is in the video business big time. This has caught the attention of all the big media buyers at places like General Motors and Procter and Gamble. These folks spend billions on advertising.

Now, will Google get sued over and over? Probably. But if you think that matters then you are missing the point. Did Microsoft’s legal troubles slow down its cash generation machines? No. Neither will Google’s. Plus, Google has demonstrated it’s fairly adept at working out deals with folks who produce content, or own it. Yeah, they’ll probably lose a few battles in court, but that’s like losing a battle or two but winning the war.

I do note that Google’s stock is up. Yahoo and Microsoft’s are down.

Another angle? Google is getting over its initial engineering-driven arrogance. You know the kind. Where when you show engineers/geeks/developers something like YouTube they answer “we can build that in a few weeks.”

I heard that over and over again at Microsoft and my friends at Google say it a lot too. It’s called “not invented here” syndrome. The fact that someone told the Google Video folks to sit down and be quiet during this deal is pretty significant. That’s a sizeable change from previous times when Google was looking to acquire companies.

It also means that the price for new companies has just gone up dramatically and that the venture capital barn door is gonna totally unlock as investors chase down “flip to big company” deals. I’m not saying there will be another YouTube, but investors get ancy when they see other people making big bucks.

Update: My brother, Alex, just IM’ed me: “another missed opportunity for microsoft.” Exactly. What are those bean counters doing with all that money? I guess they want the entire advertising world to go to Google, huh?

Everyone I met today asked me what I thought of YouTube’s rumor. The blogs certainly are lit up, which demonstrates well that if you get blogs to talk about you, it’s probably a pretty good predictor that other people are talking about the same thing too.

$1.6 billion. Whew. And all I got was a cool YouTube sticker for my tripod. Heheh.

Lots of people think Google is nuts for buying YouTube, if this rumor proves to be correct. I don’t. When you have an audience that large and that engaged you’ll be able to find a way to turn that into dollars. And, for someone like Google, it means more than that even. It means a way to keep it out of Yahoo’s and Microsoft’s hands.

Engineers always talk that way, though “I could build that in a week.” Bullshit, I answer. You might be able to clone the technology but you’ll never get the community to move.

Remember all the eBay competitors back in the late 1990s? I do. They almost always had better technology than eBay, but still failed. Why? This is a rock star business.

You can’t copy the Beatles. If you try you’ll be destined to play in high school auditoriums forever.

That’s why YouTube is worth the $1.6 billion. It’s the access to a group of people who won’t move anywhere else.

I’m at the hot company of the day, Blue Dot. They just got written up on TechCrunch (Mike Arrington has been telling friends that he’s using Blue Dot instead of Del.icio.us). I just met the entire company (10 people) and they have a cool way to share Web sites with your friends. This is the next Digg. Instead of sharing stuff with the world, you can share with groups. Sounds lame here in text land, but when you see the video demo it all will make sense.

Anyway, here’s some exclusive news. They just told me about their mobile service. Go to bluedot.us/m and you can get to your Blue Dot groups from your mobile phone. Doesn’t always work on every phone, but if it does it’s very cool.

Today was absolutely incredible. Zune, Microsoft Research were both excellent videos. Research showed me something that just blew my mind. But you gotta see it on video. I’ll let you know when that’s up.

More on Zune later, but I’m just running my ass off. Gotta go get ready for the Woz interview. Hope you’re having a good Friday.

Got a very warm welcome back at Microsoft yesterday. Hung out with some of the top Windows Vista folks, was over at the Tablet PC team hearing about their latest UMPCs, spent a fun hour with Buzz interviewing the Windows Quality team (the folks who get your reports after your computer crashes), then hung out with the MindCamp folks for a fun party and dinner.

Today is just as packed in. Interviewing the Zune team, getting a tour of Research, before heading over to Pioneer Square to see some startups (Pluggd is first on list) before heading to University of Washington (Keene Hall) to interview Woz in front of an audience of hundreds of people tonight.

Anyway, I got an interview with Joe Kraus, CEO of JotSpot up (he was also a founder of Excite at Home, so he’s seen the ups and downs of Silicon Valley).

I’m sorry about only having one microphone so you can’t hear my questions very well. I have several more interviews I did that way, but now I have a second microphone so in the future this problem goes away.

I’m sitting on the plane heading back to Microsoft. In honor I’m wearing my Longhorn jacket and my Channel 9 t-shirt. If anyone wants to meetup, I have a slot at about 4 p.m. Be warned, might get filmed for my show. Got some slots tomorrow too before I interview Woz tomorrow night.

Microsoft Live Spaces has something like 75 million spaces, and about 125 million unique visitors a month (at least those were the last numbers I saw shared).

Wordpress.com, according to Automattic’s CEO (that’s the company that makes Wordpress), Toni Schneider, in an interview I had with him yesterday, has 400,000 Wordpress.com blogs, but has 25 million unique visitors per month.

Which service is going to be more attractive to advertisers? Which one builds a better business?

I wonder if anyone is doing a comparison of readers per URL among all the blogging services (and MySpace and FaceBook too)? Anyone doing research on these kinds of metrics?

Tonight I had dinner with Ajit Jaokar, CEO of Futuretext, a publishing company that publishes tech books like Mobile Web 2.0 and Russell Shaw, a prolific blogger (he writes a VoIP blog over on ZDNet, but also has political blogs and other blogging jobs over on Weblogs Inc, among others).

Anyway, during dinner we talked about some of the trends and things we were seeing. One thing Amit and I both noticed is Skype’s new “Click to Call” feature in its latest beta.

What does it do? Well, it turns a phone number like 425-205-1921 into a clickable number (using Skype of course). That’s pretty darn cool, right? But, I wondered what would happen if MSN Messenger started doing that? Who would win? The most recently installed? Or would you see two links for every phone number?

Why does that matter? Well, it’ll add up to big bucks for whoever gets their little utility installed on the most machines. Skype, obviously, gets installed on lots of machines so this functionality really takes over and makes it possible to do a lot more calls.

On my machine I forget that Skype is even there. I just take it for granted. I click the number and Skype calls it. I don’t even need my cell phone anymore.

This is really pretty darn powerful. And wait until it comes to your mobile phone.

Anyway, remember how we were all mad that Microsoft tried doing something similar in IE 6 betas? Yeah, we were pissed cause Microsoft was putting advertisements on top of our content.

How is this any different? Yes, it’s useful. Yes, its scope is limited to only phone numbers (today). But, aren’t we on a slippery slope here? I can just see a bunch of toolbars trying to do the same thing and the user experience going downhill. But maybe that’s just me. What do you think?

Oh, and Amit has a whole post titled “I am a tag not a number!” to further get you thinking about the implications of this new trend.