As we have reported in both MIN and DMR, Yahoo’s new social media network, Buzz, is using its beta release to drive traffic from the Yahoo front page to a limited range of branded media sites. Yahoo itself has been touting partner success stories, namely sites that get massive spikes when one of the highly rated articles in this new recommendation engine floats to the Yahoo.com page. But now metrics provider Hitwise is suggesting that Buzz is rivaling Digg in the places that matter most to major media partners. Heather Hopkins, vp research, Hitwise, UK says she was “amazed” at new charts showing Digg.com driving only 10% more traffic to news and media destinations in the last week. To be sure, Digg.com still is the gorilla in the room when it comes to driving traffic to blogs, games and video. Hopkins concludes that Buzz’s quick rise proves “there is likely room for a new entrant in social news media.” Well, there is room if you have hundreds of million of eyeballs already coursing through your pages. What Yahoo is proving is that it still has scale no one else enjoys, and it can throw that weight around to its partners’ benefit when needed.

In-game video game advertising has been in the act of becoming for a decade now, but eMarketer claims it is only worth about $408 million in spending this year. While planting ads into console video games is the sexy part of the business, in fact the majority of spending ($286 million) is going in and around games on the Web.  Expect that spending to grow only to $478 million by 2012. Ironically, gaming is among the most popular online activities, and yet traditionally it is harder to monetize. As with social networks, people are highly engaged in what they are doing when gaming online, and they pay little attention to ads that generally are not well targeted in the space.

In a survey of industry experts on the effects of the expected recession on media industries, our own partner Samir “Mr. Magazine” Husni of University of Mississippi tells Mediapost not to be too surprised if new print books emerge. Fortune, Esquire and Entertainment Weekly all grew out of hard times, when a soft ad market lowered the barriers for entry. The Internet will continue to prosper, maybe more so, because frugal media buyers will be looking for digital’s more precise targeting and ROI. Low-cost social networking and word-of-mouth techniques online may see some of the best benefit from a downturn, some media mavens predict. But the rich will get richer, Forrester predicts. Cost-per-action media like search is bound to look even better under tighter budgets.

Leveraging its leadership in the mobile Web space, with over 6 million monthly uniques, The Weather Channel Interactive (www.weather.com) will introduce mobile video ads to its inventory. The site already offers mobile video for compatible handsets, and these ads will include a banner on the video index page, a five-second pre-roll and a 15-second post-roll. Media buyers will be able to sponsor the entire section in its initial stages and eventually be able to buy the mobile units as part of a larger bundle on Weather.com and the TV properties. The Weather Channel recently held a 2008 Upfront where it rolled out an aggressive program of ad products across its platforms and report record sales for 2007. The company has been in the mobile content business since 1999 and is one of the medium’s biggest players.

In another sign that Microsoft is dead serious about becoming a major player in the online ad industry, the Redmond company acquires ad yield management solution Rapt and fold it into its existing Atlas ad serving platform. Rapt offers pulbihser sales workflow solution that already counts among its clients CNet, Dow Jones, New York Times Company, Microsoft, and Expedia. Rapt’s product includes pricing analytics, inventory management and business intelligence. The next front in the online ad wars is technology, which providers have the best tools that help publishers and marketers go to the next level of targeting and monetization.

As everyone knows by now, AOL will purchase international social media/network Bebo for $850 million. But no one seems to agree on whether this was a smart move, let alone a smart price. Yes, it gives AOL’s large ad business a great deal more inventory. But Google complains that its ad deal with MySpace has been tough to monetize, in part because people engaged in social networking do not like clicking away to advertiser sites. AOL’s recent buying spree has been focused mainly on advertising technology and networks (Tacoda, Quigo, Third Screen) and so this marks a major attempt to keep its own position as a content portal relevant. CEO Randy Falco sees it as reasserting AOL’s legacy at the heart of online community. Of course, social networks are stronger on entertainment topics, and arguably this gives Time Warner a nice international promotional platform for its TV, film and print properties. Or, it makes AOL a more attractive acquisition target for someone else. Rumors persist that AOL is not done buying, however.

As we reported last week in MIN, Yahoo’s new Buzz social media engine was starting to push a number of branded media site headlines onto the front page of Yahoo.com. The company reported some specific results from the first two weeks that seem to demonstrate the enduring power of portals married to familiar content labels. To wit:

USMagazine.com had it second highest traffic day ever on Feb. 27 in part from Yahoo Buss referrals. Almost a third of US visits that day were off of Yahoo.

Portfolio.com got a half million refers from a Buss link

Salon.com reaches 1 million uniques in a single day for the first time in its 12-year history after getting linked from a Yahoo Buzz item.

HuffingtonPost.com got 800,000 uniques in on day from a Buzz link.

Even as some metrics mavens argue that traffic is migrating away from portals and to the content niches, it is still apparent that using portals as a funnel towards branded, targeted media is enormously effective.

The News Corp. and NBC Universal joint venture for branded video programming, Hulu.com, launches formally on Wed. The ad-supported video site claims partnerships with 50 media companies, 200 premium titles in the library and distribution across MSN, AOL, MySpace and Yahoo. The company has not landed deals with two of the major TV networks, CBS and ABC, both of whom are pursuing their own online TV distribution strategies. While the Hulu.com viewer is very polished and responsive, we are still waiting to see how effective the distribution strategy proves to be. How much will Hulu.com really demand that people return to the Hulu site to watch video, and how eager will these many partners be to promote Hulu.com content over other video alternatives at their own site?

In a remarkable and aching smackdown of a media operative, journalist Sarah Lacy was unanimously rebuked for her interview with Facebook CEO Mark Zuckerberg at the SXSW ’08 conference last week. According to formal news reports in AdAge and a painful blow-by-blow reporting at MediaBistro. Lacy apparently meandered, self-promoted and descended into personal anecdotes to the point of being heckled by the audience. Bloggers and Twitter posters went wild about this squandered opportunity to get the elusive Zuckerberg on the record. Lacy responded on Twitter with the same level of professionalism she seemed to show on stage. “Seriously screw all you guys,” AdAge quotes her as saying. Ah, youth. The ever-awkward  Zuckerberg and very young Lacy demonstrate that the second Web wave may be as precocious as the first.

Anyone hoping to see new native iPhone apps this month was sorely disappointed by Apple’s bait and switch last week. The company rolled out its long-promised Software Development Kit, which is both late and still in beta. This means that the iPhone 2.0 software that will support third party mobile content won’t see the light of day until late June. Apple promised that developers would be able to make apps that link into key features of the iPhone, like mapping, geo-location, video and music players, WiFi, address books, etc. Publishers will need to go through Apple and the on-phone or iTunes store to distribute, so Apple is going to have some gatekeeper function. Actually, in what may be another slap at the usurious revenue sharing exacted by carriers on content, third parties in the iPhone app store will be able to set their own price for these programs and keep 70% of the revenues. That alone could prove to be a major incentive for all media companies to develop for the iPhone and thumb their nose at the current carrier model.