Microsoft Corp. believes it has made a fair offer to acquire Yahoo and is committed to bolstering its digital advertising capabilities irrespective of the outcome, its chief operating officer said.

“We believe we’ve made a very fair offer to Yahoo’s board of directors,” Kevin Turner said at a news conference in Mumbai Friday to launch strategic initiatives with India’s HCL Infosystems Ltd.

“Currently, it’s in their hands to decide the outcome of that offer,” he said.

Microsoft had threatened Saturday to launch a hostile bid for Yahoo and could lower its offer of US$42.4 billion in about three weeks if it does not get a deal, which Yahoo argues is worth more than Microsoft’s bid.

The New York Times reported this week News Corp. was in talks to join Microsoft’s bid for the Web pioneer.

The offer for Yahoo was in line with Microsoft’s aim to enhance its digital advertising capabilities, Turner said.

“We will continue to drive marketshare from a search standpoint within the consumer space, and that’s a strategy we’re committed to in the long term,” he said.

The offer for Yahoo was “a tactic and a strategy” toward that goal, Turner said.

“The rest is now up to their board … With or without the acquisition we are committed to becoming a world class digital advertising company.”

Yahoo announced Wednesday a test to outsource Web search advertising to Google Inc., which sources say is part of a three-way alliance that would combine Yahoo with Time Warner Inc.’s AOL instead of Microsoft.

But a joint Microsoft-News Corp. bid would create a more formidable competitor to Google by bringing together three of the biggest Web site publishers: Yahoo, Microsoft’s MSN and News Corp.’s MySpace social network.

Any of the potential mergers would fundamentally change business on the Web as growth slows dramatically after a decade of explosive growth.

Radio One Inc. (ROI), the largest U.S. radio broadcasting company targeting African-American and urban listeners, has added social networking sites operator Community Connect Inc. (CCI) to its list of new acquisitions.

ROI announced in a statement that the $38 million merger deal with CCI Thursday is a move that virtually makes the radio company “the clear number one in the African-American online space.”

ROI’s 53 radio stations, Giant magazine and TV One cable network reaches 20 million people nationwide. The 23 million members of CCI’s BlackPlanet.com, MiGente.com and AsianAve.com more than doubles ROI’s audience.

ROI CEO and president Alfred Liggins III, said in a statement, “CCI is an innovator and pioneer in social networking. We believe that they are a great complement to our existing radio, TV, and online properties.”

Ben Sun, president, CEO, and founder of CCI, said the merger “will truly benefit our members and advertisers.”

The merger also positions ROI and CCI well in the multi-billion dollar social networking advertisement market. Analyst eMarketer has predicted global ad spending in the social networking arena to increase 75 percent to $2.1 billion this year and $4.1 billion by 2011.

Today, imeem confirmed earlier reports that it had acquired content licensing and DRM company Snocap. No financial terms were disclosed.

After Snocap saw a major downsizing, laying off 60% of its workforce, the company made it known it was pursuing a sale. Four months later, reports started to circulate that social network for artists and musicians imeem had entered into an acquisition of the suffering

Imeem has been using Snocap’s content identification technology since 2007 to automatically identify tracks as they are uploaded by users. It determines whether the content’s owner allows full streaming of their music, and manages payments to artists and labels for use of their music.Snocap has partnered with MySpace since 2006, offering independent artists a means of selling their music through its MyStore product. The company has announced that no changes will be made to users’ accounts, but will unveil enhancements later this year. Whether imeem will use the same product, or a similar, but uniquely branded “iStore,” will soon be shown.

Imeem is a member of Google’s OpenSocial network along with MySpace, so developments in that stratum may finally begin for imeem, which recently opened its API, Imeem Media Platform, opening up the site’s library of songs, videos and photos to developers.

It turns out that building a startup company in 54 hours is a little tougher than people imagined.

Skillbit, the Seattle Internet startup created in January by a group of more than 100 volunteer developers, lawyers and business people as part of the Startup Weekend, has closed down due to legal complications over the ownership structure.

nPost’s Nathan Kaiser, who had taken a lead role at Skillbit, writes in a note to Startup Weekend participants that issuing shares could expose them to penalties from the Securities and Exchange Commission.

Here’s a portion of the note:

I hope that you found, as I did, that the Startup Weekend we attended together was a “one of a kind” community building experience. I had the opportunity to meet dozens of new people, and made new friendships that will surely grow over the months and years to come. I hope you had the same experience.

When it comes to building a viable business we can all share in legally, however, we found a problem that appears insurmountable. After consulting with attorneys specializing in securities law, it has come to our attention that Startup Weekend runs afoul of Federal and State securities laws. The problem stems from the original offer on the Startup Weekend site. We have not been able to find a way around these laws or any exceptions to the laws or the Securities and Exchange Commission (SEC) rules.

Thus, it is impossible for us to actually issue shares from the company that was formed to anyone–or even promise to do so in the future–without exposing all individuals involved to substantial risk of penalty from the SEC. Please believe that we tried to think of every possible way around this problem, but have been unable to do so.

Consequently, I am resigning from the formal position I hold as managing member of the limited liability company that we formed called Bittly. The corporation, skillbit inc., will be dissolved as well.

In an e-mail, Kaiser said that they have contacted other Startup Weekend groups to express concerns over the legality of the entities created. The key issue, he said, is that the SEC does not allow public promotion of an equity without first filing with the regulatory body.

“If we were to ever issue shares, we would be in violation of these SEC rules,” he said. story source

Google has invested $1 million in Comsenz, a Chinese provider of social network software. It’s yet another move by Google to gain a foothold in China.

that Google is preparing to launch a joint music download venture in China, largely to take on Chinese search engine The investment occurred in July as part of Comsenz’s second round of venture funding, and it was recently revealed in a regulatory filing . Rumors about the investment previously pegged Google’s portion at $5 million. The news follows a reportBaidu.com, which has been beating Google by offering free music.

As for Google’s American competition, Microsoft has a direct presence in China, while Yahoo owns a large stake in Chinese online marketplace Alibaba.com.

Beijing-based Comsenz provides bulletin board and social networking software, as well as hosting services, to Chinese websites. (We don’t have any more details — not surprisingly, the company’s website is in Chinese.)

Comsenz is backed by former Google board member Michael Moritz. Moritz is a non-managing member at Sequoia Capital China, which owns more than 10 percent of the Chinese company. He left Google’s board last May.

Separately, Google revealed it acquired Peakstream, a company that makes it easier to run applications on multiprocessor systems and thus should help Google boost its internal server architecture, for about $20.3 million (see p. 39). That means Peakstream’s investors lost money on the deal. Peakstream soaked up $23 million over two years (our coverage) from venture firms Foundation, Kleiner Perkins — and yes, there’s that connection again — Sequoia Capital. Kleiner and Sequoia, both original investors in Google, each took in about one-fourth of the acquisition proceeds. Kleiner’s John Doerr also sits on the board of Google.