Citigroup Analyst Mark Mahaney is getting a lot of attention for predicting that Amazon.com's Kindle ebook reader will be a smash, iPod-like hit -- based on looking at the reviews on Amazon.com. Which may be the lamest bit of Wall Street analysis that I can recall.

First of all, Amazon has kept a tight lid on any information about Kindle sales. Mahaney admits he's got nothing from the company. In my interview with CEO Jeff Bezos, I asked him how many Kindles have been sold and he refused to say. Mahaney pieces together the fact that Amazon can't keep up with Kindle demand, the device's sales ranking on Amazon's site, and the number of customer reviews of Kindle posted on Amazon, and guesses that 10,000 to 30,000 have been sold in about three months.

Then Mahaney applies lessons from the iPod's adoption rates, and predicts that the $399 Kindles will generate $400 million to $750 million in revenue by 2010.

Now, nothing against the Kindle. It's a pretty cool device and maybe it will indeed catch on. But, for starters, quickly selling 10,000 to 30,000 of any product doesn't mean anything. That number barely scratches the surface of the early-adopter market -- the kind of people who will buy a new gadget just to say they own it. There is no perspective that can lead to solid conclusions about what that kind of sales volume means to later adoption. For that matter, Apple sold 10,000 iPhones in Germany alone on the first day it was offered there. A Tibetan lama rapper sold 30,000 copies of his CD in Taiwan in three months.

Amazon not keeping up with demand only means Amazon underestimated demand. The reviews and votes on reviews certainly should make Amazon feel like it's made a good product, but they don't necessarily translate into buyers.

Others have been skeptical about the Kindle's sales and prospects. Why this Henry Blodget-like effusiveness from Citigroup? (Funny, huh -- Blodget, famous for his wild predictions about Amazon when he was a real Wall Street analyst, jumped right on Citigroup's Kindle bandwagon on his blog.)

Again, the Kindle may indeed do well. But drawing that conclusion from the information available so far seems irresponsible.

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CBS said this morning it will buy tech news network CNET for $1.8 billion. That's probably helpful to both. CBS is in the declining network TV business, and its prospects have been going nowhere, its stock in decline since mid-2007. CNET's stock has essentially gone nowhere for years, and it's been facing down activist shareholder action of late. Seems like the deal will protect CNET while giving CBS some solid Internet-era outlets.

Conference call at 8:30 a.m. News release here:

NEW YORK and SAN FRANCISCO, May 15 -- CBS Corporation (NYSE: CBS.A and CBS) has entered into an agreement to acquire CNET Networks, Inc., it was announced today by Leslie Moonves, President and Chief Executive Officer, CBS Corporation. Under the terms of the agreement, CBS will make a cash tender offer for all issued and outstanding shares of CNET Networks for $11.50 per share, representing an equity value of approximately $1.8 billion. The acquisition will make CBS one of the 10 most popular Internet companies in the United States, with a combined 54 million unique users per month, and approximately 200 million users worldwide.

"There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNET Networks," said Moonves. "CBS stands for premium content and unparalleled reach, and CNET Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience. Together, CBS and CNET Networks will have significant additional exposure to the fastest-growing advertising sector and can accelerate our growth through a number of new content, promotion and advertising initiatives. We could not be more pleased with the prospect of adding CNET Networks and its tremendous team of people to the CBS family. I look forward to working with Quincy Smith, Neil Ashe and the considerable combined talent at both companies, as we build upon our success."

Based in San Francisco, CNET Networks owns many of the Internet's leading entertainment, news and information sites including CNET, ZDNet, GameSpot.com, TV.com, mp3.com, CNET news.com, UrbanBaby, CHOW, Search.com, BNET, MySimon and TechRepublic. The company, which reported significant profits in 2007 on revenues of $406 million, has a large international footprint, particularly in China.

On the Web, where it's so easy to change loyalties, brand coolness means a whole lot. And there's reason to worry about Yahoo's brand coolness. Today, ComScore numbers tell us that the whole of Yahoo -- main site, email, search and everything else -- is no longer the number one Web destination, as it has been for quite some time. Google has snatched that spot for the first time. (Nielson Online already had Google passing Yahoo.)

Not only that, but there are other signs of trouble for the Yahoo brand. One writer surveyed a group of high school kids, and found that Yahoo wasn't even as cool as Microsoft, which is really saying something.

Anecdotally, I find that people are less inclined to Yahoo than any time in recent years. A Yahoo email address was once pretty cool. Now those people want a Gmail address. Yahoo is a search afterthought. Same for Yahoo maps, eclipsed by Google maps. Yahoo Messenger has wider appeal than Google Talk, but -- especially in the teen world -- sits way way behind AOL's AIM. The "coolest" thing on Yahoo these days is probably Flickr.

Yahoo needs to win hearts and minds again. Some think Yahoo's open strategy can get the coolness back, but that remains to be seen. If not, the company has a tough slog ahead.

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A survey out today shows that one in six homes has no traditional landline phone. Among people 25 to 29 years old, one in three lives in a home with no landline. Behind these statistics is a fascinating change in mass thinking: We no longer want to call a place and ask for a person. We want to call a person.

Yes, the survey by the National Center for Health Statistics (which is concerned about 911 calls) seems to reflect decisions by people about how they will make outgoing calls. But choosing to forgo a landline is not really about outgoing calls -- it's about incoming calls. You want people to be able to reach you. Households where every member is less likely to have a cell, like older people and those with small kids, are more likely to keep a landline. In those homes, you need to be able to call a place to reach the right person.

But while that used to be the norm, attitudes are changing. We increasingly want a phone number to be a specific person. You call it, you get that person. As Motorola's ex-CEO Ed Zander like to say, if a cell phone is on a table and rings, you don't pick it up if it's not yours. If a landline is on a table and rings, anyone in the room might pick it up.

It's a subtle but significant change that often goes overlooked. Analysts think we get cell phones and dump landlines because we want to talk on the go -- but that's only part of the truth. Inside a home, a cordless phone is as mobile as a cell phone. There, the driving reason is that phone numbers are becoming personal. Especially among the young, a phone number attached to a place seems kind of ridiculous.

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An IDC survey has gotten some gee-whiz attention because it found that 38% of respondents would choose their cell phones over their wallets if they had to leave one behind. But there's something more fascinating about the question itself.

In all of modern, Western history, only a few items have EVER been invented that most people choose to (or must) carry on their bodies most if not all of the time.

The list looks something like this, in rough historical order:

Money

Keys

The watch

Identification (driver's license, etc.)

Credit card

Cell phone

It's kind of amazing to know that we're witnessing a remarkable event in human history -- the rise of the first electronic, connected gadget to become a personal item as important as money or the watch.

But here's the more amazing thing: the cell phone could -- and should -- usurp and engulf all the previous personal items. Stories have been noting for a while that watch sales are down because people just rely on their cell phones for the time. Around the world, consumers are beginning to store credit card information in their cell phones and pay for items by beaming a code to a cashier.

Logic says it's only a matter of time before a cell phone can be your keys, too. Think about the wireless access and ignition in the Toyota Prius. That code could be stored in a cell phone. Your home could similarly have wireless locks that open when you touch a code on your cell key pad.

In time, ALL you'll need to carry is your cell phone. It will be keys, ID, credit card, money and a lot of other stuff. (Can Nokia squeeze in a make-up kit?) This latest survey shows only the tip of what's coming.

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I have an essay about music business models in the newest Portfolio, and I started it off with part of a conversation I'd had with MTV founder Bob Pittman in his office a few months ago.

Bob Pittman made music videos free for consumers when he found??ed MTV 27 years ago. And now he's pretty sure music in all formats should be free. No more $15.98 CDs. No 99-cent iTunes. Instead, he says, artists should use recordings to build a brand so that they can make money on concerts and T-shirts. Sitting in his New York office, a foot-tall MTV astronaut statue behind him, he says, "Maybe get a sponsor to pay a million dollars and just give the album away."

Pittman has nailed the future of music.

It's funny, the subtleties that a writer thinks he puts in but certain readers zoom past. I thought I was careful to use terms like "pretty sure" and "maybe." It's my voice, not Bob's, saying, "Pittman has nailed the future of music."

But I got a call from Pittman today saying he's getting toasted in some circles for declaring that all music must be free. And that's not what he said -- or, I thought, what I said he said. "The point is that there are a lot of things you could do," Pittman said on the phone today. "Music will always have to be paid for, it's just a matter of how -- whether it's advertising, sponsorships or something else."

He said in our original conversation that music might be better off if it's free to consumers, and suggested the sponsorship idea. "Suddenly other models are more attractive" than the current models of charging consumers for CDs and downloads, he said then.

And -- this is me talking -- he is absolutely right.

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Five years ago, if Hewlett-Packard bought EDS, everyone would've thought it was pretty much like when IBM bought PwC -- a play to create a powerful data processing consulting business that could co-exist with a computer hardware business. In fact, that's been a great model for IBM.

But with H-P today buying EDS for $12 billion, the smart thinking goes in a different direction. It's looking like a red-hot area going forward for IBM, Amazon and Google will be so-called cloud computing -- a.k.a. hardware as a service.

If you're a start-up or a corporate IT manager, you increasingly won't have to buy computers to run your business. You just rent capabilities from some computing giant and move the information there and back over the Internet. If something crashes, the data is always backed up and stored somewhere out there in the cloud. This is the ubiquitous computing idea IBM has pushed for a decade -- making computer power something like electric power.

If you tack together some of H-P's other purchases under CEO Mark Hurd -- as Om Malik did -- it seems even more obvious that H-P is at least as interested in cloud computing as consulting. And EDS is a solid cloud-computing play because a core business is owning and running giant data centers.

As part of the interview I did with Amazon CEO Jeff Bezos (the video is now on Portfolio.com), we discussed Amazon's push into cloud computing.

"We've been working on our Infrastructure Web Services for four years," Bezos said. "We launched our first one two years ago, the Simple Storage Service, and I am astonished - I rarely meet a start up company these days who isn't using our web services and now we're starting to get, you know, deployment inside Enterprise level data centers as well. So it's a very exciting."

Asked about Google's plans to get into a similar business, Bezos said: "Well, you know, the way I look at this and, you know, we don't - we really do have a practice of not talking about other companies. But this, like our retail business, is not going to be one winner, I don't think. I think there are going to be multiple winners pursuing different flavors or strategies, different kinds of products, you know, I think that this - I think our web services business is going to be part of what becomes an important industry. And I don't think important industry - important industries are rarely made by single companies."

So maybe there is room for H-P, Amazon, IBM, Google and others to play in the cloud computing space. The H-P deal is telling us that the concept is ready for prime time.

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Video of my interview with Amazon CEO Jeff Bezos at NYU is now here on Portfolio.com. You can watch a teaser below. And if you want to read the edited Q&A as it will appear in the June issue of Portfolio, that's here.

After Amazon's earnings came out, I published an excerpt from the interview here on the blog. It included perhaps my favorite comment of his from the session, about Amazon's failed search site, A9:

Bezos: Yeah, well, we are going to be bold with our experiments and some of them aren't going to work. If you know they're going to work they're not experiments. And if you decide that you are only going to do things that you know are going to work, you're going to leave a lot of opportunity on the table. Companies are rarely criticized for the things that they failed to try.

Maney: That's true.

Bezos: And they are, many times, criticized for things they tried and failed at. And that's one of the reasons, if you want to be a pioneer, you have to get comfortable being misunderstood. In some ways it's a much more pleasant life, probably, we wouldn't know from personal experience, to not - you know, once you have something good just to hone it and hone it and hone it and not try anything new.

Preview is below, but the whole hour-long video is on our site.

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OK, we've got, like, a stinkin' bacchanal of social networking strategery going on today, and I don't know about you, but most of the time I don't have ANY idea what these companies are talking about or how I'll use what they're offering.

Google's got this Friend Connect thing. "Visitors to any site using Google Friend Connect will be able to see, invite, and interact with new friends, or, using secure authorization APIs, with existing friends from social sites on the web," its press release says.

Microsoft has a new service that will "allow users to watch video clips at the same time as a network of friends and chat via Windows Live Messenger."

Facebook on Friday said it will make its user profiles portable. "Users will be able to connect their Facebook account with any partner website using a trusted authentication method," the company said.

Ultimately, I get that the idea is that everyone can have one profile that they can use no matter what Web site they're on. No more forgetting to delete the photos of you with your previous girlfriend on Orkut.

And I get that every Web site should eventually seem "alive." You're shopping on Amazon, reading news here on Portolio.com, checking how much value your house has lost on Zillow -- wherever you are, you should be able to see if any of your friends from any social network are also there at the same time, and if so, chat with them. It should be the Web equivalent of being able to visually see someone you know coming toward you down the aisle at Home Depot.

BUT -- I read these news items and have two personal reactions.

1. These baby steps are painful and I don't know what each of them means, where I'll encounter them, or how I'll use them. They come across as a whole lot of tech nerd gibberish. And it is obvious that every company that's behind in social networking (Microsoft, Google, Yahoo) is throwing everything it can think of at the wall and hoping something sticks.

2. I don't believe that the ultimate solution of a single portable profile and open access to all your friends on any Web site will ever happen. If that was ever going to be possible, it would've happened by now with instant messaging -- and in a better way than the only way it's happening now: with outsider Meebo grafting the different IM networks into a single site.

How about we lock Facebook, MySpace, Microsoft and Google in a room and not let them come out with any press releases until they have a working system figured out.

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Amazing how public awareness works. Ratan Tata is 70 years old. He's spent a long career growing Tata Group into India's version of General Electric and becoming one of the most influential players in India's technology, consulting and auto industries. Yet until about a year ago, hardly anybody in America knew who the heck he was.

Early this year, Tata unveiled its Nano car -- the little $2,500 machine that threatens to disrupt the global car business. I wrote about that in Portfolio. Then Tata bought Jaguar from Ford, and suddenly huge swaths of the U.S. population knew the Tata name.

We put Ratan Tata one of business's biggest brains in our last issue. And Time named him one of its 100 most influential people.

Now Indian publications are looking over here in wonder at Tata's popularity in the U.S. -- a local hero finally making it big in a far-off land. No doubt Ratan Tata is just the first of a wave of Indians who will become influencers in the U.S. tech industry. Although, in the latest twist on the world-is-flat theme -- Indian tech services companies seem to be pulling back in the U.S. market because of the staggering economy here.

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From way over in Indonesia, Microsoft Chairman Bill Gates let it be known that Microsoft never needed to buy Yahoo to make headway in search and advertising. It just kind of wanted to.

"We have always felt we could do very well on our own and now that's the path we are focused on," Gates told AP in Jakarta on Friday. "The standard strategy for us is to just hire great engineers and surprise people at how well we can compete, even with a company that's got a strong lead."

Actually, that may be the first bit of sense out of Microsoft since the Yahoo thing first emerged. That is exactly what Microsoft is good at: identifying market leaders in interesting new tech markets, then systematically destroying them. In fact, Microsoft is probably better at it than maybe any company in history. Netscape, Lotus, WordPerfect, Novell, Real Networks...there's a long list of companies that invented something that Microsoft then copied and took down. And Windows, of course, was a copy of what Apple and Xerox were doing. Now Microsoft's Zune is taking aim at the iPod.

Microsoft is at its best when it does this. It spends billions of dollars a year on Microsoft Research , but has yet to invent an entirely new business. (Microsoft did once get out in front of a tech development, creating travel site Expedia early on. So surprised was Microsoft that it did this, the company soon thereafter spun out Expedia -- perhaps so Expedia would not contaminate the Microsoft culture with actual market innovation.)

The thing is, though -- search so far is looking like Microsoft's Waterloo. Yeah, it's won every big battle so far, but Microsoft has spent vast amounts of time and money trying to crack search -- and so far has failed. Can it beat Google at Google's own game? That seems unlikely. Can it outwit Google and create an innovative new version of search that Google never thought of? That would be very un-Microsoftian.

So...now what?

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Reports, rumors and innuendos are bouncing around the Web that Google may not want to cut an advertising deal with Yahoo after all. This before there is actually substantiation that Google and Yahoo are crafting an advertising deal, which was something of a rumor and innuendo in the first place, allegedly planted to let Microsoft know that Yahoo had options.

Google is allegedly worried about ticking off Washington officials who might think that if Google is playing ball with Yahoo, Google has become an antitrust violator that must be terminated. Like, as if Google isn't already close to monopoly power in search. It gets 67% of all searches, and that share keeps growing. Google worrying that a Yahoo deal will push it over the brink in antitrust is like Kim Jong-il worrying that if he puts on a party hat he'll be considered crazy.

Then there's the other side: If Yahoo enters into this kind of crossroads deal with Google, it will be short-term gain for long-term pain. As I wrote in April when this idea was first floated:

You hand your search advertising to Google and you essentially belong to the Google camp for good. Google money is like heroin. This is what AOL discovered when it did the same. Now AOL gets so much revenue from Google, it has no other options. If AOL wanted to be bought by Microsoft, for instance, and start using Microsoft search, AOL's revenues would go off a cliff. Yahoo would similarly find itself penned in strategically. All its growth options would also help its chief rival, i.e. Google, grow. What kind of existence is that?

If Yahoo does a Google partnership deal...Yahoo truly will be the next AOL.

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If you hang around the tech industry long enough, you realize: It's just like high school. These grown men and women may have millions or billions of dollars, but it's the same old set of dramas on a bigger canvas.

Which seems exactly the way to view the action these days around the Microsoft-Yahoo ordeal. Today's news: Steve Ballmer has put out "feelers" about buying Facebook in the wake of ending his pursuit of Yahoo. Let's parse the Reuters story with this perspective in mind.

Microsoft gauged Facebook's interest in a possible acquisition after the software giant's failed takeover attempt of Yahoo, the Wall Street Journal reported Wednesday. Steve, frustrated and hurt after being spurned by Yahoo, got out the yearbook, found the most popular girl of the moment, and decided to go for her whether he really wanted to or not.

The newspaper reported on its website that Microsoft's bankers put out subtle signals to Facebook, the social networking website, to see if it would be open to a full acquisition. Steve didn't want to be rejected again, so he got his friends to feel out her interest.

The talks were first reported by website All Things Digital, owned by Wall Street Journal publisher Dow Jones. One of his friends told the school gossip, who of course blabbed to everybody.

Facebook spokeswoman Brandee Barker declined to comment on the report. Microsoft officials were not immediately available for comment. The girl's sidekick girlfriend wouldn't let on whether she knew this happened or not. When asked, Steve's friends also refused to say whether Steve was actually interested.

In October, Microsoft took a $240 million stake in Facebook, which valued the start-up at $15 billion. Citing an unnamed source, the report said there are no active discussions between the two companies. Steve, a senior and a BMOC, flirted with Facebook last fall, immediately raising her profile, but nothing much happened between the two of them after that.

The news came a few days after Microsoft dropped its unsolicited offer to buy Yahoo for $47.5 billion. The aim of that proposal was to build an online advertising powerhouse to rival Google Inc. Steve's interest in Facebook is seen as a rebound thing.

Facebook, founded in 2004 by Harvard student Mark Zuckerberg, has become one of the hottest properties on the Internet because of its rapid growth and the loyalty of its users. Facebook has more than 70 million active users. But Facebook has in the past year turned into a hottie, and Steve probably can't get her now.

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Last week Meebo landed a $25 million investment from a group led by Time Warner. I caught up with Meebo CEO Seth Stern Sternberg last night about what that means and where Meebo is heading.

As for the TW deal, Sternberg says there's still a lot to be discussed about how the two might partner. But he points to soon-to-be-launched Meebo chat rooms inside Time Warner's TMZ.com as one model. Meebo chat set up next to stories on Web sites for magazines such as Time or Sports Illustrated could let readers talk to each other about that story. "Media companies are really good partners for us" for that reason, he says. In some cases a media property would just pay to license Meebo for the site. But Meebo would rather sell ads to appear in the embedded chat rooms and split the revenue with the host site.

In the other direction, Sternberg is hoping Time Warner's New Line Cinema will be a big advertiser on Meebo. The studio could run a banner ad for a movie on Meebo, and if a user clicks on it, the ad will pop open and present the movie trailer alongside a chat box. The user could invite friends to see the trailer and talk about it.

I met Sternberg early in Meebo's life, and at the time it was pitched mostly as just an easier way to aggregate IMs from different providers, like AOL, MSN and Yahoo. But, Sternberg says, within about 30 days of launch, Web site owners started telling Meebo that they wanted Meebo-like capabilities inside their sites. "Widgets were not around yet," Sternberg says. "No one was doing anything like that."

As Meebo worked out how to insert itself into other sites, a strategy evolved that centered on creating the "live Web" -- i.e. bringing live conversation to previously static Web content. "It was clear we should be the people who try to do that," Sternberg says.

Meebo has gotten flak for not having a way to monetize its offerings, but that's changing. As Sternberg said, Web sites are licensing Meebo or setting up revenue sharing for advertising. And Meebo is starting to be seen as a place to advertise things that people might want to talk about -- like movies or hot new gadgets.

Meebo does seem to be the brand to beat in this space right now. And, usually, if you can get that kind of position on the Internet, the money eventually comes your way. At least Meebo seems to have that promise right now.

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