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Nathan Stoll, former product lead of Google News, has been quietly working on a new social search service he started with the help of two other Google refugees, the site, called Mechanical Zoo, is poised to launch in beta next month.

The San Francisco company, which is about 9 months old, has an impressive team of tech veterans. It was co-founded by Stoll; Max Ventilla, a former business development manager at Google; and Damon Horowitz, a longtime computer scientist and former lead engineer of Perspecta, a search software company that sold to Excite@Home in the dot-com heyday. Fritz Schneider, who was an application-security engineer at Google for about five years, heading up the Google Firefox team, is also a part of the 12-person staff.

Ventilla started working on Mechanical Zoo last summer, when he left the search giant. Stoll took a leave of absence from Google last fall, but then “broke up” with his longtime employer in December to work full time on Mechanical Zoo. Other engineers at the company include Winton Davies, a founding member of Yahoo Research Labs, and Bob Zoller, who worked on front-end development for social-networking site Yahoo 360. Among Mechanical Zoo’s advisers are Sep Kamvar, founder of search technology company Kaltix, which sold to Google.

At a high level, Mechanical Zoo is building an application–rather than a destination site–that will help people tap into the knowledge of their social circle to find information, such as what movie to see or where to go out on a Friday night. The company is not ready to publicly preview or talk about its technology, but it currently has at least 100 “alpha” users testing the service. According to Ventilla, it will be a Yahoo Answers-type product, with more built-in intelligence about your personal tastes.

“We’re tackling the problem of subjective search–when no one answer would satisfy everyone–and the answer is not to serve a Web page,” Ventilla said in an interview. “We’ve developed an online social structure that lets users reach out to people they already know” for answers.

Of course, Mechanical Zoo is not alone in working on social search applications. Many companies, including FriendFeed (started by former Googlers), Delver, and Eurekster are packing social context into the task of finding information on the Web, all with a slightly different tack.

The privately funded Mechanical Zoo has raised about $750,000 in convertible debt from angel investors, including ex-colleagues and friends. Two institutional investors have committed another $1.25 million to Mechanical Zoo, but the founders may raise a series A round of funding in lieu of that money, according to Ventilla. The name Mechanical Zoo is an homage to the mechanical workings of its application, as well as several animal-named products that the company plans to introduce over time.

Ventilla, a longtime entrepreneur, said he left Google because it can be tough inside the search giant to make new, big things happen, as well as to marshal enough talent away from the company’s main search and advertising products to build new services.

“There’s a number of ways companies can connect to Google,” Ventilla said.

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Yahoo’s first-quarter financial results issued Tuesday slightly exceeded Wall Street’s expectations, but analysts said the numbers were not likely to aid Yahoo’s efforts to fend off Microsoft’s hostile bid or to extract a higher price.

Yahoo’s chief executive, Jerry Yang, said that the company’s solid performance reaffirmed the board’s conviction that Microsoft’s unsolicited takeover offer undervalues Yahoo.

Still Mr. Yang said Yahoo remained open to “any and all” alternatives, including a deal with Microsoft.

Analysts said that Yahoo shareholders were likely to be relieved that the company’s business appeared to have avoided any fallout from the economic slowdown. But they said the results would not break the stalemate between the companies.

“It was a solid quarter,” said Clayton Moran, an analyst with the Stanford Group. “But I don’t think it is something that will significantly alter the dynamics of the Microsoft negotiations.”

Earlier in the day, Microsoft, which has been adamant in its refusal to raise its offer for Yahoo, had already begun to play down any possible impact from Yahoo’s results.

“I wish Yahoo all the success with its results but it doesn’t affect the value of Yahoo to Microsoft,” Steven A. Ballmer, Microsoft’s chief executive, said Tuesday in Morocco, according to Reuters. Mr. Ballmer has said recently that Yahoo’s business appears to be deteriorating. Analysts said the company’s results proved otherwise.

Yahoo said that, buoyed by an investment gain, net income rose sharply to $542 million, or 37 cents a share, from $142 million, or 10 cents, a year earlier. The figure included a net noncash gain of $401 million related to Yahoo’s stake in the Alibaba Group, a Chinese company, after the initial public offering of Alibaba.com.

Revenue grew 9 percent, to $1.81 billion. Net revenue, which excludes commissions paid to marketing partners, grew 14 percent, to $1.35 billion, slightly higher than the $1.32 billion analysts had forecast. Yahoo had repeatedly forecast that net revenue would increase from 8 to 17 percent.

In a conference call with analysts, Mr. Yang said that the results underscored “the fact that our strategy and investments are beginning to pay off.” He later added: “Our ability to execute on multiple fronts is clearly improving.”

Yahoo raised profit forecasts for the remainder of the year, but left revenue growth projections unchanged.

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Microsoft is preparing to take its most ambitious step yet in transforming its personal computer business into one tied more closely to software running in remote data centers.

The software giant announced on Tuesday a data storage and Web software system, called Live Mesh, that is intended to blur the distinction between software running on the Windows operating system and an elaborate array of services that will be delivered to a growing collection of electronic gadgets. Live Mesh is Microsoft’s late entry into a rapidly growing market described as cloud computing. The term refers to the movement of software applications and services from PCs to centralized data centers, where they are made available via the Internet. Companies like Amazon.com, Google, Salesforce and dozens of others are building computing centers that will effectively outsource data processing and make it a commodity that companies purchase as they would electricity.

The introduction of Live Mesh is a significant strategic shift for Microsoft, whose operating system helped popularize personal computers. Bill Gates, the company’s co-founder, chairman and chief architect, said in an interview on CNN a year ago, “We’re making the PC the place where it all comes together.”

However, a strategy document circulated to company employees on Tuesday that was written by Ray Ozzie, one of the Microsoft’s two chief technology officers, countered that view.

“The Web is the hub of our social mesh and our device mesh,” he wrote. That statement is the first of a set of three “guiding principles” that Mr. Ozzie outlined in the five-page document entitled “Services Strategy Update.” In taking the PC off center stage, Microsoft is refocusing some of its resources to catch its cloud computing rivals.

“This is a pretty significant public statement that the battle is really a cloud battle,” said Mark Stahlman, a research vice president at Gartner, an industry consulting group. “It’s not an ad search battle or a desktop operating system battle. Those are fought and won already. This is the one that’s wide open.”

Marc Benioff, chief executive of Salesforce, a company that began by offering software that managed customer relations through a Web browser, said Microsoft’s entry “means that the Internet is the center of the world.” Salesforce has more recently begun broadening its product line to a wide range of computing services, also available through a browser. “Consumer services have shown us the way to the next generation of computing,” Mr. Benioff said.

Microsoft refers to its strategy as “software plus services.” However, the new vision is built on Web-based software that will help deliver entertainment as well as business software to devices like Microsoft’s Xbox game console, to Zune music player, to cellphones running Windows Mobile software, even to Apple’s Mac computers and other consumer devices in the home.

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This is it. Yahoo’s final week to negotiate with Microsoft, or find a better bid, before the proxy battle begins. The company has until Saturday to respond to Microsoft’s offer. A lot can still happen before then.

Yahoo announces earnings tomorrow, and the conference call should be a lively one. Yahoo will certainly be asked about its test with running Google ads on its search results, and about any counteroffers from Time Warner/AOL.

Meanwhile, the posturing has already begun. Rupert Murdoch, Yahoo’s white-knight-that-wasn’t, is still hinting that he might throw his weight behind a Microsoft bid. On Monday, at a speech he gave, he said, “I certainly can’t afford to bid against Microsoft (for Yahoo).” And when asked directly if he would join Microsoft in its bid for Yahoo, he didn’t rule out the possibility.

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Apple Inc.’s next-generation iPhone will arrive in Italy in a matter of weeks under a landmark deal that will see handset sold through Telecom Italia Mobile (TIM) without a contract and carrier lock, according to  Repubblica.

The authoritative Italian newspaper reports (by way of Macitynet) that a formal agreement on the matter was signed last week when Franco Bernabè, chief executive officer of TIM’s parent company Telecom Italia, met with Steve Jobs at Apple’s Cupertino-based headquarters.

Under the terms of the deal, TIM will reportedly receive a several month exclusive on sales of a 3G iPhone through its retail shops, which will be staffed with specialists who are trained to support iPhone customers and get the touch-screen handsets up and running on the carrier’s 3G network.

Given that Italians are the number one consumer of pre-paid wireless contracts worldwide each year, Apple is also reported to have agreed to terms by which the new iPhone will be sold at a higher price than in other European countries, but without a carrier lock and two-year service agreement.

The move would represent a radical departure from the revenue-share based service model that has led to successful launches of the iPhone in the US and a handful of European countries, but would offer Italians the added freedom of being able to purchase the phone from TIM and use it with existing contracts on rival carriers’ networks.

Consumers who opt to use TIM’s network would be able to pick from predefined service plans tailored to the iPhone, or purchase minutes and data bundles as they go, Repubblica said.

The Italian carrier reportedly declined to comment on the report at this time, saying they’ll have something to say “later on.”

TIM’s subscriber base of roughly 36.6 million is similar in size to that of T-Mobile Germany, with whom Apple launched the iPhone last November. However, it’s estimated that more than 50 percent of Italy’s wireless subscribers are already TIM customers.

TIM also operates the second largest wireless network in Brazil, in addition to a much smaller network in Turkey.

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Technical skills may never die, but areas of expertise wane in importance as technology advances force companies to evolve and IT staff to forsake yesterday’s craft in favor of tomorrow’s must-have talent.

“There is less need for system-side knowledge. In the past, IT folks had to understand a lot about memory, drivers, and address locations, and what used which interrupt, but nowadays that stuff is plug-and-chug even on many Unix systems,” says Brian Jones, manager of network engineering at Virginia Polytechnic Institute and State University’s Tech Communications Network Services unit in Blacksburg. “I feel like all the skills I have picked up along the way are valuable and help shape my thinking and troubleshooting abilities. I don’t know how to value or devalue these skills; it’s like they have taken on new value now.”

Industry watchers would be hard pressed to name specific IT skills as entirely dead or completely useless, but some skills are well on their way to being considered a thing of the past — as reflected by the declining pay associated with them. As hot skills like virtualization rise to the top of company must-have lists, high-tech talents in certain operating systems and specific vendor products fall to the bottom. Here are five high-tech skills that don’t demand the pay they once did.

Plain old HTML
As companies embrace Web 2.0 technologies such AJAX, demand for skills in HTML programming are taking a backseat. According to Foote Partners, pay for skills in technologies such as AKAX and XML increased by 12.5 percent in the last six months of 2007, while IT managers say they don’t see a demand for technology predecessors such as HTML. “I’m not seeing requirements for general Web 1.0 skills — HTML programming skills,” says Debbie Joy, lead solution architect for CSC in Phoenix.

Legacy programming languages
Skills in programming languages such as Cobol,  Fortran, PowerBuilder, and more don’t rate like they once did.

“Certainly the Cobol people that had a resurgence with the Y2K bug aren’t in demand,” says John Estes, vice president of strategic alliances of Robert Half Technology, an IT staffing consultancy. “Certain other applications such as Delphi and PowerBuilder, [which were] very big in the ’90s, are no longer in demand.”

IT work-force and compensation research conducted by Foote Partners revealed that Cobol, PowerBuilder and Jini noncertified skills were among the lowest-paying skills in the second half of 2007. David Foote, CEO and chief research officer at Foote Partners, says the research shows not that such skills aren’t in use today but that companies aren’t willing to pay for them. “There is still a lot of C and Cobol around, though these skills are worth very little paywise,” Foote says.

NetWare
Operating system know-how continues to be in top demand among hiring managers, but expertise in Novell’s network operating system NetWare isn’t keeping up with other technologies in the same area. “Networking software such as NetWare isn’t near what it was in the ’90s,” Estes says. And Foote adds, “Windows Server and Linux skills have replaced, or are replacing, NetWare skills” in terms of demand.

Non-IP network
IP and Internet skills usurped non-IP network expertise and know-how in technologies such as IBM’s System Network Architecture (SNA) continue to rank among the lowest-paying skills. “For networking, IP skills have replaced SNA skills,” Foote says. According to Foote Partners’ research, SNA skills accounted for just 2 percent of base pay in the fourth quarter of 2007, while security skills made up 17 percent of base pay.

“Mainframe computing skills, including network components such as SNA, are no longer required in a server-based IP networking environment,” says Martin Webb, manager of data network operations, Ministry of Labour and Citizens’ Services, Province of British Columbia.

PC tech support
The Computer Technology Trade Association (CompTIA) reports that hardware skills and knowledge, including expertise with printers and PCs, are on the decline in terms of demand. CompTIA surveyed 3,578 IT hiring managers to learn which skills would grow in importance over time and the industry organization found: “The skill area expected to decline the most in importance is hardware.”

Foote Partners’ research separately showed an 11.1 percent decline in pay over the last six months of 2007 for ITIL skills, which are often put in place to streamline IT service management and help desk efforts.

“The ‘move, add, and changes’ PC tech function isn’t quite what is used to be,” Robert Half Technology’s Estes says.

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Electronic Arts is playing it cool in the pursuit of Grand Theft Auto developer Take Two Interactive. The would-be target is cringing under EA’s steely gaze and still complaining about “unfair value” as loudly as ever.

Take Two’s shareholders reelected the entire slate of sitting directors without opposition from its would-be acquirer, and then passed a resolution to give 1.5 million new shares of stock to Zelnick Media. That’s the private investment company that replaced most of the Take Two board last year and is owned by chairman Strauss Zelnick.

In response, EA calmly lowered its bid from $26 per share to $25.74, like the company said it might if this stock grant was voted through. That way, the extra cost of the new shares is negated, and the purchase price remains steady at $2 billion cash. The release of GTA: IV in less than two weeks doesn’t seem to faze the gaming giant, and no competing offers from other large game publishers like Activision have turned up.

This is technically a hostile takeover, since Take Two rejected the original offer, and EA then took the matter straight to shareholders. But as hostile takeovers go, this one’s actually pretty peaceful. The simple fact that EA never submitted an opposing slate of directors is a sign of the company’s smug confidence in its ultimate success. 6.4 million shares have already been signed up for the offer, with about a month to go before the newly-extended deal deadline.

The FTC is looking into antitrust problems around the proposed buyout, but given how quickly the Activision-Vivendi deal passed muster, I don’t see how tacking the relatively small Take Two onto a hulking EA would change any competitive landscapes, despite the negative effect an acquisition would have on the sports gaming scene. The industry is certainly consolidating quickly down to a mere handful of very large players, but that’s not very different from what happened in telecommunications in the last decade, or how the airline industry is boiling down to just a few large survivors.

EA will have its way with fair Lucrece, er, Take Two. I think the target is fighting the proposal simply because Zelnick and Friends are hoping to enrich themselves a bit more at the expense of other shareholders. That’s exactly what the new stock grant accomplished. It’ll be a bit sad to see Take Two lose its unique identity and get subsumed into EA’s (lack of) culture, but this is not personal. It’s just business.

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