A few days ago, Henry Blodget said he "wouldn't wish newspaper stocks on my worst enemy."

Meanwhile, former New York Times executive editor Howell Raines wonders if newspapers aren't "the worst investment in America."

But it takes two to tango, and Todd Harrison, founder and CEO of Minyanville.com, is taking the other side of the conventional wisdom about newspaper stocks.

Harrison, a former trader at Cramer Berkowitz, Morgan Stanley, and Galleon Group, has long positions in Gannett and McClatchy, two publishing giants whose shares have tumbled dramatically in recent years.

But Harrison believes the stocks have now priced in what everyone knows -- that newspapers are a dying business, in large part because of the Internet. But Harrison's bull case is that the newspaper sector isn't priced for the possibility that -- if "content is king" -- Internet giants like Microsoft and Google might seek to acquire these (or other) bastions of old-school journalism.

Two big news stories broke late Tuesday not involving Microsoft-Yahoo.

First, Cisco Systems reported fiscal third-quarter earnings and revenue that beat expectations but essentially met the company's cautious guidance from the second-quarter call.

Tuesday's conference call had a very similar tone to its second-quarter call in February: Cisco is forecasting 9%-10% growth from the current quarter, but maintains its long-term growth rate of 12%-17% remains doable.

A big difference between the two calls is that last night's cautious tone was far less surprising vs. back in February, which is why Cisco shares are basically flat today. It's also a sign Cisco CEO John Chambers has done a good job managing expectations during this downturn. (Apparently he learned a lesson after being very late in seeing the 2000 tech bust.)

Second, Sprint and Clearwire are spearheading a WiMax joint venture that is ambitious in its scope from both a technological and participatory perspective. In exchange for Sprint's spectrum and Clearwire's leadership, cable companies Comcast, Time Warner Cable, and Bright House Networks are contributing a combined $1.7 billion, while Intel is chipping in $1 billion and Google $500 million.

With that kind of broad technological expertise and financial firepower and so many participants, this WiMax venture can't fail, right?

For Yahoo, the answer is fairly simple, albeit not easy: Quell a simmering shareholder revolt and secure an advertising outsourcing deal with Google. There's also the longstanding possibility of a deal with AOL but that should be a tertiary concern right now.

For Microsoft, the answer is more complex because the company is essentially back to square one with its online initiative.

Steve Ballmer has said previously that only a few companies have the size necessary to move the needle for Microsoft's struggling online effort, including Yahoo, AOL, MySpace and Facebook.

Microsoft's decision to pull its bid may prove to be a negotiating ploy, meaning the software giant will eventually circle back with another (presumably lower) bid for Tech Ticker's parent.

But should Microsoft attempt another significant Internet merger, it would be wise to avoid MySpace, whose growth rate appears to have peaked. Plus News Corp. has had trouble monetizing MySpace and if Rupert Murdoch is selling, there's probably a good reason to think twice before buying.

A deal with AOL makes more strategic sense for Microsoft: Advertising.com, AOL email and Instant messaging, as well as Mapquest would fit well with Microsoft's existing portfolio. Plus, Microsoft would probably be better positioned than AOL to make the "hard decisions" necessary to make such a transaction successful.

Ether way, Time Warner's CEO Jeff Bewkes looks like the big winner as a bidding war for AOL might commence.

Now that Microsoft (MSFT) has abandoned its bid for Yahoo (YHOO), the tech media is sifting the entrails of the companies’ ill-starred merger talks for portents of things to come.

Paul Kedrosky at Infectious Greed says Yahoo has bought itself some more time–and litigation …

I think what has largely happened here is we have bought time and lawsuits. If I was a Yahoo shareholder I’d be seriously pissed. Microsoft pulled us out of our recent share price slump, but management was too cutesy and territorial to take the money and run. My guess is that Yahoo’s share price falls quickly on Monday, and then finds support in the low-$20, a price reflecting a belief that this is not yet over...

From All Things Digital, May 3, 2008:

After a months-long standoff, Microsoft has abandoned its bid for Yahoo, people involved in the discussions said today.

Microsoft confirmed to BoomTown that talks between the two companies, which have been taking place all week, collapsed Saturday when they could not agree on a price.

According to sources close to Microsoft, the talks broke down this afternoon after a face-to-face meeting in the Seattle area that included Microsoft CEO Steve Ballmer, Kevin Johnson, president of Microsoft's Platforms & Services Division and Yahoo Co-Founders Jerry Yang and David Filo.

According to sources, Microsoft offered $33 a share, and Yahoo countered with $37 a share. The talks went nowhere from there.

Microsoft was also concerned with the lack of friendly integration and other major strategic problems, including...» More

From Silicon Alley Insider, May 2, 2008:

iTunes' big studio deal announced yesterday? It's going to be an expensive one for Steve Jobs who's taking a loss on each film sold. Some terms from the WSJ: Apple (APPL) is paying $16 to the studios for each new release, and will sell the films to consumers for $14.99.

It's a small price to pay to gain a foothold in the market, but a sign the studios aren't planning to give up the margins they've enjoyed for decades in the traditional home video business.

But it's also a change for in strategy for Apple: While big boxes like Wal-Mart and Best Buy have been happy to use media as an outright loss-leader, Steve Jobs has previously tried to break even or better with iTunes sales.

But here's a question: Did Apple get a better deal than the $17 Wal-Mart pays the studios for new releases on DVD and is Wal-Mart cool with that?

From Silicon Alley Insider, April 29, 2008:

How bad are things in the newspaper industry? Don't ask. After another jarring 3.5% decline over the past six months, print-paper circulation will drop to about 50 million this year--the lowest level since 1946 (62 years ago).

That's during a period in which the US population has doubled, meaning that per-capita newspaper consumption has been cut in half. For more on this horrorshow, read the latest from the Dean of Newspaper Demise, Alan D. Mutter, at Newsosaur. Just don't do it if you've got friends or family (or money) in the industry.

If your career, portfolio, or fortune isn't tied to the newspaper business, however, rejoice. The newspaper industry's loss is your gain!

For anyone who's ever wondered "is Facebook for me?", the answer is a resounding "yes," says David Kirkpatrick, senior editor, Internet and technology at Fortune.

In this second part of our conversation about the usefulness of Web 2.0, Kirkpatrick provides a primer on Facebook, Twitter, FriendFeed and other programs you may or may not be familiar with. Each of these social networking programs (and others) have utility, but none has yet figured out how to sustain serious profitability.

And no one has yet figured out what I call the Holy Grail of Web 2.0: A program that will direct all my various email and IM addresses and social networking sites into one platform, regardless of which address the sender uses.

But to David Kirkpatrick, senior editor, Internet & technology at Fortune, social networking is the "transformative communications technology" of our era.

Kirkpatrick is particularly enamored with Facebook, which he calls "fundamentally different" than other social networking sites like MySpace.

In the accompanying video, recorded April 24, Kirkpatrick and I discuss what makes Facebook so different, what it needs to do before going public and how a company with $150 million of revenue in 2007 is challenging Google as the "belle of the ball" in Silicon Valley.