That’s the core of Twitter’s pitch, of course, and it has helped the microblogging service raise $155 million, a $1 billion valuation, and forge partnerships with Google (GOOG) and Microsoft (MSFT). Not surprisingly, investors are looking to place money on related bets, from search engines that parse real-time data to location-based social networks with real-time updates, and even real-time photo-sharing sites.

The newest entrant: Hot Potato, a buzzy start-up that’s supposed to let users converse about a particular event, whether they’re attending it in person or watching from afar. When it’s up and running, that is. The five-man crew doesn’t have users or a product just yet.

But that hasn’t prevented the Brooklyn, N.Y-based company from raising about $1 million, sources say, in a round led by First Round Capital and RRE Ventures. A group of smaller investors, including Betaworks, the incubator that specializes in real-time companies, and Ron Conway, the angel investor best known for his Google bet, are also backing the company.

Hot Potato is led by Justin Shaffer, an eight-year veteran of Major League Baseball Advanced Media, pro baseball’s well-regarded Web unit. Shaffer has recruited three other MLB.com employees (one of whom subsequently left to get an MBA at MIT) to join him.

Shaffer wouldn’t comment about his funding round, but was willing to discuss his start-up’s general plans. They are finishing an iPhone app and plan to submit it to Apple (AAPL) in the next few weeks, he said, and will open their doors once that’s approved.

The big idea is an interesting one. People are already using Facebook and Twitter to converse about events in real time–think about Barack Obama’s inauguration, or Balloon Boy, or last night’s Yankees-Angels game.

Shaffer’s critique of those platforms, though is that “they break at scale–there’s no good way to filter the chatter so that  you, your friends, and a group of strangers with something relevant to say can all connect. Hot Potato, he says, will offer a “curated stream” in real time of all the data coming out of the event in real time. What we’re really focused on doing is bringing together the entire audience of an event, whether they’re at the event or watching at home.”

Business model? TBD, of course. But there are a couple of obvious ways to go. For instance, Shaffer thinks people who opt-in to a particular conversation–say, about an NFL game or a U2 concert–would be okay with seeing “in-stream” ads, as long as they were relevant.

But that’s a problem that’s best tackled once the service is up and running. We’ll check back then.

Alas, you’ve got no choice but to remember that last part. It has disappeared from the Web, apparently at the behest of Major League Baseball.

Stewart dissected the media hubhub about Obama’s pitch–and in particular Fox News’s analysis of it–on his July 15 show. But if you watch the archived version of that show at Viacom’s (VIA) “Daily Show” Web site, you’ll find that the bit has been cut out of his opening monologue. It once ran for two minutes and 43 seconds, but now the archive stops short at the 55-second mark.

And if you try to watch that episode on Hulu, the Web site owned by News Corp. (NWS), GE’s (GE) NBC and Disney (DIS), you’ll find that it’s gone altogether, replaced by a message blaming “rights issues” (click image to enlarge):

What happened? The story, via Viacom officials, is that pro baseball officials contacted them this week and told them to take down the Obama footage, which it owns.

The argument, I’m told, is that the MLB was fine with Stewart (and every other TV show in the country) using the clip under “fair use” terms–the footage itself was a news story, and Stewart was adding value via his commentary, etc. But it balked at the notion of the footage remaining in Viacom’s archives, and circulating on the Web, forever.

None of that makes any sense, of course: There’s no reason that Stewart’s use of the clip should be okay, but only for a limited time. And if Viacom wanted to spend time fighting MLB on this, it certainly could have.

But presumably, the company figures it wants to use its legal resources elsewhere–like fighting the never-ending copyright lawsuit it filed against Google (GOOG) and YouTube. Remember that one?

In any case, I’ve reached out to MLB to make sure I’m not missing anything here. And of course, you can still find all sorts of footage of the pitch, along with other anchors making fun of it, all over the Web. Like this one:

Here’s an edited version of the beginning of the July 15 episode of the “Daily Show.” Before you click on it, note the title of the clip, and it’s original running time.

I’m told that an edited version of the show will show up on Hulu again later tonight or on Thursday.

Depending on your perspective, this is either interesting news or heartening news: Michael Jackson’s funeral and memorial were indeed a giant Internet event. But they don’t seem to have been as big as Michael Jackson’s death, and they weren’t as big as Barack Obama’s inauguration.

So let’s call them the third-biggest Web event of the year. To date.

That sounds more like what I was thinking this morning: Everyone had to watch Obama’s inauguration or read about Jackson’s death, but not everyone felt compelled to see his burial or memorial.

It also explains why the Akamai people were so uncomfortable with my earlier reading of their traffic stats this afternoon, when I concluded that the events were responsible for the content delivery service recording more visitors per minute than any other time in the last year. Though I’d still love it if someone could explain why that did happen. (Jennifer? Anyone?)

Statistics are tumbling in from different sites and services (if you’d like to share yours with me, I’m all  ears).

Here’s what I’ve got for now:

• Akamai (AKAM) says it delivered 2,185,000 “live and on-demand streams” today. If I’m comparing apples to apples here (Jennifer?), that’s much fewer than the seven million simultaneous streams the content delivery network delivered during Obama’s inauguration. Akamai also compares the number of visitors on its “Net Usage Index for News” and says that number peaked at 3,924,370–that’s nearly double average traffic of 2,000,000, but fewer than the 4,247,971 visitors who were looking for Jackson info when he died on June 25.
• Facebook, which integrated its service with live video feeds from CNN, E! ABC and MTV (why wasn’t Twitter doing this?), says that one million users posted 800,000 status updates during the event, with the overwhelming majority coming through CNN. There were 1.8 million updates with the word “Obama” in them during the inauguration.
• CNN says it served up 781,000 concurrent live streams during the event; during the Inauguration it served up 1.3 million. It served a total of 4.4 million streams during the event, and 10.4 million for the day.
• MSNBC claims three million live streams–which are different from concurrent streams–and says that is its second-highest total, after…well you can guess. More if they roll in.

Nope.

Check out these snapshots of Akamai’s live traffic meters, which I took shortly after 1 pm EDT. They indicate that the Web infrastructure company’s clients are serving up more than 109 million customers per minute–more than they have at any other period this year, including Barack Obama’s inauguration.

Akamai (AKAM) doesn’t represent all of the Web, but since it’s by far the biggest content delivery network service, it’s a pretty darn good proxy. The previous record appears to have been 90.6 million, set last month during the Iranian elections (click to enlarge):

UPDATE: The Akamai folks want me to note that this chart measures overall Web traffic, not just traffic to news sites, etc. Which means that there could be other factors pushing up traffic today — large software downloads, etc. And, for that matter, if you look at Akamai’s peak traffic days over the last year, you’ll note that they’ve increased nearly every month. So while we can say that Akamai’s was serving more Internet traffic at 1pm eastern time than it has at anytime in the last year, we can’t draw a straight line between that fact and the fact that Jackson event was happening at the same time. But I’m going to go ahead and draw a dotted line.

UPDATE 2: Now I see why the Akamai folks were so cautious. New stats indicate that the event was big on the Web, but not as big as the Obama inauguration.

Meanwhile, while I didn’t actually go ahead and write this, my hunch was that any Web traffic we did see today might come from countries outside the U.S. that either didn’t get a TV feed or that cared about Jackson much more than Americans did.

But Akamai’s visualization of traffic to news sites world-wide says I would have been wrong about that, too: Almost all of the traffic is being served up by American news sites, and traffic to sites around the world is down for this time of day.

But here’s the thing I still don’t get: All of this has been happening when there has been nothing to see. Here’s a representative screen grab of ABC’s live feed, which I took around 1:10 pm Eastern Time.

OK. Have at it. I’ll be back later in day with whatever other traffic tidbits I can round up.

I’m betting it is. Jackson was a global icon and his funeral will purportedly be a star-studded affair. But I just don’t think this will compare to the two events that have already tested the Web’s capacity this year alone: Barack Obama’s inauguration and news of Jackson’s death.

Recall that Obama’s first speech as president managed to get most people to stop using Google (GOOG)–voluntarily. And Jackson’s death was a news event that pretty much everyone wanted to hear more about, at least for a couple seconds.

But on the Web at least, Jackson was old news by last week. And my hunch is that anyone who truly wants to watch today’s event will do so on a TV.

But if do you want to watch it on your laptop, try one of these outlets:

TMZ (of course)

CNN.com (partnering with Facebook again, a la the Obama event).

E! Online

ABC News

Fox News

Hulu

MySpace

CBS News

Want to watch in the company of others? Cinedigm will be screening the event, for free, at the theater chain’s screens in 31 states. Details here.

Google also offers up this graph, below (click to enlarge), to give you a sense of the traffic spike it got from Jackson-searchers. It’s impressive, but without metrics it’s sort of hard to gauge what it really means–just like the chart that Google (GOOG) provided about query volume during Barack Obama’s inauguration.

But after making an initial concession earlier this year, Google (GOOG) and the White House are going further. The Electronic Frontier Foundation explains: “Ordinarily, YouTube maintains a record of every YouTube video you’ve ever viewed, associated with your YouTube account, through use of the YouTube cookie. Now, they’ve agreed to exempt videos embedded on Whitehouse.gov from this logging.”

Will that be good enough to satisfy hard-to-please critics like the EFF? Amazingly, it does! Though of course, they’d like to see more. Here’s Cindy Cohn, the EFF’s legal director:

This is a good step and we commend YouTube and the Government for taking it. It shows that they recognize that tracking the government videos that Americans view is creepy and wrong. It also shows that Google/YouTube technologists can build and offer clever, useful privacy-protective modifications to their standard software.

Now we’d like to see them turn that cleverness to other places, not just the White House. Google/YouTube should offer this same “tracking-free” viewing to others. Human rights videos, politically sensitive videos, or even ordinary videos where viewers may want privacy should all be available without tracking…

In addition, the government should adopt “tracking-free” videos across the board for all government websites. Viewers of videos from the Internal Revenue Service, the Federal Bureau of Investigation, your member of Congress and other governmental entities deserve the same privacy protection that viewers of the President’s speeches.

The IRS has videos? Who knew? In the meantime, feel free to watch clips like this one, of Obama’s April victory over the UConn women’s basketball team in a game of “P-I-G” without worrying that the government is watching you watch.

This isn’t Twitter’s first house call on Barack Obama. In March, CEO Evan Williams made a pilgrimage along with other youngish business people for a well-publicized economic summit.

But Dorsey, who was Twitter’s CEO until a year ago, seems to be making this trip solo, as part of a Washington tour he’s conducting himself.

Other stops, apparently, have included pop-ins at the State Department (“One goal of mine is to get Secretary Clinton back on Twitter”), the Department of Energy (“to talk about how Twitter can help encourage people to conserve energy everyday”) and a visit to Senator Claire McCaskill’s office, where he got a guided tour.

If this is the kind of stuff that has you on the edge of your seat, you can follow along with Dorsey’s travelogue here.

Dorsey, by the way, has 538,514 followers. The Obama administration, via its @whitehouse account, has 65,363.

[Image via Mobileman]

Steve Rattner (pictured here), once one of the the most prominent bankers in the media business, is going to Washington after all. Except that the Quandrangle Group founder won’t be getting the “Car Czar” job he was originally supposed to take in the Obama administration, since that job never got created.

Instead, Rattner will be… something sort of like a Car Czar. But his official title will be “adviser.”

The New York Times explains the difference:

Mr. Rattner, 56, will advise Treasury Secretary Timothy F. Geithner and Lawrence H. Summers, the director of the National Economic Council, on reorganization efforts by General Motors and Chrysler, two carmakers that are receiving federal bailout money.

He was widely considered the front-runner to become the car czar, the Obama administration’s point person in mediating negotiations involving G.M. and Chrysler and parts suppliers, bondholders and unions. The car czar would have had a direct oversight role for the industry but the administration did away with that position last week, placing the auto bailout talks under Mr. Geithner and Mr. Summers. Mr. Rattner will still play a similar role but in an advisory capacity.”

Rattner is a former Times reporter who moved up quickly through the investment banking world and then formed Quadrangle in 2000. Which meant he rode the private equity/cheap debt roller coaster all the way up, and then back down. Big clients included Comcast (CMCSA), Sony (SNE) and Cablevision (CVC)–and New York City mayor Michael Bloomberg, who hired Quadrangle to manage his assets via a blind trust.

That relationship will continue, even though Rattner is unwinding his connections to Quadrangle–the company’s  Web site has already wiped him away. And Rattner will presumably continue to offer advice to his longtime pal, New York Times Co. (NYT) chairman Arthur Sulzberger Jr.

In other Barack Obama/media exec news, the White House has formally announced some of its digital hires. Former Blue State Digital consultant Macon Phillips, who most recently ran Obama’s Change.gov site, is his Director of New Media.

And, as I reported last month, former Google (GOOG) manager Katie Stanton will be Phillips’s Director of Citizen Participation.

More details from CNET here.

I do take exception to the notion that this was the first time this had ever happened: Doesn’t anyone remember Jeff Gannon of Talon News, who lobbed those piercing questions at George W. a few years ago?

But in any case, the distinction between new/established online/offline news organizations is melting away very rapidly, whether anyone likes it or not. And, really, as Jon Stewart ably explains, who cares?

First, some data points:

• Gawker Media’s Nick Denton reports a big traffic spike at his sites in January–298 million page views, a 30 percent year-over-year increase. That’s even though one of his biggest annual eyeball attractors–Steve Jobs at MacWorld–never materialized.
• Blip.tv CEO Mike Hudack tells me that uploads to his Web video network have increased 50 percent so far this year.
• Now News Corp.’s (NWS) MySpace, citing comScore numbers, notes that its U.S. traffic shot up last month as well: Unique visitors were up 10 percent, which is worth noting for a (relatively) old social network, and those folks spent 30 percent more time on the site than they did a year ago. (News Corp. is the owner of Dow Jones, which owns this Web site.)
• Obligatory Twitter traffic stat: 2.6 million uniques in January, up 1,362 percent over the last year.
• ComScore’s (SCOR) overall numbers for Web usage for the last month: Uniques up 4.1 percent, page views up 3.1 percent, time spent per visitor up 2.5 percent.

Is any of this meaningful? Hard to say: Any single site can argue that it has done something to generate more visits and engagement from its users: MySpace has its MySpace Music site, Twitter is the buzziest start-up of the last 12 months, etc.

And last month also happened to feature Barack Obama’s inauguration, which was a huge Web traffic driver.

Still… there aren’t that many more Americans who are getting online for the first time at this point. Isn’t it reasonable to assume that a wide variety of sites is posting big traffic gains because many of us are now unemployed or underemployed? And that we’ve got more a lot of downtime to surf and click?

Alas, all those eyeballs aren’t translating to dollars for many of these publishers: Just ask Time Warner’s (TWX) AOL, which saw page views increase 69 percent during the last three months of 2008, but saw ad revenue drop 18 percent.

But I digress. If for some reason you do find yourself with more time on your hands, might I suggest this trio of themed YouTube videos? Enjoy. And good luck.

[Image Credit: Daquella Manera]

Because while it’s interesting (and important) to note that Intel (INTC) has committed to spending $7 billion in the U.S.–apparently at Barack Obama’s request–it seems that none of us Apple-obsessives noted this nugget: The President is a PC user.

The news came via Intel CEO Paul Otellini, who says he learned it from Obama first-hand. Computerworld:

Otellini said Obama called him last night to congratulate him on company’s decision. The president ‘reminded me that he sees the Intel logo every morning when he opens up his laptop; I was pleased to hear that,’ he noted.”

Of course, almost all Apple (AAPL) products, including any recent laptop the company has released, are based on Intel chips, too. But none of them advertise that fact (thanks to BusinessWeek Apple guru Arik Hesseldahl for on-the-fly confirmation) the way that Windows machines do.

In other words, when Barack Obama puts down his BlackBerry and boots up his laptop, he’s using a machine running Microsoft (MSFT) software. Next crucial question: What OS?

Ticketmaster (TKTM) and Live Nation (LYV) formally rolled out their merger agreement today, which calls for Live Nation to buy out Ticketmaster shareholders for $575 million in stock. But the financials here are less important than the public relations: To get this deal done, the two companies are going to have to convince regulators that they come in peace and mean no harm–no matter how loudly their constituents disagree.

So far, we’ve only heard the carping about the deal, but it’s been loud, and prominent: Bruce Springsteen has weighed in. So has the New York Times. And now Congress is getting warmed up, too.

Today, argues Ticketmaster chairman Barry Diller, the companies get to start making their case, which they couldn’t do until the deal was formally announced. Now “we are going to really explain and explain and explain and make all of this clear to all our constituencies.”

Diller gave a preview of his talking points during this morning’s conference call:

Argument 1: Don’t blame us for high ticket prices–blame Madonna, or U2, or Phish.

“Ticketmaster does not set prices,” Diller said. “Live Nation does not set ticket prices. Artists set ticket prices.”

That’s true. And then Ticketmaster and Live Nation add supplementary charges, which can jack up the price by 30 percent or more. That’s standard operating procedure for all sorts of transactions–check the invoice for your last plane ticket or give your hotel bill a once-over–but it doesn’t seem to inspire the same rage as it does in concert ticket buyers.

The other problem with this argument: Live Nation is run by Irving Azoff, who is one of the sharpest dealmakers in the music business and who also runs one of the biggest management companies in the business. And since managers are now the most powerful players in the business, they’ve got a great deal to say about how their clients price concert tickets. See the problem here?

Argument 2: Don’t blame us if you can’t get tickets for that Hannah Montana show your kids are demanding. But if you do want a ticket for a sold-out show, we can help you–at a price.

This is what Bruce Springsteen was complaining about. In addition to its core business, Ticketmaster also runs “TicketsNow,” a “secondary marketplace” for tickets. The other word for that is scalping, which is now a legal and booming business on the Web.

But when a concert ticket company also sells “aftermarket” tickets, it makes people feel queasy in a way that they don’t about eBay’s (EBAY) Stubhub, which only does resale.

That feeling is exacerbated when people suspect that Ticketmaster is directing buyers away from its regular tickets and toward its marked-up TicketsNow inventory, which is what happened to Springsteen ticket buyers this month.

Diller says the Springsteen incident was a “technological glitch.” Which may well be true. But you’re going to hear about that one a lot in the coming months.

Argument 3: Whaddaya gonna do? We sell tickets. People are never going to send us thank you cards.

Diller: “This is such a sexy issue. Ticketmaster is never perceived to be on the side of the angels.”

Remember when Pearl Jam testified against Ticketmaster in Congress in the ’90s, convinced the Department of Justice to investigate the company and led a boycott against any venue that did business with them? Those were the days.

Except that Pearl Jam ended up playing small venues, the DOJ (that’s the Clinton-era DOJ, mind you) gave Ticketmaster a pass, and by the end of the decade Eddie Vedder and crew were working with Ticketmaster again.

So maybe this one goes through, too. I’ve heard from plenty of folks who hate the proposed merger (”These two companies SHOULD NEVER be allowed to merge and reproduce,” a former Live Nation employee tells me via email), but I’d love to hear someone who knows both the music business and antitrust law make a cogent defense: You can reach me directly at peter@allthingsd.com and I’ll give you an open forum.

Until then, here’s the slideshow Live Nation is using to explain the deal:

live nation dek – Get more Business Documents

[Eddie Vedder image credit: sick of goodbyes]

Barack Obama has yet to announce who his chief technology officer will be. But he has hired a Silicon Valley exec for another role: Google product manager Katie Jacobs Stanton will be the new President’s “director of citizen participation,” starting in March, sources tell me.

What the job entails isn’t completely clear to me, but I gather that she plans on using Web tools to let, well, citizens participate in the Obama White House.

The model: Google’s “Moderator” tool, which let people submit questions for the Presidential debates, and was later used to let them suggest initiatives for the new administration via its Change.gov site.

No surprise, then, that Google Moderator was one of Stanton’s projects when she worked at Google’s elections group.

Per her LinkedIn bio, she’s also worked on Google Finance and Google’s Open Social initiative. And prior to joining Google (GOOG) in 2003 (which means she came on pre-IPO and is fully vested, if you’re doing the math), she was at Yahoo (YHOO) as a production manager and worked in Yahoo Finance.

While earlier reports suggested that the Web video audience might have rivaled that of television’s, the Web tracking service says the numbers were more modest. It figures that 13 million people watched video coverage of the inauguration between 12 p.m. and 1 p.m. Eastern Standard Time on Jan. 20. Nielsen numbers indicated that 38 million people watched the event on TV between 11 a.m. and 2 p.m. Click on table below to enlarge:

Those numbers still aren’t apples to apples, but they’re closer than the earlier numbers we had, which compared TV viewers to video streams–at least 70 million throughout that day. Last week, I theorized that the video stream numbers we’d seen were inflated because many people had to reload their browsers or switch from site to site when they ran into tech trouble. Looks like that may have been the case.

Still, comScore’s numbers show that the event was indeed a big day for Web video, and in particular for the cable networks that streamed coverage on their own sites: 30 percent of online viewers watched the events on a cable news site comScore says. That goosed numbers for Time Warner’s (TWX) CNN.com, News Corp.’s (NWS) Foxnews.com, and MSNBC.com, which is co-owned by GE (GE) and Microsoft (MSFT). (News Corp. is the owner of Dow Jones, which owns this Web site.)