But one observer says it’s already here: Ad optimization firm PubMatic reports that prices for ad network inventory it sees have increased 35 percent since the beginning of the year.

The firm’s data make for a hopeful chart (click to enlarge):

But these numbers could be less meaningful than they look. The most important thing to keep in mind here is that Pubmatic is only tracking prices for ad-network inventory. And if low-priced ad networks are taking market share from display ads, as is likely the case, then these numbers won’t do much good for  publishers–perhaps like the very one producing this site–who specialize in big, premium ad buys.

And the other obvious point to make here is that Pubmatic’s data are only about pricing, not volume, so they don’t really tell us whether advertisers are spending more, or less, than they used to.

But for what it’s worth, I made my own informal channel-check with two big publishers who do specialize in branded ads yesterday, and they told me things had picked up recently, as well: They differed on the degree of enthusiasm for the remainder of the year, but both cited demand from entertainment advertisers, as well as for advertisers of consumer packaged goods.

So maybe Pubmatic’s numbers are at least directionally accurate. That’d be nice, right?

The post, written by two YouTube PR folk, purports to be a bit “myth-busting” about the site’s business model and financial status. But it’s really a series of assertions with little data to back up the claims, many of which we’ve heard before.

So really, the big takeaway here is that the Google folks are feeling ever more confident about YouTube’s prospects, enough to do some public chest-beating. But not enough to actually talk about those prospects in concrete terms.

For instance, YouTube says that estimates that the site can sell ads against only three percent to five percent of its video inventory, first asserted in a well-reported Wall Street Journal piece a year ago, are “old and wrong.” But the company won’t say what percentage of the site it does sell.

Likewise, the company says that analysts’ attempts to peg its bandwidth and hosting costs are off the mark, but doesn’t say what the real numbers are. Nor does it address the amount that YouTube has to pay content providers, either through upfront fees or revenue splits, for their clips.

And the most meaningful boast, I think, is one the company more-or-less made last week: “We are at a point where growth is definitely good for our bottom line, not bad.”

So when will Google finally start coming clean and offering up real data about the site’s performance? Got me. But here’s one indicator to watch for: What the company tells investors.

In Google’s 10-Q, for instance, YouTube is usually described as a black hole that has yet to generate signficant revenue; the company noted the same thing in its most recent quarterly report. A new 10-Q, for the quarter the Google just reported, should be out soon. Let’s see what Google has to say about YouTube in an audited filing.

That’s because the site is very expensive to run–YouTube served up 5.5 billion videos to U.S. viewers alone in March–and a very hard sell to advertisers, who are scared off by its more-or-less-anything-goes collection of clips. The site doesn’t even bother to try sell ads on more then a small percentage of its videos.

But the latter part of that equation may be changing, argues Bernstein Research’s Jeffrey Lindsay. He thinks YouTube has the ability to sell ads against nine percent of its inventory. That alone represents progress–last year, that number was around three to four percent.

But Lindsay thinks that Google (GOOG) is getting better at putting more advertiser-friendly stuff up on the site, via projects like the TV and movie hub it rolled out last month.

That site doesn’t have anything like the breadth that Hulu boasts, but it’s a big improvement over what used to be there. Lindsay figures that it will get better and that next year YouTube will be able to sell ads on 15 percent of its inventory. His note:

We also note the large increase in advertising on YouTube, which we estimate currently has approximately 9% ad coverage and which we believe could rise to 15% within the next 12 months as more professionally-produced content and movies are added to the Web property. We understand that Google is currently exploring new payment mechanisms–micro-payments and subscriptions to expand YouTube’s business model. Although YouTube revenues are likely to be small through the end of 2009 (we estimate $123 million), we think the increased ad coverage will place YouTube in a favorable position when CPMs eventually start to recover in 2010 and beyond. Our 2010 forecast for YouTube revenues of $222 million represents 81% growth over 2009.

Then again, YouTube still has a very long way to go. Look at the most popular clips on the site today and you’ll find a whole lot of video from this week’s Barcelona-Chelsea Champions League match, all of which seem to be copyright violations, which makes them toxic to advertisers.

Here are four examples from the same game. Note that all of them seem to have been up on the site for at least a day:

That’s what finally allowed Disney (DIS) to join up with GE’s (GE) NBC and News Corp.’s (NWS) Fox in Hulu, the fast-growing Web video site.

The deal, which was finally announced yesterday, has its roots in a November 2007 meeting between Hulu CEO Jason Kilar and Disney’s executive team where Kilar demoed a private beta of the service on Disney CEO Bob Iger’s computer. But the two sides didn’t really start talking in earnest until mid-December of last year.

Since then, people who were involved in the negotiations tell me, the discussions were a long slog, complicated by the fact that there were essentially five parties in the talks. But at no point did the deal ever look to be in jeopardy, I’m told–even though everyone from Google (GOOG) to Comcast (CMCSA) was trying to convince Iger not to go forward.

In the end, Disney essentially agreed to the same terms that NBC and Fox first used when put the site together two years ago. The main components:

• A two-year guarantee of exclusive third-party access to ABC’s online TV inventory, as well as a smattering of Disney cable shows.
• Marketing money, to be spent buying market-rate air time promoting Hulu on Disney TV properties. NBC and Fox handed over $50 million each, doled out over two years, when they formed Hulu; I’m told Disney has committed to a similar amount.
• A cash investment in Hulu itself. I’m told that NBC and Fox kicked in a total of about $30 million to get Hulu off the ground, prior to getting Providence Equity Partners to pony up $100 million for a 10 percent stake. Given that NBC and Fox took on substantial risk when they contributed their stakes, it’s likely that Disney ended up paying a larger sum.

At least as important as Disney’s contribution, though, is NBC and Fox’s decision to re-up their exclusivity arrangements for another two years. Some executives at NBC and Fox I’ve talked to have downplayed this part of the deal, arguing that their companies would have kept working with Hulu even without renewing their exclusives, which were expiring.

But the reality is that if NBC and Fox had not renewed, it would have been a signal that the networks were no longer committed to their joint venture, a question that’s been whispered more and more often in recent months. There are also some practical effects when it comes to dealing with the cable guys (see below).

The deal still needs regulatory approval, and you may hear the likes of Google and Comcast murmuring loudly that a partnership between three of the four broadcast networks violates antitrust statues. But assuming it does go through, here are some of the ripple effects:

CBS: The broadcaster is on a lonely road, which is not where entertainment companies like to find themselves. It may well be that the Web strategy CBS has been pursuing–don’t put too much of your stuff online, but syndicate the stuff you do put out there as widely as possible–is the right way to go. But if CBS CEO Les Moonves ever changes his mind, he will have a hard time climbing aboard the good ship Hulu.

For the record, Kilar is enthusiastic about bringing on CBS: “We’d love to see CBS jump into Hulu,” he says. We’d love to see Time Warner (TWX) jump in to Hulu, too.”

But executives at his partner networks–the same guys who forced him to cut off Web upstart Boxee, remember–says that the door is shut for CBS, at least in terms of the equity deal ABC just got.

If CBS (CBS) does want to make a deal with a big Web distributor, it may well end up doing something with Google’s YouTube, which already distributes snippets of CBS shows on its site. You won’t hear CBS bragging about this out loud, but I’m told partnership has worked out very well for the network to date.

The cable guys: Note that there’s very little of Disney’s premium cable stuff on Hulu–just a smattering of SoapNet and a few shows from the Disney Channel, but nothing your kids care about. And there’s zilch from ESPN.

That’s because Iger doesn’t want to freak out cable operators that pay Disney billions a year for cable programming. So that stuff will stay offline. (Meanwhile, it may get increasingly hard to find some of the NBC/Fox cable programming on Hulu, for the same reason. Good luck watching the most recent episode of FX’s “Rescue Me,” for instance).

But the Disney move, along with NBC and Fox’s commitment to re-up their exclusivity arrangement, just complicated efforts by the likes of Comcast and Time Warner to push an “authentication” arrangement. That’s where cable subscribers–but only cable subscribers–get access to a wealth of TV on the Web.

Without the exclusivity clause, the cable guys could demand that the networks hand over their best stuff directly to them for their online efforts. Now, at least for the next two years, they’ll have work through Hulu, on Hulu’s terms.

It may be that the cable guys are so far away from making their authentication plans a reality–I’m told Comcast’s test will launch this summer with just a few thousand subscribers and will add something like 50,000 subscribers a month after that–that this might not mean much. It’s possible that by the time the cable guys are ready to really talk shop with their programmers, the two-year deals will be long expired.

Bonus: We get to see new Hulu ads, starring actors from ABC shows. I’m hoping for one featuring Jorge Garcia, who plays Hurley on “Lost.” For now, here’s the newest one in the current campaign, featuring Dennis Leary from “Rescue Me.”

But COO (and temporary CEO) Tim Cook’s dismissal of the netbook market will continue to spark speculation that the company is readying something that sits in between a laptop and an iPhone (which is itself a computer, of course). Silicon Alley Insider’s Dan Frommer got more of Cook’s response than I did so I’ll reprint his quote here:

“When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience and not something we would put the Mac brand on. So it’s not a space–as it exists today–that we’re interested in, nor do we believe that customers in the long term would be interested in. That said, we do look at the space and are interested in how customers respond to it. People who want a small computer than does browsing and email might want to buy an iPod touch or iPhone. We play indirect basis. Then of course if we find a way where we can deliver an innovative product that really makes a contribution, then we’ll do that. We have some interesting ideas in this space.”

EARLIER:

Apple (AAPL) just turned in a strong quarter and followed it up with conservative guidance. A fairly typical performance for the company. Now investors will want to know about new product lines, Steve Jobs’s health and other matters. I’ll be covering the call live. Please refresh this page for the most current information. Click here if you want to listen in yourself.

Joining call now. Tim Cook CFO Peter Oppenheimer going over info that’s already in the release.

Mac products: 2.2 million Macs, a three percent decline year-to-year. Tough comparison from last year. But better than the seven percent drop in PC sales overall. “We feel very positive about our Mac performance.” Began and ended quarter with three-to-four weeks of Mac inventory.

iPod: People still buying ‘em! iPod touch selling well, and so are apps. Claims people like the new shuffle player. [Dubious about that]. We own the MP3 player market. [Duh.] Began and ended the quarter with four-to-six weeks of inventory.

iTunes store: 35,000 apps available in store, up from 15,000 a quarter ago. “We are within hours” of one billions app downloaded.

iPhones: Unless I’m missing something, absolutely no new data here. Praising new iPhone 0S 3.0 that’s in the works. Apple delayed the start of revenue recognition of all iPhones sold after the company announced the new OS, which was March 17. Will start up again once OS is released.

Stores: Half our Macs sold to people who had never owned one before. Average revenue per store is down year over year, because the economy is lousy.

Gross margins: Commodity and other component costs lower than expected. Higher-margin sales better are also than expected. Apple also spent less on operating expenses than expected.

Guidance: Forecasting is “challenging” in macroenvironment. Again, noting delay in revenue recognition for iPhones (see above). Excited about new products in pipeline, etc.

Q&A

Outlook for pricing on component supply? Mostly favorable, but some commodities, like NAND, will increase sequentially. Cook does not expect to see the level of reduction seen in calendar Q1. Will it be down? It will be “in a similar range as last quarter.”

Cash flow issues? Not really, for several reasons: 1) Apple made prepayment to…. [sorry, I didn't catch who that was]; 2) accounts payable were down, from holiday quarter to spring quarter, which is standard; 3) at $1.3 billion, tax payments were up “significantly” from last year.

Mac business: Desktops selling well, but average selling price down quite a bit. What’s going on? Sales accelerated in March after Apple announced new product launch. Higher-end Pro products sold to professionals are down a bit, which is related to economy for obvious reasons. Education sales also down a bit, for same reasons. Hoping Federal stimulus funds will help with that.

Back to netbooks–why won’t Apple sell them? Cook is still criticizing netbooks. The ones available today are ”just not a consumer experience and not something we would put the Mac brand on, quite frankly. It’s not a space today that we’re interested in, and it’s not a space we think that customers in the long-term are interested in.” But… a slight hedge with regard to smaller computers, which are, of course, what the iPhone and iPod Touch are. We “have interesting ideas in this space.” Today’s netbooks really shouldn’t even be called computers, really.

App store: What’s the mix between paid and free downloads and the iPod and iTouch mix? Nope. Apple won’t say. Again, Cook notes that we’re just “hours away” from the one billionth download. Cook: One of the keys behind the growth of iPod has been that sales of the iPod touch “more than doubled year-over-year.” The iPod and iPod Touch have reached sales of 37 million units, a big platform for developers. So there’s a virtuous cycle there.

[Sorry, missed two questions here.]

Why is Apple still doing an exclusive with AT&T for the iPhone? And how’s Steve Jobs? AT&T (T) is the best wireless provider in the U.S. “They have done a very good job with iPhone….We’re very happy with the relationship we have and do not intend to change it.” Structurally, we’re using GSM architecture, and Verizon (VZ) uses CDMA, and we wanted a world phone.

And Steve Jobs? Apple CFO Peter Oppenheimer: “We look forward to Steve returning to Apple at the end of June.” [Translation: No news.]

[Yet another question missing here. Apologies.]

Any info on DRM-free/”iTunes plus” sales? Too early to tell.

How much impact did Wal-Mart (WMT) have on Apple sales? Very key partner for the iPod. The company believes Wal-Mart provides extended reach. Pleased with results, but “early going, and not much to report there yet.”

So many iPhone Apps. How can you make them easier to find on iTunes? (Same problem as music.) Any kind of unusual patterns? Nonanswer here.

Please talk about competition for smartphones–i.e., please discuss the Palm (PALM) Pre. “Difficult to comment on products that aren’t shipping. So there’s nothing intelligent I could say on the Pre.” But “we think we’re years ahead.” We see things through software lens and that has benefited us and customers very well. Power of device and ecosystem enormous and we’re now just scratching the surface.”

What about suing Palm re: patents on the Pre, etc.? “We think that Apple’s innovation is leading the industry by years. We think competition is great; we think it makes all of us better as long as other companies invent their own stuff.”

In the old days, this might have qualified as news. But for the past year or so, Zenith Optimedia, along with just about every other ad forecaster, has been revising its forecasts downward every couple of months as the reality of the financial meltdown sinks in. So it’s hard to get worked up about this stuff.

More stuff you pretty much knew already: Online advertising is doing better than traditional ads.

Citigroup (C) analyst Mark Mahaney summarizes his chat with the CEOs of PubMatic and the Rubicon Project, which help online publishers sell inventory through ad networks. Their takeaway is that while pricing for online display ads has dropped dramatically in the past couple quarters–by as much as 50 percent in some cases–overall spending should remain flat this year. And as we all know, that’s the new up.

If you’d like to see concrete numbers from the ad market, hang tight until Thursday, when we’ll get earnings reports from two companies at the opposite end of the media spectrum: Gannett (GCI) and Google (GOOG).

In October, Mahalo.com founder Jason Calacanis laid off staff at his human-powered search engine. Then he announced he was hiring engineers for a mysterious new “Project A.”

Today he’s unveiling it: An “answers” service designed to compete with one of Yahoo’s most successful sites.

Like Yahoo Answers, Mahalo’s new product relies on users to answer other users’ questions. Unlike Yahoo’s (YHOO) site, Calacanis promises to give his most prolific answer-givers a chance to make money, via a virtual currency they can earn by answering questions.

The proposition: Users can ask questions for free. But they can also buy “Mahalo Dollars” using real money and reward people who answer their queries. Users can eventually cash out the Mahalo currency they earn for real dollars, with Calacanis taking a 25 percent cut.

This aligns him with a growing number of Internet execs who think they can make money via virtual goods and currencies. That’s worked well for Asian companies and a handful of Western videogames, like Activision Blizzard’s (ATVI) World of Warcraft. But the market for virtual stuff has yet to appear at most U.S.-based Web sites.

Still, Calacanis thinks he’s got a better shot of making it work next year than his original plan for 2009: Selling ads on his site besides the ones he runs from Google’s (GOOG) AdSense. “I think it’s going to be very hard to make money selling ads,” he said. “The market needs this more than it needs us out there trying to sell inventory.”

All of this supposes that people are actually willing to pay for advice they get over the Internet. I’m dubious, but then again I had no idea Yahoo Answers was as successful as it was until Calacanis walked me through the user stats in his demo*: 24 million unique users in the U.S., according to Quantcast.

I did try it out myself, and found that Calacanis’s beta users (who are presumably incented to answer as many questions as they can) did a decent job of answering my query about moving my Palm data to my BlackBerry via my MacBook–and much better than the people at Yahoo Answers and Answers.com, who didn’t even try.

But it’s still not good enough. Looks like if I want to get this done I’m going to have to pay someone real cash.

*A note for anyone who ever has to demo a product: Find some way to watch Calacanis go through his paces live if you can. You can get a sense of the experience by reading his tutorial, or by watching video of him in action. But it’s another thing to get it in real time, and watch him simultaneously hype and soft-sell. Really effective stuff.

[Image Credit: Joi Ito]

Latest example: Borders Group (BGP), the struggling book chain, has cut its music inventory by 30 percent in the last year, the company said. Music now occupies about seven percent of its floorspace, and the space it used to take up has been given over to higher-margin products like children’s books.

Borders makes up a relatively small portion of U.S. music sales, but most big retailers have been doing the same thing for more than a year. If you don’t believe me, try to find the CD section next time you visit a Target (TGT) or Best Buy (BBY) this month.

The big stores will embrace individual albums–if they have an exclusive, like Best Buy’s deal with Guns N’ Roses, or Wal-Mart’s (WMT) recent AC/DC promotion. (That’s Best Buy’s GNR promotion, pictured above. Lonely, isn’t it?) But beyond that, they are basically telling music shoppers, who bought some $7 billion worth of discs last year, to take their business elsewhere.

[Image Credit: Idolator]