My pal Owen Thomas, late of Valleywag, has published a piece for NBC’s Bay Area local site that suggests that Time Inc. wants to get into the hardware business and produce its own e-reader.

That’s something other publishers, like Hearst and News Corp. (NWS), are actually doing or have at least mulled. But multiple sources familiar with the Time Warner (TWX) unit’s thinking say that’s not the case here.

But the publisher certainly is thinking about ways to create specialized content for e-reader devices and about the best way to distribute that content.

Time Warner executives have talked about this openly for many months–see Time Inc. digital guru John Squires’s comments in June–and Thomas appears to have gotten his hands on an internal document that addresses the same topic.

Most intriguing, according to Thomas’s read of the documents: A Hulu-like spinoff that would do…something:

The presentation concludes that Time Inc. and other partners should form a new, jointly owned company. Time Inc. might spin out its Maghound service, a service which lets consumers bundle multiple magazines together into a single monthly subscription, to form the base of the joint venture. The company is also considering acquiring other businesses to jumpstart the venture.

No comment from Time Inc.

But I do know that Time Inc.’s executives have met with other publishers about collaborating on e-reader standards, etc. And I do know that Time Inc. executives  think a special version of their print products, designed specifically for e-readers, is a good idea. Most everyone I talk to in magazine publishing, in fact, believes this.

And I understand why they do. In their minds, the e-reader versions of their products function just about the same way magazines do: People pay to read them and advertisers pay to distribute their messages through them. And–this part is crucially important, from their perspective–publishers retain control of distribution and the billing relationship with their customers.

That relationship gets obliterated in Amazon’s (AMZN) Kindle model: Publishers wholesale the stuff to Jeff Bezos, who deals with consumers directly. This is also one of the music industry’s big regrets about the digital age. Even though labels are selling their stuff on the Web, via Apple’s (AAPL) iTunes and others, they still don’t have direct relationships with its customers.

Which is why publishers are desperately hoping that they’ll be able to push their stuff through someone other than Jeff Bezos. On the surface, at least, it looks as though their wishes are being met: A bevy of Kindle competitors–Sony (SNE), Plastic Logic, iRex, etc.–is surfacing. Surely one or more of those will figure out how to offer publishers the terms they want.

But even if one or more of the Kindle clones succeeds, print publishers still have a core problem: They need to convince consumers that content–in any form, on any device–is worth paying for. That will work in some cases, but for many it’s going be a very hard slog.

Google (GOOG) has some 20,000 employees, so the scale of the sackings isn’t earth-shaking news. And these aren’t Google’s first cuts: In January the company got rid of 100 recruiters. In February it announced it could cut up to 40 jobs as it folded up its radio group.

But the fact that these cuts come from sales and marketing, which just lost its high-profile leader, Tim Armstrong, to Time Warner’s (TWX) AOL and replaced him with Google veteran Dennis Woodside, is interesting. As is SVP Omid Kordestani’s note explaining the cuts, in which he says Google simply made hiring mistakes as it grew its sales group.

Here’s the complete text of Kordestani’s post:

Google has grown very quickly in a very short period of time. When companies grow that quickly it’s almost impossible to get everything right–and we certainly didn’t. In some areas we’ve created overlapping organizations which not only duplicate effort but also complicate the decision-making process. That makes our teams less effective and efficient than they should be. In addition, we over-invested in some areas in preparation for the growth trends we were experiencing at the time.

So today we have informed Googlers that we plan to reduce the number of roles within our sales and marketing organizations by just under 200 globally. Making changes of this kind is never easy–and we recognize that the recession makes the timing even more difficult for the Googlers concerned. We did look at a number of different options but ultimately concluded that we had to restructure our organizations in order to improve our effectiveness and efficiency as a business. We will give each person time to try and find another position at Google, as well as outplacement support, and provide severance packages for those who leave the company. Finally, I would like to take this opportunity to thank everyone affected for all they have contributed to Google.

Used to be that most of their fulminations generally went unanswered, because:

1) Techmeme creator Gabe Rivera generally keeps to himself, at least in the physical world.

2) Rivera created Techmeme using an algorithm that was supposed to automatically suss out which stories were most important, using a link-based hierarchy similar to Google’s (GOOG).

But dudes who are still unhappy with Techmeme (and yes, I mean dudes; with a couple rare exceptions that prove the rule–hello, boss–this is unfortunately a Man’s Man’s Man’s World) have someone they can vent at/to. Meet Megan McCarthy, the former Valleywag writer Rivera hired late last year to add a human’s touch to the site. Headline for his blog post announcing the move: “Guess what? Automated news doesn’t quite work.”

That doesn’t mean that Techmeme has abandoned the algorithm–just that Rivera wants McCarthy tweaking the site and making sure that important/useful/interesting stories bubble up. Or that’s their argument, anyway. Sounds right to me.

If you’re at South by Southwest this weekend, you can chat McCarthy up yourself–she’s the very tall, very pleasant woman who seems to know an awful lot of people. Or you can watch this clip, where she bravely agreed to let me hold a Flip camera in front of her face.

Important (at least to some people) addendum to my interview: When I argue that Rivera “favors” certain kinds of coverage, I mean just that–that he’s more interested in, say, Web 2.0 news than he is in gadget coverage, and that he’s set up Techmeme to reflect that.

Yes, this is the third post I’ve written today about Gawker Media’s Nick Denton, who seems to prefer to get all of his news out at the same time.

But briefly:

• Denton has put Consumerist, his, um, pro-consumer site, up for sale.
• Denton is folding Valleywag, his Gawker-for-techies site, into…Gawker. Editor Owen Thomas will keep his job, and essentially become Gawker’s man in Silicon Valley. Writer Paul Boutin will contribute some stories, but likely fewer.
• Denton has more moves to come. Conveniently, he has provided a playbook for them via his post this morning, in which he spells out what Internet publishers should do in the face of a cratering ad market. Educated guess: If you sell ads for Denton, or work for one of his most successful titles (Gawker, gadget site Gizmodo, videogame site Kotaku), there are decent odds you will get to continue doing so in the future. Everybody else, all bets are off. Then again, that’s the same position that all those with a job in media finds themselves in these days. Cheers!

A year ago, the conventional wisdom said that the online advertising market would still grow in an economic slump because online ads were cheaper and more effective.

And they are. But if the slump is big enough– like the one we’re in now–then all bets are off.

Which is why there’s no longer any conventional wisdom about the future of online ads. Two data points, and one anecdote:

• J.P. Morgan (JPM) Internet analyst Imran Khan has reduced his projections for ad growth for the second time since September. But he’s still projecting growth. In fact, Khan sees overall spending, fueled by search ads on Google (GOOG) and Yahoo (YHOO), growing 13 percent in 2009, down from a previous projection of 19 percent. But he thinks display ads will fare much worse, noting U.S. spending on display will only grow six percent in 2009, down from his earlier forecast of 16 percent.
• Ad network optimizer The Rubicon Project reports that the average price for an online ad at “thousands of sites and 270 ad networks” dropped 11 percent in the last quarter. But since it can also find evidence of prices increasing at some sites–news and reference sites, for instance, increased prices 36 percent–Rubicon argues that things aren’t so bad after all.
• Gawker Media publisher Nick Denton thinks everyone who doesn’t see misery next year is delusional, period. The man behind sites like Gawker, Gizmodo and Valleywag happily offered this insight at the Silicon Alley Insider/Founder’s Club event last week, which was packed with digital movers and shakers. All of them should be terrified, he said, charmingly: “Anyone who isn’t prepared for ads to go down 40 percent is crazy.” Obligatory disclaimer here: Denton is always seeing doom just around the corner. But he’s very convincing.

Want a (slightly) more upbeat spin? Here’s Khan’s executive summary:

* Overall ad budgets continue to weaken. Since we reduced our estimates on September 4th, we have seen a further slowdown in the economy, particularly in the last two weeks of the third quarter. Weakness continued into October and spread from the US and UK throughout continental Europe and Asia. Additionally, dollar strength was greater than expected which will further depress growth rates. We are now basing estimates on a $1.25 exchange rate vs. our prior base of $1.40. Our updated model calls for total online global advertising growth of 25% in F’08 and 13% in F’09 vs. our prior estimates of 28% and 19% Y/Y growth respectively.

* Deterioration of display advertising is more pronounced than expected. Our channel checks are showing that sell-through is declining. Additionally, so far CPMs for premium inventory are flat to slightly down. Looking forward, we think CPMs will remain depressed and sell-through rates will worsen.  As a result, we are lowering our F’08 and F’09 domestic display estimates to $7.95B (11 percent Y/Y growth) and $8.45B (6% growth) from $8.15B (14% Y/Y growth) and $9.43B (16 percent growth). We are now modeling F’08 global display ad growth of 14% Y/Y vs. our prior estimate of 16% growth.

* Search performance held up in 3Q but we expect ad budget cuts to bleed through. We continue to see performance-based advertising holding up better than banner advertising. Long tail advertisers continue to allocate additional dollars to search. However, keyword price inflation is moderating. Additionally, we think marketing spend pullback in some segments including travel, telecom, autos, and retail is worsening. As such, we are lowering our domestic F’08 and F’09 search growth estimates to 23.4% Y/Y and 17.3%, respectively, from 27.4% and 25.5% Y/Y growth. We are modeling F’08 global search ad growth of 34% vs. our prior estimate of 36% Y/Y growth.”