Fox News snubbed MySpace, its corporate parent's social networking site, in favor of rival Facebook this week, which says a lot about that ailing News Corp. property. Nevertheless, it continues to extend its lead in the United States: According to comScore, MySpace attracted 75 million unique visitors here in July, up 2.5 million from June.

So who are all these MySpace users? According to our guest and my colleague, Peter Kafka of Silicon Alley Insider, bands and people looking for their music continue to flock to the network, which is valued at somewhere between $3 billion and $6 billion. Apparently that's not good enough for News Corp. oligarch Rupert Murdoch, who's made noise about selling or redeploying the site he paid $580 million for in 2005.

In the accompanying video, Peter and I discuss whether such a move makes sense, as well as how Murdoch can make another of his underperforming properties, the Fox Business Network, pay off.

We've previously noted that NBC wasn't the only site getting a boost from the Olympics: On August 11, Yahoo generated more traffic to its specialty site than NBC did. Turns out that wasn't an aberration: According to Nielsen Online, Yahoo has beaten NBC on 8 of the 11 days it's measured so far.

NBC, obviously, has the exclusive rights to Olympic video. But anyone can write about the Olympics, and Yahoo's advantage is obvious: A home page with ginormous daily traffic, where it has featured clever Olympics coverage every day. Yet another reminder, if anyone needed it, that the company's clout is still enormous, even if its leadership hasn't figured out what to do with it.

In the accompanying video, Henry and I discuss NBC's Olympics losses and wins, and how balancing online and broadcast coverage continues to be a work in progress.

See Also:
NBC Won't Show You Usain Bolt, But YouTube And DailyMotion Will
Yahoo Beating NBC In Online Olympics

Give Apple (AAPL) credit for making up for (rare) bad service: The company emailed MobileMe email/syncing customers this week, informing them that they'll be getting 60 days of free service in addition to the 30 days of free service most already received.

From Apple's support site:

The transition from .Mac to MobileMe was rockier than we had hoped. While we are making a lot of improvements, the MobileMe service is still not up to our standards. We are extending subscriptions 60-days free of charge to express appreciation for our members’ patience as we continue to improve the service.

Apple launched MobileMe -- an ambitious update to its old .Mac service -- in July, alongside the new iPhone 3G. Neither has gone flawlessly: MobileMe was a dog and permanently lost some subscribers' email, while the new iPhone reportedly has a radio transmission bug that's made phone and Internet communication flaky for some owners. (Including us.)

In the accompaning video, Henry and I talk about this uncharacteristic misstep for Apple, as well as some better news for the company: A record quarter for Mac sales and a growing presence in the enterprise market. Can Apple fill the gap left by Windows' crumbling hegemony? Or will Dell and HP finally figure out that it's all about design and beat Apple on price?

See Also:
Apple's iPhone 3G A Month Later: Excellent, But Not Euphoric
Best Buy To Sell Apple's iPhone Next Month
Three Million 3G iPhones Sold? Sure, Why Not?

The government is out of Google's way: The FCC has just approved the HTC Dream, the first phone that will run Google's "GPhone" Android mobile operating system.

No hi-res product shots included in the FCC's documentation, but we're able to confirm that the Dream will be able to access T-Mobile's nascent 3G data network -- it's been approved to use the 1700 MHz band, the chunk of airwaves that T-Mobile uses for 3G service. And the phone includes a "jog ball," which we understand is the correct jargon for the tiny trackball used on BlackBerries.

Now T-Mobile can start selling the Dream pretty much as soon as it wants. We expect it to go on sale next quarter as promised -- specifically, before Nov. 10 -- that's the date HTC has requested the FCC keep Dream photos and user manuals confidential until.

In the accompanying video, Henry and I discuss how the GPhone could change the smartphone market, particularly for U.S. market leaders RIM and Apple and overseas leader Nokia.

Maybe it's just the August doldrums, but everyone's favorite tech company seems to be getting hit with a lawsuit lately. Last week it was a class action suit against Facebook dating back to last year's Beacon debacle; today it's Google. Sue-happy GraphOn is suing Google for patent infringement. Indeed, suing well-funded tech companies over patents appears to be GraphOn's favorite pastime. Past targets include Yahoo and InterActive Corp.

Blogger and investor Paul Kedrosky joined me from San Diego to talk about whether investors should worry about these lawsuits, and who he thinks is getting slapped with a class action suit next. (Hint: The company makes iPhones.)

From Silicon Alley Insider, August 18, 2008:

Will new gadgets be able to use airspace between digital TV channels -- "white spaces," or "wi-fi on steroids," as Google has dubbed it -- for Internet access? We'll know more next month, when the FCC is expected to report its latest test results.

That's when we'll find out if gadgets submitted by companies like Philips Electronics pass the FCC's muster. These aren't gizmos designed for consumer use. Instead, the FCC is just looking to test the technology that will automatically detect which frequencies of wireless spectrum are being used by TV stations, wireless microphones, etc., so that a potential Internet device would steer clear of them.

And while "FCC engineers aren't talking about their conclusions" so far, the gadgets aren't exactly flying through their evaluations.

The American Internet giants have come under fire for doing business in China, where the Web is still censored and dissidents are often tossed in jail for what they say online. Should Google and Yahoo simply boycott China? Or should they work with the system and try to behave as responsibly as they can?

My guest Philip Pan, The Washington Post's former Beijing bureau chief and author of the new book Out of Mao's Shadow, says the companies' current approach -- careful engagement -- is the right one. Boycotting the world's largest market simply because you disagree with some of the government's policies is, for all intents and purposes, not an option.

For more of Pan's insights into China, see parts one, two, and three of our discussion.

Long before Cuil was the most talked about startup in the Valley, it was a side project that stay-at-home dad Tom Costello was tinkering with behind his wife's back. Why? She worked at Google and as he told friends at the time, "I can't do search my wife will kill me."

When he finally fessed up, she didn't kill him. In fact, she was intrigued by the math he'd come up with that allowed a small amount of servers to index billions of Web pages. But she knew there would be doubters and challenges ahead. In our final installment of our interview, Patterson tells me about the early days of the company and what it's like to start a company with her husband.

Check out our earlier discussions. The founders address: the launch controversy, why they stand behind their search engine, and where Cuil goes from here. Plus, a bonus tour!

Tom Costello doesn't care what the haters say, he's dead set on making Cuil into a Google challenger. (He claims the hyped-up-phrase "Google killer" never came from them.) Costello says it's a "travesty" that no one has taken Google on yet and is confident that Cuil will help make Google better.

No one? That may be news to Yahoo, Mahalo and the recently acquired Powerset. In the third clip of our interview with Cuil's founders, Costello and his co-founder Anna Patterson explain why those guys aren't true challengers to the search giant.

Coming up shortly, more from our interview, including: