From the New York Times: "The reorganization of AOL Time Warner last week has been recounted as a story of Time Warner, the king of traditional media, reclaiming its rightful throne from the upstart digital pretender, America Online.

"But as old-line media celebrates its return to power and to vogue, some analysts and executives caution that the Internet's capacity to change the rules should not be discounted too quickly. Investors may have repudiated the Internet, they say, but consumers have not.

"'The Internet may not be doing so great on Wall Street, but it's doing great on Main Street,' said Marshall Cohen, senior vice president for research at America Online. 'As far as the people who are online, they're using it more and valuing it more.'

"For consumers, that may be a good thing. But for media companies looking to the Internet for profits, it remains a frustrating reality. The 'digital revolution' that many traditional media executives were convinced would topple them or make them rich has not materialized.

"In part, that is because the Internet has turned out to be more of a souped-up telephone than a delivery vehicle for media and entertainment. E-mail messaging is by far the medium's most popular feature.

"But with 61 percent of American adults using the Internet, up from 46 percent two years ago, analysts and media executives say the medium is beginning to change consumer expectations of what mainstream culture should offer. Consumers who were once content to sit back and absorb what was beamed at them are demanding more control over how and when they consume movies, television, newspapers and music...

"But perhaps the most far-reaching impact lies in the rhythms and habits formed by daily use of the Web's interactive features...

"'The move from passive to a more active paradigm in consumer behavior is where the new media has had the greatest impact,' said Henry Jenkins, director of comparative media studies at the Massachusetts Institute of Technology."

Read this entire New York Times article online here.

From John Naughton in Britain's The Guardian Unlimited Observer: "The irrational exuberance triggered by the stock market's discovery of the Internet provided an excellent illustration of this column's First Law of Technology -- namely that we always overestimate the short-term impact of new technologies while under-estimating their long-term impacts.

"In the long run, the Internet will probably have as transforming an effect on our society as the automobile or even print, so it's understandable that investors wanted to get in on the ground floor. But they got the timescales wrong...

"Ever since the Nasdaq crash people have been asking plaintively 'How is it possible to make money from the Internet?'.

"It's the wrong question, because it's based on a fundamental misconception. Companies think the Internet is a new way of doing business -- like mail order on steroids. In fact the Net is much more like electricity. Nobody except power utilities makes money from electricity, but all businesses make money by using it...

"The first step on the road to business success on the Net, therefore, is to drop the wishful thinking about what industries would like it to be and come to terms with what it is -- an astonishing system that enables people to communicate on an unparalleled scale and with unprecedented intensity...

"The Internet is remarkable because it's the first communications system since print that is uncontrolled and indifferent about the uses to which it is put. All it does is deliver packets of data from one point to another. It doesn't care what's in the packets. That's why it generated such an explosion of creativity -- if you were smart enough to think of something ingenious to do with data packets (radio, file-sharing, telephony, gaming), then the net would let you do it.

"But this permissive openness is anathema to governments and the entertainment industries, both of whom are conspiring to destroy the Net by making it closed and controlled. There won't be another tech boom if they are allowed to succeed."

Read Naughton's entire column in The Observer online here.

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From the press release: "Blue Falcon Networks announced an $8.5 million third round of financing led by Sprout Group, bringing the total capital raised by the company to $20 million.

"Based in Los Angeles, Blue Falcon develops content delivery solutions that combine highly efficient distributed file transport with sophisticated centralized control and management.

"Existing investors Draper Fisher Jurvetson, Zone Ventures, and Wasatch Ventures participated in the financing with Sprout Group, the proceeds of which will be used for product development and operations. Josh Goldman, Entrepreneur in Residence at the Sprout Group, will join Blue Falcon as CEO...Jay Haynes, the company's former CEO will assume the position of President and Chief Operating Officer."