We’ll admit to feeling the occasional sting of envy when we hear about the exciting events and opportunities taking place there from our headquarters in Vancouver, Canada. But we’ve also learned that there are some real advantages to being headquartered beyond the bubble – and that having a day-to-day presence there isn’t as important as it might seem.

Here are a few of the upsides we’ve discovered, as well as tactics for staying connected to the tech entrepreneur ‘mother ship’ while enjoying the benefits of your home base:

Avoid the “Valley premium” – Startups that set up shop in the Valley fork over a premium for the exclusive location. As one of the most expensive urban areas to live in nationwide (according to ACCRA), the Valley drives up basic costs, ranging from salary and benefits to rent and utilities. This means the $5 million in funding your Valley-based competitor receives may barely keep the lights on, while a smaller round of funding could mean major growth for your firm. Leverage this fact with investors that are interested in hearing about how you can do more with less.

Be the local rock star, instead of a dime a dozen - The Valley is like a modern day Gold Rush: the possibility of striking it rich draws the masses and every tech company wants a piece of the action. As a result, it’s easy to get lost in the crowd. (And, to add insult to injury, there are no economic incentives or tax breaks for your business.) In contrast, local governments outside the Valley bubble often give entrepreneurs the star treatment and big cost-savings— such as tax breaks or subsidized health care—to stimulate growth.

Recruit Valley ambassadors - An industry influencer or PR agency based in the Valley can serve as an advisor, champion your technology and help you penetrate the exclusive bubble – giving you a “physical” presence despite being geographically removed from the Valley. They can also teach you the lay of the land, arrange networking meetings, alert you to local events and help fine-tune your Valley strategy.

Don’t be a stranger - Travel to the Valley at least once a quarter, timing your visits around major conferences/events to maximize in-person meetings and networking opportunities. Regular face time ties a personality to a name, which ultimately may be all people remember about your company. It’s also a key ingredient for maintaining relationships.

Be a joiner - Participate in local industry and entrepreneur groups – not only will they help you build a stronger presence where you’re based, but they can connect you with sister organizations or other entrepreneurs in your industry that are based in the Valley.

Give your startup space to stretch its wings - The Valley offers a high concentration of opportunities, but niche industries often struggle to get even a sliver of that pie. Consider opting for an area with a concentration of companies in your space that can help nurture your startup with good talent and resources. Colorado, for example, has a strong portfolio of UI and design startups and Canada is known for its video gaming industry.

Take advantage of the talent - When you are a company of 10, your talent is your business. Without resource-wealthy giants creating silos for incoming talent, startups outside of the Valley have a fighting chance to recruit and retain great employees without having to resort to alternatives such as outsourcing – an option that has become less cost-effective in highly-skilled industries. Target areas with academic institutions that groom the type of talent you seek or governments that allow you to import talent without heavy regulation.

Take advantage of the upcoming economic turn - Historically, investors have had a primary focus on the Valley, but with Bay Area deals falling by a much faster rate than the rest of the country last year (57 percent according to Dow Jones) investors are now more willing to look outside the bubble for innovation.

Photo by christian.rondeau via Flickr

The Marina Del Rey, Calif.-based company runs an online sports game web site, ActionAllStars.com. The company will use the money to expand its growth in sports entertainment and enhance its internal development capability.

The company lets players create their own sports athletes and enter them in competitions. Since the company launched its site in December, 2008, it has grown to more than a million unique users a month, said Minard Hamilton, chief executive, in an interview. Like rivals such as QuickHit, the goal is to build an online sports empire before video game giant Electronic Arts wakes up and invades the space.

Six Degrees has official licenses from partners such as the National Basketball Association and Major League Baseball. Now there are more than a million new athletes created every month. The site now has 14 games that target older kids and teens. Players start as amateur athletes and work their way up through five levels to become All Stars.

Hamilton started the company in 2007 with Ben Jones, who worked with Hamilton at Jamdat Mobile, which was bought by Electronic Arts in 2006. They had worked to secure deals with sports companies such as ESPN to use their brands in mobile games. Hamilton also served as a general manager at ESPN.com from 1999 to 2001. They started the sports game site because they felt no one was targeting older kids and teens with sports interests online.

At the new company, they were able to leverage those relationships and cut deals allowing the use of the NBA and MLB brands in their games. In the coming week, the company will add micro-transactions to its site, allowing players to challenge each other and customize their characters. The company plans to sell items to the players.

Other investors include Clearstone Venture Partners and Prism VentureWorks. To date, Six Degrees has raised $14 million. Both participated in the new round. The company was founded in 2007 and has 20 employees. Rivals include sports game sites such as QuickHit, UpperDeckU, Electronic Arts and NFLRush.

The San Francisco company follows SugarSync, which launched a small business version last week. The basic goal of both products is the same — to allow users to access folders and files on multiple devices, with changes to a file on one computer reflected on all devices. Not only does this keep your files up-to-date across different machines, but it also means your key data is backed up if, say, your desktop computer dies or your laptop is stolen.

The business case for this type of service seems obvious — if anything, it seems even more essential for a team to share and collaborate on files than it is for a single user who just uses lots of computers. That’s especially true for Syncplicity, since it emphasizes intelligent “conflict management” when multiple users are editing a document, as well as a smooth transition when moving documents from the web in Google Docs to your desktop on Microsoft Office, and vice versa.

The new, business-specific features include a central console for IT administrators, and the possibility of paying for accounts with unlimited file storage. Chief executive Leonard Chung showed me how administrators can create accounts for employees and and determine their access levels (so one employee could read and edit a folder, while another could only read it, while a third wouldn’t have access at all). One downside: The company is still developing its Mac service, after releasing a version earlier this year and withdrawing it after being dissatisfied with the results.

Pricing starts at $45 per month for three years and 50 gigabytes of storage.

The company has raised $2.35 million from True Ventures and others.

Sending status updates to LinkedIn also fits in with Twitter’s distribution strategy. Rather than trying to keep status updates within their network, they’ve syndicated them out to others like MySpace and AOL. (Twitter can also publish tweets into Facebook’s stream, but Facebook will not allow its status updates to go the other way into Twitter.)

So how does it work? The deal will allow LinkedIn users to tweet directly through their status updates on the professional social network’s site (see below).

Going from the other direction, Twitter users can either send all of their tweets to LinkedIn or they can selectively send a few by including the hashtags #li or #in. (See below.)

In this video (with terrible music), Twitter co-founder Biz Stone sits down with LinkedIn founder Reid Hoffman to explain the partnership:

The game, part of the Call of Duty franchise but set in the context of modern anti-terrorist combat, is going to create a blast radius. Rival games slotted in the same launch period are likely to be overshadowed by Modern Warfare 2.

The last version of the game, Call of Duty 4: Modern Warfare, launched in 2007 and sold more than 14 million units, giving its developer Infinity Ward and Activision Blizzard one of the most powerful game franchises on the planet. At $60 each, the game has generated more than $840 million at retail, and it got an average review score of 96 out 100. The industry is hoping that Modern Warfare 2 will bring back the sizzle in game sales that have been hurt by the recession.

I’m eagerly awaiting playing this game. I played the first one all the way through and went on to play multiplayer combat for weeks at a time. I got a few dozen levels up in the multiplayer rankings, out of a possible 50. Based on the previews I’ve seen so far, this is likely to be one of my picks for the best game of the year, fighting it out with titles such as Sony’s Uncharted 2: Among Thieves.

The original Modern Warfare game was an intense first-person shooter game where you play the role of American or British special forces soldiers fighting terrorists. The combat is bloody and gritty. Infinity Ward has a knack for creating intensely dramatic combat situations; one of my favorite parts of the last time was a firefight inside a broadcast TV station where flying grenades and shattering glass abounded. The new game has the same kind of intense scenes, such as firefights aboard snowmobiles.

It’s not without controversy, however. We wrote about how Activision Blizzard had to fight to run down pirates who released pirated copies of the game early. And PC gamers are in an uproar because Activision Blizzard has reversed its policy and taken control of game servers itself, rather than allowing game clubs known as clans to run them on their own. Activision Blizzard argues that its own matchmaking system for multiplayer games is easier for players to join and it eliminates rampant cheating in games.

The game also has spurred shock and dismay from people who are offended by the fact that you can take on the role of a terrorist at a certain point in the game.

But gamers will care about the way the game plays. This one includes multiplayer combat with lots of cool perks as you climb up the ranks and fight enemies on 17 new maps. The single-player campaign takes place five years after the last game and you’re after a Russian terrorist. The battles take place in Russia, Kazakhstan, Afghanistan and Brazil. The game is available on the PC, Xbox 360 and PlayStation 3.

Moxi is launching a new high-end multi-room DVR that comes with three tuners. That means it can record three shows at the same time even while it is playing a fourth show. Previous Moxi DVRs came with two tuners and could only record two shows at once. As you can tell, the Moxi gear is aimed at consumer electronics freaks.

DVRs are consumer set-top boxes that let you record shows and skip commercials. Moxi, which invented a cool user interface for navigating through tons of TV content, has been been around since 1999, when it was founded by WebTV founder Steve Perlman. Meanwhile, investor Paul Allen started Digeo, which was merged with Moxi. The company launched its line of Moxi HD DVRs for cable TV subscribers. But that market proved somewhat narrow and Moxi tried to sell its gear at retailers. Meanwhile, Moxi has added new content sources, such as the ability to surf Hulu.com, Netflix and YouTube directly from your TV.

Suwanee, Ga.-based Arris is now supporting the company’s effort to compete against the likes of Tivo and Sony. The new Moxi HD DVR with three tuners will sell for $799 and it will come bundled with a Moxi Mate, an accessory device that lets you watch different recorded content in another room of the house. You can get a three-tuner Moxi HD DVR bundled with two Moxi Mates for $999.

Meanwhile, the two-tuner Moxi HD DVR with a single Moxi Mate will sell for $499, down from $799. And a single Moxi Mate will sell for $299 instead of $399. With a fall software update, users will be able to watch live TV on a Moxi Mate. Previously, you could only watch recorded programs on a Moxi Mate.

The idea is to cover the whole spectrum of consumer preferences, said Marc Beckwitt, vice president of CPE video business development at Arris. There are no monthly DVR service fees or in-menu ads with Moxi. You can record up to 75 hours of high definition video on a Moxi product. Or, if you prefer, you can record 300 hours of standard definition video. The devices are expandable to record up to 1,000 hours of HD video.

The Intel Reader is available today for $1,499.That’s a pretty hefty price, considering that devices like the $259 Amazon Kindle can read books aloud in a robotic voice. But the Intel Reader is based on a lot of research and is designed for the visually impaired, first and foremost.

The reader can read digital files of books aloud. It can also capture images from any printed material and use its text-to-speech technology to read aloud the publication at a variety of listening speeds. It also has a four-inch color display that can render the words being read in large font sizes. The device can read millions of books that have been formatted online for visually-impaired readers, and it comes with a high-resolution camera that can convert printed text to digital text. The reader can then read the words aloud to the user. It can even work with web pages if users first capture the text from a site in a plain text file.

“We want people to experience the independence of being able to read on their own in a public place or anywhere they want to,” said Foss (right), speaking at a press event on Monday. “A metaphor for this are the ramps that make buildings wheelchair accessible. This reader is like a ramp.”

The paperback-sized device is aimed at 55 million people in the U.S. who have eyesight problems and don’t want to be dependent on others for the pleasure of reading a novel, looking at a restaurant menu, or reading web site pages. It comes with a 5-megapixel digital camera that can be used to snap pictures of book pages. Foss said he was able to scan a 262-page book in a half hour and listen to the first chapter of the book while he was doing it. The device can read text in the DAISY format, plain text, as well as MP3 music files.

The product is a result of years of research in Intel’s Digital Health Group, headed by Louis Burns. The aim is to use technology to improve quality of life. That group has devised technologies that allow patients to be monitored remotely so that they can stay home rather than be monitored in an expensive hospital. Intel hasn’t had the best history with consumer products, but Foss says the world’s biggest chip maker is committed to the project and to the digital health market.

There are ways to use personal computers and digital cameras to do the same thing with text-to-speech software. But the Intel Reader attempts to take the hassle out of the process. Other devices have not been designed directly for the visually impaired, said Dorrie Rush, who is visually impaired herself, and works as the marketing director for the nonprofit Lighthouse International, a foundation that helps the visually impaired. However, the KNFB reader, backed by futurist Ray Kurzweil, has been around for a couple of years and is designed to work with Nokia N82 or N86 cell phones.

Intel has done its homework on the device, said Rush. That’s why it has support from Rush’s group as well as other charitable instituions including the National Center for Learning Disabilities, the International Dyslexia Association, the Association of Assistive Technology Act Programs, the Council for Exceptional Children, and the National Federation of the Blind. But Foss noted Intel sees the reader as a for-profit business.

Foss noted that the packaging comes with Braille lettering that identifies its manuals. It also has an audio CD that tells users how to use the device. The device does not come with built-in Wi-Fi networking because many school don’t allow web-connected devices in the classroom.

Rush, said that there are 15 million people like herself with impaired eyesight that can’t be corrected with lenses. She held a newspaper four inches from her face and noted she could only read the name of the paper and nothing else.

Foss said Intel tested its prototypes with more than 400 visually-impaired users, including some with partial eyesight and some who were completely blind. The device can come with an Intel Portable Capture Station (right), which costs extra. The station can be used to capture images of an entire book. It has a plastic guide that holds pages down while the camera can be placed overhead. The button for placing the images is low on the station, since many visually-impaired people are older and don’t have the strength to keep raising their arms to take pictures. ‘The image capture works even if a book is placed upside down.

The device has an Intel Atom microprocessor and two gigabytes of flash memory storage. It runs Linux software and some third-party software for scanning and reading aloud. With a fully charged battery, the device can read aloud for four hours. It can last for days on standby power. It can store about 500,000 pages of text or 600 pages of scanned book pages.

One of the cool features is the ability to change the speed of the voice reading. If you set it to 110 words per minute, it sounds like a normal, if robotic-sounding, voice. At 250 words per minute, it sounds like a chipmunk talking. But Foss said that is the speed he listens at when he is trying to absorb a book quickly. The voice sounds less robotic with headphones, and even less so if it is set to a mode that emphasizes things like exclamation points. In that way, it can be used for informational reading or entertainment.

The Intel Reader will be available through resellers such as CTL, Don Johston, GTSI, Howard Technology Solutions and Human Ware. Foss acknowledged that the price of the device isn’t cheap, but he noted that the device has a lot of custom-designed components, and it is cheaper than devices such as Braille readers,which can cost up to $10,000. Some devices for the blind take a long time to learn, but the Intel Reader takes only a few hours to internalize, Rush said. Since Intel had priced the device fairly high, there is a risk that it will be undercut by eBook readers that can be converted to handle reading aloud.

Foss said there are a variety of sources for the books, including the Gutenberg Project and Book Share. The Internet Archive has 1.6 million books available to be read aloud. That includes out-of-copyright books such as Moby Dick or Alice in Wonderland. He noted that copyright law allows readers to make a copy of a book for their own personal use. On top of that, there is an exception to the law that allows books to be copies for use by disabled people.

The device isn’t perfect at capturing all of the nuances of print. In scanning a newspaper, for instance, it may have trouble with layouts that blend columns of different stories together. It isn’t really made for capturing and translating street signs either.

Over time, the company plans to introduce international versions of the device. Within a week or so, it will launch the device in the United Kingdom where it will use a speaking voice with an English accent. Here’s a video of Foss demonstrating the product.

Sun – Oracle deal meets stiff opposition from European antitrust regulators — The European Commission issued a list of objections t0 the deal. Unlike U.S. antitrust authorities, the EU feels that the open-source MySQL database is particularly threatened by an Oracle-Sun alliance, since Oracle would then 0wn Sun’s version 0f MySQL.

Yahoo to provide free WiFi in Times Square – The network goes live on Tuesday. But … isn’t there plenty of free WiFi in Times Square already?

First photos of Justin Timberlake as Facebook president Sean Parker – Timberlake’s been cast as Parker in “The Social Network,” a movie currently in production by Columbia Pictures. Valleywag put a photo of JT on the set of the movie next to a shot of the real Parker from January. Click for full size.

Containing an radio frequency identification (RFID) chip, a microprocessor and chip for wireless networking, the plugs will be able to drill down into how much energy individual appliances (plugged into the outlets in question) are using. Users will also be able to remotely control their devices via the TalkingPlugs because they are programmable.

To optimize use of TalkingPlugs, homeowners and companies are told to install many of them at once, allowing them to cast a mesh network of information over the entire space. This data is sent to its web-based interface where users can view how much electricity they are using, how they are using it, and how their consumption compares to that of others. This strategy might get a bit costly for average homeowners, with the price tag estimated at $50 per plug, although that could drop if the company starts making them en masse. It competes with Kill-a-watt, an electricity measuring device that is already on the market and costs $22. With Kill-a-watt, you plug the device into the wall and then plug whatever you want to measure into the Kill-a-watt. It reports how many watts the device uses, but that’s all it does.

Right now, the company, based in Toronto, is recruiting companies interested in trying the product out, and determining how it will impact their employees’ behavior and ultimately their electricity bills.

VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore, Google CEO Eric Schmidt and Kleiner Perkins’ John Doerr. Register for your ticket today at GreenBeat2009.com.

Blogger Scott Cleland is a little less optimistic that Google will close the deal quite so easily. Among his arguments:

* AdMob is the equivalent of a “Mobile-DoubleClick,” and the FTC took several months to review that deal closely. When the FTC approved that deal 4-1, they assumed Yahoo would remain a strong competitor, which was proven dead wrong when the DOJ, eleven months later, had to intervene and block Google’s anti-competitive proposed Ad Agreement with Yahoo.

* The antitrust concern [in the acquisition of AdMob] would be that Google’s acquisition of AdMob would lessen competition by accelerating Google’s growth and emerging dominance of the mobile search market where NetMarketShare.com’s latest survey of mobile search engine market shares has Google Global with 97.50% share.

For plenty more reasons Cleland’s sure this latest acquisition isn’t in for smooth sailing, check out his full post.

Peddling an open-source home area network platform — the open-source aspect being a key difference from many of its rivals — the company has said that its focus on serving consumers exactly the information that want will distinguish it from the rest — something that almost every other company in the space has said when asked the same question.

People Power will draw data from all home appliances and power-sucks into a central online portal where users will be able to view how much energy they are using, where, and how much it is costing them. It has also mentioned that it will be churning out various sensory devices that can be attached to appliances to monitor their energy use. This sounds a lot like British AlertMe, which does something similar, but perhaps not exactly.

Right now, the challenge for companies hoping to transmit energy data from appliances is that not all home devices, like refrigerators, washing machines, etc. come with ports or the uniform technical specs needed. Some startups are working on sensors that can be stuck to and report from any power-using device.

For now, People Power has introduced affordable devices like “GreenVent” to measure HVAC systems, “GreenHeat” to keep tabs on water heaters, “GreenSentry” to turn electric meters into smart meters, and “GreenDog” to gauge clothing dryer energy use. It also makes a special power strip that can measure how much energy is going to TVs, computers and other wall-plug electronics. The idea is that these sensory devices would learn people’s patterns over time, and eventually be able to turn appliances off and on at certain times in order to trim electricity use and bills — a very similar proposition to smart thermostat company EcoFactor.

Based in Palo Alto, Calif., People Power does have several advantages. It has teamed with top-tier researchers at UC-Berkeley and Stanford to work on a longer-range open-source wireless network that it has dubbed the Open Source Home Area Network (OSHAN). The service would be free to download online. The company says it hopes that the open-source structure will help it gain traction and inspire others to build applications on top of the platform, making it an even more valuable tool.

People Power has to make sure this happens in order to stand a chance even among its startup competitors, not to mention General Electric, Google and Microsoft, which are each hard at work developing their own home energy monitoring services. General Electric has joined forces with Tendril to make appliances that funnel energy data into web portals, while Google and Microsoft have launched consumer-facing energy dashboards PowerMeter and Hohm, respectively.

So far the company has raised an undisclosed first round of funding from New Cycle Capital and several angel investors.

VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore, Google CEO Eric Schmidt and Kleiner Perkins’ John Doerr. Register for your ticket today at GreenBeat2009.com.

At its core, GridPoint is a service and software vendor for utilities — giving them the tools they need to balance peak power loads, keep track of and parse the flood of energy consumption data being channeled by their smart meters, and supply consumer-facing home energy monitors intended to encourage conservation and energy bill saving.

The company, based in Arlington, Va., says it will integrate ADMMicro’s technology to create new opportunities in the commercial and industrial sectors. With $220 million in its pocket, its hard to tell when and where GridPoint will stop buying up the fruits of others’ labor to build its portfolio.

It rised its first round of funding shortly after its inception in 2003, bringing in $8 million from Skypoint Capital and BDC Venture Capital. Since then, Advantage Capital Partners, Altira Group, Contango Capital Partners, Goldman Sachs, New Enterprise Associates, Perella Weinberg Partners, Robeco, Susquehanna, Quercus Trust and Craton Equity Partners have all chipped into its sizable coffers.

GridPoint’s last acquisition, of home energy management system maker Lixar, came in June. Its products were being tested by Duke Energy at the time. And before that, in September 2008, it bought V2Green, developer of software systems that manage how electric cars are charged based on energy prices.

So far, it seems like GridPoint, which didn’t have a very compelling project until its acquisitions, has been able to buy success (the pitch must have been great). It has shaken up the space, and Austin Energy, Duke Energy and the Sacramento Municipal Utility District have taken notice, each working to integrate GridPoint’s software and demand response offerings into their grids.

It will be interesting to see which direction the company chooses with its next startup buy. In the meantime, it has a lot of pilot projects to keep tabs on before its technology is more widely adopted.

As more major corporations enter the Smart Grid space — like Cisco, IBM, General Electric and the like — startups offering networking, software and demand response services are going to be bought or merge to form larger units. Ironically, GridPoint is leading all of these players as the number one buyer of small Smart Grid companies. Will it be able to build its empire in time to compete with the giants?

VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore and Kleiner Perkins’ John Doerr. Register for your ticket today at GreenBeat2009.com.

Raffi Krikorian of Twitter’s Platform Team writes:

The one feature request that we’ve heard over and over, however, is “what’s going on where I am?” To answer that, we wanted to give you all a heads up regarding the new “Trends API” that we’re launching. This API will open up trending information that is specific to a number of locations around the world.

Twitter’s using Yahoo’s Where on Earth IDs (WOEIDs) to name locations because the company’s markers are language-agnostic and stable. Based on the company’s documentation, it looks like the API will return 10 trending terms for a given location.

Redwood City, Calif.-based EA also announced that the layoffs would result in cost savings of $100 million and one-time charges of $130 – $150 million. It did so even as it announced this morning it bought social game publisher Playfish for up to $400 million. John Riccitiello, chief executive, said in a statement that the company made “tough calls” to lay off employees in targeted areas so that it can invest more in higher-priority games and digital businesses. The layoffs will be completed by March 31.

The company said the layoffs will result in facilities closures, but it didn’t identify which game development studios would close. The company is already reeling from cutbacks. A year ago, EA laid off 1,000 of 10,000 employees. These new cuts are even deeper, and they reflect a few things. The newest job cuts will add up to 17 percent of EA’s 8,800 employees.

First, EA has been hurt by the recession. Second, its newest original games, such as the Beatles Rock Band, haven’t set the world on fire. Lastly, gamers have been turning to cheaper fare such as free-to-play games on Facebook. The latter is the reason that EA acquired Playfish, which offers free Facebook games and makes money with sale of digital goods, such as pet food in its Pet Society game.

John Schappert, chief operating officer, said in a conference call that Playfish got more than 90 percent of its revenue from direct consumer purchases and that EA was impressed that a very small portion of it came from the more controversial offers business (latter is my description, not his). Schappert said he thinks the social gaming industry will continue to grow exponentially for some time. Those games will also likely be entry points for gamers who might be upsold later to console and PC games.

“EA is playing offense, positioning ourselves for the future,” Riccitiello said on the conference call.

Riccitiello said he was cautious about the second half of EA’s fiscal year because consumers have been hit hard by the recession. On the positive front, EA has 17 titles this year with a Metacritic rating (aggregate of review scores) of 80 or higher. Last year, EA had 13 games rated 80 or higher. And two years ago, it had only five. Under Riccitiello, EA put more focus on building quality games rather than shoveling out licensed movie titles and other low-quality games.

EA reported non-GAAP revenue of $1.147 billion, up 2 percent from $1.126 billion a year earlier. Non-GAAP net earnings were $19 million, or 6 cents a share, compared with a loss of $20 million, or 6 cents a share a year earlier.

Sales were driven by the launches of the FIFA 10 soccer game, Madden NFL 10, The Beatles Rock Band, Need for Speed Shift, and NCAA Football 10. FIFA 10 sold 4.5 million copies in its first week and was particularly strong in Europe. Madden NFL 10 was the No. 1 title in North America, according to NPD, and it sold more than 3.9 million copies worldwide. Need for Speed Shift sold more than 2.5 million copies in the quarter.

On a GAAP basis, revenue was $788 million, compared with $894 million a year earlier. EA lost $391 million, or $1.21 a share on a GAAP basis for the quarter, compared to a net loss of $310 million, or a 97 cents a share, a year earlier.

Analysts were expecting a consensus non-GAAP profit of 7 cents per share on sales of $1.12 billion for the second fiscal quarter ending Sept. 30, according to Thomson Reuters. EA said it is the No. 1 publisher in North America and Europe, with 21 percent overall market share in PC, mobile, and console games. (Activision Blizzard reported it had 16 percent market share in PC and console games.)

Digital non-GAAP revenue hit an all-time high at $138 million, up 23 percent from a year ago. the digital businesses include titles like the free-to-play online game Battlefield Heroes. EA Mobile generated $50 million in non-GAAP revenue in the quarter, up 9 percent from a year ago. EA said it is the No. 1 publisher in iPhone games with seven of the top 10 games to date. It is No. 1 on Verizon, with eight of the top 10 games. During the quarter, EA launched six iPhone games; all six made it into the top 100 paid apps list, no small achievement with 100,000 apps on the Apple AppStore. And four of those games made it into the top 15 list.

A few years ago, digital businesses were 10 percent of the overall industry. But Riccitiello said digital is now 35 percent of the overall game business, and it is the reason that the game industry will grow in 2009, despite weakness in the packaged goods industry. Riccitiello said he thinks the packaged goods games sold at retail will bounce back, in part because console makers can still lower prices further and because new console owners will likely buy software in 2010.

For the fiscal year ended March 31, the GAAP net revenue is expected to be $3.6 – $3.9 billion. Non-GAAP revenue is expected to be $4.2 – $4.4 billion. GAAP diluted loss per share is expected to be $1.20 – $2.05 a share. Non-GAAP diluted earnings per share are expected to be 70 cents – $1 a share. EA expects to be profitable on a non-GAAP basis in both the third fiscal quarter ended Dec. 31 and the fourth-fiscal quarter ended March 31.

Big games coming in the second half of EA’s fiscal year are Mass Effect 2, Dante’s Inferno, Army of Two: the 40th Day, and Left4Dead2 (created by Valve, published by EA).

EA did not identify which studios it was closing in the coming months. But Riccitiello said that Nintendo Wii titles have not been hitting expectations. He noted that multi-platform titles have not been selling well on the Wii. The current relative weakness in the Wii compared to the resurgence of the PlayStation 3 and Xbox 360 is good for EA, which is stronger on the latter platforms, Riccitiello said.

EA also said it would put an emphasis on its EA Games label and EA Sports Label games, which lead to perennial hits over the years, and launch a new version every year or two. After that, EA would also focus on its Sims games and Hasbro-related games. EA is also investing in its digital online businesses from social games to online subscription games. But the company is essentially cutting the bottom third of its portfolio, Riccitiello said.

Other publications have reported that EA is cutting a lot of jobs at its Mythic, Tiburon, Black Box and Redwood Shores game studios. To get a sense of what this means, EA launched somewhere around 65 games last year, is launching 50 titles this year, and may have mid-30s in the coming year that ends March 31, 2011.

Speers: “The other argument from Google is that you could choose not to be on their search engine, that you could simply refuse … so that when someone does do a search, your sites don’t come up.”

Murdoch: “I think we will, but that’s when we start charging. We have it already with the Wall Street Journal. We have a wall, but it’s not right to the ceiling. You can get, usually, the first paragraph from any story – but if you’re not a paying subscriber to WSJ.com all you get is a paragraph and a subscription form.”

Best video moment is at 2:45, when Speers balls up a complicated, clever sentence about how search engines send lots of traffic to News websites. He tosses it over to Murdoch, who bats it down with a cheery ‘”That’s right.” The guy knows all about the Long Tail of referred traffic. He wants loyal readers instead.

Update: Here are some eye-opening stats from traffic research firm Experian Hitwise: