Bear Stearns (BSC) is gone, so the markets are wondering who's next. The leading contender? Lehman Brothers (LEH).

Lehman's stock dropped 15% on Friday, and it's down another 33% in pre-market trading. Some specific concerns:

Get ready. Now that Bear Stearns (BSC) has been forced to run hat in hand to the Fed and whimper that it's "too big to fail," the mewling is about to begin:

• It's not our fault! It's a run on the bank!
• We never could have seen this coming!
• Blame those jerks who stopped lending us money!

Give us a break. If Bear Stearns goes to zero, there will only be one party to blame: Bear Stearns management.

Kara Swisher revives an issue we raised a few weeks back: What happens if Yahoo (YHOO) blows Q1? This question has no doubt been bandied about in Microsoft (MSFT) conference rooms as an exasperated Steve Ballmer watches Yahoo's molasses-like response to its bid.

The Valley Bigwig outlined this strategy to us two weeks ago

Hulu finally launches, adding Warner Bros. and Lionsgate. CEO Jason Kilar says 5 million people have viewed Hulu videos in the past month and that 80% of Hulu's videos are viewed at least once a month.

Five million is an impressive number given that Hulu has been in a closed beta test, and as we said over the weekend, the product is great. As we also said over the weekend, however, we still have big doubts about Hulu as a business (see below). Judging from his quote in the NYT, CEO Jason Kilar is still optimistic that he can win over CBS and Disney as content partners, but as Michael Learmonth explained yesterday, this will be easier said than done.

AmTech initiates coverage of Microsoft (MSFT) and calls it "one of the most compelling investment opportunities in technology":

We believe that excellent fundamentals in MSFT’s core Client and Business segments will drive upside to conservative consensus estimates through CY09.

Rumor-monger TechCrunch cranks out another hot one -- Google is thinking of buying just under 20% of Yahoo just to block the Microsoft-Yahoo deal. Rumor-squelcher Swisher howls in protest but offers no scoop to debunk it. So it's time for us to weigh in.

We wish we found this "20% plan" absurd, but based on Google's silly reaction to the Microsoft bid to date, we think Google might actually be considering it. And although Kara is right that merely pretending to want to buy Yahoo stock at a premium would incite shareholder lawsuits and outrage, we don't see any reason why Google couldn't actually buy 20% of Yahoo. (Eric writes check for $11 billion, Google still has $3 billion left.)

Over at Silicon Alley Insider, we've been tracking recession signs for the past few months. Enough bad news is coming out now from enough industries now that I think it's reasonable to assume that we're already in a recession (Economists can't pinpoint recessions without the benefit of hindsight, and most recessions usually start while economists are still predicting that we won't have one).

Of course, whether we are technically in a recession or not is irrelevant--it's the trend that matters. And the trend is still getting worse. We continue to believe that the growing weakness will eventually hit online advertising, hurting AOL (TWX), Yahoo (YHOO), Google (GOOG), and others.

I'm going to go out on a limb here and assume that Microsoft (MSFT) division president Kevin Johnson is not a moron. So I'm also going to assume that, when Johnson said Thursday that Microsoft plans to grow its search share from 10% to 30% and its online ad share from 6%, he could not possibly be imagining that Microsoft could do this on its own.

So how could Microsoft actually achieve those goals?

Importantly, the traffic decline is not just for the site as a whole, and it's not just pageview-related. (Yahoo explains away some of its slow pageview growth by pointing out that it now uses a lot of video and AJAX.) Rather, it includes some of Yahoo's most important and most profitable properties...

• worldwide users +20%
• US users +18% (now 22% of 552 million global total)
• time spent on sites +113%
• page views +56%
• Google Maps: blows past Yahoo to 682 million pageviews/mo +98% (vs. Yahoo's 397 million, +32%)

Even more startling: YouTube now accounts for 28% of total minutes spent on Google worldwide and an astounding 35% of global users. This bodes well for Google's continued video dominance, but it also suggests the company's overall profit margins are likely to continue to decline significantly.

I don't know whether this is a "correction in a bull market" or the "start of a bear market," but I am far more persuaded by the latter case. After ten years on Wall Street, however, I can promise you this: No one else knows either. Go ahead and listen to the parade of smart guests on Bubblevision--their reasoning ranges from impeccable to hilarious--but just don't let yourself get seduced into betting big one way or the other. Because no one knows. (We have 50/50 odds, though, so half of us will be "right").

Senior New York Times reporters believe they are underpaid, and, relative to other highly educated folks at the peak of their professions, they sure are.  But relative to the online revenue they generate, those talented reporters, columnists, editors, and fact-checkers actually cost a fortune.

Answer: It was a good move. AOL certainly sacrificed some near-term cash flow, but, critically, it has retained (or replaced) the lost subscribers in the form of unique users. If AOL hadn't made its email available for free, meanwhile, it likely would have lost most of these subs forever. Also, even as AOL's subscription revenue plummeted, the company has preserved its cash flow, which is far more important.

Well, it seems it has. Valleywag's Owen Thomas reveals the June rate card.

Let's see, 150 group sponsorships times $300,000 per sponsorship for three months ($1.2 million per year), and you're at $180 million in revenue. And that's before the homepage sponsorships. And the $200 million three-year display deal with Microsoft (MSFT). Etc.

Do clients get discounts off the rate card? Of course. But even with the sponsorship rates set at half of what they apparently are today, director Peter Thiel's $150 million 2007 revenue number looked reasonable. And the more pertinent question is what 2008's revenue number looks like. And 2009's.

Now, people have been sticking their fingers in the wind on MySpace revenue since the day Murdoch bought it, but Forbes has better insight than most. In December, Technology Editor Peter Kafka (now Managing Editor of Silicon Alley Insider) wrote a profile of Murdoch in which he put MySpace revenue at "$30 million a month", or a run-rate $360 million a year. Forbes's Brown presumably has similarly strong Fox relationships, and she's now pegging the 2007 number at $1 billion. Assuming solid month-to-month growth off the $30 million December number, the $1 billion isn't even a stretch.

Key points:

Google's (GOOG) expenses were higher than expected (see conference call transcript) because:

1) They hired more people than they planned to, and
2) They changed the way they account for bonuses, which required a "catch-up" from Q1.

Positives

The Bancrofts have two futures: 1) Owners of a lot of moribund Dow Jones stock perpetually worth less than $30 a share, or 2) Former owners of a lot of Dow Jones stock sold for the amazing price of $60 a share. Time to pick one and move on.