This has to be salt in the wounds of Microsoft, who has had suffered several missteps and has seen the mythical Windows Mobile 7 get dealayed over 2 years. Windows Mobile 6.5 launched earlier this month to little fan fair. People are not considering Windows Mobile 6.5 a real competitor to the iPhone. Microsoft is not really in the converation now and Google has to be celebrating. Motorola’s Droid is certainly going head to head with the iPhone.

I was recently at Web 2.0 and I heard Ev’s conversation with John Battelle. Not much has changed. He seemed very coy about his plans to figure out a business model or solve Twitter’s scalability issues. Even during his talk I could see several people in the audience getting the Twitter Fail Whale trying the access Twitter. But one of Ev’s problems might be solved sooner rather than later. The two search titans Microsoft and Google struck deals with Twitter to get access to its valuable real time data. Both Microsoft and Google most certainly had to pay for it. Sheryl Sandberg made it a point to say she didnt believe in charging for data. Early this year Ev closed another round of financing putting the total at $100 million with a whopping $1 billion valuation. With all this hype Twitter is seeing their growth plateau  and they are getting more and more competition from Facebook.

The T-Mobile Sidekick disasteris turning into one of the biggest train wrecks in recent years. In the era of cloud computing and people dependent on their mobile phones Microsoft is in the middle of  a PR disasters.

Its not everyday Perez Hilton breaks a tech story wide open by ranting on his blog how for seven days he has not been able to access email or contacts on his T-Mobile Sidekick. He immediately ignited the twitt-o-sphere by telling all his loyal fans to tweet #TmobileStillSucks. What came next was so unbelievable it had to be considered a sick joke to Sidekick customers. T-Mobile issued a letter to all of its Sidekick customers saying that based on Microsoft/Danger’s recovery assessment, they basically lost all of peoples’ data. And to make matters worse they have no backup.

Update: T-Mobile halted selling Sidekick devices. T-Mobile is now saying that “Recent efforts indicate the prospects of recovering some lost content may now be possible.” CNet reported that those who do suffer permanent data loss will get a $100 “customer appreciation card” good toward T-Mobile service or products.

Microsoft launch an advertising campaign called Laptop Hunters where they give people a set amount of money to find a laptop to meet their needs. If they get it for less they keep the cash. The recent commercial has a kid and his mom shopping for a new laptop.

This marketing campaign does get enough credit for being smart and effective. Microsoft’s response to Apple’s commercials has been direct and bold. Given the current economic environment, people are much more focused on making every dollar count. And these commercials hit and the heart of Apple’s premium pricing which has helped them amass a war chest of cash. Now that premium pricing will be under pressure.

Google said, “We’ve identified and fixed a bug which may have caused you to share some of your documents without your knowledge. This inadvertent sharing was limited to people with whom you, or a collaborator with sharing rights, had previously shared a document.”

This is a huge debacle for Google and they seem to be less than transparent about the impact. Google responded to a TechCrunch inquiry, by saying that it was an isolated incident affecting less than .05% of all documents. The damage may not be widespread, but it’s still an unsettling lapse in security.  

Google has a tendacy to keep these types of things very quite. Like when Gmail goes down it takes them forever to admit something is wrong. There have been several mishaps in the last year that should call into question Google’s coding and testing practices.

The bigger question is how Jeff Bezos can scale this beyond the Kindle device. Even though he has found a niche hardware business that is probably profitable it doesn’t scale to 100s of millions of people.  Beyond the tech savvy affluent few, not many people are going to be shelling out $350 on a device with a singular purpose. Especially when you can get a netbook for roughly the same price.

Palm packed a lot in this device and seemed to really exploit the flaws of the iPhone. Namely, the Palm Pre includes a removable battery, QWERTY keyboard, and it even has a copy paste feature. It also shows off a lot of innovation around gesturing and the way the UI is built. What is is remarkable about all of this is Palm was on the verge of going out of business and in less than a year came out with a device to rival the iPhone. It looks like Palm finally got its mojo back. And if Palm can get these devices to market quickly, word on the street is some time in February, then they could become a major player again in the mobile industry.

Gmail which is still in beta after more than 5 years has been having a huge growth spurt. Over the last year Gmail has grown over 43% and with offline access I am sure the growth will continue. Gmail is one of Google’s only success stories out of their core search business. If I was Yahoo or Microsoft I would be more concerned than ever about Google taking more market share and more effectively monetizing those new users.

Now Twitter is raising more money to keep afloat after turning down a rumored $500 million offer to be bought by Facebook. Twitter’s new valuation is $250 million and IVP has given them $20 million. This should keep the lights on a little longer as they try to scale their user base and find a business model. Erick Schonfeld of TechCruch, pointed out that Twitter’s user base is growing fast and by some metrics Twitter passed Digg in number of users. Regardless, Twitter is destined for the dead pool or it will get bought by either Facebook, Microsoft, or Google. There is nothing they have which is a real competitive advantage. Twitter is nothing more than a feature in someone else’s product.