Apple releases a commercial about the glories of having Intel inside, while Bill Gates says, “The users don’t really care what’s inside the machine in terms of the processor.”

The commercial is mildly amusing, but Gates is right.

Jason O’Grady doubles down on his prediction that Apple will today unveil two big-ass Macintosh high-definition television sets, running OS X on a dual-core Intel processor, complete with a massive hard drive, an iPod dock, bluetooth, wi-fi, and an Apple DVR system.

It’s a terrific pre-Macworld rumor, for two reasons. First, it’s ludicrous. Second, it seems, well, Steve-Jobs-ish. Think about it. Up to now, the merger of TVs and computers has been a geek hack – you have to bring a computer into your living room and plug your TV into it and deal with all sorts of ugly configuration hassles. Who needs it? Make them a single device, and the hassles go away. You get a TV-Tivo-Computer with an easy interface for managing your media and a direct line into Apple’s iTunes store for downloading video and tunes. You get the TV of the future.

Sure, it’s crazy. But so was the iPod.

UPDATE: At the last moment, O’Grady wusses out. If you can’t take the heat, get out of the reality distortion field.

The iPod is toast. So says the Harvard Business School’s Clayton Christensen in a Business Week interview posted today, the eve of Steve Jobs’s Macworld keynote. Christensen, like many before him, believes that Apple’s desire to keep the iPod a closed system, rather than allowing other manufacturers to use iTunes software in their devices, amounts to a replay of Apple’s fateful decision not to license the Mac OS, which (the story goes) opened the way for Microsoft’s dominance in PCs.

“I’d be very surprised,” Christensen says, “if three years from now, the proprietary architecture [in music players] is as dominant as it is now. Think about the PC. Apple dominated the market in 1983, but by 1987, the industry-standard companies, such as IBM and Compaq, had begun to take over.”

Hold on a second. Apple dominated the PC market in 1983? That was a year before the Macintosh was introduced, and at the time PC market shares looked like this:

Commodore: 41%

IBM PC/clones: 26%

Atari: 10%

Apple II: 9%

Other: 14%

Apple was hardly dominating the market in 1983. In fact, Apple never had a particularly big share of the PC market; it’s basically been a niche player all along. The Macintosh’s share peaked at 12% in 1992 – when IBM PCs and clones held the other 88% of the market.

By contrast, the iPod’s current share of the market for portable digital music players is estimated at upwards of 70% (and its share of music downloads is probably even bigger). Controlling 70% of a market is a heck of a lot different than controlling 12%. In fact, it’s completely different.

Apple today is in the driver’s seat in the digital music business in a way that it never was in the PC business, and it will likely announce products and partnerships tomorrow that will extend its lead in video as well. If Apple’s rivals are going to overtake it, they’re going to have to come up with a better strategy than waiting for history to repeat itself.

A couple of days ago, I asked, “Is the ad bubble leaking?” I pointed to some anecdotal evidence that on-line advertisers were beginning to rebel against high per-click ad prices. A study released today, by Fathom Online, also points to some recent softness in ad pricing.

But there’s another side to the story. Writing in response to my post, Paul Needham noted that as advertisers improve their sites, increasing the efficiency with which they convert searchers into buyers, the value of every visitor will go up, and the advertisers will thus be able to bid more for keywords – boosting the revenue of Google and other search engines.

Today, in an insightful article titled “Search Engines as Leeches on the Web,” Jakob Nielsen explores the economics of this phenomenon further. Using a simple example, he shows how companies that depend on paid search ads are stuck in a vicious cycle: Whenever they enhance the effectiveness of their sites, they’ll tend to compete away the economic gains by bidding up keyword prices. “In the long run,” Nielsen writes, “every time companies increase the value of their online businesses, they end up handing over all that added value to the search engines. Any gain is temporary; once competing sites improve their profit-per-visitor enough to increase their search bids, they’ll drive up everybody’s cost of traffic.”

That in a nutshell is one of the beauties of Google’s business model. And it certainly explains why the company recently made its Google Analytics site-optimization service free – the benefits will tend to flow not into the sites’ coffers but into its own. Sweet!

But it’s also troubling: It points to a new kind of economic asymmetry arising on the web – something that I’m not sure we’ve ever quite seen before. It’s not clear, for instance, that increased competition among search engines would remedy the imbalance (as competition usually would) – after all, the search engines aren’t setting the prices; the advertisers themselves are. Nielsen writes: “I worry that search engines are sucking out too much of the Web’s value, acting as leeches on companies that create the very source materials the search engines index.” He also predicts that “liberation from search engines will be one of the biggest strategic issues for websites in the coming years.”

That sounds right, but I have to say, after reading Nielsen’s piece, I’d rather be the leach than the leachee.

UPDATE: Jason Calacanis calls Nielsen’s article “the stupidest thing I’ve read in a long time,” noting that search engines drive lots of visitors to sites and that Google’s AdSense can provide sites with important revenues. I think Calacanis and Nielsen are both right; they’re just looking at different things. Nielsen is looking at sites as advertisers, while Calacanis is looking at sites as content providers. Obviously, many sites are both, which certainly complicates the picture.

Be careful what you wish for.

After Google’s Larry Page finished his CES presentation in Las Vegas tonight, he reportedly headed over to the Venetian Hotel to take a ride in a fake gondola down an artificial canal in a shopping mall disguised as a great city. “Cool,” he said. “This is just like the internet.”

OK. I made that up.

But what exactly does a Do No Evil guy do in Sin City? One thing he does is get up to a little competitive devilry by unveiling the Google Pack, a parcel of software programs that you can download for free (if you have a Windows PC). There’s nothing particularly interesting or surprising about what’s in the Pack – it’s something of a dog’s breakfast, actually – but that, I’m pretty sure, is by design. Google wants the initial version of the Pack to be inoffensive because the overriding goal is to get as many Windows users as possible to download it. (If Google stuck Open Office in it, for instance, a lot of users would be nervous, both about the size of the download and about the possibility of screwing up their existing applications.) The Pack is a preemptive strike against Microsoft, which Google knows will use its upcoming updates to Windows, Internet Explorer, and Office to lead users as far away from Google as possible. The Pack will enable Google to get its two desktop search tools – Google Desktop and Google Toolbar – onto more PCs and, in the process, to install a little trojan horse named Google Updater. Updater, Google says, “helps you discover new programs and keep your current software up to date.” In other words, it gives the Googleplex a direct channel into your PC, bypassing Microsoft’s operating system and updater.

Why’s that important? Because, among other things, Google desperately wants to avoid ceding to Microsoft control over a PC’s default software settings, particularly those controlling the desktop-search and web-browser applications (Pack also includes the Firefox browser, with embedded Google search). It’s worth remembering that one of Google’s top advisers is Hal Varian, the Berkeley economist, who has studied what he calls “the power of the default”: the tendency of ordinary people to stick with what they’re given, rather than spend time actively seeking alternatives. Defaults have a big influence over how people operate their computers and thus over which browser and search engine they use – and defaults are often set when you install or update a program.

Updater gives Google an opportunity to counter, to some degree, at least, the advantage that Microsoft holds through its control of the operating system. How well the tactic will work remains to be seen, but it’s certainly worth a shot.

Microsoft still doesn’t get it. I had allowed myself, as I read Ray Ozzie’s recent memo on the transformation of the software business, to believe that a fresh wind was blowing through Redmond, that the Goliath of the desktop was genuinely interested in remaking itself for the post-PC age. But this morning I finally forced myself to watch Bill Gates’s presentation at the Consumer Electronics Show. It was the same old Gates, the same old Microsoft.

Microsoft has always been obsessed with “features,” with the new things software can be made to do. That obsession, which despite the lipservice routinely paid to “user-centricity” gives the technology precedence over the customer, served the company very well when the competitive battle was over control of the PC desktop. By constantly dumping more features into the box, Microsoft overwhelmed its competitors. It owned the box. But the PC is dead. Dead as a buggy whip. I don’t mean the form factor of the PC; I mean the idea of the PC – the standalone, jack-of-all-trades-master-of-none box sitting on your desk or in your lap. That box is exploding into myriad devices, myriad services. What matters now is not features but tools, not complexity but simplicity, not coolness but usefulness. We’re not geeks playing with technology; we’re people trying to get things done with the least amount of hassle possible – maybe even with a little pleasure.

So what does Gates talk about? The “digital lifestyle” with “software at its center.” Maybe robots want digital lifestyles, but human beings don’t. Human beings want lives. This digital lifestyle, as Gates envisions it, is just another big pile of software features that we have to sort through and make sense of. We get up and stare into a vast computer screen in our kitchen, with multiple video feeds, multiple digital images of our children, and a map on which we can track the moment-by-moment movements of our family members. (What’s next? The Xbox Digital Chastity Belt?) When we get to work we sit down in front of – guess what? – an even bigger computer screen filled with a bunch of software features, not to mention a handy tablet PC to doodle on. Go to the airport? Another big screen with another bunch of software features. As we move between the big screens, we have the little computer screen of our cell phone, loaded with, yes, a bunch of software features.

What’s revealing about Gates’s vision of the future is that it is completely devoid of direct human contact. It’s a geek’s paradise. You get to fiddle with software all day, from the moment you get out of bed to the moment you fall back into it. We’re not freed from the box; we’re trapped inside it. Endlessly.

In talking about media, Gates says software will make things “simpler.” But then he tees up a demo, by another Microsoft employee, of a bunch of software features larded on top of new DVD technology – features that seem designed to be as annoying as possible. As you’re watching a movie, for instance, you’ll be able to superimpose all sorts of new doo-dads on your TV screen. Robert Scoble, Microsoft’s resident blogger, speaks for the geeks of the world by saying this is “Neat!” but it’s New York Times columnist David Pogue who nails the normal person’s reaction:

Doesn’t Microsoft realize that people HATE all the superimposed junk these days – the pop-ups, the network logo in the corner, the animated distractions? That’s one of the main reasons we WATCH movies on DVD – to escape all of that detritus. And now we’re supposed to buy a new player and a new DVD collection so we can superimpose still more crud on our favorite movies? Hello!?

I have enormous respect for Bill Gates. I admire his steadfast refusal to be anyone other than himself. I think he proved himself the greatest strategist of the PC era. His philanthropic work, particularly in fighting malaria, is a model that other billionaires would do well to emulate, as is his commitment to giving his fortune away rather than bestowing it on his kids. But if he’s going to lead Microsoft successfully into the post-PC age, he’s going to have to realize that while software may be at the center of his existence, it’s not at the center of most people’s.