Navel Observatory: Snippets from Sun Valley

The Sun Valley media and technology conference opened Wednesday. We like to make fun of the confab of media moguls and owners as “navel gazing” (hence the pun in the post title!)—I mean, a media conference that’s closed to the press?—but since the press seems to be swarming around outside the conference and lots of people seem willing to talk, I guess it’s time to fire up the ol’ rumor mill.

First up, Google’s CEO Eric Schmidt. In a press conference last night, Schmidt said he tried for six years to save us from Chrome and the pending Google OS, but eventually the wave of enthusiasm that is Larry Page and Sergey Brin overpowered his objections:

“I just gave up,” Mr. Schmidt said. “But there is no question I am hugely supportive of Chrome and Chrome OS. They are game-changers. They change the way you think about your computer.”

The new Chrome OS, they said, will be “virtually indistinguishable from a browser” (WSJ’s words). However, they were careful to avoid saying they’ll be a competitor to Microsoft in the netbook space, opining instead that they’ll “expand the market for netbooks” (WSJ again).

The Wall-Street Journal has more notes from their remarks, covering everything from Twitter (“We like Twitter a lot. . . . We were worried these guys might be competitors, but it looks like people who use Twitter and Facebook start using Google more.”) to the book settlement agreement to YouTube.

Next up: AOL’s Tim Armstrong. As a refresher, while the once-ISP-king is now struggling mightily, a little over a year ago AOL acquired Bebo, formerly the most popular UK social network at the time (and still a strong competitor to Facebook), for $850M. AOL also owns such sites as TMZ,

Now, AOL is reviewing its acquisition portfolio. While in this economy (and with social networks’ continued struggles for monetization) they couldn’t hope to recoup their purchase price, could AOL need the cash enough to sell off Bebo?

CEO Tim Armstrong says that’s improbable. The company is “reviewing assets it could sell or divest, but will likely keep its social networking site Bebo,” as Reuters reports.

What do you think? Is the Chrome OS going to open up the netbook market, or is it yet another way for Google to challenge Microsoft? What should AOL sell off to keep itself afloat?