By now the headlines already will have covered the basics. Google’s (GOOG) fourth-quarter revenues were up 18% to $5.7 billion, a solid showing. Profits fell, but only because Google wrote down loser investments in AOL, a unit of Fortune parent Time Warner (TWX), and Clearwire, the Wimax company that’s also an embarrassment to Motorola  and Intel (INTC). On a day that Microsoft’s (MSFT) stock tanked by 12%, once again Google comes up smelling like roses. Not super fragrant roses. But roses all the same.

Google believes it is doing well because scarce advertising dollars continue to flow to search and because it keeps improving its search engine. (Google made 300-plus  search-quality improvements during 2008, says the company’s product pooh-bah Jonathan Rosenberg.) Microsoft, in comparison, can’t shoot straight online. Earlier in the day the company reported that its online unit’s operating loss had doubled to $471 million on flat revenue.

Google’s got almost $16 billion in cash now, compared with $28 billion for Apple (AAPL) and about $21 billion for Microsoft (which has given back oodles to its shareholders in the form of special dividends). Google ended the year with 20, 222 employees (one of whom is my wife), up about 100 people from the previous quarter. That’s a sea change for the company that previously couldn’t recruit people fast enough. (Larry Page, who likes to review every hire, must be at least a little relieved by this.)

If there was anything at all notable about Google’s results and comments to investors during an end-of-day conference call, it is the curious prudence that has crept into its collective voice. Google always used to say it was careful about costs and thoughtful about how it managed its resources. That was well understood to be code language for: “We spend willy nilly — wouldn’t you? — and we’re willing to try just about anything. Our core business is that good.”

Things have changed a bit. Credit this with new CFO Patrick Pichette, who has been at Google only six months and is carefully deciding where — and where not — to push. You can hear the tension in his own conflicting statements. “We have a lot of flexibility within our model,” he said Wednesday, meaning Google easily can cut more costs when it wants or needs to. And then, “We are managing this business for the long term. The mindset of the company is a growth company.” That latter comment signals Google will continue to invest and spend on things that may never see a return, just as powerful risk-taking concerns should — despite the professed commitment to prudence.

So where does the more measured behavior manifest itself? I’ve already noted the hiring halt. Capital expenditures declined 19% from the third quarter to $368 million. This is a huge deal in Googledom as capex goes primarily to data centers and other hardware that make the Google search engine hum.

One last item of note. Google is offering employees the opportunity to exchange underwater stock options for newly priced options due to the stock price having been hammered. (The only catch in the exchange is that employees will have to wait an additional 12 months before selling re-priced options.) The stock price is  currently around $300, compared with $700 in late 2007. The number of shares eligible for exchange is about 3% of the shares outstanding, and the exchange will result in a charge to earnings of $460 million over a five-year period.

One must re-phrase this last bit in English: Google is transferring almost half a billion dollars in wealth from shareholders to employees, and for what ….? Motivation and retention, says Google. This a well known farce, as old as the Valley, which tells itself first that it offers generous stock options as a form of incentive and then, when share prices plummet, moves the ball so its employees, whose incentives apparently didn’t work (as if the stock price were under their control) can be re-incentivized. Retention? Would someone please tell me where the average Google employee is going to go right now?

In conclusion, and as the headline says, Google is in good shape. Not fantastic. But plenty damn good. It’s also becoming more and more like other technology companies in so many ways.

There was a magical moment that had nothing to do with financial results Wednesday afternoon in Apple’s (AAPL) conference call with investors. What made the magic remarkable is that it came from Tim Cook, the supposedly uncharismatic, unemotional, uninspiring chief operating officer of the company, the guy whom Steve Jobs tapped to run day-to-day operations during his medical leave of absence, even though Cook already runs the company’s operations.

Asked the inevitable first question about how the company would function without Jobs, Cook let loose the following, courtesy of Seekingalpha.com, a monologue I’m labeling the Cook Doctrine, that he appeared to deliver extemporaneously:

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

This is fascinating at a number of levels. Some of it is stuff you’d expect from anyone in Apple’s senior management. Some ideas have been articulated at Apple for years. But this shows an executive who has given tons of thought to what it means to lead Apple. He couldn’t have been clearer that he’s in charge, at least for now. It also was a show of strength, as when Cook later threatened Palm (PALM) with patent litigation.

It raised so many questions too. Other than the company’s proprietary operating systems, what technologies was Cook referring to? What are some projects Apple has considered and rejected? When has the company been wrong — and been “self-honest” about it? What’s an example of the culture being so embedded that things work, even when Jobs isn’t involved?

There is so much to learn about Apple that frankly has been obscured for so long by the cult of personality around Steve Jobs. As Cook said before beginning his series of “We believes,” it’s a place with a deep bench. Yet few have heard of the supporting cast memebers, in part for fear of their being poached, in part because its always been all about Steve.

What’s clear is that Apple’s current leader — whom I’ve admittedly spent a lot of time thinking about – is eloquent, forceful and passionate about Apple. He may be a just-the-facts operations wonk with little experience in design, marketing for products. But he’s clearly so much more as well.

Pattie Sellers and I are having a debate about board memberships. She intelligently argues that boards are good, especially for women, who have a disadvantage at the highest reaches of corporate America.

Still, you’ll know Carol Bartz, the incoming CEO of Yahoo (YHOO), is super serious about her massive task at hand if she immediately drops off the boards of Cisco (CSCO), where’s she’s the lead independent director; Intel (INTC) a board post she awkwardly shares with outgoing Yahoo President Sue Decker; and NetApp (NTAP).

I totally get that outside boards help the individual as well as, at least a little, their company. However, when you’re in crisis mode, which is what Bartz’s situation at Yahoo will be, there’s simply no time for anything else. There’s no room for a single 200-hour-a-year commitment other than the one company where you’re the chief executive.  (Never mind a personal life; that’s another story.) When the crisis passes, that’s a good time to join an outside board. (It took HP’s (HPQ) Mark Hurd three years before he joined the board of News Corp., for example.)

There’s no right answer to this question. It’s all opinion. And Pattie already is reporting that Bartz will exit the Intel and NetApp boards. Were she to drop Cisco too, I’d argue for boosting her odds of success at Yahoo exponentially.

Just before the new year a Silicon Valley financial type pointed out to me that August Capital, an old-line but quiet venture firm, had invested twice in disc-drive leader Seagate (STX), once as a venture investment and again alongside Silver Lake and TPG in a going-private transaction in 2000. “Who knows,” this investor quipped, noting Seagate’s plummeting stock price, then and now below $5 per share, “maybe August will get another chance.” (August’s co-founder, David Marquardt, is on Seagate’s board.)

Seagate this week dumped its mouthy CEO, Bill Watkins, whom Jeff O’Brien describes nicely here. If you don’t follow the drive business carefully you don’t know who’s up and who’s down. Apparently, Western Digital (WDC), which I profiled at least one complete cycle ago, is up, and Seagate is down. A Seagate spokesman gave O’Brien an unusually clear answer as to why Watkins got the boot, explaining that “everyone here is focused on fixing the execution issues and regaining the technology leadership that we let slip. That means improving time to market, [and] getting the customers the right products at the right time. It’s been apparent that we’ve let that slip, and we’ve got to get that back.” That’s industry code for: The competition released faster, better products more quickly than we did, causing us to lose share and profitability.

So would Seagate go private again? It’s worth less than half  its 2002 IPO price and a sixth of its post-IPO peak. Former and now new CEO Steve Luczo is a congenital investment banker who loves to do deals. Then again, a new LBO would be problematic. First, there’s little leverage (debt) to be had right now.  Second, the 2000 deal was unique because Seagate owned a weirdly highly valued stake in Veritas, now owned by Symantec (SYMC). Third, the drive business itself faces a crisis in the substitution of flash memory in devices that use hard drives, like music players.

But good luck, Steve. Really.

Some other thoughts on the week so far …

* At the risk of piling on a departing executive who ought to have been shown the door a ways back, I had a different reaction to what Pattie Sellers refers to as outgoing Yahoo (YHOO) President Sue Decker’s “breadth of experience” and “impressive resume.” Sellers notes that Decker is on the boards of Berkshire Hathaway, Intel and Costco.  My thought on being reminded of that? How the hell did someone in a grueling and overwhelming job and who happens to have a punishing commute to work maintain memberships on the boards of three such significant companies? Here’s another question: Why did the board tolerate Decker’s willingness to be even the slightest bit distracted for so long?

* David Swensen, the legendary head of the Yale endowment, sort of answered the question I raised this week about endowments, in an interview with the Wall Street Journal Tuesday. Asked if his lousy performance in 2008 would cause him to alter his approach, he said: “I don’t think it makes sense for an institutional investor with as long an investment horizon as Yale’s to structure a portfolio to perform well in a period of financial crisis. That would require moving away from equity-oriented investments that have served institutions with long time horizons well.” The introduction to the article notes, however, that Yale will cut its operating budget as a result of the performance of its endowment. Swensen’s the genius. But I don’t care how long your time horizon is if your failure to protect near-term earmarked money causes your single client to cut its near-term spending.

* Kudos to First Round Capital, the pioneering angel/VC firm that specializes — like many, many other new firms — in smallish investments in truly early-stage companies, for hosting its “CEO summit” in an inexpensive venue:  meeting rooms at a community center on the Mission Bay campus of the University of California at San Francisco. No, I wasn’t invited to the meeting. It just so happens that First Round’s welcome table was set up right outside the UCSF gym, where I worked out Tuesday morning. The foyer was lousy with late thirtysomethingish men dressed in sport coats, blue jeans and lots of hair product. The VC business may be freaking out, but you wouldn’t know from observing the breakfast chatter among frugal First Round’s CEOs.

To start the week off, here are a few things that jumped out at me over the weekend.

* In a New York Times review of a new biography of William Randolph Hearst was this startling fact: In the 1890s, when Hearst relocated to New York from San Francisco, his new city was home to 48 daily papers. Reviewer and veteran newsman Jack Rosenthal calls this period “print’s riotous spring, a different transformative time for newspapers.” It’s a nice turn of phrase, and the period certainly stands in stark contrast to the bleak, Google (GOOG)-dominated period I’ve been describing.

* The Times also reported that last seaon’s two-night premier of American Idol on News Corp.’s (NWS) Fox network attracted an average of 33.3 million viewers, its worst debut since the fourth season, “down 6 percent from the previous season, according to Fox, though,” – and here the emphasis is mine - “‘Idol’ remained the highest-rated series on network television.” Any other program on television gladly would suffer through an audience of 33.3 million viewers.

* ExxonMobil (XOM) CEO Rex Tillerson last week advocated a carbon tax rather than a regulated carbon trading regime in the United States. The commentariat quickly said a carbon tax isn’t politically possible and some, like Fortune partner Breakingviews.com, accused Tillerson of (cleverly and productively) pandering to the incoming administration. The notion of a carbon tax first came to my attention at the Fortune 500 Forum last month, where FedEx (FDX) legend Fred Smith and Marvin Odum, U.S. chief of Shell (RDSB), supported it. Given all the problems with carbon trading, and despite that Congress isn’t paying attention to it, my instincts tell me it’s probably a good idea to pursue.

* Palm (PALM) introduced a new phone, and its stock popped 91% on the week. Two facts from Palm jumped out at me: the phone is due out in the “first half of 2009″ and “pricing for the phone has not yet been determined.” Long articles could be written on what it means that Palm and partner Sprint don’t yet know when they’ll actually deliver the product or how much it will cost. I’m comfortable predicting this volatile stock will remain volatile.

* Last thing. Loads of endowments, the latest being Princeton University’s, are announcing that investment losses will lead to decreased funding to their university’s operating budgets. Last week the head of a philanthropy told me his budget will take a hit as donors stretch out the payments of promised grants. This is pathetic and shocking on so many levels. If you’ve promised to give someone money in the next year or so, wouldn’t you make sure that money was invested conservatively, like in cash or Treasuries? That’s essentially how my toddler’s 529 plan works with Vanguard: As she approaches college age Vanguard automatically will shift my investments for her into ultra-safe places. Why on earth wasn’t Princeton – and donors to the philanthropy – doing this with promised money? Again, articles – no, books – could be written.

Have a nice week.

There’s been so much online discussion about the interview I did with Google’s (GOOG) Eric Schmidt on this subject that I thought I’d post a few more thoughts. (John Battelle snarkily notes that all the discussion has been online … that’s, of course, just the discussion you’re seeing, John, which isn’t the same thing as all the discussion; most people haven’t even seen a print copy of that issue of Fortune yet, but that’s another story.)

Immediately after this piece ran I had an interesting conversation with an astute observer of this stuff, who raised a good point. Is the right question, can newspapers be saved? Or is it, can the print editions of papers be saved? I think it’s clear now that only the first question is relevant. The distribution method shouldn’t matter. If print has to die or be seriously scaled back, so be it, though I think the online-only crowd does itself a disservice. There’s simply no way to re-create the serendipitous experience of reading a newspaper online.  If you don’t read a paper, you will miss things. Period. (I know a print organization that is in the process of eliminating paid print subscriptions; that’s sad, but I digress.)  The more important thing is saving the journalism that goes into it. And I fear that in the interim period between now, when online doesn’t begin to pay for news gathering, and later, when somebody figures out the business model, irreparable damage will get done to the trade. With respect, young people who get their training at your typical blog (of course there will be exceptions) aren’t going to learn how to be journalists.

It’s a sad state of affairs, and Battelle is right to compare it to the auto industry, something Jack Welch also does in a TV show on Fox News he and I appear on this Saturday morning.

President-elect Obama’s first speech since the election won’t likely be remembered much by history, especially compared with his upcoming inaugural address. Nevertheless, it was an important moment because it marked the beginning of his new campaign, to sell a massive stimulus plan he hopes will make 2009 the low point for the American economy rather than merely the second year of a more prolonged slump. Here are a few things that jumped out at me as he spoke at George Mason University on Thursday morning.

1. It will be good to have a president who uses moderately big words. I loved the expression “paradox and the promise of this moment” referring to a time when so many are out of work and yet there’s so much work to be done.  Maybe paradox isn’t such a toughie, but merely having a leader with oratorical ambition will be a joy for a nation used to being talked to like fourth graders.

2. Obama’s overarching economic themes aren’t so very different from Bush’s. Obama plans to embrace tax cuts, stimulus and even entitlement reform, something he explicitly said in a late debate would have to wait until his second term. These are all themes the current president pursued, some more successfully than others. Obama is showing his pragmatic streak in other areas as well, as John Heilemann recently noted in New York Magazine with regard to Obama’s indicated foreign policy.

3. I wish Obama wouldn’t have said that “our government already has spent a good deal of money” on the recovery. By stressing spending he missed an opportunity to point out that so far what Washington has done most of is lending. The spending essentially starts now, and by drawing this distinction he would have helped his cause.

4. I’m all for transparency, but I fear Obama’s faith in posting government spending online is misplaced. Reporters and other watchdogs have been calling out bridges-to-nowhere for years. Politicians are like used-car salesmen, with apologies to used-car salesmen: extremely difficult to shame or embarrass.

5. Having said that, Obama’s distinction between earmarks and pork as business as usual and what he expects in this legislation was intriguing. When he said, “I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations,” he seemed to be acknowledging that it’s folly to think we can eradicate the ways of Washington. Will members of Congress honor his request to refrain from politicking  for a bit? Don’t count on it.

Obama isn’t perfect, but he’s off to a good start. I’m encouraged.

A couple years ago, right around the time Dell’s exploding laptop batteries were getting a fair amount of media attention, I had breakfast in San Francisco with a senior Dell executive. He was seriously annoyed by all the focus on Dell (DELL), even though his company wasn’t the only one with the spontaneous combustion problem caused by Sony’s (SNE) batteries.

I used, with little success, an explanation I like to give subjects trying to understand their media coverage. It revolves around a key scene in the fabulous Ron Howard movie “The Paper” in which a tortured city hall official pleads with a columnist to know why the latter is targeting the former in his columns. “You don’t get it, do you,” replies the news man.  “It’s your turn.”

My point then was that Dell, which had been among the smuggest of successful companies — ‘Our business model is our innovation’ … Michael Dell saying in 1997 that if he ran Apple (AAPL) he’d “shut it down and give the money back to the shareholders” — was about to experience the reverse of adulation. When you brag on the way up your critics will gloat on the way down. The mistake is to think the media takes sides. Not really. It joins in the praise as well as the scorn.

Anyway, fast forward to 2008, and it’s interesting to see just how defensive and downright snippy Dell has become, having been humbled by the likes of once lowly Apple and the former PC industry doormat, Hewlett-Packard (HPQ). Michael Dell, the current and former CEO, clearly picked the wrong reporter to get his back up with when he told Ashlee Vance of the New York Times, “I don’t appreciate the tone of your reference,” in response to a question about Dell’s culture. (My only quibble with Vance’s article is that it doesn’t explain why acquisitions are necessary for Dell. I don’t doubt that they are. I’d just like to have had it explained to me.)

More recently, Dell has been publicly suggesting that it’s greener than Apple, using the kind of intemperate and schoolyard-like taunting one typically doesn’t see from Fortune 500 companies. (Read John Paczkowski’s spot-on overview, titled, “Dell Green, All Right — Green With Envy.”)

It’s easy to understand why Dell (the person and the company) are so sensitive. Its once world-beating stock trades where it did about 11 years ago. Its management has largely turned over. Its reputation lags the competition.

Will Dell have its turn to shine again? Most likely. First, though, it’ll  have to lose the attitude. Then, when it starts to succeed again the ‘Dell is Back!’ stories will appear.

And the cycle will begin anew.

Facebook held a holiday party Monday night for journalists at its headquarters in rainy, cold Palo Alto. The conversations there were strictly off the record, so I can’t quote what people told me over egg nog and finger food.

I’ll share a few thoughts anyway because Facebook’s an interesting company that’s in the news a lot. First, it has acquired interesting DNA. Much has been made of how young and inexperienced CEO Mark Zuckerberg is. (The young-and-inexperienced one has become totally adequate at making small talk at cocktail parties, by the way.) I can’t tell you what Zuckerberg said to me, but I can tell you he’s pleased that Facebook is getting easier to use; he’s jazzed by the company’s new deal with IAC’s (IACI) CitySearch that makes it easy for people to share info with their “friends” about places to go and things to do; and he talks about the news biz with pal/mentor/new board member Don Graham of Washington Post Co. (WPO).

But I digress. Facebook has pulled in nearly grey-haired talent from places like Google (GOOG), Amazon (AMZN) and eBay (EBAY). They’re the kinds of people who’ve seen what works and what doesn’t in the tech business. Without saying which exiles from those companies I talked to, I’ll mention one I didn’t: Gideon Yu, the former YouTube/Google executive who’s currently Facebook’s chief financial officer. Where were you Gideon?

What else? Various Facebookers pooh-poohed the recent ruckus over its inability to sell employee shares at their anticipated valuation. Whose stock hasn’t gotten hammered, after all, goes the argument.  (A more effective way of downplaying such stories would be to discuss it with me on the record. I’m just saying.)

Someone familiar with her thinking reports that Chief Operating Officer Sheryl Sandberg, the former chief of staff to incoming Obama economic advisor (and former Treasury secretary) Larry Summers, isn’t sorry she’s not going to Washington. Sandberg isn’t a banking expert anyway, and that’s the kind of expertise that’s called for right now.

Facebook also is smart about its journalist schwag. It distributed two party favors to journos on their way out the door: A $100 gift card from DonorsChoose.org that allows its holder to donate the money to any school of their choice. I love that. The second is a little bag that looks like a compact-disc holder that unzips and unfolds into one of those crunchy granola bags people bring with them to the supermarket. Also smart. My wife will LOVE that.

Oh, one last thing. I’m beginning to crumble on my well-documented aversion to Facebook. It’s probably all my old pals from Kroehler YMCA Camp who have friended me lately that have caused me to reconsider. But that’s a story for another day.

I’m always too slow to get around to reporting about our great Fortune conferences. Once again, in the better-late-than-never category, here are a few thoughts from the Fortune 500 Forum, held last Monday to Wednesday (Dec. 1-3) in Washington, D.C., at the Ritz-Carlton hotel near DuPont Circle.

This conference draws together a group of CEOs and other big shots to go high level: the economy, corporate governance, state of the world, and so on. Officialdom made an appearance in the form of Treasury Secretary Henry Paulson and FDIC Chairwoman Sheila Bair.

Regrettably, I flew in too late to catch Paulson. Bair I did see, and she is as impressive as I expected. A Kansan and a just-the-facts-ma’am type. She’s not charismatic, and she has a bad habit of swallowing the ends of her sentences. But she’s clearly smart and in control. And she’d like to not be asked by President-elect Barack Obama to leave her job before her term is up. (Clearer version: Bair wants to keep her banking watchdog job.) One question I’d like to have asked Bair but didn’t: Does the FDIC approve the too-high CD and money-market rates you constantly see troubled banks advertising in the newspapers? It’s so clear those rates are designed to pull in depositors and that the FDIC is on the hook to insure the deposits up to the regulated levels. As such, the FDIC ought to bless each rate before a GMAC Bank or Washington Mutual advertises it in the San Francisco Chronicle, for example. But do they? Does anyone know?

As for business leaders, one word describes the mood at the conference: bleak. Blackstone (BX) co-founder Peter Peterson sees the recession lasting through 2009, and he also forecasts housing prices continuing to plummet. Free-market types like Brad Anderson of Best Buy (BBY)  and AT&T’s (T) Randall Stevenson didn’t have anything good to say about the stimulus plans being plotted by Congress. But they assume they’ll happen anyway.

On energy policy, a high-power panel moderated by my colleague Marc Gunther came to an interesting conclusion: A carbon tax would have a much bigger and better impact than a cap-and-trade system supported by both former presidential candidates and the Democratic Congress. I had one nagging question for the panel, which included legendary FedEx (FDX) founder Fred Smith, Conservation International’s Glenn Prickett, U.S. Shell Oil boss Marvin Odum, and Andy Karsner, the Bush administration’s former emissary to the alternative-energy industry: If a carbon tax is such a smart idea, why aren’t any politician’s talking about it?  (The short answer: This debate is just getting started.)

***

One of the highlights of the conference was a dinner in the Benjamin Franklin Room at the State Department. Lots of china and portraits from the early days of the Republic, giant seal of the United States on the ceiling, that sort of thing. Rick Stengel, managing editor of Time Magazine, Fortune’s kissing-cousin publication, interviewed former Secretary of State Madeline Albright, now a consultant as well as Obama transition team advisor. She wasn’t any more upbeat than the business chieftains. She said Pakistan has “everything that gives you an international migraine,” including nuclear weapons, corruption and the like. She called Russia’s president, Dmitry Medvedev, “stunningly young.” And this was while she was just warming up.

***

Speaking of Pakistan, the following evening the group split up among several embassies and I was privileged to dine at that country’s well-fortified embassy. Ambassador Husain Haqqani is a charmer, a former journalist and academic who went into exile under his country’s previous regime and only recently came back into political life with the change in government there. Asked how the Pakistani people view Obama, a different diplomat explained that his people are emotionally excited about Obama but concerned because of his debate comments that he would attack Pakistan if necessary. (John McCain was more cautious on the question of Pakistan.) It’s a good reminder that while Americans suffer through the ennui of endless debates, people around the world hang on whatever words most impact them.

Two panels on our final day, one of which I moderated, danced around the topic of the role boards of directors play in over-the-top executive compensation. The severe recession will probably do more to address that problem than all the hot air that compensation experts and shareholder-rights activists blow on the subject. (Pearl Myer, a leading compensation consultant, made what sounded to me like a ridiculous comment, that boards have a tough time finding worthy candidates with industry knowledge. That didn’t seem to stop the boards of Ford (F) and Chrysler from going outside the auto industry.)

I asked every executive I could if they’ve been able to borrow money from banks. Western Refining CEO Paul Foster told me he can, but at rates that don’t make sense. He’s selling a refinery to pay down debt.

And in the crazy times category, James Turley, CEO of Ernst & Young, checked out of the Mumbai Oberoi the afternoon of the tragic attacks. We were pleased to have him at our conference  the following week.