Eager to expand use of the Web to advertise their products, pharmaceutical giants, including Eli Lilly (LLY) and Pfizer (PFE), are heading to Washington this week to call on the Food and Drug Administration to provide guidelines for marketing prescription drugs online.

Wayne Gattinella, CEO of WebMD, is among the drug-industry leaders expected to attend Thursday’s FDA hearing on online advertising.

Drug companies are dabbling with Internet advertising, but their efforts have been minimal. Most of the ads promote broader health or corporate initiatives, rather than individual medicines. That’s chiefly due to industry fears of running afoul of regulators.

Seeking a bigger piece of one of the country’s largest ad categories, Web companies including Google (GOOG), Yahoo (YHOO) and WebMD Health (WBMD) are also planning to attend Thursday’s hearing at the FDA, which has been scrutinizing drug makers’ digital marketing efforts.

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Google (GOOG), Microsoft (MSFT) and Yahoo (YHOO) are all offering some form of courtesy Wi-Fi through the holiday season, at venues such as airports, hotels and Times Square.

Each has a relatively new service it’s hoping to attract consumers to, whether it’s Google’s Chrome browser, Microsoft’s Bing search engine or Yahoo’s revamped home page and customization features.

Google is working with Wi-Fi providers Boingo Wireless and Advanced Wireless Group to provide connectivity at 47 airports, including Boston, Houston, Las Vegas, Miami and Seattle from today until Jan. 15 (sorry New Yorkers, JFK, LGA and EWR are not on the list).

“We know that this is a very hectic travel season for people, and we hope that free Wi-Fi will make both traveling and connecting with friends and family a little bit easier,” Marissa Mayer, Google’s vice president of search, said in a statement.

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The China Internet Illegal Information Reporting Center has released the latest list of “vulgar content” offenders (in Chinese). This time, Google (GOOG) escaped mention–but Yahoo (YHOO) China and a popular real-estate portal, Soufun, did not.

The list referred to user-generated content on a section of Yahoo China’s Web site called “Yahoo Space,” which is not currently in operation. But a subsequent notice released today by the center said remnants of the “vulgar” content from Yahoo Space could still be found in other parts of Yahoo’s portal.

The Web sites “didn’t continue to follow the government’s call to effectively crack down on vulgar content and information on the Internet, and relaxed supervision of their Web sites, which ultimately led to the appearance of a lot of vulgar content, which is against social morals and does harm to the physical and mental health of the youth,” the center said in a notice. “Such behavior…has led to the anger of our public and should be strongly condemned.”

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Google (GOOG) co-founder Sergey Brin said Thursday that he believes it’s a “shame” that Yahoo (YHOO) had decreased its focus on Internet search, through its recently announced partnership with Microsoft (MSFT).

Yahoo in July agreed to a pact with Microsoft that effectively sees the Sunnyvale, Calif., Internet company outsource search to Microsoft.

Mr. Brin, who with Larry Page founded Google, said that, despite the company’s dominance of the Internet search-advertising market, he believes there is healthy competition. He’s disappointed, however, that Yahoo, for some time Google’s key competitor, is decreasing its work in that area.

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It’s a face-off between new and traditional media at the Web 2.0 Summit.

Representing new media, in a discussion over the future of journalism, are Federated Media’s John Battelle; Marissa Mayer, who leads Google’s (GOOG) search services and consumer products like Chrome; and Huffington Post CEO Eric Hippeau. Arthur Sulzberger Jr., publisher of the New York Times (NYT), and The Wall Street Journal’s top editor, Robert Thomson, stand in for the old guard.

Aggregator sites like Huffington Post and online portals like Yahoo (YHOO) and Google have seen their readership, advertising revenue and influence increase. Meanwhile, traditional-media types have criticized these forces for unfairly leeching their reporting and hurting their business models. We’ll be alert for verbal sparring.

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A new executive team at MySpace is trying to reignite the brand by focusing on areas like music, videos and games as users abandon the social-networking site for cooler destinations.

MySpace, which is holding a conference this week for its global ad-sales staff, needs to lure visitors back and kick-start advertising revenue, ad executives say. Research firm eMarketer estimates U.S. ad spending on the site will be $495 million this year, down 15 percent from $585 million in 2008.

The basic challenge is similar to the one facing big Internet companies, such as Time Warner’s (TWX) AOL and Yahoo (YHOO), that are under pressure to reinvent themselves for fickle audiences.

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You didn’t think Google (GOOG) was going to take the Microsoft-Yahoo (MSFT) (YHOO) search deal lying down, did you?

The Mountain View, Calif.-based giant hasn’t taken an official position on the proposed deal, but it is quietly disseminating a view to regulators, politicians, analysts and journalists: that the need for scale is not a valid case for approving Microsoft’s search deal with Yahoo.

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“I’m not saying Google’s an enemy, all right?” the chief executive of The Associated Press, Tom Curley, was telling a few people in Hong Kong on Tuesday. “I’m saying they were brilliant, and we didn’t, collectively, license as aggressively as we could have. So now there’s this moment, and the two of them are competing.” He meant Google (GOOG) and Microsoft (MSFT). “So where does that take us?”

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Phishing attacks that affected customers of Microsoft’s (MSFT) Hotmail Monday have compromised more than 30,000 email accounts, including those of Gmail, Yahoo (YHOO) Mail and other services.

Microsoft blamed phishing, in which cybercriminals try to trick consumers into revealing personal information through fraudulent emails, for a list of Hotmail account passwords that appeared online. The company recommended Hotmail customers change their passwords and said it’s helping phishing victims fix compromised accounts.

But security firms and the BBC said Tuesday that the attack extended to other services, including those run by Google (GOOG) and Yahoo as well as AOL, EarthLink (ELNK) and Comcast (CMCSA).

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Convergence between the television and the home computer — a holy grail of the digital age — has largely eluded the industry, but the living-room screen is now emerging as a key battleground for software and Internet companies.

Improvements to the processors in TV sets are making it feasible to run Web applications on a TV without the need for a special set-top box, such as those offered by TiVo Inc. or Apple Inc. (AAPL).

While challenges remain, including technical issues and the reluctance of parts of the entertainment industry, companies are building chips and Web browsers for TVs, and others such as Yahoo Inc. (YHOO) and Adobe Systems Inc. (ADBE) are developing Web applications that can be accessed on a new generation of TV sets.

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Yahoo (YHOO) is planning to reintroduce its battered brand to the public Tuesday with a massive global marketing campaign, according to people familiar with the effort.

The Internet company’s new tagline, according to one of those people: “It’s You!”

The Y in the “You” is the Y from “Yahoo,” and the famous Yahoo exclamation point will pop up too, this person said. The ads are being created by Ogilvy & Mather, a unit of Dublin-based WPP, according to people familiar with the effort.

Yahoo declined to comment.

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Tomorrow’s crisis today: Apple’s (AAPL) critics haven’t yet realized that the iPhone App Store has fueled millions in software development efforts to produce content exclusively tied to the company’s proprietary Cocoa Touch mobile platform. Is this a credible threat, and what is Apple’s real motive behind its iTunes rich media content strategy?

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Yahoo (YHOO) shares are on the rise this morning after Bank of America/Merrill Lynch (BAC) analyst Justin Post lifted his rating on the stock to Buy from Neutral, increasing his price target to $19, from $17.

Post describes Yahoo as “a growth company which is now trading like a long-term secular decliner.” He contends that Yahoo’s user traffic continues to perform at or above the Internet as a whole, with U.S. users up 12 percent in July, compared to a 3 percent increase for the Internet as a whole.

Post says a turnaround in display advertising will likely lag behind the search sector, but he contends the stock at 4.6x estimated 2010 EBITDA “is pricing in long-term declines, not an ad market recovery.”

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Silicon Valley antitrust lawyer Gary Reback made his case against the Google Books settlement Tuesday, arguing that the settlement is illegal but could be remedied if the Justice Department insists that Google (GOOG) license the books it scanned to competitors.

In a court filing on behalf of the Open Book Alliance, a consortium that opposes the settlement, the attorney argues that the settlement between Google, the Authors Guild and the Association of American Publishers gives publishers and Google monopoly control over the pricing of digital books. Reback, who was involved in spurring the Justice Department to bring an antitrust suit against Microsoft in the 1990s, co-founded the consortium along with the Internet Archive, a nonprofit that is trying to create a digital archive of the Web, last month. Many members of the consortium, including the Internet Archive, Amazon.com (AMZN), Yahoo (YHOO) and Microsoft (MSFT), have filed their own briefs opposing the settlement too.

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Alibaba Group’s restructuring of its China Yahoo business, which strips out a classified listings operation added to the site last year, marks yet another setback for China Yahoo since its high-profile tie-up with the Chinese e-commerce giant four years ago.

Alibaba said Friday it would separate Koubei.com, a classified-listings Web site, from China Yahoo and inject Koubei into its rapidly expanding retail Web site, Taobao.com. The Koubei listings service was merged with China Yahoo in June 2008, one of several moves to revamp the site since Alibaba took over Yahoo Inc.’s (YHOO) China operations.

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