Who knew pictures of cats with funny misspelled captions would evolve into one of the bigger indie blog networks in the world? Ben Huh, 31, is CEO of Cheezburger Network of Seattle, publisher of a growing blog empire best known for I Can Haz Cheezburger (aka LOLcats) and Failblog, but also hits such as Engrish Funny, There I Fixed It, Roflrazzi, and the newly launched blog about cars with problems, That Will Buff Out.

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The Federal Trade Commission is cracking down on blogger payola.

The agency, which protects consumers from fraud or deceptive business practices, voted 4 to 0 to update its rules governing endorsements, and the new guidelines require bloggers to clearly disclose any “material connection” to an advertiser, including payments for an endorsement or free product.

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If you’re a Gmail user who also happens to use Twitter, it’s probably been about five minutes since you’ve seen an ad promising to boost your follower count. The folks at online ad firm uSocial are taking that a step further: Pay them money and they’ll make you at least appear to be very big on Facebook.

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What does the TV network of the future look like? A version of it is coming into focus at New York-based startup blip.tv.

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Google’s (GOOG) got a not-so-secret weapon in its bid to convert the world to applications such as Gmail, Google Docs, Google Talk, Google Sites and, soon, Google’s Chrome operating system: the 17 million college students on more than 4,000 campuses across the country.

For more than two years, Google has approached colleges and universities with a near-unbeatable offer: provide unlimited hosted e-mail and other applications, all branded by the institution and delivered free of charge.

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In a world of double-digit unemployment and old-line industries in mid-collapse, here’s a sales pitch tailor-made for the times: “Get Paid by Google” (GOOG).

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Gawker Media impresario Nick Denton, one of the more vocal Cassandras of media collapse last fall, got a surprise this spring when things turned out to be, well, not so bad. Mr. Denton told us earlier in the year that sales were actually up double digits, and it appeared marketers’ reactions to the recession were “more strategic” than he thought.

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Myth: newspapers stuck their heads in the sand and just hoped the internet would go away.

Reality: Newspapers took some of the biggest, earliest swings on the web, most turned out to be misses, and then got steamrolled by Google (GOOG) just like everyone else.

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YouTube is still Google’s (GOOG) toughest sell to advertisers, but the video site is doing better by one measure than most people think: YouTube is selling ads against about nine percent of its video views in the U.S., up from just six percent a year ago.

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Consider, for a moment, what would happen if the identities, geographies and surfing histories of a large number of Internet users suddenly became invisible.

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When NBC Universal and News Corp. created Hulu, they gave the video portal a valuable but short-term asset: exclusive rights to distribute NBC and Fox shows outside of the media giants’ own websites.

From that base of content, Hulu.com has become the fourth-biggest online video distributor by unique visitors in January, behind YouTube, Yahoo and MySpace, according to the latest from Nielsen VideoCensus. In total video streams, it’s No. 3, with 232 million, behind YouTube (5.8 billion) and Yahoo (277 million).

But the exclusive part of that NBC-News Corp. deal lasts only two years, and Hulu knows all too well that the scarcity that helped it establish an audience (and brand) is going away soon. Hulu has never said exactly when the deal expires, but it’s likely within a year after the first anniversary of Hulu’s public launch, in March.

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MyDamnChannel’s “You Suck at Photoshop” is a near-perfect series for the Web: short, funny and low-budget, it both doesn’t require viewers to commit to a series and actually provides some useful information for those of us who do, in fact, suck at Photoshop.

But the series isn’t immune from the one of the most vexing problems facing producers of Web video: how to build a loyal audience and keep it coming back. In the short history of Web series, most have struggled to replicate the TV model where audiences come back–and even build–from the first episode. And retaining audiences is key, given that brands marketing around Web video are paying according to that old TV model: for eyeballs.

Online audiences are spotty, fickle and distracted. Even the best Web series have trouble getting numbers when they’re not getting front-page promotion on a major video portal such as YouTube or MySpace Video. To illustrate the problem, Ad Age asked Web-analytics firm TubeMogul to compile viewing stats for the first eight episodes of 50 of the highest-profile Web series: EQAL’s “LG15: The Resistance” to Crackle’s “Hot Hot Los Angeles” to Michael Eisner’s “Back On Topps.”

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NBC is supposed to give all its hit “Saturday Night Live” clips to its online joint venture, Hulu, not YouTube, right? Well, not always, apparently. Andy Samberg’s “J**z in My Pants” has racked up 6.7 million views on YouTube, and is the most-watched video of the past month.

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Sen. John McCain’s snub of David Letterman last week may have deprived the “Late Show” host of some needed star power last week, but it’s given him a hit on the Web. So far, video of Mr. Letterman’s tirade against Mr. McCain, who bowed out the day of the telecast, has generated more than 3.5 million views on YouTube.

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Credit “Family Guy” creator Seth MacFarlane’s genius, or maybe just YouTube’s distribution clout: His channel, “Seth MacFarlane’s Cavalcade of Cartoon Comedy,” has taken the No. 1 spot on YouTube, edging out Tania Derveaux and AtheneWins.

MacFarlane’s channel has had more than 3 million views since it was launched earlier this week, and so far has 51,000 subscribers. Good news for MacFarlane, YouTube (GOOG) and Media Rights Capital, which are sharing the AdSense advertising revenue on the deal.

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