“I don’t think you’re going to have those anymore. Bigness isn’t that great an asset anymore.”

– Tom Freston, former Viacom (VIAB) CEO, in a Reuters story about the waning influence of media moguls. These titans are being upstaged by the darlings of digital, like Facebook’s Marc Zuckerberg and Twitter’s Evan Williams. Old and new media alike are gathered this week at the Allen & Co. media summit in Sun Valley, Idaho.

Freston’s opinion comes from experience. After being fired in 2006 by one major media tycoon — Viacom chairman Sumner Redstone — he has gone on to help Oprah build her OWN cable network (which is likely to have a strong digital play) and to join U2 frontman Bono on his mission to reduce global poverty and AIDS. Read more about Freston in Pattie’s profile of “The Most Wanted Man on the Planet.” –Jessica Shambora

Google (GOOG) is barging into the business of computer operating systems—via Chrome, due next year. Microsoft (MSFT) is vigorously defending its turf–via Windows 7, its new operating system due in October. Simultaneously, Microsoft is striking at the heart of Google, via Bing. “We should have been earlier in search,” said CEO Steve Ballmer two weeks ago in France when asked to name his greatest regrets over the years.

We may be at a tipping point in tech. The spending will rise. So will the sparring. And as the sparks fly, have you noticed? Google and Microsoft both seem to be doing their own searching…to answer that most basic business question: Who am I?

Ballmer riffed on this question, actually, at the Cannes Lions International Advertising Festival. I did an  on-stage Q&A with him there (you can find details and video clips by searching “Ballmer” on Postcards‘ homepage), and afterwards, I followed him to a meeting with the Cannes “Young Lions.” These are rising-star marketers and creative execs age 3o and under. One of them asked: “What does Microsoft stand for?”

Ballmer seemed to love the question. “This is a real debate inside Microsoft,” he replied. “It’s rumored that we’re going to open retail stores,” he added, and then he surveyed the Young Lions about whether it would be wiser to call the stores “Microsoft” or “Windows.” Ballmer suggested that “Microsoft” means “software company” and “well-run business.” What does “Windows” mean? “Access” and “guide to technology,” he said.

Ballmer didn’t get what he hoped for in this mini-focus group. The young stars of the ad universe appeared evenly divided on the ideal name for the prospective retail outlets. Microsoft’s chief ended the discussion by asking: “How many people here use Macs?” Most in the room raised their hands. “Biased!” Ballmer bellowed.

For what it’s worth, we’ll likely see in October what Microsoft can do retail-wise. The company is mum on its plans, but it’s a pretty safe bet that stores will open this fall, accompanying the Windows 7 marketing onslaught. Retail is a gamble; except for Apple (AAPL), consumer tech giants have stumbled. Managing conflicts with existing retailers, like Best Buy (BBY), is tricky too. Moreover, who would bet that Microsoft, which has never oozed sex appeal or product-intro pizazz, would be good at this game?

Then again, Microsoft is redefining itself–or trying to, at least. To command its retail drive, the company recently recruited a heavy-hitter: David Porter, previously head of worldwide product distribution at DreamWorks Animation SKG (DWA). Before the movie gig, Porter spent 25 years at Wal-Mart (WMT).

One of the smartest takes on consumer tech retailing is a story that Fortune ran in 2007: “Why Apple is the best retailer in America.” It’s worth reading again.

“Just like Henry Ford drove down car prices and ripped the heart out of the automobile industry, Google is trying to force Microsoft to cut its prices and eat the heart out of Microsoft’s revenues.”

- Gartner analyst Tom Austin, on Google’s (GOOG) drive to steal customers from the heart of Microsoft’s (MSFT)–its Windows operating system. “Bring it on!” said Microsoft CEO Steve Ballmer two weeks ago in France, where I interviewed him at the Cannes Lions International Advertising Festival. Ballmer boasted that Windows’ superior integration and support is worth the higher price than any system that Google will offer. Here’s Microsoft’s boss talking about Windows 7, due in October, and lessons learned from Vista:

Last week, Rica Rwigamba attended a meeting with Starbucks (SBUX) CEO Howard Schultz at the U.S. embassy in Rwanda. Rica lives in Kigali, Rwanda’s capital, where she is co-owner and director of New Dawn Associates, a “responsible tourism” and event management company. Rica is also a participant in the 2009 Fortune-U.S. State Department Global Women Leaders Mentoring Partnership, an extension of the Fortune Most Powerful Women Summit. Through this mentoring program, Rica spent three weeks in May shadowing her assigned mentor, Mary Wittenberg, who is the CEO of the New York Road Runners (which puts on the New York Marathon each November). We asked Rica to share her observations of the Starbucks event with Postcards readers, and she offered this captivating account.

Rica Rwigamba at Fortune's Most Powerful Women Dinner, May 2009

It was a gathering of more than 50 Rwandan business people and staff from the U.S. embassy, Howard and members of his team, and fair trade guys. It felt great to be part of it, and I realized the power of being part of a network. Lots of the people in the room were directors and experts in their fields. Some have undergone trainings or U.S. sponsored programs like me, and that is how they got invited.

I had read about Howard, so I knew his remarkable achievements and his picture. It was funny to see that the woman I sat next to didn’t have a clue about him and didn’t even know what he looked like until I pointed him out. I can’t bet $1 million USD that she wasn’t the only one who didn’t know about him, because I don’t have that kind of money. But it was interesting to witness that!

His message wasn’t what was expected. Everyone waited to hear how he had climbed the ladder and made so much money. He didn’t really talk about that. Instead he talked about how special Rwanda was and how he felt he wanted to contribute to the development of the country. He praised the people of Rwanda for their efforts and constant struggles. He shared his memories of the meeting he had with a woman member of a coffee cooperative whose dream was to own a cow. He compared his life as a young man who came from a humble background and how it’s not money that really makes a person, but values — which many forget about because of riches.

The highlight of the event was the interaction with the crowd. One man pointed out an initiative started in eastern Rwanda to sell coffee made by women once a week. This was done to encourage men to let women make money from their work. Women often work the hardest in the field but they never get to sell their crops. So this guy said that they convinced the men to let women sell their products on Thursday at local markets and brand them “coffee made by women.” And what is selling the best?  The man then asked Starbucks to encourage this culture within cooperatives that they participate in and one day sell “Coffee made by Rwandan women” in their stores.

The crowd really applauded that. And a woman from the fair trade group later said that something similar was happening in Latin America, and that Femina was sold as “coffee made by women.” It will be interesting to see if this initiative is actually implemented! Howard invited this guy to attend a meeting in Seattle that will take place this year.

It was great to witness the active discussion and to know that Starbucks has now opened an office in Rwanda, and that we are the first African country where they have an office. If nothing else, I hope our coffee gets a permanent market and that the culture of drinking coffee is spread in Kigali and around the country. Did I say that I am drinking delicious Rwandan coffee while writing this?

The ideal career path may be: reaching the top of the corporate world, then taking time off for family when your kids need you most, and then jumping back into a primo job at a top-tier global company.

Impossible in this dreadful economy? Here’s someone who’s done it. Remember Jeanne Jackson? At Gap (GPS) in the 90s, she built Banana Republic and then went to help Wal-Mart (WMT) take Walmart.com from start-up stage. But after leaving Wal-Mart seven years ago, Jackson was out of the big game, except for board gigs at McDonald’s (MCD), Nordstrom (JWN), and Nike (NKE).

She’s back. Actually, I follow these Most Powerful Women (and Jackson was one, on our annual list a decade ago), but the announcement four months ago that she landed at Nike–as President, Direct to Consumer, reporting to the CEO–was so low-key that I’d missed it. A few days ago, I spotted Jackson’s name and Nike title on the participant list for our upcoming Fortune Most Powerful Women Summit. I popped her an email. We talked yesterday.

“I made a commitment to my family,” Jackson, 57, told me, explaining why she had dropped out for so long. Since 2001, when she joined the Nike board, Jackson actually had talked on and off with chairman Phil Knight and CEO Mark Parker about joining the company. But not until this year, when her son graduated from high school and her daughter accepted an internship in London, at Burberry, did she decide to jump.

She didn’t think the jump would be to Nike first thing. “I thought I’d do something related to private equity,” says Jackson, who has been quietly running her own private equity/consulting business, MSP Capital, out of Newport Beach, California for the past several years. She expected one of the companies she backed “would speak to me.” But nothing did. (Along with “some spectacular failures,” she says, she scored a couple of hits, including Pure Digital, which sells the Flip camera and recently was acquired by Cisco.)

As the global economy tanked, she felt ever more drawn to the thing that she has focused on throughout her career: strong brands. Says Jackson, who was at Disney (DIS) and Victoria’s Secret early on: “In this economy, consumers default to strong brands.” Now, in this new role that Nike CEO Parker created for her, she oversees the company’s global retail holdings. That includes some 3,500 franchised Nike stores, more than 600 wholly-owned Nike and Cole Haan stores, and five e-commerce sites. Some $3 billion in revenues annually travels through these “direct to consumer” channels.

And despite the global meltdown, Nike is performing well. Revenues reached $19.2 billion in the year ended May 31. Profits fell 21% after five years of 20%+ annual growth, but investors have stayed with the stock: It’s up nearly 40% in five years, while the S&P has dropped 20%. The world’s largest athletic shoe and apparel marketer, Nike has smartly reduced spending and layers of management, while selectively adding key talent like Jackson.

Of course, she’s contending with the retail slowdown–Nike too has cut new-store expansion. But in some ways, Jackson is returning to the sort of thing she did inside Gap and Wal-Mart: playing entrepreneur inside a corporation. Last week, she opened the first Hurley/Converse/Nike store, in Orange County, California. The Hurley brand is for surfers and skateboarders and other cool kids. Converse, she says, has particularly broad appeal–from high school kids to musicians to “my mother-in-law, who is 87 years old and wears Converse.”

The family dynamic–usually a complication when executives, especially women, return to big jobs–is alright for Jackson. At least until her son heads off to SMU this fall, she’s commuting from California to Oregon, where Nike is based. Husband Doug, a retired airline pilot, is flexible and always has been. “I could take any job and he would just relocate,” Jackson says. (He has his own passion: cars. He owns the Batmobile–one of four built in 1966 for Batman on TV.)

Jackson, meanwhile, has simplified her business extracurriculars. She quit the boards of Nordstrom and Harrah’s Entertainment, as well as Nike. The one board she’s staying on: McDonald’s. After all, you can never get enough lessons in smart retailing.

A gloomy outlook as we head off for the long weekend. Today’s monthly jobs report was worse than May’s, worse than expected, and worse than we’ve seen in 26 years. The U.S. unemployment rate rose to 9.5%…and is bound to go past 10%.

So when will the pain ease? Microsoft (MSFT) CEO Steve Ballmer told me last week: “I don’t think we’re in a recession. I think we’ve reset. It’s very different. A recession sort of implies a recovery…I don’t assume there is a recovery.” Here’s the video of Ballmer and me on stage at the Cannes Lions International Advertising Festival, where he was named Media Man of the Year.

While in France, I caught up with another CEO, WPP Group’s (WPPGY) Martin Sorrell, who’s long been one of the more wise and worldly forecasters. (His company owns ad and marketing agencies that serve global giants like IBM (IBM), American Express (AXP), Ford (F), and Nestle (NSRG.Y), as well as Microsoft.) I asked Sir Martin is he buys Ballmer’s belief that media spending might decline as a percentage of GDP in the next 10 years. “I think advertising and marketing services as a proportion of GDP will be flat or rise,” he replied. “Any flatness or decline in the developed markets will be outpaced by growth in the BRICs and next 11.” Next 11? He means the major developing countries beyond Brazil, Russia, India, and China.

As for that broader question of how we’ll “reset” or otherwise emerge from this global economic downturn, Sorrell has an artful way of envisioning it: “It will be like an italic, lower-case letter “L” with a little bit of a flip up,” he says. “The recovery will not be a ‘V.’ And it will not be a ‘W.’ The little flip up will come in the first half of next year.”

Noodle that, and leave your worries behind this weekend!

P.S. In case you missed them, here are two more video clips from my conversation with Steve Ballmer in Cannes: Ballmer on Bing and Yahoo and Ballmer on Windows 7 and lessons from Vista.

Lloyd Blankfein, the CEO of Goldman Sachs (GS), phoned from Madrid a few weeks ago to share “The Best Advice I Ever Got.” This is the cover package in the current issue of Fortune. And you can read wisdom from Blankfein and lots of other power players –Bill Gates, Tiger Woods, Google (GOOG) CEO Eric Schmidt–in the issue and online.

Beyond Blankfein’s “Best Advice” that appears in the issue, he told me some best advice that he likes to pass on at Goldman Sachs–and I’ll share it with you here. Blankfein said that executives, on their way up, tend to forget that they become role models. “People’s sense of  themselves is a lagging indicator,” he told me. He went on to say that he talks with folks at Goldman to make sure that they recognize the impressions they leave:

I ask our people, “When you were on the way up, who had the job that you have now and how did they respond to you? It’s shocking to think that people respond to me like I responded to  [former Goldman Sachs CEO] John Weinberg. I don’t feel that way about myself.

I also say to people here, ‘Okay, take that person who was in your current position when you were growing up in the company. How often did you talk about that person to your spouse or your boyfriend or your girlfriend? A lot. Well, guess what. Those people who are subordinate to you—they’re talkin’ about you now. So whatever you did, however you behave—it may be over in your mind. But it’s not  over in theirs. They’re still talking about you, saying, ‘He or she is unpleasant or thoughtless.’

Blankfein went on to say that this sort of self-awareness has been particularly important amidst the global economic crisis and backlash against Wall Street.

I tell people here, ‘We’re going to get through this crisis. However you perform  now–well or badly–we’re going to get through it. But how you behave will affect your reputation for the rest of your career. Do you show courage or not? Do you act big or small? Are you a statesperson or are you selfish?  Everybody’s going to notice and remember.“

Think about it: Who was in your job back when you were starting out? What did you think of that person? And what impression will you leave today?

On Friday I told you about Microsoft (MSFT) CEO Steve Ballmer’s riff on Bing and Yahoo. I asked him: How much market share do you need to gain in search to not need to do a deal with Yahoo (YHOO)? Ballmer called my question “back-handed” and went on to give a really interesting answer. Check out the video or my Friday Postcard if you missed the Microsoft boss’s take on Bing and Yahoo.

Ballmer nobly engaged and sparred in our on-stage Q&A at last week’s Cannes Lions International Advertising Festival. He batted back my question about the global recession this way: “I don’t think we’re in a recession. I think we’ve reset. It’s very different. A recession sort of implies a recovery.” He added: “For planning purposes, I don’t assume there is a recovery.” Here’s more from Ballmer on the “reset” and how Microsoft is adjusting to it:

The Festival’s 2009 Media Man of the Year wasn’t afraid to sock the ad community with bad news. Ballmer proposed that media spending might decline as a percentage of GDP in the next 10 years. “We live in a funny Internet world,” he told the crowd of 1,000 or so. “As soon as all information and content is digital, and the marginal cost of production can look pretty close to zero, you get all kinds of changes in the monetization models.” Innovators will invent new ad-funded models, he said, “yet at the same time, the amount of time that people will be spending in relatively advertising-free environments could continue to increase.”

Not a happy outlook. Though, as I noted to Ballmer and the audience: Who can predict, really? I mentioned that I’d last been to this Lions Festival in 1993—and read aloud this prediction from a 1993 Fortune story titled “How Bill Gates Sees the Future”:

“I think the intelligent-corded phone will catch on faster than the PDA (personal digital assistant). We can take today’s office phone system with all those features you can’t figure out how to use and put a screen on it, and even do simple video conferencing. Also, in four or five years, you’ll have wild advances in flat-screen technology that will really change what makes sense to be on paper versus what makes sense to be on that screen.”

Ballmer’s reply to his famous partner’s outlook: “Well, he was right on 50% of the predictions!” Indeed, and the art of business is betting big on the right 50%.

by Patricia Sellers

As speculation ever swirls about Yahoo (YHOO) and Microsoft (MSFT) joining forces to give Google (GOOG) a better run for its money in search, one party in the on-and-off  negotiations has been notably evasive this week. “If we ever have a deal with Microsoft, it will be announced publicly and until we do, we have nothing to say,” declared Yahoo CEO Carol Bartz at the company’s shareholders meeting yesterday in Santa Clara, California.

A world away in France, one day before, I did an onstage interview with Steve Ballmer, Microsoft’s CEO, at the Cannes Lions International Advertising Festival, And of course I asked him about the likelihood of a deal with Yahoo. Some industry watchers have speculated that the early success of Bing, Microsoft’s new search venture that debuted June 1 (and in less than a month boosted Microsoft’s share of U.S. search results pages to 12% from 9%, according to comScore) makes a Yahoo deal less essential–for Microsoft, at least. Here, in this excerpt from our Wednesday conversation in Cannes, Ballmer suggests that’s not necessarily so…

Sellers: For every share point that you gain in search thanks to Bing, by what percent does that decrease the need to do a deal with Yahoo?

Ballmer: Have you ever heard of a more back-handed way of asking the question than that?  Oh my God… (He waits for audience laughter to die down.) OK, I’m going to try this one time. First of all, we have no interest in acquiring Yahoo.  Can I…? I’ve said that 88 times. I’ll say it the 89th just to make sure it’s clear.

I have said, and I will continue to say, we remain open to a partnership with Yahoo. I think the thing that advertisers. probably more than anything else, appreciate is: When you have two players that are fairly low-share, sitting in an advertiser’s shoes, you have to decide how many of the “search engines” do you bid on and how many key words do you bid on per platform? More people, more advertisers bid on more key words on Google than on Yahoo or Microsoft–even more dramatically outside the U.S. than in.

Forget the economic side to that story, it also affects the product.  The more relevant ads the search engine can serve up, the more relevant the whole page looks. When your average consumer looks at the search page, they don’t just say, “I’m going to look at the algorithmic results.”  They look at the whole page, including the ads.

So, I will tell you, I have a friend who rents apartments–mostly to American tourists. She rents apartments in Paris. If I wasn’t her friend, she would not submit bids. In the old days of 8% share–this goes back a year–she wouldn’t probably bid on our system. She’d only bid on the market leaders. So now somebody types “apartments in Paris for rent. And they’re going to get the relevant ad on the market leader. And they may not get the relevant ad on Yahoo or on Microsoft.

So a partnership makes sense, not because of technology just. Or business just. It makes sense because I think we can provide a better product through scale to our users based upon the kinds of interactions we have with advertisers. I want every bid on every key word that every advertiser in every part of the world would put on Google, I want on our system. As much not just for the revenue, but as much for the value in terms of the relevance of our offering as anything else.

So, am I open to a partnership with Yahoo? We remain open to a partnership with Yahoo.

Sellers: So what’s the likelihood that there will be a partnership in the next year?

Ballmer: Who knows?  Who knows?  I can…

Sellers: Carol Bartz wants “boatloads of money.” Don’t you have, like, almost $30 billion of money in cash?

Ballmer: We’ve got shareholders who want to make sure we take good care of it.

– Thanks to Joshua Glasser and Jessica Shambora for additional reporting.

“All content consumed will be digital…social…and interactive.”

- Microsoft (MSFT) CEO Steve Ballmer, predicting the death of print yesterday at the Cannes Lions International Advertising Festival. After Ballmer, in a talk to 1,000 or so ad and media folks, floated this prediction about the world within 10 years, I interviewed him on stage. Stay tuned to Postcards these next few days. I’ll share some of what the always boisterous Ballmer said, about Bing and Yahoo (YHOO) and Google (GOOG) and more.

Turns out, we had so much ground to cover yesterday that I didn’t get to ask him if he means, by his prediction, that magazines and newspapers won’t exist on paper in 2019. Does Ballmer really think that my company, Time Inc. (TWX), won’t be printing anything on paper a decade from now?

The man answers. Here I am, back in New York and sitting in my living room, taking in the news about Michael Jackson’s death. An email from Ballmer popped in moments ago: “I really really think print goes away.” Well, good for Microsoft, I guess. For us journalists, more pressure to adapt.