Here’s the latest action:

Health site operators plan to team up against WebMD — The merger between Revolution Health Network and Waterfront Media is valued at $300 million, and should help the combined companies take on with market leader WebMD. We’ve heard that Revolution was trying to sell for $400 million a couple months ago, but difficult times call for difficult deals.

Google rethinking its aversion to traditional advertising — The search giant has relied on partnerships and word of mouth to promote its products in the past. But company executives are now debating whether this is still the best strategy. The Wall Street Journal reports that Google has even met with several Madison Avenue advertising agencies.

Nokia acquires email and instant messaging provider OZ Communications — The value of the deal was not disclosed. OZ says it has 5.5 million paying users.

After a bounce earlier this week, stock market plunges again — The Dow Jones Industrial Average, Standard & Poor’s and Nasdaq all took a dive today. Earlier, VentureBeat writer MG Siegler looked at the (dismal) performance of tech stocks.

Yahoo layoff rumors in full-swing — An anonymous tipster tells Silicon Alley Insider that Yahoo plans to lay off 3,500 workers, but SAI writer Peter Kafka says the cuts will probably be much smaller.

Facebook to open international HQ in Dublin
— The new office will serve as the center of Facebook’s international operations, with a focus on Europe, the Middle East and Africa.

Nokia reveals iPhone competitor and iTunes rivalThe company’s first touchscreen phone will be called the 5800 XpressMusic officially, but I prefer its nickname, the Nokia “Tube.”

Dropped by potential buyer EA, game publisher Take-Two says it will go it alone — And Take-Two’s stock drops as a result.

Researchers find security holes in major web sites — Those holes could have allowed the theft of users’ money and private information from YouTube, The New York Times’ website and Metafilter, according to two Princeton researchers. The Times says it has fixed the hole.

Microsoft CEO Steve Ballmer says Zune coming to Windows Mobile — Plans to bring Zune music software to Windows Mobile phones indicate Microsoft probably doesn’t intend to create a separate ZunePhone to compete with Apple’s iPhone.

Skype messages under surveillance in China — A group of Canadian human-rights activists and researchers (pictured, left) revealed that Skype’s partner in China, Skype TOM, stores text messages that use words deemed subversive by the Chinese government. In a blog post responding to the news, Skype President Josh Silverman said Skype wasn’t aware that Skype TOM was storing the messages, athough he also argued that TOM has to play by China’s rules if it wants to do business there.

Europe faces its own financial crisis — In fact, European banks are in deeper debt than their U.S. counterparts.