The global war on widgets launched by MySpace since its acquisition by News Corp made the New York Times today in a piece about MySpace blocking the Hooka music player a few days it was put to use by MySpace’s most visible user, a singer named Tila Nguyen, whose professional name is Tila Tequila.

Ok, so Hooka, a recently launched project of online music consultancy indie911 wasn’t really “blocked.”  A MySpace spokeswoman told the NYT:

A MySpace representative contacted [Nguyen] and told her that she had violated our terms of service in regards to commercial activity. She removed the material herself, after realizing it was not appropriate for MySpace.

The TOS element that Nguyen apparently violated was loading a potentially commercial widget whose maker doesn’t have a revenue sharing deal with MySpace (the MySpace music player is powered by Snocap).

At Mashable Pete Cashmore has been tracking the GWOW for a year noting today that News Corp has also killed Revver, VideoCodeZone, Stickam, Imeem and ProjectPlaylist.

Suggests Cashmore:

…maybe MySpace has realized that the value being created by exponential growth (YouTube, for instance), is far higher than a license fee would cover. Perhaps the more intelligent move would be an “acquire or die” strategy: snap up the best widgets on the way up.

That’s fine, but what happens if the widget war escalates? Say MySpace buys Hooka, and Facebook retaliates blocking Hooka and driving its users into a proprietary music player widget? Will users abandon widgets that aren’t supported by their social nets of choice? Or will they abandon the social nets who limit widgets in favor of open platforms?

After widget makers the people most interested in the answers to those questions are the VCs who invest in widget businesses.

These guys have been having a great conversation about the monetization of the business. David Cohen started it all proclaiming that no matter what widgets will be big business because users love them.

Brad Feld responded with the opinion that widgets which function as application containers for publishers will work, but widget management systems don’t make sense to Brad.

Mike Hirschland issued an open call for thoughts about how to monetize widgets and got a lot of interesting responses.

Chris Fralic offered the opinion that widget management will work as a business offering a variety of functions:

I think we’ll see features like multiple levels of control and customization, automatic updating across the installed base, and tracking of how widgets spread and their “parent/child” relationships

It seems to me that user-chosen widgets freely attachable to all sorts of platforms–from blogs to white label social nets–are the inevitable future and will constitute a new set of networks that will carry ads, messages, and other sorts of media and information. In the long run the social nets most open to innovative add-ons will survive the transition away from social networking hubs towards private -abeled social nets. Why? Because the Internet industry always develops from a more restrictive environment to a less restrictive one.