Showing posts with label Yahoo. Show all posts
Showing posts with label Yahoo. Show all posts
Sunday, January 13, 2013
The top 12 tech stories of 2012
Heather Kelly
Fri December 28, 2012
http://www.cnn.com/2012/12/27/tech/web/top-tech-stories-2012/
Facebook struggled with its new life as a publicly traded company, and Instagram, the photo-sharing network it acquired in April, was dragged along for the ride.
There were inspiring stories, such as the Internet coming together to protest anti-piracy legislation. And there was darker news, like the Israeli military live-tweeting its strikes against Gaza.
And as always, the world's dominant and most closely watched tech company was all over the news. Apple did a little bit of everything in 2012, from hit new products (the iPad Mini) to high-profile failures (Apple Maps) to some old-fashioned courtroom drama in its patent war with Samsung.
Here are our picks for the top 12 tech stories of 2012. What did we leave out? Let us know in the comment section below.
Microsoft's big push
This was the year Microsoft took a big, bold and surprisingly fun step with a new version of Windows, an updated mobile operating system and its very own iPad rival.
The company, best known for its efficient but stodgy desktop software, needed to do something fresh to get customers' attention in 2012 and started with its flagship product. Windows 8 is a complete overhaul of the Windows operating system. Microsoft nixed the Start button and mixed a playful touchscreen interface with a more traditional desktop experience that runs on tablets, traditional computers, and hybrid machines.
The company also made a leap into the hardware market, releasing its first tablet, the Microsoft Surface, which ran a truncated version of the new Windows 8 operating system. And finally, there was Windows Phone 8, a major revamp of its smartphone operating system, which Microsoft hopes can compete with Apple's iOS and Google's Android.
It's still too soon to judge any of the new releases as successes or failures, but give Microsoft credit for taking chances.
SOPA backlash
In January, a pair of anti-piracy bills united the Internet in outrage. The proposed legislation, the Stop Online Piracy Act, or SOPA, and the Protect IP Act, or PIPA, would have restricted access to sites associated with pirated content, including the search engines and ad networks that do business with them.
The Internet cried censorship, and on January 18 some of the most popular sites blacked out their pages in protest. Reddit, Craigslist, Boing Boing, The Oatmeal, the English-language version of Wikipedia and thousands of other sites went dark. Even Google put a black censorship box over its logo. There were also petitions and organized boycotts of companies that supported the bills.
The protests worked, as both SOPA and PIPA were shelved. It was an impressive demonstration of the power of an organized Internet community.
Live-tweeting war
Violence and war have long been documented on Twitter and other social networks -- typically by journalists and by regular people on the ground (notably the Pakistani witness to the 2011 raid that killed Osama bin Laden).
But in November, the Israeli military took this concept to a new level. During its conflict with Palestinian forces in Gaza, the Israel Defense Force tweeted updates, including the news it had "eliminated" Hamas leader Ahmed Jabari. The military arm of Hamas responded on Twitter with its own provocations.
The back-and-forth between the warring sides signaled a jarring evolution in how war is broadcast in real time.
iPhone 5 and Apple Maps stumble
Every Apple hardware release is a big news story, starting with rumors months in advance and peaking with a well-oiled Apple press event, followed by usually glowing reviews and huge sales numbers. But in 2012, Apple made a major misstep when it released the iPhone 5 and its new operating system, iOS 6.
The company dropped the Google-powered maps that had come pre-installed on every iPhone since 2007. In its place, Apple introduced its own mapping app. Apple Maps looked stunning, with 3-D graphics and neat features like Flyover and turn-by-turn directions. All it was missing was transit directions and accuracy -- the maps were riddled with mistaken locations and outdated information.
The resulting criticism inspired an apology from CEO Tim Cook and led to an executive shakeup at Apple. Customers turned to third-party map apps until Google finally released an iOS version of its popular maps in December.
Apple vs. Samsung
It was the biggest tech trial of the year. Two of the top phone and tablet manufacturers went to war when Apple accused Samsung of infringing on its iPad and iPhone patents for a variety of tablets and smartphones. The drama culminated in a federal jury trial over the summer that offered a rare peek into how notoriously secretive Apple operates.
The story became huge because of the large amount of money at stake and the implications that its verdict would have on Samsung's business and the Android platform.
The jury decided in Apple's favor, awarding the company just over $1 billion in damages. But the case is far from over. Lawyers for both sides will continue bickering over potential appeals for months and possibly years to come.
Facebook's botched IPO
It was the most anticipated IPO of the year, and one of the largest ever for a tech company. Social-media darling Facebook looked primed for a big public opening: The company was valued at $104 billion, snapped up popular photo-sharing app Instagram and was still growing.
But then an array of problems and misjudgments led to a botched IPO in May, and the company's stock plummeted. The initial offer price of $38 was too high, too many shares were issued, its opening day was marred by Nasdaq's technical glitches, and underwriter Morgan Stanley was fined for improperly influencing share sales.
The stock price dropped significantly, hitting a low of $17.55 on September 4. Facebook is still struggling to recover some of its early-2012 luster.
The Instagram boom
Instagram started out scrappy two years ago as a fun little app for sharing sepia-shaded photos with friends. But when its user base skyrocketed, Facebook bought it for $1 billion in cash and shares of Facebook stock. That amount later dropped to $735 million as the value of Facebook shares plummeted.
By September, Instagram had more than 100 million users. The app capped off its big year with a rite of passage for social networks: a bungled update to its terms of service that sparked user outrage and led to a hasty backtrack by founder Kevin Systrom.
Instagram's challenge for 2013 is to figure out how to grow its free service into a business that makes money so that Facebook can begin to get its money's worth.
Megaupload and Kim Dotcom
The Megaupload case would have been mildly interesting on its own. A popular file-sharing company and its various sites were shut down by the F.B.I for piracy. But when Megaupload founder Kim Dotcom was arrested in January at his lavish New Zealand estate, he went from unknown entrepreneur to a flamboyantly rich cult hero.
Dotcom (he legally changed his last name from Schmitz in 2005) did what any self-respecting boy video-game nerd would do with millions of dollars. He bought a yacht, helicopter, luxury cars and motorcycles. He lived with his model wife in a $24 million rented mansion in New Zealand where he spent hours playing "Call of Duty: Modern Warfare 3," earning a spot as the top-ranked player in the world.
But after Dotcom was jailed and his assets were seized, he slowly emerged as a leader for Internet freedom activists who thought he was unfairly targeted. He's still fighting the charges and using his newfound fame to launch new projects. His current plans include a new file-sharing site that encrypts all its files, and a streaming music service called Megabox.
Mid-sized tablets take off
It was the rare case of Apple following a trend instead of setting it. Apple introduced its 7.9-inch iPad Mini in October to take on its new rivals in the tablet market: cheaper 7-inch devices from Google and Amazon. While the Kindle Fire and Nexus 7 were only selling modestly compared to the iPad, Apple quickly recognized the growing demand for a smaller, more portable device.
The iPad Mini proved especially notable because Apple's late CEO, Steve Jobs, famously stated a 7-inch tablet would never make it in the market because it was "too big to compete with a smartphone; too small to compete with an iPad." This may have been one of those rare cases in which Jobs was wrong.
Nintendo launches Wii U
In November, Nintendo released a new version of its popular Wii game console, which while groundbreaking when launched in 2006 was badly in need of a refresh.
The Wii U's most novel feature is a touchscreen tablet controller called a GamePad, which communicates with the main console. Inside the tablet are motion control sensors, speakers, a camera, buttons and other bells and whistles -- all of which the gamer uses to interact with what's happening on the larger screen.
It's a bold move for the company and brings a new perspective to console gaming, although the Wii U has received mixed reviews so far.
Yahoo hires Marissa Mayer
Aging Internet giant Yahoo was facing slumping revenues and internal strife in July when it hired Google exec Marissa Mayer as its new chief executive. The hire made headlines for many reasons: Mayer was a bold choice that showed Yahoo was serious about shaking things up. She was also young, a Silicon Valley power player, and a woman who was expecting her first child.
There was much media hand-wringing over her pregnancy, with some pundits wondering aloud whether Mayer could juggle a newborn baby and a demanding new job. Many saw her as a role model for working mothers.
But when the news settled, the real question returned: Could Mayer save the floundering Yahoo? So far she has shaken up Yahoo's executive team, given employee morale a much-needed boost and begun to improve the company's mobile offerings, including a stunning new Flickr app.
It will take a while to properly gauge her impact, but investors seem optimistic. Yahoo's stock price has risen $4 a share since her hiring was announced.
Tech's role in the presidential election
Technology issues such as net neutrality weren't discussed much during the 2012 presidential election, but tech played a huge role in rallying supporters and getting out the vote. President Obama, arguably the most tech-savvy of U.S. presidents, went on Google Plus and Reddit to take questions from voters.
And both his campaign and that of his GOP challenger, Mitt Romney, sent social media messages almost daily in attempts to sway media reports and public opinion.
But the most impressive use of tech took place behind the scenes, where both sides used new and powerful computer databases to target voters. The Romney campaign's get-out-the-vote program, called Orca, suffered technical glitches on Election Day and was perceived to have been outflanked by Obama campaign software which compiled massive amounts of data on voters and dispatched volunteers to pinpoint locations across the country.
Thursday, January 5, 2012
Doh! The top 10 tech 'fails' of 2011
Doug Gross, CNN Thu December 29, 2011
http://www.cnn.com/2011/12/29/tech/web/2011-tech-fails/index.html
Netflix's short-lived plan to split itself into two services didn't go over so well this year. Qwikster?
STORY HIGHLIGHTS
The highs were high but the lows were lower in the tech world in 2011
U.S. Rep. Anthony Weiner makes our top 10 list for using Twitter to send lewd photos
PlayStation outage, "Duke Nukem Forever" and failed tablets also made the cut
It was a rough year for RIM and its BlackBerry, with a handful of "fails"
(CNN) -- Can't win 'em all, can you?
The highs were pretty high in the tech world in 2011, as new gadgets, updates and advances delighted the masses. I mean, Facebook made a change that most people (so far) seemed to actually like. What are the odds?
But the lows were lower. For every moment of digital bliss, it seemed, there was a clunker of equal or greater magnitude.
So, who are we to not rub salt in the wounds of those who got it oh-so-wrong this year?
In fairness, some of these "Doh!" moments came from folks who had otherwise good years. And nobody, not even perennial tech darling Apple, is perfect. (One hard-working journalist even had to write this very story twice after he accidentally deleted it and was forced to start over. Sweet, sweet irony.).
Sure, tech successes are nice. But these social-media miscues, foot-in-mouth e-moves and other digital duds gave us more to talk about in 2011.
Here are our 2011 "Tech Fails of the Year." Feel free to jump in the comments and let us know what we missed.
Weiner on Twitter
In a crowded and competitive field, former U.S. Rep. Anthony Weiner grabs our "What Were You Thinking?" award for this one.
The congressman (we're staying away from name jokes because ... well ... too easy) was being talked up as possibly the next mayor of New York City when his Twitter account was apparently hacked by someone who sent lewd photos to some of his female followers. That's the story Weiner gave, anyway.
Except, as it turned out, that someone was him.
Many of us gave Weiner the benefit of the doubt in the scandal's opening hours. I mean, what public official would be dumb enough to get raunchy on a platform like Twitter, where anyone who wants to can follow your every tweet?
Turns out ...
He wasn't alone. Comedian Gilbert Gottfried tweeted jokes about the Japan tsunami and earthquake that killed more than 15,000 people. Actor and Twitter pioneer Ashton Kutcher posted a hasty tweet defending Penn State coach Joe Paterno -- before, he says, learning the full extent of the school's child-sex scandal. The resulting backlash even led him to quit Twitter, at least temporarily.
But for so badly misunderstanding the public nature of Twitter, for the whirlwind of lies that followed before he fessed up and resigned and ... yes ... for thinking women like it when you send them closeup pictures of your crotch on the Internet, Weiner earns this bulging "Fail."
Go Daddy's SOPA misstep
When the vast majority of the Web's most active players are against something, and when your livelihood depends on the Web's most active players, it's probably best to either go along or keep quiet about it, right?
Not so for Go Daddy, the Web registrar and hosting company known for its titillating TV ads. In December, the company made the ill-fated decision to come out in support of the Stop Online Piracy Act (SOPA).
Google, Yahoo and Facebook are just some of the Internet heavyweights that have lined up to stop the proposed federal law, which would penalize websites that host pirated content. The bill has come under fire from Web-freedom advocates, who say it could dampen online expression.
Go Daddy, which had submitted testimony to Congress in support of the bill, issued a public statement supporting it -- even doubling down with a stronger statement when the Web backlash began.
Fast forward 24 hours and the company -- which had already earned ire in some quarters for its racy (some might say sexist) TV commercials and its founder's penchant for elephant hunting -- changed its mind amid a rash of defections.
Tens of thousands of domains, including more than 50 owned by Wikipedia's Jimmy Wales, were moved from Go Daddy, and that's before a Reddit-organized boycott planned for Friday. Oops.
'Duke Nukem Forever'
When video gamers wait 14 years for a follow-up to one of their favorite titles, they sort of expect it not to suck. In the minds of many, "Duke Nukem Forever" failed that important test.
First announced in 1997, "Forever" was to be a follow-up to a game that got lots of love for good-heartedly pushing the boundaries of sex, violence and naughty language in the emerging field of shooter games.
It was delayed. And delayed. And delayed. What finally emerged in June hit with a thud.
"At best, it can look a few years out of date; at worst, it is a blurry, stuttering mess," wrote CNN's Ravi Hiranand, in what actually was one of the kinder reviews of the game "Playing the game feels like being thrown back into the mid-'90s, and not in a happy, nostalgic sense."
In a post-"Grand Theft Auto" world, maybe waiting "forever" would have been a better idea after all.
The other tablets
As 2011 dawned, it appeared that Apple had created a thriving new space in personal computing with its iPad.
Beginning in January at the Consumer Electronics Show, a host of competing companies stepped forward with their rival tablets. The Motorola Xoom. BlackBerry's PlayBook. Samsung Galaxy Tab. The HP TouchPad.
One problem: Nobody bought them.
Most of the new tablets, many running Google's Android operating system, came in at roughly $500 -- about the same price as Apple's new iPad 2. And the public showed that at that price, they were happy going with the industry leader.
Some tablets got pulled. Others never made it off the production line. HP had some luck selling TouchPads -- after throwing up its hands and slashing prices to fire-sale levels.
One exception. Amazon may have cracked the code late in the year with its Kindle Fire, a smaller, simpler tablet that, at $199, is $300 cheaper than the least-expensive iPad 2.
Game off at PlayStation Network
When roughly 70 million users lose access to your gaming and entertainment network, it's a "fail."
In April, a hacker accessed account information for users of Sony's PlayStation Network, ultimately knocking the network offline in late April. It wasn't completely restored until early June and some gamers lacked access for weeks.
While getting hacked was bad, some users were even madder after Sony took a week from the time of the attack to let them know what happened.
Another, much smaller, attack happened in October. In the end, it looks like most of the network's fans stuck around -- a fact no doubt aided by multiple blockbuster game releases this year.
iPhones and bars don't mix
Seriously, Apple employees?
No ... seriously?
In 2010, the tech world was aflutter after an Apple employee, reportedly celebrating his birthday, lost a prototype of the unreleased iPhone 4 in a California beer hall.
Tech blog Gizmodo bought the phone, showcased it on their site, and touched off a firestorm that included everything from police raids to legal threats.
Well, at least we know that after all of that, it could never possibly happen again.
No ... wait. It happened again.
Tech blog CNET reported that an Appler left a prototype of the iPhone 4S in a Mexican bar and restaurant in San Francisco.
As our John Sutter wrote: "Here's a theory: Maybe there's some sort of connection between drinking and losing things?"
Netflix-Qwikster
Netflix, the Web's most popular movie-rental service, first rattled some customers by raising prices in July.
Then, in September, the company announced it was, basically, splitting itself in half. Web-streaming video would still come from Netflix. DVD-by-mail rentals would come from a separate company.
Called ... "Qwikster."
Where to start here? Customers who wanted both services complained about having to set up and maintain two different accounts on two different websites. Then there was the new name, which felt dated (Napster and Friendster, anyone?) and like it was spat out by some zany-misspelled-startup name generator.
Oh yeah ... and there was the fact that the "Qwikster" Twitter handle was already owned by a guy whose avatar was a weed-smoking Elmo muppet.
Chris Taylor, of Mashable, questioned whether Qwikster was "the worst product launch since New Coke."
It didn't even last as long as that syrupy mistake. About three weeks later, Netflix announced that Qwikster was dead.
PayPal plays Scrooge
Shutting down a fund to give presents to children in need at Christmas? Sounds like something one-percenter Mr. Potter from "It's a Wonderful Life" would endorse.
But that's essentially what Web-payment titan PayPal was doing before getting popped in the nose by the Internet.
Snarky blog Regretsy, when not mocking regrettable craft projects, has long maintained various charity funds. With the holidays approaching, actress and blog runner April Winchell (who writes on the site as "Helen Killer") announced a fund drive to buy toys for 200 children submitted by community members.
It was hugely successful, meeting its fundraising goal in the first 24 hours. Then PayPal, which was processing the donations, stepped in and froze the fund because it said Winchell used a "Donate" button that's supposed to be for nonprofits only.
The Web wasn't pleased.
Winchell used her popular blog to blast PayPal in less-than-friendly terms. Twitter users and other sites amplified the outrage.
A day later, PayPal said it "recognized our error" and even offered to donate to the fund.
God bless us ... every one.
iPhone 4S battery life
OK ... this one never reached the fever pitch that the iPhone 4's antenna problems did last year.
And maybe it's a sign that, when millions of people buy your product in the first few hours it exists, there are bound to be problems.
Despite not being the mythical iPhone 5, the 4S flew out of Apple stores when it was released October 14. But within hours, users started flocking to Apple's support forum to complain their batteries were running out of juice faster than Herman Cain's presidential campaign.
Apple publicly ignored the complaints for a little over two weeks. Then the company issued a statement saying that "a small number of customers" had complained about the battery and that an update to the phone's operating system was on the way.
As with the iPhone 4 "death grip," we'll call this a modest "fail" wrapped inside an epic win. The battery gripes didn't stop Apple from selling an iLoad of the new phones.
Bad year for BlackBerry
Alas, poor BlackBerry.
Research in Motion's crack-like gadget was once synonymous with "smartphone," effectively ushering in the era of messaging, e-mail-checking and other Phone 2.0 behavior.
But, 2011 wasn't kind.
It's bad enough that the iPhone and the rise of the Androids continue to muscle BlackBerrys out of the limelight. Then the BlackBerry PlayBook, RIM's effort in the burgeoning tablet space, arrived with a thud in April.
The capper, however, was an October outage at a data center that caused users to lose messaging ability in parts of Europe, the Middle East, India, Africa, Latin America and North America. (To their credit, RIM ultimately gave away a pile of free apps to the folks affected).
The outage lasted for several days and was the final straw for some users, who abandoned ship for other phones.
http://www.cnn.com/2011/12/29/tech/web/2011-tech-fails/index.html
Netflix's short-lived plan to split itself into two services didn't go over so well this year. Qwikster?
STORY HIGHLIGHTS
The highs were high but the lows were lower in the tech world in 2011
U.S. Rep. Anthony Weiner makes our top 10 list for using Twitter to send lewd photos
PlayStation outage, "Duke Nukem Forever" and failed tablets also made the cut
It was a rough year for RIM and its BlackBerry, with a handful of "fails"
(CNN) -- Can't win 'em all, can you?
The highs were pretty high in the tech world in 2011, as new gadgets, updates and advances delighted the masses. I mean, Facebook made a change that most people (so far) seemed to actually like. What are the odds?
But the lows were lower. For every moment of digital bliss, it seemed, there was a clunker of equal or greater magnitude.
So, who are we to not rub salt in the wounds of those who got it oh-so-wrong this year?
In fairness, some of these "Doh!" moments came from folks who had otherwise good years. And nobody, not even perennial tech darling Apple, is perfect. (One hard-working journalist even had to write this very story twice after he accidentally deleted it and was forced to start over. Sweet, sweet irony.).
Sure, tech successes are nice. But these social-media miscues, foot-in-mouth e-moves and other digital duds gave us more to talk about in 2011.
Here are our 2011 "Tech Fails of the Year." Feel free to jump in the comments and let us know what we missed.
Weiner on Twitter
In a crowded and competitive field, former U.S. Rep. Anthony Weiner grabs our "What Were You Thinking?" award for this one.
The congressman (we're staying away from name jokes because ... well ... too easy) was being talked up as possibly the next mayor of New York City when his Twitter account was apparently hacked by someone who sent lewd photos to some of his female followers. That's the story Weiner gave, anyway.
Except, as it turned out, that someone was him.
Many of us gave Weiner the benefit of the doubt in the scandal's opening hours. I mean, what public official would be dumb enough to get raunchy on a platform like Twitter, where anyone who wants to can follow your every tweet?
Turns out ...
He wasn't alone. Comedian Gilbert Gottfried tweeted jokes about the Japan tsunami and earthquake that killed more than 15,000 people. Actor and Twitter pioneer Ashton Kutcher posted a hasty tweet defending Penn State coach Joe Paterno -- before, he says, learning the full extent of the school's child-sex scandal. The resulting backlash even led him to quit Twitter, at least temporarily.
But for so badly misunderstanding the public nature of Twitter, for the whirlwind of lies that followed before he fessed up and resigned and ... yes ... for thinking women like it when you send them closeup pictures of your crotch on the Internet, Weiner earns this bulging "Fail."
Go Daddy's SOPA misstep
When the vast majority of the Web's most active players are against something, and when your livelihood depends on the Web's most active players, it's probably best to either go along or keep quiet about it, right?
Not so for Go Daddy, the Web registrar and hosting company known for its titillating TV ads. In December, the company made the ill-fated decision to come out in support of the Stop Online Piracy Act (SOPA).
Google, Yahoo and Facebook are just some of the Internet heavyweights that have lined up to stop the proposed federal law, which would penalize websites that host pirated content. The bill has come under fire from Web-freedom advocates, who say it could dampen online expression.
Go Daddy, which had submitted testimony to Congress in support of the bill, issued a public statement supporting it -- even doubling down with a stronger statement when the Web backlash began.
Fast forward 24 hours and the company -- which had already earned ire in some quarters for its racy (some might say sexist) TV commercials and its founder's penchant for elephant hunting -- changed its mind amid a rash of defections.
Tens of thousands of domains, including more than 50 owned by Wikipedia's Jimmy Wales, were moved from Go Daddy, and that's before a Reddit-organized boycott planned for Friday. Oops.
'Duke Nukem Forever'
When video gamers wait 14 years for a follow-up to one of their favorite titles, they sort of expect it not to suck. In the minds of many, "Duke Nukem Forever" failed that important test.
First announced in 1997, "Forever" was to be a follow-up to a game that got lots of love for good-heartedly pushing the boundaries of sex, violence and naughty language in the emerging field of shooter games.
It was delayed. And delayed. And delayed. What finally emerged in June hit with a thud.
"At best, it can look a few years out of date; at worst, it is a blurry, stuttering mess," wrote CNN's Ravi Hiranand, in what actually was one of the kinder reviews of the game "Playing the game feels like being thrown back into the mid-'90s, and not in a happy, nostalgic sense."
In a post-"Grand Theft Auto" world, maybe waiting "forever" would have been a better idea after all.
The other tablets
As 2011 dawned, it appeared that Apple had created a thriving new space in personal computing with its iPad.
Beginning in January at the Consumer Electronics Show, a host of competing companies stepped forward with their rival tablets. The Motorola Xoom. BlackBerry's PlayBook. Samsung Galaxy Tab. The HP TouchPad.
One problem: Nobody bought them.
Most of the new tablets, many running Google's Android operating system, came in at roughly $500 -- about the same price as Apple's new iPad 2. And the public showed that at that price, they were happy going with the industry leader.
Some tablets got pulled. Others never made it off the production line. HP had some luck selling TouchPads -- after throwing up its hands and slashing prices to fire-sale levels.
One exception. Amazon may have cracked the code late in the year with its Kindle Fire, a smaller, simpler tablet that, at $199, is $300 cheaper than the least-expensive iPad 2.
Game off at PlayStation Network
When roughly 70 million users lose access to your gaming and entertainment network, it's a "fail."
In April, a hacker accessed account information for users of Sony's PlayStation Network, ultimately knocking the network offline in late April. It wasn't completely restored until early June and some gamers lacked access for weeks.
While getting hacked was bad, some users were even madder after Sony took a week from the time of the attack to let them know what happened.
Another, much smaller, attack happened in October. In the end, it looks like most of the network's fans stuck around -- a fact no doubt aided by multiple blockbuster game releases this year.
iPhones and bars don't mix
Seriously, Apple employees?
No ... seriously?
In 2010, the tech world was aflutter after an Apple employee, reportedly celebrating his birthday, lost a prototype of the unreleased iPhone 4 in a California beer hall.
Tech blog Gizmodo bought the phone, showcased it on their site, and touched off a firestorm that included everything from police raids to legal threats.
Well, at least we know that after all of that, it could never possibly happen again.
No ... wait. It happened again.
Tech blog CNET reported that an Appler left a prototype of the iPhone 4S in a Mexican bar and restaurant in San Francisco.
As our John Sutter wrote: "Here's a theory: Maybe there's some sort of connection between drinking and losing things?"
Netflix-Qwikster
Netflix, the Web's most popular movie-rental service, first rattled some customers by raising prices in July.
Then, in September, the company announced it was, basically, splitting itself in half. Web-streaming video would still come from Netflix. DVD-by-mail rentals would come from a separate company.
Called ... "Qwikster."
Where to start here? Customers who wanted both services complained about having to set up and maintain two different accounts on two different websites. Then there was the new name, which felt dated (Napster and Friendster, anyone?) and like it was spat out by some zany-misspelled-startup name generator.
Oh yeah ... and there was the fact that the "Qwikster" Twitter handle was already owned by a guy whose avatar was a weed-smoking Elmo muppet.
Chris Taylor, of Mashable, questioned whether Qwikster was "the worst product launch since New Coke."
It didn't even last as long as that syrupy mistake. About three weeks later, Netflix announced that Qwikster was dead.
PayPal plays Scrooge
Shutting down a fund to give presents to children in need at Christmas? Sounds like something one-percenter Mr. Potter from "It's a Wonderful Life" would endorse.
But that's essentially what Web-payment titan PayPal was doing before getting popped in the nose by the Internet.
Snarky blog Regretsy, when not mocking regrettable craft projects, has long maintained various charity funds. With the holidays approaching, actress and blog runner April Winchell (who writes on the site as "Helen Killer") announced a fund drive to buy toys for 200 children submitted by community members.
It was hugely successful, meeting its fundraising goal in the first 24 hours. Then PayPal, which was processing the donations, stepped in and froze the fund because it said Winchell used a "Donate" button that's supposed to be for nonprofits only.
The Web wasn't pleased.
Winchell used her popular blog to blast PayPal in less-than-friendly terms. Twitter users and other sites amplified the outrage.
A day later, PayPal said it "recognized our error" and even offered to donate to the fund.
God bless us ... every one.
iPhone 4S battery life
OK ... this one never reached the fever pitch that the iPhone 4's antenna problems did last year.
And maybe it's a sign that, when millions of people buy your product in the first few hours it exists, there are bound to be problems.
Despite not being the mythical iPhone 5, the 4S flew out of Apple stores when it was released October 14. But within hours, users started flocking to Apple's support forum to complain their batteries were running out of juice faster than Herman Cain's presidential campaign.
Apple publicly ignored the complaints for a little over two weeks. Then the company issued a statement saying that "a small number of customers" had complained about the battery and that an update to the phone's operating system was on the way.
As with the iPhone 4 "death grip," we'll call this a modest "fail" wrapped inside an epic win. The battery gripes didn't stop Apple from selling an iLoad of the new phones.
Bad year for BlackBerry
Alas, poor BlackBerry.
Research in Motion's crack-like gadget was once synonymous with "smartphone," effectively ushering in the era of messaging, e-mail-checking and other Phone 2.0 behavior.
But, 2011 wasn't kind.
It's bad enough that the iPhone and the rise of the Androids continue to muscle BlackBerrys out of the limelight. Then the BlackBerry PlayBook, RIM's effort in the burgeoning tablet space, arrived with a thud in April.
The capper, however, was an October outage at a data center that caused users to lose messaging ability in parts of Europe, the Middle East, India, Africa, Latin America and North America. (To their credit, RIM ultimately gave away a pile of free apps to the folks affected).
The outage lasted for several days and was the final straw for some users, who abandoned ship for other phones.
Saturday, November 6, 2010
Microsoft is a dying consumer brand
http://money.cnn.com/2010/10/27/technology/microsoft_pdc
Microsoft is a dying consumer brand
Steve Ballmer, and the company he leads, are struggling with "the vision thing."
David Goldman, staff writer
October 27, 2010
NEW YORK (CNNMoney.com) -- Consumers have turned their backs on Microsoft. A company that once symbolized the future is now living in the past.
Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets. It has even fallen behind in Web browsing, a market it once ruled with an iron fist.
Outgoing Chief Software Architect Ray Ozzie called out Microsoft's lost ground in a blog post over the weekend.
"Our early and clear vision notwithstanding, [competitors'] execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction," he said.
It's not like Microsoft didn't foresee the changes ahead. With a staff of almost 90,000, the company has many of the tech world's smartest minds on its payroll, and has incubated projects in a wide range of fields that later took off. Experiments like Courier (tablets), HailStorm/Passport (digital identity), and Windows Media Center (content in the cloud) show the company was ahead of the game in many areas -- but then it either failed to bring those products to market, or didn't execute.
"In this age, the race really is to the swift. You cannot afford to be an hour late or a dollar short," says Laura DiDio, principal analyst at ITIC. "Now the biggest question is: Can they make it in the 21st century and compete with Google and Apple?"
Some influential analysts think not. Several have downgraded Microsoft's (MSFT, Fortune 500) stock in recent weeks, as PC sales continue to slow and Microsoft struggles with its tablet strategy. The company's stock is down more than 17% this year.
What's wrong with Microsoft
A rundown of Microsoft's major consumer projects finds trouble in almost all of them.
Internet Explorer's popularity has been waning for years, and one recent study showed that for the first time in more than a decade, more people are using alternative browsers. The browser is becoming the single most critical piece of software on a device -- potentially eclipsing the operating system -- but all of the major innovations of the past few years, like tabbed browsing and add-on extensions, came from outside Microsoft.
Windows Phone 7 has promise, but Microsoft dug itself an enormous hole with the subpar Windows Mobile platform. With its market share currently sitting below 5%, developers are taking a "wait and see" approach.
Microsoft's media platform Zune was dead on arrival.
Bing is growing, but substantially all of that growth has come at the expense of its business partner, Yahoo -- not its archrival Google.
Microsoft's attempts to build a social network through Windows Live have failed to gain traction. It has no real answer to Facebook.
Six months after Apple's release of the iPad, Microsoft still has virtually no presence in the tablet market. And its strategy for taking on Apple -- Windows 7 on a tablet, rather than a tablet-specific operating system -- is leaving potential partners cold. Lenovo's technology director recently told PC Mag that his company won't be building around the platform: "The challenge with Windows 7 is that it's based on the same paradigm as 1985 -- it's really an interface that's optimized for a mouse and keyboard."
With Xbox, Microsoft succeeded at innovating: It created a competitive video game brand for hardcore gamers. But even Xbox was outdueled by Nintendo with the Wii, which outsold Xbox by appealing to casual gamers.
Then there's the epicenter of the Microsoft universe: Windows. Microsoft likes to point out that its operating system is its biggest consumer brand and Windows 7 has been selling rapidly. Its new version has sold 240 million licenses in a year, making it the fastest-selling OS in Microsoft's history.
But Windows' momentum isn't from consumers. In fact, consumers are a worry for the Windows division, because they have dramatically slowed their purchases of PCs in recent months.
Rather, the fast sales are coming from businesses, which significantly delayed their purchases of new Windows licenses because Windows Vista was bug-ridden mess. Then the recession hit. A years-overdue corporate PC refresh cycle is now happening all at once.
Meanwhile, Microsoft's executive suite is in turmoil. CFO Chris Liddel, entertainment unit head Robbie Bach, device design leader J Allard and business division chief Stephen Elop have left within the past year. Ray Ozzie joined the exit parade last week.
Consumers matter
Microsoft has a lot of questions to answer, and it will have an opportunity to do so at its Professional Developers Conference in Seattle, which kicks off Thursday.
But PDC, which used to be one of Microsoft's most important and widely attended conferences, is going to be relatively small this year, with only a few thousand people making the trip, analysts say. PDC's hottest news this year is about cloud computing -- vital to enterprises, but not exactly sexy stuff.
So is this Microsoft's Waterloo? Will it become the next IBM (IBM, Fortune 500) -- crucially important to businesses but an afterthought for consumers?
"Microsoft is at a transition point, and there is a risk of that happening," says Al Hilwa, analyst at IDC. "But Microsoft cares much more about consumers than IBM ever did. It's in its DNA, and it understands that it is necessary to stay relevant. I don't see Microsoft ever abandoning consumers."
As Apple has proven, success in consumer products can fuel explosive growth. Apple surpassed Microsoft's market value earlier this year, and is on pace to eclipse the company in sales for 2010.
And if Microsoft cedes consumer ground, it risks its enterprise stronghold. Businesses are becoming more willing to allow employees to use their personal devices for work purposes, and a growing number of those gizmos are Macs, iPads, iPhones and Android smartphones.
So it's up to Microsoft to turn that around by being a leader, rather than a follower, in the consumer market.
Windows Phone 7 is a good start. Internet Explorer 9 has some exciting new features that other browsers lack. And Xbox's controllerless Kinect -- the first of its kind -- is coming this holiday season.
Microsoft just has to hope it's not too late.
Microsoft is a dying consumer brand
Steve Ballmer, and the company he leads, are struggling with "the vision thing."
David Goldman, staff writer
October 27, 2010
NEW YORK (CNNMoney.com) -- Consumers have turned their backs on Microsoft. A company that once symbolized the future is now living in the past.
Microsoft has been late to the game in crucial modern technologies like mobile, search, media, gaming and tablets. It has even fallen behind in Web browsing, a market it once ruled with an iron fist.
Outgoing Chief Software Architect Ray Ozzie called out Microsoft's lost ground in a blog post over the weekend.
"Our early and clear vision notwithstanding, [competitors'] execution has surpassed our own in mobile experiences, in the seamless fusion of hardware & software & services, and in social networking & myriad new forms of internet-centric social interaction," he said.
It's not like Microsoft didn't foresee the changes ahead. With a staff of almost 90,000, the company has many of the tech world's smartest minds on its payroll, and has incubated projects in a wide range of fields that later took off. Experiments like Courier (tablets), HailStorm/Passport (digital identity), and Windows Media Center (content in the cloud) show the company was ahead of the game in many areas -- but then it either failed to bring those products to market, or didn't execute.
"In this age, the race really is to the swift. You cannot afford to be an hour late or a dollar short," says Laura DiDio, principal analyst at ITIC. "Now the biggest question is: Can they make it in the 21st century and compete with Google and Apple?"
Some influential analysts think not. Several have downgraded Microsoft's (MSFT, Fortune 500) stock in recent weeks, as PC sales continue to slow and Microsoft struggles with its tablet strategy. The company's stock is down more than 17% this year.
What's wrong with Microsoft
A rundown of Microsoft's major consumer projects finds trouble in almost all of them.
Internet Explorer's popularity has been waning for years, and one recent study showed that for the first time in more than a decade, more people are using alternative browsers. The browser is becoming the single most critical piece of software on a device -- potentially eclipsing the operating system -- but all of the major innovations of the past few years, like tabbed browsing and add-on extensions, came from outside Microsoft.
Windows Phone 7 has promise, but Microsoft dug itself an enormous hole with the subpar Windows Mobile platform. With its market share currently sitting below 5%, developers are taking a "wait and see" approach.
Microsoft's media platform Zune was dead on arrival.
Bing is growing, but substantially all of that growth has come at the expense of its business partner, Yahoo -- not its archrival Google.
Microsoft's attempts to build a social network through Windows Live have failed to gain traction. It has no real answer to Facebook.
Six months after Apple's release of the iPad, Microsoft still has virtually no presence in the tablet market. And its strategy for taking on Apple -- Windows 7 on a tablet, rather than a tablet-specific operating system -- is leaving potential partners cold. Lenovo's technology director recently told PC Mag that his company won't be building around the platform: "The challenge with Windows 7 is that it's based on the same paradigm as 1985 -- it's really an interface that's optimized for a mouse and keyboard."
With Xbox, Microsoft succeeded at innovating: It created a competitive video game brand for hardcore gamers. But even Xbox was outdueled by Nintendo with the Wii, which outsold Xbox by appealing to casual gamers.
Then there's the epicenter of the Microsoft universe: Windows. Microsoft likes to point out that its operating system is its biggest consumer brand and Windows 7 has been selling rapidly. Its new version has sold 240 million licenses in a year, making it the fastest-selling OS in Microsoft's history.
But Windows' momentum isn't from consumers. In fact, consumers are a worry for the Windows division, because they have dramatically slowed their purchases of PCs in recent months.
Rather, the fast sales are coming from businesses, which significantly delayed their purchases of new Windows licenses because Windows Vista was bug-ridden mess. Then the recession hit. A years-overdue corporate PC refresh cycle is now happening all at once.
Meanwhile, Microsoft's executive suite is in turmoil. CFO Chris Liddel, entertainment unit head Robbie Bach, device design leader J Allard and business division chief Stephen Elop have left within the past year. Ray Ozzie joined the exit parade last week.
Consumers matter
Microsoft has a lot of questions to answer, and it will have an opportunity to do so at its Professional Developers Conference in Seattle, which kicks off Thursday.
But PDC, which used to be one of Microsoft's most important and widely attended conferences, is going to be relatively small this year, with only a few thousand people making the trip, analysts say. PDC's hottest news this year is about cloud computing -- vital to enterprises, but not exactly sexy stuff.
So is this Microsoft's Waterloo? Will it become the next IBM (IBM, Fortune 500) -- crucially important to businesses but an afterthought for consumers?
"Microsoft is at a transition point, and there is a risk of that happening," says Al Hilwa, analyst at IDC. "But Microsoft cares much more about consumers than IBM ever did. It's in its DNA, and it understands that it is necessary to stay relevant. I don't see Microsoft ever abandoning consumers."
As Apple has proven, success in consumer products can fuel explosive growth. Apple surpassed Microsoft's market value earlier this year, and is on pace to eclipse the company in sales for 2010.
And if Microsoft cedes consumer ground, it risks its enterprise stronghold. Businesses are becoming more willing to allow employees to use their personal devices for work purposes, and a growing number of those gizmos are Macs, iPads, iPhones and Android smartphones.
So it's up to Microsoft to turn that around by being a leader, rather than a follower, in the consumer market.
Windows Phone 7 is a good start. Internet Explorer 9 has some exciting new features that other browsers lack. And Xbox's controllerless Kinect -- the first of its kind -- is coming this holiday season.
Microsoft just has to hope it's not too late.
Thursday, June 24, 2010
Starbucks Announces Free Wi-Fi, Proprietary Content Network
http://www.wired.com/epicenter/2010/06/starbucks-announces-free-wi-fi-proprietary-content-network
Starbucks Announces Free Wi-Fi, Proprietary Content Network
Eliot Van Buskirk June 14, 2010
NEW YORK — Starbucks’ coffee drinks have become synonymous with the high costs consumers are cutting back on these days, but at least the Wi-Fi connections in its stores will no longer require a credit card.
Free Wi-Fi is in my mind just the price of admission.Starting July 1, Starbucks will let anyone connect to its WiFi network for free. This fall, the company will add a content network called Starbucks Digital Network, in partnership with Yahoo and other sites, which will include local content you won’t be able to read anywhere else. Both offerings will be free.
“Free Wi-Fi is in my mind just the price of admission — we want to create … new sources of content that you can only get at Starbucks,” chairman and president and CEO Howard Schulz told the Wired Business Conference. “This is a thing that doesn’t exist in any other consumer marketplace in America.”
Starbucks hopes to make money from these initiatives indirectly, by “enhanc[ing] the experience” and making the content “so compelling that it drives incremental traffic,” said Schulz as he announced the new initiative at Wired’s Disruptive by Design conference on Monday.
McDonalds has free Wi-Fi too, of course, as does just about every other coffee place in the country other than Starbucks. Schulz admitted that both of those stratas have been competing with Starbucks on coffee as well as internet service, with McDonalds stealing bargain-oriented customers and boutique independent coffee shops in urban areas grabbing some of its loyal epicures.
However, none of Starbucks’ direct competitors have their own localized content networks on the level of what Schulz described. In some communities, Starbucks functions as a sort of community center — a “third place” between home and the office, in Schulz’s words — and this infusion of local news and information, along with a free way to get it, could enhance that effect.
Each customer must log in to Wi-Fi and the Starbucks Digital Network with a unique identifier, so Starbucks won’t only know where you are, but who you are, potentially allowing for targeted messaging to offset cost further. Focus groups have been quite receptive to the free Wi-Fi and local content customers will get in return, says the CEO.
So, where will all of this content come from? Especially, when Starbucks wants it to be updated multiple times a day, so people always see something new.
In addition to the inked partnership with Yahoo, Starbucks is talking to AOL’s Patch.com content-creation division about having it create customized content for the network. In addition, the network will include free online access to the Wall Street Journal, with a percentage of subscription revenue generated when coffee drinkers decide they want to access those articles elsewhere, too.
Starbucks Announces Free Wi-Fi, Proprietary Content Network
Eliot Van Buskirk June 14, 2010
NEW YORK — Starbucks’ coffee drinks have become synonymous with the high costs consumers are cutting back on these days, but at least the Wi-Fi connections in its stores will no longer require a credit card.
Free Wi-Fi is in my mind just the price of admission.Starting July 1, Starbucks will let anyone connect to its WiFi network for free. This fall, the company will add a content network called Starbucks Digital Network, in partnership with Yahoo and other sites, which will include local content you won’t be able to read anywhere else. Both offerings will be free.
“Free Wi-Fi is in my mind just the price of admission — we want to create … new sources of content that you can only get at Starbucks,” chairman and president and CEO Howard Schulz told the Wired Business Conference. “This is a thing that doesn’t exist in any other consumer marketplace in America.”
Starbucks hopes to make money from these initiatives indirectly, by “enhanc[ing] the experience” and making the content “so compelling that it drives incremental traffic,” said Schulz as he announced the new initiative at Wired’s Disruptive by Design conference on Monday.
McDonalds has free Wi-Fi too, of course, as does just about every other coffee place in the country other than Starbucks. Schulz admitted that both of those stratas have been competing with Starbucks on coffee as well as internet service, with McDonalds stealing bargain-oriented customers and boutique independent coffee shops in urban areas grabbing some of its loyal epicures.
However, none of Starbucks’ direct competitors have their own localized content networks on the level of what Schulz described. In some communities, Starbucks functions as a sort of community center — a “third place” between home and the office, in Schulz’s words — and this infusion of local news and information, along with a free way to get it, could enhance that effect.
Each customer must log in to Wi-Fi and the Starbucks Digital Network with a unique identifier, so Starbucks won’t only know where you are, but who you are, potentially allowing for targeted messaging to offset cost further. Focus groups have been quite receptive to the free Wi-Fi and local content customers will get in return, says the CEO.
So, where will all of this content come from? Especially, when Starbucks wants it to be updated multiple times a day, so people always see something new.
In addition to the inked partnership with Yahoo, Starbucks is talking to AOL’s Patch.com content-creation division about having it create customized content for the network. In addition, the network will include free online access to the Wall Street Journal, with a percentage of subscription revenue generated when coffee drinkers decide they want to access those articles elsewhere, too.
Wednesday, June 16, 2010
BP buys Google, Yahoo search words to keep people away from real news
http://www.examiner.com/x-33986-Political-Spin-Examiner~y2010m6d6-BP-buys-Google-Yahoo-search-engine-words-to-keep-people-away-from-real-news-on-Gulf-oil-spill-disas
BP buys Google, Yahoo search words to keep people away from real news on Gulf oil spill disaster
June 6, 1010
Political Spin Examiner
Maryann Tobin
In their most tenacious effort to control the ‘spin’ on the worst oil spill disaster in the history, BP has purchased top internet search engine words so they can re-direct people away from real news on the Deepwater Horizon catastrophe.
BP spokesman Toby Odone confirmed to ABC News that the oil giant had in fact bought internet search terms. So now when someone searches the words ‘oil spill’, on the internet, the top link will re-direct them to BP’s official company website.
This would not be the first time that BP has tried to control information to protect the company’s public image.
Shortly after the Deepwater Horizon exploded on April 20, 2010, BP executives quickly underestimated the size of the disastrous oil spill. Some suggest they did it to avoid costly EPA per-gallon spill fines. The less oil spilled, the lower the fines.
A month into the spill, the public learned through independent science, that the spill was in fact a million gallon a day gusher. BP got caught in their own lie when the used a syphon pipe in one of the broken riser pipes and proudly proclaimed that they were capturing 5,000 barrels of oil a day. With the oil obviously still gushing, they had to up their spill rate to explain the reported discrepancy in their earlier estimates.
As the dead bodies of birds, turtles and dolphins began showing up on land, BP used a private security company as their ‘oil spill police’ to try to keep photographers and reporters away from the true death toll from their spill. Tides of black goo lapping a shore lined in corpses did not portray the company image Tony Hayward and his oil rich executives wanted.
BP can spend millions on advertising campaigns, and they can try to misdirect people on the internet. But no matter how hard BP tries or how much money they spend on public relations, they will never be able to hide the apocalypse unfolding in the Gulf of Mexico. You just can’t buy or smile your way out of a multi-billion gallon oil spill disaster.
The world is watching the Gulf of Mexico from airplanes, boats and satellite images. Sending people to the BP company website when they click on the words ‘oil spill’ is not going to erase the horrors of the Deepwater Horizon disaster, nor will the trickery of British Petroleum.
BP buys Google, Yahoo search words to keep people away from real news on Gulf oil spill disaster
June 6, 1010
Political Spin Examiner
Maryann Tobin
In their most tenacious effort to control the ‘spin’ on the worst oil spill disaster in the history, BP has purchased top internet search engine words so they can re-direct people away from real news on the Deepwater Horizon catastrophe.
BP spokesman Toby Odone confirmed to ABC News that the oil giant had in fact bought internet search terms. So now when someone searches the words ‘oil spill’, on the internet, the top link will re-direct them to BP’s official company website.
This would not be the first time that BP has tried to control information to protect the company’s public image.
Shortly after the Deepwater Horizon exploded on April 20, 2010, BP executives quickly underestimated the size of the disastrous oil spill. Some suggest they did it to avoid costly EPA per-gallon spill fines. The less oil spilled, the lower the fines.
A month into the spill, the public learned through independent science, that the spill was in fact a million gallon a day gusher. BP got caught in their own lie when the used a syphon pipe in one of the broken riser pipes and proudly proclaimed that they were capturing 5,000 barrels of oil a day. With the oil obviously still gushing, they had to up their spill rate to explain the reported discrepancy in their earlier estimates.
As the dead bodies of birds, turtles and dolphins began showing up on land, BP used a private security company as their ‘oil spill police’ to try to keep photographers and reporters away from the true death toll from their spill. Tides of black goo lapping a shore lined in corpses did not portray the company image Tony Hayward and his oil rich executives wanted.
BP can spend millions on advertising campaigns, and they can try to misdirect people on the internet. But no matter how hard BP tries or how much money they spend on public relations, they will never be able to hide the apocalypse unfolding in the Gulf of Mexico. You just can’t buy or smile your way out of a multi-billion gallon oil spill disaster.
The world is watching the Gulf of Mexico from airplanes, boats and satellite images. Sending people to the BP company website when they click on the words ‘oil spill’ is not going to erase the horrors of the Deepwater Horizon disaster, nor will the trickery of British Petroleum.
Wednesday, September 2, 2009
Yahoo Mail still king as Gmail lurks
http://news.cnet.com/8301-30684_3-10311150-265.htmlTom Krazit
August 17, 2009
Yahoo Mail still king as Gmail lurks
Yahoo is still king of the e-mail market as of June 2009, but Gmail has the most momentum.
Google's Gmail is the fastest-growing e-mail service on the planet, but it has a way to go to catch Yahoo's still-growing market share.
ComScore's latest figures for the e-mail market show Yahoo added almost 20 million users last year, growing its share of the market by 22 percent from 87.2 million users to 106.2 million users in June. Only Gmail grew faster--a 46-percent clip--but just 36.9 million people are currently using Gmail. Microsoft's Hotmail is the second-most widely used e-mail with 47.1 million users, up 3 percent from last year.
Some outlets, such as TechCrunch, zeroed in on Google's performance, noting that it has now surpassed Web 1.0 stalwart AOL's steadily falling share of the e-mail market. Others, such as Daring Fireball, noted that Google has better mindshare among the digerati than Yahoo or Hotmail.
But Yahoo, currently rebranding itself around content and services after dumping its search business on Microsoft, should be thrilled at 22 percent growth starting from such a large number. Now that Yahoo will be dependent on attracting eyeballs to its vast network of Web content, pushing that content to those logging into Yahoo to check their e-mail becomes extremely important.
Google has had to make some changes as Gmail has grown larger, tweaking the "labels" sorting structure it uses inside Gmail to behave more like the traditional folder-based organization used by other e-mail services. Still, there's no doubt that Gmail has breathed new life into the original killer application for the Internet since it made its debut five years ago, and Yahoo Mail will have to make sure to stay on top of evolving usage patterns to maintain its edge.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple.
Thursday, December 18, 2008
Google Wants Its Own Fast Track on the Web
http://online.wsj.com/article/SB122929270127905065.html
DECEMBER 15, 2008
Google Wants Its Own Fast Track on the Web Article
By VISHESH KUMAR and CHRISTOPHER RHOADS
The celebrated openness of the Internet -- network providers are not supposed to give preferential treatment to any traffic -- is quietly losing powerful defenders.
Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.
At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same -- nobody is supposed to jump the line.
But phone and cable companies argue that Internet content providers should share in their network costs, particularly with Internet traffic growing by more than 50% annually, according to estimates. Carriers say that to keep up with surging traffic, driven mainly by the proliferation of online video, they need to boost revenue to upgrade their networks. Charging companies for fast lanes is one option.
One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.
"If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks, referring to the likely reaction of regulators and lawmakers.
Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.
The contentious issue has wide ramifications for the Internet as a platform for new businesses. If companies like Google succeed in negotiating preferential treatment, the Internet could become a place where wealthy companies get faster and easier access to the Web than less affluent ones, according to advocates of network neutrality. That could choke off competition, they say.
For computer users, it could mean that Web sites by companies not able to strike fast-lane deals will respond more slowly than those by companies able to pay. In the worst-case scenario, the Internet could become a medium where large companies, such as Comcast Corp. in cable television, would control both distribution and content -- and much of what users can access, according to neutrality advocates.
The developments could test Mr. Obama's professed commitment to network neutrality. "The Internet is perhaps the most open network in history, and we have to keep it that way," he told Google employees a year ago at the company's Mountain View, Calif., campus. "I will take a back seat to no one in my commitment to network neutrality."
But Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service. Mr. Lessig, who has known President-elect Barack Obama since their days teaching law at the University of Chicago, has been mentioned as a candidate to head the Federal Communications Commission, which regulates the telecommunications industry.
The shifting positions concern some purists. "What they're talking about is selling you the right to skip ahead in the line," says Ben Scott, policy director of Free Press, a Washington-based advocacy group. "It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier -- that is anathema to a culture of innovation."
Advocates of network neutrality believe it has helped the Internet drive the technology revolution of the past two decades, creating hundreds of thousands of jobs.
The concept of network neutrality originated with the phone business. The nation's longtime telephone monopoly, nicknamed Ma Bell, and its regional successors were prohibited from giving any public phone call preference in how quickly it was connected. When the Internet first boomed in the 1990s, content largely traveled via telephone line, and the rule survived by default.
'Dumbpipes'
The carriers picked up the unflattering nickname "dumbpipes," underscoring their strict noninterference in the Internet traffic surging over their networks. The name heightened resentment among the carriers toward the soaring wealth of the content providers, such as Amazon.com Inc., that couldn't exist without the networks of the telecom and cable companies.
In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four "guiding principles." The step had the effect of making the FCC's power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it.
Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet -- and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.
That unleashed a firestorm of criticism. A diverse group including Internet companies Google, Microsoft and Amazon joined the likes of the Christian Coalition, the National Rifle Association and the pop singer Moby in what they characterized as a fight to "save the Internet." The coalition claimed such steps could endanger freedom of speech.
Advocates of network neutrality also claimed that dismantling the rule would be the first step toward distributors gaining control over content, since they could dictate traffic according to fees charged to content providers. The fortunes of a certain Web site, in other words, might depend on how much it could pay network providers, rather than on its popularity.
That concern would grow if the carriers themselves offer content, which some have tried, with mixed success. AT&T, the country's largest broadband provider, recently launched its own online video service, called VideoCrawler, to compete with YouTube and others.
"One way AT&T can win that competition is to give their own video service preferential treatment on their network," says Robert Topolski, a networking engineer based in Portland, Ore. An AT&T spokesman says the company has no plans to give VideoCrawler preferential treatment on its network.
Mr. Topolski discovered that Comcast was slowing a video file-sharing service called BitTorrent. That discovery eventually led to sanctions against Comcast by the FCC. Comcast has appealed the decision, arguing the FCC did not have the authority to make such a ruling.
In 2006, Microsoft felt strongly enough about the issue that it wrote Congress to declare that saving network neutrality "could dictate whether the U.S. will continue to lead the world in Internet-related technologies."
The debate eventually reached a stalemate. Legislation to codify network neutrality failed to pass, and carriers backed off their plans for a tiered Internet.
During his presidential campaign, Mr. Obama spoke frequently about the Internet, which was a critical tool in his grass-roots effort to reach new voters, and the importance of network neutrality. "Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out," he told Google employees a year ago when he campaigned at the company. "And then we all lose."
Obama Advisers
But some of those who advise the new president on technology have changed their view on network neutrality. Stanford's Mr. Lessig, for one, has softened his opposition to variable service tiers. At a conference, he argued that carriers won't become kingmakers so long as the faster service at a higher price is available to anyone willing to pay it.
"There are good reasons to be able to prioritize traffic," Mr. Lessig said later in an interview. "If everyone had to pay the same rates for postal service, than you wouldn't be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer."
Some telecom experts say that broadband is the most profitable service offered by phone and cable companies, and they are simply trying to offset declining revenue from their traditional phone business.
In the two years since Google, Microsoft, Amazon and other Internet companies lined up in favor of network neutrality, the landscape has changed. The Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.
Microsoft, which appealed to Congress to save network neutrality just two years ago, has changed its position completely. "Network neutrality is a policy avenue the company is no longer pursuing," Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.
Microsoft has a deal to provide software for AT&T's Internet television service. A Microsoft spokesman declined to comment whether this arrangement affected the company's position on network neutrality.
Amazon's popular digital-reading device, called the Kindle, offers a dedicated, faster download service, an arrangement Amazon has with Sprint. That has prompted questions in the blogosphere about whether the service violates network neutrality.
"Amazon continues to support adoption of net neutrality rules to protect the longstanding, fundamental openness of the Internet," Amazon said in a statement. It declined to elaborate on its Kindle arrangement.
Amazon had withdrawn from the coalition of companies supporting net neutrality, but it recently was listed once again on the group's Web site. It declined to comment on whether carriers should be allowed to prioritize traffic.
Yahoo now has a digital subscriber-line partnership with AT&T. Some have speculated that the deal has caused Yahoo to go silent on the network-neutrality issue.
An AT&T spokesman said the company should be able to strike any deal it sees fit with content companies. Yahoo said in a statement that carriers and content companies "should find a consensus on how best to ensure that Americans have access to a world-class Internet."
Google Connections
Google, with its dominant market position and its perceived ties to the Obama team, may hold the most sway. One of President-elect Obama's most visible supporters during the campaign was Eric Schmidt, Google's chief executive officer. Mr. Schmidt remains an adviser during the transition.
Eric Schmidt
Google's proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google's service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.
Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google's move, if successful, would give it an advantage available to very few.
The matter could come to a head quickly. In approving AT&T's 2006 acquisition of Bell South, the FCC made AT&T agree to shelve plans for a fast lane for 30 months. That moratorium expires in the middle of next year. A Democratic lawmaker has already promised new network-neutrality legislation early in 2009. And a new chairman of the FCC could take a stricter position on forcing companies to comply with network neutrality.
Richard Whitt, Google's head of public affairs, denies the company's proposal would violate network neutrality. Nevertheless, he says he's unsure how committed President-elect Obama will remain to the principle.
"If you look at his plans," says Mr. Whitt, "they are much less specific than they were before."
Write to Vishesh Kumar at vishesh.kumar@wsj.com and Christopher Rhoads at christopher.rhoads@wsj.com
DECEMBER 15, 2008
Google Wants Its Own Fast Track on the Web Article
By VISHESH KUMAR and CHRISTOPHER RHOADS
The celebrated openness of the Internet -- network providers are not supposed to give preferential treatment to any traffic -- is quietly losing powerful defenders.
Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.
At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same -- nobody is supposed to jump the line.
But phone and cable companies argue that Internet content providers should share in their network costs, particularly with Internet traffic growing by more than 50% annually, according to estimates. Carriers say that to keep up with surging traffic, driven mainly by the proliferation of online video, they need to boost revenue to upgrade their networks. Charging companies for fast lanes is one option.
One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.
"If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks, referring to the likely reaction of regulators and lawmakers.
Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.
The contentious issue has wide ramifications for the Internet as a platform for new businesses. If companies like Google succeed in negotiating preferential treatment, the Internet could become a place where wealthy companies get faster and easier access to the Web than less affluent ones, according to advocates of network neutrality. That could choke off competition, they say.
For computer users, it could mean that Web sites by companies not able to strike fast-lane deals will respond more slowly than those by companies able to pay. In the worst-case scenario, the Internet could become a medium where large companies, such as Comcast Corp. in cable television, would control both distribution and content -- and much of what users can access, according to neutrality advocates.
The developments could test Mr. Obama's professed commitment to network neutrality. "The Internet is perhaps the most open network in history, and we have to keep it that way," he told Google employees a year ago at the company's Mountain View, Calif., campus. "I will take a back seat to no one in my commitment to network neutrality."
But Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service. Mr. Lessig, who has known President-elect Barack Obama since their days teaching law at the University of Chicago, has been mentioned as a candidate to head the Federal Communications Commission, which regulates the telecommunications industry.
The shifting positions concern some purists. "What they're talking about is selling you the right to skip ahead in the line," says Ben Scott, policy director of Free Press, a Washington-based advocacy group. "It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier -- that is anathema to a culture of innovation."
Advocates of network neutrality believe it has helped the Internet drive the technology revolution of the past two decades, creating hundreds of thousands of jobs.
The concept of network neutrality originated with the phone business. The nation's longtime telephone monopoly, nicknamed Ma Bell, and its regional successors were prohibited from giving any public phone call preference in how quickly it was connected. When the Internet first boomed in the 1990s, content largely traveled via telephone line, and the rule survived by default.
'Dumbpipes'
The carriers picked up the unflattering nickname "dumbpipes," underscoring their strict noninterference in the Internet traffic surging over their networks. The name heightened resentment among the carriers toward the soaring wealth of the content providers, such as Amazon.com Inc., that couldn't exist without the networks of the telecom and cable companies.
In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four "guiding principles." The step had the effect of making the FCC's power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it.
Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet -- and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.
That unleashed a firestorm of criticism. A diverse group including Internet companies Google, Microsoft and Amazon joined the likes of the Christian Coalition, the National Rifle Association and the pop singer Moby in what they characterized as a fight to "save the Internet." The coalition claimed such steps could endanger freedom of speech.
Advocates of network neutrality also claimed that dismantling the rule would be the first step toward distributors gaining control over content, since they could dictate traffic according to fees charged to content providers. The fortunes of a certain Web site, in other words, might depend on how much it could pay network providers, rather than on its popularity.
That concern would grow if the carriers themselves offer content, which some have tried, with mixed success. AT&T, the country's largest broadband provider, recently launched its own online video service, called VideoCrawler, to compete with YouTube and others.
"One way AT&T can win that competition is to give their own video service preferential treatment on their network," says Robert Topolski, a networking engineer based in Portland, Ore. An AT&T spokesman says the company has no plans to give VideoCrawler preferential treatment on its network.
Mr. Topolski discovered that Comcast was slowing a video file-sharing service called BitTorrent. That discovery eventually led to sanctions against Comcast by the FCC. Comcast has appealed the decision, arguing the FCC did not have the authority to make such a ruling.
In 2006, Microsoft felt strongly enough about the issue that it wrote Congress to declare that saving network neutrality "could dictate whether the U.S. will continue to lead the world in Internet-related technologies."
The debate eventually reached a stalemate. Legislation to codify network neutrality failed to pass, and carriers backed off their plans for a tiered Internet.
During his presidential campaign, Mr. Obama spoke frequently about the Internet, which was a critical tool in his grass-roots effort to reach new voters, and the importance of network neutrality. "Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out," he told Google employees a year ago when he campaigned at the company. "And then we all lose."
Obama Advisers
But some of those who advise the new president on technology have changed their view on network neutrality. Stanford's Mr. Lessig, for one, has softened his opposition to variable service tiers. At a conference, he argued that carriers won't become kingmakers so long as the faster service at a higher price is available to anyone willing to pay it.
"There are good reasons to be able to prioritize traffic," Mr. Lessig said later in an interview. "If everyone had to pay the same rates for postal service, than you wouldn't be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer."
Some telecom experts say that broadband is the most profitable service offered by phone and cable companies, and they are simply trying to offset declining revenue from their traditional phone business.
In the two years since Google, Microsoft, Amazon and other Internet companies lined up in favor of network neutrality, the landscape has changed. The Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.
Microsoft, which appealed to Congress to save network neutrality just two years ago, has changed its position completely. "Network neutrality is a policy avenue the company is no longer pursuing," Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.
Microsoft has a deal to provide software for AT&T's Internet television service. A Microsoft spokesman declined to comment whether this arrangement affected the company's position on network neutrality.
Amazon's popular digital-reading device, called the Kindle, offers a dedicated, faster download service, an arrangement Amazon has with Sprint. That has prompted questions in the blogosphere about whether the service violates network neutrality.
"Amazon continues to support adoption of net neutrality rules to protect the longstanding, fundamental openness of the Internet," Amazon said in a statement. It declined to elaborate on its Kindle arrangement.
Amazon had withdrawn from the coalition of companies supporting net neutrality, but it recently was listed once again on the group's Web site. It declined to comment on whether carriers should be allowed to prioritize traffic.
Yahoo now has a digital subscriber-line partnership with AT&T. Some have speculated that the deal has caused Yahoo to go silent on the network-neutrality issue.
An AT&T spokesman said the company should be able to strike any deal it sees fit with content companies. Yahoo said in a statement that carriers and content companies "should find a consensus on how best to ensure that Americans have access to a world-class Internet."
Google Connections
Google, with its dominant market position and its perceived ties to the Obama team, may hold the most sway. One of President-elect Obama's most visible supporters during the campaign was Eric Schmidt, Google's chief executive officer. Mr. Schmidt remains an adviser during the transition.
Eric Schmidt
Google's proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google's service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.
Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google's move, if successful, would give it an advantage available to very few.
The matter could come to a head quickly. In approving AT&T's 2006 acquisition of Bell South, the FCC made AT&T agree to shelve plans for a fast lane for 30 months. That moratorium expires in the middle of next year. A Democratic lawmaker has already promised new network-neutrality legislation early in 2009. And a new chairman of the FCC could take a stricter position on forcing companies to comply with network neutrality.
Richard Whitt, Google's head of public affairs, denies the company's proposal would violate network neutrality. Nevertheless, he says he's unsure how committed President-elect Obama will remain to the principle.
"If you look at his plans," says Mr. Whitt, "they are much less specific than they were before."
Write to Vishesh Kumar at vishesh.kumar@wsj.com and Christopher Rhoads at christopher.rhoads@wsj.com
Monday, November 3, 2008
Yahoo, AOL in due diligence on combination
http://www.reuters.com/article/innovationNews/idUSTRE49S7EQ20081029
Yahoo, AOL in due diligence on combination: source
Wed Oct 29, 2008
By Anupreeta Das
SAN FRANCISCO (Reuters) - Yahoo Inc and Time Warner Inc's AOL unit are looking at each other's books to figure out how much money they could make together and where costs can be saved, a person familiar with the talks said on Wednesday, indicating a merger may finally be on the way.
While noting a deal was not imminent, the source said the two companies have engaged in "meaningful" due diligence about a possible combination for the past couple of weeks.
Talks are focused on how to integrate AOL's content and advertising business into Yahoo, said the source, who was not authorized to speak publicly because the discussions are confidential.
Yahoo and Time Warner began talks several months ago, when the Internet company was looking for an alternative growth strategy to fend off a $47.5 billion takeover bid from Microsoft Corp.
Yahoo had repeatedly rejected Microsoft, which finally withdrew its $33-per-share proposal in June after Yahoo cut a search advertising partnership with Google Inc.
But the Google deal, also part of Yahoo's alternative strategy, is mired in the regulatory process because critics have said it is anti-competitive. Meanwhile, Yahoo shares have plunged to around $12.
Time Warner shares are down about 45 percent from year-earlier levels, while Yahoo shares have fallen about 63 percent, as fears of an economic recession curbed corporate spending on advertising while Google continued to dominate in the Web search market.
Under the deal Yahoo and Time Warner have discussed, Yahoo would fold AOL's content and advertising business into its own operations, and Time Warner would get a stake in the combined company.
Executives and advisers from both sides met last week as part of the due diligence process, the source said. Both sides are being cautious because any potential deal carries "a lot of risk," the source said, without providing further details.
Integration concerns would likely revolve around how to fold AOL's advertising network into Yahoo's operations, choosing whether to keep separate portals and email services, and squeezing out cost savings by reducing duplication, one former AOL executive said on condition of anonymity.
Yahoo and Time Warner declined comment. News of the due diligence was first reported by the AllThingsDigital blog.
Shares of Yahoo were up 4 cents at $12.40 in late trading, while Time Warner shares were down 15 cents or 1.5 percent at $9.95.
(Editing by Gerald E. McCormick and Brian Moss)
Yahoo, AOL in due diligence on combination: source
Wed Oct 29, 2008
By Anupreeta Das
SAN FRANCISCO (Reuters) - Yahoo Inc and Time Warner Inc's AOL unit are looking at each other's books to figure out how much money they could make together and where costs can be saved, a person familiar with the talks said on Wednesday, indicating a merger may finally be on the way.
While noting a deal was not imminent, the source said the two companies have engaged in "meaningful" due diligence about a possible combination for the past couple of weeks.
Talks are focused on how to integrate AOL's content and advertising business into Yahoo, said the source, who was not authorized to speak publicly because the discussions are confidential.
Yahoo and Time Warner began talks several months ago, when the Internet company was looking for an alternative growth strategy to fend off a $47.5 billion takeover bid from Microsoft Corp.
Yahoo had repeatedly rejected Microsoft, which finally withdrew its $33-per-share proposal in June after Yahoo cut a search advertising partnership with Google Inc.
But the Google deal, also part of Yahoo's alternative strategy, is mired in the regulatory process because critics have said it is anti-competitive. Meanwhile, Yahoo shares have plunged to around $12.
Time Warner shares are down about 45 percent from year-earlier levels, while Yahoo shares have fallen about 63 percent, as fears of an economic recession curbed corporate spending on advertising while Google continued to dominate in the Web search market.
Under the deal Yahoo and Time Warner have discussed, Yahoo would fold AOL's content and advertising business into its own operations, and Time Warner would get a stake in the combined company.
Executives and advisers from both sides met last week as part of the due diligence process, the source said. Both sides are being cautious because any potential deal carries "a lot of risk," the source said, without providing further details.
Integration concerns would likely revolve around how to fold AOL's advertising network into Yahoo's operations, choosing whether to keep separate portals and email services, and squeezing out cost savings by reducing duplication, one former AOL executive said on condition of anonymity.
Yahoo and Time Warner declined comment. News of the due diligence was first reported by the AllThingsDigital blog.
Shares of Yahoo were up 4 cents at $12.40 in late trading, while Time Warner shares were down 15 cents or 1.5 percent at $9.95.
(Editing by Gerald E. McCormick and Brian Moss)
Thursday, July 31, 2008
Time Warner AOL discussions
http://news.cnet.com/8301-1023_3-9992465-93.html
Yahoo and Microsoft step up Time Warner AOL discussions
July 16, 2008
Yahoo and Microsoft have both accelerated their respective deal-making talks with Time Warner's AOL, as a proxy fight looms less than three weeks away between Yahoo and investor activist Carl Icahn, according to a source familiar with the discussions.
"The ongoing talks between all the companies have recently picked up," said the source.
That may come as no surprise, given that Yahoo over the weekend rejected a sweetened Microsoft offer to buy just its search assets and the board of directors for the Internet pioneer will be up for grabs when Yahoo and Icahn face off at the August 1 annual shareholders meeting.
Specifics about the types of deals that are currently underway in these two separate discussions and the likelihood of an outcome are not clear.
But previously, talks between Yahoo and AOL reportedly involved discussions of Yahoo acquiring AOL and, then, Time Warner taking an investment in Yahoo.
And as noted in the Silicon Alley Insider last month, a Microsoft buyout of AOL could come sooner than later. In fact, Silicon Alley Insider posted this nugget Tuesday that a team from AOL was in Seattle to talk about a potential deal with the software giant.
And a report in Reuters Tuesday was the first to note talks had "heated up" among the three parties.
Yahoo and Microsoft step up Time Warner AOL discussions
July 16, 2008
Yahoo and Microsoft have both accelerated their respective deal-making talks with Time Warner's AOL, as a proxy fight looms less than three weeks away between Yahoo and investor activist Carl Icahn, according to a source familiar with the discussions.
"The ongoing talks between all the companies have recently picked up," said the source.
That may come as no surprise, given that Yahoo over the weekend rejected a sweetened Microsoft offer to buy just its search assets and the board of directors for the Internet pioneer will be up for grabs when Yahoo and Icahn face off at the August 1 annual shareholders meeting.
Specifics about the types of deals that are currently underway in these two separate discussions and the likelihood of an outcome are not clear.
But previously, talks between Yahoo and AOL reportedly involved discussions of Yahoo acquiring AOL and, then, Time Warner taking an investment in Yahoo.
And as noted in the Silicon Alley Insider last month, a Microsoft buyout of AOL could come sooner than later. In fact, Silicon Alley Insider posted this nugget Tuesday that a team from AOL was in Seattle to talk about a potential deal with the software giant.
And a report in Reuters Tuesday was the first to note talks had "heated up" among the three parties.
Tuesday, March 11, 2008
Yahoo, Time Warner step up combination talks
http://news.yahoo.com/s/nm/20080305/bs_nm/yahoo_timewarner_dc
Yahoo, Time Warner step up combination talks: report
Wed Mar 5, 2008
Yahoo Inc (YHOO.O) and media conglomerate Time Warner Inc (TWX.N) have stepped up talks to create an alternative to Microsoft Corp's (MSFT.O) offer to take over the Web company, the Wall Street Journal reported on Wednesday citing people familiar with the matter.
The paper reported that the talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, according to the people, who still consider a Yahoo purchase by Microsoft as the most likely outcome.
Last month Microsoft made a $41 billion offer to buy Yahoo, which was rejected as undervaluing the business.
Yahoo and Time Warner were not immediately available for comment.
(Reporting by Yinka Adegoke, editing by Elizabeth Fullerton)
Yahoo, Time Warner step up combination talks: report
Wed Mar 5, 2008
Yahoo Inc (YHOO.O) and media conglomerate Time Warner Inc (TWX.N) have stepped up talks to create an alternative to Microsoft Corp's (MSFT.O) offer to take over the Web company, the Wall Street Journal reported on Wednesday citing people familiar with the matter.
The paper reported that the talks center on a deal that would fold Time Warner's AOL Internet unit into Yahoo, according to the people, who still consider a Yahoo purchase by Microsoft as the most likely outcome.
Last month Microsoft made a $41 billion offer to buy Yahoo, which was rejected as undervaluing the business.
Yahoo and Time Warner were not immediately available for comment.
(Reporting by Yinka Adegoke, editing by Elizabeth Fullerton)
The World's Richest People
http://www.forbes.com/home/billionaires/2008/03/05/buffett-worlds-richest-cx_mm_0229buffetrichest.html
The World's Richest People
Gates No Longer World's Richest Man
Matthew Miller
03.05.08
Warren Buffett is the richest man on the planet.
Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. That massive pile of scratch puts him ahead of Microsoft co-founder Bill Gates, who was the richest man in the world for 13 straight years.
Gates is now worth $58 billion and is ranked third in the world. He is up $2 billion from a year ago, but would have been perhaps as rich--or richer--than Buffett had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February.
Microsoft shares fell 15% between Jan. 31, the day before the company announced its bid for the search engine giant, and Feb. 11, the day we locked in stock prices for the 2008 World's Billionaires list. More than half of Gates' fortune is held outside of Microsoft shares.
Mexican telecom tycoon Carlos Slim Helú is the world's second-richest man, with an estimated net worth of $60 billion. His fortune has risen $11 billion since last March.
Buffett, whose fortune is estimated based on his stake in Berkshire Hathaway and assets he holds outside the company, refused to comment on his net worth.
The race for the title of World's Richest Man has been extremely competitive in recent months. Class A shares of Berkshire Hathaway soared 25% between the middle of July and the day we priced our list. The stock hit an all-time high of $150,000 a share in December. At that time, Buffett was worth roughly $65 billion.
Berkshire Hathaway shares closed at $137,100 per share on Tuesday, down 2% since the announcement last Friday that the company's net earnings fell 18% in the fourth quarter of last year.
Gates' fortune also swelled massively last fall. Shares of Microsoft jumped 30% between late October and early November to $37 a share, only to fall after the company announced its intentions to buy Yahoo! for $45 billion on Feb. 1.
Slim's fortune has doubled in the past two years. Stock in his most significant holding, telecom outfit America Movil, has risen 120% since the beginning of 2006. Helú also owns stakes in Carso Global Telecom, Grupo Carso and Grupo Financiero Inbursa.
The son of a Nebraska politician, Buffett delivered newspapers as a boy. He filed his first tax return at age 13, claiming a $35 deduction for his bicycle. He moved on to study under value investing guru Benjamin Graham at Columbia University.
Buffett began buying shares in textile firm Berkshire Hathaway in 1962 and purchased a controlling stake in 1965. He began buying insurance companies and astutely investing those companies' cash reserves.
Today, Berkshire is invested in insurance (GEICO, General Re), jewelry (Borsheim's), utilities (MidAmerican Energy Holdings) and food (Dairy Queen, See's Candies). It also has noncontrolling stakes in Anheuser-Busch, Coca-Cola and Wells Fargo. Recently, the company disclosed it owns a significant stake in Kraft Foods.
In December, the company purchased a 60% stake in the Pritzker family's manufacturing and services group, Marmon Holdings, for $4.5 billion. The privately held Marmon owns businesses across wire and cable, transportation services and industrial products.
Despite Buffett's meteoric rise, his days as the World's Richest Man are almost certainly numbered. He had long promised to give away his fortune posthumously. But in the summer of 2006 he irrevocably earmarked the majority of his Berkshire shares to charity, most going to the Bill & Melinda Gates Foundation.
At the time, the gift was valued at $31 billion. However, assuming that Berkshire shares continue to rise, the final amount of the donation will far exceed that sum. Buffett gives 5% of his shares to charity every July.
In October, Buffett issued a challenge to members of the Forbes 400 richest Americans list, saying he would donate $1 million to charity if the collective group (or a significant number of them) would admit they pay less taxes, as a percentage of income, than their secretaries.
Days after issuing the challenge, Buffett appeared before Congress to encourage it to keep the estate tax. Armed with a few Forbes 400 issues, he told the hearing that "dynastic wealth, the enemy of a meritocracy, is on the rise."
The World's Richest People
Gates No Longer World's Richest Man
Matthew Miller
03.05.08
Warren Buffett is the richest man on the planet.
Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago. That massive pile of scratch puts him ahead of Microsoft co-founder Bill Gates, who was the richest man in the world for 13 straight years.
Gates is now worth $58 billion and is ranked third in the world. He is up $2 billion from a year ago, but would have been perhaps as rich--or richer--than Buffett had Microsoft not made an unsolicited bid for Yahoo! at the beginning of February.
Microsoft shares fell 15% between Jan. 31, the day before the company announced its bid for the search engine giant, and Feb. 11, the day we locked in stock prices for the 2008 World's Billionaires list. More than half of Gates' fortune is held outside of Microsoft shares.
Mexican telecom tycoon Carlos Slim Helú is the world's second-richest man, with an estimated net worth of $60 billion. His fortune has risen $11 billion since last March.
Buffett, whose fortune is estimated based on his stake in Berkshire Hathaway and assets he holds outside the company, refused to comment on his net worth.
The race for the title of World's Richest Man has been extremely competitive in recent months. Class A shares of Berkshire Hathaway soared 25% between the middle of July and the day we priced our list. The stock hit an all-time high of $150,000 a share in December. At that time, Buffett was worth roughly $65 billion.
Berkshire Hathaway shares closed at $137,100 per share on Tuesday, down 2% since the announcement last Friday that the company's net earnings fell 18% in the fourth quarter of last year.
Gates' fortune also swelled massively last fall. Shares of Microsoft jumped 30% between late October and early November to $37 a share, only to fall after the company announced its intentions to buy Yahoo! for $45 billion on Feb. 1.
Slim's fortune has doubled in the past two years. Stock in his most significant holding, telecom outfit America Movil, has risen 120% since the beginning of 2006. Helú also owns stakes in Carso Global Telecom, Grupo Carso and Grupo Financiero Inbursa.
The son of a Nebraska politician, Buffett delivered newspapers as a boy. He filed his first tax return at age 13, claiming a $35 deduction for his bicycle. He moved on to study under value investing guru Benjamin Graham at Columbia University.
Buffett began buying shares in textile firm Berkshire Hathaway in 1962 and purchased a controlling stake in 1965. He began buying insurance companies and astutely investing those companies' cash reserves.
Today, Berkshire is invested in insurance (GEICO, General Re), jewelry (Borsheim's), utilities (MidAmerican Energy Holdings) and food (Dairy Queen, See's Candies). It also has noncontrolling stakes in Anheuser-Busch, Coca-Cola and Wells Fargo. Recently, the company disclosed it owns a significant stake in Kraft Foods.
In December, the company purchased a 60% stake in the Pritzker family's manufacturing and services group, Marmon Holdings, for $4.5 billion. The privately held Marmon owns businesses across wire and cable, transportation services and industrial products.
Despite Buffett's meteoric rise, his days as the World's Richest Man are almost certainly numbered. He had long promised to give away his fortune posthumously. But in the summer of 2006 he irrevocably earmarked the majority of his Berkshire shares to charity, most going to the Bill & Melinda Gates Foundation.
At the time, the gift was valued at $31 billion. However, assuming that Berkshire shares continue to rise, the final amount of the donation will far exceed that sum. Buffett gives 5% of his shares to charity every July.
In October, Buffett issued a challenge to members of the Forbes 400 richest Americans list, saying he would donate $1 million to charity if the collective group (or a significant number of them) would admit they pay less taxes, as a percentage of income, than their secretaries.
Days after issuing the challenge, Buffett appeared before Congress to encourage it to keep the estate tax. Armed with a few Forbes 400 issues, he told the hearing that "dynastic wealth, the enemy of a meritocracy, is on the rise."
Thursday, February 21, 2008
Yahoo’s Unlikely Alternatives to Microsoft
http://bits.blogs.nytimes.com/2008/02/13/a-guide-to-yahoos-unlikely-alternatives-to-microsoft/
February 13, 2008
A Guide to Yahoo’s Unlikely Alternatives to Microsoft
By Saul Hansell
In the course of a terminal illness, a person will often start to cast about for alternative therapies: herbs, acupuncture, fasting on a Tibetan mountain. This exploration is simply part of the process of coming to terms with the painful truth.
That’s the best way to understand all the reports of possible deals coming from Yahoo. Jerry Yang, Yahoo’s chief executive, has engaged a bevy of creative bankers who are busy trying to concoct all sorts of fanciful business arrangements. They tried and failed to find any takers in the private equity world, and they have run proposals by the business development departments at all the usual suspects -– Google, AOL and News Corporation, among them, according to executives at those companies.
There is indeed some active discussion between News Corporation and Yahoo now (as first reported by Silicon Alley Insider). But News Corporation senior executives say they don’t believe anything will come of this.
The diagnosis is even more clear now than it was 12 days ago when Microsoft first announced its unsolicited bid: Yahoo will get sold to Microsoft. All that’s left to work out is the price.
In the meantime, here is a guide to all of the alternative therapies that Yahoo has been exploring, and why they are not safe or effective.
The key to understanding this is to realize that Yahoo is considering two types of procedures. The simplest would be to sell itself outright to some other company or group willing to outbid Microsoft. This is a long shot. No one but Microsoft and Google have the cash or stock market valuation to make this work. Private equity funds in this market can’t get their Visa credit limits raised, let alone borrow $50 billion.
The other possibility is that Yahoo could restructure in some way, perhaps taking an outside investment, so it can try to convince a majority of shareholders that it is better off as a standalone company than as part of Microsoft. This is unlikely to work because shareholders may well prefer the certainty of Microsoft’s offer, particularly given the lack of confidence in Yahoo’s current management. But it is at least possible to consider such a deal, so that is what is being discussed.
A big variable in any possible deal structure is the role of Google, which has indicated that it would like to help Yahoo fight off Microsoft. Presumably this means having Google sell search ads on Yahoo in return for a stream of guaranteed cash payments. There has been a lot written about how such an arrangement would undergo a lot of antitrust scrutiny. That’s true.
But another problem came up in the negotiations about this last week. Some people who toyed with making a run at Yahoo figured that they would get a big guarantee from Google and then borrow a lot of money against it in order to help finance their bid for Yahoo. It turns out, several dealmakers told me, that Google insists on minimum traffic levels in return for a guarantee of ad revenue. That provision doesn’t stop companies like AOL and News Corporation from cutting search ad deals with Google. But they are enough to stop a bank from backing such a buyout.
And if Yahoo simply announced a deal with Google, and no outside investment, it would have a hard time convincing shareholders that the extra money from search alone is reason enough to turn down Microsoft.
The deal under discussion with News Corporation, according to an executive briefed on the talks, involves a variation of a deal that it proposed to Yahoo last year. It would give Yahoo MySpace, its other Internet properties, some advertising credit and perhaps some cash, in order to take a 20 percent to 30 percent stake in Yahoo. A search deal with Google might be part of that too.
The hope would be that synergies with MySpace, as well as management help from News Corporation, would seem appealing enough to investors to rebuff Microsoft. Moreover, if News Corp. had a 25 percent stake, say, along with the 10 percent of the shares owned by Mr. Yang and David Filo, his co-founder, they would have enough of a voting bloc to win a shareholder vote if it came to that. Whether Yahoo really could play that tough, given its corporate governance structure, is an open question, however.
The deal proposed with Time Warner was similar: Trade AOL and perhaps some cash for a big stake in Yahoo. This has all the problems of the proposed deal with News Corporation and one more: Unlike News Corporation’s chief executive, Rupert Murdoch, who has already expressed interest in Yahoo, Jeff Bewkes, Time Warner’s new chief executive, is skeptical, according to an executive who has spoken to him. He soured on big Internet deals after Time Warner’s disastrous combination with AOL. Still, fixing AOL is one of Mr. Bewkes’s key challenges. So his business development staff is firing up its spreadsheets to consider the possibilities with Yahoo, according to a person familiar with the analysis.
But this person said that like Mr. Murdoch, Mr. Bewkes thinks it would be hard to win this one away from Microsoft.
Internet, AOL, Google, Microsoft, News Corporation, Time Warner, Yahoo, Yahoo In Play
February 13, 2008
A Guide to Yahoo’s Unlikely Alternatives to Microsoft
By Saul Hansell
In the course of a terminal illness, a person will often start to cast about for alternative therapies: herbs, acupuncture, fasting on a Tibetan mountain. This exploration is simply part of the process of coming to terms with the painful truth.
That’s the best way to understand all the reports of possible deals coming from Yahoo. Jerry Yang, Yahoo’s chief executive, has engaged a bevy of creative bankers who are busy trying to concoct all sorts of fanciful business arrangements. They tried and failed to find any takers in the private equity world, and they have run proposals by the business development departments at all the usual suspects -– Google, AOL and News Corporation, among them, according to executives at those companies.
There is indeed some active discussion between News Corporation and Yahoo now (as first reported by Silicon Alley Insider). But News Corporation senior executives say they don’t believe anything will come of this.
The diagnosis is even more clear now than it was 12 days ago when Microsoft first announced its unsolicited bid: Yahoo will get sold to Microsoft. All that’s left to work out is the price.
In the meantime, here is a guide to all of the alternative therapies that Yahoo has been exploring, and why they are not safe or effective.
The key to understanding this is to realize that Yahoo is considering two types of procedures. The simplest would be to sell itself outright to some other company or group willing to outbid Microsoft. This is a long shot. No one but Microsoft and Google have the cash or stock market valuation to make this work. Private equity funds in this market can’t get their Visa credit limits raised, let alone borrow $50 billion.
The other possibility is that Yahoo could restructure in some way, perhaps taking an outside investment, so it can try to convince a majority of shareholders that it is better off as a standalone company than as part of Microsoft. This is unlikely to work because shareholders may well prefer the certainty of Microsoft’s offer, particularly given the lack of confidence in Yahoo’s current management. But it is at least possible to consider such a deal, so that is what is being discussed.
A big variable in any possible deal structure is the role of Google, which has indicated that it would like to help Yahoo fight off Microsoft. Presumably this means having Google sell search ads on Yahoo in return for a stream of guaranteed cash payments. There has been a lot written about how such an arrangement would undergo a lot of antitrust scrutiny. That’s true.
But another problem came up in the negotiations about this last week. Some people who toyed with making a run at Yahoo figured that they would get a big guarantee from Google and then borrow a lot of money against it in order to help finance their bid for Yahoo. It turns out, several dealmakers told me, that Google insists on minimum traffic levels in return for a guarantee of ad revenue. That provision doesn’t stop companies like AOL and News Corporation from cutting search ad deals with Google. But they are enough to stop a bank from backing such a buyout.
And if Yahoo simply announced a deal with Google, and no outside investment, it would have a hard time convincing shareholders that the extra money from search alone is reason enough to turn down Microsoft.
The deal under discussion with News Corporation, according to an executive briefed on the talks, involves a variation of a deal that it proposed to Yahoo last year. It would give Yahoo MySpace, its other Internet properties, some advertising credit and perhaps some cash, in order to take a 20 percent to 30 percent stake in Yahoo. A search deal with Google might be part of that too.
The hope would be that synergies with MySpace, as well as management help from News Corporation, would seem appealing enough to investors to rebuff Microsoft. Moreover, if News Corp. had a 25 percent stake, say, along with the 10 percent of the shares owned by Mr. Yang and David Filo, his co-founder, they would have enough of a voting bloc to win a shareholder vote if it came to that. Whether Yahoo really could play that tough, given its corporate governance structure, is an open question, however.
The deal proposed with Time Warner was similar: Trade AOL and perhaps some cash for a big stake in Yahoo. This has all the problems of the proposed deal with News Corporation and one more: Unlike News Corporation’s chief executive, Rupert Murdoch, who has already expressed interest in Yahoo, Jeff Bewkes, Time Warner’s new chief executive, is skeptical, according to an executive who has spoken to him. He soured on big Internet deals after Time Warner’s disastrous combination with AOL. Still, fixing AOL is one of Mr. Bewkes’s key challenges. So his business development staff is firing up its spreadsheets to consider the possibilities with Yahoo, according to a person familiar with the analysis.
But this person said that like Mr. Murdoch, Mr. Bewkes thinks it would be hard to win this one away from Microsoft.
Internet, AOL, Google, Microsoft, News Corporation, Time Warner, Yahoo, Yahoo In Play
Sunday, February 10, 2008
Would Merger Demote Yahoo?
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/03/AR2008020301100.html
Would Merger Demote Yahoo to a Microsoft Front End?
Analysis: The pairing gives Microsoft a needed outlet, but the outcome could quash Yahoo.
PC World
Sunday, February 3, 2008
While dealing logistically and technically with their overlapping online offerings will certainly prove troublesome ifits bid to purchaseYahoo succeeds, Microsoft will at least have an immediate outlet for bringing more of its traditional desktop portfolio to the Web and to a broader customer base.
Microsoft has been trying for more than two years to find a critical mass to adopt new online services beyond search, e-mail and instant messaging under the Windows Live brand -- with little success. Its early MSN e-mail and IM offerings are popular enough with Web users; however, users of Google and Yahoo online services have been loathe to adopt the revamped Windows Live offerings in favor of the ones they're already using.
Not only could that change if the company purchases Yahoo, but Microsoft also will have a ready-made Web front end for rolling out more of its desktop applications as services, said Paul Fox, CIO of Guy Carpenter, a New York-based reinsurance company.
"The Yahoo platform is really what they're buying," he said. "With Yahoo they're tapping into the base culture of the Internet online community that's matured over the last 10 years. It's going to make it easier for people to take a look at and try their services, whereas before it had to be a more conscious effort."
Aside from the usual raft of consumer applications like search, e-mail, maps and the like, Microsoft already has brought some of its many business desktop applications -- such as Office and CRM -- online in hosted, though often scaled-down, versions.
Access to Yahoo's estimated 500 million visitors per month will give it a new channel to deliver what the company now calls its "software plus services" strategy, as well as buy the company time to bring more competitive versions of applications that were originally coded for the desktop to the Web.
Indeed, in the conference call discussing the Yahoo bid Friday, Microsoft CEO Steve Ballmer made a pointed reference to efforts toshed its desktop legacyand move even aspects of its Windows OS to the Web, a trend the company started with some features in the latest version, Windows Vista.
"The Windows user wants to be live, the Windows experience needs to increasingly embrace the Internet," he said. "There will be a Windows Live, there will be an Office Live, as we continue to bring out innovations in which Office transforms and is transformed by the Internet."
Ballmer also likely had the rising popularity of Web-hosted productivity software such as Google Apps, Zoho and Yahoo's Zimbra in mind when considering how to Web-enable Microsoft's desktop software. So far, Microsoft's Office Live has been more of a way for small businesses to get up and running with a Web site and basic hosted business applications like accounting and CRM; however, bringing a full productivity suite to the Web has been Microsoft's plan for some time.
Microsoft also can leverage its own strength among business customers to bundle and technically link applications so customers buy an all-in-one package rather than individual products. For instance, Microsoft has created tight links between a new unified communications product, Office Communications Server, and its Office and SharePoint collaboration software so customers must buy them all together to create comprehensive infrastructure. Microsoft can make similar attachments between online versions of its applications -- or just bundle them together in creative ways -- and market them to a broader audience.
"If Microsoft does something well, it's bundling products and services," said Ned May, director and lead analyst of marketing research firm Outsell. He joked that if Microsoft purchases Yahoo, there might come a day when you start up Windows and "up pops Yahoo and it takes you three days to remove that functionality."
"Yahoo provides a platform in many regards -- an audience of 500 million people to which you can bundle products and new offerings," May said.
Doing quick math, May figured that at "500 million a month for about $44 billion" it will cost Microsoft about $86 a head for acquiring each member of its new audience of Web users. "Not a bad deal," he said.
Would Merger Demote Yahoo to a Microsoft Front End?
Analysis: The pairing gives Microsoft a needed outlet, but the outcome could quash Yahoo.
PC World
Sunday, February 3, 2008
While dealing logistically and technically with their overlapping online offerings will certainly prove troublesome ifits bid to purchaseYahoo succeeds, Microsoft will at least have an immediate outlet for bringing more of its traditional desktop portfolio to the Web and to a broader customer base.
Microsoft has been trying for more than two years to find a critical mass to adopt new online services beyond search, e-mail and instant messaging under the Windows Live brand -- with little success. Its early MSN e-mail and IM offerings are popular enough with Web users; however, users of Google and Yahoo online services have been loathe to adopt the revamped Windows Live offerings in favor of the ones they're already using.
Not only could that change if the company purchases Yahoo, but Microsoft also will have a ready-made Web front end for rolling out more of its desktop applications as services, said Paul Fox, CIO of Guy Carpenter, a New York-based reinsurance company.
"The Yahoo platform is really what they're buying," he said. "With Yahoo they're tapping into the base culture of the Internet online community that's matured over the last 10 years. It's going to make it easier for people to take a look at and try their services, whereas before it had to be a more conscious effort."
Aside from the usual raft of consumer applications like search, e-mail, maps and the like, Microsoft already has brought some of its many business desktop applications -- such as Office and CRM -- online in hosted, though often scaled-down, versions.
Access to Yahoo's estimated 500 million visitors per month will give it a new channel to deliver what the company now calls its "software plus services" strategy, as well as buy the company time to bring more competitive versions of applications that were originally coded for the desktop to the Web.
Indeed, in the conference call discussing the Yahoo bid Friday, Microsoft CEO Steve Ballmer made a pointed reference to efforts toshed its desktop legacyand move even aspects of its Windows OS to the Web, a trend the company started with some features in the latest version, Windows Vista.
"The Windows user wants to be live, the Windows experience needs to increasingly embrace the Internet," he said. "There will be a Windows Live, there will be an Office Live, as we continue to bring out innovations in which Office transforms and is transformed by the Internet."
Ballmer also likely had the rising popularity of Web-hosted productivity software such as Google Apps, Zoho and Yahoo's Zimbra in mind when considering how to Web-enable Microsoft's desktop software. So far, Microsoft's Office Live has been more of a way for small businesses to get up and running with a Web site and basic hosted business applications like accounting and CRM; however, bringing a full productivity suite to the Web has been Microsoft's plan for some time.
Microsoft also can leverage its own strength among business customers to bundle and technically link applications so customers buy an all-in-one package rather than individual products. For instance, Microsoft has created tight links between a new unified communications product, Office Communications Server, and its Office and SharePoint collaboration software so customers must buy them all together to create comprehensive infrastructure. Microsoft can make similar attachments between online versions of its applications -- or just bundle them together in creative ways -- and market them to a broader audience.
"If Microsoft does something well, it's bundling products and services," said Ned May, director and lead analyst of marketing research firm Outsell. He joked that if Microsoft purchases Yahoo, there might come a day when you start up Windows and "up pops Yahoo and it takes you three days to remove that functionality."
"Yahoo provides a platform in many regards -- an audience of 500 million people to which you can bundle products and new offerings," May said.
Doing quick math, May figured that at "500 million a month for about $44 billion" it will cost Microsoft about $86 a head for acquiring each member of its new audience of Web users. "Not a bad deal," he said.
Friday, February 8, 2008
Microsoft Bids $44.6 Billion for Yahoo
http://www.nytimes.com/2008/02/01/business/01cnd-yahoo.html
February 1, 2008
Microsoft Bids $44.6 Billion for Yahoo
By MIGUEL HELFT
SAN FRANCISCO — Microsoft said Friday that it has made an offer to buy Yahoo for about $44.6 billion, or $31 a share, in a mix of cash and stock.
The offer represents a 62 percent premium over Yahoo’s closing stock price of $19.18 on Thursday.
If consummated, the deal would redraw the competitive landscape of the Internet consumer services business, where both Microsoft and Yahoo have struggled to compete with Google.
Microsoft said the combination of the two companies would create efficiencies that would save approximately $1 billion annually. The software giant also said that it has an integration plan to include employees of both companies and intends to offer incentives to retain Yahoo employees.
"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Steven A. Ballmer, Microsoft’s chief executive, in a statement.
"We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners," he said.
Microsoft said it planned to work closely with Yahoo’s board of directors as they evaluate this, apparently, unsolicited offer.
Despite their heavy investments in online services, both Yahoo and Microsoft have watched Google extend its dominance over Internet search and the lucrative online advertising business that goes along with it.
In recent months, Yahoo has struggled to develop a plan to turn around the company under co-founder Jerry Yang, who was appointed chief executive amid growing shareholder dissatisfaction last summer.
Yahoo investors, however, remain skeptical. The company’s shares have slumped and before the bid were trading at levels not seen in more than three years.
Earlier this week, Yahoo said it would cut 1,000 jobs in an effort to refocus the company and reduce spending, and issued an outlook for 2008 that disappointed investors.
It is not clear how Yahoo’s board will react to Microsoft’s offer.
Microsoft said it believes the transaction could receive the necessary regulatory approvals by the second half of this year.
February 1, 2008
Microsoft Bids $44.6 Billion for Yahoo
By MIGUEL HELFT
SAN FRANCISCO — Microsoft said Friday that it has made an offer to buy Yahoo for about $44.6 billion, or $31 a share, in a mix of cash and stock.
The offer represents a 62 percent premium over Yahoo’s closing stock price of $19.18 on Thursday.
If consummated, the deal would redraw the competitive landscape of the Internet consumer services business, where both Microsoft and Yahoo have struggled to compete with Google.
Microsoft said the combination of the two companies would create efficiencies that would save approximately $1 billion annually. The software giant also said that it has an integration plan to include employees of both companies and intends to offer incentives to retain Yahoo employees.
"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Steven A. Ballmer, Microsoft’s chief executive, in a statement.
"We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners," he said.
Microsoft said it planned to work closely with Yahoo’s board of directors as they evaluate this, apparently, unsolicited offer.
Despite their heavy investments in online services, both Yahoo and Microsoft have watched Google extend its dominance over Internet search and the lucrative online advertising business that goes along with it.
In recent months, Yahoo has struggled to develop a plan to turn around the company under co-founder Jerry Yang, who was appointed chief executive amid growing shareholder dissatisfaction last summer.
Yahoo investors, however, remain skeptical. The company’s shares have slumped and before the bid were trading at levels not seen in more than three years.
Earlier this week, Yahoo said it would cut 1,000 jobs in an effort to refocus the company and reduce spending, and issued an outlook for 2008 that disappointed investors.
It is not clear how Yahoo’s board will react to Microsoft’s offer.
Microsoft said it believes the transaction could receive the necessary regulatory approvals by the second half of this year.
Tuesday, January 8, 2008
Who on Earth Would Want to Buy Yahoo?
http://blog.wired.com/business/2008/01/who-on-earth-wo.html
Who on Earth Would Want to Buy Yahoo?
By Betsy Schiffman
January 02, 2008
While pundits yap away about how Yahoo is fresh acquisition meat, we find it hard to believe. The company is pretty pricey, with a market cap of roughly $33.5 billion, and the number of businesses that could actually swing it is minuscule.
We understand why internet industry watchers think Yahoo is in play. At the very least, it's in flux. Former CEO Terry Semel was ousted last spring, management is fleeing the scene in droves, and the stock is drifting.
But even if Yahoo's business has been dwarfed by Google, its revenue is still growing (it grew by about 12 percent in the third quarter); and more importantly, co-founders David Filo and Jerry Yang, who own roughly 10 percent of the company, are dead set on executing on a turnaround plan.
The bigger question is who would want Yahoo? The major media players (Time Warner, News Corp., Viacom) are desperate to build out their online media businesses, but probably not to the tune of $33.5 billion. We asked a slew of analysts to weigh in on the odds of potential acquirers, and here's what they had to say:
NBC - The network, which is owned by conglomerate General Electric, has flailed on the web over the last decade, and while it needs to grow its online business, at least one analyst, who asked not to be named, thinks GE is more likely to sell NBC in the next couple years than it is to grow the business. The upshot? The chances that GE would have any interest in buying Yahoo are slim to none.
Microsoft - It just won't die: For at least a year, gossipers keep rehashing the same old rumor that Microsoft is in talks to buy Yahoo. While the company is one of the few businesses positioned to do it (Microsoft has plenty of cash on hand, a rich market cap, and would have no problem raising additional financing) such a deal would be a total disaster for Microsoft, according to Global Equities Research analyst Trip Chowdhry. "Microsoft has all the pieces it needs to build its Live brand. A Yahoo acquisition will disrupt Microsoft's execution, confuse customers, and dilute -- without repair -- Microsoft's brand," Chowdhry says. "The Live brand is youthful, while Yahoo resonates as an internet site for old people."
News Corp. - Rupert Murdoch is in it to win it, and he's willing to spend exorbitant sums of money to own the internet (as evidenced by his $580 million acquisition of MySpace). Still, an outright acquisition of Yahoo isn't really his style. "I think Rupert's been willing to take minority stakes in companies where he can take control," says Pali Research analyst Richard Greenberg. "I'm skeptical of the portal business in general and with the MySpace acquisition, I think News Corp. has some big opportunities to attack portals' core business."
Time Warner - It's been eight years since AOL announced its bid to buy Time Warner in a $165 billion deal. Since then, the AOL business has deteriorated dramatically, and Time Warner has even toyed with the idea of spinning it off. "We've seen how the AOL Time Warner merger just didn't work," says Greg Gorbatenko, an analyst with Jackson Securities. "Now AOL's dragging Time Warner down. If you were to introduce Yahoo into the mix, it would be like . . . you gotta be kidding me!"
Viacom - Although Viacom is expected to shop around for acquisitions this year, Yahoo is probably not on the shopping list. "We would expect Viacom to be more active in buying online assets in 2008, but these acquisitions would be small-to-medium moderately sized deals. A large acquisition, the size of Yahoo, would surprise us," says Laura Martin, Soleil-Media Metrics analyst. "It's more important for Viacom to get their core business in shape, and resolve issues with DreamWorks."
We're not saying a deal won't happen -- anything is possible -- but it seems a little far fetched to us.
Who on Earth Would Want to Buy Yahoo?
By Betsy Schiffman
January 02, 2008
While pundits yap away about how Yahoo is fresh acquisition meat, we find it hard to believe. The company is pretty pricey, with a market cap of roughly $33.5 billion, and the number of businesses that could actually swing it is minuscule.
We understand why internet industry watchers think Yahoo is in play. At the very least, it's in flux. Former CEO Terry Semel was ousted last spring, management is fleeing the scene in droves, and the stock is drifting.
But even if Yahoo's business has been dwarfed by Google, its revenue is still growing (it grew by about 12 percent in the third quarter); and more importantly, co-founders David Filo and Jerry Yang, who own roughly 10 percent of the company, are dead set on executing on a turnaround plan.
The bigger question is who would want Yahoo? The major media players (Time Warner, News Corp., Viacom) are desperate to build out their online media businesses, but probably not to the tune of $33.5 billion. We asked a slew of analysts to weigh in on the odds of potential acquirers, and here's what they had to say:
NBC - The network, which is owned by conglomerate General Electric, has flailed on the web over the last decade, and while it needs to grow its online business, at least one analyst, who asked not to be named, thinks GE is more likely to sell NBC in the next couple years than it is to grow the business. The upshot? The chances that GE would have any interest in buying Yahoo are slim to none.
Microsoft - It just won't die: For at least a year, gossipers keep rehashing the same old rumor that Microsoft is in talks to buy Yahoo. While the company is one of the few businesses positioned to do it (Microsoft has plenty of cash on hand, a rich market cap, and would have no problem raising additional financing) such a deal would be a total disaster for Microsoft, according to Global Equities Research analyst Trip Chowdhry. "Microsoft has all the pieces it needs to build its Live brand. A Yahoo acquisition will disrupt Microsoft's execution, confuse customers, and dilute -- without repair -- Microsoft's brand," Chowdhry says. "The Live brand is youthful, while Yahoo resonates as an internet site for old people."
News Corp. - Rupert Murdoch is in it to win it, and he's willing to spend exorbitant sums of money to own the internet (as evidenced by his $580 million acquisition of MySpace). Still, an outright acquisition of Yahoo isn't really his style. "I think Rupert's been willing to take minority stakes in companies where he can take control," says Pali Research analyst Richard Greenberg. "I'm skeptical of the portal business in general and with the MySpace acquisition, I think News Corp. has some big opportunities to attack portals' core business."
Time Warner - It's been eight years since AOL announced its bid to buy Time Warner in a $165 billion deal. Since then, the AOL business has deteriorated dramatically, and Time Warner has even toyed with the idea of spinning it off. "We've seen how the AOL Time Warner merger just didn't work," says Greg Gorbatenko, an analyst with Jackson Securities. "Now AOL's dragging Time Warner down. If you were to introduce Yahoo into the mix, it would be like . . . you gotta be kidding me!"
Viacom - Although Viacom is expected to shop around for acquisitions this year, Yahoo is probably not on the shopping list. "We would expect Viacom to be more active in buying online assets in 2008, but these acquisitions would be small-to-medium moderately sized deals. A large acquisition, the size of Yahoo, would surprise us," says Laura Martin, Soleil-Media Metrics analyst. "It's more important for Viacom to get their core business in shape, and resolve issues with DreamWorks."
We're not saying a deal won't happen -- anything is possible -- but it seems a little far fetched to us.
Monday, July 23, 2007
Google Strides To Disrupt Wireless Market
http://money.cnn.com/news/newsfeeds/articles/djf500/200707201553DOWJONESDJONLINE000805_FORTUNE5.htm
Google Talks Principles But Strides To Disrupt Wireless Market
July 20, 2007
NEW YORK -(Dow Jones)- Google Inc. (GOOG) on Friday portrayed itself as a champion of consumers' unfettered access to the Internet, but demonstrated with a $4.6 billion promise that it sees profit in disrupting the telecommunications companies' hold on the wireless market.
The Mountain View, Calif., Internet giant stepped up its effort to persuade federal regulators to bust open competition in wireless services by promising to be a multibillion-dollar bidder in an important upcoming auction of wireless spectrum. But Google said it will participate only if the Federal Communications Commission embraces the network-openness principles it has advocated - and that incumbent U.S. wireless carriers like AT&T Inc. (T) and Verizon Communications Inc. (VZ) have fought.
In Washington and to the public, Google couched its move as part of its longtime effort to find and remove "obstacles that prevent the Internet from being available to everyone on the planet," as Chris Sacca, head of special initiatives at Google, put it in an official blog post early Friday. In the case of mobile access, he identified the problem as control of the airwaves by a handful of wireless carriers, resulting in limited consumer choice.
"Today, we're putting consumers' interests first, and putting our money where our principles are - to the tune of $4.6 billion," Sacca said. The sum is equal to the reserve price the FCC has proposed for the auction. Google said it thinks the auction under the terms it hopes for "will likely produce much higher bids."
What Sacca didn't say is that wireless carriers have steadfastly resisted efforts by Google, Yahoo Inc. (YHOO) and other Internet companies to offer consumers services on mobile phones. Internet companies see big growth opportunities in mobile advertising and have developed applications like Web search and email tailored for cellphones and their smaller screens.
But wireless carriers have maintained an iron grip over their customers, essentially dictating what content they can view, services they can enjoy and mobile handsets they can use. The model has kept carriers in control, stymied Internet companies' expansion plans and made handset makers beholden.
"Companies like Google may be frustrated by their inability to replicate the openness of the broadband environment in the wireless environment," says Rory Altman, a partner at consulting firm Altman Vilandrie & Co.
Google's answer has been to enlist Washington to help it circumvent the carriers' "Walled Gardens." The Web giant wants regulators to stipulate that the winner of the new spectrum give consumers the freedom to use whatever mobile applications they desire on any handset they want. It also wants the winner to sell wireless services to resellers on a wholesale basis and let Internet- service providers interconnect with the network.
Without device and application restrictions, Google would be able to push its products directly to customers without any interference and serve up lucrative advertising, a potentially significant future revenue stream that's also coveted by the carriers. The other two provisions "would ensure that entrepreneurs starting new networks and services will have a fair shot at success," Sacca said.
Verizon on Thursday said in a statement that "to rig the auction in any way ... would be a huge disservice to the nation. Corporate welfare for Google is bad public policy."
On a conference call with Wall Street analysts late Thursday, Google Chief Executive Eric Schmidt indicated that distributing Google products and getting advertising revenue in return is foremost in the company's mind.
"From a Google perspective, the most important thing is that there be an open network," Schmidt said. "There's really a direct connection between the open, interoperable network that we are now arguing for in [Securities and Exchange Commission] filings and so forth and the ultimate usage of Google services and applications, and of course, advertiser satisfaction."
Google Phone?
Google may also be interested in bringing its own handset to market, a subject of much rumor recently. The company is reportedly developing software for mobile phones that goes well beyond the applications it already offers in areas like search and maps. Schmidt on Thursday declined to comment on the rumors and said only, "We have looked pretty carefully at wireless, and we are sort of thinking about what we want to do there."
It isn't clear whether Google would be willing to run a network itself, a move that would be a huge departure from its business strategy to date. It could, of course, form a joint venture with one or more other companies, perhaps including an independent network operator, to ease its entrance into the carrier business.
If Google wants to offer its own wireless service, it will have to be patient. Even if it wins the auction, it wouldn't receive the spectrum until 2009, when the cable television providers have to give it up. It will likely take another two years to build a reliable enough network with enough geographic coverage to start running a service.
"There's nothing fast about this," Altman said, predicting Google wouldn't be able to launch a service until perhaps 2011.
Google would be aided, however, by the fact that the 700 megahertz spectrum being auctioned travels long distances. That would cut down on the number of cellular towers and radios that would have to be strung up and, thus, the time needed to build a network.
Mature Market
Though Google would presumably hit the ground running with innovative services for its mobile customers, it would enter a crowded, maturing market. The wireless industry is already experiencing slowing customer growth as cellphones have become a near-ubiquitous sight on the streets. And even as saturation nears, niche players like Walt Disney Co.'s (DIS) Disney Mobile and SK Telecom Co. (SKM) and EarthLink Inc.'s (ELNK) Helio have jumped into the fray.
"It is a very mature market," Altman said. "The wireless penetration growth is starting to slow, which is causing concern everywhere. It's hitting the weakest carriers the hardest."
Google's entry would most certainly spur action on the part of incumbents, forcing the telecom companies to better utilize their assets and innovate in ways Google couldn't. For instance, AT&T and Verizon could better integrate their wireless services with their fixed-line telephone and even television services.
Rival Yahoo, which has been mum about the spectrum auction, might also have a role to play. Google might be resistant to letting Yahoo on its network, even though that would run contrary to Google's openness "principles." However, Yahoo has strong partnerships with AT&T and Verizon, and could find ways to deepen those alliances, or even become an attractive acquisition for one of them.
For now anyway, "Yahoo benefits by drafting behind Google without upsetting any of its network partners," Altman says.
- Riva Richmond, Dow Jones Newswires; 201-938-5670; riva.richmond@dowjones.com
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
Google Talks Principles But Strides To Disrupt Wireless Market
July 20, 2007
NEW YORK -(Dow Jones)- Google Inc. (GOOG) on Friday portrayed itself as a champion of consumers' unfettered access to the Internet, but demonstrated with a $4.6 billion promise that it sees profit in disrupting the telecommunications companies' hold on the wireless market.
The Mountain View, Calif., Internet giant stepped up its effort to persuade federal regulators to bust open competition in wireless services by promising to be a multibillion-dollar bidder in an important upcoming auction of wireless spectrum. But Google said it will participate only if the Federal Communications Commission embraces the network-openness principles it has advocated - and that incumbent U.S. wireless carriers like AT&T Inc. (T) and Verizon Communications Inc. (VZ) have fought.
In Washington and to the public, Google couched its move as part of its longtime effort to find and remove "obstacles that prevent the Internet from being available to everyone on the planet," as Chris Sacca, head of special initiatives at Google, put it in an official blog post early Friday. In the case of mobile access, he identified the problem as control of the airwaves by a handful of wireless carriers, resulting in limited consumer choice.
"Today, we're putting consumers' interests first, and putting our money where our principles are - to the tune of $4.6 billion," Sacca said. The sum is equal to the reserve price the FCC has proposed for the auction. Google said it thinks the auction under the terms it hopes for "will likely produce much higher bids."
What Sacca didn't say is that wireless carriers have steadfastly resisted efforts by Google, Yahoo Inc. (YHOO) and other Internet companies to offer consumers services on mobile phones. Internet companies see big growth opportunities in mobile advertising and have developed applications like Web search and email tailored for cellphones and their smaller screens.
But wireless carriers have maintained an iron grip over their customers, essentially dictating what content they can view, services they can enjoy and mobile handsets they can use. The model has kept carriers in control, stymied Internet companies' expansion plans and made handset makers beholden.
"Companies like Google may be frustrated by their inability to replicate the openness of the broadband environment in the wireless environment," says Rory Altman, a partner at consulting firm Altman Vilandrie & Co.
Google's answer has been to enlist Washington to help it circumvent the carriers' "Walled Gardens." The Web giant wants regulators to stipulate that the winner of the new spectrum give consumers the freedom to use whatever mobile applications they desire on any handset they want. It also wants the winner to sell wireless services to resellers on a wholesale basis and let Internet- service providers interconnect with the network.
Without device and application restrictions, Google would be able to push its products directly to customers without any interference and serve up lucrative advertising, a potentially significant future revenue stream that's also coveted by the carriers. The other two provisions "would ensure that entrepreneurs starting new networks and services will have a fair shot at success," Sacca said.
Verizon on Thursday said in a statement that "to rig the auction in any way ... would be a huge disservice to the nation. Corporate welfare for Google is bad public policy."
On a conference call with Wall Street analysts late Thursday, Google Chief Executive Eric Schmidt indicated that distributing Google products and getting advertising revenue in return is foremost in the company's mind.
"From a Google perspective, the most important thing is that there be an open network," Schmidt said. "There's really a direct connection between the open, interoperable network that we are now arguing for in [Securities and Exchange Commission] filings and so forth and the ultimate usage of Google services and applications, and of course, advertiser satisfaction."
Google Phone?
Google may also be interested in bringing its own handset to market, a subject of much rumor recently. The company is reportedly developing software for mobile phones that goes well beyond the applications it already offers in areas like search and maps. Schmidt on Thursday declined to comment on the rumors and said only, "We have looked pretty carefully at wireless, and we are sort of thinking about what we want to do there."
It isn't clear whether Google would be willing to run a network itself, a move that would be a huge departure from its business strategy to date. It could, of course, form a joint venture with one or more other companies, perhaps including an independent network operator, to ease its entrance into the carrier business.
If Google wants to offer its own wireless service, it will have to be patient. Even if it wins the auction, it wouldn't receive the spectrum until 2009, when the cable television providers have to give it up. It will likely take another two years to build a reliable enough network with enough geographic coverage to start running a service.
"There's nothing fast about this," Altman said, predicting Google wouldn't be able to launch a service until perhaps 2011.
Google would be aided, however, by the fact that the 700 megahertz spectrum being auctioned travels long distances. That would cut down on the number of cellular towers and radios that would have to be strung up and, thus, the time needed to build a network.
Mature Market
Though Google would presumably hit the ground running with innovative services for its mobile customers, it would enter a crowded, maturing market. The wireless industry is already experiencing slowing customer growth as cellphones have become a near-ubiquitous sight on the streets. And even as saturation nears, niche players like Walt Disney Co.'s (DIS) Disney Mobile and SK Telecom Co. (SKM) and EarthLink Inc.'s (ELNK) Helio have jumped into the fray.
"It is a very mature market," Altman said. "The wireless penetration growth is starting to slow, which is causing concern everywhere. It's hitting the weakest carriers the hardest."
Google's entry would most certainly spur action on the part of incumbents, forcing the telecom companies to better utilize their assets and innovate in ways Google couldn't. For instance, AT&T and Verizon could better integrate their wireless services with their fixed-line telephone and even television services.
Rival Yahoo, which has been mum about the spectrum auction, might also have a role to play. Google might be resistant to letting Yahoo on its network, even though that would run contrary to Google's openness "principles." However, Yahoo has strong partnerships with AT&T and Verizon, and could find ways to deepen those alliances, or even become an attractive acquisition for one of them.
For now anyway, "Yahoo benefits by drafting behind Google without upsetting any of its network partners," Altman says.
- Riva Richmond, Dow Jones Newswires; 201-938-5670; riva.richmond@dowjones.com
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
Google eyes high-speed data freeway
http://www.latimes.com/business/la-fi-google21jul21,0,4303522.story?coll=la-home-center
From the Los Angeles Times
Google eyes high-speed data freeway
The search giant may help transform public airwaves, driving down the cost of internet access.
By Jim Puzzanghera
Times Staff Writer
July 20, 2007
WASHINGTON -- If Google Inc. has its way, your cell phone will work on any wireless network and companies will sell high-speed Internet access for cut-rate prices.
Google thinks that would be a wonderful world -- for consumers as well as its own bottom-line -- and is proposing to pony up $4.6 billion in a long-shot bid to create it.
The king of Web search Friday offered to dig into its mountain of cash to transform a chunk of prime public airwaves into a high-speed data freeway. If successful, it could drive down the price of Internet access by creating more competitors to phone and cable companies.
Google promised to bid in an upcoming federal auction of spectrum that is ideal for fast wireless Internet service -- but only if regulators agree to the company's proposals to require open access to those airwaves. That means any device, service, software application or network could operate on it with no restrictions.
"That would be revolutionary," said Bob Williams director of HearUsNow.org, a Web site run by Consumers Union that promotes telecommunications competition. "If you want high-speed Internet service, you basically have a choice of two, and in a lot of places you don't have any choice ... and that situation has to change."
Google told the Federal Communications Commission it would put up the minimum bid of $4.6 billion. The Mountain View, Calif.-based company wanted to prove its seriousness and counter big wireless companies such as AT&T Inc. and Verizon Communications Inc., which say the conditions would make the spectrum virtually worthless.
The offer is unlikely to sway the FCC. The agency thinks the airwaves being given up by TV broadcasters in 2009 as they switch to digital signals could fetch much more for the federal coffers.
But Google is showing its intention to influence one of the biggest spectrum auctions in the nation's history.
Google's offer comes at a time when investors are raising questions about how much money the company is spending to put its ambitious plans in place. Its stock fell more than 5 percent, to $520.12, Friday after big investments on hires and other expansion costs caused its second-quarter earnings to miss Wall Street's expectations.
Despite its promise to bid, Google actually might not want to license the airwaves itself. But it does want to force them open to increase competition with cable and phone companies -- and make it cheaper for people to get on the Web and use Google's growing array of services.
Wireless companies now control all access to the spectrum they license from the government, which is why, for example, Apple Inc.'s iPhone can't be used on any network other than AT&T's. Under Google's plan people could connect any device to any network and run any software they want on their phones, such as free Internet-based calling systems.
But most important for boosting competition, companies would have the right to use the airwaves at a wholesale price to offer their own Internet access.
"In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win," Google Chief Executive Eric Schmidt wrote in a letter to FCC Chairman Kevin J. Martin on Friday.
The effort is backed by public-interest groups and a coalition of major technology companies, including Intel Corp., eBay Inc., Yahoo Inc., DirecTV Group Inc. and EchoStar Communications Corp. But it faces huge obstacles in Washington, where the politically powerful phone companies have been fighting it.
Last week, Martin supported Google's plan to allow people to use any device or software on a network but not the more controversial open-access requirement that many view as the key to creating a viable nationwide competitor to phone and cable companies in broadband access.
Martin worried that imposing the conditions could make it difficult for auction winners to get funding to build their networks.
The FCC is still drawing up the rules for the airwave auction, and Google's plan is a longshot.
AT&T slammed Google's bid offer Friday, saying it was just an attempt to pressure the FCC to "stack the deck in its favor."
Under the traditional auction rules, Google says it and other companies can't outbid the big phone companies because of their built-in advantage of existing networks of cellular towers and pools of customers.
"It doesn't matter whether or not Google has the deep pockets -- at some point you've got to say this is just an unreasonable investment," said Richard Whitt, Google's telecom and media counsel in Washington. "We're just trying to un-skew things enough to give Google ... or a DirecTV or an EchoStar or a Yahoo or whoever comes in there at least a decent shot for the spectrum."
The spectrum is being given up by TV broadcasters in 2009 as they switch to digital signals and is considered ideal for providing wireless high-speed Internet access.
Rob Sanderson, an analyst with American Technology Research, said Google had much to gain from lowering the price of high-speed Internet access. But he doubted Google wanted to buy any airwaves and provide the service itself.
"They're really trying to encourage an environment where others ... can step in and become competitors," he said.
From the Los Angeles Times
Google eyes high-speed data freeway
The search giant may help transform public airwaves, driving down the cost of internet access.
By Jim Puzzanghera
Times Staff Writer
July 20, 2007
WASHINGTON -- If Google Inc. has its way, your cell phone will work on any wireless network and companies will sell high-speed Internet access for cut-rate prices.
Google thinks that would be a wonderful world -- for consumers as well as its own bottom-line -- and is proposing to pony up $4.6 billion in a long-shot bid to create it.
The king of Web search Friday offered to dig into its mountain of cash to transform a chunk of prime public airwaves into a high-speed data freeway. If successful, it could drive down the price of Internet access by creating more competitors to phone and cable companies.
Google promised to bid in an upcoming federal auction of spectrum that is ideal for fast wireless Internet service -- but only if regulators agree to the company's proposals to require open access to those airwaves. That means any device, service, software application or network could operate on it with no restrictions.
"That would be revolutionary," said Bob Williams director of HearUsNow.org, a Web site run by Consumers Union that promotes telecommunications competition. "If you want high-speed Internet service, you basically have a choice of two, and in a lot of places you don't have any choice ... and that situation has to change."
Google told the Federal Communications Commission it would put up the minimum bid of $4.6 billion. The Mountain View, Calif.-based company wanted to prove its seriousness and counter big wireless companies such as AT&T Inc. and Verizon Communications Inc., which say the conditions would make the spectrum virtually worthless.
The offer is unlikely to sway the FCC. The agency thinks the airwaves being given up by TV broadcasters in 2009 as they switch to digital signals could fetch much more for the federal coffers.
But Google is showing its intention to influence one of the biggest spectrum auctions in the nation's history.
Google's offer comes at a time when investors are raising questions about how much money the company is spending to put its ambitious plans in place. Its stock fell more than 5 percent, to $520.12, Friday after big investments on hires and other expansion costs caused its second-quarter earnings to miss Wall Street's expectations.
Despite its promise to bid, Google actually might not want to license the airwaves itself. But it does want to force them open to increase competition with cable and phone companies -- and make it cheaper for people to get on the Web and use Google's growing array of services.
Wireless companies now control all access to the spectrum they license from the government, which is why, for example, Apple Inc.'s iPhone can't be used on any network other than AT&T's. Under Google's plan people could connect any device to any network and run any software they want on their phones, such as free Internet-based calling systems.
But most important for boosting competition, companies would have the right to use the airwaves at a wholesale price to offer their own Internet access.
"In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win," Google Chief Executive Eric Schmidt wrote in a letter to FCC Chairman Kevin J. Martin on Friday.
The effort is backed by public-interest groups and a coalition of major technology companies, including Intel Corp., eBay Inc., Yahoo Inc., DirecTV Group Inc. and EchoStar Communications Corp. But it faces huge obstacles in Washington, where the politically powerful phone companies have been fighting it.
Last week, Martin supported Google's plan to allow people to use any device or software on a network but not the more controversial open-access requirement that many view as the key to creating a viable nationwide competitor to phone and cable companies in broadband access.
Martin worried that imposing the conditions could make it difficult for auction winners to get funding to build their networks.
The FCC is still drawing up the rules for the airwave auction, and Google's plan is a longshot.
AT&T slammed Google's bid offer Friday, saying it was just an attempt to pressure the FCC to "stack the deck in its favor."
Under the traditional auction rules, Google says it and other companies can't outbid the big phone companies because of their built-in advantage of existing networks of cellular towers and pools of customers.
"It doesn't matter whether or not Google has the deep pockets -- at some point you've got to say this is just an unreasonable investment," said Richard Whitt, Google's telecom and media counsel in Washington. "We're just trying to un-skew things enough to give Google ... or a DirecTV or an EchoStar or a Yahoo or whoever comes in there at least a decent shot for the spectrum."
The spectrum is being given up by TV broadcasters in 2009 as they switch to digital signals and is considered ideal for providing wireless high-speed Internet access.
Rob Sanderson, an analyst with American Technology Research, said Google had much to gain from lowering the price of high-speed Internet access. But he doubted Google wanted to buy any airwaves and provide the service itself.
"They're really trying to encourage an environment where others ... can step in and become competitors," he said.
Saturday, July 21, 2007
Whole Foods CEO sorry for anonymous Web posts
http://www.reuters.com/article/businessNews/idUSN1725360820070717?feedType=RSS&rpc=23&sp=true
Whole Foods CEO sorry for anonymous Web posts
Tue Jul 17, 2007
By Nichola Groom
LOS ANGELES (Reuters) - The chief executive of Whole Foods Market Inc. (WFMI.O: Quote, Profile, Research) apologized to shareholders on Tuesday for anonymously posting comments about his company on the Internet as the organic and natural foods grocer said the U.S. Securities and Exchange Commission had launched a probe into the matter.
News of the SEC probe comes a week after court documents filed by the U.S. Federal Trade Commission revealed that Whole Foods Chief Executive John Mackey posted messages on a Yahoo! chat forum under an alias for years.
In the postings, Mackey talked up his company while predicting a bleak future for Wild Oats Markets Inc. (OATS.O: Quote, Profile, Research), the rival his firm is trying to acquire.
"I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards," Mackey said in a statement on Tuesday. "I am very sorry and I ask our stakeholders to please forgive me."
Last week, Mackey had defended the postings, saying he "posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms."
Corporate governance expert Nell Minow of the Corporate Library said she did not expect him to remain CEO for long.
"The fact that somebody has twisted his arm into saying he's sorry just isn't enough," Minow said.
FTC LAWSUIT
The FTC cited Mackey's postings as part of its lawsuit aimed at blocking Whole Foods' planned $565 million acquisition of Wild Oats on the grounds the deal would hobble competition and increase prices for consumers.
SEC staff contacted Whole Foods late on Monday, the company said, adding that it was cooperating with the probe and would not make any further comments while the inquiry is pending.
The Austin, Texas company also said its board of directors formed a special committee to investigate the postings. Whole Foods hired Munger, Tolles & Olson LLP to advise it in its internal investigation.
Minow said the SEC would likely be looking at whether Mackey broke any disclosure rules in his postings and at whether his comments constituted an attempt to manipulate the share prices of Whole Foods and Wild Oats.
"When you are the CEO of a public company you no longer have the luxury of communicating in any way you like about what's going on at your company," she said.
The internal company probe would focus on Mackey's "monumental poor judgment," she said.
Whole Foods shares fell to $39.49 after closing at $39.97 on Nasdaq.
Thursday, July 19, 2007
A Reprieve for Net Radio
http://www.businessweek.com/technology/content/jul2007/tc20070713_940496.htm?chan=rss_topStories_ssi_5
A Reprieve for Net Radio
The music industry won't impose higher royalty rates on Webcasters—yet. Stay tuned, though
by Olga Kharif
Web radio will keep playing, rather than play dead, come July 15. The music industry won't impose higher royalty rates, which were to take effect that day, but the good news for Webcasters may prove fleeting.
The reprieve came July 12 when some 20 representatives of music labels, traditional radio networks, and Webcasters met on Capitol Hill, with industry royalty collector SoundExchange agreeing to hold off on the new fees while negotiations continue. The higher rates, approved in March by the Copyright Royalty Board (see BusinessWeek.com, 3/7/07, "The Last Days of Internet Radio?"), are so much higher than those currently paid that many Webcasters claimed that they will be forced out of business.
The music industry, by not sticking firmly to the deadline, appears to be giving credence to that dire declaration. "SoundExchange is in the business of generating revenues, and it's not going to help them if a good chunk of the industry goes out of business," explains Paul Palumbo, research director for AccuStream iMedia Research.
Large-Scale Talks Planned
SoundExchange also agreed to cap a new minimum royalty fee at $50,000 per station per year in place of a $500-per-music-"stream" fee mandated by the CRB, says Tim Westergren, founder of Pandora, a customizable online radio station. That marks a huge win for Webcasters because with online radio technology, each individual Web user can create a custom stream.
Webcasters had struck an adamant stance on the issue, refusing for months to respond to compromise proposals issued by SoundExchange. "We weren't going to do any kind of a proposal until that fee was gone," Westergren says, pointing out that Pandora, with more than 7 million registered listeners, would have owed millions of dollars in royalties. With that settled, "we are absolutely committed to figuring out solutions," he says.
SoundExchange and Webcasters are now expected to gather for a large-scale negotiating session early in the week starting July 16, says Westergren, who was present during the July 12 meeting. At the heart of next week's discussions: the exact royalty rates Webcasters will be required to pay.
Devilish Details Remain
The Webcasting side now believes a compromise can be reached, and fast. "Our plan is to come to the negotiating table and be very reasonable," says Ian Rogers, general manager of Yahoo! (YHOO) Music. Rogers says the parties may ax the per-song fee in favor of a revenue-sharing agreement, which would allow the music industry to benefit as Net radio's sales grow. Web radio listening is expected to balloon as wireless broadband technologies such as WiMAX spread, enabling Web radio to become a mainstay in cars.
Alternatively, the two sides could hammer out tiered royalty rates, charging different fees to Webcasters of different sizes, says Dave Van Dyke, an analyst with consultancy Bridge Ratings. Perhaps nonprofit stations would pay different, lower fees as well. Whatever the compromise, if one is reached at all, Webcasters "are still going to have to pay the piper very shortly," Van Dyke says. While the minimum-fee compromise has appeased many large Webcasters, a deal on royalties is critical for smaller stations. "You may still see hundreds, if not thousands, of Webcasters go out of business," he says.
The Net radio business is not yet all that lucrative, generating just tens of millions in ad revenue per year, Palumbo estimates. "The industry is immature in what it can withstand in terms of royalty payments," he says.
Yet even if the talks collapse, just as illegal music sharing persists despite being outlawed, the Wild West of Web radio won't disappear overnight. "There are still a lot of Webcasters who are going to continue to broadcast no matter what," says Tom Webster, an analyst with consultancy Edison Media Research.
Kharif is a reporter for BusinessWeek.com in Portland, Ore.
A Reprieve for Net Radio
The music industry won't impose higher royalty rates on Webcasters—yet. Stay tuned, though
by Olga Kharif
Web radio will keep playing, rather than play dead, come July 15. The music industry won't impose higher royalty rates, which were to take effect that day, but the good news for Webcasters may prove fleeting.
The reprieve came July 12 when some 20 representatives of music labels, traditional radio networks, and Webcasters met on Capitol Hill, with industry royalty collector SoundExchange agreeing to hold off on the new fees while negotiations continue. The higher rates, approved in March by the Copyright Royalty Board (see BusinessWeek.com, 3/7/07, "The Last Days of Internet Radio?"), are so much higher than those currently paid that many Webcasters claimed that they will be forced out of business.
The music industry, by not sticking firmly to the deadline, appears to be giving credence to that dire declaration. "SoundExchange is in the business of generating revenues, and it's not going to help them if a good chunk of the industry goes out of business," explains Paul Palumbo, research director for AccuStream iMedia Research.
Large-Scale Talks Planned
SoundExchange also agreed to cap a new minimum royalty fee at $50,000 per station per year in place of a $500-per-music-"stream" fee mandated by the CRB, says Tim Westergren, founder of Pandora, a customizable online radio station. That marks a huge win for Webcasters because with online radio technology, each individual Web user can create a custom stream.
Webcasters had struck an adamant stance on the issue, refusing for months to respond to compromise proposals issued by SoundExchange. "We weren't going to do any kind of a proposal until that fee was gone," Westergren says, pointing out that Pandora, with more than 7 million registered listeners, would have owed millions of dollars in royalties. With that settled, "we are absolutely committed to figuring out solutions," he says.
SoundExchange and Webcasters are now expected to gather for a large-scale negotiating session early in the week starting July 16, says Westergren, who was present during the July 12 meeting. At the heart of next week's discussions: the exact royalty rates Webcasters will be required to pay.
Devilish Details Remain
The Webcasting side now believes a compromise can be reached, and fast. "Our plan is to come to the negotiating table and be very reasonable," says Ian Rogers, general manager of Yahoo! (YHOO) Music. Rogers says the parties may ax the per-song fee in favor of a revenue-sharing agreement, which would allow the music industry to benefit as Net radio's sales grow. Web radio listening is expected to balloon as wireless broadband technologies such as WiMAX spread, enabling Web radio to become a mainstay in cars.
Alternatively, the two sides could hammer out tiered royalty rates, charging different fees to Webcasters of different sizes, says Dave Van Dyke, an analyst with consultancy Bridge Ratings. Perhaps nonprofit stations would pay different, lower fees as well. Whatever the compromise, if one is reached at all, Webcasters "are still going to have to pay the piper very shortly," Van Dyke says. While the minimum-fee compromise has appeased many large Webcasters, a deal on royalties is critical for smaller stations. "You may still see hundreds, if not thousands, of Webcasters go out of business," he says.
The Net radio business is not yet all that lucrative, generating just tens of millions in ad revenue per year, Palumbo estimates. "The industry is immature in what it can withstand in terms of royalty payments," he says.
Yet even if the talks collapse, just as illegal music sharing persists despite being outlawed, the Wild West of Web radio won't disappear overnight. "There are still a lot of Webcasters who are going to continue to broadcast no matter what," says Tom Webster, an analyst with consultancy Edison Media Research.
Kharif is a reporter for BusinessWeek.com in Portland, Ore.
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