technology

Robert Teitelman: Facebook, Instagram and the Disciplines of Mergers and Acquisitions

by Robert Teitelman on April 11, 2012

Huffington Post…

For years, it’s been a popular pastime to decry the use of mergers and acquisitions (M&A) as a colossal, ego-inflating, comp-expanding, waste-of-shareholder-money exercise. Most of these charges are either wildly exaggerated or absurdly simplistic. M&A is a necessary means for companies to grow, particularly in a world so driven by change. Failures are unavoidable — it’s not easy — although measuring what’s exactly a failure or a success given the complexities of large corporations is pretty difficult. But it’s very true that in overheating markets, when currency in the form of shares is highly inflated, lots of lousy, value-destroying deals can get hatched. This is particularly the case in intensely competitive technology industries, where the value creation of a given deal may lie not in the current organization but in a technique, a process, a piece of intellectual property still undergoing gestation: that is, in an opaque future. Thus the truism beloved of Warren Buffett: In M&A, there’s nothing riskier than tech deals. And then there’s Facebook and Instagram. Facebook is famously paying a cool billion dollars for the two-year-old app-based photo service. Instagram has 13 employees, 30 million users and no revenues. Facebook’s Mark Zuckerberg decided the social media giant absolutely had to have the startup, and took a year’s worth of cash flow and offered it up, about twice Instagram’s recently closed Series B venture round valuing the company at $500 million. There was no indication of other bidders, though everyone seems convinced that a Google or an Apple was lurking out there ready to make its own pre-emptive bid. In the developing meme about the Instagram deal, Zuckerberg didn’t have a choice: He had to strike. It was eat or be eaten. The sheer uncertainty of the social media landscape can’t tolerate hesitation; it demanded action. In California, venture capitalists, investment bankers and analysts can’t praise the deal highly enough (of course, they all profit from the resulting euphoria). Zuckerberg showed brilliance, they said, by recognizing Instagram’s potential and making the bid — despite the fact that this will further complicate Facebook’s enormous and much-hyped IPO in a month or so. That alone should cause one to pause along with the profound faith in a young CEO who hasn’t done much dealmaking. The issue here is not that Zuckerberg made a good decision or not. We’ll find out in time whether Instagram is a PayPal or a Skype (both eBay acquisitions: the former, as The New York Times lays out today , a big success, the latter, a big loser) or a Flickr (a Yahoo! bomb) or a Flip (which Cisco, a regular and expert user of M&A, shut down last year). Instagram most closely resembles some of the giant telecom deals from before the bubble burst in 2001, particularly in the size of the deal and the tiny number of employees. Billions of dollars in those deals were written off when the market collapsed. And let us not wallow in AOL-Time Warner again. No, the issue with these sorts of deals is how any investor can make a rational judgment about a) whether this deal makes strategic sense, or b) whether the price makes any sense at all. The two are related, of course. The view from Silicon Valley seems to be that Facebook had the money so why not spend it. Cutting-edge tech companies need to bet big and make “strategic deals,” that is, deals that can’t be be valued — the feeling is that Zuckerberg is a genius and if he doesn’t know what Facebook needs, then nobody does. Facebook isn’t even public so Zuckerberg can spend his money any way he wants and the reaction of users and the tech community seems to be so positive it can’t go wrong. Well, of course, it can go wrong. Crowds change their minds, and Instagram’s users in the Twittersphere don’t seem to want to be enveloped into Facebook world, though this is about as scientific as a finger in the breeze. Apps (and social media sites) come and go. Instagram has very few employees, all of whom are now loaded with dough. They may stay and develop the product — though no one seems to know how it’ll make money — or they may drift off to start new companies or go into politics or try venture capital. There seems to be few barriers to entry in the app world, and it’s hard to imagine that Instagram, as nifty as it is, is unassailable. Moreover, it’s unclear whether Instagram boasts the kind of network effects that makes PayPal, YouTube, Google, Microsoft, Apple and Facebook so formidable. Remarkably, few seem to be asking. Again, this could turn out to be a fabulous deal. But this is the kind of deal that gives M&A a bad name. The notion that Zuckerberg can spend “his” money any way he wants is not only wrong — it’s not really his — but about to become a real problem when public investors buy shares. (Substitute, say, Bank of America for Facebook and see how that works.) A billion dollars remains a big number, no matter the market cap. Moreover, it’s pretty clear, as the Financial Times ‘ Lex column pointed out Tuesday, that despite Zuckerberg’s statement that this is a one-off deal, what it really suggests — and that the tech crowd confirms in its comments — is that there could well be other Instagrams to be scooped up. Facebook is implicitly admitting that in a burgeoning and remarkably fluid app world, it can’t really go it alone: It needs to buy and buy and buy. Again, that’s not a shock (Google has been a busy buyer) — though Zuckerberg, prepping for public company status, should be more careful with statements about one-offs he may have to take back, and that will hurt him with investors once he goes public. Will this deal hurt Facebook if it never works out? Not really. It’s just a write-off, which Facebook can shrug off. By then there will be new hot apps, racking up millions of grazing users. But what this deal tells us most clearly is just how risky the Facebook enterprise is. For Zuckerberg to make a pre-emptive bid that’s twice the venture valuation from two weeks ago — and one a month before a public offering — suggests two things: either he’s undisciplined with all that money (were there negotiations or due diligence? what’s the breakdown of cash and shares?) or that the powerful network effects that keep users coming back to Facebook may not be as strong as a relatively obscure two-year-old startup’s app. Is this a sign of a bubble? I don’t believe that , unless you define bubble in a very narrow sense. Social media is clearly heating up, but for rational reasons: new devices, new services, new apps, an exploding audience. Instagram might look like an old dot-com — lots of users that may come or go, no viable revenue model — but Facebook does not: Like Google, it has found a way to make a lot of money. But you don’t have to have a full-blown bubble to lose your discipline as a buyer. You just need the sudden appearance of a lot of cash. Which is how M&A gets a bad name. Robert Teitelman is editor in chief of The Deal magazine.

Read the original post:
Robert Teitelman: Facebook, Instagram and the Disciplines of Mergers and Acquisitions

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Richard Komaiko: The Ultimate Irony of Groupon

by Richard Komaiko on April 11, 2012

Huffington Post…

Just yesterday, a Pennsylvania class action lawyer, Howard G. Smith, filed a class action lawsuit against Groupon on behalf of all shareholders who bought in during the infamous IPO. The complaint alleges that Groupon misrepresented or failed to disclose information that they had an obligation, under Securities Laws, to share with prospective investors. According to MarketWatch , “no class has been certified” at this time. Here’s what that means in plain language. When large numbers of people have been harmed in the same way by the same defendant, each of them could file a lawsuit on their own, which is very expensive. Alternatively, they can merge all of their lawsuits into one, which totally changes the economics of litigation. All of a sudden it becomes very cost effective to sue, because the overhead of the legal fees is defrayed over large numbers of plaintiffs. Needless to say, it’s in the interest of the plaintiffs to do this, but courts are cautious about when they should and should not permit it. When the court decides to permit it, that’s called certifying the class. The principal factor that courts look to when deciding whether or not to certify a class is the number of people who come forward to announce that they believe they have been wronged. And often times, these types of law suits can sink or swim depending on whether or not the class gets certified. In other words, the fate of Groupon literally depends on whether this class action lawsuit “tips.” The irony is just too delicious… This post originally appeared on AttorneyFee

See the original post:
Richard Komaiko: The Ultimate Irony of Groupon

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Jacqueline Corbelli: Insights on Tech as an Agent for Transformative Change, on Madison Avenue and Beyond

April 9, 2012

When you think about advertising, it’s not likely that the latest tech gadget immediately leaps to mind. But, new technologies and digital devices play a vital role in how today’s digitally connected consumers engage with and experience life, and as an extension brands. Over the past ten years, technology has helped redefine the way businesses in most industries add value. From online banking to internet advertising, the business landscape has been reshaped by the ways consumers discover, interact with, and absorb information and content. And there’s a pattern — when technology proves it can enhance our experience as consumers, it tends to catch on. Pure technology solutions on the other hand (‘technology for the sake of technology’), most often, do not. From advising CEOs on how to best harness and capitalize on the promise of technology, to my current role leading the TV advertising company I founded and architected off the same premise back in 2003, I consistently find that true technology solutions feed our desired behaviors and preferences as consumers, rather than simply change or replace them. Smart phones, tablets, mini-laptops, connected TVs — the value to us of this ever-increasing array of devices lies in the ways we combine our use of them to specifically fit our life; our decisions are most often guided by choice, ease of use and control. As part of my new contributed blog series, I’m going to cover the various ways technology is influencing our behavior, what and why we adopt and the impact of true technology solutions on the world — from mental models to business models, economic development to keeping a business relevant to consumers. All with a persistent focus on the winning formula: a sustained commitment to increasing the impact and quality of the end consumer experience. I’ll begin with one of my latest passions, advertising. Digital Killed the TV Star? Digital media reporters have asserted that Silicon Valley is the new Madison Avenue. With so much focus on digital and social media, you would have expected technology to successfully kill the 30-second TV commercial. Not true. In fact, TV advertising and how you experience it has been going through a decade of gradual transformation that allows your favorite brands to build an interaction and relationship with you, through deeper engagement and an ongoing dialogue. It’s a widely held belief that as consumers we hate advertising; many point to our desire to skip commercials in favor of a TiVo or VOD experience. However, the latest statistics on the topic show there is a place for advertising in consumers’ lives. That, indeed, when made enjoyable and to fit seamlessly with the way we prefer to watch television, ads not only “break through” the clutter and noise of our busy lives, they actually can inspire us to voluntarily watch and interact with them — at a rate of millions per week, to be exact. As a result, major consumer brands — and the country’s top advertisers — have set their sights on the latest in interactive TV advertising as a way to build an ongoing dialogue with their target consumers. Here are just a few of the brands running the newest, most innovative forms of interactive TV ads that viewers can watch right now: Axe, via Xbox and iPhone iAd Degree for Men, via Xbox Dr. Pepper, via Xbox, DIRECTV and Dish GM Chevy Sonic, via DIRECTV and Xbox Hellmann’s, via Dish and Verizon FiOS Suave Keratin Infusion, via DIRECTV, Cablevision and iPad iAd Tresemme, via DIRECTV and Dish Red Bull, via Xbox What’s most shocking to some is the results these interactive campaigns are generating. iTV ad campaigns average 3 to 5 percent click rates. For some perspective, this compares to best performance benchmark online of just less than one percent. In addition, TV viewers are spending up to 15 minutes playing custom branded games, downloading recipes, entering sweepstakes, ordering products and more, all with their remote control. According to Nielsen, these interactive campaigns consistently outperform traditional TV and online advertising in generating awareness, engagement and ROI. I’ll touch more on these compelling figures in my next blog post, “New Digital Technologies Set to Advance Interactive TV Advertising.”

Read the full article →

Josh Levy: Hey America! We’re Ranked #16 in Broadband!

April 3, 2012

Q: Do you live in America? If you answered, “yes,” you can proceed directly to the “You live in a country ranked 16th in the world in broadband penetration, speed and price” section below. You live in a country ranked 16th in the world in broadband penetration, speed and price. It’s true . The U.S. ranks an average of 16th in the world in these three categories. That puts us behind countries like Portugal (15th), Belgium (9th) and Denmark (2nd), whose residents enjoy greater access to a faster, cheaper Internet than Americans do. There’s one core reason for our poor global performance. As journalist Rick Karr explained in his film on the state of broadband in Europe, a simple “game changer” — competition — leads to better broadband. But competition in the U.S. broadband market is virtually nonexistent. That means that millions of Americans live without high-speed Internet access, and those who do have it experience slower speeds and higher prices than their European counterparts. Most U.S. residents have a choice of only one cable provider, with slower DSL and satellite providing a cheap façade of competition . Big broadband companies are all too happy to point to this “competition” whenever they’re asked why they’ve been allowed to become quasi-monopolies that dictate how — and for what price — we connect to the Internet. Now the tiny sliver of broadband competition that still exists in America could disappear completely. Verizon and a group of cable companies including Comcast, Cox and Time Warner Cable have settled on a deal that would allow them to divide up the broadband market among themselves, leaving Internet users in the lurch. In short, Verizon would purchase a big chunk of wireless spectrum owned by the cable companies in exchange for an agreement to resell those companies’ broadband services to its customers — customers who once hoped that Verizon would build out its own FiOS network to compete with these very same cable companies. This deal amounts to an agreement between Verizon and these cable companies to stop competing. Whatever slices of the broadband market they currently dominate, they’ll continue to dominate — without the threat of competition. With that threat removed, these companies will have little incentive to lower prices, increase speeds or build out to underserved areas. Meanwhile, Verizon’s wireless spectrum purchase would make the already concentrated mobile market even more so — with AT&T and Verizon controlling two-thirds of all wireless subscriptions, 80 percent of the most valuable wireless spectrum and 80 percent of the entire industry’s profits. The U.S. broadband market is in bad shape. More competition could help fix it, but shady business deals and bad government policies are fostering more concentration, not less. How do we solve this competition problem? We’re asking Congress, the Justice Department and the FCC to block Verizon’s proposed deal . That’s a start. But we also have to support other forms of broadband competition, like municipally owned networks that compete with — and often beat — big incumbents like Comcast when it comes to speed, access and affordability. Unfortunately, those incumbents have spent millions to pass state-level bills that outlaw such networks. A movement is coming together to support communities’ right to decide for themselves whether to build such systems. You can join it here . You can also learn more about the history of corporations trying to control our access to basic utilities at the expense of residents who have depended on those utilities for their very survival. Indeed, many people see the battle for broadband as the 21st-century equivalent of the fight for rural electrification . We oppose the Verizon-cable deal and support community-owned broadband networks for one simple reason: Without competition, companies will leave Americans behind when it comes to the basic information utility of our time.

Read the full article →

Daniel Gulati: You, the Technologist

April 2, 2012

As the Internet has grown from 70 million users in 1997 to 2.2 billion , entrepreneurial companies with technology at their core have disrupted entire industries and threatened or eliminated incumbents. For example, Square, the new electronic payment service, has already upended a long-established financial ecosystem, with some arguing that it may even replace cash . In recent years, incumbents have fought back. A 2011 IBM study of over 3,000 CIOs revealed that CIO-CEO alignment is stronger than ever, with traditional companies aggressively investing in technology innovation. Big-box retailers, like Best Buy, now have large, fast growing e-commerce businesses. The New York Times and other traditional publishers are launching digital products tailored to the mobile web . Even the big banks are getting social . Yes, this is creating unprecedented demand for employees with serious technical chops. But as more traditional businesses are being run on software and a larger component of a company’s customer experience is being delivered online, everyone from marketing to general management needs to take notice. Studies confirm that technology skills will be crucial for future employment prospects. Engineer or not, the managers and employees who understand new consumer technologies and can create value by deploying software as a solution will be those most valued by organizations young and old. Firstly, entirely new categories of technology jobs are forming , creating exciting opportunities for today’s job seeker. A few years ago, community managers did not exist. Yet with 67% of surveyed brand managers planning to launch social media campaigns in the next 12 months, community managers are now amongst the most sought after marketing professionals. With the rise in new web-based applications, advertising products, and client-side software, user experience (UX) design is suddenly one of the nation’s fastest growing employment areas . Because these categories are so new, a drastic shortage of formally trained professionals exist to fill the roles available. This creates opportunities for the savvy job seeker in an adjacent field looking to switch into an in-demand technology role. Secondly, traditional roles are likely to have a larger technology component that will only increase over time. Marketers no longer live in an above-the-line world; instead, direct-response and pay-per-click advertising have entered the mix. Similarly, HR professionals who fail to harness the power of LinkedIn, Identified, and BranchOut may miss out on attracting star candidates. Nonmanagerial, nonconsumer-facing employees, such as data entry specialists, need to be well-versed in specific new technologies that relate to them. Even the most traditional of employees, the factory worker, must transform into a technologist or face extinction. As Adam Davidson recently argued , “Today, the computer moves the cutting tool and the operator needs to know how to talk to the computer.” In a world where everyone must become a technologist, how can we land an exciting technology job in an entirely new category — or simply become more technologically sophisticated in the way we approach our current, traditional roles? Here’s a five-step checklist to ensure you stay relevant: 1. Be an end user : The best way to understand new technologies is to use them. It would be difficult to truly grasp the power of Facebook fan page marketing without being both a Facebook user and a fan of brands yourself. Dedicate time on the job to tinkering with platforms that are highly relevant to your role. 2. Know the ROI : As the pace of technology innovation increases, the savvy professional will curate and invest in the platforms that matter. Different consumer technologies, like Twitter and Pinterest, have different use cases and entirely different customer acquisition economics. Therefore, a well-understood financial model is crucial if you’re arguing for a reallocation of company resources to support investments in new consumer technology platforms. Even internal collaboration tools, such as Basecamp, salesforce, and Sharepoint, should be subject to detailed business case and ROI analyses. 3. Demonstrate your knowledge : Do you know your SEO from your SEM ? New technologies are creating new vocabularies. This isn’t irrelevant jargon, but rather essential concepts you’ll need to successfully weave into your verbal and written arguments to land that new role or perform at a higher level in your existing role. 4. Learn technical skills : New companies and older institutions alike have recognized the structural mismatch between available technology jobs and worker skillsets. That’s why you can log onto Codecademy and learn programming for free, instantly. Universities are rapidly growing their engineering courses. Venture capitalists are creating software engineering academies in their own cities. There are now countless opportunities to learn what you don’t currently know and use these skills to your advantage in your new or current role. 5. Anticipate trends : With the age of device fragmentation, increasing smartphone and tablet penetration will usher in a post-PC era. Translating mega-trends like these to potential impacts your current professions, and then to the implications for your skillsets, is a powerful way to get ahead. Trends need not be domestic. As the cost of computing falls, overseas markets and entirely new customer sets are suddenly being propelled into relevancy. Anticipate international trends, too. What else can we do to position ourselves? Is your job or industry becoming more technologically focused? This post was originally published on HBR.org.

Read the full article →

Jeremy Rifkin: The Third Industrial Revolution: How the Internet, Green Electricity, and 3-D Printing Are Ushering in a Sustainable Era of Distributed Capitalism

March 28, 2012

The great economic revolutions in history occur when new communication technologies converge with new energy systems. New energy revolutions make possible more expansive and integrated trade. Accompanying communication revolutions manage the new complex commercial activities made possible by the new energy flows. Today, Internet technology and renewable energies are beginning to merge to create a new infrastructure for a Third Industrial Revolution (TIR) that will change the way power is distributed in the 21st century. In the coming era, hundreds of millions of people will produce their own renewable energy in their homes, offices, and factories and share green electricity with each other in an “Energy Internet” just like we now generate and share information online. The creation of a renewable energy regime, loaded by buildings, partially stored in the form of hydrogen, distributed via a green electricity Internet, and connected to plug-in, zero-emission transport, opens the door to a Third Industrial Revolution. While the TIR economy allows millions of people to produce their own virtual information and energy, a new digital manufacturing revolution now opens up the possibility of following suit in the production of durable goods. In the new era, everyone can potentially be their own manufacturer as well as their own internet site and power company. The process is called 3-D printing; and although it sounds like science fiction, it is already coming online, and promises to change the entire way we think of industrial production. Think about pushing the print button on your computer and sending a digital file to an inkjet printer, except, with 3-D printing, the machine runs off a three-dimensional product. Using computer aided design, software directs the 3-D printer to build successive layers of the product using powder, molten plastic, or metals to create the material scaffolding. The 3-D printer can produce multiple copies just like a photocopy machine. All sorts of goods, from jewelry to mobile phones, auto and aircraft parts, medical implants, and batteries are being “printed out” in what is being termed “additive manufacturing,” distinguishing it from the “subtractive manufacturing,” which involves cutting down and pairing off materials and then attaching them together. 3-D entrepreneurs are particularly bullish about additive manufacturing, because the process requires as little as 10 percent of the raw material expended in traditional manufacturing and uses less energy than conventional factory production, thus greatly reducing the cost. In the same way that the Internet radically reduced entry costs in generating and disseminating information, giving rise to new businesses like Google and Facebook, additive manufacturing has the potential to greatly reduce the cost of producing hard goods, making entry costs sufficiently lower to encourage hundreds of thousands of mini manufacturers — small and medium size enterprises (SMEs) — to challenge and potentially outcompete the giant manufacturing companies that were at the center of the First and Second Industrial Revolution economies. Already, a spate of new start-up companies are entering the 3-D printing market with names like Within Technologies, Digital Forming, Shape Ways, Rapid Quality Manufacturing, Stratasys, Bespoke Innovations, 3D Systems, MakerBot Industries, Freedom of Creation, LGM, and Contour Crafting and are determined to reinvent the very idea of manufacturing in the Third Industrial era. The energy saved at every step of the digital manufacturing process, from reduction in materials used, to less energy expended in making the product, if applied across the global economy, adds up to a qualitative increase in energy efficiency beyond anything imaginable in the First and Second Industrial Revolutions. When the energy used to power the production process is renewable and also generated on site, the full impact of a lateral Third Industrial Revolution becomes strikingly apparent. Since approximately 84 percent of the productivity gains in the manufacturing and service industries are attributable to increases in thermodynamic efficiencies — only 14 percent of productivity gains are the result of capital invested per worker — we begin to grasp the significance of the enormous surge in productivity that will accompany the Third Industrial Revolution and what it will mean for society. The democratization of manufacturing is being accompanied by the tumbling costs of marketing. The internet has transformed marketing from a significant expense to a negligible cost, allowing startups and small and medium size enterprises to market their goods and services on internet sites, like Etsy, that stretch over virtual space, enabling them to compete and even out compete many of the giant business enterprises of the 21st Century. As the new 3-D technology becomes more widespread, on site, just in time customized manufacturing of products will also reduce logistics costs with the possibility of huge energy savings. The cost of transporting products will plummet in the coming decades because an increasing array of goods will be produced locally in thousands of micro-manufacturing plants and transported regionally by trucks powered by green electricity and hydrogen generated on site. The lateral scaling of the Third Industrial Revolution allows small and medium size enterprises to flourish. Still, global companies will not disappear. Rather, they will increasingly metamorphose from primary producers and distributers to aggregators. In the new economic era, their role will be to coordinate and manage the multiple networks that move commerce and trade across the value chain. The rapid decline in transaction costs brought on by The Third Industrial Revolution are leading to the democratization of information, energy, manufacturing, marketing, and logistics, and the ushering in of a new era of distributed capitalism that is likely to change the very way we think of commercial life in the 21st Century. For a more detailed look at how 3D printing in the Third Industrial Revolution era is going to transform the global economy you can link to my cover story in the current issue of The World Financial Review here . Jeremy Rifkin is the author of The New York Times best selling book, The Third Industrial Revolution, How Lateral Power is Transforming Energy, the Economy, and the World. Mr. Rifkin is an adviser to the European Union and to heads of state around the world. He is a senior lecturer at the Wharton School’s Executive Education Program at the University of Pennsylvania and the president of the Foundation on Economic Trends in Washington, D.C.

Read the full article →

Eliot Van Buskirk: A Brief History of Spotify’s Attempt to Become the ‘OS of Music’

March 26, 2012

Spotify recently rolled out a third batch of music apps that run within its desktop software, offering new ways to find stuff to listen to on your desktop, whether you pay for Spotify or not. This didn’t “just happen.” Rather, it’s part of a concerted effort on the part of Spotify to become, in the words of its director of developer platform Sten Garmark, “the OS of music.” That phrase might be confusing, because don’t operating systems run on computers, and not on the Internet? Basically, it means that Spotify would become sort of like Twitter, which might be considered “the OS of 140-character messages.” The same way app developers can build Twitter and Facebook into their applications, they would build in Spotify to handle music playback — and many of them already do, not only in the desktop version, but on iOS as well. You heard it here first, in an article that rose to the top of Techmeme in which we predicted that Spotify would double-down on becoming an app platform — a necessary step on its journey to become “the OS of music.” Our prediction was accurate, but it was not formed in a vacuum. Here’s a short history of Spotify’s attempt to become a musical operating system for the Internet, web and apps: 2011 4/11: Spotify limits free listening , most likely in preparation for its launch in the world’s biggest music market, the United States. 5/25: Spotify and Facebook reportedly hatch a plan to scrobble Spotify plays on Facebook, which they eventually did . Now, if you hear something in a Spotify app, your Facebook friends can find out about it (but only  if you want them to ). 7/14: Spotify officially launches in America . Some members of the U.S. press had already been using it for years. 8/26 Evolver.fm posts a collaborative Hurricane Irene playlist on Spotify. The “collaborative playlist” feature telegraphs Spotify’s intentions to become an operating system for music — especially in a social context. 8/31: Spotify announces an API that lets iOS developers build apps that hook into its catalog of officially-licensed music. As they do today, users must subscribe to the Premium version of Spotify in order to use them, because they run on smartphones . 9/20: A third-party developer creates a hack for Spotify that adds an equalizer , hinting at things to come. 9/26: Spotify defends its relationship with Facebook. ( Sean Parker owns part of both Spotify and Facebook.) 9/30: After some users complain (and some executives argue), Spotify adds a “private listening” feature that lets you play stuff without telling the world about it. 9/30: Spotify’s partnership with Facebook pays big traffic dividends . 10/7: Spotify developer community manager Andrew Mager appears at a small event in Brooklyn, New York to demonstrate 10 awesome apps that run on Spotify… and also mentions that the company is working on a commercial API that will let developers charge for apps that run on Spotify (it has yet to roll out). 10/4: Sean Parker and Mark Zuckerberg reportedly argue about the plan to require Spotify users to log in with Facebook. 11/1: Evolver.fm posted Occupy Wall Street playlists in Spotify. 11/22: Evolver.fm predicts that  Spotify would become a music platform for apps at its upcoming press event. 11/30: Spotify officially  becomes a music platform , launching its first round of apps that run within the desktop version. 11/30: Spotify-powered apps are free (and still are), but the company is working on a commercial API that will let developers charge for them, sharing revenue with Spotify. 12/1: The app-developing launch partners tell Evolver.fm they expect Spotify to put their creations on the map . (From the ones we’ve talked to, they were right — see Songkick’s latest investment round , for example.) 12/2: Spotify unveils a ” preview version ” of its app-running desktop client, which rolls out to all users shortly thereafter. 12/2: Spotify UK managing director Chris Maples calls the company’s app platform “arguably our biggest announcement since we launched .” 12/9: Soundrop CEO talks to Evolver.fm about his real-time group-listening app that runs within Spotify on the desktop (and now on the iPhone too ). 12/20: Spotify launched its second round of desktop apps , focusing this time on helping fans curate music for each other. 2012 1/4: A neat app allowed SXSW attendees to plan their festival calendar by listening to SXSW bands on Spotify . 1/6: Spotify prepares to add new limits to the free version of its service, which we figure was a prerequisite in order to maintain licensing from record labels and publishers who objected to it giving away so much for free. 1/12: Facebook announces ” real-time social listening ” with Spotify as the main launch partner. 1/13: The combination of Facebook and Spotify proves so powerful that developers at a competing company  complain . 2/10: Spotify CEO Daniel Ek (pictured in post to the right)  explains his app strategy to Evolver.fm. 2/27: Spotify throws its own ” Music Hack Weekends ” to attract more app developers (see also: SongJitsu  and ” Search for music by drawing a picture of it “). 3/6: Spotify announced that its app users listened to 1,500 years of music in three months . 3/13: Spotify chief content officer and managing director of North America Ken Parks tells Evolver.fm about Spotify’s app strategy and more. 3/19 Soundrop goes mobile , letting people carry around listening rooms in their pockets (as with Turntable.fm ). 3/22: The third round of Spotify desktop apps appears,  featuring  apps from record labels and distributors, with an emphasis on educating the listener. Whew! That brings us up to date. Stay tuned , to continue to monitor Spotify’s progress and music apps in general.

Read the full article →

Bill Robinson: Memo to Small Business: RingCentral Will Take Your Calls

March 24, 2012

Small businesses have always had a simple but nonetheless nagging problem: answering their phones with a consistent, professional presence. Does the fearless leader hire an effervescent receptionist and pay the base salary plus all those excruciating payroll taxes, healthcare and other costs? Or, do they get one of those bleak, soul-less automated, ‘interactive voice response’ (IVR) systems that put us all through a soul-destroying telephonic chase? RingCentral wants to be the third option in that management decision. “We started out with two guys named ‘Vlad’ just to make it interesting,” said Vlad Shmunis , RingCentral co-founder and CEO. The other Vlad is RingCentral CTO and co-founder Vlad Vendrow who Shmunis says “is the original architect of the system and the smarter of the two.” Vlad Shmunis RingCentral, which was founded in 2003, has a very interesting evolutionary path. Schmunis started a company called RingZero Systems in the 1990s which, according to Shmunis, provided “a fee-based PBX system for SMBs (small and medium sized businesses) which ran on Windows.” The company’s distribution was solely through OEM and bundling partners which Shmunis would later change in RingCentral. In spite of what he now looks back on as a failed business model, Shmunis had IBM as a major partner and eventually sold the business to Motorola. Later, as it became apparent Motorola had no idea how to integrate RingZero into their org chart, Shmunis bought his assets back from Motorola to build what is now RingCentral. “I learned not to do it on a PC system; it wasn’t the right platform for an answering system,” Shumnis reminisced. “I learned that a stand-alone, hosted service was the right business model and that’s what RingCentral is built upon.” Shmunis says, “We don’t compete with the telcos; we compete with the hardware manufacturers. And simultaneously, RingCentral is more than just a PBX .” As the RingCentral business model was refined and shifted, Shmunis was after one big, traditionally hard-to-reach market of customers: small business. Making this jump in markets served could not have been easy but it was done, Shmunis said, as the delivery method also changed dramatically from ASP to SaaS to, finally, the Cloud. Shmunis said, “We thought, ‘How do we enable a very small business to communicate like a bigger corporation? How does the small business owner downscale from the big, expensive phone systems?’ Small business really needs a product like RingCentral.” When asked what the size of his ideal SMB customer is, Shmunis doesn’t equivocate. “For us, there’s no such thing as too small a market; we developed our product for the smallest of VSBs (very small businesses). Not to sound too corny but we really had in mind when we founded RingCentral that we would make the world a better place.” Shmunis used his own money to start and grow RingCentral initially, referring to his personal funding as “the first round.” The first true Series A occurred in 2006 when he said RingCentral “had a couple of million in revenue and good clients.” Doug Leone from Sequoia Capital and David Weiden from Khosla Ventures jumped aboard the USS Shmunis and are both on the Board of Directors today. With key strategic investments from the likes of Cisco Systems and Silicon Valley Bank, the total outside investment in RingCentral today stands at approximately $55 million. Vlad Shmunis was born in Odessa, Ukraine on the Crimean Peninsula and came to America at 14. In many ways, he is the embodiment of the ‘American Dream,’ with his parents and younger sister learning English on the fly and then doing well in Bay Area schools. “I did well in my school in Russia,” he said smiling while delivering a jab to the U.S. educational system, “so I did very, very well in my American school.” As is common amongst Russian emigrants to America, Shmunis’ parents were involved in some form of mathematics, science or engineering. His father was a mechanical engineer specializing in “extreme precision instruments” and his mother, an electrical engineer. Does growing up in this kind of technical household mean the ensuing generations tend to be more technically oriented? Undoubtedly. Going on to San Francisco State University in the late seventies, Vlad Shmunis took an interest in computers and obtained bachelors and masters degrees in Computer Science. “I was programming in Pascal and Fortran but always avoided Cobol ; Cobol wasn’t cool,” Shmunis said with the look of a man who missed coding, “I really loved LISP though and ended up teaching a course on LISP at San Francisco State.” After finishing his college degrees, Shmunis worked for several years as a software engineer then software manager at Ampex. It was after this work experience that he decided to start his own company, RingZero later becoming RingCentral. RingCentral is headquartered in San Mateo and has offices in Denver; the Philippines; China; St. Petersburg, Russia; and the Ukraine with a total of about 900 employees. “What RingCentral is all about,” Shmunis observed, “is complete parity between landline phones, mobile phones, VoiP, tablet PCs and faxes. The Cloud is perfect for this and the PC wasn’t because Windows crashes, hard drives freeze and dogs eat power cords.” Moving to the current day, RingCentral is striving to expand their SMB market penetration but refuses to release precise numbers on how many SMB clients they have. Pursuing strategic relationships with partners such as Go Daddy, LegalZoom and Vistaprint are key for Shmunis’ SMB strategy. For example, Vistaprint is one of the world’s largest printers of business cards and has millions of small business-owner customers. Vistaprint sends out a RingCentral offer with every business card order. “Our biggest challenge is awareness,” Shmunis stated, “once you’re aware of us, you’ll use our product.” For access to some reviews of RingCentral’s (and others) service, see VoipReview.org . Asked about the widely rumored possible RingCentral’ IPO, Shmunis only says he “can’t comment on an IPO.” He is similarly coy about how RingCentral will turn out; whether the creation will sell in a trade sale or continue to grow as a publicly-traded or independent enterprise. How does Shmunis want RingCentral end up? “Our investors are pretty happy,” he says, “I’m not sure I want it to end up. RingCentral as a stand-alone might be best.” One thing is for sure, if RingCentral gets even a minuscule percentage of the gargantuan SMB market, it will be writing its own ticket.

Read the full article →

Women 2.0: From Students to Startups: Rebellion Photonics Founder and CEO Allison Lami Sawyer

March 22, 2012

By Angeline Evans (Writer & Blogger, The New Professional) Allison Lami Sawyer was born to be an entrepreneur. The Rice University MBA student always knew she wanted to start her own business, and armed with a master’s degree in nanotechnology, she hit the pavement in Houston in search of the right product. After a year and half, she met her co-founder, and before the ink on their diplomas was dry, Rebellion Photonics was born. In the two years since Allison and her co-founder finished their degrees and started the company with $175,000 in business competition winnings, Rebellion Photonics has grown to eight employees and brought in over $2 million in income. Recently, the company was awarded two Small Business Innovation Research Grants totaling $1.3 million. From their academic beginnings, Allison and company are well on their way to commercial success. Technology for the taking Universities are a prime breeding ground for cutting edge technology, and, in the best cases, entrepreneurs can find ready and willing prototypes that have stood the test of research and benefit from thousands of dollars of grant funding already put to use. Working with someone else’s product and research doesn’t come without challenges. Building a company from the ground up usually means spending several years pinching pennies while your fellow biz school alums may be raking in six figures off the bat. Entrepreneurship can also be a lonely path, and not everyone is suited to that lifestyle. Convincing a researcher to sign on for commercialization can be tough as well. From Allison’s experience, graduate students seem more receptive to taking their work out of the lab and into the market. University research is patented through technology transfer offices, but once patented, technology often languishes for years. Researchers may not realize that they don’t have to leave academia, but can work out licensing deals instead. Sometimes, as in Allison’s case, entrepreneurs find their match in a researcher that is willing to make the jump with the technology. Even so, it’s important to find someone with the same “appetite for risk,” as she puts it, who holds the same company values and goals in mind. Procuring a product Finding the right technology for you might take a few tries, but Allison encourages budding entrepreneurs to jump right in and get to know some graduate students, researchers, or local companies. “If you’re looking to start and you’re not an inventor, get in touch with local organizations and give time for free,” says Allison. “Make a name for yourself in that community. Allison started her search for an inventor at Rice University, offered free business assistance at the Houston Technology Center, and got involved with the Rice Alliance for Technology Entrepreneurship. Word spread quickly about her search, and in the end, her technology inventor (and now CTO) found her. Digging through patents at university offices of technology transfer is also a good way to find cutting edge technology. Where are the women? On her path so far, Allison has yet to meet any other women hard tech entrepreneurs, but she thinks women are perfectly suited for working with inventors and researchers to bring new technology to market. “You have to be very gentle and gain their trust, not just talk but actions,” Allison says. “I think a lot of women could be really good at that: not coming in all type A, but instead ‘Let’s grow this together.’” To encourage fellow female entrepreneurs, she mentors business students at her alma mater. But she thinks women who have already blazed the trail can do more. “Women in positions of power think [self-promotion] is unnatural or arrogant,” she says. “But they should do better at publicizing themselves not for their own sake but for girls everywhere.” About the guest blogger: Angeline Evans is a freelance writer, nonprofit communications consultant and career and style blogger at The New Professional . She believes that business casual doesn’t have to be boring and strives to help the everywoman find balance and success in the office lifestyle and in their careers. Prior to striking out on her own, Angeline spent over five years in magazine publishing and public sector and nonprofit communications. Follow her on Twitter at @angelineevans .

Read the full article →

Preeti Vissa: A "Separate But Equal" Internet?

March 21, 2012

The phrase “knowledge is power” dates back to at least the seventeenth century, and it’s as true today as it was then. But today, technology has become the essential portal to information, and information technology has potential to be a great social and economic equalizer — but only if we preserve today’s open Internet. That is not by any means a sure thing. There is a real danger we could let ourselves slip into a sort of “separate but equal,” segregated Internet, as my colleagues in The Greenlining Institute’s telecommunications team explain in their new report, “Saving the Open Internet: The Importance of Net Neutrality.” There are a lot of misconceptions about net neutrality. For example, some on the far right would have you believe that net neutrality is code for government control of the Internet. It’s no such thing. Net neutrality is actually just a modern version of a very old principle, first embodied in the Pacific Telegraph Act of 1860 . Back when the telegraph was cutting-edge communications technology, there was concern that telegraph companies would pick favorites — transmitting messages they liked right away while delaying those they disliked, including communications from rivals or competitors. So Congress stepped in to require that each telegraph message be “impartially transmitted in order of its reception,” without the telegraph company picking out favored communications for preferred treatment. Today’s technology has advanced far beyond dots and dashes transmitted over wires, but the basic idea remains precisely the same: Companies that control the “pipes” through which information flows shouldn’t become censors, favoring or disfavoring messages because they approve or disapprove of the content. In short, net neutrality simply preserves the free, open Internet we know and depend on today. But is that free and open Internet really in danger? In a word, yes. In one particularly egregious example, a few years ago Verizon blocked text messages from NARAL Pro-Choice America on the grounds that it had the right to block “controversial or unsavory” communications. After howls of public outrage, the company backed down, but the threat of censorship remains. Without net neutrality, any provider could block or slow down messages it doesn’t like, including those from competitors. Or it can force low-income individuals or small businesses into Internet “slow lanes,” reserving faster speeds and swifter transmission for those who can afford to pay the most. This could impose real hardship on millions. In a wired world, those with the weakest wires are at a permanent and serious disadvantage. The winners in such a scenario will be the largest, wealthiest firms and individuals. The losers will be small businesses and people with low incomes. Of particular concern is the wireless field, where the FCC’s efforts to preserve net neutrality have been weakest. This weakness especially threatens communities of color: As documented in Greenlining’s 2011 report, ” iHealth “, people of color are less likely than whites to have broadband access at home and are more likely to access the Internet via a smartphone rather than a computer. At present, the FCC’s level of authority to preserve an open Internet is under dispute. Congress could solve the problem instantly by passing legislation such as S 74 , proposed last year. This bill would provide the FCC unquestioned authority to maintain a free Internet. Without federal action to preserve net neutrality, any of us could be forced into the slow lanes of the information superhighway.

Read the full article →

Matthew Knell: Jay-Z, a Social Fridge and Cats vs. Humans: The Best Brand Activations at SXSW 2012

March 16, 2012

Along with hosting a wide array of content, SXSW Interactive has become a showplace for companies trying to bring their brands to life for the thousands of people who attend the conference. As the price of a SXSW badge continues to rise , and the conference continues to spread its wings through larger parts of Austin with more than 15 sites spread out the city , larger brand activations have also grown from swag giveaways to include content and programming featuring experts on par with those speaking at panels. After a few days of unexpected Austin rain, I joined Kristin Ciccone and Grace Meiners of the AOL Advertising team for a walk around Austin to see how marketers brought brands to life. Here were some of our favorites: American Express Sync with Jay-Z Show It’s hard to discount the amazing job American Express did at SXSW. By launching their new Twitter sync product which allows you to tweet with hashtags to “load” discounts to your American Express card for major partners including Whole Foods, Zappos, McDonald’s, Virgin America and more, they were able to redefine social commerce. But on top of that, they offered up an amazing launch incentive for people to sync — a live performance featuring none other than Jay-Z, in as small of a venue as he has played in years — which required people to sync their cards, and present them early in the morning to receive tickets. I was lucky enough to qualify for tickets, and the show was amazing. The post show tweets on #JayZSyncShow were full of thanks to American Express for making things possible. Nothing better for brand sentiment than that. PepsiCo Central Pepsi brought back their Zeitgeist screen for another year, featuring social content contributed by conference attendees, on a giant screen designed to have the feel of a train station. The space also featured a series of product demos and nutritional facts, a social vending machine, and an interactive phone booth that words can’t even describe. Pepsi also hosted a schedule of brainstorming sessions featuring Gary Vaynerchuk , Toby Daniels of CrowdCentric, and Alexis Ohanian , founder of Reddit , amongst others. But my pick for the coolest swag of the conference, and the best interactive experience was the “What If” program, where they gave 200 conference attendees specially designed LiveScribe pens (pens with a little camera inside to record drawings and gestures) and notebooks to share their SXSW experience. Read Kristin’s interview with the folks who designed the program and learn more about the inspiration behind it. GE Garage Featuring a “social” refrigerator that opened only after 10 people checked in on Foursquare , a MakerBot Replicator 3D printer, a precision laser cutter, some folks welding (!) things, sample of products by Quirky (a brand that makes products submitted and voted on by users) and regularly scheduled demonstrations with people who, well, make stuff, the GE Garage was a genius way to bring GE’s component business to life for consumers. Take a deeper look at GE Garage on our Advertising Blog . Spotify House Spotify’s home away from home, east of the Convention Center, featured a home-y experience, live musical acts, and a respite from the craziness going on downtown. It opened its doors right in the gap between SXSW Interactive and SXSW Music, as the company sees itself as innovating in both worlds. We caught up with their crew and enjoyed a little chillout time . Friskies’ You vs Cat After my last post previewing some of the must-see panels at SXSW Interactive, one of the best e-mails I got was a request to come play Buddy the cat in a new iPad game called You vs Cat. I was more than happy to oblige, after all — cats and tech are pretty much the center of the Internet universe. Kristin and Grace and I dropped by to meet Buddy, play the game (we lost) and learned a little more about the inspiration for the product . Spotsi Knife Throwing Spotsi , a Portland-based startup that builds an app that facilitates user generated tours, took a very low tech and local approach to their activation — knife throwing! It was one of the more Texas things that we did and we talked with their CEO about the unexpected connection between their app and knife throwing. All in all, the marketers were out in force again this year, competing in a noisier than ever atmosphere. But for me, the brands who “won” SXSW were the ones who cut through the noise by telling their brand stories in the most actionable way possible. ( Thanks to Emily Hom for her editing support. )

Read the full article →

Brenda Peterson: Buying the New iPad3: A Moral Dilemma

March 14, 2012

It was midnight when I found myself hunched over my iMac, one finger poised over the “pre-order” button for the new IPad3. Maybe my defenses were down. Or my lust for all shiny things Apple was overly aroused by the live blogs and ecstatic hype for a faster processing chip, a super-charged camera, and a retina display more dazzling than my HD television. I’m sure my eyes were dilated, my breathing quickened, my body tense with excitement — like any addict. But I’d carefully worked out my budget. And the iPad3 wasn’t a luxury item. Every week I use my iPad2 to read and listen to books, to teach, to research, to take video and photos. With a wireless keyboard, I actually use my iPad2 as much as my computer. So why then did I hesitate to punch the “Purchase” button and send an iPad3 winging my way? I was paralyzed by a moral dilemma. In my mind I kept seeing a re-run of those photos of Foxconn, the Chinese factory that makes our fabulous Apple products. I was troubled by the images of wide, rope nets slung on the sides of the gargantuan building — to catch young and mortally stressed workers from jumping. Would my ordering another iPad condemn some bleary-eyed worker-servant to run and take the fatal leap? Didn’t every action affect everything else — like those proverbial butterfly wings whose luminous, silken flaps somehow change us all — even if we’re on the other side of the world? Wasn’t there now an ethical concern that I needed to factor into my purchasing power? I decided to do my research — loath as I was to discover anything more disturbing about my beloved Apple products. I jumped onboard the bright Google Chrome express to research and witness the many links to the story of Apple and Foxconn factory. My favorite articles were on Mashable.Tech with its spotlight on popular petitions demanding that Apple improve labor conditions at Foxxconn. Another excellent Mashable article pointed out that Foxxconn doesn’t just supply Apple, but also Amazon, Sony, IBM, Dell, HP, Samsung, Panasonic, Motorola, Nintendo, Microsoft, Nokia, and Intel. I was educated about Apple’s dominance in a New York Times article that Apple sells “forty percent of the world’s consumer electronics.” And that “Apple revenue topped $108 billion, a sum larger than the state budgets of Michigan, New Jersey, and Massachusetts.” I also listened to the This American Life segment, adapted from Mike Daisey’s one-man show, The Agony and Ecstasy of Steve Jobs . Daisey, an avowed Apple lover, has decided to wait to buy any new technology. A kind of tech Time Out. After all of this research, I signed a petition on TheSumofUs.org The petition urges Apple to step up and lead the way in factory labor improvements. I joined in asking Apple to “make the iPhone5 and your other products ethically.” The petition notes, “The quality of working conditions matters as much as the quality of your products.” It cites an unnamed Apple executive telling The New York Times , “Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.” How humane and far-sighted to ask that Apple, the world’s richest company, also lead the way in setting an ethical standard for workers. Now, that would be some Butterfly Effect. This week, the iPad3 debuts in stores. Already Apple has announced it has sold out of the new whiz-bang iPad3 in pre-sales; there will be several weeks to wait for more. Will this huge demand further stress overworked factories? I don’t want to feel guilty and ashamed when I buy my new iPad3. I don’t want to be haunted by those nets and workers who labor 12 hour days, six days a week, at less than $17 a day, with no overtime; young people who live in barracks and are exposed to toxic chemicals and forced to do repetitive motions until their joints wear away. It doesn’t matter that these workers are often better off than other Chinese laborers or that the Foxconn suicide rate is still less than the Chinese average . The world is watching how Apple will handle this moral dilemma. It just released an annual report on labor conditions, listing its suppliers by name for the first time. It also announced it was joining the Fair Labor Association. These are very good first steps; but they are reactions to exposes, not humane changes initiated by Apple. Apple can do much more. Think of it as good old American competition to see whether Apple or Microsoft, our tech overlords, can really make a difference in our bettering workers’ lives. Think beyond just profit. Think reputation, leadership, integrity. One thing you have to say about Bill Gates — he is a mighty generous philanthropist. Can’t Apple also use its massive profits to change the world? In the same way that Bill Gates uses his vast fortune to fight AIDS in Africa, Apple could use its clout to change working conditions in China and other “cheap labor” factories that make our tech toys. This Foxxconn dilemma offers Apple a new product to be developed: A People Product, in which Apple engages its considerable genius. Elevate those who make Apple products to the same esteemed level as Apple engineers, software designers, and buyers. Factor in the factory workers. At the end of the Nightline story on Apple and Foxconn , the reporter asks Louis Woo, the Foxxconn factory spokesman, “If Apple said, ‘Hey, out of the goodness of our hearts, because we’re doing so well, what if we paid everyone who touched an iPad double?’ Do you think that would work?” “Why not?” says Woo, “it would be good for the employees, good for China. Good for them and for us. Because we would have more stable workers who would love to work for our company because they would get paid a lot more than anyone else.” What an inspired idea! C’mon, Apple. Break the sweatshop tradition. For every iPad3 that is sold, double the salary of those who do the hands-on assembly. Make us Mac people proud, once again. Benda Peterson is the author of 17 books, including the recent memoir, I Want To Be Left Behind: Finding Rapture Here on Earth, which was named among the “Top Ten Best Non-Fiction Books of 2010″ by The Christian Science Monitor . Hew new book is Leopard and Silkie: One Boy’s Quest to Save Seal Pups.” For more: http://www.IWantToBeLeftBehind.com

Read the full article →

Mark Cuban: I Hope Yahoo Crushes Facebook in Its Patent Suit

March 13, 2012

Anyone who reads my blog knows how much I hate patent laws . I think 99 percent of the time they are anti-competitive, corruptive, impede creativity and innovation and can kill small businesses. I think the ratio of patent law doing a good job protecting company IP vs. it being used purely to negatively impact competitors or to troll for un-earned revenue is probably 1000 to 1, or worse. When I read that Yahoo was suing Facebook my immediate reaction was disdain. As I thought more about it, I came to realize that this case could be the watershed moment that causes enough people to recognize just how horrific our patent law is. I am not saying that there is zero value to patents. There are plenty of examples out of the however many patents that have been issued where the patent was put to legitimate use to protect a company from a large predator. It’s the law of big numbers. When there are enough of anything issued, some good will be done. Look at the patent that some individual has for a BCS Playoff System . I’m sure he was the first one to think of it and of course he should be protected from the BCS. Does patent law get any better than this? Seriously, there are industries where patents are used fairly to protect intellectual property. The technology industry is not one of them. Change is needed. However, its not going to come from our government. The lobbyists have taken over. One of the symptoms of the illness patents have caused the technology industry is the explosion of lobbyists pushing the agenda of big patent portfolio holders. They are not going to let our lawmakers give an inch. Rather than originating in Congress, its going to take a consumer uprising to cause change. What better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet ? If Yahoo were to be awarded $50 billion from Facebook, I think consumers may take notice. And don’t think that $50 billion should be an impossibility. If Yahoo’s patents truly are valid and recognize that they got Google to pay money for their Pay Per Click patent (acquired from Overture), then there is absolutely no reason why the same patent shouldn’t be valid against Facebook. The company looking at an IPO with a $100 billion market cap ! The same with the patent for personalizing pages. My.Yahoo.Com was way ahead of its time when it was introduced. Facebook is built on personalized pages. If ever a patent in this patent environment should be valid, these two should be valid in today’s world. Which is the exact reason why Yahoo should do everything possible to use the patents to tear apart Facebook with as large an award as it possibly can get. 1 billion. Peanuts. 10 billion, Peanuts. Start at 50 billion. After all, there is no way Facebook gets as large as it is without use of Yahoo’s patents. No personalized pages, no PPC, no Facebook IPO. No Facebook as we know it. This is what patents are for, right ? To protect companies with original IP from smarter, faster, aggressive companies who catch the imagination of consumers and advertisers. What else could patents be for? I hope Yahoo is awarded $50 billion. It is the only way that consumers will realize what is at stake with patent law as is. Then maybe we can get it right and further innovation and competition in this country. This post was first published on BlogMaverick.com .

Read the full article →

This App Could Seriously Change The Way You Make Friends

March 12, 2012

By Natasha Baker TORONTO (Reuters) – Looking to find new friends or business partners among the hundreds of people you encounter each week? A new app may help. The iPhone app called Highlight aims to transform how people meet by alerting users when they are physically near people with whom they share a connection such as mutual friends, similar interests or the same hometown. “Nothing affects our happiness or influences our lives more than the people around us. But the way we find or learn about them, is — and always has been — completely random and inefficient,” said Paul Davison, the founder of Highlight. “Take San Francisco as an example. It’s a city of 800,000 strangers. We sit on the bus and stand in line next to each other. But you don’t know anything about anyone that you pass by. That doesn’t seem weird, because it’s always been that way. But if you think about it, it’s kind of ridiculous,” he said. The Highlight app runs in the background on users’ devices. When it makes a connection it sends each user the other’s profile, including information such as names, photos, mutual connections and interests. It can include companies where they work, or neighborhoods where they live, if the information is provided on their Facebook profiles. The app displays each user’s current location on a map, within an accuracy of 35 to 50 meters (yards). Davison said the evolution of social technology during the past decade has shown the natural urge to share information about ourselves and our curiosity about the people around us. It is for these reasons that he thinks apps like Highlight, which have been defined as “people discovery” or “ambient awareness” will be embraced despite security concerns from critics. He cited Facebook, Foursquare and Twitter as examples of how users have embraced technology that had raised privacy concerns, according to Davison. “You see this pattern repeat over and over again. When they first launch, a lot of people look at it and say, ‘That’s weird, that’s creepy, why would I do that?’” “But then a small subset of people give it a shot and find out that it’s really fun and rewarding. Over time, more and more people see them having fun, and they hear good things about it, and they decide that the social benefits of being part of this thing and participating in this ecosystem outweigh the cost of the additional privacy they’re giving up.” Davison added that all participants opt-in to using the app. He said the company will have a heavy focus on security and adding more intelligence. For example, they will increase the ways in which Highlight identifies and makes a connection, depending on circumstances. “If you and I are friends and both live in San Francisco and are three miles apart, that’s not that interesting. But if you and I are both in Kansas three miles apart — and didn’t travel there together — that’s really interesting,” he said. Similar people discovery apps include Glancee, Sonar and Banjo. (Reporting by Natasha Baker; editing by Bob Tourtellotte and Patricia Reaney)

Read the full article →

Google’s Social Chief Explains What Google+ Is (But Not Why To Use It)

March 10, 2012

AUSTIN, Texas — Google+ has been called a “ghost town,” a “little version of Facebook” and “dead” since its launch last year. Users have continually questioned what it is and why they would want to use it. Google’s senior vice president of social business, Vic Gundotra, attempted to rebut critics’ claims during a panel at South by Southwest on Friday and defended Google+ against allegations that users are fleeing a stagnant service. Traffic has declined more than 30 percent in the past four months , according to one estimate . To hear Gundotra tell it, Google+ is a thriving social service that allows Google to better serve its users by personalizing their experiences on its numerous products, from Gmail to YouTube. Asked to explain what Google+ is exactly, Gundotra answered, “At its simplest level, Google+ is a social layer across all of Google’s services.” Gundotra described Google+ as intimately intertwined with the whole of the Google experience, rather than an independent, standalone product. Google+ is Google, according to Gundotra. “You can think of Google+ as Google 2.0. It’s the next generation of Google,” Gundotra said. “The old Google was siloed; your identity and how you share with your family was different across each product.” He added, “In the new version of Google, we know your name, we understand your circles and we make every service better.” To “make every service better,” Google seeks to pull in even more information about its users — specifically, who they’re friends with and whose opinions they trust — and break down barriers between its products so the company can use data gathered on one service, such as Google+, to customize a user’s experience on another site, such as YouTube. “There are some things Google could have done better,” Gundotra said. “While we’ve organized the world’s pages and information, we asked ourselves, What if Google did more than understand pages but understood people? What if we could become an engine not just for information but really understood individuals? It would unlock all sorts of scenarios.” Despite mounting a vigorous defense of Google+, Gundotra failed to answer in any depth why users would want to use Google+ instead of (or even in addition to) competing social sites . So far, users don’t seem to find Google+ all that compelling: The Wall Street Journal notes that , according to comScore, “[v]isitors using personal computers spent an average of about three minutes a month on Google+ between September and January, versus six to seven hours on Facebook each month over the same period.” The closest Gundotra came to an explanation was to say that using Google+ would improve an individuals’ experience on Google and deliver more personalized ads. The latter could be seen as benefiting Google more than the user, however. He also briefly noted that the ads on Google+ are less intrusive than those of its competitors and its privacy policies more respectful. “The idea that Google could know your name and the people that matter in your life is important. It’s amazing how much better Google can be if we even know the tiniest bit about you about you,” Gundotra said. Gundotra shared statistics that he argued show Google+ is bustling with activity. Yet a closer look at the numbers reveals some tricky accounting. Gundotra said that Google+ has 100 million users who return to the site monthly and 50 million who return daily. But those users aren’t necessarily checking Google+. Those figures include users signed in to a Google+ account who are using any one of Google’s suite of services, from search to Google Maps to Gmail. His other message to Google+ critics: You might be using it wrong. “Make sure you’re using it correctly,” Gundotra said, when asked what he’d tell columnists who argue Google+ is empty.

Read the full article →

What Happens When A Suggested Facebook ‘Friend’ Is Your Husband’s Other Wife?

March 10, 2012

SEATTLE — A corrections officer is facing bigamy charges after authorities said a Washington woman using Facebook discovered that she and a potential “friend” were married to him at the same time. According to charging documents filed Thursday, Alan L. O’Neill married a woman in 2001, moved out in 2009, changed his name and remarried without divorcing her. The first wife first noticed O’Neill had moved on to another woman when Facebook suggested the friendship connection to wife No. 2 under the “People You May Know” feature. “Wife No. 1 went to wife No. 2′s page and saw a picture of her and her husband with a wedding cake,” Pierce County Prosecutor Mark Lindquist told The Associated Press. Wife No. 1 then called the defendant’s mother. “An hour later the defendant arrived at (Wife No. 1′s) apartment, and she asked him several times if they were divorced,” court records show. “The defendant said, `No, we are still married.’” Neither O’Neill nor his first wife had filed for divorce, according to charging documents. The name change came in December, and later that month he married his second wife. O’Neill allegedly told wife No. 1 not to tell anybody about his dual marriages, that he would fix it, the documents state. But wife No. 1 alerted authorities. “Facebook is now a place where people discover things about each other they end up reporting to law enforcement,” Lindquist said. Athima Chansanchai, a freelance journalist who writes about social media, said Facebook over the years has played a role in both creating relationships and destroying them. “It’s just the latest vessel by which people can stray if they want to,” she said. O’Neill, 41, was previously known as Alan Fulk. He has worked as a Pierce County corrections officer for five years, sheriff’s spokesman Ed Troyer said. He was placed on administrative leave after prosecutors charged him Thursday. He could face up to a year in jail if convicted. O’Neill and his first wife had issues that went back to 2009. In 2010, his first wife was arrested after an altercation with the woman who later became the second wife. A Facebook message to wife No. 1 was not immediately returned. There was no immediate phone number available for O’Neill and his second wife. Lindquist said it’s unclear why O’Neill and wife No. 1 didn’t go through the divorce. “Every few years we see one of these (bigamy) cases,” he added. O’Neill is free, but due in court later this month, which is standard procedure for non-violent crimes, Lindquist said. “About the only danger he would pose is marrying a third woman,” he said.

Read the full article →

Apple And Its Ilk May Take Nasdaq 100 Hostage

March 9, 2012

By Ryan Vlastelica NEW YORK (Reuters) – A year ago, Apple had its weight in the Nasdaq 100 cut in half after having grown to where it tipped the scales at more than one-fifth of the index. The cut didn’t last. Apple, along with a few stocks that have surged in recent months, could soon represent nearly half the index, making this index of 100 well-known companies a hostage to the performance of a few technology titans. The concentration of Apple, along with others, in the index’s market cap-based weighting is exasperating for investors, who don’t dispute that Apple should be the biggest weight but bemoan the size of its influence. “There should be some limitation on how much is held in a particular name,” said Mark Bronzo, a money manager at the Irvington, New York-based Security Global Investors, which manages $22 billion. Apple Inc was cut to 12.3 percent from 20.5 percent of the index in April 2011, but a surge in price has pushed it back up to 17.2 percent — and the other big names have seen their share prices balloon as well. A rebalance of the index will be triggered if Apple grows to more than 24 percent, or if the collective weight of all components over 4.5 percent exceeds 48 percent. Along with Apple, the four names dominating the average are Google Inc , Microsoft Corp , Intel Corp and Oracle Corp . The growth of the top five companies increases the likelihood that the biggest names in the average will soon make up 48 percent of the Nasdaq 100 . “When you construct an index that is supposed to be a market benchmark, it shouldn’t just represent a handful of names,” said Bronzo. Currently, Microsoft is the second-largest component, with a weighting of 9.4 percent, followed by Google (5.5 percent) Oracle (5.3 percent) and Intel (4.8 percent). At the rebalance, Microsoft’s weighting was bumped to 8.3 percent from 3.4 percent, and it has grown since. The five top names add up to 42.2 percent. That’s up from 37.3 percent when the index was rebalanced, so their influence is growing but has not reached a point where a rebalance will occur. “No rebalancing is imminent, and if it happens, people will know about it weeks in advance,” said John Jacobs, who runs the Nasdaq OMX Global Index Group in New York. Apple’s weighting was cut in 2011, as the Nasdaq felt it necessary to give more weight to other names that had shrunk in terms of their influence because of previous rebalancings. Even with the other stocks taking a bigger part of the average, Apple is still the $500 billion gorilla. The outsized influence of the technology giant means that on days when the Nasdaq sees big swings, Apple is the primary driver. How much does it matter? The stock’s nearly 30 percent gains year-to-date are responsible for essentially all of the Nasdaq 100′s 13.4 percent rise in 2012. “Apple has such a big weighting that it makes fundamentals less important for other names in the index, resulting in an environment where Dell Inc can trade based on the number of iPads Apple sells,” said Todd Schoenberger, managing director at LandColt Trading in Wilmington, Delaware. If Apple stock falls, Schoenberger said, “the whole tech sector is unfairly vulnerable.” This isn’t to say the stock’s influence on the index is completely out of whack. The Dow Jones Industrial Average is weighted by price, so International Business Machines , the third-largest stock in that average in terms of market value, accounts for nearly 12 percent of the index, more than six times the weight of Microsoft, which is a bigger company. Nasdaq OMX Group , which operates the Nasdaq 100, can also rebalance “if it is determined necessary to maintain the integrity of the index,” a spokesman said. Apple’s return to a weighting near its previous one has come as its market cap has risen by about 58 percent since April 2011, when the rebalancing first occurred. Paul Brigandi, vice president of trading at Direxion Funds in New York, said he would support a cut in Apple’s weight “for diversification purposes, as concentration in a few names is a concern.” Direxion operates a leveraged mutual fund that is tied to the Nasdaq 100 and is down 2 percent this month. “Apple has a huge impact on the performance of the fund, and if it corrects that will impact total Nasdaq performance,” Brigandi said. “That’s a valid concern, and not one we can do anything about.” (Editing by Andrea Evans)

Read the full article →

Fake Pop Star Sells Out Shows In Japan

March 9, 2012

By Chris Meyers TOKYO (Reuters) – Hatsune Miku has a following that would make most Japanese pop stars green with envy, with thousands of fans at every concert and a big international following. She never misses a beat, fluffs a line or messes up a step. But then she doesn’t really exist. Hatsune Miku is computer generated, based on a voice-synthesizing programme developed by the company Crypton Future Media that allows users to create their own music. Her image was produced by the company, but her music is a creation of her fans, Her best songs — the ones headlined at her concerts — have emerged from more than 20 different people. The fans know what the fans like. All 10,000 tickets for the digital diva’s four shows in Tokyo — two on Thursday and two on Friday — sold out in hours despite the 6,300 yen ($76) ticket price. Hatsune Miku was projected onto the stage at the shows while thousands of other fans packed into 24 cinemas to watch live. “It was absolutely amazing, it’s like my heart is still dancing. I don’t think I’ll be able to sleep,” 21-year-old Yuya Ofuji said as she came out of a concert. Another fan, Hazuki Koide, showed her dedication by dressing up as Hatsune Miku. “I’ve liked her for a long time and wasn’t able to come to the concert last year and watched it in a movie theatre. But this year I thought that I absolutely had to make it,” Koide said. The concert, billed as possibly Hatsune Miku’s last, was also broadcast in cinemas in Shanghai, Hong Kong and Taiwan. Some fans came from further afield to catch what could be their idol’s last gig. “We thought we really had to make a real effort to come because we wouldn’t get a chance to see her in the future,” said Daniel Noll who flew in from Australia. It’s not clear why organizers said these shows could be Hatsune Miku’s last, but if they are, she’ll be going out on a high. Some online polls have her down as the most-requested singer for the London Olympics opening ceremony. Whatever her future, the virtual star has made a real difference to many fans, they say. “She gave a lot of people that didn’t have a voice, a voice to express their feelings and thoughts,” Noll said. (Editing by Elaine Lies and Robert Birsel)

Read the full article →

Google Threatens To Ban Apps That Don’t Play By Its Rules

March 8, 2012

By Alistair Barr SAN FRANCISCO (Reuters) – Google Inc has been pressuring applications and mobile game developers to use its costlier in-house payment service, Google Wallet, as the Internet search giant tries to emulate the financial success of Apple Inc’s iOS platform. Google warned several developers in recent months that if they continued to use other payment methods – such as PayPal, Zong and Boku – their apps would be removed from Android Market, now known as Google Play, according to developers, executives and investors in mobile gaming and payment sectors. Developers say the Internet search giant is trying to simplify consumer payments, hoping apps-buying will rise and offset their higher costs. Google’s payment service charges a higher cut per transaction than some rivals’. But the move also suggests Google is using its powerful position in the mobile apps market to promote an in-house offering. “Although this move by Google might seem high-handed, it reduces the friction for purchases inside Android apps and therefore makes users more valuable,” said Hugo Troche, chief executive of Appsperse, a cross-promotion network for app discovery. A Google spokesman declined to comment on Thursday. Android Market, or Google Play as it is now known, is the company’s answer to Apple’s apps store, where consumers browse and buy or download everything from games and music to individual software or applications. Google wants Google Wallet to be the dominant way that people pay for anything on this platform. In one email sent to a developer in late August, Google said the developer had 30 days to comply, otherwise the developer’s apps would be “suspended” from Android Market. Reuters obtained a copy of the email this week. “They told people that if they used other payment services they would be breaking the terms of use,” said Si Shen, founder and chief executive of Papaya, a social gaming network on Android. “Whether it’s right or wrong, we have to follow the rules.” Papaya placed social games on Android more than two years ago. At that time, the search company’s payment service – now known as Google Wallet – was not available for Android app payments, Shen explained. She said Papaya used PayPal, owned by eBay Inc, and Zong, a mobile payments company that has since been acquired by eBay. Papaya has now dropped PayPal and Zong in favor of Google Wallet for in-app billing, she said. “If we had a choice, the freedom to choose which billing service, then that’s even better. But if we have to follow the rules, we will,” she added. “I want to maintain a very good relationship with Google. We are very collaborative. It’s very important to the business.” MOTIVES The initiative is important for Google. While Android Market has been a hit in terms of the number of smartphones using the platform, there has not been a commensurate increase in purchase activity by users. In early 2011, Android platform manager Eric Chu told a conference that while the number of Android smartphone users was surging, the number of purchases of paid apps in the Android Market was not doing nearly as well, Forbes reported. This is partly because the buying experience has been varied and confusing for users – reducing the chance that they will go through with a purchase, something known as conversion. By pushing all app developers to use Google’s payment system, the experience should be simpler, increasing conversion. “On Android it used to be laissez faire – you could use any payment provider you liked,” said Todd Hooper, chief executive of Zipline Games. “It’s probably naive of developers to think they could keep choosing different payment providers,” he added. “If purchasing on Android is all over the place, that is worrying.” Apple’s iOS platform generates higher conversion rates mainly because the company required developers to use its own payment system from day one, according to Hooper and others. “This is one of the things that has helped Apple succeed,” said Charles Hudson of Bionic Panda Games, an Android-focused mobile social games company in San Francisco. “Every single developer is using the Apple payment system. Google sees the benefits that provides for the Apple platform and wants to create a similar system.” When Bionic Panda started on Android Market about a year ago, Google Wallet was not available, so the company used PayPal initially, Hudson said. It switched exclusively to Google Wallet around the spring of 2011, he added. Developers using Google Wallet typically have to pay Google a 30 percent cut of revenue from purchases – higher than the cut taken by rival third-party payment services. But Hudson and other developers said this may be worth it, if conversion rates increase. When Bionic Panda dropped PayPal it lost some customers, but there was “an overall lift in conversion and monetization on a per-user basis,” Hudson said. “Without having to chose your payment option it’s closer to the one-click experience of the Apple iOS platform,” he added. “The convenience factor would outweigh customer losses.” (Editing by Edwin Chan and Matthew Lewis)

Read the full article →

Bianca Bosker: Why The New iPad Is Like Madonna

March 8, 2012

Apple’s name for the new iPad is “the new iPad.” Or to be more specific, just “iPad.” The third generation of the company’s tablet has bucked Apple’s own tradition of numbering models chronologically — it was widely expected to be the “iPad 3″ — to distinguish them from their predecessors. Whereas the first iPhone was followed by the iPhone 3G and 3GS, then iPhone 4 and 4S, the iPad has gone from “iPad 2″ back to plain old “iPad.” The name change (or lack thereof) has left some people frustrated. Many are confused as to what to call the tablet , disappointed, and altogether displeased. “Let’s be honest, the name ‘The New iPad’ is already a $10 billion mistake, black eye on the Tim Cook era, and it’s an hour old,” tweeted one user . Another chimed in , “So, just to confirm: Apple created a new iPad, declined to give it a real name and barely changed it from the last one? No thanks.” Apple’s senior vice president of worldwide marketing Phil Schiller told Fortune’s Miguel Helft Apple chose the name because the company doesn’t “like to be predictable.” But that pithy response glosses over the fundamental logic and branding genius of the return to a moniker devoid of numbers or acronyms. With a single word, Apple has signaled to consumers they should consider the iPad heir to the PC throne, while accentuating the differences between its device and rivals. Whereas Apple’s iOS devices each have suffixes that distinguish one version from another, its PCs have kept the same name from generation to generation. The first MacBook Air, launched in 2008, was called the MacBook Air, as were all subsequent versions of the laptop. And whether the device has an 11-inch screen or a 13-inch screen, a Core i5 or Core i7 processor, 2 GB of memory or 4GB, it’s still the “MacBook Air” — no “MacBook Air 4″ or “MacBook Air 13.4.” Likewise, Apple’s iMac has been “iMac” for more than a decade. Calling the latest iPad “iPad” links the tablet more directly to Apple’s stable of PC devices and suggests the gadget isn’t to be seen as an accessory, but a staple — something to be relied on for multiple generations, or even as a substitute for a PC. “iPad” also shifts the focus away from how the device has evolved and instead emphasizes that it belongs to a class of devices all its own. Apple CEO Tim Cook proclaimed that Apple has “its feet firmly planted in the post-PC future,” noting that 76 percent of the company’s revenue stems from sales of iOS devices. The iPad name is one more way Apple has affirmed this. Apple has also used the one-word “iPad” to distinguish its tablet from a growing number of Android competitors, which, almost as a rule, have impossible-to-remember names that rival the titles of British aristocrats for complexity and wordiness . Tablets touted as alternatives to the iPad include the critically-acclaimed “Asus Eee Pad Transformer Prime” and even more befuddling “Asus Eee Pad Slider SL 101″ — both solid devices, but difficult to ask for by name. Samsung has used a system of numbers (with decimals!?) and words to distinguish between versions of its Galaxy Tab. The company’s line of tablets include the Galaxy Tab 7.7, Galaxy Tab 7.0 Plus, Galaxy Tab 8.9, and Galaxy Tab 10.1, titles that correspond only generally to the capabilities of each device. The onerous names of Android gadgets have become so notorious that they’ve spawned a website , “Android Phone Name Generator,” mocks smartphones’ names with titles such as “Acer Liquid Vivid Z E G1.” The simplicity of the iPad’s name not only makes it easy to remember, but suggests that Apple’s tablet is exceptional. Madonna doesn’t need a last name. Nor does the iPad, it seems. Check out the slideshow (below) for everything you need to know about the new iPad .

Read the full article →

Apple Announces New iOS

March 7, 2012

Developing: Updates to follow Apple has announced that iOS 5.1, the newest version of its mobile operating system, will be available for download starting today. The latest version of iOS will offer Siri, the voice-controlled personal assistant, in Japanese, according to Apple CEO Tim Cook. (We’re assuming it’ll have more features than that, and will update the post as they’re announced) “Siri is your best friend, your intelligent personal assistant who gets things done just by asking. It’s a whole new way of interfacing with your phone, and our customers tell us that they love it,” Cook said during Apple’s press conference Wednesday, according to gdgt So, how can you download iOS 5.1? Well, if your iPad or iPhone is already running a version of iOS 5, and you’re connected to a WiFi network, then you don’t have to plug in a thing: Just follow the handy instructions in the slideshow below. For photos from Apple’s March 7 event, check out the slideshow (below).

Read the full article →

More Lawyers Join Man’s Fight For Facebook Ownership

March 5, 2012

BUFFALO, N.Y. — An upstate New York man who says he’s entitled to half ownership of Facebook has added five attorneys to his legal team. Paul Ceglia’s (SEHG-lee-uhs) lead attorney, Dean Boland, said Monday that the addition of the lawyers should be seen as an indication of the case’s strength. Ceglia is suing Facebook and founder Mark Zuckerberg in federal court in Buffalo. Ceglia says a contract he signed with the then-Harvard University freshman in 2003 entitles him to half of the multibillion-dollar social networking site. Lawyers for the Menlo Park, Calif.-based company say the contract is doctored and had nothing to do with Facebook. The social networking site has 845 million users and recorded $3.7 billion in revenue last year. A scheduling conference is set for April 4.

Read the full article →

Michael Jackson’s Back Catalog Reportedly Stolen By Hackers

March 5, 2012

Sony (NYSE: SNE) is facing yet another major security breach. Hackers reportedly illegally downloaded over Michael Jackson’s entire back catalog, consisting of 50,000 tracks, many never released. Sony purchased the catalog from Jackson’s estate for $250 (£157.51) million last year.

Read the full article →

Foursquare Co-Founder Is Leaving

March 5, 2012

Is there a way to check-out on Foursquare? Either way, Naveen Selvadurai is doing it. The location based service’s co-founder announced on Sunday that March will be his last month at the company. On his blog Selvadurai writes that while he will continue to be involved with Foursquare (he’s on the board and will continue to advise the company), he hopes to get back to “what I love most — being an entrepreneur, learning and building new things.” “[A]fter three years, I feel I’ve done all I can do and I’m moving on,” Selvadurai writes in his blog post. “Going forward, I’m going to continue to be connected to the company: I’m on the board, I’ll still be advising, and I’m obviously going to be the single most vocal user. But the spring is time for things that are new, and I realize that I have a desire to do something new as well.” A Foursquare spokeswoman said in an email statement to The Huffington Post: When Naveen and Dennis launched foursquare at SXSW 2009, they had a few hundred beta testers. Now, as we approach our third birthday, we have a community of over 15 million that has checked in over 1.5 billion times. This wouldn’t have been possible without Naveen’s creativity, vision, and tireless work. We’re sad to see him go, but excited to see what he builds next. We can’t thank him enough for everything he’s done to make foursquare what it is today. The announcement comes days before Foursquare’s third anniversary. Selvadurai and founding partner Dennis Crowley launched the service at Austin’s tech, music and film extravaganza SXSW in 2009. Foursquare allows users to share their real-time locations by “checking-in” at venues using an app on their smartphone. Each check-in confers points which go towards rewards such as becoming the “Mayor” of a location or acquiring venue specific badges. Check-ins also can be used to claim discounts and loyalty rewards. In his blog post Selvadurai writes with pride about the company’s quick success: [I]t’s hard to believe that now, three years later, instead of one hundred beta testers, the company has over a hundred incredibly talented employees helping us realize that vision. and they’re building amazing things. In June of last year, the company announced via blog post that there were more than 10 million Foursquare users around the world. Now, there are over 15 million. According to CNET, 750,000 merchants have signed up to participate in the service. Selvadurai was a software architect for Sony when he began working with Crowley on a program that would allow people to digitally bookmark the places they’d been around the city. In June 2011 TechCrunch reported that Foursquare had a reported valuation of between $500-600 million.

Read the full article →

Yelp To IPO Today

March 2, 2012

By Aman Shah (Reuters) – Yelp Inc priced its initial public offering of class A common stock at $15 a share, above the expected price range, valuing the U.S. consumer review website at nearly $900 million. The offering generated $106.5 million in proceeds for the company, which offers online reviews of local businesses and services. Earlier this month, Yelp had said it would sell 7.1 million of the 7.15 million shares in the offering at between $12 and $14 a share. The company, founded by former PayPal engineers Jeremy Stoppelman and Russel Simmons as a start-up idea in a business incubator in 2004, is active in 46 markets in the United States and 25 international markets as of the end of last year. Yelp shares will begin trading on Friday on the New York Stock Exchange under the symbol “YELP.” FIRST-DAY STOCK POP SEEN The stock is expected to see a first-day pop in its price just like peers Groupon and Angie’s List, but concerns persist about its long-term earnings potential and over-dependence on advertising as a revenue generator. The San Francisco-based company has incurred losses since inception, and had an accumulated debt of about $41.2 million as of December 31. For the year ended December 31, 2011, Yelp recorded a loss of about $17 million but saw revenue jump 74 percent to $83.3 million. Like a slew of recent tech and Internet offerings and the upcoming Facebook IPO, Yelp will have two classes of stock — class A shares being offered to the public worth one vote and class B shares with 10 votes each. This structure is seen by many as a method to keep voting power restricted to the major stockholders as the outstanding class B common stock will represent about 98.7 percent of voting power following the offering. Goldman Sachs is the lead bookrunning manager for the offering, while Citigroup and Jefferies acted as joint bookrunning managers. (Editing by Richard Pullin and Muralikumar Anantharaman)

Read the full article →

Is True Innovation Over?

February 27, 2012

Innovation is what America has always been about,” President Obama remarked in his recent State of the Union address. It’s hard to disagree, isn’t it? We live in a world dominated by innovative American companies like Apple, Microsoft, Google and Facebook. And even in the face of a recession, Silicon Valley’s relentless entrepreneurs have continued to churn out start-up companies with outsize, world-changing ambitions. But we idealize America’s present culture of innovation too much. In fact, our trailblazing digital firms may not be the hothouse environments for creativity we might think. I find myself arriving at these doubts after spending five years looking at the innovative process at Bell Labs, the onetime research and development organization of the country’s formerly monopolistic telephone company, AT&T.

Read the full article →

Matthew Knell: 5 Reasons Niche Social Networks Are Winning New Users

February 24, 2012

One constant through the many evolutions of Internet platforms is the fickleness of human beings. Especially when asked to make quick decisions. Successful products have been driven by the combination of: The “right” feature set Clarity in purpose And most importantly, the vibrant nature of communities and how accessible they are to the user. Indeed, social media users have gone from having options limited by the technical feasibility of what they are trying to accomplish, to being left with a barrage of decisions to make about what, how, and with who they socialize their content. They’re running into too many choices of types and places to share their content. And, increasingly, they’re also running into one parameter that’s impossible to change — the number of hours in the day. We Are Leaving The Shopping Malls So, what’s starting to happen? People, especially early adopters and power users, are taking time away from the “shopping mall” social networks — Facebook and Twitter, for purposes of this discussion — where people can conceivably get anything they want, but have to do a lot of filtering and sorting and following and set up. Instead, they are starting to turn towards specialized niche social networks to get one type of content that may be most properly appealing to them. Compare to a real-world scenario: let’s say if you’re a marathon runner, and are looking for a new pair of shoes. You may be fine going to Target, because they sell sneakers, but their selection probably isn’t aimed at you. You could try a Foot Locker, and you may have better luck, but you may be out of luck if you have flat feet, or a high arch, or need width. At the end of the day, many people go to a store where they have people who can share their expertise with running and know how to fit you best for shoes. Now if you knew that ahead of time, wouldn’t you go to the specialty store first? To me? The Target for your content is Facebook, the Foot Locker is Twitter, and the specialty stores? I’d wager them as Pinterest, Instagram, Foursquare and Tumblr. Facebook’s Big Problem I think that Facebook’s problem has become trying to be too many things to too many people and Twitter has always struggled with people who are new to the service understanding the ecosystem. As Twitter and Facebook start to move their ad products public, it is in their best interest to have users share as much content as possible because it allows them the space to insert ads into the content stream. And this is the last holy grail of social advertising, and why these niche networks will continue to succeed — it’s an area the “shopping malls” don’t want to play in anymore. In a quantity vs quality comparison, on a per piece of content basis, quantity almost never wins. Why are these niche networks appealing? I think it’s because the decision set has been limited, the options to act have been filtered, the context and actions are clear, the complexity has been largely removed, and the onus is on creativity and curation. (I’d be lying if anyone ever said to me, “man, you have an amazing Facebook page.”) Here are five reasons why I think niche networks are starting to win some users away: 1. There are limited explicit options about what and how to share. On Instagram, you’re sharing photographs with a quick way to customize. With Foursquare, you’re telling people where you are and who you’re with. With Pinterest, you’re telling people what you want. With Tumblr, you’re giving a very limited set of options to share your content, and encourage to keep it short and to the point. It’s a classic web design tenet — don’t make the user think too much, and they will be more likely to do something. 2. The action is both spontaneous and lasting. At point of creation or curation, the user decision set is limited, often reactionary, doesn’t take a lot of effort and all take care to make your content broadcast able to the audience that you want, and store it for easier review and curation. 3. Each action builds towards a collection of content that you can control and edit at any time. Facebook is certainly trying to do this with Timeline, but the daunting task of reviewing and curating content prior to the middle of 2011 is too much for many long time users who don’t want the stress of trying to figure out who the audience is. There is emotional and archival value in your Pinboards, or your Tumblr blog or your Instagram stream. Your Foursquare check-in history reminds you of where you where and what you did both on a global scale, and every time you check-in. If you choose to go further, all of these services have a secondary system for organizing your content via tags (Tumblr, Instagram), or through groupings (boards and tips and lists), but you are under no obligation to use them. You’re building your own unique canvas – you’re creating something to last. 4. Your collection is much likely to be about one thing, or related sets of things. I’ve seen Pinterest boards about everything from shoes, to fashion, to best football teams, to memes, Tumblrs about everything from Kim Jong Il , to one featuring the same picture of Full House star Dave Coulier . Foursquare reminds you that you’re really into movie theaters, Apple stores, pizza joints or karaoke bars by awarding you leveled badges based on your activity there. Instagram photo streams capture the eye of the photographer and often revolve around the things they like to shoot. 5. There is a built-in community online around content discovery. If you’re new to these communities, there are a host of people who can show you the way to best utilize these tools, either implicitly or explicitly, and thus make it easier to discover people with like interested. Discovery tools allow the random serendipity that makes social media great to connect people across shared content interests. — The explosive growth of Pinterest , Instagram , Foursquare and Tumblr are no longer something marketers can ignore. And remember, user choice always wins; for every Facebook, Twitter and Foursquare, there is a Friendster, Pownce and Gowalla. So what’s a marketer to do with these new channels? (Originally posted on the Social Fresh blog )

Read the full article →

Apple CEO Says Company Has More Cash Than It Needs

February 23, 2012

CUPERTINO, Calif. — Apple CEO Tim Cook believes the world’s most valuable company has more money than it needs. His next challenge is to figure out whether Apple should break from the cash-hoarding ways of his predecessor, the late Steve Jobs, and dip into its $98 billion bank account to pay shareholders a dividend this year. During a question-and-answer session Thursday at the company’s annual shareholders’ meeting, Cook indicated he and the rest of Apple’s board are nearing a decision. The board and management are “thinking about this very deeply,” Cook said. “This isn’t a case where 100 percent of people are going to agree with what we do.” The question of how to handle Apple’s cash stockpile is a touchy one, partly because company co-founder Jobs had steadfastly brushed aside suggestions that the company restore its quarterly dividend. Apple stopped making the shareholder payments in 1995 when it was in such deep trouble that it needed to hold on to every cent. Things got so bad that Apple turned to rival Microsoft Corp. in 1997 for $150 million infusion to stay afloat. Microsoft came to the rescue at the same time Apple named Jobs as its CEO – a decision that turned out to be one of the smartest business moves ever made. Haunted by memories of Apple’s grim times, Jobs kept accumulating cash even as the company’s fortunes soared during the final decade of his life. Cook, though, appears willing to return some of the cash to shareholders since he succeeded Jobs as Apple’s CEO last August. Jobs died Oct. 5 after a long battle with cancer. During Thursday’s meeting, Cook dropped his strongest hint yet that Apple will part with some of the money. “Frankly speaking,” Cook said, “it’s more than we need to run the company.” One Apple shareholder, Asif Khan of Sugar Land, Texas, urged Cook to resist committing to dividend every three months. He thinks it makes more sense for Apple to pay a one-time dividend later this year before the expiration of a provision that limits the federal tax rate on dividends to 15 percent. If Apple opts for a regular quarterly dividend, Khan is worried it might be misinterpreted by some investors as a sign that Apple is losing confidence in its ability to keep propelling its stock price higher as the company churns out hit products such as the iPhone and iPad. During the past year, Apple’s stock has surged 50 percent to create about $160 billion in shareholder wealth Apple now has a market value of $480 billion – more than the combined value of Microsoft and prominent rival, Google Inc. Apple shares gained $3.35 Thursday to close at $516.39. The high price sparked a question Thursday about whether Apple plans to split its stock to make it more affordable to buy. Cook indicated it’s unlikely to occur, saying the board has studied the history of other companies that regularly split their stock and concluded “it does nothing” for long-term returns.” Apple last split its stock seven years ago. The shares have increased 11-fold since then. Although most of those gains occurred under Jobs’ leadership, Apple’s stock and financial results have remained stellar under Cook, Job’s hand-picked successor. Cook has worked as a top Apple executive since 1998. Given how well Apple has been doing, shareholders had little reason to complain at Thursday’s hour-long meeting. While shareholders waited in a 40-minute line to get inside the meeting at Apple’s Cupertino, Calif. headquarters, a few protesters carried signs urging the company to ensure that workers building its products in Taiwanese and Chinese factories are paid more and treated humanely. “Stop iSweatshop,” one sign implored. Another stated: `iWant an ethical phone.” No questions about the conditions in Apple’s overseas factories were posed during the meeting. In other matters, Apple agreed to adopt a proposal from the public pension fund Calpers that will require all of the company’s directors to receive a majority of shareholder votes to remain on the board. The proposal was backed by more than 80 percent of the shareholder votes counted in the preliminary results announced by Apple Thursday. All eight of Apple’s current directors were re-elected with at least 81 percent of the shareholder votes in the preliminary results, so the switch to majority-voting rules wouldn’t have changed this year’s outcome if the new rules had already been in effect.

Read the full article →

Even His ‘Fastidious Narcisissm’ Couldn’t Keep Steve Jobs Smelling Good

February 22, 2012

Steve Jobs, the book, is very much a product of its time, which is to say, a product of its subject’s fastidious narcissism and the broader culture’s limitless capacity for nurturing it.

Read the full article →

FCC Pressures Internet Providers To Protect Customers From Internet Fraud

February 22, 2012

WASHINGTON (Reuters) – Internet service providers need to work harder to prevent hacks, data theft and other fraud, including contacting customers whose infected computers have been hijacked by organized crime and helping them clean out viruses, the head of the Federal Communications Commission said on Wednesday. FCC Chairman Julius Genachowski said he sought “smart, practical, voluntary solutions” to the massive problem of Internet fraud and data theft. He estimated that 8.4 million credit card numbers are stolen online each year. Policymakers are eager to prevent security problems and subsequent bad publicity from slowing the growth of the Internet market, worth about $8 trillion a year. “If consumers lose trust in the Internet, this will suppress broadband adoption and online commerce and communication, and all the benefits that come with it,” Genachowski said in a speech. In addition to helping customers whose computers have been pulled into a botnet, a network of computers used to send spam aimed at committing fraud, Genachowski urged network owners to adopt standards to ensure that Internet traffic goes through the most efficient route and to prevent any hijacking. That step would presumably prevent a repeat of a 2010 incident where some 15 percent of Internet traffic was diverted through Chinese servers for about 18 minutes, said Genachowski. The reason for the diversion, whether an innocent mistake or cyber espionage, has never been established. Lastly, Genachowski urged Internet providers to adopt a system called DNSSEC to ensure that if an Internet user, for example, types the Internet address of their bank that they will go to their bank’s web site rather than a fraudulent web site designed to steal passwords. Comcast, which already contacts customers who have been pulled into botnets and which already uses DNSSEC, praised the chairman’s speech. “To be effective, everyone who is a part of the Internet ecosystem must play a meaningful role in ensuring that private and government networks, and personal computers and devices are secured,” said Comcast/NBCUniversal President Kyle McSlarrow in a blog posting. There was no immediate reaction from Verizon or AT&T Inc. Internet security experts were pleased at the prospect of Internet service providers informing customers when their machines were pulled into criminal botnets, and helping them clean up their machines. “The notification has to happen in some way. I think it’s overdue,” said Johannes Ullrich, a cybersecurity specialist at the SANS Institute Internet Storm Center, which monitors threats. Some of the ISPs found that it was cheaper to notify customers before they telephoned to complain. “If you’re infected with malware, your computer is going to be slow. And the first thing they (customers with slow computers) do is call the ISP,” said Ullrich. Dmitri Alperovitch, president of Asymmetric Cyber Operations, said he supported any effort to clear out botnets but said the FCC effort would do little to stop two other major threats: state-supported cyber-espionage, often blamed on China, or securing mobile devices. Prominent hacking targets have included VeriSign, RSA, an authentication company owned by storage maker EMC Corp, and defense contractors such as Lockheed Martin Corp. Others include web search leader Google Inc, Citigroup bank and exchange operator Nasdaq OMX. There are other efforts in Washington to ensure the Internet continues to function smoothly. On Capitol Hill, the Senate is considering a bipartisan bill that requires the secretary of homeland security to designate certain infrastructure like air traffic control as critical and compel steps to defend against hackers. The U.S. House of Representatives is considering similar legislation. (Reporting By Diane Bartz; Editing by Tim Dobbyn)

Read the full article →

Top Olympus Exec Found Dead In Apparent Suicide

February 21, 2012

NEW DELHI (Reuters) – A top executive of Japan’s scandal-ridden Olympus Corp was found hung to death outside his apartment in suburban Delhi in a likely suicide, police said on Tuesday. Tsutomu Omori, 49, head of the company’s medical equipment business in India, appeared to have killed himself late Sunday, Lal Singh, investigating officer of Gurgaon Police told Reuters. There was no immediate suggestion his death was linked to a $1.7 billion fraud that has rocked corporate Japan and led to the arrest of senior executives in Tokyo. “At this stage of probe, it looks like he committed suicide. One of his company executives told us he was depressed for the last two weeks,” Singh said, adding that the Japanese Embassy was informed of the death on Monday. Two handwritten notes, one in Japanese and the other in English, were discovered from Omori’s home in Gurgaon. “I am sorry for bothering you,” the note in English, read, according to Singh. The police officer said his team had not yet translated the note written in Japanese. An official at the Japanese embassy told Reuters the mission was aware of the ongoing probe. “The police told us on February 20 that a Japanese national’s body was found in a park outside his apartment. The cause of the death is being investigated by Indian authorities,” the diplomat said. Earlier this month, Tokyo police arrested seven top executives of Olympus Corp for their alleged involvement in the accounting fraud, one of Japan’s biggest corporate scandals in recent times. (Reporting by Satarupa Bhattacharjya; editing by Ed Lane)

Read the full article →

Iran Reveals Details Of Stuxnet Virus Attack

February 18, 2012

VIENNA (AP) — Diplomats say Iran is poised for a major expansion of its nuclear program at a cavernous underground site. They have told The Associated Press that Tehran has readied the site for the installation of thousands of new-generation centrifuges. These machines could greatly speed up production of material that can be turned into the core of nuclear warheads. The diplomats say that electrical circuitry, piping and supporting equipment for the new centrifuges is in place. They emphasize that Tehran has not started installing the more efficient machines at its Fordow facility and cannot say whether it was planning to. But the diplomats say Iran has little reason to prepare the ground for the better centrifuges unless it planned to operate them. The diplomats asked for anonymity because their information is privileged.

Read the full article →

Yelp Sets IPO Target

February 17, 2012

SAN FRANCISCO — Online review service Yelp rated its own business Thursday, setting an IPO target of $12 to $14 per share that could value the 7-year-old company as high as $840 million. The setting of a price range signals Yelp is close to completing its initial public offering of stock. The process began three months ago when Yelp filed its plans to go public. Although Thursday’s filing didn’t lay out a timetable, IPO pricings typically occur two to three weeks after the selling company spells out how much it wants for its stock. Yelp’s shares will trade on the New York Stock Exchange under the ticker symbol, “YELP.” The company, which is based in San Francisco, plans to sell 7.1 million shares while its charitable foundation will sell 50,000 shares. Investment bankers also have an option sell an additional 1.07 million shares, depending on investor demand. At $14 per share, the IPO could raise as much as $115 million, before expenses. Yelp Inc. could still end up getting more or less money in the IPO, depending on investor demand. The interest in the IPOs of Internet companies with large audiences has been running hot and cold since professional networking service LinkedIn Corp. made its stock market debut nine months ago. LinkedIn has proven to be one of the top-performing Internet IPOs so far while others from Internet radio service Pandora Media Inc., online deal site Groupon Inc. and Web game maker Zynga Inc. have been greeted with less enthusiasm. One of Yelp’s online review rivals, Angie’s List Inc., has seen its stock gain 19 percent since its IPO was priced at $13 per share in November. Angie’s shares closed Thursday at $15.41, giving that company a market value of $757 million. Yelp will be coming to market amid feverish anticipation for Facebook’s IPO. The Internet social network filed its IPO papers at the beginning of this month, putting it on track to price its stock in May or June. Facebook Inc. is expected to be valued at $75 billion to $100 billion. Yelp’s more modestly sized IPO reflects the much smaller numbers underlying its business, although its review site is a popular destination for getting recommendations on everything from churches to strip clubs. By the end of the last year, Yelp had stockpiled more than 25 million reviews and was attracting about 66 million visitors to its website. But Yelp’s financial numbers haven’t been as impressive so far. It has suffered losses totaling $41 million since its inception, including a setback of nearly $17 million on $83 million on revenue last year. Nevertheless, Yelp’s popularity attracted the attention of Internet search leader Google Inc., which offered about $500 million to buy Yelp in late 2009 only to be rebuffed, according to media reports. Since then, Google has introduced and acquired competing services that are frequently prominently displayed in its search results. That practice has provoked complaints from Yelp CEO Jeremy Stoppelman, who joined a chorus of Google rivals who contend Google is abusing its dominance of Internet search to stifle competition in other areas of electronic commerce. Stoppelman, 34, is in line to be one of the biggest winners in the IPO. His 11 percent stake in Yelp would be worth about $83 million at $14 per share. He already made $15 million by selling some of the company’s stock to venture capital firm Elevation Partners in 2010. Yelp Chairman Max Levchin also made the same amount by selling some of his stock to Elevation Partners. Levchin retain a 13 percent stake that would be worth about $100 million at $14 per share. When it last granted stock options in December, Yelp appraised the value of its stock at $11.40 per share.

Read the full article →

Maggie Jackson: A Valentine Mystery: What Do Our Email "XOXOs" Say About Our Digital Relations?

February 13, 2012

At a recent dinner party, the talk grew heated. A woman crossed in love grew angry, remembering how the man who ultimately jilted her had led her astray. A financier vowed he wouldn’t cross that line, except with his family. I told the story of a magazine editor eerily doing it to me in a second email exchange, although we’d never met in person. What gesture inspired such passions? The seemingly innocuous act of signing off an email with an “xoxo” — a virtual kiss and hug. We’re well used to the fact that email is a kind of communication mutt, being something like a letter infused with the informality of the spoken word. Its capacity for evoking misunderstanding is well-known. Stripped of voice tone and body language and often penned in haste, even an informal social email can make its author seem demanding, curt, and insensitive. But why would a simple sign-off — the now-popular xoxo — arouse ire? Isn’t it merely an attempt to warm up a cool online media? Curious, I recently dug into the past of this seemingly innocent sign-off. We’re certainly long past the days when formality and rigidity reigned in written communications. In Mary Owens Crowther’s 1923 book of letter etiquette, even children’s notes look to modern eyes like state diplomacy — and hard work. “Dear Frank,” begins one sample. “I am going to have a birthday party next Friday afternoon, from three-thirty until six o’clock. I hope you will come and help us to have a good time. Sincerely yours, Harriet Evans.” According to Crowther’s Book of Letters , proper adult letters of the time ended with “yours truly” or “yours respectfully” (business), “cordially yours” or even “yours lovingly” (social), to name a few. A closing might vary, but could never omit “yours,” exhorts Crowther, without, alas, explaining why. Today, we no longer earnestly wind up an email with such inky self-sacrifices, even when writing to our intimates — and yet we throw x’s and o’s about with seeming abandon. Why? Perhaps message closures are akin to what linguists call “frozen phrases” — the “how are yous” and even “have a good days” that “no longer carry literal meanings in the eyes of almost all users,” says linguist Naomi Baron . Is the closure a meaningless template, case closed? Or does the “xo” carry meaning, sometimes, for some people — and therein lies the rub? As class lines soften and public-private boundaries blur, life’s increasing informality shapes our language, notes Baron in her 2008 book Always On: Language in an Online and Mobile World . We, in turn, become what she calls our own “language czars.” In other words, with few agreed-upon rules of communications, especially online, we follow our own ever-shifting standards. An “x” for you may be a “cordially” for me — and what’s the difference, we shrug? Undoubtedly, we “xo” for the same reasons that we reduce “best wishes” to “best” — a yen for brevity in a hurried world. An “x” denoting a kiss first entered our lexicon in 1763, according to the Oxford English Dictionary , which unfortunately falls silent on the subject of an “o” symbolizing an embrace. Intriguingly, 19-year-old Winston Churchill, in a postscript to an 1894 letter to his mother from military college, used the x-kiss, although he felt a need to explain himself: “Please excuse bad writing as I am in an awful hurry. (Many kisses.) xxx WSC.” Much later, the 1943 book Letter Writing in Wartime carries a letter from mother to son, closing with a mention of kisses — spelled out. In a somewhat strange sign-off to a son at war, a mother breezily writes, “Come and see us when you can. Love and kisses from us all. Mother.” Did her son at the front hurriedly respond with an “x”? Does it matter how and when we are x’ing and o’ing? Should we care about whether we care, in closing? At the end of our telephone interview, Baron makes a point that lingers with me. We’re sending and receiving so many messages these days that perhaps we’ve begun to care less about whether our meanings are clear, she speculates. Perhaps we’re “somewhat inert” to making the effort to be exacting in our prose. If true, she says, “that says something very sad, and what it says is that talk is cheap in the worst sense of the term, and relationships are cheap.” I’m not against using a judicious x and o here and there, to my kids, husband and a few close friends. But the passionate debate around my dinner table about these seemingly innocent symbols tells me something about the fate of relationships in the digital age. When we’re unthinkingly throwing “best” at our children or “xo” at a new business contact, we may be missing a crucial leap of imagination: what the person at the other end of the line may be feeling, thinking and expecting. In other words, matching an “x” and an “o” or a “cordially yours” to the right recipient at the right moment may be as much a matter of empathy, as etiquette. If we cannot take a moment to take another person’s perspective into consideration when we write, our magically quick and easy communications will too often go astray. Respectfully, I hope you agree.

Read the full article →

Netflix Settles Class Action Suit

February 11, 2012

SAN FRANCISCO — Netflix pressed the rewind button on its fourth-quarter earnings after settling allegations that the video subscription service violated a consumer-privacy law. Accounting for the $9 million settlement resulted in a 14 percent decrease in the fourth-quarter net income that Netflix Inc. reported Jan. 25. The bottom line for the final three months of last year now comes to $35.2 million, or 64 cents per share, down from the previously reported $40.7 million, or 73 cents per share. The company, which is based in Los Gatos, disclosed the change in a regulatory filing late Friday. Netflix’s stock price has surged 23 percent since the fourth-quarter results were released, partly because the company’s earnings were substantially above analysts’ average estimate of 57 cents per share. But investors mostly were impressed with Netflix’s fourth-quarter gain of 600,000 subscribers – a number unaffected by Friday’s accounting adjustment The upturn in subscribers indicated that Netflix had bounced back from a public-relations nightmare triggered by a 60 percent increase in its U.S. prices last September. Netflix expects to sustain a loss this year as it pays higher licensing fees for video and establishes its service in Latin America, the United Kingdom and Ireland. The $9 million legal settlement rids Netflix of another potential headache. A lawsuit on behalf of Virginia residents Jeff Milans and Peter Comstock alleged Netflix had been breaking a 24-year-old law by retaining records of the DVDs and Internet video that its subscribers watched for up to two years after they cancelled their plans. The complaint, filed in San Francisco federal court, cited the Video Privacy Protection Act, which was passed in 1988 to prevent video rental services from sharing information about what their current and former customers have been watching. The class-action lawsuit asserted Netflix violated a section of the law requiring personally identifiable information to be destroyed within a year “from the date that the information is no longer necessary for the purpose for which it was collected.” Retaining former customers’ viewing records allows Netflix to restore their old video queues and make better recommendations if they reactivate their subscriptions. In a statement Friday, Netflix said it didn’t make any admission of wrongdoing in the settlement. No other details were disclosed in a settlement notice filed Friday in federal court. In most class-action settlements, attorneys filing the case usually are paid a large portion of any money that is paid out. Sean Reis, an attorney representing Milans and Comstock, didn’t immediately return phone calls Friday. Netflix has been lobbying Congress to revise the Video Privacy Protection so it can introduce a feature on Facebook’s online social network that would allow its U.S. subscribers to automatically let their family and friends know what they have been watching. Netflix already offers the Facebook tool in the 46 other countries it operates, but all but more than 90 percent of its roughly 26 million subscribers are in the U.S. “This matter is unrelated to the company’s concerns about the ambiguities contained in the VPPA,” Netflix spokesman Steve Swasey said. Netflix shares closed Friday at $123.93, down 91 cents.

Read the full article →

New Users Flocking To LinkedIn

February 9, 2012

SAN FRANCISCO — LinkedIn provided further evidence of online networking’s popularity and moneymaking potential with a fourth-quarter performance that got a glowing review on Wall Street. The results announced Thursday indicate LinkedIn Corp. is playing an increasingly influential role in the employment market as millions more people post their resumes there. The professional-networking service has been turning into a digital rolodex for headhunters and job seekers alike. LinkedIn added another 14 million profiles during the final three months of last year to bring its total membership to 145 million. Meanwhile, more companies have been paying to get additional access to LinkedIn’s membership as the U.S. economy has been steadily adding jobs in recent months. LinkedIn gets more than two-thirds of its revenue from fees it charges companies, recruiting services and other people who want broader access to the profiles and other data on the company’s website. The rest comes from advertising. The trends helped LinkedIn fare far better than the company’s own management and analysts had predicted. The pleasant surprise came a day after online coupon distributor Groupon Inc. raised investor doubts about young, rapidly growing Internet companies by announcing an unexpected fourth-quarter loss. LinkedIn’s numbers seemed to lift spirits; the company’s stock surged more than 8 percent late Thursday. The ebullient reaction may bode well for an upcoming IPO from Facebook Inc., which has built an online network of 845 million users by focusing on family and friendships instead of career advancement. Facebook filed papers last week for an initial public offering of stock. It’s expected to be completed in May or June. The IPO is expected to value Facebook at $75 billion to $100 billion. LinkedIn, which is based in Mountain View, Calif., has emerged as one of the stars from last year’s crop of Internet IPOs. During the first nine months of trading, its stock has remained well above its IPO price of $45 and is moving upward again. The stock rose $6.44, or 8.4 percent, to $82.83 in extended trading Thursday after the release of results. LinkedIn earned $6.9 million, or 6 cents per share, during the final three months of last year. In 2010, the company had income of $1.6 million, or 3 cents per share. It’s not directly comparable because LinkedIn’s outstanding shares have ballooned since its IPO in May. Before figuring the net income credited to shareholders, LinkedIn’s net income for the latest quarter increased 30 percent from $5.3 million If not for certain accounting items unrelated to its ongoing business, LinkedIn said it would have earned 12 cents in the fourth quarter. That figure topped the average estimate of 7 cents per share among analysts polled by FactSet. Revenue more than doubled from the previous year to nearly $168 million – about $8 million above analyst estimates. Management’s projections for the first quarter and full year also called for revenue above analyst forecasts.

Read the full article →

Groupon Reports Earnings Results For First Time

February 8, 2012

NEW YORK — Groupon investors were expecting a better deal than the surprise loss the company delivered on Wednesday. The online deals site, reporting for the first time as a public company, said its fourth-quarter revenue nearly tripled, but it lost money and its shares fell sharply after hours. Groupon Inc., which went public in November, makes money by taking a cut from the online deals it offers on a variety of goods and services, such as restaurant meals, manicures and weekend getaways. Investors are watching whether this business model is sustainable and leads to growth over the long term – and whether the company can not only grow its customer base but make more from each subscriber. Groupon’s net loss totaled $42.7 million, or 8 cents per share, for the final three months of 2011. A year earlier, as a private company, it booked a larger loss of $378.6 million, or $1.08 per share. The company said its adjusted loss was 2 cents per share in the latest quarter. On this basis, analysts were expecting a profit of 3 cents per share, according to FactSet. Groupon said an unusually high international tax rate hurt the quarter’s adjusted results. Groupon’s revenue was $506.5 million, nearly triple the $172.2 million it reported for last year’s fourth quarter. Analysts, on average, had expected lower revenue $473.1 million, according to FactSet. For the current quarter Groupon expects revenue of $510 million to $550 million. Analysts are forecasting $501 million. CEO Andrew Mason called 2011 a “phenomenal growth year” for Groupon. But he stressed that the company wants to keep expanding and that will require continuing investment in technology. “While Groupon is the clear market leader in online local commerce, we estimate that we still participate in less than 1 percent of total local transactions,” Mason said. Groupon had 33 million active customers at the end of the quarter, nearly four times as many as a year earlier. It defines active customers as those who have purchased a Groupon in the previous 12 months. Customers spent $1.25 billion on all the Groupons the company sold in the quarter. That “gross billings” figure doesn’t include taxes or account for the money the company paid to merchants. Benchmark analyst Clayton Moran called the sharp share price drop unwarranted, though he noted that the stock has been “volatile, hotly debated” and “somewhat controversial” since its IPO. Nonetheless, he said Groupon’s first quarter as a public company was impressive and strong where it counts, notably revenue and other key metrics. Chicago-based Groupon’s stock tumbled $3.59, or 14.6 percent, to $20.99 in after-hours trading. The stock, which closed at $24.58 on Wednesday, has traded in the range of $14.85 to $31.14 since pricing at $20 ahead of its initial public offering on Nov. 4.

Read the full article →

Huge Shakeup At Yahoo

February 7, 2012

SUNNYVALE, Calif. — Yahoo Chairman Roy Bostock and three longtime board members are leaving the troubled Internet company. The shake-up announced Tuesday continues a drastic makeover of Yahoo’s leadership during the past month as the company tries to win back investors frustrated with years of broken turnaround promises. Yahoo Inc. ushered in a new era last month by hiring former PayPal executive Scott Thompson as its fourth CEO in less than five years. Then Yahoo co-founder Jerry Yang resigned from the board. Bostock is departing along with Vyomesh Joshi, Arthur Kern and Gary Wilson. Many Yahoo shareholders have been clamoring for Bostock to step down since the company balked a $47.5 billion takeover offer from Microsoft Corp. in 2008.

Read the full article →

Twitter, Facebook Are Least Used Sources Of Political News

February 7, 2012

WASHINGTON (AP) — In this campaign season, the social networks have nothing on the news networks. A new survey from the Pew Research Center for the People and the Press finds cable news most frequently cited as a regular source of political campaign news, followed by local TV news, network news, the Internet and finally local newspapers. Twitter, YouTube and Facebook were at the bottom of the list. But with only Republicans choosing a presidential nominee this time around, fewer people are interested in following campaign news in any medium. This year’s poll marks the first time that cable news topped the list of campaign news sources, with 36 percent of those surveyed reporting that they regularly learn something about the campaign or the candidates from pay TV news. Cable has not gained as a source since early in the 2008 cycle, when 38 percent identified it as a top source. But the share who said they regularly get news from other TV sources or newspapers has declined. Asked where they get most of their campaign news, 74 percent cited television, in keeping with findings over the past few election cycles. Thirty-six percent said the Internet is their main source, up 10 points from this point in 2008, and newspapers provided most of the news for 23 percent, down 7 points. Use of the Internet as a regular campaign news source has held steady at 25 percent, on par with the 24 percent who regularly turned to the web in 2008. Pew attributes the lack of growth to declining interest in campaign news overall, particularly among younger adults, the primary users of online news. In January 2008, 34 percent of adults said they followed election news very closely. But that dipped to 29 percent this year, with the steepest declines among those under age 30 and Democrats. The 2008 campaign saw a relatively slim, 8-point difference in strong election interest by age. This year, however, senior citizens are twice as likely as those aged 18-29 to say they are following campaign news very closely. Among older age groups, the share saying they turn to the Internet regularly for campaign news has held steady or climbed, but among those under age 30, that figure has dropped sharply, from 42 percent in December 2007 to 29 percent now. A majority of those surveyed said they use social networking sites like Facebook, but most do not use them for news. Just 6 percent regularly turn to Facebook for campaign updates, and 2 percent go on Twitter. But the low standing of social networking sites doesn’t mean they aren’t a news source with potential for broader appeal. In early 2000, just 6 percent of survey recipients said they got most of their campaign news from the Internet. That grew to 13 percent by the start of the 2004 campaign and has nearly tripled, to 36 percent, in the eight years since. Among current Twitter users, 41 percent said they turn to the site at least sometimes for news, among users of other social networking sites, 36 percent sometimes or regularly use Facebook for news. Those using online news sources this cycle are most likely to turn to traditional news sites, such as CNN and Yahoo News, and aggregators, such as Google, over the candidates’ websites or social networking sites. CNN (24 percent) and Yahoo News (22 percent) top the list of online sources, followed by Google (13 percent), Fox News (10 percent), MSN (9 percent) and MSNBC (8 percent). All other sites were named by 5 percent or less, including Facebook, Twitter, the Drudge Report and Huffington Post. Interaction with a candidate’s online campaign is generally not seen as a key source of information. Just 2 percent who use the Internet for campaign information say they turn to candidate websites for news, but many more have had online contact with a candidate. Among registered voters, 15 percent say they have visited a candidate’s website and 16 percent have received email from campaign or political groups. Six percent say they have followed a candidate on Twitter or Facebook, rising to 12 percent among those under age 30. But whether online, on TV or in print, few Americans find it fun to keep up with politics. Overall, just 23 percent said they deeply enjoy following campaign news. The number dips to 17 percent among political independents, and to 13 percent of those under age 30. The Pew Center’s campaign news survey was conducted Jan. 4-8 and included interviews with a random national sample of 1,507 adults contacted by landline and cellular telephone. Results from the full survey have a margin of sampling error of plus or minus 3.5 percentage points. ___ Online: Pew Research Center: http://www.people-press.org

Read the full article →

Art Brodsky: The Jack Nicholson Answer to Hollywood Moguls on SOPA and PIPA: ‘You Can’t Handle the Truth’

February 6, 2012

Earlier today (Feb. 6), a most extraordinary group of people sent a letter to Capitol Hill, in the latest round of the fight over the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA), telling Congress it was time to reject the well-worn lobbying of the big media companies. More than 70 grassroots activist organizations and emerging Internet companies got up the nerve to show Congress that it was time to stop fooling around with bills that helped to generate the largest online protest in recent memory.  More than 100,000 Web sites participated in the Jan. 18 blackout day.  Tens of thousands of people called and visited their Congressional representatives, all with one message: These bills are dangerous, and shouldn’t be allowed to proceed. The letter, coordinated by Public Knowledge, said, “Now is the time for Congress to take a breath, step back, and approach the issues from a fresh perspective.”   The message that there were, and are, fundamental concerns coming from a wide and comprehensive communities is one that doesn’t come across in comments that big executives have made lately. It’s a shame that Hollywood moguldom didn’t get that message and instead is still playing make believe.  Lawmakers should realize that their constituency in Hollywood is lacking a grasp of reality and missing the mark by a mile. One hand, Viacom CEO Philippe Dauman was quoted by deadline.com as saying at a conference that Hollywood didn’t lose the SOPA/PIPA fight on the merits of their case.  It was, instead, because there was “a lot of misinformation” from Silicon Valley.  He blamed the ” mob mentality ” and “unfortunate rhetoric” for the bills’ troubles. Speaking at the same All Things D conference, Chase Carey, the number-two exec at Fox, said it was “the message getting twisted” by that nasty Interweb that caused the bills to go down.  Carey admitted he hadn’t read the bills, but rejected working with Silicon Valley on a solution.  That’s fine.  It really isn’t Silicon Valley’s place to work out a solution with Hollywood anyway. It boggles the mind that Hollywood, which exists to tell stories, thinks it has let its story get away.  Let’s define the issue in a way Hollywood would understand, with this adaptation and then quotation from A Few Good Men : Int.  THE COURTROOM We are in a courtroom, in a tense moment of a trial.  It’s a court-martial, and the participants are all in the military.  At the prosecution table is Navy LIEUTENANT JUNIOR GRADE DANIEL ALLISTAIR KAFFEE (Tom Cruise in the movie), who has been performing unevenly throughout the trial, but now is gaining confidence.  He’s questioning COLONEL NATHAN R. JESSEP (Jack Nicholson), a decorated Marine commander who looks down on KAFFEE as if he’s an inferior life form.  Back and forth they go, with KAFFEE asking and JESSEP grudgingly answering, until this, from the movie (as opposed to the play from which the movie was taken):   JESSEP   You want answers?   KAFFEE   I think I’m entitled to them.   JESSEP   You want answers?!  KAFFEE I want the truth.   JESSEP   You can’t handle the truth! That’s it in a nutshell, isn’t it?  Hollywood can’t handle the truth about SOPA and PIPA. First , they can’t handle that there were dangerous elements to the bills.  That was why so many people, the very people Congress left out of the discussion, were moved to get involved.  The bills were much more complex than “cracking down on overseas pirates,” and yet those pushing the bills either disregarded or didn’t recognize the threats to a free Internet.  Certainly their testimony before Congress didn’t give any indication that they did either.  When anyone brought up their objections, Hollywood executives and their legislative allies dismissed them.  Who cared what cybersecurity analysts, law professors, artists, human rights groups, public-interest organizations and others had to say?  Eventually the sponsors caved on the security issue, but only after a long-standing dispute. Unlike the moguls, the activist letter recognized: “A wide variety of important concerns have been expressed — including views from technologists, law professors, international human rights groups, venture capitalists, entrepreneurs, and above all, individual Internet users. The concerns are too fundamental and too numerous to be fully addressed through hasty revisions to these bills. Nor can they be addressed by closed door negotiations among a small set of inside-the-beltway stakeholders.”   Second , the executives didn’t recognize that the protest against the bills was not a product of classic special-interest lobbying.  It was not Hollywood vs. Silicon Valley.  As this article in PC World (and other publications) showed, Google did not create the protest against the intellectual property bills.  Rather a network of groups with substantive concerns worked with organizations from around the country, which, once informed of the dangers of the bills, spread the word to their members, and constituent organizations. Third , there really is some question about what “the truth” is in these cases.  The only numbers for “harm” come from the industry and haven’t been duplicated by anyone.  It’s time to find out what the “harm” really is. That time-out is necessary to “determine the true extent of online infringement and, as importantly, the economic effects of that activity, from accurate and unbiased sources, and weigh them against the economic and social costs of new copyright legislation. Congress cannot simply accept industry estimates regarding economic and job implications of infringement given the Government Accountability Office’s clear finding in 2010 that previous statistics and quantitative studies on the subject have been unreliable.” This is too important to hand over law making to one industry, as Congress did in the case of these bills.  Too much is at stake to try to rework the bills in a slapdash manner, behind closed doors.  That’s the truth.

Read the full article →

Happy Birthday, Facebook!

February 4, 2012

Today marks the eighth anniversary since the social network first launched at Harvard University in Mark Zuckberg’s dorm room on February 4, 2004. After Google, Facebook is the most visited site in the world and may reach as many as 1 billion members by August , notes Mashable. On February 1, the company filed a Form S-1 with the SEC in preparation for an IPO worth $5 billion. Some speculate that once Facebook begins trading publicly, it could be valued as high as $100 billion . According to Facebook’s S-1 , the company pulled in a whopping $1 billion in net profit on $3.7 billion in revenue in 2011. But much of Facebook’s success has come from building a better user experience and resisting the temptation to make fast money. Indeed, the S-1 featured a section titled “The Hacker Way,” a declaration by Mark Zuckerberg, who wrote that the company’s mantra has long been to focus on delivering features first and improving later. WIth over 800 million members worldwide, it’s pretty amazing how Facebook has grown and changed our lives over the years. It now seems almost impossible to imagine life without witty status updates, friend requests, relationship statuses or photo tags. Users became even more attached to the site after the company rolled out interactive features like chat, the timeline and the subscription button . Some might even say the site resembles a digital resume, especially since now you can turn your timeline into business cards . Even more notable is how Facebook expanded internationally. Available in over 70 languages, 80% of the company’s monthly users are from outside the U.S. and Canada . Happy Birthday, Facebook.

Read the full article →

HP CEO Awarded Hefty Pay Package

February 3, 2012

SAN FRANCISCO — Hewlett-Packard Co. ushered in Meg Whitman as its CEO with a $16.5 million compensation package that hinges on the one-time politician’s ability to lift the stumbling technology company’s stock price during the next two years. Last year’s pay consists almost entirely of 1.9 million stock options valued at $16.1 million, according to documents filed Friday. Whether Whitman ever gets an opportunity to cash in most the options will depend on whether HP’s market value rises substantially from its depressed level when HP fired her predecessor, Leo Apotheker, as CEO last September. HP disclosed Whitman would be getting the stock options shortly after her hiring, but didn’t specify their value at that time. The company, which is based in Palo Alto, also had previously disclosed Whitman’s salary would be limited to $1 while she tries to rebuild the momentum that HP lost after ousting Mark Hurd as its CEO in a titillating scandal in 2010. Apotheker fared even better than Whitman, partly because of a severance package that paid him more than $12 million in cash and allowed him to keep most of the stock awards that he got while he was CEO. Including the salary and perks that Apotheker received while he was still HP’s CEO, his 2011 compensation package was valued at $26.7 million. That figure excludes a $3.7 million stock incentive that HP canceled as part of Apotheker’s severance agreement. If Whitman succeeds in her mission at HP, she could use the windfall from the stock options to offset her losses from her unsuccessful attempt to become California’s governor in 2010. During that campaign as the Republican nominee, she spent more than $140 million of her own money. Before entering the political arena, Whitman was best known as the CEO of eBay Inc. during the dot-com boom. She did so well there that she was a billionaire by the time she left the e-commerce company in 2008. HP faces challenges on multiple fronts. Its personal computer division is trying to adapt to consumers’ growing preference for tablet and other mobile devices. Meanwhile, its operations that sell servers and consulting services to big companies locked in a fierce battle with IBM Corp. and Oracle Corp. As with most companies, HP says it is trying to tie Whitman’s compensation to the company’s performance. Most of the stock options won’t become hers to exercise unless HP’s stock surpasses certain thresholds before October 2013. The rights to 800,000 stock options will vest on Whitman’s first anniversary as HP’s CEO if the company’s shares have closed at or above $28.31 for 20 consecutive trading days. The price target is 20 percent above the options’ stock price of $23.59. That price requirement hasn’t been met yet, though HP’s stock has closed above $28.31 several times in the past two weeks. The shares gained 57 cents to close Friday at $29.07. Although the stock has climbed since Whitman took over, it remains 37 percent below its price when Hurd left the company in August 2010. Another 800,000 options will vest on Whitman’s second anniversary on the job if HP’s stock has closed at or above $33.03 for 20 consecutive trading days. That’s 40 percent above the exercise price. The remaining 300,000 options vest in annual increments of 100,000 on Whitman’s first three anniversaries as CEO. Those awards aren’t tied to HP’s stock reaching a certain price. Whitman, 55, also received more than $372,000 in additional compensation that stemmed from cash and stock grants that she received last year while she was a non-executive director on HP”s board. This year, Whitman will be eligible for a bonus of up to $6 million to supplement her $1 salary if HP does well. The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year.

Read the full article →

Will There Be A ‘Cyber Cold War’?

February 3, 2012

By Peter Apps, Political Risk Correspondent LONDON (Reuters) – With worries growing over computer hacking, data theft and the risk of digital attacks destroying essential systems, western states and their allies are co-operating closer than ever on cyber security. But as they do so, the gulf between them and China and Russia — blamed for many recent hacks and with a very different and much more authoritarian view over the future of the Internet — grows ever wider. Last week, Chinese officials turned down invitations to a privately-run conference of military and civilian experts on cyber security in London, telling organizers Defense IQ they would not attend due to a “low tide” in relations with the U.S., particularly its military. A senior Russian official also pulled out at the last moment, citing a failure to obtain a UK Visa in time — although other attendees suspected that might simply have been an excuse. Western officials talk down such snubs. But they admit progress towards international agreement on “norms of behavior” in cyberspace remains a distant dream. “It is worrying,” says John Bassett, a former senior official at British signals intelligence agency GCHQ and now senior fellow at London’s Royal United Services Institute. “If anything, in the last year the differences have become more apparent and there seems to have been little success in tackling them. There is a risk it could end up damaging the wider relationship.” Russia and China, it seems, have little appetite to tackle data theft whilst the West has no intention of acquiescing to Russian and Chinese demands for a more controlled Internet. Jim Lewis, a former U.S. foreign service officer and now senior fellow at Washington DC think tank the Centre for Strategic and International Studies, participates in regular semi-official meetings with China on cyber. “There are several things coming together here,” he says. “There is the political difference over the freedom and future of the Internet. Then that gets tied together with the theft of commercial property — which itself becomes part of the wider trade issues..” Already, Western officials and academics involved in talks say discussions on cyber between East and West have become much more difficult and more complex than on any other issue. “This is going to be a very gradual process,” says Christopher Painter, the U.S. State Department lead official on cyber policy. “There are obviously some very different visions of the future of the Internet… On intellectual theft, I’m not going to single out China or Russia but it’s obviously something we take very seriously.” A November London conference organized by British Foreign Secretary William Hague was supposed to kickstart progress towards global consensus. But if anything, it looks to have simply exacerbated the differences. A follow-up conference in Budapest later this year could be similar, some fear. “The London conference did seem to show a “non-flexible” attitude from both the West and East,” says Tony Dyhouse, a leading cyber security specialist for UK defense firm Quinetiq. “Dare we coin the term “Cyber Cold War?”" INTELLECTUAL PROPERTY THEFT In public, U.S. and other Western officials almost always decline to detail where they believe the plethora of recent cyber attacks have come from. In the last year, they have included attempts to break into computer systems at the U.S. State Department and British Foreign Office and other highly publicized attacks on Lockheed Martin, Google, the NASDAQ and the International Monetary Fund amongst others. But privately and occasionally on the record, they frequently point the finger at Russia and China. Both angrily deny any involvement, saying they too are victims of hacking. But many Western security specialists say the evidence against both nations — particularly China — has become increasingly compelling. “China is currently engaged in a maximal industrial espionage effort that it justifies internally in terms of a catch up strategy (with the West),” says Thomas Barnett, chief analyst at political risk consultancy Wikistrat and a former strategist for the U.S. Navy. “The key question here is: can China assume the mantle of intellectual property rights respect fast enough to avoid triggering economic warfare of the West… If it can’t, then this is likely to get ugly.” PricewaterhouseCoopers consultant Tim Hind, a former intelligence chief at British bank Barclays, has few doubts. “I think government circles and organizations now… have very good attribution,” he says. “The question is what you do diplomatically with that attribution… I think our government sees our economic and political mission with China as more important than addressing the cyber issue.” Some believe the most promising avenue of negotiation might be to link it to one of Beijing’s primary worries — the buildup of U.S. military forces in Southeast Asia. “There is a deal to be made here involving the U.S. ceasing its intelligence gathering, naval and air activity off China’s coast,” Nigel Inkster, a former deputy chief of Britain’s Secret Intelligence Service (MI6) and now head of political risk and transnational threats at London’s International Institute for Strategic Studies, said late last year. But others suspect the scale of Chinese responsibility might be overstated. “One thing is certain — the “in thing” to do is blame China and hence it is likely that at least some of the actions blamed on China will not be of that origin,” said another European cyber security expert, speaking on condition of anonymity. “They’ve become a “no questions asked” scapegoat.” Because of the focus on China, some experts say the scale of hacking from Russian territory is often ignored. That, some suggest, is how Moscow was able to marshal so many “patriotic hackers” to paralyze Estonia’s Internet during a political face-off in 2007 as well as attacking Georgian websites during the 2008 war. More recently, such hackers have targeted dissident websites. VAST PHILOSOPHICAL GULF Perhaps even more serious than worries over hacking, however, is the vast philosophical gulf between East and West. Last year, both Russia and China saw a rise in Internet-fuelled unrest that they blamed in part on the West. Beijing’s censors increasingly struggled to control micro-blogging on their relatively tightly regulated Internet, whilst recent protests against Vladimir Putin are seen further fuelling Russian desire for control. In the run-up to the London meeting, Moscow and Beijing released a suggested “code of conduct” for the global Internet that would give national governments much more control over the Internet within their borders. But Western states swiftly shot down such suggestions. Despite British hopes the Chinese and Russians would not feel “ambushed” at the London summit, they would have found much to dislike there. “The Chinese see the Internet as an American construct, designed to provide the U.S. with military and commercial advantage,” said Lewis, adding that Beijing suspected the West of fostering dissent within its borders as well as building powerful cyber weaponry with which to attack. With almost every nation dramatically ramping up its military spending on cyber security — including offensive “cyber warfare” capabilities to attack essential networks, turn off power grids and cause massive disruption — some fear more serious confrontation. In a worst-case scenario, a single damaging cyber attack could spark a wider conventional war or even nuclear confrontation — with the risk a nation might wrongly blame a rival government for the actions of a single hacker and strike back. The 2009 Stuxnet computer worm attack on Iran’s nuclear program that reprogrammed sensitive equipment to tear itself apart was seen by many as a sign of things to come. As with any potential military conflict, experts have long said the key to avoiding accidental escalation is the creation of “confidence building measures” between all sides such as meetings, hotlines and shared discussions over threats. Senior officers from the newly launched U.S. Cyber Command and other officials have massively ramped up links with other military and civilian cyber agencies across NATO and the Western world. That process with China and Russia is at a much earlier stage, officials say. Some believe more should be done. “Even if you have long-running cyber arms control negotiations that never really went anywhere, that would give you the chance to get conversation and contacts going,” says former GCHQ official Bassett. For now, many believe the greatest risk is that paranoia sets in on both sides, further entrenching positions. “We are very tempted by a “Cold War” way of thinking,” says Lewis at the Centre for Strategic and International Studies. “The problem is that that can be very self-fulfilling.” (Additional reporting by William Maclean and Tim Castle) (Reporting By Peter Apps)

Read the full article →

Life On Facebook May Be More Pleasant Than Life On Earth: STUDY

February 3, 2012

NEW YORK (AP) — The goody-two-shoes among us say it’s better to give than to receive. That’s not true for the average Facebook user, though. A new study out Friday found that the average user of the world’s biggest online social network gets more than they give. That means more messages, more “likes” and more comments. Yes, even more “pokes.” Behind all that is Facebook’s relatively small group of “power users,” who do more than their share of tagging, liking and uploading. The report from the Pew Research Center’s Internet and American Life Project comes two days after Facebook filed for a $5 billion initial public offering of stock that could eventually value the company at $100 billion. Key to that mammoth valuation will be Facebook’s ability to convince advertisers they can make money from the billons of connections and interactions that people partake in on its website and beyond. Though Pew’s findings don’t address the commercial side of people’s activities, they shed important light on how people use the site and what they get out of it. The study is the product of Pew’s analysis of Facebook users’ activities in November 2010. It consisted of data that Facebook provided to Pew after 269 users gave their permission. Those users were identified through a random telephone survey about broader Internet issues. The researchers found that about 20 percent to 30 percent of Facebook users fell into the “power user” category, though they tended to specialize in different types of activities on Facebook. Some of them sent a lot of friend requests, while others tagged more photos than the average user. Only 5 percent were power users in every activity that Pew logged. The way this plays out is that the average user is more “liked” than they click “like” on other’s posts. They receive more friend requests than they send. On average, 63 percent of Facebook users studied received friend requests in the survey month while only 40 percent made a friend request. The result? It feels good to be on Facebook. It might even feel better than life off Facebook. After all, there’s no dislike button, and friends are unlikely to post harsh comments on your page. Instead, people you might not have seen in years bombard you with positive affirmations day after day, year after year. “You keep getting all these wonderful positive rewards,” said Keith Hampton, the study’s main author and a Rutgers University professor. “That’s pretty hard to give up.” Getting more than you are giving, in terms of emotional support, “is kind of what you are looking for,” he added. This might be the lure of Facebook, the reason it could be worth $100 billion and the reason it has 845 million users who are not leaving even if they’ve been on the site for years. The study found no evidence of “Facebook fatigue,” the idea that people get tired of Facebook after they’ve been on it for a long time. In fact it was the opposite. The longer someone had been using Facebook, the more frequently they posted status updates, pressed “like” and commented on friends’ content. “For most people, the longer they are on Facebook, the more they do on Facebook,” Hampton said. The original phone survey of 2,255 adults was done in October and November of 2010 and has a margin of error of plus or minus 2.3 percentage points. At the end of that survey, users were asked for consent for Facebook to share data. Twelve percent of the survey participants agreed.

Read the full article →

How Does Twitter Handle Piracy? An Inside Look

February 2, 2012

Last week, in the wake of protests over SOPA and PIPA, the controversial Internet anti-piracy legislation in Congress, Twitter released a database that offers a detailed view of how the company handles piracy. A look at the data yielded some surprises. To understand why, it’s helpful to know a few basic things about how Twitter works. Say someone posts a link to a pirated movie or song on Twitter. The record label or film studio that owns the right to that material can fire off a message asking Twitter to remove it. These messages are called DMCA requests, after the Digital Millenium Copyright Act, the 1998 law against online file-sharing, and the Twitter database contained an archive of all of these messages from the past two years -– more than 4,000 of them. Powered by Tableau In other words, Twitter answered the question, “Which companies are most aggressively pursuing pirates who use Twitter to promote their sites?” Universal Studios? Sony? Warner Brothers? All of those companies have plenty of material to protect — and plenty of resources, one would assume, for chasing copyright violators. But no. A New York film distributor called Magnolia Pictures was responsible for a third of the messages. Magnolia isn’t exactly a Hollywood powerhouse. The most recognizable name on the list of its recent releases is “Melancholia,” a movie about the end of the world made by a European director, Lars Von Trier, known for his formal inventiveness and his fascination with stories of alienation and despair. The movie made only $3 million at the box office in the U.S., and it’s not like most films in Magnolia’s pipeline figure to do much better. The Magnolia website describes one of those movies, “Beyond the Black Rainbow,” as “a Reagan-era fever dream inspired by hazy childhood memories of midnight movies and Saturday morning cartoons.” So Magnolia’s disproportionate presence in Twitter’s inbox is a bit of a mystery, until you realize that one of Magnolia’s owners is Mark Cuban, the outspoken owner of the Dallas Mavericks and an outspoken commentator on copyright issues. Cuban is well acquainted with the world of online entertainment. In 1998, he started Broadcast.com, offering live-streaming radio and video. He was an early and frequent critic of YouTube’s business model, and from his online soapbox, Blog Maverick, he has criticized the recording industry for going after customers who download private material, while advocating a nuanced approach to the protection of intellectual property. We asked Cuban why Magnolia was responsible for so many of the Twitter take-down requests. He responded with an email that looked as though it could have been dashed off on a Blackberry from the sidelines of a Mavericks game. Pirates, he wrote, “use twitter to automate the process of distributing content, we automate the process of finding them and taking them down.” “This isnt about personal use,” he added, “I dont care about that.” In fact, as it turns out, Magnolia’s automated attack on piracy was largely the work of another company, Web Sheriff. A British firm founded by an entertainment lawyer named John Giacobbi, Web Sheriff has contracts with several Hollywood companies, including Universal Pictures and Sony, and is one of the most prominent of the third-party companies that send take-down notices to Twitter, file-sharing sites, fan forums, and other corners of the web where pirated material is posted. According to Giacobbi, Web Sheriff was responsible for at least half the Twitter take-down notices. Like Cuban, Giacobbi advocates a nuanced approach to fighting piracy. “We treat our fans as fans, not criminals,” Giacobbi said. He said he works with band managers to get them to provide fans with two free tracks, which he can then post on their forums alongside the messages asking them to take down the illegally uploaded material. Though Cuban described Magnolia’s piracy response as “automated,” Giacobbi and his employees apparently take a lot of time to engage in conversation with fans and potential pirates. Giacobbi pointed to a comment thread on a forum for fans of the British band Prodigy. It stretches 18 pages and consists mainly of fans mocking Web Sheriff and posting pictures of cops and donuts, while Giacobbi and his company play along, making fun of themselves and at one point offering to treat everyone to a donut feast. According to Giacobbi, Web Sheriff aims at “working with the fans instead of against them.” In a world where the Internet reigns and piracy is the norm, there may not be many other options. Click here to download the Twitter DMCA data used in this report.

Read the full article →

Woman Accused Of Peddling Fake Facebook Stock

February 2, 2012

By Brendan O’Brien MILWAUKEE (Reuters) – A Wisconsin woman has been charged with theft over accusations she tried to profit from Facebook’s much-anticipated plans to go public by selling fake stock in the social media giant, a criminal complaint showed on Thursday. Prosecutors said Marianne Oleson told acquaintances she obtained $1 million in stock because her daughter was an acquaintance of Facebook’s founder, and persuaded several people to buy fictitious Facebook stock over a 4-month period. Oleson, of Oshkosh, was charged with 31 counts of theft, forgery and making misleading statements. Facebook unveiled plans on Wednesday for the biggest ever Internet IPO that could raise as much as $10 billion, but made it clear CEO Mark Zuckerberg will exercise almost complete control over the company, leaving investors with little say. The long-awaited filing kicked off a months-long process that will culminate in Silicon Valley’s biggest coming-out party since the heyday of the dotcom boom and bust. Facebook said it was seeking to raise $5 billion, but analysts estimate it could tap investors for $10 billion. The complaint against Oleson said that one of the people she was accused of selling fake stock to was a contractor who did concrete work at her house in September. Oleson paid the contractor for the work with $13,980 worth of fake Facebook stock. The contractor, who also paid $10,000 in cash to the woman for additional stock, grew suspicious when he found she lied about her name and various oddities on documents referring to the transaction, the complaint said. The 46-year-old woman was also accused of scamming a 66-year-old Oshkosh man who was suffering from a vision impairment. According to the district attorney, the man gave Oleson four checks totaling about $43,000 late last year to pay for Facebook stock. The woman promised him that she would send stock certificates in the mail, the complaint said. It also accused Oleson of selling fake Facebook stock to two other men for a total of $9,900. During the investigation, police said they found marijuana plants growing Oleson’s sun room, leading to additional charges of possession and manufacturing of marijuana. An attorney for Oleson could not immediately be reached for comment. (Reporting By Brendan O’Brien; Editing by Mary Wisniewski and Cynthia Johnston)

Read the full article →

Pirate Bay Founders’ Prison Sentences Will Stand

February 1, 2012

A few moments ago Sweden’s Supreme Court announced its decision not to grant leave to appeal in the long-running Pirate Bay criminal trial. This means that the previously determined jail sentences and fines handed out to Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundström will stand.

Read the full article →

Anonymous Hacks Brazil’s Largest State-Run Bank

February 1, 2012

SAO PAULO (AP) — A group of Internet hackers said Wednesday it took down the website of the Banco do Brasil, Brazil’s largest state-run bank. It’s the third such attack against financial institutions in a week. “Attention sailors: Target hit! … BancodoBrasil is sinking. TANGO DOWN,” said a Twitter post from the group that calls itself “Anonymous Brasil.” It threatened further attacks on other banks. Banco do Brasil said in a statement that its website was not taken down but was “slowed down” by a flood of traffic.” The Associated Press was unable to access the site in repeated attempts. On Monday, the group attacked the website of Itau Unibanco Banco Multiplo SA, Brazil’s largest private sector bank and one day later it did the same against Banco Bradesco SA, the country’s second largest private bank, using a denial of service attack that essentially swamps a website with false users. Anonymous Brasil posted a video on the UOL Internet news portal in which a man wearing a mask depicting the character “V” of the film “V for Vendetta” said the attacks against the banks’ websites are aimed at “calling attention to the corruption and inequality in Brazil.”

Read the full article →

Google Revenues Fail To Meet Expectations

January 19, 2012

SAN FRANCISCO (AP) — Google’s moneymaking machine misfired badly in the fourth quarter as its advertising prices fell during the holiday marketing season. The results announced Thursday fell way below the lofty expectations of stock market analysts. That caused Google’s shares to plunge more than 9 percent after the numbers were released. Google Inc. earned $2.7 billion, or $8.22 per share, during the October-to-December period. That’s just a 6 percent increase from $2.5 billion, or $7.81 per share, at the same time in 2010. If not for certain items, Google says it would have earned $9.50 per share. Analysts surveyed by FactSet had expected $10.51 per share. Revenue climbed 25 percent from the previous year to nearly $10.6 billion. After subtracting ad commissions, Google’s revenue totaled $8.1 billion. That was about $300 million below the average analyst forecast. The disappointing performance stemmed from a surprising downturn in the prices that the Internet search leader collects for each click. The average price declined 8 percent from the same time in 2010. The erosion reversed what had been happening earlier in the year. The year-over-year increases in Google’s price per ad click had ranged from 5 percent to 12 percent increase in the first three quarters of 2010. The fourth quarter marked the first time Google’s revenue surpassed $10 billion for any three-month period in the company’s 13-year history. Reaching that milestone wasn’t enough to impress investors. Google shares shed $58.56 to $581.01 in Thursday’s extended trading.

Read the full article →

Gary Shapiro: Revenge of the Geeks: The Day Washington Reversed Course

January 19, 2012

We’ve all heard of the geeks — Jobs, Bezos, Chambers, Ellison, Gates, Jacobs, Zuckerberg. But political Washington has never much concerned itself with the geek community. Yesterday, that changed. Yesterday, American geeks roared at establishment Washington, and Washington listened and acted. In 2010, it was healthcare; 2011 was all about spending and the deficit. On both issues, the establishment won. But 2012 has started off on a different footing: the American people told Congress in one clear voice to keep its hands off their Internet. With sites like Google and Wikipedia leading the charge, Americans overwhelmed congressional phone lines demanding that their senator or congressman oppose the House’s Stop Online Piracy Act ( SOPA ) and the Senate’s PROTECT IP Act ( PIPA ). These twin bills were well-intentioned efforts to stop overseas rogue websites from pirating copyright content, like music and movies. But they were also the creatures of the content lobby and were designed as one-sided nuclear missiles to destroy any website that hosted illegal content or linked to an illegal site. In a stunning shift, this week more than 40 members of Congress withdrew their support for or announced their opposition to SOPA and PIPA. How did this happen, especially when the Senate bill sailed through the Judiciary Committee last spring in a unanimous vote? Last week, the focus was the International CES, where over 150,000 tech leaders visited over 3,100 innovators introducing some 20,000 new products, many of them connected to the Internet. The CES was an exhilarating display of innovation and convinced all who attended that these technologies are the future and the engine for our economy. From the keynote stage I called on an “army of geeks” to oppose this anti-innovation legislation. Rep. Darrell Issa (R-CA) and Sen. Ron Wyden (D-OR) contributed to the cause by hosting a joint press conference at CES to voice their opposition to the bills and offer an alternative (the OPEN Act ), which would still shut down foreign rogue web sites – but through an existing government agency, the International Trade Commission. By the weekend, House Majority Leader Eric Cantor said he would not bring the PIPA legislation to the House floor while the White House said it would not support the PIPA or SOPA legislation as drafted. Then, on Monday and Tuesday, members began breaking ranks and announced their opposition to PIPA and SOPA. Finally, yesterday our website along with thousands all over the U.S. went black and urged users to contact their members of Congress. They did. Politico reported that on Wikipedia more than 5.4 million people began the process of contacting their politicians, and Google said it received four million signatures on its petition. Anyone on Capitol Hill Wednesday in any Congressional office heard phones ringing off the hook. By the end of the day, Politico also reported that at least six of the original 40 Senate co-sponsors had removed their names from the SOPA bill and another 22 had agreed to changes. This for a bill that passed unanimously out of Committee! On the House side, scores of members tweeted, posted their opposition on Facebook or told calling constituents they would not support the SOPA bill. In over 30 years of fighting in the Washington trenches, I have never witnessed such a mass exodus of support for legislation happen so quickly. I have spent an entire career fighting on behalf of innovation and often against the copyright owners, and too often the copyright owners won based on lobbying power rather than what was best for the nation. But not this time. Despite overwhelming their opposition in lobbying dollars, the copyright industry lost the American public. What made the fight against SOPA and PIPA the issue that finally awoke the fire of the American people on both sides of the aisle? Three good reasons. First, Americans are fed up with Congress. The RealClearPolitics average shows more than 80 percent of Americans have an unfavorable opinion of Congress. Second, Americans are tired of moneyed interests controlling Congress. The American public saw a well-heeled industry attempt to force its selfish will no matter the consequences, and they revolted. If you have any doubt about that Hollywood thinks it can buy support read how it responded to the White House weekend announcement; headline says it all: ” Hollywood Moguls Stopping Obama Donations Because Of President’s Piracy Stand: ‘Not Give A Dime Anymore .’” Third, Americans feel that no one can control the Internet, least of all an entrenched business lobby, and they certainly don’t want Congress messing with it. Thus, members of Congress are abandoning the sinking ship of this legislation. But it’s not over. Senate Majority Leader Harry Reid has promised a Senate vote on SOPA next week. The content community will agree to an amendment on the technical Internet shutdown provisions and declare the bill fixed. But that is only one objection to the bills. They will still allow anyone to sue a fledgling website; it will still allow a private right of action against entrepreneurs; and it will still make it illegal to hyperlink to a website copyright owners don’t like. Yesterday the geeks won and took their revenge on an industry that has long had Congress take its money and do its bidding to expand copyright laws, terms and penalties. Although the copyright owners haven’t surrendered yet, they know that the will of people is against them — and now the will of Congress has followed. But it wasn’t just the geeks; all of America, left, right, red and blue, rose up and said, “Hands off our Internet!” This is a national victory. Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, ” The Comeback: How Innovation Will Restore the American Dream .”

Read the full article →

← Previous Entries