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They Shoot Yahoo CEOs, Don't They? But Not Without a Really Smoking Gun and a Much Stronger Board.

Kara Swisher — Sat, 05 May 2012 16:33:02 +0000

Earlier today, Yahoo’s persistent thorn, activist shareholder Dan Loeb of Third Point poison-penned another letter to the board of the Silicon Valley Internet company, demanding that Yahoo fire its new CEO Scott Thompson, as well as director Patti Hart, over bizarre inaccuracies related to their academic achievements.

“Permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top,” Loeb wrote.”[Yahoo must] terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.”

And while many across the blogosphere — including some very clever tweets — called for his head tout de suite, that’s just not going to happen.

At least for now, at this early point in a controversy over Yahoo filing legal documents that misrepresented Thompson’s long-ago degree from Stonehill College.

In a nutshell: Thompson does not have a computer science degree, as he had maintained he did in public bios for almost a decade, a falsehood that mysteriously seeped into documents Yahoo filed with the Securities and Exchange Commission.

That’s bad news for Yahoo, for sure, on many levels, but moving against Thompson at this moment is not likely to be the answer — for the short term, at least.

That’s due to many reasons, that I like to think of it as three hopelessly complex puzzles that need solving pronto.

The What-Did-Yahoo-Know-and-When-Did-It-Know-It Question

There is no question the first thing Yahoo’s board needs to do is a thorough investigation to determine how a borked bio could proliferate so widely and for so long.

Most importantly, Yahoo will have to reveal if Thompson actually gave them this incorrect information, as he aggressively lobbied for the then-open CEO job.

As I had previously reported several times, Thompson cold-emailed a Yahoo director — Intuit CEO Brad Smith, as it turns out — despite not being on the list of potential candidates. Thompson was then shuttled over to Hart, who was running the vetting process with the help of headhunting firm Heidrick & Struggles, and hired within weeks.

Oddly, sources said Thompson never filled out the required informational papers for the job, nor did Heidrick conduct the normal background check on him. Instead, another forensic firm Yahoo hired did the work.

If it turns out Thompson gave any of them the bad bio info, it would be quick curtains for him.

But if Yahoo’s board members obtained his info on their own, the next key query would be how no one at Yahoo — especially its legal and compliance staffers, as well as outside help — managed to catch the problem during the vetting of Thompson.

Here are some good questions to start with:

Who put a faux computer science degree on Thompson’s bio in the first place, why and when did it happen?

Where did Yahoo get the inaccurate information?

Who was in charge of checking Thompson’s academic record for Yahoo?

And, who checked the work of the checkers?

The problem is made more complicated, because correct information was easily available in the SEC filings of eBay for years, since Thompson was head of its PayPal payments unit.

While the resume information was indeed wrong on eBay’s Web site and on numerous bios of Thompson for years, how did eBay legally get it right while Yahoo did not?

That calls into question the expertise of the company, its directors and those they hired to make sure execs were completely on the up and up, a task they clearly failed at.

If rank incompetence is the reason, which it looks like it might be, expect certain board members and other Yahoo staffers to go, along with anyone who helped in the Thompson vetting, or lack thereof.

Unless, of course, the gang-that-couldn’t-shoot-straight actually did shoot straight and some one at Yahoo found out about the educational discrepancy before the new CEO was announced, but declined to fix it.

While sinister, such a scenario is not entirely implausible, given how much pressure Yahoo was under at the time to hire a CEO quickly, due to Loeb and his looming proxy fight.

If any evidence were to surface that this was so, it is curtains all around, which would rain the kind of disaster down on Yahoo’s Sunnyvale HQ that would make Loeb’s attacks look like a Nerf battle. Instead, it would be “The Hunger Games” — except that no one survives.

The Chaos-in-Sunnyvale Conundrum

Which brings us to the profound implications of Yahoo jacking its second CEO within six months.

While it’s easy to yell “Fire the CEO” on a crowded Twitter, it’s simply not so easy in practice.

How long did it take Yahoo’s lugubrious board to figure out Carol Bartz needed to go? A … long … time. (And, she had a CS degree!)

More to the point, Thompson — and his not-so-merry band of consultants from Boston Consulting Group and, this week, McKinsey & Company — has only just completed a massive layoff of 2,000 employees and a jarring restructuring of management.

He’s also in the early stages of rolling out a new and decidedly still-squishy strategic plan to top execs (also just this week), along with working on some other key initiatives.

That includes renegotiating its search partnership with Microsoft; noodling around on a possible deal with Google; contemplating the sale of a variety of assets; and — oh, yes — trying to take on social networking Godzilla Facebook over patent infringement.

Busy much?

But, most importantly, Thompson is now the umpteenth Yahoo CEO to be working on the never-ending talks with its Asian partners over selling back a piece of the company’s lucrative stake to them.

While Yahoo CFO Tim Morse and head lawyer Mike Callahan are the point men on the deal, the lack of CEO would be an issue in the now-proceeding again talks.

This is a sale that must — and I underscore must — get done and soon, giving Yahoo much-needed breathing room and a whole lot of cash to fork over to increasingly disgruntled shareholders.

So, expect Yahoo to try to milk that deal for all it’s worth in the coming week, in order to give the appearance, at least, of positive forward momentum.

And, like it or not, Thompson has to play a key role in it getting done.

Thus, the likelihood of wait-and-see over point-and-shoot on Thompson is higher than you might think.

That’s especially true given four members of the board are leaving within six weeks and have either or are in the process of being replaced by new members.

Then, Thompson will be their problem to solve.

Again, no small thing, since the old crew — led by feckless Chairman Roy Bostock — is not likely to want to end its appalling tenure with yet another disaster.

Such a move would further tarnish the legacy of its outgoing directors, although I am not sure how it could be any more sullied, given their consistent record of one bad decision after the next.

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

It could be a different case with the new directors, of course, who all seem pretty sharp and not as easily impressed by a record of failure.

They will surely be monitoring Thompson carefully, as will employees, who have taken to internal message boards with a rage not seen in a while over the resume debacle.

Their morale might be one uncertainty impacting Thompson’s fate. If a lot of key employees continue to bolt Yahoo or those remaining more loudly express their disdain for the bio antics, the new directors might listen.

The Whatever-Loeb-Says-We-Won’t-Do-Till-Later Head-Scratcher

Which brings us back to Loeb, whose noisy campaign to grab seats on the Yahoo board has certainly hit home this week.

And, though Yahoo likes to ding him a lot, since he started his campaign of terribly entertaining investor terror, a lot of what he’s been calling for has happened.

That includes a major flushing of the board — with five longtime members, including co-founder Jerry Yang, going, going and gone.

In addition, Loeb brought pressure to slow down some questionable deals, from Yahoo’s PIPE dream to a tax-free spinoff in Asia in a deal only an accountant could love.

He’s also — though they try to deny it — got the Yahoo directors in the dangerous habit of reacting to him, rather than playing their own game.

While the Yahoo board has resisted any deal with Loeb (pictured here), blaming him for rejecting their kind offers of settlement, it is he who is setting the tone more than Yahoo.

And that tone is of alarm and trouble and chaos at Yahoo.

That’s not going to work to convince other Yahoo investors to back his cause — in fact, Loeb has a decidedly uphill battle to win his proxy challenge — he has still scored a direct win with the bio relevations.

So far, though, Loeb has not sunk Yahoo’s battleship, so it is unlikely the board will acquiesce to his latest demand of Thompson being fired by noon on Monday.

Maybe it will eventually, or maybe it will just scold Thompson or maybe it will do nothing at all.

All that is an unknown — a riddle, wrapped in a mystery, inside an enigma, with a lot of managerial incompetence thrown in. And that, most of all, is the sad definition of today’s Yahoo.

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Viral Video: A Pit Bull Is Delicious!

Kara Swisher — Sun, 29 Apr 2012 16:44:45 +0000

Here’s the full video of President Barack Obama from the White House Correspondents’ Association Dinner.

It includes the terrific joke he told — riffing on the one Sarah Palin used in the last presidential campaign, about the difference between a hockey mom and a pit bull, and referring to the recent spate of stories of him once eating dog.

Worth the watch:

To Mitt: Here's Your Digital Etch A Sketch

Lauren Goode — Fri, 23 Mar 2012 17:29:03 +0000

A remark made by one of Republican presidential candidate Mitt Romney’s advisers has sent online shoppers — and investors — into an Etch A Sketch frenzy.

In case you’ve missed the sandstorm, Eric Fehrnstrom, a top Romney adviser, said on Wednesday that if Romney wins the GOP nomination, the campaign will “hit a reset button” to take on President Obama in the fall.

Fehrnstrom then added, “It’s almost like an Etch A Sketch. You can kind of shake it up, and we start all over again.”

While Romney’s rivals have pounced on the comment — Newt Gingrich’s camp has even created a SketchyRomney app — Etch A Sketch fans have pounced on the venerable toy, buying it in droves on Amazon.com.

Politico reports that sales of the 1950’s relic shot up more than 2,000 percent on the e-commerce site, while Ohio Art Company, the maker of Etch A Sketch, saw its stock hit a 52-week high yesterday, before closing at $9.65, more than double its Wednesday closing price of $4.

Here at AllThingsD, we say: Why go for the plastic version, when you can play with a digital Etch A Sketch on your mobile appendages?

That’s right: Campaign platforms, errant Twitpics, awkward remarks — all erased with the shake of an iPad.

It’s a politician’s best friend.

For iPhone, there’s Etch A Sketch Premium, from Freeze Tag, Inc., a company that makes casual games for mobile devices and personal computers. It costs just 99 cents (or about 0.000001309367724577594 percent of the $75,609,012 Romney has raised to date).

Unlike the physical Etch A Sketch, users of this app can change the color of the toy’s frame, choose from a color palette when drawing, use predrawn shapes or a background (like Hangman), and share their drawings with friends via email, Facebook or a photo album. As with the original Etch A Sketch, you simply shake it to erase it.

But a smartphone screen is just too small for this kind of app, and the knobs of the Etch A Sketch appear to be cut off at the bottom. You can use your finger to draw, but that seems like Etch A Sketch sacrilege.

Fortunately, there’s an iPad app from the same company. This one costs $2.99, and is the real deal.

The Draw Something addicts out there can share their Etch A Sketch iPad drawings with friends over Wi-Fi. Or, users can draw alone, add photos from a photo album, use colorful stamps, share through Facebook and even access an iPod song library to set sketches to a soundtrack … like, maybe a campaign soundtrack?

For Android devices, there’s a free version of Freeze Tag’s Etch A Sketch with ads; and a 99-cent version without. There’s also the 99-cent Etch-a-Doodle app, which replicates the Etch A Sketch experience.

Those who would rather pay a more visible homage to Etch a Sketch can check out these retro red covers for mobile devices.

And if you’re feeling really ambitious, you can attempt to make a Kinect-a-Sketch, as these guys did, as seen in the video below:

(Photo courtesy of Flickr/The Children’s Museum of Indianapolis)

Viral Video: Hollywood Loves Obama Again

Kara Swisher — Mon, 19 Mar 2012 08:09:55 +0000

This has got to be the mother of all political ads — directed by Oscar-winning director Davis Guggenheim, narrated by Tom Hanks, and lasting 17 minutes — all part of the campaign of President Barack Obama.

Plus, “The Road We’ve Traveled” video was posted right to YouTube upon its release.

It will be interesting to see how it will be received, and if it will work. The Washington Post is calling it a “docu-ganda,” noting that it cost $345,000.

What do you think?

Viral Video: Best Worst Sarah Palin Imitation

Kara Swisher — Wed, 14 Mar 2012 08:17:01 +0000

Here’s Andy Samberg from last week’s “Saturday Night Live,” trying his very worst to channel Sarah Palin in the absence of Tina Fey. It’s related to HBO’s recent original movie, “Game Change,” about the 2008 presidential campaign. Palin, who was the GOP VP candidate, dismissed the highly rated cable show as “Hollywood lies.”

Whatev, but this is funny:

HomeAway Hopes Golden Globes Ad Can Fix Super Bowl Blunder

Tricia Duryee — Sun, 15 Jan 2012 14:00:13 +0000

HomeAway hopes its new commercial, airing during today’s Golden Globes broadcast, will make its Super Bowl blunder a thing of the past.

The new campaign — set to the tune of “Let’s Stay Together,” by Al Green — is much more tame than last year’s ad. The 30-second spot focuses on creating family memories around campfires, swimming holes and hiking trails; memories that often can be made in or near homes — not in hotels.

HomeAway, which operates vacation-rentals marketplaces, including HomeAway.com, VRBO.com and VacationRentals.com, went out on a limb for its Super Bowl commercial last year. If the point was to generate buzz before filing for its initial public offering, it was a success.

But the Austin, Texas-based company ended up having to yank the ad after drawing criticism over a particularly disturbing image: In the commercial, a doll — which was obviously not a child — was thrown against a wall to demonstrate how cramped hotel rooms can be, compared to more spacious rental houses.

The updated — and more subtle — campaign will air in select markets during NBC’s broadcast of the 69th Golden Globe Awards. Following its debut, the spot will air on the Travel Channel, the Food Network, HGTV and other special promotions, including the Grammy Awards on Feb. 12, the Academy Awards on Feb. 26 and the “Survivor” finale.

Second time’s the charm?

Viral Video: "Game Change" (Or the Latest Sarah Palin Impersonation)

Kara Swisher — Mon, 26 Dec 2011 11:22:53 +0000

The ever-bickering crop of current Republican Presidential nominees dragging themselves to the first Iowa vote in the coming weeks almost makes you wish for a true political character to liven up the proceedings.

Or some nostalgia for the last go-round, which is definitely present in this trailer for HBO’s upcoming adaptation of “Game Change,” the lively book about the 2008 campaign, featuring the always telegenic Sarah Palin.

The former Alaska governor is played this time around by Julianne Moore, who really looks and sounds like the GOP VP candidate.

You betcha, she does:

Digital Marketing Start-Up Thismoment Raises $7.3 Million From Sierra Ventures

Kara Swisher — Tue, 15 Nov 2011 15:30:58 +0000

Thismoment, the San Francisco-based digital marketing platform provider, said it has raised $7.3 million in its first institutional venture round from Sierra Ventures.

Before this funding, the company raised $4.25 million since 2008, when it was founded as a content-sharing Web site.

The company, which serves brands and agencies with its Distributed Engagement Channel platform, said it is aimed at “managing content, conversation and creative assets across earned, owned and paid media channels.” That means marketing “initiatives across Facebook, YouTube, brand sites, rich media ad units, mobile devices, tablets and digital outdoor placements,” as well as a platform to manage these social marketing campaigns.

Sierra’s Mark Fernandes will join the board. Other investors include private equity firm Fenway Partners, as well as well-known digital execs Shelby Bonnie, Jason Hirschhorn and Mika Salmi.

Thismoment said it will use the new funds to expand operations in the U.S. and also add them internationally.

Exclusive: Yahoo Overhauls Marketing Unit -- The Internal Memo

Kara Swisher — Fri, 21 Oct 2011 15:48:58 +0000

Yahoo is drastically rejiggering its marketing division, according to an internal memo sent today to employees from its Chief Marketing Officer Elisa Steele, in a move that seems to leave her future role unclear.

Steele was brought to Yahoo over two years ago by now-fired CEO Carol Bartz — whom she had been very close to — and charged with turbocharging and reorganizing the unit, which has never been strong.

While Steele certainly did overhaul the marketing department, some of her efforts, such as Yahoo’s pricey “It’s You” advertising campaign, have not worked out. And, largely due to the ongoing turmoil at the company, its brand has suffered under her watch.

The changes, which appear to be at the behest of Steele (though you never know at Yahoo!), will shift the major marketing functions back to the regions of the Silicon Valley Internet company from its current global centralized one.

“I believe we now need to bring marketing decisions, marketing talent and marketing budgets closer to the customer — and into the regions that depend on these critical plans,” she wrote. “We need to further link our marketing strategies to revenue growth, sales objectives and overall accountability.”

Since Steele took over the marketing department at Yahoo several years ago, she has been moving those powers to a more centralized system.

No longer.

In the internal memo, which I obtained and is embedded below, Steele outlines the shift, which will remove a lot of that control of marketing from the HQ and out to its business units.

Steele said in the email to the marketing team that she will remain at the company as CMO for now, although seems to indicate that she is also evaluating her future role.

“My current role as CMO on CEO staff is unchanged,” she wrote. “However, whatever I decide to do next for my career is my choice — and I’ll think about that on my own timeline.”

Sounds like an eventual departure to me, with Steele trying hard to stress she was going out on her own motor, even though giving up contro of big parts of your unit is unusual.

In any case, Steele obviously is betting now that on-the-ground control of marketing will help improve things for the beleaguered company. Here’s the memo:

Team,

It is critical for Yahoo! to grow faster and become more agile. We need to make decisions to accelerate the Regions’ growth plans around the world, and Marketing plays a crucial role in helping develop, support and execute these plans. We’ve built an integrated marketing machine that is an asset to help the company grow now and into the future. When we assembled a global and centralized organization in 2009, we took the opportunity to create best practices, establish consistency, deepen domain expertise, enhance functional capabilities and innovate for one of the biggest brands in the world. And, in the past 12 months, Global Marketing took home dozens of industry awards for marketing leadership in integrated consumer marketing, digital marketing and event marketing – including the acclaimed Cannes Lions, a Clio, a Webby and IAB Awards. Our Marketing achievements have been broad, deep and well recognized.

Now that we have this strong capability, it is time to leverage it even further. I believe we now need to bring marketing decisions, marketing talent and marketing budgets closer to the customer — and into the regions that depend on these critical plans. We need to further link our marketing strategies to revenue growth, sales objectives and overall accountability. Therefore, I want to put the marketing programs and tools we’ve developed right with the Sales and Audience teams responsible for the business outcomes.

It is with this in mind that I recommended a marketing reorganization plan to align to these objectives, accelerate decision-making and simplify roles. The plan centers on decentralizing the current global team into 2 types of specific teams:

1. Regional Marketing: Our regional marketing teams will move to report directly to the Regional leaders in Americas, EMEA and APAC.

2. Corporate Marketing: Our strategic brand, communications and marketing services teams will remain centralized and report into HQ.

This was my proposal to Tim for the best interests of Yahoo! today, and I am glad he agreed with my thinking. I really hope you will endorse and support these changes, too. Yahoo! needs your help and expertise to insure this important next phase is successful.

I want you to know how proud I am of your achievements and contributions. I also want to thank you for the incredible support you have shown me over the past 2.5 years in the current organization. It’s been an amazing brand adventure and working with each of you has been a great source of satisfaction.

My current role as CMO on CEO staff is unchanged. However, whatever I decide to do next for my career is my choice — and I’ll think about that on my own timeline. First, I will work with Tim, my peers and all of you to ensure a smooth transition — and that is my focus for now.

We have a meeting scheduled with the marketing leadership team on Monday and I can address any questions you may have about this transition.

Thanks,

Elisa

Apple Brand Ascendent, While Yahoo's Is in Marketing Retrograde

Kara Swisher — Wed, 05 Oct 2011 12:55:01 +0000

Yahoo — which has been trying to right itself after a series of missteps and an ever-weakening business — took another direct hit yesterday, as it got dinged in a high-profile annual survey of the Top 100 global brands.

According to Interbrand’s “Best Global Brands 2011,” Yahoo dropped 11 percent in brand value — calculated as $4.4 billion — in the year in which it fell from No. 66 to No. 76.

Way to go, Yahoo marketing! I think that pricey “It’s You” advertising campaign might not have worked.

Meanwhile, Apple broke into the Top 10 list for the first time, vaulting from No. 17 to No. 8, rising 58 percent in brand value to $33.5 billion.

Other tech companies did pretty well in the Interbrand poll — which is the gold standard of the state of brand health with consumers — especially compared to Yahoo (whose brand value high was in 2007 and which is now back at 2001 levels).

For example: IBM kept its No. 2 spot, with brand value rising eight percent; Microsoft fell three percent, but maintained its No. 3 place; Google stayed at No. 4, up 27 percent; and Amazon rose 32 percent and reached No. 26 from No. 36.

Even troubled companies prevailed over Yahoo’s twin declines: Hewlett-Packard held on to its No. 10 slot, with brand value up six percent; Research In Motion dropped only five percent and two slots, from No. 54 to No. 56; and Nokia fell from No. 8 to No. 14 and saw its brand value decline 15 percent.

Most interesting, perhaps, about the 12-year-old survey: Six of the Top 10 brands are tech companies.

Federated Media Buys Lijit Networks

Kara Swisher — Tue, 04 Oct 2011 12:00:16 +0000

San Francisco-based Federated Media Publishing said it has bought Lijit Networks, a smaller online advertising analytics and tools firm.

The price for the Boulder, Colo., start-up — which was founded in 2006 — was undisclosed, but it has received just under $29 million in venture funding from firms such as Foundry Group. Federated said Lijit would continue to operate independently, “but in conjunction.”

In an interview yesterday, Federated CEO Deanna Brown said the buy was to round out offerings for its clients and to better compete in a world where most of the online ads go to the top five players.

“I am excited we can give both publishers and advertisers more tools for engagement and monetization,” she said.

Federated, which lost big social-media news site Mashable earlier this year, also benefits from increased scale and inventory of sites.

Lijit CEO Todd Vernon, who will become EVP of technology at Federated, said that it was ever more important for ad-focused firms on the Web to “deliver the entire stack.”

“Lijit has a core competency in the media business, and combined with FM’s best-in-class sales force, we can offer everything needed to do effective online campaigns,” he said.

Here’s the official press release:

Federated Media Publishing To Acquire Lijit Networks

Combined Entity Will Power More than 77,000 Independent Publishers Across the Web Via Comprehensive Advertising, Analytics and Reader Engagement Tools

SAN FRANCISCO, October 4, 2011 – Federated Media Publishing, which powers the best of the Independent Web, today announced the acquisition of Lijit Networks, Inc. Lijit is a leading provider of advertising services, audience analytics and reader engagement tools for online publishers of all sizes. The combined entity will reach nearly 300 million global unique visitors according to Quantcast.

Lijit, headquartered in Boulder, Colorado, will continue to operate independently but in conjunction with the rest of Federated Media Publishing. Lijit CEO Todd Vernon and COO Walter Knapp will take on corresponding EVP of Technology and SVP of Platform Revenue responsibilities at Federated Media Publishing and will report directly to Federated Media Publishing’s CEO, Deanna Brown. Additionally, Lijit board member Seth Levine from Foundry Group will join the Federated Media Publishing board of directors, effective immediately.

With the addition of Lijit Networks’ existing publisher relationships, Federated Media Publishing will now reach more than 77,000 online publishers and nearly 15,000 expert communities, making it one of the largest companies to power publishing on the Independent Web. The acquisition vastly expands the combined company’s inventory of sites, offering premium advertisers improved scale and reach.

Publishers Will Profit and Flourish

Lijit helps publishers more thoughtfully interact with and better understand their audience by providing analytics and engagement tools that build deeper relationships, lengthen time on site and increase page views. These robust and actionable audience analytics and reader engagement tools leverage intent, behavior and demographics to help publishers of all sizes increase revenue and better engage their readers.

Additionally, the combined advertising services provided by FM and Lijit will give publishers of all sizes a revenue stream that complements existing sales efforts and helps grow and monetize their website businesses, no matter what the size.

Advertisers Can More Easily Analyze and Engage

The combination of Federated Media Publishing’s premium online advertising and conversational marketing programs and Lijit’s proprietary data collection tools will empower advertisers to better understand user intent, contextual relevance and demographic information. And by leveraging the combined entity’s extensive publisher relationships, advertisers will have unprecedented scale on the Independent Web.

Introducing Programmatic Buying to the Independent Web

Programmatic buying is one of the fastest growing trends in digital media and the introduction of Lijit’s robust RTB exchange will equip media buyers with one of the largest platforms available. Over the next few months, Federated Media Publishing and Lijit will develop a series of private exchanges that will highlight leading independent publishers. These exchanges will allow brands to engage active, passionate consumers found in highly conversational online communities and publications, while delivering premium CPM rates via FM’s conversational marketing programs.

Quote

“The Lijit Networks team is just as passionate and committed to powering publishers as we are at Federated Media Publishing and that was a crucial element to this decision,” said Deanna Brown, chief executive officer, Federated Media Publishing. “Our combined relationships, proprietary tools and conversational marketing services will be invaluable to publishers and advertisers alike.”

“Federated Media invented how to leverage authentic voices and engaged conversations that exist in the Independent Web,” said Todd Vernon, founder and CEO of Lijit Networks. “The combination of the two companies is a game changer in the industry that unlocks new opportunities for both companies and our combined publisher network.”

Exclusive: Efficient Frontier Buys Context Optional for $50 Million

Kara Swisher — Wed, 04 May 2011 16:15:53 +0000

Online performance marketing firm Efficient Frontier is acquiring San Francisco-based social marketing software and services start-up Context Optional, the company said.

While terms of the deal were not revealed, sources said the price was $50 million.

The purchase of Context Optional is the first acquisition for Efficient Frontier, which has grown from a start-up that focused solely on search engine marketing to now including display and social media campaigns.

The move is a significant sign, said Efficient Frontier CEO David Karnstedt, that social has become a key part of the advertising ecosystem and an end-to-end solution is important to marketers.

With the purchase, for example, he said advertisers will be able to run Facebook ads all the way through to managing their brand’s fan page and help with both acquisition and retention.

“Our heritage is that we were early in optimizing search engine advertising for clients, so we wanted to expand our efforts exponentially with Context Optional, since social is different than search,” said Karnstedt in an interview yesterday with BoomTown. “We want to help advertisers interested in social media keep engaged and regularly returning customers.”

Context Optional was founded in 2006 and competes with other start-ups, such as Buddy Media, Involver and Vitrue.

Here is the official press release from Sunnyvale, Calif.-based Efficient Frontier:

Efficient Frontier Acquires Context Optional to Create the First Comprehensive Solution for Social Media Marketing

Unites Leading Advertising and Page Management Platforms to Maximize Social Marketing Impact

Sunnyvale, Calif.–May 4, 2011–Efficient Frontier, a leading global performance marketing company, today announced that the company has acquired Context Optional, a leader in enterprise social marketing solutions. The acquisition expands Efficient Frontier’s social media offering which will combine the company’s advertising campaign management and optimization with Context Optional’s page management platform. This marks the first unified solution for managing and optimizing Facebook fan acquisition through to fan retention and engagement. Terms of the deal were not disclosed.

“We are excited to offer marketers a complete solution for capitalizing on the growing social marketing opportunity across Facebook, Twitter and LinkedIn,” said David Karnstedt, Efficient Frontier’s CEO. “Social media marketing is more than just the initial contact with the customer and requires both compelling experiences and an ongoing dialog to realize the full potential of the interaction. The acquisition of Context Optional will create a unified platform for marketers to manage all of their social media touch points with brand enthusiasts.”

Efficient Frontier’s platform manages ad campaigns across search, display and social media, enabling customers to acquire audiences across multiple channels and optimize for better results. Context Optional’s Social Marketing Suite of products is an enterprise solution for brands to engage and retain audiences across Facebook and Twitter.

By aligning acquisition and engagement strategies, the combined company will be able to deliver a seamless and measurable user experience by integrating advertising and social marketing content. Brands will be able to more efficiently target audiences based on social engagement insights and continually refine their Facebook application experiences to better match their audiences’ interests. Efficient Frontier will also be able to provide integrated analytics to provide a more complete view of performance including virality.

“Efficient Frontier is a leader in digital marketing and our respective clients are asking us for a comprehensive solution to both acquire and build relationships with their customers,” said Kevin Barenblat, Context Optional’s Co-Founder and CEO. “This combination is recognition that social media is now indeed a powerful marketing channel in which brands are significantly investing. “We’re excited to be the first in the market with an integrated, enterprise solution to enable brands to effectively scale their investment in social.”

Viral Video: Czech President Pen Caper (and Inevitable Facebook Campaign)

Kara Swisher — Wed, 20 Apr 2011 10:10:11 +0000

A video of Czech President Vaclav Klaus sneakily pocketing a fancy pen at a signing ceremony has, of course, continued to rack the views on YouTube.

And–also, of course–there is now a Facebook campaign to send him more pens.

Klaus, who does not seem to get the profound silliness of the Internet, has declared that pens are for the keeping when it comes to official duties.

All true, but his stylus caper looks pretty hysterical when set to music, as it was by this Czech television news program:

Viral Video: Foursquare's Dennis Crowley Is Character Approved

Kara Swisher — Thu, 17 Mar 2011 07:05:55 +0000

Recently, Foursquare was selected for an “award,” as part of an advertising campaign for USA Networks, whose motto is “Characters Welcome.”

On its Web site, “USA Network’s Character Approved: Honoring 12 Cultural Trailblazers” is described as “innovators in their field who influence our opinions, our style, and our view of the world.”

Now, a commercial featuring co-founders Dennis Crowley and Naveen Selvadurai is in heavy rotation on the cable television channel–what can BoomTown say, except, “NCIS” rocks, and thus, I have had to endure the ad 67 times so far!

In fact, it’s actually kind of sweet and awkward, as the pair try to explain the social geo-location service to the masses.

Enjoy:

Thank William Shatner as Priceline's Stock Price Negotiates a Five-Year High

Tricia Duryee — Tue, 15 Feb 2011 19:09:36 +0000

Priceline’s shares traded at a five-year high today, nearly tripling in value over the past year alone.

The company said it is performing well, as deal seekers around the world–from North America to Western Europe to the Asia-Pacific region–look for deals on hotels and rental cars, specifically, and benefit from improvements in the economy.

The company’s stock is trading at $463.33, up $6.32 a share today. A new 52-week high was hit yesterday, trading at $459.57 a share.

Yesterday, Priceline announced it entered its fifth straight year of its well-known advertising campaign, featuring William Shatner–a.k.a. “the Priceline Negotiator.”

Shatner is portrayed as a James Bond-like character who will stop at nothing to obtain the best travel deals and maximum savings for Priceline customers–although he does silly things along the way, too, like watch a gorilla wrestle a scrawny man.

Shatner will be joined in the campaign–created by Butler, Shine, Stern & Partners–by new sidekicks Naomi Pryce and the NBA’s all-time leading scorer, Kareem Abdul-Jabbar.

The Norwalk, Conn.-based company will release its fourth-quarter and full-year results Feb. 23.

Expect the focus to be on growth.

Priceline is forecasting total gross travel bookings to jump year-over-year by 36 to 41 percent, with most of the growth coming internationally.

International bookings are expected to jump by 54 to 59 percent vs. minimal growth in domestic gross travel of 5 to 10 percent.

Annual revenues are forecasted to jump by 31 to 36 percent, and gross profits are expected to soar by 49 to 54 percent.

As a close competitor to Priceline, Expedia.com hit a 52-week high of $29.85 back in September, but has fallen considerably since, to trade around $21.69 a share.

Yesterday, Expedia relaunched a new price-savings campaign called ASAP: A Sudden Amazing Price. The promotion will offer two discounts a day on hotels and other items of up to 50 percent, aimed at both sides of the country.

Rupert Murdoch Gives Guests a Sneak Peek of Tomorrow's "Daily" Tonight. Here's What They'll See.

Peter Kafka — Tue, 01 Feb 2011 14:31:32 +0000

The Daily makes its official debut tomorrow morning, at a press event at New York’s Guggenheim Museum.

[CLICK HERE FOR LIVE COVERAGE OF THE PRESS EVENT]
But a select crowd will get to see the iPad newspaper tonight, at an equally notable Manhattan location: Rupert Murdoch’s apartment, where the News Corp. CEO is hosting a “low key” cocktail party.

Although News Corp. owns this Web site, my email invite to tonight’s pre-launch launch event hasn’t arrived, and I’m told it never will. The company hasn’t offered me a peek at the Daily, either.

But at this point I’ve still got a pretty decent sense of what Murdoch’s guests will see this evening, and the rest of us will see tomorrow: A newspaper that’s both old-fashioned and cutting-edge.

People who have gotten up close to the the Daily describe a digital paper where many of the news stories look just like news stories you’d see anywhere else.

Others will look more like iPhone apps, featuring interactive graphics or videos, or photos you can swipe, pinch and zoom–with perhaps almost no text at all.

And there’s more! There’s no 3-D video yet, though it’s on the agenda. But there will be an audio feature so you can have stories read aloud to you. And there’s a crossword puzzle! And Sudoku!

A Daily-watcher who thinks the thing is amazing compares it to the Daily Prophet, the magical newspaper read by Harry Potter and his wizard pals.

More jaded observers tell me it’s more or less what they’ve seen in existing iPad magazine apps, particularly Hearst’s Popular Mechanics and Condé Nast’s Wired. The big difference is that those magazines come out monthly, and the Daily will get beamed to your iPad… daily.

Still, the most striking thing about the Daily has nothing to do with any technical bells and whistles. It’s Murdoch’s insistence that he can sell a digital newspaper app to consumers trained to expect that digital news is what you get on the Web, for free.

The Daily is almost defiantly anti-Web: It will have a free site, with a grudging sample of perhaps 10 percent of the newspaper’s stories, but that’s it. While Web news sites increasingly focus on aggregation and filtering of other people’s content, the Daily will focus on making its own stuff, even though plenty of other people are already doing it.

And while News Corp. officials have tried to argue that the Daily isn’t a newspaper but something else, it is most definitely produced using a newspaper model: Six sections, written once a day–the Daily team is particularly excited about its sports coverage–and delivered in the wee hours of the morning.

The Daily will allow for some midday updates, but it’s really designed to land with a digital thud on your virtual doorstep, just like the newspapers Murdoch has loved all his life.

Murdoch will charge 99 cents a week for a subscription, and he’s certainly going to get some takers at the start, especially since the Daily will be free for the first two weeks after tomorrow’s launch.

Which will be a noisy one. The press will give it plenty of free promotion, and News Corp. will augment that with a digital ad campaign, in addition to offline marketing donated and/or bartered from other Murdoch properties. Perhaps there’s a way to mention it once or twice during Sunday’s Super Bowl broadcast on Fox.

Much more important will be the endorsement from Apple, which is using the Daily to roll out a new “push” subscription feature.

Apple CEO Steve Jobs, who was supposed to appear onstage in San Francisco with Murdoch to bless the launch, will send content boss Eddy Cue to New York tomorrow instead.

That’s still Apple’s seal of approval, though, and I can’t think of another time the company has so conspicuously blessed a single third-party product. That alone will be enough to prompt an enormous number of people to try it out.

Remember that Apple already has a customer base of some 125 million iTunes users–if you do want to buy this thing, you won’t need to pull out a credit card. A few button clicks will do.

The real question, of course, is how many people are going to pay for the Daily a month down the road, when the buzz is gone. And there’s no way to guess at that when you get your first look at the thing. No matter when that happens.

Netflix Takes Aim at the Cable Guys, With a Promise to Start Firing Tomorrow

Peter Kafka — Wed, 26 Jan 2011 22:25:40 +0000

Interesting PR campaign from Netflix, which is fighting with the cable guys and telcos over the cost of delivering all that streaming video to your living room: The company is going to publish a list of broadband Internet providers, ranked by performance.

Netflix CEO Reed Hastings’s letter to shareholders goes on about his company’s position vs. the ISPs at great length, and I’ll reproduce it at the bottom of the post.

But you can summarize it in a sentence: If the broadband guys insist on gouging us to get video to our customers, we’re going to make a very public stink.

So tomorrow’s list is a warning shot, meant to give the ISPs a sense of where Netflix is willing to go on this one.

Hastings says the list will detail “which ISPs provide the best, most consistent high-speed Internet for streaming Netflix,” and offers a preview: Charter is tops, right now.

But if you invert Hastings’s description, you get what he really means: We’re going to tell some broadband customers that they’re getting screwed and should switch to a new provider. Heads up, Time Warner Cable, Comcast, etc.

In other news, Netflix casually tossed off another very good quarter: The company added three million subscribers in the last three months of 2010, and says that a third of its new customers are choosing its new streaming-only plan. International expansion is still on the table for 2011 and is a major focus for Netflix going forward, Hastings said.

Here’s his warning/threat to the broadband business:

Recently the FCC adopted a version of net neutrality for wired networks in the U.S., and it’s a step in the right direction. The focus is on fair-play within an ISP’s network, but does not explicitly address entry into the ISP’s network.

Delivering Internet video in scale creates costs for both Netflix and for ISPs. We think the cost sharing between Internet video suppliers and ISPs should be that we have to haul the bits to the various regional front-doors that the ISPs operate, and that they then carry the bits the last mile to the consumer who has requested them, with each side paying its own costs. This open, regional, nocharges, interchange model is something for which we are advocating. Today, some ISPs charge us, or our CDN partners, to let in the bits their customers have requested from us, and we think this is inappropriate. As long as we pay for getting the bits to the regional interchanges of the ISP’s choosing, we don’t think they should be able to use their exclusive control of their residential customers to force us to pay them to let in the data their customers’ desire. Their customers already pay them to deliver the bits on their network, and requiring us to pay even though we deliver the bits to their network is an inappropriate reflection of their last mile exclusive control of their residential customers.

Conversely, this open, regional, no-charges model should disallow content providers like Netflix and ESPN3 from shutting off certain ISPs unless those ISPs pay the content provider. Hopefully, we can get broad voluntary agreement on this open, regional, no-charges, interchange model. Some ISPs already operate by this open, regional, no-charges, interchange model, but without any commitment to maintain it going forward.

Tomorrow, we’ll publish on our blog ongoing performance statistics about ISPs collected from our 20 million subscribers detailing which ISPs provide the best, most-consistent high speed internet for streaming Netflix. We can tell you now, though, that for our subscribers streaming Netflix, Charter is the highest-performance ISP in the United States.

Recently, there was a report that at peak times Netflix subscribers in the U.S. were driving about 20% of peak downstream last-mile Internet traffic. This may or may not be accurate, but it should be noted that because we pay for the data to be delivered to regional ISP front doors, little of this traffic goes over the Internet or ISP backbone networks, thereby minimizing ISP costs, avoiding congestion, and improving performance for end-using consumers.

An independent negative issue for Netflix and other Internet video providers would be a move by wired ISPs to shift consumers to pay-per-gigabyte models instead of the current unlimited-up-to-a-large-cap approach. We hope this doesn’t happen, and will do what we can to promote the unlimited-up-to-alarge-cap model. Wired ISPs have large fixed costs of building and maintaining their last mile network of residential cable and fiber.

The ISPs’ costs, however, to deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling, so there is no reason that pay-per-gigabyte is economically necessary. Moreover, at $1 per gigabyte over wired networks, it would be grossly overpriced.

One Down: Spotify Signs Sony to U.S. Deal

Peter Kafka — Thu, 20 Jan 2011 00:18:03 +0000

This doesn’t get them into the States, but it gets them a lot closer: Music service Spotify has finally signed with Sony for a U.S. distribution deal. Multiple sources tell me the deal, which has been very close since last fall, is now closed.

I’m told the terms call for a U.S. service that more or less mirrors the one Spotify offers in Europe: A certain number of hours per month of free streaming music, with the ability to pay for an ad-free version, or a more popular one that lets users listen on mobile devices like Apple’s iPhone.

Both Spotify and Sony declined to comment.

The deal doesn’t mean a U.S. launch is imminent for the service, which has been trying to make the leap from Europe for a couple of years, and which missed a self-imposed deadline to make it over in 2010. In order to make a credible offer to U.S. customers, it will need at least two of the three other big music labels to sign on.

And practically, at least one of those labels has to be Vivendi’s Universal Music Group, the world’s biggest music label. So Spotify will need to hammer out a deal with UMG and either Warner Music Group or EMI before we can start talking about a U.S. launch date.

The New York Post reported last week that Spotify was close to a Sony deal.

What’s taking Spotify so long to land in the U.S.? Depends on whom you ask.

Some industry sources tell me the big music labels are genuinely worried that Spotify’s free streaming service will increase the decline of CD sales, which have been dropping for a decade, but still make up the majority of the labels’ revenue.

Others have a more cynical take, though it’s not mutually exclusive: The labels, which have already licensed Spotify in Europe, simply want more cash from the company before they do an American deal. There is also muttering that the labels don’t want to upset Apple, which sells tunes on a track-by-track basis via its iTunes store and dominates the market for digital music.

It’s also unclear how close Spotify is to more label deals. Executives at the service have long been hopeful that getting one deal done would convince the other labels to join up. On the other hand, you could argue that it gives the holdouts that much more leverage.

And in any case, even if Spotify signed two more labels tomorrow, it would still take the company some time to cross the Atlantic, as it prepares a marketing campaign, etc.

It might also be nice for the company to have a new slug of cash on hand, something it would have if it goes through with fundraising talks it has been holding recently.

Spotify CEO Daniel Ek talked to me about some of these issues, in a general and noncommittal way, at our D: Dive Into Mobile conference last month. You can see an abbreviated version of our chat below, or you can watch the whole thing here.

[ See post to watch video ]

Happy 10th Birthday, Wikipedia! What's Next? (Video)

Liz Gannes — Fri, 14 Jan 2011 18:04:34 +0000

Wikipedia now seems like an enduring institution on the Web, but the site was only founded 10 years ago, tomorrow.

Sue Gardner, executive director of the Wikimedia Foundation, which operates Wikipedia, says it is just recently that the site has gotten itself on sustainable financial footing, and has become widely accepted as a useful, quality resource.

We stopped by the nonprofit’s San Francisco headquarters, which is located amidst a sea of tech companies in the city’s SOMA district, on the eve of the big anniversary, which Wikipedia is celebrating with a set of relatively mellow user meet-ups around the world.

Gardner spoke about the evolution of Wikimedia as an organization, and set out its goals for the coming years. We videoed the part of the interview where she sets the scene for the 10th anniversary.

[ See post to watch video ]

Wikipedia is coming off a successful grassroots fundraiser, where it was able to raise $16 million from users, in part due to founder Jimmy Wales’s face greeting users every time they visited the site until the end of the campaign. That’s double the amount raised in a similar campaign the year before.

And over the last 18 months, Wikimedia orchestrated a wide-scale community discussion of its strategy, aided by collaboration expert Eugene Eric Kim, which resulted in a set of goals to take the organization and its many volunteers forward.

Wikipedia now has cumulative 380 million edits, resulting in 17.8 million articles in 250 languages by eight million user accounts, of which about 100,000 edit at least five times per month. It has 52 people in its San Francisco headquarters, which Gardner took over in 2007.

The nonprofit’s three-part mandate is to increase Wikipedia participation, quality and reach. Its big focus for the coming year will be reach, according to Gardner, specifically targeting poorer areas of the world where Wikipedia has so far proved to be less popular.

The idea, said Gardner, is that if people in these places have the tools and exposure to contribute to Wikipedia, the resulting content will be better representative of the world, as well as more comprehensive.

“You can’t blame editors for not being representative,” said Gardner. “The way to solve this is not to make them feel bad.”

A major implementation of the initiative will be opening a Wikimedia office in India in the next couple of months. Gardner had just recently returned from a trip to India when we spoke.

Meanwhile, Wikimedia’s product team is also working to redo its registration and discussion tools, and future projects include a better system for understanding user reputations.

The company has also started a campus ambassador program at colleges, which Gardner said is promising in part due to the folks who have turned out so far. Unlike with Wikipedia, where 87 percent of contributors are men, the campus ambassador volunteers were 50 percent women.

Another college effort is a program with 25 public policy classes to improve the Wikipedia pages on a particular subject matter.

And on the infrastructure front, Wikimedia is finally moving its data center out of the hurricane zone in Florida to a dedicated space in Virginia. The nonprofit is also looking to cache the site from more locations (it currently does so in Amsterdam) so it can be more quickly accessible in more parts of the world.

Funny, an "Analyst" on the Next Bar Stool Told Me the Same Thing

John Paczkowski — Thu, 13 Jan 2011 11:48:58 +0000

Verizon’s long-awaited iPhone announcement has really pushed the Apple analyst community into making some (cough) risky proclamations. First, it told us 2011 will be a big year for the iPhone. Now, it’s claiming Verizon will put some marketing muscle behind the device.

“Our checks with industry sources indicate that Verizon will put heavy promotion behind the iPhone, likely ahead of its other platforms including Android,” Kaufman Bros. analyst Shaw Wu says.

I’d say that’s a safe bet, given the amount of effort that Verizon put into the deal and the obviously high expectations for it. Indeed, as Wu himself notes, the carrier is already touting the iPhone 4 as a flagship product on its Web site. And it’s given it a snappy little tagline that’s well suited for an (inevitable) ad campaign: “The phone that changed everything. Coming to America’s most reliable network.”

PREVIOUSLY:

Verizon iPhone Will “Suck The Wind Out of Android’s Growth”

Analysts Go Out on Limb, Predict Verizon iPhone Will Be Big for Apple

AT&T: Verizon iPhone? Whatever.

Verizon iPhone: What, AT&T Worry?

Why Verizon’s iPhone Won’t Be So Bad for RIM

How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?

Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.

Verizon iPhone to Debut With Unlimited Data Plan

Apple CEO Likely to Appear at Verizon iPhone Event

Verizon Event Set for Tuesday–iPhone Time

Time Inc. Hires Ad Industry Trade Head Randall Rothenberg for Digital

Peter Kafka — Mon, 13 Dec 2010 16:20:21 +0000

Time Inc. has a newish boss, and now Time Warner’s publishing unit has a new head of digital, too: Randall Rothenberg, who has been heading up the Interactive Advertising Bureau trade group since 2007. Technically, CEO Jack Griffin has created a new EVP position for Rothenberg; more practically, he’s replacing Monica Ray, who ran digital for Time Inc. until August, when she jumped to Condé Nast. Side note on Rothenberg: I highly recommend “Where the Suckers Moon,” his 1994 book that went behind the scenes of a Subaru campaign.

Palm Boss Jon Rubinstein Explains the HP Deal: "The Market Moved Too Fast"

Peter Kafka — Tue, 07 Dec 2010 23:08:53 +0000

Former Palm CEO Jon Rubinstein explains why he’s no longer running an independent company but working as a Hewlett-Packard employee instead: It wasn’t the phone, or the carriers or the marketing campaign–it was the competition.

Palm could have succeeded on its own–but only as a small company, Rubinstein says. It wouldn’t have been able to really compete with Apple, Google and the rest of the market.

Here’s Rubinstein at D: Dive Into Mobile explaining to Kara Swisher Palm’s decision to sell: “The market moved too fast, as far as competition went… what we didn’t see was a way to get to scale…. We could have been a small, successful company, but I don’t think that’s long-term sustainable in this business.”

More in-progress coverage here from our liveblog.

Live at Dive–Microsoft Talks Windows Phone 7

Ina Fried — Tue, 07 Dec 2010 18:45:33 +0000

So just how is Windows Phone 7 doing, and what is next in Microsoft’s effort to get back into the phone game?

In the hot seat next at D: Dive Into Mobile is Joe Belfiore, one of the Microsoft VPs in charge of the company’s phone effort. We’ll see what he has to say on these and other topics, including a planned January update that would bring copy and paste, among other things.

11:48 am: Joe Belfiore gives a quick résumé. Windows Media Center, Zune, etc.

11:49 am: Walt: Why so late?

Belfiore: We’ve certainly been doing phones for a long time. A lot changed in the industry with the iPhone. Belfiore says Windows Phone 7 tries to respond to what Apple has done with the iPhone and Google with Android.

11:50 am: Walt: What makes you think you are right up there when you don’t have a lot of things?

Belfiore: (Points to Andy Rubin’s comments that Android is really for tech enthusiasts.) Belfiore says he agrees and that Windows Phone is built more for everyday people, to do the key tasks average users do and do so in an elegant way. “There are certainly some functionality shortfalls, and we are going to work to address them,” he says.

Copy and paste coming in “early 2011,” he reiterates.

As for multitasking, he says some tasks are there, such as background fetch of email and Web pages. Music playing works (but only if you are using Zune).

Walt points out that is where iPhone was when it launched and it got away with it because it was so different from what was on the market.

11:53 am: Belfiore says that some of Windows Phone 7′s features are worth the tradeoffs. As an example, he cites a feature that takes a picture with one click even if the phone is locked.

“We’ve focused on valuable scenarios that are different,” he says. “Some set of users will choose the value of those scenarios.” Belfiore says that Microsoft still aspires to fill the gaps.

Walt: How many have you sold?

Belfiore: We’re not talking about numbers yet.

Walt: Other people do.

Belfiore: We’re four weeks in. At some point we’ll get to that. “It’s just too soon to talk about numbers.”

11:55 am: Talk shifts to Microsoft’s ad campaign that suggests Microsoft’s phone provides at-a-glance information so that people can go back to their “real” life.

“Being late to do this type of experience,” Belfiore says, allowed Microsoft to go back and see what was working and what wasn’t with existing software. “Can people accomplish the most common tasks more quickly?”

That, he says, is how the company was led to the dedicated camera button. Another good example, he says, is Live Tiles–icons that can update with notifications, photos or other data.

11:58 am: He’s talking more about the Live Tiles and the fact that you can have a tile for the people who are most important to you and then contact them in any way you want (text, photos, call, Facebook).

12:00 pm: Walt: How many apps do you have?

Belfiore: I think the marketplace now has between three and four thousand.

12:02 pm: Walt: (Google Android chief) Andy Rubin said that parts of Windows Phone 7 have been around a long time. Is it old or new?

Belfiore: It’s mostly new. It is true we have kernel code that has been around for a long time.

But that’s not a bad thing, he says. The code has been tested, the bugs have been fixed. It’s true on the desktop with Windows. It’s true of Linux as well.

It’s probably true of Android, since it is Linux-based, which is based on Unix.

But a lot is new, such as Silverlight and XNA, in which developers build their apps. “He implied we were encumbered by legacy…I don’t think that’s true.”

12:06 pm: Walt: Why not build your own phone?

Belfiore: Our view is that both Microsoft’s core capabilities and our ability to affect more people would be greater with third parties building diverse hardware.

But, Belfiore says, the company recognized the challenges that come when you don’t make both software and hardware. In the past, Windows Mobile was wide open. This time around, Belfiore says, the company aimed for “the right amount of specified variation in hardware and the right amount of specified sameness.”

12:08 pm: Over time we expect to increase the variation that you see. “We are trying to get the benefits of constraint,” such as better user interface and making things easy for developers while still giving choice to consumers.

12:09 pm: Walt: How long will it take you to again become one of the big players in terms of market share.

Belfiore: It will certainly take some time. He points out that current Windows Phone software runs on only about 10 phones, all high-end devices. Over time, they want to get to lower price points.

Walt: So, how long?

Belfiore: I don’t know how long it will take.

Walt: Months?

Belfiore: It will probably take longer than that.

Walt: A couple of years?

Belfiore: Yeah, maybe.

Walt: Who will be the leaders three years from now?

Belfiore: It’s certainly the case that there are a lot of people building good products. My personal feeling is things won’t change that dramatically that quickly.

I do assume we’ll be in it. The question has to start with whether you have a great product….I think we have that so far. We’ll see how this plays off. BlackBerry has done that in the past. Nokia has done that in the past. We’ll have to see about the future.

12:13 pm: Walt: What about tablets, an idea Microsoft has championed for a long time. But what is the strategy? Seems to be desktop Windows is not a variation of the Windows Phone.

Belfiore: Historically, Microsoft has tried to adapt Windows for other uses (e.g., Media Center, tablet).

So far we’ve continued down that path.

The work we have done on the phone has been focused on very small-screen devices.

Walt: Why not just scale up? Both Apple and Android are working from their phone OSs in doing their tablets.

Belfiore: We’re four weeks out of introducing this new thing. The state of the world today is Windows, is our broad operating system. Runs on same screen size as tablets.

12:15 pm: On to Q&A

Q: How can phone makers really differentiate beyond apps and things like a keyboard and a camera?

Belfiore says the company aims for elegant co-existence. Dictates certain screen sizes, three buttons, four-point capacitive multitouch. “We really want all users to get a great touch-typing experience.”

There’s no upper limit on what they can add in terms of hardware features. For example, a hardware maker could add near field xommunications or some other peripheral not already supported.

12:17 pm: Joshua Topolsky from Engadget asks about tablets again, says last answer a bit of a cop-out. “You can’t possibly be this blind” that Windows 7 isn’t going to work on tablets in the way you want it. Is that really the strategy?

Belfiore hints that the announced strategy focuses on Windows for tablets, but says the company will evaluate that going forward.

Topolsky: Courier?

Belfiore; I wouldn’t count on that.

Last question, from a mobile video calling app. As of today, no native access for developers that need things like native access to the camera.

Belfiore: Individual software makers don’t, but phone makers and operators do, so software makers could work with them. He reiterates the platform is new and the goal is to open things up.

Goal is that all of these creative things can be built. “We’re going to move as fast as possible.”

12:21 pm: Walt: One last question on carrier craplets. There’s a limited number of tiles on Windows Phone 7. On the two phones I saw, some of the space I saw was taken up by carriers.

Belfiore: I really like our approach. I think it is really well considered. When AT&T sells a phone it is AT&T selling the phone. Makes sense for them or hardware makers to be able to showcase their differentiation. Both phone makers and carriers can create tiles, but the user can choose to remove the tile or even uninstall the app.

The Beatles Aren't Yesterday, After All: Two Million Songs, 450,000 Albums in a Week

Peter Kafka — Tue, 23 Nov 2010 19:53:36 +0000

Question every Internet wisenheimer had last week: “Doesn’t every Beatles fan already have every Beatles song?“

Answer: Nope. Consumers had room for two million Fab Four songs, and another 450,000 albums in their digital catalogs, it turns out. That’s from EMI, via Billboard.

Top album: “Abbey Road.” Top song: “Here Comes the Sun.” Both excellent choices.

Probably didn’t hurt that the George Harrison song is one of the ones Apple is using in its new campaign. Also, it’s a great freaking song:

The really important point to make about the Beatles on iTunes, at least from Apple’s perspective: It will be be nice for the company if it sells a lot of Beatles songs. But it’s really great for them that they get to advertise iTunes using Beatles songs.

And remember, once people get to iTunes, it doesn’t matter to Apple if they buy Beatles songs, Angry Birds or episodes of “House.”

You can put a price on that kind of marketing campaign. But whatever Apple paid (I have a hunch it was a big sum, at least part of which was up front), it will end up getting its money’s worth.