Let’s face it: Everyone in Silicon Valley — one way or another — fashions themselves as the next Steve Jobs.

And why not? Both the professional and even personal story of the legendary Apple CEO — which will be chronicled in November in a major book — are the stuff of tech legend and envy: Iconic, in charge, decisive, elegant, innovative, phoenix-like and visionary.

And, of course, more than just a little bit terrifying.

So why not Larry Page, too, and why not now?

One issue: By temperament and action — by which I mean genetically hyper-competitive and hammer-time aggressive — he’s been more like Microsoft’s Bill Gates, who has been the Yin to Jobs’ Yang in their deeply interconnected careers over the last decades.

As I wrote before Page took over again as Google’s CEO earlier this year:

After our first interview in 2001, my notes on the encounter had this one line underlined and in all caps:

LARRY PAGE=BILL GATES.

It was not meant as an insult, but I can tell you I never wrote such a note about Page’s co-founder, the jokey and affable Sergey Brin.

Even then, Gates had a fearsome reputation as a manically competitive exec, a cutting manner to those not as smart as he clearly is and a reputation as a very tough and often eviscerating boss. (And all that was also my experience whenever I was interviewing him.)

While much wonkier, friendlier and more of a sensitive new-aged male, Page, it seemed to me, had the exact same obvious drive and aggression as Gates.

The latest incarnation of that has been Page’s move — bold for now and we’ll-see later — to buy Motorola Mobility for $12.5 billion, which Google announced yesterday.

By all accounts, Page was the key driver of the deal inside Google, where he now reigns firmly.

Although neither Gates nor Jobs has used acquisitions much as a key weapon in their arsenals, the size and scope of the deal is pure Gates: A focused, overwhelming and competitor-scaring display of might that speaks of industry dominance and play-to-destroy aspirations, masking what is also very reactive.

If Page’s doubling down on mobile reminds you a bit of Gates’s “Internet Tidal Wave” memorandum in 1995, that’s because the move-now tone is the same.

And, also, in that it is more than just a little bit sneaky. Case in point: Google’s yammering on about the importance of Motorola’s patents in the deal. While the patent love is true and an important element, bolstering Google’s own weak portfolio, it’s also a bit of a feint by the search giant, which can simply never come out and say what it is actually up to.

Which is to be the dominant and overwhelming player in the mobile market that Google sees as critical to its future.

“The company obviously wants everyone to focus on the patents, but its ambitions are so much larger in mobile,” said one person close to the situation. “So it underplays as it overplays.”

Indeed, in the time I covered Google, it has always been my experience when the search giant insists stringently on one thing, Page and others are playing a more complex version of “Star Trek” three-dimensional chess.

As the New York Times’ DealBook noted correctly:

If there’s any question about Google’s motivation to own a handset maker rather than just a portfolio of patents, consider this: InterDigital, a licensing company that owns some 8,000 wireless patents and has another 10,000 patent applications being processed, has been up for auction. Many industry insiders were sure that if Google were serious about acquiring a portfolio of patents, InterDigital would be its target. The company’s market value is only about $3 billion and it doesn’t come with all the baggage of Motorola’s handset business.

That’s exactly right, because Page’s ambition is about Google playing a big part in the mobile market — which is humanity’s next critical platform in computing — for its interlocked ecosystem of Google products — from its flagship search to social networking via Google+ to Gmail to its latest Google Wallet initiative to Google Maps to Google Voice.

In other words, it’s a Google world and we all just live in it.

At the heart of it is a desire to make and completely control the object at the center of the virtuous circle: The mobile device, whether it be a smartphone, tablet or whatever doodad you might wear around your neck.

In fact, as I also remember from Google’s earliest days, Page did sport a lot of such contraptions back then, such as a communicator of some sort he once joyfully showed off to me that allowed him to reach Brin quickly. Later, it was a kind of pollution sensor that took its place.

My recollection from that time was that Page adored such objects, visibly inspired by the idea of digital devices that delivered a myriad of helpful and smart services to users as they moved around the world.

You know, like an Apple iPhone, the ground-breaking technical achievement that Jobs rendered unto the world less than a decade ago, changing everything.

With Android and Page’s firm backing, Google quickly and smartly jumped partway into that market with its powerful and fast-growing mobile operating system.

Now, like Jobs, I have no doubt Page wants to own and control the whole value chain to solidify what Google started several years ago and which is its best hope to vault into the next era of computing.

It’s a leap that Gates and Microsoft largely failed at, not for lack of trying — something else Page has to have taken note of.

So, perhaps by making things — maybe even beautiful things like Jobs — Page will transform himself from a Gates into a Jobs.

Or, more likely, a little bit of both.

Until that reckoning, here is a terrific video of Spock playing 3D chess with Captain James T. Kirk — and, yes, he does look freakishly like Page here:

Please see this disclosure related to me and Google.

Related posts

• Google: We’re Spending $12.5 Billion on Motorola to ‘Protect’ Android
• Motoogle: BOOM! The Mobile Business Just Got Completely Blown Up
• Google’s Motorola Deal Will Spur Antitrust Regulators to Action
• Watch Google Android Kingpin — and Motorola Acquirer — Andy Rubin Unplugged (Video)
• Defense Spending: Google Arms Itself With Moto Patents
• Is Google’s Motorola Deal the Break That Windows Phone Needed?
• Should Google Keep Motorola’s Patents and Sell Off the Hardware Business?
• Motorola Could Get Google Closer to Your Living Room — If the Cable Guys Play Along
• U.S. Carriers Silent on Motoroogle, but France Telecom Gives It a Thumbs Up
• Google-Motorola Deal Includes $2.5 Billion Reverse Termination Fee
• Google Can’t Say Hello To Hulu Now. (Can It?)
• More Google news
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• More Motorola Mobility news

Yahoo turned in another weak performance in the second quarter, with yet another decline in revenue.

This time it was five percent, compared to last quarter’s six percent. In other words, at least things are looking up as they go down!

While earnings per share rose smartly, Wall Street is still looking for strong sales growth from the Silicon Valley Internet giant, which seems unable to provide it.

Blamed most this time for the revenue fall: Yahoo’s changes in its display sales operations in the key Americas region, reasons for which were largely unspecified in the initial company press release. (You can see the damage in this slide deck from the company here.)

Maybe Yahoo CEO Carol Bartz will explain it all in its upcoming conference call with analysts (or she could try the I-don’t-know approach taken by News Corp. CEO Rupert Murdoch in PhoneGate hearings in Britain earlier today!).

2 pm PT: It starts with the usual regulatory blah-blah, which I always enjoy.

Bartz gets right into it, opening with the key problems with China’s Alibaba Group, as well as its display and search revenue weaknesses.

The fight with Alibaba is over its Alipay payments unit, which was spun out of the Chinese company without Yahoo’s say-so. Yahoo is a big shareholder.

Bartz says that the company was working on a settlement night and day.

But she quickly gets onto how display did not perform as expected in its key Americas arena. “Obviously, I am not happy,” she said.

Obvi! Neither are shareholders, Carol.

She says it was not about new competitive development. It was not about the economy. It was not about engagement.

So what was it? Changes in its sales leadership and organization, says Bartz, which has included talent walking out the door in droves.

A lot more than Yahoo expected, but no surprise to anyone who has been paying any attention to the brain drain at the company.

Bartz promises a new approach to sales, part of its endless turnaround, which is beginning to feel like a digital version of “Waiting for Godot.”

Search revenue, though, says Bartz, was better than expected.

2:11 pm: CFO Tim Morse is on now, running through the numbers and the display shortfall in the Americas region.

“We simply did not have appropriate coverage,” says Morse, noting consumer products, tech and autos as weak spots in the advertising market.

Thank goodness, then, for the guarantees from search revenue in the Microsoft partnership deal.

More numbers and then it is back to Bartz to talk about search, which is going better than the last quarter, when it was the culprit for the revenue decline.

She says that Microsoft and Yahoo were working together to improve the issues.

“We’d like to be further down the road,” says Bartz about the goal of search revenue per search growth, as well as settling all the other problems, such as the Asian issues.

And, by further, I am presuming she means actual forward movement, which is what roads are actually for.

2:27 pm: Q&A time, the part of our program where Wall Street analysts do not ask the questions that need asking (and where I win fancy journalism awards for pointing this delta out!).

Therefore, Bartz is first thanked for providing “color” about the display disaster and is not asked about more specifics of the disaster itself.

The second question still does not get to it either, but she does note Yahoo’s sales force has to sell beyond “Gee, we’re big” and come up with better ad solutions.

“The issue is we did not have enough sales people in front of the big clients,” says Bartz.

That’s because all those former Yahoos are now working at Groupon, LivingSocial, Facebook and on down the line and now in front of big clients for those hotter companies.

2:34 pm: Question about its Asian assets. Yahoo’s talks with Yahoo! Japan and Alibaba are separate, says Bartz, although I would add that they have non-movement in common.

And also a question about Yahoo’s interest in the acquisition of the Hulu premium online video service.

Bartz winks verbally and says nothing, which translates into: Of course, it is interested.

More on the reasons for the display fall-off, which Bartz makes clear is not due to big competitive threats, but internal issues.

Maybe she’s saving big competitive threats as the reason for a revenue decline in the third quarter!

I look forward to the quarter I get the finger pointed at me for causing revenue to fall, due to my snarky posts.

Now, we are into softball questions about improvements in engagement. It’s up, but no one asks why Yahoo is still not doing anything very cutting edge in product innovation compared to competitors.

I believe Google has launched at least 14 new social networks since this Sunday, along with its strong quarterly performance last week. And Apple, well, blew away its quarter today as it is about to release more cool new stuff later this week.

And that might be the crux of the issue for Yahoo, which might not solve its woes by throwing a more focused sales army at the issue.

That’s because Yahoo’s products are simply not nearly has social as Facebook or even Google right now, which might be the true problem as old customers move on to new advertising solutions.

Whatever the reason, Yahoo clearly needs a refresh of its ad products and how it sells them, especially in its fast-growing mobile, video and communications products.

Bartz talks about getting better expertise, a tighter regional focus and other issues of going to market, which is perhaps something she might have realized many, many quarters ago.

After all, she’s been in charge for a while, and these issues are not new.

In fact, in an earlier quarter, Bartz was stressing “tentpole” events and anchor media properties and the power of the size of Yahoo as a selling point.

This was in April, in fact, in the first quarter of this year.

As I wrote then:

“CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars. In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.”

Now big is out! Moving on!

The last question is another about Yahoo’s talks with its Asian partners.

“It’s complex,” says Bartz.

You can say that again.

“We’re still in the early stages,” Microsoft Senior Product Manager Greg Sullivan told Mobilized in a phone interview on Wednesday. “When people use this phone, they really, really like it.”

Back in December, Microsoft said that 1.5 million Windows Phone 7 devices had shipped to carriers.

AT&T, which carries the broadest lineup of Windows Phone 7 models among the U.S. carriers, declined to give out specific sales figures, but said that sales have been steadily growing since launch and that 90 percent of customers said they would recommend a Windows Phone to others.

“We believe this shows that Windows Phone has a bright future in an intensively competitive space,” an AT&T spokesman told Mobilized.

LG had less-nice things to say, with an executive telling a mobile enthusiast site that early sales weren’t what it had hoped. “From an industry perspective we had a high expectation, but from a consumer point of view the visibility is less than we expected,” LG’s James Choi told Pocket-lint.

Sales are an important measure of success over the long term, but perhaps not even the best indicator of the platform’s long-term success, Sullivan said.

“One of the key ways that we’ll measure success of Windows Phone is did we ship a phone people love,” he said, pointing to its customer-satisfaction data, which said that 93 percent of early customers are “satisfied” or “very satisfied,” adding, “That’s a really great number.”

Senior Product Manager Ryan Bidan said that the tablet will have a 5,300-milliamp-hour battery that will offer plenty of battery life, but he wouldn’t quote a specific estimate.

“We’ll have good battery life,” he said. “Don’t worry about the battery life.”

Among other details, Bidan said that, unlike with the BlackBerry, RIM will deliver software updates directly to PlayBook devices. He also said that there would be a version of App World for downloading programs created by third-party developers.

The company also listed a number of technical specs for the device, including a 1GHz dual-core TI processor, a 3MP front-facing camera and a 5MP rear-facing camera, as well as mini-HDMI and mini-USB ports. Developers, he said, will have unfettered access to the camera and HDMI port, paving the way for all kinds of cool video-conferencing and presentation-delivery applications.

As for the key details, Bidan stuck to the company line, saying only that it will ship in North America this year and refusing to talk exact timing or pricing. “We’ll be competitively priced,” he said.

Bidan also demonstrated the tablet synching with his BlackBerry to display email and calendar information stored on the handheld. Each PlayBook can only synch with one BlackBerry at a time, Bidan said.

Update, 12:21 pm ET: Asked whether RIM is still aiming for eight hours of battery life, as it claimed at CES, Bidan said, “That is the case–our goal is to get a full day.”

That battery, by the way, is a fixed, nonremovable battery.

Asked about the size of the marketing campaign that will accompany PlayBook’s release, RIM executives declined to give specifics, but said it will be big.

“It’s not going to be a soft launch,” said VP Alec Taylor. “The magnitude will be commensurate with the opportunity.”

PREVIOUSLY

• PlayBook Sequel Will Run on Sprint 4G
• Analyst: Flash Could Be Hogging PlayBook Battery Life
• RIM: PlayBook Battery Life Will Be “Comparable,” Not Crappy
• BlackBerry PlayBook: Car Battery Not Included

]]> http://allthingsd.com/20110113/rim-dont-worry-about-playbooks-battery-life/feed/ 0 http://allthingsd.com/20101129/if-google-buys-groupon-itll-be-a-windfall-for-investors-bankers-and-regulators/ http://allthingsd.com/20101129/if-google-buys-groupon-itll-be-a-windfall-for-investors-bankers-and-regulators/#comments Mon, 29 Nov 2010 13:33:39 +0000 Kara Swisher http://kara.allthingsd.com/?p=37734

If Google does manage to close the deal to buy Groupon–acquisition discussions flagged by BoomTown 10 days ago–it will be at a cost that is likely to be much more than the $2.5 billion price tag being floated in the latest batch of rumors.

It’s not just that the deal will likely come in at a higher number–upwards of $3 billion, according to sources I have spoken to–which will mean a big payoff for Silicon Valley’s Accel Partners, Boston’s Battery Ventures and Russia’s DST Global.

Or that this deal will net New York bankers used on each side–Allen & Co. for Groupon and Morgan Stanley for Google–sizable fees.

It’s because as soon as it purchases the social group buying phenom, the search giant will be buying a whole lot of pricey regulatory scrutiny too.

That cost will be, many think, much deserved and will definitely not come at any discount, given the rising worries in Washington about the swaggering power of Google.

After ever-testier brushes with federal regulators–including over an overreaching attempt to join with Yahoo in search and online access to copyrighted books–Google narrowly missed getting approval for its $750 million purchase of mobile advertising start-up AdMob.

That deal was only saved after Apple made enough noise in the same space to take the focus off the controversy.

And let’s not forget Google suing the feds earlier this month over being excluded from competitive bidding to provide email and collaboration technology to the Interior Department’s 88,000 employees.

More seriously, Google has come under fire recently from numerous critics for its proposed purchase of huge flight data firm ITA Software for $700 million.

Those opposed to the acquisition, on antitrust grounds, contend that Google would control travel search in a way that would inevitably invite abuse.

The government, of course, is looking over the whole deal now.

Having Groupon in its arsenal would garner Google even more powerful pricing information from both customers and merchants across the globe.

That would in the lucrative local commerce arena. Currently, despite a plethora of clones, Groupon dominates socially fueled couponing across cities worldwide.

Owning the hot space around local purchasing and consumer information, combined with the social element, would be a tasty treat for Google.

The Silicon Valley search giant has struggled to deliver social tools to users, even as Facebook has morphed into a potent rival.

Google had looked at social reviews site Yelp for purchase previously, but that deal fell apart.

It has been introducing its own various local advertising and commerce efforts, which would be instantly turbocharged given Groupon’s much quicker progress.

In April, Groupon garnered a valuation of well above $1 billion in a massive venture funding.

It has used that money to buy up companies in the U.S. and internationally, trying to solidify itself as the major player in the marketplace.

If Google were to complete a deal to buy Groupon, it would have echoes of its purchase of YouTube in 2006 for $1.6 billion.

Many felt it a high price at the time, but it looks cheap now given how the site almost completely dominates Web video.

If that deal were to be struck today, of course, it is unlikely regulators would allow such a purchase to sail through the approval process so easily.

Thus, it will be interesting to see how they will react to a possible hook-up with Groupon, which–in many ways–is perhaps the most aggressive of Google’s moves to date to own valuable data up and down the food chain.

And, like I said, this particular move to buy discounting online could be one of its costliest too, in more ways than one.

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20101129/if-google-buys-groupon-itll-be-a-windfall-for-investors-bankers-and-regulators/feed/ 6 http://allthingsd.com/20101101/google-to-u-s-whos-being-anticompetitive-now/ http://allthingsd.com/20101101/google-to-u-s-whos-being-anticompetitive-now/#comments Mon, 01 Nov 2010 20:20:07 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=51742 Well how about that: Google’s suing the United States government for a change.

The company and its government-reselling partner Onix Networking have filed suit against the Department of the Interior claiming they’ve been excluded from bidding on a contract to provide email and collaboration technology to the department’s 88,000 employees.

Seems the Department’s Request for Quotations on the project required standardization on Microsoft’s Business Productivity Online Suite, which means Google’s Apps Solution was necessarily shut out of bidding. “Significantly, the SOW (statement of work) and even certain terminology were closely aligned with Microsoft’s product literature for its Exchange Online, SharePoint Online, and Office Communications Online applications,” Google said in its complaint. “This was because the DOI had defined its needs and requirements around the Microsoft products.” The company argues that’s “unduly restrictive of competition,” and is “arbitrary and capricious, an abuse of discretion, and otherwise contrary to the law.”

As reparation for these offenses, Google wants the DOI to comply with legal requirements for an open and competitive process, and it wants an injunction preventing the department from proceeding any further with the bidding process until it does. “Google is a proponent of open competition on the Internet and in the technology sector in general,” the company said in a statement. “Here, a fair and open process could save US taxpayers tens of millions of dollars and result in better services. We’re asking the Department of Interior to allow for a true competition when selecting its technology providers.”

]]> http://allthingsd.com/20101101/google-to-u-s-whos-being-anticompetitive-now/feed/ 0 http://allthingsd.com/20100902/september-surprise-aol-reups-search-agreement-with-google/ http://allthingsd.com/20100902/september-surprise-aol-reups-search-agreement-with-google/#comments Thu, 02 Sep 2010 12:30:01 +0000 Kara Swisher http://kara.allthingsd.com/?p=33199

In a surprisingly quick and even stealthy move, AOL has renewed and expanded its search agreement with Google, even though many had expected there to be more-competitive bidding throughout the fall to win the deal.

The five-year partnership to provide search technology and search advertising by powering AOL Search is more wide-ranging than the one it replaces, also including improved search products, global search, mobile search and also a video-distribution arrangement with YouTube, which could evolve over time to include content partnerships.

“We have tried to make a deal that has 100 percent alignment on what we each do best,” said AOL CEO Tim Armstrong in an interview last night with Boomtown. “At the end of the day, Google checked all the boxes.”

The search partnership between AOL (AOL) and Google (GOOG)–the third since 2002 actually–was set to run out December 19.

Thus, AOL had been talking for months with a number of new partner possibilities, especially with Microsoft (MSFT) about using its Bing search service for AOL.

Microsoft has been trying to improve its market share with the innovative Bing and has made great strides.

But, despite a valiant effort so far, it is still the No. 3 search engine, with about 11 percent of the market share, according to the latest comScore (SCOR) report for July, compared to 66 percent for Google and 17 percent for Yahoo (YHOO).

Adding AOL would have been a plus for Microsoft, since it has a 2.3 percent share.

But Armstrong said a deal was worked out early once AOL got what it wanted from Google, which certainly had the inside track in terms of experience in working with AOL.

Nonetheless, AOL had started the process of re-evaluating who it would pick to serve its search needs late last summer and had planned for a process to last closer to when the Google deal expired.

In April, Armstrong said, AOL re-engaged with all potential partners worldwide, which he said numbered a half-dozen.

He declined to name them, but sources said the other companies included Yahoo, as well as China’s Baidu.

The talks with Google were turbocharged when Armstrong–who, ironically, was one of the key Google execs who negotiated the first AOL deal, when he headed U.S. ad sales there–met with Google CEO Eric Schmidt and co-founders Larry Page and Sergey Brin at the Allen & Co. conference earlier this summer in Sun Valley, Idaho.

The deal moved quickly after that, with Armstrong wanting AOL to get access to the search innovation pipeline at Google, rather than just receive a more basic product.

He would not say if Google guaranteed search ad revenues in the deal, but sources said it has similar terms to the previous deal, which did include them.

The video part of the deal puts AOL content more prominently on YouTube and presumably it will be better programmed. AOL and Google will share ad revenue on the premium videos.

The mobile details are still being worked out, but will likely be served via Google’s mobile technology from its AdMob acquisition.

Armstrong admitted Google had the advantage from the start, especially since it knew how AOL Search performed, although early talks between the companies were initially rocky.

Perhaps that was due to the massive writedown in 2009 of the $1 billion investment Google–a key part of its previous search deal–had made in 2005 for a five percent stake in AOL, when it was still owned by Time Warner (TWX).

Armstrong also noted he wanted to avoid a lot of attention and uncertainty a bidding war would surely create.

“We had a no-drama policy on this,” said Armstrong. “And, as it turned out, this was not a single, not a double, not a triple, but a home run for us.”

Here is a detail-free–with promise of more to come–8-K filing AOL submitted to the Securities and Exchange Commission on its new deal with the Silicon Valley search behemoth:

AOLInc

Here is the official press release on the new Google-AOL deal:

AOL AND GOOGLE RENEW AND EXPAND GLOBAL PARTNERSHIP

MOUNTAIN VIEW, Calif. and NEW YORK, NY–September 2, 2010–Google Inc. (NASDAQ: GOOG) and AOL Inc. (NYSE: AOL) today announced a five-year renewal and expansion of one of the largest and longest-standing partnerships in Internet history. The global alliance, which has at its core Google’s provision of search services to AOL’s content network and properties, in exchange for a revenue-sharing arrangement between AOL and Google, will be expanded to include mobile search and YouTube.

“Today is another important step in the turnaround of AOL,” said Tim Armstrong, AOL’s Chairman and Chief Executive Officer. “AOL users will be getting a better search and search ads experience from the best search company in the world–Google. After nearly a decade-long partnership in search, we’re looking forward to expanding our global relationship to mobile search and YouTube. All aspects of our partnership will be improved by this deal.”

“We’re excited to deepen our partnership. This agreement combines Google’s expertise in search and advertising with AOL’s strength in online content,” said Eric Schmidt, Chairman and Chief Executive Officer of Google. “It’s particularly exciting to see our relationship expand into video and mobile. These areas are now at the heart of users’ online experiences and at the core of both of our businesses.”

The partnership includes a broad range of features that will improve and expand the products and services offered to consumers.

· Search Products: Google will provide AOL with additional features and enhancement to its leading Web search products that will improve the consumer search experience across AOL’s network of sites.

· Advertising Products: Google will provide AOL with best-in-class ad formats, giving AOL consumers a better, more relevant ad experience.

· Mobile Search: As AOL renews its focus on mobile apps and content, the companies will work together to expand the alliance to cover mobile search.

· YouTube: AOL and YouTube have agreed to a content partnership that will bring AOL’s video content to YouTube.

· Global Focus: The alliance is international in scope and will provide improved experiences to AOL’s worldwide audience.

]]> http://allthingsd.com/20100902/september-surprise-aol-reups-search-agreement-with-google/feed/ 1 http://allthingsd.com/20100619/like-e-books-amazon-sells-more-of-them-for-less-than-apple-for-now/ http://allthingsd.com/20100619/like-e-books-amazon-sells-more-of-them-for-less-than-apple-for-now/#comments Sat, 19 Jun 2010 11:00:26 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=20746 The introduction of the iPad and the iBooks store has lots of people forecasting doom for Amazon’s Kindle. And Citigroup’s (C) Mark Mahaney, an Amazon bull, acknowledges that Apple will eat into Kindle’s share: He is convinced, quite reasonably, that Amazon needs to overhaul the Kindle very soon and cut its price below $200 to stay competitive.

That said, Mahaney points out that Amazon, with its long-established relationships with publishers, still offers book buyers a wider selection of e-books than Apple does. And it sells its books for less. From his note published Friday:

• 88 percent of New York Times (NYT) fiction and nonfiction best sellers are available on Amazon’s Kindle vs. 63 percent available for Apple iBooks
• The average price of the best-selling ebooks available on both platforms is $11.23 on the Kindle and $12.31 on the iBook platform–a 10 percent difference
• All in all, about 50 percent of NYT fiction and nonfiction best sellers are available on both the Kindle and the iBook platform
• For eBooks available on both the Kindle and the iBook platforms, 80 percent had the same price, whereas Kindle prices were cheaper for 20 percent of the books by an average of 11 percent

These gaps will narrow over time if Apple (AAPL) pushes hard with publishers to do so. And assuming it does, the real difference for buyers ought to be: Do you want to read e-books on a multipurpose device (the iPad) or one that costs a whole lot less and does much less (the Kindle)? My guess is that even after Apple eats into Kindle’s share, Amazon (AMZN) is going to find plenty of people who just want an e-reader. We’ll see.

]]> http://allthingsd.com/20100619/like-e-books-amazon-sells-more-of-them-for-less-than-apple-for-now/feed/ 0 http://allthingsd.com/20091106/ve/ http://allthingsd.com/20091106/ve/#comments Fri, 06 Nov 2009 19:06:09 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=28388 Beginning Nov. 15, Verizon subscribers looking to get out of their smart-phone contracts early will pay $350 for the privilege. That early-termination fee is double the current one, but Verizon insists it’s justified because of the higher prices of today’s phones.

“The cost of smart phones is considerably higher than feature phones for which the early termination fees were created years ago at $175,” said Verizon spokesman Jim Gerace. He added that the new $350 ETF declines by $10 per month through the life of the contract and customers can avoid it by buying their devices off contract and paying full retail price.

An interesting move for Verizon (VZ), which just last year agreed to pay $21 million to settle a class-action lawsuit filed by California consumers over the very early-termination fees it is now increasing. The plaintiffs in the suit alleged that Verizon’s ETFs were illegal under California law and that they were designed to unfairly lock consumers into long-term contracts and prevent them from switching carriers. When Verizon settled the suit, it denied any wrongdoing, insisting that early-termination fees are simply a means of recovering legitimate costs. And to some extent Verizon does have a point.

Full retail price for the Motorola’s (MOT) new Droid is $559.99. With a two-year contract, Verizon sells the handset for $199.99. Theoretically, that’s a $359.99 subsidy (I have no idea at what price Verizon purchases Droid from Motorola). So if Verizon allowed subscribers to break their contract after a month without paying an early-termination fee, the company would stand to lose money. And subscribers who did so could subsequently sell the device online and potentially make a profit, though a small one.

So it’s certainly understandable that Verizon and other carriers want to protect the subsidies they dole out for these new smart phones. And as noted earlier, Verizon’s new ETF drops by $10 each month a subscriber remains under contract. But at this rate, subscribers are still bound to pay a $110 termination fee in the 23rd month of a two-year contract. The contract is nearly over, the subscriber obligation to Verizon almost fulfilled, yet the company can still slap its customers with nearly a third of the full ETF if they break it at that time.

By month 23 of a two-year contract, does Verizon really stand to lose $110 if subscribers decide to switch carriers? Doesn’t seem likely if subscribers can walk away just a month later without consequence, taking their handsets with them.

Since Verizon is pro-rating the ETF, why isn’t it doing so in such a way that it zeroes out by the end of the contract?

And isn’t the fast pace of innovation in the smart-phone sector such that prices–for both component and device–are dropping so quickly that high ETFs aren’t really justified? Remember, you can get Apple’s (AAPL) iPhone for $99 today. When the iPhone debuted in 2007, it commanded a price of $499/$599, depending on model.

I’ve put those same questions to Verizon and will update here when I hear back. In the meantime, here’s what Consumers Union policy analyst Joel Kelsey has to say on the matter: “When people want to switch wireless services, the biggest cost they face is early termination fees. These fees are designed to lock people into long-term contracts and stop them from getting better deals. Early-termination fees make the marketplace less competitive. Verizon’s move is painful proof that it’s time for lawmakers to crack down on these fees.”

UPDATE: Verizon Wireless spokesperson Nancy Stark offers the following answers to the questions I posed above:

Your first question regarding the balance at month 23 or 24 assumes that, at that point, we have recovered all of our subsidy and up-front costs for every device. That simply is not so.

On your second question, while the pace of innovation plays a role in prices coming down somewhat, it also plays a role in driving up costs as more and more complexity that customers want is added to phones–from premium HTML browsers to high-resolution MP cameras with optical zoom; videoplayers; music players; dual processor chipsets; WiFi; very high display resolution, operating systems such as BlackBerry, Windows Mobile, Palm, Android–ALL with the added value (vs a desktop) of mobility, and ALL in one tiny device that ALSO allows you to talk to anyone from anywhere. phew! (by comparison, I recently paid $200 for a camera and all it can do is take pictures, and it has only middle of the road capabilities.)

But getting back to ETFs specifically. The most important point is that Verizon Wireless customers do not have to have an ETF at all if they do not want to. ETFs allow customers to have it either way: They can have no ETF and pay full retail for their device. OR, they can get a greatly discounted device by having an ETF.

]]> http://allthingsd.com/20091106/ve/feed/ 0 http://allthingsd.com/20090922/oracle-mysql/ http://allthingsd.com/20090922/oracle-mysql/#comments Tue, 22 Sep 2009 14:30:31 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=25210 Though some analysts claim otherwise, MySQL is an asset, not baggage, and Oracle has no plans to unload it. Nor does the company think it will be forced to win regulatory approval for its proposed purchase of Sun Microsystems.

“No, we’re not going to spin [MySQL] off,” Oracle CEO Larry Ellison told attendees of a Churchill Club event in Silicon Valley Monday evening. “We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 and SPARC. And we’re going to increase investment in all of them.”

In other words, technologists worried about Oracle’s (ORCL) intentions for MySQL and other Sun (JAVA) systems need to relax.

“Sun has fantastic technology. We think it’s got great microprocessor technology–it needs a little more investment, but we think it can be extremely competitive. It’s got the leading tape archival systems. We think the Open Storage on their new disk system is absolutely fantastic. Java speaks for itself. Solaris is overwhelmingly the best open-systems operating system on the planet….Sun has been a national treasure for the last couple of decades.”

]]> http://allthingsd.com/20090922/oracle-mysql/feed/ 0 http://allthingsd.com/20090730/sony-still-losing-steam/ http://allthingsd.com/20090730/sony-still-losing-steam/#comments Thu, 30 Jul 2009 18:00:41 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=22515

]]> http://allthingsd.com/20090730/sony-still-losing-steam/feed/ 0 http://allthingsd.com/20090708/netapp-data-domain-end-merger-agreement/ http://allthingsd.com/20090708/netapp-data-domain-end-merger-agreement/#comments Wed, 08 Jul 2009 20:22:13 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=20992 EMC has long claimed that its bid for Data Domain is clearly superior to NetApp’s, and today, NetApp finally agreed. After market close Wednesday afternoon, NetApp said it has terminated its merger agreement with Data Domain, giving the data storage technology vendor leave to accept EMC’s (EMC) unsolicited takeover bid–at $33.50 per share cash, an 11 percent premium over its own.

Which is exactly what Data Domain did.

One consolation: NetApp (NTAP) may have failed as a suitor, but it received a $57 million breakup fee from Data Domain (DDUP) as a result of the termination of the agreement.

Still, it’s a tough blow for NetApp (NTAP), which will now focus on “existing growth opportunities” instead of ill-starred bidding wars with rivals.

Said Dan Warmenhoven, NetApp’s chairman and CEO: “While NetApp’s acquisition of Data Domain would have produced benefits for customers and employees and complemented NetApp’s existing growth trajectory, we remain highly confident in our already compelling strategic plan, market opportunities, and competitive strengths.”

“NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders.” Warmerhoven added. “We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits. NetApp has established leadership positions in virtualized infrastructure, storage efficiency, and unified storage, even in these difficult economic times, by helping customers meet their business objectives with less physical storage while reducing costs. That commitment will not change. We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy.”

[Image credit: despair.com]

]]> http://allthingsd.com/20090708/netapp-data-domain-end-merger-agreement/feed/ 0 http://allthingsd.com/20090707/palm-pre-in-europe-by-christmas/ http://allthingsd.com/20090707/palm-pre-in-europe-by-christmas/#comments Tue, 07 Jul 2009 12:00:08 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=20792 Now that sales of the Pre in the states have tapered off to a point where supply and demand are roughly in parity, Palm is gearing up to bring the handset to Europe. In a statement issued this morning, the company said Telefónica’s O2 subsidiary will carry the Pre in the U.K., Germany and Ireland, while its Movistar brand will offer it in Spain. The Pre will arrive at market in those countries in time for the winter holidays. That likely means October, which will give Telefonica enough time to maximize orders in the run-up to Christmas. Telefónica declined to give a price or to say how long its exclusive deal with Palm will last.

For Telefonica, which, through O2 and Movistar, is already the exclusive carrier of Apple’s (AAPL) iPhone in the U.K. and Spain, the deal is another coup. As Mathew Key, chairman of Telefónica Europe, noted in a gloating press release, “Telefónica is fast becoming the home of the smartphone.”

And for Palm (PALM), well, it’s another big step on the road to recovery. As CEO Jon Rubinstein said earlier this year, “We’ve been fighting the battle with basically both hands tied behind our back for the past year and half. Now we’re getting on the playing field, and we’re going to be extremely competitive. But it’s the beginning.”

]]> http://allthingsd.com/20090707/palm-pre-in-europe-by-christmas/feed/ 0 http://allthingsd.com/20080702/yahoogle_doj/ http://allthingsd.com/20080702/yahoogle_doj/#comments Wed, 02 Jul 2008 17:29:43 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2532 “Good for competition.” That’s how Omid Kordestani, Google’s (GOOG) senior VP of Global Sales and Business Development, described the advertising deal it struck last month with Yahoo (YHOO). “Why did we make this agreement?” he asked. “Quite simply, we think it is good for users, advertisers and publishers. By offering Google’s industry-leading technology to Yahoo, the whole system becomes more efficient, and everyone benefits.”

A reassuring profession of altruism, but one that the Justice Department isn’t buying. The agency has opened a formal antitrust investigation into the deal and will soon begin issuing civil investigative demands to the companies’ competitors, customers and potential partners in the hopes of determining whether it will further tighten Google’s near-monopoly grip on the search advertising market. “This is a complicated situation, but one of the key questions is very simple,” said David Balto, an antitrust lawyer who was competition policy director at the Federal Trade Commission during the Clinton administration. “What is Yahoo’s incentive to continue to compete?”

Good question.

Helpfully, Google and Yahoo have already agreed to delay implementing their new alliance for three and a half months so the DOJ can answer it.

]]> http://allthingsd.com/20080702/yahoogle_doj/feed/ 0 http://allthingsd.com/20080612/yahoo-google-3/ http://allthingsd.com/20080612/yahoo-google-3/#comments Thu, 12 Jun 2008 22:48:53 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20080612/yahoo-google-3/ Google (GOOG) co-founder Larry Page recently discounted the idea that a Google-Yahoo partnership would present any potential antitrust problems. We may soon find out if he’s right.

This afternoon, just a few hours after announcing the not-with-a-bang-but-a-whimper conclusion of its negotiations with Microsoft (MSFT), Yahoo (YHOO) said it had inked a non-exclusive search-advertising deal with Google that could, could, be worth about $800 million in annual revenues.

Yahoo explained the deal in another one of its retina-tormenting purple-font press releases entitled “Yahoo to Strengthen Competitive Position in Online Advertising Through Non-Exclusive Agreement With Google.”

Under the terms of the agreement, Yahoo will select the search term queries for which–and the pages on which–Yahoo may offer Google paid search results. Yahoo will define its users’ experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search.”

Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!’s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.”

And what might it generate for Google? The companies are hoping for at least $83 million gross — every 4 months. From Yahoo’s latest SEC filing:

Google may terminate the Services Agreement if, after ten months after the Services are first launched, and each month thereafter, the gross revenues recognized by Google under the Services Agreement are less than $83,333,333 for the four prior calendar months.

Anyway … although the two companies are not required to receive regulatory approval for the deal before moving ahead with it, they’ve helpfully agreed to delay implementation for up to three and a half months while the U.S. Department of Justice reviews the arrangement. “We have been in contact with regulators about this arrangement, and we expect to work closely with them to answer their questions about the transaction,” Google’s Omid Kordestani wrote in a post to the company’s blog. “Ultimately we believe that the efficiencies of this agreement will help preserve competition.”

[Image Credit: AdRants]

]]> http://allthingsd.com/20080612/yahoo-google-3/feed/ 1 http://allthingsd.com/20080612/yahoo-google-3-2/ http://allthingsd.com/20080612/yahoo-google-3-2/#comments Thu, 12 Jun 2008 22:48:53 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20080612/yahoo-google-3/ Google (GOOG) co-founder Larry Page recently discounted the idea that a Google-Yahoo partnership would present any potential antitrust problems. We may soon find out if he’s right.

This afternoon, just a few hours after announcing the not-with-a-bang-but-a-whimper conclusion of its negotiations with Microsoft (MSFT), Yahoo (YHOO) said it had inked a non-exclusive search-advertising deal with Google that could, could, be worth about $800 million in annual revenues.

Yahoo explained the deal in another one of its retina-tormenting purple-font press releases entitled “Yahoo to Strengthen Competitive Position in Online Advertising Through Non-Exclusive Agreement With Google.”

Under the terms of the agreement, Yahoo will select the search term queries for which–and the pages on which–Yahoo may offer Google paid search results. Yahoo will define its users’ experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search.”

Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!’s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.”

And what might it generate for Google? The companies are hoping for at least $83 million gross — every 4 months. From Yahoo’s latest SEC filing:

Google may terminate the Services Agreement if, after ten months after the Services are first launched, and each month thereafter, the gross revenues recognized by Google under the Services Agreement are less than $83,333,333 for the four prior calendar months.

Anyway … although the two companies are not required to receive regulatory approval for the deal before moving ahead with it, they’ve helpfully agreed to delay implementation for up to three and a half months while the U.S. Department of Justice reviews the arrangement. “We have been in contact with regulators about this arrangement, and we expect to work closely with them to answer their questions about the transaction,” Google’s Omid Kordestani wrote in a post to the company’s blog. “Ultimately we believe that the efficiencies of this agreement will help preserve competition.”

[Image Credit: AdRants]

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