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Amazon Job Descriptions Hint at More Perks Coming to Prime

Tricia Duryee — Thu, 12 Apr 2012 12:00:52 +0000

First, Amazon Prime offered free two-day shipping for $79. Then it started offering add-on services for no additional cost, like streaming videos and Kindle books.

And now it appears the e-commerce giant has even more plans in the works.

A Wells Fargo Equity Research note distributed this week writes: “A key discovery this month is that Amazon has plans to expand the Prime membership benefits beyond the Amazon.com platform.”

The note points to a number of job descriptions, disclosing that Amazon is creating a “Prime Expansion” team, tasked with driving awareness of the Prime program and expanding the scope of its benefits, geographically and on and off Amazon.

So what areas or new benefits might Amazon be expanding into?

It’s not clear, and an Amazon spokesperson did not return emails seeking comment.

But first, let’s throw out the areas where Amazon won’t be expanding to — other online retailers. Today, Amazon sells pretty much everything under the sun, so it would be very hard for it to find a retailer that would be comfortable with letting Amazon run its loyalty program, even if it does mean offering perks like free shipping.

“I think any retailer would have to have their head examined if they allowed themselves to be a customer-acquisition tool for Amazon Prime,” said Mike Golden, president of ShopRunner. “Especially if it’s under the assumption that Amazon won’t compete with them. Because people have been proven false every single time.”

Of course, Golden has his biases.

ShopRunner, which includes eBay as an investor, operates a service — much like Prime — that offers shoppers free two-day shipping across a variety of retailers, including Toys “R” Us and PetSmart, for $79 a year.

But even if other retailers are out of the question, there are still some opportunities Amazon could be pursuing. For instance, it could work with other delivery services that don’t compete with Amazon.

ShopRunner has already demonstrated this through a partnership with Domino’s Pizza, which provides free delivery to ShopRunner members. Other scenarios with national scale could include Ticketmaster or Fandango, which have service fees at checkout.

Another internal program that Amazon is working on that could be a candidate for Prime is free access to Amazon Locker, which allows consumers to pick up packages from secure mailboxes at 7-Eleven. The lockers address a segment of the market that can’t receive packages at their homes because people work during the day and there’s nowhere for a delivery to be dropped off, or because it’s likely to get stolen.

So far, Amazon Prime is considered a very successful program that increases loyalty to Amazon.com — for an annual fee. As is typical with Amazon, it does not disclose how many Prime members it has, but Baird Equity Research estimates that there’s somewhere between seven million and 11 million members.

With even more benefits, it will make Prime — and Amazon overall — even harder for consumers to walk away from.

(Image courtesy of www.cicadamania.com)

AT&T Chief Sees Divestitures in T-Mobile Deal

Roger Cheng — Wed, 30 Mar 2011 17:10:37 +0000

AT&T Inc. Chief Executive Randall Stephenson said he expects some divestiture of customers and wireless spectrum as the company marches through the approval process to close its acquisition of T-Mobile USA.

“We anticipate there will be some markets we will have to divest,” Mr. Stephenson said in an interview.

AT&T’s proposed plan to buy T-Mobile from Deutsche Telekom AG for $39 billion is expected to face heavy scrutiny from regulators and opposition from consumer-advocacy groups and competitors. Rivals Sprint Nextel Corp. and Clearwire Corp. have already been vocal about the harmful impact from the deal.

Read the rest of this post on the original site »

Sony's Music Service Comes to the U.S., Still Won't Work on the Go

Peter Kafka — Thu, 17 Feb 2011 11:30:26 +0000

There are a bunch of music subscription services in the U.S., all of which offer more or less the same thing at the same price.

And now there’s Sony. Which is offering less at the same price.

Sony is rolling out its (bear with me) “Music Unlimited powered by Qriocity” service today, and it’s a lot like MOG, Rhaposdy and other competitors: It sells access to all the music you want, whenever you want to hear it, for $10 a month.

But unlike its competition, Sony’s service won’t let you take the music with you on your iPod or mobile phone.

Which, as I’ve noted before, is pretty much the whole point of these things.

What’s Sony thinking? I chatted with Sony Network Entertainment head Tim Schaaff about it, and you can see our entire discussion below. Short version: Sony says it will make its music portable sooner than later; Sony thinks people will enjoy listening to the music on their TVs, controlled by their PlayStation 3s; and Sony will advertise the heck out of this thing.

There’s also an interesting backstory about why Sony isn’t launching with mobile. Or at least I’m sure there has to be. Right? But Schaaf won’t give that one up.

When Sony does go mobile, expect to see it on Android first. The company has been explicit about its interest in working with Google’s mobile platform, and hasn’t mentioned Apple and its iOS platform in its press materials. But I did get Schaaff to concede that, yes, Sony plans on working with Apple, too.

Except now that Apple’s new subscription terms seem to make it impossible for streaming music services to work in their present incarnation–Apple wants 30 percent of a low-margin product with high variable costs–it may be that none of Sony’s competitors will end up working on iPhones and iPods. Which would end up dramatically reducing the amount of ground Sony will have to make up.

Schaaff, by the way, should be an interesting person to talk to about Apple and its head-scratching subscription fiat. Prior to joining Sony in 2005, he had spent 14 years at Apple, and was intimately involved in the company’s media products.

But Schaaff is too politic to let me bait him into saying much about Apple’s moves, other than allowing that “it seems a little aggressive.” And then he can’t help himself: “Sounds like a good thing for Android.”

[ See post to watch video ]

Ball Gag Starting to Look Like a Good Idea for Google CEO

John Paczkowski — Tue, 08 Feb 2011 19:30:44 +0000

Eric Schmidt recently joked in a tweet that he was stepping down as Google CEO because the company’s younger co-founders no longer needed “adult supervision.”

Or wanted it–at least not the kind that Schmidt’s been offering recently, which was on display once again today in yet another PR gaffe.

Asked by the Sunday Telegraph about the European Commission inquiry into the company’s dominance in search, Schmidt spun the requests for information that Google received as part of that investigation as the beginnings of possible settlement discussions.

“I think it is in our interests and I would hope in their interests to do a quick analysis of concerns that have been raised by competitors, hopefully they are minor or they are not correct, and we’ll find out and make sure we are operating well within the law and the spirit of the law,” he said. “We understand we play a major role in Europe and we’re not denying that. We have a lot of meetings with appropriate government officials.”

We have a lot of meetings with appropriate government officials.

If that’s true, the officials to which Schmidt refers have nothing to do with the European inquiry into Google’s business practices. Because the European Commission today flat-out denied it is in antitrust resolution talks with the company. “There are no discussions,” commission spokeswoman Amelia Torres said in a statement. “The investigation is not finished.”

We have a lot of meetings with appropriate government officials. One more to add to Schmidt’s dubious canon.

What's on the Table for Tablets This Year

Walter S. Mossberg — Thu, 27 Jan 2011 02:09:57 +0000

Lots of consumers are planning to buy tablet computers this year, and lots of companies are hoping to sell them. Apple managed to sell around 15 million of its ground-breaking iPads last year in only nine months, and, for many users, the iPad has replaced the laptop, at least for some uses. So it’s no surprise that consumer appetites for tablets have been growing and tech companies are planning to roll out as many as 80 iPad competitors in 2011, by some estimates.

[ See post to watch video ]

But the tablet mania can be confusing. The coming devices will be heavily defined by a variety of operating systems they’ll use. They will be offered in different screen sizes, with attendant pluses and minuses. And they’ll come from very different kinds of companies—major computer makers like Hewlett-Packard, Toshiba, Acer, Lenovo and Dell; phone makers like Motorola and Research in Motion; multi-faceted electronics giants like Samsung; and even Vizio, which is largely a TV manufacturer.

And, of course, a second generation of the iPad is expected to be announced in the next few months.

So here’s a guide to what to expect in the tablet market in 2011, and some key factors that could affect your choices. As it’s early in the year, the road map is necessarily incomplete. For instance, prices aren’t generally known, though many rivals will be trying to undercut the iPad’s $499 base price. Some will be sold on a subsidized basis through phone carriers, others won’t. And there will surely be surprises as companies adjust their strategies.

Apple’s Next Move

Given the quality and success of the iPad, it makes sense for tablet buyers to hold off until they see what Apple has up its sleeve for the second version. One big reason: The iPad has a huge head start in third-party apps designed for tablets—more than 60,000 of them, plus the 350,000 or so iPhone apps that the iPad can run.

The Motorola Xoom

But Apple is more secretive than the CIA, so we know little about this product. I believe it will almost certainly have one or two cameras, and be able to make video calls. And there’s widespread speculation that it will be thinner and lighter, since even the original’s 1.5-pound weight was a bit too heavy for extended use for some people. There’s some evidence it will have at least one added port, perhaps for a camera memory card or connection to a bigger display.

The Android Army

Just as in the smart-phone market, the bulk of Apple’s tablet competitors will rely on Google’s Android operating system, which is provided free to hardware makers. Most of the hardware companies mentioned above are counting on Android to allow them to undercut the iPad on price, add different features, and attract third-party apps.

The big question mark here is the tablet-specific version of Android that’s code-named Honeycomb, which hasn’t been publicly unveiled. The first Honeycomb tablet is likely to be a 10″ model called the Motorola Xoom, which is expected to show up in the early spring. The others will mostly emerge in the summer. If Honeycomb succeeds, the Android tablets could be a very attractive alternative, though it will take awhile for large numbers of third-party tablet apps to become available. Honeycomb will support Flash video on the Web, while the iPad doesn’t.

One big issue will be how these Honeycomb-powered products will be differentiated from each other. Here, price and hardware features could be decisive. Speed, size, screen quality, connections to TVs, and support for fast, 4G wireless networks are all possibilities. For instance, the Xoom will work with “smart dock” accessories, and will eventually support 4G. The Vizio Via will have a big speaker and a built-in TV remote control.

BlackBerry PlayBook

RIM and H-P

BlackBerry maker RIM plans a light, thin, 7″ tablet called the PlayBook, likely in the next few months. In demos, it looks handsome and colorful—nothing like a BlackBerry phone. That’s because it runs on an entirely different operating system.

One unusual feature of the PlayBook is that, in key respects, it’s more of a companion to a BlackBerry phone than a standalone tablet. It draws its cellular connectivity from a BlackBerry, rather than having it built in. The first model will lack its own email, calendar and contact apps, and instead merely view and interact with those in a user’s BlackBerry. This reliance on a BlackBerry could be a plus for BlackBerry users. But it could be seen as a downside for users of other phones.

H-P plans to unveil a 10″ tablet on Feb. 9 based on Palm’s sleek webOS operating system, which H-P now owns. Based on trademark filings, it’s likely to be called the HP TouchPad. While the computer giant has said little or nothing about the device, it’s likely to ship this summer and feature, out of the box, integrated video calling and document editing. A big question is whether the software scales well to a tablet size and whether third-party developers, who mostly shunned webOS when Palm launched it, will write enough apps for the HP tablet.

Windows Tablets

Unlike the other players, Microsoft seems to be planning to cram a full PC operating system into a multi-touch tablet. The first Windows tablets, which will be out soon, will be based on Windows 7, use styluses, and be aimed mainly at corporations, not consumers. Even their makers privately express little enthusiasm for them. However, later in the year, Microsoft is expected to roll out a new Windows-based multi-touch tablet platform better designed to go head-to-head with the iPad and Android tablets.

Size Matters

One big decision for consumers will be whether they like the 10″ size of the iPad, and of many of the new Android tablets, or the smaller 7″ size of some other models. A 7″ screen actually has less than half the surface area of the iPad’s display. But 7″ tablets—like the existing Samsung Galaxy Tab—are lighter and easier to hold in one hand than 10″ models. They also can cost less. Some companies will be trying even smaller tablets, despite the poor sales of Dell’s 5″ Streak tablet in 2010. One big-name PC maker has been working on a 4.8″ tablet.

Keyboards and Ports

Since the iPad lacks a built-in physical keyboard, and common PC ports like USB connectors, many of the competitors will try to outdo it with these things. Lots of them will have some form of USB port, and a few will come with hidden keyboards that slide out or fold out somehow. Lenovo plans to ship an Android tablet that can optionally be used as a slide-in screen for a Windows laptop.

All this tablet competition is good news for consumers, but I urge you to study the landscape carefully and weigh your options before plunging into the new category.

Find all of Walt Mossberg’s columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

Collecta: Another Real-time Search Engine Bites the Dust

Liz Gannes — Thu, 20 Jan 2011 02:09:05 +0000

Los Angeles-based start-up Collecta has shuttered its real-time search business, including a destination site, API and publisher widgets. The two-year-old company isn’t closing down, but will pivot to unannounced and related projects, said CEO Gerry Campbell in a phone conversation today.

Asked whether creating a real-time search engine is a viable start-up business, Campbell answered quickly: “No.” His company’s pivot is the latest of multiple efforts in the space; last year, OneRiot gave up its search business to pursue real-time advertising, and Ellerdale sold to Flipboard to help add relevance analysis to its social magazine app.

The exit of Collecta and its competitors from real-time search is remarkable given they had swarmed to the space only a couple of years ago.

In 2009, many entrepreneurs and their investors bet that real-time search was the next frontier, recognizing that search engines were having trouble handling the onslaught of status updates and fresh information streaming onto the Web from Twitter and elsewhere.

Given the companies’ emphasis on speed, perhaps it’s not surprising that they failed and moved on so quickly.

Campbell would not say how many employees Collecta had laid off as part of the change, but he maintained the company has plenty of money in the bank from the $4.7 million it raised last spring from Dace Ventures and True Ventures. Mashable reported earlier today in its story about the Collecta changes that co-founder Jack Moffitt is no longer with the company.

Campbell said Collecta will apply its “very serious technology” to other real-time projects, but it will not become a real-time ad engine like OneRiot.

Who’s left in real-time search? There are still a few, including Wowd and Topsy.

Topsy’s tweet search is much more comprehensive than Twitter’s own, and it serves half a billion queries per month, mostly through its API, Topsy co-founder Rishab Aiyer Ghosh told NetworkEffect via email today. And while Google and Bing also index tweets (and Bing has an extensive relationship with Facebook), they have not fully incorporated social updates into their core search engines.

“With TweetMeme, CrowdEye and Collecta all pivoting out of it, Topsy may be the only real-time/social search engine left,” Ghosh said. He maintained that there’s still an opportunity to build an independent real-time search engine “done right,” despite the competition dropping like flies. Topsy has raised $15 million in funding from investors including BlueRun Ventures, Ignition Partners and the Founders Fund.

Want to Cut Your Cord? The NBC U-Comcast Deal Won't Make It Easier

Peter Kafka — Tue, 18 Jan 2011 22:47:42 +0000

If you were hoping that the government restrictions on the NBC U-Comcast deal would make it easier for you to stop paying for cable, you’re out of luck.

At a very first glance, some of the new rules imposed by the feds might seem like they require the new company to offer up programming to any online player that wants to pay up.

And technically, they do. But the new rules have plenty of conditions and limits. So the bottom line is you’re not much more likely to get access to “30 Rock” via YouTube, or CNBC via iTunes, then you were before.

The new FCC and DOJ rules do give, say, Google the ability to buy access to some of NBC U shows or channels. But it would require Comcast’s competitors to do the same thing, first.

That is: Unless the people who are reluctant to put their stuff online because they don’t want to upset Comcast go ahead and put their stuff online, Comcast doesn’t have to, either. So it’s theoretically possible, but not probable.

And if it happens, it will happen haltingly. If Viacom sells someone online access to its MTV lineup of reality shows, that might require Comcast to offer up its reality show lineup on Bravo. But it wouldn’t entitle an online outlet to the police procedurals on USA.

The government also gives the option to, say, Netflix, to set up shop as another cable operator, and buy access to all of NBC Universal’s programming. But it would have to buy all of it–just like Time Warner Cable and Cablevision do when they make a carriage deal for NBC U’s shows.

And again, Comcast wouldn’t have to do that unless its peers did. Which means that if Netflix really wanted to set up shop as a direct competitor of the cable guys, it can do so. But it would have to operate exactly like the cable guys, just like the satellite guys did when they entered the market a couple of decades ago.

So if Netflix, or Apple or whoever really wants to offer a full suite of cable programming, at cable prices, it could. But that would be very, very expensive: Analyst Rich Greenfield estimates that the bill for NBC U’s programming alone would run a new entrant $1 billion a year.

Just as, or even more, important, is that those kind of bundled, take-it-or-leave-it deals are exactly the kind of thing that the cord-cutting crowd complains about.

They don’t want to have to pay for USA and Bravo and Syfy and MSNBC–they want to pick and choose channels, or shows. And pay a lot less.

“I don’t think cord-cutting was a major focus” of negotiations, Comcast EVP David Cohen said during a press conference this afternoon. And that may be true!

But the net result reads very much as if Comcast wanted to make sure the government didn’t force it to break its business model. And if that was the case, it got what it wanted.

YouTube Brings More Ads to Your Phone, Next to Justin Bieber and Lady Gaga

Peter Kafka — Wed, 12 Jan 2011 22:00:14 +0000

YouTube on your phone is popular, but until now it hasn’t made Google much money. The search giant has only been able to slap ads on the homepage of its mobile version, and on search results.

That’s changing starting today, as the company begins to stick “pre-roll” ads in front of several thousand of its clips, including a new set of music videos that hasn’t been available for YouTube mobile until now.

YouTube will start running videos from Vevo, the “Hulu for Music” joint venture that it works with. And it will run ads with those clips, as well as a few thousand other clips, primarily from its network of semi-pro “partners.”

The caveats: The music clips will run only on Google’s Android handsets, and not on Apple’s iPhone or any other competitors’ phones. And the clips will be limited to whatever Vevo has available in its catalog. Which means, most notably, that Google won’t be able to show clips from Warner Music Group, since the company still hasn’t come to terms with Vevo.

That doesn’t mean iPhone users have to go without music videos, of course: There’s a Vevo iPhone app, if you’re so inclined, and there’s plenty of other ways to get music videos on your phone if you want or need to. It’s just that Google won’t make any money when you watch them.

The big picture is that YouTube says it is now generating 200 million video views a day from mobile devices (that number includes both phones and tablets like the iPad), up 3x from last year. And now it wants start turning those views into dollars, or at least pennies.

Worth noting that while YouTube has been most aggressive about putting “overlay” ads on the clips it runs on the Web, it’s not doing so here.

That makes sense, because the format would be particularly annoying on a small screen, where the real estate it eats up would be even more noticeable. And because the point of overlay ads is to get a user to click on them, which opens up a new site. That works fine on the Web, but, again, it seems like a very tough sell on a handset.

What's In Store for Technology in 2011

Walter S. Mossberg — Thu, 30 Dec 2010 02:03:49 +0000

It has been a big year in personal technology, from the debut and early success of Apple’s iPad, to the rise and continuous improvement of Google’s Android smart phone platform, to the continued surge in social services led by Facebook and Twitter.

[ See post to watch video ]

So I thought I’d take a look at the challenges and opportunities facing some major players in consumer tech in 2011. As with all my columns, this one is focused only on products and services provided directly to consumers, rather than to businesses. Also, as usual, this column isn’t meant to offer investment advice or to evaluate the management skills or financial condition of companies. It is a look at the products and competitive positions of the key contenders as they enter the new year.

Apple: Coming off a highly successful 2010, in which it introduced a new category of portable computer—the multitouch tablet—and sold millions of the product, Apple will have to withstand an onslaught of competitors by wowing consumers again with the second version of the iPad. At the same time, it will have to make a widely expected transition for the iPhone from a single carrier in the U.S., AT&T, to a second, likely Verizon. This could present a new opportunity to reach lots of new customers, but the sleek phone will have to work well on different network technology. At the same time, Apple will be hoping its planned new Macintosh operating system, Lion, can preserve the surprising momentum of the high-priced Mac, which the company is trying to enhance with certain iPad-like features, such as an app store and longer battery life.

Apple’s iPad will face an onslaught of competition in the coming year.

In 2011, Apple also is likely to try to address two areas where it has been weak: cloud computing and social networking. Both its MobileMe cloud service and its Ping social network had rough starts, and MobileMe charges $100 a year for services others give away. Apple is so popular, it has a huge opportunity to link users of its family of devices and of iTunes via the cloud and social networks, but it will have to aim higher and execute better. The second area where it likely hopes to improve is in the living room. The new, cheaper Apple TV is selling better than its predecessor but still lacks much Internet content. To break through, Apple will have to strike landmark deals with media companies.

Google: The search giant, also riding high, is now in so many product areas it competes with nearly everyone. In its core search business, it must focus on fending off a surprisingly strong challenge from Microsoft’s Bing by giving consumers more attractive, actionable results. Its Android operating system is a big hit, but still isn’t as polished or easy to use as the iPhone’s software, and even a Google official admitted it is still “an enthusiast product for early adopters.” One big test will be the forthcoming Honeycomb version of Android, meant for tablets that challenge the iPad.

A separate group at Google will try in 2011 to revolutionize the PC operating-system business and muscle in on incumbents Microsoft and Apple. Its new Chrome OS will power notebooks that essentially act as Web browsers, and run programs stored in the cloud, not on a hard disk. They also store all your files in the cloud. We’ll learn in 2011 how many consumers are comfortable with that approach.

Google also may take another whack at social networking, where it hasn’t made much of a dent after its Buzz service failed to take off. And it will have to rework its overly complex Google TV effort to bring Internet video to the living room.

Microsoft: The software giant still generates strong consumer loyalty with its older products, like Windows and Office and Xbox, all of which have had updates in the past year or two. But it faces big challenges in two hot areas: smart phones and tablets. Its new Windows Phone 7 platform has some nice design features, but also some missing capabilities that need to be addressed. Initial sales seem respectable, but will have to accelerate to get Microsoft back in a game it once led. The company also is a long way from the 300,000 apps available for the iPhone or the 100,000 for Android.

In tablets, Microsoft is hinting that a new version of Windows is being designed with a tablet focus to complement its PC focus. That product can’t be too late, given the rapid rise of the iPad and the many planned Android and other tablets for 2011. One golden opportunity Microsoft has is to expand the reach of its brilliant Kinect technology for games to other forms of computing. This system can recognize individual users and interpret gestures without the use of a controller device.

Meanwhile, Microsoft hopes to seize on a surge in concern about privacy to help keep its diminishing lead in browsers by building new privacy features, unavailable so far in other browsers, into the 2011 version of Internet Explorer.

RIM: The BlackBerry maker had a good 2010 in some ways, though sales were propped up by two-for-one giveaways, and consumer surveys show enthusiasm fading for the iconic smart phone. It needs a radically new user interface to keep up with iPhone and Android, and a lot more third-party apps. But it can’t afford to alienate its fan base. The company has an answer: a new software platform called QNX, but is vague on when that will show up on the BlackBerry. For 2011, RIM’s big move will be a new QNX-based tablet, the PlayBook, which looks speedy and highly attractive in the limited demos RIM has provided. What isn’t clear is how much the PlayBook will be aimed at consumers, as company officials have consistently stressed its appeal to businesses.

HP: The technology behemoth’s laptops and printers have proved popular with consumers. But it hasn’t had any real presence in smart-phones, tablets or consumer cloud services. To solve the problems, in 2010 HP bought innovative but struggling Palm, whose smart-phone operating system, webOS, and phones, the Pre and Pixi, got good reviews but sold poorly and didn’t attract many third-party apps. In 2011, HP hopes to use its ample money and talent to revive webOS with new phones and tablets to challenge Apple and Android. A successful Palm re-launch, with the new initiatives from RIM and Microsoft, would be good for consumers by providing more choice and competition. HP also hopes to boost home printing with a new line of printers that can print anything emailed across the Internet and wirelessly print from Apple’s hand-held devices.

Facebook and Twitter: The twin leaders in social networking were red-hot in 2010, attracting vast numbers of users. They have huge opportunities for further success, but face challenges. Smaller services, like social-coupon company Groupon, continue to emerge with new social and community ideas consumers like. Apple and Google could be big headaches if they get social right in 2011. Facebook must continue its recent initiative to let members share personal details with more limited groups of friends, and to find ways to make money while offering more privacy, which has been a thorn in its side. Twitter is on a mission to get more than an active minority to post, while convincing people it is a valuable way to keep up with news and opinion even if you never post.

Despite the poor economy, the consumer-tech companies continue to show vibrancy, innovation and success. But every year brings challenges and surprises, and 2011 promises to be another fascinating ride.

For all of Walt’s columns and videos, go to the All Things Digital site, walt.allthingsd.com.

Write to Walter S. Mossberg at walt.mossberg@wsj.com

Verizon 4G Network to Launch Sunday

Ina Fried — Wed, 01 Dec 2010 17:13:57 +0000

Verizon Wireless announced on Wednesday that it will launch its 4G network on Sunday in 38 markets across the United States.

The company had shared most of its plans ahead of time. One of the unknowns, though, was what Verizon would charge for the service. Verizon said on Wednesday that pricing will start at $50 a month for 5GB of data (that’s $10 a month cheaper than Verizon currently charges for its 3G data service). The company also announced two 4G USB modems (4G-ready phones won’t be coming until next year).

The event is just now kicking off, with Verizon Wireless CTO Tony Melone going through the details.

“This announcement has been a long time coming,” Melone said, noting that the company announced its plans to use LTE at Mobile World Congress in 2009. At the time, he said, the company didn’t necessarily know that it would be the first with a significant 4G network.

Melone also took shots at competitors, some of whom are already billing their existing networks as either 4G or delivering near-4G speeds.

“This is the real deal,” Melone said. “Not all 4G is the same.”

Update, 9:15 am PT: More on pricing. Two data plans: 5GB for $50 and 10GB for $80. Anything more than that will be charged at $10 per GB.

“There’s no limit,” Melone said. “We’re not going to slow customers down if they want to use more.”

As for speeds, Verizon said it expects customers will get 5 to 12 megabits per second when downloading and 2 to 5 Mbps when uploading once the network is fully loaded. (Speeds should be faster early on, Melone said.)

The two modems, which will sell for $99 after rebates, also support Verizon’s 3G network in areas where 4G is not available. They will be available online and at Verizon stores, but not immediately at retailers like Best Buy or Radio Shack.

More devices (i.e., phones) will be out by the middle of next year, Melone said. Verizon will talk more about smartphones at the Consumer Electronics Show in January, a spokesman said.

9:25 am: On to Q&A.

Asked about pricing, Melone said that they expect many customers will find their usage is above 5GB and will opt for the $80 a month plan, but still wanted to entice some customers with the lower price plan. “We believe the combination of the two will meet the needs of most customers,” he said.

Consumers will be able to get alerts letting them know when they are at 50 percent, 75 percent, 90 percent or 100 percent of their data plan and they can also query to see how much data they have used.

As for shifting from 4G to 3G, there won’t be a hiccup. However, the caveat is that going from 3G to 4G, you stay 3G until you finish an active session.

We’re likely to hear about some 4G-specific services around CES, Melone said, hinting at some sort of video service. “Obviously the capabilities of this network lend themselves to video-based applications,” he said.

9:38 am: I asked a couple of questions. First, how will Verizon handle voice and data simultaneously. (LTE supports it but 3G doesn’t.)

Melone said that was part of the thinking in launching data modems before 4G smartphones. “One of the reasons why we are not going out with voice out of the gate is it creates complexities that don’t serve anyone,” he said. That said, Verizon’s plan is that initially voice-only calls will be placed on the 3G network, while data sessions will be on 4G when both are available. Eventually, both will move to LTE, he said.

My second question was on whether the speeds Melone talked about on a fully loaded network take into account having a hit device, like the iPhone.

“We expect to be successful and have lots of devices on this network,” Melone said, adding that the company designed the network to be able to handle that kind of usage.

A Fall Guide: How to Pick Your Next Computer

Walter S. Mossberg — Thu, 04 Nov 2010 02:05:08 +0000

If you’re shopping for a new computer this fall, you won’t find big surprises. But you’ll still have to juggle a lot of technobabble terminology and watch your budget. Perhaps the biggest question for some buyers will be whether to get a tablet or a laptop, now that Apple’s iPad is a proven hit and a flood of competitors is on the way.

[ See post to watch video ]

So, here is my annual fall computer buyers’ guide, a simplified road map to the key decisions shoppers must make. I’ve focused on laptops—the most common purchase—but much of this advice also applies to desktops. As always, these tips are for average users doing the most common tasks. This advice doesn’t apply to businesses, to hard-core gamers, or to serious media producers.

Tablets vs. Laptops: If you’re looking for a light-duty, highly portable computer, it’s worth considering the iPad, which starts at $499, instead of a small laptop. This is especially true if you’re in the market for a secondary computer, or one mainly for use on the go. Many owners of iPads, including me, are finding it handily replaces a laptop for numerous tasks, such as Web browsing, email, social-networking, photos, video and music. It has superior battery life, lighter weight, and it starts instantly. I don’t recommend it for people who are creating long documents, especially spreadsheets and presentations, even though it is capable of those tasks. And I don’t recommend it for users who require, or prefer, a physical keyboard.

If you don’t like the iPad, there will soon be alternatives. For instance, Samsung’s Galaxy Tab, which has a 7-inch screen versus the iPad’s 10-inch display, and runs Google’s Android operating system, will be available this month from major wireless carriers. Sprint, for example, will offer it at $400 with a two-year contract. But some tablet buyers may want to wait till the first half of next year, when many more models will be available, and Apple will likely roll out the second-generation iPad.

Netbooks: These low-cost, low-powered little Windows computers are losing popularity, but are still available, typically for about $350 to $500. They are being hurt by the rise of tablets and by light but larger laptops. Some buyers also find the screens and keyboards are too cramped. But these are evolving. Some now have bigger screens and roomier keyboards. And Dell will soon introduce a sort of hybrid netbook-tablet. Called the Inspiron Duo, this model, starting at $499, has both a regular keyboard and a touch screen that flips around when the lid is closed to act like a tablet.

Windows vs. Mac: Windows laptops can be much less costly—and come in many more styles and varieties—than Mac laptops. The Macs start at $999, versus as little as $500 for a decently equipped Windows portable. Windows laptops are still dominant. But Apple laptops are stylish and reliable, and usually boot much faster than Windows machines, in my tests. Also, Apple scores high on surveys of customer support. Its latest models, like the new, light MacBook Airs, have extraordinarily good battery life. Macs also aren’t affected by the vast majority of malicious software, have much better built-in multimedia software and, at extra cost, can run Windows programs in cases where Mac equivalents aren’t available.

The light but speedy 13-inch Toshiba R705 offers good battery life.

Cost: Most of the popular consumer Windows laptops cost $500 to $800. You can get full-size laptops for as little as $280, but their processors and graphics are weak and some lack webcams. If you can afford it, a light but speedy 13-inch machine like the Toshiba R705 offers very good battery life for just under $800. All-in-one desktops typically cost around $1,000 and some, like the HP TouchSmart, offer touch screens with special touch software. Apple’s popular all-in-one iMac starts at $1,199.

Processors: The most promoted chips are Intel’s i3, i5, and i7 Core models, the latter two of which can turn on and off some of their functions to boost power or save energy. But there is nothing wrong with buying a PC that uses chips from rival AMD, which usually cost less. For average users, Intel’s older Core 2 Duo still works just fine, even with the latest software. Intel’s weaker Atom processor line powers most netbooks.

Graphics: Integrated graphics, which share the computer’s main memory, are fine for most common tasks, but costlier discrete graphics, which have dedicated memory, can speed things up by taking some of the load off the main processor. They also are better for games. Some computers have both and can switch among them.

Wireless: More and more laptops are coming with optional cellular modem chips in addition to Wi-Fi. These can be handy while traveling, but be warned that they require a cellular data contract, which can be costly.

Connections: If you plan to connect your laptop to a TV, look for a connector called an HDMI port, which is used on most high-definition TVs. Some laptops also come with a feature called Wireless Display, or Wi-Di, which, with an extra-cost adapter, can beam your laptop screen to a TV without a cable. There is a new, much faster USB port, called USB 3.0, but, so far, it’s on very few machines.

Memory: Aim for 4 gigabytes of memory, or RAM, on a new computer, and never settle for less than 2 gigabytes.

Hard disks: A 320 gigabyte hard disk should be the minimum on most PCs, though 250 gigabytes is OK if price is key, or if it’s your secondary machine. Solid-state disks, which lack moving parts and use flash memory like smartphones do, are faster and use less battery power. They cost much more, but are coming down in price fast. However, they typically offer much less capacity.

64-bit: Many models now use a 64-bit architecture, which allows properly written software to use more memory and run faster. If possible, buy 64-bit, which will become more and more important.

Touch: Some Windows 7 computers have touch capability built into the screen, though Windows wasn’t designed with touch as a core element and the combination isn’t ideal. Computer makers try to resolve this with special touch software, which you should try in a store. Apple laptops use huge touch pads as the multitouch surface, instead of the screen.

As always, don’t buy more machine than you need.

Find Walt Mossberg’s columns and videos online at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

Apple Has $51 Billion and a Shopping List. Is Facebook on It?

Peter Kafka — Mon, 18 Oct 2010 22:58:07 +0000

Steve Jobs made a rare appearance during today’s Apple’s earnings call and spent most of his time beating up his rivals, past and present. Summary: The iPhone has left Research in Motion’s BlackBerry in the dust. And while Google’s Android phones and tablets-to-be looked impressive, they weren’t.

Great fun to listen to for Apple watchers. But not that meaningful, really–mostly positioning and spin. There was at least one important nugget, though: Apple has a specific shopping list, with some very big-ticket items on it.

Jobs wouldn’t lay those out, of course. But when asked if he planned on spending any of Apple’s $51 billion (!) in cash via a dividend or stock buyback, he explained that he had something else in mind. From my notes, a combination of direct quotes and paraphrase:

“We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash,” and we want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

M&A guys, start your engines!

The “what will Apple do with all its cash” speculation story is a time-honored tradition–I seem to remember writing one four or five years ago, when Apple had $6 billion or so lying around, and discussing whether it made sense for Jobs to buy a music company like Universal.

But I don’t remember Jobs every signaling his desire to go shopping quite as openly as this before (feel free to correct me in comments if I have this one wrong). Two caveats:

Jobs is famous for saying one thing and doing…something else. So don’t get too riled up about this.
Just because Jobs is talking about spending money on “opportunities” doesn’t mean he’s talking about buying a company. He could be talking about big, hairy capital expenditures, like the billion-dollar server farm Apple is finishing up in North Carolina.

Still. It’s hard not to read or hear that quote and not think that he’s thinking about some very big buys. Like what?

A lot of folks will assume that Jobs is talking about buying a big content producer. Music doesn’t make any sense, because there’s little value left in that business. But if Jobs wants to make headway in the TV business, perhaps it makes sense for him to snag a big broadcaster or programmer to give him the leverage he needs with the Comcasts, Viacoms and Time Warners of the world.

Or you could make the same argument for other content makers, like game studios. The biggest one, Electronic Arts, has a market cap of a mere $5.21 billion. Jobs could give ERTS shareholders a hefty premium and still have plenty of walking-around money.

Or perhaps it makes zero sense for Apple to be in the content business, because it’s done just fine not being in the content business to date.

So then what?

Feel free to throw your own guesses in, but I’ll kick off with my own: It’s a company that has yet to compete with or brush up against Apple in any significant way. And it’s one that Apple seems unlikely to be able to move aside, even if it wanted to. And it’s one that’s already competing directly with Google, which has to make Jobs like it even more.

And, if you believe this L.A. Times report, Jobs is already strolling around Palo Alto with its CEO: What do you think of Apple buying Facebook? Discuss….

Earlier

Apple investors who got their first look at the company’s earnings numbers don’t like them–AAPL is trading down seven percent after hours. Let’s see if Apple executives can soothe their concerns during the earnings call.

You can listen in for yourself via this link, or follow along in my liveblog below:

Live Blog

Apple or Apple’s IR company trying some very, very mellow string and piano stuff while we wait.

CFO Peter Oppenheimer kicks off. “Outstanding results” for September quarter. Highest quarterly revenue, earnings.

Mac products and services: 3.9 mm Macs. Record quarter. 27% y/y growth. Double market growth for Q.

IMac, Macbook, Macbook Pro all good. Asia/Pacific performing best.

IPods: 9.1 million.

ITunes revenue more than $1 billion.

IPhone. “Extremely pleased” with 14.4 million unit sales; basically doubled y/y.

$8.6 billion in sales value of iPhones alone.

Heaping praise on iPhone 4 (justified) and stressing iPhone’s move into corporate market, rattling off blue-chip customers.

IPad. “Thrilled” with momentum. “Great enthusiasm” from customers.

65% of Fortune 100 deploying or piloting iPad. Lists some of them.

125 million iOS device sales last month.

200,000 registered iOS developers.

“Very happy” with results of iAd so far.

On to Apple stores. More records here.

Expects to open 40-50 stores next year, 50% of them outside U.S.

IPhone sales mix “better than expected”–boosted overall margin.

$51 billion cash hoard. [Deep, longing sigh from everyone in media, tech business.]

For the year: 5x revenue and 10x earnings compared with five years ago.

“Very enthusiastic” about lineup, “extremely confident” in new product pipeline.

Rare appearance from Steve Jobs!

Had to drop by for first $20 billion quarter.

“We’ve now passed RIM, and I don’t see them catching up to us in the foreseeable future.”

They have to move into software/platform development, and I don’t think they can.

So what about Google?

Apple is activating 275,000 iOS devices per day on average over the past 30 days; peaked at 300k iOS devices some days. 300,000 apps in app store.

Unfortunately, there is no solid data on how many Android handsets sold each quarter.

Google loves to characterize Android as open, Apple as closed. “We find this a bit disingenuous.”

Windows is “open.” But Android is “very fragmented.” OEMs like Motorola install own stuff to make their phones stand out. We don’t do that.

Shout out to “Twitterdeck” ( I think he means Tweetdeck) and their challenges running 100 versions of Android client. “Compare this to iPhone, where there are two versions of the software…to test against.”

Meanwhile, at least four app stores on Android. “This is going to be a mess for both users and developers.”

Apple’s app store has 3x apps compared with Google marketplace.

“Even if Google were right, and the real issue was closed vs. open, it’s important to remember that open systems don’t always win.”

For instance: Microsoft’s [miserable] “PlaysForSure” strategy, RIP.

Google’s “open” argument is a “smokescreen.” Real issue is what’s best for customer–”fragmented vs. integrated.”

Integrated is a huge advantage for us, because it’s better for customers, and better for developers. “We are very committed to the integrated approach no matter how many times Google tries to characterize it as closed.”

Now! On to our tablet competitors:

First of all, only a few credible competitors.

Second, most of them are pushing 7.5″ screen. That means they are just at 45% size of our 10″ screen. “You heard that right….This size isn’t sufficient to create great tablet apps.”

Extolling features of iPad size vs. teeny tiny tablet competitors: They’re “tweeners”–too small to compete with iPad, too big to compete with smartphones.

IPad has 35,000 apps. New crop of tablets will have “near zero.”

Competitors having a hard time coming close to iPad pricing, even with their puny screens. We make our own everything, and this results in an “incredible product, at a great price.” Our competitors will “likely offer less, for more.” They’ll be “DOA. Dead on arrival.”

Questions and Answers

Supply constraints on iPad?

COO Tim Cook: We’ve got a handle on it. And note that we’re expanding distribution in the U.S. and internationally, with more countries to come.

Question about margins I didn’t quite catch.

Oppenheimer: Sold more iPhones than planned, and commodity prices came down, so that helped.

Q for Steve. Please talk about “iPad opportunity.” Size of business, etc., two years or more down the road?

Jobs: “The iPad is clearly going to affect notebook computers. The iPad proves it’s not a question of if, it’s a question of when.” Already seeing “tremendous” interest from education and “much to my surprise, from business.”

“The more time that passes, the more I am convinced that we’ve got a tiger by the tail here.” We’ve trained tens of millions of people on this OS via the iPhone. “I see it as really general purpose, and I see it as very big.”

Could it be the second biggest business after the iPhone?

“I try not to predict, I try to report.” We’re selling more iPads than Macs.

What about Flash? Any update?

“Flash memory? We love flash memory” [hohoho]

A question on iPhone demand, which I missed.

Q: Steve, “You are the tablet market.” Do you see tablet competitors cutting into your market in the same way you cut into RIM’s market? Won’t that fragment the market?

“I have a hard time imagining what those strategies…are.” Pricing won’t work. “Flash hasn’t presented any problem at all; as you know, most video on the Web is now presented in HTML5.” The iTunes store is dominant and “we’re not done” working on stuff for the future.

Q: Smartphones–”Do you see that as a zero-sum game?”

Jobs: As you know, most phones in the world aren’t smartphones. They’ll convert over time, so there will be room for multiple competitors, but “eventually it will turn into a zero-sum game, or close to that.”

Q: For Oppenheimer: Another margins question.

A: We do see a small sequential decline. Higher-than-expected mix of new iPods and new iPads. We’ve been very aggressive on pricing there, and that’s what’s pushing down margins.

Q: Steve, how’s your Apple TV “hobby” coming? And what’s up with streaming media?

Jobs: We don’t talk about unannounced products, but I’m happy to tell you what we know about Apple TV. We have moved to streaming. It’s all streaming. Everything is rented, and/or soon to be streamed from iPad or iPhone.

So far we’ve sold 250,000 new Apple TVs. “I’m thrilled with that.” And with Airplay set up, “it will give people another big reason to buy it.”

Another margin/guidance question. Seems to be the same one repeated each time, with the same answer.

Q for Steve: Key risks for company?

The goal is to make the best devices in the world. “It’s not to be the biggest. As you know, Nokia’s the biggest… but we don’t aspire to be like them.”

Android is the biggest competitor. Outshipped us in June quarter as we transitioned. We’re waiting to find out what happened in this quarter. “I don’t know how we’ll find out” though.

Our approach is to create products that “just work” and “their approach is very different from that.”

Questions for Steve and Tim: Aspirations for iPhone and iPad. In Mac, you didn’t aspire to high market share; in iPod, it was the opposite–you own that market. In the past, Tim you’ve described iPhone business as closer to the iPod model. Steve, you sort of said something different. Please resolve that difference: Biggest, or best?

Jobs: “Nokia makes $50 handsets. We don’t know how to make a great handset for $50.” We want to make “breakthrough, best products,” and “drive costs down” while making them better through “relentless improvement.”

We have a very low share in the phone market. Single digits. And a very high share in tablets. But we don’t think about it that way.

The reason we won’t make a seven-inch tablet isn’t because of price point, “it’s because we don’t think you can make a great tablet with a seven-inch screen.” And as a software company, we think of software first. Developers don’t want to build for all these different platforms and devices, and on this small screen. “It’s not about cost, it’s about value, when you factor in the software.”

Q: Okay, but if the market moves toward lower-functionality smartphones and “dramatically lower price points,” then you’ll cede share, right?

Jobs: “You’re looking at it wrong.” You’re looking at it as a hardware guy who doesn’t really know about software. You assume that software “can come alive on this product that you’re dreaming of. But it won’t” because developers want to build for better products, with faster processors and better screens.

Q: You have about $50 billion in cash. What are you going to do with that? Why not return it to shareholders?

Jobs: “We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash” and want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

Missing next question about iPhone and iPad penetration into corporate market.

[Market not sold on Apple's story yet, btw: Stock still down 5.84%.]

Question for Oppenheimer. Guess what? It’s about gross margins. Any change in manufacturing, etc? Any color at all?

Oppenheimer: Don’t provide product-specific gross margins. Always trying to lower costs, though. “We were happy” with gross margins for quarter. Down slightly because of product mix, as I’ve said over and over.

Q: Talk about demand from carriers to pick up iPhone 4.

Cook: The pressure I’m feeling is about supply. That’s the problem. At the country level, we have 166 relationships in 89 countries. In many countries, we went to more than one carrier. Latest one of those is Germany.

IPhone 4 in 85 of 89 countries. Will be in all 89 by end of year.

What happens to margins and subsidy when you go nonexclusive?

We don’t give information out on specific markets, but you can see that our ASPs have stayed above $600.

For Steve: Why do you have advantage in price on iPad, as opposed to PC?

Jobs: We engineer so much of it ourselves. Everything from chip to battery to enclosures. We’ve learned so much. We’ve learned a lot, developed a lot of our own components, where competitors have to go through middlemen. “This is a product we’ve been training for for the last decade.”

Call is over. You can hear the whole thing on a podcast later this evening.

How Andreessen Horowitz Evaluates CEOs

Ben Horowitz — Sun, 30 May 2010 20:22:45 +0000

“I mean damn, did you even see the test
You got D’s, motherf*$@%&, D’s! Rosie Perez”
– Kanye West

No position in a company is more important than the CEO, and as a result, no job gets more scrutiny. Sadly, little of this analysis benefits CEOs, as most of the discussions happen behind their backs. This post is a step in the opposite direction. By describing how Andreessen Horowitz evaluates CEOs, I am at the same time describing what I think the job of the CEO is. Here are the key questions we ask:

Does the CEO know what to do?

Can the CEO get the company to do what she knows?

Did the CEO achieve the desired results against an appropriate set of objectives?

1. Does the CEO know what to do?

One should interpret this question as broadly as possible. Does the CEO know what to do in all matters all of the time? This includes matters of personnel, matters of financing, matters of product strategy, matters of goal sizing, matters of marketing. At a macro level, does the CEO set the right strategy for the company and know its implications in every detail of the company?

I evaluate two distinct facets of knowing what to do:

Strategy–At Andreessen Horowitz, we like to say that in good companies, the story and the strategy are the same thing. As a result, the proper output of all the strategic work is the story.

Decision-making–At the detailed level, the output of knowing what to do is the speed and quality of the CEO’s decisions.

The Strategy and the Story

The CEO must set the context that every employee operates within. This context gives meaning to the specific work that people do, aligns interests, enables decision-making and provides motivation. Well-structured goals and objectives contribute to the context, but they do not provide the whole story. More to the point, goals and objectives are not the story. The story of the company goes beyond quarterly or annual goals and gets to the hardcore question of why? Why should I join this company? Why should I be excited to work here? Why should I buy your product? Why should I invest in the company? Why is the world better off as a result of this company’s existence?

When a company clearly articulates its story, the context for everyone–employees, partners, customers, investors, and the press–becomes clear: When a company fails to tell its story, you hear phrases like:

“These reporters don’t get it.”

“Who is responsible for the strategy in this company?”

“We have great technology, but need marketing help.”

The CEO doesn’t have to be the creator of the vision. Nor does she have to be the creator of the story. But she must be the keeper of the vision and the story. As such, the CEO ensures that the company story is clear and compelling.

The story is not the mission statement; the story does not have to be succinct. It is the story. Companies can take as long as they need to tell it, but they must tell it and it must be compelling. A company without a story is a usually a company without a strategy.

Want to see a great company story? Read Jeff Bezos’s three-page letter he wrote to shareholders in 1997. In telling Amazon’s story in this extended from–not as mission statement, not as a tagline–Jeff got all the people who mattered on the same page about what Amazon (AMZN) was about.

Decision-making

Some employees make products, some make sales; the CEO makes decisions. Therefore, a CEO can most accurately be measured by the speed and quality of those decisions. Great decisions come from CEOs who display an elite combination of intelligence, logic, and courage.

Courage is particularly important, because every decision a CEO makes is based on incomplete information. In fact, at the time of the decision, the CEO will generally have less than 10 percent of the information typically present in the ensuing Harvard Business School case study. As a result, the CEO must have the courage to bet the company on a direction even though she does not know if the direction is right. The most difficult decisions (and often the most important) are difficult precisely because they will be deeply unpopular with the CEO’s most important constituencies (employees, investors, and customers).

In my personal experience, the best decision that I made in my career–the decision to sell the Loudcloud business to EDS and become Opsware the software company–would have lost by landslide had I put it to a vote with my employees, my investors or my customers.

As CEO, there is never enough time to gather all information needed to make a decision. The CEO must make hundreds of decisions big and small in the course of a typical week. The CEO cannot simply stop all other activities to gather comprehensive data and do exhaustive analysis to make that single decision. Knowing this, CEOs must be continuously and systematically gathering knowledge in their day-to-day activities so that they will have as much information as possible when the decision point presents itself.

In order to prepare to make any decision, the CEO must systematically acquire the knowledge of everything that might impact any decision that she might make. Questions such as:

What are the competitors likely to do?

What’s possible technically and in what timeframe?

What are the true capabilities of the organization and how can you maximize them?

How much financial risk does this imply?

What will the issues be, given your current product architecture?

Will the employees be energized or despondent about this promotion?

Great CEOs build exceptional strategies for gathering the required information continuously. They embed their quest for intelligence into all of their daily actions from staff meetings to customer meetings to 1:1s. Winning strategies are built on comprehensive knowledge gathered in every interaction the CEO has with an employee, a customer, a partner, an investor, and so on.

2. Can the CEO get the company to do what she knows?

If the CEO paints a compelling vision and makes fast, high-quality decisions, can she then get the company to execute on her vision and decisions? The first ingredient in being able to do this is leadership, as I outlined in a previous post, Notes on Leadership.

In addition, executing well requires a broad set of operational skills. The larger the organization, the more elaborate the requisite skill set.

In order for a company to execute a broad set of decisions and initiatives, it must:

Have the capacity to do so–in other words, the company must contain the necessary talent in the right positions to execute the strategy.

Be a place where every employees can get things accomplished–the employees must be motivated, communication must be strong, the amount of common knowledge must be vast, and the context must be clear.

Is the CEO building a world-class team?

The CEO is responsible for the executive team plus the fundamental interview and hiring processes for all employees. She must make sure that the company sources the best candidates and that the screening processes yield the candidates with the right combination of talent and skills. Ensuring the quality of the team is a core part of running the company. Great CEOs constantly assess whether or not they are building the best team.

The output of this capability is the quality of the team. It’s important to note that team quality is tightly tied to the specific needs of the company in the challenges that it faces at the point in time that it faces them. As a result, it’s quite possible that the executive team changes several times, but the team a) is high-quality the entire way and b) there is no attrition problem.

Is it is easy for employees to contribute to the mission?

The second part of the evaluation determines whether or not the CEO can effectively run the company. To test this, I like to ask this question: “How easy is it for any given individual contributor to get his or her job done?”

In well-run organizations, people can focus on their work (as opposed to politics and bureaucratic procedures) and have confidence that if they get their work done, good things will happen for both the company and them personally. By contrast, in a poor organization, people spend much of their time fighting organizational boundaries and broken processes.

While quite easy to describe, building a well-run organization requires a high level of skill. The skills required range from organizational design to performance management. They involve the incentive structure and the communication architecture that drives and enables every individual employee. When a CEO “fails to scale,” it’s usually along this dimension. In practice, very few CEOs get an “A” on this particular test.

Netflix’s CEO Reed Hastings put great effort into designing a system that enables employees to be maximally effective. His presentation on this design is called Reference Guide on our Freedom and Responsibility Culture. It walks through what Netflix (NFLX) values in its employees, how they screen for those values during the interview process, how they reinforce those values, and how they scale this system as the number of employees grows.

3. Results against objectives

When measuring results against objectives, start by making sure the objectives are correct. CEOs who excel at board management can “succeed” by setting objectives artificially low. Great CEOs who fail to pay attention to board management can “fail” by setting objectives too high. Early in a company’s development, objectives can be particularly misleading as nobody really knows the true size of the opportunity. Therefore, the first task in accurately measuring results is setting objectives correctly.

We also try to keep in mind that the size and nature of the opportunity varies quite a bit across companies. Hoping that VMware (VMW) can be as capital-light as SolarWinds (SWI) or trying to get Yelp to grow as fast as Twitter doesn’t make sense and can be quite destructive. CEOs should be evaluated against their company’s opportunity–not somebody else’s company. Let me share a funny story, which illustrates a CEO really owning delivering against results. This story is from Robin Li, CEO of Baidu (BIDU). He shares that on the day of Baidu’s IPO–usually one of an entrepreneur’s most exhilarating days of his entire life–he sat at his desk terrified. Why? Listen to how Robin owned delivering results:

In 2004, we raised our last round of VC money led by Draper Fisher Jurvetson…and Google, one of our great colleagues. Then a year later, in 2005, the company went public. The ideal price was $27 [the stock's initial offer price] and it closed on the first day at $122. It was great with us for many of the Baidu employees and for all of the Baidu investors. It was a very miserable thing for me because when I decided to take the company public, I was only prepared to deliver financial results that match the price of $27 or maybe a little higher, $30, $40. But I was really shocked to see that the price went to $122 on the first day. So that meant I needed to deliver real results that matches an expectation much, much higher than what I had prepared to do. But in any case, I thought I had no choice. So I put my head down and focused on operation, focused on technology, focused on the user’s experience, and I delivered.

Once we’ve taken all of this into account, we see that black-box results are a lagging indicator. And as they say in the mutual fund prospectuses, “past performance is no guarantee of future performance.” The white box CEO evaluation criteria–“does the CEO know what to do?” and “can the CEO get the company to do it?”–will do a much better job of predicting the future.

Closing Thought

CEO evaluation need not be a byzantine, unstated art. All people, including CEOs, will perform better on a test if they know the questions ahead of time.

Ben Horowitz is co-founder and general partner of Andreessen Horowitz. He co-founded Loudcloud, later renamed Opsware Inc., in 1999 and served as CEO of the company before it was acquired in 2007 by Hewlett-Packard. He was most recently vice president and general manager of Hewlett-Packard’s Business Technology Organization Unit.

A Sheriff for Web Ads Gets $10 Million

Peter Kafka — Mon, 08 Mar 2010 12:00:06 +0000

Web advertising is a big business, but it’s a young and rowdy one, too. Does it need a sheriff?

That’s the job DoubleVerify wants. And the start-up just raised more money to help it get the gig. Institutional Venture Partners led a $10 million B round for the company, with earlier investors Blumberg Capital, First Round Capital and Genacast Ventures all reupping after a $3.5 million A round last May.

DoubleVerify’s basic pitch is directed at advertisers: It promises to make sure they are getting the media buys they paid for. The company says it can confirm, for instance, that a marketer that only wants to reach a U.S. audience on Yahoo (YHOO) doesn’t have its ads displayed to visitors in France–or that an ad network isn’t running invisible ads no one can see. It also promises to maintain “brand safety” for advertisers–to keep, say, a Jet Blue ad from running next to a story about the underwear bomber.

This stuff sounds small-time, but it’s a big enough concern for advertisers–and publishers that want to court them–to turn into a real business for DoubleVerify and a host of competitors.

DoubleVerify won’t disclose revenue, but says that since November, it has been generating enough to cover costs for a 45-person staff. My back-of-the-envelope math translates that into something like a $5 million run rate. (CEO Oren Netzer says I’m way low. Think “several multiples” of that, he says.)

The problem for DoubleVerify is the same one facing all start-ups that want to carve off a piece of the online ad market: There are a lot of start-ups that want to carve off a piece of the online ad market.

In DoubleVerify’s case, it is either getting paid directly by advertisers, in which case its fee gets tacked on to the ad buyer’s media spend, or by an advertising network, in which case its fee comes out of the ad buyer’s media spend. Either way, it is taking another slice of a piece that is already getting sliced quite thin.

Venmo Wants You to Pay Your Pal, Over the Phone. What Will the Carriers Think?

Peter Kafka — Tue, 02 Mar 2010 15:48:40 +0000

Here’s an interesting take on mobile payments: What if you could send money to a friend simply by tapping out a message on your phone?

That’s the premise behind Venmo, a stealthy but buzzy start-up that just closed its first funding round. The four-man team gathered up something in the $300,000 to $400,000 range, I’m told. Investors include Betaworks, Lerer Media Ventures, and, oddly, given that it’s a modest angel funding round, RRE Ventures.

The big difference between Venmo and its much bigger mobile payment competitors–both Boku and Zong, for instance, have millions of venture capital dollars behind them–is that Venmo doesn’t involve the mobile carriers, which can take 30 percent or more of each transaction they process.

That might be okay for virtual goods, like sheep for your Farmville game, since you’re just throwing money away in the first place. But if you want to send a friend $5, you don’t want her to end up with $3.50. And you don’t want to give AT&T (T) or Verizon (VZ) another $2.14 to place the full $5 into your pal’s account.

So Venmo simply sets up an account for each user, funded by a checking account or credit card, and moves the money into other Venmo accounts. Simple and clever, if it works.

A few obvious stumbling points:

Red ink: Venmo doesn’t charge individual users for transactions, so it’s going to lose money on each transfer since it has to eat credit card fees, etc. The plan is to make that up by charging commercial users–your local coffee shop or flea market vendor or whatever business sets up an account–a 3.5 percent fee for each transaction.
Fine print: The Venmo team–headed by Betaworks veteran Andrew Kortina and Iqram Magdon-Ismail, his former Penn roommate–doesn’t anticipate problems. But smart folks I talk to think that at a minimum, the start-up will have to turn itself into a credit card company or a bank to satisfy regulators. Certainly doable, but that’s the kind of stuff that requires time and money and comes with big penalties if you get it wrong.
Trust: The big one–this thing doesn’t work, period, unless people are comfortable moving money back and forth via a four-man company they’ve never heard of. But the only way to combat that is to let people try. Venmo is in private beta now, but allows friends to invite friends and plans on opening up to a wider audience in the next month. Another option for New Yorkers: Drop by tonight’s New York Tech Meetup, where the team will be handing out invites.

Dude Web Site Publisher Breaks Into Games (Heh heh. Heh heh.)

Peter Kafka — Mon, 25 Jan 2010 19:59:00 +0000

For the past several years, Keith Richman has run a Web publishing company that specializes in video and stuff for dudes. Which means he ought to be struggling and/or out of business by now–both sectors have had way too many competitors chasing not nearly enough ad dollars.

Not so, says Richman. He won’t divulge numbers, but says his Break Media has seen revenue climb 40 percent in the last year and is sort-of profitable (sort-of technical term: “Ebitda profitable”) to boot.

Break.com and its associated sites (CagePotato.com, HolyTaco, etc.) have plenty of competition from the likes of College Humor and Heavy et al–not to mention Google’s (GOOG) YouTube and Hulu–but they’re holding up quite nicely: ComScore (SCOR) pegs their audience at six million monthly uniques. Just as important: Minority owner Lionsgate Entertainment (LGF), which plunked down $21 million for a 40 percent stake in the company in 2007, doesn’t seem to be demanding a payout anytime soon.

Richman is now tackling another market that already has way too many competitors: Social games, dominated by the likes of Zynga, Electronics Arts (ERTS), and Playfish, etc.

No matter. Richman has hired a staff of 13 to kick off his games effort–you can get a taste of what he’s up to here–and says he’ll have a staff of 30 by March (most of them will be in China). Richman’s idea is simple: These games are hot now, but they’re only going to become bigger, so best to jump in while you still can.

Plus, you can iterate through this stuff pretty quickly–Richman’s team put together a supercrude and pretty popular “Tiger Woods Wife Outrun” game within three days of Woods’s car crash last fall–so the sooner you start, the more you can learn.

We talked about all of this in a brief chat last week in New York:

[ See post to watch video ]

Will the Feds Slow Google's Shopping Spree? Regulators Take a Closer Look at AdMob.

Peter Kafka — Wed, 23 Dec 2009 21:29:55 +0000

About that Google shopping spree, which has seen the company buy six companies since August: It’s actually only four companies so far.

That’s because Google’s plans to buy video compression outfit On2 have been held up by disgruntled shareholders. And the company’s plans to spend $750 million on AdMob, the mobile ad start-up, can’t go through until federal regulators sign off.

That may take a little longer than Google (GOOG) would like. The company announced today that the Federal Trade Commission has asked for more information–formally, a “second request”–as part of its review. From a post on Google’s Public Policy Blog:

…we know that closer scrutiny has been one consequence of Google’s success, and we’ve been talking to the U.S. Federal Trade Commission over the past few weeks. This week we received what’s called a “second request,” which means that the FTC is asking for more information so that they can continue to review the deal.

While this means we won’t be closing right away, we’re confident that the FTC will conclude that the rapidly growing mobile advertising space will remain highly competitive after this deal closes. And we’ll be working closely and cooperatively with them as they continue their review.

Google was well aware that it was going to face regulatory scrutiny on this deal; in fact, CEO Eric Schmidt says the company assumes regulators will now look at every big deal it makes, simply because it’s Google.

And also because Google’s competitors are doing their best to make sure there is regulatory scrutiny. Microsoft (MSFT), which knows a thing or two about regulatory headaches, helped slow down Google’s $3.1 billion purchase of DoubleClick for a very long time. And it’s quite clear that Redmond intends to holler loudly in Washington about other deals. Googlers tell me they also believe AT&T (T) agitates against them.

I’ve tried getting Googlers to guess at how long they think the AdMob deal will take to clear, but they’ve been pretty reluctant to do so. “I thought DoubleClick would take a few months, and it took more than a year,” one would-be bettor told me recently. “I’m not making that mistake again.”

Nvidia CEO Not Above Celebrating Intel's Misfortune [Memo]

John Paczkowski — Wed, 16 Dec 2009 23:10:39 +0000

A number of tech companies are rejoicing over the Federal Trade Commission’s complaint against Intel today, none more so than Nvidia.

A top player in the market for graphics processing units, Nvidia stands to gain quite a bit from the FTC lawsuit, which will obviously undermine Intel’s (INTC) efforts to extend its monopoly into the GPU market. In an all-hands memo to employees, Nvidia CEO Jen Hsun Huang explained just how important the FTC’s action is to Nvidia (NVDA) and the GPU market.

Huang’s memo, in full, below:

The U.S. government announced today that it has filed an antitrust lawsuit against Intel. This is an action the industry needs and one that consumers deserve. And it’s one that can completely transform the computer industry.

The facts are clear. The FTC has charged that Intel has used its monopoly illegally to stifle innovation, to keep prices for their products inflated, and to unfairly block competitors. The FTC believes that millions of consumers have paid more and received less quality in return–and that companies and their employees have been forced out of markets where Intel has been threatened.

Intel is fully aware that great graphics have become one of the most important features for consumer PCs, the fastest-growing segment of the PC market. Even more alarming to Intel is the revolutionary parallel computing technology in our GPUs that is being adopted by software developers across the world. The more successful we became, the bigger threat we were to Intel’s monopoly. Instead of creating competitive GPU solutions and competing on the merits of their products, Intel has resorted to unlawful acts to stop us. The FTC announced today that this isn’t acceptable.

Nothing this complicated gets decided quickly. It will take months for the FTC case to be heard by an administrative judge who will then recommend a ruling back to the FTC. And it’s possible that this decision could be appealed. But today is a huge step forward for all of us that will begin to re-level the playing field.

Today’s FTC announcement highlights the industry-changing impact of the GPU and the importance of our work. Our innovation is making the PC magical and amazing again. I can now imagine the day when Intel can no longer block consumers from enjoying our creation and experience computing in a way we know is possible.

Want to Be Relevant Again, Nokia? Buy Palm.

John Paczkowski — Thu, 03 Dec 2009 22:48:00 +0000

Over the past few years, Nokia’s dominance of the smartphone market has been steadily eroded by competition from the likes of Apple (AAPL) and Research In Motion (RIMM). In its latest quarter, the company’s smartphone market share slipped to 35 percent from 41 percent.

With Motorola (MOT) and HTC building some compelling new Android devices and a new iPhone presumably on the way, there’s no telling what Nokia’s market share will be this time next year. The company desperately needs a worthy super-smartphone contender (it’s clearly not the N900 or N97) or it will end up reducing forecasts for market share and profitability in perpetuity.

So what should Nokia do? Wedge Partners analyst Brian Blair has a suggestion.

Nokia should buy Palm (PALM)–for its webOS operating system and for the guy who quarterbacked its development, CEO Jon Rubinstein. And then the company should abandon its Symbian and Maemo operating systems–Blair dismisses them as “inferior” and “lacking polish and smoothness”–and build just a handful of smartphones, all based on Palm’s webOS.

“You need each other,” Blair explains in an open letter to Nokia’s leadership. “You have the manufacturing and distribution capabilities and global carrier relationships and Palm has the second best operating system behind the iPhone. Alone, it will be difficult for Palm to ramp globally and compete with the top players largely because it takes meaningful marketing dollars to ramp units across global carriers especially while you remain focused on R&D efforts. You, by yourself, will cede market share to your competitors each quarter as smartphones become a larger part of global handset sales and you fail to offer a compelling offering in that category.”

Continuing his evaluation, Blair says, “I know you said you expect flat market share in 2010 but that isn’t going to happen if you don’t act. I think you could lose 10% of your share by the end of 2010 to your competition, taking your global share under 30%. However, together, as a unified company the two of you would rock the foundation of the handset industry and create real worry for your competition because each of you bring critical elements to the table that the other lacks and you would be a powerful force complimenting each other’s strengths and addressing the other’s weaknesses.”

As Blair notes, stateside carriers might not have been so quick to dismiss the N900 and N97 if they had run webOS. And developers might not be so hesitant to write apps for webOS if the market for them was as vast as Nokia’s. Finally, with Palm’s market cap at around $1.6 billion and Nokia’s at nearly $50 billion, the Finnish phone maker could easily figure out a way to finance an acquisition.

Interesting proposal, yeah? Tough to see Nokia adopting it, though. The company has been pushing Maemo pretty hard lately. And it wasn’t so long ago that it invested some $410 million in Symbian and released it as a royalty-free open mobile platform. It seems unlikely that the company would simply dump it now. Even more unlikely when you consider that Symbian is by far the world’s leading smartphone software platform.

But you never know. Anything’s possible. And remember, it wasn’t so long ago that Nokia was making rubber boots.

UPDATE: Looks like Blair’s assessment of Palm’s market cap is off, and by quite a bit. The company’s fully diluted shares number at least 236 million. With Palm shares trading at $11.73 as I write this, the company’s market cap is $2.7 billion, not $1.6 billion as Blair suggests.

PREVIOUSLY:

Nokia Buy Palm? Riiiiight.

AMD CEO Dirk Meyer's Comments on Intel Settlement [Transcript]

John Paczkowski — Thu, 12 Nov 2009 16:35:54 +0000

Earlier today, Intel (INTC) and Advanced Micro Devices (AMD) announced a comprehensive agreement to end their outstanding legal disputes. Below, AMD CEO Dirk Meyer’s official remarks about the agreement:

Good day everyone … and thank you for joining us. For the past few years, we have been very open in outlining the major steps for AMD’s transformation into a processing powerhouse:

From the acquisition of ATI Technologies;

To the formation of GLOBALFOUNDRIES; and

The creation of AMD-The Product Company,
o with a single business unit,
o a reinvigorated roadmap,
o a new business model,
o And a close relationship with a world-class leading-
edge foundry.

Today, I am pleased to announce the last major component of that transformation–in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry–taking us one big step closer to achieving our bold vision.
There are three key components to the agreement:

First, Intel has agreed to an important set of ground rules that we hope will define the path to a free and open market in the microprocessor industry;

Second, we have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to operate a business utilizing multiple foundries,

And third, GLOBALFOUNDRIES has agreed to terms that allow them the freedom to operate as an independent world-class leading-edge foundry company, going forward, without being a subsidiary of AMD.

In addition, Intel has agreed to pay AMD $1.25 billion.

Today marks the beginning of a new era… one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important–for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement.

And we are optimistic that it will usher a new era for our industry. We recognize that it will take time for people to understand how operating conditions in the processor business have changed–but make no mistake–they have changed.

I would like to thank the regulatory agencies around the world for their diligence and consistency. Their work has enabled us to achieve this milestone. We are optimistic they will continue their vigilance in maintaining a level playing field, especially with respect to exclusionary practices in our industry.

Looking forward to three keys to our continued success: Compelling offerings; Access to customers and channels, And a winning business model.

We are optimistic this agreement addresses concerns about customer and channel access and our business model. We look forward to healthy competition with the mutual respect one would expect between world-class competitors.

Apple’s Insanely Great Quarter: 3.05 Million Macs, 7.4 million iPhones Sold

John Paczkowski — Mon, 19 Oct 2009 20:37:07 +0000

Apple’s September quarter saw, among other things, the release of Snow Leopard, the latest upgrade to its OS X operating system and the first public appearance of CEO Steve Jobs, who’d been on a medical leave of absence for a liver transplant. It was also the first full period since the company launched the iPhone 3GS, in late June.

No wonder it was a blowout quarter.

After market close Monday, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. That topped the estimates of analysts surveyed by Thomson Reuters, who’d expected the company to earn $1.42 a share on revenue of $9.2 billion.

The company sold 3.05 million Macs during the quarter, a 17 percent increase over last year. It sold 10.2 million iPods, an eight percent decline from the year-ago quarter.

And iPhones? Apple (AAPL) sold 7.4 million of those–seven percent more than during the same period last year. So much for those supply-chain issues that some analysts warned might undermine iPhone sales.

“We are thrilled to have sold more Macs and iPhones than in any previous quarter,” said CEO Jobs. “We’ve got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.” [Editor's Note: "...really great new products"--is that code for a tablet?]

Apple shares, which closed at $189.86 today, are spiking as I write this. At $203.90, they’re up more than seven percent in extended trading.

Looking ahead to its fiscal first quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion. That’s comically lower than the $1.91 a share on $11.45 billion in sales that analysts are forecasting. But as today’s results clearly demonstrate, Apple subscribes to the underpromise-and-over-deliver school of guidance theory, so there’s likely little cause for concern.

So, to recap: Apple sold more Macs and more iPhones than in any previous quarter in the company’s history. Before the holiday quarter. And in midst of the worst economy we’ve seen in 50 years.

Notes From the Earnings Call:

Apple COO Tim Cook and CFO Peter Oppenheimer are handling the earnings call. CEO Steve Jobs will not be attending.
Oppenheimer says this was Apple’s second-highest quarterly revenue ever. Highest-ever operating margin. “We are thrilled with these record-breaking results, particularly given the economic environment around us.” Obviously.
Macs are showing “fantastic momentum,” says Oppenheimer. Sales have outpaced the market in 19 of the past 20 quarters. Quarterly sales were up 17 percent; portable sales, 35 percent. Interesting: 42 percent growth in Asia.
Moving on to iPods: Sales were down to 10.2 million from 11 million a year ago. But iPod touch sales doubled. MP3 market share in the U.S. is now more than 70 percent (according to NPD, I think).
iPhone sales were up seven percent. Apple will begin selling iPhones in China later this month. More than 85,000 apps in App Store. Two billion downloads.
Apple opened 15 new stores during the quarter. Now has 273. Will soon open first two stores in France, including one at the Louvre.
Moving on to the Q&A. Asked about those iPhone 3GS supply issues I mentioned earlier, Cook acknowledges that demand did outstrip supply in a number of countries. But the situation improved “markedly” in September. How are things looking for China? Cook: “I would have liked to have had more, honestly, because we were still short in some countries at the end of the quarter.”
Apple is obviously very excited about the iPhone’s impending debut in China. “There’s a good opportunity, and we’re really excited to get started,” says Cook. “It’s the largest market in the world in terms of total phones.”
No comment on the broader economy. “We just spend our time projecting our business and leave the economy to the economists.”
Does Apple worry about iPhone rivals? Android? Not really, says Cook. “We feel very good about suiting up and competing against anyone.” Our competitors are still trying to catch up with the first iPhone, he adds.
Snow Leopard? Cook says the company’s been “pleasantly surprised” by sales of Apple’s latest OS.
How does Apple benefit from carrier-exclusivity iPhone deals? Cook says carriers with exclusivity deals are willing to invest more in the platform and that means greater innovation. Visual voicemail is an example of that. That said, he adds, “We’ve found no lack of people wanting to sell iPhones, frankly.”
International store revenue up more than 20 percent, on average.
More on iPhone supply issues. Cook insists this is not a component issue, though he notes that silicon can sometimes be hard to get. “We feel good about our position now.”
And still more on iPhone supply issues: How many iPhones would Apple have sold if it had an adequate supply? Impossible to say, really, Cook says, adding that 3GS units were in short supply virtually everywhere in September.
Enterprise demand for the iPhone is very strong. It’s either being deployed or already in use at some 50 percent of Fortune 100 companies. Same with Europe and the FT 100. Widely used in higher ed and government as well.
But perhaps not widely enough. Asked about institutional sales, Cook says Apple isn’t seeing much stimulus funding. The company’s worried about state spending. Says Cook, “We may see more this quarter, but it’s too early to tell.”

Stroker Acer

John Paczkowski — Wed, 14 Oct 2009 20:14:44 +0000

Six months. That’s how long it’s going to take Acer to surpass Dell in market share. Speaking at a news conference in London, company President Gianfranco Lanci took a few moments to talk a bit of smack about his rivals. “We don’t expect revenue to decline this year, which is outstanding, compared to our competitors. Therefore, we’re [expecting] good growth in 2010 again,” Lanci said. “Between this quarter and the next, we can finally pass Dell” (DELL).

And once Acer does that, Hewlett-Packard (HPQ)–the world’s largest PC maker by shipments–best start watching its back. Said Lanci: “I would expect not only to pass Dell very soon, but also to breach the gap with HP.”

Have Acer’s buyouts of Gateway and Packard Bell gone to Lanci’s head? Perhaps just a little. That said, the company has seen quite a bit of growth thanks to the netbook phenomenon, which shows no signs of abating.

Fighting Words! Time Warner Says Comcast/NBCU as Dumb as…Time Warner/AOL.

Peter Kafka — Tue, 13 Oct 2009 15:02:39 +0000

Just in case anyone thought Time Warner had any lingering interest in NBC Universal, this ought to put it to rest: Time Warner (TWX) CEO Jeff Bewkes just compared the proposed Comcast/NBCU deal with the disastrous one his company made with AOL nearly a decade ago.

At a TVWeek conference in Manhattan, Bewkes repeated arguments he has made in the past: Chiefly, that big media mergers have a lousy track record and that he couldn’t see how Comcast (CMCSA) could unlock any value by buying a majority stake in NBC Universal from GE (GE).

“Somebody has finally noticed that these things don’t work out so well,” he said, adding “We love to see our competitors taking risks.”

But just to hammer that point home, Bewkes compared the proposed deal to the one his company made nine years ago when it embarked on an ill-fated merger with AOL. That deal (made when Bewkes was running Time Warner’s HBO unit) “basically made no sense” at the time, he said.

The main talking point in favor of that transaction–that connecting Time Warner’s content with AOL’s Internet distribution would create synergy–was “nonsensical,” he said. But “these kind of arguments, you’ll hear some of them this week, in the other merger that we’ve been talking about,” Bewkes said.

Clear enough?

Wall Street, by the way, remains unimpressed with the proposed deal as well: Comcast shares are down about 10 percent since word got out.

In other reiteration news, Bewkes also said, again, that he doesn’t plan on selling his Time Inc. publishing unit. Though he left himself a tiny window of wiggling room by noting that “no public company can ever say that it wouldn’t consider restructuring some part, whether it’s Warner, HBO, whatever.”

But Bewkes insisted that Time Inc.’s best-known magazine brands, including “Time, People, Sports Illustrated, InStyle,” are holding their own as print products and that the challenge will be turning them into online successes.

“We have basically a healthy business in terms of our relationship with readers. These brands mean something and they’re evolving…,” he said. “If you can’t take the leading titles that people have known for decades, and use the new world to make them relevant, really, shame on us.”

Google to AT&T: "Noisome Trumpeter"? Takes One to Know One.

John Paczkowski — Fri, 25 Sep 2009 21:46:00 +0000

Google is violating the Net neutrality principles it so strongly advocates–according to AT&T, anyway. In a letter to the head of the Federal Communications Commission’s Wireline Competition Bureau Friday (see below for full text), the telephone company described Google (GOOG) as “one of the most noisome trumpeters of so-called net-neutrality” and asked the FCC to order it to “play by the same rules as its competitors.” (As folks are noting in the comments below, AT&T, by describing Google as “noisome” is either using the word incorrectly or being extraordinarily honest about it’s opinion of the company)

Seems AT&T (T) feels that Google’s Google Voice Internet call-forwarding service violates federal rules designed to ensure that phone companies connect all calls. From the company’s letter:

Numerous press reports indicate that Google is systematically blocking telephone calls from consumers that use Google Voice to call telephone numbers in certain rural communities. By blocking these calls, Google is able to reduce its access expenses. Other providers, including those with which Google Voice competes, are banned from call blocking because in June 2007, the Wireline Competition Bureau emphatically declared that all carriers are prohibited from pursuing “self help actions such as call blocking.” The Bureau expressed concern that call blocking “may degrade the reliability of the nation’s telecommunications network.” Google Voice thus has claimed for itself a significant advantage over providers offering competing services. Google casually dismisses the Bureau’s Order, claiming that Google Voice “isn’t a traditional phone service and shouldn’t be regulated like other common carriers.” But in reality, “Google Voice” appears to be nothing more than a creatively packaged assortment of services that are already quite familiar to the Commission….

[The FCC] cannot, through inaction or otherwise, give Google a special privilege to play by its own rules while the rest of the industry, including those who compete with Google, must instead adhere to [FCC] regulations.

AT&T’s letter comes just days after FCC Chairman Julius Genachowski proposed six Net neutrality regulations that will apply to both wireline and wireless platforms. Interestingly, it also follows an FCC investigation into the rejection/delay of Google Voice for the iPhone.

UPDATE:

Google’s responded to AT&T’s letter in a post to the company blog, pointing out the differences between Google Voice and traditional phone service and questioning AT&T’s motives for appealing to the FCC.

“AT&T is trying to make this about Google’s support for an open Internet, but the comparison just doesn’t fly,” Richard Whitt, the company’s Washington telecom and media counsel, wrote. “The FCC’s open Internet principles apply only to the behavior of broadband carriers–not the creators of Web-based software applications. Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.”

Google to AT&T: "Noisome Trumpeter"? Takes One to Know One.

John Paczkowski — Fri, 25 Sep 2009 21:46:00 +0000

Seems AT&T (T) feels that Google’s Google Voice Internet call-forwarding service violates federal rules designed to ensure that phone companies connect all calls. From the company’s letter:

Numerous press reports indicate that Google is systematically blocking telephone calls from consumers that use Google Voice to call telephone numbers in certain rural communities. By blocking these calls, Google is able to reduce its access expenses. Other providers, including those with which Google Voice competes, are banned from call blocking because in June 2007, the Wireline Competition Bureau emphatically declared that all carriers are prohibited from pursuing “self help actions such as call blocking.” The Bureau expressed concern that call blocking “may degrade the reliability of the nation’s telecommunications network.” Google Voice thus has claimed for itself a significant advantage over providers offering competing services. Google casually dismisses the Bureau’s Order, claiming that Google Voice “isn’t a traditional phone service and shouldn’t be regulated like other common carriers.” But in reality, “Google Voice” appears to be nothing more than a creatively packaged assortment of services that are already quite familiar to the Commission….

[The FCC] cannot, through inaction or otherwise, give Google a special privilege to play by its own rules while the rest of the industry, including those who compete with Google, must instead adhere to [FCC] regulations.

UPDATE: