You would think the settlement of a major dispute would goose the stock of a company, but Yahoo’s deal with its Chinese partner Alibaba Group on Friday did exactly the opposite.

Despite the clearing of an obvious overhang to its shares, the stock of the Silicon Valley Internet giant dropped almost three percent Friday to close at $13.10. While the ongoing federal budget wrangling was partly to blame, it was only a very small part with an overall market decline of under one percent.

A tepid reaction to the deal — in which Yahoo, Alibaba and Japan’s SoftBank came to terms over the spinoff of Alibaba’s Alipay payments unit after much wrangling over the move — came quickly from Wall Street analysts.

A report titled “Yahoo Inc: Alipay Agreement: Better than Nothing, But Not That Great,” by J.P. Morgan’s Doug Anmuth, was typical. Pointing to no clarity on an IPO of the Chinese assets of Alibaba and that “prior to the divestiture, Alibaba Group owned 100% of Alipay and all of its income, which is now reduced to 37.5% ownership of Alipay and 49.9% share of the pre-tax income,” he noted that Wall Street “has recently assigned no value to Yahoo!’s share of the asset.”

Well, less than zero, if the stock decline is taken into account, which means Yahoo’s market cap is now just over $17 billion.

According to sources close to the situation, especially since Yahoo’s Asian assets make up more than $9 billion of that valuation, private equity investors and others are pulling out their spreadsheets once again about a possible takeover or privatizing of Yahoo.

Several months ago, for example, former News Corp. exec Peter Chernin had been contemplating a friendly bid with partners such as Providence Equity Partners and others. While there have been rumors recently that he has reengaged in that effort, that is unclear.

Sources also note that Yahoo’s top execs, especially CEO Carol Bartz, and also members of its board, are perplexed that the settlement in China — a positive development — had the opposite effect on the stock.

It’s part of a continuing decline. Yahoo shares are down almost 26 percent in the past three months. Most Web stocks — such as Google, Amazon and Microsoft — are strongly up in that period. The only other obvious laggard is AOL, which is down almost 16 percent in the past three months.

Microsoft’s legal eagle Brad Smith didn’t even bother to pretend the software giant’s filing of a formal antitrust complaint against Google with the European Commission wasn’t a wee bit ironic.

Wrote Smith in a blog post late last night:

“There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step.”

But take it the company did, noting: “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law.”

Google, no surprise, disagreed, via a statement from a spokesman.

“We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we’re happy to explain to anyone how our business works.”

Here is the whole Microsoft post, in which Smith outlines Microsoft reasons for its action:

Adding our Voice to Concerns about Search in Europe

30 Mar 2011 9:00 PM

Posted by Brad Smith

Senior Vice President & General Counsel, Microsoft Corporation

Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law. We thought it important to be transparent and provide some information on what we’re doing and why.

At the outset, we should be among the first to compliment Google for its genuine innovations, of which there have been many over the past decade. As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive. Google has done much to advance its laudable mission to “organize the world’s information,” but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.

We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market. By the European Commission’s own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo!.

At Microsoft we’ve shown that we’re prepared to work hard and invest literally billions of dollars annually to offer Bing, a search service that many now regard as the most innovative available. But, hard work and innovation need a fair and competitive marketplace in which to thrive, and twice the Department of Justice has intervened to thwart Google’s unlawful conduct from impeding fair competition. In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down. And last year the DOJ formally objected to Google’s efforts to monopolize book content, a position affirmed by a federal district court in New York just last week. Unfortunately, even this has not stopped the spread by Google of new and disconcerting practices in the United States.

As troubling as the situation is in United States, it is worse in Europe. That is why our filing today focuses on a pattern of actions that Google has taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers.

How does it do this? Google has built its business on indexing and displaying snippets of other organizations’ Web content. It understands as well as anyone that search engines depend upon the openness of the Web in order to function properly, and it’s quick to complain when others undermine this. Unfortunately, Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers.

On PCs it is usually not difficult for people to navigate to any search engine. Google in fact makes this point virtually every time someone raises antitrust concerns about their practices. Their defense ignores the hugely important fact that there are many other important ways that search services compete. Search engines compete to index the Web as fully as possible so they can generate good search results, they compete to gain advertisers (the source of revenue in this business), and they compete to gain distribution of their search boxes through Web sites. Consumers will not benefit from clicking to alternative sites unless all search engines have a fair opportunity to compete in each of these areas.

Our filing details many instances where Google is impeding competition in these areas. A half-dozen examples below help illustrate some of our concerns.

First, in 2006 Google acquired YouTube–and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google.

Second, in 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It’s done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service.

Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

Third, Google is seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week, in the decision involving Google’s effort to obtain exclusive and unfettered access to the large volume of so-called “orphan books–books for which no copyright holder can readily be found. Under Google’s plan only its search engine would be able to return search results from these books. As the federal court said in rejecting this plan, “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.” This is an important initial step under U.S. law, but it needs to be reinforced by similar positions in Europe and the rest of the world.

Fourth, Google is even restricting its customers’–namely, advertisers’–access to their own data. Advertisers input large amounts of data into Google’s ad servers in the course of managing their advertising campaigns. This data belongs to the advertisers: it reflects their decisions about their own business. But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.

This makes it much more costly for Google’s advertisers to run portions of their campaigns with any competitor, and thus less likely that they will do so. That is a significant problem because most advertisers figure that they have to advertise first with Google. If it’s too expensive to port their advertising campaign data to competing advertising platforms, many won’t do it. Competing search engines are left with less relevant ads, and less revenue. And while this restraint isn’t visible to consumers, its effects are nonetheless felt across the Web. Advertising revenue is the economic propellant fueling the billions of dollars needed for ongoing search investments. By reducing competitors’ ability to attract advertising revenue, this restriction strikes at the heart of a competitive market.

Fifth, this undermining of competition is reflected in concerns that go beyond Google’s control over content. One of the ways that search engines attract users is through distribution of search boxes through Web sites. Unfortunately, Google contractually blocks leading Web sites in Europe from distributing competing search boxes. It is obviously difficult for competing search engines to gain users when nearly every search box is powered by Google. Google’s exclusivity terms have even blocked Microsoft from distributing its Windows Live services, such as email and online document storage, through European telecommunications companies because these services are monetized through Bing search boxes.

Finally, we share the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.

Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They’ve urged us to share our knowledge of the search market with competition officials. As they’ve pointed out, the stakes are high for the European economy. On any given day, more than half of all Europeans use the Internet, and more than 90 percent of them look for information about goods and services on the Web. Indeed, the European Commission’s Digital Agenda made clear that commerce is moving online, where two-thirds of Europeans begin their shopping process. It’s therefore critical that search engines and online advertising move forward in an open, fair and competitive manner.

There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.

We readily appreciate that Google should continue to have the freedom to innovate. But it shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That’s what it’s doing now. And that’s what we hope European officials will assess and ultimately decide to stop.

Please see this disclosure related to me and Google.

Yesterday, the Obama administration dribbled out the news that it was going to nominate current Commerce Secretary Gary Locke as the next ambassador to China.

If approved, Locke will surely have his hands full on a wide range of issues, many of them impacting the tech sector, including piracy, privacy and government-sponsored censorship.

Perhaps more interestingly, the move leaves open a post–which the Obama administration actually had a hard time filling initially–that could get a true turbocharge if it were filled by an exec from the fast-growing digital arena.

It’s not a bad idea, since tech is probably now the most critical business arena in the U.S. and one of the only markets in which this country innovates and excels at.

While the Commerce Department has a huge and disparate domain, from international trade to the census to promoting American businesses, its digital footprint has been much less profound than the industry’s increasing importance to the U.S. economy.

After all, despite some interesting international efforts, most of the current crop of tech stars are U.S. born and bred and leading the way in digital innovation.

In fact, every big trend right now in value creation are all coming out of tech.

Gaming? Zynga.

Social networking? Facebook and Twitter.

Retail? Groupon.

Mobile? Google and Apple.

So, why not pick a business person from the area to lead the government agency dedicated to business?

But that’s where it gets dicey.

One more obvious candidate would be outgoing Google CEO–and Obama favorite–Eric Schmidt.

I would assume he might welcome such a prominent post, although putting him in place at Commerce would be a tough road.

Issue one and only: The investigations of Google’s aggressive business practices by federal regulators make this an awkward decision for Obama, given Schmidt would be open to a lot of scrutiny going through confirmation.

But there is a long list of others who could be considered to serve, especially if you think well outside the box.

What about former Xerox CEO Anne Mulcahy, who certainly has the management cred?

Or mega-VC John Doerr, who–despite his recent social fever–might finally get to push his beloved clean-tech agenda onto a larger stage?

What about Facebook COO Sheryl Sandberg, who recently showed she could deliver a boffo speech and who might lend some Silicon Valley magic to her former Washington, D.C. rep?

And while Amazon’s Jeff Bezos’ laugh would have a hard time getting Congressional approval, why not consider someone who has profoundly changed the way an entire business sector does business?

In that vein, Reed Hastings of Netflix also fits the bill.

Except these three execs are pretty busy these days. So, what about former eBay CEO Meg Whitman, whose failed bid to be California’s governor as the Republican candidate leaves her without a post.

President Barack Obama had picked a GOP pol as his second choice for Commerce head, in fact, so Whitman or even Cisco CEO John Chambers are not out of the question.

The point is to perhaps move outside the Beltway’s comfort zone and pick a Commerce Secretary who represents the future rather than the past.

Nestled within that amount was $350 million to draw a map showing a detailed, block-by-block inventory of the existing broadband infrastructure in the U.S. It took two years, but the results were unveiled by the National Telecommunications and Information Administration today on the Web site Broadbandmap.gov.

This is far from the first time someone has tried to tackle the problem of mapping existing broadband pipes in order to show where service is lacking. But prior attempts have generally been haphazard because service providers tend to carefully guard the precise maps of their physical plant as competitively sensitive. And prior federal efforts fell short because the maps were based on ZIP codes. If one person in some geographically large but sparsely populated rural ZIP code had access to service, prior federal maps showed that area as “served,” even if the majority of the population didn’t have access. The new map uses the far more granular census tracts.

The map shows some new data that shouldn’t come as a surprise to anyone who’s been following the saga of broadband in America: Anywhere from 5 to 10 percent of Americans lack access to broadband at acceptable speeds. Recall that the Federal Communications Commission last July set a benchmark of 4 megabits per second downstream and 1 MBPS upstream as what it considers acceptable.

Another key finding is that so-called “community anchor institutions” are going without adequate access to broadband. These are schools, libraries and hospitals, where different kinds of services are needed. As a rule of thumb, a school needs about 50 to 100 MBPS for every 1,000 students, and most of the schools surveyed had speeds of 25 MBPS or less, and precious few libraries reported speeds approaching that.

When residential service isn’t available, these are the institutions that people turn to when they need to use the Internet. A few years ago I visited a rural county in Tennessee where the local library had broadband and provided free wireless. If you watched the parking lot after the library was closed you’d often see people pull their cars up with laptops and use the Wi-Fi to work on homework assignments with the kids. Even the local sheriff’s deputies would pull up and use it to check their email.

There was some good news. Alongside the map, the NTIA released a separate report on broadband adoption. It found that 68 percent of households have access to a cable modem, a DSL line or a home fiber connection, up from less than 64 percent a year ago. The usual demographic disparities remain: People living on low incomes or with disabilities, along with seniors, minorities and those with low educational attainment, tend to lag behind other groups in home access. The city-country divide remains as well: 70 percent of city dwellers, versus 60 percent of rural residents, access broadband at home.

But here’s a stat that should surprise you: 28.3 percent of all the people in the nation do not use the Internet, period. That’s down about two percentage points from a year ago, but still means that out of every 25 Americans, seven don’t use the Internet at all. I don’t know about you, but that surprises me.

It’s the latest development in a shareholder lawsuit against HP in which the plaintiffs have alleged that HP’s board of directors let Hurd walk out the door with too much money when he resigned following accusations of sexual harassment by a onetime contractor. They’re seeking an order that would require Hurd to disgorge the payments he received as his severance deal.

The judge, James Ware, ignored Hurd’s argument that he deserves to see documents relating to the matter that so far HP has refused to share, though the ruling doesn’t address whether he’ll ultimately get to see them or not. Hurd had objected to a new investigation, saying he would agree to it only if he were to get copies of the initial demand letter from shareholders that led to the lawsuit, as well as related documents that are under seal in a separate shareholder case on the same issue that’s before the Delaware Court of Chancery. Ware scheduled a hearing on March 20 to hear an update on the investigation.

Hurd resigned from HP in August after accusations about sexual harassment arose from Jodie Fisher, a onetime actress and former HP contractor. He was found not to have violated HP’s sexual harassment policy, but was found to have violated HP’s expense-reporting policy. After leaving HP, he went on to become co-president of Oracle, after Oracle CEO Larry Ellison criticized HP’s board of directors for its handling of the incident.

Word of a new probe comes in response to a shareholder lawsuit in federal court in California claiming that HP paid Hurd too much in severance when he left. In the meantime, both HP and the shareholders suing have asked the judge to put the case on hold until the investigation is complete.

Hurd says he wants to see a copy of the shareholder demand that led to the lawsuit, and will oppose the delay in the case until that happens. HP says that as a subject of the inquiry, Hurd isn’t entitled to see any of the documents in question.

In the Delaware case, Hurd’s lawyers argued that the original letters from Jodie Fisher, a onetime actress and a former HP contractor who accused Hurd of sexual harassment, shouldn’t be made public.

Hurd, you’ll recall, went on to become co-president of Oracle, after Oracle CEO Larry Ellison raked HP’s board over the coals for its handling of the incident. Ellison wasn’t alone, as former General Electric CEO Jack Welch later piled on.

Twitter has been ordered by a U.S. federal judge to turn over documents related to several people involved with WikiLeaks to the Justice Department.

Tonight, a Twitter spokeswoman responded to a request for comment on the situation:

“We’re not going to comment on specific requests, but, to help users protect their rights, it’s our policy to notify users about law enforcement and governmental requests for their information, unless we are prevented by law from doing so. We outline this policy in our law enforcement guidelines.”

In an onstage interview I did with Twitter CEO Dick Costolo at a D@CES event last night in Las Vegas, he referenced the issue, but would not give any specifics.

While he said he could not talk about WikiLeaks specifically, he indicated that he disliked government mandates to keep things quiet and reiterated Twitter’s desire to connect people with useful information.

“We’re going to lash out at things that prevent us from doing that, as aggressively as we can,” said Costolo, who also used Twitter crackdowns in China as an example.

It might be a Herculean task to fight the federal government, which is aggressively going after WikiLeaks and its founder, Julian Assange.

Some Web companies, such as eBay’s PayPal unit, have cut off WikiLeaks.

On the other hand, Twitter took legal action to unseal the court order, which allowed it to inform those involved, giving them 10 days to object. Otherwise, the San Francisco microblogging service would have had to turn over information without the knowledge of these users.

There will surely be more of these to other Web companies, with obvious candidates being Google and Facebook.

The order from the U.S. District Court for the Eastern District of Virginia is ordering Twitter to fork over subscriber names, user names, screen names, mailing addresses, residential addresses and more of several people involved with WikiLeaks.

But you can read for yourself–here is the court order, as well as the unsealing order:

twitter1

twitter2

In November, Google sued the Department of Interior, arguing that the Google Apps platform was frozen out of the bidding. Today, a federal judge, Susan Braden, sided with Google by issuing a preliminary injunction preventing the department from deploying Microsoft’s Business Productivity Online Suite. Braden also found that Google had made a preliminary showing that the department had violated a 1984 regulation on competitiveness in government contracts.

Google and a reselling partner, Onix Networking, had argued in court that the Interior Department’s request for bids specifically excluded Google Apps by stating the system had to include the Microsoft product.

The case isn’t over, but it’s certainly not looking good for the Interior Department, which may be forced to reconsider Google Apps for the contract.

Rambus, whose nominal specialty is designing ways for chips to pass data back and forth but which is better known for more than a decade of bitter legal battles, earlier this month filed a complaint with the ITC, saying that products from several companies contained chips that infringe on its patents.

As anyone who’s been paying attention to the numerous patent battles around smartphones knows, the ITC is generally seen as a fast track to a settlement of a patent dispute. Since federal courts are slow and litigation is expensive, companies often go to the ITC ostensibly to block the import of products found to infringe on patents. Since practically every technology product is built outside the U.S., sales of an infringing product can be subject to an exclusion order, the usual outcome when a violation is found.

What’s interesting is the wide range of companies that Rambus has named in its complaint: Hewlett-Packard, Cisco Systems, Nvidia, Broadcom, Seagate, Motorola, Garmin, Asus and Hitachi are among the better known ones. The full list contains 34 companies, including some subsidiaries.

Some of the patents involved in this complaint were the subject of a prior case that Rambus took to the ITC against Nvidia. The commission ruled the patents–known as the Barth family of patents–were valid and issued an exclusion order, prompting Nvidia to come to the table and sign a licensing agreement in August. Rambus is obviously looking for a similar outcome from Broadcom and Freescale, which it says are among those now infringing on the Barth patents.

Additionally there’s another set of patents known as the Dally family, which Rambus didn’t invent but to which it holds a license. The patents are owned by MIT and are based on the work of Bill Dally, a former MIT professor of electrical engineering who’s now at Stanford University. The patents had been licensed exclusively to a small private firm called Velio Communications, where Dally had been CTO and which was acquired by the chip maker LSI Logic in March of 2004.

In a twist that could happen only in the strange world that is patent law, Rambus acquired the exclusive license to Velio’s serial interface patents–the Dally family–in a separate deal in the waning months of 2003. The irony is that LSI is among those being sued for infringing on the Dally patents. Some M&A lawyers at LSI must be kicking themselves today.

The music file-sharing service, which basically called it quits in October after losing a federal court case, is turning off or shelving most of its related products. But it has found a home for at least one of them: Its LimeExchange.com services marketplace is being swallowed by Freelancer.com, which describes itself as “the world’s largest outsourcing marketplace.”

Terms of the deal haven’t been released; Freelancer.com says it will “migrate” LimeExchange’s users to its own platform.

What’s that? You had no idea the people behind LimeWire also ran a freelance marketplace? Me neither.

But now that I’m looking, I see that Lime Labs, which formally ran LimeExchange, also lists a domain registration/hosting business and an open-source Web site-building service among its assets. Anyone know what’s become of those?

Big picture: New York-based LimeWire and its affiliated companies look like they will all be wound down by the end of the month.  Not coincidentally, the following month there are supposed to be federal court hearings in which the major music companies are going to try to extract millions from LimeWire owner Mark Gorton for copyright violations.

I don’t know that shuttering all the related companies will help Gorton hang on to his money. But anything that helps him focus on his legal problems can’t be a bad idea.

Viacom’s filing runs 72 pages, but here’s the gist: It argues that if the appeals court lets the lower ruling stand, then it will “radically transform the functioning of the copyright system and severely impair, if not completely destroy, the value of many copyrighted creations.”

Google’s response: “We regret that Viacom continues to drag out this case. The court here, like every other court to have considered the issue, correctly ruled that the law protects online services like YouTube, which remove content when notified by the copyright holder that it is unauthorized. We will strongly defend the court’s decision on appeal.”

youtube appeal

The General Services Administration–which oversees government procurement–will soon become the first major federal office to move to cloud-based email and calendar apps on an agency-wide basis. And it’s chosen Google Apps to do it.

A hard-won victory for Google, which beat out Microsoft for the $6.7 million five-year contract, leaving the folks up in Redmond more than a little peeved to see Office’s ubiquity in government threatened in this way.

“We are disappointed in the GSA’s internal e-mail decision,” the company said in a post to its “Why Microsoft” blog, adding that it is nonetheless “gratified that so many federal, state & local governments have chosen Microsoft to meet their business needs.”

You can almost hear the gritting teeth, can’t you? The horror of 15,000 GSA employees all using Gmail….

So again, a coup for Google, which has been working hard to push its cloud computing suite of messaging and collaboration apps to the government.

Interestingly, sources close to the negotiations tell me that the RFP (Request for Proposal) for the GSA contract was amended midway through the process to allow for offshoring of government data outside the United states–as an accommodation for Google.

Which is odd, because you’d think that if the United States government is embracing cloud computing, it would prefer the clouds in which its data is stored to be within its own borders. That Google requested and was granted the option to store GSA data offshore isn’t necessarily troubling (it must meet GSA security requirements regardless), but it is…interesting.

Google wouldn’t tell me the reason for its request, although I’ve heard it may have something to do with how the company segregates data and apps geographically. It was, however, quick to insist that it isn’t planning to offshore any U.S. government data entrusted to it–at least, currently.

Said spokesman Andrew Kovacs, “The government’s starting with Gmail and Calendar, and their data will be stored in a segregated system located in the continental United States that is exclusively for our government customers.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Please see this disclosure related to me and Google.

According to multiple sources close to the situation, Google is in discussions with local deals powerhouse Groupon about buying it.

Without making the requisite joke about the deal of the day, sources said the price being considered is certainly no discount–well above the $2 billion to $3 billion that Yahoo offered Groupon in acquisition talks that took place earlier this year.

But sources cautioned that the talks are not complete, and could also end up without any result, as the Yahoo discussions did.

In an email, a Google spokesperson said with some style: “Per usual, we don’t comment on rumor or speculation. If we did we’d be busy 24/7!”

A Groupon spokesperson was also sassy, noting: “Thanks for the heads-up!”

Still, the company appears to be engaged in a pattern of shopping itself around, via its bankers Allen & Co., even though Groupon investors have expressed a desire to stay independent many times.

But could there be other interested parties poking around, given the explosive revenue growth of Groupon–whose revenues are reportedly upward of $50 million a month–in the huge local retail market?

Sources said only three could pay such a high price: Microsoft, Amazon and, perhaps the most logical buyer, eBay.

Facebook is another company that could be interested, of course, although this would be a sizable purchase in both cost and also staff for the social networking giant, which has fewer employees than Groupon.

As does Google, all–except perhaps Facebook, which is not public yet–have more than enough cash reserves, as well as stock, to pay up for one of the more promising start-ups in a lucrative arena.

That would be local commerce. Currently, despite a plethora of clones, Groupon dominates socially fueled couponing across cities globally.

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

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

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

It has been introducing various local advertising and commerce efforts, efforts that would be turbocharged given Groupon’s quick progress.

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

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

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

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

A purchase this size would also likely require bankers. Google’s favored one is Morgan Stanley.

But there is one major issue in a possible Google purchase of Groupon: Even more regulatory scrutiny by the federal government over its power online.

Google narrowly missed getting approval for its $750 million purchase of mobile advertising start-up AdMob.

And it is currently under fire from numerous critics for its proposed purchase of huge flight data firm ITA Software for $700 million.

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

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

Stay tuned, but check out this video interview I did with Groupon founder and CEO Andrew Mason this summer in Vancouver, where I asked him specifically about Google’s interest (actually, I suggested he mug Google co-founder Larry Page):

Please see this disclosure related to me and Google.

]]> http://allthingsd.com/20101119/google-turns-its-local-eyes-to-groupon-but-who-else-could-enter-bidding/feed/ 16 http://allthingsd.com/20101109/labor-board-backs-worker-who-criticized-on-facebook/ http://allthingsd.com/20101109/labor-board-backs-worker-who-criticized-on-facebook/#comments Tue, 09 Nov 2010 13:00:50 +0000 Melanie Trottman http://voices.allthingsd.com/?p=32233 The National Labor Relations Board is taking a stand on employees’ rights to post negative comments about supervisors on social networking sites, alleging that a company illegally fired a worker for criticizing her boss on Facebook. The agency disclosed the complaint last week against ambulance service American Medical Response of Connecticut Inc.

The NLRB, an independent federal agency that settles disputes between private-sector employers and employees, said the supervisor questioned the employee about a customer complaint on her work but that the employer illegally denied her representation from her union during the probe. The employee later posted the negative remark about the supervisor on her personal Facebook page from her home computer.

Read the rest of this post on the original site

]]> http://allthingsd.com/20101109/labor-board-backs-worker-who-criticized-on-facebook/feed/ 0 http://allthingsd.com/20101029/gag-order-denied-in-oracle-sap-trial/ http://allthingsd.com/20101029/gag-order-denied-in-oracle-sap-trial/#comments Fri, 29 Oct 2010 17:31:58 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=51671

Bad news for SAP, Hewlett-Packard, it’s new CEO Léo Apotheker and anyone else tarred and feathered in Oracle CEO Larry Ellison’s recent fusillade of anti-SAP broadsides. A federal judge has denied a request for a gag order in the increasingly contentious legal battle between Oracle and SAP.

According to a court filing made public this morning (click on image above to enlarge), U.S. District Judge Phyllis Hamilton denied Oracle’s request for a three-day delay in the trial and ordered it to begin as scheduled on Monday, without the additional restrictions on extrajudicial communication SAP had requested.

Nonetheless, SAP–which, in a change of strategy, will not contest Oracle’s allegations that it contributed to acts of copyright infringement committed by its discontinued TomorrowNow unit–pronounced itself satisfied, saying in a statement, “The decision to narrow the scope of the trial and to start the trial on time will keep the focus on the core issues and eliminate the unnecessary sideshow. This will increase the chance of a faster resolution and we couldn’t be more pleased.”

So expect jury selection to occur on Monday, opening arguments on Tuesday and the rhetorical jousting we’ve seen to date to continue.

PREVIOUSLY:

• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

]]> http://allthingsd.com/20101029/gag-order-denied-in-oracle-sap-trial/feed/ 0 http://allthingsd.com/20100602/julius-genachowski-session/ http://allthingsd.com/20100602/julius-genachowski-session/#comments Wed, 02 Jun 2010 20:15:27 +0000 John Paczkowski http://d8.allthingsd.com/?p=478 It has been a tough spring for Federal Communications Commission Chairman Julius Genachowski.

In April, a federal appeals court found that the FCC had overstepped its bounds when it censured Comcast (CMCSA) for violating its net neutrality principles and in so doing, called into question the agency’s authority to regulate the Internet. In May, 282 members of Congress, from both political parties, petitioned him to suspend the FCC’s plans to reclassify broadband as a telecommunications service, a move that would, once and for all, put broadband under the agency’s purview and clarify its jurisdiction.

And so today, Genachowski heads an agency whose legal authority is in question, as is its ability to implement a much needed National Broadband Plan. And his ambitious policy agenda is, for all intents and purposes, on hold.

What will he do now to regain momentum and fix the country’s ailing broadband policies?

1:19 pm: You’re a different sort of FCC chairman, aren’t you, Walt asks. You have somewhat of a tech background.

Genachowski: I do. I spent the last 10 years in the tech space. I’m probably the only FCC chairman who worked for the same company as Jeffrey Katzenberg.

1:21 pm: The conversation quickly moves on to an issue top of mind today: broadband and how lousy it is in the United States. Genachowski talks for a moment about broadband, saying the U.S. is grievously behind. He cites a survey that ranked the U.S. 40th out of 40 when it came to rate of change of capacity. “That means we are moving more slowly than any other country in that survey.”

1:23 pm: Walt jumps in to note that U.S. broadband customers are being screwed on performance AND cost. “They have slower broadband than lots of other people and they pay more for it,” he says. “You’re the head of the FCC: Why won’t you fix this?”

Genachowski: Because I thought you might invite me, I spent the last year working on a broadband plan. But there’s no silver bullet. There are things we can do to drive more innovation. Unleashing mobile is the most important thing we can do. There’s no doubt in my mind that mobile broadband will drive innovation. We have an enormous chance with 4G.

1:25 pm: Genachowski–The FCC plan that I inherited provided for new spectrum coming on the market that’s about a threefold increase over now. Until you see the new demand being driven by devices like the iPhone and the iPad. It’s 40 times. And we need to address that.

Walt jumps in, noting that spectrum is finite. Is there enough spectrum available to solve the problem?

Genachowski: There’s enough available if we have the right policies in place. We’ve got to work on policies that themselves create better efficiency, policies for trading spectrum, for example.

1:28 pm: Genachowski recalls that a few years ago there was a band of spectrum that no one knew what to do with. Finally, someone said, ‘why don’t we just put this spectrum out unlicensed and see what people do with it?’ And the first thing that people came up with were garage openers…and later someone discovered that it could be used for Wi-Fi. Obviously, an important innovation, but also part of the congestion problem. So what we’re trying to do is identify things like that,” he says. We’re also looking into spectrum-related efficiency.

1:30 pm: Walt–Are you going to take spectrum away from TV broadcasters?

Genachowski says he has offered them the opportunity to put their spectrum up for auction. We think this creates a mechanism for freeing up spectrum that’s currently tied up, he says.

1:31 pm: Walt asks about Genachowski’s broadband plan. Does the FCC have the power to bring it to fruition?

Genachowski: First thing to understand about the plan is that we were asked to develop a plan that would apply to the FCC and other parts of the government as well. It includes recommendations for the FCC, for Congress, etc. So focusing on the things we recommended for ourselves, there’s no dispute that we have authority. With respect to others, there’s a court ruling that’s created problems for us. So what’s important is that we move forward on the broadband policies and strategies.

We run something at the FCC called the Universal Service Fund. It promotes universal phone service and it does a good job of that. One of the recommendations of our plan is that this fund be used to support broadband instead of legacy phone service. This court decision is preventing us from doing that.

1:34 pm: Genachowski–No one really cares what section of the statute we point to except for the lobbyists and lawyers. It would be unfortunate if that process slowed us down as a country on improving our broadband infrastructure.

1:36 pm: Genachowski–We need to have enough of a broadband infrastructure in the United States that companies want to do business here.

1:37 pm: Walt wonders if it’s even possible to get some sort of policy implemented that would improve broadband for consumers.

Genachowski says it is, but concedes that “some elements of the system are broken” and prevent the country from moving as quickly as it could on its infrastructure initiatives. “We’re kidding ourselves if we think that the infrastructure will come simply because we want it to come….We need dramatic investment and we need an environment that encourages innovation.”

1:39 pm: Walt recalls a question from yesterday’s session with Steve Jobs about AT&T’s capacity problem. Noting the dramatic increase in demand for data on AT&T’s network, he asks if Genachowski can fix it so that people who complain about not being able to make calls on AT&T (T) will be able to make calls.

Genachowski: I think on an issue like this where AT&T hears from its consumers every day about how bad it is, I don’t worry so much. I worry more about issues where consumers are disempowered. Things like the number of consumers who don’t know what their broadband speeds are, for example. Ultimately, we want to give consumers the information they need to be better consumers. … What we’re looking at is digital labels that will show consumers what their actual broadband speeds are as opposed to the speeds they’re told they’re getting. I think we’re in an era when information technology creates opportunities to empower the consumer to make the market work more efficiently.

1:44 pm: Walt talks a bit about the state of the set-top box. The boxes that the cable companies give you are awful, he says. But there’s a law meant to promote options. Why aren’t you enforcing it?

Genachowski says he is, noting that consumers can buy CableCards.

Walt: Why don’t you make companies make better CableCards and better cable boxes?

Genachowski concedes that the CableCard strategy hasn’t quite worked out the way the FCC had hoped. The agency is now looking to see if there’s a sort of universal gateway that will solve the set-top box issue and allow innovation in the living room, he says. But the pay folks are concerned about how this will preserve the integrity of the pay stream. We’re at the point technologically where we can explore devices that preserve that pay stream while improving the broadband experience, he says, and we’ve set a goal of 2012 for developing a device like this.

Q & A

Q: Why is the FCC putting the 4G spectrum next to the Wi-Fi and Bluetooth bands?

A: I don’t think that will happen. At the FCC we have terrific engineers who understand these interference issues.

Q: What do you think about rewriting the Telecommunications Act of 1996?

A: I think it’s true that the act gives us the authority that we need. But I also think that by virtue of its structure, it’s not quite ideal. I’m doing everything I can with the following goal: We need solutions, speed, etc., because we’re not just competing with ourselves, we’re competing with the rest of the world.

Q: Does Obama have an iPad?

A: I don’t know whether he has an iPad yet, but I’m sure that will be taken care of.

Q: Your thoughts on malware and security?

A: The dangers are very serious. The systems that should be in place aren’t in place yet. I’m very concerned about the substance of this and whether in Washington we can do what needs to be done to ensure the security of our networks.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

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]]> http://allthingsd.com/20100602/julius-genachowski-session/feed/ 0 http://allthingsd.com/20100527/google-closes-admob-deal/ http://allthingsd.com/20100527/google-closes-admob-deal/#comments Thu, 27 May 2010 20:50:22 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=41669 Federal regulators on Friday approved Google’s $750 million purchase of mobile advertising company AdMob. Now, less than a week later, the search sovereign has closed the deal.

“We believe that mobile advertising can play a significant role in every single marketing campaign. We’re passionate about the unlimited possibilities in this space,” Susan Wojcicki, Google vice president of product management, said in a celebratory blog post. “Today, with AdMob, our work to make them a reality begins.”

And what a circuitous route it was to get there. Google (GOOG) announced plans to buy AdMob last fall, but the acquisition was quickly hamstrung by a grueling regulatory review.

]]> http://allthingsd.com/20100527/google-closes-admob-deal/feed/ 0 http://allthingsd.com/20100526/maybe-apple-should-pay-attention-to-amazon-after-all/ http://allthingsd.com/20100526/maybe-apple-should-pay-attention-to-amazon-after-all/#comments Wed, 26 May 2010 13:52:26 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19996 Some interesting context for federal regulators looking at Apple’s monopoly position in digital music: New data show Amazon making a bit of headway in its attempt to take on iTunes.

Amazon’s MP3 store now has 12 percent of the digital download market in the U.S., according to NPD Group. That’s up from eight percent a year ago. But those sales don’t seem to have come at Apple’s expense: NPD puts the iTunes market share at 70 percent, compared with 69 percent a year ago.

So who’s losing market share? NPD hasn’t explained (yet). But based on previous surveys from the data company, I assume it’s some combination of Rhapsody, Microsoft’s (MSFT) Zune marketplace and Napster. And if I had to guess, I’d point to Napster, which has really struggled since Best Buy (BBY) purchased it in 2008.

UPDATE: I was wrong! Looks like Amazon’s gain stems primarily from Rhapsody’s loss. The music subscription service, which also sells downloads, saw its share drop from four percent to 1.3 percent within the last year (see table below; click to enlarge).

In any case, the new data show Amazon making steady, grinding progress. Which makes reports of Apple strong-arming music labels that gave exclusives to Amazon a little more interesting.

Meanwhile, Apple (AAPL) remains the biggest player in music retail, period. NPD says it now owns 28 percent of the U.S. market, up from 24 percent a year ago. Amazon (AMZN) is also up, from nine percent to 12 percent, which ties Wal-Mart (WMT) for second place.

[Image credit: Paolo Camera]

]]> http://allthingsd.com/20100526/maybe-apple-should-pay-attention-to-amazon-after-all/feed/ 0 http://allthingsd.com/20100521/ftc-gives-google-admob-deal-green-light-a-big-bouquet-of-flowers-sent-to-apple/ http://allthingsd.com/20100521/ftc-gives-google-admob-deal-green-light-a-big-bouquet-of-flowers-sent-to-apple/#comments Fri, 21 May 2010 16:27:20 +0000 Kara Swisher http://kara.allthingsd.com/?p=28673

In the regulatory equivalent of a surprise switcheroo, the Federal Trade Commission announced that it had officially closed its investigation of the $750 million AdMob deal with Google (GOOG), which had been at risk over the past months, citing adequate competition in the mobile advertising market, especially from Apple (AAPL).

It was a 5-0 unanimous vote.

In a press release, the FTC said:

“The Commission said that although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc.–the maker of the iPhone–to launch its own, competing mobile ad network.”

This comes after two days of arrogant and petty Apple-bashing by Google at its I/O conference in San Francisco this week by the search giant’s execs–including CEO Eric Schmidt.

Guess it’s time to send some love to Apple CEO Steve Jobs, Eric, given that his company’s entry into the market tipped the balance against what could have been a thorny investigation of Google by regulators!

Not that Google is out of the regulatory woods in Washington, D.C., by any means. Both the FTC and the Justice Department have been carefully scrutinizing the search giant as its power in the digital arena has grown, especially over antitrust and privacy concerns.

That federal attention is sure to continue.

Google was only saved from a preliminary injunction to stop the transaction this time because of recent moves by Apple in the mobile ad market.

Apple bought AdMob competitor Quattro Wireless in January and later announced its iAd mobile offering.

In addition, first pointed out by MediaMemo’s Peter Kafka, since Apple lost out to Google in its attempt to buy AdMob, the pair were facing a less-than-cooperative company whose iPhone has been one of AdMob’s key devices to place ads on.

Apple recently issued some new rules–thus far, unenforced–that could hurt AdMob’s ability to take advantage of the powerful iPhone smartphone platform.

Such growing rivalry is the main argument that Google and AdMob have been pushing, noting that the mobile ad business is still small and pointing to a recent survey that showed the combined entity had only 21 percent of the market.

Google CEO Eric Schmidt also took a much more aggressive stance recently on fighting the FTC if the deal was stopped, and sources said the agency was not keen to lose a legal battle over the issue.

Still, until recently, Google’s effort had not seemed to move the FTC, which has been asking for reaction to the deal from a range of sources, such as advertisers, even as Google has been soliciting official support from a number of tech sources.

In addition, lawmakers have been agitating for the FTC to act, and there has been intense lobbying by Microsoft (MSFT) and public interest groups.

The FTC is likely to catch some fire for not moving on Google.

AdMob was also caught in the crossfire, unable to move forward after Google forked over $750 million to buy it last fall.

The San Mateo, Calif.-based AdMob released a statement on the outcome: “We are extremely pleased with today’s decision from the Federal Trade Commission to clear Google’s acquisition of AdMob. Over the past six months we’ve received a great deal of support from across the mobile industry–and we deeply appreciate it. Our focus is now on working with the team at Google team to quickly close the deal.”

Here’s the official press release from the FTC, as well as blog posts from Google’s Susan Wojcicki and AdMob CEO Omar Hamoui on the development:

FTC Closes its Investigation of Google AdMob Deal After Thorough Review, Agency Finds Transaction Not Likely to Harm Competition

The Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network company AdMob after thoroughly reviewing the deal and concluding that it is unlikely to harm competition in the emerging market for mobile advertising networks.

In a statement issued today, the Commission said that although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc.–the maker of the iPhone–to launch its own, competing mobile ad network. In addition, a number of firms appear to be developing or acquiring smartphone platforms to better compete against Apple’s iPhone and Google’s Android, and these firms would have a strong incentive to facilitate competition among mobile advertising networks.

“As a result of Apple’s entry (into the market), AdMob’s success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob’s competitive significance going forward, whether AdMob is owned by Google or not,” the Commission’s statement explains.

The Commission stressed that mergers in fast-growing new markets like mobile advertising should get the same level of antitrust scrutiny as those in other markets. The statement goes on to note that, “Though we have determined not to take action today, the Commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers.”

Mobile ad networks, such as those provided by Google and AdMob, sell advertising space for mobile publishers, who create applications and content for websites configured for mobile devices, primarily Apple’s iPhone and devices that run Google’s Android operating system. By “monetizing” mobile publishers’ content through the sale of advertising space, mobile ad networks play a vital role in fueling the rapid expansion of mobile applications and Internet content.

According to the FTC’s statement, evidence gathered by the agency raised important questions about the transaction. Google and AdMob have competed head-to-head for the past few years, with a notable increase in intensity during the past year. This competition has spurred innovation and allowed mobile publishers to keep a large share of the revenue generated from the sale of their ad space. The companies also have economies of scale that give them a major advantage over smaller rivals in the business, the statement says.

These concerns, however, were outweighed by recent evidence that Apple is poised to become a strong competitor in the mobile advertising market, the FTC’s statement says. Apple recently acquired Quattro Wireless and used it to launch its own iAd service. In addition, Apple can leverage its close relationships with application developers and users, its access to a large amount of proprietary user data, and its ownership of iPhone software development tools and control over the iPhone developers’ license agreement.

The Commission vote to close the investigation was 5-0.

Working with AdMob to move mobile advertising forward

5/21/2010 09:25:00 AM

Today, the Federal Trade Commission cleared our acquisition of AdMob, a mobile advertising start up. We’re excited to work with Omar Hamoui and his talented team at AdMob to develop new mobile advertising solutions for marketers, mobile app developers and mobile publishers.

The decision is great news for the mobile advertising ecosystem as a whole. This was reflected in the widespread industry support for our acquisition.

Throughout the FTC’s review process, it’s been clear that mobile advertising is growing rapidly.

As mobile phone usage increases, growth in mobile advertising is only going to accelerate. This benefits mobile developers and publishers who will get better advertising solutions, marketers who will find new ways to reach consumers, and users who will get better ads and more free content.

We’re very excited about the possibilities in this field. As an immediate matter, we’re now moving to close this acquisition in coming weeks. We’ll then start work right away on bringing AdMob’s and Google’s teams and products together. This industry is moving fast, and we’re excited to be part of the race!

Posted by Susan Wojcicki, Vice President of Product Management

AdMob Blog: Working with Google to move mobile advertising forward

May 21st, 2010

We are extremely pleased with the FTC’s decision today to clear Google’s acquisition of AdMob. Over the past six months we’ve received a great deal of support from across the mobile industry – and we deeply appreciate it.

We are excited to get to what’s next and to start working with Google to develop new products and services for our advertisers, developers, and publishers. We share a commitment to helping our customers navigate and take advantage of the mobile opportunity. Together, Google and AdMob will be able to bring a whole host of new products and capabilities to mobile advertising.

I have to pause to acknowledge the AdMob team. It takes a tremendous group to stay focused and remain productive during a process like this review. The Google deal was announced in November of last year. Rather than sit idle for six months, we’ve launched 15 new products, updated 11 more, and continued building a phenomenal business that is serving an ever growing base of customers. I couldn’t be more grateful for all this group has done.

We will now work with Google to close the deal. Once that happens, we will finally get to the fun part–connecting our teams and products to find ways to better serve our customers. Stay tuned.

Omar

]]> http://allthingsd.com/20100521/ftc-gives-google-admob-deal-green-light-a-big-bouquet-of-flowers-sent-to-apple/feed/ 3 http://allthingsd.com/20100517/19491/ http://allthingsd.com/20100517/19491/#comments Mon, 17 May 2010 10:00:04 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19491 Is Apple really trying to shut out other ad networks from its iPhones and iPad apps? That’s what it looked like at first blush last month.

Recently, though, I’ve talked to some mobile ad companies that are more hopeful. They think Apple will let them compete with its iAd platform in a fair fight.

Maybe they’re saying that because they have to appear optimistic. Maybe they really believe it. But I think they’re wrong. I think Apple intends to own the ad market for its app ecosystem.

A refresher: No one says Steve Jobs is formally preventing rival ad networks from selling ads within the 200,000-plus apps his gadgets support. But the language in the developer agreement for Apple’s new mobile operating system reads as if the company is effectively crippling competitors, by making it hard for them to target ads and track their performance.

That ability, which requires transmitting data from iPhones and iPads to third parties, is standard in Web advertising. But Jobs’s agreement seems either to rule it out altogether or require “opt-in” approval from consumers. Which is almost like ruling it out.

The optimistic mobile ad folks, whom I talked to on background, think things won’t be so dire. They make a couple arguments to support their “we’ll be okay” reasoning.

1) “We’re talking to people at Apple, and they’re hinting that we’ll be okay. Or that at the very least, things haven’t been settled yet.”
2) “It makes no sense for Apple to shut out other mobile ad guys. What it really wants to do is encourage developers to build for the iPhone/iPad, by helping them make more money. The best way to do that is to allow multiple ad networks.”

The problem with these arguments:

1) At a different company, you could argue that a developer agreement is just legalese, not a strategy. But Steve Jobs seems to takes his developer agreements quite seriously. Remember when it looked like he was using a clause in the new contract to kick Adobe (ADBE) and Flash in the teeth? Turns out he really was trying to kick Adobe and Flash in the teeth.

2) Sure, Jobs could generate more money for himself and his developers by opening up his platform to outside ad networks. But you could make the same “open it up” argument about his App Store, and that’s not happening. Instead, Apple insists on approving every app, by hand. Apple also insists on approving the tools developers use to build their apps. If you want to build for a platform that lets in every app, Jobs argues, head over to Google’s (GOOG) Android. It will even let you use Flash.

Not convinced? Check out the first thing Jobs wrote to Gawker’s Ryan Tate over the weekend*. Apple, Jobs said, was offering “freedom from programs that steal your private data.”

I’m almost certain that Jobs is talking about apps and ad targeting there. And sources tell me Apple (AAPL) is defending its policies to federal regulators with the same argument: We’re doing this to protect our users’ privacy.

And perhaps that really is Apple’s primary intent. But it looks like the effect is the same regardless of their motive: It’s going to be very hard for outside ad companies to sell ads inside Apple’s apps.

*I believe, but don’t know, that the Jobs-Tate exchange is authentic.

[Image credit: stp243]

]]> http://allthingsd.com/20100517/19491/feed/ 0 http://allthingsd.com/20100503/close-encounters-of-the-regulatory-kind-admob-google-braces-for-the-worst/ http://allthingsd.com/20100503/close-encounters-of-the-regulatory-kind-admob-google-braces-for-the-worst/#comments Mon, 03 May 2010 13:12:14 +0000 Kara Swisher http://kara.allthingsd.com/?p=27914

While executives at both AdMob and Google are pulling out all the stops to convince federal government regulators otherwise, multiple sources close to the situation said that the pair now expect the Federal Trade Commission to try to block the acquisition of the small mobile advertising start-up by the search giant.

While the situation could change, of course, sources said that the lack of any kind of indication of clear direction of the inquiry this late in the game by FTC staff–which recommends action to its five commissioners–is a bad sign.

“The federal government is looking for a way to discipline Google in some way, because of larger concerns about its search power on the Web,” said one source. “And this is where it looks like it will try to show that concern.”

Action could come as early as this week, but is more likely next week, in the form of a request for a preliminary injunction to stop the transaction due to antitrust concerns.

As luck would have it, late last week on a Virgin America redeye to Dulles Airport near Washington, D.C., BoomTown ran smack into AdMob Founder and CEO Omar Hamoui, who was on the same flight.

Unfortunately for Silicon Valley’s luckiest entrepreneur of 2009–he sold the San Mateo, Calif. start-up to Google (GOOG) for $750 million last November–it was yet another of a half-dozen trips back east so far that have taken on a less than pleasant tone.

Hamoui, who usually has a fresh-faced demeanor, was clearly looking a lot more haggard than usual.

He declined to comment in detail about the situation, only noting that, “I have been trying to explain our business, which is still nascent, to the FTC.”

That’s a big problem, of course, since Hamoui’s real job is to keep his start-up cooking with gas until it is officially bought by Google.

Along with keeping up with competitors–such as Quattro Wireless, which was bought by Apple in January–Hamoui is now hampered in hiring new staff for AdMob, as it waits in limbo.

That’s because AdMob has no currency now to offer engineers,

In addition, first pointed out by MediaMemo’s Peter Kafka, since Apple (AAPL) lost out on its attempt to buy AdMob to Google, he’s also facing a less-than-cooperative company whose iPhone has been one of AdMob’s key devices to place ads on.

And Apple recently issued some new rules–thus far, unenforced–that could hurt AdMob’s ability to take advantage of the powerful iPhone smartphone platform.

Such growing rivalry is the main argument that Google and AdMob have been pushing, noting that the mobile ad business is still small and also pointing to a recent survey that shows the combined entity has only 21 percent of the market.

But that point does not seem to have moved the FTC, which has been asking for reaction of the deal from a range of sources, such as advertisers, even as Google has been soliciting official support from a number of tech sources.

In addition, lawmakers have also been agitating the FTC to act, along with intense lobbying by Microsoft (MSFT) and also public interest groups.

“The FTC really wants to do this and is in search of a legal theory that it can win with,” said a close observer of the situation.

Bloomberg also reported Friday that the FTC was urging the filing of an antitrust suit to challenge the deal.

In other words, big regulatory trouble for Google, and–more to the point–questions over the fate of AdMob.

“It feels like AdMob is going to suffer collateral damage for a bigger fight going on about reining in Google,” said one source.

And, until the verdict is in, here’s a video of an interview I did with Hamoui in late 2008, when life was a lot simpler and bureaucrat-free for him:

Please see this disclosure related to me and Google.

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