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Déjà Hoo: Yahoo Has Done the Pre-IPO Legal Shakedown Dance Before

Kara Swisher — Tue, 13 Mar 2012 13:29:19 +0000

A hot Internet company poised for an even hotter IPO is attacked in court by a competitor whose lunch it has been eating.

Sound familiar? Actually, it’s just as much Google in 2004 as Facebook yesterday.

What the pair have in common is Yahoo, for whom this kind of patent infringement lawsuit is a whole lot of been there, done that.

In Google’s case, Yahoo was suing the then-smaller company over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting 2.7 million more shares of that stock, which it then sold off relatively quickly.

As part of the settlement from a lawsuit started in 2002, Google licensed U.S. Patent No. 6,269,361, entitled “System and method for influencing a position on a search result list generated by a computer network search engine,” which was owned by Yahoo Overture subsidiary.

In plain terms, the patent was over its key pay-for-performance service, which was at the heart of Google’s business of allowing bidding for search results placement related to relevant keywords.

In Facebook’s lawsuit, Yahoo is alleging intellectual property violations by the social networking giant, and is also taking credit for Facebook’s success.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

(Cue the movie script: If Yahoo had invented Facebook, it would have invented Facebook.)

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property, and that royalty payments alone will not suffice.

What happens next today will be interesting — way back when, Google finally gave in in the delicate game of chicken with Yahoo, at the last minute.

But it’s not clear whether Facebook will flinch — or not.

Until we find out, here’s the press release from the 2004 settlement between Yahoo and Google to peruse:

Yahoo! and Google Resolve Disputes

SUNNYVALE, CA & MOUNTAIN VIEW, CA — August 9, 2004 – Yahoo! Inc. (Nasdaq: YHOO) and Google Inc. today announced that the companies have resolved two disputes that have been pending between the companies.

Under the terms of the settlement agreement, Google will take a license to U.S. Patent No. 6,269,361 and several related patents, held by Yahoo!’s wholly-owned subsidiary, Overture, and Yahoo! dismissed its patent lawsuit against Google. The two parties have also resolved a dispute regarding shares issuable to Yahoo! pursuant to a warrant to purchase Google shares in connection with a 2000 services agreement.

In connection with the settlement of the warrant dispute, the patent lawsuit, and in payment for the license, Google issued shares of its Class A common stock to Yahoo!.

Worst But First: Yahoo Uses Words of Facebook's Zuckerberg to Poke Him in Patent Lawsuit

Kara Swisher — Mon, 12 Mar 2012 22:00:04 +0000

On the sixth page of its just-filed patent lawsuit against Facebook, Yahoo quotes the social networking company’s CEO and co-founder Mark Zuckerberg:

“Getting there first is not what it’s all about.”

The quote, which Yahoo contends shows Zuckerberg has “conceded that the design of Facebook is not novel and based on the ideas of others,” is woefully taken out of context, but it’s an attempt to hit home one point:

We were here first and we have more patents.

Even if, as it has turned out, Yahoo has done little over the years with the innovation those patents might represent. Meanwhile, Facebook has run the bases with the wide range of the advertising, messaging, customization, privacy and social networking concepts involved.

Of the 10 patents Yahoo is using in the 19-page lawsuit, filed today in California, the company said: “For much of the technology upon which Facebook was based, Yahoo was there first.”

First but worst, as Yahoo has struggled in recent years to make itself more relevant and prevent the decline of its once mighty business.

Via a series of ineffective leaders and strategies, that has not worked at all, as its business has declined. Now — under the much more in-your-face reign of new CEO Scott Thompson — Yahoo is hoping that courts will determine that what it says it invented counts for something.

That includes in the legal action, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

Given the scope of the patents Yahoo said it has, that means it wants Facebook to essentially close down.

Therefore, I would be expecting Facebook to poke back in three … two … one …

Yahoo Sues Facebook for Patent Infringement, Which Social Network Calls "Puzzling" (Including Filing)

Kara Swisher — Mon, 12 Mar 2012 20:15:52 +0000

In what is either the boldest gamble of its history or the most boneheaded, Yahoo has filed a massive patent infringement lawsuit against Facebook.

The attack by the Silicon Valley Internet icon against perhaps the most powerful consumer social networking site today — also based in tech’s heartland and also an important partner of Yahoo — is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

Multiple sources said he is primarily driving this new aggressiveness from Yahoo.

Since Yahoo told the New York Times that it was considering such a move last week, the issue has been widely debated within the company, with many top techies there opposed to it, due to the company’s longstanding ethos of using patents for defense rather than offense.

Thus, the decision to move was closely held, sources said, with only Thompson and legal chief Michael Callahan largely working on it.

Still, patent lawsuits have become ever more prevalent among tech companies, as they seek to battle for advantage in a rapidly changing competitive landscape. Apple, Google, Microsoft and others are involved in several legal actions, although they are largely related to mobile technology.

Yahoo’s lawsuit is the most prominent in the social networking arena, a sector that has seen a huge explosion of late. Its timing could not be worse for Facebook, since it is in a quiet period for its upcoming IPO, which is expected to value the company at close to $100 billion.

Yahoo has done this kind of thing before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock.

Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook’s initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets.

More importantly, at least initially, the move did nothing to boost Yahoo’s moribund shares — the stock was down about one percent to $14.49 in after-hours trading.

More to come, but here is the entire document below. The lawsuit has been filed in San Jose, Calif., federal court.

Lastly, the official PR back-and-forth:

Said Yahoo, in its statement:

“Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Facebook, obviously, disagrees, and also threw in a jab about the lack of discussions over the issue between the pair:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

I’ll admit to also being puzzled about the strategery here, but I am sure there will be much more to come.

Until then, read on:

Complaint

And here is what I wrote last week on the subject:

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.
That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

SXSW News: Jerry Levin's StartUp Health Academy for Entrepreneurs Announces First Class

Kara Swisher — Mon, 12 Mar 2012 18:20:44 +0000

In an interesting twist on the accelerator and incubator model for entrepreneurs, StartUp Health Academy announced its first class of “healthcare transformers” today at SXSW in Austin.

StartUp Health, which is chaired by former Time Warner CEO Jerry Levin and is backed by AT&T and the California HealthCare Foundation, is backing 10 entrepreneurs who are focused on “fixing a broken healthcare system in ways that significantly reduce costs and dramatically improve care.”

Unlike programs that support start-ups, some of these companies are well on their way in terms of funding and staff. What has been missing, according to StartUp Health, are the other support functions aimed specifically at companies in the still-nascent digital health care field.

Most of all, it’s a nice break from similar groups that back companies designing apps to help people stalk each other at SXSW bars.

Here’s the press release about the 10 that were picked, who were selected from nearly 400 applications and will be part of a three-year curriculum:

StartUp Health Announces Its Inaugural Class Celebrating “Healthcare Transformers”

AT&T and the California HealthCare Foundation Provide Scholarships to the First Class of the Academy for Health and Wellness Entrepreneurship

Austin, TX — SXSW — Monday, March 12, 2012 –Today StartUp Health announced the ten “Healthcare Transformers” that will make up the inaugural class of the StartUp Health Academy for Health and Wellness Entrepreneurship. These extraordinary and passionate entrepreneurs and innovators are on a mission to solve one of the great challenges of our time: fixing a broken healthcare system in ways that significantly reduce costs and dramatically improve care. StartUp Health also announced that both AT&T and the California HealthCare Foundation will be generously providing full-tuition scholarships for the first class of Healthcare Transformers accepted into the program.

“StartUp Health represents a new model for helping innovation succeed in the health sector and is based on a simple premise,” said Jerry Levin, Chairman of StartUp Health. “The best way to transform healthcare is to support and promote entrepreneurs with ongoing inspiration, education, and access to customers, capital, and other critical resources so that innovation and growth can occur more quickly.”

“StartUp Health Academy is the first program of its kind and is based on our unique methodology and platform for supporting Healthcare Transformers,” said Steven Krein, co-founder and CEO of StartUp Health. “The Academy is structured as a 3-year curriculum with strategic thinking tools and collaborative peer groups designed to help innovators navigate the many challenges of building a sustainable growth business in the health sector. We believe there is great power in these networks and in the access we provide to the community of customers, investors, and partners we have organized to transform healthcare.”

The first class of Healthcare Transformers in StartUp Health Academy are all highly accomplished and are operating companies at various stages of the growth lifecycle. All of them have already received funding or financial backing for their venture via venture capital, angel investors, grants, or customer revenue. Five of the class are serial entrepreneurs, two are healthcare professionals, and half are located on the East Coast and half on the West Coast.

The group includes:

Sundeep Bhan is a serial entrepreneur on a mission to revolutionize the way physicians and patients leverage lab testing to make better decisions leading to improved health. Sundeep is CEO of Medivo (medivo.com), which he co-founded with Jason Bhan, MD, and Destry Sulkes, MD, and is headquartered in New York City. The company recently raised $7 Million in a Series A from Safeguard Scientifics. Sundeep’s previous company Medsite was acquired by WebMD in 2006.

Veer Gidwaney is a serial entrepreneur on a mission to improve people’s health through daily behavior change. Veer is CEO of DailyFeats (dailyfeats.com), which he co-founded along with Morley Ivers, President & COO, and Vinay Gidwaney, Chief Product Officer, and is headquartered in New York City and Cambridge, MA. DailyFeats is profitable and growing rapidly with numerous partners including Walgreens and Cigna. Veer’s previous company Control-F1 was acquired by Computer Associates in 2005.

Samer Hamadeh is a serial entrepreneur on a mission to make it easier for people to find and book appointments with alternative healthcare and wellness practitioners ranging from acupuncturists and chiropractors to massage therapists, physical therapists, and personal trainers. Samer is the Founder and CEO of Zeel Networks (zeel.com), headquartered in New York City. Zeel has raised over $1.5 million in seed funding from angel investors including Esther Dyson, Ravi Mhatre, Tim Kendall, and Matt Ocko. Samer was recently EIR at Lightspeed Venture Partners. Samer’s last venture, career site Vault.com, was acquired by private equity firm Veronis Suhler Stevenson in 2007.

Nadeem Kassam is a serial entrepreneur on a mission to reinvent how people track and manage their health. Nadeem is the Founder and Chief Alliance Officer at Basis (mybasis.com), which he manages with Jef Holove as the CEO, and is headquartered in San Fransisco. The company has raised $9 Million in a Series A from Norwest Venture Partners & DCM. Jef was previously CEO at wireless photo card maker Eye-fi and spent almost a decade at Logitech.

Hesky Kutscher is a serial entrepreneur on a mission to revolutionize and simplify the way families manage their children’s health. Hesky is Founder and CEO of MotherKnows (motherknows.com), headquartered in Palo Alto, CA. MotherKnows has raised $1.7 Million in a Series A from First Round Capital, Charles River Ventures, Giza Ventures, and Band of Angels. Hesky’s previous company Shoplocal was acquired by Tribune and Gannett in 2004. Hesky is also Chairman and founder of High Gear Media, a leading automotive content network.

Bill Scott is a Board Certified Neurotherapist on a mission to revolutionize therapeutic treatment options by giving clinicians the ability to easily and cost-effectively use neurofeedback to help patients train their brains to be more adaptive and healthy. Bill is CEO of BrainPaint (brainpaint.com), which he co-founded with Cora Scott, President, and is headquartered in Malibu, CA. BrainPaint is profitable and growing rapidly with over a 125 customers including Promises treatment centers and hospitals in 35 states and 7 countries.

Bronwyn Spira is a physical therapist on a mission to deliver mobile applications for physical therapists that transform the delivery of care. Bronwyn is co-founder and President of FORCE Therapeutics (forcetherex.com), which she founded with her husband Mark Lieberman, a serial entrepreneur and technology executive, and is headquartered in New York City. FORCE Therapeutics has raised seed funding from prominent CEO investors including Thomas Layton, John Pleasants, Joseph Varet, and Randall Winn.

David Wong, MD, PhD, is a dermatologist on a mission to make it easy and affordable for anyone to get online access to board-certified dermatologists and get immediate assistance in the diagnosis and management of skin diseases. David is CEO of Direct Dermatology (directdermatology.com), which he co-founded with Rajnish Gupta, MD, PhD, and is headquartered in Palo Alto, CA. Direct Dermatology has received funding from California HealthCare Foundation and angel investors.

Faheem Zaman is a young entrepreneur who recently left Harvard University to become one of the first Thiel Fellows and pursue his dream of rethinking healthcare by leveraging technology, data, and elegant design to make quality care more accessible. Faheem is founder of a “stealth mobile health company,” which he co-founded with Ilya Vakhutinsky, and is headquartered in New York City. Ilya brings expertise in contextual design and data visualization from his work at the Princeton Plasma Physics Laboratory. Faheem is a recipient of $100,000 from Peter Thiel and the Thiel Foundation’s “20 Under 20″ Thiel Fellowship program.

George Zamanakos, PhD, is an entrepreneur on a mission to make it easier and more affordable for pregnant women to get remote care from anywhere in the world. He is heading up a “stealth mode” initiative backed by some of the biggest visionaries in the ecosystem, and is headquartered in San Diego, CA. George has a PhD in Physics from Caltech, was an associate principal at McKinsey, and previously worked with Johnson & Johnson’s leading strategy and product development in diabetes.

The inaugural group of ten entrepreneurs represents the first of at least four classes StartUp Health will launch in 2012 and marks the beginning of its decade-long mission to help inspire, educate, and provide resources to 1,000 Healthcare Transformers as they build world-class growth companies. The entrepreneurs were selected from nearly 400 applications. The StartUp Health Academy operates on a “rolling admissions” basis and all entrepreneurs who have already applied will also be considered for subsequent classes.

“These entrepreneurs, along with their co-founders, represent a diverse group of Healthcare Transformers focusing on solutions ranging from mobile and digital health services to new diagnostic technologies and devices that will dramatically improve health and wellness and lower the cost of care,” said Unity Stoakes, co-founder and President of StartUp Health. “This group has visionary dreams and are already busy making them come true and pushing the entire ecosystem forward in the process.”

“The California HealthCare Foundation is excited to support StartUp Health on their mission to help Health Transformers grow and innovate more quickly so together we can spark innovations that can reduce the costs of healthcare and expand access to services for the underserved,” said Margaret Laws, Director of the Innovations for the Underserved Program at the California HealthCare Foundation.

“Innovation and collaboration are critical to drive changes in healthcare, and we’re pleased to support this amazing class of healthcare entrepreneurs in the StartUp Health Academy,” said Eleanor Chye, Executive Director, Mobility Healthcare and Pharma, Mobility Product Management, AT&T Business and Home Solutions. “We’re committed to helping the health and wellness ecosystem grow and support new ways that mobile technologies and smart networks can be used to improve the quality of care, reduce costs, and contribute to a healthier world.”

Anyone who wants to support the movement to help innovate in health and wellness can get involved or apply for a future class at startuphealth.com.

Honest: Jessica Alba's Now an E-Commerce Geek (Video)

Kara Swisher — Wed, 25 Jan 2012 18:05:48 +0000

From the Web 1.0 Matt Damon-Ben Affleck debacle to the stunt-casting of Justin Timberlake as a Myspace impresario and everything in between, I have been more than dubious about any online effort by a celebrity.

Not surprisingly, it is usually a lot of special effects but little in the way of substance, from an entrepreneurial point of view.

So it was nice to be actually impressed by actress Jessica Alba’s fledgling effort to break into online commerce, via a new site called the Honest Company.

Using an interesting online subscription model and aimed at the modern mom, Honest sells its own private-label, eco-friendly and hipster baby diapers and biodegradable wipes, as well as organic bath/skin care and green cleaning products.

Alba, who is Honest’s president and one of its co-founders, was inspired to bootstrap the start-up after having kids and being confused as to how to find nontoxic products for them in a marketplace of questionable offerings.

Thus, she and Christopher Gavigan, author of “Healthy Child Healthy World,” hooked up with an experienced entrepreneur — Brian Lee, co-founder of ShoeDazzle and LegalZoom — to create Honest, which just launched.

Selling its own products using a monthly “bundle” model differentiates Honest from comparable sites, such as Gwyneth Paltrow’s GOOP, which focuses on classy recommendations of a wide variety of similar fare.

Right now, the online-only Honest effort is using Alba’s high profile and online clout — many millions of fans and followers on social sites like Facebook and Twitter, for example; and also viral marketing, via mommy bloggers — to get noticed.

But the proof will be if Honest can keep its customers coming back every month for more, as it expands its line. (So far, the reviews of the products have been raves, such as this one from salt & nectar.)

Here’s Alba talking about Honest with Lee, in a video interview at the company’s Santa Monica, Calif., HQ:

[ See post to watch video ]

Roadshow: CEO Pincus Not Selling Shares in Upcoming Zynga IPO

Kara Swisher — Wed, 30 Nov 2011 06:01:45 +0000

According to sources close to the situation, neither CEO Mark Pincus nor one of its principal venture shareholders, Kleiner Perkins, will be selling any shares in its upcoming initial public offering.

While big investors often divest stock in IPOs, not all do. It is a carefully watched number by investors, who are always wary of insiders who unload a lot of shares in an offering.

But such activity by the fast-growing San Francisco online gaming company will be watched carefully since Pincus has recently been painted in a number of press reports as the greedy Mr. Potter of Silicon Valley.

Among the allegations is that he runs a poisonously tough culture that tracks its employees’ output and performance via elaborate data models that require extraordinary amounts of work, along with nefarious list-making of who’s naughty and who’s not.

That big-brother behavior has reportedly included taking away high-ranking jobs and the sweet stock options that go along with them from those execs found wanting.

While there is no doubt Pincus is a hard-charging personality, his defenders note that it’s due to a belief that life at Zynga is a meritocracy and that his practices are not any more heavy-handed than those at other firms.

Indeed, Pincus has a lot of competition in the tough-guy tech CEO category from longtime legends such as Microsoft’s Bill Gates, who set the gold standard for mean, as well as Amazon’s Jeff Bezos and now Google CEO Larry Page.

Pincus does not even rate in this pantheon, which is more typical of tech companies than anyone would care to admit or, to be fair, care to care about. With big benefits, vast wealth and much latitude, many in tech don’t mind the grueling work schedules.

After all, it’s not exactly ditch-digging, now is it?

In any case, sources said the coverage has hit Zynga staff hard, as well as Pincus, who has not responded due to the IPO’s quiet period. That’s in contrast to Groupon, the daily-deals site whose own rough process was rife with highly negative stories about the company’s prospects.

While those media accounts were more aimed at the business itself and less personal, Groupon CEO Andrew Mason vociferously defended the company in a controversial letter that was then leaked and published (to me and by me!).

Pincus will doubtlessly have a lot to say to investors who ask about the company’s culture and its possible negative impact on attrition, as some stories have charged.

His decision not to sell, sources said, was inspired by Zynga investor and close friend Reid Hoffman, who has sold very little of the stock of LinkedIn, where he serves as chairman.

The action all begins next week, according to multiple reports, when Zynga takes its show on the road in preparation for an IPO that is expected to value the company at $15 to $20 billion and will take place before the new year.

It will debut under the ZNGA ticker on the Nasdaq market.

While some have been worried about Zynga’s future growth, its past performance has been a lot stronger than other Internet offerings. In the first nine months of the year, the company posted $828.9 million in revenue, double the amount from a year ago, with net income of $30.7 million.

Pincus’s holding onto shares will be seen as a plus, of course, although he has sold a large amount of stock in Zynga’s history.

According to its S-1 filing:

“From our inception in October 2007 to date, Mr. Pincus, our Chief Executive Officer, Chief Product Officer and the Chairman of our Board of Directors, has purchased an aggregate of 149,197,328 shares of our common stock. To date, Mr. Pincus has sold an aggregate of 43,629,310 shares of our common stock at prices ranging from $0.42 to $13.96.”

Pincus now holds 91.4 million of Class B shares, 16 percent of the total, as well as 20.5 million of Class C shares, 38 percent of that group. Kleiner holds 65.2 million shares, or 11.2 percent, of Class B shares.

Other big Zynga owners, who might or might not sell at the IPO, include Institutional Venture Partners, Union Square Ventures, Foundry Venture Capital and Avalon Ventures.

Ahead of Earnings Next Week, Demand Media Shares Drastic Dip Due to Googley Panda-Monium

Kara Swisher — Wed, 27 Apr 2011 18:35:16 +0000

April showers bring…well, a bad month for the still-young stock of online content maker Demand Media.

After a successful IPO in January, shares of the Santa Monica, Calif., company had stayed largely in the mid-$20 range, including a high of $27.38.

That is, until this month, when gloom in the form of algorithm changes at Google–with the seemingly dulcet code name of “Panda” and designed to weed out poorly made content–appeared to hit SEO-heavy Demand hard.

At first, the updates by the search giant seemed not to effect Demand as much as other sites. But more recent tweaks have caused traffic to its flagship site, eHow.com, to be much more negatively impacted.

And–presumably due to its search advertising-heavy business model–that worry then caused the stock to plummet from above $24 in the beginning of April to yesterday’s close of just above $15.

Since Demand went public, its shares are now down almost 34 percent.

You can see the situation pretty clearly in this Demand stock chart below (click on the image to make it larger):

Of course, this might all be needless panic on the part of Wall Street investors, but the drop has been all too real.

Not surprisingly, Demand acknowledged the dip, but also countered some third-party reports that were more dire.

It tried to staunch that worry on April 18, with a press release and blog post by its Media and Operations EVP Larry Fitzgibbon, which read in part:

…Google recently made significant search algorithm changes in an update dubbed Panda that has rolled out in various capacities from late February thru mid-April. With respect to Panda’s mid-April update, some of our properties saw Google search referrals move up while other properties, including our largest property eHow.com, saw these referrals go down.

As I said in my prior post, we generally do not comment or speculate on changes by major search engines, as these changes can happen nearly daily. However, recent third-party reports attempting to estimate the impact to our search driven traffic, including one projecting a 2/3rds decline in eHow.com traffic, are so significantly overstated that we decided to comment. As discussed in our press release issued today, we currently expect that in Q2 2011 our owned and operated Content & Media properties will generate year-over-year page view growth comparable to or greater than the year-over-year page view growth reported for Q2 2010. We have also reaffirmed our calendar year 2011 financial guidance in this press release.

That’s why it will be interesting to see what Demand execs will say on its first-quarter earnings call next Thursday, May 5, to explain how it will cope with Panda and–more importantly–what it plans to do to minimize the skadoosh impact on its business and share price.

Exclusive: AOL Fires Moviefone Editor Who Offered Fired Freelancers the Chance to Work for, Um, Free

Kara Swisher — Wed, 06 Apr 2011 20:28:30 +0000

Yesterday, AOL’s Huffington Post Media Group got into hot water after the top editor at its Moviefone unit sent a memo to freelancers it was in the midst of firing, offering them an opportunity to “contribute as part of our non-paid blogger system.”

Today, that exec–Moviefone Editor-in-Chief Patricia Chui–was fired by the company, which is in the midst of drastically rejiggering its stable of writers.

Many of those were freelance bloggers under contract to AOL, who are now getting the boot in favor of reallocating staff back to largely paid journalists.

Thus came the controversial email from Chui, which read, in part:

“We will, indeed, be moving away from a freelancer model and toward one relying on full-time staffers. Sometime soon-–this week, I believe–-many of you will be receiving an email informing you that your services as a freelancer will no longer be required. You will be invited to contribute as part of our non-paid blogger system; and though I know that for many of you this will not be an option financially, I strongly encourage you to consider it if you/d like to keep writing for us, because we value all of your voices and input.”

Oh dear. Really, oh dear, especially since the Huffington Post has had its own share of controversies over not paying some bloggers (although it never quite ever offered up a doozie that this letter was).

Sources said Chui was terminated by John Montorio, the HuffPo Media Group’s culture, entertainment and lifestyle editor. Arianna Huffiington is head of all content at AOL, which recently paid $315 million to buy the Huffington Post.

Since she took over, Huffington has tried to stress a return to journalism over more algorithmic content creation. The unloading of its freelance writers was part of that effort.

Thus, Chui’s missteps did not help matters.

But it was not the first time recently that she had made an ill-advised editorial judgment.

Sources said the firing is also due to an incident several weeks ago, in which Chui appeared to defend a marketing employee who sent an email to TechCrunch writer Alexia Tsotsis, asking her to soften a review of “Source Code” due to studio relationship considerations.

AOL bought TechCrunch, a well-known tech news site, last fall. At the time, its CEO Tim Armstrong promised editorial independence and no meddling over advertising concerns.

Instead of taking this minion to task, on Moviefone’s own blog Chui said, in part:

“The reality of our situation is that, as a movies site, we work with movie studios every day, and it is in our best interests to stay on good terms with them. Staying on good terms with studios means that we will relay information if asked. It does not mean that we would ever force a writer or an editor to edit their work for the sake of a studio–or anyone else.”

Even with the last line, it is not exactly a profile in courage, because it was clear violation of the traditional separation of church and state in force at most media organizations.

Typically, editors are supposed to come down on any such communication. That has certainly been my experience in journalism over the years at the Washington Post and Dow Jones–including during its News Corp. ownership. In fact, I have often been shielded from such requests to pass such complaints onto me and only found out much later of advertiser discomfort about my reporting.

At the time, TechCrunch quite clearly called for Chui’s firing and that happened today.

Here is Chui’s full memo to freelancers, as well as the one about TechCrunch, neither of which were apparently cleared with higher-ups:

From: Chui, Patricia
Sent: Tuesday, April 05, 2011 11:26 AM
To: MoviefoneWriters
Subject: Moviefone/Cinematical–Status of Writers

Dear Moviefone/Cinematical Writers,

I know there’s been a lot of uncertainty regarding the future of freelancers and your status as a writer for the site. I personally apologize for the lack of communication, but I’ll tell you what I can.

We will, indeed, be moving away from a freelancer model and toward one relying on full-time staffers. Sometime soon–this week, I believe–many of you will be receiving an email informing you that your services as a freelancer will no longer be required. You will be invited to contribute as part of our non-paid blogger system; and though I know that for many of you this will not be an option financially, I strongly encourage you to consider it if you’d like to keep writing for us, because we value all of your voices and input.

Some of you have indicated interest in applying for full-time writer and editor positions, and the status of those positions are also part of discussions that are ongoing right now. I cannot at this point, however, tell you how many positions there are, or what the exact nature of those positions will be.

Despite the move toward a full-time staff vs. freelancer model, I’m told that there will be room for “exceptions”–for example, in the cases of writers who specialize in certain subjects. Again, what these exceptions are for Moviefone, and what the budget for them would be, is still being discussed.

As for Cinematical, the resignation of Erik Davis is certainly a loss. But I am continuing to have conversations with the editorial leadership here, and I am hopeful that we will still be able to maintain the Cinematical brand and voice going forward. Again, I will share with you any pertinent information as I have it.

In the meantime, those of you who already have assignments, please do continue to work on them unless you hear otherwise. If you’re uncertain of the status of your assignment, check with me. It may take me a while to get back to you, so please be patient–but I will respond.

I am sorry that I don’t have more specific details to give you, but I promise that I’ll keep you as well-informed as I possibly can. Don’t hesitate to reach out if you have questions or concerns.

Best,

patricia

By now you may have read the recent post in TechCrunch regarding that site’s SXSW coverage of the film “Source Code.” A representative from Moviefone, who set up the interview with Summit Entertainment, received some feedback from the studio and passed it along to TechCrunch (our sister site here at AOL). That email has now caused something of a Internet kerfuffle.

Here is the email–reprinted in the post–that was sent to the TechCrunch writer.

Hey Alexia,

Hope you’re having a good time at SxSW and that it’s not been too crazy busy for you!

First wanted to thank you for covering Source Code/attending the party, etc. But also wanted to raise a concern that Summit had about the piece that ran. They felt it was a little snarky and wondered if any of the snark can be toned down? I wasn’t able to view the video interviews but I think their issue is just with some of the text. Let me know if you’re able to take another look at it and make any edits. I know of course that TechCrunch has its own voice and editorial standards, so if you have good reasons not to change anything that’s fine, I just need to get back to Summit with some sort of information. Let me know.

Thanks!

TechCrunch’s issue with Moviefone is that by sending this email, we, in their words, “asked us to change our post. It’s not just sad, it’s wrong.”

I wanted to take this opportunity to clarify a few things.

1) The person who wrote that email was not acting in an editorial capacity. That person’s job is to act as an intermediary between the studios and editorial–not to dictate content, nor to weigh in on the content of Moviefone or any other AOL site. In fact, the presence of a person with that role is just one means we have of ensuring editorial integrity on Moviefone.

2) This is important: We never told TechCrunch to change the post in any way. A publicist at Summit reached out asking if we could convey the studio’s feedback to TechCrunch. We did so. If the editors had responded that they declined to edit the post–which, naturally, is entirely their call–we simply would have conveyed that information back to Summit.

The reality of our situation is that, as a movies site, we work with movie studios every day, and it is in our best interests to stay on good terms with them. Staying on good terms with studios means that we will relay information if asked. It does not mean that we would ever force a writer or an editor to edit their work for the sake of a studio–or anyone else.

We take editorial integrity seriously at Moviefone, and it’s painful to be depicted as a pawn of the studios when that is emphatically not the case. You may think it unseemly for a studio to request changes in an article; that’s certainly your right. But the accusation of pandering on our part or crossing an editorial line is, to my mind, completely unfair, and I would hope that a reasonable reader would be able to recognize the situation for what it is–overblown and unwarranted.

Patricia Chui
Editor-in-Chief, Moviefone

Nokia's Stephen Elop Didn't Start the Fire–But His "Burning Platform" Certainly Lights One

Kara Swisher — Wed, 09 Feb 2011 14:15:21 +0000

Memo to tech CEOs everywhere: Now that’s how to write an internal memo.

That would be the 1,300-word one that Nokia CEO Stephen Elop (pictured here) apparently penned for employees at the Finnish telecom giant, which inevitably leaked to the media (in this case, kudos to Engadget for getting the whole thing, which is below).

Elop uses the harsh but cogent metaphor of a burning oil platform to take a bracing opening shot at turning around Nokia, which has lost market share–and, more importantly, mindshare–to both Apple’s iOS and Google’s Android mobile operating system.

This is not breaking news to anyone in the wider tech world, of course. But for the CEO to say it so flatly and brutally to the insular troops at Nokia makes it remarkable.

As you can read, it’s dramatic all right, and just the kind of thing a lot of leaders at troubled companies–Hello, Yahoo!–could learn a thing or two from.

That’s because it’s honest and also genuine, and with enough of a direction and glimpses into pending action–to be revealed later this week at an event to unveil a new strategy–that it’s not just a diatribe by a new manager about how bad the previous managers were.

There is clearly plenty of that, of course, which is no surprise. But with rumors of an imminent significant management overhaul–which few execs ever do enough of at the start of their tenure, when it is easiest–there seems to be teeth to the memo too.

And although the burning platform part will get all the attention, perhaps the most important observation was in one particular passage that outlines exactly the giant challenge Nokia faces to catch up:

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

Because, as it has turned out, it is all about ecosystems and using them to provide consumers with the best and most seamless experience possible.

Walt Mossberg and I will be interviewing Elop–the former Microsoft exec, who is neither a Nokia insider nor Finnish–about all this and more at the ninth D: All Thing Digital conference in late May.

Obviously, there will be a lot to talk about.

But, until then, here’s Elop’s memo below in its entirety.

I also reposted a video interview I did with Elop in April of 2009 in which he talked about making Microsoft a more open and innovative place, the changing business model of software and more.

Also below is a video Elop ordered up while running Microsoft’s Business Division as part of an “Envisioning” series.

These see-into-the-future videos were done by Microsoft Office Labs as part of a “Productivity Future Vision” series that sketched out a landscape of smartphones, touchscreens everywhere and a whole lot of cool interacting.

It would be nice if he can drag Nokia back into that world–although Elop’s memo is a good start.

[ See post to watch video ]

Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times–his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion–we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally–taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward–a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen.

Verizon Beats AT&T in Voice Calls for iPhones

Walter S. Mossberg — Thu, 03 Feb 2011 02:01:45 +0000

For millions of iPhone owners, or would-be iPhone owners, who dislike AT&T’s wireless service or prefer Verizon Wireless service, liberation is at hand. Starting Feb. 10, Apple’s iconic smart phone finally will be available in the U.S. on a second carrier, Verizon, instead of just on AT&T, which has been the exclusive iPhone network since the device launched in 2007. Current Verizon customers can pre-order the iPhone Thursday.

[ See post to watch video ]

Complaints about dropped voice calls, or calls that can’t be initiated, on AT&T’s service, especially on iPhones, have been legion. Meanwhile, Verizon has enjoyed a general reputation for reliable voice service. So, many frustrated AT&T iPhone users and those scared off by reports of dropped calls, or simply loyal to Verizon, have been eagerly anticipating this move. To these people, I’m here to say: Yes, there are some major benefits to having your iPhone on Verizon, but, as with all good things, there are also trade-offs.

I’ve been testing a Verizon iPhone 4 and comparing it to an AT&T iPhone 4, which has been out since last summer. The phones themselves are essentially identical, except for the fact that they have different radios inside to accommodate the two carriers’ differing network technologies. They aren’t interchangeable.

On the big question, I can say that, at least in the areas where I was using it, the Verizon model did much, much better with voice calls. In numerous tries over nine days, I had only three dropped calls on the Verizon unit, and those were all to one person who was using an AT&T iPhone in an especially bad area for AT&T: San Francisco. With the nearly identical AT&T model, I often get that many dropped calls in one day.

Calls on the Verizon unit were mostly crisp and clear, including speakerphone calls and those made over my car’s Bluetooth connection. On my first full day of testing, I did have several Verizon calls that dropped out for a few seconds, before recovering. Apple attributed this to a very minor glitch I’d encountered in my initial setup of the phone and urged me to reboot it. I did and suffered no more momentary dropouts.

The Verizon model also introduces a feature that some iPhone power users have been craving but that AT&T hasn’t allowed in the past: the ability to use the phone, for an extra monthly fee, as a Wi-Fi hot spot for Internet connectivity to multiple laptops or other devices. In my tests, this worked fine with Windows and Macintosh laptops, and an iPad. Wednesday afternoon, AT&T countered by announcing a similar Wi-Fi hot spot plan for the iPhone at an unspecified future date.

For an extra fee, Verizon iPhone users can use the phone as a Wi-Fi hot spot. AT&T has rushed to counter this feature with one of its own.

Also, Verizon is, for an unspecified but limited time, offering an unlimited $30 a month data plan for the iPhone. That is something AT&T once offered new customers, but has since replaced with capped plans offering fixed amounts of data at $15 or $25 a month. (Existing AT&T customers have been allowed to keep their $30 unlimited plans.)

What about the trade-offs? Chief among them is data speed. I performed scores of speed tests on the two phones, which I used primarily in Washington, and its Maryland and Virginia suburbs, and for part of one day at Chicago’s O’Hare Airport. In these many tests, despite a few Verizon victories here and there, AT&T’s network averaged 46% faster at download speeds and 24% faster at upload speeds. This speed difference was noticeable while doing tasks like downloading large numbers of emails, or waiting for complicated Web pages to load. AT&T’s speeds varied more while Verizon’s were more consistent, but overall, AT&T was more satisfying at cellular data.

Also, because Verizon’s iPhone—like most other Verizon phones—doesn’t work on the world-wide GSM mobile-phone standard, you can’t use it in most countries outside the U.S. AT&T’s iPhone does work on this standard, and can be used widely abroad, albeit at very high roaming rates. In the midst of my testing, I had to travel to Hong Kong, one of the few countries where the Verizon iPhone functions. But even there, it only worked for voice, not data, at least in the areas where I was working. The AT&T model handled both voice and data everywhere I tried it there.

Finally, the Verizon model can’t fetch Internet data at the same time it is making a voice call, something the AT&T model can do. In fact, if you try to, say, call up a Web page while on a voice call with the Verizon model, you get an error message warning the two things can’t be done simultaneously. While this distinction is a weapon in the war of words between the carriers, I doubt it’s a big deal for most average users. My guess is that the most common things you’d want to check while talking would be your calendar, contacts and notes. And, in my tests, it was possible to check all those things on the Verizon model during calls, even though I have them set up to sync via the Internet.

I did have some issues with the Verizon model. In the D.C. area, long a coverage stronghold for Verizon, it kept switching briefly from 3G mode to slower 2G mode. This didn’t affect voice quality, and didn’t last long, but it slowed data downloads drastically for short periods. Also, on my first day of testing—after the setup glitch but before I rebooted—the Verizon phone showed poor battery life, and had trouble connecting to my car’s Bluetooth setup. After that, these problems disappeared. Bluetooth worked fine and I was able to make it through a day with the battery on both phones.

Apple lists the specs on the two models as identical. They both start at $199, both have the same battery-life rating, both run the same operating software. In my tests, I was easily able to transfer all my apps, music, photos, settings, music and videos from the AT&T iPhone to the Verizon model, using iTunes, and I didn’t run into any apps or media that failed to work as expected.

Prices for voice and data plans are a bit different. The least you can pay monthly for an iPhone on Verizon is $75, which includes 450 voice minutes, 250 text messages and unlimited data. On AT&T, you can pay just $65, but your data is limited to a paltry 200 megabytes, though you get 1,000 text messages in this scenario.

The Verizon wireless hot-spot plan costs $20 a month for 2 gigabytes of data, but gets expensive if you run over: $20 for each extra gigabyte.

One big question about the Verizon iPhone that neither company is answering is whether it will be updated to a new iPhone 5 model when the AT&T model is updated. Such updates typically have occurred in June or July, which could make people who buy a Verizon iPhone now resentful that their new phone was bested so soon. Of course, Verizon customers who wait might be resentful if their version of the iPhone isn’t upgraded at the same time as AT&T’s.

Officials at both Apple and Verizon will only say they don’t intend to make Verizon customers unhappy, but that could mean anything.

Bottom line: In my tests, the new Verizon version of the iPhone did much better at voice calling than the AT&T version, and offers some attractive benefits, like unlimited data and a wireless hot-spot capability. But if you really care about data speed, or travel overseas, and AT&T service is tolerable in your area, you may want to stick with AT&T.

See a video of Walt Mossberg discussing the Verizon iPhone at WSJ.com/PersonalTech. Find all his columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

Video: Sean Parker on No Victoria's Secret Models in Silicon Valley (What?!?!)

Kara Swisher — Mon, 24 Jan 2011 16:57:15 +0000

Here is former Napster troublemaker, former Facebook consigliere and current investor, entrepreneur and movie subject Sean Parker onstage at the DLD conference in Munich, Germany, yesterday.

It was vintage Parker, who always tries to paint himself as more of a geek than the multicolored life of the digital party. In truth, he is very much both.

In these clips, he talks about the fabrications in the movie “The Social Network,” in which Justin Timberlake played him as a hyperactive version of Falstaff.

Parker thought the character was “morally reprehensible,” although that’s what made him so fun to watch.

Parker also took issue with other creative liberties about the social networking site in the movie and noted that the film was “a complete work of fiction.”

As an example, he pointed out how there are “no Victoria’s Secret models in Silicon Valley” as there were in “The Social Network.”

You’re kidding! Hollywood glamorized the nerdtastic tech scene in order to make it more exciting to audiences? I cannot believe it!

(And, frankly, Parker seems to be enjoying the attention as much as he does tweaking the film.)

Parker also talked about Facebook being a neutral platform, making a much more interesting observation about what the true power of CEO and co-founder Mark Zuckerberg really is.

Enjoy:

[ See post to watch video ]

Second-Edition iPad–Worth the Wait?

Walter S. Mossberg — Wed, 05 Jan 2011 22:36:42 +0000

I am considering buying an iPad, but am wondering if I should wait for the second edition which is rumored to be coming soon. What do you advise?

I regard the current, original iPad as an excellent product, and can’t say you’d go wrong with it. But while Apple is famously secretive, I’d be surprised if there isn’t a new model announced in the next few months that will have added or improved features. There’s wide speculation, for instance, it will gain a camera or two. The company has a long history of improving its products, and, in the case of the iPad, must keep making it better to deal with a host of coming tablet rivals. So, if you can wait a few months, I’d do so.

I see that many of the newer wireless routers with attractive features do not support printer sharing. Does that mean you cannot connect a printer via Ethernet cable to the router and be able to access that printer through the wireless network? Why do so many of the newer routers not support printer sharing?

In the context you seem to be using it, the term “printer sharing” referred to plugging in an otherwise non-networkable printer via USB to a router, which would then make the printer usable over the network. I presume that this feature has declined in popularity as more home printers now have wired or wireless networking built in, and the latest Windows and Mac operating systems make it much easier to share even a printer without its own network features through the computer’s connection to the network. If the printer has wired networking built in, you should be able to plug it into one of the Ethernet jacks on most wireless routers and make it usable on your wireless network.

I have an almost two-year-old MacBook Pro. The hard drive is nearly full, and I wondered if you knew of any tricks to free up some space. I’m particularly interested in cost-effective fixes.

One useful free utility for freeing up space on a Mac is called Monolingual, and is available at http://bit.ly/dqTCSC. This little utility allows you to remove all the obscure files on a Mac that allow the computer to operate in languages you can’t read or don’t use. For instance, if you only speak and read English, you can erase the files that enable the computer to run in, say, Albanian and Portuguese. Its maker says this can free up hundreds of megabytes of space. I have tried it and it works. Of course, whether you have a Windows PC or a Mac, you can free up space in many other ways, such as by deleting files and programs you don’t use, archiving or deleting old email, and removing temporary browser files.

Email mossberg@wsj.com.

Nokia, Silicon Valley Giant?

Ina Fried — Fri, 17 Dec 2010 13:20:35 +0000

When one thinks of Silicon Valley tech companies, Nokia is hardly a name that comes to mind. But the company has amassed a decent presence in the Valley, with about 500 people working on everything from research to inking deals with Web giants to building the features that the company hopes will someday soon return it to the forefront of the smartphone market.

In fact, the Bay Area unit was one of the first parts of Nokia that CEO Stephen Elop visited when he took the job earlier this year–in part because the company’s board had already scheduled to have its meeting in the area.

Silicon Valley has slowly become an important spot for the company, despite the fact that Nokia doesn’t sell all that many smartphones in the U.S.

Earlier this month, the company’s area employees got a new home as Nokia consolidated nearly all of its Bay Area workers in new offices in Sunnyvale (see picture above). Each floor of the Finnish-style interior has self-standing structures that from the outside look like saunas, but are actually “privacy huts” used for small group meetings or just some alone time pondering the ins and outs of the cellphone business. Nokia kept its research labs in Palo Alto and Berkeley so they could stay close to the area’s top two universities.

The local staff is doing a range of different things. About 50 of Nokia’s Silicon Valley employees come from the company’s 2008 purchase of a Norweigian company called Trolltech, which makes an application platform called QT that is used to control everything from phones to trains and more.

There are also a variety of individuals and small groups working on various product and research efforts. Kari Pulli is a Nokia Fellow who focuses on camera technology. He helped develop a panorama photo feature that is part of the latest Nokia cellphones. His team also developed an HDR photography capability–a feature Pulli reminds people was added to Nokia’s phones before Apple included it in the iPhone. He said his team is currently working on techniques to improve cellphone pictures taken in low-light conditions.

Typically, such photos are either noisy or blurry, depending on what step is taken to compensate for the lack of light. But by taking two pictures–one picture that aims to be sharp, though noisy, and another that will be a bit blurry, but have low noise–he said that a better composite image can be created.

Pulli, who was born in Finland but has spent the past four years in Palo Alto, said he is not too worried that the new Nokia chief is not Finnish. “At least he’s Canadian,” Pulli said, pointing out it’s another cold, dark place that loves hockey. (Elop does love hockey.)

While some of Nokia’s workforce is building new features, others are working on making sure that the company has partnerships with all the important companies in the valley–especially the Facebooks and Twitters of the world.

As for the research projects, they vary widely, and many are only tangentially related to Nokia’s core phone-making business.

Tico Ballagas is a user experience researcher working on how to make technology a better tool for family communications. So he’s been spending a lot of time with Elmo as part of a Family Story Play project to see if distant relatives can better connect with young relatives by reading a story to them over videoconferencing gear.

Meanwhile, Jorg Brakensiek is working with a number of German carmakers to develop a framework known as Terminal Mode, which would allow all manner of smartphones to be usable within cars without users having to stare down at a screen to make use features like maps, email and more.

What many at the offices lament, though, is the fact that so few of the people in the U.S. get a chance to appreciate their work. While Nokia certainly has its challenges globally, it is all but invisible at the cutting edge of the U.S. market. that’s because none of the major carriers here sell a subsidized model of the company’s high-end phones.

What’s worse, the phones that the carriers do sell tend to be the most basic and boring of cellular designs. The company has plans to change that next year, when it hopes the introduction of Meego-based phones will finally sway U.S. carriers to offer subsidized Nokia smartphones, ideally by next summer.

Exclusive: Chegg Buys Cramster

Kara Swisher — Wed, 08 Dec 2010 08:02:25 +0000

According to sources close to the situation, online textbook rental company Chegg has acquired Cramster, a social online homework help platform.

The Pasadena, Calif.-based Cramster is the leading online study community, offering expert Q&A help, study groups and practice tests and problems. College and high school students, teachers, professors, parents and other experts add information into the network on a large range of subjects.

It was founded in 2002 and now has one million members, using either a free or premium service.

The Cramster purchase is one in a series of start-up acquisitions that Chegg has been making of late, part of a strategy to be a central place for student needs.

In late September, the company bought CourseRank, a Mountain View, Calif., start-up that helps students share course schedules, take classes with friends, and read and write reviews on classes and professors, as well as find out how professors grade.

To expand, Chegg has raised a whopping $220 million in funding from a number of venture firms, including Kleiner Perkins.

That’s because Chegg has become the front-runner in the increasingly competitive online textbook rental space, as it seeks to disrupt the $10 billion college textbook business.

Chegg got its start in 2005 at Iowa State University as a classified rental service, where books were the dominant item, but evolved its business to focus on actually doing the textbook rentals.

The company’s unusual name, Chegg, is a mashup of “chicken and egg,” and its model is similar to that of innovative video rental outfit Netflix.

Chegg now serves close to 7,000 schools across the U.S.

Typically, renting a book costs a fraction of what buying one outright does. It is ordered online and then sent to a renter, who then returns it.

Terms of the Cramster deal were not clear.

Another eBook Store? Yep! But This One's From Google.

Peter Kafka — Mon, 06 Dec 2010 15:00:25 +0000

Don’t want to buy your ebooks from Amazon, Apple, Barnes & Noble or Borders? Google is happy to help: The search giant has launched its own e-book store, along with its own ebook reader software.

Lots of today’s Google eBook launch has already been covered in the past (this Wall Street Journal piece from last week got a lot of it). And since I haven’t been able to actually take the store and software out for a run, I can’t vouch for any of it so far.

But here’s what you need to know at the start:

Google is opening its own store, but the big goal is to set up an ecosystem and e-commerce channel that works across the Web.
That means you can buy ebooks directly from Google, and you can also buy books from the sites of independent book shops, like Powell’s Books.
That also means you can read the books on multiple platforms: There’s an Android app, of course. But there’s also an Apple-approved app in the iTunes store. And since the system is Web-based, you can read the books you buy on PCs and tablets, too. As well as e-readers from Sony, Barnes & Noble and Borders. The only place you can’t read Google-purchased titles–Amazon’s Kindle.
Google says its catalog will be competitive with everyone else’s, though it’s hard to assess that without really digging in. It says it will have some three million books available in the store, “hundreds of thousands” of which which are commercial titles. Amazon, by comparison, boasts of 750,000 titles, but it’s including periodicals in that total.
One distinct advantage Google has over a particular rival: Unlike Apple, it has access to Random House titles, which aren’t available on the iBooks platform due to a dispute about pricing.
Speaking of pricing: Google says it supports both the traditional wholesale/retail model, as well as the new “agency” model that Apple has been pushing.
Where’s all this going? Good question! Google executives argue that this is just a natural extension of its ongoing books project, which is supposed to make as many books available to as many people, period–it’s just that they happen to be selling some of them now. But view it from a different lens, and it looks like yet another attempt by Google to move from pointing to stuff, and selling ads along the way, to selling stuff, period. It hasn’t worked yet, but the company seems dead set on making a go of it.

Google Tries to Ride Angry Birds' Coattails

Ina Fried — Fri, 03 Dec 2010 21:27:34 +0000

Google is hoping to use the Angry Birds to show the power of mobile advertising.

A video posted to YouTube has Rovio’s “Mighty Eagle” Peter Vesterbacka talking about, among other things, how an ad-based model can work to generate serious bucks. Off camera, Vesterbacka told Google that the company expects that by the end of the year, its ad-supported Angry Birds will be bringing in over $1 million per month. There have been more than five million downloads of the ad-supported Android version to date.

“It seems to be a very good fit,” he said. “We’re very happy with the monetization that provides us.”

Google is using the spot as the first in a series of YouTube videos to tout ways of establishing ad-based mobile businesses. Of course, the Angry Birds lesson is really more one of coming up with a hit game. Create a hit that everyone wants to play and you can find lots of ways to make money. That’s just a truism.

Vesterbacka did throw out a few interesting stats, such as the fact that 80 percent of everyone who downloads Angry Birds also downloads updates when they are available. Also, on just the iPhone version of Angry Birds, Vesterbacka said that there are 65 million minutes per day spent playing the game.

Plus, about four minutes into the video below, Vesterbacka works in a cute plug for the company’s forthcoming line of toys.

Let a Zillion Users Blab: Yahoo Debuts "Contributor Network"

Kara Swisher — Mon, 15 Nov 2010 08:01:43 +0000

Yahoo is debuting a new offering for its hundreds of million of users, which takes the Demand Media model and notches up the volume by presumably allowing a thousand flowers to bloom.

Or, more to the point, blab.

The Internet giant is “inviting people to contribute to many of its most popular sites with the launch of the Yahoo Contributor Network, a new platform for people to publish their creative content on Yahoo!.”

This all comes out of its recent acquisition of Associated Content.

It’s an interesting gambit, since everyone is already yammering away like mad on Facebook.

But Yahoo is trying to put a spin on it by using its copious content assets as inspiration for consumers, and which the Silicon Valley social networking giant does not have.

Yet!

(By the way, Mao Tse-Tung’s whole phrase in his famous speech was: “Let a thousand flowers bloom, a hundred schools of thought contend.” After that happened all over the place, a brutal crackdown was then initiated.)

Let’s hope Yahoo CEO Carol Bartz does not do that, but here is the company’s official press release:

Yahoo! Adds the Voice of the People With the Launch of the Yahoo! Contributor Network

Yahoo! Invites You to Reach Millions of People by Contributing to Its Popular Content Sites, Including the Yahoo! Homepage

SUNNYVALE, Calif., November 15, 2010– Yahoo! (NASDAQ:YHOO) today is inviting people to contribute to many of its most popular sites with the launch of the Yahoo! Contributor Network, a new platform for people to publish their creative content on Yahoo!. The Yahoo! Contributor Network is an evolution of the Associated Content platform and will bring contributions from more than 400,000 writers, photographers, and videographers to the Internet’s largest media destinations, including Yahoo! News, Yahoo! Finance, Yahoo! Sports, and even the Yahoo! homepage, among many others.

“The launch of the Yahoo! Contributor Network is a great example of how Yahoo! is executing against its content strategy. In less than six months since the acquisition of Associated Content, we’ve completely retooled the platform in order to bring the people’s voice to Yahoo!,” said Carol Bartz, CEO, Yahoo!. “Bringing this authentic perspective to Yahoo!’s most popular sites will deepen our engagement with the millions of people who visit us every day and provide new opportunities for creative contributors who participate in the Yahoo! experience.”

The Yahoo! Contributor Network extends Yahoo!’s position as the leading provider of high-quality, personally relevant content by bringing the diverse perspectives of more than 400,000 contributors to Yahoo!’s existing media portfolio. The new platform invites all Yahoo! users to become a part of the Yahoo! experience by sharing their perspectives and expertise, and also lets Yahoo! editors quickly and efficiently assign and select crowdsourced contributions for all of Yahoo!’s media properties. These contributions–which span topics from niche to mainstream–complement the programming already provided by Yahoo!’s award-winning editorial team and content partners.

“With the launch of the Yahoo! Contributor Network, our contributors now have an unprecedented opportunity for exposure and distribution across Yahoo!’s portfolio,” said Luke Beatty, vice president and general manager, Yahoo!. “Associated Content has been known for maintaining the industry’s largest contributor base, and with the launch of the Yahoo! Contributor Network, we’ve added scale and reach that sets us apart from any other crowdsourced media platform.”

The Yahoo! Contributor Network is the culmination of a months-long effort to merge the strengths of Associated Content and Yahoo!, following the announcement of Yahoo!’s acquisition of Associated Content in May 2010. The Associated Content From Yahoo! library will continue to serve as the official digital library for all content generated by the Yahoo! Contributor Network. It remains one of the world’s largest sources of community-created content, with over two million contributions spanning text, images, video, and audio.

The Yahoo! Contributor Network also sets performance payment guidelines for content featured on Yahoo! sites, and has a dashboard that provides full transparency into how each contributor’s content performs. For more information, visit: http://contributor.yahoo.com.

Samsung's Galaxy Tab Is iPad's First Real Rival

Walter S. Mossberg — Thu, 11 Nov 2010 02:02:56 +0000

After seven months of unchallenged prominence, Apple’s hot-selling iPad now has its first credible competitor in the nascent market for multitouch consumer tablet computers: the Samsung Galaxy Tab.

[ See post to watch video ]

The Tab is being introduced over the next week by three major U.S. wireless phone carriers at $400 with a cellular data contract, or at $600 with cellular capability but no contract. The iPad starts at $499 for a Wi-Fi model with no cellular-data capability or contract, and is $629 for the least expensive model with cellular data capability but no contract.

Like the iPad, the Tab, which uses Google’s Android operating system, is a good-looking slate with a vivid color screen that can handle many of the tasks typically performed on a laptop. These include email, social networking, Web browsing, photo viewing, and music and video playback. It also can run a wide variety of third-party apps. But it has major differences, most notably in size.

The Samsung Galaxy Tab has less than half the screen real estate than that of the iPad.

The Tab has a 7-inch screen versus the 9.7-inch display on the iPad. That may seem like a small difference, but the numbers are deceptive, because screen sizes are always described using diagonal measurements. In fact, the actual screen real estate on the Tab is less than half of the iPad’s. That’s a disadvantage, but it allows the overall unit to be much smaller and lighter, and thus more easily used in one hand, something some users will welcome.

The new tablet will be introduced in coming days by Sprint, T-Mobile and Verizon, with a variety of cellular data plans. AT&T also will carry the Tab during the holiday season but hasn’t announced its timing or data-plan pricing. Although it is being sold by cellular carriers, the Tab, like the iPad (which offers optional month-to-month cellular data through AT&T) can’t make cellular voice calls.

I’ve been testing the Tab for a couple of weeks and I like it. It’s a serious alternative to the iPad and one that will be preferred by some folks. It includes the three most-requested features missing in the iPad: a camera (two in fact); the ability to run Web videos and applications written in Adobe’s Flash software; and multitasking, though, to be fair, the latter feature is coming to the iPad imminently via a software update. Another strong point is that like Apple, Samsung has rewritten some of the standard apps, such as the email and calendar programs, to make them look more like PC programs and less like smartphone apps.

On balance, however, I still prefer the iPad. For one thing, I like getting twice the screen size for a little more money up front—as little as $29 for the no-contract model with cellular capability. For another, the iPad has vastly more apps specifically designed for a tablet versus a smartphone—about 40,000 according to Apple, compared with just a handful for the Tab. And it can run about triple the apps overall, if you count smartphone apps that aren’t optimized for tablets.

Also, in my tests, the iPad’s battery life was about five hours better than the Tab’s, its maximum storage capacity is higher, and its aluminum body is more rugged than the Tab’s plastic casing. Finally, the iPad can be bought in a Wi-Fi-only model that frees you from any entanglement with cellphone carriers. The Tab also has Wi-Fi, but, so far, no Wi-Fi-only version, though Samsung is promising one next year.

Still, the Tab is a very attractive product and I enjoyed using it. For buyers who want to spend less up front, don’t mind the smaller screen, prefer the more compact dimensions and one-handed usability, and place high value on the cameras and on Flash, it may well be a better choice.

Hardware

The Tab is a rectangular slate about two inches shorter and three inches narrower than the iPad. It is also a tad thinner. It weighs less than a pound, compared with 1.5 pounds for the iPad. While its screen is smaller, it has almost the same resolution as the iPad, so almost as much material can be displayed on it.

The screen is sharp and generally responsive to touch, though, in my tests, a bit slower than the iPad’s screen. The Tab comes with 16 gigabytes of flash storage, the same as the base iPad. But with some carriers, this storage is internal and in others, it’s on a removable memory card. The card slot comes on all models and can hold up to 32 gigabytes at extra cost. The iPad, also at extra cost, comes in versions that go up to 64 gigabytes, all internal.

With its lighter weight and smaller size, I found the Tab easy to use while standing and moving. It easily fit in one hand, though for many tasks you’ll still need two hands.

Battery Life

Samsung and its partners make wildly varying battery claims for the Tab. The former says it can last up to 13 hours on a single charge, while T-Mobile claims just eight hours. I gave the Tab the same test I used for my iPad review: I put the screen on nearly full brightness, left the Wi-Fi on to collect email and played back-to-back videos until the unit died. My test Tab lasted six hours, 50 minutes, though at six hours, 10 minutes the screen dimmed irrevocably to a darkness level that made it useless. In the same test last spring, the iPad logged 11 hours, 28 minutes.

Cameras

The Tab has a 3-megapixel rear camera with flash and a 1.3-megapixel front camera mainly for video calls. Still-photographs and videos I took were of average quality, but videos taken with the front camera were fuzzy.

I tested video calling using a pre-release, tablet-optimized version of Qik, the software being preinstalled for this purpose on the Tab. Results were mixed. It will work over either cellular or Wi-Fi connections, but the version I tried wasn’t tuned for cellular, so we used Wi-Fi. In my conversation with a Qik executive, the call at first failed to go through. When it did go through, it worked fine for awhile, and then failed when I tried a feature designed to hide my image. Later, the audio dropped altogether. Qik says it is fixing the problems.

Software

The Tab uses the latest version of Android, and it generally worked very smoothly, even though Google has warned that Android isn’t yet ready for tablets. I was especially impressed with Samsung’s attractive and usable rewrites of the calendar, email and contacts apps, which, like their iPad cousins, use multiple panels to make them more computer-like, while still remaining touch-friendly.

I found the Web browser to be a bit jerky in zooming into text and scrolling through long pages. I tested several Adobe Flash videos and websites written in Flash. Sometimes they played and sometimes they didn’t. In all cases, they slowed the browser down. On one site written in Flash, I got a warning saying I might want to “abort” lest the computer become “unresponsive.” In another case, the Tab crashed. So I conclude that while the Tab does play Flash, it needs work on that score.

I downloaded a few third-party apps. I couldn’t find any that were rewritten with extra features for tablets, nor any way to discover these in the Android Market. Some of my downloaded apps scaled fine to tablet size. Others were surrounded by large black bars.

Cellular pricing

On an iPad, if you opt for cellular-data service, there is no contract and only two monthly prices—$14.99 for 250 megabytes and $25 for 2 gigabytes. On the Tab, it’s much more complicated. Verizon, which is selling only the $600 no-contract model, says its pricing will start at $20 a month for 1 gigabyte of data. Sprint charges $29.99 monthly for 2 gigabytes and $59.99 for 5 gigabytes. T-Mobile has different prices for no-contract and contract models, and different rates for new and existing customers. Just two examples: a new customer under contract on a Tab can pay $30 monthly for 200 megabytes or $50 for 5 gigabytes.

So, I urge Tab buyers to do the math carefully on the overall cost of the device under various carriers and plans.

Bottom Line

The Tab is attractive, versatile and competitively priced, though monthly cell fees can add up. It’s different enough from the iPad, yet good enough, to give consumers a real choice.

Find all his columns and videos at walt.allthingsd.com Email him at mossberg@wsj.com.

MacBook Air Rises to Top of Consumer Reports Ratings

John Paczkowski — Wed, 10 Nov 2010 17:48:54 +0000

More good press for the MacBook Air. Consumer Reports updated its computer ratings earlier this week to include the machine, and while it had some criticisms, it ranked the 11-inch Air and its 13-inch sibling at the top of their respective categories and gave both machines a “recommended” rating. (Sorry, full rating access is for subscribers only.)

The 11-inch Air scored 67 points out of 100, well above its closest rival, the Toshiba Satellite, which scored a 51. Meanwhile the 13-inch model scored 78 points out of 100, two points better than the Toshiba Portege. The publication found the Airs’ performance, displays and ergonomics to be their stand-out features, but wasn’t quite as impressed by the speakers on the 11-inch model and the versatility of both, which it rated as “fair.”

And then, of course, there is the issue of price. Both Airs exceeded their closest rivals on that front as well. At $1,300, the 13-inch Air is $520 more than the Portege, and at $1,000, the 11-inch is approximately double the price of the Satellite. ’Course, the Satellite also weighs over a pound more and pales in the performance, ergonomics and display categories, so there are obvious trade-offs here.

In any event, a good showing for Apple. If the Air truly is the future of the MacBook, as Steve Jobs claims, Apple has a lot to look forward to.

Digital Cameras Improve Zooms, HD Function

Katherine Boehret — Tue, 09 Nov 2010 22:26:27 +0000

With Thanksgiving fast approaching, so, too, comes the start of the holiday shopping mayhem. Once again, digital cameras are rocketing to the top of wish lists, and once again, shoppers are tentatively entering electronics stores with bewildered looks on their faces.

[ See post to watch video ]

To alleviate some of that shopping stress, I’ve compiled a buyer’s guide for different camera categories with prices and pointers to innovation. This year, manufacturers have improved photo-location tagging and are offering artistic photo alteration and clever ways to label images for future sharing on social networks.

Let’s Get Physical

Consumers are starting to understand that better sensors make it possible to do things like taking photos in low light, which can really make a difference in photo quality. Some high-quality sensors are making their way into affordable models, like the CMOS sensor in Nikon’s $300 Coolpix S8100. High megapixel counts aren’t overly important, though more megapixels per photo still make it easier to zoom in while editing and give higher resolution in a larger photo or poster. A 14-megapixel camera like the Olympus FE-47 costs just $100, but a recent Consumer Reports review gave it low marks in handling shake and liquid-crystal-display screen quality. Optical zoom, or the physically manipulated distance between the camera and a subject, is still more important than digital zoom, and it’s easy to find many models with 7x optical zoom or better. LCD screens on digicams are so large that they leave little room for optical viewfinders, thus making built-in image stabilization all the more important. Image stabilization comes on nearly all new cameras. And more digicams than ever are capable of recording high-definition videos.

Breaking It Down

Digital cameras can be divided into four broad categories: pocket-size, point-and-shoot, super- or mega-zooms and digital single-lens reflexes (D-SLRs). I’ll leave SLRs out of the discussion, since they’re still primarily aimed at hobbyists who don’t mind the cost and effort of buying additional lenses, filters, flashes and other accessories.

Most pocket-size digital cameras cost between $100 and $300, weigh no more than seven ounces and lack optical viewfinders, forcing users to look at LCD screens to compose pictures. Most of these LCD viewing screens measure between 2.6 inches and 3.5 inches diagonally. Samsung, however, has an even bigger touch-screen LCD, at 3.7 inches, on its CL80 camera priced at $350.

These small but powerful machines capture images with 10, 12 or 14 megapixels and their optical zoom lenses usually range from 3x to 7x, though a handful of manufacturers are boosting their cameras’ optical zooms. The $170 Casio Exilim EX-H5, for example, is equipped with a 10x optical zoom lens.

Today’s point-and-shoot digital cameras are sleeker and more stylish than they used to be, though they remain somewhat bulkier than their pocket-size relatives. The point-and-shoot size can allow for better optical zoom lenses, and these models sometimes cost less than the pocket sizes. The $300 Canon PowerShot SX210 IS and $280 Panasonic Lumix DMC-ZS5 are equipped with 14x and 12x optical zoom lenses, respectively.

Super-zoom or mega-zoom digital cameras satisfy people who want the power of a great zoom and optional manual settings without the hassle and expense of an SLR. At a glance, you might mistake these models for SLRs due to their bulkier bodies, and, in some cases, detachable (or hot-shoe) flashes. Nikon’s $400 Coolpix P100 offers a 26x wide-angle optical zoom, and Olympus’s $350 SP-800UZ is the smallest camera with a 30x wide-angle optical zoom. Both cameras have built-in flashes, but the Nikon includes an optical viewfinder while the Olympus offers only an LCD screen for viewing and capturing photos.

Shaking It Up

Camera manufacturers are adding creative new features to these devices. Starting the week of Thanksgiving, Casio will provide Hybrid GPS on its $350 EX-H20G, which geotags (adds digital location information to) images indoors where GPS satellite signals can’t reach. This works using a combined GPS radio and motion sensor to measure the direction in which the camera has moved, and how fast. When you’re back in satellite range, the camera corrects the geotag by cross-referencing its own estimates with satellite-provided latitude and longitude.

Olympus now has art filters, which let you view your subject with special effects before capturing the photo. Some filters supply gentle sepia, soft focus or grainy film. There is also a drawing filter, which makes a subject instantly appear as a sketch.

Samsung’s $150 PL90 model has a pop-out USB arm that reminds me a lot of the pop-out USB connector on Cisco’s popular Flip camcorders. Samsung’s USB arm eliminates the need for messy wires, or the removal of a memory card to transfer photos from a digicam to a PC.

Many cameras have and continue to supply guides that appear on screen as a photo is being captured. Sony’s NEX-5 offers this, and the Olympus Live Guide let you preview photo adjustments—like brightness or color saturation—on the screen as you make them. Nikon’s Scene Auto Selector, found in the Coolpix P7000, Coolpix S8100 and Coolpix S80, will automatically adjust the camera’s settings so users can stop worrying about scrolling through menus to select the right scene from a list.

Fujifilm offers the only true (not simulated) three-dimensional digital camera in its $500 FinePix REAL 3D W3, which I reviewed in August. These 3D images can be seen through the camera’s LCD viewing screen but not on laptops or television sets unless they’re 3D-capable and you’re wearing 3D glasses.

Kodak is trying to encourage sharing with its cameras by including a Share button that, when pressed, digitally tags images and videos with labels for Facebook, Flickr, YouTube, Kodak Gallery or email, then automatically sends the photos to those places when you next plug the camera into a PC.

One last warning: Don’t be seduced by lower prices or better technology alone. Be sure you try a camera in the store before buying it. The way it feels or works for you is just as important as any technological specification.

Email Katherine Boehret at mossbergsolution@wsj.com.

Edited by Walter S. Mossberg

Dive Into Mobile in December

Walt Mossberg — Mon, 01 Nov 2010 13:00:17 +0000

Can Google’s Android keep surging without fatally fragmenting? Can Research in Motion get back its mojo? Can Palm be revived inside the Hewlett-Packard monolith? Can Microsoft resuscitate its mobile business? Will local apps and mobile Web sites fight to the death or co-exist? Is the Apple iPad a fluke or will tablets spread like wildfire, threatening laptops?

And what will it matter without better networks, must-have software and a viable advertising model?

These are some of the questions we hope to explore with top mobile industry leaders at the first new edition of our D, conference, to take place December 6th and 7th in San Francisco.

While our main D event, which will continue to occur each year in the late spring, takes a wide view of technology and digital media, this new, shorter confab, called D: Dive Into Mobile, is focused on the most dynamic area of tech–mobile devices and all of the content, apps, social networking and commerce that they support.

Answering all these questions is a strong lineup of leaders in the mobile sector, including Andy Rubin, who runs the surging Android platform at Google; Mike Lazaridis, co-CEO of RIM and the father of the BlackBerry; and Dan Hesse, CEO of Sprint, the wireless carrier that leads in the race to faster 4G networks.

In addition, we’ll be hearing from Jon Rubinstein, who heads Palm; Joe Belfiore, product manager for the new Windows Phone 7; Dennis Crowley, CEO of Foursquare; Mike McCue, CEO of Flipboard; Glenn Lurie, who handles the iPhone and other cutting-edge devices for AT&T; and Susan Wojcicki, the advertising center square at Google.

We’re excited to be doing a deep dive into an exciting topic, using our tried-and-tested technique from eight years of D conferences: No canned speeches, no slides, no large panels–just unrehearsed journalistic interviews on stage, sprinkled with a few demos of interesting new products.

And, this time, we’re adding a fresh twist. In addition to Kara Swisher and me, two of our colleagues, Peter Kafka and Katherine Boehret, will also be conducting onstage interviews.

To learn more, and to register, click here.

Evernote Raises $20 Million From Sequoia Capital

Beth Callaghan — Tue, 19 Oct 2010 15:54:34 +0000

Evernote, the cloud-based platform for note-taking, has raised $20 million in a series C round of funding led by Sequoia Capital. The company’s success makes it the go-to example of the “freemium” business model–its premium product recently started paying for its current day-to-day operations, and there’s still $9 million left over from its B round. CEO Phil Libin aims to use the new infusion of cash to expand into more countries and into corporate and educational markets.

VC Ben Horowitz Takes Aim at HP Critics (Are You Listening, Larry and Jack?)

Kara Swisher — Fri, 08 Oct 2010 23:32:43 +0000

Today, in a sharply worded post titled “In Defense of Standards, Ethics, and Honest Financial Reporting at Hewlett-Packard,” prominent venture capitalist Ben Horowitz took to his blog to shoot back at the plethora of critics of the Hewlett-Packard board for their conduct related to the controversial jettisoning of CEO Mark Hurd.

That came after Hurd admitted to filing inaccurate expense reports related to an outside contractor who worked closely with him, and who later alleged sexual harassment on his part. Those charges were dropped after Hurd settled with the woman, named Jodie Fisher, but before HP could complete an investigation.

Since then, the board has been under fire from Oracle (ORCL) CEO Larry Ellison, who hired Hurd as the database giant’s president, and former GE head Jack Welch, who laid into the HP board this week.

Now Horowitz has fired back and here’s a taste of his ire, which is aimed at execs, the media and more:

If a CEO is prone to compromise for any reason, he will have every reason. This time it was his expense report. Next time will it be a marginal accrued liability? A deal that came in at 12:01 am on the last day of the quarter? This is a slippery slope that a public board simply cannot tolerate.

And:

Who is Jodie Fisher? According to press reports, Fisher is a former Playboy model, reality show contestant, and softcore porn movie actress with no work history relevant to her job with HP. She was hired by Hewlett-Packard and paid up to $5,000 per meeting to meet with Fortune 50 CEOs.

The mainstream press has reported these facts as mundane, ordinary, and hardly worth concern. I disagree. HP employs over 300,000 people. Every single one of HP’s employees is keenly interested in the qualities, skill sets, and behaviors that HP values most. Financial compensation and access to the CEO are the most important ways that HP communicates what it values to its employees. Jodie Fisher had more access to the CEO and was paid more than 99.9% of HP’s workforce, despite having no traditional qualifications.

It’s important to note that this was not Hurd paying for his personal extracurricular activity out of his own pocket. This was the Hewlett-Packard Corporation paying a softcore porn movie star with no relevant work experience more than it pays Harvard graduates with 20 years of industry experience. This was the company spitting in the face of the people who worked hard and sacrificed every day to help the company win in the market. It was completely and categorically unacceptable.

And:

There are many who take the view that business is singular in purpose–to increase shareholder value. They further take the position that constraining that purpose in any way is inefficient and counterproductive. The mainstream press seems to have broadly adopted this position in its attacks on HP. The Wall Street Journal Op Ed page even complained that businesses were being held to an unfair standard when compared to politicians.

I do not subscribe to this view. Running our companies with no moral or ethical standards is bad for society, bad for the country, and ultimately leads to criminal behavior.

So, what do you really think, Ben?

Horowitz does have an interest in the situation, which he discloses clearly at the top of his piece: His longtime business and now venture partner is HP (HPQ) board member Marc Andreessen.

And the Silicon Valley soap opera continues….

In Defense of Standards, Ethics, and Honest Financial Reporting at Hewlett-Packard

Ben Horowitz — Fri, 08 Oct 2010 23:22:29 +0000

“I’m not afraid
To take a stand”
—Eminem

Disclaimer: my business partner, Marc Andreessen, is on the board of directors of Hewlett-Packard (HPQ). I note that I have no inside information, and this blog post is based purely on published material. In 2007, I sold Opsware, the company that I founded and ran to Hewlett-Packard for $1.6B. I worked at Hewlett-Packard from 2007 to 2008 as an executive in the software business.

Recently, my old company Hewlett-Packard has been in the news–and not in a good way. I’ve been watching the coverage from the sidelines up to this point, but felt increasingly compelled to join the conversation and share my point of view. So here goes.

After firing their CEO, Mark Hurd, the HP board has been accused of everything from incompetence to being prudes. The criticism comes from credible, important journalists and bloggers such as Joe Nocera from the New York Times (NYT), prominent economics blogger Felix Salmon, and former GE (GE) CEO Jack Welch. In addition, HP competitor Larry Ellison lambasted the board and even went so far as to hire Mark Hurd to be President of Oracle (ORCL).

So why in the world did the HP board fire such a high performing CEO? Don’t they care about profits and shareholder value? Aren’t those the most important things? Who cares about his personal shenanigans? Did Mark and his marketing contractor even have sex?

While I am pretty sure that there is much more going on behind the scenes than has been broadly reported, as there often is, let’s look at what has been reported:

* Mark Hurd falsified expense reports.

* The false expense reports are related to a contractor named Jodie Fisher, a former softcore porn movie actress and Playboy model with no relevant marketing experience, who HP was paying up to $5,000 per marketing event.

* At the time of his departure from HP, Hurd issued a public statement saying that he’d violated HP’s Standards of Business Conduct:

“As the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career. After a number of discussions with members of the board, I will move aside and the board will search for new leadership. This is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time. I want to stress that this in no way reflects on the operating performance or financial integrity of HP.”

Let’s start with the issue of falsifying expense reports. This factor has been largely dismissed in the press with characterizations like this from Joe Nocera of the New York Times:

“When pressed, H.P. said that Mr. Hurd had fudged some expense reports.”

Nocera goes on to argue that there must have been an alternate motivation to dismiss Hurd, because clearly no CEO would be fired simply for “fudging” an expense report.

When I first read of the expense report issue, my reaction was the opposite of Nocera’s. If the Chief Executive Officer of a public company falsifies any official financial statement, he must be fired. In my mind, this is non-negotiable. We are not talking about a low-level employee tossing an extra receipt into his expense report. We are talking about a public company CEO who is paid tens of millions of dollars a year and is responsible for the integrity of the company’s financial statements fraudulently reporting his own expenses. Why is this a problem?

Every person who invests in Hewlett-Packard does so on the basis of HP’s financial statements. Every pension fund, every retiree, every charitable organization, every employee who joins and is compensated via stock options. When they do so, they trust that the statements are true and that the numbers are accurate. The person they trust to ensure accuracy is the CEO.

If the Chief Executive is willing to compromise the integrity of the company’s financials for any reason, then it is impossible to trust any statement. Every day, there are many potential reasons to falsify financial statements. Here are four examples:

* If you miss the quarter, shareholders will lose money.

* If revenues aren’t high enough, you’ll be forced to lay-off hard working, valued employees.

* If you grow slower than a competitor, you may jeopardize your job.

* A shareholder that you’ve been having an illicit affair with doesn’t want the stock price to go down and threatens to tell your wife.

If a CEO is prone to compromise for any reason, he will have every reason. This time it was his expense report. Next time will it be a marginal accrued liability? A deal that came in at 12:01 am on the last day of the quarter? This is a slippery slope that a public board simply cannot tolerate.

What reason was so powerful that it caused Mark Hurd to break his ethical standard, falsify an official financial statement, mislead the board, and ultimately be fired? It seems that this was done to cover up a “close personal relationship” with a woman named Jodie Fisher, who later accused him of sexual harassment, then subsequently withdrew her claim after Hurd personally paid Fisher a large sum of money.

Who is Jodie Fisher? According to press reports, Fisher is a former Playboy model, reality show contestant, and softcore porn movie actress with no work history relevant to her job with HP. She was hired by Hewlett-Packard and paid up to $5,000 per meeting to meet with Fortune 50 CEOs.

The mainstream press has reported these facts as mundane, ordinary, and hardly worth concern. I disagree. HP employs over 300,000 people. Every single one of HP’s employees is keenly interested in the qualities, skill sets, and behaviors that HP values most. Financial compensation and access to the CEO are the most important ways that HP communicates what it values to its employees. Jodie Fisher had more access to the CEO and was paid more than 99.9% of HP’s workforce, despite having no traditional qualifications.

It’s important to note that this was not Hurd paying for his personal extracurricular activity out of his own pocket. This was the Hewlett-Packard Corporation paying a softcore porn movie star with no relevant work experience more than it pays Harvard graduates with 20 years of industry experience. This was the company spitting in the face of the people who worked hard and sacrificed every day to help the company win in the market. It was completely and categorically unacceptable.

Finally, Hurd admitted in a press release to violating the company’s standards of ethics and integrity. So what? Why do companies have standards and ethics anyway? Shouldn’t they just be concerned with profits? Do we want choir boys or shareholder value?

There are many who take the view that business is singular in purpose–to increase shareholder value. They further take the position that constraining that purpose in any way is inefficient and counterproductive. The mainstream press seems to have broadly adopted this position in its attacks on HP. The Wall Street Journal Op Ed page even complained that businesses were being held to an unfair standard when compared to politicians.

I do not subscribe to this view. Running our companies with no moral or ethical standards is bad for society, bad for the country, and ultimately leads to criminal behavior.

Companies should not merely be thought of as money generating machines. Business can represent human society at its best. A business is a group of people working together to deliver value to the world and improve people’s lives. When done ethically, business quite literally changes the world for the better. However, if the dark side of human motivation is not mitigated with standards and ethics, business can destroy.

We saw this unfold at Enron, a company that was, in its time, celebrated for its impressive profits. Underneath the profits was a culture designed from the ground up to completely ignore any ethical standard including a dazzling display of ethically questionable sexual activity among its executives. These activities, such as promoting secretaries to executive positions in exchange for sexual favors, parallel Hurd’s behavior with Jodie Fisher. In Enron’s case, the bad behavior bled over into first line employees who conspired to create blackouts in California in the name of profits and in the absence of ethics. Ultimately, Enron imploded in a swirl of criminal behavior that bankrupted the company, but not before destroying tens of thousands of peoples’ life savings and damaging millions of innocent victims. After the fact, the press bemoaned the culture that lead to the destruction. However, the same reporters instantly forgot the cause as they cavalierly dismissed Hurd’s ethical breach.

In closing, I point out the impressive courage of the HP board of directors to ignore popular opinion and do the right thing. It is not an easy thing to fire a popular, highly successful CEO. It’s even more difficult when you know that you will be roundly criticized for tolerating that same CEO’s failure to develop internal successors. Despite those factors, Hewlett-Packard’s board of directors stood tall and protected the company, its shareholders and all of us from a dark and destructive journey. As a member of the business community and as a citizen, I am extremely proud of and grateful for their actions.

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.

Analyst: IPad a Want, Then a Need

John Paczkowski — Sat, 02 Oct 2010 15:52:47 +0000

If netbook sales are in decline, Apple’s (AAPL) iPad isn’t to blame–not yet, anyway.

According to a new survey from NPD, only 13 percent of iPad owners bought the device in lieu of a PC. For the other 87 percent, it was an incremental purchase, a luxury purchase.

Which to NPD analyst Stephen Baker means recent claims that the iPad is cannibalizing the PC market are overblown.

“Early adopters, like iPad owners, follow a traditional pattern of consumer behavior; they purchase products because they want them, not because they need them,” Baker explains. “However, as Apple increases iPad distribution and consumer interest peaks, the profile of an iPad owner is much more likely to mirror the overall tech population. When that does happen other tech products with similar usage profiles as the iPad, such as notebooks, netbooks, and e-readers will come under increased pressure from the iPad.”

Evidently that’s happening already. According to Baker, folks who purchased the iPad within a few months of its release were 44 percent more likely to watch YouTube videos, 50 percent more likely to watch movies, 60 percent more likely to watch TV shows, and 38 percent more likely to be reading e-books. And that type of usage behavior is, as Baker observes, “a dagger at the heart of the usage model for netbooks and secondary notebook computers.”

A personal observation: For me, the iPad started out as an incremental purchase, driven by early adopter mania. But now, having used the device for some time, I see it as a needful one. In other words, I wanted the iPad, but I didn’t realize I needed one until I had a chance to use it.

PREVIOUSLY:

IPad: Tonight We Feast on Laptop Flesh!

Forget Netbooks, iPad Cannibalizing Entire PC Industry
Apple: The iPad Isn’t Cannibalizing the Mac, But We Sure Hope It’s Cannibalizing the PC