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Farms Begin to Wither as Strategy and Combat Drive Social Gaming

Tricia Duryee — Tue, 15 May 2012 13:00:10 +0000

More people are paying to play social games than they were a year ago, but the average player is also spending less than in the past.

According to SuperData, the average social gamer who pays to play in the U.S. spent $37.59 in April, which is about $8 less than a year ago, when the average social gamer spent $45.58.

SuperData partners with publishers and developers to create an online gaming panel, which tracks more than a million paying online gamers every month. The report covers the U.S., Germany, Brazil and Spain, spanning all major social game genres, including city building, farming, and strategy and combat.

While the amount each player pays has fallen, SuperData found that as the industry has matured, more people have become more comfortable spending money inside the free-to-play games. In April, 2.5 percent of social gamers converted to spending users, compared to 1.4 percent a year earlier.

But the average paying game player should not be confused with the overall average spend per user. After all, you can spend a lot of time harvesting crops and building cities without ever paying a dime.

For instance, in the first quarter, Zynga said the average bookings per user totaled 5.5 cents, which is the company’s total revenue for one quarter spread across all gamers — whether they pay or not.

SuperData found that game players who play mid-core games, which include strategy and combat games, are spending the most right now. Meanwhile, the average spending player of farming games has been on a decline for the past few months.

The research firm estimates that the North American social gaming market will be worth $1.8 billion by the end of this year, and the worldwide social gaming market, including social games on mobile, is expected to hit $13 billion in 2015.

Your Smartphone as Superman: 86 Percent Use Phones for “Just-in-Time” Situations

Lauren Goode — Mon, 07 May 2012 16:39:55 +0000

Many mobile phone owners use their devices for non-urgent purposes like gaming (an addiction to Draw Something doesn’t qualify as urgent). But a huge chunk of U.S. consumers are using their cellphones and smartphones for more pressing needs — something Pew Internet Research is calling the “just-in-time” phenomenon.

A new Pew survey of more than 2,200 U.S. adults shows that 70 percent of all cellphone owners and 86 percent of smartphone owners say they’ve used their phones in the past 30 days to access immediate information, solve a problem or get help in an emergency.

The fact that cellphones and smartphones are being used as need-it-now devices really isn’t that surprising, since they put the world’s trove of information in our pockets. What’s more interesting is how those situations are categorized — something the mobile ad industry might want to pay heed to.

The majority of those surveyed — 41 percent — say they’ve used their phones for the basic task of coordinating meetings or get-togethers.

That outweighs the number of people who say they’ve used their phones to look up a restaurant (30 percent), check sports scores (23 percent) and get transit information (20 percent).

Less than one-fifth of those surveyed said they’ve used their phone in an emergency situation in the past 30 days, which is probably a good thing.

Another interesting tidbit: Despite the fact that slightly more women than men now own smartphones, as my AllThingsD colleague Ina Fried reports, men who own mobile phones are more likely than women to look up information during an argument. Some 31 percent of men admit to doing this, compared with 22 percent of women.

Could this be because women are less likely to experience memory loss? Just saying …

(Image courtesy of Flickr/Brenderous)

Couch Commerce Spans Researching, Reviewing and Buying

Tricia Duryee — Fri, 04 May 2012 16:42:32 +0000

Americans are using smartphones and tablets for every part of the shopping process from researching to buying.

CMKeiner

But in a new survey conducted during the first quarter, Nielsen discovered that the two devices are not being used for the same kinds of shopping-related activities.

For instance, U.S. consumers are most likely to use their smartphone to find a store and check prices, whereas tablet owners are more likely to do PC-type activities, such as researching products and reading product reviews.

Owners of both devices report frequently making purchases, including 42 percent of tablet owners and 29 percent of smartphone owners.

Last Christmas, the mobile shopping category first started to get retailers’ attention in a big way, leading to new vernacular such as “m-commerce,” or more fun things, like “couch commerce,” which conjures up images of consumers shopping while sitting in front of the TV.

Most retailers, like Amazon, haven’t started breaking out the mobile contribution, but eBay is forecasting that purchases made from apps or the browser on a phone or tablet will hit $8 billion in mobile gross merchandise volume this year, up 60 percent from $5 billion in 2011.

Look, Men Shop Online, Too!

Tricia Duryee — Wed, 02 May 2012 16:42:21 +0000

As it turns out, for males, the Internet is not just about fantasy football and porn.

A new report by digital marketing agency iProspect finds that millions of affluent men are using the Internet for research and shopping — and spending a boatload of money.

It has long been assumed that women are the dominant shoppers online, and that if you were to start a company, it should be aimed at the female wallet. Well, here’s some testosterone to shoot down that argument.

IProspect identified a population of 19 million men over the age of 18 who make at least $100,000 and are frequently shopping online.

More of the report’s findings:

40 percent of respondents are shopping online at least twice a week, and those who are shopping multiple times are spending in excess of $30,000 annually.
Luxury menswear in particular is benefiting, and is growing at a rate of about 14 percent every year.
70 percent of men in this demographic research and buy online, as opposed to researching online and then purchasing in the store.

Several e-commerce start-ups that have cropped up over the past couple of years are targeting this demographic, perhaps unknowingly. They include apparel sites like Gilt Groupe, Bonobos, Trunk Club, J. Hilburn and Indochino. The top Web sites visited are Amazon (41 percent), Yahoo (37 percent), Google (29 percent) and eBay (20 percent).

To put the market into perspective, here’s a pretty — albeit manly — infographic from iProspect:

Facebook IPO Docs Could Get Approval This Week, Followed by Road Show With Zuckerberg (No Guarantee on Tie)

Kara Swisher — Tue, 01 May 2012 12:58:49 +0000

According to sources close to the situation, Facebook is anticipating getting approval from government regulators to officially distribute its S-1 public offering prospectus to investors within days, which would mean its road show could begin as early as next week.

As I reported back in January, the social networking giant is expected to go public in the second or third week of May, a timeline (get it?) which currently appears to be on track.

In addition — although some have speculated that its famous CEO and co-founder Mark Zuckerberg might not take a “hands-on” role in the high-profile process, having missed one pre-IPO meeting with Wall Street analysts and bankers (can you blame him?) — sources said he would be appearing before potential shareholders, and would be present at key meetings to help sell the company to them.

Of course, he will — although there was much speculation that the Silicon Valley superstar would bow out of any of the hubbub around the huge IPO, and that bankers were practically begging him to appear, sources said Zuckerberg is too key to all aspects of its business not to appear.

(No word as yet on whether he will don a tie, as he sometimes does, or if his usual hoodie will be Zuckerberg’s outfit of choice — although his sartorial choices on the road show are sure to get excessive media scrutiny.)

“Facebook is Mark Zuckerberg and Mark Zuckerberg is Facebook,” said one person with knowledge of the situation. “He’ll do his job as CEO, as he always does.”

Indeed, although he is often portrayed as shy and not a fan of the limelight, Zuckerberg has always stepped up — and rather enthusiastically — when a public appearance is needed, whether in times of trouble or touting for the eight-year-old company.

This is a touting-Facebook moment, of course, as it seeks to raise up to $10 billion in a blockbuster offering that could value the company at $75 billion or more. Filed in February, that will make it the biggest Internet IPO ever.

Also expected to play key roles in the road show are CFO David Ebersman and COO Sheryl Sandberg, as well as other top Facebook execs.

Whether they all can rev up the jets and get going on the road show depends on the Securities and Exchange Commission finally declaring Facebook’s preliminary prospectus of its business and finances “effective” or in legal compliance.

Facebook has updated the initial filing several times, with new financials as well as information about its purchase of photo-sharing site Instagram and its ever-nasty patent battle with Yahoo.

But, overall, the SEC process has been rather smooth for the company, and sources said it appears it will continue that way.

After the road show: A sales process in which investors ask their questions of management and then officially begin to place orders for Facebook stock.

Among the areas of likely concern are that Yahoo patent lawsuit and, most importantly, how Zuckerberg and others characterize the slowing of its explosive revenue growth in its most recent filing update.

Last week, Facebook said its revenue was $1.058 billion, up 46 percent for the year, but down 6 percent from the previous quarter. In the first quarter of 2012, its net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

After the road show, Facebook’s bankers will price the offering — which is widely expected to be massively oversubscribed — and then it will go public on the Nasdaq market, under the “FB” ticker.

The rest, as they say, will presumably be history — or, in fact, the future for Facebook in the public eye.

Games Taking a Back Seat to Social Networking on the Phone

Tricia Duryee — Fri, 27 Apr 2012 18:54:24 +0000

For the first time in four years, games are not the top category of applications on the phone.

In fact, consumers are now spending equal amounts of time social networking and playing games, according to Flurry, which provides tools to app developers to track consumer behavior.

In the first quarter, Flurry found that the average consumer spent 24 minutes on games and social networking — each — every day. In the same period a year earlier, consumers spent 25 minutes playing games and only 15 minutes social networking.

In a blog post, Flurry’s Peter Farago explains that while time is now evenly split, the shift is more severe when you calculate the percentage of time spent on each type of application. By doing so, you can see that time spent on gaming has dropped as overall usage on phone applications has increased from 68 minutes a day to 77 minutes a day.

In the first quarter, consumers spent 31 percent of their time playing games, falling from 37 percent a year ago. Likewise, social networking has soared from 22 percent to 37 percent.

Social networking on the phone would include Facebook and other applications like Instagram (which Facebook just acquired for $1 billion). Games include everything from Rovio’s Angry Birds to Zynga’s Words With Friends. Other popular phone categories include news and entertainment.

Flurry also discovered that advertisers have followed the change in behavior with more ad revenue being generated by social networking apps than games. In April, 37 percent of ad revenue went toward social networking apps versus 36 percent going toward games. Just two months earlier, games were generating 35 percent of ad revenue and social networking was generating only 24 percent.

One limitation of the study is that it is looking only at smartphones and does not take into account behavior on tablets, where a lot of gaming is taking place.

Updated S-1: Facebook's Yearly Revenue Growth Up 45 Percent, But Down Six Percent From Last Quarter

Kara Swisher — Mon, 23 Apr 2012 19:13:53 +0000

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

Say It Loud: ATD Relaunches the "Voices" Section

Kara Swisher — Mon, 23 Apr 2012 13:04:53 +0000

One of the least-changed parts of AllThingsD since we started this site has been our “Voices” section, which has attracted robust and ever-increasing traffic over the years.

But today Voices gets a new look as we relaunch an updated section to bring you even more writing and information from outside sources. Voices will be run by senior editor Beth Callaghan, and will offer six regular features:

Must-Reads — formerly called Voices — will be the same daily compendium of links from around the Web. These are pieces we’ve selected editorially because we think they’re worth your time. We’ve made two changes in order to clarify the nature of the content and our role in suggesting them: We’ve renamed the links “Must-Reads From Other Web Sites” and we’ve simplified them to consist merely of outbound links. The links will appear in widgets across the site and in an archive — but when you click on a headline, you’ll be taken directly to the original Web site.

Voices is now made up of exclusive op-eds and posts from outside contributors who are well-versed in AllThingsD and have unique perspectives to share. We welcome and will evaluate all such pieces, and also plan to reach out to a range of industry experts on a variety of topics. Our goal is to spur debate and also give smart and engaging content a platform on our site.

Forum is conceived as an assembly of quick opinions from four or five well-known personalities on a single issue that is in the news. Topics can range from thoughts on the possible bubble in Silicon Valley to what’s the most interesting new trend to how possible privacy regulation will impact the tech industry. We hope to elicit a lot of different opinions and insights from a wide-ranging panel of execs, academics, venture capitalists, Wall Street analysts, entrepreneurs, bloggers and more.

Eye to Eye will be even more pointed, pitting a pair of often-opposing viewpoints on a controversial topic of the week — kind of like a Spy vs. Spy, but with words. The possibilities are endless here: Was $1 billion too much for Facebook to pay for photo-sharing site Instagram? Will Yahoo’s recent restructuring work? Do you think Google Glasses is a good idea? Where will Apple’s stock be in a year?

Numbers is a weekly story told by data — sometimes scientific, sometimes irreverent, always interesting. We will be working with many top research outfits, and will also be doing a number of our own polls of readers. We love infographics, surveys and pie charts at ATD and you’re going to get a whole lot of them.

Lastly, Ten Things About Me finds answers to entertaining and informative questions aimed at prominent people in the digital realm. It’s a little like the Proust Questionnaire mixed with the kind of queries that we are well known for at our D conferences, plus a whole lot of unusual ones, so you can get to know a variety of tech and media figures in a different way. First up: Twitter and Square inventor Jack Dorsey tells us what he’d be up to if he weren’t doing what he is doing now.

The new Voices will roll out all this week. Enjoy.

Millions of Americans Dial Up Travel Plans From the Phone

Tricia Duryee — Tue, 17 Apr 2012 21:43:03 +0000

While total spending on online travel continues to grow, it is the mobile travel market that has everyone excited.

In a report released today, eMarketer estimates that 16 million Americans will book travel from their mobile devices this year, increasing 33 percent from 12 million in 2011. Even more people — roughly 37.8 million — will use their phones to research travel this year.

It’s no wonder that big online travel agencies, like Priceline and Expedia, are quickly expanding into mobile. One common mobile strategy is to build an app that gives deep discounts to people who book a hotel room from their phone for the same night.

Travelers who may not have access to a computer are an obvious market for hotel information, flights, maps, reviews and other services.

EMarketer said despite mobile’s rapid growth, total spending on online travel is growing more slowly than overall online retail sales. This year, online travel spending is set to increase 11 percent to $120 billion in the U.S.

But clearly all the trends spell bad news for travel agents and physical travel agencies. EMarketer expects a majority of Internet users to research and book via the Web.

More D10 Speakers: Ellison, Meeker, Myhrvold, Along With Pixar and Visa!

Kara Swisher — Mon, 09 Apr 2012 21:49:26 +0000

A month ago, I posted an initial list of speakers for the 10th D: All Things Digital conference.

After a decade, the event — which is held in Rancho Palos Verdes, Calif., just south of Los Angeles, at the end of May — has attracted another amazing group of speakers, including: New York City Mayor Michael Bloomberg; serial entrepreneur Sean Parker, who will appear with Spotify co-founder and CEO Daniel Ek; Zynga founder and CEO Mark Pincus; Federal Trade Commission Chairman Jon Leibowitz; LinkedIn Chairman and VC Reid Hoffman, who will appear with the social business site’s CEO Jeff Weiner; and Skype CEO Tony Bates.

Now, here’s another group of stellar speakers we’ve added to the programming lineup (and there are still even more big names to come in the weeks ahead): Oracle CEO Larry Ellison; former tech analyst superstar and now VC Mary Meeker of Kleiner Perkins; Intellectual Ventures’ Nathan Myhrvold; Pixar co-founder and Disney animation head Dr. Ed Catmull; and Visa President John Partridge.

Larry Ellison, CEO and founder of the enterprise giant Oracle, needs little introduction, as one of tech’s highest profile figures and a true Silicon Valley icon. Frankly, I think the short bio that’s on Oracle’s Web site says it all: “Larry Ellison has been CEO of Oracle Corporation since he founded the company in 1977. He also races sailboats, flies planes, and plays tennis and guitar.” There will be a lot to talk about with the voluble and always entertaining exec — who appeared at the D conference once before many years ago — from the current state of the tech industry to insights to where it’s all going. (In addition, Ellison has agreed to appear on a panel we are doing as a tribute to his close friend, Apple’s former CEO Steve Jobs.)

Another well-known tech figure is Meeker, who is now a partner at Kleiner Perkins Caufield & Byers, having joined the storied venture capital firm in early 2011. She focuses there on investments in its digital practice and via KP’s Digital Growth Fund, working with companies such as Spotify, Jawbone and One King’s Lane. But Meeker is perhaps best known for her long stint — 1991 to 2010 — as a star Internet research analyst at Morgan Stanley, where she brought many of the Internet’s great companies to the attention of Wall Street and beyond. She also wrote a series of groundbreaking reports on the landscape. That includes her annual “State of the Internet,” which Meeker will debut this year at the conference in an extended demo of her always riveting Internet trends presentation.

Nathan Myhrvold is also a tech legend, having worked for 14 years as chief strategist and CTO of Microsoft. But, instead of retiring, the avid inventor decided to focus on patents, founding and leading a controversial company called Intellectual Ventures, which buys them up and licenses them out (or sues if it doesn’t sell). With all the mishegas around patents right now, it’s a good time to have Myhrvold back to explain it all and perhaps to take some of the blame for the explosion in intellectual property lawsuits. (Myhrvold also co-authored a cookbook, “Modernist Cuisine,” so we hope we will also get some sort of futuristic cooking demo. Perhaps, Patently Delicious Flan?)

Speaking of tasty, the animation from Pixar over the years has been just that and it’s been one of Disney’s greatest acquisitions. Given how much Pixar has contributed to animation technology, we are glad to finally get Dr. Ed Catmull onstage. As co-founder of Pixar Animation Studios and president of Walt Disney and Pixar Animation Studios, he will discuss where entertainment and technology are intersecting and where they are not. Catmull is a geek’s geek in the industry — having also founded the computer graphics laboratory at the New York Institute of Technology, the computer division of Lucasfilm, as well as Pixar, which he did with chief creative officer John Lasseter. Get ready to talk about image compositing, motion blur, subdivision surfaces, cloth simulation and rendering techniques, texture mapping and the z-buffer. Also, Catmull’s five Academy Awards.

Lastly, it is perfect timing for bringing on John Partridge, president of Visa. With swirling issues around online identity theft, digital privacy, the future of money and the rise of upstart competitors such as Square, Partridge has his hands full at the credit card giant. One of the most neglected arenas in tech, the way we manage payments is perhaps the biggest story of the next era, especially as it relates to mobile and the rise of smartphones as all-purpose devices.

Exclusive: Yahoo's Chief Product Officer Blake Irving Resigns

Kara Swisher — Fri, 06 Apr 2012 01:28:26 +0000

According to sources close to the situation, Yahoo’s Chief Product Officer Blake Irving has turned in his resignation and it has been accepted by the company.

The process for Irving’s departure is a bit more formal since he is a top officer at the Silicon Valley Internet giant. But it is perhaps not that surprising, given that a brunt of the 2,000 employee layoffs at Yahoo yesterday were in his part of the organization.

Irving has not been at Yahoo this week during those wrenching cuts — that’s because the resignation has been in the works for some time.

In fact, in a restructuring to be announced next week, the central product organization at Yahoo he runs was essentially blown up, with the development moving back into media, sales and consumer products units being planned.

In addition, Yahoo’s new CEO Scott Thompson has been contemplating selling off large parts of the company’s advertising technology platforms, as well as its search business, also now under Irving.

Irving had largely opposed the strategy that Thompson has been aiming toward, said sources, and also strongly disagreed with laying off so many employees without a clear plan in place. Many inside and outside Yahoo agree.

He was also apparently concerned about the massive engineering and research talent exodus of late, especially in Yahoo’s vaunted Labs arm, which suffered major cuts in the layoffs.

The former Microsoft exec has no plans for another job, said sources, but has had a number of offers.

Yahoo confirmed the resignation when I called to ask about Irving’s goodbye. “Yahoo wishes him all the success in the future,” said the spokesperson.

Irving came to Yahoo in mid-2010 under former CEO Carol Bartz, who was fired last fall. Under his leadership, the product unit had focused a lot on creating a major publishing platform for Yahoo and other media companies. He debuted its Livestand content app earlier this year.

Here is a video interview I did with Irving in happier times, talking about Yahoo products, in which he sported a very handsome blue cashmere sweater:

[ See post to watch video ]

It's Official: Yahoo Lays Off 2,000 Employees -- 14 Percent of Workforce

Kara Swisher — Wed, 04 Apr 2012 13:22:13 +0000

In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

Yahoo's Layoffs Tomorrow Morning of up to 2,000 Will Only Be the First Move of a Larger Purge to Come

Kara Swisher — Tue, 03 Apr 2012 22:16:46 +0000

According to sources close to the situation, Yahoo’s massive round of layoffs — which is likely to impact up to 2,000 employees — is just the tip of the proverbial iceberg that will hit the storied Silicon Valley Internet giant in the months to come.

Sources said Yahoo is currently planning to announce the cuts in staff in the early morning, just as the markets open. That could change, of course, but the cuts will definitely occur within the next two days.

The layoffs, which will touch all units of the company, are expected to hit hardest in the product division, which is headed by Blake Irving.

Also set to be hard hit are Yahoo’s local businesses, as well as its marketing and research divisions. While still sustaining losses, its media units will not be as badly impacted. And it’s not clear how many employee terminations will be aimed at the company’s general and administrative staff.

That said, Yahoo will be “doubling down” in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

But not tomorrow, which will be one of the tougher days in Yahoo’s long history of periodic layoffs. Newly installed CEO Scott Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

That is indeed the case, which is causing massive strain throughout the company, which now employs over 14,000 and has many thousands more hired as contractors.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week, which will create several major, soup-to-nuts units at the company. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

Let’s hope that Yahoos who will be let go tomorrow find themselves with many new employment choices after the ax falls.

Yahoo Layoffs Set to Begin Next Week, Followed by Restructuring the Week After

Kara Swisher — Fri, 30 Mar 2012 16:00:38 +0000

Yahoo is preparing to begin layoffs of what could be thousands of employees starting next week, according to multiple sources, and is then expected to announce a new restructuring of the company the week after.

The swirl at the Silicon Valley Internet giant has grown more intense this week, as new CEO Scott Thompson has brought in top management for a series of meetings both Tuesday and Wednesday to outline the plans.

What has emerged — although sources noted that Thompson and others communicating the pending changes said nothing was yet set in stone — is the picture of a drastically slimmed-down organization with a focus on media, advertising and new but unclear “future” initiatives.

First the layoffs: Sources said the cuts will be deep and mostly aimed at the product, research and marketing units of Yahoo, which are likely to take place Wednesday. The ultimate goal, said multiple sources, is to cut many thousands from Yahoo’s staff of close to 14,000 employees, which is actually much larger, due to contract workers not officially in its roster.

The entire cut will not take place at once, said sources, since Thompson and others are still trying to figure out how to dispense with its ad technology org and, potentially, its search business. He has been in discussions with both Microsoft and Google about this, although there are other possibilities, too.

Both these parts of Yahoo together have about 2,500 staffers, whose fate is not yet sorted out.

Also still baking is the new structure, although sources said it is most likely to be comprised of a global media division, one that encompasses Yahoo’s communications and search businesses, and ones focused on global and also regional sales. There could also be a small organization of about 50 aimed at future innovation.

Americas head Ross Levinsohn is the likeliest exec to run the media arm, while Shashi Seth — who now heads search and marketplaces — would be the obvious candidate for the the communications/search one.

Thompson has already been conducting a search for a new worldwide sales head, although one possible internal exec for the job could be Rich Riley, who was recently running Yahoo’s Europe, Africa and Middle East region.

It is not clear how Chief Product Officer Blake Irving fits in the possible new org, since much of the development could now move to the decentralized units.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

Thompson, along with consultants he has hired from the Boston Consulting Group, presented the possible plan in front of Yahoo’s senior execs on Tuesday. That was followed by more meetings with a wider range of top management yesterday, although Thompson was not as highly specific in these meetings.

In fact, according to a half-dozen sources, Thompson apparently grew somewhat testy in one of the gatherings, when asked if there was a strategy he was going to announce in more detail to the group.

(Dear Scott, these are very talented employees who love the company and who have been through the wringer and it’s not their fault that leadership has failed them, so it might be a good idea to treat them with as much respect as possible right now.)

More to come, obviously.

Finally! Things Are Looking Up for IT Spending, Survey Finds.

Arik Hesseldahl — Thu, 29 Mar 2012 16:45:10 +0000

I’ve become a little tired of writing stories about gloom and doom and ongoing difficulty in the world of IT spending. Spring is here and I’m ready for a little optimism. Thank goodness, I’ve found it.

It comes in the form of a survey of 100 CIOs by the investment bank J.P. Morgan. The firm finds that, on average, CIOs say they’re going to boost their IT spending by 2.7 percent this year, up from 2.4 percent in 2011. That may not seem like a big change, but here’s why its important: It’s the first time in a few years that the same survey has detected a directional change in sentiment. CIOs are at long last saying they intend to boost their spending on IT, rather than trimming it back and back and back as they have for the last several years. “In our prior CIO survey in September 2011, the directional movement indicated a reduction in planned spending growth, as at that time CIOs were starting to pare back on spending during more uncertain macroeconomic conditions,” the firm says in its report, which was shared exclusively with AllThingsD.

The optimism is a bit more pronounced when you see it expressed in the graphic below, which I grabbed from raw survey results. More than two-thirds of the CIOs surveyed said they planned to boost their overall IT spend this year, most of them by a modest 1-5 percent, but some by more than 10 percent. Last year, the figure was 58 percent, but it usually swings up by only 3 or 4 percentage points, analyst Mark Moskowitz told me.

“The overall tone we got in our conversations with these CIOs was more optimistic than it has been in a while,” Moskowitz said. “They have the green light to start projects that are going to take several quarters to get done. Most aren’t willing to do that when they’re worried their overall business is going to roll over.” A lot of that has to do with more confidence in the overall macroeconomic environment.

And where will that growth be? And, perhaps more importantly, where won’t it be? Software, storage and security are looking like big spending priorities among the CIOs surveyed. Business intelligence tools and getting mobile devices integrated are also high on the list — there’s that ongoing trend toward “bring your own device” (BYOD), rearing its persistent head once again.

Employee-purchased iPhones, iPads and Android devices are supplanting company-assigned BlackBerrys. “BYOD is real,” Moskowitz says. “And you have to assume that Apple is going to be the one that benefits the most from it.”

Other winners include EMC and NetApp, as they play strongly in networked storage. Server virtualization — making one physical server act like dozens of servers, using software to subdivide its resources — also has a lot of room to grow, the survey finds. That’s good news for VMware.

Losers? There are few. Intel’s new Romley chip isn’t going to be as big a deal in spurring spending on new servers: In fact,91 percent of CIOs surveyed said they don’t expect Intel’s new chip to drive new spending in the data center. Intel’s last big upgrade, Nehalem, did change the game, Moskowitz says. The trouble is, most of the companies using Nehalem-generation chips in their servers are happy with them, and are unlikely to bother with the expense of an upgrade, for now.

Nor is Windows 8 going to cause a new round of PC buying, as both Hewlett-Packard and Dell are hoping. “A new version of Windows hasn’t caused a PC upgrade cycle since 1995,” Moskowitz told me. Asked directly if Windows 8 was expected to drive a major PC upgrade cycle, 78 percent of the CIOs in the survey said no. In fact, at least 30 of the CIOs in the survey said they were still working on deploying Windows 7. Ouch. Perhaps it’s too much to ask for things to be looking up for everyone all at once.

(Image is a movie poster for the 1935 British film starring Cicely Courtneidge, but the title song in this case is, well, awful. What I really wanted was an image of Fred Astaire dancing with Joan Fontaine to the underappreciated George and Ira Gershwin tune of the same name, from the 1937 film “A Damsel in Distress,” but I could find nothing suitable. So — loving Gershwin tunes as I do — just for fun, I’ve embedded both Astaire and Billie Holiday singing the tune, below, courtesy of Grooveshark. Yes, I’ll admit, sometimes I have a little too much fun in this job.)

Remember Obama's National Broadband Plan? Neither Does Anyone Else.

Arik Hesseldahl — Tue, 20 Mar 2012 12:26:15 +0000

Like it or not, 2012 is an election year in the U.S. That means there is, and will be, a great deal of political rhetoric slung in multiple directions — lots of speeches and debates; lots of ads, both negative and positive — meant to sway the opinions of people who are likely to vote.

A great deal of this campaigning takes place in the traditional media forums: TV, radio, local newspapers, and voters occasionally get to meet the candidates in person.

But even more of this takes place on the Web. Practically every political ad that runs on a television screen anywhere in the country is also placed on YouTube and promoted on Twitter and Facebook. So are speeches and debates. This is good for voters who don’t watch a lot of TV, so they can go back and evaluate what candidates says and make a judgement about them on their own time.

That is, if you can get to them. For most Americans, access to a solid broadband Internet connection is as readily available as an electrical connection, and only a phone call away. But for roughly a third of the country, it’s not so easy. That means that about a third of the nation’s population is less able to participate in the democratic process the way the rest of us do.

That, to me, is a troubling thought, when I consider the nation’s broadband-adoption problem. It basically comes down to this: Lower-populated rural areas and some inner-city areas don’t have the same access to the Internet that most Americans take almost for granted. Cable and phone companies often opt not to build the infrastructure needed in certain lightly populated areas, because they can’t justify the investment.

When he came into office in 2009, one cornerstone of President Obama’s technology policy concerned correcting this via grants included in the economic stimulus package. In 2010, Obama delivered the National Broadband Plan. And last year, the president talked to Congress about his hopes to bring broadband to 98 percent of the country, and using wireless technology to do it.

Little has worked. A new study, out today from TechNet, a tech-industry lobbying group, says that broadband adoption at the national level has plateaued at 68 percent of the population, only slight higher than the 65 percent it was when Obama became president.

What happened? Lots of people and organizations with great ideas emerged to try and tackle the problem, the report finds. But they all suffer from a severe lack of coordination, and wildly different visions of what the outcome should be. “Stakeholders are flying blind when it comes to understanding best practices to improve broadband adoption …” the report reads. It goes on to say, “To the extent that poor policy coordination hampers efforts to increase broadband adoption, we run the risk of having a less inclusive society, a smaller domestic market for tech goods and services, and a less innovative economy.”

One problem is simple demographics: A 2011 survey by the government’s National Telecommunications and Information Administration found that only 43 percent of households earning $25,000 or less had broadband at home, and that only 46 percent of those with less than a high school diploma have it.

Then there’s the economy. A Pew survey found that 9 percent of people who at one time had broadband had cut their service off during the previous 12 months because of economic concerns. And that figure rose to more than 16 percent of people earning $30,000 a year or less.

There are apparently historical precedents for this sort of thing. During the Great Depression, telephone adoption dropped from 42 percent in 1929 to 31 percent in 1934. Electrical service leveled off at 67 percent during the Depression, and didn’t resume climbing until later.

A lot of people think that this same demographic just uses smartphones instead, but the data in the report shows that’s not the case generally, and if you added “smartphone-only” users to broadband users, you still end up with only a 73 percent adoption rate.

And this cost of “digital exclusion,” TechNet finds, is more than just participation in the election process. Employers increasingly require that applications for jobs be filed online. Healthcare is increasingly tracked online. Even just taking advantage of good deals on Groupon or LivingSocial more or less implies broadband access.

What to do? Get everyone on the same page, for one thing. The report suggests getting the numerous federal and state efforts pulling in one direction on such aspects of the problem as collecting reliable data, and setting an agreed-upon set of best practices.

There’s also the option of leaving well enough alone. Demographics have a way of shifting over time. Old people who don’t bother with broadband will die, and younger people who can’t imagine living without it will either demand it where they live or move to places where they can get it. As I learned in 2008 when I wrote this story for Businessweek, sometimes that can be as easy as moving to the other side of a street. Sometimes it’s just a matter of waiting for the cable company to offer service in your area.

My guess is that this is a problem that’s not going to easily solve itself with a market-based approach, but so far the government-based options aren’t looking so good, either.

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.

“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.

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.

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.

When Gaming Is Good for You

Robert Lee Hotz — Tue, 06 Mar 2012 16:00:21 +0000

Videogames can change a person’s brain and, as researchers are finding, often that change is for the better.

A growing body of university research suggests that gaming improves creativity, decision-making and perception. The specific benefits are wide ranging, from improved hand-eye coordination in surgeons to vision changes that boost night driving ability.

Read the rest of this post on the original site »

Exclusive: Yahoo Labs Head Raghavan Departing to Google

Kara Swisher — Sun, 04 Mar 2012 21:40:27 +0000

Prabhakar Raghavan, the well-respected head of Yahoo’s Labs unit and also recently its head of strategy, is leaving the company to take a job at Google.

The departure comes ahead of what will be very deep cuts in his division, which is in charge of long-term research at the Silicon Valley Internet giant, said sources, and is spread all over the country. More researchers at Yahoo — which is a very well-respected group — are also expected to go too and will be the subject of fervent recruiting interest by companies such as Google and Facebook.

Yahoo confirmed the move after I made an inquiry about it this morning.

In a statement, the company said:

“Yahoo! thanks Prabhakar Raghavan for his dedication and contributions to Yahoo! for the past 7 years. We wish him well in his next endeavor. Ash Munshi, CTO, will assume leadership for Y! Labs.”

It is unclear what Raghavan’s new role at Google is.

But, as head of Yahoo Labs, Raghavan’s research arena has been extensive, encompassing everything from data mining to algorithms to search.

He is also a consulting professor of computer science at Stanford University. According to his bio, Raghavan has “co-authored two textbooks, on randomized algorithms and on information retrieval.”

The Berkeley PhD had been CTO at Verity and had held a number of jobs at IBM Research.

More to the point, he was very well respected within the company, which seems to be curtailing its commitment to research as it attempts to turn itself around under the new leadership of CEO Scott Thompson.

Raghavan had been made head of strategy under former CEO Carol Bartz, who was fired.

He has been at Yahoo seven years.

People Say They Care About Their Online Privacy, But Do They Care Enough to Switch?

Liz Gannes — Mon, 13 Feb 2012 14:00:00 +0000

The rational response to the question, “Do you worry about your privacy online?” is “Yes.”

We transmit and share a ton of information about ourselves online these days. A little concern about how companies and governments and other people treat that personal content is a very good thing.

The privacy seal seller TRUSTe is now going to start asking that do-you-worry question (and some follow-ups) on a quarterly basis, in what it’s calling the Consumer Confidence Privacy Index.

The first time TRUSTe asked — in an online survey of 2,415 U.S. adults in Jan. 2012, conducted by Harris Interactive — 90 percent of respondents said they are worried about online privacy.

Further, 41 percent of those surveyed said they don’t trust most businesses with their personal information online. But that means that 59 percent do.

TRUSTe and Harris also asked whether that lack of trust leads to action. Eighty-eight percent of participants reported that they avoid doing business with companies who they believe do not protect their privacy.

But do people really act on those moral high grounds, and punish specific companies like Path when their privacy oversteps are exposed? Sometimes.

In a separate survey, Digital World Research looked at how upset Google users are over the company’s announcement that it will consolidate its privacy policies and share data between some Google-owned services that hadn’t before.

That survey was only of 60 users, but it found that 60 percent of them said they were concerned about Google aggregating personal data to serve more personalized advertisements.

A slightly larger portion of respondents — 69 percent — said they were “not at all likely” to stop using Google products because of the changes.

Only 4.8 percent told DWR they were “very likely” or “extremely likely” to stop using a Google product because of the changes.

A couple of months back, I wrote about two more studies that looked at how people feel about privacy settings. Here’s that story.

What none of these studies did was measure actual user behavior; they were all surveys that depended on people reporting their own habits and intents.

A Look at Walmart's Plans for Making Commerce High-Tech (Video)

Tricia Duryee — Fri, 03 Feb 2012 14:00:20 +0000

Walmart is typically associated with its everyday low prices, not with technology.

But the mega-retailer is trying to change that by building a tech center in San Bruno, Calif., just south of San Francisco, which houses Walmart.com and a growing team of researchers.

The mission of @WalmartLabs is to study how mobile and social platforms are changing commerce, and how the line is increasingly blurring between online and offline shopping.

The lab, which now has a headcount of around 200, was founded about a year ago, when the Bentonville, Ark.-based company purchased Bay Area start-up Kosmix.

In an interview last week, SVP of global e-commerce Anand Rajaraman, who founded Kosmix along with Venky Harinarayan, said the group has had near-autonomy in trying out several experiments, some of which you might have thought would be taboo for such a large physical retailer.

For instance, the team rolled out Shopycat over the holidays on Facebook, which recommended gifts based on a friend’s interests.

The notable part was that the gifts did not necessarily come only from Walmart, but other retailers, as well. “It was the first time we sent traffic to a non-Walmart site,” Rajaraman said. “But if we want to be a place to find gifts, we thought the right thing to do was to include other retailers.”

More recently, the lab launched a contest called “Get on the Shelf,” which allowed small businesses to submit a video featuring a product they had invented. Starting on March 7, visitors to GetOntheShelf.com will be able to vote on those products they think deserve shelf space. Among the submissions is a product called “the Catcher,” which, as it implies, can be used to catch your dog’s poop before it hits the ground.

In the interview video below, Rajaraman also addresses another unfavorable topic among large brick-and-mortars — the shift from buying offline to online. It is a trend that Walmart’s big Internet competitor, Amazon, is benefiting from.

Today, retailers are fighting hard not to become showrooms, places where consumers go to decide what to buy before then making the purchase online. But Rajaraman suggested that maybe the concept can be embraced, and physical locations will indeed become showrooms, where shoppers pick up items that were ordered online, or try out products that are ultimately shipped to their homes.

And perhaps Rajaraman will help invent the technology that will make it all happen.

[ See post to watch video ]

On Facebook, We Get More Love Than We Give

Liz Gannes — Fri, 03 Feb 2012 05:01:05 +0000

We receive significantly more likes, messages, tags and friend requests from our Facebook friends than we send out ourselves, according to a new Pew Internet report.

In one month, Pew study participants “Liked” other people’s Facebook content an average of 14 times, and had their own Facebook content “Liked” 20 times. They sent nine personal messages, and received 12. Twelve percent of them tagged friends in photos, and 35 percent were themselves tagged in at least one photo. Forty percent made a friend request, and 63 percent received one. Every category showed that same pattern.

This probably isn’t surprising if you’ve heard of the “80:20 rule,” or something similar, where the minority of any group generates the majority of activity. Thus, the majority of the group is on the receiving end.

Pew finds that 20 to 30 percent of people on Facebook are “power users” — meaning they perform these various social networking activities at a higher rate, often on a daily basis.

(Interestingly, these power users tend to specialize in one particular Facebook activity. Some people are power- “Likers” and others are power photo-taggers.)

Pew’s findings are based on getting direct access to 269 Facebook users’ accounts, with their permission.

Admittedly, that’s not an enormous sample, but here are some other findings about the frequency with which Facebook users perform various actions:

On average, users make seven new Facebook friends per month; they initiated three requests and accepted four.
80 percent of friend requests that are initiated are accepted.
Women average 11 updates to their Facebook status per month, while men average six.
On average, Facebook users contribute about four comments/”Likes” for every status update that they make.
Less than five percent of users hid content from another user on their Facebook feed.

Pew also didn’t find much evidence of Facebook fatigue among those who chose to be in its study. People who had been on Facebook for longer, and people who had more Facebook friends, tended to “Like,” post, tag and comment more.

But here’s a cautionary note, for those who wish to restrict their personal content within a relatively close network of people. Many Facebook users choose to share content using the “friends of friends” option. The median Facebook user, according to the Pew sample, has 31,170 friends of friends. That’s a ton!

What’s more, the average Facebook user — which includes some people who have enormous networks of people that are not densely connected to each other — reaches 156,569 people with the “friends of friends” setting.

Please see the disclosure about Facebook in my ethics statement.

Report: Internet Economy Set to Nearly Double to $4.2T by 2016

Liz Gannes — Fri, 27 Jan 2012 12:45:49 +0000

The Internet economy of G-20 nations will nearly double in value to $4.2 trillion by 2016, according to a new projection by the Boston Consulting Group, released at an event with Google today. That’s up from $2.3 trillion in 2010.

It seems that Internet companies are particularly concerned about earning their spots at the World Economic Forum in Davos this year. Earlier this week, Facebook and Deloitte released a more specific (and self-serving) study about the social networking company’s revenue and jobs contributions to the European Union.

There will be three billion Internet users in 2016, or 45 percent of the world’s population, the BCG study estimated. By 2013, there will be more mobile broadband connections than fixed-line connections.

By 2016, China will have 800 million Internet users — as many as France, Germany, India, Japan, the U.K. and the U.S. combined. At that time, its Internet economy will be about the same size as that of the U.S., BCG noted.

BCG highlighted the value of social media in a couple of emerging areas. More than 90 percent of Internet users in Argentina, Brazil, Indonesia and Mexico engage in social media, a higher contingent than in many more-developed markets. Plus, small- and medium-sized businesses with significant Internet presences expect to grow 5 percent faster than those that do not.

(Photo courtesy of World Economic Forum)

Pew: Nearly One-Fifth of U.S. Adults Own Tablets or E-Readers

Lauren Goode — Mon, 23 Jan 2012 15:45:36 +0000

Last year’s back-to-school season may not have spurred a ton of tablet and e-reader purchases, but the holidays were a different story, according to new data from the Pew Research Center.

The share of U.S. adults who own tablet computers nearly doubled from 10 percent to 19 percent between mid-December and early January, while the same growth spike also applied to e-book readers, which also jumped from 10 percent to 19 percent over the same period. The driving force behind the surge in ownership, Pew said, was the relatively low cost of tablets like the $199 Kindle Fire and the $249 Barnes & Noble Nook tablet, as well as the price of some e-readers dropping below $100.

The new data comes after a period — from mid-2011 into the fall — in which there wasn’t a lot of change in the ownership of tablets and e-book readers, Pew said.

We already had an inkling that the Amazon Kindle Fire sold very well in its first few weeks on the market; a Barclays analyst has estimated that Amazon sold 5.5 million Kindle Fire tablets last quarter, and predicts that Amazon will sell 18.4 million Kindle Fires this year, giving Amazon half of the non-iPad tablet market.

Also not entirely surprising: Households with higher incomes bought more tablets, while women’s ownership of e-readers increased more than men’s. More than a third of those living in households earning more than $75,000 — 36 percent — now own a tablet computer, Pew said. Ownership of e-readers among women grew more than among men, from 11 percent to 21 percent; compared to a 5 percent increase for men, with just 16 percent of them owning e-readers.

Anecdotally, those cheaper tablets still are harder to spot “out in the wild” than the iPad, as my AllThingsD colleague, Peter Kafka, notes here, whereas iPads seem to be popping up everywhere, from the airport to the gym. Personally, I know a handful of female adults who got either Kindle Fire tablets or less expensive Kindle e-readers this holiday season.

The Pew report comes from the combined results of two surveys — one conducted Jan. 5-8 among 1,000 adults age 18 and older; and another, conducted Jan. 12-15 of 1,008 adults, with a margin of error of +/- 2.4 percentage points. The study is part of Pew’s research, supported by funds from the Bill and Melinda Gates Foundation, to look at how tablets and e-readers are impacting libraries.

(Photo courtesy of DJ Murdok/Flickr)

Facebook Is Totally Not an Echo Chamber, Says Facebook

Peter Kafka — Tue, 17 Jan 2012 17:38:00 +0000

SFC / Shutterstock

Is Facebook your own personal hangout, where you gossip with a small group of your close friends? Or is it a big, sprawling cyber-campus, where you get bombarded with new ideas and information all the time?

Yes, says Facebook, via a new research paper that’s both wonky and accessible, and which the company thinks is worth telling knuckle-draggers like myself about.

The big takeaway here is that while most people on Facebook spend most of their time sharing stuff with a small group of like-minded friends, Facebook is so big — 800 million users! — that Facebook users end up learning lots of stuff from people they barely know: “The information we consume and share on Facebook is actually much more diverse in nature than conventional wisdom might suggest.”

The title of the paper is “Rethinking Information Diversity in Networks.” But it ought to be “No, Facebook Is Not Just an Echo Chamber” — “echo chamber” being a term that comes up three times in the post.

Or even more pointedly: “Eli Pariser — That Guy Who Wrote ‘The Filter Bubble’ — is Wrong.” Or how about yet another: “Why Would You Want to Limit Your Friends to 150 People?”

So keep this in mind as your Facebook feed starts to fill up with even more updates about what your friends are watching, reading, listening to or linking to — Facebook thinks you’re getting a whole lot of signal out of that noise.