I am here at Yahoo HQ in Sunnyvale, Calif., to check out “Product Runway,” which is the Silicon Valley Internet giant’s attempt to show that it can still innovate.

First and foremost is the launch of Livestand, a personalized news reader that is similar to Flipboard and a variety of other rivals, including — soon — Google.

It’s Yahoo’s attempt to present a business-as-usual feel — amidst a long and agonizing and very public strategic overview that might also include the sale of the company (or not!), in the wake of the recent firing of its last CEO, Carol Bartz.

It has caused a lot of trauma inside Yahoo, which can’t help with innovation.

But we press on!

In other words, despite the three-ring circus going on outside, Yahoo wants you to know it is still hard at work.

We begin:

10:35 am: As the strains of U2 die out, Yahoo Chief Product Officer Blake Irving takes the stage, which is actually set up in the company’s cafeteria. I can smell lunch being made nearby and I am hungry.

Apt — Yahoo certainly needs to show off a lot of cool stuff or its fate will be cooked.

No pressure, Blake!

“Personally, I am more bullish on Yahoo today,” he said. “What is Yahoo? Simple. It’s the premier digital media company. Period. Stop.”

Oh, if it were only that easy.

10:46 am: Irving pulls out his favorite slide, which looks like a chemistry test. It lists the various elements of the product strategy, with things like personalization, mobile, premium.

Now to Livestand, which is available on the Apple iTunes app store right now.

Don’t all rush at once!

Irving notes that Livestand is more than just an app — it is a platform.

In other words, Yahoo wants to help publishers publish online. Kind of a Facebook of content.

If Yahoo can pull it off, that is. (And, of course, unless Facebook decides to do the same.)

10:50 am: Livestand is an HTML5 “personalized living magazine.”

“This is the way Web pages are going to look,” declares Irving. Which is to say, heavy on photos, swoopy navigation, a television screen-like interface.

Irving uses the example of Surfer magazine, which is a good idea since waves always look pretty. Especially in a video-in-frame with Kelly Slater in Hawaii.

But, in essence, for anyone who has used Flipboard for years now, none of this is entirely different.

10:54 am: The look of what would be the Yahoo News page is actually much more interesting, since it is clearly a whole lot better than the Web page.

Irving also shows off a “living ad” — in this case, an unusually snuggly couple on a couch. It is cool, but creepy.

When launched, the ad has tap points. Irving — naughtily declaring about what is an ad, “I’ll tap that” — taps the lady’s butt, which would also have been my move. We learn about the jeans, of course.

10:58 am: Irving then shows off the ability to add feeds.

Next, something called “Cocktails.” First up, a developer tool called Yahoo Mojito and Yahoo Manhattan, which is a hosting service. The company will open-source both the technologies in 2012.

Irving brings up Mike Kerns, VP of Personalization & Social, who came to Yahoo when it bought the innovative sports fan site called Citizen Sports.

“We like to ship sh#t,” he notes. I like Mike Kerns immediately.

Kerns intros C.O.R.E. No, it is not a secret government organization that takes out fussy bloggers, who might be more critical than Yahoo execs would like.

In fact, it stands for “content optimization relevance engine.” Of course it does.

Simply put, C.O.R.E. is trying to link the right content or whatever to the right consumers and who likes what. Ladies like this, dudes like this. Apparently, “men of multiple ages” enjoy stories about golden chicken.

11:11 am: Kerns is moving on to social, especially its integration with Facebook. While much touted, sources tell me it has gone slower than expected in terms of use, but that it is improving.

Kerns talks about the idea of matching content to conversations to interests and, well, you know — the now exhausting world of modern media consumption.

The world in which you can no longer simply read an article and enjoy it — you must comment, share, discuss, parse, tweet.

Does anyone remember when you read something cool and just kept it to yourself?

Forget it, pal! It is a full-information society now and you better get on board and start poking your friends about every little thing.

(Personally, I plan on becoming a hermit in 3 … 2 … 1.)

11:18 am: Now Tim Parsey, who is Yahoo’s design head. He is hands down the most delightful exec the company has had in a while, mostly because he loves to smirk adorkably.

He shows off Yahoo’s first original design, which was a dull list. And then another really bad logo. But Parsey loves it! It’s kitschy!

Smirk attack!

Parsey moves into what has to happen now, which is to deliver a much more emotional experience and a much better designed one. He uses words like “humanism.”

Say what? He is right — Yahoo has for too long completely ignored design as an important part of the experience.

That’s why Flipboard was so quickly touted — it was pretty and fun. And it is why everyone is simply forced to love Apple products.

11:22 am: Parsey even has a code for it, called REM — for rational, emotional and meaningful.

He shows off a weather app. People take photos and they can be used in the app. Then Yahoo Mail for the iPad, whic is also handsome with photos and video. Livestand, also pretty.

“Great way to differentiate,” says Parsey. He calls it “one Yahoo!” Indeed.

11:35 am: I’ll admit it. After Parsey-fest, I zoned out for a sec when IntoNow dude, Adam Cahan, comes up.

Donut emergency!

Back to IntoNow, it’s the television indexing service that Yahoo bought in April.

Essentially, more ways to watch the media — in this case, video — and do 53 other things at the very same time. Memo to humanity: We will all be paying continuous partial attention for the rest of eternity.

Like I said: Hermitage!

11:41 am: Product dude Irving is back, making a point that, despite all the public mishegas, Yahoo has been busy at innovating.

A redo of email, better search, social “Facebar” with Facebook, Flickr for Google Android.

Irving is correct — Yahoo’s engineers have been hard at work and deserve kudos for doing so, even with attrition issues, stock declines and questions about the company’s very future being debated daily.

The problem is that too many of these improvements are mostly incremental and essentially table stakes for tech companies, most of whom have introed many more significant innovations in the same time frame as Yahoo has.

Google did Android, Google+ (as well as some notable failures). Microsoft did Kinect, Windows Phone, Windows 8. Amazon did Kindle Fire. Facebook did a range of major updates, as it has grown like a weed.

And there’s Apple. You might have heard of the iPhone and the iPad.

You get my point. Yahoo’s Product Runway today is well done, but what it really needs to be is just the beginning of a take-off.

11:48 am: Now Q&A time.

The first question is what took so long to get Livestand out, the second is why should people use Livestand since Flipboard and others have already been around for a dog’s age.

I ask about design — mostly because I want Parsey to use the word “delicious” a lot — and also about all the turmoil around the company and its impact on product creation. (I decide not to mention that Yahoo blew its acquisition of the bookmarking site, Delicious, and then sold it.)

Parsey delivers on the delicious scale, noting that Yahoo must have one design experience and yet has a lot of different interfaces. In other words, it cannot be Apple, but it can feel a lot more cohesive.

Irving talks a little bit around the obvious elephant in the room — the future of Yahoo — noting that the product staff was trying to focus and forget the storm going on outside.

“We have dreams about what this company can be,” says Irving.

You and me both, brother.

12:04 pm: More questions that are too detailed for my tastes, since they have delivered lunch and I can see it and I am ravenous.

As Parsey might say: It looks deliiiiiccccious.

Now, let’s hope Yahoo can do even more tasty stuff.

Tonight at 1 am PT, techies who have nothing else to do — that would be me! — can click onto a brand new tech site called The Verge.

Well, kind of — it’s the result of many months of work by the gang that defected from AOL’s popular Engadget tech powerhouse, set up temporary shop under the Web site name This Is My Next and busied themselves with creating The Verge.

I have another screenshot below of the new site that will be focused on news, reviews and features about tech, and which has been getting a final tweaking all today.

From my quick perusal, it has a vibrant and slick design, with a lot of packed boxes, swooshy movement and plenty of content.

Along with the launch, The Verge’s parent company — formerly doing business as SB Nation, focused on sports — will also transform into Vox Media.

In a chit-chat with Vox’s CEO Jim Bankoff, top exec Marty Moe and Josh Topolsky, The Verge’s Editor-in-Chief, the trio of former AOLers all said they were going to for the big time.

“We want to build the platform for talented native Web voices, in sports and tech for now, and then we plan to grow more verticals,” said Bankoff.

“We want to create more than a news site or blog about tech — the frustration at AOL was that we did not get the resources or manpower to realize that bigger vision,” said Topolsky.

(You’re speaking to the choir, brother!)

Said Moe: “We think this category has not had a large enough vision…not enough has been innovated over the years and we think it is a big opportunity.”

Topolsky said the site, along with a mass of original content from 30 writers, will also be helped by a strong database of information about all its topics and gadgets and also focus a lot on community input.

“What we want to do was graduate beyond the blog,” he said.

(Hmm…and here I just got the hang of this blog thing.)

Bankoff, who would not say how much Vox spent on launching The Verge — my back-of-the-envelope guess, several million dollars — said that costs were spread out between the tech and sports sites with centralized sales and product teams.

Initial launch sponsors are BMW, Sony and Samsung, said Moe, who is aiming to sell “major brand advertisers on the idea that we will be the premiere destination of consumer tech coverage.”

It has to grow past big sites like Engadget to do so, but Topolsky said that This Is My Next had three million unique visitors in the last month and more than 10 million page views.

“We have done that with a lot of editorials and in-depth reviews,” he said. “I think people are really hungry for great content and stories.”

As to competitors, Topolsky said that “this not to necessarily I win if you lose,” although his clear aim is to unseat sites like CBS-owned CNET, Engadget and Gawker Media’s Gizmodo and perhaps even newsier sites such as TechCrunch and AllThingsD (as if!).

“We are going to do the nuts and bolts stuff,” he said. “Somewhere between Engadget and Wired.”

Topolsky compared The Verge to a “boutique hotel — we have the same stuff everyone else has, but it is a much more elegant experience.”

Later, that will change, he promised, noting that “this is only version 1.0.”

Of course — but what else would you expect from a gadget site?

(Good luck and congrats to the entire The Verge team from AllThingsD!)

And here is another lovely screenshot, as promised:

The app’s functionality is similar to group messaging apps like GroupMe, with group discussions centered on real-time score updates from a particular game.

Four-year-old PlayUp this year raised a seemingly insane $50 million from individual investors it declined to disclose. The company also offers text-based sports products in other countries; its most popular one is for cricket fans in India.

You probably know this, but ESPN star Bill Simmons — the guy they built an entire site for — is a big Twitter user. He has some free advice today about things he’d like changed/added. I concur! Let’s make it happen, ok? Thanks.

Via Grantland:

I can’t believe Twitter hasn’t added one of the following two wrinkles …

a. Adding a checklist to your follower list so you could follow however many people you want, but “check” the ones you want to actually show up in your feed. This would prevent wounded feelings (if you’re not following a friend who’s secretly bitter that you’re not following them, which means either they tweet too much or their tweets suck) and clogged Twitter feeds (if you have a couple of friends who post 40 to 50 times a day and clog your feed up, only you can’t unfollow them because they’re your friends).

b. Adding a button so you can make your follower list private. Do you realize how many more porn stars, strippers and hoochie mamas would be followed by athletes and rappers if nobody could see whom they were following? (Well, not you, Amar’e Stoudemire, you obviously don’t care. I’m talking about everyone else.) Do you realize how much more DM-inspired casual sex could be going down? You’re cheating the condom industry, child alimony lawyers and sports blogs, Twitter. Get your act together.

Visitors to Yahoo Sports and its Rivals.com fan properties will see links to SeatGeek embedded in a team’s schedule page; links will also appear within articles, blogs and on the 130 team-specific college sports pages at Rivals.com. Yahoo has more than 51 million unique visitors a month.

The links simply say “buy tickets”; clicking through brings up a stadium seating diagram, with a list of available seats and prices on the right side of the page.

SeatGeek says it is aggregating roughly 19 million tickets for upward of 60,000 sports events from more than 50 secondary markets, including StubHub, Ticketmaster’s TicketsNow, RazorGator and others.

Russell D’Souza, co-founder of SeatGeek, said the service is free to consumers, and that the company collects an affiliate fee from the seller, which will now be split partially with Yahoo in some cases. Since the average purchase ranges between $250 to $300, SeatGeek’s cut can be between $25 to $30 per transaction, D’Souza said. SeatGeek also has partnerships with The Wall Street Journal and the New York Daily News.

D’Souza said before he and Jack Groetzinger started the company, they used to open six windows in their browsers to compare ticket prices on dozens of sites where tickets were posted for sale by smaller brokers. He said there were often hidden fees, service fees and shipping fees, which made it even more complicated.

“It would be really hard to compare, so we wanted to create an interface for any event that would expose to users where the best seats were in the stadium and how much they’ll be paying,” D’Souza said.

Generally speaking, D’Souza said, the secondary ticket market is great for finding deals on tickets for events that are sold out, but a little-known fact is that it’s also good for events that still have tickets available.

“If an event is sold out, you have to go there — there’s only one option. But if it’s not sold out, you’ll end up finding tickets from season-ticket holders and brokers who will list it below face value,” he said.

By making it easier to sort through the various marketplaces, SeatGeek hopes to make consumers more aware of the alternatives. From its site, the company also offers venue maps and price forecasts to advise users when to buy tickets.

SeatGeek has raised about $2.5 million in venture capital from Founder Collective, NYC Seed and others. Founder Collective, an early-stage investor in New York, previously invested in Get Me In, a European secondary-market ticket vendor that was acquired by Ticketmaster in 2008.

I love the smell of blog wars in the morning!

Acting as Facebook often does to Google, a new site started by former Engadget editor Josh Topolsky just hired away yet another passel of tech journalists from the giant gadget news and reviews organization.

Editorial movement is not uncommon on tech news sites, but this level of it from one site to another is somewhat, um, aggressive.

Engadget, which is owned by AOL, is one of the largest tech-focused sites on the Web. Topolsky left his editor-in-chief job there in March.

By April, he had grabbed eight prominent Engadget staffers who had left the huge tech site amid editorial tensions, in order to start a new competing gadget property for the well-funded sports content start-up SB Nation.

Now, sources said, Topolsky has added Thomas Ricker, an Engadget senior editor, who had run its European coverage; Sean Hollister, a senior associate editor, who ran its West coast team; and Joseph Flatley, an associate editor.

Also hired: Thomas Houston, editor-in-chief of Switched, an AOL tech site that was recently subsumed into its Huffington Post Media unit; and Dieter Bohn, who was editor-in-chief for the Smartphone Experts network of sites, including Crackberry and others.

And other possible new hires soon from Engadget: Another European editor, Vlad Savov, and writer Jacob Schulman.

The Topolsky-helmed site is still unnamed but is now operating as This Is My Next. It already has 16 writers, compared to Engadget’s two dozen, and is set to debut in the fall with a new name.

It will be the first content expansion at the Washington, D.C., SB Nation, which completed a $10.5 million Series C round, led by Khosla Ventures, in the fall.

Before that, SB Nation had already raised about $13 million in total venture funding from Accel Partners, Allen & Company and Comcast Interactive Capital, as well as from angel investors such as Ted Leonsis and others in Silicon Valley.

Another AOL link: SB Nation was founded by former AOLer, CEO Jim Bankoff, who had bought Engadget for AOL many years ago.

Engadget Editorial Director Josh Frulinger said that the impact of the talent drain on Engadget — mostly from This Is My Next raids — has been small, since the site has also been aggressively hiring.

“We’re past the people leaving and into celebrating what we’ve accomplished in six short months, and we welcome any new competition,” he said. “Dana Wollman, Brian Heater, Myriam Joire, Zach Honig, Joe Pollicino, Richard Lawler, Michael Gorman, Sean Buckley, Joseph Volpe, Brad Molen, Terrence O’Brien, Amar Toor and Sharif Skar — all brought on in the past six months — are your Engadget stars of tomorrow.”

To prove it, AOL said unique visitors for Engadget in June were up 1.1 percent from May and will be up again for July. In recent reports, the site had 14 million unique monthly visitors.

With that in mind, the always-sophisticated Journal sports section recently bandied around this question: What could famous athletes like LeBron James be writing about that’s so fascinating to more than 2.1 million followers? To calm our inquiring minds, we read nearly 2,000 tweets written by the five active athletes with the most followers in the four major sports (NFL, MLB, NBA, NHL) and analyzed their content.

Read the rest of this post on the original site »

In a surprise cameo, Activision CEO Bobby Kotick has gone Hollywood, appearing in a new trailer for the movie “Moneyball.”

Based on the excellent Michael Lewis book about the Oakland Athletics baseball team and its quirky general manager Billy Beane, who is played by Brad Pitt, Kotick is apparently playing its owner.

Kotick seems to do a pretty good job as a sports mogul, which is not much different than his one as a gaming mogul. And, if it works out as it seems it will, a social networking mogul as a possible new owner of Myspace.

Here’s the video of the trailer for the film, which comes out in September, with Kotick:

Talking to AOL CEO Tim Armstrong earlier this week about its investors day tomorrow, he used the word “execution” a lot.

No, not the kind evoking a firing squad if he did not succeed at turning around the New York-based Internet giant soon as he has long promised.

Instead, Armstrong was referring to reassuring big shareholders and Wall Street analysts that AOL was now in a mode of making sure all its many moves to turn around the company will finally begin to pay off.

“Basically, our point is going to be about fully operating around the strategy we’ve built,” said Armstrong in a wide-ranging interview. “It seems right for investors to ask about executing on what we have been doing for the last year and a half.”

It’s certainly the right message for the charismatic executive to be delivering, as he and other top AOL execs present their plans moving forward, especially after what has turned out to be a very hyperactive year.

After deep layoffs, a massive rejiggering of its management ranks and a number of shifts of its business focus, without much advertising increase to show for it yet, Armstrong has also pushed through a series of acquisitions.

It culminated in the high-profile and decidedly dramatic purchase of the Huffington Post in January for $350 million in cash.

Now, said Armstrong, deals will be taking a back seat to products.

“We are diligently staying on strategy and really focusing on products and services,” said Armstrong. “We have laid out the path we are on and now investors want proof of the concept.”

To Armstrong, that means the push of “branded content” and a continued focus on significant properties in key topic areas.

Tomorrow, in news that could worry investors, AOL will be noting that traffic is flat year over year, but explaining that it is due to the outsourcing of its sports and health sites.

“If you added that back in, we would have had a phenomenal year of growth,” said Armstrong. “Our main point will be that this is the right path for AOL.”

In fact, in an unusual wording, he said AOL was betting on the “urbanization” of the Web around big branded sites, which is, in many ways, exactly where the Web was a decade ago with Yahoo, Excite and others.

But Armstrong will be making the point that this retro idea is perfect for today, as marketers look for quality content that attracts big audiences, which has seen its most energetic application in the Huffington Post.

Thus, his linchpin remains the flashy news site’s even flashier co-founder Arianna Huffington, who has cut a very wide swath through AOL’s content efforts since Amstrong made her media czar of the company.

As Armstrong did, she also stressed the focus on unique visitors and ad growth, more video and a laser focus on local.

This includes shoving editorial into every AOL property, including unlikely ones such as Moviefone and MapQuest, and integrating it all to point back to the Huffington Post mothership.

“Much better editorial integration is a centerpiece of what we are doing, surfacing content in new places it was not before,” said Huffington, who used examples of local stories via its Patch unit that have gone global with a special push.

And by global, that also means the creation of new content sites in Europe and elsewhere, in order to build this unusual dream of a fully aggregating world.

“It is a big test of the HuffPo platform aggregation to do this,” said Huffington, who has clearly longed for the kind of money and staff to do this for a very long time. “It has moved a lot faster than I thought it would … but it feels good to be moving on so many fronts at once.”

Many fronts indeed, which might make investors pause. So far, those shareholders have had a continued wait-and-see attitude toward AOL, which has seen its stock decline almost 13 percent from its late 2009 IPO debut.

That’s mostly due to worries about whether the continued and expected fall-off of its lucrative access business can be met by similar increases in its ad business.

That share drop has been especially steep since the beginning of the year, but it has also not been drastic, indicating an interest in continuing to believe Armstrong’s confident — well, confidently delivered, at least — narrative.

As Citi’s Mark Mahaney wrote in a one-hand-other-hand note yesterday about the investor day:

Positives: 1) AOL still remains a top 5 U.S. Internet property; 2) In the latest quarter, AOL’s Display segment grew Y/Y for the first time in ~3 years, and this improvement seems sustainable; 3) At 4x ’11 EV/EBITDA, AOL’s valuation is among the lowest of any ’Net Stock. Negatives: 1) Deteriorating fundamentals; 2) Significant market share losses — ’Net usage, Display Advertising revenue & Search queries; 3) A significant profit hole from the structural decline of its Subs biz; 4) Substantial competitive risk; and 5) An unproven (@ AOL) management team.

“We all like Tim and what he says makes a lot of sense,” added one big investor, who is also attending and has many questions about the efficacy of what AOL is doing, in a common sentiment among its large shareholders. “But we also need to see real results soon.”

While there has been a report on a boxing news site that Yahoo Americas head Ross Levinsohn was leaving the Internet giant to run HBO’s sports unit, it’s not so.

Trust BoomTown on this one–I have all top Yahoo execs embedded with Apple iOS and Google Android location tracking devices.

Apparently, calling to ask about such a big move is tough one-two for BoxingScene.com, but Yahoo confirmed the non-departure and Levinsohn did too in a brief phone conversation.

“I’m not leaving,” he said.

If you’re a big fan of collegiate sports, the prospect of locating all the games you want to watch can be daunting.

Assuming the game you are looking for isn’t deciding some crucial tournament that lands it on ESPN2, where do you go? A school’s athletics Web site? The site for the specific team? For the venue? What if the game is out of conference or pre-season?

And while these issues may seem like the lament of the crazed sports fan, Tom Bleymaier, co-founder of LateralSports.com, believes he’s onto something thinking there’s a problem to be solved.

“There are 347 Division One schools in the NCAA, which means about 6,500 teams total,” explained Bleymaier in a recent interview. “We want to be the one place online that fans can go to locate the games they want to watch–we want people to search with us, and be confident that if we aren’t listing it, then it just isn’t available.”

He and his co-founders, his brother and sister, built LateralSports.com not only to connect users with the hard-to-find games, but to highlight games fans didn’t even know they were interested in.

Indeed, a quick search for San Diego State Softball, where a friend is a coach, showed where I could watch online this weekend. Searching for my hometown ZIP Code revealed 42 active collegiate athletes from my high school alma mater, and showed where I might watch the games of those currently in season.

This sort of discovery seems to be exactly what Lateralsports.com is designed to elicit.

Said Bleymaier: “Big name schools think that people who want to see their games know where to find them. We agree that all of their existing fans may, but there are 200 kids and their new freshmen’s old high school who would watch the game if they knew about it. We can send alerts to anyone from that hometown to tell them when games are on, and connect them with where to watch.”

The alerts, emails and texts could be more helpful than they sound–and not just for the fans.

“NCAA rules actually restrict who a college can send such alerts too,” said Bleymaier. Those rules don’t bind Lateral Sports, and we could be a pretty useful middle man for athletics departments.”

The real bet for Lateral Sports, though, seems to be on a new kind of social connection between would-be fans and the games they could be watching. The connection it hopes to build on is something different than the jersey-wearing hero worship that might bring fans to pro sports.

“Part of our growth will be tapping into that wiki-like loop. If someone is a big Alabama fanatic, and they send us a good link for where to watch a game, we need to put that up,” he said. “People are already doing that work, but it’s on message boards and forums, not one, easy to use, central place.”

Bleymaier said that today the LateralSports.com site has complete listings of where to find games and live statistics for baseball, lacrosse, golf and tennis–the larger spring sports. That list is far from complete, but not bad for two weeks after launch.

The company is currently part of the Stanford design school’s (d.school) Launchpad class, run by Michael Dearing and Perry Klebahn.

The class takes new and existing ideas through an accelerated process of prototyping, user testing and iteration–and has developed somewhat of a reputation for attracting interesting ideas.

It was the same Launchpad class that birthed the Pulse news reader less than a year ago.

Although he dodged questions about being the “next Pulse,” Bleymaier said the long-term vision for LateralSports is to scale up and include all college sports from all divisions, and later plugging in high school and pro level play as well. He wants fans to be able to log in and track a player’s career from the high school JV squad through their retirement from pro ball (whatever ball that might be).

I talked with Bleymaier, who looks every inch the all-American boy, on his way out of a session of the Launchpad class. I grilled him on the idea and some of the barriers to scale–all the while dodging every sports metaphor that came to mind.

]]> http://allthingsd.com/20110506/early-adopter-lateralsports-com-kayak-for-college-sports-online/feed/ 0 http://allthingsd.com/20110506/can-electronic-arts-really-become-a-digital-gaming-powerhouse/ http://allthingsd.com/20110506/can-electronic-arts-really-become-a-digital-gaming-powerhouse/#comments Fri, 06 May 2011 12:00:48 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=5190 Electronic Arts CEO John Riccitiello talked a big game Wednesday, telling analysts on its year-end conference call that the 29-year-old company is well on its way to a major transformation.

It argued that instead of creating hits that are sold on store shelves for videogame consoles, the Redwood City, Calif.-based company wants to take popular franchises, like Madden or Need for Speed, and digitally distribute them across a number of platforms, such as mobile, social and PC, to create recurring revenue streams.

Riccitiello was unwavering in his commitment:

“The consumer has changed. 200 million console players have become 1.5 billion consumers gaming on multiple devices,” he said. “Today, we are a very different company….From here, it is about building a better, more predictable, and more profitable business, a business that is less dependent on individual hits and more deeply anchored in the ongoing monetization of game franchises.”

But the big question is whether EA can turn the ship when there are 8,000 employees on it who are used to doing business the old way.

Habits are hard to break, especially when it requires replacing a controller with a mouse or a touchscreen. In the meantime, some of its more nimble competitors are getting most of the credit as the industry shifts to digital.

For example, earlier this year, we watched as the private market valuation of Zynga–EA’s much smaller and younger competitor–exceeded EA’s public market valuation. Zynga was reportedly worth between $7 and $9 billion, while EA was valued at roughly $6 billion.

Today, EA’s market cap stands at about $7.25 billion.

Zynga, which makes such Facebook games as FarmVille and CityVille and has dabbled in mobile games, reportedly had revenues of $850 million in 2010. In comparison, EA’s digital revenues totaled $833 million for its fiscal year 2011. (Meanwhile, its overall revenues totaled much more, or $3.6 billion.)

Still, smaller competitors, such as Zynga, which strictly make money from digital revenues, are viewed as not having a lot of baggage and can go hard after something new without sacrificing the old.

Just last week, there was a sign that EA wasn’t winning that battle–even internally.

Electronic Arts disclosed that its COO John Schappert resigned. Rumors indicated that he was joining Zynga, although Zynga has not confirmed the appointment.

Despite that potential set-back, and EA’s public perception, it has been trying.

It has been on an acquisition spree for the past couple of years, picking up everything from Playfish, a social-games developer, to Chillingo, a mobile-games publisher. Earlier this week, it bought a small mobile-games studio called Firemint. (Of course, those investments also become a curse because they have to start paying off.)

Beyond acquisitions, it has also re-prioritized the work it was doing.

On the call, Riccitiello said that involved paring back the number of titles it was making from roughly 70 to around 20. While that was something of a defensive move, he said they are now shifting to offense, by picking the game franchises they do decide to build and porting them across several platforms to increase their profitability. “Over the coming years, we will transform EA from a packaged goods company to a fully integrated digital entertainment company.”

He calls it the “games-as-a-service” model, which is comparable to the software industry switching from a licensed packaged goods model to SAAS, or software as a service, several years ago.

Under this philosophy, he said, they will rely on intellectual property and strong brands, such as EA sports and Hasbro, and build out a platform of registered users that can be marketed to (in Q4, it had 112 million users, roughly twice as many from a year ago). It’s also making managers experts across mobile, social and console, rather than making silos for each category.

“It’s a big change,” Riccitiello said. “As an investor, you can see this as a way to better manage our IP, and drive up the ARPU for our core properties.”

At least one analyst was reluctant to believe the transformation could take place. How does Riccitiello plan to get everyone on board?

“If only you could spend a couple of weeks with us,” Riccitiello joked.

His more serious answer was that they’ve spent the past three years conducting a managerial change: “We’ve identified intellectual property owners inside of our company, and we’re sort of organizing around that.” Those individuals are charged with plans that involve console, PC, mobile, social and a variety of business models, including microtransactions and subscriptions.

The change will be relatively slow. This year the company is projecting digital revenues to total $1 billion, increasing roughly 20 percent over 2011.

And despite all of its efforts, the company will face other challenges, including some that are out of its control. For instance, the company’s EA Sports business is facing two potential league lockouts and this year there won’t be a FIFA World Cup title. Those three things represent roughly a $250 million revenue gap.

It’s also launching its biggest launch campaign for a game in EA’s history for Battlefield 3, and it’s unclear when the highly anticipated launch of Star Wars, an online multi-player game, will occur. Depending on when it is ready, EA’s earnings per share could fluctuate by 15 cents.

Overall, at least some people were sold on the picture Riccitiello painted.

The company’s stock increased a modest $1.76 a share yesterday, or roughly 8.8 percent, to close at $21.68. And Piper Jaffray analysts raised their price target on EA’s shares from $19.50 to $25.00.

]]> http://allthingsd.com/20110506/can-electronic-arts-really-become-a-digital-gaming-powerhouse/feed/ 2 http://allthingsd.com/20110502/on-the-web-bin-laden-news-is-big-but-not-as-big-as-soccer/ http://allthingsd.com/20110502/on-the-web-bin-laden-news-is-big-but-not-as-big-as-soccer/#comments Mon, 02 May 2011 18:49:03 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=32375 No debate that Osama bin Laden’s death is one of the biggest news stories in years.

Except on the Web, where all of our tweeting and reading and live-streaming about it isn’t generating nearly as much traffic as other big events of the last decade.

Here’s a look at the last day of Akamai’s “Net Usage Index For News,” which is pretty much what it sounds like: It tracks interest via page views. Note the spike last night:

Akamai says traffic peaked around midnight, at 4.1 million page views per minute, which sounds like a lot. But it’s not that much–it’s not enough to crack Akamai’s top 10 list, or even its top 14 (the Internet infrastructure company has been tracking this stuff since 2005).

If you want to really make waves on the Internet, it turns out, your best bet is to involve soccer, as four of the top five biggest Web news events did. Sports in general is a good bet–it accounts for seven of the top 14:

The obvious asterisk here is that the bin Laden news broke late on a Sunday night, when a good chunk of the U.S. was headed to bed and most Europeans were presumably fast asleep.

Had this popped on a weekeday, during daylight hours, it’s reasonable to think this would have been much, much bigger. Maybe not soccer big, though.

]]> http://allthingsd.com/20110502/on-the-web-bin-laden-news-is-big-but-not-as-big-as-soccer/feed/ 4 http://allthingsd.com/20110428/liveblogging-microsoft-3q-earnings-office-tastic-and-kinect-able/ http://allthingsd.com/20110428/liveblogging-microsoft-3q-earnings-office-tastic-and-kinect-able/#comments Thu, 28 Apr 2011 21:48:13 +0000 Kara Swisher http://kara.allthingsd.com/?p=43296

You’d think there would be a party in Redmond, Wash., today, as software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released earlier today.

Microsoft said it had revenue of $16.43 billion for the quarter ended March 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

The surge was led by sales of Office, Kinect and Xbox and a stronger economy.

But there are shadows, too, as results were dragged down by weaker revenues for its flagship Windows unit.

The report comes as Microsoft’s stock continues to lag, declining 14 percent for the year.

Buzz kill!

BoomTown livedblogged the call for Wall Street analysts:

2:30 pm PT: Peter Klein, Microsoft’s CFO, who sounds super peppy, outlined the strong quarter, especially for its Office products.

He also mentioned some glitches, such as Microsoft’s still-struggling efforts to increase revenue per search (RPS) in its longtime search and online advertising partnership with Yahoo and the slower growth of the PC sector upon which the software giant’s Windows relies.

PC should stand for “possibly crappy,” but good-boy Klein did not say so.

Investor relations dude Bill Koefoed also read through the news, sounding at times like a sports announcer on a cable television network.

“Quuuuaaadrupled…,” he intoned about one part of Microsoft’s business.

This all went on for a while, since Microsoft has a lot of divisions. Servers & Tools. Online Services. Entertainment and Devices. Fashion & Cute Tops.

Okay, not that one, but a girl can dream.

It was all fun and games until Koefoed got to the Yahoo problem, which Yahoo CEO Carol Bartz had used as a cudgel in her earnings report recently.

Yes, it is a bummer. But soon it was back to the happy land of Xbox!

Klein said he was pleased with the results in a jaunty manner, which made me desperately wish Microsoft CEO Steve Ballmer led the call.

Because he’s always one obnoxious query away from a volcanic popping off.

Which is why I love those Yahoo calls and Bartz.

Buzz kill!

2:54 pm PT: That was fast–the call was quickly into questions.

The first is about COGS–cost of goods sold–and how it impacts gross margins.

Klein said the expenses were volume driven. I’d explain, but then I would fall asleep.

The next question was about stock buybacks.

That might get the stock up. Yeah, said Klein, they’ll keep doing that–not that it has helped much on the share price front.

More and more questions, about the PC market, the issues at Yahoo (let’s get that RPS up!), the Windows Phone 7 business.

I’ll be honest, I was a bit bored and started reading a riveting Business Insider interview with TechCrunch’s Michael Arrington on his myriad conflicts of interest related to his tech investing while also blogging as a news guy.

Whatever you think about him, that dude is good copy.

Wait, back to growth rates for Office!

It’s going great, said Klein (hey, maybe Arrington will invest!).

The call wraps up on news of an upcoming investor conference, being held near Disney World.

Oooh, party time!

]]> http://allthingsd.com/20110428/liveblogging-microsoft-3q-earnings-office-tastic-and-kinect-able/feed/ 0 http://allthingsd.com/20110420/yahoos-focuses-on-tentpole-events-with-new-head/ http://allthingsd.com/20110420/yahoos-focuses-on-tentpole-events-with-new-head/#comments Wed, 20 Apr 2011 14:11:25 +0000 Kara Swisher http://kara.allthingsd.com/?p=42909 At least one thing in yesterday’s lackluster first-quarter earnings report for Yahoo that got its Microsoft-search-bashing CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars.

In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.

There will be more of that, it seems, with the elevation of Yahoo exec Sam Silverstein (pictured here) as head of its special events coverage. Sources said it will be a major area of emphasis, given obvious advertiser interest.

It’s all part of a lot of dramatic changes being made in the media unit at Yahoo, which is run by its newish Audience head Mickie Rosen.

Previous to his new duties, Silverstein has been mostly focused on major sports events for Yahoo, but has also been managing content on its front page and in tech and green arenas.

The move to taking over more comes after Lawrence Yee–who led Yahoo entertainment efforts and was once the managing editor of its omg! celebrity site–headed to TMZ.com, the competing and much sassier celebrity site, owned by AOL. His new job is as managing editor of its TooFab site, TMZ overlord Harvey Levin confirmed to me.

Also gone recently is Annette Cardwell, who was managing editor of Yahoo’s Shine women’s site, who is now working as director of digital content and games at Future US, according to her LinkedIn profile.

Now it will be up to Silverstein, who is well-regarded at Yahoo, to run the upcoming Royal Wedding coverage by himself.

William and Kate, as well as Bartz, will be watching.

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