AllThingsD » trends

Out-Trending the Trendmakers: NewsWhip Says It Defeats Twitter and Facebook's Filter Bubbles

Eric Johnson — Fri, 25 Jan 2013 15:00:25 +0000

Yes, it’s possible to stay on top of the news entirely from within Twitter and Facebook … but it takes work.

Following the right number of people (so as not to get overwhelmed) posting about a broad variety of topics (so as not to leave oneself ignorant) is an inexact and tedious science.

And call me cynical if you must, but I don’t trust my real-life friends to keep me informed, either: Absent the professional news organizations I follow there, my Facebook news feed would be largely pets, music videos and distressed chatter about how winter is, evidently, cold in some places.

All of this is a roundabout way of making the case for NewsWhip, a Dublin-based startup trying to beat Twitter and Facebook at their own social-news capabilities.

NewsWhip claims its site automatically pulls in and ranks the best trending stories of the moment from Twitter and Facebook, based on aggregated and weighted data of what the world is tweeting, sharing, liking and commenting on. The faster a recent story is spreading online, the higher it moves in the rankings.

CEO Paul Quigley said that speed is his “fundamental metric.”

“If a story has 10,000 shares and is 12 hours old, it won’t necessarily be a big deal,” he said. “We only care about how many shares it got in the last one to two hours, or even 30 minutes.”

Users of the free site or mobile app are greeted with a single column of stories from around the Web, which can be filtered by topic or location. A sister site for news professionals, Spike, lets paying subscribers filter even further by time intervals (“published in the last hour,” “published in the last three hours,” and so on).

Quigley’s pitch is that NewsWhip and Spike are better at surfacing trending news topics than Twitter and Facebook because the filter bubbles created by whom we follow “can cause us to become isolated from alternative ideologies to our own.”

But does it work? This isn’t a review, but I will say the algorithm would need some work before I could make NewsWhip my first stop for news. Unsurprisingly, the stories that gain the most speed and, consequently, the most prominent placement on NewsWhip are very “social-friendly.”

So you’ll see a mix of stories that provoke outrage sharing top billing with pop-culture watercooler fodder in the default “Worldwide” section, and not so much “real” worldwide news of the same moment, which usually makes it to the top of that other little aggregator, Google News.

And within certain topics, the absence of human editors is sorely noticed: I came to the technology section yesterday afternoon expecting something similar to the homepage of (human-edited) Techmeme, with stories about Microsoft’s Q2 or the rocky launch of Twitter’s video app, Vine.

No such luck. Instead, one of the top articles in tech was “GRAPHIC: Girl Puts Apparently Bloody Tampon Where It Should Never Go.” Thanks, but no thanks, Huffington Post.

(I’ll leave the inevitable hand-wringing about what the popularity of these articles says about society, or whatever, to the commenters.)

Still, NewsWhip has potential amid a crowded field of curators and aggregators, and even in the short term it could be a decent alternative news source for, as one example, the majority of American adults who have never seen news on Twitter or Facebook. It’s a good surface glance at the zeitgeist, and for some casual newsreaders, that’s enough.

Twitter CEO Dick Costolo Says Company Needs to Unify Its Experience Across Devices

Ina Fried — Mon, 14 Feb 2011 16:28:40 +0000

Twitter CEO Dick Costolo said on Monday that although the service is available on nearly every phone, the company has a long way to go to make the product consistent across devices.

“The experience has to be the same,” Costolo said during an afternoon keynote speech at Mobile World Congress in Barcelona. “I shouldn’t have to think how to use Twitter.”

About 40 percent of tweets come from a mobile device, while half of all active users are active on more than one device, he said.

Until not that long ago, Twitter built only the product for the Web and let third parties handle phones and other devices. In recent months, though, it has scooped up various app makers and now offers official apps for the major smartphones. However, given that those official apps stem from different acquisitions, they often work in different ways.

Costolo said the company also wants to make sure that one doesn’t have to sign up and follow lots of people to get something out of the service.

“We want Twitter to be instantly useful,” he said.

With Twitter for Windows Phone 7, the company introduced the notion, already present on the Web, that one shouldn’t have to be an active user to have Twitter on their phone.

His talk is still ongoing and I’ll update things as it continues.

5:32 pm: Costolo said the company will begin offering crowdsourced translations of the service into Russian, Turkish and Indonesian and, later this year, will have its own translation to Portuguese.

5:33 pm: Some stats from Super Bowl, this year.

4,000 tweets per second at the end of the game and 3,000 tweets per second during the game. That was 27 tweets per second in 2008.

The overall record is New Year’s Eve in Japan (the country has a single time zone) and the prior sporting event record was from last year’s World Cup.

5:34 pm: Twitter is actually bringing things back to live TV and away from the DVR.

“That’s not just happening with live sporting events,” Costolo said. He cites game shows in the U.K.

5:36 pm: “Glee,” for example, has 30 times the number of tweets about it when the show is on.

Takeaway: the long-talked about second screen of interactive TV is here and it is Twitter.

5:38 pm: About Twitter as a business: The short answer is we are already making money, Costolo said. The really good thing, he said, is that businesses can use the service in the same way as others–building community around shared interest.

5:41 pm: A viral campaign of note. Al-Jazeera highlighting its coverage of the events in the Middle East and North Africa with the hashtag #demandaljazeera to get its programming on U.S. cable systems.

5:44 pm: Costolo, on the role of Twitter and Facebook in recent events there:

“I think that takes away from what these people have accomplished,” he said. “We are probably a very small piece of the puzzle.”

5:47 pm: On to Q&A. Battery is running low, but hoping to make it through the question period.

First question came in over Twitter and asks what is the company’s biggest fear.

“Twitter’s biggest fear is lack of execution,” Costolo said, saying he tries to convince workers not to focus on competitors. “If we execute on what we are trying to do we will be successful.”

5:48 pm: A couple of questions on local trends and translations. Costolo said that crowdsourcing offers a way to do more translations quickly, while the trends piece requires more work on Twitter’s part, some of which should be done this year.

5:53 pm: What is the biggest mistake Twitter has made?

Costolo said company’s founders would say they shot themselves in the foot, head and everywhere else not hiring or scaling fast enough.

“I think we are out of the woods on that one,” Costolo said.

Next question is on what Twitter is doing in response to its pivotal role in Arabic-speaking countries right now. Costolo noted that Twitter doesn’t yet support right-to-left languages.

On being blocked, Costolo said Twitter is only a 350-person company and doesn’t have the resources of some larger companies. “We try to just leverage our own platform to plead for help,” he said.

5:58 pm: Costolo is asked if there is a need for Twitter-branded smartphones.

“No,” Costolo said. “I believe there is a need for Twitter in the existing platforms.”

Earlier in his keynote, Costolo said he wants deep integration so that when a user takes a picture they don’t have to open a separate app to tweet out that picture.

6:03 pm: As for rumors that Google might be willing to pay $10 billion for the company.

“I don’t know where these things come from,” Costolo said. “It’s just a rumor.”

6:03 pm: End of keynote. (just as my battery was on its last sliver of red, too!

Tablet Cannibalization on the Rise in 2011

John Paczkowski — Tue, 08 Feb 2011 15:15:48 +0000

Nearly 56 million tablets will be shipped in 2011–200 percent more than were shipped in 2010. That’s the latest forecast from NPD’s DisplaySearch, which expects that number to hit 172.4 million by 2014. That’s 35 percent of the overall mobile PC market, which also includes the notebooks and mini-notes whose sales NPD says the tablet is cannibalizing, particularly in mature markets where the percentage of households that already own PCs are highest.

Hardly a surprise given recent trends. Recall that retail notebooks in the United States have been charting decelerating growth for months now, driven largely by the iPad. Now with RIM’s PlayBook, Hewlett-Packard’s “PalmPad” and dozens of other tablets headed to market it’s only going to slow further.

PREVIOUSLY:

Forecast: 19 Million Notebooks Lost to Tablet Cannibalization (Meaning iPad) in 2011

IPad: Tonight We Feast on Laptop Flesh!

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

IPad No Cannibal, Says Analyst

Apple’s iPad: Angel or Cannibal?

A First Guess at Twitter Ad Results: How About $150 Million for 2011?

Peter Kafka — Mon, 24 Jan 2011 12:20:06 +0000

Twitter’s ad business is still in the just-getting-started phase, but eMarketer thinks that will still be a nine-figure business: It predicts Adam Bain and crew will sell $150 million worth of promoted tweets, promoted trends, etc., this year. Next year, spurred in part by a Google/Facebook-like self-serve ad system: $250 million. “But the company must show it can live up to its hype.” Noted!

Cisco Security Survey Finds Windows Vulnerabilities And Spam Decreasing

Arik Hesseldahl — Thu, 20 Jan 2011 14:40:09 +0000

Cyber criminals have fewer ways to attack Microsoft Windows, and sent less spam in 2010 than in 2009–a first-ever decline of spam from year to year. Those are among the findings in an annual report on the state of Internet security released today by networking giant Cisco Systems.

All the security attention paid in recent years to securing the Windows desktop and the applications running on it have paid off a little, Cisco found, making it harder for computer scammers to successfully carry off their intended crimes on that platform. The trouble is they’re now starting to focus more attention on mobile devices, including Apple’s iPhone and iPad, and devices running Google’s Android operating system, Cisco said.

Meanwhile, the overall global volume of spam, which often contains troublemaking links that are used to deliver attacks, decreased for the first time ever in 2010. Even so, spam still increased in some developed countries where broadband connections are multiplying. In the United Kingdom, spam volume nearly doubled, while the volume in France went up 115 percent. The U.S. saw a slight decline–11.1 trillion messages down from 11.3 trillion in 2009. Spam in Brazil, China and Turkey also declined. Some of the decline can be attributed to last year’s arrest by FBI agents in Milwaukee of a Russian accused of being the “king of spam,” and to the shutdown of a few botnets used by scammers to send spam.

One thing about Cisco’s report that’s likely to draw some attention is its finding that the raw number of vulnerabilities on Apple products appear to be growing. Apple users are usually pretty sensitive about this topic, and any comparison of the Mac to Windows on the security front tends to make them grind their teeth and pound out annoyed comments on tech blogs. I know because I’ve done the same teeth-grinding and have in the past criticized other reports for similar findings.

Here Cisco is addressing vulnerabilities that Apple has itself documented and patched in software updates. One thing that’s not clear to me–though it sure looks like it–is whether Cisco is combining vulnerabilities found on both iOS (iPhone and iPad) and OS X (the Mac). The data it’s using is from its IntelliShield service, which tracks vulnerabilities and security incidents, and shows that over five years Apple’s vulnerabilities rose, from less than 200 in 2006 to more than 350 in 2010. That rate was higher than Microsoft and Hewlett-Packard and Cisco itself, the report found, though it goes on to say that Apple has worked harder than most other vendors to protect its users. Security is one of the reasons Apple imposes such strict rules on what’s available in the App store, though people still jailbreak their phones.

Another trend Cisco found is something called “money muling.” Tom Gillis, VP and general manager of Cisco’s Security business unit, describes money muling as using unsuspecting people who are attracted by “work at home” spam messages and Web ads to participate in money laundering by moving small amounts of money into bank accounts, just a few thousand dollars at a time. He says the operations around this are becoming increasingly elaborate, and criminals will devote a lot of effort to developing it this year.

I talked with Gillis about the report and other security trends that Cisco found. Here are a few highlights from our conversation:

NewEnterprise: So you’re seeing fewer attacks on Windows and more on mobile devices. Is that simply because there are more of them?

Tom Gillis: It’s the simple fact that there’s this new class of mobile device coming into the enterprise that used to be a phone and now it’s a computer, and it can access enterprise information. So what we’re seeing is that the raw number, but not the severity, is down on Windows. Part of this is that Windows 7 was a very good release on Microsoft’s part from a security standpoint. And we’ve got these new devices coming into the enterprise, and so we’re seeing a shift in focus of attacks on these mobile devices. They’re vulnerable to attack and they’re relevant in the enterprise. Two years ago this would have been too small a population to be meaningful.

What kind of attacks are you seeing?

It varies. In some cases there’s a little “phone home” code in a free gaming app. Pretty gentle stuff so far. But as people start using smartphones to access sensitive information we need to start thinking about security considerations on these devices. There’s a larger theme here that the whole nature of attacks is changing dramatically. The fact that spam volumes dropped at all is a big tell. For 10 years this has only gone up. We’re not forecasting a steady decline in spam, but the fact that it slowed down at all is an indicator of the shift in the way that attackers are using email. The attacks are more targeted and personal, for one thing.

Can’t some of this decrease be attributed to some of the arrests that happened last year?

It can. There’s been a handful of arrests. And they went after not only the botnet operators but other parts of the spam value chain. There are firms and entities that build botnets of compromised machines that relay the spam, and then there are other firms and entities that rent time on those botnets that do the merchandising. The biggest category is selling fake pharmaceuticals. Some of these fake pharma operations were shut down and the people associated with them arrested. It’s not an easy thing to do, because they’re global, they move around, and so to make an arrest in this space is a huge accomplishment.

So what is the thinking now about securing the mobile device?

We think there are two ways to make mobile devices work in the enterprise. The flood of devices into the enterprise is huge, and everyone wants to use them to check their email and access corporate directories and other fundamental things. There needs to be some kind of software on the end point–the phone or device. It will have to be light. You can’t have some kind of antivirus suite running on the phone. It would be a little piece of software that’s on all the time that knows when you’re behind the corporate firewall and when you’re not, and manages your connection accordingly. We bought a company called ScanSafe that has 40 data centers around the world. When you’re outside the firewall it connects to you the nearest data center and enforces your corporate policies, but all you as the user know is that it just works. This notion of being on or off the corporate network goes away. And we can do all kinds of scanning for security, independent of the device that’s being used.

This year we also saw the Stuxnet attacks, which we now know for certain were carried out against the Iranian nuclear program. Clearly this is a new kind of attack that can be mounted against industrial control systems via computer networks. Is Cisco researching this?

Massively. Often these types of attacks are targeted against Cisco’s biggest enterprise customers. Who buys Cisco’s infrastructure? The biggest banks in the world, the defense contractors. If the goal of an attacker is to disrupt an economy, their targets will be our customers, and they’re demanding a response from us. I like to call it global threat correlation, but it comes down to taking huge samples of network traffic and picking out good traffic from the bad. Cisco has a good advantage here because our equipment is so widely deployed around the world. As we start measuring traffic we can develop reputation data on every publicly routable IP address on the Internet. As we start putting telemetry info into that equipment–and the customer can choose to enable it or not, and it’s turned off by default. But people turn it on because it helps them against the unknown kind of attacks that are popping up. If a Web server says its a Web server, but you just saw it sending spam three minutes ago, there’s a pretty good chance it’s part of a botnet. Once you know that you know that, you can start to mount a pretty good defense. We’re putting a lot of energy into developing that, and it’s proven to be pretty robust.

You've Heard About Windows for ARM Chips; Now Meet ARM

Arik Hesseldahl — Fri, 07 Jan 2011 16:00:11 +0000

For all the attention being paid to the fact that Windows now runs on ARM chips from the likes of Texas Instruments, Qualcomm and Nvidia, few people know much about ARM, the British company whose technology is central to so many of the devices seen at the Consumer Electronics Show in Las Vegas this week.

Shares in ARM have nearly tripled in value from this time a year ago, and the most recent surge occurred in December, when the first reports emerged that Microsoft would do something that previously seemed almost unthinkable: Create a version of Windows designed to run on chips other than the x86 chips from Intel and Advanced Micro Devices. Microsoft confirmed the news two days ago. If 2011 is going to be the year of the tablet, then chances are it’s going to be the year of ARM chips.

The funny thing is, practically every year has been a good year for ARM chips. They’re so widely used already that there’s a good chance you use them, probably several of them, every day. During its most recent quarter, more than 900 million ARM-based chips were sold in mobile devices like smartphones and tablets, while another 600 million were used in devices as varied as TV, toys, cars, alarm clocks and remote controls.

ARM doesn’t build the chips itself; it designs the cores–or central brains–used on those chips. I like to compare it to selling a basic cake recipe. If you’re a baker whose expertise is making really great frosting, why bother dreaming up a brand-new cake recipe when you can use an existing one, and instead use your time and effort to make great frosting? A lot of semiconductor and electronics companies have reached the same conclusion, and paid to license ARM’s recipes for chips, and then built their own custom enhancements around the ARM core.

It’s a pretty popular recipe. The company issued more than 700 licenses as of last year to some 250 chip companies, which then turned around and sold the chips to more than 1,000 manufacturers. ARM estimates that in 2009 four billion chips based on its designs were sold, and that more than 20 billion have been sold in the two decades since the company launched.

Aside from the three ARM-based chips from Texas Instruments, Nvidia and Qualcomm that Microsoft demonstrated running Windows as part of CEO Steve Ballmer’s Jan. 5 keynote presentation at CES, the list of companies using ARM includes Samsung, Broadcom, Toshiba and scores of smaller chip companies.

ARM also has an interesting history. It was founded as a joint venture between Apple and a British outfit called Acorn Computers in 1990. Apple’s interest was to create and develop a chip that would run the Newton, and spur the development of a new-age handheld computer that the Newton was supposed to bring about. (As a few commenters note below, the first ARM chips were used in desktop computers sold primarily in the U.K.) The Newton went nowhere, but the vision for ARM as the chip of choice for mobile computing was right on the money. ARM chips from Motorola (now Freescale) landed in devices from Palm and early handhelds running Windows Mobile. ARM flourished and went public on the London Stock Exchange in 1998. Between 1998 and 2004, Apple sold off its ARM shares for combined proceeds of almost $800 million.

Now having built a considerable lead in the wireless world, ARM-based chips look awfully strong as the battle over tablets shapes up. And beyond that lies higher-end computing opportunities like servers. Some think Intel should be worried. Despite this week’s launch of its Sandy Bridge generation of PC processors, Intel’s shares are trading lower today than they did at the start of the week.

I caught up briefly with ARM Executive Vice President Antonio Viana by phone from CES to talk about the year ahead for ARM.

There’s been a lot of attention around ARM coming into the Windows fold, and everyone knows it from its strength in the wireless devices. How is 2011 shaping up for ARM?

We got our start more than 20 years introducing a chip architecture aimed primarily at the mobile industry. We offered a chip design that’s efficient in the way it consumes power. What happened was the technology moved beyond the cellphone: Into the home, cars, printers. And that trend is continuing. Consumers want features that require a lot more computing power. Some of these devices are handhelds, some aren’t. What makes the ARM architecture central to all that is that industry brings their own secret sauce, their own pieces to the table. The development with Microsoft is just a small microcosm of that.

Are there new licensees coming on?

Our roadmap is constantly evolving, and we’ve developed the architecture for a pretty broad set of use cases. We license to companies like NXP that are relatively simple 8- and 16-bit microcontroller chips that go into industrial equipment, or meters or toys. But because of the network connectivity requirements that are starting to come to those devices, you’re starting to see some of these move to more versatile 32-bit chips and the costs are manageable because developers are so used to working with ARM. Then if you swing way out to the other extreme we just launched our A15 architecture. That’s a multicore design, and it’s finding its way into next-generation servers.

Who’s using that?

Unfortunately, we can’t say yet. A15 was announced last year. We think we’ll start seeing production silicon in the latter half of next year, and there will be samples before that. When you start seeing samples then the partners working with it will start announcing products.

Obviously Intel has its Atom processor, which it has aimed at tablets and handhelds and many other market segments you’re involved in. What kind of competitive threat do you see from Intel?

The competitive threat is certainly there–x86 is incredibly robust and it has the incredible capital resources of Intel behind it. ‘Nuff said. Intel will be successful in various markets they go after. We’d be fools not to acknowledge that. But the question is who’s going to grow more? Who is going to leverage off the market trends right now? Tablets are a wonderful example of that. Right now about 90 percent of all tablets in the marketplace are ARM-powered. At a show like CES you see a lot of things that indicate the market trends. You always have to take a step back and wonder which of the things you see may never happen. But the trends are usually accurate. One of those trends is for always-on, always-connected power-efficient devices. When you look at it that way I’m pretty comfortable with ARM’s position.

In 4G Race, Verizon Pulls Ahead With Pricey Speed

Walter S. Mossberg — Thu, 06 Jan 2011 02:03:48 +0000

One of the biggest technology trends in 2011 will be the expansion of new, faster cellular networks called 4G, or fourth generation. These networks promise a big increase in speed and capacity to handle the surge in streaming video, audio and Web surfing from hot-selling devices like super-smart phones and tablets, as well as from laptops. But you’ll have to buy new phones, modems and other connected consumer devices to get the higher speed they offer.

[ See post to watch video ]

Wireless carriers and handset makers will be touting their 4G plans and compatible devices at this week’s Consumer Electronics Show in Las Vegas, but it will be a couple of years before 4G networks in the U.S. achieve the same coverage as the current standard, called 3G.

The move to 4G from 3G began last year, with Sprint leading the way and Verizon Wireless joining in the last few weeks of 2010 with a limited deployment. But 2011 will see the service spreading to more and more cities, and is also expected to see the entry of AT&T. T-Mobile hasn’t announced an actual 4G network rollout, but is instead relying on a souped-up version of 3G that it is marketing as 4G because it claims it can deliver similar data speeds with its approach.

I’ve been testing the 4G network of the latest entrant, Verizon, in the suburbs of Washington, D.C., which is one of 38 metro areas (plus 60 airports) where the company turned on its 4G network in December. My verdict is that it’s wicked fast—the fastest 4G network I’ve tried—but also potentially costly. In my tests, with a laptop modem, it proved dramatically faster than Verizon’s 3G network, and recorded speeds on a par with some land-line Internet connections.

But 4G from Verizon won’t be cheap. For laptop modem users, at least, Verizon is charging $50 a month for up to 5 gigabytes of data use and $80 monthly for 10 gigabytes. If you run over, the company will bill you $10 for every extra gigabyte. Such data limits aren’t new, but, with 4G’s much higher speeds, users may find themselves sending and receiving more data more often, and thus breaching the limits more regularly. For instance, in my tests, I was easily able to download a nearly 600 megabyte TV show, something I wouldn’t even try with a 3G modem. That one download would have eaten up more than 10% of my monthly cap under the $50 plan.

Verizon’s first LTE laptop modem, the LG VL600, has a flip top that reveals the USB connector.

Verizon’s variant of 4G uses a different underlying technology than Sprint’s. It’s called LTE, for Long Term Evolution, and is also the 4G system being adopted by many other cellular operators around the world, including AT&T. (Technically, this first version of LTE isn’t considered true 4G by the engineering standards body that rules on such matters, but that makes little difference to consumers looking for faster connections.)

The company says it chose LTE because it is not only fast, but is less prone to interference, can provide better battery life, has less latency, or lag, and can better handle multiple users simultaneously. The LTE system doesn’t affect voice calls on Verizon’s network—it’s only for data, and operates in tandem with the current voice network.

Verizon claims its new network is up to 10 times faster than its 3G network and says consumers will see speeds of between 5 and 12 megabits per second for downloads and between 2 and 5 mbps for uploads, in “real-world, loaded network environments.”

As of this writing, Verizon doesn’t offer an actual LTE-capable smart phone, only LTE USB modems that plug into laptops. But the company is expected to offer a sneak peek at CES this week of several LTE phones that will roll out in the coming months, as well other planned LTE devices, from a variety of manufacturers. Again, I want to stress that your current Verizon phone or laptop modem can’t be upgraded to work with LTE. You’ll need a new one.

For my tests, I used Verizon’s first LTE laptop modem, the VL600 made by LG of Korea. It sells for $100 after a $50 mail-in rebate with a two-year service contract. This modem can handle data over slower 3G networks, if you happen to stray out of one of Verizon’s 4G service areas. For now, it works only on computers running Windows XP, Vista, and Windows 7. But the company says it should have Mac-compatible LTE modems in a month or so.

To use it, you have to first install, from an included CD, a new version of Verizon’s cellular modem software, VZAccess Manager. Older versions won’t work. My test machine was a Lenovo ThinkPad X301, which worked fine with a Verizon 3G modem. Installation was relatively quick and smooth, though I was immediately instructed to download an updated version of the software, so I had to go through it twice.

I disabled Wi-Fi on the ThinkPad, plugged in the LTE modem and ran 10 tests using the popular Speedtest.net website. The results were impressive. Verizon’s 4G network averaged just a shade under 16 megabits per second for downloads and 6.6 mbps for uploads. That was 15 times the download speed, and 13 times the upload speed, of a Verizon 3G modem I tested immediately afterward using the same method in the same location.

To relate these speeds to real-world scenarios, I downloaded from iTunes a standard-definition episode of the TV show “The Good Wife”—a 588 megabyte file—in just seven minutes, instead of the two hours or so iTunes predicted it would take when I was using the 3G modem. I streamed several long videos, including two in HD, from the Web, and they played smooth as silk.

But there are caveats. For one thing, hardly anyone is using this new Verizon network yet, and it’s likely to slow down as it gets crowded, especially with smart-phone users. Secondly, laptop cellular modems typically deliver faster speeds than phones, so my results don’t necessarily predict phone or tablet performance.

Also, speeds can vary by city and distance. My tests were mainly conducted against a server in my local D.C. area. But I also tried a few tests against a server in San Francisco and only got about 6 mbps download—within Verizon’s claims, but much slower.

Still, if you can afford it, and if it works well in phones and tablets, Verizon’s new LTE network could be a great boon to your digital lifestyle.

Find all Walt Mossberg’s columns and videos at the All Things Digital website, allthingsd.com.

#lessambitiousmovies Shows Twitter Can Still Be Community, Not Just a Tool

Liz Gannes — Wed, 05 Jan 2011 08:31:41 +0000

Just when you thought Twitter had become a basic broadcast tool that serves many purposes, we’re reminded that the service has fostered an actual community.

Twitter tonight overflowed with a meme that just about everyone can participate in and appreciate: #lessambitiousmovies. There have been more than 26,000 tweets using the hashtag in the last day, according to tweet indexer Topsy, and tonight the fad made the Twitter top trends list in the U.S.

This latest craze involves punning on an existing movie title to make it a little more ordinary, and appending the hashtag #lessambitiousmovies.

Some of my favorites: “The Devil Wears Zara,” “The Sound of Muzak” and “Saving Private Ryan 15% on his Auto Insurance by Switching him to GEICO.”

The most popular submission, at least according to Topsy, is “Being John Stamos” from Twitter user @jennyjohnsonHi5, with 225 retweets.

It doesn’t seem to be just the techies I follow that are playing along. Here’s celeb host Ryan Seacrest’s timely contribution: “Black Duck.”

Unlike the news items and celebrity names that often dominate Twitter trends, #lessambitiousmovies is actually sort of creative. But it’s far from the first hashtag game; another recent example was #fatindiebands, which also played off an easily replicable formula.

According to Twitter engineer Dana Contreras, the first #lessambitiousmovies tweet appears to have been “Scott Pilgrim vs The Room #lessambitiousfilms” on Jan. 3 from Toronto artist Rob McCallum, who has just 488 followers.

McCallum tweeted Wednesday evening, “I started it last night when I couldn’t sleep and it’s gotten right out of hand!…I don’t know how to feel! Cheers! I’m away to hide under some coats and plan my next move.”

Making the Case for E-Commerce (i.e., Amazon) in 2011

Tricia Duryee — Wed, 05 Jan 2011 01:22:14 +0000

Amazon has one really big thing going for it that others don’t: Its size.

Being the largest e-commerce company is an obvious barrier to entry, but there are at least two opportunities in 2011 that will drive even more traffic to its site and others: Social and mobile.

A 78-page presentation by J.P. Morgan on the Internet Sector Outlook of 2011, which focuses a lot on the e-commerce market, predicts that the big losers will be physical retailers as more spending shifts online.

If you’ve been reading eMoney, you already knew this. Last month, we referred to these trends as the so-lo-mo trifecta, referencing the impact of social, local and mobile on e-commerce.

In 2010, J.P. Morgan found that nearly 8 percent of Amazon’s traffic was coming from Facebook, compared to 20 percent coming from Google, and that e-commerce revenues are expected to grow by 13.2 percent in 2011.

But as more consumers discover products and services through social networks, like Facebook, and compare prices on their smartphones in stores, traditional brick-and-mortars will lose market share and face bankruptcy, J.P. Morgan concludes. (It’s a small coincidence that Macy’s said it expects to add about 725 new positions over the next two years to beef up its Macy’s and Bloomingdale’s Web sites).

Here’s how J.P. Morgan makes the case for the future of e-commerce:

–U.S. e-commerce revenues totaled $28 billion in 2000, soaring to $166 billion in 2010. Revenues are expected to grow by 13.2 percent in the U.S. this year alone.

–In 2010, 36 percent of people said they bought something online at least once a month. Slightly less, or 32 percent of people, said they purchased one to two items online a month. However, less than 2 percent of folks bought more than 10 items a month.

–Traffic to Amazon’s sites is increasingly coming from Facebook, jumping 328 percent over the past year to almost 8 percent. That compares to almost 20 percent of referrals coming from Google.

–Facebook is driving less traffic to eBay than to Amazon, or roughly 4.7 percent, compared to 11.4 percent from Google.

–E-Commerce 2011 Top Picks: Amazon, Priceline and Latin American e-commerce provider MercadoLibre.

Nintendo Gives Itself High Fives for Wii and DS Franchises

Tricia Duryee — Tue, 04 Jan 2011 16:13:31 +0000

Now that the year has wrapped up, Nintendo is claiming to have broken two industry-wide records in 2010 to make its portable DS franchise and the Wii two of the best-selling game systems of all time.

The company said the portable DS handheld, which originally came out in November 2004, has sold an accumulated 47 million devices to become the U.S.’s best-selling videogame system of all time.

Additionally, the Wii sold more than seven million game consoles in 2010, marking the third consecutive year of such volumes–a feat Nintendo says has never been accomplished in the history of game systems.

The figures are impressive for the game company, which has always focused on a family-friendly niche, with lovable characters bouncing around in imaginary worlds, rather than on complex multiplayer games focused on violence and intense graphics.

But whether it will be enough to sustain the company against rivals such as the Xbox is unclear.

The Xbox has been the best-selling console for the past few months, a position that was supercharged in November when Microsoft released the Kinect, which allows users to play hands-free, similarly to how the Wii operates but taken to the next level.

Sales of the Kinect accessories have been strong, and have helped expand Microsoft’s audience beyond the hard-core gamer.

Nintendo is not expected to release a new console in the short term, and critics are unclear about the 3DS, which is the new portable handheld coming that boosts 3-D images without the need for glasses.

Nintendo said it’s coming to the U.S. in March, and more details will be available soon. Nintendo is attending the Consumer Electronics Show in Las Vegas this week for the first time in 16 years, but it’s not expected to make big news at the show.

But it’s unclear whether the 3DS can compete as a standalone gaming device as other multipurpose devices–like Apple’s iPhone and iPod Touch, as well as other smartphones–gain market share.

Nintendo of America President Reggie Fils-Aime begs to differ when forecasting the trends of the future: “When we look ahead to 2011, we see new portable technology and more great Wii games that need to be seen to be believed.”

If he does say so himself.

IT Trends in 2011 and Beyond: More Cloud, Flash and Virtualization

Arik Hesseldahl — Fri, 31 Dec 2010 18:38:13 +0000

Gleacher analyst Brian Marshall is out with a short research note this morning summarizing a few trends he thinks will be important in IT in 2011. Companies he covers, which include VMware, NetApp, EMC, IBM, Dell, Hewlett-Packard and Apple collectively saw their shares grow by 40 percent this year, beating the S&P 500, which grew 13 percent. With enterprise IT companies roughly six quarters into a recovery period following the disaster that was 2009, he says 2010 is going to prove to be a difficult year to follow.

For 2011, he expects a continuation of a lot of trends you’ve already been hearing about. You probably already knew about the direction of the general trends, but Marshall has included some interesting figures around the size of various opportunities.

Cloud computing, he says, currently consumes only two percent of the global enterprise storage budget today, and he expects that to grow to between 15 and 20 percent within five years.

He says solid-state storage–which uses flash memory to enhance storage in servers by breaking up the bottlenecks that exist between processors that do the number crunching and hard drives that store the data–is “at a nascent stage,” and that solid-state use in enterprise applications will only get more important in 2011.

Finally, expect more virtualization in the data center. Currently, corporations virtualize about 30 percent of their servers and storage machines. Marshall thinks over five years, that will grow to about 70 percent, and if the conditions are right, 2011 could be a year where the growth rate could accelerate significantly.

Game Off! Viacom Dumps Rock Band on Investment Group

Peter Kafka — Thu, 23 Dec 2010 20:23:04 +0000

Remember when music video games like Guitar Hero and Rock Band were red-hot? That was a couple of years ago. Now Rock Band owner Viacom is getting out of the business.

The cable programming giant has sold its Harmonix unit, which published the game, to investment fund Columbus Nova LLC. It hasn’t disclosed a price, and if it’s not material it won’t have to. And my guess is that it won’t: Viacom bought the games business for $175 million in 2006, when the games were on the upswing, and if I had to bet, I’d say it will end up selling it for less.

Let’s take a minute here to point out something obvious, but which we always seem to forget–media consumption trends move very, very fast. You only have to go back two years to find Warner Music Group’s Edgar Bronfman Jr. demanding that the music labels get their fair share of the “enormous opportunity” the games were creating.

And just a year ago, (some) people were convinced that a special Beatles version of Rock Band was going to be a very, very big deal.

Now gamers are on to something new: Microsoft’s Kinect, for instance, seems to be selling very well this month. But I wouldn’t bet on it staying hot a couple of years from now.

Shocking Bieber Upset: Oil Spill Tops Twitter's 2010 Trends

Liz Gannes — Mon, 13 Dec 2010 08:00:33 +0000

Although World Cup tweeting caused record high volume and infrastructure demands on Twitter, the most-discussed topic on Twitter in 2010 was actually the Gulf oil spill, said the San Francisco-based company tonight. The South Africa-hosted World Cup came in at No. 2.

(Of course, Twitter hasn’t revealed the secret formulas that helped it aggregate, tabulate and rank these topics.)

In the Twitterverse, after the BP oil spill and soccer, the next most popular topic of conversation in 2010 was the movie “Inception,” followed by the Haiti earthquake and the vuvuzela. The iPad, Android, Justin Bieber, Harry Potter and Pulpo Paul round out the top 10. It’s an odd list, indeed.

The person most discussed on Twitter in 2010 was obviously he of the dedicated servers, Mr. Bieber. (It’s somewhat shocking that world events and tech gadgets were able to keep the teen phenom out of the overall top spot.) Beating out her royal highness Lady Gaga, the No. 2 person on Twitter was Brazilian president-elect Dilma Rousseff (pictured).

Here’s the full 2010 list, courtesy of Twitter, followed by 2009′s list for comparison.

2010 Twitter Trends

Overall Top Trends:
1. Gulf Oil Spill
2. FIFA World Cup
3. Inception
4. Haiti Earthquake
5. Vuvuzela
6. Apple iPad
7. Google Android
8. Justin Bieber
9. Harry Potter and the Deathly Hallows
10. Pulpo Paul

News Events:
1. Gulf Oil Spill
2. Haiti Earthquake
3. Pakistan Floods
4. Koreas Conflict
5. Chilean Miners Rescue

People:
1. Justin Bieber
2. Dilma Rousseff
3. Lady Gaga
4. Julian Assange
5. Mel Gibson

Movies:
1. Inception
2. Harry Potter and the Deathly Hallows
3. Scott Pilgrim vs. the World
4. Despicable Me
5. Karate Kid

Television:
1. MTV Video Music Awards
2. Pretty Little Liars
3. True Blood
4. Walking Dead
5. Grammy Awards

Technology:
1. Apple iPad
2. Google Android
3. Apple iOS
4. Apple iPhone
5. Call of Duty: Black Ops

World Cup:
1. FIFA World Cup
2. Vuvuzela
3. Pulpo Paul
4. Dunga
5. Diego Maradona

Sports:
1. LeBron James
2. Wimbledon
3. Manchester United
4. Brock Lesnar
5. Celtics

Hash Tags:
1. #rememberwhen
2. #slapyourself
3. #confessiontime (hash tag started by Usher)
4. #thingsimiss
5. #ohjustlikeme

2009 Twitter Trends

News Events:
1. #iranelection
2. Swine Flu
3. Gaza
4. Iran
5. Tehran
6. #swineflu
7. AIG
8. #uksnow
9. Earth Hour
10. #inaug09

People:
1. Michael Jackson
2. Susan Boyle
3. Adam Lambert
4. Kobe (Bryant)
5. Chris Brown
6. Chuck Norris
7. Joe Wilson
8. Tiger Woods
9. Christian Bale
10. A-Rod (Alex Rodriguez)

Movies:
1. Harry Potter
2. New Moon
3. District 9
4. Paranormal Activity
5. Star Trek
6. True Blood
7. Transformers 2
8. Watchmen
9. Slumdog Millionaire
10. G.I. Joe

TV Shows:
1. American Idol
2. Glee
3. Teen Choice Awards
4. SNL (Saturday Night Live)
5. Dollhouse
6. Grey’s Anatomy
7. VMAS (Video Music Awards)
8. #bsg (Battlestar Galatica)
9. BET Awards
10. Lost

Sports (Teams, Events, Leagues):
1. Super Bowl
2. Lakers
3. Wimbledon
4. Cavs (Cleveland Cavaliers)
5. Superbowl
6. Chelsea
7. NFL
8. UFC 100
9. Yankees
10. Liverpool

Technology:
1. Google Wave
2. Snow Leopard
3. Tweetdeck
4. Windows 7
5. CES
6. Palm Pre
7. Google Latitude
8. #E3
9. #amazonfail
10. Macworld

Hash Tags:
1. #musicmonday
2. #iranelection
3. #sxsw
4. #swineflu
5. #nevertrust
6. #mm
7. #rememberwhen
8. #3drunkwords
9. #unacceptable
10. #iwish

When You Wish Upon a List

Katherine Boehret — Wed, 01 Dec 2010 05:05:26 +0000

It’s official, the holiday shopping season has begun and it’s time to get serious about gift lists. This week, I took a closer look at some online services that could help you—or those shopping for you—find and buy the right gifts.

While there are many services around, I’ll just touch on a handful of them, including some that take advantage of social networking and group buying.

[ See post to watch video ]

Bing, Microsoft’s search engine, is jumping into the wish-list action this holiday season with the Bing Shopping List. Starting Wednesday, this feature lets people add items to a saved wish list by simply check-marking an on-screen box in shopping search results. Shopping search results are displayed by clicking the Shopping tab in Bing search results or by selecting Shopping on Bing.com and going from there. Once an item’s box has been checked, a small, in-browser visual of all items added to the wish list is displayed in the lower left corner of the browser window. Lists are saved between sessions, so you can close your browser and open it another time and work with the same saved list.

In addition to collecting a list of wished-for items, the Bing Shopping List lets people share those lists with their Facebook friends, giving them a chance to see and buy items from someone else’s wish list. Or people can use Bing Shopping Lists to select just a couple items, share them with the Facebook community, and ask for friends’ opinions about which product is better. Users may get feedback from friends they wouldn’t otherwise know were experts in certain areas.

A Microsoft spokesman said the impetus for this came from trends the company saw taking place on the Web—specifically, people using Facebook to solicit opinions about what to buy and to tell others what they want.

A downside to the Bing Shopping Lists is that they don’t yet offer a way to share items with only certain people, which might mean sharing a private gift with all your Facebook friends. And you can’t yet create multiple lists. A way to share items with only certain people and options for create multiple lists are on the product road map for next year, according to a company spokesman.

Speaking of social networks, Sears is taking a unique approach to the group-buying concept with Wish Together, a program launched in mid-November. With Wish Together, Sears puts at least one new item on its Facebook page (facebook.com/sears) each day. If enough people click on the item’s “Like” button before a certain time, a steep discount on the item becomes unlocked, like a diamond necklace that originally cost $285 will cost $100 at its Wish Price if it gets the required 200 “likes.” People can see the number of necessary “Likes” and time remaining (down to the second) displayed on the item’s Wish Together Facebook page.Once a Wish Together deal is unlocked, it’s available to everyone—not just those who originally “liked” it. But those who “liked” the item get an email notification from Facebook as soon as the deal is unlocked so they can buy it while supplies last.

Bing is jumping into the wish-list action this holiday season with the Bing Shopping List

The tried and true Amazon Wish List, which has been around for 11 years, can be used to add wish-list items from any website, not just Amazon.com. This works using the site’s Universal Wish List. It can be set up by dragging an “Add to Wishlist” bookmark (http://3.ly/G82n) into your browser’s bookmark bar. Then you just click the bookmark whenever you’re on the specific Web page of an item you’d like to add to your Wish List. A small pop-up menu lets users designate a specific Amazon Wish List or add their own notes about an item. Universal Wish List browser extensions, or shortcuts built right into a Web browser, are available for Google’s Chrome, Apple’s Safari and Mozilla’s Firefox browser. Some online retailers like ModCloth.com, save you a step by offering “Add To Amazon Wish List” buttons right on their websites. Amazon Wish Lists can be shared to friends through Facebook or Twitter using a link on the list’s webpage.

There are many Facebook apps for creating wish lists and sharing them with Facebook friends. I tried a couple apps, including a basic one called Fulfill My Wishlist (http://3.ly/3u3d). It let me search a shopping portal (that uses Google Shopping in the background) for items to add to my wish list, or let me copy and paste a link for any item to appear in my list. A notes section for each item allows room for describing details like preferred size or style. This list can be emailed to friends or viewed through the Facebook app by friends who use it.

If you’re planning to go in on buying a pricey gift with several other people, a group-gift option like eBay’s might be the right tool for you. EBay introduced its Group Gifts feature (groupgifts.ebay.com) in November. It lets several people pool their money to buy one item without one person chasing down those who owe money.

One person chooses an eBay item and selects the Buy It Now option (auction prices aren’t applicable when you need to tell the group how much they’ll definitely owe). The initiator tells the group how much he or she will pay and then shares the item with others via email, Facebook or Twitter, in hopes of getting contributions. A PayPal account is required for at least one person in the group to ultimately pay for the item, but gift contributors can chip in using credit or debit cards, and they can add their own notes to a gift.

Thanks to technology, there are many ways to direct your friends and family toward exactly what you want for the holidays, taking much of the guesswork out of giving and receiving this year.

Edited by Walter S. Mossberg

Write to Katherine Boehret at mossbergsolution@wsj.com

Invasion of the Market Share Snatchers: BlackBerry Losing Share to Android?

John Paczkowski — Wed, 12 May 2010 15:29:02 +0000

Research in Motion’s BlackBerry is the leading smartphone brand in the United States thanks to its vast core demographic of enterprise power users. But as the smartphone evolves into the standard for the broader consumer market, RIM (RIMM) may see that lead eroded by rivals with sexier devices.

In a research note to clients today, Piper Jaffray analyst T. Michael Walkley says his checks this month and last suggest the BlackBerry is losing momentum at the country’s largest wireless carriers, mostly to handsets running Google’s (GOOG) Android OS.

“While BlackBerry remains a leading smartphone brand, our checks indicate potential sell-through share losses at AT&T, Verizon, and T-Mobile,” Walkley writes. “In fact, we believe the Bold 9700 continued to lose smartphone share at AT&T following a price increase last month to $199.”

There’s worse. “In addition, our checks indicated further share losses to Android products at T-Mobile and Verizon. At Verizon, our checks indicated slowing RIM sales, as sales managers continue to push Android products such as the HTC Incredible and Motorola Droid. At T-Mobile, our checks indicate weaker BlackBerry sales due to strong sales of Android products such as the HTC MyTouch and the Windows based HTC HD2.”

But RIM’s situation isn’t dire. RIM is one of the five largest mobile phone manufacturers in the world and it makes only smartphones. Still, these market trends are worth keeping an eye on, particularly the likely arrival of a new iPhone at AT&T (T) this summer and a handful of slick new Android smartphones at Verizon (VZ).

While the new Blackberry Bold 9650 and the Pearl 3G might fend off those devices in the enterprise market relatively easily, they’re likely to have a harder time of it in the consumer market.

Is Verizon Deal Enough to Turn Palm Around?

John Paczkowski — Fri, 12 Feb 2010 14:30:20 +0000

Palm’snew distribution deal with Verizon is proving a boon for the smartphone company, although less of one than you’d think, given the carrier’s size and reach. According to a trio of analyst notes released this week, Palm’s Pre Plus and Pixi Plus haven’t exactly inspired a run on Verizon stores.

Piper Jaffray analyst T. Michael Walkley says he has been “slightly disappointed” with initial Palm (PALM) sales at Verizon (VZ), observing that sell-through so far has been at best “modest.”

RBC analyst Mike Abramsky is of a similar opinion. “Despite an initial first day ‘pop,’ Palm’s soft launch sell-through at Verizon was modest (ex 1-2/store/day),” he wrote in a research note to clients this week.

“However,” Abramsky elaborated, “as of Feb 9, checks show momentum steadily improving (now 3-4/store/day)….Broad awareness continues to be Palm’s challenge, with many unaware of Palm despite the marketing campaign. Some Verizon reps remain unfamiliar with webOS.”

Deutsche Bank analyst Jonathan Goldberg has also been unimpressed by initial sales of the Pre Plus and Pixi Plus at Verizon. He, like Abramsky, contends that more aggressive promotion from both Verizon and Palm is what’s needed to bolster demand.

“We have conducted a phone survey of 210 Verizon outlets in 38 states to gauge Palm and smartphone trends,” Goldberg explained in a client note issued this morning. “We have found that Verizon has yet to fully engage in promoting Palm products, however we did see a clear improvement as the survey progressed, indicative of ongoing training efforts.”

So Palm will be well-served with Verizon as a partner, but its challenge, as always, is one of awareness — particularly with expectations for a Verizon iPhone running high. Once it overcomes that, increasing carrier momentum should follow.

Ad Sales, Pay Walls, and Absolutely Nothing About iPads at the New York Times Earnings Call

Peter Kafka — Wed, 10 Feb 2010 16:01:05 +0000

The New York Times said things got better–or, if you like, no worse–during the last quarter of 2009. But investors are disappointed that the publisher isn’t more optimistic about 2010, and they’re pushing shares down this morning.

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

News Corp.: Conan's Not Coming to Fox Just Yet; Amazon's Ready to Bend on E-Book Pricing

Peter Kafka — Tue, 02 Feb 2010 22:41:33 +0000

Two interesting nuggets from a wide-ranging earnings call today:

News Corp. CEO Rupert Murdoch tried to lower expectations that his Fox broadcast network would hire Conan O’Brien.
Murdoch hinted that his book publishing unit is in line to get a new deal on e-books from Amazon, just as Macmillan has demanded (as will other publishers).

On the second point, here’s my on-the-fly transcription and paraphrasing of Murdoch’s comments about Amazon (AMZN), Apple (AAPL) and e-book pricing. It’s one of the most candid descriptions you’ll hear from a top executive about Big Media’s reluctance to embrace digital distribution at the expense of its existing system and revenue:

“We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much” because they cost us less to distribute, “but we want some room to maneuver.” The Apple deal…“does allow some flexibility and higher prices” though e-books will still be lower than print versions. And now Amazon is willing to sit down with us again and renegotiate.

UPDATE: Here’s a more complete transcript from Seeking Alpha:

We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against [inaudible] books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it. Amazon, sorry Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices.

There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing.

Again, it’s impossible to stress how scarring the music labels’ experience has been for Big Media. And they’re determined not to repeat the experience. Their takeaway, though, seems to be that they can stave off digital distribution by keeping prices high and inventory relatively scarce. Hard to believe consumers are going to go for that.

Earlier

A first glimpse at News Corp.’s fourth-quarter earnings (which, due to the company’s weird fiscal calendar, is technically the company’s Q2 for 2010): Pretty good. And much better than a year ago (thankfully). After factoring out one-time charges, the company posted earnings of 25 cents on revenue of $8.7 billion.

The Street was looking for earnings of 20 cents on revenue of $8.23 billion, and analysts were also hoping the company would boost its earnings forecast, due in part to a bump from the ginormous success of “Avatar.” No word on guidance in the earnings release, though.

I’ll pick through the release for other worthwhile nuggets for the next few minutes. And then the real show begins at 4:30 Eastern, when the company’s earnings call–easily the most entertaining one in its peer group due to the censor-free presence of CEO Rupert Murdoch–begins. We’ll be looking for commentary on his battle/negotiation with Google (GOOG), upcoming content deals with Apple and the iPad, his thoughts on paid content in general, a dash of political commentary or two, and an update on the turnaround effort at MySpace.

From the release: A pretty nice quarter at most of the conglomerate’s divisions, including the previously battered broadcast TV and newspaper groups. News Corp. says print revenue at The Wall Street Journal was up five percent and ads on the Journal’s digital network were up 17 percent.

MySpace and the company’s other digital properties, shuffled into the “other” category, don’t get much of a mention, but don’t seem to have done much, not surprisingly.

But News Corp does mention that digital media earnings were down $32 million compared with a year ago, “principally due to lower search and advertising revenue.” And the company lost $29 million on “digital media dispositions”–i.e., the fire sale/giveaways of properties like Rotten Tomatoes and Photobucket.

Here’s the breakdown by segment (click table to enlarge):

Liveblog

CFO Dave DeVoe: “Extremely pleased” with the quarter.

Movies: Revenue up due to decent DVD sales (no MGM problem here). Also high costs due to “Avatar,” but big profits from the movie will be coming in during the next couple quarters.

Broadcast TV: Local ads are improving; the telecom, fast food, finance categories are all improving.

Cable: Revenue is up 18 percent. Affiliate revenue is up 21 percent (more money for Fox News subs), and there was a “single-digit” boost in ad dollars.

Newspapers: Journal dollars are up, operating costs down. Ad revenue got better as the quarter progressed.

Books: Revenue up, expenses down.

“Other”/MySpace: Digital media revenue down, but cost-cutting helped trim losses.

News Corp. is boosting its dividend by 25 percent.

Guidance: The company’s operating income growth rate is expected to grow from single digits to the high teens. Better than anticipated: Film group, TV and cable. But revenue goals for digital media, including MySpace, will take longer than anticipated.

Murdoch sings the praises of content. [I will not argue with him, for now]. “Avatar” is awesome, he says, a “harbinger of fundamental change in the industry.” Also really good: “Alvin and the Chipmunks.” Fun to hear Rupe say “Alvin and the Chipmunks.”

WSJ is the No.1 paper in U.S. in terms of circulation, influence, quality. WSJ.com is a “digital model for newspapers around the world.”

Fox News Channel’s audience is both “loyal and lucrative.” Roger Ailes is doing an “admirable job” [translation: Bite me, Michael Wolff--the author of a recent Murdoch biography].

Last year, Murdoch says, News Corp.’s pay-to-play ideas sounded nutty, but now “the content clan has gathered around our ideas.” Consumers must pay and will pay “to be entertained and informed.” All those awesome new gadgets being made in China and sold at the Consumer Electronics Show need content or they’re worthless. Content, content, content. Get it? Content, content, content.

Murdoch says he’ll be wringing more dollars from cable operators. And “when it comes to online news, we’ll be changing that model too,” adding that News Corp. is in “substantive conversations with device makers on developing subscription models” to deliver content. And don’t forget about 3-D!

Not performing well but “long-term growth drivers”: Sky Italia satellite service. Also Sky Deutschland. And MySpace is “not yet where we want it.” In the last quarter, however, MySpace “started to see signs of traffic stabilization.”

Shout-outs for Chase Carey and other managers (but not by name).

Q&A

Question: How big a deal is retransmission consent in coming years? $40 million a month? $100 million a month?

Chase Carey: No numbers, but it’s going to be a “transforming event.” We have two of top 10 distributors done, more coming. It’s a three- or four-year process to knock these deals out.

Q: Does this fix the broadcast model?

Carey: “Yes, I guess you could say simplistically, it fixes it.”

Q: What’s the timing on an “Avatar” DVD, and what about a sequel? Also, how do TV ads look this year?

Murdoch: For “Avatar,” we think about 60 percent of profits will be in the next six months. Which means the DVD will be coming “as soon as possible,” but the movie will stay in cinemas for a while because we’re doing huge dollars in theaters still. Sequel? “Very early talks about it. Jim has ideas for one. We haven’t come to any agreement with him….Being Jim Cameron, I wouldn’t hold your breath for an early one.” Asked about the economics of a future release (“Will you keep the same revenue split?”), Rupe sort of rumbles and growls and sort of doesn’t have much to say. “Ask anybody; it is very easy to drop a $100 million in a hurry on a film, and we’d like to lay off some of the risk.”

Carey: TV trends for this year are “positive.”

Murdoch: TV stations will be up 18 or 19 percent, but last year was terrible. We’re still down compared with two years ago. Hard to see more than a quarter in advance. In newspapers, it’s hard to see more than a few weeks.

[Missed a question on Sky Italia here.]

Q: What are growth prospects for cable networks? They’ve been driven a lot recently by new subscriber fees. How much longer can you get those boosts?

Murdoch: Overall, “we think we have great potential for growth. Quite a long way to go yet.” Look at how NBCU’s USA is growing.

Carey: In the U.S., we’re moving to “quality over quantity”–we can wring more out of foreign exchange, etc. Fox News is only getting more powerful; it has “great upside.”

Q: Regarding newspapers, what growth came from organic increase versus currency fluctuations?

The majority is from foreign exchange.

Q: Does your guidance assume that the “Avatar” DVD is coming in the next two quarters?

Murdoch: “Yes, but it won’t be 3-D” [which I don't think the analyst was asking about].

Q: Back to retransmission consent: You’ve been getting more and more money from cable guys. Why can’t you get $4 or $5 per subscription for Fox broadcast subs?

Murdoch: “We’re modest people.”

Carey: Hyuk, hyuk. Real answer: It takes time. “We try to approach this constructively. We’ve built businesses with [cable guys], we’ve built valuable cable channels” [translation: patience!]. We want to extract more without killing the cable guys.

Murdoch: That said, we’re asking for the same thing [for broadcast channels] that the cable networks are getting, which “certainly won’t kill the cable companies.”

Q: Please talk about value of film libraries (i.e., MGM). They’re generating big operating profits for cable now. How long will this last?

Murdoch: Regarding the MGM auction, “you can count us out of that one altogether” because others will pay more than we’re willing. And we’re not pursuing the Miramax catalog at all.

Carey: A film library by itself, without new stuff coming through, is a “depreciating asset.”

Q: On guidance: You say the ad market getting better, etc., but it sounds like you’re saying Ebidta growth is slowing.

Murdoch: “We honestly do not have any visibility about the last quarter.”

Q: On books/e-books/Apple, what’s going on with that?

Murdoch: We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much, lower costs to us, but we want some room to maneuver. The Apple deal does allow “some flexibility and higher prices” though e-books will still be lower than print. And now Amazon is willing to sit down with us again.

Press Q&A

Q: What’s up with plans to charge for newspapers on the Web?

Murdoch: “Not ready to announce yet [long pause]. We won’t be ready yet to make an announcement.” A “lot of talks with a lot of people.” There will be more to say within the next two months, Murdoch adds.

Q: Are you still going to fall $100 million short on the Google deal?

Murdoch: Yes. People using social networks don’t use search a great deal. Facebook has seen this, too. It’s “really too early to make confident predictions…but from going down, we’re beginning to go up.”

Q: Can we get some details about Time Warner Cable (TWC) deal?

Nope.

What about Conan O’Brien on late night?

Murdoch: If the programming people can show us we can do it and make a profit on it, we’ll do it in a flash. I’m sure there have been conversations with Conan, but “if you mean real negotiations, no.”

[Missed two questions here.]

Q: Another late-night question: If you do go into negotiations with Conan, how do you placate your affiliates?

Murdoch: It’s a different deal than NBC. They screwed up 10 pm, which reduced the lead-in to local news. Our affiliates run syndicated programming at 11:30, though, so it will take time to adjust there.

Call ended. This one seemed short to me.

More or less redundant disclosure: News Corp. (NWS) owns this Web site.

Sprint Undervalued by as Much as 50 Percent? Keep Dreaming…

John Paczkowski — Tue, 08 Dec 2009 17:05:38 +0000

If Sprint, as Barron’s recently claimed, deserves more respect on Wall Street, it’s not going to find it at Pali Research, which clearly does not see the same 50 percent upside potential in the company’s shares.

In a note to investors this morning, Pali analyst Walter Piecyk says he’s not buying predictions about Sprint (S) returning to growth in 2010. Sure, the company is improving post-paid subscriber losses, says Piecyk, but not as quickly as it needs to. And its prepaid business, which already faces a fair bit of competition, will be confronted with even more competition next year.

“Over the past six months our concerns have been rising over the slow pace of change at Sprint and what we view as lost opportunities for growth, but we maintained our Buy rating due to the low valuation on the stock and the depressed expectations of investors,” Piecyk writes.

“Those concerns increased in recent months as the pre-paid business, which Sprint has been accessing for growth, became more competitive and Verizon began executing on a more open device strategy,” the analyst adds. “In the past few weeks, investors have become more optimistic about positive post-paid signs early in Q4 and Sprint’s prospects of even stronger pre-paid results in 2010, in the face of increasing competition.”

In contrast, Piecyk notes that “We are less confident about those trends and as we model out a more competitive market in 2010 for all our companies it becomes evident to us that Sprint will be challenged to stabilize EBITDA. Faced with negative catalysts in the months ahead and the challenge of appropriately valuing a company whose EBITDA is in perpetual decline, we believe now is the right time to downgrade the stock to Neutral.”

Wall Street, then, isn’t underestimating Sprint’s prospects for 2010. It’s overestimating them–or at least it certainly was yesterday.

“For 2010, we expect post-paid losses to be pared by 35% to 2.3 million subs lost compared to our prior estimate of less than 2 million subs lost in that year,” Piecyk concludes. “While pre-paid net adds might offset the losses or even top post-paid losses in Q4 we expect the total customer base to decline by 700,000 in 2010.”

New York Times Delivers Some Not Terrible News: Earnings, Ad Sales Better Than Expected

Peter Kafka — Thu, 22 Oct 2009 12:05:36 +0000

The New York Times announced plans to cut eight percent of its newsroom payroll this week, citing “economic thunderstorms,” which suggested that this morning’s earnings results were going to be particularly unpleasant.

Surprise! They’re not that awful, at least by the diminished standards of the newspaper industry:

Excluding one-time charges, the publisher earned 16 cents per share on revenue of $570 million. Analysts expected the Times (NYT) to lose a penny per share on revenue of $561 million.

Ad revenue declined 26.9 percent, which is unpleasant but better than the previous quarter, when it dropped 30.2 percent. Internet revenue dropped by 7.2 percent and Internet ad revenue was down 8.2 percent. Both of those results are improvements over the previous quarter as well: Last quarter, Internet revenue was down 14.3 percent and Internet ad revenue was down 15.5 percent.

Some cautious optimism from CEO Janet Robinson:

Looking ahead, visibility remains limited for advertising in the fourth quarter. But as is the case across the media sector, we have seen encouraging signs of improvement in the overall economy and in discussions with our advertisers. Early in the fourth quarter, print advertising trends, in comparison to the third quarter, have improved modestly, while digital advertising trends are improving more significantly.

A little more color on digital: The big improvement this quarter was driven by a turnaround at the Times’s About.com content mill: Revenue was up 7.2 percent, way up from the 5.1 percent decline posted in the previous quarter. This makes sense, given that About is driven by pay-per-click ads and these have come back across the industry, led by Google (GOOG).

But the story is less impressive at the Times’s traditional Web sites. Ad revenue there was down 18.5 percent, which is better than the 21.6 percent drop the previous quarter, but nothing to write home about. As it has done in previous quarters, the publisher blames the decline on a drop in online classifieds, and I assume that much of the drop stems from vaporized employment ads. If this is the case, it’s going to be hard to move those numbers significantly for quite some time.

Nokia Reorg Actually "Job Rotation"

John Paczkowski — Fri, 16 Oct 2009 17:27:49 +0000

Nokia describes the management overhaul it’s undertaking as a common “job rotation,” but coming as it does after its lousy third-quarter financial performance and a worrisome decline in smart-phone market share, it seems perhaps just a little bit more.

This morning the Finnish mobile phone giant tapped Rick Simonson, currently its chief financial officer, as head of its handset division. And the company named Timo Ihamuotila, currently global head of sales, CFO.

While Simonson’s move from CFO to head of Nokia’s mobile phone business might seem a bit odd, analysts say it could be just what the company needs. “Simonson has been in the business for years,” Swedbank Securities analyst Jan Ihrfelt told Forbes. “He knows the company quite well, has the financial skills and the skills of a good communicator to make people in the company excited about new goals.”

And that’s clearly something Nokia (NOK) needs. For while the company is holding its ground in the broader mobile phone business, it’s losing it in smart phones, the fastest-growing segment of the market. As I noted yesterday, Nokia’s share of the smart-phone market slipped to 35 percent from 41 percent in its latest quarter, a grim reminder of just how poorly the company’s flagship smart phones are faring in their battle with iPhone maker Apple (AAPL) and BlackBerry manufacturer Research In Motion (RIMM).

Said Ihrfelt: “Nokia hasn’t been as quick as others in catching up with trends in the market and in bringing phones to consumers. One would expect a player the size of Nokia to have a product that competes with the iPhone, but that hasn’t been the case.”

Not yet, anyway. But that may soon change. A few weeks back, Nokia hired John Martin, former vice president of iPhone and Mac Internet Services at Apple to oversee development of new devices based on its Maemo platform.

Nokia Reorg Actually "Job Rotation"

John Paczkowski — Fri, 16 Oct 2009 17:27:49 +0000

Google: We're Hiring, and Spending, Again

Peter Kafka — Wed, 07 Oct 2009 17:55:00 +0000

Google CEO Eric Schmidt used the opening moments of a New York City press conference to reinforce a message he’s been delivering for a couple months: The worst is over, things are looking up, and Google is spending accordingly.

Schmidt added a bit of nuance to that message today, noting that the company had been surprised to see its European business bounce back as quickly as it has. Here’s my transcript of his opening statement.

We are clearly seeing aspects of recovery, and what is notable is that we’re seeing aspects of recovery not just in the United States but in Europe. I had been in error in assuming that there would be a lag, that it would the U.S. first and Europe second. Asia, of course, was never significantly hit in the first place.

So that means from a Google perspective that…we never stopped hiring, but we told our team internally and again, we’ve said to many other people that we are increasing our hiring rate and our investment rate in anticipation of a recovery.

Schmidt and Google co-founder Sergey Brin covered a lot of ground in the hour-plus press conference, and I’ll try to go back and break out out some of the other highlights. A few items worth noting in summary:

Brin expressed contrition over recent Gmail outages and said the company was working both to prevent future failures and to react more quickly if and when they do happen. But he reiterated the argument, common among cloud-computing fans, that conventional email systems fail much more frequently.
Schmidt repeatedly defended the proposed settlement Google had reached with authors and publishers regarding its book archive. Recurring theme: It’s not a perfect settlement, but it’s workable.
Schmidt stressed the importance of porting Google’s Chrome browser to Apple’s Mac platform and said this would happen within months.
Schmidt said Google was working on ways to help publishers sell their work on the Web (via one-offs or subscription). But he said he had no interest in promoting one publisher’s results over another, as Associated Press officials had recently suggested: “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.”
Schmidt, who’d previously noted that he expected Google to start making an acquisition per month, said that these would likely be small, five-to-ten-person companies. He added that it was unlikely the company would be in the market for something the size of a YouTube acquisition, which cost Google $1.65 billion. Translation: Don’t expect us to pony up billions for Twitter.

Earlier: My live coverage of the press conference:

Google (GOOG) co-founder Sergey Brin is sitting down with about a dozen reporters in Google’s New York City headquarters for a Q&A session. Tune in for live coverage. This should be a wide-ranging conversation, which I’ll attempt to cover live as well as I can. Please consider everything below to be a paraphrase unless it’s in quotes.

Brin is joined by Google CEO Eric Schmidt. Brin gives an unofficial intro.

Schmidt adds his own informal introduction.

Schmidt: We’re here because we have a global sales meeting in New York, and we’re winding that up right now. A series of internal talks, and the mood was “very, very positive.” We told them that “the worst is behind us” (which Schmidt has said before). We’re seeing recovery not just in the U.S., but in Europe as well. I had been in error in thinking it would be U.S. first, then Europe second. Asia is less important, obviously. We’re increasing our hiring rate and investment rate in an anticipation of a recovery.

Brin discusses some tweaks to search. Do you feel that Microsoft’s innovations with Bing will cause you to accelerate your innovations?

Brin: Competition is healthy. Microsoft (MSFT) has made its contributions. So has Cuill. Many of the tweaks in Bing we’d already seen from Microsoft Live earlier in the year.

Schmidt: I agree!

But do you think Bing is really different? Or just a rebranding.

Brin: [Demurs]

Schmidt: You guys should judge us and our competitors. We’ve been criticized for having a self-referential view of the world. But I’d argue that our success so far proves that’s been a good strategy.

Please talk about Android and other mobile plans.

Brin: We started with Android because it was a problem for us, as an end-user and a developer, that phones lacked powerful browsers and the ability to install powerful apps. I think Android has addressed this very well, but it has also pushed the market. It has pushed Apple (AAPL) with the iPhone and RIM (RIMM) and Windows Mobile. I’m pretty excited about the future; they’re getting increasingly capable browsers, and you can now write native applications across five platforms that will cover most smart phones. I think that having the software platform has freed the hardware makers from spending time on that, and they can rejuvenate their efforts on hardware.

Please talk about enterprise efforts.

Brin: We started in enterprise, like mobile, to address our own needs. When we started with mail in ’04, Web email was like a toy. We really focused on something that would work in an enterprise and then made it available to consumers. We feel we’re farther ahead (than competitors) both in email and in collaborative document-editing. We’re moving toward eventually having everything (all our applications) available everywhere. “I just think the cloud model is a better model….I do think this install-less model of a cloud is better….It’s definitely made me more productive.”

More on enterprise from Brin: We’ve been successful with both SMB [small and medium business] and increasingly with enterprise. We’ve got a big implementation with Genetech (DNA), and in Washington D.C. We’re specifically adding features for enterprise. That’s part of the Postini acquisition–to add some of those email features for enterprises. You’d be surprised to hear some of the things businesses ask for.

Please talk about recent Gmail outages.

Brin: Certainly we’re not happy with any outages. With those outages we’re at the “three nines” level, which is not where we want to be. Targeting “four nines” by end of quarter. We’ll let you know how we do. Focusing not only on outages, which we don’t like, but recovery time. Second outage could have been resolved in five or ten minutes, but we made errors in handling it, and it extended over an hour. But if you look at a typical enterprise today, those outages tend to add up to more than even these kinds of outages that we had in Q3. Also, we’re working on the number of people affected by outages. Trying to group people into pods so that if one goes down it doesn’t affect others.

You’re adding more complexity to search. It’s more confusing than it ever was. Same thing with site links. Is that an issue (it is for Danny Sullivan)?

Brin: I’d like to see all the options, available in all the corpuses. We don’t have all the same options in each offering. In terms of the links and snippets that we’re offering, we’re trying to experiment with that.

On Google book deal: If the judge asked you why he shouldn’t be concerned by the concentration of Google’s power, what would you say?

Schmidt: It’s an error to answer a theoretical question from a journalist. But anyway, we won’t get that kind of question. With respect to book search, we were doing something that we thought was appropriate. We were sued, and after three years of discussion, we’ve come to a settlement. This is perfectly normal. From our perspective, this is a settlement we like, it’s a settlement we think they’ll like, and we’ll hear what the court says, within minutes. Let me reframe your question: There’s nothing particularly exclusive about what we’re doing. The rights registry we’re doing is for the benefit of orphan works. “It’s not a particularly good business for us. We’re going it because we think it’s the right thing to do.” We don’t think the settlement is perfect, but we think it’s good.

What are plans to expand book search?

Schmidt: We’re already huge. There are millions of books that have never been read, and we’re going to deliver readers to those books.

Brin: We want as many works as possible in some form, because that’s of tremendous value.

Schmidt: This doesn’t cover all international books, all books in the world. [Some disagreement about this between Brin and Schmidt]. It will take time to get the registry up and running, so for the near future I think that’s all we can achieve.

Back to the economy, please.

Schmidt: We’ve tried for a while to figure out if Google is an accurate predictor of the economy, and we can’t prove it. If we could, we’d brag about it. Last early in the year we saw a decline in U.K., which surprised us. From our perspective, the low point was somewhere in the spring. Which is why I said worst was behind us in May, June. We noticed a recovery “June-ish.” The conventional wisdom is that U.S. recessions are 18-24 months. Bernanke sees a recovery too, which we agree with. Conventional wisdom was that Europe would lag by three-five months, which we’re not seeing. Europe is not one country, and it varies a great deal depending on which country we’re in. I won’t go in to specifics but it’s the obvious stuff–the countries that didn’t have a big bump did not have a big fall. More on being a leading indicator: Obviously we’re a leading indicator in advertising.

Brin: And we’re good indicator for consumer spending, and you can see for yourself by looking at Google trends.

It seems as if Chrome isn’t having the impact with consumers that you would like.

Brin: [Starts, then stopped by Schmidt]

Schmidt: Some of your premise about Chrome is incorrect, in terms of adoption, and we’re going to get that message out.

Brin: It’s actually exceeding our benchmarks.

Schmidt: I see a lot of Macs in this room, and a lot of very sophisticated people are using Macs now and we need to get a version of Chrome out for that, which we’ll have in a couple of months. Key to browser strength is speed. In general, we announced Chrome OS and Chromium product. Everything is linked together: Cloud, chrome, etc.

At one point do Android and the Chrome OS come together or not come together?

Schmidt: Current definition of use platforms has to do with use patterns. Android for mobile, delivered via telecom store, heavily integrated with telco offerings, like our Verizon (VZ) deal, which we’re enormously excited about. The analog for Chrome is that it’s designed for a 10, 12-inch form factor. They both use Linux, etc. But they’re designed for different uses. [Netbooks?] May be some overlap there.

Is Google being too nice? Is there a rethinking of relationships with aggrieved groups?

Schmidt: In many ways we’ve always wanted to be this Google as opposed to the way we were perceived a few years ago. We’re particularly proud of the way we’re working with advertising agencies, which is very important to us. With the media industry, we’re having success with YouTube and YouTube monetization, and we’ll have more on that coming forward….”We have always wanted to have these partnerships….We’re learning how to do them in a way that they win, too.”

Brin: People can now differentiate between us and the Internet.

Schmidt: Google is an innovator. The Internet is causing collisions. Innovation plus collisions equals opportunity. For instance, the fact that Verizon has embraced most of the open principles that we put forth five years ago is shocking. “It’s pretty amazing. This is Verizon. It’s not some itty-bitty telecom start-up.”

Are you uncomfortable with Google employees’ sense of entitlement? [Per new Ken Auletta book]

Brin: [Refers to layoffs--Schmidt corrects him: "We did not have layoffs."] [Addendum: Schmidt was talking about Google closing engineering offices in Phoenix and other locations; Google did have layoffs last winter.] You’re right:

What do you think about publishers requiring pay walls, and how will you help surface that.

Schmidt: We’re starting with that YouTube. Overall, “there’s clearly a market for free content, and that market is the size of the Internet.” Also a market for subscription/paid. The analogy I would offer is TV. We all grew up with “free” TV. Now almost everyone pays for cable, and some people pay for pay-per-view, “which is ridiculously expensive,” but people will pay for particular events, like boxing. I think all three of those uses will emerge. We’re working on payment models, subscriptions, to enable that.

But what about surfacing paid content in search [this comes from WSJ.com editor Alan Murray]? Will you factor the desire of someone to pay for content into results?

Schmidt: We’re not going to use the price you use as our ranking in results. That’s not going to be our signal. But we’ll incorporate the price people are paying for your content into results. But I’m not going to answer this precisely because I don’t want to discuss how we produce results. The most interesting improvement you could make is that to the degree that we have more of the marketplace data available, we could take that information and reflect some of that in our rankings.

The AP CEO said Google or Microsoft might be willing to pay a premium for an advance look at the news.

Schmidt: We have a deal with the AP, and I don’t want to talk about any specifics of any deal. I don’t think that’s proper. “We have to be very very careful not to favor one media organization over another, with regard to speed or latency.” We are staying out of the media business. “You guys are very good at it, and we’re not.”

[Apologies for tech error; I missed the specific question and part of the following exchange, but the subject is entitlement.]

Brin: We cut down on snacks, etc. to “reset expectations” regarding entitlement.

Schmidt: “Google pays very well. Google is clearly a growth company. People at Google don’t work for those reasons at Google. We don’t want them to come to work for Google for those reasons. We want people to come to Google to change the world. Life is short.” The tightening in the last year has been good for this, by the way, the controls put into place by Patrick Pichette, who is our hero, have been very helpful.

Please talk about M&A plans and goal of one acquisition per month.

Schmidt: That’s been our historic pattern. I think we will be buying small companies–five, ten people. That’s where some of our best stuff has been. One day Larry and Sergey bought Android, and I didn’t even notice. Think about the strategic opportunities that has created. Sergey found Google Earth one day while he was surfing on the Web. And then he walked into my office and told me he bought them. “And I said, ‘for how much, Sergey?’ And it turned out to be a few million.”

Would you buy a YouTube?

Schmidt: Is there another one to buy? The problem with that size of acquisition is that you have to make your money back. I think that DoubleClick and YouTube will be two of our best acquisitions. DoubleClick is already close to paying back, and YouTube will get there soon. But bear in mind that any major acquisition now will involve a regulatory review, because of our size and because our competitors will make sure of that.

[Sorry, missed another question]

Do you anticipate making large upfront commitments for new or renewed search deals [as you did with MySpace and AOL]?

Schmidt: I’d rather not comment on search deals. We are in discussions with both of those companies. “Some of our best friends are in those companies.”

[Missed yet another one]

What will new tablet machines [like Apple's] mean for you? And to content producers?

Brin: Hardware is getting amazing with regard to cost. Used to be that display was expensive. Now that’s cheap, and so are chips, etc. Now, the main cost is broadband connection, or cellular, or however you get to the Internet. That’s why wide broadband availability is important to us. Think about how much you spend on access costs compared to the amount you spend on your handset. The phone cost is negligible.

Schmidt: Not sure how to answer question. We provide the infrastructure below what you’re talking about [touch interfaces, etc.]. Kindle is a good example. Don’t think about current one, think about one two or three years out. I think there will be many kinds of things like Kindles, and that’s a material change in the way people will interact with hardware, media.

Brin: I think it’s better if hardware isn’t locked down to specific platforms.

[Long exchange between Schmidt and Danny Sullivan that I'll have to pick up later]

Should Google be required to lease servers and access to Google checkout numbers to deal with “lock-in” issues that broke up the telcos?

Schmidt: Google Checkout isn’t interesting. But I think your analogy is wrong and that there are no data to support your theses.

[I missed the next question on the book settlement about orphan works, etc.]

Schmidt: A lot of these complaints are being made by people who don’t want a solution.

What are the reasonable book settlement proposals you’ve seen?

Schmidt: Goal is to get all the books to everyone and to get all the authors compensated properly. Some of the proposals make sense to me, but I don’t want to characterize them. Not a perfect solution, but the best one we can do.

How will book settlement affect international users?

Brin: It won’t. We’d love settlements that work across a range of countries.

Why won’t you be like Microsoft with regard to antitrust?

Schmidt: Many reasons. Culture, for one. Another reason is that majority of users are one click away from moving away from us. Third: If we went into an “evil room” and had an “evil light” shined on us, and we then behaved in an “evil way” we would be destroyed….There is a fundamental trust between Google and its users.”

Schmidt walks through “ludicrous” thought experiment whereby Chrome takes 80 percent of market share and then tries to lock consumers in, noting that it wouldn’t work due to open source.

Do you think you’ll take another stab at moving into radio, print?

Brin: We are quite optimistic on the TV front. Radio and print didn’t pan out as well as we thought initially. One of the reasons is that those mediums are moving online and consumers are moving online and the publishers/producers want to work with us there. “We were kind of at the dock where the ship had already left.” But TV is quite similar to the Web in terms, potentially, of measurability, so we’re excited about those prospects.

Is page rank broken? People are gaming it, etc.

Brin: No. We have to continually develop. Part of the issue is span, but the main issue is that everything changes. We’re doing a much better job of ranking than we did a decade ago. If we just rested on our laurels with what we wrote in paper from 1998, we’d be in big trouble.

Some More Positive Murmurs for Web Ads

Peter Kafka — Fri, 25 Sep 2009 12:01:13 +0000

More upbeat–but not too ecstatic–chatter about the state of the Internet advertising market this morning from Wall Street: Barclays Capital analyst Douglas Anmuth is raising his estimates for Google (GOOG), citing “improving macro conditions [and] a stronger ad market.”

Anmuth says his research shows an increase in pricing for Google’s search ads over the past few months, particularly in the battered retail and auto sectors. His note comes a couple days after Citigroup’s Mark Mahaney raised his Google estimates, citing a dramatic improvement from mid-August to mid-September.

Other Google bulls: Investors, who have been pushing up the company’s shares since March (they’re now hovering near the $500 mark again), and CEO Eric Schmidt, who declared this week that “it’s clear that the worst is behind us.”

The tempered enthusiasm isn’t limited to Google’s chances, by the way. Mahaney also had good things to say about Yahoo’s (YHOO) chances as the economy recovers. While Yahoo is handing over its search business to Microsoft (MSFT), Carol Bartz and crew still dominate the display ad business, and that should be picking up as well, he said.

It is worth noting that Yahoo executives themselves were more cautious this week when asked to describe market trends: At an Advertising Week press conference, Bartz brought out her “still bumping along the bottom” line, while EVP Hilary Schneider said ad sales had stabilized but that she “wouldn’t go so far as to say as we’re seeing a full recovery.”

Deutsche Bank Gives Palm a Hand

John Paczkowski — Fri, 31 Jul 2009 22:17:36 +0000

Sales of the Palm Pre aren’t slowing; nor is the device suffering from unusually high return rates. And all this incessant hand-wringing over the Pre’s performance at market is needless.

That’s the word from Deutsche Bank analyst Jonathan Goldberg, who says the smartphone is doing just fine.

“Palm’s stock has underperformed since their earnings announcement last month in the absence of any hard news,” Goldberg wrote in a research note Friday. “We think market fears about return rates, weekly order trends and applications development are off the mark. Our checks continue to point to solid demand and carrier interest.”

According to Goldberg, his checks also indicate that “…Palm has become a healthy momentum stock adding to volatility. Sifting through the noise, however, we believe the key trends are healthy. The August quarter is tracking ahead of our estimates. We think the Street is still underestimating the company’s improved execution and long-term operating leverage.”

That’s certainly possible, given the wide disagreement among analysts over sales and satisfaction. Perhaps when Palm (PALM) next reports earnings, it will release some hard sales numbers and put an end to this speculation once and for all.