Publicis, the giant French ad holding company, has been warning Web publishers to be “hyper-vigilant” about other bogus ads like the ones the Times mistakenly sold, which were purportedly for Vonage (VG) but were actually designed to distribute malware. Publicis, whose units includes Starcom, Digitas, Optimedia, MediaVest, Zenith, and Spark, has been sending out letters warning publishers to be wary of the rogue ads, which it describes as an “industry issue.”

The catch: It appears that the only way to combat the attacks, at least in the near-term, is to do something that runs counter to industry trends: Throw bodies at the problem. Publicis wants publishers to individually verify the ad orders they receive, which would be a nonissue for traditional media but is a problem for Web publishing, which increasingly relies on automation. Mediapost:

The incidents have exposed potential vulnerabilities in on online publishing security, and are causing advertisers, agencies and publishers alike to reassess the processes they use to conduct business, especially as they interact with an increasing array of third-party intermediaries–advertising networks, exchanges, etc.–many of which place insertion orders automatically and without human intervention. The solution, as the Times’ and Publicis’ new policies suggest, is to reinsert human interaction into the process–at least for the time being.

Whoops. That whole thrust of Web publishing is get humans as far away as possible from buying and selling decisions: The ad exchange that Google (GOOG) launched last month, for instance, is designed to handle those tasks in milliseconds. Now think about how long it takes to pick up the phone to actually confirm that ad buyers are who they say they are [shudder].

It’s possible that this is simply butt-covering on the part of Publicis (these attacks have been out there for quite some time) and that this will blow over soon. But I don’t think so. Which means the ascent of Web ads may slow down, just a bit, as the industry figures out just how many humans it will take to fight the problem.

Interesting, given the recent flap over Google Voice for iPhone, which Apple (AAPL) hasn’t yet allowed into its iTunes App Store because it “appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voice mail.”

How is Vonage’s (VG) app different? Its features and functionality are certainly very similar to those of Google Voice.

Apple won’t say, but the company did tell the Associated Press that Vonage’s app falls under the same category as other VoIP applications that have already been approved for the iPhone.

Geekfighting may never become its own UFC event, but following tech news this week seemed, in places, like a view to a big, well-funded cage match. Things got so rowdy that Kara Swisher could hear them all the way across “The Pond.”

Before heading off on her tour of Euro-BoomTown this week, Kara set off for Carlsbad, Calif. to visit with Warren Buffet and the ladies of Fortune. Après Buffet, readers were treated to an exclusive interview, Kara-style, with Loïc Le Meur, Seesmic founder and namesake of the Web’s cutest logo. Kara wasn’t just visiting Europe for some cute overload, though. She wired back a report on the Oxford Social Media Convention, where she spoke on social media’s effect on business. Kara rounded out her week with rowdiness and the legal tantrums of Skype founders Zennström and Friis.

Closer to home, Digital Daily covered the media battle between Apple (AAPL) and Google (GOOG), which recalls a shoving match between the prom king and the captain of the football team. Apple continued to insist that it was still “studying” the proposed Google Voice app for iPhone, while Google insisted that it had already been rejected. It’s tough being the popular kids.

Between the smartphone scuffles, Palm CEO Jon Rubinstein was urging everyone to play nice, even as Palm still may have to fight for survival.

The Silicon Valley malevolence even spread to Gotham early in the week. MediaMemo got the backstory on how the New York Times was hacked into spreading malware to its Web visitors. The explanation: It sold an ad to hackers, who posed as mild-mannered VOIP client Vonage (VG) to make the purchase. Meanwhile in a related–or not–story, Microsoft is seeking and suing some mystery malvertisers who perpetrated a similar scheme with ads sold by the software giant. Whether it is a growing trend or a few overachieving hackers, it was a tough week in ad land.

Amid all the kneecapping and eye-gouging, all things Mossberg was a helpful calm in the storm. Walt liked the new features in iTunes 9 and found it uncluttered, easier to use and more intelligent than its predecessor. Also among the hits were upgraded management and improved content-sharing.

Mossberg’s Mailbox was stuffed full of sage advice about online backup as the kids go of to college, compression and the vinyl vs. digital dilemma, and some on-target advice for the family genealogist making the switch from PC to Mac.

The Mossberg Solution delved deeper into email mastery with some unmissable tips and tricks for Microsoft Outlook users. Katie made an industry standard better, and even gave readers a peek into some coming attractions for Outlook 2010.

Tune in next week. We’ll keep bringing you the blow by blow ’til the final bell.

For starters, AT&T a few years ago started its own voice over IP service called CallVantage–but quietly shut down the service earlier this year. True, AT&T and other telcos have been seeing a rapid fall in their residential land lines. But that has more to do with people substituting wireless phones for landlines than it does with the invasion of voice over IP services.

Auriga USA analyst Chandan Sarkar this morning took a look at the theoretical combination, and finds the concept lacking.

Read the rest of this post on the original site

Read the rest of this post on the original site

But it isn’t just Vonage. A whole bunch of micro-cap telecom stocks are on a tear for reasons that so far are not entirely clear to me. Consider this list:

• NextWave (WAVE) today rose $1.02, or 242 percent–242 percent!–to $1.44, on volume of 26.5 million shares. Average volume: 768,000 shares. The stock actually started to run up earlier in the week. Three-day run: 324 percent.
• FiberTower (FTWR) today rose 10 cents, or 17 percent, to 69 cents, on 5.6 million shares. Average volume: 887,000 shares. Three-day move: 53 percent.
• Fairpoint Communications (FRP) today rose 15 cents, or 32.6 percent, to 61 cents, on 9.6 million shares. Average volume: 1.5 million shares, The stock is up another 21 cents, or 34 percent, after hours, for a total move today alone of 78 percent.

Read the rest of this post on the original site

On a trip to Seattle, BoomTown visited the headquarters of the Pet Holdings empire, which includes Lolcats (icanhascheezburger.com), Fail Blog and now, Emails From Crazy People. While there, Kara filmed a video with Ben Huh, CEO of the (profitable!) company. There is obviously a method to Huh’s wackiness.

Elsewhere in Seattle, BoomTown got some of the lowdown on the machinations in the wake of the Yahoo-Microsoft deal. Satya Nadella and Yusuf Mehdi are just two of the Microsoft (MSFT) execs charged with leveraging the deal to knock Google (GOOG) out of its number one spot. They each sat down in front of the Flip camera to share their thoughts.

BoomTown also noted the beginning of the Yahoo-Microsoft regulatory filings this week and provided the full document of Yahoo’s (YHOO) 8-K to the Securities and Exchange Commission about the deal. To think: this is only the tip of the MicroHoo iceberg.

If you were one of the many wondering about Twitter’s high-profile outage this week, don’t worry–Kara provided a handy translation of the co-founder Biz Stone’s blog post about the whole matter. If you weren’t wondering at all, you’re not alone–Kara’s mother and older son, Louie, think the whole thing is a waste of time.

Google CEO Eric Schmidt’s resignation from Apple’s (AAPL) board of directors was just some of the news on Digital Daily this week. In some of the other news, the FTC responded with a “nice try, but we’ll continue our investigation anyway.” Better news for Apple, then, that it claims 32 percent of operating profits in the handset industry, even though it’s only the fifth-largest handset vendor.

In the not-so-good department on Digital Daily this week, NewsCorp. (NWS) (which owns the Wall Street Journal and this Web site) reported a 32.5 percent drop in fiscal-year-adjusted operating income–largely because of its “red-hot” social network, MySpace. Elsewhere, Cisco (CSCO) reported a 46 percent drop in quarterly profit while still beating the Street’s estimates, and Vonage (VG) recorded a second-quarter profit of $2.3 million while losing 89,000 net subscribers in the same quarter.

On Personal Tech, Walt Mossberg reviewed a new netbook from Toshiba this week great battery life and a winning keyboard, among other things. On the Mossberg Solution, Katie Boehret reviewed the Wii MotionPlus remote accessory, an add-on to the Wii remote that includes a gyroscope and allows for more precision and sensitivity in gameplay. Walt responded to readers on Mossberg’s Mailbox, answering emails about buying a new no-frills laptop, switching ISPs and moving contacts emails without too much pain, and discerning the minimum system requirements for Windows 7.

Walt went into a little more detail about Windows 7 on his MossBlog. Unfortunately, he discovered that more detail does not equal more clarity when it comes to a Windows 7 upgrade. At his request, Microsoft sent along a handy chart meant to simplify all aspects of the matter for readers. It is an astoundingly, even comically, complicated document. The company has promised to send a newer, simpler one. Stay tuned.

More next week.

Indeed it is: The Internet phone service provider reported a second-quarter profit of $2.3 million, or a penny a share. Wall Street had been expecting a loss of three cents a share. Great news.

Sadly for Vonage, however, the news was tainted by an increase in subscriber defections. The company lost 89,000 net subscribers during the quarter as churn rose to 3.2 percent from three percent. It ended the quarter with just 2.5 million lines.

“While our financial performance was strong, our subscriber base did not grow at expected levels due in part to the challenges of the current economy and the increasing impact of wireless substitution,” said Vonage Chief Executive Marc Lefar. “During the quarter, we launched our new marketing campaign, which we anticipate will drive new customer acquisition over time.”

“Anticipate” seems a generous word here. “Hope” is perhaps a better one. To lose almost 90,000 subscribers in a single quarter at time when the lousy economy should be inspiring cost-conscious consumers to sign up for Vonage’s discount service seems rather bleak. That better be some marketing campaign.

That’s not nearly as bad as the $10.3 million loss the company posted in the fourth quarter of 2008. Still, it’s not pretty. Especially given some of the company’s other metrics. Vonage (VG) lost 6,000 net subscriber lines during the quarter at a time when you’d expect the souring economy to be driving cost-conscious consumers into its waiting arms. Churn rose to 3.1 percent from 2.9 percent. And ultimately, the company ended the quarter with 2,583,861 subscribers, fewer than the 2,610,360 it had a year ago.

In its earnings release, Vonage said it has tapped TBWA\Chiat\Day, “a firm known for creating impactful messaging on highly regarded brands,” to do something similar for it. But is that even possible with a not-so-highly-regarded brand like Vonage?

It doesn’t look like it. The voice-over IP phone company today posted Q4 revenue of $222 million, up three percent from a year ago. Vonage lost 26 cents a share in the quarter, but noted that it posted an operating profit of $2.8 million, its first quarter ever that far in the black. However, Vonage lost a net 14,700 subscribers, to finish with 2.6 million lines in service.

Wait, wasn’t VoIP supposed the change the world and cripple the Bells? Well, it certainly has made a dent, but the damage is being done largely by the cable companies, rather than Vonage.

Read the rest of this post

Great news for Vonage (VG), which has been tormented by a barrage of costly legal battles and set upon by new and powerful rivals. The company’s net loss shrank to $8.96 million, or 6 cents a share, from a loss of $72.3 million, or 47 cents, in the year-earlier quarter.

Sadly for Vonage, the company’s Q1 loss isn’t the only thing that shrank. Subscriber growth did as well. The company signed up just 30,000 new subscribers in the quarter, a big decline from a year earlier when it added nearly 166,000 subscribers. Worse, turnover rate increased to 3.3% from 3% in the fourth quarter.

Still, Vonage is a bit healthier than it’s been for some time now. So while it may not exactly be on the road to recovery, it’s at least crawling in its general direction. To that end, the company’s inked a deal to resell Covad’s DSL service under the Vonage Broadband name. An interesting idea, in that it will allow Vonage to bundle a broadband offering with its Internet telephony services like most other phone and cable companies on the planet. But DSL? Really? At a time when Verizon (VZ) is expanding its FiOS fiber-optic service and Comcast (CMCSA) is boosting the speed of its high-tier cable broadband?

Many others keep their landline-phone service grudgingly, only because it is needed for things like fax machines. But even they often use their cellphones at home, because their friends and family members dial their cellphone number routinely, and their personal phone books are inside their cellphones.

But there is a big drawback to using a cellphone at home, especially in a large house: You have to schlep it around with you from room to room. By contrast, landline phone service can be used via either cordless or corded extension phones. Now, T-Mobile, one of the big U.S. cellphone companies, is rolling out a new system that it hopes will make cellphone service at home more convenient and even cheaper to use.

The service, being introduced this month in two test cities, Seattle and Dallas, allows you to use a cellphone account with any corded or cordless home phone, with multiple extensions, for just $10 a month. That very low price gets you unlimited domestic calls.

This new T-Mobile service, tentatively called Talk Forever Home Phone, is likely to be available nationally in a few months. It works via a special Wi-Fi wireless router that you must buy, with a two-year contract, for a one-time charge of $50. The router, which can either replace or supplement your existing wireless router, is essentially a stationary cellphone that marries an in-home Wi-Fi network to the T-Mobile cellphone network.

I have been testing the new system and found that it worked well, and it was extremely simple to set up and use. For my tests, I used a cordless phone supplied by T-Mobile, which included a base station and one extension handset. I was able to make and receive calls all over my home in exactly the same manner, and with exactly the same quality, as I do with my normal cordless landline service.

While T-Mobile is selling this cordless phone as a $60 option, it isn’t necessary for use with the new $10 service. The only new hardware that is required is the special Wi-Fi router.

However, there are some significant downsides to the new T-Mobile service that might make people think twice about dumping their landlines. For one thing, it doesn’t work with fax machines, home-security systems and other devices that rely on dial-up modems. Also, unlike landline phones, it doesn’t automatically transmit your home address to 911 emergency centers. You have to manually supply that address to T-Mobile during signup, and the company then sends it to your local emergency center.

Another downside: You must be a T-Mobile cellphone customer to buy and use this $10 monthly home service, and your T-Mobile plan must either be an individual plan costing at least $40 a month or a family plan costing at least $50 a month.

Finally, while you can transfer your current landline phone number to this new service, it cannot share your existing T-Mobile cellphone number. So people who are used to calling you on your cellphone will still do so, and you will still have to race for the cellphone or carry it around to receive those calls. You also can’t transfer your cellphone’s address book to the new home phone.

The special router is made by Linksys and looks very much like a typical Linksys router, except for the fact that it has two standard telephone jacks in the back and slots inside for T-Mobile SIM cards, the same kind that are inside a T-Mobile cellphone.

You can use the special router as a replacement for your current Wi-Fi router, but I just plugged it into an existing port on my old router, inserted the SIM card, and then plugged the cordless-phone base station into one of the phone jacks. It worked immediately, and didn’t affect or degrade my existing Internet service.

In addition to enabling the phone service around my house, the router was also usable by my computers for Internet connectivity, though it doesn’t support the new, fast “n” flavor of Wi-Fi.

This new system is not a so-called voice-over-Internet-protocol phone system, such as Vonage. It doesn’t carry your phone calls wholly over the Internet, but merely uses the Internet to get them to the T-Mobile cellphone network, which then carries the calls as if they had been made on a cellphone.

T-Mobile says the system will work fine even if you don’t have T-Mobile cellphone coverage at your house, because the call doesn’t rely on the cellphone network for its first leg and only is routed to the cell network once it reaches a T-Mobile switching center.

If you are a T-Mobile customer and can live with this system’s drawbacks, the $10 monthly fee may be hard to resist. But this new system is far from a perfect replacement for landline phones.

• Email me at mossberg@wsj.com. Find all my columns and videos online, free, at the new All Things Digital Web site, http://walt.allthingsd.com.

]]> http://allthingsd.com/20080228/t-mobile-service-ties-cellphones-to-home-with-some-sacrifices/feed/ 0 http://allthingsd.com/20071108/ddv20071108/ http://allthingsd.com/20071108/ddv20071108/#comments Thu, 08 Nov 2007 18:00:06 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071108/ddv20071108/

[ See post to watch video ]

]]> http://allthingsd.com/20071108/ddv20071108/feed/ 0 http://allthingsd.com/20071108/vonage-att/ http://allthingsd.com/20071108/vonage-att/#comments Thu, 08 Nov 2007 16:38:21 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071108/vonage-att/ About the best thing to be said about Vonage’s third quarter was that it was an improvement over the second. Which isn’t saying much–especially since the $161.8 million loss the company reported was more than double that of a year ago, weighed down by the legal costs of a pair of major patent disputes.

Still, quarterly revenue did grow to $211 million from $162 million, a bit ahead of the Street’s estimate of $210 million. And Vonage signed up some 78,000 new customers, though customer loyalty remains a problem. Churn–the percentage of subscribers who cancel service–rose to 3% from 2.5% in the prior quarter.

Best of all, Vonage has settled another of the patent-infringement lawsuits against it–this one with AT&T. Under the terms of the agreement, Vonage will pay the telecom $39 million over five years. Not exactly a pittance, but certainly less than the $80 million Vonage paid to settle its dispute with Sprint Nextel and a hell of a lot less than the $120 million it may end up forking over to Verizon.

Vonage’s long-suffering investors reacted well to the settlement, sending shares in the company up 16% to $2.38.

]]> http://allthingsd.com/20071108/vonage-att/feed/ 0 http://allthingsd.com/20071108/vonage-att-2/ http://allthingsd.com/20071108/vonage-att-2/#comments Thu, 08 Nov 2007 16:38:21 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071108/vonage-att/ About the best thing to be said about Vonage’s third quarter was that it was an improvement over the second. Which isn’t saying much–especially since the $161.8 million loss the company reported was more than double that of a year ago, weighed down by the legal costs of a pair of major patent disputes.

Still, quarterly revenue did grow to $211 million from $162 million, a bit ahead of the Street’s estimate of $210 million. And Vonage signed up some 78,000 new customers, though customer loyalty remains a problem. Churn–the percentage of subscribers who cancel service–rose to 3% from 2.5% in the prior quarter.

Best of all, Vonage has settled another of the patent-infringement lawsuits against it–this one with AT&T. Under the terms of the agreement, Vonage will pay the telecom $39 million over five years. Not exactly a pittance, but certainly less than the $80 million Vonage paid to settle its dispute with Sprint Nextel and a hell of a lot less than the $120 million it may end up forking over to Verizon.

Vonage’s long-suffering investors reacted well to the settlement, sending shares in the company up 16% to $2.38.

]]> http://allthingsd.com/20071108/vonage-att-2/feed/ 0 http://allthingsd.com/20071022/ddv20071022/ http://allthingsd.com/20071022/ddv20071022/#comments Mon, 22 Oct 2007 18:00:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071022/ddv20071022/

[ See post to watch video ]

]]> http://allthingsd.com/20071022/ddv20071022/feed/ 0 http://allthingsd.com/20071022/att-sues-vonage/ http://allthingsd.com/20071022/att-sues-vonage/#comments Mon, 22 Oct 2007 07:01:46 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071022/att-sues-vonage/ Unlimited local and long-distance calls aren’t the only things Vonage is selling at a steep discount these days–check out its stock. Shares of the Internet phone company, which went public in May 2006 at $17, are this morning trading at $1.32, down 14.29% on news that AT&T has filed a patent-infringement lawsuit against it.

In a filing with the U.S. District Court for the Western District of Wisconsin, the telecom accuses Vonage of willfully infringing upon a single AT&T patent: No. 6,487,200, which describes, broadly, a system for routing telephone calls over data networks. From the abstract:

A packet telephone system which employs a packet network that provides virtual circuits. The packet telephone system employs short packets containing compressed speech. The use of the short packets makes possible compression and decompression times and bounded delays in the virtual circuits, which are together short enough to permit toll-quality telephone service. The packet telephone system employs an intelligent network interface unit to interface between the packet network and standard telephone devices. The network interface unit does the speech compression and decompression and also responds to control packets from the packet network. Consequently, many telephone system features can be implemented in the network interface unit instead of in the switches. The network interface unit may also be used to provide data connections to devices attached to it. The combination of virtual circuits, with bounded delays, short packets, rapid compression and decompression, and intelligent network interface units makes it possible to build a telephone system with fewer and cheaper switches and fewer links for a given volume of traffic than heretofore possible and also permits substantial savings in provisioning and maintaining the system.”

Seems a bit broad, but now that Sprint Nextel and Verizon have proved you can win a jury verdict on such claims, AT&T would have been foolish not to sue. And, to be fair, the company claims it sued only after it failed to negotiate a “reasonable licensing arrangement” with Vonage. “We were forced to file a lawsuit,” said an AT&T spokesman.

In a statement, Vonage vowed to continue negotiations. “It’s our preference to settle disputes through negotiation rather than litigation,” said Vonage chief legal officer Sharon O’Leary. “We will continue to work toward an amicable solution.”

]]> http://allthingsd.com/20071022/att-sues-vonage/feed/ 0 http://allthingsd.com/20071008/ddv20071008/ http://allthingsd.com/20071008/ddv20071008/#comments Mon, 08 Oct 2007 18:00:51 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071008/ddv20071008/

[ See post to watch video ]

]]> http://allthingsd.com/20071008/ddv20071008/feed/ 0 http://allthingsd.com/20071008/vonage-sprint/ http://allthingsd.com/20071008/vonage-sprint/#comments Mon, 08 Oct 2007 13:11:34 +0000 John Paczkowski http://digitaldaily.allthingsd.com/20071008/vonage-sprint/

These patents are invalid. We don’t owe them a dime.”
– Vonage lawyer Louis Jameson, Sept. 21

Vonage lawyer Louis Jameson was right. Vonage doesn’t owe Sprint Nextel a dime. It owes the company 800 million of them. Vonage settled its patent dispute with Sprint Nextel this morning for $80 million–$35 million for past use of Sprint’s patented technology and $40 million for future licensing, along with a $5 million prepayment.

Sprint, in turn, has agreed to license Vonage its VOIP portfolio, which includes more than 100 patents covering methods and components to connect voice calls between a traditional telephone network and an IP network. The settlement comes two weeks after a federal jury ruled that Vonage illegally used Sprint patents and awarded Sprint $69.5 million in damages.

In a statement today, Vonage General Counsel Sharon O’Leary said, “We believe this deal is good news for Vonage, our customers and our shareholders. It allows us to put this litigation behind us and continue to focus on our core business by removing the uncertainty of legal reviews and long-term court action.”

Presumably with the “uncertainty of legal reviews” removed, Vonage will have that much more time to focus on other uncertainties, like its financial viability. As of June 30, Vonage only had $344 million in cash. Of that, $66 million is restricted cash used as collateral for the Verizon bond. (Verizon also won its patent-infringement case against Vonage.) And it’s carrying $248.2 million in debt, with a put option that may mean it is due as soon as December 2008.

But why dwell on matters so bleak. There is, after all, good cause for celebration: Vonage stock soared as much as 80% this morning–if soaring is what you call reaching for $2 per share from a baseline of $1.56–on the news, giving the company its biggest single-day advance since going public last year.

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