Between the Lines

November 23rd, 2009

Online retailers, marketing firms scam consumers for $1.4 billion

Posted by Andrew Nusca @ 4:18 pm

Categories: E-commerce, Government, Marketing, Retail, Security

Tags: Consumer, Marketing, Credit Card, Retail Company, U.S. Senate, Marketing Firm, Greg Sandoval, Retail, Andrew Nusca

A U.S. government investigation has prompted several well-known online retailers to sever ties with marketing firms after both were accused of working together to deceive customers out of $1.4 billion.

The retailers, including Priceline.com, Classmates.com, FTD.com, Shutterfly.com and Orbitz.com, were accused of working with marketers Affinion, Vertrue and Webloyalty to mislead consumers into unknowingly signing up for “affinity” or “loyalty” programs that would charge their credit card accounts.

Read the rest of this entry »

November 23rd, 2009

HP reports Q4; raises outlook for 2010

Posted by Sam Diaz @ 1:30 pm

Categories: Earnings, Hewlett-Packard

Tags:

Hewlett Packard today reported its fourth-quarter earnings that were in-line with a preliminary release last week, when the company announced plans to acquire 3Com. For the quarter, the company reported earnings of $1.14 per share on $30.8 billion in sales. Analysts had been expecting of $1.13 per share on $30.4 billion. (Statement)

For the full year 2009, the company reported earnings of $3.85 per share on sales of $114.6 billion.

Looking ahead, the company forecast earnings of $1.03 to $1.05 per share on sales of $29.6 billion to $29.9 billion for the first quarter - which would include the holiday season. For the full year 2010, the company raised its projection to $118 billion to $119 billion, up from $117 billion to $118 billion and also upped its earnings projection to $3.65 to $3.75 per share, up from $3.60 to $3.70. The projections do not reflect any impact from the 3Com acquisition, the company said.

Among the highlights of the quarter was the eight percent jump in revenue, to $8.9 billion, in Services, which has been a darling of the company as its integrated EDS.

On a call with analysts, Hurd said the integration of EDS, which he called an “enormous asset,” has gone well and that the company is just starting to leverage it to position HP in not only services offerings but through hardware and software, as well. In a statement, HP Chairman and CEO Mark Hurd said:

HP’s solid performance in Services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010. Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position.

In contrast, the imaging and printing group saw a revenue decline of 15 percent, down to $6.5 billion. Supplies - aka ink - revenue was down 8 percent. Printer unit shipments were down 20 percent, with commercial units down 38 percent and consumer units down 14 percent.

Also see: HP’s printing business: Will ink spending be questioned in the long run?

Hurd said the group is positioning itself for recovery with strategic moves, including controlling costs and inventory levels, as well as corporate partnerships and web-connected printers. He said the company sees mergers and acquisitions as a way of quickly entering adjacent businesses that work well with HP’s strategies. He touted the 3Com deal as one that will advance HP’s offerings in security and networking, enabling it to “deliver the next generation of data centers.”

Finally, Hurd said the company is positioned stronger than when it entered the economic downturn. The economy remains challenging, Hurd said, but that there are “encouraging signs of recovery” that are starting to emerge in certain markets.

Shares of HP were up about 2 percent in regular trading, closing at $51.02. In after hours trading, shares saw a slight decline.

November 23rd, 2009

Analyst: News Corp.'s Google saber rattling really about MySpace

Posted by Larry Dignan @ 1:17 pm

Categories: Bing, General, Google, Microsoft, Search

Tags: Google Inc., News Corp., MySpace, Lindsay, Operational Accounting, Finance, Larry Dignan

News Corp.’s alleged dance with Microsoft’s Bing and Rupert Murdoch’s big plan to de-index from Google is likely to be nothing more than saber rattling to secure a semi-respectable MySpace search deal, according to an analyst.

Bernstein analyst Jeffrey Lindsay made some key comments on news that News Corp. is looking to cut a deal with Bing (Financial Times, Techmeme).

Today’s articles reporting that News Corp. is exploring planning to remove its newspaper content from Google’s search engine but keep it on Microsoft are unlikely to cause much angst in Mountain View. We think the reports are saber-rattling from News Corp. to put pressure on Google during the renegotiation of the advertising deal with MySpace. We think Microsoft, as usual, is fishing in troubled waters in the hope that it may get something out of the situation or at least give “market leader” (Microsoft management’s name for Google) a poke in the eye.

The MySpace angle was raised by a reader in my last post. And it makes a lot of sense. News Corp. is trying to pressure Google ponying up money for a MySpace search deal. Google is likely to walk away from the MySpace deal, according to analysts.

Google paid MySpace $900 million guaranteed in a 3-year search in a disaster of a deal. Lindsay reckons that Google has countered with only $50 million in guaranteed revenue.

Lindsay writes:

We think the story has broken at a critical time in the Google-MySpace re-negotiation. In the original deal negotiated three years ago, Google guaranteed payments of $300 million per year ($900 million in total) provided News Corp. and MySpace met certain traffic volumes. This deal has been a large negative to Google (we estimate that at its height it reduced Google’s operating margins by over 100bps), but has been a godsend for MySpace right through the economic downturn. We note, however, that Google’s new CFO, Patrick Pichette has brought a long-absent discipline to AdSense for Content renewals and that instead of agreeing to a renewal of $300 million in guaranteed annual revenues, Google is reported to have counter-offered $50 million in guaranteed revenues – giving some indication of just how uneconomic the original agreement was.

Meanwhile, MySpace’s traffic drop has already lowered Google payments to News Corp., estimates Lindsay.

A few points raised by Lindsay:

• Google drives 11 percent to 14 percent of traffic to News Corp.’s properties.
• Murdoch’s de-index Google plan only works if other news sources follow.
• Google doesn’t need News Corp., which amounts to just 10 basis points of daily traffic (and lower ad revenue). News Corp. gets 12 percent of daily traffic from Google.
• Google would walk away from an uneconomical MySpace deal and Microsoft shareholders won’t be too hip to an expensive deal given losses at the software giant’s online unit.

November 23rd, 2009

Google to beef up display ads with acquisition of Teracent

Posted by Sam Diaz @ 12:46 pm

Categories: Advertising, Google

Tags: Google Inc., Acquisition, Advertisement, Sam Diaz

Google, in an effort to bring more value to its display advertising business, has announced plans to acquire Teracent. In a blog post, Google explained its interest in Teracent:

Teracent’s technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors. These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads. This technology can help advertisers get better results from their display ad campaigns. In turn, this enables publishers to make more money from their ad space and delivers web users better ads and more ad-funded web content.

To explain the idea, the company uses an image of two similar display ads, a template altered for a create a new look, add a custom message and provide more information about specific products. This all goes along with Google’s recent efforts to improve display advertising, including measurement tools and the Double-Click Ad Exchange.

Financial terms of the deal were not disclosed.

November 23rd, 2009

Apple's Schiller defends app approval process; misses the point

Posted by Sam Diaz @ 11:14 am

Categories: Android, Apple, Mobile, iPhone

Tags: QA, Apple Inc., Approval, App, Sam Diaz

Apple VP Phil Schiller is coming to the defense of his company’s process for approving - or rejecting - apps submitted for its iPhone and iPod Touch. In an interview with Business Week, he talks about how some apps are inappropriate, how some cross legal boundaries that could potentially put Apple at risk and others are just simply buggy. (Techmeme)

But that’s not the issue at-hand. Approvals aren’t a bad thing - at least at this point in time, given how new the marketplace is. While the Business Week piece offers some insight as to why some apps are rejected or approved, it doesn’t offer much insight into the process that happens behind the scenes.

No, I’m not asking for proprietary information on how it’s done but rather the sequence of events around the process and a estimated timeline for approval or rejection. That would directly address the biggest complaint among developers lately - the inconsistency in approval of apps and the stuck-in-perpetual-limbo status that some find themselves in. The developers just need updates. They’re simply saying, “Hey, if the app is buggy, send it back so we can fix it.” Or if it’s inappropriate, slap a rejection stamp on it, along with an explanation, and move on.

Also see: Apple’s app approval revolt: Will it matter? Maybe

If Apple wants to keep this sort of control over apps and grow its app store marketplace, it’s going to need to beef up its quality assurance department and kick that approval process into high gear, with some clear-cut policies and an established procedure for submissions and appeals.

I’m no developer so I can’t speak directly about the frustrations with the process. If there are policies and procedures already in place, they seem to be flawed. Developers are squawking and that’s something Apple needs to address because it eventually could become a problem.

When it comes to mobile app platforms, the competition is heating up. Android is entering the scene hard and fast with devices and an app store of its own. Schiller is right to defend the process as it relates to reasons for rejection and approval.

But it sounds like Apple’s app store quality assurance team needs a quality assurance team of its own, something that spots defects in the process and works on fixing them.

November 23rd, 2009

LinkedIn's platform debut: Late but important

Posted by Larry Dignan @ 10:58 am

Categories: General, Social networking, Web 2.0

Tags: LinkedIn, B2B, Recruitment & Selection, E-business/E-Commerce, Internet, Human Resources, Workforce Management, Larry Dignan

LinkedIn has opened its platform so developers can integrate the site into business apps and Web sites. Think Facebook Connect for professionals.

A little late? You bet. Important. You bet.

In the end, there’s a lot of me-too in LinkedIn’s announcement. LinkedIn APIs and widgets are now available to connect folks. For the business-to-business world, this LinkedIn integration could be notable.

So why does all this networking matter? LinkedIn has never been more important as the unemployment rate rises. Facebook keeps you up to date, but LinkedIn can help you get a job.

As comScore noted back in September, LinkedIn “has become more important than ever for those looking for job opportunities and it has the growth to show for it.”

Simply put, LinkedIn may be late, but for the site’s popularity the timing may be just right.

November 23rd, 2009

AOL ditches the triangle; previews new brand identity, logos

Posted by Andrew Nusca @ 9:09 am

Categories: AOL

Tags: Brand, America Online Inc., Brand Identity, Publishing Business, Branding, Marketing, Andrew Nusca

In a move that mimics Yahoo’s “It’s You” media branding campaign, AOL has unveiled a “new brand identity” now that the company will spin off from corporate conglomerate Time Warner on Dec. 10.

Instead of the old triangle logo the world has come to recognize, AOL is moving in a new, more multifaceted direction, introducing a new text logo printed across colorful splash backgrounds, including a goldfish, a “rock hand,” scribbles and more.

For now, the new logos are just the tip of the iceberg, a preview of an upcoming full announcement once the company is fully spun off from Time Warner.

The rebranding also marks AOL’s shift from an Internet provider to a digital publisher. The company, helmed by CEO and former Googler Tim Armstrong, has a large family of blogs from the purchase of Weblogs, Inc. in 2005 that includes Engadget, Joystiq, Autoblog, TUAW, Asylum and Switched.

“Historically, brand identity has been monolithic and controlling, little more than stamping a company name on a product. AOL is a 21st century media company, with an ambitious vision for the future and new focus on creativity and expression, this required the new brand identity to be open and generous, to invite conversation and collaboration, and to feel credible, but also aspirational. We’re delighted to have worked so closely with the AOL leadership team to create something bold and exciting that sets AOL apart,” said Karl Heiselman, CEO of Wolff Olins, the global brand and innovation consultancy that AOL partnered with for the new digs.

Nevertheless, AOL’s primary revenue still comes from its connectivity business, and while its online properties help it redefine its corporate image, the company’s still heavily relying on it. The online publishing business is still very much in flux and heavily dependent on ad revenue, which is depressed in the wake of the recession.

November 23rd, 2009

eBay gets off to rough holiday shopping start

Posted by Larry Dignan @ 8:43 am

Categories: E-commerce, Economy, General, eBay

Tags: eBay Inc., Outage, E-business, Web Technology, E-business/E-Commerce, Internet, Larry Dignan

EBay is kicking off this key holiday shopping week with credits for sellers affected by a search outage over the weekend.

The company on Saturday suffered a search outage “due to errors in some of our backend systems.” A search on products would lead to an error message or blank page. Six hours later service was restored mostly and the company said “we will be issuing full credits for all affected items for this title search outage.”

Almost 24 hours later search was fully restored, including secondary search features such as color, inventory and clothing size.

The outage comes amid a critical time for sellers who are listing products for what could be a big shopping week. And while the outage for eBay isn’t material to earnings it does make you wonder if the auction site is ready to roll when crunch time. And crunch time comes a week from today on “Cyber Monday,” the next workday after Black Friday when e-commerce is supposed to ramp up.

Read the rest of this entry »

November 23rd, 2009

Sergey Brin: Google Android, Chrome OS likely to converge

Posted by Andrew Nusca @ 8:20 am

Categories: Chrome OS, Google, Mobile, Operating Systems

Tags: Google Inc., Google Android, Mobile, Operating System, Sergey Brin, Mobile Operating Systems, Desktops, Advertising & Promotion, Smart Phones, Open Source

Google’s two operating systems, mobile Android and desktop Chrome OS, will likely converge as a single OS in the future, said Google co-founder Sergey Brin.

“Android and Chrome will likely converge over time,” Brin said in an informal discussion with reporters after the company’s Chrome OS presentation last Thursday. Brin added that the common Linux and Webkit code base present in both projects facilitates convergence.

Read the rest of this entry »

November 23rd, 2009

Is Wikipedia maxed out?

Posted by Larry Dignan @ 7:37 am

Categories: General, Web 2.0, Web Technology, Wikinomics

Tags: Wikipedia, Wiki, Online Communications, Larry Dignan

Wikipedia may have reached the upper limits of what can be done with crowdsourcing, according to a researcher in Spain.

Felipe Ortega, a researcher at the Universidad Rey Juan Carlos in Madrid, notes that Wikipedia is at risk because its core editors can’t continue to keep up their current pace. And if Wikipedia doesn’t recruit more volunteers its content could suffer.

Ortega’s research, the basis of his Ph.D. thesis, was highlighted by the Wall Street Journal. The PDF of the thesis contains more than you’ll ever want to know about how Wikipedia works. It’s worth reading at least a few pages—it’s 162 pages before you hit the bibliography.

The main conclusion that we can infer from the overall results of our quantitative analysis is that there exists a severe risk on the capacity of the top-ten Wikipedias, to maintain their current activity level in due course. According to our graphs and numbers, the inequality level of the contributions from logged authors is becoming more and more biased towards the core of very active authors. At the same time, the monthly Gini coefficients show that the inequality level of contributions from logged authors has remained stable over time, at the cost of demanding more and more contributions from active authors to alleviate this deficit of monthly revisions.

Furthermore, we have seen that the distribution of the total number of revisions per author follows an upper truncated Pareto distribution. While more core authors begin to reach the upper limit of their human contribution capacity, we will see a point in the future of this language versions in which the steady-state of the monthly Gini coefficient will start to decrease. This situation would not pose a problem in itself, unless for the fact that we have demonstrated that the most significant part of the content creation effort in Wikipedia is not undertaken by casual, passing-by authors, but by members of the core of very active contributors.

On top of that, the lack of new core members seriously threaten the scalability of the top-ten language versions regarding the quality of their content.

Simply put, active editors are carrying too much weight. In the first three months of 2009, Wikipedia lost more than 49,000 editors, compared to 4,900 a year earlier. In the Journal story, Wikipedia officials maintained that the foundation could carry on fine with fewer volunteers, but that premise is questionable given the size of Wikipedia. As Wikipedia is reproduced in more languages it should need a larger army of volunteer editors.

It’s possible that Wikipedia is already being stretched. Ortega noted in the Journal story that the site is becoming increasingly hostile.

Jimmy Wales, founder of Wikipedia, tells the Journal it’s unclear what the optimal number of volunteers is, but the hostility can be corrected.

The larger question is whether crowdsourcing has a cap or not. Is there a point where crowdsourcing gets so big that it crumbles under its own weight? It’s a worth asking the question, but let’s put this in a little perspective. If Wikipedia somehow imploded it would still be one of the best examples of the Web at work. For corporate purposes, you could crowdsource R&D, get huge, perhaps create some neat products and dismantle if it got unwieldy.

Overall, there’s a big coordination problem at work here. But Wikipedia is at the collaboration forefront in terms of doing it at scale. Whatever happens from here with Wikipedia is going to be educational.

Post script: I wonder if the economy has something to do with Wikipedia’s drop-off in volunteers. Let’s say you were an active volunteer with a job. Let’s say you were laid off. Would you spend your time managing Wikipedia or looking for a job? It may be worth looking into other volunteer-based organizations and what happens during a downturn. Do people volunteer more or less?

November 23rd, 2009

Admob: Droid and Android army make big browsing splash

Posted by Larry Dignan @ 6:42 am

Categories: Android, General, Google, Mobile, Motorola, RIM, Research In Motion

Tags: Mobile, Smart Phone, Motorola Inc., Apple iPhone Platform, Smart Phones, Cellular Phones, Handhelds, Consumer Electronics, Personal Technology, Hardware

It didn’t take long for Motorola’s Droid to make a big splash in the browsing statistics, according to mobile ad firm AdMob.

In AdMob’s latest metric report (blog, statement, PDF), Android phones had 20 percent of smartphone traffic, up 7 percent from six months before. And Motorola’s Droid and CLIQ have had a quick impact on the browsing share.

AdMob, which has been acquired by Google, looked at the devices that comprise the market share of the mobile players. For instance, here’s a look at the Android breakdown:

Simply put, Motorola’s new handsets really moved the needle within Android market share stats.

RIM’s breakdown was also interesting. The big takeaway: The Curve rules the roost and the Storm is a so-so performer. Browsing is infinitely better on the Storm than Curve so it’s a little surprising it doesn’t have more share.

Overall, not a lot has changed in the smartphone standings. Apple’s iPhone platform is dominant. However, Android and its army of devices are likely to make a push in the months to come.

November 23rd, 2009

Meet Pearltrees: Bookmarks with a social twist

Posted by Sam Diaz @ 2:30 am

Categories: Social Media, Social networking, Web Technology

Tags: Twitter Inc., Link, Pearltrees, Social Networking, Web Browsers, Internet, Online Communications, Marketing, Advertising & Promotion, Sam Diaz

A French Web site, called Pearltrees, is developing a Web service that is trying to bring a social networking element to bookmarking - but with the connections based on content instead of people. Think Facebook and Twitter mixed with one Amazon’s recommendation system.

You don’t add friends in Pearltrees. Instead, you add links. As you come across something on the Internet that interests you, something that you might have otherwise bookmarked or tweet, you put it in your personal pearltree - which is really like a “main folder,” that contain the links themselves, called “pearls.”

Here’s the trick: if there are others on Pearltree who have also posted that same URL into one of their own pearltrees, you are now connected and can see their other links. No, that doesn’t mean you’re “friends” with that person or that you are even “following” them. You both just chose to save the same link in Pearltree - and chances are good that person may have saved some links that might be of interest to you.

The service, which is free, is still in alpha mode and has limited functionality and exposure. For the most part, it’s only been used in France, but the company is making a push into the U.S. now. The execs are also working on an integration with Twitter, which would allow the links embedded into a tweet to also be placed into Pearltrees, as well. And, there are also plug-ins (Firefox and IE) or bookmarklets (Chrome and Safari) to get content into Pearltrees.

For now, it’s a bit buggy but the concept is pretty solid. The stuff that I discover is “pushed” at me via Twitter and Facebook is based on the interests of people I know. That doesn’t mean we share common interests all the time, though, and much of that content may not even be worth reading.

With Pearltrees, I “pull” information that’s more likely to be relevant to my interests. There’s certainly some value in that.

November 23rd, 2009

Smart Planet: A bright idea for wasteful office lighting

Posted by Larry Dignan @ 2:00 am

Categories: General, Green Tech, Innovation

Tags: Commercial Office Building, Adura Technologies, Adura, Desktops, Hardware, Larry Dignan

Commercial office buildings are one of the main culprits of the current climate crisis. They consume large amounts of electricity and release excessive carbon emissions into the atmosphere. Adura Technologies has developed a mesh-based lighting system that is reducing costs and consumption inside buildings. The technology consists of wireless radios that plug into florescent light fixtures giving employees more control over their personal lighting space. Adura has also created a dual motion sensing-personal control system that is being used at UC Berkeley that allows students to break the hard-wired connection and control their lighting from their desktop PCs.

November 23rd, 2009

News to know: MSFT-News Corp.; YouTube; Chrome OS; California HDTV; Oracle-Sun

Posted by Sam Diaz @ 2:00 am

Categories: General, News to know

Tags: Google Inc., Larry Dignan, Oracle Corp., Operating System, Sun Microsystems Inc., YouTube Inc., Jason Perlow, Matthew Miller, Government, Microsoft Windows 7

Here are today’s notable headlines. You can get News To Know via email alert and RSS daily. For continuous updates see BNET’s around-the-Web tech coverage:

Larry Dignan: A Microsoft and News Corp. search pact? It adds up

Christopher Dawson: YouTube automatic captioning: one more reason GOOG’s not evil

Jason Perlow: A Chrome OS Video Tour

• Rachel King: Google Chrome OS has arrived as free VMWare download
• Mary Jo Foley: Will Microsoft’s Silverlight dampen the appeal of Google’s Chrome OS?

Sean Portnoy: California adopts tough new requirements on HDTV energy use: Visionary or draconian?

• Poll: Where will you shop for an HDTV on Black Friday?

Sam Diaz: EU extends deadline for review of Oracle-Sun deal

Doug Hanchard: Internet: A threat to government or the other way around?

• Internet: A threat to government or the other way around? (Part 2)
• Internet: A threat to government or the other way around? (Part 3)

Matthew Miller: Hands-on with the T-Mobile Samsung Behold II Google Android smartphone

• Image Gallery: A look at the T-Mobile Samsung Behold II Google Android device

Larry Dignan: Michael Dell sticks to Windows 7 big bang theory

Dan Kusnetzky: iPhone - is it a good tool for traveling business people?

Jason Perlow: Roku becomes cloud-enabled with new Roku Channel Store and Developer SDK

Chris Jablonski: The surgeons of tomorrow: Miniaturized robots that go inside you

Harry Fuller: More people, more pollution, right?

Jason Perlow: Stupid DROID Tricks, Volume 1

Garett Rogers: GrandCentral closing up shop

Harry Fuller: American cars giving slightly more miles per gallon

Matthew Miller: Want to see the HTC HD2? Join me at the PSHUG meeting next Tuesday

Jason Perlow: Frugal Friday: Joblessness, DROID, Chrome OS, Richard Stallman, V.i. labs

Oliver Marks: Flipping Fantastic

Jason D. O’Grady: First serious iPhone app for DJs: Touch DJ

Joe McKendrick: Popping the buzzword bubble

Phil Wainewright: Taming the Chatter cloud

Paul Murphy: Educating IT decision makers

Christopher Dawson: Who’s afraid of the big bad cloud?

Doug Hanchard: Friday’s Throw out the trash day and Polls for the week of Nov 20th

Jason D. O’Grady: Appearance: PPUG meets tomorrow in Philadelphia

Tom Foremski: Tech Awards: Al Gore’s a bore, “cash prizes” . . . and amazing laureates

Heather Clancy: Holiday LED redux: E-store will accept Home Depot coupon

Andrew Nusca: New Pogoplug brings hard drives online with additional USB ports, bright colors

Harry Fuller: Science of better fuel cells

Read the rest of this entry »

November 22nd, 2009

A Microsoft and News Corp. search pact? It adds up

Posted by Larry Dignan @ 5:41 pm

Categories: Bing, General, Google, Microsoft, Search

Tags: Google Inc., Microsoft Corp., News Corp., Search, Larry Dignan

Microsoft and News Corp. are reportedly discussing a deal where Rupert Murdoch would take his properties and delist them from Google. These sites would presumably wind up on Bing.

The Financial Times reported that Microsoft and News Corp. have talked about de-indexing its news Web sites from Google. In addition:

The Financial Times has learnt that Microsoft has also approached other big online publishers to persuade them to remove their sites from Google’s search engine.

Crazy? Not if the money is right.

Microsoft’s grand plan would be to hamper Google by taking key properties away. And the software giant’s idea to approach other newspapers makes sense too. After all, Microsoft’s search partner Yahoo is really tight with newspapers.

The big picture here: Microsoft wants to ding Google, but it also wants market share. In many respects, search engines could resemble the stock exchanges. The Nasdaq and New York Stock Exchange spend a lot of time and money on poaching big-name companies from each other. However, the investor doesn’t really care where a company lists shares. You use both exchanges.

Carry that analogy out to search and you see what Microsoft is pushing with Bing. Microsoft only wants to be on par with Google. If Bing has properties that garner attention perhaps consumers will use Microsoft’s search a little more. If folks use Bing and Google throughout the day it’s a clear win for Microsoft.

November 20th, 2009

Who's afraid of the big bad cloud?

Posted by Christopher Dawson @ 9:27 pm

Categories: General

Tags: Google Inc., Tech New, Data Center Virtualization, Software As A Service (SaaS), Linux, Cloud Computing, Operating Systems, Storage, Hardware, Data Centers

Tech news has been dominated this week by Google’s announcements regarding their upcoming Chrome OS. Plenty of geeks are excited at the prospect of a lightweight, user-friendly, Linux-based operating system that, if only on the basis of brand cache, can be a potential Windows competitor in some important sub-markets. Plenty of industry insiders and business analysts are excited at the revenue potential for Google and new levels of competition. You know who aren’t excited? Those who say we aren’t ready for an OS dependent upon “The Cloud” (dramatic music plays here).

These are the same people who regularly stop by my ZDNet Education posts and can’t believe my affection for Google Apps or my willingness to use a student information system that’s hosted in the cloud. “Why wouldn’t you run the system on your own servers? Why would you run mission-critical mail and communications in the cloud? Why would you let your student data sit somewhere else?”

Uhhhh…because my time should be spent on my real business (in my case, integrating technology into education and ensuring that teachers have the data and resources they need to do their own jobs), not running servers when Google can do it infinitely better than I can or when other SaaS vendors can leverage large virtualized data centers to deliver high quality services to me quickly and with minimal intervention on my part. Read the rest of this entry »

November 20th, 2009

EU extends deadline for review of Oracle-Sun deal

Posted by Sam Diaz @ 11:45 am

Categories: EU, Government, Oracle, Sun

Tags: Oracle Corp., European Commission, Sun Microsystems Inc., Regulations, Mergers & Acquisitions, Open Source, Databases, Government, Investment, Finance

European regulators have agreed to extend the deadline to review Oracle’s acquisition of Sun, giving Oracle some more time to develop arguments in reply to Europe’s concerns, according to a Reuters report.

Earlier this month, the European Commission filed a Statement of Objections, a first step toward blocking the $7.4 billion deal, over concerns about MySQL. Oracle immediately fired back, issuing a statement that said European regulators have a “profound misunderstanding of both database competition and open source dynamics.” The same day, the U.S. Department of Justice, which has already given its blessing to the deal, pretty much backed Oracle and offered reasons why the U.S. did not see the deal as anti-competitive.

Oracle has said that delays are becoming costly - to the tune of $100 million per month - and are further damaging the economies through job losses. Sun has had to put restructuring plans in place to stay alive while everyone waits for European approval, most recently by laying off 3,000 employees.

Oracle has said that Sun’s customers “universally support this merger and do not benefit from the continued uncertainty and delay.” The company said evidence against the Commission’s position is overwhelming. and that it lacks any credible theory or evidence of competitive harm.

The deadline was extended by one week, to Jan. 27, 2010 from Jan. 19.

Also see: Oracle tries to stop Sun’s bleeding: Is it too late?

November 20th, 2009

Mozilla: Still too dependent on Google for revenue; Can it diversify?

Posted by Larry Dignan @ 4:49 am

Categories: Browser technology, Earnings, General, Google, Mozilla, Web Technology

Tags: Revenue, Google Inc., Mozilla Firefox, Mozilla Corp., Operational Accounting, Web Browsers, Finance, Internet, Larry Dignan

Mozilla reported its 2008 audited financials and the organization behind the Firefox browser delivered consolidated revenue of $78.6 million, up 5 percent from 2007. And the revenue picture looks even better if you exclude the $7.8 million loss in Mozilla’s investment portfolio. The worry: Google, now a competitor, is still bankrolling Mozilla.

Mitchell Baker, chairman of the Mozilla Foundation, outlined the financial picture on her blog. There’s a lot of good stuff in there.

To wit:

• Mozilla funds 200 people working full or part-time on Mozilla.
• The company has outposts across the globe and Firefox comes in 70 languages.
• Mozilla is launching messaging software.
• And Firefox has 110 million daily users as of November.

The worry for me as a Mozilla fan: The foundation’s financial stability depends on Google. Baker noted that Mozilla is diversifying its revenue base somewhat, but not enough in my view. She notes on her blog the majority of Mozilla’s revenue “is generated from the search functionality in Mozilla Firefox from organizations such as Google, Yahoo, Amazon, eBay, and others.”

A trip to the actual audited PDF of Mozilla’s financial results and a note on “concentrations of risk” reveals:

Mozilla has a contract with a search engine provider for royalties which expires in November 2011. The contract was recently amended and extended to November 2011. Approximately 91% and 94% of Mozilla’s revenue for 2008 and 2007, respectively, was derived from this contract. The receivable from this search engine provider represented 80% and 86% of the December 31, 2008 and 207 outstanding receivables, respectively.

Obviously that search provider is Google. Simply put, Mozilla needs to diversify that revenue base from Google, which funds the foundation, but is increasingly a competitor. Having a rival fund your operations isn’t comfortable for any organization. Mozilla’s current situation is like Oracle accounting for the bulk SAP’s revenue. Or Microsoft providing most of Red Hat’s revenue. Or MySpace accounting for the majority of Facebook revenue. You get the idea.

Baker notes in her blog:

The past few years have seen an explosion of innovation and competition in web browsers, demonstrating their critical importance to the Internet experience and marking the success of our mission. In 2008 not only did Microsoft and Apple continue developing their web browsing products, but Google announced and released a web browser of its own. Competition, while uncomfortable, has benefited Mozilla, pushing us to work harder. Mozilla and Firefox continue to prosper, and to reflect our core values. We expect these competitive trends to continue, benefiting the entire Web.

Can Mozilla realistically diversify its revenue base away from Google? That’s unclear on many fronts. Google has the dominant market share in search. Yahoo is a non-factor. And Microsoft has the Bing search engine, but isn’t likely to support Firefox, a browser that competes (and often wins) against the software giant’s Internet Explorer.

Given that landscape Mozilla needs to get creative about that lucrative search box. Of Mozilla’s revenue generating partners only Amazon and eBay have the heft to really help diversify the foundation away from Google. Instead of a search box, perhaps Firefox needs a commerce box that would allow eBay and Amazon to pick up some of the revenue slack.

How do you think Mozilla can diversify away from Google?

November 20th, 2009

Michael Dell sticks to Windows 7 big bang theory

Posted by Larry Dignan @ 4:30 am

Categories: Dell, Earnings, Economy

Tags: Revenue, Dell Computer Corp., Theory, PC, Microsoft Windows 7, Microsoft Windows, Desktops, Operational Accounting, Operating Systems, Software

Dell chief Michael Dell is projecting a Windows 7 upgrade cycle that could put PC growth “well into the teens.” What’s unclear is whether Dell will be able to grab a bigger share of the revenue pie or be outmaneuvered by rivals like HP and Acer.

Following the company’s disappointing quarter, Dell executives said the timing of the Windows 7 launch hurt revenue and earnings. That’s why Dell’s third quarter results fell short of expectations.

On a conference call, Dell executives sounded upbeat about the fourth quarter and the fiscal year to come.

When asked about the potential for a PC replacement cycle that would be above the 10 percent growth rate usually expected, Michael Dell said:
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November 20th, 2009

Research paints ugly IT employment picture: Almost 2 million jobs gone in 14 years

Posted by Larry Dignan @ 2:45 am

Categories: General, IT Management, IT jobs

Tags:

The Hackett Group reports that 300,000 IT jobs have disappeared in 2009, a spike that will translate into nearly 2 million eliminated technology positions between 2000 and 2014.

In a report, Hackett notes that IT is taking the brunt as companies cut back-office jobs. In 2009, 630,000 back office jobs will be lost at the world’s largest companies. Overall, there’s an “extended jobless recovery” in “IT, finance, procurement, HR, and other general and administrative (G&A) areas.

Hackett reports:

Longer-term, Hackett’s research estimates that nearly 3.6 million G&A jobs in North America and Europe will have been eliminated between 2000 and 2014. More than half of these losses, or nearly 2 million of these jobs, are in IT, making it the largest back office area to be hit by a wide margin.

Hackett researched 4,000 global companies with $1 billion in revenue.

Also see: TechRepublic’s IT Training Directory · Career management blog · IT leadership blog

The underlying trends behind these job losses are well known. In a nutshell, companies need to keep improving profit losses, jobs are going offshore, outsourcing and process improvements. In a report, Hackett writes:

Hackett’s analysis of close to 4,000 large (over $1 billion in revenue), publicly held companies reveals that as a result of efficiency gains made through automation, process improvement, outsourcing and offshoring, G&A functions cost approximately $333 billion less to run in 2007 than in 2000 for this group of companies. However, these improvements have come at the cost of 1.4 million net back-office G&A jobs at these companies. This job loss occurred despite average annual economic growth of 2.2% during this period, which offset a portion of the jobs eliminated through efficiency gains. On balance, the pre-crisis years showed a healthy trend for an increasingly knowledge-based, industrialized economy, modest net declines in lower-value-added jobs, and net creation of higher-value-added jobs elsewhere in the economy. However, the current economic downturn has disrupted this trend. In order to protect margins in the face of declining revenue, companies have been forced to accelerate G&A cost take-outs.

Here’s a chart of the IT job losses in context of other positions: