29 November 2009

City Of Big Brotherly Love?

Chicago's Extensive Surveillance System Integrates Nonpolice Video, Raises Concerns About Possible Privacy Abuses

Wall Street Journal

A giant web of video-surveillance cameras has spread across Chicago, aiding police in the pursuit of criminals but raising fears that the City of Big Shoulders is becoming the City of Big Brother.

While many police forces are boosting video monitoring, video-surveillance experts believe Chicago has gone further than any other U.S. city in merging computer and video technology to police the streets. The networked system is also unusual because of its scope and the integration of nonpolice cameras.

The city links the 1,500 cameras that police have placed in trouble spots with thousands more—police won't say how many—that have been installed by other government agencies and the private sector in city buses, businesses, public schools, subway stations, housing projects and elsewhere. Even home owners can contribute camera feeds.

Rajiv Shah, an adjunct professor at the University of Illinois at Chicago who has studied the issue, estimates that 15,000 cameras have been connected in what the city calls Operation Virtual Shield, its fiber-optic video-network loop.

The system is too vast for real-time monitoring by police staffers. But each time a citizen makes an emergency call, which happens about 15,000 times a day, the system identifies the caller's location and instantly puts a video feed from the nearest camera up on a screen to the left of the emergency operator's main terminal. The feeds, including ones that weren't viewed in real time, can be accessed for possible evidence in criminal cases.

A police spokesman said the system has "aided in thousands of arrests." Video cameras caught 16-year-old Michael Pace, an alleged Chicago gang member, opening fire with a 40-caliber handgun on a city bus in a 2007 incident that claimed the life of 16-year-old honor student Blair Holt and wounded four others. In July, Mr. Pace pleaded guilty to murder on the eve of his trial, and the video was released during a hearing where a judge sentenced him to 100 years in jail.

The city is "allowing first responders access to real-time visual data," said Ray Orozco, executive director of the city department responsible for the system. "Chicago understands the importance of networking instead of just hanging cameras," said Roger Rehayem of International Business Machines Corp., which designed the system. Former U.S. Homeland Security chief Michael Chertoff has called Chicago's use of cameras "a model for the country."

That worries some Chicagoans. Charles Yohnka, director of communications and public policy for the American Civil Liberties Union of Illinois, said, "With the unbelievably rapid expansion of these systems, we'd like to know when enough is enough."

The ACLU has been calling, so far without success, for the city to disclose how many cameras are in the system and what the capabilities of the system are, as well as who is allowed to look at the video feeds and under what circumstances.

Mr. Yohnka said that he isn't aware of any abuses in the use of the video but that "political surveillance" of opponents could be tempting for office holders. In other cities there have been reports of male police staffers ogling and tracking women for extensive periods though they aren't doing anything suspicious.

Mr. Orozco dismisses worries about privacy abuse. The department logs in all users and can monitor what they are doing, he said, assuring accountability. He also said access to the command center is tightly controlled. He declined to discuss specifics of who is allowed inside the center.

Chicago said that it only networks video cameras in public areas where people have an expectation they may be seen. None of the cameras record speech, because that would violate wire-tapping laws, although some can detect the sound of gunfire and breaking glass.

"People want these cameras in their neighborhoods," said Mayor Richard Daley in a prepared statement. "We can't afford to have a police officer on every corner, but cameras are the next best thing."

While video-surveillance cameras are ubiquitous in most of the developed world, they're primarily used to collect evidence that can be examined after a crime has been committed.

The Chicago system is also designed to deal with emergencies as they happen. Besides turning on when people call 911, some are set to sound alerts at command centers if people enter closed areas after hours, and some also issue spoken warnings at the site.

At the Navy Pier amusement area, cameras monitor an inlet that only official boats are allowed to enter. When the system detects recreational boats in the area, a warning to move away is issued over a loudspeaker.

It's difficult to tell how much Chicago's system cuts crime. The city's crime rates have declined steadily over the last 10 years, like those in many other cities.

Chicago police started installing highly visible cameras topped by flashing blue lights back in 2003. Many were placed at locations where residents had complained about drug-dealing, and the city later said that crime decreased up to 30% in areas with cameras. But some critics complained that the cameras just pushed drug dealers to nearby street corners.

Even if cameras don't prevent crimes, "prosecution is much quicker," said Fredrik Nilsson, general manager of Axis North America, a unit of a Swedish company that makes the digital cameras used in Chicago. "When people face recorded videos, they don't go through court trials."

YouTube To Broadcast Univision (Sans Telenovelas)

Wall Street Journal

Google and Univision said Monday that they will provide the Spanish-language broadcaster’s videos on YouTube starting in the first quarter.

Univision is the largest Spanish-language broadcaster in the U.S., and its YouTube channel will include both clips and full-length programs from its three networks, Univision, TeleFutura and Galavision.

Viewers won’t be watching Univision’s most popular telenovelas, however — those series are owned by Mexican media company Televisa, and Univision doesn’t have the right to stream them in the U.S.

YouTube said that there is “huge demand” for Spanish-language content on the video-sharing site and noted in a blog post that its Hispanic audience grew 80% this year.

For Univision, the deal is a way to snag more online-advertising dollars, which to date have been a small part of its overall sales. Its third-quarter revenue from television rose 5.4% to $421.8 million, while revenue from interactive media inched up only 0.9% to $11.6 million.

Canon To Bid For Dutch Printer Maker Oce

Wall Street Journal

TOKYO—Canon Inc. said Monday that it plans to buy Dutch printer maker Océ NV for €730 million ($1.09 billion) in cash, as the Japanese office-machines maker pursues growth amid the global economic downturn. The proposed bid sent Océ shares sharply higher.

Canon aims to launch its tender offer of €8.60 a share between January and March. The bid, which is supported by Océ's management and supervisory board, would be a premium of 70% over Océ's closing share price on Friday, and more than double the average closing share price over the past 12 months.

In Amsterdam Monday, Océ shares rose 70% at close at €8.62. Canon shares fell 1.5% to close at 3,370 yen ($37.58) in Tokyo.

Canon said a takeover of Océ would help the Japanese company expand its product lineup and sales networks amid weak corporate spending. Océ "is a very attractive partner for our marriage," Tsuneji Uchida, Canon's president, said at a news conference. "We can complement each other."

During an Amsterdam news conference, Canon's chief financial officer and executive vice president, Toshizo Tanaka, said he couldn't quantify the synergies that would be achieved through the integration of Océ.

Canon expects Océ's high-end printing systems to complement Canon's midrange products. Océ offers strong sales networks in Europe and the U.S., while Canon has a solid foothold in Asia.

"Combined skills would give better results," said Anton H. Schaaf, Océ's chief technology and operations officer.

Fortis Bank Netherlands analyst Niels de Zwart said he doesn't expect Canon's offer to be topped by rival bidders. "Canon is paying a decent takeover premium," he said. Mr. De Zwart has a "buy" rating on Océ's stock.

Océ's business was hurt as the global downturn affected some of the company's key markets, such as construction and manufacturing. Océ has been reviewing its strategic options and in April said it wouldn't rule anything out—a move viewed by analysts as a sign that the company gave in to shareholder pressure to seek a buyer.

Bestinver Gestion SA, a holder of about 9.5% of Océ's outstanding shares, as well as Ducatus NV, ASR Nederland NV and ING AM Insurance Cos., holders of cumulative preference shares that carry about 19% of Océ's voting rights, have all said they will support the offer.

Some analysts see other potential bidders, but wonder if a rival offer will materialize. "Of the strategic options, we would see Hewlett-Packard Co. and Kyocera Corp. with sufficient financing options, while Ricoh Co. and Konica Minolta currently have high debt levels and relatively low earnings generation," SNS Securities analyst Maarten Altena said. He has a "hold" rating on Océ.

Canon's move to take over Océ is likely to be a long-term positive for Canon, said Tetsuya Wadaki, analyst at Nomura Securities. "Since Ricoh purchased Ikon, we've been assuming that Canon would take a strategic action eventually." In August, Ricoh purchased Ikon Office Solutions, a distributor of copiers and printers for Ricoh rival Canon.

Canon said it expects its net income for 2009 to decline to 110 billion yen from 309 billion yen a year earlier, as the company expects sales of its office equipment to shrink amid prolonged weak market conditions. Océ, which employs about 22,000 people, generated €2.9 billion in revenue in 2008, down 6.5% from €3.1 billion in 2007.

27 November 2009

The Phone Is Smart, But You Have To Be Smarter

Wall Street Journal

Would you want hackers to have all the information on your device? Here's how to protect yourself.

Given how much information can be found in people's smart phones—contact lists, emails littered with details about their personal lives and their work, company documents and data, personal financial information and passwords—it's startling how little most users feel the need to protect the devices.

"People have a false sense of security" about their phones, says Daniel Hoffman, chief technology officer of SMobile Systems Inc., a provider of security software for mobile devices.

Security experts have long warned of the vulnerability of smart phones to hackers. And in the past year the threat has been highlighted by an attack on the Symbian operating system, used mainly by Nokia Corp. phones, and a demonstration at a conference of a flaw that was found in the iPhone's security.

As the software for smart phones becomes more sophisticated and open, they become better breeding grounds for a new generation of spyware and viruses. Hackers can work their way into your phone through text messages, steal your information and use your contact list to find more victims. Scammers can now dupe you into revealing your Social Security number or credit-card account number on your phone, just like they've been doing for years on PCs.

There are low-tech ways to get into trouble, too. Theft or loss of your phone can be much more than an inconvenience if the person who ends up with it chooses to explore its contents. And you can even give away sensitive information by using your phone without regard to who might be watching or listening to you.

To some extent, you need to rely on your phone's maker to keep you safe. But there are several simple ways you can help protect yourself.

Here's a look at some of the dangers and how you can minimize them.

Message Minefields

Text messaging is a favorite service for many mobile-phone users. It's also becoming a favorite line of attack for scammers. For instance, text messages carrying insidious coding were the weapon in an attack late last year on phones using the Symbian operating system and were later identified as a threat to the iPhone.

For owners of the Symbian phones that were targeted, the attack was a major annoyance. Phones that received the malicious text messages shut down and lost their ability to receive any further text messages—damage that could only be repaired by sending them back to the factory. Then, in July, hackers at a conference on digital security demonstrated the ability to send text messages to iPhones that would allow the senders to gain access to data stored in the devices.

Apple Inc. and the Symbian Foundation patched up the holes in their security. For attacks like these, users have no defenses of their own—the messages do their damage without any action on the part of the user. But these incidents should alert smart-phone users to the vulnerability of their devices, and encourage them to guard against other kinds of attacks.

That includes phishing scams, which attempt to acquire personal data such as passwords or credit-card account information through fraudulent messages. These scams have spread from email to text messaging. Here the best protection should be familiar: Be skeptical of any messages that ask for passwords, account numbers or any other personal information. When in doubt, check directly with the company that claims to be asking for the information.

Multimedia messages—photo attachments sent like text messages—also pose a threat. A message could contain a virus that not only can tap into any information stored on your phone but also dig into your phone's address book to spread itself to all of your contacts. Other versions might spread by using the phone's Bluetooth connection to attack nearby devices. Attacks like these will drain your phone's battery and leave you with a large messaging bill, not to mention the embarrassment of contaminating the phones of your friends and colleagues, or even perfect strangers.

Again, caution is the best protection. If you don't know the origin of the message or don't recognize the number it's sent from, it's best to delete it before opening. Even if you do recognize the number, be wary of messages you weren't expecting, since viruses spread through contact lists look like they're coming from a trusted source.

Denying Applications

Applications could be another avenue for hackers, security experts warn, though it appears to be one that hasn't been explored yet to any great extent.

One way to head off potential problems is to limit the access applications have to your phone's functions. For example, some games require access to your Internet connection so that they can compare your scores to those of other players. But many applications don't need this capability, and if you find that one of those apps does have access to your connection, it could be a sign that something is amiss.

Smart phones running on the Android operating system or the BlackBerry system allow you to limit the amount of access an application has. You simply head to your Settings menu and choose Application. You can then look at each application to see which phone functions it has access to, and deny it access to any that don't seem necessary.

Losing It

One sure way to give strangers access to your phone is to lose it. And of course theft is another concern. If you have sensitive data on the device, make sure you have a way to remotely erase the contents—and that you know how to do it. Most corporate phones have the ability, as do iPhones, BlackBerrys and Windows Mobile phones.

If your phone doesn't have the capability, SMobile offers a program that allows you to remotely back up data and wipe the device clean. The company charges $20 a year for the software, which works with most smart phones.

A password is another simple measure that can go a long way toward deterring common thieves from gleaning anything from your phone. All smart phones have the ability to create a password built in. For BlackBerrys, simply go to the Security Options under Settings to turn on the password. Similarly, iPhones have the option in the Settings menu.

For extra security, you can set up additional passwords for other actions, such as accessing email or downloading a program. That can also be done in the Settings menu. BlackBerrys have the option to encrypt data on the media storage card so it can only be read on that phone. Simply go to the Media Card menu under Settings to activate the encryption.

Another easy way to lessen your vulnerability is to limit the amount of personal information on your phone. Don't list your home address, or the personal relationships with your contacts. Also, never place your credit-card or bank account numbers on your phone. There are programs designed to track down the 16-digit credit sequence in electronic devices.

If your phone is lost or stolen and you get it back, be wary of any new applications that have been loaded. If your cellphone is sluggish, take it to the carrier; it might be compromised.

Keep It Down

It's also important, and easy, to shield your phone from prying eyes and ears.

3M Co. makes a thin film called the Mobile Privacy Filter that goes over your screen, making it tough to see what's displayed unless you're directly in front of the phone. It can be found at any office-supply store or online for roughly $10.

Also, try not to discuss sensitive topics in public. It sounds obvious, but people sometimes appear oblivious to those around them as they discuss work or rattle off their name, Social Security number or credit-card account numbers while making purchases or taking care of personal business on the phone.

Let The New (Online) Games Begin

Wall Street Journal

Online gaming is heading in some tantalizing new directions.

Spurred by the spread of social networking, faster Internet connections and powerful mobile devices, game makers are experimenting with a host of innovations that drastically improve online play.

A new crop of games lets friends cooperate or compete on social-networking sites, or team up online using their gaming consoles. New hand-held devices let you pull down games directly from the Internet, instead of having to plug in a cartridge or a disk. And cloud computing, which lets people tap into computing resources over the Web, makes it possible to have feature-rich gaming regardless of where you play or what kind of machine you use.

The upshot is that consumers can play online games wherever they want—whether on their personal computers, mobile phones or consoles—and have access to the widest possible array of game titles.

Here's a look at some of the new games, trends and devices that companies are hoping will reshape online play.

Social Games

Facebook Inc. and other networking sites have made social gaming a popular new category. Users play with others in their network, often cooperating to achieve a goal. One of the best-known offerings was an unauthorized version of Scrabble that ran on Facebook and boasted about two million registered users before legal threats shut it down. Now a host of new social games are cropping up. Playfish is one of the most successful developers, with 10 games in its lineup. Its success was recently highlighted by Electronic Arts Inc., which acquired the company last week for $400 million.

One of Playfish's most popular games, Restaurant City, which has 15 million monthly active users, allows gamers to join with their friends to manage a virtual restaurant. Users pick food ingredients, furniture, decorative items and fancy additions like a jukebox or an arcade machine; they can also hire friends as waiters or cooks, as well as trade ingredients with them. The object of the game is to increase your friend network—thereby bolstering the status of your virtual restaurant.

Free Multiplayer Games

One of the most popular varieties of online games is getting a lot more affordable. In September, a Korean game publisher, Nexon Corp., introduced its Dungeon Fighter game to the North American market. Popular in Asia, the game differs from dozens of other massive multiplayer online games, which require users to pay monthly subscription fees to play. Nexon allows gamers to play free—but makes money by selling in-game items and tools, such as magical weapons, that help players advance to higher levels of the game.

Since it was introduced in Asia in 2005, the game has been a wild success, with more than 10 million South Koreans playing the game since its launch. It also inspired dozens of other online-game publishers to use the same no-subscription strategy.

Still, Nexon executives are unsure if the model will succeed in North America as it has in Asia; parents of North American teens may not want to use their credit cards to buy $3 blue hairdos for their kids' in-game characters. To hedge its bet, the company has augmented the model to include prepaid cards. Gamers can go to Target or 7-Eleven to purchase cards, which can later be used to purchase virtual items.
Cooperative Console Games

In 2002, Microsoft Corp. introduced an Internet service called Xbox Live for its Xbox game console, making it possible for fans to battle each other inside, say, its popular Halo game.

With the latest version of Xbox Live, introduced last fall, Microsoft wants to expand the reach of its consoles by offering more games that are aimed at the casual player and foster cooperation. While plenty of attention will still be paid to hard-core gamers and their shoot-'em-up games, there will be a growing focus on cultivating cooperation between players interested in less violent fare.

For example, in June, Microsoft launched 1 vs. 100, a live quiz show for the gaming community. Every Friday and Saturday, gamers can sign on and play as a single contestant called "The One," or as one of 100 players called "The Mob" and collaborate on answers. A live studio host tosses out trivia questions and players try to accumulate Microsoft Points, which can be used to buy certain items. About three million gamers have downloaded the game, and according to an Xbox Live spokesman, as many as 100,000 people have signed on to play a single session of the game.

Games in the Cloud

Typically, consumers who wanted to play graphically rich games needed to buy high-end personal computers or dedicated gaming consoles. But new technology promises to make a top-notch gaming experience available to users on less powerful PCs or inexpensive set-top boxes that are connected to their televisions. OnLive Inc., Palo Alto, Calif., is developing technology that runs games on powerful servers that players can access through their Internet connections. The service, which plans to launch this winter, has signed such top-tier game publishers as Electronic Arts and Take-Two Interactive Software Inc. to open their libraries for the games. Pricing hasn't been determined.

Downloading Fun

Most hand-held gaming devices require users to buy videogame cartridges or disks. Last month, Sony Corp. introduced the PSP Go, a portable device that plays only games that can be downloaded from Sony's online marketplace. Users can download the games via built-in Wi-Fi, or download them onto a computer and transfer them to the device with a USB cable. Gamers can choose among 225 titles, including top names such as Sony's racing game Gran Turismo and Electronic Arts' John Madden football game. They can also buy PSP Minis—simple games that run about $10.

High-Tech At Home, Low-Tech At The Office?

Wall Street Journal

At the office, you've got a sluggish computer running aging software, and the email system routinely badgers you to delete messages after you blow through the storage limits set by your IT department. Searching your company's internal Web site feels like being teleported back to the pre-Google era of irrelevant search results.

At home, though, you zip into the 21st century. You've got a slick, late-model computer and an email account with seemingly inexhaustible storage space. And while Web search engines don't always figure out exactly what you're looking for, they're practically clairvoyant compared with your company intranet.

This is the double life many people lead: yesterday's technology for work, today's technology for everything else. The past decade has brought awesome innovations to the marketplace—Internet search, the iPhone, Twitter and so on—but consumers, not companies, embrace them first and with the most gusto.

Even more galling, especially to tech-savvy workers, is the nanny-state attitude of employers who block access to Web sites, lock down PCs so users can't install software and force employees to use clunky programs. Sure, IT departments had legitimate concerns in the past. Employees would blindly open emails from persons unknown or visit shady Web sites, bringing in malicious software that could crash the network. Then there were cost issues: It was a lot cheaper to get one-size-fits-all packages of middling hardware and software than to let people choose what they wanted.

But those arguments are getting weaker all the time. Companies now have an array of technologies at their disposal to give employees greater freedom without breaking the bank or laying out a welcome mat for hackers. "Virtual machine" software, for example, lets companies install a package of essential work software on a computer and wall it off from the rest of the system. So, employees can install personal programs on the machine with minimal interference with the work software.

Some forward-thinking companies are already giving employees more freedom to pick mobile phones, computers and applications for work—in some cases, they're even giving workers allowances to spend on outfitting themselves. The result, they've found, is more-productive employees. There's a reason professional chefs bring their own knives to work, rather than using a dull set of blades lying around the kitchen.

What Century Is This, Anyway?

For a look at how sharp the divide between work and home can be, consider my experience. The Wall Street Journal gives me a laptop with Windows XP, an operating system I found satisfying when it came out eight years ago but that lacks a lot of modern touches, like a speedy file-search function. My home computer, meanwhile, is a two-year-old iMac running the Leopard version of Apple's Macintosh operating system. Among other virtues, it's got a search function called Spotlight that lets me track down files in a flash.

Or take email. Please. There's a limit on how much email employees can store on the company's system, and I routinely bump into it. So, I need to spend time hunting through old notes in Microsoft Outlook and deciding what to keep and what to delete, or risk a shutdown of my account. I'm not the only one; a colleague told me she often receives messages with large attached files that overload her inbox while she's asleep. That means she can't receive any more mail until she gets into the office in the morning and cleans out her messages.

Limits like those are tough to swallow when you consider how generous free email services are. In nearly five years, for instance, I've used only about a quarter of the storage space in my personal Gmail account from Google Inc., despite almost never deleting messages. Furthermore, I can search for old Gmail messages almost instantaneously, while the search function in the email I use for work is painfully slow.

When they get fed up with work technologies, employees often become digital rogues, finding sneaky ways to use better tools that aren't sanctioned by the IT department. In my case, I've installed a search engine called Google Desktop that lets me quickly scour my hard drive for files, and a product by Xobni Corp. that does something similar for Outlook email, even though neither is approved by my IT department. And those programs have made a world of difference. In a simple test, it took Outlook two minutes to track down an email from a few months ago, based on a few search terms. Xobni found the message before I finished typing the words.

When Kraft Foods let employees choose their mobile phones, 
the company's David Diedrich picked an iPhone

The Journal declined to comment on its policies. But even with the potential for productivity gains from newer technologies, it's tough for many enterprises to stomach the prohibitive costs of a companywide upgrade to the latest software and hardware, especially during the current economic downturn. Research firm Gartner Inc. estimates enterprises will cut technology purchases by 6.9% this year, which would be the biggest decline on record.

Furthermore, there are indirect costs connected with upgrades that give businesses an incentive to stick with battle-tested technologies, like the hassles of retraining workers and of dealing with buggy new products. In one example, many companies never bothered to upgrade to Microsoft's last version of its operating system, Windows Vista, in part because of technical issues with the software when it was first released.

Home-Field Advantage

It wasn't always this way. For years, the big breakthroughs in computing technology came in corporate IT departments and university computer labs. But that started to change as the cost of PCs plunged and they became fixtures in people's homes. Now consumers buy more PCs than businesses do—and the consumer market spurs the most interesting innovations.

Instant messaging reached the mainstream through America Online. Amazon.com Inc. used the technology behind its shopping site to become a pioneer in "cloud computing"—where businesses rent resources in Amazon data centers rather than running hardware and software on their own. Apple Inc.'s iPhone broke new ground in Web surfing and running applications on mobile phones.

The rise of the consumer market also means people have gotten a lot smarter when it comes to technology—and a lot less patient with substandard stuff at the office. Even with the weak economy, companies will find it harder to recruit savvy workers if they don't let them use their favored technology.

Some companies have decided the best solution is to start giving workers what they want. Until a couple of years ago, Kraft Foods Inc., the consumer-goods giant, had a rigid approach to workplace technology that was typical of many big companies: It locked down PCs so employees couldn't install software on their own, and it prevented them from accessing sites like YouTube and Facebook. When it came to hardware, Kraft offered a limited choice of smart phones and Windows PCs.

Executives began to worry that the company's technology policies were preventing employees from staying in step with trends. Kraft was a consumer company, they figured, so workers needed to be more familiar with the technologies that consumers were using, whether the iPhone or YouTube.

So, the IT department stopped blocking access to consumer Web sites, and the company started a stipend program for smart phones: Workers get an allowance every 18 months to buy a phone of their choosing. (Over 60% picked iPhones.) Kraft has also started a pilot program to let some of its employees pick their own computer. One catch: Employees who choose Macs are expected to solve technical problems by consulting an online discussion group at Kraft, rather than going through the help desk, which deals mainly with Windows users.

"The win for Kraft is employees are more productive if they use devices they're familiar with," says David Diedrich, vice president of information-systems technology, security and workplace services at Kraft.

A Brighter Tomorrow

The prospect of giving employees choice may be too frightening for some companies to contemplate, but there are ways of doing it without completely giving up control. Employers could require workers to sign agreements promising that they'll back up all their data and run the latest antivirus software and won't download pornography. Employers can also require workers to run all of their corporate applications inside a virtual machine on the computer, which seals company information off from everything else.

Still, financial-services companies, law firms and others may feel the need to maintain stricter control, for regulatory and legal reasons. Even some companies moving toward letting employees choose their own computers, like consumer-goods maker Unilever PLC, say the policy won't work for every employee inside a business. One reason: Many companies offering free choice ask workers to troubleshoot technical problems on their own, and some people simply aren't up to the task.

That said, many executives agree that change is in the air. Chris Turner, Unilever's chief technology officer, says the pressure to relax IT policies is bubbling up, especially from young employees. "They look at your standard corporate desktop and say, 'I can't work with that,' " Mr. Turner says. "If you can make it an attractive thing that they want to work with, that's a hugely powerful thing."

A Game-Changer For SEO: YouTube Automated Captioning

from MediaPost

Google launched an automatic video captioning service for YouTube videos in an effort to make the visual clips more accessible to deaf people or anyone searching for videos online, but some see advantages for search engine optimization, too.

The machine-generated service will generate English-only captions initially on 13 partner channels. The service combines Google's automatic speech recognition (ASR) technology with the YouTube caption system to offer automatic captions.

"Auto-caps" use the same voice recognition algorithms in Google Voice to automatically generate captions for video, according to Ken Harrenstien, the Google software engineer who created the technology.

The captioning service isn't perfect, but will improve in time, Harrenstien explains in a blog post. Harrenstien, who is deaf, created the technology because "the majority of user-generated video content online is still inaccessible to people like me," he wrote.

The idea of video captioning is not new at YouTube, but the automatic feature could help to further optimize videos for people searching for content across engines and on YouTube. In theory, video scripts should become more optimized by the keywords in the captions. And while it's a great feature to make content more accessible for the deaf, other benefits exist for marketers.

"Having a transcript in the video is huge for SEO," says Andrew Shotland, owner of Local SEO Guide, a SEO in Pleasanton, Calif. "Having targeted text on a page helps the video rank in search engines for specific searches."

Today, very little text from video is being captured on the Web because no one wants to transcribe thousands of videos. Walking through an example, Shotland says if YouTube begins by making one million videos available with automatic video capturing, that adds nearly a million new pages that engines can crawl, index and rank because on those pages are many keywords.

"If we're talking about a plumber video, that page will have words like leaky pipe, city name, change your toilet and many others the publisher may not have added to the written description on YouTube," Shotland says. "The videos will attract search engines even more. I wouldn't be surprised if YouTube's traffic goes through the roof. The video pages will have so much more text they can rank on."

Shotland says if the video transcripts work similar to the embeds, the tag that lets people add the video to their Web site, anyone pulling the YouTube video onto their site can also rank for the text.

The problem, he says, is that spammers will begin grabbing the captioning transcripts and people will begin to see the text appear across the Web. "It will become a spammer's wonderland," Shotland says.

The challenge to index videos has always been the self-tagging architecture, according to Kevin Ryan, chief marketing officer at WebVisible. "In theory, the videos should index more efficiently if they have captions," he says. "It's a big challenge because it's a self-attribution model. The first thing a brand manager wants to do is control where the video is seen, so it's never positioned in a negative light."

Google also announced a feature called Automatic Timing to help video owners add manually created captions to YouTube videos by automatically determining when the words are spoken in the video. Text transcripts are required -- no time codes required -- and Google does the rest.

Video captions made it to I/O videos on Friday. Every English and Spanish video from I/O now has captions that work in YouTube, writes Naomi Bilodeau, manager on the Google development team.

25 November 2009

Battle Of The Professional Networks

The Economist

Does local beat global in the professional-networking business?

IN THE three-way fight between the biggest online professional networks—America’s LinkedIn, France’s Viadeo and Germany’s Xing—this week the French contender scored a victory. Last year LinkedIn had struck a deal with Apec, France’s best-known professional-recruitment service, to offer search functions to its huge customer base of over 30,000 companies and 500,000 executives. But on November 17th Apec made a new deal with Viadeo, having noted that although LinkedIn could reach executives at France’s biggest international companies, it failed to connect enough people in the country’s thousands of smaller firms.

In professional networking, argues Dan Serfaty, Viadeo’s founder, having local depth is better than signing up a narrow slice of the highest-powered people around the world. A typical LinkedIn member would be an investment banker at Société Générale, a French bank, he says, “too proud to invite his friends to join or to pay for it”. In contrast, Mr Serfaty claims, Viadeo signs up branch managers for Société Générale, who use the site often and are happy to spend €5 ($7.50) a month on a subscription. Local entrepreneurs and provincial civil servants may be less impressive as members than Bill Gates, Microsoft’s co-founder, Mr Serfaty continues, but they are more engaged. (Mr Gates has been on LinkedIn since last year, and so far has made only five connections to other members.) At Xing, too, a hyper-local network which went public in 2006, the typical member is not a senior executive but a middle manager, says Stefan Gross-Selbeck, its boss.

“We have the most elite, international and aspiring people,” says Kevin Eyres, head of LinkedIn in Europe. The firm’s global approach, he says, has brought rapid growth in members at a low cost relative to its competitors. Having a large American membership is a particular advantage. In Mexico, for instance, Viadeo started from scratch and had to visit dozens of local alumni associations to recruit members, whereas LinkedIn could offer Mexicans the chance to connect to American business people right from the start.

In Italy and Japan, LinkedIn is number one even though it has not translated its site into the local language in either place. In China, however, LinkedIn has to compete against the Chinese-language website of Tianji, the country’s biggest professional network, which is owned by Viadeo.

Which is the most attractive model? All three networks have benefited from the crisis, as executives fearful of losing their jobs have rushed to burnish their contacts. But it is estimated that fewer than 1% of LinkedIn’s 50m members worldwide actually pay for the service, compared with around 10% of Viadeo’s members in Europe and 18% of Xing’s German-speaking members. LinkedIn, therefore, relies on firms’ human-resources departments and advertisers for most of its revenues, which reached $100m last year. The firm has been profitable for two years. Revenues at Xing and Viadeo come mostly from subscribers. In the first three quarters of 2009, Xing, with 8m members, brought in revenues of €33m, 33% higher than the previous year, and operating profits of €9m.

LinkedIn is concentrating on growing quickly around the world, not on extracting profits in each market, says Mr Eyres, and is only starting to localise. It could soon launch an initial public offering of its shares. In October Viadeo bought Unyk, a Canadian-based networking service with members in several countries including America and Brazil. That put the French firm in second place behind LinkedIn measured by number of members: it now has 25m in total. It too is contemplating a share offering. That may advance the day when all three firms are obliged to focus on profits, making the relative value of humble local managers versus masters of the universe clearer.

24 November 2009

Will Facebook Go Public?

Wall Street Journal

Facebook Inc. took steps to solidify the control of founder Mark Zuckerberg and other existing shareholders in the event the social-networking company goes public.

The closely held Silicon Valley firm, emulating one of Google Inc.'s well-known strategies, established a dual-class stock structure that would increase the voting power of Mr. Zuckerberg, who is the company's chief executive, and other existing shareholders if they hold onto their shares during an IPO.

Facebook said Tuesday the move shouldn't be construed as a signal that the company is planning to go public, saying it has "no plans" to do so "at this time."

It said it is introducing the structure "because existing shareholders wanted to maintain control over voting on certain issues" and "focus on the long-term."

As part of the plan, Facebook will convert existing holdings to Class B stock, which carry 10 times the voting power of Class A stock, according to a person who has seen documents outlining the plan.

Those shares will remain Class B shares unless the owner sells them following an initial public offering, at which time they will become Class A shares, this person said.

Mr. Zuckerberg, who is 25 years old, has said in recent interviews that the company plans to go public eventually. If that happens—and existing investors hold onto their shares—the dual-class structure would enhance their control and make it easier to fend off unwanted suitors.

Mr. Zuckerberg, already the company's largest shareholder, has a percentage stake measured in double digits, according to people familiar with the matter. He already wields the most power among investors through board seats he controls.

Others with sizeable stakes include co-founder Dustin Moskovitz and Sean Parker, the company's founding president, along with early investor Peter Thiel and Accel Partners, a venture capital firm.

Facebook declined to comment on the ownership stakes.

The fast-growing company, which operates one of the most popular sites on the Web, said earlier this year it is generating positive cash flow and that revenue in 2009 is expected to be up more than 70% from 2008.

Mr. Zuckerberg has taken a number of steps to buy the company more time before going public, most recently allowing some employees to sell up to a million dollars in stock through a private buyback program. Under that program, Digital Sky Technologies purchased shares from Facebook employees at a price that valued the company at $6.5 billion.

If Facebook chooses to raise more money it is unclear whether the company would issue Class A or Class B shares or which currency it would use for potential acquisitions.

23 November 2009

Learning Stealth Branding From 'Mad Men'

Canadian Business Online

Mad Men is lauded for many things — historical accuracy, wit, and layered characterization — but slaughterhouse gore is not considered its forte. Nonetheless, a brief detour into graphic violence proved a highlight of the recently concluded third season. During an office party at Sterling Cooper, the show’s fictional ad agency, a drunken secretary took the wheel of a lawn tractor made by John Deere, one of the firm’s clients, and quickly mangled the foot of a young executive. With Don Draper, the show’s hero, and Joan Harris, the resident bombshell, tending the wounded, it was left to senior partner Roger Sterling to reassure the nervous employees. “Believe me, somewhere in this business, this has happened before,” he says.

The incident left Mad Men’s characters fretting for their jobs and some viewers questioning whether it was a misguided bit of product placement. Once ridiculed as ham-handed, product placement has become its own art as companies find new, ever-more effective ways to integrate their wares into the entertainment itself. What makes the product integration on Mad Men so seamless is that the show needs brand names to give verisimilitude to its portrayal of the advertising world. Indeed, rather than irritating their audience, product integration gives Don Draper something to sell, clients to chase, and products to muse upon as he stares into the middle distance, imagining the next big step in advertising.

Mad Men has featured dozens of brand names — from Gillette to American Airlines — in all sorts of contexts, flattering and otherwise, but the John Deere incident demonstrates how hard it is to tell which ones the companies planted and which came unprompted from the show’s writers. (A statement issued by John Deere shortly after the episode aired made it clear the company had no part in its tractor’s use as an executive toe trimmer.)

The last season of American Idol featured 4,636 instances of product placement.

“[The practice] definitely has evolved,” says Melissa Wasserman, vice-president of advertising sales marketing for AMC, Mad Men’s network. “The trend is toward integration, finding new ways to get products on television. But the more seamless it feels, the better reputation your shows will have.”

Wasserman, like everyone who works on Mad Men, is coy about its blend of art and commerce. Some companies lobby to appear, some pay, some strike cross-promotional deals and some have no involvement in their cameos at all. The show’s makers feel no compunction to say which products fit into which category. Ambiguity seems to be part of product placement’s refinement. “We don’t really distinguish between placed or not-placed products,” Wasserman says. “We don’t have a distinction about how the products got on there. The most important thing for us is that they be written appropriately.”

As an advertising tool, product placement existed long before Don Draper’s era. In 1925, the makers of The Lost World, an adaptation of an Arthur Conan Doyle novel, armed their hero with a Corona typewriter to record his encounters with dinosaurs. (In a cross-promotion, Corona hyped its products as the only typewriters worth taking up the Amazon.) But the practice has skyrocketed recently, as technological wonders like personal video recorders, which make it easier for viewers to avoid ads entirely, reached a critical mass. Product placement leapt 33.7% in 2007, according to PQ Media, a media research firm. There was a further 39% hike in early 2008, according to Nielsen. Advertisers spent roughly $3.6 billion on product placements last year. And consider this: The last season of American Idol featured 4,636 instances of product placement.

Wasserman says Mad Men’s writers, led by creator Matthew Weiner, are responsible for determining which brands suit the show’s needs, but that does not mean they are not open to lobbying. Last year, Weiner met with executives from Hilton Worldwide, the hotel chain, who suggested incorporating their founder, Conrad Hilton, into the show. After a little research, Weiner became enamoured with the idea, particularly the notion of presenting a businessman motivated by principles rather than just greed. “There were people like Hilton,” Mr. Weiner recently told The Wall Street Journal, “and I love what he was about.”

Over the course of the third season, “Connie” Hilton becomes a client and mentor to Draper, before severing their contract in the season finale. In his final scene, the hotel magnate gives the fictional ad man a fatherly talking to. “I got everything I have on my own,” he says. “It has made me immune to those who complain and cry because they can’t. I didn’t take you for one of them, Don.”

The portrayal of Hilton — shrewd businessman, vocal anti-Communist, deeply religious and principled — was accurate, according to Mark Young, the archivist at the Conrad Hilton College in Houston. “Hilton was a little beefier, but that’s splitting hairs,” he says. “The character has a direct approach like Hilton. Hilton was folksy but he was very much a businessman.”

Transforming Hilton, who died nearly two decades ago, into the fictionalized embodiment of the company he founded, a sort of upscale Colonel Sanders, made some sense to Young. “He had a sense of style, and he had this genius of knowing when to buy a hotel, when to sell, and I can see why for some people, particularly in other countries, the name ‘Hilton’ is synonymous with hotels,” Young says.

AMC and Hilton’s relationship extended beyond making Conrad Hilton famous once again for being something other than Paris’s grandfather. The companies co-sponsored a “Live Like a Mad Man,” contest, which promised three nights at the Waldorf-Astoria, a wardrobe item from the show and other swag. Similarly, Heineken’s partnership with the show sprawled beyond the small screen. Draper pursued Heineken as a client, pushing them to market their beer to housewives rather than beer halls. In the real world, the beer maker sponsored the show’s second-season finale and a high-profile wrap party.

John Deere, it goes without saying, did not throw a party the day their episode aired. In fact, John Deere learned of its appearance on the show at the same time as the viewing public, according to spokesman Ken Golden. “We did not endorse the activities that happened during that show,” Golden says. “We would never want our product to be displayed in an unsafe way.” American Airlines was also not consulted about an episode focused on the 1962 crash of one of its planes during takeoff in New York, an actual event. While the companies may not like how they are portrayed, there is little they can do, Golden says. “When products are publicly sold, you face the possibility that a show will display your product,” he says, adding the tractor that appeared was not yet available in 1963.

Even co-ordinated product placements can create problems. A public-relations team facilitated London Fog’s inclusion in the third-season premiere, with Draper crafting a campaign for the firm featuring a nude model and the slogan: “Limit your exposure.” The plotline annoyed Richard Gilbert, a noted ad man from the era, who complained London Fog was far more successful in 1963 than the show portrayed. Furthermore, Draper’s campaign would have never made it past magazine censors. “The show’s producers claim that they did meticulous research, and they obviously did — on girdles, cigarettes, clothing, furnishings, art work, etc. But they seem to have done little or none on advertising for an advertising-themed show,” Gilbert said in a missive sent to Ad Age magazine.

Nielsen to Measure Effectiveness of Advertising on Xbox Live

Interactive TV Today

Pilot Test Part of Longer-Term Microsoft-Nielsen Collaboration to Measure Xbox Advertising

In a posting on a corporate blog last week, Microsoft's general manager of marketing and advertising strategy, Mark Kroese, announced that the company is teaming with the Nielsen Company on a pilot test to measure the effectiveness of in-game advertising. The test is launching with the second season of "1 vs. 100 Live," the avatar-driven interactive TV version of the Endemol-developed "1 vs. 100" game show format, that Microsoft offers on its Xbox Live service.

Like a regular linear-TV game show, "1 vs. 100 Live" has real hosts--albeit represented via avatars--airs in regularly scheduled timeslots, has seasons, includes commercial breaks, and allows participants to win prizes, including Microsoft Points, which can be redeemed for Xbox Live content downloads.

The "1 vs. 100" format features a single contestant--the "one"--competing against 100 other contestants--the "mob"--to correctly answer multiple-choice trivia questions: each question is first posed to the "mob" outside of the "one's" hearing, so that they can lock in their answers, and is then posed to the "one." If the "one" answers the question correctly, all the members of the "mob" who answered it incorrectly are eliminated. In the Xbox Live version of the format, the "one" wins Microsoft Points for each correct answer and, if he or she succeeds in eliminating all the members of the mob, he or she can win up to 10,000 Microsoft Points.

Individual members of the "mob," meanwhile, can win prizes, including Microsoft Points and Xbox Live arcade games, for answering questions correctly, outlasting the majority of their fellow "mob" members, and outlasting the "one." Xbox Live subscribers who want to participate in one of the show's live episodes are selected to play as the "one," as members of the "mob," or as mere audience members, based on how frequently and how well they play the live and practice versions of the show.

"The Xbox Live advertising group has teamed up with the Nielsen Company to launch a pilot test, beginning with Season 2 of "1 vs. 100," to obtain content, channel and ad-specific metrics and identify who was playing the game and saw a particular advertisement," Kroese wrote. "This is the first time content delivered through a video game console network will be capable of being measured by Nielsen's television, online and video game metering technologies, such as the Nielsen people meter. Our goal is to ultimately provide advertisers with concrete Gross Rating Points (GRP's) and Targeted Rating Points (TRP's) to maximize their media spend. I'm really looking forward to this effort--it's a huge milestone in the evolution of games and entertainment advertising and a great benefit for our advertisers. We've made a substantial investment of time and resources to launch this pilot. Yet, as we bring Xbox Live into the TV advertising ecosystem, we feel that it is imperative to bring valid measurement capabilities along with it. This is a critical first step in doing that."

Kroese also stated that, after the pilot test concludes (note: the second season of "1 vs. 100 Live" premiered November 19th and is scheduled to last 14 weeks), Microsoft will "continue to collaborate with Nielsen to learn how electronic measurement, panels and census data can be applied to additional Xbox Live media types such as TV, video, [and] social media."

20 November 2009

Unsuccessful In Court, AT&T Takes Verizon Fight To Airwaves

PC World

For some reason, Luke Wilson is taking AT&T's side in the 3G coverage wars, appearing in a new ad that retaliates against Verizon Wireless' stinging assault.

The ad arrived just as a U.S. District Court judged ruled that Verizon can keep airing its attacks on AT&T. Unable to silence its biggest competitor, AT&T has no choice but to retort. Unfortunately, the carrier ends up looking like the one kid on the playground who can't come up with a good “yo' mama” joke.

First of all, why is Luke Wilson the spokesperson here? Does he have some deep understanding of mobile broadband that I'm not aware of? Of course not, but in his 30 seconds of air time, all Wilson can manage are AT&T's tired old PR bullets, plus one really weak insult. Let's go over those points, shall we?

Nation's Fastest 3G Network

Fine, but that won't help you in areas where there's no 3G coverage, which is what Verizon's been saying all along. How about quantifying this claim instead of just repeating it? I'd like to know what uses or in what situations AT&T's extra speed will afford me, to the point that it's preferable to more reliable overall 3G service. Make the case to people who live in big cities.

Talk and Surf at the Same Time

This feature is not useful enough to deserve the second bullet point on Wilson's list. Maybe it's just me, but usually I hold the phone to my ear when I talk. When I'm on speakerphone, it's usually because I'm driving or I just don't feel like holding the phone. Besides, browsing the Web during a conversation is kind of rude. Besides, who says “surf” in relation to Web browsing anymore?

Most Popular Smartphones

This needs to be singular, or explained better. If we're talking about the most popular smartphones exclusive to AT&T, that leaves the iPhone. Blackberry phones are the most popular in the United States, but Verizon carries them, too. And it's got a relevant AT&T-bashing ad.

Access to More Than 100,000 Apps

This claim, of course, is entirely thanks to the iPhone, whose days on AT&T might be numbered. Repeating “We've got the iPhone” ad nauseam until it's gone is not an effective marketing strategy.


At the end of the ad, Wilson concedes one point to the competition: Their name “starts with the letter 'V.'” Wow, good one, AT&T. Verizon, Berizon, the big fat Ferizon. Next time, just pay Luke Wilson to call Verizon Wireless a poo-poo head and call it a day.

19 November 2009

There's A Map For That

Judge rejects AT&T's effort to pull Verizon ads from the airwaves.
from Business Week

A federal judge on Wednesday denied a request by AT&T Inc. to force competitor Verizon Wireless to pull its "There's a Map for That" commercials.

But the judge scheduled a Dec. 16 hearing to give the AT&T attorneys another chance to make their case.

AT&T filed the lawsuit in federal court in Atlanta earlier this month and asked for a temporary restraining order and a permanent injunction to stop the ads. It contends they are misleading and amount to deceptive trade practices.

Verizon argues that the commercials are valid and truthful.

The ads show maps of the United States with areas highlighted to depict where third generation -- or "3G" -- network coverage is available. A map of the country nearly covered with red dots is shown to depict Verizon's coverage, while a map with some blue areas and a lot of blank space is shown to ostensibly display AT&T's 3G coverage.

AT&T says those maps are misleading because there is still regular coverage in areas where 3G service is not offered. The 3G networks allow users to access data faster.

The Verizon commercials mock Apple Inc.'s popular "There's an App for That" spots touting the thousands of applications that can be used on the iPhone. AT&T provides coverage for the iPhone.

Comcast: Bulking Up

from The Economist

IT SEEMED for a while as though the media business had dispensed with swagger. As the markets push their companies around, moguls such as Rupert Murdoch of News Corporation have taken to complaining about the power of Google. A new book, “The Curse of the Mogul”, tries to bury such figures once and for all. But executives at Comcast, a big American cable operator, seem not to have read it. Reports this week suggested that the company was close to a deal to acquire a majority stake in NBC Universal, a television and film outfit. The combination would rival Disney as the world’s biggest media firm.

Ownership of NBC Universal is split between GE (which holds 80%) and Vivendi, a French conglomerate. Comcast would commit cash and merge its modest collection of cable channels, which include E! and the Golf Channel, with NBC Universal’s much more impressive roster. It would end up with 51% of the resulting entity. GE would end up with 49% and would probably exit gradually over the next few years. The deal depends in part on Vivendi agreeing to sell its stake.

Comcast has coveted content for a while—it made an offer for Disney in 2004. The company has reportedly agreed to value NBC Universal at about $30 billion, which seems generous. News Corporation and Time Warner, which boast almost double the revenues of NBC Universal, as well as reputations for better management, are worth about $35 billion each. Comcast presumably believes that cables and content to push through them are worth more together than separately. In that it may be mistaken.

The cable business is labour-intensive—Comcast employs about 100,000 people—and demands huge investment. When Time Warner ran a cable operation (it spun it off in March), investors doubted it could focus properly on either content or distribution. They seem not to like Comcast’s ambitions either. Its shares dropped sharply as rumours of the NBC Universal deal spread, and have not yet recovered. Almost all big media mergers provoke scepticism, given their troubled history.

Although it is hard to imagine regulators blocking the deal, they may attach conditions to it. America has already evolved rules greatly restricting the ability of combined content-and-distribution businesses to bully rivals. Comcast may have to agree to refer disputes over the price it pays to carry rivals’ content, which are expected to become more common in the next few years, to binding arbitration.

There is, however, one extremely good reason for Comcast to do a deal. The big strategic problem facing media companies these days is how to move their products online while preserving margins—without swapping analogue dollars for digital pennies, as Jeff Zucker, NBC Universal’s boss, once put it. As one of the architects of Hulu, an online video service, NBC Universal has been deeply involved in these experiments. For their part, cable companies fear that people will become so accustomed to getting television and films online that they will drop their video subscriptions. A combined Comcast-NBC Universal would be able to exert a good deal of control over old media’s internet dreams, to say the least.

18 November 2009

Revenue Down For Time-Warner

NY Times

Time Warner, the media conglomerate that was once the world’s largest but has lately slimmed down by shedding some businesses, said both revenue and profits declined in the recent quarter.

The results were hurt by one business that the company has said it will spin-off — AOL — and another that has been battered by the advertising recession and is not viewed by executives as central to the company’s future, the Time Inc. magazine publishing empire.

The company’s biggest business, cable networks, which includes channels such as HBO, TNT, TBS and CNN, gained in revenue and profit. Revenue at the movie unit, the Warner Brothers studio, declined mainly because of lower DVD sales, a trend that has been felt across Hollywood, although its profitability improved.

Time Warner’s performance, like the results posted Monday by a rival, Viacom, is emblematic of a mainstream media industry that is largely contracting as consumers change how they view television and movies. The trend is compounded by the recession.

So media executives are left to cut costs to maintain profitability, rather than increase the revenue pie.

“We are executing well, despite the tough environment,” said Jeffrey L. Bewkes, Time Warner’s chief executive officer, in a conference call with Wall Street analysts.

Over all in the third quarter, revenue declined 6 percent, to $7.1 billion. Net income was $661 million, down from $1.1 billion in the last year’s third quarter. Operating income decreased 10 percent, to $1.4 billion.

The results, though, were better than Wall Street forecast, and the company raised its financial outlook for the remainder of the year. Excluding certain items, the company reported earnings-per-share of 61 cents, better than the 55 cents expected by Wall Street, according to Thomson Reuters.

AOL posted a 23 percent drop in revenue, to $777 million. But the company plans to complete its spin-off of the unit by the end of the year. At Warner Brothers, revenue fell 4 percent, while operating income increased 6 percent to $291 million.

Warner Brothers, like other studios, is facing a decline in DVD sales, which once drove growth in Hollywood. But the performance of the unit, particularly the increase in profits, surpassed what many on Wall Street expected. The studio’s major release in the quarter was “Harry Potter and the Half-Blood Prince.” “I think the most noteworthy thing in the quarter is film,” said Anthony DiClemente, an analyst at Barclays Capital. “They’ve grown operating profits at film for each of the past six quarters. “A lot of it is streamlining and cost cutting,” he said.

The only division of Time Warner to post revenue growth was its cable networks. Revenue there rose to $2.87 billion, from $2.73 billion in the quarter a year ago. Operating income rose to $938 million from $909 million.

Time Warner confirmed that it would take a $100 million restructuring charge to lay off hundreds of workers at Time Inc., which publishes titles like Time, Sports Illustrated, People and Fortune. Also Tuesday, the company said it would close Fortune Small Business, which is produced by Time Inc. but owned by American Express. In the quarter, Time Inc.’s revenue declined 18 percent to $914 million, while its operating income declined 40 percent, to $97 million, from last year’s third quarter.

Advertising revenue declined by $129 million, or 22 percent, while subscriptions declined 13 percent, to $49 million.

Mr. Bewkes said he believed much of the downturn in magazine advertising a result of the recession rather than permanent shifts of readers turning away from print and toward the Internet. This view runs counter to that of many others who believe that print is on a steady decline and will never return to the growth it once enjoyed.

15 November 2009

NBC Deal Would Raise Comcast To Elite Membership

San Jose Mercury News

At a dinner 12 years ago in Redmond, Wash., Brian Roberts challenged the richest man in the world to invest in his business — cable TV.

Other guests, cable industry executives older than Roberts, then a 30-something scion of a cable industry family that owns Comcast, looked at their shoes. Someone quickly changed the subject by asking Bill Gates about his vacation plans.

Two days later, one of Gates' deputies at Microsoft called Roberts, and a month later the company invested $1 billion in Comcast, a vote of confidence in an industry that was struggling to adapt to the Internet and slow to build broadband services.

Roberts is on the verge of his next big moment, a takeover of NBC Universal. The $30 billion deal, the final details of which are still being negotiated, will catapult Comcast from being the top cable operator to a major producer of television and movies, and will elevate Roberts to the top ranks of the media industry elite.

For Roberts, 50, acquiring NBC Universal will be the capstone of years of carefully plotting how to control both the distribution of content into homes and the production of it.

The path from Roberts' moment with Gates to his prominence today is terrain marked by successes big and small — the biggest being the $30 billion deal for AT&T Broadband in 2002, which made Comcast, based in Philadelphia, the largest cable company in the country. It was also marked by one big failure, a hostile takeover bid for Walt Disney Co. in 2004.

After that defeat, Roberts took a small-ball approach to building the company's content assets — focusing on networks such as Versus, the Golf Channel, and E the Entertainment Channel.

He still harbored ideas of a big play for content, but he learned that his approach had to be friendly, as Comcast's own shareholders reacted negatively to the Disney bid. The Disney offer was an all-stock bid for the entire company, while in the case of NBC Universal, Comcast is proposing to use only cash to buy a majority stake.

"In today's world," Roberts said at a recent Internet conference, "people want to get connected to content they love." As they find more ways to connect, "you could make a case" that content "is going to grow in value, and is going to be a healthy business."

13 November 2009

Murdoch To Try Making Paid Content Stick

from Media Buyer Planner

Rupert Murdoch plans to use the Sunday Times as a test for his new push to charge for online content, beginning in November.

The Sunday Times website is currently combined with sister title the Times, but it will be launched as a stand-alone site in the fall and will begin charging a fee to access content, according to the Guardian. So far, it is unclear whether the site will charge a fee for each visit, or whether it will offer a subscription model.

Following the announcement of huge financial losses in its fourth quarter, News Corp. chairman Rupert Murdoch said earlier this week that the company will charge for access to all news websites, including FoxNews.com, by the middle of next year. News Corp. revenue fell 11% to $7.7 billion in the quarter ended June 30; the company’s loss was $203 million, down from a $1.1 billion net gain last year.

The Sunday Times is the largest of the weekend newspapers in the U.K., with more than 1 million copies sold per week. It has long offset losses at the Times, but is now thought to be losing money.

Murdoch’s public announcement that he plans to charge for all titles indicates he may be subtly encouraging competitors to do the same, industry executives say. “[Murdoch] knows that this will work better if all the main competitors do it,” Andrew Neil, former editor of the Sunday Times and a key executive in Murdoch’s empire, is quoted as saying. But Neil said the online version of the paper will have to change significantly and have a distinct character, different from the print version, if a pay model is to succeed.

Meanwhile, readers of the News Corp.-owned Australian news site, news.com.au, are threatening to quit News Corp. sites should Murdoch make good on his plan to charge for content. More than 140 replies from readers were attached to Murdoch’s announcement, with most of them opposed to the move.

Murdoch is likely aware the move will not be a popular one among readers - but if he is successful in prompting enough other newspaper companies to charge for content, readers may have little choice but to ante up for the news. “Quality journalism is not cheap,” Murdoch said (via Australian paper The Age). “An industry that gives away its content is simply cannibalising its ability to produce good reporting.”

Murdoch is not alone in his claim that quality journalism does not come cheaply. BusinessWeek points out that New York Times executive editor Bill Keller, for example, used a similar phrase in an interview last December with NPR.

The most prominent newspapers that charge for content online are the Wall Street Journal and the Financial Times. Both offer some content for free but charge fees to those who want complete access.

How NOT To Show Up In Google SERPs

Rupert Murdoch is determined to change the way print content is treated on the web. In addition to being one of the first and largest media companies to plan a full-scale switch from free to paid content models for its newspapers, Murdoch is saying he will block News Corp content from being indexed by Google.

The issue involves the debate surrounding free versus paid content. Murdoch has made it clear for months that he believes free content online devalues the worth of the content. With that in mind, News Corp plans to stop offering its news sites for free, though Murdoch has said the company might not meet its own deadline of charging for content across all sites by the middle of next year. Murdoch’s company has clearly been at the forefront of the debate, and Murdoch expects a paid model to begin to be played out more and more often over the next two years.

News Corp, if it does indeed block Google’s access to its content, will be the first major media company to do so. “The traffic which comes in from Google SEO brings a consumer who more often than not reads one article and then leaves the site,” Miller says. “That is the least valuable traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.”

Google, for its part, claims to send news organizations about 100,000 clicks every minute. “Publishers put their content on the web because they want it to be found,” said a spokesperson (via the Telegraph). “But if they tell us not to include it, we don’t.”

12 November 2009

Ted Turner Longs For Another Shot At CNN


Ted Turner, the cable television pioneer who became one of the richest Americans, recalls the pain of losing his job at Time Warner Inc., his wife, the actress Jane Fonda, and $7 billion of his fortune.

“It was like having my heart ripped out,” Turner said yesterday in an interview in New York. The founder of Turner Broadcasting System and the 24-hour cable news channel CNN, Turner said that he has “a couple billion” dollars left, including $700 million in Treasury bills.

While contemporaries such as News Corp. Chief Executive Officer and Chairman Rupert Murdoch, Liberty Media Corp.’s John Malone and Viacom Inc.’s Sumner Redstone keep competing in the media industry, Turner says that he doesn’t have enough money to get back in the business. He now focuses on nuclear disarmament, global climate change, women’s rights, and the environment.

“I’m working on the issues that are life or death for us,” said Turner, 70, who co-chairs the Nuclear Threat Initiative along with Sam Nunn, a former Democratic Senator from Georgia. “What I’m trying to do is stay relevant.”

The CNN founder, known for provocative comments in his 40- year career, has lost none of his passion for news. He says 24- hour coverage of fighting worldwide has made war tougher for people to stomach.

War ‘Obsolete’

“War is obsolete,” Turner said. “The last time someone surrendered was Japan and that was 60 years ago. The Afghans will never surrender. We will just get tired and come home. We’ve already given up on Iraq and there’s oil in Iraq, there’s no oil in Afghanistan.”

Turner quit the media business three years ago when he left the board of Time Warner, based in New York. The company bought Turner’s cable channels, also including TBS, TNT and Cartoon Network, in 1996, making him its largest individual shareholder. Turner lost $7 billion when Time Warner’s stock collapsed in the wake of the 2001 merger with AOL, the Internet business it is now shedding.

Discussing the growing value of cable networks in the U.S., Turner said, “I feel like a dummy.” Mocking himself, he sings, “You let the big one get away.”

Turner, who founded CNN in 1980, said that if he got his wish to run the network again, he would increase coverage of countries including China.

“If I had the money, I’d think seriously about getting control of Time Warner and getting CNN to focus on serious journalism,” Turner said in a separate interview from his eighth-floor office at Turner Enterprises Inc. in downtown Atlanta. “They’re doing a good job but they could do better.”

Forbes List

Time Warner’s stock dropped 60 percent in three years following the AOL merger’s completion in January 2001. Turner, once ranked among the richest Americans in the Forbes 400 list, was listed at number 196 in this year’s list, with an estimated net worth of $1.8 billion.

Before Time Warner lost so much value, Turner says he had given away much of his money. His largest gift was a $1 billion pledge in 1997 to establish the United Nations Foundation. So far, $750 million of the pledge has gone to the organization, Turner said. He said he has the rest set aside.

‘Like a Joint’

“If you were around at the time, I gave everybody a hundred thousand dollars if they came up with anything,” Turner said. “I just couldn’t hold onto it. I wanted to keep it moving. I get a dollar, I give it to you, you spend it, somebody else gets it. You know, pass it around. You know, it’s kind of like a joint -- you just pass it around, light it up, you know, share with your friends.”

Turner’s Atlanta offices are filled with memorabilia from his years in media and sailing, including his 1977 America’s Cup victory aboard Courageous. Three swords sit on his coffee table; a photo with Warren Buffett hangs on a nearby wall.

Turner Enterprises owns about 2 million acres in 12 U.S. states and Argentina. More than 50,000 bison roam on parts of his land, according to the company. Some of those bison wind up in burgers and other dishes at Ted’s Montana Grill, a restaurant chain he co-founded in 2002.

Ted’s has more than 50 outlets, according to its Web site. One of the restaurants is on the ground floor of the Atlanta offices, where a sign out front reads, “Eat here and we both can live.”

Turner said he bought much of his land from energy companies. They retained the rights to oil, coal or natural gas found on the property, while he is entitled to royalties.

“My land value has gone down,” Turner said. “I’m not in a position to buy anything substantial. I will still look at anything adjacent to me.”

Turner said he has learned to live with less, yet he still bemoans the decline in his net worth.

“To drop out of that league, that was hard to do,” Turner said. “I’ve had the experience of being on top and riding the roller coaster down again, nearly to the bottom. You know, if you economize and don’t buy new airplanes or long-range jets, or that sort of thing, you can get by on a billion or two.”

11 November 2009

Logitech Breaks Into Videoconferencing

NY Times

In a move to break into the videoconferencing market, Logitech International has agreed to buy LifeSize Communications, a start-up that makes high-definition videoconferencing equipment, for $405 million in cash.

LifeSize, which is based in Austin, Tex., sells videoconferencing tools that cost less than most other products on the market. The high-definition video is so clear that viewers can see scribbles on Post-it notes.

Logitech, a maker of desktops and personal computer equipment that is based in Fremont, Calif., and Switzerland, will be competing against Cisco Systems, Polycom, Microsoft, Hewlett-Packard and I.B.M, which have all made investments in the industry.

With LifeSize’s technology, Logitech aims to “make lifelike, HD-quality video communication as mainstream and seamless as a telephone,” said Gerald P. Quindlen, Logitech’s chief executive.

For a long time, videoconferencing was limited to big businesses that could afford to build expensive systems for business VoIP and video in their conference rooms. But videoconferencing has become more accessible because Internet connections are commonplace, video has become more efficient and the price has dropped for high-definition cameras and displays. Now, many companies are trying to reach small businesses and individuals that previously used low-quality webcams on PCs.

Cisco, for instance, sells its high-end TelePresence system to big businesses that install it in conference rooms. Last month, Cisco said it planned to buy Tandberg, a Norwegian video communications company, for $3 billion. Tandberg makes smaller and less expensive videoconferencing tools that can sit on desks. Cisco has said it hopes to use Tandberg’s technology to sell equipment to small businesses and individuals.

The LifeSize Passport, a high-definition videoconferencing system for use with televisions or computers, was introduced in October. The device, which weighs less than a pound and is priced under $2,500, works with Skype business VoIP services and is aimed at workers who travel or telecommute.

Andrew W. Davis, senior partner at the consulting firm Wainhouse Research, said the deal surprised many in the industry because Logitech made products for consumers while LifeSize made products for businesses. “But that wall, like the Berlin Wall, will come down,” he said. “Logitech has been aggressive in this space across a variety of fronts, and that’s who you’ll see in your living room, not Cisco.”