Wednesday, December 31, 2008

Online holiday sales fall 3 percent

Online sales over the holiday period fell a worse-than-expected 3 percent compared with the same period last year, tracking firm comScore Inc said on Tuesday.

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Online spending reached $25.5 billion between November 1 and December 23, the company said, noting this was below its expectations for flat sales on the same period a year ago.

Apple Inc and were among the top traffic gainers in an overall bleak period, comScore said.

Apple sites attracted 35 million visitors between December 1 and December 24, up 19 percent from a year ago, while Amazon sites drew 76.2 million visitors over the same period, 7 percent more than a year ago. Wal-Mart also saw its website traffic rise by 4 percent to a total of 51.5 million visitors.

Online auction site eBay Inc was the most visited retail site with 85.4 million visitors but its traffic declined 4 percent.

Electronics retailer Circuit City, which filed for bankruptcy, saw traffic fall off by 21 percent to 15.5 visitors.

A combination of five fewer shopping days between Thanksgiving and Christmas and the recession made the season particularly tough for retailers, Gian Fulgoni, comScore chairman, said in a statement Tuesday.

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Saturday, December 27, 2008

Online retailer Inc increase sales at this holiday season

Online retailer Inc. called this holiday season its "best ever," saying Friday that it saw a 17 percent increase in orders on its busiest day — a rare piece of good news in a season that has been far from merry for most retailers, including online businesses.

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Amazon customers ordered more than 6.3 million items on Dec. 15, compared with roughly 5.4 million on its peak day last year, the company said. It shipped more than 5.6 million products on its best day, a 44 percent rise over 2007, when it shipped about 3.9 million on its busiest day.

The company did not provide dollar figures and wouldn't say whether the average value of orders had changed, and the jumps it reported Friday are in line with increases Amazon has seen since it started releasing the figures in 2002.

Amazon's best-sellers included the Nintendo Wii game console, Samsung's 52-inch LCD HDTV and Apple Inc.'s iPod touch.

Analysts agreed Amazon's report was good news for the online shopping giant, but they were divided over whether the results indicate strength in online commerce in general.

Forrester Research analyst Sucharita Mulpuru said Amazon's experience shows the current economy is favoring discount retailers, both online and offline.

"The Amazon story doesn't surprise me because Amazon has always traditionally been a leader on price, and they're one of the first places consumers go when they're looking for things online," Mulpuru said. "In many ways they're like the Wal-Mart of the online world."

Wal-Mart is one of very few traditional retailers where revenue has risen this holiday season over last.

Holiday sales typically account for 30 percent to 50 percent of a retailer's annual total, but rising unemployment, home foreclosures, the stock market decline and other economic worries led many shoppers to slash their shopping budgets this year.

SpendingPulse — a division of MasterCard Advisors — said its preliminary data show that online sales fell 2.3 percent compared with the 2007 holiday season, while retail sales overall fell 5.5 percent to 8 percent, including sales of cars and gasoline. The decline was 2 percent to 4 percent when auto and gas sales are excluded.

Online shopping may have gotten a boost from winter storms during last two weeks before Christmas, which made travel to brick-and-mortar stores more difficult.

And, although Amazon's orders rose, the company didn't say whether orders were, on average, worth more or less than last year. Spokeswoman Sally Fouts said the company would release revenue results in its fourth-quarter earnings report, due in about a month.

But she said this was Amazon's "best season ever."

Orders to Amazon on the peak day of its holiday season have jumped in the double-digit percentage range for at least the past 5 years, according to data released by the Seattle, Wash.-based company since 2002. Last year, Amazon's orders spiked 35 percent to 5.4 million at their peak, from 4 million in 2006.

Stifel Nicolaus & Co. analyst Scott Devitt said online retailers' sales tend to grow much faster than those of brick-and-mortar retailers, but he said that difference narrowed this year. That's in part because shoppers tend to go to stores for necessities and online for discretionary purchases, he said. And in an economic downturn, consumers focus on their most-needed purchases and cut back on more frivolous items.

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Devitt said Amazon benefited from a vast infrastructure that allows for faster, more reliable shipping than most of its online peers offer. He called Amazon's announcement an "extremely positive data point" and said the company is "uniquely positioned to do well in an environment like this."

That environment has left many retailers in a tough position. NPD Group senior retail analyst Marshal Cohen said they will be forced in coming weeks to take still more drastic measures to drive sales and raise whatever cash flow they can.

Wednesday, December 24, 2008

Shirtless images of Obama cause stir online

Forget Barack Obama's staff making contact with a governor charged with corruption. What's got everyone talking is the president-elect's fine first form.

"FIT FOR OFFICE: Buff Bam is Hawaii hunk," the New York Post gushed on its cover Tuesday above a photo of the future president strolling without a shirt in Hawaii. The Drudge Report called him "President Beefcake" while TMZ said the president-elect is "still humble enough to do laundry — ON HIS ABS!"

The photos were distributed by Bauer-Griffin, a photo agency more typically found on the corners of Hollywood. Photographer Chris Behnke simply strolled along the beach to get the shot, said agency co-owner Frank Griffin.

Obama "wasn't hiding. He was completely out in the open," Griffin said. "We didn't by any stretch of the imagination expect to get the images we got."

Griffin said Behnke had gone to the beach to get general views of the estate where Obama is vacationing, but instead found easy access to a view of the first family hitting the beach. "We use the expression, 'He gave it up,' " Griffin said.

Members of the press corps traveling with Obama have been careful to respect his privacy. A spokesman traveling with Obama in Hawaii did not have immediate comment.

Griffin said he doesn't expect his agency to stake out Washington on a regular basis, but added that Obama is "now the world's biggest celebrity, just after Angelina and Brad. I guess they're neck and neck right now."

The celebrity description is apt, even if Obama faces a plummeting economy and two wars upon entering office. He's seen as often on "Access Hollywood" as on the nightly news, and appears in "Us Weekly" with the regularity of a Jennifer Aniston.

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When John F. Kennedy was pictured shirtless, there were media accounts fretting about the threshold we had crossed as a country, said David Greenberg, a professor at Rutgers University who is working on a history of political spin.

"There was John F. Kennedy by the beach, shirt off, this young, glamorous president," Greenberg said. "So in a way this is 48 years old now that we're having this."

Since then we've had Lyndon B. Johnson lifting his shirt to show reporters his surgery scar and pictures of Ronald Reagan and Bill Clinton in swim trunks.

"It was kind of an erosion of what had been boundaries of formality between the president and the public," Greenberg said. "We've had 'boxers and briefs' and a real acquaintanceship with a personal side, an uninhibited side, an unclothed side of the president."

Obama's physique has been well-exposed; photographers snapped him body surfing in Hawaii during the campaign. He was on the November cover of Men's Health and detailed his workouts for the magazine: 45 minutes, six days a week, alternating weights and cardio.

Peter Moore, editor of Men's Health, called Obama focused and disciplined about his workouts and what he eats. "I'd say he has a four-pack, rather than a six-pack, but most of us are working with a full keg," he said.

He said Obama has buffed up since his days on the road during the campaign: "It's heavy lifting to form your Cabinet, that's for sure."

Combine the increased interest in a president's personal life with an increasing hunger for celebrity photos and a chiseled presidential body, and Obama becomes an obvious target for paparazzi. Apparently the Obama Girl isn't the only one with a crush.

"Comments have been 95 percent positive, everything from 'helllooo president' to a 65-year-old lady who said she had to wait this long to find a president who she finds attractive," Griffin said.

Earlier on his vacation, Obama was cranky as reporters snapped pictures through a chain-link fence and bushes, asking "OK, guys. Come on. ... How many shots do you need?"

But such personal shots — dropping the girls off at school, hitting the gym, practicing his golf swing — also serve to humanize the president. Greenberg can see why Obama might allow the beach photos to be taken.

"I'm sure if he didn't do it on purpose, he's not exactly crying in his coffee about it," he said. "I don't see any downside."

Well, maybe one: Might world leaders take the president less seriously if they can picture him in his underwear?

Fortunately, French President Nicolas Sarkozy beat him to it with stripped-down beach photos. Russian Prime Minister Vladimir Putin was pictured shirtless on a fishing expedition.

"In some ways we're entering a more casual international environment, too," Greenberg said. "But if he's sitting down with Putin, he has to project gravitas."

Griffin has submitted his photo agency for credentials for Obama's inauguration on Jan. 20. He said it's too soon to estimate how much Bauer-Griffin will earn from the beach photos "within tens of thousands or hundreds of thousands."

"I have a feeling that the president-elect kind of accepts this, that it goes with the territory," Griffin said. "He's become a celebrity. I think the pictures humanize him and show that he's just like the rest of us."

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Thursday, December 18, 2008

Yahoo to shorten logs of user activity

Yahoo Inc. said Wednesday that it will shorten the amount of time that it retains data about its users' online behavior — including Internet search records — to three months from 13 months and expand the range of data that it "anonymizes" after that period.

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The company's new privacy policy comes amid mounting concerns among regulators and lawmakers from Washington to Europe about how much data big Internet companies are collecting on their users and how that information is being used. Yahoo's announcement also ratchets up the pressure on rivals Google Inc. and Microsoft Corp. to follow its lead.

In September, Google said it would "anonymize," or mask, the numeric Internet Protocol (IP) addresses on its server logs after nine months, down from a previous period of 18 months. And Microsoft, which keeps user data for 18 months, said last week it would support an industry standard of six months.

Under Yahoo's new policy, the company will strip out portions of users' IP addresses, alter small tracking files known as "cookies" and delete other potential personally identifiable information after 90 days in most cases. In cases involving fraud and data security, the company will anonymize the data after six months.

Sunnyvale, Calif.-based Yahoo also said it will expand the scope of data that it anonymizes to encompass not only search engine logs, but also page views, page clicks, ad views and ad clicks. That information is used to personalize online content and advertising.

Yahoo will begin implementing the new policy next month and says it will be effective across all the company's services by mid-2010.

Anne Toth, vice president of policy and head of privacy for Yahoo, said the company is adopting the new policy to build trust with users and differentiate it from its competitors. Yahoo also hopes to take the issue of data retention "off the table" by showing that Internet companies can regulate themselves, Toth said.

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European Union regulators have pressured Yahoo, Google and Microsoft over the past year to shorten the amount of time that they hold onto user data. And Congress has begun asking questions about the extent to which Internet and telecommunications companies track where their users go online and use that information to target personalized advertising.

Edward Markey, D-Mass., chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, praised Yahoo for setting a new standard on privacy protection and said Google, Microsoft and other companies will now be compared against that standard.

Ari Schwartz, vice president of the Center for Democracy & Technology, a civil liberties group, agreed that Yahoo's new policy is "step in the right direction." He added, however, that he would like to see more clarity — and more standardization — from the industry about what it does with Internet users' data. He noted, for instance, that while some companies delete full IP addresses, other delete only parts of IP addresses or simply encrypt them.

Indeed, Redmond, Wash.-based Microsoft said in a statement that the method of anonymization is more important than how long records are logged. It called on the entire industry to adopt a "high standard."

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For its part, Mountain View, Calif.-based Google said it takes privacy seriously and strives to strike "the appropriate balance between protecting our users' privacy and offering them benefits of data retention, such as better security measures and new innovations." Google did not address, however, whether it would be open to further reductions in the time it maintains user logs.

Tuesday, December 16, 2008

Australia agree Facebook for serving lien notice

CANBERRA, Australia – You've been "superpoked" — and served. A court in Australia has approved the use of Facebook, a popular social networking Web site, to notify a couple that they lost their home after defaulting on a loan.

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The Australian Capital Territory Supreme Court last Friday approved lawyer Mark McCormack's application to use Facebook to serve the legally binding documents after several failed attempts to contact the couple at the house and by e-mail.

Australian courts have given permission in the past for people to be served via e-mail and text messages when it was not possible to serve them in person.

McCormack, a lawyer for the lender the couple borrowed from, said that by the time he got the documents approved by the court late Tuesday for transmission, Facebook profiles for the couple had disappeared from public view.

The page was apparently either closed or secured for privacy, following publicity about the court order.

"It's somewhat novel, however we do see it as a valid method of bringing the matter to the attention of the defendant," McCormack said.

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Despite the setback, McCormack said the Facebook attempt would help his client's case that all reasonable steps had been taken to serve the couple. A court is expected to settle the matter as early as next week.

Facebook has become a wildly popular online hangout, attracting more than 140 million users worldwide since it launched in 2004. Facebook friends can "poke" or "superpoke" each other — terms for giving someone a playful nudge.

Lawyer and computer forensic expert Seamus Byrne said he was aware of only one similar case in Australia. A Queensland state District Court judge ruled in April against documents being served by Facebook because the option of contacting a person via a post office box had not yet been exhausted.

In the latest ruling, Master David Harper insisted that the documents be attached to a private e-mail sent via Facebook that could not be seen by others visiting the pages.

McCormack said he and a colleague found the woman's Facebook page using personal details that she had given the lender including her birth date and e-mail address. The man was listed on her page as a friend. Prior to Tuesday, neither had imposed security options that deny strangers access to their pages.

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McCormack said he did not bother searching for the couple through any other social networking sites.

"It's one of those occasions where you feel most at home with what you know and I myself have a Facebook account," McCormack said.

Monday, December 15, 2008

Microsoft releases its first iPhone application

Engineers in the company's Live Labs have released the company's first application for Apple's popular smartphone--even before making it available on Microsoft's own mobile platform. Seadragon Mobile, which was added to Apple's App Store on Saturday, is a free image-browsing app that allows users to quickly "deep zoom" images while online and is intended to demonstrate what is possible with a mobile platform.

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Is it possible some at Microsoft find the iPhone a more attractive platform than the software giant's own Windows Mobile?

Seadragon is the backbone for Microsoft's Photosynth, which allows users to take a grouping of photographs and stitch them together into a faux 3D environment.

Other iPhone apps are reportedly in development in Redmond; Microsoft's Tellme unit was expected to release the company's first iPhone app in the form of a voice-activated search for a variety of phones, including iPhone and BlackBerry. A Microsoft representative told my colleague Ina Fried in September that a public version of that program would likely be released in a few months.

So where's the Windows Mobile version of Seadragon?

"The iPhone is the most widely distributed phone with a (graphics processing unit)," Alex Daley, group product manager for Microsoft Live Labs, told TechFlash. "Most phones out today don't have accelerated graphics in them. The iPhone does and so it enabled us to do something that has been previously difficult to do."

Friday, December 12, 2008

Google releases finished version of Chrome browser

Google yanked the "beta" test label off Chrome, quickly putting a stamp of approval on its Web browser released in a direct challenge to Microsoft's ubiquitous Internet Explorer.

The California online search titan -- known for leaving new software offerings in beta, or test, modes for what seems like ages -- says Chrome proved its merits, and in a relatively brief 100 days.

Google's free web-based Gmail service still bears a "beta" label even though it was launched nearly five years ago.

Chrome has gone through 15 iterations since its launch with fixes and modifications engineered based on feedback from some of the more than 10 million people worldwide that have started using the browser.

"We're excited to announce that with today's 50th release we are taking off the 'beta' label," Google engineering director Linus Upson and product management vice president Sundar Pichai wrote in an online posting.

"We have removed the beta label as our goals for stability and performance have been met but our work is far from done."

Improvements which users called for, and reportedly got, include better video viewing, faster data loading, and strict privacy and security controls.

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Google and Microsoft have been in an escalating war, with the Redmond, Washington-based software goliath striving to unseat Google as king of Internet search and advertising.

Google, meanwhile, is striking at the heart of Microsoft's empire by offering software free online as services supported by advertising.

Thursday, December 11, 2008

Another Yahoo investor seeks Microsoft search deal

A large Yahoo Inc. shareholder has joined a growing chorus urging the beleaguered Internet company to set aside its past differences with Microsoft Corp. and renew negotiations to sell its search operations to the spurned suitor.

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In a letter sent Wednesday to Yahoo's board, Ivory Investment Management called upon the directors to make amends for "acting unreasonably" in their earlier talks with Microsoft by quickly closing a deal with the software maker now.

Ivory Investment, which owns a 1.5 percent stake in Yahoo, reasoned the Sunnyvale, Calif.-based company could persuade Microsoft to pay $15 billion for its search operations and still emerge with more earning power than it currently has.

The net result: Yahoo could nearly double its current stock price to at least $24, based on the financial assumptions made in Ivory's analysis.

Some of Ivory's math is debatable, but there is little doubt left on Wall Street that a search deal with Microsoft now appears to be Yahoo's best bet, said Stanford Group analyst Clayton Moran.

"It's a very reasonable question for Yahoo shareholders be asking right now: why the company isn't talking to Microsoft right now," Moran said. "The pressure should be mounting for them to talk because there is no good explanation for them not to be doing so at this point."

Investors reacted as if Ivory's cajoling will help bring Yahoo and Microsoft back to the bargaining table. Yahoo shares surged $1.21, or 10 percent, to close at $13.40 while Microsoft shares rose 1 cent to $20.61.

Yahoo spokesman Brad Williams declined to comment on Ivory's letter.

Redmond, Wash.-based Microsoft didn't immediately respond to a request for comment, but Chief Executive Steve Ballmer reiterated last week that he remains interested in exploring a search deal with Yahoo as he tries to come up with a way to undercut Google Inc.'s dominance of the online advertising market.

Although it trails Google by a wide margin, Yahoo's search engine is the Internet's second most popular, with a U.S. market share of about 20 percent, according to comScore Inc. Microsoft's search engine ranks third at 8.5 percent.

Ballmer has maintained that Microsoft no longer is willing to buy Yahoo in its entirety — an option that was pulled off the table seven months ago when Ballmer withdrew a takeover offer of $47.5 billion, or $33 per share. Yahoo CEO Jerry Yang was holding out for $37 per share.

With Yahoo's stock in the doldrums, other shareholders besides Ivory Investment already have been lobbying for the company to reconcile with Microsoft.

Yahoo director Carl Icahn, who owns 5.5 percent of the company, has been leading the charge, and others, like Mithras Capital, also have thrown their support behind a Microsoft deal.

Last month, Yang said he is ready to talk if Microsoft wants. He made the comments shortly after Google scrapped a planned advertising partnership that Yang had been counting on to boost Yahoo's revenue by as much as $800 million annually.

Yahoo is now searching for a new CEO to replace Yang, who co-founded the company 13 years ago.

As his 18-month stint as CEO winds down, Yang is overseeing layoffs of about 1,500 employees as part of an effort to lower Yahoo's annual expenses by $400 million. Yahoo handed out pink slips to most of the affected U.S. employees Wednesday. The company also might close some of its unprofitable products during the next few weeks and shift other, less popular services into "maintenance mode," Williams said.

Yahoo also has been talking to Time Warner Inc. about a possible purchase of AOL — an idea that Ivory Investment adamantly opposed in its letter.

Ivory Investment, a hedge fund run by Curtis Macnguyen, devoted most of its letter to a detailed breakdown attempting to justify why a $15 billion sale of Yahoo's search engine to Microsoft would pay off for both sides.

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The firm estimates Yahoo would lose more than $2 billion of annual revenue from the sale but would gain about $1.6 billion a year in commissions. The analysis assumes Microsoft would be able to leverage the additional search market share it would pick up from Yahoo to boost its Internet revenue by about $1 billion annually.

Saturday, December 06, 2008

Yahoo Could Open Access to Flickr, Other Technologies

Yahoo might open access to a broader range of technologies beyond just search, a company executive said.

Earlier this year the company launched BOSS (Build Your Own Search Service) program, that offered third parties its search infrastructure and algorithms to set up their own specialized search services. Similar models could potentially be tried with Yahoo's other technologies and products such as Flickr, its photo sharing service, and social networking, said Andrei Z. Broder, research fellow and vice president for computational advertising at Yahoo, on Thursday. He added that the list of which technologies Yahoo might open to others is speculative at the moment.

Yahoo hopes that opening its search technology to other companies will help attract startups with new ideas, Broder said. It wants to allow small companies to figure out better ways of doing something, without having to invest in search infrastructure and algorithms.

As the second player in the search market after Google, Yahoo has an interest in opening up the market, and letting a lot more ideas in, Broder added.

Earlier this year the company released the beta version of an API (application programming interface) that web sites can use to build the search services.

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The "monetization platform" for this strategy is likely to be announced soon, and is more likely to be based on sharing of revenue for advertisements that Yahoo places on these sites, Broder said.

Some of Yahoo's technologies in the areas of information extraction will be made available to web sites participating in the BOSS program.

Friday, December 05, 2008

Will Mac Become a Virus Trap?

Apple has backed off its suggestion that Macs require antivirus software. Yesterday, the computer maker suffered a public relations nightmare after an article was discovered on the company's site encouraging Mac users to install antivirus software. Less than 24 hours later, Apple has quietly removed this recommendation from its KnowledgeBase. Turns out the article, which the BBC says was posted on November 21, was simply an update to a 2007 entry. In response to the firestorm of comments, Apple spokesperson Bill Evans said, "We have removed the KnowledgeBase article because it was old and inaccurate. The Mac is designed with built-in technologies

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that provide protection against malicious software and security threats right out of the box." Apple has repeatedly claimed that Macs, while not completely immune to viruses and spyware, are far safer than Windows computers. In fact some ads have subtly suggested that Macs are completely safe from viruses. After discovering the KnowledgeBase article, tech bloggers the world over excoriated Apple accusing the company of backing off its anti-antivirus stance. But is Apple projecting a false sense of security just to save face? Many experts repeatedly warn that all operating systems are susceptible to viruses, and as the Mac becomes more popular OS X will inevitably become a bigger target for malicious attacks. Regardless, many Mac users don't bother to purchase the memory sucking software that ties up their Windows counterparts. That may change in the event of a widespread attack, but for the moment Mac users aren't buying.

Wednesday, December 03, 2008

Yahoo shares climb on hopes for $30B

SAN FRANCISCO - Yahoo Inc.'s stock rallied Tuesday on a report that AOL's former chief executive believes he can raise enough money in a worsening recession to buy the struggling Internet company for as much as $30 billion.

The Wall Street Journal raised investor hopes with a story that said Jonathan Miller, who stepped down as AOL's top exec two years ago, is trying to secure financing to make a bid for Yahoo at $20 to $22 per share, or $28 billion to $30 billion.
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The story posted on the Journal's Web site cited unnamed people familiar with the matter.

Branding the report a "rumor," Yahoo spokeswoman Tracy Schmaler declined to comment. Miller didn't immediately respond to interview requests.

Yahoo shares rose 76 cents, or more than 7 percent, to close at $11.50, reflecting hopes that a new suitor may emerge for the Sunnyvale-based company. The surge left Yahoo with a market value of just under $16 billion.

Given his past experience running AOL, Miller has the connections and savvy needed to turn around Yahoo, said Standard & Poor's Internet analyst Scott Kessler.

But Miller faces a huge hurdle: A credit crunch and the prospect of the deepest recession in a generation has spooked lenders and investment funds so badly that they have shown little interest in making big bets on risky propositions like this.

Miller "has a strong reputation and an expansive Rolodex, but ($30 billion) is a lot of money to raise in an environment when deals are falling apart and companies are going out of business just about every day," Kessler said.

Speculation about Yahoo's future has intensified since rival Google Inc. pulled out of a proposed advertising partnership a month ago. Yahoo had been counting on the alliance to boost its profits and placate shareholders incensed about the company's rebuff of a $47.5 billion takeover bid from Microsoft Corp.

The guessing game took a new turn two weeks ago when Yahoo founder Jerry Yang revealed his plans to step down as CEO as soon as a replacement can be found.

Yang, who became CEO in June 2007, didn't want to sell to Microsoft because he believed he had charted a strategy that would prove the company was worth more than the software maker was willing to pay.

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Most industry analysts believe Microsoft eventually will return to the bargaining table and buy Yahoo's search engine — a concept that has been embraced by Yahoo's most outspoken board member, Carl Icahn. Microsoft CEO Steve Ballmer also has said he remains open to that idea.

The Times of London tantalized investors during Thanksgiving weekend with a report that Microsoft was preparing to buy Yahoo's search operations for $20 billion in a complex deal involving Miller and his current partner, former News Corp. executive Ross Levinsohn. But representatives from both Yahoo and Microsoft have since denied any discussions along these lines are taking place.

Tuesday, November 25, 2008

Facebook targeted Web 2.0 start-up Twitter

Social networking company Facebook recently held acquisition talks with Twitter, the micro-blogging company, the Financial Times said.

The negotiations, put a valuation of as much as $500 million on Twitter, which has become one of Silicon Valley's most closely watched start-ups, the paper said.

The talks, which were first reported by the AllThingsD blog, were confirmed to the paper by two people familiar with the situation.

Facebook offered to pay for the acquisition in stock, the paper said, citing a person close to the situation.

Putting a value on Twitter's shares proved controversial, according to the paper.

If it used the $15 billion valuation at which Microsoft Corp bought a stake in Facebook last year, it would have valued the Twitter purchase at $500 million, though that investment was seen as a high-water mark for Web 2.0, the paper said.

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One person close to the situation suggested to the paper that the $15 billion valuation for Facebook was the top end of a range of values the two companies talked about, implying that a deal might have valued both Facebook and Twitter at a much lower level.

Biz Stone, Twitter's co-founder, would not comment on the talks, but suggested that the company wanted to remain independent to build on its messaging service, the paper said.

Tuesday, November 18, 2008

Yahoo to replace Yang as CEO, ending rocky reign

Yahoo Inc. co-founder Jerry Yang is stepping down as chief executive, ending a rocky reign marked by his refusal to sell the Internet company to Microsoft Corp. for $47.5 billion — more than triple Yahoo's current market value.

The change in command announced Monday won't be completed until Yahoo finds his replacement. The Sunnyvale, Calif.-based company said it is interviewing candidates inside and outside Yahoo in a search led by its chairman, Roy Bostock, and the executive recruitment firm Heidrick & Struggles.

"Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level," Bostock said.

Yang, who started working on Yahoo with Stanford University classmate David Filo in 1994, will revert to "Chief Yahoo," a titular role he filled before replacing former movie studio boss Terry Semel as CEO in June 2007. He will also remain on Yahoo's board of directors.

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"I will continue to focus on global strategy and to do everything I can to help Yahoo realize its full potential and enhance its leading culture of technology and product excellence and innovation," Yang said in a statement.

Sue Decker, Yahoo's president, is expected to be among the candidates to succeed Yang, although she has been an integral part of the management team that has exasperated the company's shareholders.

Friday, November 14, 2008

Google Adds On-Demand Indexing to Site Search

In another move to gain traction in the enterprise, Google on Thursday launched a new feature to help businesses that use its Site Search service instantly add and update Web pages.

Google Site Search serves all Web site content as search results with the aim of offering relevant and comprehensive coverage of a Web site. Google does this by creating special indexes that supplement pages already searched by

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"Customers today demand speed. Waiting around is so, well, yesterday -- as so many of the things we used to have to wait for are now at our fingertips online," said a blog posting by Google's Nitin Mangtani and Tom Duerig. "For a business running their own Web site, this means that visitors who turn to search expect to have access to the newest products, pages and announcements a site has to offer."

Tuesday, October 28, 2008

Google looking to invest in energy sector

(Reuters) - Internet search and advertising leader Google Inc is increasingly looking at the energy sector as a potential business opportunity, the New York Times reported.

Engineers at Google are hoping to soon unveil tools that could help consumers make better decisions about their energy use, the paper said.

To support these efforts, Google has hired engineers who are conducting research in renewable energy, former government energy officials, scientists and even a former NASA astronaut, whose experience with electronic gadgets is being put to use to develop energy tools for consumers, the Times said.

It added that the company's philanthropic unit, is considering large investments in projects that generate electricity from renewable sources.

"We want to make money, and we want to have impact," Dan Reicher, director for climate change and energy initiatives at told the Times.

But with a recession looming and oil prices dropping, investors might pressure Google to curtail its clean energy ambitions, the paper said.

Calls to Google seeking comment were not immediately returned.

Tuesday, October 21, 2008

Adobe's Flash Player 10 Takes on Microsoft's Silverlight 2

Just weeks after releasing the beta version of its Flash Player 10, code-named Astro, Adobe Systems this week released the final version for Linux, Windows and Macintosh computers. Flash Player 10 comes with a slew of new features and goes head-to-head with Microsoft's Silverlight 2, which was also released this week.

The multimedia products are competing head-to-head. Adobe has the lion's share of the market, but adoption of Microsoft's Silverlight has ramped up since it launched a year ago with 150 partners, including, Blockbuster, Yahoo Japan and AOL.

Silverlight features content protection, deep zoom, a compatible subset of Microsoft's .Net framework, and built-in controls. Silverlight also supports several programming languages, including JavaScript, Visual Basic, C# and IronPython.

"We launched Silverlight just over a year ago, and already one in four consumers worldwide have access to a computer with Silverlight already installed," said Scott Guthrie, corporate vice president at Microsoft.

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Adobe's new Flash Player includes new 3-D effects, custom filters and effects, enhanced sound through audio mixing, and improved visual performance, including faster and smoother videos. The company said it has used 25 years of experience to develop its new text engine, which gives designers and developers more text-layout options and better control.

"Designers and developers know if they deliver video, online games, rich Internet applications, and other interactive experiences using Adobe Flash Player, they can reliably reach the entire Web," said David Wadhwani, general manager and vice president of the platform business unit at Adobe.

After releasing the beta version to developers, Adobe found some issues and has created fixes.

For example, in Linux, Flash Player 10 supported only browsers supported by each specific distribution of Linux. At the time the product was written, Firefox 3 was not supported by Ubuntu 7.

Another problem was with the 3-D effects. Components were not working properly, and objects were not being sent correctly to PDF files or printers.

Other problems included dynamic streaming. Adobe plans to release Adobe Flash Media Server in the future, which will be required to use dynamic streaming. The same is true for other features, including Real Time Media Flow Protocol and Speex for speech.

Quick Fixes

Adobe made several quick fixes before releasing the final version. Linux camera issues have been fixed, full-screen optimizations have been made, vector printing on Macs now works, and video-playback issues on PPC Macs have been resolved.

Another Adobe fix was for video-camera support. Flash Player 10 includes native support for cameras conforming to the Video4Linux v2 API, according to Adobe's Mike Melanson, who writes about the fix in his blog.

"Flash Player content reaches over 98 percent of Internet-enabled desktops, and more than 80 percent of online videos worldwide are viewed using Adobe Flash technology, making Flash the number-one format for video on the Web," said Tom Barclay, senior vice president of product development for Adobe. "We think the new features in Flash Player will change the look of the Web in under a year."

"In the last year, Adobe has increased its worldwide share of video on the web from 66 percent to 80 percent and MSFT Windows Media/Silverlight has dropped from 24 percent to 13 percent," Barclay added. "This is both because Flash is making video more important on the Web and because sites are transitioning to Flash from other technologies."

Friday, October 17, 2008

Microsoft ad deal with Yahoo may still be possible

NEW YORK (Reuters) - Microsoft Corp Chief Executive Steve Ballmer said a Web search advertising deal with Yahoo Inc makes economic sense and may still be possible, though the two sides are not in any discussions.

Shares of Yahoo jumped as much as 17 percent as investors hoped Ballmer's comments could lead to the two sides returning to the negotiating table. But gains were pared back to about 12 percent after Microsoft issued a statement saying it had no interest in buying Yahoo.

Talks between the two broke off in July after Yahoo rejected Microsoft's proposal to buy its search advertising business and enact a revenue-sharing partnership.

Yahoo had also rebuffed in May a full acquisition bid from Microsoft that was priced at $33 per share, or $47.5 billion. Instead, Yahoo signed a search advertising pact with Web leader Google Inc, which is being scrutinized by regulators.

"Perhaps there will continue to remain opportunities to partner around search," Ballmer told a Gartner Inc conference in Orlando, Florida.

"We are not in any discussions with them. We'll see. They want to remain independent. There are probably still opportunities around search. I think it would still make sense economically for their shareholders and ours."

Since talks broke off, Yahoo shares have plunged to a 5-1/2-year low of $11.37, weighed by concerns over the outlook for Web display advertising, as major advertisers such as banks and automakers cut back spending.

"We offered 33 bucks not too long ago and it's 11 and a half. So I don't know what price might have got the job done," Ballmer said, responding to a question from Gartner analyst David Smith on whether Microsoft might take another stab at buying Yahoo now that its stock price is so low.

"It's clear that Yahoo did not want to sell the company. It did not want to sell when we offered 33 ... They probably think it's worth at least 33 today."

Yahoo declined comment. Its shares rose to as high as $13.73 on Thursday, before settling at around $13.16 in late trading on the Nasdaq.

"Our position hasn't changed. Microsoft has no interest in acquiring Yahoo; there are no discussions between the companies," a spokesman for Microsoft said in a statement.

Microsoft shares were up 3.6 percent at $23.48.

Despite the market's excitement, any pursuit of new talks would be impeded by several issues, including Yahoo's severely depressed stock price and the poor outlook for the advertising market due to the weak economy, analysts said.

"The larger issue is strategic fit," Cross Research analyst Richard Williams said. "Microsoft clearly has spent money and changed its focus to 'build' rather than 'buy.'

He added that for businesses driven by advertising, such as Microsoft and Yahoo's Internet operations, it is the wrong time for a deal with markets reeling and consumer confidence plummeting.

"Going into a recession is about the worst time to buy an advertising firm," Williams said. "It's hard to know how hard they are going to be hit and how low they are going to go."

Thursday, October 09, 2008

Microsoft backs using videogames as teaching tools

SAN FRANCISCO (AFP) - Microsoft's research arm and a set of US universities are creating a first-of-its-kind institute devoted to using videogames to teach math, science and engineering to school children.

A Games For Learning Institute (G4LI) is being established at New York University in Manhattan and guaranteed funding for at least three years.

G4LI research will focus on the potential of videogame as tools to teach sciences and other technology-related subjects to middle school children, particularly girls and minorities, according to Microsoft.

"Technology has the potential to help reinvent the education process, and excite and inspire young learners to embrace science, math and technology," Microsoft chief research and strategy officer Craig Mundie said Tuesday.

"The Games for Learning Institute at NYU is a great example of how technology can change how students learn, making it far more natural and intuitive."

Microsoft is providing 1.5 million dollars to fund the institute and an equal amount of money is being provided Columbia University, Dartmouth College, Parsons, Polytechnic Institute of NYU, and other colleges.

"Middle school is a critical stage for students, a time when many are introduced to advanced math and science concepts," said NYU computer science professor Ken Perlin, who will direct G4LI.

"Many students become discouraged or uninterested and pour their time at home into gaming. Ironically, we think gaming is our starting point to draw them into math, science and technology-based programs."

Educators are hoping that by adding videogames to their education arsenals they will be able to win over Internet generation students whose math and science skills are on a disturbing decline.

"While educational games are commonplace, little is known about how, why or even if they are effective," said John Nordlinger, senior research manager for Microsoft Research's gaming efforts.

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The G4LI will evaluate game prototypes and test them in New York City schools. Results will be shared with researchers, game developers and educators, Microsoft said.

A Microsoft Gaming Initiative has invested more than three million dollars in educational game kits, studies and academic events since 2004.

Tuesday, September 23, 2008

Microsoft to issue debt

Chaos in the money markets gave Microsoft Corp. an opening Monday to announce it would take on debt for the first time, launch a new $40 billion stock buyback plan and raise its dividend.

The moves indicate that for all the credit problems plaguing the financial sector, cash-laden technology companies with good credit ratings are still borrowing money on favorable terms and otherwise enjoying flexibility.

The largest information-technology company, Hewlett-Packard Co., approved an $8 billion buyback plan Monday. And Intel Corp. Chairman Craig Barrett told The Associated Press that the chip maker — which boasted $11.5 billion in cash and $2.1 billion in debt at the end of the last quarter — was feeling no squeeze from the credit crunch.

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"I don't see any slowdown in our technology investment or R&D investment or manufacturing investment going forward," he said. "When you've got 10, 15 billion dollars in your bank account, short-term credit is not a significant issue."

Microsoft, which benefits from having $23.7 billion in cash and short-term investments on hand as of June 30, historically has avoided taking on debt to fund day-to-day operations, acquisitions and stock buybacks, even as many of its peers, including IBM Corp. and Oracle Corp., have done so.

Oracle, for one, has accumulated $11.2 billion in debt in recent years while buying up dozens of its smaller rivals, while sitting on $13 billion in cash as of Aug. 31. The business software maker indicated recently that much of that money would go toward acquisitions or buybacks.

Microsoft did plan to borrow money for its $47.5 billion run at Yahoo Inc. this year, but the proposal fell through before the company issued any debt.

Now, as investors are growing increasingly risk-averse, blue-chip companies like Microsoft are finding interest rates on commercial paper — short-term loans that range from overnight to nine months — hovering around 2 percent. Finally the world's largest software maker decided it was time to borrow.

The company said Monday its board approved a $2 billion commercial paper program, as part of a bigger $6 billion, open-ended allowance for debt financing. Moody's Investors Service and Standard & Poor's Rating Services both assigned Microsoft's debt their highest ratings.

"They've had pressure to do this for a long time, and I think it's a process of just getting everybody at the company comfortable with taking on debt," said Walter Pritchard, an analyst at Cowen and Co.

Heather Bellini, an analyst for UBS, said she was surprised by the move, given that the company was vague about what it might use the proceeds for.

"Listening to (CEO) Steve Ballmer in the past, his position has been he wouldn't issue debt for the sake of issuing debt," the analyst said. But given the interest rates available to companies like Microsoft right now, "I think they were just being opportunistic," she said.

In general, taking on debt makes sense for a company like Microsoft. The interest payments Microsoft would make are tax-deductible, which could help boost Microsoft's mighty profits even more.

Richard Lane, a senior vice president at Moody's, also noted that because much of Microsoft's revenue growth comes from overseas, it's cheaper to use debt to fund buybacks and other domestic activities than to do it with money that originates with overseas sales and is taxed when it is brought back into the U.S.

Microsoft also raised its quarterly dividend to 13 cents from 11 cents, payable Dec. 11 to shareholders of record on Nov. 20. Investors reacted to that, the buyback and the debt offering by sending Microsoft's shares up 24 cents, nearly 1 percent, to close at $25.40 even as the broader market fell.

Microsoft's fiercest competitor in the Web search business, Google Inc., has said it isn't planning to buy back stock or take on debt. Google has $12.7 billion in cash, which it prefers to use for acquisitions and investments in its business. - Printer Ink, Toner, & More

"The drama is in New York, not here," Chief Executive Eric Schmidt said in a meeting with reporters last week. "It's business as usual at Google."

Saturday, September 20, 2008

Google co-founder Sergey Brin begins blogging

Google co-founder Sergey Brin has started a blog, candidly telling of being at risk for Parkinson's Disease and plugging his wife's genetic testing start-up firm.

While Brin is no stranger to news-making webcasts and online press announcements, he made a blogging debut Thursday by sharing personal musings in a post at the Blogger weblogging website Google bought in early 2003.

Brin wrote of his mother being diagnosed with Parkinson's Disease and how testing by 23andMe, a company started by his wife Anne Wojcicki, shows he has a gene mutation that "markedly" increases his chances of getting the illness.

"This leaves me in a rather unique position," Brin wrote.

"I now have the opportunity to adjust my life to reduce those odds. I also have the opportunity to perform and support research into this disease long before it may affect me."

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Brin told of working with The Parkinson's Institute and the Michael J. Fox Foundation to combat the disease and provided links to the organizations' websites.

Brin wrote of comparing his genes with those of relatives and of checking whether his DNA links him to others with his family name.

Founded by Wojcicki and Linda Avey two years ago, California-based 23andMe offers genotyping for a price of 399 per person.

Friday, September 19, 2008

iPods make choice harder

The Zune has a long way to go to become a threat to the iPod. But it is getting closer.

With updated Zunes and new iPods hitting the market in the past week, I spent some time with each: a black-on-black version of Microsoft Corp.'s music and video player and a bright red model of Apple Inc.'s iPod Nano. And it became clear that there are a few things Apple can learn from the Zune — though not surprisingly, Microsoft might want to take some notes as well.

The Nano ($149-$199) remains the more attractive of the two. Its new look is sort of growth-spurt chic, combining the long, lean looks of earlier models with a reoriented 2-inch screen that debuted with the shorter, wider third-generation model. In addition, its sides are rounded, which gives it an oval-esque shape that felt awkward cradled in my hand but was easy to slip into a back pocket.

The new Nano comes in an array of bright colors, and this alone may appeal to buyers who want something that stands out from the crowd.

The latest flash memory-based Zune ($150-$200) comes with some new color options, but they're not nearly as loud, and overall the device is identical to the one Microsoft rolled out in October. At 3.6 inches tall and one-third of an inch thick, it is the same height as the new Nano but noticeably bulkier.

Looks aside, the biggest differences are in the players' new features, which include wireless music downloads and streaming on the Zune and an accelerometer that makes it easier to manipulate song-shuffling, gaming and image viewing on the Nano.

Unlike the iPod family, Zunes have always included a wireless feature, but it was limited to sharing songs with other Zune users (who can be hard to find) and to synchronizing music, videos and photos with personal computers. On the most recent Zune, this has been expanded so that when users are in Wi-Fi hotspots they can access the Zune Marketplace online music store straight from the device.

The ability to download songs over the air is not unique — the Nano's big brother, the iPod Touch, can snag songs from Apple's iTunes Store via built-in Wi-Fi — but it certainly gives the smaller Zunes an edge over the wireless-less Nano, and a free update makes it work on older Zunes, too.

I found the Zune's Marketplace feature easy and definitely satisfying, especially since I tend to think of music I want while I'm listening to tunes.

The feature lets you search by lists of top songs, or by sluggishly tapping in artist names; most users will probably find the former simpler, but I did appreciate the option of the latter.

Another neat Wi-Fi feature on the Zune is the ability to download songs you hear over the built-in FM radio. This was simple, and only required a few clicks from start to finish. If you don't have Wi-Fi access, you can still choose songs and they will queue up so you can download them the next time you connect to your computer.

Users who pay $15 per month for Microsoft's all-you-can-eat Zune Pass music subscription can also stream songs over Wi-Fi, and I found songs came in pretty clearly.

The new Nano, meanwhile, does have a few tricks up its chrome sleeves. Apple added an accelerometer, which it had previously included in the iPod Touch and iPhone. The accelerometer lets you do things like turn the Nano sideways while listening to music to scroll through album covers. That had its own menu tab on the previous Nano. Or now you can give the Nano a shake to shuffle it to another song.

I thought the shaking-shuffle feature was kind of annoying. With the slipperiness of the Nano's curved sides I worried I would throw the little guy onto some subway tracks or a busy street while commuting.

But the accelerometer can make games cooler. Apple included a simple game called "Maze" to give users an idea of how this works, and I was surprised at the responsiveness of a little, silver on-screen ball as I tilted and maneuvered the Nano. This was one trick I wished the Zune could learn.

You can also view photos either in portrait or landscape mode on the Nano; the Zune only shows photos in landscape mode, and both devices limit video playback to landscape mode, too.

Another highlight of the Nano's makeover is the new "Genius" feature, which is meant to help you put playlists together by taking one song as a starting point and suggesting other tracks with a similar sound or feel. Or if you try this from a computer, while using the iTunes software, a Genius sidebar shows related songs you can buy from the online iTunes Store.

This gave me some interesting suggestions, like Fujiya & Miyagi's light electro-groove tune "Cassettesingle" when I used The Bird and the Bee's dreamy-sounding pop song "Because" as a starting point. But it seemed a bit off-base by suggesting Jason Mraz's cheerful "I'm Yours" when I started with Rihanna's dark-sounding "Disturbia."

The Zune's latest software includes a similar feature called Mixview that uses thumbnails of album art and artist photos to illustrate users' listening patterns and give music suggestions. Visually, Mixview is miles above the Genius feature, as the images show up in a circular pattern around a rectangle containing a user's profile information.

I liked being able to click on each thumbnail to find related albums, artists who may have influenced the music I'm checking out, or profiles of other Zune users who listen to that music.

Beyond these features, there are plenty of similar specs on the two players. Both sound good, power up fully in about three hours and are rated for up to 24 hours of audio or four hours of video playback per charge.

Their screens appeared similarly bright, and a photo of my brother's bandana-clad dog looked equally crisp (and cute) on the Zune and Nano.

Videos looked very good on both, but the Nano is easier for watching because it has a larger viewing area — 2 inches on the diagonal, compared to 1.8 inches on the Zune.

Both are solid multimedia players, though. And while Apple may be at the front of the pack right now, clearly Microsoft is making strides — and maybe making consumers think twice before running out to buy a new iPod.

Tuesday, September 09, 2008

Wikipedia's Wales launches Wikia Green

Jimmy Wales is best known for evangelizing Wikipedia, the open-source, nonprofit encyclopedia he co-founded in 2001. On Tuesday his for-profit venture, Wikia, in its fourth year, unveiled a community for all things "green."

Anyone can edit Wikia, just like Wikipedia, which is built to attract people passionate about a given topic rather than to provide a general reference. For example, a Wikipedia article about ExxonMobil provides an overview of corporate history, while Wikia Green might zero in on the company's environmental record, with special emphasis on the Exxon Valdez oil spill of 1989.

To reduce costs and its load on the electrical grid, Wikia has halved its server need over the past six months, in part through using virtualization and efficient power supplies. Its offices recently moved from San Mateo, Calif., to San Francisco in part to reduce employees' commutes, and the company is applying to be certified by the city's green business program.

Thursday, August 28, 2008

Microsoft's newest browser may block ads

The next version of Microsoft Corp.'s Web browser makes it easier for people to surf the Internet without leaving a trace.

Companies that sell advertisements online — including Microsoft — can electronically gather tidbits about Web surfers' habits, and then use that information to help decide what kinds of ads to show. However, in the newest "beta" test version of Microsoft's forthcoming Internet Explorer 8, which was made available Wednesday, a mode called InPrivateBrowsing lets users surf without having a list of sites they visit get stored on their computers.

The program also covers other footprints, including temporary Internet files and cookies, the small data files that Web sites put on visitors' computers to track their activities.

Both Internet Explorer 7, Microsoft's current browser, and Mozilla's recently released Firefox 3, already allow users to block cookies. The top two browsers also let users delete private information such as temporary files and browsing history after the fact. But they can't turn off that collection entirely.

The beta also introduces an additional InPrivateBlocking mode, which can block third-party content from appearing on Web sites. For example, a news site might carry stock quotes from one company and weather information from another. Companies that provide such content may also be collecting and sharing information about what people do online. But users who turn on InPrivateBlocking won't see that content or be exposed to such data collection without their consent.

InPrivateBlocking can also keep some types of ads from appearing — including those served up by Microsoft's own advertising platform, whose success is considered critical to the software maker's future.

JJ Richards, a general manager in Microsoft's advertising division, responded in a statement that consumers understand that they get free content and services in exchange for advertising, but want "transparency, trust and control with respect to the sites they visit."

"If IE8 helps heighten awareness of this value exchange, that's a step in the right direction," he said.

Users surfing with InPrivateBlocking turned on can review a list of which companies are trying to display or collect data. Users also can click a link to read more and decide case by case whether to permit certain ones to go ahead.

"Today as a user, we have no visibility or control over how that information is shared and recorded," said James Pratt, a product manager for IE8. "I wouldn't put Microsoft as being the arbiter of what should and shouldn't be tracked."

InPrivateBlocking isn't purely an ad-blocker by design, but publishers are still worried, said Mike Zaneis, vice president of public policy for the Internet Advertising Bureau, which represents Web publishers.

If InPrivateBlocking were widely adopted by IE8 users, small sites that rely almost exclusively on outside companies to serve ads couldn't survive, he said. The Internet ad economy didn't crash after ad-blocking plug-ins appeared for Firefox, but Zaneis said that may have more to do with Firefox's much smaller market share. (Firefox's challenge to IE has grown, however; the browser is used by more than 10 percent of Web surfers.)

If IE8 blocks programs that track how many times an ad is seen — a calculation that helps determine payments to advertisers and publishers — that could also bring down the Web ad marketplace, Zaneis noted.

"We'll wait and see what the marketplace looks like," he said. "I think (Microsoft) realizes, we all realize that it's a beta version, and it's sure to change before it's finalized."

An earlier IE8 beta showed off many bells and whistles that make Web browsing easier. Since then, Microsoft said it also improved the address bar's ability to figure out users' intended Web destination as they type.

An improved search box also provides more content alongside suggested results. For example, an search for an music album, entered in the browser toolbar, populates a drop-down menu with titles, prices and thumbnails of cover art.

Microsoft would not say when it plans to release a final version of the newest browser, but said this second beta is ready for average users to try.

Tuesday, August 12, 2008

Google resolves Gmail access problems

SEATTLE (Reuters) - Google Inc said on Monday it has resolved an issue with its contacts system that caused many users of its Gmail service to have trouble accessing their online e-mail.

The problems began at about 5 p.m. EDT and an announcement on the company's Gmail "Help Center" site said the issue is now resolved.

Google said an outage in the contacts system used by Gmail prevented the e-mail system from loading properly. The company also said that there may be minor delays in deliveries even though all mail is safe.

Users across the United States, Canada and India reported problems with Gmail and a Google employee also reported that the company's own corporate e-mail account was down.

Thursday, August 07, 2008

Text of Chinese Foreign Ministry's statement

BEIJING - Text of a statement by Chinese Foreign Ministry spokesman Qin Gang in response to President Bush's speech, posted on the ministry's Web site Thursday and translated from Chinese by The Associated Press:

With the common efforts made both by China and the U.S., the Sino-U.S. relationship has developed steadily in the last few years. The two countries have conducted fruitful talks, communication and cooperation bilaterally and on a range of international issues. Facts prove again that although there are divergences between China and the U.S., there is a wide range of common interests, and a basis for cooperation. A good Sino-U.S. relationship is a benefit to the people of both countries, and helps peace and stability in the Asia-Pacific region and throughout the whole world.

We are willing to work together with the U.S. on strengthening dialogue and cooperation, appropriately dealing with divergences and sensitive issues and helping the relations to develop constructively and stably.

The Chinese government puts people first, and is dedicated to maintaining and promoting its citizens' basic rights and freedom. Chinese citizens have freedom of religion. These are indisputable facts.

As for the divergence on human rights and religions, we always advocate that both sides talk from a basis of mutual respect and equality, to enhance understanding and diminish divergence, and enlarge mutual consensus.

We firmly oppose any words or acts that interfere in other countries' internal affairs, using human rights and religion and other issues.

Saturday, August 02, 2008

Sun 4Q profit falls 73 pct, guidance hurts stock

SAN FRANCISCO - Sun Microsystems Inc.'s profit plunged 73 percent in the most recent quarter as slumping sales to big U.S. companies and restructuring charges weighed on the server and software maker.

The Santa Clara, Calif.-based company also revealed plans Friday to expand its stock buyback program by $1 billion, a sign Sun believes its shares, which have fallen by 50 percent over the last nine months, are undervalued and poised to rebound.

Wall Street didn't share that optimism.

Sun's shares sank more than 12 percent on the company's worse-than-expected guidance, which indicated that the pressures that hurt Sun in the April-June period, its fiscal fourth quarter, are bleeding into the current quarter.

Sun, the world's fourth-largest server maker, said before the market opened that it expects a "slight" sales decline in the fiscal first quarter, which ends in September, and indicated it likely wouldn't turn a profit. Analysts surveyed by Thomson Financial were expecting flat sales and a profit of 11 cents per share in this quarter.

Goldman Sachs analysts David Bailey and Min Park said in a note to clients that Sun's results supply "another piece of evidence that the problems the company faces have no short-term fixes, and we would continue to avoid the shares."

The disappointing forecast represents the latest setback for a company that until recently was riding a sudden run of profitability: The latest quarter was Sun's sixth profitable quarter out of the last seven periods.

That marked a turnaround from the more than $5 billion in losses Sun racked up after the dot-com meltdown obliterated demand for many of its expensive servers. Sun turned the corner with intensive cost-cutting, such as by slashing 6,500 jobs over the past two years.

Investors still have had muted expectations. Analysts lowered their estimates in July when Sun announced early that its fourth-quarter sales and profit margins would be below the company's previous guidance.

Sun blamed weakness in the U.S. economy, which has caused some of its biggest customers to cut spending, and the sale of fewer higher-end servers, which carry better profit margins. Sun faces intense competition in that market from IBM Corp. and Hewlett-Packard Co.

Sun earned $88 million, or 11 cents per share, in the latest quarter. That compares with $329 million, or 36 cents per share, in the year-ago period.

Excluding one-time charges, Sun earned 35 cents per share. Analysts surveyed by Thomson Financial were expecting profit of 25 cents per share, but some include charges that Sun is excluding, so the numbers aren't directly comparable.

Sales were $3.78 billion, a 1 percent decline from $3.84 billion last year. That matched analyst estimates.

For the full 2008 fiscal year, Sun earned $403 million on $13.9 billion in sales.

Investors remain wary of Sun's prospects considering the U.S. market makes up about 40 percent of its sales. They're also concerned because much of Sun's gains have come from its cost-cutting, which might not be sustainable.

Those fears have been reflected in Sun's stock, which has fallen steadily since the company's 1-for-4 reverse stock split in November. The maneuver was supposed to improve Sun's image, but instead seemed like a sign of trouble.

Sun shares fell $1.31, or 12.3 percent, to close at $9.32 Friday.

Another worrisome figure for Sun was its gross profit margin, which declined 2.9 points to 44.3 percent in the latest quarter. For all of fiscal 2008, however, the figure improved by 1.3 percentage points to 46.5 percent.

Some view Sun's stock as attractive because of its sharp decline.

Wachovia analyst David Wong said it might take a while for the shares to get any kind of big boost, but in the meantime, "Sun continues to restructure and focus on cost cutting, which we think will result in improved profitability when demand improves."