Assessing the latest iPad 2 rumors, hints and allegations

It was a busy weekend for people looking for insights on the next version of Apple's iPad. I've been seeing sustained chatter about a successor to that best-selling tablet computer since at least December, but now it's starting to get specific.

The obvious feature on the next iPad will be front and back cameras. Now that Apple has anointed FaceTime as its preferred spelling for "phone call"--while competing tablets are all touting their own video-calling cameras--there's no way that the next iPad won't match the iPhone 4 and the current iPod touch in this regard.

But what other features will such a successor bring? A report by Engadget on Friday spotlighted an intriguing, improbable addition: an SD Card slot.

This would make perfect sense in the abstract--pretty much every non-Apple mobile device uses this format, or at least its microSD variant, for removable storage. But Apple has yet to standardize on SD Card slots in its desktops and laptops and has never added them to its mobile devices. I would be surprised if the next iPad had one.

The Engadget post also predicted that 3G models of the iPad 2 (which, to be clear, Apple will simply call "the iPad" if it sticks to its habits) will support both AT&T and Verizon's incompatible networks. We already know there will be a Verizon-ready iPad 3G, since an executive at Verizon Wireless blabbed about it to Bloomberg--on the record, even. But for Apple to adopt a hybrid GSM/CDMA design when half of that chipset would be useless in most of the world would be something else.

How about a higher-resolution screen? Reports at MacRumors and elsewhere have pointed to graphic elements in the latest version of the iPad's iBooks program to forecast a display with a 2,048-by-1,536 pixel resolution. I do expect a sharper picture than what the current model delivers, but those numbers, far above HD, seem like overkill to me. They also seem implausible at today's $500-and-up price structure.

Well, what if the iPad 2 cost more? A sighting of three vague listings in Best Buy's inventory database suggests the new model could start at $699 $599. That I can believe, because I've seen Apple do it before. I can almost picture Steve Jobs explaining why a $100 price increase represents an amazing and revolutionary bargain considering the new model's brilliance ... except, of course, he won't be heading up any product launches while he's on sick leave.

Finally, an AppleInsider post suggests that the next iPad will add a Mini DisplayPort video output. On one hand, Apple has been quasi-religious about keeping its proprietary iPod dock connector as the sole cable connection on its mobile devices. On the other, it's been pushing Mini DisplayPort as the future of video output on its desktops and laptops--even though HDMI makes plugging in an HDTV far easier.

(TechCrunch's iPad 2 rumor roundup, which I saw after I'd begun sketching out this post, offers a similar rundown of these possibilities and covers some I hadn't considered.)

I'm tentative about a lot of these forecasts (I'll leave it to you to suggest in the comments which ones are most flawed), but there are two more iPad 2 predictions I can now make with at least 95 percent accuracy. One, the next iPad will arrive in stores almost exactly a year after the first one, making for a retail debut in the first weekend of April. Two, people will line up to buy the first allocation of retail models, even though millions more will be on their way from factories overseas.

11:16 a.m. Fixed a typo in the supposed price of a new iPad as seen in a Best Buy computer system.

Yahoo's 4Q earnings double despite falling revenue

Yahoo Inc.'s fourth-quarter earnings more than doubled, but the Internet company's sagging revenue showed that it's still lagging in the high-stakes race for online advertising.

The results announced Tuesday illuminated why many investors are wondering if Yahoo CEO Carol Bartz is the right person for the job as she enters the second half of a four-year contract she signed in January 2009. Those doubts have undermined Yahoo's stock price, fanning speculation that the company may attract a takeover bid from buyout firms that prey on troubled companies.

Yahoo shares fell 38 cents, or 2.4 percent, to $15.64 in extended trading Tuesday after the results were released. In regular trading earlier, shares dipped 7 cents to $16.02.

Although Bartz has boosted Yahoo's earnings through layoffs and other cost-cutting measures, the company's revenue has fallen since her arrival.

With less money coming into the company, Yahoo has laid off more than 700 workers in the past two months. The latest cutbacks came Tuesday, with Yahoo laying off 100 to 150 employees, roughly 1 percent from a work force that totaled 13,600 people at the end of December. Bartz told analysts in a conference call that the company still intends to hire more people this year while finding other ways to ensure its expenses don't rise.

"We are on the right path," Tim Morse, Yahoo's chief financial officer, said in an interview. "We are transitioning into a different company, and that is going to take some time."

Signaling the financial funk will persist into this year, Yahoo predicted its net revenue during the first quarter will decline by 4 percent to 10 percent from last year. The net revenue figure strips out commissions that Yahoo pays its advertising partners. The company, based in Sunnyvale, didn't provide a full-year outlook.

Yahoo earned $312 million, or 24 cents per share, in the October-December period. That compared with net income of $153 million, or 11 cents per share, at the same time in 2009.

If not for charges incurred from 600 layoffs made last month, Yahoo said it would have earned 26 cents per share. Analysts surveyed by FactSet had predicted Yahoo would earn 23 cents per share

Revenue for the period fell 12 percent to $1.53 billion, from $1.73 billion a year earlier.

After subtracting commissions, Yahoo's net revenue totaled $1.2 billion — about $10 million above analysts' estimates. The net revenue declined 4 percent from the previous year.

Investors focus on Yahoo's net revenue because it reflects how much money the company has to run its business and wring out a profit.

Net revenue in the latest quarter was slightly below Yahoo's total of $1.38 billion in the final three months of 2008, the final reporting period before Bartz was hired to reverse a slump that began in 2006 while the overall economy was still strong.

The downturn has been driven in part by an Internet search partnership that Bartz forged with Microsoft Corp. to lower Yahoo's overhead and free up employees to work on other products. The alliance requires Yahoo to pay Microsoft $12 of every $100 in ad revenue flowing from searches on its website.

Yahoo also sold its help-wanted service, HotJobs, last year and has pruned other revenue-generating services from its operations since Bartz took over.

If not the cutbacks and Microsoft partnership, Morse said Yahoo's fourth-quarter revenue would have increased by 2 percent to 3 percent from the prior year.

Yahoo expects the Microsoft partnership, divestitures and other cutbacks to decrease its revenue by about $220 million in 2011.

Even if it had that additional revenue, Yahoo's growth rate would still trail other Internet companies that have assembled more compelling services and better methods for reaching audiences that appeal to marketers.

Google Inc. and Facebook, in particular, have been outmaneuvering Yahoo in the chase for online advertising dollars.

Propelled by the Internet's dominant search engine, Google's revenue rose 26 percent in the fourth quarter to $8.4 billion — surpassing Yahoo's total of $6.3 billion for the entire year. Google is doing so well that it plans to hire more than 6,200 employees this year in what will be the biggest expansion in its 12-year history.

Facebook is privately held, but disclosed some of its results while raising $1.5 billion in a deal put together by Goldman Sachs Group Inc. Those figures indicated that Facebook's 2010 revenue would more than double from $777 million in previous year.

Google awards $100 million to Eric Schmidt

Google Inc. has awarded $100 million worth of equity to Eric Schmidt, who is stepping aside as CEO but will stay with the company as executive chairman.

Google said in a regulatory filing on Monday the stock and stock options will be granted on Feb. 2 and will vest over four years.

The magnitude of the award is "unusual" for an executive who is transitioning out of the CEO role — and may even be unusual for sitting CEOs, said David Wise, senior principal at management consulting firm Hay Group. But given Schmidt's success, "the board clearly wants to retain his guidance for the next four years."

"It's a signal to shareholders that he'll continue to steer the boat," Wise added.

Schmidt, 55, is being replaced as Google's CEO by co-founder Larry Page. Both men, along with Google's other co-founder Sergey Brin, have limited their salaries to $1 for years. But the three are Google's controlling shareholders and Schmidt's net worth is about $5.45 billion, according to Forbes magazine.

Page, 37, takes over the CEO role in April. Schmidt summed up seismic shift at Google's helm in a Twitter post last week that said, "Day-to-day adult supervision no longer needed!"

Schmidt has led Google since 2001, three years before the company went public in August 2004. Since then, Google's shares have grown more than sixfold, at one point surpassing $700. Google's market capitalization is now about $196 billion. Though it faces a formidable crop of young new rivals, notably Facebook, Google so far has managed to stay on top of the online advertising food chain, relying mainly on its search prowess but flexing its muscles in other areas too.

Schmidt, Brin and Page had led Google through the past decade as a ruling triumvirate. With the changes, Schmidt will serve an adviser to Page and a liaison for Google's business partners and government officials, the latter an important role as Google faces growing regulatory scrutiny in the U.S. and Europe.

Page will lead product development and technology strategy and run Google's day-to-day operations. Brin, meanwhile, will work on strategic projects with an emphasis on new products.

Schmidt held about 9.2 million of Google's shares as of Dec. 31, 2010, according to a separate filing from last week. This amounts to about 2.9 percent of Google's outstanding shares and about 9.6 percent of the voting power. He plans to sell about 534,000 Class A shares as part of a pre-arranged trading plan. If he does, he will then hold about 9.1 percent of Google's voting power, the company said.

Top 10 Twitter Trends This Week

Last Saturday, the world was shocked by the news of the shooting in Tuscon, Arizona that killed six and wounded 13, among them Rep. Gabrielle Giffords. Twitter exploded as real-time reports flooded in, showcasing the network's ability to spread news quickly, though not always accurately. A few major media outlets had reported that Giffords had died, and the online world took some time to sort out the facts. On top of that, discussions of whether or not partisan rhetoric had a hand in inciting the violence fanned the flames of a social media firestorm. All these factors pushed the news item into the number one trending spot for the week.

Soccer is back in at number two after a few weeks out of the spotlight. This time, it wasn't just excitement on the field, but the activities of the athletes on Twitter itself that spurred the chatter.

A particularly interesting trend pops up in the number three slot. "Alay Style," a method of spelling that incorporates odd capitalization, numerals and syntax, seems to have grown in popularity across the web. The phenomenon apparently stems from the Facebook profile of a teenager from East Java. It doesn't get much more viral than that.

And on a humorous note, the recent broadcast of Star Wars: The Phantom Menace on UK television reminded people just how much they disliked a certain CGI character from the much maligned prequel. Discussions of the broadcast brought the topic in at number four. Tastes in film aside, the trend shows once again that TV (old media) is still a powerful force around which mainstream discussions coalesce online -- Twitter being a regular beneficiary.

For the full list of top trends, check out the chart below, compiled by our friends at What The Trend. Because this is a topical list, hashtag memes and games have been omitted from the chart.

You can check past Twitter trends in our Top Twitter Topics section, and read more about this past week’s trends on What The Trend.

BlackBerry Dakota Signals RIM's Desperation

Images and details of the BlackBerry Dakota--the impending flagship smartphone from Research In Motion (RIM)--have emerged. The Dakota is packed with features as RIM struggles desperately to regain lost ground and compete with the Apple iPhone and the rising Android invasion.

First, let's take a look at what the Dakota has to offer. The BlackBerry smartphone is expected to have a 5MP camera with HD video recording, flash, and image stabilization. It will also have 768MB of RAM and 4GB of internal storage space. The razor thin smartphone will have both a touchscreen and the trademark QWERTY keyboard, proximity sensor, accelerometer, magnetometer, near-field communications (NFC), Bluetooth, and more. Oh, and it will launch BlackBerry OS 6.1.

Not too shabby. If it could also make breakfast and fold the laundry it would really be the total package. Of course, I don't blame RIM for trying. It is not only reasonable, but expected that RIM would try to push the envelope of design and function and develop a smartphone worthy of competing against Android smartphones and the Apple iPhone.

RIM is still leading the smartphone pack, but it has been hemorrhaging market share for some time--first to the iPhone, and now Android. RIM's once dominant market share has been whittled down to a few percentage points. The most recent comScore survey shows RIM with 33.5 percent of the smartphone market, Android edging out Apple with 26 percent, and Apple coming in a close third at 25 percent. With the launch of the iPhone on Verizon, demand for the iPhone will probably spike and jump back to number two, or possibly even leapfrog RIM to take the top spot.

Unfortunately for RIM, the dominance of the iPhone, and the ascendance of Android are formidable challenges to overcome. RIM has essentially been coasting on its former glory as the de facto smartphone and mobile communications platform for business customers. The BlackBerry culture and infrastructure still make up the backbone of mobile communications for many businesses--which may be one of the reasons that RIM is still clinging to the smartphone lead.

The upcoming PlayBook tablet seems like a potentially compelling entrant into the nascent tablet market--and one that might stand out among the hundred or so iPad wannabes. But, RIM has tried repeatedly to regain its smartphone mojo with little success.

What do you think? Can the BlackBerry Dakota compete against the iPhone 4--and the iPhone 5 that is almost certainly going to launch sometime this summer, or the massive arsenal of cutting edge Android smartphones on the market? Is there still some compelling reason you might choose BlackBerry over iPhone or Android?

Investments place value of Facebook at $50 billion

An injection of cash that values Facebook at $50 billion will help it delay going public for at least another year, giving the company breathing room to focus on long-term ambition rather than short-term profit.

The infusion — $500 million from elite investment house Goldman Sachs and a Russian investor, according to a report by The New York Times — represents the most emphatic endorsement yet of Facebook's potential to make money in online social networking.

It places the company at twice the value of Internet giant Yahoo and about equal to what well-established names such as Boeing and Kraft Foods are worth on the open market.

More important, it buys time for Facebook to keep its books private and not have to cater to the demands of the market. And it gives 26-year-old founder Mark Zuckerberg room to grow into his role as the public face of a multinational company.

Zuckerberg is widely believed to be more comfortable operating behind the scenes, thinking about technology and business, than engaging in public discourse, says Standard & Poor's equity analyst Scott Kessler, who follows large Internet companies.

"There is still some question whether he has the persona to be a public CEO and, if he doesn't, would he be willing to cede control to someone who does," says Mark Heeson, president of the National Venture Capital Association, a trade group that represents firms that invest in startups. "That is probably an issue that Facebook's board has been discussing for some time."

As it nears the seventh anniversary of its founding in a Harvard dorm room, Facebook is already slightly more mature than Google was when it went public, in 2004. At the time, investors placed Google's value at about $24 billion.

By the time Google turned 7, in September 2005, its market value had ballooned to about $90 billion, and the company wound up with $6 billion in revenue that year.

Google, like Facebook, wanted to stay private as long as possible to avoid public scrutiny of its finances, investor complaints about its strategy and potential management distractions.

The $50 billion is more than twice as much as the market's valuation of Yahoo. It's also worth more than eBay, but still less than Amazon.com — not to mention Google, which now stands at nearly $200 billion.

Facebook has grown quickly as a business, even as it seeks to retain a startup culture, valuing innovation, hiring the smartest engineers from its neighbors and gobbling up small tech companies.

It has swelled to more than 500 million users, about half of whom log in on a given day. Each month they share more than 30 billion links, notes, photos and other types of content. Facebook "Like" buttons are everywhere online.

Facebook is free and makes money from selling highly targeted ads. Investors are increasingly convinced it is destined to become a marketing mecca. It has cemented its place as the king of social media, much as Google did for online search.

The New York Times reported the investment over the weekend, citing unnamed people involved with the deal. Facebook and Goldman Sachs declined to comment Monday.

Russian investor Digital Sky Technologies, which focuses on Internet properties, already has a 10 percent stake in Facebook, but the nod from Goldman Sachs is a sign of just how big the Palo Alto, Calif.-based startup has become even outside tech circles.

Wedbush Morgan analyst Lou Kerner, who has been bullish on social media and Facebook in particular, says Facebook is well worth $50 billion.

He says it's still 15 percent less than the going rate on private stock exchanges such as SecondMarket and SharesPost, where stock is generally sold by former employees or early investors in these companies. Kerner thinks the company could trade at $100 billion if it went public.

Not that Facebook is in any rush. Zuckerberg has been coy about a possible initial public offering, recently telling CBS' "60 Minutes" that he doesn't see selling the company or going public as an end goal, as a lot of entrepreneurs seem to.

That approach is "like you win when you go public. And that's just not how I see it," he said in the broadcast, which aired Dec. 5.

There are many reasons for Facebook to put off an IPO, a big one being that it doesn't need the money, as the latest investment shows. Companies go public to get access to capital, and Facebook clearly has access to capital, Kerner says.

Going public is also a big time commitment for senior management — time they could otherwise spend running the company, he says. Zuckerberg has been deeply involved in Facebook since its founding and shows no signs of wanting to give that up to cash out. He's even pledged to give away at least half of his wealth along with a slew of much older billionaires such as Carl Icahn and Barry Diller.

And Facebook, which already faces government scrutiny for the way it handles the troves of personal information its users share, would be subject to even more poring eyes were it to go public, Kerner notes.

"If I'm Facebook, I don't think I ever want to go public," he says.

The company discloses very limited financial information now, but that will change if it amasses at least 500 shareholders. Once a company with at least $10 million in assets crosses that threshold, the Securities and Exchange Commission requires it to disclose its finances and other crucial information. That regulation triggered Google's IPO in 2004.

Exactly how many shareholders Facebook has is not publicly known. The Times said Goldman hopes to circumvent the rule by counting itself as just one investor while pooling investments from thousands of its own clients.

Separately, Facebook in 2008 created a restricted class of shares for new employees that can't be sold until the company goes public. The SEC exempted these shares from being counted toward the 500-stockholder cap.

The agency is looking into whether recent trading in private Facebook stock may be enough to require more disclosure.

Facebook hasn't said whether it is making money under the accounting rules used by public companies, though in 2009 it announced it was bringing in more than it was spending. Research firm eMarketer estimates that Facebook generated $1.29 billion in online ad revenue in 2010 and will rake in $1.76 billion in 2011.

Digital Sky Technologies — together with sister company Mail.ru, which had its IPO in London in November — already owned about 10 percent of Facebook. A person answering the phone at the company's office in Moscow said no one was available to comment.

Microsoft also owns a small stake in Facebook. It invested $240 million in Facebook in 2007 in exchange for a 1.6 percent stake, at the time implying a valuation of $15 billion.

Goldman Sachs, by cozying up to Facebook now, could be gaining an inside track to handle the eventual IPO, says Reena Aggarwal, a Georgetown University finance professor specializing in investment banking and IPOs.

"This looks like a very smart move by Goldman because it helps them get their foot in the door," she said.