Top Patch editor’s “bittersweet” exit
In case you haven’t had your fill of AOL news this week: Patch editor-in-chief Brian Farnham surprised employees today by declaring he will be out the door May 4.
The once-mighty Internet corporation stunned Silicon Valley just days ago by announcing it was unloading the majority of its patents to Microsoft for more than $1 billion. Now, Farnham’s imminent departure raised questions about the future of a once highly touted hyper-local news and community site that reportedly lost $160 million in 2011 alone.
AOL’s media business now also spans TechCrunch, Engadget, and the Huffington Post — all under the auspices of Arianna Huffington.
“Taking leave of Patch ain’t easy, but let me try to boil down why I’m doing so: it turns out I really love creating things from scratch, and while Patch is in a continual process of truly fascinating evolution and only a toddler of a company, it has definitely left “scratch” in the dust,” Farnham wrote in a Wednesday blogpost. “So I’m heading off to explore some other startup opportunities. But not before I take a good, long nap.”
Industry insiders had speculated that Patch — or any of a number of AOL properties — was on the auction block, even before the patent sale. Some trade publications in particular had wondered whether Huffington — who crossed to Tim Armstrong’s empire with the acquisition of her namesake content website amid much fanfare — might not see her influence diminish.
What’s next for the ever-more uncertain AOL sprawl? I guess we’ll have to wait and see.
“Brian is part of Patch’s DNA, which makes his decision to leave bittersweet for all of us. We’re going to miss him, but it goes without saying that we wish him well and that we’re excited to see what new opportunities await him post-Patch,” AOL’s Jon Brod said in a prepared statement.
Samsung takes the Sony media route with ex-AOL, ex-YouTube hire
Samsung, the South Korean consumer electronics giant, has spent most of the last two decades eating the lunch of rival Japanese electronics giant, Sony. While Sony has had struggled with all types of existential debates and attacks at home and abroad including, the global hacker attack of its online network, Samsung has gone from strength to strength in setting the electronics agenda with its cutting edge TVs, phones and tablets.
A lot of Samsung’s success could be put down to be its focus on the basics: making great mass market products and not getting distracted with creating or distributing content. By contrast, Sony not only owns the world’s second largest music company and a major Hollywood studio but also a video games business.
The problem is that Sony has never been able to figure out how to make all those things work in conjunction with its position as one of the world’s largest device makers. Most recently it has launched new online music and video services that it no doubt hopes will help sell more devices. It’s very early to tell if that will strategy will work.
Samsung is now going to try its hand at developing a media platform for content on its devices with the appointment of David Eun as executive vice president. Eun left AOL recently after one of its many restructurings. While there, he was president of AOL Media and Studios. Before that he was the guy charged with doing content deals at Google’s YouTube and before that he was at Time Warner and NBC.
As Samsung says:
He will play a key role in developing a global media strategy and driving new business opportunities to take advantage of Samsung`s growing number of digital televisions and displays, mobile phones, tablets and other connected devices.
AOL rocks the GOP vote
No doubt this is a politically divided nation; just go to a dinner party and see what happens when some half-in-the-bag neighbor brings up health care or gay marriage or taxes — or, apparently, absurdly, email providers. If you can believe it, a new poll out today shows a major difference between Republicans and Democrats when it comes to picking their favorite email service.
It seems that Republican voters favor AOL over every other email provider, according to a survey of 1,184 registered voters by Poll Position. In fact, about 20 percent of them picked AOL as their preferred email provider, ahead of both Google (18.9 percent) and Yahoo (15.6 percent). Democrats took a completely opposite view, picking Google as their favorite (27.3 percent), followed by Yahoo (15.6 percent). And what about AOL? It didn’t fare well, with only 5 percent of Democrats picking it as the best service.
Why such a significant difference? Tough to know. I ran it past a number of people, and the best response I got, from a good friend and keen political observer, was this: “I would guess if you held age, location, and income steady, the differences would be negligible.”
I’ll buy that.
But the other surprise of the poll, which had a margin of error of plus/minus 3 percent, was how well AOL fared with the younger set. Nearly a third — yes, a third — of the respondents 18-29 years-old picked AOL as the top service. Most of this demographic, by the way, weren’t even walking the planet when AOL was formed as Control Video Corporation in 1983. Perhaps this is exactly the reason that AOL is so popular with the younger set. Having an AOL account seems quirky, offbeat, even hip in a retro way. Neoclassic, I think it’s called.
Politico’s Ben Smith recently touched on AOL’s coolness in one of his posts.
“Now that my mother has switched to Gmail, virtually the only people I email at AOL accounts are big shots — people who were already so important by the time the various new fads (and technical advantages) arrived that they couldn’t be bothered to switch, and had nothing to prove to anyone.”
The Republican voters might favor AOL as an e-mail service – but I doubt that AOL is the preferred news source for the GOP. Any hopes of being a neutral media outlet ended when AOL agreed to purchase the Huffington Post.
Tech wrap: Olympus shareholders want entire board purged
Pressure mounted on Japan’s Olympus to take radical action after it admitted to hiding losses on securities investments for decades, with the camera and endoscope maker’s largest foreign investor demanding the resignation of the company’s entire board. Southeastern Asset Management, which owns about five percent of the 92-year-old company, said Tuesday’s admission “changes everything”.
Brushing aside new Olympus President Shuichi Takayama’s insistence he was “absolutely unaware of the facts,” Southeastern told Reuters correspondents Sinead Cruise and Kirstin Ridley that any further reign of the Olympus board risked damaging the company’s key medical business. Takayama, a previous board member who was promoted last month, blamed former Chairman Tsuyoshi Kikukawa, Vice-President Hisashi Mori and internal auditor Hideo Yamada for the cover-up, saying he would consider criminal action.
Former Olympus CEO Michael Woodford, who was fired on October 14 after persistently asking why the company had spent around $1.3 billion on obscure fees and acquisitions, told Reuters that the company’s partners should come under close scrutiny after Tuesday’s admission and that questions remained to be answered about the money trail. “You need forensic accountants going in there to find out where the money has gone, who has worked with Olympus, who has cooperated with Olympus, who has received fees from Olympus,” he told Reuters Insider. “Those are questions we need answered. And then we need an impairment test.”
Discontent continues to grow among a group of Research in Motion shareholders who are demanding the BlackBerry maker do more to breath life into its slumping share price. As Reuters correspondents Pav Jordan and Alastair Sharp report, three Research in Motion shareholders backing a call from merchant bank Jaguar Financial for transformational change at the Canadian smartphone company said the still-informal group was bound to grow if RIM’s shares don’t rebound soon. Jaguar says the dissidents want a sale of the company as a whole or in parts, and the replacement of co-CEOs Mike Lazaridis and Jim Balsillie. The pair are RIM’s two largest shareholders and the most powerful figures in its management.
British billionaire Richard Branson has made a “multimillion” dollar investment in Square, a mobile payment startup led by Twitter co-founder Jack Dorsey, reports Reuters correspondent Alexei Oreskovic. Branson’s investment in Square follows a $100 million investment in June led by venture capital firm Kleiner Perkins Caufield & Byers and an investment for an undisclosed amount by credit card company Visa in April. Square’s technology lets merchants accept payments using tablet PCs or mobile phones. The company recorded $10 million in daily transactions for the first time this past weekend, spokeswoman Katie Baynes told Reuters, up from the $4 million per day in gross payment volume that it announced during the summer.
Yahoo, Microsoft and AOL have set up an advertising partnership meant to take on the growing dominance of Google and Facebook in the online ad sector, reports correspondent Jennifer Saba. The alliance, announced on Tuesday, allows each of the companies to sell each other’s unsold premium advertising inventory — known as display ads — by early next year. Display units are big splashy units that appear on Web pages and attract marketers interested in branding their products or services. Typically, these ads command higher rates.
Tech wrap: Sony suffers as TV picture dims
Sony warned of a fourth straight year of losses, with its television unit alone set to lose $2.2 billion on tumbling demand and a surging yen, sinking its U.S. shares and raising concerns about the viability of its high-profile TV business. Investors had expected Sony to reduce its profit forecast, but not flag a swing to massive losses.
The maker of Bravia TVs, Vaio computers and PlayStation game consoles cut its sales forecast for TVs, cameras and DVD players and said it may report a 90 billion yen ($1.1 billion) net loss for the current financial year, scrapping its earlier net profit estimate of 60 billion yen.Sony’s U.S. listed shares closed down nearly 6 percent.
A small Spanish tablet maker won a patent infringement battle with Apple in a rare victory against the tech giant in its global defense of markets for its iPads, a court document showed. Spain’s Nuevas Tecnologias y Energias Catala (NT-K) successfully appealed a 2010 injunction from a local court to ban the import of its tablet computer — manufactured in China — to Spain. NT-K, from the Valencia region of Spain, is demanding compensation from Apple for losses during the ban of its product and is suing the U.S. giant for alleged anticompetitive behavior.
WikiLeaks founder Julian Assange should be sent to Sweden from Britain to face questioning over alleged sex crimes, the British High Court ruled, rejecting his appeal against extradition. Assange now has two weeks to consider whether to make a final appeal to the Supreme Court. However, any recourse to Britain’s highest judicial body can only be made on a point of law considered by judges to be of general public interest, so permission to appeal must be obtained first from the High Court.
Google launched and then pulled a much-anticipated Gmail app for Apple iOS devices via Apple’s App Store. Initially launched to make access to Google’s email service faster and easier, the app was removed after it quickly became apparent that it wasn’t working, causing “users to see an error message when first opening the app,” Google said in a blog posting. No estimate was given for when the Gmail app would return to the App Store.
Yahoo unveiled a handful of products to try and bolster its mobile and social networking offerings, as the struggling Web company continues to evaluate its future. Among the new products unveiled were a multimedia newsstand for tablets dubbed Livestand, a weather application for Android mobile devices, and a new version of IntoNow, a social application related to television, for the iPad. Yahoo has long endured criticism for lacking a more comprehensive strategy for engaging Web users who are drifting away from PCs and spending more time on tablets and smartphones.
AOL’s third-quarter revenue dropped 6 percent because of its dwindling dial-up Internet access business though it beat analysts expectations and its stock rose more than 11 percent. “Investors have gotten used to disappointment from AOL especially in the forward outlook,” said Benchmark analyst Clayton Moran. “Mainly there are no negative surprises in this quarter… and the forward outlook seems to be more stable.” Prior to the rally, AOL shares were down more than 40 percent year to date.
AOL, Yahoo, Demand Media set sights on the ladies
It’s early October in New York which means that Advertising Week, which kicked off on Monday, is officially in full churn. This year, the organizers of the conference that attracts all stripes from publishing outfits to retailers to ad agencies may as well have slugged the event Ladies Week given the number of companies pitching to women.
Specifically that would be AOL, Yahoo and Demand Media all of which launched in the past couple of days “premium” video channels catering to the women, and, by extension, consumer packaged goods companies looking for a means to place their online advertising dollars.
AOL rolled out more than 15 original Web series some aimed at the ladies with such titles as “Little Women, Big Cars,” ” A Supermodel Stole My Husband,” and “Jocks & Jills.” (An aside: AOL also touted its “You’ve Got” one minute series lumping in President Barack Obama with other “notables” such as Kevin Bacon and Paula Abdul.)
Over at Yahoo, Senior Vice President of the Media Network Mickie Rosen introduced Screens and its new fall line-up on Tuesday that includes original content mainly aimed at females 25 to 45 in addition to other programs from third party sources from the likes of Hulu, CBS, Turner Sports.
Demand Media launched a new channel within its eHow network called Shift that targets “professional women seeking an online channel that reflects their holistic life,” according to a Demand press release.
“A lot of content designed for women is on the softer-side. What we are doing is different,” said Erika Nardini, senior vice president of sales and marketing at Demand, adding that Shift is focusing on solution-based articles and videos.
All three companies are going after lucrative online display ad dollars from the consumer packaged good companies that like to reach women. According to eMarketer, the CPG segment — that’s industry short hand for staples like soap and food products like mac-n-cheese — is poised to spend almost $2.5 billion in online advertising in the United States this year, more than doubling to $5 billion by 2015.
Tech wrap: AOL talking merger with Yahoo?
AOL Chief Executive Tim Armstrong has reportedly approached private equity firms to gauge interest in a deal with Yahoo that would place Armstrong as the head of the combined company, according to a Bloomberg report.
CNBC later reported that a source close to Yahoo said the company had no interest in a deal with AOL.
AOL shares closed down 5.3 percent at $14.72 while Yahoo inched up 0.3 pct to $14.48.
Both former tech powerhouses have fallen on tough times and Reuters.com columnist John C. Abell says: “It’s impossible to know if anything short of IBM-like reinvention could have altered the course of these two companies so that the music playing now would still be more jazz than dirge.”
In other AOL-related news, Xconomy blogger Wade Roush argues that the “explosion of criticism” over TechCrunch founder Michael Arrington’s plans to create a startup seed fund has finally convinced Armstrong that “yoking a formal venture fund to a journalistic operation would make the (real or perceived) conflicts wholly unmanageable.”
Apple Inc scored a symbolic legal victory in efforts to keep its lead spot in the tablet computer market when a German court upheld a ban barring Samsung’s local unit from selling its Galaxy 10.1 tablets in Europe’s biggest economy.
A new iPhone application aims to make social networking truly social, with the help of geo-location technology.
Whither AOL and Yahoo?
About 1,000 years ago, while I was working at Reuters, I did a couple of really smart things: I bought shares in a dial-up Internet company with a mere million or so users, and a web search and catalogue service with a very funny name.
It wasn’t 1,000 years ago, of course, but it sure feels like it has been that long since buying shares in AOL or Yahoo would have been considered genius.
These now-iconic corporations more or less defined the heady, early days of the Internet boom, both as investments and as vast unexplored digital continents which, a few minutes before, hadn’t even existed.
It’s not easy to convey the sense of an infinitely possible future brought on by a paradigm shift — the sort of thing people must have felt when radio disrupted the world, and then television and most recently, the Internet. In my bio I confess that my first encounter with the first web browser, Mosaic, was a borderline religious experience akin to that of Roy Neary, who, at all costs, just had to meet the space aliens visiting Earth (again) in Steven Spielberg’s Close Encounters of the Third Kind.
I’ve long divested myself of any individual shares and some time ago ceased to use the web sites of these companies in any particularly conscious way. And thereby hangs a sad, cautionary tale.
There’s no crying in this game. We stop using certain Internet services and they wither and die by the rules of the jungle that is the free market. Investors roll the dice: they might be in it for the long haul, the short haul, or the short. Those of us who love new toys delight in playing with them. But there is always a new toy, and if it is better then the “old” one gets tossed in a heartbeat.
The missteps taken by AOL and Yahoo are well documented. The Karmic disintegration of AOL came with an ill-considered and since un-spun merger with Time Warner. Now, under former Googler Tim Armstrong, AOL is still swimming upstream to become a media company under the direction of the inestimable Arianna Huffington. But defections and confusion at two key news properties — Engadget and now TechCrunch — seem only to confirm that the company is off course, which leaves it open to stories touting its break-up value.
Crunch theater: blogger’s VC fund creates media spectacle
The tech blogosphere was on fire on Friday with a flood of constantly-updated news reports and a barrage of tweets dissecting every angle of the story.
A new iPhone? Details of the long-awaited Facebook IPO?
Not quite. The object of fascination was the preceding day’s news that high-profile tech blogger Michael Arrington has launched a $20 million venture capital fund.
The move instantly triggered a debate about the inherent conflict of an influential blog editor investing in many of the start-ups that would presumably be covered by TechCrunch — a must-read in the tech crowd.
But things only got more confusing as Arrington’s role at TechCrunch and parent company AOL appeared to undergo a series of metamorphoses as each hour passed.
AOL, which acquired TechCrunch in September 2010 and is also an investor in Arrington’s new CrunchFund venture fund, initially said Arrington would become “founding editor” and that AOL would look for a new managing editor.
But a flurry of subsequent reports on the Business Insider blog had Arrington moved to an unpaid contributor role, a non-employee of AOL and finally an employee of the AOL Ventures division.
Tech wrap: Apple after Jobs
So, Apple can survive without Steve Jobs as CEO after all. At least that’s the message that was sent by Apple investors today. Apple shares, which took a beating in after-hours trade on Wednesday after the company announced Jobs’s departure, stabilized on Thursday and were down about 1 percent. Investors, at least for now, appear convinced that Apple can keep churning out blockbuster products and oversized profits with new CEO Tim Cook in charge.
What will those new hit products be? Wired’s GadgetLab takes a look at some of the patents Apple has sought recently to get a sense for where the company could be heading next. The answer: smart TVs, mobile devices with hybrid LCD/e-ink displays and voice-controlled devices. Of course, Apple fans can also expect updates to many of the company’s existing hit products. The company is expected to release a new version of its popular iPhone this fall, and there have been news reports that the iPad could get a refresh this year as well. As some analysts have remarked, Apple’s product machine seems well intact and should be for the next few years.
Reuters correspondents Poornima Gupta and Peter Henderson take a closer look at the man responsible for transforming Apple into the tech juggernaut that it is today. “Charismatic, visionary, ruthless, perfectionist, dictator – these are some of the words that people use to describe the larger-than-life figure of Jobs, who may be the biggest dreamer the technology world has ever known, but also a hard-edged businessman and negotiator through and through,” they write in a newsmaker piece.
The resignation of Jobs opens the door for rivals Samsung Electronics and HTC to battle for smartphone supremacy in salesrooms and courtrooms globally, argues Miyoung Kim. “Samsung’s fortunes are most tied to Apple, both as a competitor and supplier of components. The group also has a scale and an ability to react quickly that is rare in the sector,” she writes.
Twitter can add a new milestone to its list of achievements: the word “tweet” has made it into the Merriam-Webster dictionary. Social media term “crowdsourcing”, which is “the practice of obtaining information from a large group of people who contribute online,” also made the cut.
AOL shares rose nearly 9 percent on Thursday as the Internet company — long seen as a merger candidate — confirmed it has an investment banker and a law firm on retainer. According to Adweek, teams from investment banking firm Allen & Co and law firm Wachtell, Lipton, Rosen & Katz met AOL executives on Wednesday. Wachtell Lipton lawyer Martin Lipton and Allen & Co banker Nancy Peretsman attended the meeting, Adweek said.
