MediaFile

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.

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.

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.

Tech wrap: Clash of tech titans looming?

Apple Inc’s increasingly effective patent war against rivals like Samsung Electronics may mask its real target: arch-foe Google Inc. Poornima Gupta writes: “Recent success in blocking sales of Samsung’s latest Galaxy tablet in most of Europe and Apple’s challenges to the Korean giant in Australia reflect an aggressive effort to defend its top position in the red-hot mobile market from the runaway success of Android.”

AOL said on Thursday it would buy back $250 million of its stock, a move presumably intended to boost confidence in the shares, which fell 32 percent in two days. AOL has been in a turnaround mode since it was spun off from Time Warner in December 2009 after one of the most disastrous mergers in recent times.

Zynga, which has filed for an initial public offering of up to $1 billion, revealed it draws fewer paid players than expected in a regulatory filing on Thursday.

Tech wrap: A trillion-dollar Apple?

Apple Inc briefly edged past Exxon Mobil Corp to become the most valuable company in the United States. Looking ahead, Beakingviews columnist Robert Cyran asks: Could Apple be the first $1 trillion company?

Three initial public offerings were postponed on Tuesday, the latest casualties of volatile market conditions. Nearly half of the dozen IPOs planned this week have now been called off and Fortune.com’s Dan Primack says it “wouldn’t be surprising if none of them get out.” Primack added that Boston-based Carbonite is the best bet to stay the course: “A source familiar with the offering puts its chances of pricing this week at around 70 percent, so long as we don’t experience another major swoon.”

AOL reported a surprise second-quarter loss, citing weaker-than-expected advertising growth. The news sent shares of the company plummeting as much as 20 percent.

Tech wrap: Netflix sees subscriber slowdown

Netflix says it’s expecting its subscriber growth in the United States to slow in the coming quarter. The warning to investors came as the popular video rental company also reported second-quarter revenue that missed Wall Street expectations. The double-shot of bad news sent the company’s shares down about 9 percent in late trading.

BlackBerry maker Research in Motion delivered on a promise it made last month to pare back its global workforce  . . . and then some. The Canadian company announced it is laying off 2,000 staffers – or 11 percent of its workforce – in an effort to cut costs and offset sales declines in the mobile market, which is increasingly dominated by Apple and Google. Analysts are split on whether the cost cuts will do much to help the firm regain a competitive position. “The problem is you can’t cut your way into growth or market leadership, and while I’m sure there was fat at RIM, the core problem sits squarely with management,” Ed Snyder from Charter Equity Research told Reuters. Another analyst, however, argued that the cuts were a necessary step for RIM as it adjusts to a “new growth, or sales, reality.”

In addition, RIM announced a number of changes to the roles and responsibilities of some of its senior managers. Most notably, the company said one of its three chief operating officers, Don Morrison, is retiring and that his responsibilities would fall to the remaining two, Thorsten Heins and Jim Rowan. As AllThingsD points out, though, the changes fail to address shareholder concerns that the real shakeup needed is at the very top with Mike Lazardis and Jim Balsille, who share CEO and chairmen duties.

Defending Arianna Huffington from the shareholder value police

By Maureen Tkacik

The views expressed are her own.

A few weeks ago I read an astonishing story about an army of lobbyists who had stormed Capitol Hill bent on repealing a law passed last year, thanks largely to the energies of a rival battalion of lobbyists. The dueling industries had spent tens of millions enlisting 242 former legislative officials to badger their replacements over a single vote.

Hanging in the balance was $50 billion in profits one industry was extracting each year from, inter alia, the other. But the real cost of the dispute, the authors insisted, was the incalculable one borne by the public when its ostensibly democratic government is entirely preoccupied, in the words of one dismayed senator, “trying to divide up the spoils between various economic interests.”

Which is what was so astonishing about the story: its aggressive and unabashed pursuit of the “public interest.” I was pretty sure this concept was extinct; Washington has become so thoroughly infested with paid promoters of some industry or another’s shareholders’ interests that it’s impolite to display anything more than passing contempt for the “public.” More puzzling still, the media outlet that published this extravagant display of public interest journalism was the Huffington Post, a site famous for many forms of content, most of which are pretty much the antithesis of 8,000-word corruption investigations.

Tech Summit Q&A, day 1: AOL’s Tim Armstrong, Arianna Huffington

AOL CEO Tim Armstrong and Editor in Chief of The Huffington Post Arianna Huffington joined us Monday for the premiere of the 2011 Reuters Global Technology Summit.

Here’s a clip of Tim Armstrong answering why he thinks the expansion of AOL’s local news service Patch is a sound investment.

And another clip of Tim Armstrong, this time talking about one of two Tech CEOs he admires:

Tech wrap: Facebook friends Google exec

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010. REUTERS/Thierry RogeFacebook signaled an increased interest in deals, poaching a member of Google’s corporate development team to lead its fledgling merger and acquisition efforts and underscoring the rivalry between the social networking company and the search engine giant.

AOL hired Twitter co-founder Biz Stone as a strategic adviser for social impact. Its newest addition, The Huffington Post, also announced several hires. AOL announced last week that it was firing 20 percent of its global workforce and editor in chief for AOL’s Engadget Joshua Topolsky quit over the weekend. Still unclear was the fate of AOL freelancers.

Sales of Apple’s iPad 2 eclipsed that of its predecessor on its debut weekend, with around 1 million units being gobbled up. One analyst sees the iPad 2′s early success as a warning sign of a global tablet bubble, where supply could outpace demand for tablets by about 36 percent. While a glut might not make tablet makers happy, consumers aren’t likely to complain about the price drops that could result.

Fired AOL India employee talks

AOL cut more than 900 jobs around the world today — 20 percent of its staff — and  India took a pretty tough cut from the axe: 400 jobs, according to several sources, and 300 contractors, according to another source. The nice thing for Reuters is that we have a big  bureau in Bangalore, not too far from AOL, and plenty of our people know other people there and were able to get important details about the job cuts.

I coordinated some of the coverage from here since I’m hanging out in the bureau, and was happy when I heard that my colleague Nivedita Bhattacharjee got time to talk with one of the employees who was laid off today. Here is some of what he told her. We agreed to his request for anonymity because he wants to get work again and does not want to disqualify himself from jobs because he spoke to the press.

The entire team had a meeting, and they briefed us about how issues will be handled… we work in AOL. It’s something that we are always prepared (for). We were expecting an announcement soon.