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.
Tech wrap: Apple teases “Mountain Lion”
Apple released details on the successor to its “Lion” operating system for Mac computers, due out late this summer. OS X 10.8, dubbed “Mountain Lion,” will inherit features already running on iPhones and iPads such as iMessage, Notification Center and AirPlay mirroring, according to an Apple press release. Game Center will give Mac users the opportunity to square off against gamers on iOS devices as well as other Mac users. A new feature called “Gatekeeper” is meant to give OS X users more control over what apps can be downloaded onto their Macs, further distinguishing Apple-approved apps from third-party ones. The plan to introduce more iOS functions to Apple’s desktop and laptop OS comes as Microsoft prepares to make its desktop applications more mobile with a rumored fall release of Windows 8.
Four months after one of Japan’s biggest corporate scandals, police and prosecutors arrested seven men, including the former president of Olympus and ex-bankers, over their role in a $1.7 billion accounting fraud at the medical equipment and camera maker. Three former executives arrested, ex-President Tsuyoshi Kikukawa, former Executive Vice President Hisashi Mori and former auditor Hideo Yamada, had been identified by an investigative panel, commissioned by Olympus, as the main culprits in the fraud, seeking to delay the reckoning from risky investments made in the late-1980′s bubble economy.
Groupon CEO Andrew Mason said that the company’s location-based service Groupon NOW will likely not be a material contributor to results in the next one or two quarters. Mason said customers of the company’s daily deals are using Groupon NOW too. However, he stressed that the new service will likely take time to grow. Groupon NOW is a relatively new service that differs from Groupon’s main daily deal business. Groupon subscribers can check on nearby deals that are happening in the next one or two hours, based on their location.
Transportation Secretary Ray LaHood proposed voluntary steps for automakers that would establish new safety criteria for hands-free calling, navigation, and entertainment systems that have become common in new cars and trucks. The guidelines introduced recommend that automakers adopt technology to disable distracting electronic systems that are accessible to the driver — but not passengers — when a car is moving. The latest government figures show that roughly 10 percent of U.S. traffic deaths in 2010, or 3,092 people, were linked to distracted driving.
Microsoft’s msnNOW targets hot news, gossip
Microsoft’s MSN portal, like Yahoo’s, is finding it tough to compete with Facebook and Twitter as people’s first port of call on the Internet.
The software giant is looking to grab back some buzz and appeal to younger users with a new service that delivers a snapshot at any minute of the day on news stories, people and topics that are most popular on the web.
The product, branded ‘msnNOW’, launches on Thursday at now.msn.com, and will be integrated into items on Microsft’s main MSN site.
It takes data from Microsoft’s own Bing search engine to find out what people are searching for, and mixes in results from Facebook (which Microsoft owns a small part of) and Twitter to get a hold on what links are being exchanged.
Editors at MSN will then sort out the results — filtering out the fake death rumors that spread so quickly on Twitter — to give a ranking of news stories and hot topics and point out resources to find out more on a particular subject.
The service is aimed primarily at younger users, who are accustomed to fast-moving data flows, said Bob Visse, MSN’s general manager. But it may also serve as a useful tool for news junkies and media professionals who want to keep track of hot news, he added.
Tech wrap: Kodak files for bankruptcy protection
Eastman Kodak, the photography icon that invented the hand-held camera, filed for bankruptcy protection and planned to shrink significantly after a prolonged plunge for one of America’s best-known companies. The Chapter 11 filing may give Kodak the ability to find buyers for some of its 1,100 digital patents, a major portion of its value. According to papers filed with the U.S. bankruptcy court in Manhattan, Kodak had about $5.1 billion of assets and $6.75 billion of liabilities at the end of September. Kodak now employs 17,000 people, down from 63,900 just nine years ago.
Kodak’s long decline can be traced back to one source: the former king of photography’s failure to reinvent itself in the digital age, writes Ernest Scheyder. Kodak’s film dominated the industry but the company failed to adopt modern technologies quickly enough, such as the digital camera — ironically, a product it invented. ”Kodak was very Rochester-centric and never really developed a presence in centers of the world that were developing new technologies,” said Rosabeth Kanter, a professor at Harvard Business School. “It’s like they’re living in a museum.”
Apple unveiled a new digital textbook service called iBooks 2, aiming to revitalize the U.S. education market and quicken the adoption of its market-leading iPad in that sector. The move pits Apple against Amazon.com and other content and device makers that have made inroads into the estimated $8 billion market with their electronic textbook offerings. Apple has been working on digital textbooks with publishers Pearson, McGraw-Hill and Houghton Mifflin Harcourt, a trio responsible for 90 percent of textbooks sold in the United States.
Google’s net revenue jumped more than 27 percent in the fourth quarter but fell short of Wall Street targets, sending shares down sharply in after hours trading. The No.1 Internet search engine said that it earned $2.71 billion, or $8.22 per share in the fourth quarter, compared to $2.54 billion, or $7.81 per share in the year-ago period.
Microsoft said fiscal second-quarter profit fell slightly, as lower computer sales hurt its core Windows business. The company reported net profit of $6.624 billion, or 78 cents per share, compared with $6.634 billion, or 77 cents per share, in the year-ago quarter.
Some members of Congress switched sides to oppose anti-piracy legislation as protests blanketed the Internet on Wednesday, turning Wikipedia dark and putting black slashes on Google and other sites as if they had been censored. Several sponsors of the legislation, including Senators Roy Blunt, Chuck Grassley, Orrin Hatch and John Boozman and Marco Rubio, said they were withdrawing their support. Some blamed Senate Majority Leader Harry Reid for rushing the Senate version of the bill.
Rovio, the Finnish creator of the global smash-hit Angry Birds video game will not join the stock market this year but still aims to eventually seek a listing, its marketing chief said. ”We are not in a rush. This year is way too early for an IPO, there are too many open things, and we are in a very early stage of the Angry Birds lifecycle,” marketing chief Peter Vesterbacka told Reuters.
Shadowing a fund manager at CES
More than 140,000 people descended (or will descend) on Las Vegas this week to kick the tires on a new wave of consumer electronics gadgets. Of those, a relatively small contingent (estimared? 3,500) are portfolio managers and other financial professionals earnestly seeking to place informed bets on the Next Big Thing.
We tagged along as Hampton Adams, head of research and a portfolio manager at Pasadena, California-based Gamble Jones Investment Counsel, hiked around a CES showfloor spanning 30 football fields in a pair of comfortable loafers, taking a first-hand peek at the technology industry’s latest offerings.
Inevitably, Apple always features high on Adams’ agenda even though the consumer electronics trendsetter isn’t even officially there. He wants to see what might be gleaned about Apple from its competitors.
Here’s a photo log of some of the highlights of our nine-hour odyssey. We’ll publish more details of his discoveries on Reuters.com.
Tech wrap: Microsoft presses pause on Web TV
Microsoft has put its talks with media companies about an online subscription service for TV shows and movies on hold, according to people familiar with the discussions. The company had been in intense talks with potential programming partners for over a year and was hoping to roll out the service in the next few months. But it pulled back after deciding that the licensing costs were too high for the business model Microsoft envisaged, the sources said. Microsoft is still working to distribute TV shows over the Web, focusing on delivering programming via its Xbox gaming system to existing cable subscribers.
Dell intends to launch its first consumer tablet computer in late 2012, marking its entry into a hotly contested arena that has already claimed arch-foe HP. The Texas company had dipped its toe in the waters with an enterprise-focused, “Streak” tablet. Chief commercial officer Steve Felice was coy about which operating system Dell might adopt — Microsoft’s upcoming Windows 8 or Google’s Android — saying both were viable options. But Felice did say he liked the feel of Microsoft’s touch-enabled OS, which would be well-timed when it emerges later this year.
According to an Ipsos/Reuters poll, more than 10 percent of parents around the world say their child has been cyberbullied and nearly one-fourth know a youngster who has been a victim. The online poll of more than 18,000 adults in 24 countries, 6,500 of whom were parents, showed the most widely reported vehicle for cyberbullying was social networking sites likes Facebook, which were cited by 60 percent. Mobile devices and online chat rooms were a distant second and third.
The U.S. Department of Homeland Security’s command center routinely monitors dozens of popular websites, including Facebook, Twitter, Hulu, WikiLeaks and news and gossip sites including the Huffington Post and Drudge Report, according to a government document. A DHS official familiar with the monitoring program said that it was intended purely to enable command center officials to keep in touch with various Internet-era media so that they were aware of major, developing events to which the Department or its agencies might have to respond.
Two Dutch cable companies were ordered by a court to block access to the website The Pirate Bay to prevent the illegal downloading of free music, films and games in case brought on behalf of the entertainment industry.
Nokia’s Weber devises U.S. plan of attack
If Nokia’s big challenge this year is getting back in with US consumers and operators, it should be a busy 2012 for Chris Weber.
Weber – who heads the Finnish company’s business here – took a moment with us at the Consumer Electronics Show in Las Vegas to lay out some of his plans a day after AT&T announced it would sell Nokia’s Lumia 900, and a day before the Lumia 710 goes on sale at T-Mobile USA.
Weber told Reuters that he has to first find a way to convince enough consumers to at least try out Nokia’s Windows Phone-based devices, to at least give them a chance.
In this regard, he expects a lot of help from T-Mobile in the form of flagship phone status in their stores. This involves 6 Lumia display locations in each store, a poster out front, and a center island display to top it all off. At AT&T, Weber says, details on a promotional assist from the carrier are “still being worked out.”
But if the AT&T keynote announcement of eight LTE devices yesterday was anything to go by, Weber may have to fight harder for attention there. Weber also needs to gain attention at other U.S. operators, such as Verizon Wireless and Sprint Nextel.
To do this, the executive promised to bring out a broader range of phones and more devices exclusive to carriers.
“We’re going to have a broad portfolio with multiple devices, mutiple price points, multiple user experiences and multip operators. That’s a lot of multipes,” Weber said. Asked about other operators, he said: “Certainly Verizon is a very important partner in that equation.”
Tech wrap: Huawei takes slimmest smartphone crown
Huawei, China’s largest maker of telecommunications gear, unveiled the “Ascend” smartphone, touting it as the slimmest on the market as it moves to boost its share on the global consumer market. Huawei unveiled the Ascend smartphones – available in black, white and pink – at the Consumer Electronics Show in Las Vegas. The 6.68-mm thin phone will be available in April 2012 in markets from North America, Europe to Asia and will cost roughly $400, but the final price has not been set, the company said.
AT&T announced plans to launch seven new smartphones and a tablet computer early this year for a new wireless network it is building. The product line-up will include a phone with a 16 megapixel camera from HTC using Microsoft software along with Microsoft-based smartphone from Nokia. AT&T said it will also sell three new high-speed smartphones from Samsung as well as a high-speed phone from Sony and Pantech. In an unusual pricing move, AT&T also announced that it would sell Pantech Element, a waterproof tablet based on Google Android software with a smartphone, the Pantech Burst, for a combined price of $249.
Olympus sued its current president and three ex-directors for several million dollars in compensation, sources told Reuters, as the company seeks to draw a line under one of the nation’s worst accounting scandals. The company filed suit against its president, Shuichi Takayama, with the Tokyo district court on Sunday, along with three former executives identified by investigators as having engineered or helped cover up a $1.7 billion fraud at the firm, the sources said.
Netflix launched in Britain and Ireland, taking on BSkyB’s premium drama and movies offerings and prompting Amazon-owned rival Lovefilm to offer a new cut-price service. Lovefilm, which has 2 million customers in its core British market, immediately announced Lovefilm Instant — an Internet streaming-only offer to undercut Netflix — in addition to its current offer that combines streaming and DVD rental by post.
Deutsche Telekom is overhauling its strategy for its U.S. wireless unit T-Mobile USA after AT&T last month dropped its planned $39 billion takeover of the unit, a person familiar with the strategy planning said, adding that no date had been set to unveil the plan but it would certainly not be before 2011 results are published on February 23. The company’s Chief Financial Officer Tim Hoettges said one of the first steps could be to sell and lease-back the company’s mobile phone masts.
A group of Chinese authors sued Apple for 11.9 million yuan ($1.9 million) in compensation for allegedly providing copyright-infringing books for download through its online store, Chinese financial magazine Caixin reported. The group of nine authors, under the mantle of the China Written Works Copyright Society (CWWCS), sued Apple in Beijing’s No. 2 Intermediate People’s Court for copyright infringement of 37 works, Caixin reported on Friday.
Tech wrap: PayPal darling takes Yahoo reigns
Yahoo named PayPal President Scott Thompson CEO as the company plows ahead with a strategic review in which discussions have included the possibility of being sold, taken private or broken up. Thompson, a former Visa payments software platform designer, joins the company five months after the firing of previous CEO Carol Bartz.
Thompson has been credited with driving growth at eBay’s online payments division. After the Yahoo appointment, some questioned if he could replicate his success as CEO of Yahoo. ”The risk element is that his background was in payments. And this is not a payment company, it’s a marketing, technology company,” said Lawrence Haverty, a fund manager with GAMCO investors, which owns Yahoo shares.
Eastman Kodak is working on a Chapter 11 bankruptcy protection filing that could be filed as soon as this month if it cannot sell its digital patents, The Wall Street Journal reported, citing unnamed sources. The newspaper said Kodak is in talks with lenders to secure about $1 billion in debtor-in possession financing to sustain it through any bankruptcy proceedings.
Microsoft said it is suing Britain’s second-largest electronics retailer Comet for allegedly creating and selling more than 94,000 sets of ”counterfeit” recovery CDs of its Windows operating system to customers buying Windows-loaded PCs and laptops. A spokesman for Kesa, which owns Comet, told Reuters that Comet provided the disks as a service to its customers between March 2008 and December 2009, but stopped the practice when Microsoft objected. He said Comet sold the disks as many buyers of PCs and laptops did not create their own recovery CDs and faced problems when their computers failed.
Securities regulators charged an investment adviser with using LinkedIn and other social media networking websites to lure investors by offering more than $500 billion in fake securities. The SEC alleged that Anthony Fields, 54, of Lyons, Illinois, made the fraudulent offers to sell securities through two sole proprietorships. The agency said Fields provided false and misleading information about clients, assets under management and even the history of his firm’s business.
Twitter apologized for incorrectly verifying a false account for Wendi Deng, the wife of News Corp CEO Rupert Murdoch. The fake account with the handle @Wendi_Deng popped up on Sunday soon after a real Twitter account was started by the media mogul on New Year’s eve. The Wendi account was initially verified by Twitter, featuring the well-known blue tick which shows Twitter has confirmed the account belongs to the named person. But by early Tuesday, Twitter was forced to remove its famous blue tick from the Wendi account after it said it confirmed the account did not belong to her. AllThingsD’s Kara Swisher said it was a case of mistaken punctuation.
Microsoft switches off CES
Microsoft, one of the most visible superpowers at the Consumer Electronics Show, has decided its keynote and booth at the upcoming event in January will be its last.
The world’s largest software company, which has long tried to boost the profile of its consumer business, usually puts up a huge duplex on the floor to show off its games, phones and other gadgets running its products at the Las Vegas jamboree. CEO Steve Ballmer is a regular keynote speaker, as Bill Gates was before him.
But the company is now admitting what it has said privately: that a show right after the holiday season just doesn’t fit its consumer product cycle. That is to say, Ballmer rarely has much new to say, when all its Xbox, phone and software news is done and dusted for the year.
In the words of Frank Shaw, Microsoft’s PR chief: “Our product news milestones generally don’t align with the show’s January timing.”
It will certainly save Microsoft valuable time and resources getting ready for the show, which yields an uncertain return at best. Remember, Apple conquered the consumer electronics market without exhibiting at CES at all.
The company says it will still attend CES to meet up with customers and partners and will keep its relationship with the Consumer Electronics Association, the industry group which organizes the show.
It’s hard to see the upside for the association, which must fear further big-name defections from its marquee event. But it says it has already had expressions of interest from other exhibitors in taking over Microsoft’s show floor space, and is not bearing any grudges.
