MediaFile

Tech wrap: Amazon impresses

Amazon wowed investors when it reported a 51 percent surge in sales for the second quarter and said revenue for the current quarter would beat expectations. Shares of the e-commerce giant shot up more than 6 percent on the figures in after-hours trade, even though second-quarter net profits fell as the company’s margins continued to be pressured by heavy spending on distribution, technology and digital content.

Netflix shares took another beating on Tuesday after it warned a day earlier it was expecting subscriber growth to stall in the third quarter in response to price hikes announced this month. That didn’t stop several analysts from raising their price targets on the video rental company’s stock, though, as they took the company at its word that the effects of the subscriber slowdown would be temporary. According to one analyst interviewed by Reuters, the gain in average revenue per user in the fourth quarter will “more than offset” the expected cancellations from the higher prices. Another expressed optimism about the company’s plans to expand into Latin America early next year.

Wal-Mart’s answer to Netflix, Vudu, has a new home on the Walmart.com website. The retailer decided to move its video streaming and rental service to its flagship site in a bid to drum up more use as it competes with a host of other similar services. Starting Tuesday, consumers can order a DVD for mail delivery or pickup or rent or buy releases digitally directly from Wal-Mart’s website. The retailer bought the video company last year but had operated it separately until now.

Facebook has taken steps to put yet another privacy controversy behind it by making it easier for users to opt-out of its facial-recognition technology for photographs. The social network began running ads on members’ home pages this month notifying them about its “tag suggestions” feature and giving them the option of disabling it completely in their account’s privacy settings. The technology – which scans photos just added to the site, compares the faces in the shots with previous pictures and then suggests name tags – came under scrutiny last month after Connecticut Attorney General George Jespen wrote a letter to the company saying the feature compromised users’ rights to privacy by analyzing faces in photographs posted on Facebook and then cataloging them.

Motorola Solutions Inc lost a bid to dismiss a class-action lawsuit accusing it of misleading shareholders about deteriorating prospects for its cellphone business, resulting in investment losses. In a decision on Monday, U.S. District Judge Amy St. Eve in Chicago said there is a “genuine dispute” as to whether predecessor company Motorola Inc in 2006 and early 2007 hid key information about its ability to compete with such rivals as Nokia Oyj and Samsung Electronics Co Ltd.

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.

Tech wrap: Google impresses investors

Google shares soared in after-hours trade as the company’s second-quarter revenue zoomed past Wall Street expectations. The Internet giant’s net revenue, which excludes fees paid to partner websites, jumped 36 percent to $6.92 billion in the second quarter. That’s not all investors had to cheer, though. Growth in a range of businesses from mobile to online video helped the company ring up a strong quarterly profit that also exceeded investor expectations.  “Google should be viewed as a growth company again this quarter,” Stifel Nicolaus analyst Jordan Rohan told Reuters. “The combination of mobile search, Android, ad exchange, YouTube, and the core search businesses, they’re all doing well. Google is no longer a one-trick pony.”

The pool of underwriters working on Groupon’s upcoming initial public offering just got a lot bigger. The online daily deals website has added 11 new underwriters, including JPMorgan, Allen & Co, Bank of America Merrill Lynch, Barclays Capital, Citigroup, Deutsche Bank Securities, William Blair & Co, Citadel Securities, Loop Capital Markets, RBC Capital Markets and the Williams Capital Group, according to an updated regulatory filing. They join Morgan Stanley, Goldman Sachs and Credit Suisse, who were the lead underwriters named in the earlier filing.

Blockbuster unveiled a new promotion on Thursday aimed at scooping up Netflix subscribers who are unhappy about new price increases the company announced this week to its streaming-and-DVD plan. Blockbuster, which is owned by Dish Network, offered Netflix customers who switched to one of Blockbuster’s “total access” plans a 30-day free trial. Netflix has tried to deflect the rage from its subscribers. “We knew there would be some people who would be upset,” a company spokesman told the International Business Times recently. “To most people, it’s a latte or two.”

Tech wrap: Amazon plans Android tablet

Take note, Apple. Amazon.com wants to steal more of your customers. The online retailer plans to release a 9-inch tablet computer this fall that will run on Android software, the Wall Street Journal reported, citing sources familiar with the matter.

The company is building at least 1.5 million Amazon-branded devices for the third quarter and is aiming to ship 4.5 million to 5 million by the end of the year, according to a recent analyst note. The move should help Amazon expand its reach as the world’s largest Internet retailer and increase sales of digital content such as e-books, music and videos, posing more competition for Apple’s iTunes store.

Of course, Amazon isn’t the only tech company looking to step up its game against Apple. Microsoft COO Kevin Turner announced at a conference that the software company will open 75 new retail stores over the next two to three years in an effort to take on Apple’s bricks-and-mortar outlets. Judging by a graphic published alongside the TechCrunch story, many of the new stores will be opening in the North East region of the U.S. where the company currently does not have any outlets.

Tech wrap: Netflix jacks prices, adds DVD-only option

Netflix subscribers could see their monthly bill increase starting this fall. The company announced it is doing away with a combo plan that lets customers watch unlimited movies and TV shows online and get DVDs by mail for $9.99 a month. Starting in September, current subscribers who want both services will have to pay $7.99 per month to rent one DVD plus an added $7.99 for unlimited streaming, for a total of $15.98 a month. That’s an increase of 60 percent. The new pricing begins immediately for new customers. Old-fashioned types who just want DVDs now have the option of an unlimited DVD-only plan that costs $7.99 for one at a time or $9.99 for two at a time. Good or bad news, depending on how you use Netflix.

Changes are afoot in Apple’s legal department. The tech giant’s chief patent lawyer Richard “Chip” Lutton Jr. plans to leave the company soon, sources close to the matter told Reuters. So who will Apple tap to oversee the many legal battles it’s fighting against rival smartphone makers around the world? Apple is mum on the matter, but BJ Watrous, a former deputy general counsel with Hewlett-Packard, is now listed as Apple’s chief intellectual property counsel on Watrous’s LinkedIn Web page.

Would Research in Motion be better off as two companies? That’s an idea that was floated on Tuesday by an analyst at RBC Capital Markets, who argued that the BlackBerry maker could spur innovation by splitting itself up into separate network and handset businesses. The Waterloo, Ontario-based firm has fallen behind rivals in recent months, leaving investors hungry for news about how the company intends to reverse its lackluster performance.

Tech wrap: Verizon ditches unlimited data plan

Verizon Wireless customers, say goodbye to the days of  unlimited Web surfing for a set fee on your smartphone. The biggest U.S. mobile provider will stop offering its $30 all-you-can-surf  deal later this week, replacing it with a new tiered approach to data pricing. Customers who keep their smartphone use to 2 gigbytes (GB) of data per month or under won’t see a change to their bill, but those who go over that limit will be slapped with an extra $10 charge per GB. Heavy mobile users will have the option of signing up for a 5 GB or 10 GB plan for $50 or $80 respectively. AT&T made a similar move last year, meaning Sprint is now the last major wireless carrier offering unlimited data use. CNET reports that Verizon will also start charging for access to its mobile hot-spot service, which up until this week has been free and without bandwidth restrictions.

Aspiring cord cutters across Latin America and the Caribbean, rejoice. Netflix is on its way. The company, which offers TV shows and movies over the Internet and DVD rentals through the mail, will be expanding its online video streaming service to 43 countries in the regions later this year. Shows and movies will be available to subscribers in Spanish, Portuguese or English on PCs, Macs and other mobile devices that are able to stream from Netflix, the company said in a blog post. The overseas expansion marks the company’s second foray outside the United States. It began offering its services in Canada last year.

You’ve heard it before and now you’ll hear it again – the next iteration of Apple’s iPhone is on its way this September. Supply-side sources told Asian IT industry newspaper DigiTimes that Taiwan-based notebook maker Pegatron Technology has received an order to make 15 million iPhone 5/iPhone 4 handsets that are set to ship sometime in September.  The iPhone 5 is not expected to differ much from the previous model on the surface, according to the report. As AllThingsD’s John Paczkowski points out, the real differences are expected to be “under the hood” where you’ll find a faster processor and better rear camera among other improvements.

CBS: Get used to growth

CBS put on a big show in yesterday’s quarterly report, blowing out estimates on both profit and revenue. On the call that followed, Sumner Redstone called Les Moonves a “genius,” and Moonves called broadcast TV “the best game in town.”

Here are some notes from last night’s call:

    CBS, which said it would double its dividend, also plans to repurchase $250 million in stock this quarter. A nice bonus for shareholders who have already seen the stock rise by about 35 percent this year.
    Scatter rates, or prices for last-minute commercial buys, are up more than 40 percent in some cases for CBS. That’s a stunning number. Given those sorts of prices, Moonves is talking about “solid” double digit increases in upfront ad market next month.
    CBS is putting together six or seven fewer pilots than normal this year, showing that it’s pretty happy with its schedule right now (So far this season, CBS has declined the least of the big four broadcast networks in total household audience)
    Basically, investors and analysts should get used to these sorts of results, CBS suggested. Moonves said he was “confident” the first quarter’s performance would be “sustainable.”
    Part of that momentum is due to revenue CBS is getting from retransmission deals, which has been a big focus for Moonves. He said CBS would reach its goal of retransmission fees of $250 million by next year.
    What is more, “meaningful” revenue from its streaming deal with Netflix will start in second quarter.
    As for the outdoor division, Moonves said “we have no great intent to sell” it to JCDecaux, the French company that has it would be interested if CBS Outdoor came up for sale.  “Mr. Decaux, who we know very well and we like, makes statements about how he’d like to buy our outdoor company. As you know, our outdoor results as you can see are growing substantially quarter after quarter,” Moonves said on the call. “We are here, he has our phone number. If he wants to make an offer, we will always listen to it. It’s not our intent to aggressively sell.”
    And finally, there was bound to be a question about “Two and a Half Men” on the call. Moonves dodged it. “We don’t know what the resolution is right now. There are obviously a lot of moving pieces,” he said. He then added, “It’s an important show to us, but the good news about the CBS schedule is we are not dependent on a single show on any single night of the week.”

Tech wrap: Netflix gets in the game

Netflix CEO Reed Hastings speaks during the unveiling of the iPhone 4 by Apple CEO Steve Jobs at the Apple Worldwide Developers Conference in San Francisco, California June 7, 2010. REUTERS/Robert GalbraithOnline video and DVD rental service Netflix is breaking away from its traditional role as a licensor of movies and TV shows , negotiating with actor Kevin Spacey and director David Fincher for the exclusive rights to a two-season, 26-episode remake of British political drama “House of Cards”, a source said.

Media execs who say they haven’t seen evidence of cable or satellite television subscribers canceling because of TV shows and movies available online may not want to break out the champagne, writes Paul Thomasch. The best devices to help cut your household’s dependence on pay TV are an ATSC tuner, digital media receivers Boxee Box and Roku XDR, digital video recorder Tivo Premiere, and small desktop computers Dell Zino and Apple Mac Mini, according to TechCrunch’s Matt Burns.

Electronics manufacturers warned production would be hobbled by further supply and distribution problems as companies struggle with power blackouts after the disaster in Japan. And the impact could be felt in higher prices or shortages of gadgets such as tablets, smartphones and computers for months to come.

TodayInMusic: Pandora adds Chernin and ex-Netflix CFO to board

Pandora_Tim Westergren11Pandora, the popular Internet radio service, has expanded its board membership with two heavyweights of the media world: former News Corp no.2 Peter Chernin and former Netflix CFO Barry McCarthy.

The news will naturally stoke speculation that an IPO is indeed round the corner. Reuters reported last month that the company has met with bankers to discuss a $100 million public offering.

Chernin, wh0 left News Corp in early 2009, now runs his own business in Hollywood called The Chernin Group and Chernin Entertainment investing in media, entertainment and technology businesses.

Orb TV: the latest device bringing web to TV

Orb TV alonephotoAdd Orb TV to the list of devices that is attempting to bring the web to the TV. The Oakland, Calif.-based company launched the product on Thursday — a hockey puck shaped object (pictured on the left) that promises to deliver all sorts of content  available on the Internet straight to your TV.

Orb TV is selling for $99 (purchased only through its website)  and can help you find any show regardless of the source including content from Hulu, YouTube and CBS or from your computer like photos, according to Orb TV.  Users control the device through a smartphone app and can search simply by typing in a show like “Glee.”

“Our belief is that the evolution of digital media has been stymied,” said Orb TV CEO Joe Costello. “The whole premise it that it should be enjoyed anywhere, anytime and to make it simple. The last part hasn’t happened.”