It’s a tale of two companies in the technology world on Thursday. There’s Apple, whose quarterly profit beat expectations on strong iPod and Mac computer sales. And then there’s Microsoft, whose dismal earnings sent shockwaves through financial markets.

There should be plenty of interesting questions for CEO Steve Ballmer on the company’s conference call this morning — some of which he likely wouldn’t answer if asked.

Why didn’t Microsoft give investors a warning if the results were going to look so lousy? Why release the results Thursday morning rather than when it was supposed to, later this afternoon? What’s going on with Yahoo? Will 5,000 jobs cuts — the biggest ever by Microsoft — be sufficient? And, seriously, why is Apple doing such so much better?

Already, there is no shortage of opinions on what’s happening over at Microsoft, and more will tumble out after the conference call. For now, check out this Instant View by Reuters, which gives a pretty good idea of what Wall Street is thinking.

Or just read this comment by Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago: “This is not good news for Microsoft, there’s nothing here to inspire buying, not even buying on weakness at this point.”

Keep an eye on:

• Sony Corp warned it would post a record $2.9 billion annual operating loss due to sliding demand and a stronger yen, and unveiled fresh restructuring steps to revive its ailing electronics operations (Reuters)
• “The Curious Case of Benjamin Button,” a drama in which Brad Pitt plays a man who ages backward, led the field of Oscar contenders with 13 nominations (Reuters)
• Meredith posted a lower quarterly profit on Thursday, and forecast a bleak advertising market for the rest of the year in its magazine publishing and broadcasting businesses (Reuters)

(Photo: Reuters)

 If that notion of a recession-resistant entertainment industry hasn’t already been debunked, just get in touch with one of your pals out in Hollywood. They’ll tell you how bad it is — how jobs are disappearing.

Warner Brothers Entertainment is the latest to cut staff, announcing 800 jobs would be lost, or 10 percent of its worldwide staff.  NBC Universal and Viacom have already cut jobs, and industry watchers expect more job cuts to be announced by Walt Disney and Sony Pictures.

Perhaps more than other layoffs, the Warner Bros cuts send a signal of just how bad business look, The New York Times points out.

While not unexpected — Warner had been quietly preparing Hollywood to expect cuts — the layoffs rattled the movie capital because the studio is regarded as one of the industry’s healthiest. With a parade of hits like “The Dark Knight,” “Sex and the City,” “Get Smart” and “Four Christmases,” Warner recorded global ticket sales of $1.77 billion in 2008, up 25 percent from a year earlier.

But DVD sales plummeted in the fourth quarter and orders of scripted television programs — a huge Warner business — are expected to decline as networks cope with tumbling advertising sales. The struggles of Warner’s parent company, Time Warner, in the publishing arena have also put pressure on the studio to increase profitability.

The Wall Street Journal  also notes the challenges faced by parent Time Warner.

The deepening economic downturn has heaped added pressure on Time Warner to cut costs. The company recently announced a $25 billion fourth-quarter write-down to account for the tumbling value of its cable, publishing and AOL businesses, and once again scaled back its advertising outlook.

Warner Bros. was always seen as one of Time Warner’s more bloated divisions, with significant room for trimming and margin improvement. Time Warner’s movie business has already gone through one round of around 300 job cuts last year when Time Warner folded its New Line Cinema unit into Warner Bros. and shut down two boutique labels, Picturehouse and Warner Independent Pictures.

Keep an eye on:

• Google will halt its Print Ads program on Feb. 28 because the program to help newspapers make more money in online advertising sales was not working (Reuters)
• Tensions are rising at Sony over a restructuring aimed at cost cutting (FT.com) 
• Russian billionaire and ex-KGB agent Alexander Lebedev is buying a majority interest in London’s struggling Evening Standard newspaper for a nominal sum (Reuters)

(Photo: Reuters)

Tom Hanks and Sony CEO Howard Stringer might just have gained a little street cred with the tech crowd this week.

Onstage at the Consumer Electronics Show in Las Vegas, the pair of old buddies bantered, aimed gentle jibes at each other and got an appreciative audience rolling in their seats.

Hanks — displaying the same comedic flair he showed in “Big” — insisted he was here because it was written into his contract for starring in the upcoming, Sony-distributed “Angels and Demons”.

The two-time best actor Oscar winner marched in exaggerated fashion around the stage in clear response to a teleprompter, pretended he wished he were anywhere else but in Sin City, then made a raucous exit pleading with Stringer to rescue him from the Samsung and Casio “hellholes”.

“Everywhere in this world I turn, I see the name Sony Sony Sony Sony,” Hanks read off a teleprompter, grimacing as though the obvious corporate plug galled him inwardly. “I show up on the set and there it is on the camera: Sony.” He paused. “Really? I have yet to see that,” he deadpanned.

For his part, Stringer — a former documentary film maker — took Hanks’ antics in stride, accompanied by a stream of near-ceaseless laughter from the crowd. “I took a risk. It failed,” the more somber Stringer told the audience. “But we’ll still be friends.”

Despite the fun and games, CES felt a little forlorn this week. Following Hanks in rapid succession at Stringer’s keynote event was R&B star Usher and baseball Hall of Famer Reggie Jackson, but that nearly rounded up celebrity sightings at the once-extravagant, glitzy show. Motown icon Stevie Wonder showed up to promote technology development for the blind, while recording star Akon was on hand to promote his newly released album — on a memory card.

Perhaps unintentionally referencing his inner thoughts, Hanks said at the end of his struggle with the teleprompter: “I should have read this before I came out.”

Video courtesy of YouTube:

The official start of the 2009 Consumer Electronics Show in Las Vegas saw PDA pioneer Palm unveiling its answer to the popular iPhone smartphone and a new, Web-oriented operating system. Investors pushed the stock up 30 percent for two consecutive days and bloggers affirmed their optimism in early hands-on reviews.

Gizmodo’s Adrian Covert admired the Palm Pre’s intuitive design and “beautiful” screen. And Engadget’s Joshua Topolsky found switching between applications graceful and simple.

Elsewhere in Vegas, Sony continued blazing the organic light-emitting diode trail showing off a bendable OLED video screen that would make it possible to literally wear what you want to display. Actor Tom Hanks demonstrated a pair of prototype Sony eyeglasses with built-in video screens for watching full-length movies.

Sony Ericsson offered up a clamshell-design music mobile phone for style-conscious consumers and a candy-bar shaped phone boasting Sony’s “Smile Shutter” technology, which is supposed to make taking pictures of people grinning easier.

Motorola lived up to the “green” theme of this year’s CES introducing its W233 “Renew” mobile phone, which it says is made partly from recycled water cooler bottle plastic and by purchasing carbon offsets to counter the energy needed to produce, use and dispose of the phone.

Samsung displayed a semi-transparent active matrix OLED screen and a mobile handset that does double-duty as a video projector.

And flash memory card maker SanDisk rolled out a family of fast solid-state hard drives (SSDs) designed to replace traditional hard drives in notebook PCs.

(Photos: Palm’s Pre phone, Tom Hanks wearing Sony’s movie-watching glasses, Motorola phone made of recycled water cooler bottles/ REUTERS)

In the old days -– say six months ago -– netbooks were easy to describe in a few short words. Cheap (less than $400), small (10-inch screen or less) and light (less than 3 pounds). Alas, things are not quite so simple anymore.

The netbook category’s parameters were already expanding as the market flooded with new offerings. Screen sizes crept up, as did retail prices.

And then along comes Sony to really confuse things with its Vaio P Series Lifestyle PC, which it unveiled at the Consumer Electronics Show. It’s plenty small (8-inch screen) and light (1.4 pounds). But note that decidedly un-netbook-like price tag: $900.

Of course, the company itself is not calling it a netbook either, although plenty of others are. And the impressive array of high-performance bells and whistles Sony packed into the little laptop might well justify the hefty price tag, and succeed in separating it from its similarly small, yet more stripped-down and lower-market peers.

So call it what you want, netbook or mini notebook or something else entirely. The Vaio P is simply the latest evidence that ultra-portable computers, though they may be small, are succeeding in redefining the PC world.

Gaming insiders who have given consoles the death sentence, get a life!

Shane Kim, VP of Strategy and Business Development at Microsoft Corp’s Interactive Entertainment Business, said it’s too soon to write off the Xbox.

“This console generation will have a long life cycle. I think it’s way premature to say there will never be another Xbox,” said Kim at the Reuters Media Summit.

Industry veterans like WildTangent Chairman Alex St. John and Sandy Duncan, who set up and ran the European Xbox business for Microsoft, believe that consoles as we know them are doomed. Duncan said they will “die out ” in the next five to 10 years, according to an interview published in www.Thatvideogameblog.com.

Such forecasts are based on views that gaming consoles will be rendered obsolete by the increasing convergence of devices such as set top boxes and the fact that gamers will increasingly turn to the Web for new cool applications.

Kim admitted there was a lot of room for expansion via the Web.

“What’s interesting to think about will be what will define the next generation. It is absolutely a possibility where the next generation is defined by what we can do online rather than the hardware,” he said.
“We can reinvent the experience with the magic of software,” he said.

With Black Friday only a few days away and projections for the holiday shopping season bleak, it’s not surprising that Sony is making a price cut move on its PlayStation 3 video game console to lure cash-strapped shoppers.

Now, you can get a hearty $150 price cut on the PlayStation 3 console. The caveat: you’ve got to sign up for a shiny new PlayStation credit card first.

There’s two ways to take advantage of the deal, it just depends how badly you want the PS3.

If you can’t wait to get your hands on the console, go to www.sony.com/newpscard to get instant approval for the PlayStation credit card and the visit the Sony Rewards site to purchase the PS3. You’ll receive a $150 credit for the PS3 after you’ve been approved for the card. What’s more, gamers who receive instant approval for the credit card will receive a coupon from Sony for a buy one, get one free offer on any Blu-Ray DVD purchase.

For those who are slightly more patient, sign up for the card at www.sony.com/getpscard and use it at any Sony retailer to purchase the PS3. The $150 credit will show up on the next billing statement.

The offer from Sony comes after rival Microsoft cut the price of its entry-level Xbox 360 console from $279 to $199 in September - but with no credit card sign-up required. Microsoft also lowered the prices of its mid-range and high-end Xbox 360 consoles by $50 each.

The price cut has reaped big rewards for Microsoft as unit sales of the Xbox 360 leapt 7 percent in October, according to the most recent NPD research report. The release of cult-classic “Gears of War 2″ will also bump sales during the holiday season.

But will the credit card offer lead to more sales of the PS3? It’s tough to predict as the offer is most likely to be available to those with good credit, rather than all interested PS3 buyers. Gamers with less-than-stellar credit ratings might not be able to access the offer as credit standards have tightened in the face of the global financial crisis. For more of Reuters coverage of the credit crisis, click here.

Sales of the PS3 have lagged behind the Xbox 360 and the Nintendo Wii since August. So will this offer help the Sony console edge out Microsoft?

(Reporting by Jennifer Martinez)

Give the “Glass is Half Full” award to Stan Glasgow, Sony’s top U.S. electronics executive, ahead of what could be the most crucial (and potential painful) “Black Friday” shopping weekend in many years. It’s normally a happy time of year, filled with family gathering, gifts, etc.

This year its different. Read the papers, or a blog. Things look pretty gloomy.

Perhaps, just perhaps, things aren’t as bad as they seem, Glasgow told a gathering of journalists on Thursday, suggesting that there are great bargains to be had on cool gadgets and big TVs, if consumers can overcome their apprehension.

Glasgow, a passionate engineer-by-trade, whose casual briefings with the tech press are usually chock full of geek-y chatter about flat screen TVs, Digital SLR Cameras and OLED displays, took on the economy, such as it is.

His message in short: Yes We Can shop our way out of this mess:

All of us get shell-shocked a little, that we have been disappointed by the events that have happened in the economy. We’d like to think that it’s an opportunity. I’ve asked our employees to get out there and get aggressive, to come up with new ideas how to do things better for Sony, but also to begin to talk to their friends and family about ‘its a good time to buy products — the values are good right now.’

Prices have gone down on every product. It’s almost a deflationary time period in terms of good and services in this country. What that means is that everything is going down in price, including oil and gold and stocks and bonds and everything. It is not a bad time to buy products, it is not a bad time to make investments. So I’m encouraging our people — and I’m encouraging all of you around the table — that we can play a part in helping restore consumer confidence.

(Reuters photo of Stan Glasgow)

Another dark week for the publishing business, capped by a double-barrel blow yesterday when news emerged that the New York Times was slashing its dividend and the Associated Press was slashing its workforce.

New York Times’ decision to cut its dividend is particularly noteworthy, since it could up the pressure on the Ochs-Sulzberger family to make even more dramatic moves down the road — like maybe selling parts or all of the media company.

The family has resisted any calls to sell the famous publishing company, but cutting the dividend makes it tougher for some of the younger family members who rely on that income. Check out the recent profile of family member Dave Golden in New York magazine.

Meanwhile, the New York Times said it would curtail capital spending and lower its operating costs. It did not say whether it would cut more jobs… although the Associated Press pretty much the stole the show on job cuts, anyway, with its announcement that 10 percent of its workforce would be eliminated.

Good times.

Keep an eye on:

• Concerns are growing in Hollywood that buyer interest in DVDs is plummeting as the global economic crisis worsens (NY Times)
• After weeks of shuttle diplomacy, a U.S. federal mediator brought labor negotiators for major Hollywood studios and the Screen Actors Guild back together for their first meeting in four months (Reuters)
• High definition Blu-ray disc players may be one of the holiday season’s best sellers, but they will still fall short of expectations, due to the tough economy, the head of Sony’s U.S. electronics unit said (Reuters)

(Photo: Reuters)

Everyone seems to have accepted (like it or not) that advertising spending will be in bad shape in the fourth quarter and well into next year. But just how bad is a matter of debate — every new piece of research marks another downward revision to the advertising outlook.

Case in point is Citi’s Catriona Fallon, who issued a new report saying that U.S. advertising spending would drop by 1.8 percent in 2008 and 3.6 percent in 2009. So what? Well, consider this: that would mark the first back-to-back annual declines since at the 1950s. The 1950s! We’re talking The Cold War, Fats Domino, Gidget, Cadillac Eldorado — you get the picture.

Here’s a bit from Fallon’s research report, where she discussed the thought behind cutting the 2008 outlook from growth of 0.2 percent to a decline of 1.8 percent :

Essentially, we made a dramatic reduction in our Internet advertising growth expectations and also see steeper declines in local ad-focused media categories, including newspapers, radio, and yellow pages. Internet advertising had been one of the few shining lights coming into 2008, but overall economic softness has lowered 2009 expected growth rates in this medium to the single digits. Meanwhile, Q3 results for publicly-traded newspaper, magazine and yellow pages companies, and CIR forecasts for the radio industry show that the ad revenue declines in these businesses have
sharpened over the course of the year.

Anyone seen my Elvis Presley albums?

Keep an eye on:

• More bad new for Sirius XM Radio — as if trading at 27 cents a share isn’t bad enough. The company posted a $4.8 billion write-down and made some more ominous comments about the auto industry (Reuters)
• A nine-car NASCAR pileup may have wrecked a vehicle sponsored by the Federal Communications Commission, but it gave the agency more mileage in advertising the imminent switch to digital TV signals (Reuters)
• Blu-ray backers are banking on falling prices, summer blockbusters and an ad blitz to get consumers to make the leap to high-definition (NY Post)
• Time Inc has asked for volunteers to get bought out from People, Time, Sports Illustrated, Fortune and Money, as it goes into job cutting mode (AdAge.com)

(Photo: Reuters)