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From: Bennitto1/7/2006 8:27:06 PM
   of 20
 
Yahoo, Google bring out the bulls
Move comes amid video plans, higher earnings views

By Scott Banerjee

SAN FRANCISCO (MarketWatch) -- Shares of Yahoo Inc. and Google Inc. both surged Friday as the Internet media companies moved to expand their wireless and digital-video initiatives.

Additionally, Goldman Sachs raised its estimate for Yahoo's earnings.

The Net sector made a strong move to the upside as the Dow Jones Internet Index (DJI_DJINET:
Dow Jones Internet Index (Composite)
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Last: 100.67+2.08+2.11%

5:17pm 01/06/2006

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FinancialsMore DJI_DJINETDJI_DJINET100.67, +2.08, +2.1%) rose 2.1% to 100.67, breaking the 100 mark for the first time since mid-2001, while the technology-heavy Nasdaq Composite Index ($COMPQ: Nasdaq Composite Index
News, chart, profile
Last: 2,305.62+28.75+1.26%

5:16pm 01/06/2006

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FinancialsMore $COMPQ$COMPQ2,305.62, +28.75, +1.3%) rose 28.75 points to 2,305.62, capping a 4.5% gain for the week.

Yahoo (YHOO:
Yahoo! Inc.
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Last: 43.21+1.68+4.05%

5:05pm 01/06/2006

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FinancialsMore YHOOYHOO43.21, +1.68, +4.0%) shares closed up 4% to $43.21 while Google (GOOG: google inc cl a
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Last: 465.66+14.42+3.20%

5:05pm 01/06/2006

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FinancialsMore GOOGGOOG465.66, +14.42, +3.2%) shares hit an all-time closing high of 465.66 after trading above $470 in the last hour of trading.
Both companies made agreements with Motorola (MOT:
Motorola, Inc.
Motorola will provide one-click access to Google's Web-search services on handsets capable of transmitting data. In addition, it will make it easy for consumers to access core Yahoo services such as email, address books, calendar and instant messenger from some Motorola phones. See full story.

Motorola said the mass-market, Internet-optimized handsets will be available in early 2006.

Yahoo and Google were set to unveil plans later in the day on initiatives that highlight their efforts to become major distributors of paid video-on-demand programming.

Yahoo announced at the Consumer Electronics Show in Las Vegas a suite of services called Yahoo Go, accessible outside of Web-browser software, from computers, cellphones and on television sets. See full story.

Also lifting Yahoo, Goldman Sachs raised its earnings estimates for on the company, citing expectations of higher search and branded revenue growth. Analyst Anthony Noto also increased his value estimate for Yahoo shares to about $50 from $40 to $44.

Noto lifted estimated 2006 earnings to 85 cents a share from 79 cents and forecast 2007 earnings of $1.05 a share, vs. a previous estimate of 92 cents a share.

The Journal also reported that Google plans to announce that it will begin allowing consumers to buy videos from major content partners through the Google site and will also roll out a new downloadable bundle of software for consumers that could heighten Google's competition with Microsoft Corp.
Noto raised his implied value estimate for Google to $500 from $400 based to reflect higher earnings expectations. A more aggressive valuation scenario, wrote Noto, would lift the implied value estimate to $556.

On Thursday, Caris analyst Mark Stahlman wrote that Google's addressable market could perhaps reach $100 billion in sales, over time. At these levels, wrote Stahlman, his valuation metric yields a market capitalization of $620 billion and an implied share price of $2,000. Stahlman underscored that this is not an official price projection.

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From: Bennitto1/7/2006 8:28:04 PM
   of 20
 
Motorola to Add Google Button to Phones
Friday January 6, 5:10 pm ET
Motorola to Sell Web-Enabled Cell Phones That Feature Easy Access to Google's Search Engine

NEW YORK (AP) -- Motorola Inc. will soon begin selling Web-enabled cell phones that feature easy access to Google's search engine by clicking on a button on the phone's keypad, the world's second-largest maker of cell phones said.

The company said in a statement late Thursday it will integrate a Google icon onto certain Internet-optimized handsets that will be distributed starting in the first quarter this year.

Financial terms were not disclosed and Motorola spokeswoman Una Kent said she could not give any specifics on what model phones or which operating systems the button will be built into.

Motorola is also working with Yahoo Inc. to bring Yahoo Go Mobile, a mobile version of Yahoo's search and content, to those phones, Marco Boerries, senior vice president of Yahoo's "Connected Life" division, said Thursday.

"Many of our customers have been asking for mobile devices integrated with their consumers' favorite online search services," said Scott Durchslag, vice president and general manager of Global xProducts for Motorola's mobile device business. "Our relationship with Google provides an opportunity for us to offer a high quality mobile search experience -- one familiar to and loved by millions of users across the globe."

In a separate statement, Motorola said it also reached a 10-year global product, licensing and marketing agreement with Eastman Kodak Co. to improve camera phones. The companies will codevelop devices with Kodak sensors that will integrate with Kodak printers, kiosks and other services.

Motorola said Kodak will receive royalty revenue from the agreement, but financial and other details were not disclosed.

Shares of Google Inc. rose $14.42, or 3.2 percent, to close at $465.66 Friday on the Nasdaq Stock Market, while Motorola shares rose 82 cents, or 3.5 percent, to close at $24.34 on the New York Stock Exchange.

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From: Bennitto1/7/2006 8:28:55 PM
   of 20
 
Google Plans to Expand Video Offerings
Saturday January 7, 1:51 am ET
By May Wong, AP Technology Writer
Google Plans to Expand Video Offerings, Allow Content Owners to Set Their Own Prices

LAS VEGAS (AP) -- Google Inc. is upping the ante in the online video gold rush, allowing content owners to set their own prices in a bid to create a more flexible alternative to Apple Computer Inc.'s pioneering iTunes store.
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The upcoming Google Video Store, announced Friday at the Consumer Electronics Show, already has lined up commitments to sell thousands of downloads, including recent television broadcasts of popular CBS shows and professional basketball games, as well as vintage episodes from series that went off the air decades ago. A launch date for the store has not been released.

"This is a historic meeting of established and new media," Google co-founder Larry Page said during a keynote speech.

Page drew a sellout crowd, a turnout usually only drawn by technology luminaries such as Microsoft Corp.'s Bill Gates, who has headlined the electronics show for 10 years.

"It's the biggest marketplace of content that was previously off-line and is now brought online," said Jennifer Feikin, director of Google Video.

Since Apple began selling video downloads for its iconic iPod in October, a flurry of companies have joined forces to distribute TV programming or other video content. The company says it currently offers more than 3,000 music videos and 300 television shows for sale.

Google's flexible pricing model sets its service apart.

Apple dictates all the pricing in its iTunes store, charging $1.99 for each video download and 99 cents for each song downloaded. The restrictions already have caused considerable consternation in the music recording industry and eventually could trigger a backlash on the video side.

With Google's marketplace, content suppliers can name their own price, from zero on up. The content owners who charge for video downloads must share 30 percent of the revenue with Google.

The video providers have the option of offering content on a download-to-own or download-to-rent basis.

In a sign that content owners will likely pursue different approaches through Google Video, the National Basketball Association will sell broadcasts of its games one day after the event for $3.95. Meanwhile, public television staple Charlie Rose will post his interviews the day after a broadcast, allowing a free streaming for the first 24 hours then making it downloadable afterward for 99 cents each. Meanwhile, CBS is selling episodes of its popular "CSI" and "Survivor" series at the standard iTunes price of $1.99 per download.

Although Google's service allows content owners more pricing freedom, it isn't necessarily as liberating for users.

While all of videos downloaded through Apple can be transferred onto a portable player -- albeit only its own iPod -- for on-the-go viewing, that won't be true at Google's service.

Google has developed its own copy protection technology that so far prevents content owners from moving their video downloads to a mobile playing device. In instances where the content provider adopts Google's copy protection scheme, watching a video sold through Google will require users to be online so they can log on and view it via the company's video player. CBS and the NBA are among the content owners adopting Google's copy protections.

However, if a content owner posts unrestricted video on Google, the user could move the video onto pretty much any portable device. Charlie Rose is among those offering unprotected video.

In another distinction from iTunes, Google Video so far works only on Microsoft Corp.'s Windows-based PCs and not yet on Apple's Macintosh computers.

By relying on its own proprietary copy-protection technology, Google threatens to compound the frustration that some consumers feel when they buy songs from one online source like the iTunes store, only to discover the music can't be played on an incompatible gadget such as Creative Technologies' Zen player.

Forrester Research analyst Josh Bernoff offered a possible explanation for Google's decision: "It's arrogance."

Page told a group of reporters after his speech that Google felt other copy protection schemes would not have worked as well as one made in-house.

A majority of new media players and media centers, other than Apple's and Sony's devices, are built to work with Microsoft's copy-protection technology -- a setup that most entertainment companies have embraced.

"So now Google is telling Toshiba and others, 'No, you have to implement ours.' It's just crazy," Bernoff said.

Other than that potential weakness, Google appears to be laying the foundation to become a future entertainment hub along with rivals Yahoo Inc. and Microsoft's MSN, said Creative Strategies analyst Tim Bajarin.

Yahoo is widely expected to extend the range of its video offerings, although chief executive Terry Semel didn't announce any new initiative on that front during a Friday speech at CES.

"Yahoo and Google will both offer video, and I think at the end of the day, video is what the Web wants," Semel said in an interview afterward. "The opportunities are quite large for all the Internet players."

At the show, Semel unveiled a software platform that he said would allow Yahoo users to view customized content, including video, on Web-connected televisions and cell phones.

The Google Video Store, an expansion of a free-video service Google launched last year, marks the Web search engine leader's first foray into a paid service.

If the online store proves popular, it could help the company lessen its dependence on Internet advertising, which accounted for virtually all of its estimated profit of $1.5 billion last year. Some industry analysts view Google's lack of financial diversity as its Achilles' heel.

Besides programming from CBS, the NBA and Charlie Rose, the list of other video material that will be sold through Google includes: old episodes from "I Love Lucy," "The Twilight Zone," and "The Brady Bunch;" music videos from Sony BMG; and historic video from Getty Images.

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From: Bennitto1/7/2006 8:30:04 PM
   of 20
 
Yahoo expanding Web on TV, phones with Go service
Friday January 6, 5:10 pm ET
By Eric Auchard

LAS VEGAS (Reuters) - Yahoo Inc. (NasdaqNM:YHOO - News), the world's largest Internet media company, on Friday unveiled a new service that will make using its Web, media and personal services as easy to use on mobile phones and TVs as on computers.

Chief Executive Terry Semel said products marketed under the newly established Yahoo Go brand reflected consumer demands to easily access information wherever they like and to customize the way in which they view the Web and the world.

"We think the Internet isn't just a Web page," Semel told the Consumer Electronics Show in Las Vegas, the largest U.S. electronics convention. "Connecting the Internet to any device you might imagine" is the next stage of the Web, he added.

CES embraced the Web as never before this year and Semel pleaded with hardware makers to work with Yahoo to make its services available everywhere. Announcements during the week showed Web connectivity is becoming standard on many communications devices well beyond the PC.

The Web media company's new products include Yahoo Go Mobile and Yahoo Go TV. A third product, Yahoo Go Desktop, will tie the phone and TV services to the personal computer, the most common way of using Yahoo services.

But there are nearly 2 billion cell phones worldwide, roughly double last year's Web use, Semel noted as an indication of where the Web would grow.

Wall Street applauded, sending shares of Yahoo up 4 percent to $43.21. Rival Google Inc.'s(NasdaqNM:GOOG - News) stock rose 3.2 percent to $465.66 ahead of its presentation on Friday afternoon. Google is expected to introduce an online video service and an industry effort to improve PC ease of use.

The phone service is a logical extension of Yahoo's efforts to become a standard channel on mobile phone screens instead of being available only on special phones via Web browsers.

The television plan, which represents a far more ambitious and early-stage effort, will target consumers buying PC-linked TVs with fast Internet connections.

Semel and other Yahoo executives said the Internet media company's recent push to encourage users to create more information, reviews, Web logs and other shared information could now extend to other devices.

"For many, many years, we grew up where somewhere else was the programer. That dynamic has completely changed," Semel said.

The Yahoo Go service will be embedded on millions of Nokia phones sold worldwide. Yahoo is also working with U.S. phone partners AT&T Inc. (NYSE:T - News) and Cingular Wireless.

Yahoo Go Mobile will be available in the United States in coming weeks. Consumers buying certain Nokia 6630, 6680, 6681 and N70 devices -- all so-called Series 60 smartphones -- will receive the Yahoo Go Mobile service preinstalled.

Roughly 10 countries, including Britain, Germany, France, Singapore, India, Malaysia, the Philippines and Australia, are to follow in the first quarter, a spokeswoman said.

REGIONALLY, THEN IN 10 COUNTRIES

Yahoo will launch Yahoo Go Mobile with AT&T and Cingular in the traditional 13-state local phone service region of AT&T in the southern and western United States. It will also be available in a handful of other unspecified markets, they said.

Cingular is the largest U.S. wireless carrier. It is jointly owned by AT&T and BellSouth Corp. (NYSE:BLS - News), the No. 3 U.S. provider of local phone service.

Yahoo Go marks the latest step in a four-year program through which Yahoo has formed broadband marketing partnerships with major communications carriers in the United States, Canada and Britain, executives said.

Within the 13-state AT&T core service region, the partners will offer a co-branded Go Mobile service for existing AT&T- Yahoo broadband customers to link their home Internet access with their mobile phones.

Yahoo Go TV will allow consumers to link their existing base of Yahoo contacts and resources directly into their televisions, allowing them to watch digital photos and to check news, sports or other Yahoo services from the same account they use on their computer or mobile phone.

Yahoo demonstrated the new products on machines using Intel Corp.'s (NasdaqNM:INTC - News) new Viiv chips and a demonstration computer stopped working at one point in the presentation.

"I think it's a Windows problem," Intel Chief Executive Paul Otellini quipped, laughing at his long term partner Microsoft Corp.'s (NasdaqNM:MSFT - News) possible role.

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From: Bennitto1/7/2006 8:39:23 PM
   of 20
 
Yahoo! Seen With Potential Gains Of More Than 20%
Kate DuBose Tomassi, 01.06.06, 3:11 PM ET

NEW YORK - Goldman Sachs analyst Anthony Noto lifted earnings estimates for Internet bellwether Yahoo! and raised the stock's "implied value" to approximately $50.

"Yahoo! (nasdaq: YHOO - news - people ) remains the broadest beneficiary of the global Internet secular growth," Noto wrote in a client note issued Thursday.

The research analyst raised the 2006 and 2007 earnings-per-share estimates to 85 cents and $1.05, respectively, from 79 cents and 92 cents.

Noto cited several factors including continued market share gains in branded advertising, 12 million paying subscribers "which are poised to grow given the recently signed Verizon (nyse: VZ - news - people ) and BellSouth (nyse: BLS - news - people ) access deals," and the development of new entertainment services.

"We continue to advise investors to buy Yahoo! shares as we see more than 20% appreciation potential to our new implied value of approximately $50," the analyst said.

Noto also said he expects Yahoo!'s fourth-quarter search-related revenue to grow 13% from a year-ago, "which is still below the potential 20% to 30% quarter-over-quarter net revenue forecast for Google (nasdaq: GOOG - news - people )."

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From: Bennitto1/7/2006 9:03:07 PM
   of 20
 
INVESTOR'S BUSINESS DAILY

Posted 1/6/2006

Buzzmakers Google (GOOG) and Yahoo (YHOO) did just that, as top executives of each company gave separate keynote addresses at the Consumer Electronics Show on Friday that pitched more services to users.

Google aims to make the Web more versatile for consumers — and make a buck in the process.

Larry Page, co-founder of the Web's No. 1 search service, was slated Friday to reveal a new one-stop service that will give consumers access to many features in one software download called Google Pack.

Page also was expected to reveal a first-of-its-kind agreement with CBS and the National Basketball Association to provide, for a fee, video downloads of TV shows and games via Google's Web site.

While Page's speech was to start after press time, Marissa Mayer, Google's vice president of search products and user experience, briefed IBD earlier Friday.

With Google Pack, consumers no longer have to surf the Web to find varying lines of software to enhance their Web experience, says Mayer.

"We want to make computers simpler and easier for consumers to use," she said. "If they are, people will use them more and, ultimately, that will help our core business."

Google is teaming with six companies to offer Google Pack, seen as a jab at rival Microsoft. (MSFT) Partners include RealNetworks, (RNWK) Symantec (SYMC) and Adobe Systems. (ADBE)

Google makes nearly all of its money from ads. It has stepped up efforts to find new ways to drive more consumers to its site and away from rivals Microsoft and Yahoo.

Mayer says Google Pack is a free one-stop solution, but should bring more users to Google's sites.

"We approached third parties, to get everyone consolidated in one user licensing agreement," she said. So, Google Pack users only have to click on one licensing agreement page to get the entire service.
Earlier Friday, Yahoo Chief Executive Terry Semel announced plans to move Yahoo deeper into your living room — and into your purse or pants pocket.

He unveiled Yahoo's Go TV and Go Mobile offerings, designed to take Yahoo beyond the PC. The idea is to make Yahoo easily available on PC-linked TV sets and on Web-connected cell phones. Yahoo Go is a new brand for the No. 1 Web portal, which is accessed far more via computers than via other devices — so far.

Yahoo Go Mobile will be launched with AT&T (T) and Cingular Wireless in the U.S. and with Nokia (NOK) in 10 foreign markets in the coming months. Cingular is owned by BellSouth and AT&T (formerly SBC Communications).

Consumers in the coming weeks will be able to buy Go Mobile preloaded on Nokia's Series 60 smart phones at Cingular Wireless stores in Austin, Texas; Columbus, Ohio; and Los Angeles, and in AT&T sales outlets in the 13 Western states that comprise SBC's local phone region. In those 13 states, a co-branded Go Mobile service will be offered to existing AT&T-Yahoo broadband customers.

Semel demonstrated how it might work. He did a Yahoo search for a pizza place. The phone detected he was in Las Vegas and provided a list of nearby pizza places. As he scrolled down the screen, up came maps of shop locations. The service encompasses search and content, or what Semel called Yahoo's core premise.

Yahoo Go Mobile also will be installed on some Motorola (MOT) phones, though dates weren't announced. Go Mobile will have a user interface designed specifically for a cell phone's small screen.

Presently, Yahoo's Web service is only available on certain cell phones via Web browsers.

Semel also showed how Yahoo will become user friendly on your TV screen. Any PC connected to a TV will be able to use the Go TV features. It's designed so that users can easily bring to their TVs content such as digital photos and movie playtimes at local theaters and other personalized services from across the Web. Yahoo also plans to make its music offerings available through this service.

Semel brought comedian Ellen DeGeneres on stage at the Las Vegas Hilton as a comical prop to set the scene. The TV star said her favorite tech gadget is a button on her microwave that cooks popcorn. No techie, she.

After comforting DeGeneres, Semel noted that new consumer electronics technology "was not a paradigm shift" for today's teens and 20-somethings. Nor for some older folks, of course, though DeGeneres isn't yet 48.

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From: Bennitto1/7/2006 9:09:50 PM
   of 20
 
January 5, 2006
A Commercial Runs Through It
Google's Grand Plan to Take Over TV Advertising
By Robert X. Cringely

My 2006 predictions column has to be delayed until next week, not because I have no predictions, but because there is so much speculation and mis-information swirling around about Google and the Consumer Electronics Show that I feel it is important to print the column I had planned for next week right now. So look for my annual predictions column in this space next week.

Google's Larry Page is making a keynote address this week at the Consumer Electronics Show, and some folks have been speculating that Google will announce a $200 PC, a deal with Wal-Mart, or even the Google Cubes I wrote about a few weeks ago. Frankly, I don't know what Google plans to announce, but I'll take a risk and say it is unlikely to be a $200 PC or a Cube, and I can't even imagine what they'd announce with Wal-Mart. This is risk-taking on my part because this column lingers for a week, half of which will be AFTER the Google keynote, so many of you reading this will already know what I don't.

Google would be crazy to announce a $200 PC. Profit margins are bad enough in the PC business, but in the $200 PC business they are even worse. Google, as a public company, can't afford to kill its gross profit margins by entering such a business in any credible way. I say "credible" because Google may well announce that it is giving more money to the MIT Media Lab's $100 notebook PC project, for example, but that's philanthropy, not business. So much for the $200 PC.

They MIGHT announce the Google Cube, I suppose, but I seriously doubt that puppy is anywhere near ready to ship, so if they do announce, it is strictly to do so before some other company. I now know of two other companies -- one a dot-com and the other a telco -- that are planning to introduce cubes of their own, so some preemption might be in order, but I still tend to doubt it.

A lot of this week's speculation seems to rise from an unsourced L.A. Times article and from a Bear Stearns research note, both of which mentioned me. I stand by what I have written, but I can't write what I don't know, so we'll all just have to wait and see what happens.

There is plenty of room, though, for rumination about what's coming and why. That's the rest of this column, which attempts to look into the minds of Brin, Page, and Schmidt, and figure out where the heck Google is actually going.

Google's inscrutability has served them well. The company gets lots of attention because it introduces lots of products and services, none of them pre-announced and most of them different from what came before. They aren't afraid to try new things, and having tried them, also aren't afraid to shut them down if they don't seem to be working as intended. All of this is by design.

Google has turned beta code into a weapon, creating "beta" programs that in the case of Gmail had more than three million testers signed-up before it went from beta to production. A beta test is a wonderful thing because it can be ended with a whimper but not with a lawsuit. Betas for Google are sometimes real statements of product direction and sometimes not, but Google competitors have no way of knowing which is which until they, too, have devoted resources to competing with something that may have no long-term existence. The greatest impact of Gmail, for example, was on HotMail and Yahoo Mail, forcing them to dramatically increase their cost structures to keep users from fleeing for Gmail's greater storage allowance.

To understand what Google really means, however, I keep coming back to the core values of the company -- search and advertising. What does each new product or service do for search or advertising? Because until they come up with a third revenue source as big as those two, Google will always be looking for its livelihood in those two directions.

Does that mean Google isn't serious about getting into video distribution? No. Google has been talking to every TV network including one where I work, so I have to assume that they are serious about video distribution. But that doesn't have to mean that Google is planning to kill television as we have come to know it over the last 50-plus years. On the contrary, for all its interest in video distribution, I think Google sees a lot of its future in helping existing players in the TV business to make even more money. That's a prime use for those shipping container data centers and Google cubes.

I have to admit in this next bit that I didn't come up with all these ideas on my own. That's what super-smart friends are for. However, I'll gladly take credit for them if they turn out to be correct.

Google is an advertising company. Their edge is granularity. No one uses Google AdWords to push toilet paper because everybody uses TP. But if you want to sell custom Warlock capes or hand-machined shifters for discontinued Studebakers, Google can charge advertisers a huge premium (per prospect) because these customers are too expensive to find any other way.

So what are the data center trailers for? Well, right now, everyone in the country watching "American Idol" sees the identical commercials at the same time, except for two ads at every half-hour mark, which are inserted by the local station. So the state-of-the-art in TV ad granularity is buying only a million people, instead of a hundred million. This is how it's been done since David Sarnoff cobbled together the first radio network. It's very primitive, but no one's really noticed since TV advertising is still incredibly profitable. And it's profitable despite the fact that VIRTUALLY EVERY TV AD IS WASTED ON PEOPLE WHO AREN'T REAL PROSPECTS. The entire programming chain is profitable DESPITE the fact that practically the entire audience is freeloading.

How often do you see an ad on TV for something you're currently in the market for? I'm guessing almost never. But imagine if everyone watching "American Idol" only saw ads for things they might really buy? Or, better yet, only saw ads for things they had already expressed an interest in? The value of those same 30-second commercial slots would increase by orders of magnitude.

Google imagines a world where only single people see match.com ads, and people who can't drive see ads from taxi companies where others see Toyota campaigns. Where fraternities see ads for strip clubs, beer, Cancun weekends and LSAT prep courses, and only seniors (and their adult children) see ads for Alzheimer's drugs. What would be the value of that increased efficiency, capitalized into present dollars? Ten billion? Fifty billion? I say the value is $100 billion -- 25 percent of the total U.S. advertising market and 15 times Google's current size.

Google is going to let the telco and cable companies burn their capital building out IP-TV, knowing that Google will still be the only game in town for the crux of the whole thing: the ability to show every viewer the specific ads that companies will pay the most to show him at that specific moment. What Google wants to do with these trailers is SERVE EVERY TV COMMERCIAL ON THE PLANET because only they will be able to do it efficiently. Only they will have the database that converts those IP addresses into sales leads, only they will have the servers and disk space close enough to the viewers to feed the ads. Only Google will have the chops to run a constant, real-time auction for the next ad every consumer is about to see, and then serve that ad at the moment the program goes to commercial.

Suddenly, everybody can (and, really, must) advertise on TV, because it'll be so specific...and so dynamic. If you start shopping for a new WiFi access point in the morning, Google will know, and that night when you watch Two and a Half Men, your ads will be from D-Link, Linksys and Belkin. And, further, they'll know that an intelligent buyer lives at your IP, so your ads won't show you a hot model demonstrating how they're plug-and-play, but will instead feature a quick recommendation from the SveaSoft guy about which AP's the best one for hotrodding.

You're puttering in your home office around 6pm when you hear your wife call out from the living room where she's watching CNN. She says she'd rather not cook tonight -- how about going out for Italian and a movie? You Google movie showtimes and restaurants, print out a list of what's playing, and a map to Antonio's, and walk out into the living room just as Wolf Blitzer is throwing to commercial...

Guess what the commercials are? Yep -- nothing but movie and local restaurant ads, with special "code words" to give at the box office and restaurant for steep discounts, good that night only. And it seems a new Italian place just opened up in town, and their commercial is hammering away at a recent review they got that said that they're so much better than that cheesy Antonio's dump it's not even funny. And it's half-off for new customers, tonight only!

But Google can't insert ads into an "American Idol" stream. Fox would just sue, right?

No, Google will cut a deal with every network to customize their ad spots for every viewer. For a small cut of their ad revenues, Google will handle all customization costs, hardware and software. The networks will all go along because the customized ads will be so much more profitable that it would make no sense for any network to refuse.

If I'm right, Google's current business will have been nothing more than a great test-bed for what will turn out to be their real business, which will be IP-TV ads. Program choice is just the Trojan horse that will be used to sell this to viewers; the essence of the IP-TV buildout is the fully domesticated consumer.

Far scarier, of course, is that Google will be handling all political advertising, and will eventually be helping networks customize their news offerings, too.

This just in! Apple Computer filed a lawsuit this week asking for a declaratory judgment against Burst.com. The two companies had long been in negotiations for a license to Burst's many digital media patents, a possibility I mentioned here several weeks ago. "I can understand why they did this," said Burst CEO Richard Lang. "It's an attempt to get the suit on their turf, though since both companies are from Northern California it is really all our turf. Apple is doing so much business in this area that (the royalty) is inevitably a very large number. We were willing to continue negotiations, but they decided to pull the trigger. Of course we are confident that we will prevail."

Burst will shortly file a counter-suit for patent infringement. With Apple remaking itself into a media company that is highly dependent on Burst-type technology for video distribution, this should make Next week's MacWorld even more interesting than we already expected.

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From: Bennitto1/9/2006 12:29:58 AM
   of 20
 
TiVo Uncharacteristically Quiet at CES
Sunday January 8, 10:17 pm ET
By Matthew Fordahl, AP Technology Writer
Digital Video Recorder Pioneer TiVo Uncharacteristically Quiet at TV-Dominated CES

SAN JOSE, Calif. (AP) -- TiVo Inc., the digital video recorder pioneer, made headlines a year ago in vowing to take TV to the next level with support for high-definition video, software that can sling shows outside the box and a plan to pipe movies over the Internet.
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But at this year's Consumer Electronics Show, the company was unusually quiet despite the event's major focus on big changes in how TV is distributed and watched -- something TiVo helped start but from which it hasn't consistently profited.

Fact is, rival set-top boxes often cost less but offer the same features that made TiVo a household name. And the competition is heating up.

"The standalone TiVo boxes now are facing a real challenge from the DVRs offered by cable and satellite operators," said Josh Bernoff, an analyst at Forrester Research. "As a result, they have to pull back and look at who it is they are and who it is they're going after."

TiVo says nothing should be read into its lack of activity at the gigantic trade show that ended Sunday. Its management team opted instead to make announcements late last year, said Jim Denney, TiVo's vice president of product marketing.

TiVo's news would have had trouble competing with such CES announcements as Google's that it was entering the online video store business and its deal with media companies like CBS -- as well as other Hollywood-Silicon Valley dalliances.

At the show, Alviso-based TiVo touted a deal with Yahoo Inc. where subscribers can remotely schedule recordings on the Web portal as well as view some of its content on their TVs through their DVRs. It highlighted some previously announced online services such a deal with Live365 for radio and the ability to browse and order movie tickets online on a TiVo through Fandango.

It showed off improvements to its TiVoToGo feature that will enable automatic transfers and support for Apple Computer Inc.'s video-capable iPod and Sony Corp.'s PlayStation Portable -- a move that miffed some content providers' legal departments.

In a move that might generate some revenue but appears a dubious selling point, TiVo announced plans late last year to offer a service that lets customers search for TV ads and view them on demand.

"These efforts toward product differentiation could face future legal challenges from the networks," Standard & Poor's analyst Tuna Amobi said in a research report. "Also, the potential advertising opportunity could take several years to scale, if at all."

And while companies like Google, DirecTV (with its own DVR) and Intel struck deals for major content for distributing over the Internet, TiVo pointed to its limited trials that offered material from CNET tech news, Independent Film Channel, College Sports Television and a video blog called Rocketboom.

Last year, the buzz was considerable about TiVo's plans for a movie download service with Netflix. But that's currently on ice because the DVD rental service is focusing on high-definition, while TiVo's primary focus remains standard-definition video, Denney said.

"We still have a relationship," he said. "When appropriate, we will re-explore or revive that type of arrangement."

Denney wouldn't comment on other possible deals, except to say TiVo is "looking for content that more complements broadcast television or provides things you can get through the (regular) channels."

TiVo also showed off a working prototype of its next-generation, high-definition capable DVR, which sports built-in Ethernet networking and USB ports, support for an external hard drive and two TV tuners. It also will be capable of acting like a cable descrambling box -- a move that should make setup and use easier for digital cable subscribers.

But it was something less than a revelation: The new box was first announced early last year to great acclaim, and TiVo isn't saying when it will be available or how much it will cost. It's expected to be a premium offering -- and TiVo could use the money.

In late November, it reported a fiscal third-quarter loss of $14.2 million on sales of $49.6 million but predicted the red ink in the current quarter would be between $17 million and $22 million. It has reported only one profitable quarter in its history.

The company's biggest source of new subscribers, a long-running relationship with DirecTV, is set to end next year as the satellite TV company switches to a different DVR platform.

The DirecTV relationship brought in 379,000 of TiVo's 434,000 new subscribers in the fiscal third quarter. In all, TiVo has slightly more than 4 million subscribers.

Last year, TiVo announced it would supply higher-end DVRs for Comcast Corp., the nation's largest cable TV company. That's still on track with the first boxes expected to be available in mid- to late-2006, Denney said.

But deals with cable and satellite companies and steeply discounted hardware make the standalone DVR business very tough, said Anthony Wood, who founded TiVo rival ReplayTV and later started Roku LLC, a maker of advanced digital media players.

"It's always been my opinion that DVR is sort of a stepping-stone technology, more of a feature than an actual product," he said. "Really, the future is Internet delivered content -- not recording it and watching it later."

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From: Bennitto1/9/2006 9:35:18 PM
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Google buys Canadian wireless-software company
January 9, 2006 2:50 PM PST
Google has acquired Reqwireless, a small Canadian company that makes Web browser and e-mail software for use on wireless devices, according to the Financial Post.

Google also has posted openings for software engineers and developers in Reqwireless' home town of Waterloo, Ontario, the report said.

Terms of the deal, sealed last summer, were not disclosed.

Waterloo is home to Research In Motion, maker of the popular BlackBerry handheld device.

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From: Bennitto1/10/2006 1:57:30 AM
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Google Introduces Software Starter Kit
Monday January 9, 5:33 pm ET
By Michael Liedtke, AP Business Writer
Google Distributes Free Software Startup Kit Designed to Make Computing Safer and Easier

SAN FRANCISCO (AP) -- Google Inc. is distributing a free software startup kit designed to make computing safer and easier -- a generous gesture driven by the company's desire to steer technology offline as well as online.



The software bundle, unveiled Friday in Las Vegas during a speech by Google co-founder Larry Page, represents the Internet search engine leader's latest jab at industry kingpin Microsoft Corp.

The suite of programs is designed to make it easier to install and maintain basic applications that have helped turn the PC into a hub of information, entertainment and communications.

With the initiative, Google is setting out to prove that it is better positioned to help people get the most out of their computers than more-established software makers, particularly Microsoft -- the maker of the pervasive Windows operating system.

"We thought, 'Why can't using a computer be more fun, simple and empowering?'" said Marissa Mayer, Google's vice president of search products and user experience.

Six of the programs in the package are owned by Google, which had previously offered all but one on a piecemeal basis. A screensaver that automatically displays pictures stored on a personal computer is being introduced for the first time as part of the "Google Pack."

With the exception of a Norton antivirus program that is being offered in a free six-month trial, the seven other applications in the Google Pack are already available for free on the Internet.

Mountain View, Calif.-based Google has simply negotiated agreements to create a one-stop shop for all the applications, supplemented with tools to simplify the process for installing and updating the programs.

Neither Google nor the other participants in the Google Pack are paying each other any money, Mayer said.

Although cobbling together a bunch of free software isn't revolutionary, the move could foreshadow bigger things to come as Google's maneuvers to gain more influence over the products people install on their PCs while diminishing Microsoft's power.

If the Google Pack proves popular among PC owners, more software makers are likely to be lining up to be included in future versions -- a phenomenon that would give Google even more leverage in its slugfest with Microsoft, said Forrester Research analyst Charlene Li.

"This has the potential of giving Google more control over the software supply chain," Li said. "They in effect could become the arbiters of software taste, determining what's good and bad."

For now, Google is primarily interested in making personal computers easier and more enjoyable to use, Mayer said.

If people spend more time on their computers, Google believes it will receive more Internet search requests -- an activity that generates the highly profitable ads that has catapulted its stock and spawned more than $100 billion in shareholder wealth during the past 18 months.

Google's shares surged $14.42 Friday to close at $465.66 on the Nasdaq Stock Market. The stock price reached a new high of $470.50 earlier in the session.

Hoping to stunt Google's rapid growth, Microsoft has invested heavily to expand its presence in Internet search during the past year. So far, though, Google has been able to win even more market share, emboldening the company to embark on far-flung expansion that has increasingly put it on a collision course with Microsoft.

Toward that end, Google plans to distribute even more software as it builds upon the loyalty fostered by its popular search engine.

"I can imagine an operating system that some day does a better job storing your data, using (a) network," Mayer said in a barb clearly aimed at Microsoft.

The Google Pack includes Adobe Systems Inc.'s Acrobat Reader, RealNetworks Inc.'s media player, Mozilla's Firefox Web browser and Cerulean Studios' Trillian instant messaging program.

Notably missing are word processing and spreadsheet programs, though Google pledged in October to work with Sun Microsystems Inc. to promote an open-source version of those applications.

Mayer couldn't explain why the free OpenOffice suite, which includes word-processing and spreadsheet applications, wasn't included in the Google Pack.

Li believes the programs were excluded because Google didn't want to risk including anything that might be difficult to install or interfere with other applications, such as Microsoft's competing Office suite.

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