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If you're a fan of online video, you could be in for a new advertising treat: AOL and Google have announced plans to start selling upfronts. This common practice of television networks is where they sell shows and ad space for the upcoming season. This is a good way to clear advertising inventory and have predictable revenue streams.
Google is set to have these upfronts in May of this year. AOL has since announced that they are getting in on the action. AOL says that they will offer "guaranteed audience delivery for online video advertising campaigns bought across its properties." AOL will host advertisers on April 24 at a Digital Content Newfronts presentation.
Nikesh Arora, chief business officer at Google, highlighted YouTube's brand power. Google hopes to translate that into ad dollars. Arora said:
We're seeing a breakthrough on brands. More than at any point in the last decade of online advertising, we're at a point where major brand advertisers, from movie studios to CPG companies, are finally looking to digital media as a central part of their marketing efforts. We are making huge progress. YouTube has gone from an interesting ad buy to a key buy for brands. In May we'll be hosting our first upfront for brands and agencies showcasing the latest channel content and opportunities for marketers, something television has been doing forever, we will do that for YouTube [in the year].
Friday saw a court hearing in Virginia about what to do with all of the MegaUpload data that is being stored by Carpathia on its own money. Carpathia, along with several other groups including the MPAA, believe that the federal government should pay for the storage and hosting costs of the data.
The government asserts that they had nothing to do with causing these problems to Carpathia. His message was if the cost of doing business with MegaUpload has gone up, the added expenses shouldn't be pushed onto tax payers. The government's lawyer also seemed to place some of the blame for the piracy on Carpathia. For the first time, the blame wasn't solely on MegaUpload's managers.
As reported Friday, the judge has sent everyone back to negotiations to try to figure out what to do with all of this data and how to handle the costs associated with it. The interesting part of this that no one really knows about is that MegaUpload put Carpathia on the map. Before MegaUpload, they were a small, largely unheard of company in 2009.
Microsoft could end up swapping their search engine, Bing, for Facebook shares after the upcoming Facebook IPO. This news comes from a news editor at CNBD where they let details slide that Microsoft could be doing the swap. The source hasn't been revealed, and it is reportedly from the anonymously authored Kindle e-book that has just come out called "The Facebook IPO Pitch".
Just last week Microsoft purchased 800 patents from AOL which could be used to protect its Partner, Facebook, from social networking litigation. We already know that Microsoft and Facebook are in bed together, so this makes sense. On top of that, Facebook and Skype collaboration is playing into this fight, with Microsoft owning Skype and all.
At the moment Microsoft are bleeding cash from Bing, big time: $2.5 billion a year to be exact. Facebook already sports Bing for its results in search, but a full ownership of the search engine could help Facebook integrate Bing much deeper into its social networking site. This year is definitely turning out to be very interesting for both Microsoft and Facebook.
Best Buy are set to close 50 of their big box retail stores, as they said they would before the end of its 2013 fiscal year, and that time has come. Just days after Mike Mikan took over as CEO from Brian Dunn, they've listed the stores that will be closing down.
Two locations have already been closed down, with six others to be closed before the end of the year, Best Buy also hope to have the remaining 42 closed by May 12th. Employees were informed of the news over the weekend, and the company is hoping to re-position them within the company, or at least offer some severance packages.
Best Buy is also trying to reassure customers that its all OK, and that even though their local Best Buy stores are closing down, they still have other stores in nearby locations. There's no word about the 100 Best Buy Mobile stores the company hopes to open up, but that information should follow through this year.
MegaUpload had a pretty successful day in court: they got most of what they wanted, as far as user data preservation, from a ruling by U.S. District Judge Liam O'Grady. In short, the Judge has agreed that the data needs to be preserved, at least for now. He has sent the interested parties back into negotiations to come to a compromise.
Unless the interested parties wanted to hire a mediator, or "special master," the judge will send them to a magistrate judge known for "bringing people together." If you're rooting for MegaUpload, like me, or have data on the service, this ruling is good. If you're rooting for the MPAA, government, or others, you may not be so happy.
It appears, from the Judge's demeanor, that he is unlikely to make a ruling which would result in the loss of the data. It seems as though most of the interested parties want the data preserved, they just can't seem to agree on how or who should pay for it. At least for now, the data is safe and Carpathia is still stuck footing the bill.
I'm not sure what it was Larry Page said that Wall Street didn't approve of, but it could be either that the revenue was below expectations or the announcement of the stock split to create a new class of non-voting stock. The business will effectively run the same after the stock split so it's hard to see investors getting excited about the stock change.
I have a feeling the stock is down due to the revenue being slightly less than expected. That said, profit was higher than expected, so that would seem to me to cancel out any effect of lower revenue. It's probably more due to the continuing trend of decreasing cost-per-click. It has continued to decline and has fallen by 12 percent year-over-year.
Google's stock is trading down by 4 percent, and that's a fact. Some of the above is speculation, but I have a feeling it's pretty close to accurate. It will be interesting to see how the stock split affects prices. I imagine the non-voting will be quite a bit less than the voting stock. I may even be able to afford to invest in Google.
Just two days after the Department of Justice filed antitrust charges against Apple and major book publishers, Apple has responded to the claims. Contrary to the three book publishers who signed settlements immediately, Apple seems to want to fight this to the end. The other two publishers are also fighting the claims.
Apple spokesman Tom Neumayr:
The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.
The response is similar to those of Penguin Group and MacMillan. The pricing of books and apps in Apple's store is set differently from music. The prices for books and apps are set by the publishers whereas the music is set by Apple. It will be interesting to see how this plays out. More as it comes.
Activision Blizzard is the latest casualty in the patent wars, being sued for virtual world infringement
Worlds Inc. has begun a lawsuit against World of Warcraft creator Activision Blizzard. The firm asserts that games like World of Warcraft and Call of Duty infringe on its patent regarding a "system and method for enabling users to interact in a virtual space." The patent seems extremely broad, but they did manage to use it to get a settlement out of NCSoft for City of Heroes in 2010.
"Technologies created by Worlds have helped the businesses of virtual worlds gaming and the sale of virtual goods to grow into a multi-billion dollar industry," said Worlds CEO Thom Kidrin. "While we are pleased to see that the gaming industry and its rapidly growing customer base have enthusiastically embraced our patented technologies, we deserve fair compensation for their use."
It will be interesting to see how this plays out in court. If this patent is truly infringed upon by World of Warcraft and Call of Duty, I think many other games would also be considered infringing. That said, I haven't read the patent in full detail. It's scary that a patent can be this broad. It stifles innovation.
Google's acquisition of previous powerhouse smartphone maker, Motorola, was approved by the Justice Department in February. There was much talk that Google acquired Motorola for their roughly 17,000 patents they held. Just two months after the acquisition, rumors are circling that Google are looking to dump the entire hardware division.
The Wall Street Journal has tapped the keys on their keyboards and are claiming that Google are already looking to sell their cable set-top box business, and that they've offered the handset division to China's Huawei at a premium. At the moment, Google licenses their Android open-source operating system to 55 manufacturers across the world.
This is where Google run into problems: owning the Motorola hardware division means they could risk relationships with these OEMs, if they were to move forward with developing "in-house" hardware. Other manufacturers could see this as a bias toward Google owning the Motorola hardware division. Getting rid of it, would calm the nerves, obviously. Senior vice president of mobile for Google, Andy Rubin, has actually addressed concerns over this at Mobile World Congress in Barcelona.
Google have just announced a plan in which we'll see the company split its stock in an effort to preserve its corporate governance, and still give co-founders Sergey Brin and Larry Page control of the company. This will create a 2-for-1 stock split, where Google have said it will create a new class of stock, Class C, that won't sport any voting power.
Any share holders of Google with Class A or Class B stock will automatically receive a share of the new Class S stock. This new class of shares will trade under a different ticker symbol. This new deal is said to preserve the voting power of Google co-founders. The stock proposal was announced as Google reported a first-quarter profit of $2.89 billion, or $8.75 a share, from $1.8 billion, or $5.51 a share, twelve months ago.
Excluding one-time charges and other items, Google's profits sat at $3.33 billion, or $10.08 per share, compared to last years $2.64 billion or $8.08 per share. Google easily beat Wall Street estimates which pegged them at $9.65 per share. Revenue-wise they were not too bad at all, hitting $10.65 billion, a 24-percent increase over $8.58 billion year-over-year. After backing out traffic acquisition costs, revenue amounted to $8.14 billion, missing Wall Street expectations by a slither, pegged at $8.15 billion.