March 2010

What a Google China exit would mean

The Google-China duel represents perhaps the biggest showdown over Internet free speech, a growing priority in the Obama administration, as it brings to light not only China's tight controls on online information, but limitations on the Internet in many other countries, as well.

Indeed, a Google departure from China would likely have broad implications on decisions by other American and European firms to open shop in authoritarian counties. China, the largest Internet market in the world, not only limits Google search results, but also blocks Facebook, YouTube, and Twitter. In China, Google's move is seen as having political overtones, though the Obama administration has stayed out of the fight, and could have ramifications on US-China trade negotiations.

Google Partners Unaware of Compensation Demands, Doubt Letter

A letter demanding Google Inc. compensate advertising agents if it withdraws from China probably isn't genuine, said a sales official at one of the companies named as a signatory. The letter, published yesterday on state-run China Central Television's Web site and received by Google, is "likely a fake," said Gao Min, who's in charge of Google ad sales at Beijing Zoom Interactive Media Co. Shenzhen Winkee Networking Co., also included among the 27 partners CCTV tied to the letter, denied signing it. Of the 22 companies reached by Bloomberg News today, none confirmed the authenticity of the letter.

Facebook becomes bigger hit than Google

Social networking website Facebook has capped a year of phenomenal growth by overtaking Google's popularity among US Internet users, with industry data showing it has scored more visits on its home page than the search engine.

In a sign that the web is becoming more sociable than searchable, research firm Hitwise said that the two sites accounted for 14 per cent of all US Internet visits last week. Facebook's home page recorded 7.07 per cent of traffic and Google's 7.03 per cent. It is the first time that Facebook.com has enjoyed a weekly lead over Google.com. The lead may be slim, but it has become inevitable as Facebook's popularity has grown rapidly from just over 2 per cent of visits a year ago. Heather Dougherty of Hitwise said that Facebook had "reached an important milestone" with the weekly figures. Facebook's membership has more than doubled in the past year, passing the 200m mark last April and 400m in February.

How Privacy Vanishes Online

If a stranger came up to you on the street, would you give him your name, Social Security number and e-mail address? Probably not. Yet people often dole out all kinds of personal information on the Internet that allows such identifying data to be deduced.

Services like Facebook, Twitter and Flickr are oceans of personal minutiae — birthday greetings sent and received, school and work gossip, photos of family vacations, and movies watched. Computer scientists and policy experts say that such seemingly innocuous bits of self-revelation can increasingly be collected and reassembled by computers to help create a picture of a person's identity, sometimes down to the Social Security number. "Technology has rendered the conventional definition of personally identifiable information obsolete," said Maneesha Mithal, associate director of the Federal Trade Commission's privacy division. "You can find out who an individual is without it."

Europe's Public Broadcasters Ask Lawmakers to Make It Easier to Offer Programs Online

European public broadcasters are calling on lawmakers to make it easier to offer their programming over the Internet, saying cumbersome copyright practices restrict their ability to develop new digital services and prolong the fragmentation of the European television landscape. The European Broadcasting Union, which represents public television and radio providers, said its proposals were intended to push cross-border online video services, which have been slow to develop in Europe.

Verizon Files Patent Case to Halt Cablevision Set-Top Imports

Verizon filed a patent-infringement complaint with U.S. trade officials, seeking to block imports of television set-top boxes for Cablevision Systems Corp.

In the complaint filed yesterday with the U.S. International Trade Commission in Washington, Verizon claims Cablevision is infringing five patents. New York-based Verizon seeks to halt imports of digital set-top boxes brought into the U.S. by or on behalf of Cablevision, plus any related software. The patents are related to boxes with advanced features such as the ability to download videos or provide functions such as games, local weather and social networking. Verizon said it uses the inventions in its FiOS television service, which competes with Cablevision for customers. "Each of these five patents is important to Verizon's success in the highly competitive fields of digital video and entertainment services and communications services," Verizon said in the complaint. They "enable Verizon to offer more advanced and differentiated products and services than its competitors."

Verizon asked that the case be handled on a faster, 12-month schedule. Typically, the commission sets out a goal of completing investigations in 15 months.

Hollywood Studios, Cable Systems Tout On-Demand Films

Hollywood's biggest film studios and the largest U.S. cable systems are joining in a $30 million marketing effort to build consumer awareness of on-demand movie rentals as DVD sales decline.

Participating studios include News Corp., Sony Corp., Universal Pictures and Time Warner Inc., the Cable & Telecommunications Association for Marketing Co-Op said today in an e-mailed statement. The campaign will highlight recent releases, including the Oscar-nominated "Precious," "The Twilight Saga: New Moon," and "Pirate Radio." The promotion highlights studios' efforts to bolster revenue, as DVD sales drop, and cable companies' attempts to combat a threat from Web-based services such as Boxee Inc. and Roku Inc. Studios are likely to make more video-on-demand titles available on the same day as the DVD goes on sale, said Mike Dunn, president of News Corp.'s Fox Home Entertainment.

Gap Widens Between Tech Richest and the Rest

A handful of cash-rich companies are consolidating power in the technology industry, using their wealth to expand into new businesses and making it harder for small and midsize competitors to break through.

Why the industry is evolving this way is rooted in balance sheets. Over the past two years, Apple Inc., Oracle Corp., Google Inc., Microsoft Corp. and six other large tech companies have generated $68.5 billion in new cash, compared with just $13.5 billion for the other 65 tech companies in the S&P 500 Index combined, according to a Wall Street Journal analysis of data provided by Capital IQ. The rich few are funding investments at a time when many others have retrenched.

Over the past year, Oracle paid $7.4 billion to get into the hardware business by acquiring Sun Microsystems, and Dell Inc. bought Perot Systems to add technology services. Cisco Systems Inc. spent more than $7 billion to acquire six companies. Google, meanwhile, has tapped its savings to fund moves into computer operating systems and mobile phones. Microsoft has financed its money-losing quest to take on Google in search with its cash. And Apple has used its reserves to develop the iPad and take aim at Google recently by acquiring a mobile-advertising company.

Because of their massive cash accumulation, these companies can afford to take risks that smaller companies can't at a time when the economy remains fragile. The result is a bifurcated tech landscape, says Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology's Sloan School of Management.

Measure would force White House, private sector to collaborate in cyber-crisis

The Cybersecurity Act, drafted by Senate commerce committee Chairman John D. Rockefeller IV (D-WV) and committee member Olympia J. Snowe (R-Maine), is an attempt to prod the Obama administration and Congress to be more aggressive in crafting a coordinated national strategy for dealing with cyberthreats.

It is to be unveiled today (March 17). The legislation would require the White House to collaborate with the private sector in any response to a crisis affecting the nation's critical computer networks. The senators also sponsored the National Cybersecurity Advisor Act, which would create a Senate-confirmed, Cabinet-level position to lead efforts to protect the nation's computer systems, elevating the role of the cyber coordinator's job that President Obama filled late last year. That bill is pending in the Senate.

Slow steps to high-speed broadband

[Commentary] The National Broadband Plan that the Federal Communications Commission released Tuesday is ambitious in the right way, staking out such immodest national goals as building the most innovative and fastest wireless networks on the planet and vastly improving the wired infrastructure within a decade.

But the commission moved so cautiously toward those goals, it's hard to see at this point how it's going to reach them. The boldest part of the plan is its proposal that local television stations be paid to give up some of their airwaves to make room for powerful new wireless broadband services. It's a compelling idea that requires Congress' approval, but it's likely to die on Capitol Hill unless broadcasters go along. That's not a rebuke of the plan or the commission's pragmatism; it's just an acknowledgment of the fight that lies ahead.

Benton

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