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March 2011

Google Cranks Up M&A Machine, Will Continue to Pursue Start-Ups

Google doesn't seem daunted about acquisitions in the wake of its failure last year to land online coupon site Groupon. Indeed, the Internet giant's deals chief plans to be very active, despite challenges that include soaring valuations for some Web start-ups.

Coming off a record 48 acquisitions last year, Google is "going to continue to be aggressive," said David Lawee, Google's vice president of corporate development. Rather than large targets like Groupon, the main focus for Google continues to be small start-ups that can be a source of new technology, talented engineers and revenue. But courting those start-ups has seldom been harder. The skyrocketing valuations of Internet and mobile device-related start-ups don't appear to worry Lawee, who said they were "high, but they reflect the real possibilities." He added: "these are truly exciting times" for entrepreneurs. Besides the possibility of competing offers from other well-heeled Internet firms, such as Facebook Inc. and Twitter Inc., many entrepreneurs can easily raise money from venture-capital firms to hold off the need to seek a buyer.

In YouTube, Google finds a nimble model to compete with Facebook

Once derided as Google's folly, the home of cheesy cat videos and the money-losing stepchild of an otherwise wildly profitable company, YouTube is emerging as a model for the more nimble, faster-paced company Google co-founder Larry Page hopes to foster as he takes the reins as CEO.

That's quite a shift. While YouTube was a cultural phenomenon when Google bought it in 2006, for years it was bleeding money -- losing nearly half a billion dollars as recently as 2009, by one estimate. And while YouTube wasn't Google's Siberia, it wasn't exactly a mecca for many ambitious Googlers. But now, YouTube's revenue has grown dramatically. Many Google employees increasingly see it as an attractive place to work, with a less bureaucratic environment that lets them run with their ideas. Page, by all accounts, is looking to inject that same energy into Google, spurring the mother company to innovate more quickly in its rivalry with fast-moving Facebook. YouTube is not trying to have less emphasis on video contributed by individuals; in fact, Kamangar said the site wants to make it even easier for people to upload video from their phones, wherever they are.

But YouTube is also now focusing on becoming a platform that could host hundreds of hyper-specialized channels that would appeal to the most specific of interests. Some YouTube channels, like Mystery Guitar Man, a sunglass-wearing maker of inventive music videos that have been viewed over 90 million times, already have several million subscribers.


Subcommittee on Communications and Technology
House Commerce Committee
Wednesday, March 9, 2011


House Commerce Committee Democrats Urge Open Debate and Regular Order on Open Internet Legislation

House Commerce Committee Ranking Member Henry A. Waxman (D-CA), Subcommittee Ranking Member Anna G. Eshoo (D-CA), and the other Democratic members of the Communications and Technology Subcommittee sent a letter to Committee Chairman Fred Upton (R-MI) and Subcommittee Chairman Greg Walden (R-OR) protesting their decision to deny members the opportunity to amend their legislation to overturn the Federal Communications Commission’s open Internet rule. In the letter, the members state, “The process you propose would deprive members of one of their most fundamental rights: the right to offer amendments. We recognize there is disagreement about the role of the Commission with respect to the Internet, but we do not believe that justifies denying us the right to amend your legislation.”

Battle for Techies Intensifies

The competition for skilled technology workers is going to get even more intense this year, particularly as new IT demands, talent shortages and overworked tech departments become more prevalent.

More than half (54 percent) of hiring managers and recruiters expect that tech talent poaching will get more aggressive this year, while only 3 percent expect a let-up. The battle for techies who have some business experience also will amplify, as nearly three-quarters of corporate recruiters believe that business experience will be a firm requirement for tech positions. On the other side, retention also will play a key role as organizations look to keep tech talent from running to the competition. The most popular retention incentives are flexible work hours, salary boosts and work on new or emerging technologies. Still, 54 percent of hiring managers believe there are signs when a tech employee is planning an exit, such as lack of engagement, large numbers of single day absences and getting up-to-date on expense accounts. As demand for tech workers intensifies, can the federal government compete?

Feds not best guard of cyberspace

[Commentary] More than 90 percent of the nation’s critical information infrastructure is operated by the private sector. Protecting cyberspace, however, is not just about securing our nation’s critical information infrastructure, but promoting economic security.

The online and physical worlds have become so intertwined that vulnerabilities in the information infrastructure now pose real risks to physical establishments and individuals. One can easily envision a situation in which a hacker could electronically break into a critical infrastructure and cause the failure of a physical establishment — such as a hospital — which would result in serious injury or death. While the government has a crucial role to play, any policy to improve private-sector cybersecurity should not be overly burdensome and counterproductive to economic prosperity. Regulatory mandates are not only unlikely to lead to private-sector cybersecurity improvements, they would likely hinder economic growth. [Rep Goodlatte is chairman of the House Judiciary Subcommittee on Intellectual Property, Competition and the Internet]

Cybersecurity needs complete plan

[Commentary] The Internet has nurtured a remarkable amount of innovation, commerce, freedom of expression and economic connectivity. But these great benefits are accompanied by an ever-growing number of serious cybersecurity threats. Resolving this crucial issue will enhance our effectiveness in combating cybersecurity threats. But it is merely one of many technical, legal, and political issues our nation faces in the cybersecurity realm. Six areas need particular attention.

  • First, the public has little awareness about cyberthreats.
  • Second, we need to improve the means for industry sectors to deploy common defense strategies — like the westward pioneers circling their wagons.
  • Third, we need to provide end-users, ISPs and software and hardware suppliers with basic rules of the road.
  • Fourth, we must provide the federal government adequate authority and capability to protect critical private infrastructure — including our financial, communications, transportation and energy sectors.
  • Fifth, we must put more cybercriminals behind bars.
  • Finally, we must more clearly define the rules of engagement for covert action against cyberthreats. The president must have access to as many lawful and appropriate tools as possible — subject to clear executive policies and procedures, as well as vigilant congressional oversight.

[Sen Whitehouse served as chairman of the bipartisan Cyber Task Force in 2010]

How to make Internet more secure?

[Commentary] We must be mindful that the Internet is vulnerable to exploitation and attack. Those vulnerabilities increase every day as more and more activity finds its way onto cyberplatforms. Clearly, the Internet must be made more secure, but in a manner that does not infringe on our constitutional rights to receive information and express views.

Last year, Sens. Joe Lieberman (I-CT), Tom Carper (D-Delaware) and I introduced legislation to strengthen the government’s efforts to safeguard U.S. cybernetworks from attack and prevent presidential overreach. That bill was unanimously approved by the Senate Homeland Security and Governmental Affairs Committee. Last month, we introduced a new version with stronger, more explicit provisions that would prevent the president from ever shutting down the Internet. It would also provide an opportunity for judicial review of designations of our most sensitive systems and assets as “covered critical infrastructure.”

Tyrants can use Facebook, too

[Commentary] There has been much talk lately about the “Facebook revolution” in the Middle East. But the rhetoric oversimplifies a more complicated reality.

The Internet has helped activists from Morocco to Iran organize demonstrations and publicize human rights abuses. The world had a front-row seat at the Tunisian and Egyptian revolutions thanks to Facebook, Twitter and YouTube. This publicity likely helped restrain government crackdowns on protesters. It is important to remember that the Internet, like every sea change in communications technology does not inevitably lead to social progress. It is merely a tool for brave men and women willing to put their lives on the line to improve their lot. Technological advancement also has a downside. The Internet makes it easier for repressive regimes to crack down on dissidents. The Belarusian and Iranian governments have used what Internet expert Evgeny Morozov calls the “digital panopticon” created by social-networking technology to track down and arrest activists. With a few notable exceptions, the technology industry is failing to address serious human rights challenges.

Filtering software produced by U.S. companies like McAfee — recently acquired by Intel — has been used by repressive governments to censor political content on the Internet. Cisco routers are part of the architecture of China’s Great Firewall. Search engines such as Google and Yahoo censor political content. US technology companies allow millions around the world to express themselves more fully and freely. But the industry has a moral obligation to ensure that its products and services do not help repressive governments. If U.S. companies are unwilling to take reasonable steps to protect human rights, Congress must step in.

[Sen Durbin is chairman of the Senate Judiciary Subcommittee on the Constitution, Civil Rights and Human Rights]

Could feds ever shut down the Web?

Could the Internet be shut down in the US like it was in Egypt? Experts say that it may be technically possible. However, only a fool in the Oval Office would take such irrational steps. Still, revelations about torture at Guantanamo and domestic spying and wiretapping after Sept. 11 have created a heightened sense of anxiety about giving the federal government more leeway to intrude or restrict behavior in times of conflict. While there are thousands of Internet service providers in the U.S., there are only a dozen or so “Tier 1 ISPs” — the providers that carry the bulk of Internet traffic around the country. Shutting down those companies would kick about 80 percent of Americans off the Web, said Jonathan Zittrain, a Harvard Law School professor who also teaches computer science at the university. “Imagine the government went completely off the rails, and someone went thundering around and said, ‘Do X,’” Zittrain said. “Ten phone calls to Internet service providers who can't say no would make the Internet virtually inaccessible to the vast majority of people in the country.” Many politicians and government officials dismiss as “unrealistic” the idea of the government silencing the Internet in the US.

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