April 2012

A Billion-Dollar Turning Point for Mobile Apps

The path for Internet start-ups used to be quite clear: establish a presence on the Web first, then come up with a version of your service for mobile devices. Now, at a time when the mobile start-up Instagram can command $1 billion in a sale to Facebook, some start-ups are asking: Who needs the Web?

Smartphones are everywhere now, allowing apps like Foursquare and Path to be self-contained social worlds, existing almost entirely on mobile devices. It is a major change from just a few years ago, underscoring how the momentum in the tech world is shifting to mobile from computers. In that context, the Instagram deal looks like something of a turning point, as even the Web giant Facebook tries to get a better grasp on a market that requires a rethinking of old rules.

Data Points: How We Use Our Mobiles

Some mobile habits overlap, but there are significant differences in how consumers use their tablets and smartphones which marketers need to understand to effectively use the devices.

Like portable personal assistants, smartphones accompany us everywhere. They tend to be used primarily for task-related activities, like sending email, going online and sending text messages, so text message and shorter ads have been successful in this environment. Tablets, meanwhile, are most likely to be taken out at home and used for long-term media consumption, so users may be more tolerant of longer ads as long as they don't get in the way of their media experience.

Google's $12 Billion Toy

Here's a business riddle: Divine Google intentions for its largest-ever acquisition, the $12.5 billion purchase of the once-great, now-faltering Motorola Mobility. Motorola represents one of the thorniest strategic and operational challenges in Google's 14-year history. Oddly, few seem to be paying attention.

What will happen to Motorola’s 20,500 employees? What of the factories churning out low-margin cellphones and cable-TV boxes? What of the five years of losses, some $5.3 billion in all? With Google stock down 3% year to date, compared with a 15% rise for the Nasdaq Composite, it seems logical that Google might just sell off these metal-bending headaches and focus on its strength—spreading mobile Web search around the world. So, it's gut-check time. Does Google sincerely want to be a company that makes actual stuff? The disquieting answer is that there appears to be no sense that a choice is even required.

House to take up cybersecurity bill with revisions

The House of Representatives will take up a cybersecurity bill at the end of April that lets the government and corporations share information about hacking attacks on U.S. networks, with amendments intended to ease civil liberties concerns.

Reps Mike Rogers (R-MI) and C.A. "Dutch" Ruppersberger (D-MD), the top two lawmakers on the House Permanent Select Committee on Intelligence, are pushing legislation that would expand a Pentagon pilot program for sharing classified and sensitive threat information from just defense contractors and their Internet providers to a broader segment of the private sector. The bill, which has 105 co-sponsors, has come under attack from groups like the Electronic Frontier Foundation, which said in a blog post last month that the bill failed to use narrow enough language to define a cyber threat.

Online sales tax battle pits Amazon against Norquist and Sen. DeMint

Internet retail giant Amazon has been a vocal supporter of the online sales tax effort. Still, there are long odds for an online sales tax to be passed this year. Campaign season is expected to slow down work in Congress, and opponents argue the tax proposals put forward in the House and Senate would be harmful to small business.

A number of conservative heavyweights — from Grover Norquist’s Americans for Tax Reform (ATR) to Sen. Jim DeMint (R-SC) — have come out against the plans. With prominent Democrats and Republicans having backed legislation for the tax, lobbyists hope that it could enter the debate during a December lame-duck session. Barring that, they are laying groundwork for action in 2013.

Malone and Murdoch

Regulators have finally given the go-ahead to merge Australia’s two biggest pay-TV groups.

Austar, the takeover target, is majority owned by the US media mogul’s Liberty Global. Meanwhile Foxtel, the buyer, is half owned by local telecoms group Telstra and one-quarter held by Rupert Murdoch’s News Corp. Talks to merge the two groups began a decade ago, but moved forward only last year after Austar deemed Foxtel’s A$1.52-a-share offer “appropriate”. Regulators deliberated over the impact on competition. Their indecision has already wiped out the 20 per cent premium Foxtel was willing to pay. And the greenback’s 2.4 per cent appreciation against the Australian dollar since will have knocked $26m off Liberty Global’s portion of the sale.

Manager Benched for Castro Praise

The Miami Marlins suspended team manager Ozzie Guillen for five games following his comments praising Fidel Castro, the former president of Cuba.

"The Marlins acknowledge the seriousness of the comments attributed to Guillen," the team said in a statement. "The pain and suffering caused by Fidel Castro cannot be minimized, especially in a community filled with victims of the dictatorship." The uproar was triggered by a Time magazine article that was posted online last week. "I respect Fidel Castro," Mr. Guillen was quoted as saying. "You know why? A lot of people have wanted to kill Fidel Castro for the last 60 years, but that mother f— is still here."

The remarks provoked a sharp response in Miami, where the population is heavily Cuban-American and where anti-Castro sentiment, especially among the older generation of political exiles, is widespread and passionate. The city's Spanish-language radio stations were flooded with callers voicing disgust with Guillen, who was born in Venezuela. Joe Martinez, chairman of the Miami-Dade County Commission, demanded that Mr. Guillen resign. Later, Miami-Dade Mayor Carlos Gimenez issued a statement condemning the remarks, though he stopped short of calling for Guillen's resignation.

The Marlins Punish Political Speech

[Commentary] For the crime of expressing a strange support for an unpopular Communist dictator, Ozzie Guillen, the manager of the Miami Marlins, has been banished from the dugout for five games. It may be the first time that baseball has punished political speech, and it would be considered an over-the-top reaction anywhere but South Florida.

Other baseball figures have been disciplined over the decades for expressing racial hatred, including Jake Powell, a Yankee outfielder, in 1938, and John Rocker, a star pitcher for the Braves, in 2000. Marge Schott, who owned the Cincinnati Reds, expressed some admiration for Adolf Hitler, but the main reason she was suspended from baseball in 1993 was for slurs against Jews and blacks. Guillen’s statements were of a different order. He told Time magazine that he “loved” and “respected” Fidel Castro, not because of Mr. Castro’s violent and destructive reign over Cuba, but because the man had survived for so long. No hatred was expressed, but that was enough to set off a firestorm in Miami, where the easily incited Cuban exile community immediately demanded his ouster.

Lawmakers: Cybersecurity bill is not SOPA

The sponsors of a cybersecurity bill that is moving through Congress pushed back against claims that the legislation is a reboot of the Stop Online Piracy Act (SOPA) that online activists helped defeat earlier this year. Critics who compare the Cyber Intelligence Sharing and Protection Act (CISPA) to SOPA are “comparing apples and oranges,” said Rep. Mike Rogers (R-MI), the chairman of the House Intelligence Committee. Preventing online piracy and securing the nation’s infrastructure are “two very different things,” he said. CISPA, which Rep Rogers introduced with Rep Dutch Ruppersberger (D-MD), the ranking Democrat on the Intelligence Committee, would allow government authorities to make classified and non-classified data available to the private sector for the purpose of shoring up the electronic defenses of critical infrastructure. Online activists who helped sink SOPA have turned their attention to the bill, and say they are concerned that the measure is another attempt by Congress to restrict the Internet.

GAO Looking Into Sponsorship IDs

The Government Accounting Office is preparing a report to Congress on sponsorship identification requirements for television and radio stations, cable systems and satellite operators.

At the request of House Minority Leader Nancy Pelosi (D-CA) and ranking House Commerce Committee member Henry Waxman (D-CA), GAO is looking at "current issues with sponsorship identification by media outlets, including the prevalence of video news releases and sponsorship in news and other features, the prevalence of broadcasters not meeting the requirements, the actions FCC has taken in the past, and the role FCC and others may play in the future as technology changes," according to an e-mail request from a field office analyst to one stakeholder.

In the letter, the analyst said the following were the topics GAO had been asked to focus on in its report:

Discuss how FCC regulates the sponsorship identification laws and regulations;
Identify challenges to implementing the regulations, meeting the requirements, and reporting violations;
Discuss if Congress or FCC should consider any changes to the laws or regulations;
Identify, how many complaints FCC has received and what enforcement actions FCC has taken in response to complaints and violations; and
Discuss stakeholders' views on the effect of the regulations and the effect of the enforcement actions.

Benton

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