May 2012

Don’t Be Shocked by More Big Acquisitions, Facebook Says

If you thought the $1 billion Instagram buy was big, don’t be surprised by more big buys: Facebook will continue to invest in things that rev up its presence on mobile phones.

That’s one crucial message that Facebook executives are conveying to would-be investors in the company’s roadshow video. “Expect us to invest heavily in our mobile presence, even if mobile monetization is uncertain and will take time,” David Ebersman, the company’s chief financial officer, says toward the end of the 32-minute video. Ebersman said the company was in a heavy investment stage, adding that it had to spend significantly already on building the infrastructure required to accommodate high volumes of data.

AT&T Chief Regrets Offering Unlimited Data for iPhone

When Randall Stephenson, AT&T’s chief executive, spoke about the state of the wireless industry at a conference this week, he shared some surprisingly frank comments about the iPhone.

In particular, he said that he wished the company had never offered an unlimited data plan for the device and that he loses sleep over free texting services like Apple’s iMessage. If AT&T hadn’t offered unlimited data, it would have been able to get people who used more data to pay up for it, as opposed to having the light data users subsidize the heavy ones, he said. “My only regret was how we introduced pricing in the beginning, because how did we introduce pricing? Thirty dollars and you get all you can eat,” he said in the on-stage interview at the Milken Institute’s Global Conference. “And it’s a variable cost model. Every additional megabyte you use in this network, I have to invest capital.”

Study: iPad Accounts for Nearly 95 Percent of Tablet Web Traffic

There’s no question that the iPad is the dominant force when it comes to tablet sales. But when it comes to usage, the iPad’s power is even more impressive. Aiming to get a sense for how powerful the tablet is, online advertising network Chitika looked at what devices it was serving ads to and found that it was almost exclusively Apple tablets. For every 100 iPad impressions, Chitika is serving slightly more than one ad to a Samsung Galaxy and Asus Transformer Prime and under one ad to the Motorola Xoom, BlackBerry PlayBook and Kindle Fire. The Nook Tablet share is even lower, though clearly both the Nook and Kindle are marketed less as Web browsing devices and more as media consumption tools. In total, the iPad accounted for more than 94 percent of ads, Chitika said.

Facebook IPO: How could privacy concerns affect revenue?

Now that Facebook has set its share prices, valuing the company between $77 billion and $96 billion, the question is whether it will be able to convince investors that it’s got a sustainable business model, can keep growing and find new ways to generate revenue. And because advertising revenue is such a big part of Facebook’s business model, user privacy will have to be a major consideration for potential investors.

“If you use Facebook, you’re the product, not the customer,” said Bill Kerrigan, chief executive of the privacy company Abine. “The company’s financial success requires it to collect more personal information and make available to advertisers.” Facebook itself is clearly aware of how important it is to keep up a good reputation on privacy, especially after settling with the Federal Trade Commission over complaints that it was making data public without user permission. In the list of risk factors that the company has put in its S-1 filing, the company has listed that “changes in user sentiment” about the network’s “privacy and sharing, safety security or other factors” could have a bad effect on the company and its revenue.

State attorneys general: Google privacy changes appear to harm consumers

Dozens of state attorneys general wrote Google’s chief executive to express “strong concerns” that the company’s new privacy policies starting next week will violate consumer privacy.

In a letter to CEO Larry Page, the state attorneys general said the plan to begin sharing consumer data across Google’s services on March 1 “forces these consumers to allow information across all of these products to be shared, without giving them the proper ability to opt out.” The law enforcement officials said users may want to keep their Web searching history separate from information they get from Gmail or YouTube. But for users signed on to those services, that data will be blended by the search giant to serve up ads better tailored to users preferences. Google has defended its plans, which have raised concerns among European regulators and privacy groups.

Fears of spying hinder U.S. license for China Mobile

Concerned about possible cyber spying, US national security officials are debating whether to take the unprecedented step of recommending that a Chinese government-owned mobile phone giant be denied a license to offer international service to American customers.

China Mobile, the world's largest mobile provider, applied in October for a license from the Federal Communications Commission to provide service between China and the United States and to build facilities on American soil. Officials from the FBI, the Department of Homeland Security and the Justice Department's national security division are concerned that the move would give the company access to physical infrastructure and Internet traffic that might allow China to spy more easily on the US government and steal intellectual property from American companies, according to people familiar with the process who declined to be identified because the deliberations are secret. Those officials, known collectively as "Team Telecom," review FCC applications by foreign-owned companies. They could advise the FCC not to issue the license, but may instead demand a signed agreement designed to satisfy security concerns, the people said. The review is being led by the Justice Department, which declined to comment, as did the FBI and DHS. A move to block the license could provoke a lawsuit by China Mobile, officials said. But lately, the U.S. government's focus on cyber espionage has sharpened considerably.

Does the 1st Amendment cover clicking 'like' on Facebook?

Before you click that "like" button in Facebook, you should know that a judge in federal court asserted that this is not protected under the 1st Amendment.

In what boils down to a wrongful termination case (Bland vs. Roberts) brought before the U.S. District Court for the Eastern District of Virginia, four former employees of a sheriff up for reelection claimed that they were fired after, among other things, he discovered that they "liked" his opponent's campaign page on Facebook. "According to the Plaintiffs, after learning of their support of their opponent, the Sheriff called a meeting in which he informed his employees that they should get on the 'long train' with him rather than riding the 'short train' with his opponent," according to court documents. In citing other cases of protected speech on Facebook in his decision, the judge notes that, unlike the simple act of clicking "like," actual statements were made. "The key question is, is the act of 'liking' something of Facebook, does that express an opinion or thought," said Aden Fine, senior staff attorney for the American Civil Liberties Union in an interview with The Times. "It certainly does. The mere fact that you're pressing a button to express that view or opinion instead of saying those words doesn't make a difference."

Verizon moves toward 911 texting

Federal Communications Commission Chairman Julius Genachowski praised Verizon Wireless for selecting a vendor to help deploy its first-in-the-nation implementation of its "text-to-911" service.

The service will allow wireless phone users to contact Public Safety Answering Points, or 911 call centers, using text messages. It could be of particular use to deaf and hard of hearing consumers, who have been shown to be rapid adopters of smartphones for their text-messaging capabilities. “Verizon is at the forefront of 911 public-safety innovations, and today’s announcement is another step in making SMS-to-911 service available to those who cannot make a voice call to 911,” said Marjorie Hsu, Verizon Wireless vice president of technology. FCC spokesperson Tammy Sun said Chairman Genachowski "commended the company for offering consumers another way to reach 911 that is consistent with how millions of consumers already use mobile devices in their daily lives."

Rep Barrow wants answers from Google on Wi-Fi snooping case

Rep. John Barrow (D-GA) sent a letter to Google CEO Larry Page demanding that the company reveal more information about why it collected data from unprotected Wi-Fi networks. Rep Barrow noted that it has been two years since Google acknowledged that it had been collecting the data, but he said, "American consumers and Congress still haven’t received a full account of what happened." Rep Barrow also asked Google to respond to the FCC's charge that it was uncooperative.

Facebook’s PAC donations tilt towards GOP, Judiciary committee members

FB PAC, Facebook's new political action committee, spent its first-ever quarter of activity hewing to a more or less bipartisan donation strategy with emphasis on the House and Senate Judiciary committees, the PAC's first quarter disclosure form shows.

Of the $128,900 the PAC took in, it quickly gave away $119,000, distributing the donations on a mostly bipartisan basis. Uncharacteristic for most tech companies, the final tally of contributions favored Republicans $65,500 to $53,500. Typical leadership cash magnets like House Speaker John Boehner (R-OH), Minority Leader Nancy Pelosi (D-CA) and Senate Majority and Minority leaders Harry Reid (D-NV) and Mitch McConnell (R-KY) were FB PAC recipients. But despite the almost bipartisan final breakdown, many of the PAC's donations seemed to ignore party labels altogether, going instead either to tech favorites like Rep. Anna Eshoo (D-CA), Greg Walden (R-OR) and Fred Upton (R-MI) or Judiciary committee veterans like Reps. Darrel Issa (R-CA), Mary Bono Mack (R-CA) Zoe Lofgren (D-CA), James Sensenbrenner (R-WI) and Sens. John Cornyn (R-TX), Orrin Hatch (R-Utah), Amy Klobuchar (D-MN) and Chuck Schumer (D-NY).

Benton

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