May 26, 2019

Bits Blog: New Phone by Facebook to Showcase Its Network

Facebook has been putting increasing focus on its mobile products for over two years.Valentin Flauraud/Reuters Facebook has been putting increasing focus on its mobile products for over two years.

8:45 p.m. | Updated

Facebook users post more photos, write more status updates and hit the like button more often from mobile devices than they do from computers. So it was almost inevitable that Facebook would introduce a smartphone that put its social network front and center.

On Thursday, Facebook plans to unveil the first smartphone created to showcase its social network. The phone, made by HTC, uses a version of Google’s Android software, according to two people briefed on the announcement, which will be made at a news conference at the company’s headquarters in Menlo Park, Calif.

The software is designed so that some of the core features of the phone, like the camera, will be built around Facebook’s services, according to one of the people, who is a Facebook employee. Both people briefed on Facebook’s plans spoke on the condition of anonymity because they were not authorized to discuss the product before the formal announcement.

Derick Mains, a Facebook spokesman, declined to share details of the event. But he said it would be a “significant mobile-focused announcement.” The invitation sent to members of the news media says, “Come see our new home on Android.”

For Facebook and any other online business that is supported by ads, mobile is a tough puzzle to crack. It is difficult to get people to look at advertisements on smaller screens, where display space is limited, without becoming too intrusive.

Facebook’s business strategy is to persuade people to congregate around its social network as much as possible and eventually show them more ads. That is why, over the last year, Facebook has been revamping its organization to be “mobile first.” Every team at Facebook is involved somehow in its mobile products. And the company has recruited engineers who specialize in mobile phone development, including former Apple employees who worked on the development of the iPhone.

The Facebook employee familiar with the announcement said that when the Facebook phone is turned on, it will immediately display a Facebook user’s home screen. A phone with a strong Facebook focus would prompt customers to use Facebook more than competing apps and services. But the success of such a device would depend on how much support the handset received from wireless carriers, said Chetan Sharma, an independent telecommunications analyst who consults for carriers. The carriers can choose which devices are sold in their stores, as well as how prominently to promote them.

“Unless the phone is in front of the consumers in stores, it’s hard to see how it will gain traction,” Mr. Sharma said.

He said it was difficult to imagine that big carriers like ATT and Verizon Wireless would place a serious bet on a Facebook phone from HTC, because that manufacturer’s other phones have not been selling very well. HTC once made a phone called the Cha Cha that had a button for posting photos directly to Facebook, but it sold poorly.

The idea of a Facebook-powered Android phone is not new. In 2008, Inq, a phone maker based in London, released a phone called the Inq1 that integrated Facebook services into crucial areas of the device. In 2011, it said it would release an Android phone called the Inq Cloud Touch, which had some of Facebook’s services integrated into the home screen.

But early last year, Inq pulled the plug on theCloud Touch, saying it would instead focus on other products. Frank Meehan, the former chief executive of Inq, said in an e-mail interview that the Inq had felt too threatened by Samsung Electronics, now the biggest maker of phones in the world, so it abandoned its plans.

“Samsung was already on a path to crush everyone, and we decided to get out of hardware and turned the company into software only,” Mr. Meehan said.

Mr. Meehan said that if HTC released an Android phone with a focus on Facebook, it would still face the problem that Samsung is the dominant player on Android, Sony is gaining traction in mobile and Huawei, a Chinese handset maker, is dominant in Asia. He said it would be better for Facebook to create a special layer that consumers could install on Android devices so the social network would embed more deeply into Android apps and Google services.

“I would see this as a more radical way of providing the social layer functionality on mobile that would really bring the power of Facebook to Android,” he said.

The Facebook employee familiar with plans for the new phone said the stand-alone mobile apps it released over the last two and a half years were essentially experiments to see what worked on mobile devices before rolling them into a Facebook-focused Android phone. This year the company introduced Poke, a private messaging service, as a stand-alone app. Last year, it released a camera app that specialized in tagging and uploading photos to Facebook. In 2011, it introduced Messenger, an app for free text messaging, which was later expanded to include free voice calls.

Facebook has been exploring making its own smartphone for the last two years. But the project, which was at one time code-named “Buffy,” had stalled because the company could not decide whether to make its own hardware or team up with a phone maker.

Facebook’s approach to modifying Google’s Android software is similar to Amazon’s, said a former employee of Facebook who had been briefed on the product. For its Kindle Fire tablets, Amazon removed Google’s apps and promoted its own services, like the Kindle e-book store, Amazon’s video service and Amazon’s own app store. The tablet is essentially an Amazon-powered shopping console.

A smartphone that gives priority to Facebook services is good for Facebook, but it is unclear whether that is something consumers want. Jan Dawson, a telecommunications analyst at Ovum, said the concept was “a solution to a problem that doesn’t exist.”

“There are lots of people who love Facebook, but I doubt if any of them feel like they need a more Facebook-centric experience on their phones,” he said. “There isn’t anything obviously missing.”

He agreed that it was unlikely that wireless companies would put much support behind such a device, because they are already worried about the way Google and Facebook are supplanting carriers in people’s minds as providers of content and communication services.

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Bits Blog: New Android Smartphone Is Said to Favor Facebook

Facebook has been putting increasing focus on its mobile products for over two years.Valentin Flauraud/Reuters Facebook has been putting increasing focus on its mobile products for over two years.

12:53 p.m. | Updated Added background on Facebook’s mobile business strategy.

Facebook will introduce a special version of Google’s Android software system next week that is modified to put the social network front and center on a smartphone. The software will debut on a handset made by HTC, according to a Facebook employee and another person who were briefed on the announcement.

Facebook sent invitations on Thursday evening to members of the media for an event on April 4 at its headquarters in Menlo Park, Calif. The Facebook employee, who asked not be named because he was not authorized to talk about the company’s plans, said the company would introduce a version of Android that makes Facebook’s software more prominent.

For instance, when the device is turned on, it will immediately display a Facebook user’s home screen, the source said, a fact reported earlier by The Wall Street Journal. Facebook’s camera and messaging apps will be the default apps for the core functions of the phone, the Facebook employee also said.

Derick Mains, a Facebook spokesman, declined to comment on what would be unveiled at the event. But he said it would be a “significant mobile-focused announcement.”

Mobile is a crucial part of Facebook’s future. People are now spending more time using Facebook through mobile apps than on computers. Facebook’s business strategy is to get people to hang around its social network as much as possible to eventually see more ads. A phone with a strong Facebook focus would prompt customers to use Facebook more than competing apps and services.

The Facebook employee said that the company’s portfolio of mobile apps had been the vanguard of the Android-based Facebook operating system. Over the past two and a half years, Facebook has been creating standalone mobile applications. For example, this year the company introduced Poke, a private messaging service as a standalone app. Last year, it released a camera app that specialized in tagging and uploading photos to Facebook. And in 2011, it introduced Messenger, an app for free text messaging, which was later expanded to include free voice calls.

Amazon has also modified Android for its Kindle Fire tablets.

Facebook has been exploring making its own smartphone for the last two years, but the project, which was codenamed “Buffy,” kept stalling internally as the company could not determine whether to make its own hardware or partner with a phone maker.

Facebook has recruited engineers who specialized in mobile phone development, including former Apple engineers who worked on the development of the iPhone.

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Bucks Blog: Young People Paying Off Card Debt More Slowly

European Pressphoto Agency

Younger Americans not only borrow heavily on their credit cards, but they repay the debt at slower rates than previous generations, new research from Ohio State University finds.

The findings suggest this bleak situation: the typical young credit card holder who keeps a balance on the card will die in debt to credit card companies, said Lucia Dunn, an economics professor at Ohio State who was a co-author of the study with Sarah Jiang, manager of credit and business strategy at Capital One Financial in McLean, Va.

If such behavior persists, Professor Dunn said, the country may eventually be faced with a financial crisis among elderly people who can’t pay off their credit cards. “They’re paying it back at much slower rate than previous generations,” she said in a telephone interview.

The study, published in the January issue of the journal Economic Inquiry, is based on two large, long-term monthly surveys conducted by Ohio State University, including one that includes not only borrowing data but also payoff data, which hasn’t previously been available to most researchers. The data allowed the researchers to more precisely estimate when Americans will be able to pay off their credit card debts.

The researchers combined the data to obtain information for 13 years, from 1997 to 2009. They examined respondents from 18 to 85 years of age, and had a final sample size of 32,542 people.

The findings suggest that someone born from 1980 to 1984 has credit card debt substantially higher than debt held by the previous two generations: on average, about $5,000 more than his or her parents at the same stage of life, and about $8,000 more than his or her grandparents.

Professor Dunn said there were several reasons why younger generations have higher credit card debt. Credit is more readily available, for one thing, and attitudes toward debt have changed. “It’s a lot more socially acceptable to have debt and go into bankruptcy,” she said.

The results also suggest that younger people are paying off their debt more slowly. The study estimates that the younger borrowers’ payoff rate is 24 percentage points lower than their parents’ and about 77 percentage points lower than their grandparents’ rate.

Younger people now also have much higher levels of student loan debt than previous generations, she noted, which makes it harder to pay off card debt.

But the study also offered some hope, in that it found that increasing the minimum required monthly payment on credit cards spurs borrowers to not only meet the minimum, but to pay off substantially more, possibly eliminating their debt years earlier.

Professor Dunn said higher minimum payments may provide a sort of “jolt” to card holders, spurring them to pay off their debt. Legislative action, like the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, has led to an increase in minimum payments for cardholders But Professor Dunn said the findings suggest regulators should press card companies further on minimum payments.

Would higher minimum payments motivate you to pay off your credit card debt? Or would they force you into default?

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The Media Equation: In 2013, Engineering a Reversal of Fortune for Media Leaders

In business, all years are critical — make a big mistake and you won’t have the chance to make another one. But in the media, wave after wave of transformation mean the coming year is particularly important.

Insurgents are racing over the hills; margins, along with the advertising sales that drove them, are tumbling; and people consume media content at a time, place and, often, at a cost of their choosing. Forget New Year’s resolutions. We’re talking imperatives, a to-do list that requires eating your Wheaties and then some. So on the last day of 2012, it’s worth looking at a group of leaders who confront very steep hills to climb in the year that ends in lucky 13.

Laura Lang

Fred R. Conrad/The New York Times

Laura Lang


Hired a year ago from a digital advertising firm to head Time Inc., Time Warner’s magazine behemoth, Ms. Lang was optimistically viewed as an out-of-the-box answer to the knotty problem of making a print company dance in a digital era.

Twelve months later, the honeymoon, if there ever was one, is over. Advertising has quickly gone backward at the publisher, and the nascent efforts in mobile and video Ms. Lang has championed will not fill the crater anytime soon.

Time Inc., an industry leader in print subscriptions, has yet to find a way to wring money from consumers on the Web. Ms. Lang has been slow in articulating a business strategy and building a team to execute it, and at some point, the people who hired her will start checking their watches.

Jeffrey Zucker

Jamie McCarthy/Getty Images for Paramount Pictures

Jeffrey Zucker


Of all the people on this list, Mr. Zucker, whose appointment was announced in November, probably has the best chance of showing progress. After all, he will take over a business that makes $600 million, all while doing not much of anything right.

Fixing any one of CNN’s manifest problems — mornings that are not competitive, evening ratings that are deeply embarrassing and a late-night transplant inPiers Morgan who is being rejected by the viewing public — will make him look like a genius.

Most important, to me at least, is that CNN master the Big Story. The network, often useful on breaking international news, has fumbled on signature domestic events including the Newtown school shooting. Call me old-fashioned, but fewer breathless, informationless stand-ups from reporters and more actual reporting may be a good place to start.

Martha Stewart

Evan Agostini/Associated Press

Martha Stewart


A nice little franchise that overshot after going public, Martha Stewart Living Omnimedia resembles a troubled aircraft that is madly switching pilots while chunks of the plane are flying off.

Big write-downs caused third-quarter losses to exceed total revenue; after all of five months, the chief executive said she would step down; and the company just cut two of its magazines, Whole Living and Everyday Food, as stand-alone products.

Add in the fact that the Hallmark Channel declined to renew the daily “Martha Stewart Show,” and you have a lot less media coming out of a company named Omnimedia. Most of the profits now come from merchandising, but even those are imperiled.

The company signed a deal with J. C. Penney to sell branded Martha Stewart products last year, which was a coup, except that Macy’s accused the company of already selling it those rights and promptly sued. The stock fell to $2.50 a share from over $4.50 at the start of the year. Clearly, it’s going to take more than a few well-placed floral arrangements to make this company look pretty again.

Robert Thomson

Shannon Stapleton/Reuters

Robert Thomson


A trusted Rupert Murdochlieutenant who took over as managing editor of The Wall Street Journal in 2008, Mr. Thomson overcame the skepticism of the staff with an acute eye for news. The result was a more general interest newspaper that was a hit with readers. And now that News Corporation has been split into two divisions, publishing and entertainment, Mr. Thomson will make the leap to the business side and become the chief executive of the publishing unit.

Running those assets without the support of Fox News and “Avatar” will be a challenge, which became clear this month when the company said in a filing that its publishing businesses lost $2.1 billion in the fiscal year that ended June 30. Those losses came largely from $2.8 billion in charges mostly related to closing News of the World in Britain in the wake of the phone-hacking scandal.

The remaining print assets — including newspapers like The Wall Street Journal, The New York Post and The Times of London, and HarperCollins, a book publisher — will be folded in with a number of fast-growing Australian pay-television assets, which should give the newly formed division some financial cushion.


Twitter: @carr2n

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