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Retailers Fight Exile From Gmail In-Boxes

September 15, 2013 by

Over the summer, the Internet behemoth gradually introduced a new in-box with an assortment of folders for different types of messages, including a main in-box and ones for social networking alerts, e-commerce promotions, updates from businesses like banks and mailing-list messages.

For Google, it’s another moneymaking avenue (note the ads that look like e-mails that now appear at the top of the promotions folder). Also, the company says it wants to fix e-mail overload.

Yet any tiny change that the Internet giant makes has cascading effects for businesses across the Web.

“I don’t like it,” said Ada Polla, chief executive of Alchimie Forever, a skin care brand. “My guess would be that you might log on to your Gmail 20 times a day, and look at promotions once a week.”

Retailers, who have a love-hate relationship with Google, say this is the latest tussle in an increasingly contentious union. Google, they say, has effectively classified their messages as junk mail by shunting them to an in-box ghetto.

It is too early to tell exactly how Gmail users treat the new tabs, because Google is still rolling out the feature. Although retailers fear that fewer customers are clicking on their sites — because they didn’t read the e-mail promising 40 percent off — so far, there has been only a small effect. The rate at which consumers open e-commerce e-mails has declined about 1 percent since it was introduced, according to three services that manage mass e-mails — Yesmail Interactive, MailChimp and 3DCart.

Another change, though, might be more worrisome for e-commerce companies. While shoppers typically click on promotions within hours of receiving an e-mail on other services like Yahoo and Outlook, Gmail users are waiting more than 24 hours, 3DCart said.

That is problematic for flash-sale sites, like Gilt and MyHabit, whose business depends on drawing customers to limited-time sales.

“One of our limitations is we’re a flash site that starts our sales at noon, so that’s the primary way that we communicate with our members, through e-mail,” said Elizabeth Francis, Gilt’s chief marketing officer.

Retailers also say the changes don’t apply to every business; Google’s own marketing messages from Google Analytics and AdWords have been appearing in the primary in-box — belying the company’s argument that the promotions folder is vibrant.

But Alex Gawley, a Gmail product manager, said that there was “no special treatment” for Google’s own promotional e-mails, and that the algorithm was still learning how e-mails should be categorized.

“You’ll see it get more and more accurate and you’ll probably see those types of e-mails moving to the place where people expect them to be,” he said.

Companies, including Gap and Groupon, are resisting the changes by begging customers to move their messages back to the primary in-box. Gilt has been putting banners atop daily e-mails that say, “Drag and drop me into your Primary tab!” If people do that, future e-mails from the same sender will appear there. Gmail users can also turn off the sorting by changing their in-box settings.

Gilt does not know whether its campaign is working, Ms. Francis said, because Google does not disclose how customers move their e-mail around.

Retailers have little choice but to use Google, whether buying search ads or sending inventory feeds to Google’s comparison shopping service. But they complain that Google has been complicating the relationship. Last year, for instance, it began charging retailers to appear in its product search, leading some, including Amazon, to remove their listings from the service.

The change to Gmail, though, strikes at the heart of retailers’ marketing tactics. Eighty percent of marketers are investing more in e-mail this year than last, according to a study by Forrester Research and Shop.org. And with nearly half a billion users, Gmail is a major part of that strategy.

Although Google is also filtering other messages into secondary in-boxes, like sending Twitter and LinkedIn notifications to the social tab, retailers say they have the most to lose.

E-mail marketing is vital to her business, Ms. Polla said; She, too, has urged customers to move Alchimie’s e-mails back to the primary in-box.

“I worked so hard to get it, I want to make sure that I’m able to utilize it,” she said of her e-mail subscription list.

Article source: http://www.nytimes.com/2013/09/16/technology/for-retailers-new-gmail-has-one-tab-too-many.html?partner=rss&emc=rss

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Ex-Ad Chief Is Named Next Leader at Pandora

September 11, 2013 by

Mr. McAndrews, 54, is the former chief executive of aQuantive, an online advertising company, and most recently he was a partner with the Madrona Venture Group, a venture capital firm focused on technology. He serves on a number of corporate boards, including The New York Times Company, the food ordering service GrubHub Seamless, and AppNexus, an online advertising platform.

“I’m impressed with what the company has done in inventing a new type of product, transforming the way people listen to music and continuing to grow successfully,” Mr. McAndrews said in an interview on Wednesday. “My goal is to help the company continue that trajectory and take it to the next level.”

The company’s stock rose more than 5 percent in after hours trading after the news.

Mr. McAndrews’s experience with online advertising is crucial for Pandora, which makes almost 90 percent of its revenue from ads and has grown into one of the most popular places for people to listen to music. In August, the service had 72.1 million active users.

After beginning his career at General Mills and ABC, Mr. McAndrews took over Avenue A, a digital ad agency in Seattle, in 1999, and built it into aQuantive. It was bought by Microsoft in 2007 for $6 billion, during a rush by technology giants like Google and Yahoo to acquire digital ad companies.

Mr. McAndrews was promoted to lead Microsoft’s publishing and advertising group but left in 2008. In the years after that, the performance of aQuantive slid. In 2012, Microsoft took a $6.2 billion accounting charge in its online services division, which included aQuantive.

“We had very specific criteria for our new C.E.O., and we were very strategic about finding the right person. Brian is that person,” Tim Westergren, Pandora’s founder and chief strategy officer, said in a statement. “No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive’s meteoric rise.”

Pandora has also been pressured by investors to maximize its ad rates, particularly on mobile devices, and to limit expenses. Its push to reduce music royalties has led to a frosty relationship with the music industry. On Wednesday, Mr. McAndrews echoed the company’s familiar position on royalties.

“I share Pandora’s longstanding belief that musicians have to be compensated fairly, but the existing system has been put together piecemeal and does not serve anyone well,” he said.

Mr. McAndrews’s corporate biography has already been tailored for digital music. His playlists, according to Pandora, “reflect his love for Elton John, Billy Joel, the Rolling Stones and Bruce Springsteen,” as well as younger acts like Bruno Mars and Rihanna.

Article source: http://www.nytimes.com/2013/09/12/business/media/ex-ad-chief-is-named-next-leader-at-pandora.html?partner=rss&emc=rss

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Judges Hear Arguments on Rules for Internet

September 9, 2013 by

On Monday, the Federal Communications Commission and Verizon, one of the largest Internet service providers, squared off in a two-hour session of oral arguments — three times as long as was scheduled. As Verizon pushed for the authority to manage its own pipes, the government argued that creators of legal content should have equal access to Internet users, lest big players gain an unfair advantage.

But two judges appeared deeply skeptical that the F.C.C. had the authority to regulate the Internet in that manner.

The two jurists, Judge Laurence H. Silberman and Judge David S. Tatel, said that the agency’s anti-discrimination rule — which requires an Internet service provider to give all traffic that travels through its pipes the same priority — illegally imposed rules meant for telephones on the infrastructure of the Web. The F.C.C. itself disallowed the telephone-type regulation a decade ago.

The third judge, Judith W. Rogers, did not ask as many questions but appeared to accept much of the F.C.C.’s position.

Consumers could experience a significant change in the Internet if the United States Court of Appeals for the District of Columbia Circuit strikes down the F.C.C.’s requirement, called the Open Internet Order.

Currently, companies that offer goods or services online do not have to pay anything to get their content to consumers. If Internet service providers started charging fees to reach customers more quickly, large, wealthy companies like Google and Facebook would have an edge, the F.C.C. says. The government argued that such a tiered service could cause small, start-up companies with little money to pay for their access — the next Google or Facebook, perhaps — to wither on the vine.

In any case, the added costs would be likely to be passed on to consumers.

The case, which is expected to be decided late this year or early next year, has attracted enormous interest. On Monday, telecommunications lawyers began lining up to get into the courtroom two and a half hours before the session was scheduled to start. The session was standing room only, with many others left to listen in an adjacent overflow room.

The judges were not entirely hostile to the F.C.C.’s arguments. Judge Tatel, who many telecommunications analysts expect to be the swing vote on the case, pushed lawyers on both sides to concede that the part of the F.C.C. rule that prohibits outright blocking of online content or applications could be allowed.

Judge Tatel also queried each side on whether the two main provisions of the Open Internet Order — no blocking and no discrimination — had to be taken as a whole or could be separated, with the no-blocking rule being upheld.

An opinion that voided one provision yet upheld the other would be more likely to be appealed to the Supreme Court, telecommunications lawyers said, because neither side would be completely happy with the decision.

Helgi C. Walker of the law firm Wiley Rein, who argued the case on behalf of Verizon, said the rules had to be struck down as a whole. Congress never intended the F.C.C. to have authority to regulate the Internet, she said.

Sean A. Lev, who argued the case for the agency, told the judges that the F.C.C. did have the authority to govern the Internet under numerous parts of the Telecommunications Act, including one that gives the commission the duty to work to expand broadband access. Companies that have equal access to consumers are encouraged to innovate, Mr. Lev said, adding that it would result in more vibrant start-ups and a growth in demand for Internet service.

The judges themselves seemed intent on viewing the case from as many sides as possible. Each side was scheduled 20 minutes to present its case and answer questions from the justices. But after spending 30 minutes on Verizon’s presentation, the judges proceeded to grill the F.C.C.’s lawyer for a full hour.

The remainder of the two-hour session was spent hearing from a lawyer representing public-interest groups, who joined the lawsuit on the F.C.C.’s side, and a rebuttal from Verizon.

The F.C.C.’s uphill battle, in part, reflects politics and past decisions by the agency. In 2002, its chairman at the time, Michael K. Powell, a Republican, got the majority of the commission to agree that the Internet was not a telecommunications service like the telephone system. Instead, it classified the Web as an information service, making it subject to much lighter regulation.

Article source: http://www.nytimes.com/2013/09/10/technology/judges-hear-arguments-on-rules-for-internet.html?partner=rss&emc=rss

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Google Makes New Offer in European Antitrust Case

September 9, 2013 by

The latest offer by Google was acknowledged in Italy on Sunday by Joaquín Almunia, the European Union’s competition commissioner. Mr. Almunia has been seeking a settlement with the company since the early stages of the case, which formally began in 2010.

The case revolves around claims that Google has abused its dominance in the Internet search and advertising field by, among other things, favoring its own products and services in search results. Google powers 90 percent of searches in many European markets; its share in the United States is closer to 70 percent.

“Once we have completed our analysis, once we will check that these new proposals are able to eliminate our concerns, we will tell Google what to do,” Mr. Almunia, referring to the offer, said in an interview with Bloomberg Television.

Mr. Almunia is under mounting pressure from Google’s rivals seeking to prolong its legal entanglements in Europe and toughen the terms of any deal.

In July, he was forced to reject a preliminary settlement struck with Google after industry groups complained that aspects of the deal could strengthen, rather than loosen, Google’s hold in Europe.

That proposal, the result of Google’s first offer of a settlement, would not have required the company to change the algorithm, or formula, that produces its search results. But it would have been the first time Google had agreed to legally binding changes to its search results, and it went much further than the minor concessions it made to settle a case before the U.S. Federal Trade Commission.

The latest proposal by Google addressed Mr. Almunia’s “areas of concern,” Al Verney, a spokesman for the company in Europe, said Monday. “We continue to work with the commission to settle this case,” said Mr. Verney, who declined to describe the contents of the offer.

Mr. Almunia said over the weekend that he would prefer a swiftly negotiated settlement with Google because that would be a better way of regulating the fast-moving technology sector. But he said he could still issue formal charges against the company if a deal failed to materialize.

With the case still open, Google faces a serious challenge in Europe, where it risks far-reaching orders demanding it change its business practices and potentially a fine of up to $5 billion.

Leaders of industry groups said that the latest offer by Google should be carefully tested in the marketplace to assure the remedies address complaints that the company favored its own products in search results.

“We must hope after so much prevarication that this time Google’s proposals represent a genuine attempt to address the concerns identified,” said David Wood, the legal counsel for Icomp, an industry group backed by Microsoft and a number of other companies. The previous proposals were, he said, “manifestly defective.”

Article source: http://www.nytimes.com/2013/09/10/technology/google-makes-new-offer-in-european-antitrust-case.html?partner=rss&emc=rss

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Baidu Deal May Reduce App Piracy in China

August 18, 2013 by

Baidu, the leading search engine in China, signed a deal last week to buy an operator of mobile application stores called 91 Wireless for $1.9 billion from an online video game company, NetDragon. The move should help Baidu regain ground against two other Chinese Internet giants, Alibaba and Tencent, which were quicker to add mobile capabilities.

The deal may also advance the fight against digital piracy of mobile apps, which remains widespread in China. In the rest of the world, most mobile applications are distributed through official outlets like Google Play or Apple’s App Store. But in China, dozens of so-called alternative app stores are the dominant distributors. Many of the applications available for download through the alternative stores are unauthorized knockoffs.

Baidu will get two of the alternative stores, HiMarket and 91 Assistant, as part of its deal with 91 Wireless. And analysts say Baidu could be motivated to crack down on unauthorized copies, which would alter the landscape of China’s app market.

“It’s fair to say that it has not been a priority among Chinese app stores to police the content,” said Carl-Johan Skoeld, director of Stenvall Skoeld Company, a consulting firm in Shanghai that works with app developers.

Two years ago, Baidu reached a landmark agreement with major record companies to distribute licensed online music after it had been labeled a conduit for piracy by the Office of the United States Trade Representative. In addition, Baidu’s stock is listed on the Nasdaq, potentially exposing the company to litigation from software developers whose applications had been copied and offered through 91 Wireless, legal experts said.

“It’s unlikely that app stores would be protected by safe harbor,” a provision of Chinese law that gives Internet companies legal protection, in certain cases, if they act to take down pirated material, said You Yunting, an intellectual property lawyer at DeBund Law Offices in Shanghai.

“If I were Baidu, I would put aside 10 to 30 percent of the purchase price as a copyright infringement fund and pay it out a year or two later, conditional on 91 stopping piracy,” he said.

Baidu and 91 Wireless declined to comment.

Analysts say 91 Wireless has already been more active in fighting piracy than some other app stores in China, taking down infringing applications when notified. But developers complain that they should not be responsible for patrolling the stores for violations; given the number of stores and the frequency of updates, the task is practically impossible.

Alternative app markets have thrived in China in the absence of Google Play, which caters to phones using the company’s Android operating system. More than three-quarters of smartphones in China use Android, but Google, which had a prominent dust-up with Beijing over accusations of censorship and network security, has not introduced a Chinese version of its app store.

Alternatives like Qihoo 360, Wandoujia, 91 Assistant and HiMarket have filled the gap. Many of the Android apps on these sites are legitimate; because there is no Chinese Google Play, the developers instead license their apps to the alternative markets.

But it is another matter for alternative apps compatible with Apple’s iOS operating system. Apple integrates its hardware and software, so iPhones are configured to download applications only from the company’s official app store.

Apple did not introduce a Chinese-language version of the online shop until 2010, and did not permit credit card transactions in the local currency until a year later. As a result, many Chinese iPhone owners decided to “jailbreak” their phones — hacking them to accept applications from outside sources. Most of the apps are unauthorized copies.

Article source: http://www.nytimes.com/2013/08/19/business/global/baidu-deal-may-reduce-app-piracy-in-china.html?partner=rss&emc=rss

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Sony and Viacom Reach Tentative Deal to Stream Cable Channels

August 15, 2013 by

The agreement is believed to be the first of its kind between a major programmer and any of the technology giants that are trying to disrupt traditional modes of TV delivery. If other programmers follow suit, Sony’s as-yet-unnamed service would let paying subscribers receive live cable channels the same way they use on-demand libraries like Netflix or Hulu. Intel and Google are working on similar services, but try to make it more user-friendly, perhaps the way Netflix does with personalization features and a fancy interface.

Most households today have only a few choices for television service: whatever cable company serves their local area, be it Comcast, Time Warner Cable or others, and two satellite providers, DirecTV and Dish Network. In some parts of the country, television through Verizon or ATT is also available. Analysts say cable delivered through the Internet could give households many more choices — if the new services give customers more for their money and if cable incumbents don’t smother the services.

To even have a chance, companies like Sony and Intel need the permission of programmers, and that’s why the Viacom deal is considered a breakthrough. Although Viacom and Sony declined to comment on Thursday, a person directly involved in the negotiations confirmed a Wall Street Journal report about the agreement. The person insisted on anonymity because the companies were not prepared to comment on the record.

Having the news spread was advantageous for Sony, though, because having Viacom on board — even just on a preliminary basis — will most likely help the company complete other carriage deals. The company has also contacted other top programmers, like the Walt Disney Company and Time Warner.

That Viacom — which has more than 20 channels, including big ones like Comedy Central and small ones like Centric — was the first to agree to support Sony’s fledgling service is not necessarily surprising, since the company has a reputation for contentious relationships with cable and satellite companies. Last year, Viacom channels were blacked out in DirecTV households for nine days. Sumner Redstone controls both Viacom and the CBS Corporation, which is blacked out in three million Time Warner Cable households because of a contract dispute.

Time Warner Cable, and to a lesser extent other TV providers, has thrown up roadblocks for new entrants by inserting language into some carriage contracts that discourages programmers from selling its channels to Internet TV services. The existing providers say they just want to ensure that the upstarts don’t get better terms, like broader video-on-demand rights or cheaper rates for channels.

Most likely, Sony will pay higher rates — one of the downsides of being new and untested. Any deals between programmers and the Sonys of the world will keep the TV bundle intact, despite occasional public agitation for an “a la carte” option.

“I don’t think the classic pay TV subscription bundle model of television is going away anytime soon — it’s a pretty compelling and cost-efficient smorgasbord,” particularly for older Americans, said Tim Hanlon, a former media agency executive who now runs the Vertere Group. “But all bets are off with the under-40 set — the growing group of folks who just want their video content when and where they want it, preferably without the messy commitment part,” he added.

Sony is well-positioned to reach younger Americans because its PlayStation video game console is already hooked up to TV sets in tens of millions of homes. The company has said almost nothing about its intentions, but it has been interested in selling a bundle of channels at least since 2011. Its TV service could also be made available in the future via smartphones, tablet computers and other devices.

Sony hopes to start selling the service in the fourth quarter of 2013 or the first quarter of 2014, said a media company executive briefed on the plans for it.

If Sony’s service (or another one like it) gets off the ground, incumbents like Comcast, Time Warner Cable and Verizon are also likely to sell their own versions, furthering this new type of competition. What no one knows — but everyone in the industry wonders — is whether these Internet cable services will steal market share; entice people who do not currently pay for any channel bundle to sign up; or fail to sign up customers at all.

The overall number of American households paying for television has remained remarkably steady in recent years, though there are some slight signs of fraying around the edges. Mr. Hanlon said he sensed that as younger viewers were getting better at “cobbling together their own workarounds to all-or-nothing content packages,” the “smart programmers are starting to carefully position themselves to take advantage, just in case the classic carriage model starts to break.”

Of course, all of the alternatives being dreamed up in Silicon Valley and elsewhere are B.Y.O.B. — Bring Your Own Broadband. Video is data-intensive, and data caps or stiffer monthly charges for broadband imposed by companies like Comcast could inhibit the establishment of virtual cable services. In a recent interview, the departing Time Warner Cable chief Glenn Britt acknowledged as much when he was asked about Intel’s interest in TV.

“The reality is, if everybody watched TV over the Internet, and we were out of the TV business, then we would have to recover more money from the Internet service,” Mr. Britt said.

Article source: http://www.nytimes.com/2013/08/16/business/media/sony-and-viacom-reach-tentative-internet-tv-deal.html?partner=rss&emc=rss

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In Germany, Union Culture Clashes With Amazon’s Labor Practices

August 4, 2013 by

But across the Atlantic — nein, non, no.

Even as President Obama spoke about middle-class jobs last week at an Amazon warehouse in Tennessee, Amazon was facing strikes at warehouses in Germany, its second-biggest market. Unions there say the company has imported American-style business practices — in particular, an antipathy to organized labor — that stand at odds with European norms.

“In Germany, the idea that warehouse workers are going to be getting opposition from an employer when it comes to the right to organize, that’s virtually unheard-of,” said Marcus Courtney, a technology and communications department head at Uni Global Union, a federation of trade unions based in Nyon, Switzerland. “It puts Amazon out in left field.”

Amazon is hardly out there alone, however. Large American technology companies are increasingly running into obstacles as they expand in Europe. For Facebook and Google, the running issue is privacy. Google was fined this year by German authorities for illegally collecting personal data while creating its Street View mapping service, after facing minimal sanctions over Street View at home. Meanwhile, European privacy regulators are considering tough regulations to protect consumers on the Internet, a direct challenge to Google, Facebook and other online companies that mine personal data.

Antitrust officials in Europe are scrutinizing Apple’s relationships with wireless carriers, as well as Google’s competitive practices. And Google, Apple and Amazon have all been criticized by European lawmakers for tactics that help them minimize their tax bills.

Amazon has been criticized for its working conditions in the United States — but not nearly to the same extent as in Europe. On the surface, Amazon’s labor problems in Germany revolve around wages.

The union says workers in warehouses in two small German cities are properly classified as retail employees, and should be paid at the higher rate required for people who work in department stores and other retail outlets. Amazon says they are more properly classified as warehouse workers, and paid at a lower rate.

The subtext, though, is Amazon’s opposition to unions in its warehouses as a general principle, because the company fears unions will slow down the kind of behind-the-scenes innovation that has propelled its growth.

Dave Clark, the company’s vice president of worldwide operations and customer service, says Amazon views unions as intermediaries that will want to have a say on everything from employee scheduling to changes in processes for handling and packaging orders. Amazon prizes its ability to quickly introduce changes like these into its warehouses to improve the experience of its customers, he said.

Last year, the company spent $775 million to buy a manufacturer of robots that it plans to eventually deploy in its warehouses, though it has not said when they would come to Germany. The last thing it wants is to have to get approval from unions for such changes.

“This really isn’t about higher wages,” Mr. Clark said. “It isn’t a cost question for us. It’s about what our relationship is with our people.”

“We’re still a developing industry,” he added — despite the fact that Amazon posted revenue of $15.7 billion in the last quarter and the company is enjoying a buoyant stock price.

In the United States, Amazon successfully thwarted efforts to unionize. Over a decade ago, Mr. Courtney of Uni Global led an unsuccessful effort in the company’s home state of Washington to organize Amazon’s customer service representatives.

Two years ago, an investigative article by The Morning Call newspaper in Pennsylvania’s Lehigh Valley chronicled poor working conditions in an Amazon warehouse in the state, including instances where it stationed paramedics outside to take heat-stressed workers to the emergency room. Amazon says it has addressed the problem by installing air-conditioning in all of its facilities.

More recently, a firm that provides temporary employees for Amazon warehouses is defending itself in a class-action suit that claims the firm shortchanged workers on pay as they waited in security lines to exit warehouses.

Jonathan Barnes, a spokesman for the staffing firm named in the suit, Integrity Staffing Solutions, declined to comment.

But it is a different story in Germany, where the powerful labor movement behind the Amazon strikes traces its roots back more than two centuries.

Mr. Courtney, the Swiss-based head of the federation of trade unions, said other American tech giants, including I.B.M. and Hewlett-Packard, have been more tolerant than Amazon of unions in their European operations.

And the strikes in Germany raise especially knotty problems for the company, which has ambitious expansion plans there.

Article source: http://www.nytimes.com/2013/08/05/business/workers-of-amazon-divergent.html?partner=rss&emc=rss

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Chipping Away at the Smartphone Leaders

July 26, 2013 by Leave a Comment

For several years, these two companies have dominated the mobile phone-making business, successively one-upping each other with ever sleeker, more technologically sophisticated iPhones and Galaxy handsets that left would-be rivals grasping. But now the competition is stirring, and consumers are giving another look to brands they once ignored.

Those challenges were evident in the latest earnings report from Samsung on Friday, when the company said it expected competition in the smartphone business to stiffen in the third quarter, with new models pending from LG and other rivals.

Already, the combined share of the worldwide smartphone market controlled by Apple and Samsung Electronics slipped to 43 percent in the second quarter from 49 percent a year earlier, IDC, a research firm, reported Friday.

Some of the companies that are chipping away at the leaders are familiar names attempting comebacks, like Sony, Nokia and HTC. Others are relative newcomers like LG, Lenovo, ZTE and Huawei.

“The story is no longer Apple versus Samsung,” said Bryan Wang, an analyst at Forrester Research. “Going forward, they will both face similar challenges.”

Analysts say buyers are more willing to look at alternatives to Apple or Samsung because the differences among smartphones are becoming less pronounced.

The proportion of phones running Google’s Android operating system keeps growing and technical specifications are converging. Like Samsung’s Galaxy S4, for example, a number of other phones, including Sony’s Xperia Z, also include high-definition, 5-inch screens.

That makes price, where LG and the Chinese smartphone makers have an edge, an increasingly important selling point.

Samsung remains a powerhouse, reporting big gains Friday in sales and earnings for its latest quarter. Net income rose 50 percent, to 7.77 trillion won, or $6.9 billion, from 5.19 trillion won a year earlier. Revenue rose to 57.46 trillion won from 47.6 trillion won. On Tuesday, Apple likewise posted quarterly net income of $6.9 billion, while revenue was roughly flat at $35.3 billion.

Strategy Analytics, a research firm, said Friday that Samsung had passed Apple for the first time to become the world’s most profitable maker of mobile handsets. Samsung, which does not break out results for its handset-making business, generated $5.2 billion in quarterly operating profit from the unit, Strategy Analytics estimated, compared with $4.6 billion for Apple.

Samsung had previously pulled ahead of Apple in market share, and its gains continued in the second quarter, when it controlled 30.4 percent of global smartphone shipments, compared with 13.1 percent for Apple, according to IDC.

But Samsung also showed signs of having to work harder to achieve those gains. Big-ticket promotional events like an introductory gala for its flagship model, the Galaxy S4, at Radio City Music Hall have driven up marketing costs. And while the S4 has been selling at a brisk pace, it has fallen short of some analysts’ expectations. “The strong growth streak for the smartphone market is expected to continue in the third quarter, albeit at a slower pace,” Samsung said in a statement.

Like Samsung, Apple sold more phones in its latest quarter — 31.2 million, up from 26 million a year earlier. But investors had grown accustomed to bigger gains, and the share prices of both companies have taken a beating this year.

“In a way, Apple and Samsung have become victims of their own success,” said Pete Cunningham, an analyst at the research firm Canalys. “When these companies report many billions of profits every quarter, it’s hard to say they are doing anything wrong.”

Together, Samsung and Apple still collect more than 90 percent of the profit in smartphones, analysts say. Yet that success has also emboldened more and more companies to try to challenge them.

Article source: http://www.nytimes.com/2013/07/27/business/global/chipping-away-at-the-smartphone-leaders.html?partner=rss&emc=rss

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N.S.A. Leaks Revive Push in Russia to Control Net

July 14, 2013 by Leave a Comment

But now the Russians are using his very presence here — on Friday Mr. Snowden said he intended to remain in Russia for some time while seeking asylum elsewhere — to push for tighter controls over the Internet.

Two members of Russia’s Parliament have cited Mr. Snowden’s leaks about N.S.A. spying as arguments to compel global Internet companies like Google and Microsoft to comply more closely with Russian rules on personal data storage.

These rules, rights groups say, might help safeguard personal data but also would open a back door for Russian law enforcement into services like Gmail.

“We need to quickly put these huge transnational companies like Google, Microsoft and Facebook under national controls,” Ruslan Gattarov, a member of the upper chamber of the Russian Parliament, or Federation Council, said in an interview. “This is the lesson Snowden taught us.”

In the United States, the documents leaked by Mr. Snowden highlighted the increasingly close ties between the N.S.A. and the biggest high-tech companies. His documents revealed how Microsoft, Facebook, Google and other companies have cooperated with the agency.

If anything, requests by law enforcement agencies in Russia, with its long history of people bugging, informing and spying on one another, poses an even more stark quandary for companies like Google and Facebook.

American information technology companies operating in Russia routinely face demands from law enforcement to reveal user data, and have less recourse than in the United States to resist in the courts.

The Russian reaction may surprise Mr. Snowden most of all. In an interview with The Guardian, he said he unveiled details of N.S.A. surveillance because “I don’t want to live in a world where there is no privacy and therefore no room for intellectual exploration and creativity.”

In a series of leaks to The Guardian, The Washington Post and other newspapers, Mr. Snowden provided documents showing the N.S.A. collected logs of Americans’ phone calls and intercepted foreigners’ Internet communications, with help from American companies, through a program called Prism.

The Russians, who with only minimal success, had for years sought to make these companies provide law enforcement access to data within Russia, reacted angrily. Mr. Gattarov formed an ad hoc committee in response to Mr. Snowden’s leaks.

Ostensibly with the goal of safeguarding Russian citizens’ private lives and letters from spying, the committee revived a long-simmering Russian initiative to transfer control of Internet technical standards and domain name assignments from two nongovernmental groups that control them today to an arm of the United Nations, the International Telecommunications Union.

The committee also recommended that Russia require foreign companies to comply with its law on personal data, which can require using encryption programs that are licensed by the Federal Security Service, the successor agency to the K.G.B.

Sergei Zheleznyak, a deputy speaker of the Russian Parliament in President Vladimir V. Putin’s United Russia party, has suggested legislation requiring e-mail and social networking companies retain the data of Russian clients on servers inside Russia, where they would be subject to domestic law enforcement search warrants.

The Russian Senate is also proposing the creation of a United Nations agency to monitor collection and use of personal data, akin to the International Atomic Energy Agency, which oversees nuclear materials, to keep tabs on firms like Facebook and Google that harvest personal data.

Many independent advocates for Internet freedom have for years, however, characterized the Russian policy proposals as deeply worrying, for their potential to hamper free communication across borders and expose political dissidents inside authoritarian states to persecution.

Article source: http://www.nytimes.com/2013/07/15/business/global/nsa-leaks-stir-plans-in-russia-to-control-net.html?partner=rss&emc=rss

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Disruptions: How Driverless Cars Could Reshape Cities

July 8, 2013 by Leave a Comment

A self-driving car at Carnegie Mellon. Researchers have been contemplating how cities could change if our cars start driving for us, including having narrower streets because parking spots might not be necessary.Jeff Swensen for The New York Times A self-driving car at Carnegie Mellon. Researchers have been contemplating how cities could change if our cars start driving for us, including having narrower streets because parking spots might not be necessary.

SAN FRANCISCO — By now, seeing one of Google’s experimental, driverless cars zipping down Silicon Valley’s Highway 101, or parking itself on a San Francisco street, is not all that unusual. Indeed, as automakers like Audi, Toyota and Mercedes-Benz make plans for self-driving vehicles, it is only a matter of time before such cars become a big part of the great American traffic jam.

While driverless cars might still seem like science fiction outside the Valley, the people working and thinking about these technologies are starting to ask what these autos could mean for the city of the future. The short answer is “a lot.”

Imagine a city where you don’t drive in loops looking for a parking spot because your car drops you off and scoots off to some location to wait, sort of like taxi holding pens at airports. Or maybe it is picked up by a robotic minder and carted off with other vehicles, like a row of shopping carts.

Inner-city parking lots could become parks. Traffic lights could be less common because hidden sensors in cars and streets coordinate traffic. And, yes, parking tickets could become a rarity since cars would be smart enough to know where they are not supposed to be.

As scientists and car companies forge ahead — many expect self-driving cars to become commonplace in the next decade — researchers, city planners and engineers are contemplating how city spaces could change if our cars start doing the driving for us. There are risks, of course: People might be more open to a longer daily commute, leading to even more urban sprawl.

That city of the future could have narrower streets because parking spots would no longer be necessary. And the air would be cleaner because people would drive less. According to the National Highway Traffic Safety Administration, 30 percent of driving in business districts is spent in a hunt for a parking spot, and the agency estimates that almost one billion miles of driving is wasted that way every year.

“What automation is going to allow is repurposing, both of spaces in cities, and of the car itself,” said Ryan Calo, an assistant professor at the University of Washington School of Law, who specializes in robotics and drones.

Harvard University researchers note that as much as one-third of the land in some cities is devoted to parking spots. Some city planners expect that the cost of homes will fall as more space will become available in cities. If parking on city streets is reduced and other vehicles on roadways become smaller, homes and offices will take up that space. Today’s big-box stores and shopping malls require immense areas for parking, but without those needs, they could move further into cities.

The Autonomous Intersection Management project, created by the Artificial Intelligence Laboratory at the University of Texas at Austin, imagines cities where traffic lights no longer exist but sensors direct the flow of traffic. Although a video showing off the automated traffic intersection looks like total chaos, the researchers insist that such intersections will reduce congestion and fuel costs and can allow cars to drive through cities without stopping.

Of course, getting to a utopian city will take a little longer than circling the block looking for a spot. A spokesman for Audi said a fully automated car would not be available until the end of the decade. And the regulatory issues to be addressed before much of this could come true are, to put it mildly, forbidding.

But the pieces are starting to fall into place, at least enough to excite future-minded thinkers. Last year, Jerry Brown, the governor of California, signed legislation paving the way for driverless cars in California, making it the third state to explicitly allow the cars on the road. And federal agencies are starting to consider their impact. In May the Transportation Department made its first formal policy statement on autonomous vehicles, encouraging cities to allow testing of driverless cars.

But to some, this promise — or overpromise as the case may be — sounds familiar.

“The future city is not going to be a congestion-free environment. That same prediction was made that cars would free cities from the congestion of horses on the street,” said Bryant Walker Smith, a fellow at the Center for Internet and Society at Stanford Law School and a member of the Center for Automotive Research at Stanford. “You have to build the sewer system to accommodate the breaks during the Super Bowl; it won’t be as pretty as we’re envisioning.”

Mr. Smith has an alternative vision of the impact of automated cars, which he believes are inevitable. Never mind that nice city center. He says that driverless cars will allow people to live farther from their offices and that the car could become an extension of home.

“I could sleep in my driverless car, or have an exercise bike in the back of the car to work out on the way to work,” he said. “My time spent in my car will essentially be very different.”

“Driverless cars won’t appear in a vacuum,” Mr. Smith said. Other predictions for the future city imagine fewer traditional-looking cars. Taking their place will be drones and robots that deliver goods.

Oh, and that food-delivery car double-parked outside? That, Mr. Calo said, will be replaced by a delivery drone.

E-mail: bilton@nytimes.com

A version of this article appeared in print on 07/08/2013, on page B5 of the NewYork edition with the headline: How Driverless Cars Could Reshape Cities.

Article source: http://bits.blogs.nytimes.com/2013/07/07/disruptions-how-driverless-cars-could-reshape-cities/?partner=rss&emc=rss

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