March 31, 2023

Microsoft Raises Dividend and Announces New Share Buyback

The 5-cent increase in the dividend, worth about $400 million a quarter, is about 3 cents per share more than many analysts had expected. Microsoft shares rose about 1 percent on the Nasdaq.

The company also announced a share repurchase program of up to $40 billion, which has no expiration date, to replace a $40 billion program set to expire on September 30.

“We view this as a further indication that things are changing at Microsoft with respect to corporate governance that we believe could benefit shareholders over the next six to 12 months,” Nomura Securities analyst Rick Sherlund said in a note.

A hotly anticipated investor meeting on Thursday will give Microsoft shareholders their first chance to press management on its plans to replace Chief Executive Steve Ballmer, who last month announced plans to retire within a year.

Ballmer made the announcement just weeks after he unveiled a ‘One Microsoft’ grand plan for the company to focus on hardware and cloud-based services.

But poor sales of the new Surface tablet, on top of Microsoft’s years-long failure to make money out of online search or smartphones, have cast doubt on the plan.

This month, Microsoft announced it would buy Nokia’s phone business and license its patents for 5.44 billion euros ($7.2 billion), a foray into mobile devices that brings potential CEO Stephen Elop back into the fold.

For years, investors have called on Microsoft to return cash to shareholders rather than invest in peripheral projects and limit its focus to the vastly profitable Windows, Office and server products.

Activist investor ValueAct Capital Management LP, whose recent lobbying of the company may have played a role in Ballmer’s decision to retire earlier than he planned, is thought to favor such an approach.

In the last two years alone, Microsoft has lost almost $3 billion on its Bing search engine and other Internet projects, not counting a $6 billion write-off for its failed purchase of online advertising agency aQuantive.

Some analysts said the increase in the dividend, payable on December 12 to shareholders of record on November 21, was more than they had expected.

“Most people were expecting a little less, so this was a pleasant surprise,” Morningstar Inc analyst Norman Young said.

Microsoft shares were up 0.9 percent at $33.10 in midday trading.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty and Robin Paxton)

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Weak PC Market Catches Up to Microsoft

On Thursday, the company missed Wall Street forecasts, blaming the declining PC market for the shortfall. Microsoft also acknowledged the disappointing sales of one of its most prominent products, its Surface RT tablet computer, by taking a $900 million charge to reflect unsold inventory of the device.

“It finally caught up to them,” said Colin W. Gillis, an analyst at BGC Partners. “We’ve been in a PC recession for five quarters.”

For the fiscal fourth quarter that ended June 30, Microsoft, which is based in Redmond, Wash., reported net income of $4.97 billion, or 59 cents a share, in contrast to a loss of $492 million, or 6 cents a share, in the period a year earlier. Last year, Microsoft took a $6 billion write-down on a soured acquisition, wiping out its overall profit.

In the latest quarter, revenue rose 10 percent, to $19.9 billion, from $18.06 billion a year earlier.

Those results fell well short of the average analyst estimates compiled by Thomson Reuters of 75 cents a share in earnings and $20.73 billion in revenue.

Revenue from Microsoft’s Windows business, which includes its Surface tablet computers, rose 6 percent, to $4.41 billion. But without including the favorable impact from an upgrade offer last year, Microsoft’s Windows revenue fell 6 percent in the quarter.

Last week, the research firm Gartner reported that global PC shipments declined 10.9 percent in the second quarter of the year, the fifth consecutive quarter of declining PC shipments, the longest ever.

Mobile devices have sapped much of the gusto out of the PC market. Many people are buying tablet computers, especially Apple’s iPad, instead of PCs to watch movies, surf the Web and write e-mails.

“We know we have to do better, particularly on mobile devices,” Amy Hood, Microsoft’s chief financial officer, said in an interview.

Ms. Hood said the company’s Windows business is a “tale of two markets,” one in which PC sales to businesses continue to grow modestly, while consumer demand for the machines is fizzling. She estimated that total industry PC shipments to the consumer market fell more than 20 percent during the quarter.

She said that a companywide reorganization that Microsoft announced last week was part of an effort to better position the business for big changes in technology, including the shift to mobile devices.

Until its most recent quarter, Microsoft showed a remarkable aptitude for finding ways to squeeze money out of its venerable business, despite the problems in the PC market. It did that through lucrative multiyear software contracts with corporate customers that tend to move far more slowly than consumers in adopting newer technologies.

Parts of Microsoft that cater more to businesses helped lessen the sting. Microsoft said revenue in its server and tools group rose 9 percent, to $5.5 billion. Revenue in its business division, dominated by the Office suite of applications, jumped 14 percent, to $7.21 billion. But the division grew only 2 percent without deferred revenue related to an earlier upgrade offer.

Office is under siege from a suite of online applications from Google and others, which has led Microsoft to adapt the software so it can be delivered as a service through cloud computing. Microsoft said that if Office 365, the version of its productivity applications that are offered as a service, were to perform for a full year at current levels, it would generate $1.5 billion in revenue.

“The consumer has voted,” said Barbara Coffey, an analyst at SP Capital IQ. “I don’t know that enterprise has yet. We’ve seen such a big shift to tablets. Microsoft just doesn’t play in tablets at the same level that they do in PCs.”

Investors had become more bullish on Microsoft’s ability to navigate the disruption of the PC market, sending its shares up more than 32 percent this year. But after the release of its financial results, shares of Microsoft dropped more than 6 percent in after-hours trading. They ended regular trading at $35.44, down 30 cents.

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New Pay Model for Times Apps

On June 27, the company will start charging nonsubscribers who want to read more than three articles a day on The New York Times apps for mobile devices. Until now, readers using the apps were able to access 10 to 15 stories a day exclusively from its Top News section without paying for content. Subscribers are able to access articles, blog posts, videos and slide shows from all sections of The Times.

After readers click through three articles, nonsubscribers will be able to browse section fronts and get article summaries. But they will have to become subscribers to read more than three articles. Web subscriptions that include mobile apps range from $15 to $35 every four weeks.

To encourage more readers to pay for the app, the company said it is also introducing a seven-day free trial.

Denise F. Warren, an executive vice president of the company, said that The Times had been planning for a long time to charge for content on its apps because readers had access to so many more articles there than they did on the Web site.

“We always knew there was an imbalance,” said Ms. Warren in an interview. “We wanted to restore that balance between the Web site and the apps.”

Since April 2011, when the company introduced a metered pay model on its Web site, The Times and The International Herald Tribune have attracted 676,000 paid digital subscribers. On the Web site, nonsubscribers can access 10 free articles a month.

This article has been revised to reflect the following correction:

Correction: June 20, 2013

An earlier version of this article gave an incorrect price range for Web subscriptions to The New York Times. The range is $15 to $35 every four weeks, not $15 to $20.

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Campaign Spotlight: ‘How’ Now, Time Warner Cable Media?

Time Warner Cable, the nation’s No. 2 cable provider behind Comcast, plans to begin on Monday a campaign to raise the awareness of its Time Warner Cable Media division, which sells video and digital ads on cable systems, channels like NY1 and Web sites like and RoadRunner. The campaign, which is being created internally, carries the theme “That’s how.”

In adopting a two-word theme, Time Warner Cable Media is echoing a similarly pithy theme, “Enjoy better,” that was introduced early last year as part of an image campaign for the Time Warner Cable brand. Unlike the “That’s how” campaign, the “Enjoy better” campaign is created by an outside advertising agency, Ogilvy Mather Worldwide, part of WPP.

The new campaign for Time Warner Cable Media will appear in the 52 markets around the country where Time Warner Cable operates, including major cities like Dallas, Los Angeles and New York. The campaign will take advantage of ad inventory on Time Warner Cable’s own properties, meaning the ads will be what are called house ads.

That is also different from the “Enjoy better” campaign, which runs in media that are not part of Time Warner Cable in addition to appearing as house ads.

The “That’s how” campaign is scheduled to run initially for six weeks. The campaign is valued at $3 million during that time, a figure that estimates how much the house ads would be worth if they were being sold to paying advertisers.

While Time Warner Cable is known for its cable systems, the campaign is also meant to play up the abilities of Time Warner Cable Media to offer advertisers “multiscreen solutions” that go beyond television into realms like smartphones and mobile devices, says Joan Hogan Gillman, executive vice president of Time Warner Cable and president of Time Warner Cable Media.

“We’ve taken the last three to four years to become more data-driven to better service clients,” she adds.

Campaigns that lay out to prospective advertisers reasons to advertise seem self-referential or a kind of meta-marketing. But unlike a creative trend called advertising about advertising, which seeks to entertain consumers by acknowledging its purpose with a smile and a wink, advertising that promotes advertising is typically serious.

That is true of the “That’s how” campaign, which eschews the humorous vein of the “Enjoy better” campaign for a prosaic approach. Also missing are the celebrities and sports stars who promote buying cable television, Internet, phone and other services from Time Warner Cable in the “Enjoy better” ads.

The “That’s how” ads are “speaking to a very different audience,” Ms. Gillman says, in that they are aimed at “owners of local businesses, marketers and agencies.”

“They talk about finding the right solutions in a very complicated world” of advertising and media, she adds, “which is a very different message from connectivity and connecting people to entertainment” that is conveyed in the “Enjoy better” ads.

In one “That’s how” commercial, as animated figures appear on screen, an announcer asks, “How can your business grow?”

“Not just to the size you know is doable,” he continues, “but the size you dreamt of when your business was just a doodle.” At that point a cartoon napkin appears on screen with writing scribbled on it.

“The Time Warner Cable Media team can show you how,” the announcer says. “We’ll show you how the consumers you need to target are more passionate and engaged with cable’s premier programming.”

“In fact,” he adds, “they’re spending 65 percent more time watching cable than local broadcast.”

Such statistics also appear on screen as the announcer speaks, among them that “88 percent of live sports programming is on cable” and people are “20 percent more likely to purchase brands that advertise on cable.” (The sources of the statistics are research reports and surveys.)

“So how will your business grow?” the announcer concludes. “Time Warner Cable Media. That’s how.”

In a second commercial, animated figures again appear on screen along with similar statistics about the power of cable television.

“How can your company prevail?” the announcer asks, when “competition is relentless and every second a new rival seems to come out of nowhere.”

“The Time Warner Cable Media team can show you how,” he continues. “You need a partner who can target your message to the right consumers in the most-watched programming and across every screen.”

This commercial also takes a jab at local broadcast television as the announcer says that it “can only offer shrinking audiences.”

“So how will your company prevail?” the announcer concludes. “Time Warner Cable Media. That’s how.”

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Intel Names Brian Krzanich as Chief Executive

Mr. Krzanich, who is 52 and currently serves as chief operating officer, will take over on May 16. He will be Intel’s sixth chief executive, succeeding Paul S. Otellini, who unexpectedly announced his resignation in November.

Of the four insiders who were considered likely candidates for the job, Mr. Krzanich is the longest-serving and has a strong background in the production of chips. He joined Intel in 1982, the year the first “luggable computer” — weighing more than 15 pounds — was introduced.

Nonetheless, he is likely to lead Intel through a period of significant transition. Personal computers, for which Intel supplies some of the most profitable parts, are losing popularity to mobile devices like tablets and smartphones. In a report last month, researchers at IDC said worldwide PC sales fell 13.9 percent in the first quarter from the period a year earlier.

The choice of Mr. Krzanich may indicate that Intel is looking more closely at turning over some of its production facilities to other semiconductor makers. Intel is known for having some of the most cutting-edge chip technology, but has been reluctant to share it with others. Changing market tastes, however, give Intel extra capacity at times, and working with other chip makers could add to its profits.

Intel also named Renee J. James as its president. Ms. James, 48, who was also considered a candidate for chief executive, runs Intel’s software division, which focuses on making Intel chips run better with other commercial software, like Oracle databases. She also served as chief of staff to Andrew S. Grove, who lead Intel through its greatest period of growth.

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Bits Blog: Facebook Seeks to Be Mobile ‘Home’ of Android Users

Mark Zuckerberg on Thursday.Jim Wilson/The New York Times Mark Zuckerberg on Thursday.

2:58 p.m. | Updated Added more details and analysis.

MENLO PARK, Calif. — Mark Zuckerberg, the co-founder and chief executive of Facebook, announced on Thursday that the company had developed new software, called Home, to showcase the social network on mobile devices using Google’s Android operating system.

“Today our phones are designed around apps, not people,” Mr. Zuckerberg said at a news conference at Facebook’s headquarters. “We want to flip that around.”

Home converts the Facebook news feed into the home screen on the user’s phone. Pictures take up most of the real estate, with each news feed entry scrolling by like a slide show. Messages and notifications pop up over the home page. To “like” something on the news feed requires no more than a double-tap. Facebook apps are in easy reach.

The company will not show ads immediately on the phone home screen, which Facebook is calling the Cover Feed, but it is very likely to do so in the future.

The first phone with the new package installed will be made by HTC and will be sold in the United States with ATT service for about $100, starting April 12. Users of some other HTC and Samsung Android phones will also be able to download the software starting on that day, with Facebook planning to roll it out more broadly to other Android devices in the coming months.

It will be available in Europe soon with Orange as the carrier, Mr. Zuckerberg said. He stressed that he wanted the new product to enable a mass, global audience to connect to Facebook, especially those who have yet to go on the Internet. “We want to build something that’s accessible to everyone,” he said.

The new product is also intended to prompt Facebook users to return to their news feeds even more frequently than they do now. Every time they glance at their phones, at the supermarket checkout line or on the subway to work, they will effectively look at their Facebook pages.

“It’s going to convert idle moments to Facebook moments,” said Chris Silva, a mobile industry analyst with the Altimeter Group. “I’m ‘liking’ things, I’m messaging people, and when ads roll out, I’m interacting with them and letting Facebook monetize me as a user.”

Mr. Silva added that the no-frills Samsung and HTC phones that will support the new interface suggest that Facebook wants to target consumers who have yet to buy an Internet-enabled phone, both in the United States and abroad. After the United States, the largest blocs of Facebook users live in emerging markets like Brazil and India, and their numbers are growing much faster there than in Facebook’s home market.

But getting millions of less-affluent global users glued to Facebook will not be easy. The service will rack up huge data charges for users, unless Facebook manages to negotiate affordable packages with carrier companies.

It is also unclear whether anyone, including the phone carriers, will be enthusiastic about the device.

Jan Dawson, a telecommunications analyst at Ovum, said that the iPhone and many Android smartphones already do a good job of including Facebook. And he said phone carriers are unlikely to give an HTC-made Facebook phone much support because HTC’s past attempt at a Facebook phone — the ChaCha, which had a physical button for posting photos on Facebook — sold poorly.

“HTC may be desperate enough to do this, but carriers aren’t likely to promote it heavily,” Mr. Dawson said. “As a gimmick, it may bring customers into stores, but they’ll mostly end up buying something else.”

At Facebook headquarters Thursday, HTC’s chief executive, Peter Chou, showed off a model of his new Facebook phone, called HTC First, in lipstick red. “HTC First is the ultimate social phone,” he said. “It combines the new Facebook Home and great HTC design.”

The new interface places a heavy emphasis on photos, much like the recent changes made to Facebook’s news feed feature on the Web.

“We think this is the best version of Facebook there is,” Mr. Zuckerberg said.

Brian X. Chen contributed reporting.

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Facebook Is Expected to Introduce Its Phone

But it needs to find a way to play a bigger role in delivering what consumers want from their phones: ways to communicate, find answers to questions, shop and be entertained. The company would especially like to become that workhorse for the vast majority of its users who live outside the United States and from whom, so far, it barely profits.

The company will make its biggest leap yet in that direction Thursday, when it is expected to introduce a moderately priced phone, made by HTC, powered by Google’s Android operating system, and tweaked to showcase Facebook and its apps on the home screen.

The Facebook phone adheres to two crucial product announcements in the last three months: A new search tool that encourages users to use their Facebook friend network to seek out everything from restaurants to running trails, and a news feed remade for mobile devices.

The details of the would-be Facebook-centric phone are under wraps. But the motivation is certain.

“Facebook would like to be, literally and figuratively, as close to its users as its users are to their phones, within arm’s reach when they are searching for information, news, time wasting, shopping, communication,” said Rebecca Lieb, an analyst with the Altimeter Group.

That can be especially attractive if the new phone is affordable to emerging market users: Brazil and India are home to the largest blocs of Facebook users after the United States, and their numbers are growing swiftly as smartphone penetration increases in those countries. Many Indian cellphone makers, for that reason, have Facebook already installed on their home pages.

But Facebook makes little money by advertising to those international users.

By partnering with HTC, a phone maker based in Taiwan, the social network is signaling that it is “making an international push,” says Michael Pachter, an analyst with Wedbush Securities.

“The more people you get to use it on phones, the more ads you can deliver,” Mr. Pachter said.

Facebook made a little more than $4 a user in North America and $1.71 in Europe, but barely more than 50 cents in the rest of the world, including large markets like Brazil and India.

Ads are its principal moneymaker, and Facebook is under intense pressure to show Wall Street that it can make more money, and fast. Its stock market value is still far below its initial public offering price, and many analysts blame the company’s belated push into mobile devices.

Mr. Zuckerberg announced last year that Facebook was retooling itself as a mobile-first company. He has consistently said that it is not in the company’s interest to manufacture a phone.

“It’s not the right strategy for us,” he told market analysts in an earnings call in January. He wanted rather to see Facebook integrated into every device that its billion users hold in their hands.

Two-thirds of Facebook’s roughly one billion users worldwide log in to the social network on mobile devices.

A study commissioned by Facebook and carried out by the research firm IDC found that those users checked their Facebook pages an average of 14 times a day; in short, users checked in two-minute bursts adding up to about half an hour each day. Mostly, the users check their news feed.

The new Facebook-optimized phone will use a modified version of the Android software, The New York Times reported last week. When turned on, it will display the Facebook news feed.

Facebook already functions much like a phone, allowing users to chat, send group messages and even, in one experiment with users in Canada, to make free phone calls over the Internet. Its platform hosts a variety of applications that deliver things like music and news, and its newsfeed has been tweaked to showcase photos, which is what Facebook users post by the millions everyday.

There are fledgling experiments with commerce. Facebook users can buy online and offline gifts on Facebook with their credit cards. Equally important, Facebook’s insistence on real names means that Facebook can be something like an identity verification service. It is well-positioned to be a kind of mobile wallet, containing the equivalent of an identity card and seamless way to buy things.

“They want to have all the services that consumers want to use in the mobile world,” said Karsten Weide, an analyst with IDC. “They want to be the major consumer Internet platform.”

The Thursday announcement, which Facebook has described as an opportunity to “come see our new home on Android,” illustrates a fundamental problem for the company. Facebook must accommodate itself to mobile operating systems controlled by Internet rivals, Apple and Google.

Mr. Weide described them as “frenemies, mutually dependent but competing.”

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Tepid Sales of Microsoft’s Windows 8 Point to Shaky Market

Not this time. Windows 8, the latest edition of Microsoft’s software, failed to pack shoppers into a Microsoft store in a mall here last week, at a time when parking lots in the area were overflowing. The trickle of shopping bags leaving the store with merchandise was nothing like the steady stream at a bustling Apple store upstairs.

Claude Ballard was among the customers at the Microsoft store who tried out Surface, a new Microsoft-designed Windows tablet. Mr. Ballard, who described himself as a “semiretired” computer systems manager for a real estate firm, said he was intrigued by the eye-catching design of Windows 8 — but not enough to scrimp to buy a new computer this year.

“It’s economics, really,” he said. “It’s going to be a better year for my mechanic than it is for me.”

Weak PC sales this holiday season suggest that the struggles of Microsoft and other companies that depend heavily on the computer business will not abate soon. Plenty of consumers already own PCs and seem content to make do with what they have, especially in a shaky economy in which less expensive mobile devices are bidding for a share of their wallets.

While there are also many tablets running Microsoft’s new, touch-friendly Windows, they have so far failed to emerge from the shadow of competing products from Apple and Amazon and other devices that are being snapped up by holiday shoppers.

Emmanuel Fromont, president of the Americas division of Acer, the world’s No. 4 PC maker, said sales of the company’s Windows 8 PCs had been lower than expected. He said one factor was the system’s unfamiliar design, which appeared to be making consumers cautious.

“There was not a huge spark in the market,” Mr. Fromont said. “It’s a slow start, there’s no question.”

The clearest evidence of Windows 8’s disappointing introduction comes from the research firm NPD, which estimates that sales of Windows machines have actually dropped from a year ago.

According to NPD, stores in the United States sold 13 percent fewer Windows devices from late October, when Windows 8 made its debut, through the first week in December, than in the same period last year.

Those figures do not include sales in Microsoft’s own stores, which were the only place to buy a Surface tablet during that period, but because the stores are scarce, analysts believe it is unlikely they made a big difference.

“I think everybody would have hoped for a better start,” said Stephen Baker, an analyst at NPD. “The thing is, this market is not the same market that Windows 7 or Vista or even XP launched into.”

Those earlier versions of Windows all came out during periods when the PC’s status as the center of computing seemed far more secure. In the intervening years, smartphones and tablets have become much more serious rivals for a share of consumer spending on technology. Sales of PCs have been declining for much of the year.

While most people are not getting rid of their PCs altogether in favor of mobile devices, analysts believe they are postponing purchases of new ones.

“What you’re seeing is not a retirement of PCs, but a push-out in the replacement cycle,” said A. M. Sacconaghi, an analyst at Sanford C. Bernstein. “If people used to buy PCs every four years and are now buying them every five years, that could lower PC sales by 20 percent over time. That’s substantial.”

Mr. Sacconaghi predicted that global PC shipments would be down 3 percent in 2012.

The shift in spending to tablets is one reason that Windows 8 is so critical for Microsoft’s future. The company overhauled its operating system with a radically different, tile-based interface that is easier to navigate on touch-screen devices. Microsoft intends the software to be flexible enough that it can still be used on conventional laptops and desktops, including newer models with touch screens.

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Media Decoder Blog: Arbitron Deal Extends Nielsen’s Reach Into Consumer Habits

With its $1.26 billion acquisition of Arbitron, announced on Tuesday, Nielsen is buying much more than the most widely followed radio ratings service. It is also extending its already substantial reach into the overlapping forms of media through which people consume their entertainment and news, and spend their money — information that is essential to advertisers.

Nielsen is best known for its television ratings, but its various branches also track an array of consumer product sales, like books and music, as well as consumers’ habits online and through their mobile devices. Just on Monday, for example, Nielsen announced a new system with Twitter to rank TV shows by their levels of social-media chatter.

Arbitron, meanwhile, has remained primarily focused on radio consumption, which has held surprisingly strong in the Internet age as people stay plugged in to their favorite radio stations, particularly while driving.

According to Arbitron’s most recent statistics, more than 241 million people in the United States, or about 92 percent of the population ages 12 and over, listen to the radio each week. And unlike television, the vast majority of the ads on broadcast radio are for local businesses.

Through the deal with Arbitron, Nielsen should be able to track even more of consumers’ media consumption and buying habits. In a presentation to investors and Wall Street analysts, Nielsen said that by adding Arbitron’s radio data to its portfolio, it would be able to increase the total amount of time in a given day it could track the listening and viewing habits of the average American to seven hours from the current five.

“That is a very big deal when your job is to measure how consumers ultimately form and change behaviors,” David L. Calhoun, Nielsen’s chief executive, said in a conference call. “And it’s that linkage of buy and watch that ultimately allows us to provide those insights.”

In early trading, Arbitron’s shares shot up by nearly 24 percent, reflecting the premium Nielsen will pay for the shares; Nielsen’s stock was up about 1.3 percent. Nielsen is active in more than 100 countries and last year had $5.5 billion in revenue. Arbitron is a much smaller company, but has substantial profit margins; last year it generated $53 million in net income on $422 million in revenue.

As some analysts see it, the challenges for the combined companies will include measuring the growth of online audio and linking Arbitron’s value for local advertising with Nielsen’s more extensive and national data.

For now, Internet radio services like Pandora are not measured by Arbitron in “apples to apples” terms alongside broadcast radio stations, which Pandora has complained puts them at a disadvantage with advertisers and media-buying agencies. But those measurements may become essential as online listening grows and is embraced by even the biggest radio broadcasters, like Clear Channel Communications.

Laura Martin, an entertainment and media analyst with Needham Company, said that Nielsen’s expertise and its aggressive push into online markets could be an advantage in exploiting Arbitron’s local radio data.

“It’s interesting that they will have the management I.Q. of Nielsen in charge of local advertising possibilities,” Ms. Martin said. “The Internet is moving at the speed of light, and the next big promise of advertising cash is sitting in local. In Nielsen’s hands those relationships may turn into something that Arbitron didn’t think of.”

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

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Disruptions: With Apple’s Siri, a Romance Gone Sour

Results from Siri can be less than satisfying.Karen Bleier/Agence France-Presse — Getty ImagesResults from Siri can be less than satisfying.

Late last summer, I was introduced to a new special someone. I wasn’t looking to meet this new muse; it all just kind of happened.

We met at an Apple product announcement in Cupertino, Calif. She was helpful, smart and even funny, cracking sarcastic jokes and making me laugh. What more could a guy ask for?

Since then, we have had some major communication issues. She frequently misunderstands what I’m saying. Sometimes she is just unavailable. Often, she responds with the same, repetitive statement.

Her name is Siri.

At first, Siri, the voice-activated digital assistant on Apple iPhones, seemed a little too good to be true. Siri lured me into a relationship promising to help me set up appointments, to gently wake me in the morning for work, and to give me the ability to text someone while I was driving.

It didn’t work out that way. “There’s something wrong, and I can’t answer your questions right now. Please try again in a little while,” Siri will say when I ask something. Or: “I’m really sorry about this, but I can’t take any requests right now. Please try again in a little while.”

She is always polite. But I’m starting to suspect that “I’m really sorry” is just something Siri says to shut me up.

Apple introduced Siri as a beta test, meaning it was still a work in progress. That was unusual for Apple, but the company was counting on it to change the way people searched for information on mobile devices. It wanted a head start. But it doesn’t seem ready to change anything yet. Many people I have spoken to have switched Siri off and reverted to the iPhone’s voice dictation service (the little microphone next to the keyboard), which is more reliable because it doesn’t use Siri’s artificial intelligence software.

Those who have left it have done that for good reason. Gene Munster, a securities analyst at Piper Jaffray, recently ran a series of tests with Siri and discovered that this is a significant problem for Apple.

Mr. Munster subjected Siri to over 1,600 voice tests, half in a quiet room and half on a busy Minneapolis street. In the quiet room, Siri understood requests 89 percent of the time, but she was able to accurately answer a question only 68 percent of the time. On a busy street, Siri could comprehend what people were saying 83 percent of the time, but answer a question correctly only 62 percent of the time.

It could hear well enough. The problem in his analysis was that the software was not good enough to understand questions. Mr. Munster gave Siri a “grade D” and said it needed to sharply improve in order to be an alternative method of mobile search.

Over time, things have really soured between Siri and me. We barely speak anymore. And, although she doesn’t know this, I’ve started seeing someone else. Her name, although not as mysterious or sexy, is Google Voice Search.

Google Voice Search, available in the latest operating software for Android phones, is a much better listener. It’s definitely smarter. If I ask Google Voice Search a question, like, “Who is Tim Cook?” it responds with an answer. (He’s the chief executive of Apple.) If I ask Siri the same question, the response is: “I don’t see Tim Cook in your contacts.”

Side-by-side comparisons, in videos posted on YouTube, give the upstart from Google the advantage. Apple used Siri as a primary selling point for its new iPhone, and now Apple is losing its advantage. At the D: All Things Digital conference in May, Mr. Cook was asked about Siri’s mistakes. “We have a lot of people working on this,” he told the audience.

“You’ll be really pleased with some of the things that you’ll see over the coming months,” he promised.

Trudy Muller, an Apple spokeswoman, said, “Siri is currently in beta, and we are continuing to improve it.” She also said, “Siri is one of the most popular features of iPhone 4S and customers love it.”

She’s apparently not wrong about that. John Barrett, director of consumer analytics at the Parks Associates research firm, recently surveyed 482 iPhone owners. “Although there were some mild frustrations, most people really like the service,” Mr. Barrett said. Of those surveyed, he said, 55 percent gave Siri a high rating, 21 percent said it was quite satisfactory, and only 10 percent were completely dissatisfied.

The question will be whether those who find Siri frustrating will toss the iPhone aside and embrace Android.

I still find it disappointing, and last week I had what will probably be my last conversation with Siri for a while.

“Siri. I think it’s time for us to take a break,” I told her.

“Hmm … Let me think. … one second,” Siri said in response, adding a few moments later, “I don’t know what you mean by ‘I think it’s time for us to take a break.’ ”

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