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The Media Equation: News Consumption Tilts Toward Niche Sites

September 12, 2011 by Leave a Comment

Apart from the specific business issues feeding those travails — sinking traffic and profits at both — they provided yet another lesson of the Internet age: as news surges on the Web, giant ocean liners like AOL and Yahoo are being outmaneuvered by the speedboats zipping around them, relatively small sites that have passionate audiences and sharply focused information.

AOL’s acquisition of TechCrunch last year for a reported $30 million was an acknowledgement that scale, once the grail of the Web, can be a disadvantage when it comes to attracting the kind of audiences advertisers want. Last year, Yahoo hired writers who had a made a name for themselves at smaller sites — including Mark Lisanti, Courtney Reimer and Will Leitch — for the same reasons. But it is difficult to successfully transplant insurgent energy into a vast conglomerate, because the big blog tends to consume or destroy whatever it is fed.

Like newspapers, portals like AOL and Yahoo are confronting the cold fact that there is less general interest in general interest news. Readers have peeled off into verticals of information — TMZ for gossip, Politico for politics and Deadspin for sports.

Part of the problem is the result of a fundamental shift in Web behavior. Media stalwarts erected a frame around the Web and organized, and sometimes produced, content. Now the frame around content is the Web browser itself, and consumers do their own programming and are more inclined to see news consumption as a kind of voting, selecting smaller brands that reflect their sensibilities.

Watching the throwdown between AOL, a behemoth with a market capitalization of over $1.5 billion, and TechCrunch, a six-year-old Silicon Valley news site started on a shoestring, it was hard to tell which was the more important brand. What works on the Web right now is an identity, one that sparks recognition and in the best case, passion among its employees and consumers. Even though AOL paid a lot of money for TechCrunch, it was clear last week that its audience and its writers believed it belonged to them.

AOL, as a way of buying what they could not grow, aggressively grabbed onto some of the shiniest names on the Web, including The Huffington Post, Engadget and TechCrunch. The jury is out on The Huffington Post, most of the staff of Engadget deserted and TechCrunch is in the middle of an uprising.

Many of the news sites that are now having success on the Web — Business Insider, Gawker and Mashable, to name a few — are built on sensibility, which is generally a product of a small group of like minds. Innovation usually requires the “two pizza rule” — a working group should be no larger than one that could be well fed by two pies — with the emphasis on lightweight hierarchy, rapid decisions and constant reiteration of those decisions as the market responds. When that kind of approach is suddenly plopped into a huge, heaving bureaucracy, everything that made the brand cool in the first place and the site a good place to work seems to evaporate.

There are exceptions. TMZ has thrived as a division of Time Warner, College Humor continues to crack wise as part of IAC/InterActiveCorp and CBS seems to have done well by CNET after acquiring it.

There are some parallels with the television world. Broadcast networks still have mass and reach, but cable has been surging in part because brands come to mean something identifiable and attractive. The name NBC communicates very little other than generic bigness, while right now, FX, HBO, AMC and Showtime each convey a cachet that the big networks lack.

Google might want to pay a bit of attention to this after buying Zagat, the restaurant ratings publisher, last week. While Zagat might fold nicely into its local listings, much of the brand’s value comes from citizen raters who share their opinions. Will they feel the same way when they see their work powering a great big local search engine?

E-mail: carr@nytimes.com;

Twitter.com/carr2n

Article source: http://feeds.nytimes.com/click.phdo?i=2c16a7eedf65ff414962e0d9b02c4ca8

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Technology in Schools Faces Questions on Value

September 4, 2011 by Leave a Comment

In this technology-centric classroom, students are bent over laptops, some blogging or building Facebook pages from the perspective of Shakespeare’s characters. One student compiles a song list from the Internet, picking a tune by the rapper Kanye West to express the emotions of Shakespeare’s lovelorn Silvius.

The class, and the Kyrene School District as a whole, offer what some see as a utopian vision of education’s future. Classrooms are decked out with laptops, big interactive screens and software that drills students on every basic subject. Under a ballot initiative approved in 2005, the district has invested roughly $33 million in such technologies.

The digital push here aims to go far beyond gadgets to transform the very nature of the classroom, turning the teacher into a guide instead of a lecturer, wandering among students who learn at their own pace on Internet-connected devices.

“This is such a dynamic class,” Ms. Furman says of her 21st-century classroom. “I really hope it works.”

Hope and enthusiasm are soaring here. But not test scores.

Since 2005, scores in reading and math have stagnated in Kyrene, even as statewide scores have risen.

To be sure, test scores can go up or down for many reasons. But to many education experts, something is not adding up — here and across the country. In a nutshell: schools are spending billions on technology, even as they cut budgets and lay off teachers, with little proof that this approach is improving basic learning.

This conundrum calls into question one of the most significant contemporary educational movements. Advocates for giving schools a major technological upgrade — which include powerful educators, Silicon Valley titans and White House appointees — say digital devices let students learn at their own pace, teach skills needed in a modern economy and hold the attention of a generation weaned on gadgets.

Some backers of this idea say standardized tests, the most widely used measure of student performance, don’t capture the breadth of skills that computers can help develop. But they also concede that for now there is no better way to gauge the educational value of expensive technology investments.

“The data is pretty weak. It’s very difficult when we’re pressed to come up with convincing data,” said Tom Vander Ark, the former executive director for education at the Bill and Melinda Gates Foundation and an investor in educational technology companies. When it comes to showing results, he said, “We better put up or shut up.”

And yet, in virtually the same breath, he said change of a historic magnitude is inevitably coming to classrooms this decade: “It’s one of the three or four biggest things happening in the world today.”

Critics counter that, absent clear proof, schools are being motivated by a blind faith in technology and an overemphasis on digital skills — like using PowerPoint and multimedia tools — at the expense of math, reading and writing fundamentals. They say the technology advocates have it backward when they press to upgrade first and ask questions later.

The spending push comes as schools face tough financial choices. In Kyrene, for example, even as technology spending has grown, the rest of the district’s budget has shrunk, leading to bigger classes and fewer periods of music, art and physical education.

At the same time, the district’s use of technology has earned it widespread praise. It is upheld as a model of success by the National School Boards Association, which in 2008 organized a visit by 100 educators from 17 states who came to see how the district was innovating.

Article source: http://feeds.nytimes.com/click.phdo?i=02a39a683eed6cb32e94c9726ec8f89d

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Media Decoder Blog: News Corp. Board Undergoes a Shuffle

September 2, 2011 by Leave a Comment

The board of directors at News Corporation, considered to be highly deferential to its chairman, Rupert Murdoch, is experiencing some turnover that will bring a new independent voice to its ranks.

James W. Breyer, a prominent venture capitalist and member of Facebook’s board, will be nominated for election to News Corporation’s board when shareholders gather for their annual meeting in October, the company said Friday.

At the same time, the company said that two longtime board members, Kenneth E. Cowley and Thomas J. Perkins, were leaving the board.

The shuffling comes as the company, under investigation on two continents for improper business and journalism practices, faces growing questions about the independence of its board of directors.

While News Corporation complies with Nasdaq guidelines for the number of directors who lack direct ties to the company, many of the directors who are considered independent for practical purposes have long histories with Mr. Murdoch.

Mr. Perkins, a leading Silicon Valley entrepreneur whose ties to the company were minimal before joining the board in 1996, and Mr. Cowley, a former executive at Mr. Murdoch’s Australian media arm, were both considered independent directors.

Mr. Breyer appears to have no direct links to News Corporation. His experience on corporate boards is deep. In addition to Facebook, he also serves on the boards of Wal-Mart, where he is the presiding independent director, and Dell.

Given his experience in the technology, Mr. Breyer’s nomination is in step with News Corporation’s strategy to make digital businesses a focal point of its growth strategy.

In a statement, Mr. Murdoch said: “Jim has a remarkable track record in the investment community and his background in media and technology will enable him to make significant contributions to News Corporation’s board.”

Just last month, the board was expected to add Elisabeth Murdoch, Mr. Murdoch’s daughter. But she and the company decided it was best to delay her nomination. Not only is News Corporation facing questions about hacking voice-mails of private citizens in Britain and anticompetitive practices in the United States, but a lawsuit over its acquisition of Ms. Murdoch’s production company, Shine.

The purchase spawned a lawsuit last spring on behalf of some shareholders. The suit, filed by Amalgamated Bank, asserted that Mr. Murdoch ran his company “as his own private fiefdom with little or no effective oversight from the board.”

News Corporation has moved to dismiss the suit.

Article source: http://feeds.nytimes.com/click.phdo?i=b924884a3b804b1f0f91ba85f6623769

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Apple Patents Show Steve Jobs’s Attention to Design

August 25, 2011 by Leave a Comment

But what about the striking glass staircases in many of Apple’s stores? Mr. Jobs led their design — and has his name on two patents Apple received for that design.

The white plastic power adapters in newer-model Macintosh computers? Mr. Jobs helped to design them too, according to patent filings.

And he also had a hand in the final look of a startling number of products, including the seemingly insignificant and those that have proved central to Apple’s success: the lanyard for some iPod headsets, the plastic clasps that hold cords in place, the cardboard packaging for scores of iPods, and model after model of desktop and laptop computers, monitors, mice, keyboards, mobile devices and media players.

Mr. Jobs’s say over the minute details of Apple’s products is legendary in Silicon Valley. A look at the patents that carry his name, for these products and others, offers a glimpse into the range of his influence at Apple. And it paints a picture of a roll-up-your-sleeves chief executive whose design choices reached into every corner of the company.

As Mr. Jobs steps down from the chief executive role, his deep involvement in so many aspects of Apple’s products also brings into sharp focus the question of whether the company’s streak of innovation can continue over the long term without his hand to guide it.

Mr. Jobs appears as the principal inventor or as one inventor among several on 313 Apple patents. Most are design patents that cover the look and feel of a product, rather than utility patents, which may cover a technical innovation like a software algorithm or computer chip.

Still, the number of patents is far larger than those granted to most other technology company chiefs, including those whose technical breakthroughs and inventions were instrumental to their companies’ success. Just nine Microsoft patents carry the name of Bill Gates, who was a co-founder of the company and its chief executive for more than two decades before stepping down in 2000. And little more than a dozen Google patents carry the names of co-founders Larry Page and Sergey Brin, according to a search of the United States Patent and Trademark Office Web site.

“That’s Steve,” said Mitchell Kapor, a veteran Silicon Valley technologist and investor who founded the Lotus Development Corporation in 1982. “He has an eye and a genius for design that cuts across disciplines. He was never formally schooled, but he has always had that sensibility.”

Some technology analysts and Apple veterans say the number of patent filings in Mr. Jobs’s name may have been lifted, in part, by the company’s efforts to further bolster the image of the visionary chief executive.

“Apple may have reasons for wanting to have Steve’s names on patents,” said David B. Yoffie, a professor at the Harvard Business School who has studied the technology industry for decades.

But patent experts say Apple was not likely to have added Mr. Jobs’s name simply for public relations purposes.

“If you put someone’s name who didn’t participate, your patent could be invalidated,” said Mark Lemley, a law professor at Stanford University.

Apple did not immediately respond to a request for comment.

Mr. Lemley and others said Mr. Jobs was likely to have had an especially prominent role in patents where his name appears first. There are 33 of those, including the two related to the glass staircase. One of those covers the look of the staircase and its structure, describing “a monolithic glass member for supporting loads.”

The patents also show how frequently Mr. Jobs huddled with the industrial design team, led by Johnny Ive, to hash out every last detail of a product. Mr. Jobs shares more than 200 patents with Mr. Ive and other members of that team, underscoring the importance he placed on design.

Shortly after the iconic iMacs came out in 1998, Mr. Gates took a swipe at Apple, which was still struggling to survive. “The one thing Apple’s providing now is leadership in colors,” Mr. Gates said. “It won’t take long for us to catch up with that, I don’t think.”

But Mr. Gates never put as much focus on design, and Apple has since rebounded strongly, surpassing Microsoft as the world’s most valuable technology company.

“It is foolish to argue with success,” Mr. Kapor said.

Article source: http://feeds.nytimes.com/click.phdo?i=07b3555415b0b0efcc3ed9515c762d1d

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DealBook: Google’s Big Bet on the Mobile Future

August 16, 2011 by Leave a Comment

Sanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning around the company, will remain as the division's top executive.Tim Boyle/Bloomberg NewsSanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning around the company, will remain as the division’s top executive.

Google, Motorola and Mobile

Both companies have met with both successes and struggles as they adapt to and influence a changing market for mobile phones.

Google made a $12.5 billion bet on Monday that its future — and the future of big Internet companies — lies in mobile computing, and moved aggressively to take on its arch rival Apple in the mobile market.

The Silicon Valley giant, known for its search engine and Android phone software, rattled the tech world with its announcement that it would acquire Motorola Mobility Holdings, allowing it to get into the business of making cellphones and tablets.

The acquisition, Google’s largest to date and an all-cash deal, would put the company in head-to-head competition with its own business partners, the many phone makers that use Android software, as well as with Apple.

The deal, which requires regulatory approval, would also give Google a valuable war chest of more than 17,000 patents that would help it defend Android from a barrage of patent lawsuits.

“Computing is moving onto mobile,” Larry Page, Google’s chief executive, said in an interview. “Even if I have a computer next to me, I’ll still be on my mobile device.”

The effect of a Google-Motorola Mobility merger on consumers is unclear. But in the past, Google has shaken up the mobile industry by pushing cellphone carriers to open up their networks, and by licensing its Android system at no charge, increasing competition. With the Motorola deal, analysts said, Google may be able to accelerate innovation in smartphones and tablets.

“For Google, it’s important for them to make sure that the mobile space is not dominated by one company, that being Apple,” said Steve Weinstein, an analyst at Pacific Crest Securities. By acquiring Motorola, he said, they “can drive down costs and create a product that is pioneering with Google services around it.”

The proposed deal would have ramifications across the tech industry, giving strength to Motorola at a time when Research in Motion and Nokia are faltering.

Google said it would continue to license its Android system to other smartphone makers, like HTC, Samsung and LG. “Many hardware partners have contributed to Android’s success, and we look forward to continuing to work with all of them,” wrote Mr. Page in a company blog post announcing the deal.

Nonetheless, while many of Google’s partners issued positive statements on Monday, analysts suggested that the acquisition would create tension because Motorola would be in an obviously favored position. That could push other phone makers into the arms of Microsoft, which offers a rival operating system.

“If you woke up today and you are one of Google’s hardware partners, the hair just set up on the back of your neck,” said Colin Gillis, an analyst with BGC Partners. “If you’re an Android partner, you may start considering the Windows platform.”

Mr. Page addressed those concerns by saying that Motorola would effectively operate as a stand-alone business. Sanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning the company around, will remain as the unit’s top executive.

Federal regulators are already investigating Google’s dominance in several areas of its business, and the planned merger will prompt additional antitrust review. But legal experts said it seemed unlikely that the deal would be blocked because the two companies are in separate, if related, businesses so a combination would not increase Google’s share of either market.

Phones running the Android system have become increasingly popular, accounting for 43.4 percent of smartphones sold in the second quarter, according to Gartner research. But many customers have complained that the phones can be confusing to use.

That is because Google works with 39 phone makers that use different versions of Android across their platforms, resulting in variable performances, said Richard Doherty, research director for Envisioneering Group, a market research and consulting firm.

Apple, by contrast, controls its entire product — device and software. With the Motorola acquisition, Google, too, could exert greater control over its products.

But it is far from clear that Google, a $179 billion business largely built on sophisticated search algorithms and online advertising, can transform itself into a device maker. The business is costly, and the margins are slim, said Jordan Rohan, an analyst with Stifel Nicolaus.

“If you have the best-selling phone, you can make a lot of money,” he said. “What’s not clear to me is whether phones that sell a few million units make a lot of money.”

The chief of Android, Andy Rubin, even proclaimed, in 2009, that the company was simply “not making hardware.”

By becoming a phone maker, Google may be able to increase its clout with wireless carriers, which control pricing and distribution of cellphones.

“This is an opportunity for Google to jumpstart the market, in pricing and innovation,” said Avi Seidmann, an information systems professor at the University of Rochester.

Google’s deal for Motorola comes just weeks after it lost a bid to a consortium led by Apple and Microsoft for 6,000 patents from Nortel, a Canadian communications company that filed for bankruptcy in 2009. For Google, which faces an increasing number of patent infringement claims against its Android system, the loss was a major blow.

David Drummond, Google’s chief legal officer, later accused the winning bidders of engaging in anticompetitive behavior, describing the deal as “a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.” Patent fights are common in the technology industry and come with high stakes. Companies are often required to pay licensing fees to continue using technology after losing infringement claims and are sometimes blocked from selling their products.

But while Mr. Drummond was complaining, he and other executives were working on the Motorola deal.

“The best way to fight a big portfolio of patents is to have your own big portfolio of patents,” said Herbert Hovenkamp, a law professor at the University of Iowa. “That appears to be what Google is doing here, arming itself with patents to be able to defend itself in this fast-growing market.”

Google’s bid for Motorola is an extension of what Eric E. Schmidt, the company’s former chief executive, said last year was a “mobile first” strategy. Following that approach, Google has expended millions of dollars and considerable engineering power into developing a broad array of mobile-centric services. But the bid for Motorola is its strongest move in that area.

“This is an emphatic exclamation point that Google is a mobile company,” said Ben Schachter, an analyst with Macquarie Capital. “It shows how important Android is to Google.”

Under the terms of the deal, which is expected to close by early 2012, Google will pay Motorola Mobility’s shareholders $40 a share, a 63 percent premium to Friday’s closing price. Although Motorola had casual talks with prospective suitors earlier this year, the sale of the Nortel patents at a $4.5 billion price tag encouraged Motorola’s directors to pursue a sale more actively, according to people briefed on the matter. Last week Google, led by Mr. Page, emerged as the frontrunner, and by Sunday, Motorola’s board gave the green light.

Shares of Google fell 1.16 percent on Monday, to $557.23, while shares of Motorola Mobility added 55.78 percent, to $38.12.

Shares of Nokia and Research in Motion surged, too, amid speculation that they are takeover targets as well. Nokia, which recently entered a comprehensive partnership with Microsoft, led the gains, with shares rising more than 17 percent.

Steve Lohr, Verne G. Kopytoff and Michael J. de la Merced contributed reporting.

Article source: http://dealbook.nytimes.com/2011/08/15/googles-big-bet-on-the-mobile-future/?partner=rss&emc=rss

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Greentech: Plug-and-Play Batteries: Trying Out a Quick-Swap Station for E.V.’s

July 31, 2011 by Leave a Comment

THERE may be fewer than 500 electric cars on Danish roads, but signs of progress in building an infrastructure to support a larger population of E.V.’s. are already evident.

The first electric car battery swapping station in Europe opened here last month, the initial site in a network of 24/7 fully automated drive-through stations. There, the lithium-ion battery packs, which weigh about 600 pounds, will be removed from specially designed cars and replaced with a fully charged pack. The swap takes five minutes.

Is this plan — a solution that could make E.V’s practical for long trips — some sort of utopian E.V. fantasy? I thought so until I experienced the process myself.

I was in the second car to do a battery swap after the ribbon was cut on June 28. Passengers in the first car included Lykke Friis, Denmark’s minister of climate and energy, and Johnny Hansen, chief executive of Better Place Denmark, the local branch of the Silicon Valley company. It is building the swap stations and related businesses in Australia, China, Denmark, Israel (where the world’s first swap station is) and eventually, the United States.

Better Place has 19 more battery swap stations in the works for Denmark. “By the first of April, we will cover the whole country,” Mr. Hansen said, referring to 2012, with stations no more than 40 miles apart.

At this point, only Renault is making cars designed for quick battery swaps. The company stretched the gasoline-powered version of its Fluence, a Corolla-like sedan, by five inches to accommodate the suitcase-size 24-kilowatt-hour battery pack. The resulting Fluence Z.E., for zero emissions, goes into full production later this year, available in either swappable or fixed-battery versions.

My 20-minute drive in the Fluence Z.E. from the Better Place offices in Copenhagen to the swap station in the suburb of Gladsaxe, was pleasingly uneventful. The swap station adjoins a filling station, where a gallon of gasoline was priced at the equivalent of $9.15 and diesel was $8.40.

The battery swap was also uneventful. Swipe a membership card at the entrance and the garage door to the battery-change track, similar to a carwash tunnel, opens. Pull forward and the robot takes over — the driver simply shifts into neutral and lets go.

As the car is guided forward, it’s lifted a few inches. Inside the car, you hear buzzes and hums and feel vibrations, but there’s no view of what is happening below. About a minute into the experience, the dashboard message indicates empty battery — meaning it’s gone — after which there’s no air-conditioning, although music and other functions continue. During most of Denmark’s year, the brief lack of climate control would not be a problem, but during my trip, on a hot summer day, the sealed cabin quickly became steamy.

That small discomfort did not mar the significance of the occasion: four and a half minutes after entering the station, the car had a fresh battery. The sedan was lowered and we pulled out of the tunnel ready to drive another 100 miles or so, according to Renault’s range estimate. The Better Place robot worked.

Better Place subscribers purchase their cars, but not the expensive battery packs. For a fixed fee of about $350 a month, they will lease access to the batteries, swap stations and charge points.

Renault says it intends to produce more than 100,000 Fluence Z.E. sedans through 2015, although availability in Denmark will be limited. Another battery-swappable model from Renault, the Zoe Z.E. — a smaller hatchback more suited to Danish tastes — is expected next year. But it could be a number of years before other carmakers produce models that work with the Better Place stations.

The economics are challenging. Each station costs “a couple of million Euros” — about $3 million — to build, Mr. Hansen said. That is a big investment for stations that might barely be used in the next couple of years.

The Better Place business model is a top-down, central-office approach to electric car charging infrastructure. Whether that plan will work may be uncertain, but its Danish swap station does deliver as promised.

When E.V.’s finally arrive here, Denmark could be one of a few places in the world to have eliminated limited driving range and insufficient charging spots as potential obstacles to the adoption of electric cars.

Article source: http://www.nytimes.com/2011/07/31/automobiles/a-plug-and-play-plan-for-ev-batteries.html?partner=rss&emc=rss

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Murdoch Faces Questions, but Gains Vocal Support

July 19, 2011 by Leave a Comment

But he did receive one piece of good news: vocal support from a prominent board member.

Tom Perkins, an independent member of the board of directors and the first to speak out on the scandal, said the board “is fully supportive of the top management.”

A well-known venture capitalist in Silicon Valley, Mr. Perkins said the independent board members “were stunned to discover the magnitude of the scandal over the last 10 days.”

“The board did discuss this several times two or three years ago, maybe earlier,” he said. “We’ve known about the phone hacking for a long time. We were told and top management, I’m sure, believed that the early news was the whole story. There’s no reason to believe top management was lying. That’s my very strong belief.”

“We all felt it was inexcusable for sure. We paid some money out, fired some people and we thought we’d fixed it.”

Mr. Perkins was also a member of the board of directors during a scandal at Hewlett-Packard, when the high-tech giant was involved in spying on board members and reporters to determine the source of leaked information. Mr. Perkins resigned from the board when he learned of the surveillance.

He said the News Corporation situation is different. “This is not like the HP situation,” he said. “The board supports top management.”

The hacking group Lulz Security claimed responsibility on Monday for a fake article about the death of Mr. Murdoch, the chairman of News Corporation, that appeared on one of the company’s Web sites, and for disruptions on other sites. The article was posted on the Web site new-times.co.uk, which appeared to be a defunct site related to The Times of London.

Lulz Security, or LulzSec, then apparently altered the Web site of The Sun, another Murdoch newspaper, so that it sent site visitors to the fake article. Soon after, the Sun site instead forwarded visitors to the LulzSec Twitter page.

The e-mail at The Times of London was also hacked into, a staff member said, leaving it nonfunctional on Monday evening.

Mr. Murdoch’s more immediate concern is Tuesday’s hearing. He spent much of Monday working on his opening statement at News International’s headquarters in Wapping, East London. A team of lawyers that works for the company, led by Joel I. Klein, a News Corporation senior vice president, was on hand to help him and his son, James, prepare.

They will be grilled in the Wilson Room of Portcullis House, adjacent to the British Parliament, along with Rebekah Brooks, the former chief executive of News International, who resigned on Friday and was arrested on Sunday, although no charges have been filed. The room will seat just 40 to 50 spectators, although interest is judged so large that Parliament is opening spillover rooms where others can follow the proceedings on television — as surely will much of Britain, and beyond.

The 10 members of the House of Commons select committee on culture, media and sport, drawn from the three main political parties in the British Parliament, will have agreed on lines of questioning. The demands are likely to come rapid fire, given that there will be only an hour for this rarest of events. In British parliamentary hearings, the witnesses do not testify under oath. Instead, they are obliged to answer “on their honor.”

If they are found to have lied, not even well-informed media lawyers could predict the consequences: they would earn the contempt of Parliament. It is not clear what the punishment, beyond opprobrium, would be.

The witnesses can choose not to answer — in American terms, plead the Fifth — if they judge their comments could be self-incriminating. The three will most likely appear with their lawyers, to whom they can turn for whispered advice.

The committee members to watch — those members of Parliament who have most aggressively denounced the phone hacking in the past — include Labour members Paul Farrelly and Tom Watson and the chairman, John Whittingdale, a Conservative. The committee’s clerks will have prepared many of the specific questions — they will be on green sheets of paper before the members — but the most combative members are likely to go off script.

Graham Bowley reported from London, and Matt Richtel from San Francisco. Jeremy W. Peters, Michael Luo and Nick Bilton contributed reporting from New York.

Article source: http://www.nytimes.com/2011/07/19/world/europe/19murdochs.html?partner=rss&emc=rss

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DealBook: Google’s Deal-Making Math

July 8, 2011 by Leave a Comment

SUN VALLEY, Idaho — With more than a dozen acquisitions signed this year, the Google deal-making machine is still on full tilt.

In a wide-ranging discussion at the Allen Company conference here, Google’s chairman, Eric E. Schmidt talked to reporters about his company’s takeover ambitions and the threat of regulatory challenges. While increased antitrust scrutiny is a “concern,” Mr. Schmidt, the former chief executive of Google, said it should not significantly impact the company’s purchasing power, since the company is largely focused on bite-size acquisitions that are too small to land on regulators’ radar screens.

“Last year, as part of our policy, we agreed to accelerate our rate of acquisition of small companies,” he said. “Because it’s the fastest way to fill out some of these broader strategies.”

In terms of acquisitions, 2010 was a banner year for the company, with a record 48 deals.

Eric Schmidt, chief executive of Google, speaks to reporters at the Sun Valley conference.Scott Olson/Getty ImagesEric Schmidt, chief executive of Google, speaks to reporters at the Sun Valley conference.

From the hundreds of start-ups in Silicon Valley, how does Google pick its targets and assess their value?

It certainly has enough money to be liberal with its offers. Google has one of the largest cash hoards in the sector with some $36 billion in cash on hand.

But the company tries to exercise some discipline by adhering to a simple formula. For example, if Google finds a 10- person team with unique intellectual property, it will consider how long it would take for an in-house to build a similar product and at what cost, according to Mr. Schmidt.

“So what’s a year worth? We then calculate the value of the team plus the value of the year, and that’s the amount of money we’re willing to pay for the company,” he said. “These are $10 million, $20 million, $30 million kind of deals.”

He added, the acquisition model “at Google is driven pretty much bottoms-up.”

“It’s a product manager who has a problem; they can’t solve the problem,” he said, “and we have a team that goes out and does that.”

That doesn’t mean Google is turning its back on bigger deals in the nine-figure or billion-dollar realm. Last month, it agreed to acquire AdMeld, a deal he acknowledged was valued in the hundreds of millions of dollars. Meanwhile, Hulu is said to be talking to Google, among others, about a potential takeover.

On Thursday, Mr. Schmidt was coy about its intentions for Hulu, the Internet video company. He only acknowledged that it’s been “widely reported that Hulu is being discussed.” In regards to YouTube’s push into premium content, he said, “anything involving Hulu would be incremental.”

Article source: http://feeds.nytimes.com/click.phdo?i=9c00cd734a95915987683c989e617dc8

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Ping: Silicon Valley Culture, but in San Francisco?

July 2, 2011 by Leave a Comment

FREE lunch — heck, free breakfast, lunch and dinner, plus all the MMs and Red Bull you can stand — is a delicious perk of working in Silicon Valley.

Free or even subsidized food in corporate cafeterias makes eminent sense in such a suburban setting. Corporate campuses, built where fruit and nut trees once stood, are cut off by busy thoroughfares. To go out for lunch, you have to drive a mile or so, park, eat and then high-tail it back to work.

Nothing much, food-wise, has sprouted around those campuses. There is not a bite to eat within a half-mile of Hewlett-Packard’s midcentury modern lab building in Palo Alto, the model of tech campuses in the valley.

So when this cafeteria culture hits the big city, does the collision somehow stultify economic activity? Cities, after all, need people out on the sidewalks.

That was an important lesson learned in the 1960s and ’70s, after urban renewal advocates like Robert Moses in New York bulldozed neighborhoods in hopes of starting afresh. Buildings with no space for shops rose on the scraped earth, and it took years for people to return to the sidewalks.

All of this comes to mind because San Francisco is offering tax breaks to tech companies that relocate their offices to the city’s blighted neighborhoods. Twitter will be the first recipient of this largess when it moves into new offices in the Furniture Mart on a particularly desolate section of Market Street next year.

Twitter, which is competing for talent with Google and Facebook, gives its employees free food. The question is whether those urban employees will leave the building often enough to dramatically improve the neighborhood.

Gabriel Metcalf, the executive director of the San Francisco Planning and Urban Research Association, or SPUR, an urban policy research group, says the impact of corporate cafeterias in an urban setting has not been rigorously studied. But, Mr. Metcalf says, “You certainly get more life on the street if everyone is going out to lunch.”

Twitter may be a good test case. Market Street, a wide avenue that bisects downtown San Francisco, begins at the Ferry Building. Smart designers transformed that structure from a seedy and little-used transportation hub; it now teems with shops and restaurants that attract tourists and office workers alike. During the twice-a-week farmers’ market, people stand in line for a half-hour to buy ramen, exotic sausages or rotisserie pork sandwiches from food carts.

But a mile and a half up Market, in the shadow of the golden dome of City Hall, it’s a different picture. Boarded-up buildings. Empty, littered lots. Even in boom times, the area never improved.

This is where the city has encouraged Twitter to set up shop. To transform the area, though, people will have to get out on the street. When the people come, shops open. When the shops open, more people come. A virtuous cycle begins.

But what happens when people don’t leave the buildings — when the culture of the suburban campus drops into an urban center? Two places in the city offer laboratories of sorts for a possible answer.

In a former industrial neighborhood called Mission Bay, the University of California, San Francisco, built its medical center. The university stashed its cafeterias up off street level. As a result, the area has remained sterile and empty. Employees and students drive in, then drive out. The public stays away.

That is expected to change when Salesforce.com, a company that has thrived providing Web services to corporate sales representatives, finishes building a new headquarters nearby. It will consist of eight buildings over 14 acres — a suburban campus in the city. The architects, Legorreta Legorreta, of Mexico City, have incorporated street-level retail space into the project that is open to the sidewalk. They say they want to invite the public in. Salesforce has never had a corporate cafeteria.

Then there is a no-name neighborhood, south of San Francisco’s financial district, that is home to a satellite office of Google. While the fare in that office’s corporate cafeteria isn’t as extensive as it is in the company’s home office in Mountain View, 40 miles to the south, it is still copious and free for employees.

The results are not surprising. In the time that Google has been in San Francisco, few establishments that draw people to the sidewalk have opened in its neighborhood. There is a new expense-account-set restaurant across the street, and a taco truck popular with the employees at the nearby Gap headquarters, which also has a corporate cafeteria, though meals there are unsubsidized.

EVEN a city like San Francisco, which in some ways likes to tell people how to live their lives — trying to ban McDonald’s Happy Meals, second-hand smoke outdoors and plastic shopping bags — is unlikely to start telling companies how to feed their employees.

“It’s not the kind of thing you can micromanage,” says Mr. Metcalf of SPUR. “It’s nice to have something that they leave alone.”

But he hopes that the executives who move into blighted city neighborhoods see a reason to encourage employees to get out.

 “The city benefits,” he says, “when a company decides to integrate more with the public life of the street.”

Article source: http://www.nytimes.com/2011/07/03/technology/03ping.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

In Tech We Trust: Investors Provide Millions to Risky Start-Ups

June 20, 2011 by Leave a Comment

In March, Color unveiled its photo-sharing cellphone application — and revealed that it had raised $41 million from investors before the app had a single user. Despite the company’s riches, the app landed with a thud, attracting few users and many complaints from those who did try it.

“It would be pointless even if I managed to understand how it works,” one reviewer wrote in the Apple App Store.

Since then, Color has become a warning sign for investors, entrepreneurs and analysts who fear there is a bubble in start-up investing. They say it shows that venture capitalists, desperate to invest in the next Facebook or LinkedIn, are blindly throwing money at start-ups that have not shown they can build something useful, much less a business that can provide decent returns on investment.

Color, which says it is overhauling its app, is just one of the start-ups that have set tongues wagging about bubbly excess in Silicon Valley. The Melt plans to sell grilled-cheese sandwiches and soup that people can order from their mobile phones. It raised about $15 million from Sequoia Capital, which also invested in Color.

Airbnb, which helps people rent rooms in their homes, is raising venture capital that would value it at a billion dollars. Scoopon, a kind of Groupon for Australians, raised $80 million; Juice in the City, a Groupon for mothers, raised $6 million; and Scvngr, which started a Groupon for gamers, raised $15 million. These could, of course, turn out to be successful businesses. The worry, investors say, is the prices.

They say they have paid two to three times more for their stakes in such start-ups over the past year. According to the National Venture Capital Association, venture capitalists invested $5.9 billion in the first three months of the year, up 14 percent from the period a year earlier, but they invested in 51 fewer companies, indicating they were funneling more money into fewer start-ups.

“The big success stories — Facebook, Zynga and Twitter — are leading to investing in ideas on a napkin, because no one wants to miss out on the next big thing,” said Eric Lefkofsky, a founder of Groupon who also runs Lightbank, a Chicago-based venture fund with a $100 million coffer.

A decade ago, in the first surge of Internet investing, it was not unusual for tech start-ups to raise tens of millions of dollars before they had revenue, a product or users. But venture capitalists became more cautious after the bubble burst and the 2008 recession paralyzed Silicon Valley.

Meanwhile, it now costs less than ever to build a Web site or mobile app. So this time around the general philosophy has been to start small.

“By starting out lean, you have the chance to know if you’re on to something,” said Mark Suster, a managing director at GRP Partners. “If you start fat and the product concept doesn’t work, inherently the company will lose a lot of money.”

Two of Color’s photo-sharing competitors, Instagram and PicPlz, exemplify the lean start-up ethos. They started with $500,000 and $350,000, respectively, and teams of just a few people. As they have introduced successful products and attracted users, they have slowly raised more money and hired engineers.

Color, meanwhile, spent $350,000 to buy the Web address color.com, and an additional $75,000 to buy colour.com. It rents a cavernous office in downtown Palo Alto, where 38 employees work in a space with room for 160, amid beanbag chairs, tents for napping and a hand-built half-pipe skateboard ramp.

Bill Nguyen, Color’s always-smiling founder, has hired a team of expensive engineers, like D. J. Patil, a former chief scientist at LinkedIn.

“If I knew a better way of doing it, I would, but that’s what my cost structure is,” Mr. Nguyen said in an interview last week.

Michael Krupka, a managing director at Bain Capital Ventures and one of Color’s investors, said Color needed to raise a lot of money because it planned to do much more than photo-sharing.

Jenna Wortham contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=5837ec24f47fbdbb31c3fb49350b2916

Filed Under: Business News Tagged With: , ,
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