Cable Clicks on Interactive Ads Again
Story from the Wall Street Journal

The traditional TV ad is losing luster as viewers get savvier about skipping commercials and some advertisers shift to the Internet to save money and target specific audiences.

Cable providers have helped undermine the 30-second spot by supplying digital video recorders to their subscribers and offering ad-free video-on-demand services.

Now they are promising to help marketers reach TV watchers with new interactive advertising that seeks to engage viewers and borrows techniques from the Internet.

"It's about making the TV a more lean-forward medium than a strictly lean-back medium," said Bob Ivins, vice president of research and data products with Comcast Corp.

It's a goal that has long eluded the industry. While the Internet has blossomed as a medium that can deliver targeted audiences and accountable results, the cable industry has promised interactive advertising for years only to leave advertisers and investors disappointed with the progress.

Cablevision Systems Inc. plans to roll out an interactive service next month that will allow viewers to respond to a banner or pop-up on their screen during a commercial, and automatically order a coupon or product sample by pressing a button on their remote control.

"It allows us to combine the power of the Internet -- with its engagement, targeting and accountability -- with the power of the big screen," said David Kline, Cablevision's president of ad sales.

Cablevision said it expects to have several major brands involved this fall including Benjamin Moore, which will send coupons for free paint samples to viewers that respond to its ads with their remote.

Cablevision said it would charge advertisers a premium to participate, but it declined to provide pricing details.

Other major cable operators, like Comcast and Time Warner Cable Inc., have also added interactive advertising to their systems. And while the traditional TV ad is typically sold based on estimated audience size, many of these new ads are sold on a pay-for-performance basis more similar to Internet advertising.

Time Warner in January rolled out a "promotions on-demand" offering in its Los Angeles market. The ads direct viewers to interactive channels fully dedicated to marketing materials from an advertiser.

By July, there were 22 advertisers participating, including CKE Restaurants Inc.'s Carl's Jr. and Big O Tires LLC. On top of regular ad spots and a set-up fee, Time Warner Cable collects a fee each time a consumer clicks to the on-demand channel.

"Interactivity through the remote control seems to drive a higher response rate than driving audiences to get on the Internet or make a phone call," said Joan Gillman, president of media sales for Time Warner Cable.

Cablevision also provides interactive channels to advertisers, like Walt Disney Co., Mattel Inc. and the U.S. Navy. Once viewers are directed to the channels through an ad, they can use their remote to choose from a variety of marketing videos and they can opt to receive coupons in the mail or request a call from a salesperson.

"Using interactive techniques, we can get a targeted consumer to engage with a brand on TV for a much longer period of time than just a 30-second commercial," said Jacqueline Corbelli, chief executive of media agency BrightLine iTV.

The New York-based agency recently worked for Axe, a brand owned by Unilever PLC, on a campaign reaching 70 million homes on cable, satellite and other pay-TV systems for its Axe Dark Temptations, a chocolate-themed deodorant and body wash.

The ads appeared on RipeTV, an on-demand network targeting males 18-24 with extreme sports and other programming. Using pre-roll spots and pop-up banners, the ads prompted viewers to press a button on their remote to do things like enter a sweepstakes or play a game.

Kevin George, an ad executive at Unilever who oversaw the campaign, said "the response was great" because it reached its targeted audience "without interrupting them," in part because Unilever reached its targeted audience "in a place where they're comfortable, giving them the option to participate without interrupting them."

Yahoo Sells Stake In Alibaba.com
Story from Bloomberg


Yahoo! Inc. is selling its stake in Alibaba.com Ltd., operator of China’s biggest trading Web site, for as much as HK$1.17 billion ($151 million), after the stock almost quadrupled in Hong Kong trading this year.

UBS AG, the sole bookrunner, is placing 57.5 million shares, equivalent to a 1.1 percent stake, at an indicated price range of HK$19.80 to HK$20.30 each, according to terms of the sale obtained by Bloomberg News. That’s as much as 6.4 percent lower than Alibaba’s closing price in Hong Kong today.

The sale by Yahoo, owner of the second most popular U.S. Internet search engine, follows a placement by Alibaba Chairman Jack Ma last week that raised HK$273 million. Sunnyvale, California-based Yahoo is still the biggest shareholder of Alibaba Group Holding Ltd., the parent of Hong Kong-listed Alibaba.com.

“Yahoo regards its investment in Alibaba as long-term, so the decision is quite negative for the stock, especially as it came after Jack Ma’s sale,” said Steven Liu, an analyst who rates Alibaba.com “sell” at DBS Vickers Ltd. in Hong Kong. “The stock is quite expensive now after the rally this year.”

Alibaba rose 3.7 percent to HK$21.15 in Hong Kong today. The stock has almost quadrupled this year, compared with the 45 percent gain in the city’s benchmark Hang Seng Index. Yahoo fell 16 cents to $15.43 at 10:19 a.m. New York time in Nasdaq Stock Market trading.

In 2005, Yahoo paid $1 billion and swapped its Chinese operations for a 40 percent stake in closely held Alibaba Group. In 2007, the U.S. company was one of eight “cornerstone” investors which subscribed to the $1.7 billion initial public offering of Alibaba.com, the biggest first-time share sale by an Internet company since Google Inc.’s IPO in 2004.

Boost Liquidity

Alibaba.com said in June that Yahoo, Cisco Systems Inc.,American International Group Inc. and other cornerstone investors would be allowed to sell their stakes immediately, five months before the expiry of a previously agreed lock-up agreement. The move was designed to boost liquidity of its shares, the Chinese company said at the time.

“We are pleased to learn of the Yahoo decision,” Alibaba spokesman John Spelich said in an e-mail today. The sale will help the company achieve broader ownership of its stock, he said.

Jeremy Seow, a Singapore-based spokesman at Yahoo, said he couldn’t immediately comment on the sale.

Google prepared to compromise on digital books deal

By The TG Daily

Undaunted by widespread opposition, Google is pressing ahead with its plans to create a vast digital library, following a cautiously positive response from the Justice Department.

In a filing late Friday, the Justice Department said that the deal was unacceptable in its present form, but that the parties concerned were modifying the agreement to appease some of its critics. The move is likely to cause delays.

"We are considering the points raised by the department and look forward to addressing them as the court proceedings continue," said Google, the Authors Guild and the Association of American Publishers in a joint statement.

The Department acknowledged in its filing that the deal would give Google organic seo a virtually exclusive license to millions of books which are either out of print or whose rights holders are unknown - so-called 'orphan books'.

But it said that the deal would have great benefits, and that it hoped it could be amended to make it fairer - for example, by giving some of Google's competitors access to these same orphan books. It also said that Google could improve matters by securing agreement from the rights holders for out-of-print books, rather than being allowed to go ahead by default.

"As a threshold matter, the central difficulty that the Proposed Settlement seeks to overcome – the inaccessibility of man works due to the lack of clarity about copyright ownership and copyright status – is a matter of public, not merely private, concern," writes the Department in its filing. "A global disposition of the rights to millions of copyrighted works is typically the kind of policy change implemented through legislation, not through a private judicial settlement."

A hearing has been lined up for 7 October.

Microsoft, Yahoo Face In-Depth Review of Search-Engine Accord

Sept. 11 (Bloomberg) -- Microsoft Corp. and Yahoo! Inc. have been asked by the U.S. Justice Department for more details on a proposed Internet-search partnership, expanding the agency’s review of the agreement.

The request means regulators will do a more extensive examination, rather than approve the deal immediately. Microsoft predicted an in-depth review when the accord was announced in July, said company spokesman Jack Evans. He declined to comment on the contents of the request.

Over the course of the review, the companies expect to be asked about their search-engine investments, ad pricing and product plans, a person familiar with the matter said.

The outcome will shape the future of the market for Internet search ads, where Google has triple the U.S. sales of its two rivals. The companies may face more difficulty proving the deal won’t hurt competition as regulators step up oversight of the technology industry, said Michael Katz, a former chief economist in the Justice Department’s antitrust unit.

“The antitrust agencies are pretty skeptical of the argument that you need to be bigger to compete,” said Katz, now a professor at the University of California at Berkeley. “The Justice Department will respond, ‘Why can’t you get bigger by competing?’”

Under the partnership, signed in July, Yahoo will use Microsoft’s Bing search engine on its Web sites. Yahoo will sell ads that appear next to Web-search results, with the companies splitting the revenue.

Bing Investment

Even though the antitrust agency will scrutinize the deal closely, the companies probably can get it done as long as they do enough to persuade the Justice Department that the agreement doesn’t hurt competition, Katz said.

During the Justice Department’s review, Redmond, Washington-based Microsoft expects to be asked to disclose its spending on Bing to ensure the company made enough investments to create a viable product, the person familiar with the matter said. Both companies also anticipate regulators will ask for their individual search-engine product plans so it can assess whether there’s an incentive to compete more or less vigorously as a result of the deal.

“Those plans will help the DOJ understand what the competitive impacts of the merger might be,” said Greg Neppl, an antitrust lawyer at Foley & Lardner LLP in Washington. If the department were to find the accord hinders innovation, it could seek to block the deal.

Ad Pricing

The government will also seek information on how the companies’ online-ad auctions operate and what might happen to prices as a result of the combination, the person said. While regulators will investigate pricing, it’s unlikely that they will dictate what prices will be, the person said.

The requests will help the agency determine whether to impose conditions to foster competition, or block the deal. Mountain View, California-based Google scrapped plans to team up with Yahoo last year after the Justice Department threatened to sue, saying the proposal would have helped them “become collaborators rather than competitors.”

“Google was dominant a year ago and is dominant today,” said Brad Smith, Microsoft’s general counsel. “Even if this is approved, Google organic seo will be dominant a year from now -- but if this agreement is approved, at least there is a chance for a more credible No. 2 to emerge.”

Laura Sweeney, a spokeswoman for the Justice Department, said the agency is aware of the proposed Microsoft-Yahoo partnership, and declined to comment further.

Fully Cooperating

“Yahoo and Microsoft are cooperating fully with the Justice Department and firmly believe that the information they will be providing will confirm that this deal is not only good for both companies, but it is also good for advertisers, good for publishers and good for consumers,” Adam Grossberg, a Yahoo spokesman, said in an e-mail.

The companies are now responding to the latest request, which they received earlier this week, Microsoft’s Evans said yesterday. They still expect the deal to close on schedule.

Microsoft rose 22 cents to $25 yesterday in Nasdaq Stock Market trading. Sunnyvale, California-based Yahoo added 67 cents to $15.45, while Google advanced $6.97 to $470.94. Microsoft has risen 29 percent this year, compared with a 27 percent gain at Yahoo and a 53 percent jump for Google.

“There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users,” Google spokesman Adam Kovacevich said in an e-mailed statement. “We’re interested to learn more about the deal.”

Of the three largest search engines, Google had 75 percent of search-ad spending in the U.S. last quarter, with the rest going to Microsoft and Yahoo, according to data from search-ad firm Efficient Frontier Inc. in Sunnyvale, California. The market should expand to $12 billion this year, according to New York researcher EMarketer Inc.

European Commission

In Europe, Microsoft is also likely to notify the European Commission about the agreement, said Neil Macehiter, a partner at Cambridge, England-based technology consultant Macehiter Ward-Dutton. If the commission gets involved, it will conduct an initial 25 working-day review, which can be extended by 90 days if the regulator has “serious doubts” about competition issues.

Last week, the Brussels-based commission put on hold Oracle Corp.’s $7.4 billion acquisition of Sun Microsystems Inc., saying its initial probe suggested the deal may reduce competition and lead to higher prices.

“I’d bet on Microsoft-Yahoo prevailing because it would be difficult for Microsoft to leverage its position,” Macehiter said.

Google Partnership

Microsoft objected to a proposed partnership between Yahoo and Google last year, saying the accord would allow them to fix prices. Now the software maker is on the other side of the same argument, and will likely tell the agency the venture won’t raise prices, said Andre Barlow, a Washington-based lawyer who worked for the Justice Department’s antitrust division and is now a partner at Doyle Barlow & Mazard PLLC.

Advertisers probably will face questions on the deal too. Carl Fremont, executive vice president at Digitas, an online ad agency, said a Microsoft-Yahoo combination would force Google to keep on improving its search engine.

“From a product offering side, I believe it will be better over time,” said Fremont, whose firm is owned by Paris-based Publicis Groupe SA. “It creates new competition in the market.”

Five US States Raise Objections To Google Settlement

By The Wall Street Journal

At least five state attorneys general have filed briefs raising concerns about Google Inc.'s (GOOG) proposed legal settlement with authors and publishers, adding to a wave of criticism lodged against the high-profile deal as it nears a public hearing.

Attorneys general from Missouri, Connecticut, Pennsylvania, Massachusetts and Washington have filed comments opposing the proposed settlement, arguing that its use of payments intended for copyright holders that can't be located is potentially unlawful.

In addition, Connecticut Attorney General Richard Blumenthal noted that his he is also interested in antitrust aspects of the deal.

A Google representative declined to comment.

Authors and publishers initially sued Google in federal court in New York in 2005, arguing that the Internet company was violating copyright by scanning and digitally publishing books without proper consent.

Under the terms of the settlement proposed late last year with the Authors Guild and Association of American Publishers, Google would pay $125 million, while earning the right to set up a vast, online trove of content. That's raised concerns among rivals and critics that Google will be handed too much influence over the nascent digital-books market.

Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN), among others, have criticized the settlement, as has the head of the U.S. Copyright Office.

A registry to be set up under the settlement would ultimately keep licensing payments intended for copyright holders that can't be located, after a certain number of years.

But in a brief filed jointly, the attorneys general of Pennsylvania, Massachusetts and Washington argue that such treatment of unclaimed payments would circumvent state unclaimed property laws, and could "constitute a misdemeanor which carries a penalty ranging from $1,000 to $10,000 and up to 12 months imprisonment."

Missouri Attorney General Chris Koster argued in his own legal brief that state law requires that "abandoned" property including the unclaimed payments be deposited with the state treasurer. Koster wrote that groups such as the American Society of Composers, Authors and Publishers regularly pay into state funds when copyright holders can't be found.

Connecticut's Blumenthal added that the settlement also appears to raise "objectionable issues" under antitrust and copyright laws. Connecticut's focus on the use of unclaimed payments to rights holders "should not be interpreted as assent or acceptance of any other feature of the settlement," the attorney general wrote.

The legal briefs filed by the attorneys general are among a number of last-minute arguments filed with the court prior to a "fairness hearing" scheduled for Oct. 7.

An opinion is also widely expected from the U.S. Justice Department about the antitrust aspects of the proposed settlement.

In an order filed Wednesday, U.S. District Judge Denny Chin wrote that the court has received "approximately four hundred submissions" related to the proposed settlement, both for and against it.

Chin wrote that due the number of submissions and "apparent public interest in the case," he is requiring that anyone who wishes to speak at the hearing submit a formal request by Sept. 21.

In testimony prepared for a Sept. 10 House Judiciary Committee hearing, Google Chief Legal Officer David Drummond argued that the settlement will expand public access to millions of books, while still providing copyright holders with proper compensation.

Microsoft-Yahoo Deal Draws Antitrust Scrutiny

By Information Week

Antitrust bodies in the U.S. and Europe are eyeing Microsoft (NSDQ: MSFT)'s search partnership with Internet portal Yahoo (NSDQ: YHOO) to ensure the deal doesn't run afoul of competition rules.

"As we said when the agreement was announced, we anticipated that this deal will be closely reviewed in the United States and EU, and discussions in both geographies continue," a Microsoft spokesman told the Reuters news agency Wednesday.

The spokesman said Microsoft remains confident that the deal will close sometime in 2010.

Microsoft and Yahoo struck a wide-ranging search partnership on July 29. Under the ten-year pact, Microsoft will place its Bing search engine on all Yahoo sites and, initially, keep 12% of the revenue from Yahoo-driven searches. Yahoo will handle sales and marketing for premium search ads for both its own properties and Microsoft's.

Microsoft is also committed to hire a minimum of 400 Yahoo employees on a full-time basis as it extends Bing to Yahoo's Web sites. It will also hire an additional 150 Yahoo workers to help with the transition.

Yahoo can terminate the arrangement if organic seo search traffic generated by the alliance falls below a specified percentage of Google's traffic. Yahoo also retains the right to expand the partnership by adding Microsoft's mapping and mobile search services to its Web properties.

Microsoft must submit to Yahoo copies of all data it collects from its sites while providing search services, according to an SEC filing.

Yahoo CEO Carol Bartz has said that, by in effect outsourcing search to Microsoft, her company can save $200 million in annual capital expenditures through reduced spending on search-related operations. The companies said it could take up to two years for them to fully implement their agreement.

How Will ReCAPTCHA Help Google?

By Channel Web

Those aggravating strings of nonsensical words you have to key into your computer when trying to send someone an e-mail or buy tickets online -- they're called CAPTCHAs -- are actually doing a job that Google (NSDQ:GOOG) finds pretty valuable. But in its zeal to teach computers to, in essence, "read," Google may be chipping away at the ability of CAPTCHAs to provide security.

Google will buy ReCAPTCHA, a company that provides CAPTCHAs to help protect more than 100,000 Web sites from spam and fraud. Financial terms were not disclosed.

CAPTCHAs (Completely Automated Public Turing Test To Tell Computers and Humans Apart) are often created from old pieces of text, including books and newspapers.

Computers, through programs called "spiders" or "robots," find it hard to recognize those words because the ink and paper have degraded over time. So far, CAPTCHA programs have been successful in deflecting robotic attacks because the spiders can't recognize the text.

But in addition, the technology can help Google in its large-scale -- and controversial -- text scanning projects such as Google Books and Google News Archive Search.

Google wants the technology because as users decipher the jumbled characters with CAPTCHAs, the software "learns" to interpret those words during organic seo searches.

The technology that Google now uses to scan documents, Optical Character Reader Recognition, stumbles over the translation of print that's faded and worn. ReCAPTCHA's Web site illustrates that accuracy problem.

Because ReCAPTCHA uses old text from old print publications and users then type them in as a CAPTCHA, users teach computers to read the scanned text. Having the text version of documents is beneficial because it facilitates searching and renders it easily on mobile devices. ReCAPTCHA's slogan, "Stop Spam. Read Books," seems to be a good fit with Google's plan.

Therein may lie the rub, however. As we teach computers to read, CAPTCHAs may lose their appeal as a security mechanism. Of course, as hackers' malicious software also becomes more sophisticated, the distorted character strategy would become threatened anyway. Google's next step may need to address that security concern.

Google Curtails Europe Book Plan

By The Wall Street Journal

Making concessions to European publishers, online-search giant Google Inc. Monday said it will remove all European books that are still commercially available from its $125 million program to scan orphaned and out-of-print books in the U.S. and sell them online.

The concessions come after concerns were voiced by European authors and publishers who don't want the company to scan books by European authors that are still protected by copyrights, without asking their permission.

The new position means books that are no longer available to U.S. consumers but are still on sale in Europe won't be included in Google's scanned catalogs, unless the author expressly wants to be included, Google said.

In the U.S., Google has reached a settlement with publishers that will allow it to scan and post online all out-of-copyright and out-of-print books, for which owners are hard to identify. Due to complex copyright rules, the U.S settlement will only apply to users in that country.

Previously, European rights holders whose books were out of print, or had never been published in the U.S., were considered to have opted for the scanning process.

It's a step in the right direction, [but] it's not enough for our members to sleep peacefully.

To alleviate European concerns, Google has also promised to have two non-U.S. representatives on the governing board of the Books Rights Registry, which is to govern the settlement. One of its jobs is to find authors for out-of-print books that are being scanned by Google, and redistribute any earnings coming through the book search. Books are orphaned if they are protected under copyright, but the rights holder is nearly impossible to identify.

Google decided to clarify its European position following complaints, especially from German publishers, that were concerned that their authors were being illegally scanned in the U.S. Several European publishing associations say they plan to send their objections to the U.S. District Court judge who is holding a hearing on the Google deal in New York in early October.

A lot of the European concerns had been already addressed in the U.S. settlement and the emphasis on rights-holder control should put minds at ease.

Microsoft Updates Bing with 'Visual Search' Feature

By PC World

Microsoft's Bing search engine is stepping up its assault on Google with the introduction of a unique beta search and shopping tool called Visual Search. The Visual Search feature offers an alternative to lists of blue links that are often delivered by search engines when researching cars, cameras, or other topics. Visual Search was announced Monday by Yusuf Mehdi, a senior vice president at Microsoft, at Tech Crunch 50, a tech conference being held in San Francisco.

Instead of displaying traditional lists of Web site search results Bing's Visual Search displays rows images of items that can be scrolled through via a slick interface. For example a search on Bing for handbags, Yoga poses, or movie showtimes will deliver traditional results. Now look to the left-hand side of your search resulst and you'll see a "Visualize" the search option. Clicking on this link takes you to the Visual Search page that allows you to scour images - not text links - to help you explore or winnow your search down fast. The tool also offers refinement options to narrow the number of images by criteria such as price, movie theater, or team (when searching for sports).

To preview Visual Search topics visit this Bing page which should be live by the time you read this.

Microsoft says Visual Search will be rolled into Bing over the next few weeks with some customers seeing it before others. By the end of September, it says, the feature will be live to all. The move comes as Microsoft has seen moderate success with Bing. Since its launch in May Microsoft`s Bing search market share in the U.S. grew slightly in July to 9 percent, according ComScore, a market research firm. Google owns 65 percent of the search market compared to Yahoo with 19 percent (Bing and Yahoo's combined market share is 27 percent).

Visual Search: Hands On

With the example of visually searching for cars I started out with 25 images appearing on my Web browser. Using a scroll bar on the right I was able to quickly scroll through hundreds of images of cars. When I hovered my mouse over a picture of a specific car a balloon popped up containing additional vehicle information. Click on the image and you are taken to Bing search results for the make and model of the car you were looking at.

Thanks to a slick user interface kicking virtual tires of cars is loads of fun, but what makes this technology really handy is its ability to winnow down you search. On the left-hand side are tools for narrowing the number of cars by 25 most popular, SUVs, or make and base price. Each time you select a preference the number images is reduced.

Unfortunately Visual Search significantly limited to 50 topics Microsoft has created Visual Search libraries for. That's right, there is no Bing engine that can create a Visual Search result on-the-fly for just any topic. Microsoft creates them specifically for what it says is popular search results. Search dinosaurs, Olympic sports, or laptops and no such Visual Search is offered.

I found this an addictive way to explore topics not limited to cars, but also politicians in office, MLB players, and dog breeds.

The number of topics Microsoft says it will expand to depends on how popular the feature is with Bing users.

Official: Book settlement makes 'mockery' of copyright law

By The San Fransisco Chronicle

Google's proposed book settlement with book authors and publishers, allowing the company to digitize and sell millions of books, makes a "mockery" of copyright protections in the U.S. Constitution, the head of the U.S. Copyright Office said Thursday.

The Google book settlement, the subject of a court hearing next month, allows Google to scan out-of-print books without permission from copyright owners, creating a sort of compulsory license, said Marybeth Peters, register of copyrights at the U.S. Copyright Office. The settlement "allows Google to continue to scan millions of books into the future and permits Google to engage in a number of activities ... that are indisputably acts of copyright infringement," Peters told the U.S. House of Representatives Judiciary Committee.

The settlement seeks to circumvent "full public debate" and Congress' authority to change copyright law by allowing Google new rights for digital books, she added.

"The settlement would alter the landscape of copyright law, for millions and millions of rights holders of out-of-print books," Peters said. "It would flip copyright on its head by allowing Google to engage in extensive new uses without the consent of the copyright owner -- in my view, making a mockery of Article One of the Constitution, that anticipates that authors shall be granted exclusive rights."

A hearing on the settlement is scheduled for Oct. 7 in the U.S. District Court for the Southern District of New York. In October, after three years of negotiations, Google, the Authors Guild and the Association of American Publishers announced a settlement of lawsuits filed against Google after it began scanning books without copyright owners' permission.

Google has scanned about 10 million books and has begun offering access to books with its Google Books product.

Representatives of Google, the Authors Guild and the National Federation of the Blind defended the book deal, saying it will give the public access to millions of out-of-print and so-called orphaned books. Orphaned books are those for which no one claims copyright, and the settlement sets up an independent book registry that will seek to find the owners of orphaned works.

Blind people will gain access to digitized versions of books, which can be run through text-to-speech software, advocates said. Disadvantaged students across the U.S. will have access to books now only available in the world's greatest libraries, added David Balto, a senior fellow at the Center for American Progress and a former antitrust attorney with the U.S. Department of Justice and the U.S. Federal Trade Commission.

Lawmakers generally praised the settlement. The settlement represents "one of the most innovative developments" since the printing press, said Representative John Conyers, a Michigan Democrat and chairman of the committee.

But critics said the settlement gives Google an unfair advantage by allowing it blanket access to most books. The settlement rewards Google for scanning first without asking authors and publishers for permission, said Paul Misener, vice president of global policy at Amazon.com.

Amazon has scanned about 3 million books, Misener said. "The difference is, and probably the only significant difference between their book-scanning project and ours, is we first sought permission from the rights holders," he said. "We went to the rights holders, and one by one, negotiated deals ... to be allowed, legally, to scan these books."

The settlement releases Google from liability for any past and future copyright infringement, giving the company a huge advantage over competitors, Misener said.

The settlement would give Google an "unlawful and inappropriate" monopoly and strips away the rights of copyright holders worldwide, added John Simpson, a consumer advocate with Consumer Watchdog. "The deal simply furthers the relatively narrow agenda of Google, the Authors Guild and the Association of American Publishers," he said.

But David Drummond, Google's chief legal officer, told lawmakers that none of the benefits negotiated in the settlement are exclusive to Google. Any other company can negotiate the same deal, he said.

Drummond also told the committee that Google will expand retailer access to books scanned and sold by the company. Google has already committed to allow retailers access to sell in-print books scanned by Google, but on Wednesday, he announced that Google would expand that program to out-of-print books covered by the settlement. Amazon.com and other retailers will be able to sell those books and get part of Google's revenue share, he said.

"We're willing to put our money where our mouth is," Drummond said. "We believe strongly in an open and competitive market for digital books. Google will host the digital books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any Internet-connected device they choose."

Google Look A Bit Different Today? It's Not Your Eyes

By Channel Web

Did Google and Google SEO look a bit different when you first opened it this morning? Did everything look just a bit bigger, but you blamed it on that double latte you had?

Starting late Wednesday, Google (NSDQ:GOOG)'s home page and search results pages feature larger text for Web surfers whose eyesight just isn't what it used to be. Most prominent is the larger search box and the larger "Google Search" and "I'm Feeling Lucky" buttons below it.

The "supersizing" of the Google page elements was announced in a blog post Wednesday by Marissa Mayer, Google vice president of search products and user experience. "Although this is a very simple idea and an even simpler change, we're excited about it -- because it symbolizes our focus on search and because it makes our clean, minimalist home page even easier and more fun to use," Mayer said in the blog.

The blog also offers a link to 17 slides showing the evolution of the Google home page from November 1998 to a sample of an October 2007 home page in Arabic.

Wal-Mart Sets Outside Offerings in Online Mall

By The Wall Street Journal

Wal-Mart Stores Inc., borrowing a page from Amazon.com Inc., Monday began offering merchandise from lesser-known retailers on its Web site in exchange for a share of the revenue.

The world's largest retailer by revenue said it added nearly one million new items to Walmart.com from other sellers as part of a new online mall, known as Walmart Marketplace.

Wal-Mart customers can purchase the products through Walmart.com, but Wal-Mart never touches the merchandise: its partners ship from their sites and handle exchanges and returns.

"Our vision is to make Walmart.com the most visited and valued online site," said Kerry Cooper, Walmart.com's chief marketing officer. Terms of the agreements weren't disclosed.

The move is part of an emerging effort by retailers to embrace the techniques that have made e-commerce companies such as Amazon and eBay Inc. successful. Adding outside merchants allows Walmart.com to considerably widen the range of products it sells, without taking on additional inventory.

Scot Wingo, one of the many keynote speakers of the night said, "Even the mega players can only manage so much selection". Scot Wingo, is the chief executive of Channel Advisor, a company that advises retailers on selling across a variety of Web sites.

Other traditional retailers have similar alliances, including Sears Holdings Corp., which began selling 130,000 Whitney Automotive Group auto parts last year through Sears.com.

Early participants in Wal-Mart's online mall include CSN Stores LLC, an online retailer that sells through websites such as Cookware.com, and Dreams Inc., which sells sports apparel through StarStruck.com.

Wal-Mart.com's expansion isn't likely to shake up the industry. But it could signal the arrival of new marketplaces from traditional online retailers and perhaps even social-networking and search sites.

Google Executive to Quit

By The Wall Street Journal

Google Inc. announced that Kai-Fu Lee, president of Google Inc.'s China operations, is resigning from the company after working to establish the Internet giant as a formidable player in the country.

Mr. Lee will be succeeded by two Google executives, the company said. Boon-Lock Yeo, currently director of Google's Shanghai engineering office, will run engineering for Google China. John Liu, who currently leads Google's sales team in greater China, will assume Mr. Lee's business and operational responsibilities.

Mr. Lee left Microsoft Corp. to join Google in 2005 to develop the company's operations in China, where Google was later than some of its rivals to establish a beachhead.

Mr. Lee's hiring kicked off a legal battle between Microsoft and Google. Microsoft, alleging Mr. Lee violated his employment contract, filed suit against Google. Google countersued, accusing Microsoft of "a shocking display of hubris," according to court documents. The companies settled privately in 2005.

Google said Mr. Lee is leaving to work on his own venture. "With a very strong leadership team in place, it seemed a very good moment for me to move to the next chapter in my career," Mr. Lee said in a statement.

During Mr. Lee's tenure, usage of Google products, including its search service, has grown among Chinese users. The company has also launched some products unique to the market, including an online music service. In announcing Mr. Lee's departure, Google said it was nearly doubling the size of its sales force in China in response to strong growth.

But Google continues to confront a range of headaches in China, which, as the country with the largest number of Internet users, is critical to its growth. Google still trails Chinese search leader Baidu by a wide margin. In the second quarter of 2009, Google drew around 20% of Chinese Internet searches, compared with Baidu's 76%, according to iResearch, an Internet research concern.

Google has also continued to clash with Chinese authorities, who have selectively blocked services such as its video-sharing site, YouTube.

Google's Gmail Goof-Up

By Business Week


It's too bad the National Transportation Safety Board can't investigate Google to find out just why Gmail crashed Tuesday as Google's explanations for its outages (via its dashboard) are short and kindergarten-like.

The NTSB would seek out the root cause of the outage, hold hearings and issue a report with recommendations for fixing the problem. But Google follows the standard operating practice of cloud and SaaS (Software-as-a-Service) providers, and that is to tell customers as little as possible about an outage. They treat their customers like dumb bunnies.

A Gmail outage isn't on the scale of a contaminated food supply incident, the discovery of lead paint on children's toys, or a plane crash—all events that trigger a federal investigation and detailed reports that flesh out causes and remedies.

But what happens if Google wins contracts to provide applications and mail services for Los Angeles and other government entities?

Cloud and SaaS providers increasingly want to manage critical services for government. And in time, outages that are now annoyances may have critical implications to them. Los Angeles' IT department is recommending the city move to Google Apps and says the company's services "often exceed the current city level."

That's a plus for Google but if something goes wrong with LA's IT systems, at least there is still a clear line of accountability to the managers responsible and an opportunity to probe.

But along with telling customers as little as possible, hosting, cloud and SaaS providers indemnify themselves as much as possible from any business losses resulting from an outage.

In theory, the accountability is provided by the market: a customer can move to new service provider. But a migration to the cloud may be a path of no return. LA, in its assessment of cloud services, said that if it ditches its current infrastructure, "it may be cost-prohibitive to return to the city-owned and operated structure."

Today, the harm is mostly economic. When eBay Inc.'s PayPal service crashed last month, it was just something customers had to deal with it.

PayPal blamed the failure on a "back-end router" and some redundancy issues, and left it at that. That meant the companies like Sailrite Enterprises Inc., a sailing supply company, which relied exclusively on PayPal, were unlikely to learn what happened and had to suffer the loss.

But if cloud and SaaS providers manage government services then it's unlikely that an informed public will settle for incomplete explanations about outages.

If the service is critical, they will want to know what went wrong. Was the equipment upgraded, patched? Was staffing at proper levels? When was the last time someone tested the emergency generators? And so on.

Answers to fair and legitimate questions will be sought and little "dashboards" aren't going to cut it.

The Gmail outage also affected the Google SEO search results. Searchers were getting queries that were not relevant to their searches, but, Google has resolved the problem and everything is now functioning properly.

Apple, AT&T Respond in Google Phone Spat

By The Wall Street Journal

WASHINGTON -- AT&T Inc. told federal regulators Friday that it played "no role" in Apple Inc.'s decision to keep Google Inc.'s Google Voice Internet phone application off the iPhone while Apple said that it hasn't rejected the software.

Instead, Apple told the Federal Communications Commission that it is still studying the Google Voice application, but said it has concerns about how Google's application puts the Google brand on Apple's device.

"The application has not been approved because, as submitted for review, it appears to alter the iPhone's distinctive user experience by replacing the iPhone's core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail," Apple said.

The FCC is looking into why Google's phone app wasn't approved for Apple's App Store and whether AT&T, which has exclusive rights to offer the iPhone to customers in the U.S., had anything to do with it. In late July, the FCC asked all three companies for information on what led to the software's apparent rejection from Apple's online store.

In its letter to the FCC Friday, AT&T said it wasn't responsible for keeping Google Voice off of the iPhone and that it doesn't block consumers from using lawful applications on the Internet.

"AT&T was not asked about the matter by Apple at any time, nor did it offer any view one way or the other," said Jim Cicconi, AT&T's senior executive vice president for external and legislative affairs. "More broadly, AT&T does not own, operate or control the Apple App Store and is not typically consulted regarding the approval or rejection of applications for the App Store or informed when an application is approved or rejected."

AT&T said that it wasn't asked by Apple about the Google Voice app "nor did [AT&T] offer any view one way or the other," according to the letter.

Additionally, AT&T said that it plans to take "a fresh look at possibly authorizing [Internet phone] capabilities on the iPhone for use on AT&T's 3G network." AT&T currently restricts use of some Internet phone applications, notable Skype's phone service, on the iPhone to Wi-Fi networks.

Google also filed a response to the FCC about the matter, but redacted any information about its talks with Apple on its Google Voice app.

Thus far, the FCC's interest hasn't reached the stage of a formal investigation. FCC Chairman Julius Genachowski has previously told reporters that the agency is interested in finding out more about what happened in the matter.

An FCC spokeswoman said the agency was reviewing the letters.

Apple declined to approve the Google Voice application and related software developed by third parties in mid-July and some have speculated that AT&T had something to do with the decision.

AT&T has maintained for several weeks that it doesn't have control over Apple's App Store and that any decision to reject an application lies with the computer giant.

Google Voice doesn't replace traditional or wireless phone services since it requires users to have at least one other phone. Google Voice is more of a call directing service. Google Voice users choose a phone number that, if called, will ring all of the user's other phones. It also offers other services, like call recording and voice mail transcription.

However, Google Voice's cheap international calling rates and free SMS message service could be more problematic for wireless carriers, which make healthy profits on text-message fees.

It's not entirely clear what action the FCC could take against Apple to require the company to offer the Google Voice application to its customers.

The agency's inquiry, however, comes as its focusing more attention on competition issues in the wireless industry, including the issue of whether to ban exclusive handset deals like the one between AT&T and Apple for the iPhone. Next week, the agency plans to open broad inquiries into the state of competition in the wireless industry and whether to change truth-in-billing rules designed to prevent phone companies from tacking on extraneous charges onto subscribers' bills.