News Corp., Microsoft Discussing Web Deal

Wall Street Journal

News Corp. has held discussions with Microsoft Corp. about a partnership that could result in News Corp. removing its newspaper content from Google Inc.'s search engine while continuing to feature it on Microsoft's online properties, according to people familiar with the matter.

The talks are still at a very early stage and may not result in a deal, according to these people. Among the most thorny issues, one of these people said, are the terms under which Microsoft would compensate News Corp., if at all, to feature its news content, which ranges from The Wall Street Journal to the Sun of the U.K.

It isn't clear whether the talks include News Corp.'s non-newspaper sites, such as its popular MySpace social-network or Fox television properties.

The discussions are another sign of a growing push by news organizations to devise new revenue streams for their online news and information in response to the challenges posed by the Internet.

The Financial Times reported Sunday on its Web site the discussions between News Corp. and Microsoft.

While such a deal with Microsoft would be another way for News Corp. to get paid for its newspaper content, the company would risk losing a huge audience if its stories weren't available to Google users.

News Corp. executives have been among the most vocal proponents of charging consumers to read stories online. The Wall Street Journal already charges for online access to parts of its site, and News Corp. executives have said its other news outlets will follow suit.

Along with the Associated Press and other news organizations, News Corp. also has criticized Google and other big Web sites for using excerpts of their stories to link to the news organizations' sites.

Google and other Web portals say they are within their legal rights to post snippets of news stories, which help point traffic to news sites.

Gabriel Stricker, a Google spokesman, said Google has a "clear policy of respecting the wish of content owners" by allowing them to prevent their material from showing up in Google search results, though he declined to comment directly on the talks between Microsoft and News Corp.

"We believe search engines are of real benefit to newspapers, driving valuable traffic to their Web sites and connecting them with new readers around the world," Mr. Stricker said.

News Corp. and other news outlets have said they want major Web sites to pay directly to use their content, though the news organizations haven't necessarily been specific about how to do so.

Microsoft's efforts to become a bigger player in the search market and its deep financial resources have made it a potentially appealing alternative to Google for publishers looking for ways to charge for content.

The company is battling with Google SEO to better its position in the lucrative search market, and has steadily gained small amounts of market share since its launched a new version of its search engine, called Bing, earlier this year. Microsoft accounted for 9.9% of the U.S. search market in October, while Google had 65.4%, according to comScore.

Microsoft could enhance Bing as an online destination if it features a better selection of news content than Google. According to a person familiar with the matter, News Corp. initiated the conversations with Microsoft. The software giant has held conversations with other publishers as well, this person said.

The talks between the parties have included a possible plan to "delist" News Corp. stories from Google's massive search index, which means they wouldn't appear in search results on Google's site. Any Web site can prevent Google from indexing their site by including special commands in their Web pages.

Automated Video Captioning Changes The SEO Game

from MediaPost

Google launched an automatic video captioning service for YouTube videos in an effort to make the visual clips more accessible to deaf people or anyone searching for videos online, but some see advantages for search engine optimization, too.

The machine-generated service will generate English-only captions initially on 13 partner channels. The service combines Google's automatic speech recognition (ASR) technology with the YouTube caption system to offer automatic captions.

"Auto-caps" use the same voice recognition algorithms in Google Voice to automatically generate captions for video, according to Ken Harrenstien, the Google software engineer who created the technology.

The captioning service isn't perfect, but will improve in time, Harrenstien explains in a blog post. Harrenstien, who is deaf, created the technology because "the majority of user-generated video content online is still inaccessible to people like me," he wrote.

The idea of video captioning is not new at YouTube, but the automatic feature could help to further optimize videos for people searching for content across engines and on YouTube. In theory, video scripts should become more optimized by the keywords in the captions. And while it's a great feature to make content more accessible for the deaf, other benefits exist for marketers.

"Having a transcript in the video is huge for SEO," says Andrew Shotland, owner of Local SEO Guide, a SEO in Pleasanton, Calif. "Having targeted text on a page helps the video rank in search engines for specific searches."



Today, very little text from video is being captured on the Web because no one wants to transcribe thousands of videos. Walking through an example, Shotland says if YouTube begins by making one million videos available with automatic video capturing, that adds nearly a million new pages that engines can crawl, index and rank because on those pages are many keywords.

"If we're talking about a plumber video, that page will have words like leaky pipe, city name, change your toilet and many others the publisher may not have added to the written description on YouTube," Shotland says. "The videos will attract search engines even more. I wouldn't be surprised if YouTube's traffic goes through the roof. The video pages will have so much more text they can rank on."

Shotland says if the video transcripts work similar to the embeds, the tag that lets people add the video to their Web site, anyone pulling the YouTube video onto their site can also rank for the text.

The problem, he says, is that spammers will begin grabbing the captioning transcripts and people will begin to see the text appear across the Web. "It will become a spammer's wonderland," Shotland says.

The challenge to index videos has always been the self-tagging architecture, according to Kevin Ryan, chief marketing officer at WebVisible. "In theory, the videos should index more efficiently if they have captions," he says. "It's a big challenge because it's a self-attribution model. The first thing a brand manager wants to do is control where the video is seen, so it's never positioned in a negative light."

Google also announced a feature called Automatic Timing to help video owners add manually created captions to YouTube videos by automatically determining when the words are spoken in the video. Text transcripts are required -- no time codes required -- and Google does the rest.

Video captions made it to I/O videos on Friday. Every English and Spanish video from I/O now has captions that work in YouTube, writes Naomi Bilodeau, manager on the Google development team.

Chinese Adept At Internet Adaptation

Wall Street Journal

BEIJING—Baidu Inc., owner of the most popular Web site in China, isn't known for ground-breaking innovation. From the Google-esque look of Baidu.com's main page to its Wikipedia-like encyclopedia to a question-and-answer service that's similar to Yahoo Answers, the Chinese Internet search company has long been tarred by critics as unoriginal.

But Baidu also is an example of how many Chinese technology companies manage to outfox foreign competitors by tailoring existing technologies to China's growing and fast-changing market. While that may not earn them respect as global innovators, their understanding of the Chinese consumer has allowed many of them to beat bigger foreign rivals at their own game in China, home to the world's largest number of Internet users.

Baidu dominates China's Internet search market, holding a 61% share of industry revenue in the second quarter, compared with 29% for Google Inc., its biggest Internet-search competitor.

While that is partly the result of regulatory issues and loose enforcement of copyright protections in China that have enabled Baidu to provide access to unlicensed music downloads through its site, it also is the result of subtle but effective distinctions on its pages and of popular tools like Baidu Post Bar, an online message board that lets users create discussion topics.

For a long time, the search bar on Baidu's main page was longer and wider than Google's, says Liu Ning, a Beijing analyst with research firm BDA China Ltd. "This makes a difference for Chinese users, because Chinese characters are much more complex than English letters, and it helps to be able to see them more clearly," says Mr. Liu.

Post Bar, meanwhile, represented an early recognition by Baidu that many Chinese Internet users are drawn to online forums. Unlike some similar online forums where moderators predetermine the categories for discussion, Post Bar lets users easily create their own categories as hot topics develop and find related posts through keyword searches. This function is popular in China.

A Chinese Feel

Baidu isn't the only company that has benefited by taking existing technologies or ideas and giving them a Chinese feel.

Tencent Holdings Ltd., based in Shenzhen, popularized instant messaging in China by pairing the service with online games and blog hosting—heavily used applications in China—and by rewarding users for high usage with points that could be exchanged for prizes. Now, the Hong Kong-listed company has robust online game and music platforms, a massive social-networking site and a bigger market value than Yahoo Inc.—about $35 billion versus $25 billion.

Alibaba Group's e-commerce site Taobao.com, meanwhile, uses a model that appears similar to eBay Inc.'s online-auction model. It added an instant-messaging service that allows buyers and sellers to haggle over prices, similar to the way business is conducted offline in China. Taobao is now the primary destination for online shopping in China, with almost $12 billion in transactions in the first half of this year. EBay shut its own Web site in China and replaced it with one majority-owned by local player TOM Online Inc., a unit of Hong Kong-based TOM Group Ltd., but still has only a tiny fraction of the market.

Baidu and these other companies have taken advantage of the fact that foreign firms often struggle to adapt their businesses for the Chinese market.

Kai-Fu Lee, the executive who ran Google's operations in China from the time the company entered the market in 2005 until he resigned in September, says the firm's challenges included simply coming up with a name that Chinese people could pronounce. "Google" is a poor fit for Chinese tongues, and the Chinese characters Google chose for its name, which are pronounced "goo guh," also got a poor reception. In 2007, Google created a shortened version of its Web address for Chinese users that is easier to remember, in any language: G.cn.

Baidu, founded in 2000 by Chinese-born Silicon Valley veteran Robin Li, portrays itself as the true Chinese choice in Internet search. Baidu says on its Web site that its name—whose characters mean "hundred" and "degree"—was inspired by an 800-year-old Chinese poem because it "wants the world to remember its heritage" and that "Baidu focuses on what it knows best—Chinese-language search."

Some of Baidu's products, however, look remarkably similar to those invented by others. Its question-and-answer service, Baidu Knows, allows users to post questions about anything that can be answered by anyone. And just like Yahoo Answers, users can vote for the responses they think are most useful. One popular recent question on the Baidu site was: "What is the most expensive food in the world?" The most popular answer: "the gold foil used to decorate chocolates and other foods."

Baidu Encyclopedia, meanwhile, has been accused by Wikipedia users and the nonprofit Wikimedia Foundation, which runs the Wikipedia site, of having some entries that appear to copy Wikipedia entries word-for-word, without credit. Still, Baidu Encyclopedia now has close to two million articles, compared with the less than 300,000 on Chinese Wikipedia.

Baidu has benefited from the fact that censors periodically block content from the Wikipedia site, which isn't licensed in China. Baidu has had few problems with censorship because it restricts content that might draw fire from the government, such as information related to Tibetan independence. While Google does the same—a decision that drew international criticism—its content has often been blocked by censors, and users redirected to a page containing a Baidu search box.

'Just a Feeling'

Then there is Baidu's MP3 music-search service, which lets users search for songs and download or stream them directly through Baidu's Web site. While this is an innovation of sorts—analysts say Baidu was among the first sites to provide such a service—it is one that has generated criticism as well as user traffic, with the recording industry saying Baidu facilitates piracy by providing links to unlicensed versions of songs.

Baidu says it isn't doing anything wrong. "Baidu is dedicated to protecting intellectual property and will continue to act in compliance with relevant laws and regulations," a spokesman says.

Google this year began offering a music-search service that links users to licensed tracks. A spokeswoman says it is one of the "many unique and innovative products" Google has initiated for Chinese users. Google, she adds, will continue to seek ways to "provide a better user experience."

Even if Baidu's features aren't always original, some Chinese users say they don't care. "Google may have stronger innovations than Baidu, but some of their functions are not necessary for me," says Zhou Chanjun, general manager of a lighting company in Beijing. "I can't say why we think Baidu is more Chinese. It's just a feeling."

Will The Net Survive Its 40th Birthday?

Wall Street Journal

The Internet recently celebrated the 40th anniversary of its founding, just in time to be welcomed in Washington by opposing political visions of its future. One is reflected in a proposal called the Internet Freedom Preservation Act, which would empower regulators to micromanage the Web. The alternative, the Internet Freedom Act of 2009, would keep regulators away.

As their similar names suggest, these laws, sponsored respectively by Rep. Edward Markey (D., Mass.) and Sen. John McCain (R., Ariz.), are both ostensibly intended to keep the Internet open. The two sides disagree about whether the way to do this is via firmer control or by keeping regulators away.

Into this divide has marched the Federal Communications Commission (FCC), which under the banner of "net neutrality" proposes an expansion of its powers over the Web. The agency argues it needs to control broadband Internet providers to make sure they don't discriminate in favor of or against any particular content, application or device. FCC Chairman Julius Genachowski acknowledges that his agency operates in an "uncertain legal framework" that makes it unclear what power it has to set rules on the Web. Despite this uncertainty, he wants his agency to "evaluate violations of the nondiscrimination principle as they arise, on a case-by-case basis."

One way to look at the battle over net neutrality is simply as one set of companies against another. There are the network owners and administrators, who want to continue to control access rules, pricing and traffic management on their networks. Then there are content companies and other users of the network, who want regulators to ensure easy access for them.

The corporate dividing lines are growing hazier. Microsoft and Yahoo recently dropped out of a net-neutrality lobbying group. Google, which has in the past supported some definition of net neutrality, is now not so sure about the wisdom of giving regulators broad authority. "It is possible for the government to screw the Internet up big time," Google Chief Executive Eric Schmidt recently told the Washington Post.

Even the FCC proposal yields on many once-sacred net-neutrality precepts. Its rules would be subject to "reasonable network management," so that providers could treat bandwidth-hogging content such as video differently from simple email. Providers would be able to respond to increasing demand by rationing services through premium-pricing models.

The uncertainty over how to ensure an open Web is the latest example of how technology is moving so quickly that our regulatory institutions can't keep up. A new book, "The Laws of Disruption" by technology consultant Larry Downes, explains this gap with a powerful idea: "Technology changes exponentially, but social, economic and legal systems change incrementally." We're used to ever-increasing computing power and endless innovation online, but politicians and regulators are left trying to manage technologies beyond their control or understanding.

"The mistake regulators and those who enable them continue to make is trying to micromanage individual technologies or applications," Mr. Downes writes. "The bottom line is simple. Encouraging infrastructure is good; micromanaging it is bad."

Why do emotions run so high on what is in essence a technical debate about how to run a network? Mr. Downes told me last week that "consumers have been done a great disservice by corporate interests on both sides of this fight, who have reduced a complicated business and technical problem into a sound bite. They've been told that net neutrality is nothing more and nothing less than a fight for the soul of the Internet."

His view is that "U.S. consumers have plenty of reasons to be suspicious of both the FCC and the communications industry." His advice: "Consumers should ask themselves which of these powerful interests is more likely in the end to abuse its power. Who, in other words, has the greater potential to make things worse for everyone?"

His answer seems sensible: "Absent any evidence of serious market failure yet, I'd much rather deal with the devil I know than a resurgent FCC."

The best defense against access providers' acting unreasonably is more competition. The alternative would treat the modern network of the Web as if it were the 19th-century network of railroads, with the FCC as a modern-day version of the Interstate Commerce Commission, which set rail rules and tariffs, slowing innovation in transportation until the agency was abolished in 1995 as a bureaucratic anachronism.

In highly regulated industries, regulations become barriers to entry. It's costly for new competitors to comply with the rules, which are designed for incumbents. As the U.S. falls further behind in broadband, we need more innovation and more competition, not a cozy, regulated cartel.

Technology may be changing faster than we can keep track, but we are well acquainted with the frailties and foibles of human institutions in Washington. Sometimes it's wiser for mortals to stand aside and leave technology to advance at its own pace. After its first 40 years delivering freedom and abundance, the Web has earned the benefit of the doubt.

Yahoo Shuts Down A Piece Of Ancient Internet History

LA Times

We always imagined how this might end: GeoCities would finally take down all of the animated "under construction" signs, and we'd hear one last Midi file to the tune of horns playing taps.

Instead, GeoCities will probably go down with a whimper today.

Time is up for Yahoo Inc.'s scheduled closing of perhaps the most significant virtual museum in recent history. Years ago a central meeting place for a massive chunk of American Web surfers, GeoCities will lock its doors and take millions of pages offline.

GeoCities allowed anyone to build a custom Web page for free and reserved a small amount of virtual storage to keep pictures and documents. It was perhaps the first mainstream example of an open, participatory and personal Internet.

At the turn of the century, GeoCities was nearly ubiquitous. Fathers created websites about their families; kids created sites about Pokemon; teenage girls created sites about the Backstreet Boys. Practically every facet of culture was documented and thanks to search engines, easily accessible.

All of those documents are about to disappear.

GeoCities stopped accepting new registrations earlier this year. Existing users could continue to update their pages and save sites to a personal hard drive in advance of the impending closure. Yahoo is encouraging the relatively few remaining users to transition their accounts to the company's $5-per-month Web hosting service.

The decision to shut down GeoCities rather than keep it around for historical reference and, say, slap ads all over it is curious. Especially when you consider that the network is still among the top 200 most-trafficked sites on the Internet, according to metrics tracker Alexa.

"Yahoo continuously evaluates and prioritizes our products and services in alignment with business goals and our continued commitment to deliver the best consumer and advertiser experiences," according to a company spokeswoman. GeoCities' closing is "part of our ongoing effort to prioritize our portfolio of products and services in order to deliver the best products to consumers."

The company downsized in a different way on Friday when billionaire financer Carl Icahn announced he was resigning as a director.

Yahoo boasts that it has closed nearly 20 services in less than a year, which includes a sort of competitor to GeoCities called Yahoo 360 as well as My Web, which was similar to Delicious, another Yahoo property.

The collapse of GeoCities, though, is perhaps the most epic failure in Yahoo's portfolio. After going public in 1998 during a period when GeoCities rose to unprecedented prominence as a top-five player on the Web, the following years practically embodied the grander burst of the Internet bubble.

Yahoo paid about $3 billion in 1999 for a company that seemed poised to continue its domination of the user-driven Net. Failing to turn any significant profit from all of those pop-ups and banner ads (in fact, there's questions about whether GeoCities was ever cash-flow positive), the purchase -- or perhaps Yahoo's inaction once GeoCities was acquired -- turned out to be one of the company's most costly mistakes.

But Yahoo's folly spelled unimaginable fortunes for two Los Angeles entrepreneurs.

David Bohnett, a tech-savvy businessman from Beverly Hills, took an interest early on in emerging technologies. In 1994, he decided that everyone should be able to have their own website. He purchased a computer server and connected with John Rezner, a friend of a friend with the know-how to build Web applications.

"He unpacked the very first server out of the box," Bohnett said about his colleague.

From the beginning, Bohnett's idea was focused on bringing the real world to the Web -- be it who people are, what they're doing or what they're interested in.

GeoCities was originally called Beverly Hills Internet (and, for a short while, GeoPages). Its initial feature focused on two cameras situated in different parts of Los Angeles -- one at their headquarters near Rodeo Drive and another at a friend's office at Hollywood Boulevard and Vine Street -- capturing video 24/7 and broadcasting it to the Web.

Before banner ads, EBay, Google, Friendster, MySpace or Facebook, there was GeoCities and its concept of site neighborhoods.

The neighborhood analogy required users to self-categorize based on what they would write about. Choose Beverly Hills for a site about shopping, Capitol Hill for politics or Hollywood for entertainment.

"People were very selective about where they wanted to live," Rezner said. "They wanted to live next to people with good pages or ones that were similar to theirs."

As the site grew, the neighborhood system had some trouble scaling. They created more addresses, new neighborhoods based on more selective areas of interest and things like sub-neighborhoods. Real estate boomed, and in order to keep residents happy, they began evicting bad neighbors.

Eventually, after Yahoo got a hold of GeoCities, it killed the entire concept and let people pick their own unique names. "It's a shame," Rezner said. "There's nothing like that in the 2D world."

"The Yahoo sale was sort of bittersweet -- obviously, financially, it was great," Rezner said. "Nothing ever happened. GeoCities stagnated from Day One."

"We could have gone into search because we had all of this data. At that time, we had a huge portion of the Web on our servers," Rezner said. "I was screwing around with algorithms, trying to do search, that were remarkably similar to what Google was doing."

Other ideas Rezner was kicking around in 1999 included profiles similar to Facebook's and an open API for developers -- a system that has worked extremely well for Twitter. But by that time, his co-founder and former GeoCities chief executive was gone. And Rezner's involvement within day-to-day operations were beginning to diminish.

"Social networking sites are very fadish," Rezner said. "They constantly have to evolve. I think GeoCities had to do that."

Bohnett echoes those sentiments. "It's not uncommon that a larger company isn't able to focus on doing a lot of different things well," he said. (Both Bohnett and Rezner agreed on one thing: Facebook won't be on top forever.)

Likewise, Jonathan Linner, an outsider working as chief executive on a location-based social network called Brightkite, suggests Yahoo spin off GeoCities to a start-up team or shop it around, rather than pull the plug.

But unlike Skype's co-founders, Bohnett and Rezner don't appear to be interested in reacquiring their baby. They now spend their time and fortunes investing in start-ups.

Bohnett with Baroda Ventures has funded companies that include NetZero and Maps.com. Rezner has invested in numerous companies, none of which have really taken off.

The Bohnett Foundation was founded in 1999 and provides funds to social activism groups in gun safety, voter registration, transportation, language research and support for the gay and lesbian communities. "It is in fact consistent with my personal philosophy of giving people a voice, ensuring that the Internet is accessible to everybody," Bohnett said.

GeoCities was a cornerstone of today's young Internet entrepreneurs. Many say they got started on the Web using GeoCities' site builder.

"I lost my 'HTML virginity' with GeoCities," wrote Reddit founder Alexis Ohanian in an e-mail. "Somewhere in SiliconValley/Grid. ... I wish I could find it."

Some GeoCities pages appear to have been lost over the years. But an independent group called Archiveteam, headed by Jason Scott, has been trying to save everything left before Yahoo closes the building.

The group of dedicated digital historians have been pointing about a hundred computers at the GeoCities domain 24 hours a day for months. First, the machines crawled the neighborhoods, duplicating copies of everything in sight.

"The hard part was going through and trying to find random user names," Scott said about the obstacle Yahoo introduced later in GeoCities' life. "Basically, we're hitting Google and crawling in every direction."

So far, Archiveteam has captured about a terabyte of data, or about a thousand gigabytes, in its mission of mirroring the entire site.

"That's a lot of data," Rezner said when we told him about Scott's project.

You have no idea. Neither do any of Archiveteam's dozens of volunteers. Yahoo won't tell them how big GeoCities really is. The amount of allotted storage fluctuated over the years, making it even harder to estimate, Scott said.

"We're running blind," Scott said.

Scott, an unemployed systems administrator looking to transition into a career as a historian, has found a lot of history in his quest. He's dug up countless family trees, computer software directories and a document on Romania that he believes was compiled over years.

Even the endless "Saved by the Bell" fan sites -- these are history. Scott put together a page populated with a bunch of the "under construction" Gif files that were synonymous with the early Web. The spiritual successor is the "beta" tag, Scott notes.

"I was trying to illustrate quickly the things that could be lost," Scott said. "All of these discussions are happening at the function of having these artifacts laying around."

Scott is also working with Archive.org, the group behind the Wayback Machine, to hit the project from two sides. But only a few grains of sand are left atop the hourglass, and scores of pages are sure to be lost.

The story of GeoCities this decade is one of a skydive from the clouds without a parachute or supervision and a sack of missed opportunities.

"Yahoo never knew the value of GeoCities," Rezner said.

FCC Considering New Rules For Internet Access

Wall Street Journal

WASHINGTON -- Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service.

The Federal Communications Commission Wednesday will lay out the case for expanding broadband Internet service, outlining current obstacles to making it widely available. The agency is considering whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for the broader access.

The proposals, which have sparked criticism from telecommunications and cable companies, represent a reversal from the Bush Administration, when regulators cut back on government control of Internet and telephone service.

The new commission, controlled by Democrats, is considering whether more government control is needed to ensure competition and more affordable Internet service.

The FCC staff will float possible solutions in December and make formal recommendations in February, when it is set to release its National Broadband Plan, a blueprint for improving broadband speed and access. Congress asked the FCC for the plan earlier this year.

FCC officials estimate it could cost anywhere from $20 billion to $350 billion to connect all American households to high-speed Internet service, depending on speed offered.

They haven't yet said how much of that investment might come from taxpayers.

The agency is looking at three politically charged proposals to reach its goal of universal broadband access.

One is to as much as double a $7 billion federal phone-subsidy fund, called the Universal Service Fund, which subsidizes phone service in rural areas for low income Americans, and expand it to subsidize construction and operation of broadband networks in rural areas. Money for this fund comes from a small charge tacked on to consumer phone bills.

Previous efforts to overhaul the fund have run into significant resistance in Congress, particularly among congressman and senators who represent rural areas where phone cooperatives and small phone companies don't want to lose the federal subsidies they get to provide service.

FCC staff also are studying whether to revive "open access" rules, which would require Internet providers to lease their networks to rivals at government-regulated rates.

Similar rules are in place in Europe and some Asian countries -- and some consumer advocates say open access is one reason why Internet service is cheaper and faster in those countries.

FCC officials have made no decisions yet on whether to adopt any of these proposals. The five-member FCC board will be the final say and they haven't been presented with any options yet.

Still, large phone and cable companies are against any effort to allow open access, arguing they will have little incentive to invest billions in networks if they are required to offer below-rate access to rivals.

In recent weeks, they have resisted efforts by the FCC's staff to gather data for pricing models. They are concerned the data-gathering might be used to help justify government rate setting, according to industry executives. FCC officials say they wanted the data for different purposes.

Consumer groups say open-access rules will spark competition and lead to more choice and lower Internet prices.

"It provides a way to bring more competition into the broadband marketplace which could drive down prices for consumers," said Joel Kelsey, policy analyst at Consumers Union, publisher of Consumer Reports.

The issue bubbled up last month, when Harvard University's Berkman Center for Internet & Society released an FCC-commissioned study which concluded that other countries have faster and cheaper Internet access because of open-access rules.

On Monday, AT&T told the FCC that the Harvard study's conclusion, "that open access is the talisman for success in broadband, is nothing short of astonishing."

The Harvard study "seems to assume throughout that we should apply the lessons of the past to the future," wrote Link Hoewing, a Verizon assistant vice president for Internet issues, on the company's policy blog. He argued it didn't make sense for the FCC to look at applying old rules, which were designed for the traditional phone system, to the fast-evolving Internet. Verizon declined to comment.

The National Cable & Telecommunications Association said the FCC shouldn't reach a "false and foregone conclusion" that such rules would increase the availability of high-speed Internet service "when a clear preponderance of empirical evidence reaches the polar opposite conclusion."

The FCC's third option for broadening Internet access, floated last month, has already stirred controversy.

The agency suggested that it might reclaim some airwaves from TV station owners and auction them off to wireless companies for more high-speed wireless Internet services.

Broadcasters, including PBS executives and station owners from Texas and other states, have been up in arms, streaming into the FCC over the past two weeks to lobby against the plan.

"The political realities of this are huge," said Gordon Smith, a former Senator from Oregon who recently became head of the National Association of Broadcasters on Tuesday. The FCC's proposal has "a long way to go," he predicted.

Phone and cable companies are already concerned by a separate FCCinitiativewhich would prevent Internet providers from favoring some Internet traffic. These net-neutrality proposals are opposed by Internet service providers, who argue that they need flexibility to manage their networks and potentially offer premium services to customers willing to pay more for faster delivery.

The FCC hasn't formally proposed any open-access rules, which require companies to lease space on their networks to competitors, and may decide not to do so. "We're looking at lots of things in the entire ecosystem. It would be premature to suggest we're moving in a particular direction," said Blair Levin, a former telecom analyst who's overseeing development of the National Broadband Plan for the FCC.

He said that the Universal Service Fund, which is financed by fees charged on consumer phone bills, is flawed because it only covers phone service and not broadband as well.

If the agency heads down the open-access road, it would be returning to policies the FCC adopted in the wake of the 1996 Telecommunications Act, which opened the local and long distance phone markets to more competition.

Congress required phone companies to lease part of their networks to competitors, but it took the FCC the better part of a decade to write rules that withstood legal challenges from the telephone companies. The FCC exempted broadband lines from such regulation in 2002.

AOL To Cut One Third Of Workforce

Wall Street Journal

AOL plans to cut its workforce by one-third in the coming months as the Internet company continues to restructure and refocus its strategy while preparing to be spun off from Time Warner Inc. (TWX).

The company, which employs about 6,900 people, said it will reduce its annual operating costs by $300 million. As a result of the layoffs and other measures, it expects to take charges of up to $200 million in the first half of next year.

AOL Chief Executive Tim Armstrong is in the midst of a campaign to sell the company to investors as an independent, publicly traded business after years of strategic shifts and disappointing financial performances under Time Warner's ownership. He launched an effort to reduce the company's cost structure called "Project Everest" four months ago.

At its height, AOL had more than 20,000 employees in 2004, a number that was roughly cut in half three years later. Many employees worked in call centers to serve the company's dial-up Internet access customers.

In January, Armstrong's predecessor, Randy Falco, said AOL would cut 10% of its workforce, or about 700 employees, and several rounds of layoffs occurred in connection with that plan. The company also hired a number of journalists over the course of 2009. Armstrong has said the company will focus on expanding in online media content and branded display advertising as its dial-up Internet access business declines.

"This shows that at least they are proactively trying to figure out the best business model going forward," said David Joyce, an analyst with Miller Tabak & Co.

Armstrong told employees Thursday that he will ask for 2,500 volunteers to be laid off, according to AOL spokeswoman Tricia Primrose. The voluntary layoff program will begin on Dec. 4 and run through Dec. 11.

"We will need to do an involuntary layoff if we do not reach the target numbers through the voluntary option," Primrose said in an email. "We believe the voluntary program gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs."

Meanwhile, Armstrong will surrender his 2009 bonus, which was expected in a range between $1.5 million and $4 million.

"That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees," Armstrong said in an email to employees.

Time Warner holders will get one share of AOL Inc. for each 11 shares of Time Warner they own in the spinoff, which is scheduled to take place Dec. 9.

Google Buys AdMob, Invests In Mobile Advertising

PC World

Google's mammoth $750 billion purchase of mobile advertising company AdMob signals a new era in online advertising. Google is looking to take its online search advertising success to its Android mobile platform and create a new lucrative revenue stream.

Google is somewhat new to the mobile operating system and mobile device markets, but one market it understands, arguably better than any other entity, is online advertising. So, there is reason to raise an eyebrow when Google throws down $750 million to purchase a company like AdMob that is focused on mobile advertising.

Mobile advertising is a nascent market, but Google is placing a pretty hefty bet on its continued success. AdMob has built a solid reputation among the emerging mobile ad competitors, serving ads to both the iPhone and Android platforms. The purchase keeps Google a step ahead of the competition and provides it with an opportunity to help define the market as it has defined the online search advertising industry.

Google developed the Android mobile operating system as a license-free open source project. Now that Android is gaining a significant stake among mobile phones with devices like the Motorola Droid, Motorola Cliq, Samsung Behold II, and HTC Droid Eris, Google is ready to cash in. The purchase of AdMob provides Google with a revenue stream it can use to capitalize on the popularity of Android.

Google has made other purchases this year, like On2, reCAPTCHA, and the rumored purchase of Gizmo5. Those purchases pale both in the investment made by Google and the potential impact they have on Google's business model and revenue.

You have to do a double-take when any company invests three-quarters of a billion dollars to purchase another. Whatever Google's plan is, you can bet that it has mapped out the strategy for recovering the investment. Google wouldn't spend $750 billion without a pretty solid plan for leveraging the purchase and turning it into a lucrative revenue stream.

The AdMob purchase is sort of the mobile seo advertising equivalent of Google's $3.2 billion purchase of DoubleClick a few years ago. Google had begun developing an in-house solution with AdSense for Mobile, but why waste time and money reinventing the wheel when AdMob already has a successful platform for serving feature-rich ads across mobile platforms.

Google is preemptively pleading its case against any potential claims of antitrust concerns. Google is quick to point out that the availability of mobile advertising that can be embedded in apps like those found in the Apple App Store and Google's Android Market help developers deliver a more diverse selection of functionality for mobile devices.

There are more mobile devices in the world than computers, and as those mobile devices have evolved to become portable computing platforms complete with broadband web access, search engine advertising like that provided by Google and Bing has to evolve as well.

The AdMob purchase is almost guaranteed to have a ripple effect, with Google competitors either expediting their own competing services, or purchasing an AdMob competitor to get in the game as quickly as possible like Google is doing.

Google, Verizon Deepen Friendship
Wall Street Journal

When Verizon Wireless and Google Inc. set out to challenge the iPhone, they started from less than scratch. They stood on opposite sides of major industry issues and had never worked closely together.

Now they're counting on an unlikely but growing friendship between their chief executives, Eric Schmidt of Google and Lowell McAdam of Verizon Wireless, to pave the way forward.

On Friday, Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone PLC, started selling two phones that are the network's first to run on Google's Android software. Verizon is putting the muscle of its largest marketing campaign ever behind the Droid from Motorola Inc., one of the two new devices.

In recent weeks, Messrs. McAdam and Schmidt have appeared at joint news conferences and co-authored a blog post on telecom regulation. They regularly visit each other when they travel cross-country. Mr. Schmidt even likes to send Mr. McAdam updates on his visits to Verizon stores.

While both men are trained as engineers, they have different personalities. Mr. Schmidt, a Silicon Valley veteran with a professorial demeanor, is comfortable in the spotlight. Mr. McAdam, who served six years with the Navy Engineer Corps and is a telecom veteran, is soft-spoken and publicity shy.

The relationship had a lot of history to overcome, including differences over "net neutrality," a hot-button idea about how the Internet should be managed. Google had called for stronger regulation to prevent telecom carriers like Verizon from slowing certain data traffic in favor of others. Carriers said new regulations could hurt their ability to manage the quickly growing demands on their networks. The Federal Communications Commission is deliberating on new net neutrality guidelines.

The two companies have butted heads elsewhere. Last year, Google participated in a government auction of wireless spectrum on the condition that the winners open the airwaves to any device. That condition forced Verizon, which paid $9.36 billion for its share of licenses, to further open up its network.

But soon after the auctions ended, in March of last year, Mr. McAdam visited Mr. Schmidt at Google's sprawling campus in Mountain View, Calif., and lobbed a pitch at him. The two men, who had spoken only sporadically before, talked for an hour and a half, taking a late-morning meeting into lunch at Google's free cafeteria.

Mr. McAdam said Verizon was willing to relinquish some control over the applications that run on its network. "We thought: Why don't we try to do something like Android on steroids?" Mr. McAdam says. Given the opportunity to work with a big player in the wireless industry, Google bit.

When Google released Android in 2008, it made it free and customizable, in hopes that some phone makers would just incorporate it into their devices without serious assistance from the company. Since then, however, it has given special attention to wireless carriers including Deutsche Telekom's T-Mobile USA and now Verizon, to build products that highlight Google services such as search and mapping.

Overshadowing—and spurring—the talks were rivals AT&T Inc. and Apple Inc., whose iPhone has been the main engine of AT&T's recent growth. In the last quarter, AT&T added two million new subscribers, more than half from new iPhone activations, while Verizon added 1.2 million customers in the same period.

But making Google and Verizon work together wasn't that easy. For one thing, Verizon was jittery that it had only a handshake agreement, without the contract it usually requires, according to Mr. McAdam. But the two CEOs kept meeting over the next months, bonding over episodes like a snake escaping from its tank while they were meeting in Google's New York office.

Meanwhile, the talks "oscillated" between various layers of Verizon and Google executives, says Andy Rubin, a Google vice president of engineering who was involved in the negotiations. Mr. Rubin and John Stratton, Verizon Wireless's chief marketing officer, began to hone the fine points of the phone that would become the Droid.

The companies brought in Motorola to design and make the flagship Android phone, the Droid, and roped in Motorola's co-CEO Sanjay Jha to take the lead. Mr. Jha, looking to add a much-needed hit product to Motorola's lackluster lineup, started talking every couple of weeks with Mr. McAdam as the phone's design reached its conclusion.

Mr. McAdam pushed Google's Android programmers to write more applications, a key match-up to the more than 100,000 applications available on the iPhone's App Store. He was looking to be "wowed," Mr. McAdam says.

Verizon, in turn, had to give over some decisions to Google, an unusual move for carriers, which have traditionally exerted strong control over the development of phones.

"Lowell, you can't be open if you don't have Google Voice on this," Mr. Schmidt said at one meeting, referring to the controversial mobile application that lets Google route calls to multiple phones. Mr. McAdam acquiesced. (Apple has yet to allow Google Voice to run on the iPhone, a dispute the FCC is investigating.)

Another challenge was balancing the phone talks with ongoing negotiations on a separate search deal. Verizon was looking for a search engine to feature on its phones and was nearing a final agreement with Google. In November, Microsoft Corp. put in an offer of about $600 million for its Internet search engine, nearly doubling Google's offer, according to people familiar with the deal. Google declined to comment. Verizon went with Microsoft. The search deal didn't derail talks on the Android phones, thanks in part to the growing relationship between Messrs. McAdam and Schmidt.

New Mining Techniques Probe Deeper Into Consumer Data

Wall Street Journal

Behind the scenes of a recent online shopping trip, Blue Kai , a startup company that collects Internet user data, was tracking when a Web surfer browsed for electronics on eBay, searched for cruises and checked out snowboards. It also tracked when a Web surfer researched Chevrolet sport utility vehicles on auto site Autobytel and priced flights to Durham, N.C., at travel site Expedia.

After collecting that kind of information, Blue Kai groups Web visits into categories of consumers. It then immediately auctions off the data from some of the sites to marketers and Internet companies, which in turn use it for consumer research and ad personalization.

The Web companies make money for selling the data about visitors to their sites, and Blue Kai takes a cut. The advertiser gets its coveted targeting.

While the idea of target marketing has been around a long time, marketers until recently have had a hard time buying on enough Web sites to make the targeting truly effective.

Blue Kai, like data-mining firm eXelate Media and others, are striking deals with thousands of Web sites to collect and sell data on their visitors that will be used for consumer research or ad targeting. Marketers, in turn, are using the information they buy to make better choices when buying ad space. It is a process that's proving especially useful when buying through ad exchanges, which are new systems that allow advertisers to bid directly on the ad space available on a large group of Web sites.

Buying such data would let a hotel chain, for instance, show ads featuring discounts in North Carolina to a person who recently shopped for a flight to Durham—and not just on the travel site, but on any of a number of sites across the Web.

Some Web sites are hesitant to sell data about the consumers visiting them to outside firms. Historically, the only way a marketer could buy ads on a Web site was through striking a deal with that site directly. Now, buying ads based on the data about visitors, rather than the content published on the site, could drastically change how media companies do business.

The data is becoming the most important component for marketers and Web sites. It tells them who their audience is

Refining digital ad buying practices could bring some steam back to the market for online display ads—those with text and pictures that border a Web page—a market estimated at $20.8 billion in 2009, down from $23 billion in 2008, analysts say. U.S. online ad spending on targeted ads will reach $1.1 billion this year, up from $775 million in 2008, according to research firm eMarketer.

"These companies are adding tremendous value to the whole advertising ecosystem," says Ross Sandler, an Internet analyst with RBC Capital Markets.

Tapping such data gives marketers a way to buy ads according to specific groups of consumers who are likeliest to be interested in a given product, says Curt Hecht. Mr. Hecht is president of Vivaki Nerve Center, a unit of Publicis Groupe that buys hundreds of millions of dollars of online ad space a year for companies such as Procter & Gamble and Wal-Mart Stores.

For instance, a credit card company can buy ads targeted to small business owners it knows are in the market for a new card, instead of buying ads on business-related Web sites.

Neither Blue Kai nor eXelate discloses specific Web sites that they buy and sell data from, citing agreements with those Web sites. In their privacy policies, some Web sites reveal that they sell data to third parties, but often do not list the particular company. EBay says in its privacy policy that it works with Blue Kai but doesn't allow the company to collect any personal information about consumers.

Travel sites Expedia and Kayak say they both sell consumer data in Blue Kai's auction, noting that the information is anonymous and not tied to the specific Web site.

The data brokers have different formulas for collecting and selling information on millions of Internet users across thousands of Web sites, from top retail and travel sites to social networks. Blue Kai, a Seattle company launched in September 2008, regularly records information on more than 160 million unique U.S. monthly visitors shopping on retail, travel and auto sites across the Web.

"The data is becoming the most important component for marketers and Web sites. It tells them who their audience is," says Omar Tawakol, chief executive at Blue Kai.

Some lawmakers, concerned about Internet privacy, are preparing legislation to make more transparent Web sites' tactics for collecting information on their users. In an effort to fend off legislation, data brokers say, they abide by industry standards and do not collect any personally identifiable information and sensitive data, such as health information. They also tout efforts to make their business practices more transparent to consumers.

Both Blue Kai and eXelate, for instance, feature sections on their Web sites to show consumers what information the company tracks and giving consumers the option not to be tracked.

Not all Web sites where Blue Kai tracks information sell data to outsiders. Some use the information to personalize their sites for individual users or for their own advertising purposes.

Some publishers fear that their competitors could buy data about the consumers visiting their sites and use it to steal customers.

IAC/InterActive, for instance, is testing the sale of consumer data tied to its e-commerce site Pronto through eXelate. "If we sell that data, it allows another sales team to sell our audience and compete against us," says Greg Stevens, president of IAC Advertising. "But if it is worth millions and millions and millions of dollars, then hey, maybe the paradigm has turned upside down."

Book Review: 'Googled: The End Of The World As We Know It'

Wall Street Journal

Google's announcement last week that it would offer free turn-by-turn navigation software prompted a nosedive in the stocks of Garmin and other navigation device makers. The jolt was just the latest such disruption caused by Google since its founding in 1998 by Larry Page and Sergey Brin. During that time the company has grown into a $22 billion behemoth—yet, remarkably, it is still in the early stages of a long growth phase. Eric Schmidt, Google's chairman and chief executive, expects that one day it will be a $100 billion enterprise. Being the gatekeeper for the world's information turns out to be a lucrative business, especially without the expense of creating any of it.

In "Googled," New Yorker writer Ken Auletta tells the familiar story of the company's rapid transformation from Silicon Valley start-up to global corporation. As expected, we hear about the young Rollerblading employees at Google's Mountain View, Calif., headquarters, with its massage rooms, pool tables and free meals. But thanks to the unusual degree of access that the company granted the author—and thanks to his sharp eye—"Googled" also presents interesting new details. The book describes, for instance, Google's close relationship with former Vice President Al Gore—during a meeting with him, back in his hirsute phase after leaving office, Google executives showed their solidarity by donning fake beards.

While the story of Google's creation and evolution still holds interest, what fascinates is the company's growing power and expanding horizons. Mr. Auletta observes that the "Google wave has crashed into entire industries: advertising, newspapers, book publishing, television, telephones, movies, software or hardware makers." This impact has forced companies to make difficult choices. One response has been to try to emulate Google, redrawing business plans to emphasize online advertising—although few other companies have so far managed to build a large, profitable business from it.

Google's focus on advertising has led the company to maximize usage by giving away most of its services. For companies selling similar products—like navigation systems—Google's approach is alarming. And even its partners are wary. Martin Sorrell, the chief executive of the advertising giant WPP, describes Google as a "frenemy"—a valuable ally and formidable competitor. Advertising firms worry about being "disintermediated" by Google. Content providers appreciate the traffic that Google sends their way but worry about the erosion of their franchises by aggregation that emphasizes Google's brand, not their own. Some businesses that rely on Google to generate both their traffic and their revenue risk becoming the chimp in the survival maxim "eat what the monkey eats and then eat the monkey."

In contrast to all this corporate anxiety, consumers so far have been upbeat about the extraordinary power that Google wields. As Mr. Brin explains, Google's importance in people's lives comes from "determining what information they get to look at." Lawrence Lessig, who was an expert in the Microsoft antitrust case (and is now a professor at Harvard Law School), tells Mr. Auletta that Google will soon be more powerful than Microsoft ever was, since primacy in search gives the company unprecedented control over commerce and content.

Remember when Google used to point to Mapquest for maps and Yahoo Finance for stock quotes before they substituted Google Maps and Google Finance? Google's favor turned Wikipedia into the world's leading reference source, but a few algorithm tweaks would easily send that torrent of Google SEO traffic elsewhere. Mr. Lessig says that, for the moment, we take comfort from the fact that Google has been led by "good guys." But then he asks: "Why do we expect them to be good guys from now until the end of time?"

Mr. Auletta notes that many successful companies have appeared "impregnable"—until they didn't. IBM once had a 70% share of the massive mainframe computer market. Then came antitrust action and the personal computer. A company expanding into as many arenas as Google is will almost certainly "wake up the bears," as Verizon Chairman and CEO Ivan Seidenberg puts it.

Google faces challenges on multiple fronts, including the real-time Web (where users can access information the instant it's published). Of most concern are the more than 800 million global users on social networks—where much of the information is unavailable to Google. In some parts of the world—for instance, China, South Korea and Russia—Google is even the underdog, trailing such search engines as Baidu, Naver and Yandex. Microsoft remains a formidable competitor, with a newly invigorated search strategy. And of course, given Google's increasing market power, regulatory intervention may be lurking, although perhaps not anytime soon in the U.S., where the company is very friendly with the current administration. Perhaps the greatest risk, as entrepreneur Yossi Vardi notes, is the "hubris" that often afflicts wildly successful companies.

Problems for Google might lie beyond the horizon, but the immediate future promises more success: Google is well-positioned for the transition to "cloud computing," where software and data are stored online rather than on personal computers. Mr. Schmidt says that cloud computing will be "the defining technological shift of our generation." Accordingly, Google's greatest value creation probably still lies ahead.

How NOT To Show Up In Google SERPs

from Media Buyer Planner

Rupert Murdoch is determined to change the way print content is treated on the web. In addition to being one of the first and largest media companies to plan a full-scale switch from free to paid content models for its newspapers, Murdoch is saying he will block News Corp content from being indexed by Google.

The move will certainly significantly decrease by a large margin the amount of traffic that goes to News Corp.‘s news sites. Jonathan Miller, News Corp’s chief digital officer, says the company will survive both economically and audience-wise without Google driving traffic to its sites.

News Corp. is expected to block Google’s access within months.

The issue involves the debate surrounding free versus paid content. Murdoch has made it clear for months that he believes free content online devalues the worth of the content. With that in mind, News Corp plans to stop offering its news sites for free, though Murdoch has said the company might not meet its own deadline of charging for content across all sites by the middle of next year. Murdoch’s company has clearly been at the forefront of the debate, and Murdoch expects a paid model to begin to be played out more and more often over the next two years.

News Corp, if it does indeed block Google’s access to its content, will be the first major media company to do so. “The traffic which comes in from Google SEO brings a consumer who more often than not reads one article and then leaves the site,” Miller says. “That is the least valuable traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.”

Google, for its part, claims to send news organizations about 100,000 clicks every minute. “Publishers put their content on the web because they want it to be found,” said a spokesperson (via the Telegraph). “But if they tell us not to include it, we don’t.”

MSN Redesign Sneak Peek
Reuters

On November 4, Microsoft Corp. unveiled a preview of its most significant home page redesign in over a decade. The new MSN home page is designed to be the best home page on the Web, with powerful Bing search, the top news and hottest entertainment, and some of the most popular social networks -- all in a fresh new look. The new home page will deliver comprehensive local information from the new MSN local information offering, MSN Local Edition, also unveiled today. Beginning today, anyone can preview the new home page at http://preview.msn.com. The new home page will begin rolling out today and become widely available to U.S. customers early next year.

Ninety percent of people surveyed find home pages such as MSN to be valuable, and they like the convenience of a comprehensive site.* Nearly 100 million people in the U.S. visit MSN every single month, and MSN added over 10 million new customers in the last year alone. However, today's sites often fall short of top customer needs and many haven't kept up with evolving trends. Extensive customer research highlights that people want less clutter and easier access to information and services they care about, including search services that help them make decisions easier and faster.

"Now is the time to clean up the mess on the Web -- people need less clutter and less hassle to find what matters most to them," said Erik Jorgensen, corporate vice president, Microsoft. "Microsoft is uniquely invested in search, media experiences and technical innovation. Combining these assets to deliver our new MSN home page is a tremendous win for customers and advertisers."

The clean, new MSN home page cuts through the clutter with 50 percent fewer links than the previous home page and a simplified navigation across news, entertainment, sports, money and lifestyle. The new MSN home page also embraces the latest customer trends by deeply integrating powerful search from Bing and providing easy access to Facebook, Twitter and Windows Live services, comprehensive local information and in-line video. Sophisticated technology powers the home page to deliver personally relevant information, and improved performance satisfies people's need for speed.

Google Dashboard Gives Some Insight As To Data Company Stores

LA Times

Google has unveiled its 'Google Dashboard' service, a page where users can get a sense of the data the company stores about them in any of 23 different Google-run services.
As questions about how the company uses consumer data continue to mount, Google has tried to answer those concerns by allowing users a clearer view into how their data is stored and used by programs like Gmail, YouTube and Google Docs.

"We think of this as a great step towards giving people transparency and control over their data, and we hope this helps shape the way the industry thinks about these issues," Alma Whitten, a Google  engineer who works on Privacy and Security, said in a statement.

The Dashboard is essentially a page listing each service that stores data, along with which types of data it stores. Rather than allowing users to control and edit their data directly from the page, however, Dashboard refers users to other pre-existing settings pages. In that sense, the Dashboard is a consolidation of existing functions, not a new set of tools by which users can control their data.

And though much of the concern about Google's data storage revolves around precisely how and what the company does to analyze and profit from user information, and incorporate that information into the system of Google SEO, the Dashboard offers little insight into those domains. It does not specify which services keep user data, or for how long. Neither does it alert users that, for instance, their Web search histories and e-mails are constantly scanned for the purposes of selling products to them and others.

But users should expect that most or all of their data could be used for advertising, Google said. "To most folks, I think that there is a general expectation that even when we launch a product that doesn't have a clear business model associated with it, there's a possibility that advertising could be associated in some way," said Shuman Ghosemajumder, Google's business product manager for Trust & Safety.

Google said it would continue to add features to the Dashboard, and that services that were not included in the first iteration -- Analytics, AdWords, AdSense, and Book Search among others -- would be added in later versions.

Opinion: Senators Orrin Hatch and Jim DeMint Voice Concern Over Possible FCC Net Regulations

from the Wall Street Journal

Chairman Julius Genachowski sees the 

need for Internet Regulation

Last week, Chairman Julius Genachowski and his Democratic colleagues on the Federal Communications Commission (FCC) began rewriting federal regulations governing the Internet and broadband communications. According to Mr. Genachowski, the Internet today is a failed market in which neither entrepreneurs nor consumers are treated fairly.

If this is news to you (especially if you're reading this on a Web site while simultaneously uploading photos to your family blog and streaming music from an online radio station), you're not alone.

The Internet is one of the only aspects of our economy and national life free from government regulation. Mr. Genachowski and his colleagues see this as a bad thing. We disagree.

If there is a perfect encapsulation of the success of Washington's current hands-off approach to the Internet, it's the popular "There's an app for that" advertising campaign. Since the latest introduction of smart phones like Apple's iPhone and Blackberry's Curve, independent software developers have created tens of thousands of applications for mobile devices. There are apps for gamers, bloggers, couch potatoes, foodies, health-care providers and every other niche market you can imagine. These applications have improved people's lives and satisfied consumer demand.

And it has all happened without a Washington politician or bureaucrat moving a muscle.

This isn't a coincidence. If the Internet were invented by a politician or worse, managed by bureaucrats, cell phones would still look like bricks and the information superhighway would still be a dirt road. If there is any sector of our economy where competition is so fierce and where the pace of innovation is so rapid that government interference would only get in the way, it is the Internet and telecommunications market.

The Internet has grown because of a virtuous and mutually beneficial circle: network operators provide ever-increasing speed and bandwidth; content providers one-up each other with game-changing innovations; and consumers adapt and adopt at lightning speed.

Ten years ago, we effectively had no broadband marketplace. Dial-up Internet was common, but not ubiquitous. Consumers had a choice of service providers, but they were typically confined to walled gardens of preselected or preferred content. The broadband revolution led us out of that desert. Instead of dog-paddling, we could surf the net, choosing between broadband service offered by traditional phone and cable companies and, now, wireless companies as well.

Compare that to the last decade of success at government dominated companies like Fannie Mae, Freddie Mac, GM or Chrysler.

Yet despite an overwhelming record of innovation, and customer satisfaction, Washington wants to replace the judgment of consumers with that of politicians and bureaucrats.

Net neutrality may sound like fairness but it is actually the opposite. Bandwidth is finite—like the finite number of lanes on a highway—and network providers must innovate in order to accommodate the burgeoning traffic. As they invest billions of private dollars in new and improved networks to accomodate demand for such net tools as business VoIP service, they should rightly expect to set prices and manage those networks as they see fit.

If the FCC takes control of the Internet, they will in effect be regulating how consumers use their computers, and we'll have the inevitable result of all poorly designed regulations: business decisions prejudiced by politicians and political decisions prejudiced by corporations. Keep in mind, we're talking about the most competitive, efficient and consumer-driven industry in the global economy.

Is it reasonable to believe committees of suits in Washington—with hearings and markup meetings and regulatory comment periods—can keep up with the competitive pressures of Google SEO and the Internet economy?

To ask the question is to answer it. There is a time and place for federal economic regulation, but the middle of a recession is not the time, and the Internet is certainly not the place.

Mr. DeMint is a Republican senator from South Carolina.

Mr. Hatch is a Republican senator from Utah.

Web Advertising Making A Comeback

From Sun-Sentinel

After bogging down in the recession, Internet advertising is regaining the momentum that has made it the decade's most disruptive marketing machine.

The signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval.

Companies seem reluctant to spend on elaborate online campaigns, such as the highly visual display ads on Yahoo.com, partly because they tend to be more expensive and not as well-aimed as search ads. The reticence is the main reason Yahoo reported its third-consecutive quarterly decline in ad sales Tuesday. Yahoo's ad revenue fell 12 percent after declining 13 percent in the first half of the year.

Even so, Yahoo isn't being hit as badly as newspaper publishers, and Google SEO is as important as ever.

Internet advertising was just about the only bright spot in the third-quarter reports of newspaper publishers Gannett Co. and McClatchy Co. Meanwhile the companies are dealing with steep declines in print ads — an imbalance most analysts predict will take years to address.

The reality is that much of the advertising in long-established media, particularly in the classified sections of newspapers, will never rebound to pre-recession levels, said Lauren Rich Fine, a longtime media analyst who is now a professor at Kent State University.

That grim outlook contrasts with the fact that advertisers are allocating more of their budgets to the Web. Rates are less expensive, and the returns on online ad investments are easier to quantify.

These trends will give Internet advertising 19 percent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 percent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates.

That would make the Internet the third-largest marketing medium, and search engine optimization one of the most important investments a company can now make in its future. Television is expected to remain on top, with $168 billion, or 36 percent of the global ad market, down from 35 percent in 2004. Newspapers would still be No. 2, but their $92 billion in advertising revenue is projected to account for 20 percent of the global ad market, down from 28 percent in 2004.

For now, though, some types of Internet advertising — real estate, travel and help-wanted, in particular — remain in the funk they fell into in the first half of the year, when U.S. ad revenue on the Web fell 5 percent. (That was still far better than the 12 percent to 29 percent declines suffered by U.S. newspapers, radio stations and television broadcasters.)

The most compelling evidence for an online recovery is being made by Google Inc., whose search engine powers an online network that has grown from $411 million in worldwide ad revenue in 2002 to more than $22 billion annually now. The company's ad revenue rose 8 percent in the third quarter, the fastest pace so far this year, and Google's executives indicated they are gearing up for even more rapid growth in the months ahead.

The greater flexibility online makes it easier to gauge the mood of consumers by buying Internet search ads before ramping up spending in other areas, Fine said.

"I think a lot of (advertisers) are experimenting right now, hoping they can stimulate a little more demand."