Organic SEO Blog

231-922-9460 • Contact UsFree SEO Site Audit

Wednesday, June 29, 2011

News Corp. to sell MySpace this week

Associated Press
June 28, 2011

LOS ANGELES (AP) - News Corp. is aiming to sell struggling social network site MySpace this week after three years of massive losses, according to a person familiar with the matter. The move will likely result in the layoff of more than half of the site's remaining 500 workers.

It's a jarring goodbye for a once-hot Internet property, which News Corp. CEO Rupert Murdoch predicted four years ago would eventually make $1 billion in annual revenue. MySpace never reached that goal. This year, MySpace is expected to make less than a fifth of that as ad sales plummet, according to research firm eMarketer.

News Corp. to sell MySpace this week.

MySpace's crash coincided with Facebook's rise - due in large part to its cleaner interface, smoother operation and better integration with other services. MySpace was generally clunky, slower and littered with display ads. It was also slower to adapt.

At least three bidders are still in the running for MySpace - online advertising network operator Specific Media, private equity fund Golden Gate Capital and Austin Ventures, an investment fund that is working with MySpace co-founder Chris DeWolfe. The company hasn't chosen a buyer yet, according to the person, who was not authorized to comment publicly and spoke on condition of anonymity.

News Corp. is looking to cut a deal Wednesday or Thursday in order to have it completed in its fiscal year, which ends Thursday.

Earlier, the News Corp.-owned website All Things D reported that MySpace was on the verge of being sold for $20 million to $30 million. The person said the deal price will likely be much higher and include a combination of cash and stock.

Any sale around that price would mark a stunning reversal from 2005, when News Corp. bought the promising startup for $580 million when social networking was in its infancy.

Facebook has turned into the dominant social media platform with more than half a billion users. A recent investment by private fund GSV Capital Corp. valued Facebook at $50 billion. LinkedIn Corp., a social network for professionals, recently went public and now has a market capitalization of about $8 billion.

The low estimate for MySpace suggests there may only be residual value in its brand, technology and declining visitor base, said Debra Aho Williamson, principal analyst with research firm eMarketer.

"It shows that this is just something that News Corp. wants to get off of its books at any price it can get," she said.

MySpace unveiled an extensive overhaul in October in an attempt to transform itself into a hub for consuming entertainment content, but it didn't help reverse visitor declines. In January, it slashed nearly half its staff, or about 500 people, in hopes of returning to profitability.

The site still lost money. For the three months through March, the News Corp. segment that includes MySpace lost $165 million. That was worse than the $150 million loss it posted a year earlier, mainly because of lower advertising revenue at the site. That marked the 11th straight quarterly loss since mid-2008, over which time the segment lost about $1.4 billion cumulatively.

MySpace CEO Mike Jones is the last remnant of a three-person executive team that came in to fix the site in April 2009. It is unclear if Jones will stay on after a sale.

According to tracking firm comScore Inc., MySpace had 74 million visitors from around the world in May, down 32 percent from a year earlier. By comparison, Facebook had 1.1 billion, up 26 percent; Twitter had 139 million, up 54 percent; and LinkedIn had 86 million.

News Corp. shares rose 25 cents, or 1.5 percent, to close Tuesday at $17.17.

Google unveils latest social networking feat

Associated Press
June 28, 2011

NEW YORK (AP) - Online search leader Google Inc. is taking yet another stab at social networking, as it tries to go up against Facebook in this wildly popular and lucrative segment of the Internet. This time the project is called Google+ and it aims to make online sharing more like real life.

"We think people communicate in very rich ways," said Vic Gundotra, senior vice president of engineering at Google. "The online tools we have to choose from give us very rigid services."

Google unveils latest social networking feat.

Other social networking tools make selective sharing within small groups difficult. They don't allow for the nuances that people are used to in offline communication and because they call so many acquaintances "friends," said Gundotra in a blog post announcing the service.

Many Facebook users, for instance, find it difficult to limit their status updates to small groups of people so that their coworkers aren't exposed to party photos or their parents aren't privy to flirtatious posts on their "wall." Though Facebook has tried to address this with a much-hyped "Groups" feature, it's not clear how many people use it.

Gundotra's criticism seems aimed squarely at Facebook, the world's largest online social network. Facebook has become synonymous with online sharing since its founding seven years ago.

In a prepared statement, Facebook said only that "we're in the early days of making the web more social, and there are opportunities for innovation everywhere."

Google, which dominates Internet search with a firm hold on two-thirds of the U.S. market, has been experimenting with different social tools since late 2009 with limited success. "Buzz" was one major mishap. The product was a social network attached to Google's popular Gmail service, and it wound up exposing email contacts that users did not want to share. Google eventually agreed to submit to independent audits of its privacy controls every other year for the next two decades as part of a Federal Trade Commission settlement.

Google shut down another attempt at online sharing, Google Wave, last August after unveiling it with much fanfare in 2009. The service, which let users chat, share files and collaborate on documents in real time, didn't gain enough fans.

More than a year in the works, the project Google unveiled Tuesday lets users share things with smaller groups of people through a feature called "Circles." This means only college buddies, say, or your favorite co-workers can see the photos, links our updates that you post.

Another feature called "Sparks" aims to make it easier to find online content you care about, be it news about surfing or barbecue recipes. You can then share this with friends who might be interested in it. In an online video, Google calls it "nerding out" and exploring a subject together.

There's also a group messaging service called "Huddle" and a feature that lets users instantly upload photos that they take with mobile phones. The photos are stored in a private photo album on Google's remote servers, and users can access them and share them as they see fit.

Altimeter Group analyst Charlene Li has high hopes for the friend grouping feature. She said that her biggest pet peeve with Facebook is its existing friend management tools. She noted that millions of people already use Google to share things with others via email, and Google+ looks like a natural extension of this type of sharing, making it more functional and organized.

"I think Facebook is going to have to up its game," she said.

Google+ is undergoing what the company calls a "field trial," so it's accessible by invitation only and not yet available to the public. The company declined to say when it'll be more widely available.

Lou Kerner, a social media analyst with Wedbush Securities, believes the game is over in the competition to become the world's global social network. With 700 million users, Facebook has won, he said.

There's a lot more to the social Web than just creating a successful social network, though, and Kerner thinks that with Google+ the search leader is trying to make its existing product offerings more social.

"I don't think they're seeing this as a direct competitor to Facebook," he said.

Google+ does have its skeptics.

"People have their social circles on Facebook," said Debra Aho Williamson, principal analyst with research firm eMarketer. "Asking them to create another social circle is challenging."

And Google is still best known for its flagship service, online search.

"The whole idea of a Google social network...they've been throwing stuff against the wall for several years and so forth nothing has stuck." Going to Google to be social, she added, is like "going to Starbucks for the muffins. Or, for that matter, going to Facebook for search."

Co-founder Biz Stone leaving Twitter

Associated Press
June 28, 2011

LOS ANGELES (AP) - Isaac "Biz" Stone is moving on from Twitter, just five years after co-founding the microblogging site that has become integral to the social media scene around the globe.

Stone, 37, said Tuesday on his blog that he will work with the company "for many years to come," but that the most effective use of his time now is to "get out of the way" of Twitter's crew and leadership team until he's called upon to be of some specific use.

Stone says he plans to focus on helping schools, nonprofits and company advisory boards. He's also relaunching Obvious Corp. with fellow Twitter co-founder Evan Williams to develop new projects.

The move comes as Twitter has been trying to build upon its popularity to make more money by selling more ads. The privately held company doesn't disclose its finances, but research firm eMarketer Inc. estimates Twitter will bring in advertising revenue of about $150 million this year.

Stone's departure caps a year of executive changes at the San Francisco-based company. Last fall Williams handed over the reins to Twitter's current CEO, Dick Costolo, and moved on to explore new business ideas. In March, Twitter's third co-founder and original CEO Jack Dorsey returned to oversee product development as executive chairman.

Monday, June 27, 2011

Murdoch's Leap Finds Converts in Cannes as Paywall Use Grows

Bloomberg News
June 24, 2011

Online news, video, and music providers are becoming increasingly open to charging for at least part of their content as paywall experiments by pioneers like London's Times show that some customers will pay.

Music-video streaming site Vevo, Huffington Post owner AOL Inc., and London's Independent newspaper said this month they may introduce paid subscriptions, joining The New York Times and London's Times in charging for online material. Making that pay will require careful execution and compelling content.

Murdoch's Leap Finds Converts in Cannes as Paywall Use Grows

Paywall advocates have had some success convincing Internet readers to sign up for subscriptions. New York Times Co., which began charging heavy users of its namesake paper's website in March, has signed up more than 100,000 people for online subscriptions that start at $15 a month, it said in April. London's Times, owned by Rupert Murdoch's News Corp., had 80,000 paid online subscribers as of March.

"The mood is changing," said Charlie Beckett, the director of the Polis media research unit at the London School of Economics. "Murdoch and the New York Times have taken the leap, and that encourages people. It's still a leap."

Alex Hole, who manages The Times's digital strategy, said at the Cannes Lions media conference this week that the newspaper's paywall is "starting to see tangible returns."

Ad Revenue

For advertisers, who still provide the bulk of newspapers' revenue, yields and response rates have also risen, he said, declining to discuss specific numbers. The Times's paywall, started a year ago, may be the most impermeable in the industry, with no free articles available online. The New York Times, by contrast, allows casual readers 20 free stories a month.

For the London newspaper "this dynamic, digital product is something that's our flagship product," News Corp. deputy Chief Operating Officer James Murdoch said today.

Most media executives considering paywalls say they'll be cautious about where they're erected, and maintain significant free services.

At New York-based AOL, which is re-positioning itself as a provider of online content after undoing its $124 billion merger with Time Warner Inc., future paid subscriptions might focus on business-to-business content rather than consumer brands such as The Huffington Post, Chief Executive Officer Tim Armstrong said this week in Cannes.

Vevo, which is backed by Vivendi SA and Sony Corp.'s music arms, will always have an extensive free offering paid for with ads but may eventually charge for access to exclusive live events or better video quality, according to CEO Rio Caraeff. European music site Spotify, meanwhile, in April reduced the amount of music available free to users in a bid to get more people to buy a 4.99 pound ($8) monthly subscription.

Post Napster

The spread of attempts to charge for digital music are helping lift some of the gloom that's weighed on the record industry since the rise of file-sharing services like Napster. Thanks in part to digital sales, music companies are "coming through the pain" of the last decade and halting revenue declines, Universal Music Group digital president Rob Wells said at Cannes Lions, which ends tomorrow.

In addition to revenue from fees, paid subscription strategies depend on offering better information on a small group of committed readers to advertisers, giving sites a chance to charge more for ad space.

'Metered' System

Marketers say they're open to that notion, even if overall traffic declines at individual sites. "We have lots of time for media that's sharply targeted," Heineken NV Chief Marketing Officer Alexis Nasard said. "That's especially true if they have the metrics" that show advertising's strong impact on loyal users, he said.

Business information websites are among the most successful current paywall users. Both the Financial Times and the Wall Street Journal charge for online content, the former using a "metered" system that allows some free articles and the latter a model that includes most business articles. Last year the FT's site had attracted about 126,000 subscribers paying a minimum of 3.29 pounds a week.

FT owner Pearson Plc, which gets most of its revenue from paid content including its extensive education businesses, has seen its shares climb 13 percent this year. News Corp. shares rose 15 percent in the period.

While general-interest media such as the Times and the New York Times say they are committed to charging for content, other experiments have had the opposite result. News magazine The Atlantic tore down its paywall in 2008, saying it hoped free access would drive more readers to pay for printed subscriptions.


The New York Times also ended its first paywall experiment, TimesSelect, in 2007 after it brought in just $10 million in revenue and was lampooned by Andrew Sullivan, an influential blogger, as 'TimesDelete.'

The magazine-like experience and multimedia that can be offered by applications for tablet computers may make this time different.

Such technologies "create some things that people will want to pay for directly," even if many apps remain free, said Kevin Lynch, the chief technology officer of Adobe Inc. San Francisco-based Adobe has helped design paid tablet apps for magazines including The New Yorker and Vanity Fair.

Consumers who own tablet computers and are willing to pay for content also tend to be attractive targets for advertisers. The average subscriber to The Times' iPad app earns more than 120,000 pounds, said Johnny Hornby of ad agency CHI & Partners.

Content providers considering paywalls have a strong ally in big advertisers who want to ensure the survival of compelling music, video and journalism online. "It is quite fundamental for us that we have quality content to put our ads alongside," Ogilvy Group Inc. CEO Miles Young said in an interview.

"People will pay for quality content," he said. "They will buy it through paywalls. Where the content is good, customers will follow, and where customers go, we will follow."

US antitrust inquiry turns up heat on Google

Associated Press
June 24, 2011

SAN FRANCISCO (AP) - Google may be entering a make-or-break phase in its colorful history now that U.S. regulators have opened an investigation into whether the company has been abusing its dominance of Internet search and advertising to stifle competition.

The probe by the Federal Trade Commission, confirmed by the company Friday, will require Google to convince regulators that its closely guarded recipe for search results is designed to give people the best recommendations, not bury links to its rivals.

US antitrust inquiry turns up heat on Google

If you search for a local business, for example, Google might highlight its own listing, from a service called Google Places, instead of one on Yelp, a popular review site and Google competitor.

Requests for directions may turn up Google Maps, and queries for a video might point to the company's own site, YouTube. Or if you type "mortgage" in Google's main search box, the top ad might be for Google Advisor, which lists the lowest interest rates.

The inquiry also is expected to peer into Google's financial engine: the advertising links tied to the subject of each search request. Some of these commercial messages appear, shaded in color, at the top of the results page, while others are stacked in the right-hand column.

Even as Google has expanded into video, mobile phones and television, the text advertising that pops up alongside search results and other Web content generates most of Google's revenue - an amount expected to exceed $35 billion this year.

Some websites contend Google has rigged its system in a way that drives up the ad prices, even though Google says the rate is determined by bids submitted in an auction. Others say Google purposely blocks their ads from appearing because the company views them as competitive threats.

The FTC is following the lead of European regulators, who launched a similar investigation last November. The Texas attorney general has been looking into Google's business practices, too

The search engines for Microsoft and Yahoo also sometimes feature their own services in search results. The big difference: Google processes about two-thirds of all search requests in the U.S. and handles an even larger volume of advertising. Microsoft's Bing and Yahoo combined have less than 30 percent of the market.

Danny Sullivan, who follows the industry closely as editor-in-chief of the trade journal Search Engine Land, said that what Google is doing is not unlike a newspaper running an ad to promote one of its products.

"From what I have seen so far," he says, "Google doesn't seem to be doing anything wrong."

Melissa Maxman, an antitrust attorney in Washington, said the FTC wouldn't have opened its inquiry unless it thought the complaints were credible.

"There is smoke if not fire," she said.

The FTC's investigation threatens to put Google on the same course as one of its biggest nemeses, Microsoft, which was the target of a Justice Department lawsuit that began in the 1990s and dragged into the next decade. That case alleged Microsoft used its dominant Windows operating system to kill competing software makers.

"It's right out of the same playbook," Maxman said of the FTC's probe into Google.

Google executives have consistently brushed off the Microsoft comparisons, insisting that people can more easily switch to a different search engine than they could change to a different computer operating system. "Competition is just a click away" has emerged as a Google mantra that is uttered more frequently than its official motto: "Don't be evil."

Although Microsoft thwarted an attempt to break up the company, it was distracted for years, and the company has never been quite the same. The investigation may have made Microsoft more vulnerable to companies such as Google during the late 1990s as the Internet emerged as an important new platform on computers.

Now, Google faces some of the same threats as it tries to figure out how to counter the rising popularity of services such as Facebook.

In an extreme scenario, the FTC's inquiry could be the first step in a long process that ends with Google having to spin off pieces of the empire it has built for 13 years. Although it doesn't have to, the FTC could hand its case off to the Justice Department, as it did in the Microsoft inquiry.

"Inevitably, if we get to the point where Google is found to have abused its power, we are going to be talking about divestiture because divestitures are always a better way to go than trying to regulate something like this," said Gary Reback, an antitrust lawyer in Silicon Valley who is representing some of the companies complaining about Google's practices.

At this early stage, breaking up Google still looks like a remote possibility.

Other antitrust attorneys think the investigation could result in less radical solutions, such as prohibiting Google from featuring its own services at the top of its search results. Google could also agree to periodic audits of how it programs its search engine, much as did earlier this year in a settlement of an FTC investigation into its privacy practices.

Or the FTC could conclude Google has been behaving properly, further emboldening the company to find ways it can reshape technology, advertising and other industries.

Google is expected to put up a fierce fight. The investigation is aimed at the heart of its business, its formula for ranking the quality of websites and ads, which has evolved since Google co-founders Larry Page and Sergey Brin began working on it at Stanford University. The company views the recommendations that it produces as a matter of opinion protected by the First Amendment.

"It's still unclear exactly what the FTC's concerns are, but we're clear about where we stand," one of Google's top search engineers, Amit Singhal, wrote Friday on the company's blog. "Since the beginning, we have been guided by the idea that, if we focus on the user, all else will follow."

The decision to have the blog written by someone other a lawyer was probably a way for Google to remind people that it believes management of Internet search is best left to engineers who spend their time writing computer codes instead of legal briefs, said Steven Levy, author of "In The Plex," a book that takes inside look at Google's culture.

Levy said Google has been preparing for this battle since it was almost sued by the Justice Department over a proposed Internet search partnership two and a half years ago. The Justice Department drew up a complaint alleging Google had built a monopoly in Internet search, but never filed it because Google scuttled its agreement with Yahoo to avoid going to court.

Google has been under increasing government scrutiny since then. It has prevailed in the key confrontations and won regulatory approval for several key acquisitions, including its $3.2 billion purchase of online ad service DoubleClick in 2008, last year's $681 million purchase of mobile ad service AdMob and a $700 million purchase of airline fare tracker ITA Software in April.

To prove Google abused its dominance, regulators will have to get it to turn over sensitive documents that it has resisted sharing in the past. And Google probably won't be shy about fighting for the right to adjust its search formula to deliver more useful results to its audience.

The company says it needs to fine-tune search results to weed out the sites that try to game its system and win a high ranking even though they have little to do with whatever a person was searching for.

Brazen hacker group LulzSec says it's disbanding

Associated Press
June 26, 2011

NEW YORK (AP) - A publicity-seeking hacker group that has left a trail of sabotaged websites over the last two months, including attacks on law enforcement and releases of private data, said unexpectedly on Saturday it is dissolving itself.

Lulz Security made its announcement through its Twitter account. It gave no reason for the disbandment, but it could be a sign of nerves in the face of law enforcement investigations. Rival hackers have also joined in the hunt, releasing information they say could point to the identities of the six-member group.

Brazen hacker group LulzSec says it's disbanding.

One of the group's members was interviewed by The Associated Press on Friday, and gave no indication that its work was ending. LulzSec claimed hacks on major entertainment companies, FBI partner organizations, the CIA, the U.S. Senate and a pornography website.

Kevin Mitnick, a security consultant and former hacker, said the group had probably concluded that the more they kept up their activities, the greater the chance that one of them would make some mistake that would enable authorities to catch them. They've inspired copycat groups around the globe, he noted, which means similar attacks are likely to continue even without LulzSec.

"They can sit back and watch the mayhem and not risk being captured," Mitnick said.

As a parting shot, LulzSec released a grab-bag of documents and login information apparently gleaned from gaming websites and corporate servers. The largest group of documents - 338 files - appears to be internal documents from AT&T Inc., detailing its buildout of a new wireless broadband network in the U.S. The network is set to go live this summer. A spokesman for the phone company could not immediately confirm the authenticity of the documents.

In the Friday interview, the LulzSec member said the group was sitting on at least 5 gigabytes of government and law enforcement data from across the world, which it planned to release in the next three weeks. Saturday's release was less than a tenth of that size.

In an unusual strategy for a hacker group, LulzSec has sought publicity and conducted a conversation with the public through its Twitter account. Observers believe it's an offshoot of Anonymous, a larger, more loosely organized group that attempts to mobilize hackers for attacks on targets it considers immoral, like oppressive Middle Eastern governments and opponents of the document-distribution site WikiLeaks. LulzSec, on the other hand, attacked anyone they could for "the lulz," which is Internet jargon for "laughs."

Monday, June 20, 2011

Internet minders approve big rise in domain names

Associated Press
June 20, 2011

SINGAPORE (AP) - Internet minders voted Monday to allow virtually unlimited new domain names based on themes as varied as company brands, entertainment and political causes, in the system's biggest shake-up since it started 26 years ago.

Groups able to pay the $185,000 application can petition next year for new updates to ".com" and ".net" with website suffixes using nearly any word in any language, including in Arabic, Chinese and other scripts, the Internet Corporation for Assigned Names and Numbers decided at a meeting in Singapore.

Internet minders approve big rise in domain names.

"This is the start of a whole new phase for the Internet," said Peter Dengate Thrush, chairman of ICANN's board of directors. "Unless there is a good reason to restrain it, innovation should be allowed to run free."

ICANN's decision culminates six years of negotiations and is the biggest change to the system since ".com" made its debut in 1984. The expansion plan had been delayed largely because of concerns that new suffixes could infringe on trademarks and copyrights.

High-profile entertainment, consumer goods and financial services companies will likely be among the first to apply for their own domain name in a bid to protect their brands, experts said.

"It will allow corporations to better take control of their brands," said Theo Hnarakis, chief executive of Melbourne IT, which manages online brands for clients such as Volvo, LEGO and GlaxoSmithKline. "For example, .apple or .ipad would take customers right to those products."

The surge in domains should help alleviate some of the overlap of names in the most popular suffixes, especially ".com", which has 94 million sites registered.

There are currently 290 country suffixes, such as ".jp" for Japan and ".fr" for France, which typically are restricted to groups or individuals with a presence in the countries, and 22 open names that include recent additions such as ".tel" for telecommunications.

In March, ICANN approved ".xxx" for pornography, but some porn sites have declined to adopt the suffix, fearing it will make it easier for governments to ban them. Conservative groups opposed the ".xxx" name too, arguing it could attract children to adult sites.

Analysts said they expect between 500 to 1,000 new domain names, mostly companies and products, but also cities and generic names such as .bank or .hotel. Groups have formed to back ".sport" for sporting sites, and two conservationist groups separately are seeking the right to operate an ".eco" suffix.

ICANN plans to auction off domains if multiple parties have legitimate claims. However, it expects companies will likely strike deals among themselves to avoid a public auction.

"I think we'll see much more of that going on than see auctions generating circuses," Dengate Thrush said. "But there is that prospect that there will be a couple of identical applicants and applications."

The application process is arduous - the fee is $185,000 and the guidebook is 360 pages - and meant to prevent scammers from grabbing valuable domain names. ICANN will receive applications for new domains for 90 days beginning Jan. 12.

"It's a significant undertaking. We're calling it the Olympic bid," said Adrian Kinderis, chief executive of AusRegistry International, which helps companies to register domains and manages names such as ".au" for Australia.

"But it's worth it for corporations that have suffered from things like trademark infringement, and can now carve out a niche on the internet," Kinderis said.

ICANN said it has set aside up to $2 million to assist applicants from developing countries.

"The board's very enthusiastic about providing support for applicants from developing areas where the evaluation fee or access to technical expertise might be somewhat of a bar," ICANN senior vice president Kurt Pritz told reporters after the meeting.

ICANN said in a statement that it will mount a global publicity campaign to raise awareness of the opportunities of new domain names.

Tuesday, June 14, 2011

Google strikes deal to buy Admeld

Associated Press
by Michael Liedtke
June 13, 2011

SAN FRANCISCO - Google has struck a deal to buy Admeld, a service that helps websites make more money from online advertising.

The agreement announced Monday positions Google to add another potentially valuable weapon to its advertising arsenal. Google already sells the most advertising on the Internet. The company's total ad revenue is expected to surpass $30 billion this year — greater than the entire newspaper industry.

For that reason, the proposed acquisition of Admeld may face more regulatory scrutiny than most deals of its size do.

Google strikes deal to buy Admeld.

Financial terms of the Admeld agreement weren't disclosed, an indication that Google isn't paying a high enough price for the proposed acquisition to be considered a major financial event.

Founded three years ago, privately held Admeld employs about 100 workers at its New York headquarters and other offices in San Francisco, London, Berlin and Toronto.

Admeld's service is focused on marketing campaigns that promote brands and typically feature imagery. The format is known as display advertising, an area where Google Inc. has been gaining market share since its $3.2 billion acquisition of DoubleClick Inc. in 2008.

The U.S. Federal Trade Commission spent a year examining the DoubleClick deal, still the largest acquisition in Google's 13-year history.

Google has been building its display advertising business to supplement its dominance of Internet search and the text-based ads that run alongside search results as well as other Web content.

The diversification has been working out so well that the research firm IDC said Google surpassed the Internet's long-time display advertising leader, Yahoo Inc., during the first three months of this year. IDC estimated Google held 14.7 percent of the U.S. online display ad market in the first quarter, followed by Yahoo at 12.3 percent and Facebook at 8.8 percent.

"Together with Admeld, we hope to make display advertising simpler, more efficient and more valuable," Neal Mohan, Google's vice president of display advertising, wrote in a Monday post on Google's blog.

Admeld works with websites to help them figure out how to make the most money from the amount of space they have available to show display ads. Its list of customers includes News Corp., IAC/InterActiveCorp., Thomson Reuters Corp. and Pandora Media Inc., which is preparing to go public this week.

Google didn't specify a timetable for closing the Admeld acquisition. The company's executives have repeatedly said they expect regulators around the world to take more time poring over how Google's acquisitions might affect competition on the Internet.

The intensified scrutiny hasn't curbed Google's appetite for acquisitions. Since the end of 2009, Google has spent more than $2.6 billion buying more than 60 companies.

Monday, June 13, 2011

Why did Apple choose Twitter over Facebook.

Beta News
by Joe Wilcox
June 12, 2011

Apple will deeply integrate Twitter into iOS 5 when it releases this Fall, but not Facebook. Now why is that? Facebook is the largest social networking platform on the planet, with more than 500 million users, according to the company (Hell, I thought it was closer 700 million based on multiple -- and unconfirmed -- press reports and blogs). Surely Apple already greatly benefits from the the social network's iOS app. Why not do more?

I can't speak for Apple CEO Steve Jobs and his executive team, obviously. Perhaps the major reason is nothing more complex than Apple and Facebook failing to reach terms either could agree to. After all, there would be more to it than just leveraging APIs. However, I see some very good reasons why deep Facebook integration into iOS would be a bad move for Apple.

Why did Apple choose Twitter over Facebook.

Conflicting Objectives

Conceptually, it's easy to see why Apple might want to give Facebook preemo placement in iOS -- it's not rocket science. The average Internet user spent 12.3 percent of his or her time online at Facebook in 2010 -- that's about one out of every eight minutes -- according to ComScore. Another metric: U.S. Internet users spent an average 6 hours and 23 minutes on Facebook in April 2011, says Nielsen. AOL Media Network was a distant second with average 2 hours 33 minutes. From the perspective of where people spend most of their time -- and looking at everybody else trying to align with Facebook somehow -- it would be easy to see Apple doing the same.

But Apple and Facebook actually have several conflicting strategic objectives, and their platforms are juxtaposed. Apple wants to push users' content to the device, whereas Facebook wants to pull content to the cloud. The differences will be starker when Apple rolls out iCloud, presumably concurrently with iOS 5 and iPhone 5 in the Fall. Contrary to some Net punditry and commentary, iCloud is not an online storage service. It is fundamentally a synchronization service, using the cloud to help Apple customers better manage their content on iOS and Mac OS X devices.

User-generated content is important to both companies, but in dramatically different ways that create, in some respects, incongruous customer priorities. Apple wants user content flowing freely among the devices it sells, while Facebook's priority is content going into the service -- and not easily coming out. Apple and Facebook also seek to lock in customers through necessary utility, but the means are different and largely incompatible. Facebook locks in customers through relationships (where friends, family and anyone else hang online) and access to content, which goes easily into the social network but comes out with greater difficulty -- if at all. Apple wants content to flow freely (at least among devices running its operating systems). Synchronization, and the convenience of it, will hold Apple customers.

Platform Competitors

Another difference in priorities: Apple makes the majority of its revenue from selling hardware -- 90 percent during fiscal 2011 second quarter, based on the quarterly report. By comparison, Facebook derives the majority of its revenue from advertising and cloud services. As such, the companies' revenue -- and, related, customer content -- priorities couldn't be more different. Twitter's revenue model is also content in the cloud, but with stark differences to Facebook, one of the more important being platform approach.

In a September 2007 post at Microsoft Watch, I explained how Facebook is more like Windows than it is cloud platforms/services like Google:

Facebook is not a Web 2.0 operation; rather it's more like Desktop 1.0 than Web 2.0. Since May [2007], when Facebook opened up to outside developers, the service increasingly has morphed into an Internet operating system. Like Windows, Facebook is an enclosed platform, and one where people can install applications, post and share digital content and communicate with friends, families or others in ways they might do with Windows on PCs...Facebook and Google both take platform approaches, but Facebook's way is more like Windows than Web 2.0.

In the post, I described Facebook as an "operating system in the clouds." Nearly four years later, little has changed. Developers write applications for Facebook's largely closed cloud OS. Whereas, Apple developers create apps for iOS and Mac OS X running on devices. From a platform perspective, Apple and Facebook are competitors. Yes, there is mutual benefit from the Facebook app, but from platform and app development perspectives, the companies are competitors. The developer incentives are different, too -- Apple's revenue sharing being the major one and the number of Facebook app developers using the social service to mine data and target customers being others.

Twitter is not an applications platform, per se. That may change in the future. But Twitter is unlikely to become anything like Facebook, which is more a closed community. Twitter is more open from the perspective of APIs and design.

It's All About Status

Facebook and Twitter do share something important in common that makes tweeter-dee more attractive to Apple than Like-dum: Status. Both services are really about status -- what people are doing, where they are doing it and with whom. Facebook and Twitter provide tools for sharing photos and videos about these engagements and relationships. Twitter restricts sharing to 140 characters and uses more of a broadcast model, where people chose to subscribe to someone rather than join their network as friend. Facebook's relationship approach is more exclusive. Twitter's is not.

Apple can provide its customers the benefits of status, essentially using Twitter as part of a social networking framework, without taking on Facebook baggage and becoming dependent on a growing competitor for customers' time and content. Twitter setup will be part of iOS 5 settings and allow iPad, iPhone and iPod touch users to tweet from Google Maps, Safari, YouTube and other apps; the camera and photo library, too. Twitter becomes the important social status mechanism for iOS, also providing location information and offering integration between @ Twitter users and the devices' contact list. Some of this capability is available today from the Facebook app. It will be pervasive within iOS 5 for Twitter.

Still, some analysts, bloggers journalists or other commentators will insist that Apple really needs Facebook, if for no other reason than time online. Poppycock. For all the time people spend online at Facebook during any given month, they spend so much more time on their iOS or Mac OS X device(s). I don't need analyst data to quantify it. If you're an iPad, iPhone or iPod touch user, ask yourself how much time you spend per day on the device(s). For some people, it's more than 6 hours and 23 minutes a day!

From that vantage point, Apple's priority is clear: Maximize the customer experience on its devices rather than look to Facebook benefits, which are sufficient enough with the social service's iOS app.

Perhaps Apple will in the future embrace Facebook like it plans to with Twitter in iOS. I sure hope not.

Spanish cops ask for trouble, say they've nabbed 3 Anonymous hackers.

Beta News
by Tim Conneally
June 10, 2011

Spanish national police have arrested three individuals responsible for hacking Spanish banks BBVA and Bankia, Italian energy company Enel and the governments of half a dozen different countries in Europe, South America, the Middle East and Africa, and Oceania. Officials believe the three men were members of Anonymous, a quasi-hivemind "hacktivist" group that has been blamed for the repeated attacks on Sony's PlayStation Network.

The three men were arrested in Barcelona, Almería and Alicante after they attempted to carry out a DDoS attack on the websites of Spain's two main political parties as well as the Spanish parliament on the eve of election day. The server they used to orchestrate these attacks, as well as ones against the website of Spain's central election commission and the Catalonian police force, was confiscated.

Spanish cops ask for trouble, say they've nabbed 3 Anonymous hackers.

At a press conference on Friday, Manuel Vázquez, commissioner of the Technological Investigation Brigade (BIT) said the Brigade had been following these individuals since October 2010, after an attack on the Ministry of Culture's website. Vázquez said the BIT had analyzed more than 2 million lines of text from chat rooms and hacker websites to arrive at the conclusion that they were the Spanish leaders of Anonymous.

Vázquez referred to the three as "The Cupola" of Anonymous, and naturally, the Internet responded in hysterics. #cupulasinexistentes shortly became a trending topic on Twitter, with users pointing out the folly of claiming to have taken down "higher ups" in a group with no hierarchy.

Monday, June 06, 2011

Video: Google Chairman Eric Schmidt

Google Chairman Eric Schmidt: Google Chairman Eric Schmidt discusses new developments with the "Gang of Four": Google, Apple, Amazon & Facebook.

Video: Google Wallet and Google Offers

Google Wallet and Google Offers: Google VP of Commerce Stephanie Tilenius demos Google Wallet and Google Offers at the D9 Conference

Android, Apple face growing cyberattacks

USA Today
by Byron Acohido
June 5, 2011

Cyberattacks that commonly had targeted computers are zapping smartphones and tablets, prompting security experts to urge Google and Apple to do more to slow their spread.

"The drive to push new tech products out the door has always trumped security, and now that mind-set has moved to the mobile platforms," says John Pironti, an adviser at ISACA, a group for information systems professionals.

Android, Apple face growing cyberattacks

After a recent attack, Google last week removed 25 corrupted applications from its Android Market, but not before up to 125,000 Android users downloaded the bad apps, says Kevin Mahaffey, chief technical officer of Lookout Mobile Security.

On each Android phone with these apps, the attacker can connect to a remote server when a voice call is received, then download other malicious programs to the phone, Mahaffey says.

Mikko Hypponen, chief researcher at Finnish anti-virus firm F-Secure, says he has monitored "several dozen cases targeting Android over the past 12 months."

Apple's App Store for iPhones and iPads has been only lightly probed by hackers — showing a difference in its security approach, experts say.

Google has made it easy for any developer to post an app in Android Market and relies on users to supply feedback about security problems.

"Their market is very open and lightly vetted, if at all," says Kurt Baumgartner, senior researcher at Kaspersky Lab. "When there are enough complaints … Google has the ability to pull the apps, which it has sparingly done."

"If Google allows it into their app store, then they should take some responsibility for the integrity and security of the code," says ISACA's Pironti, who is also president of IP Architects.

Google should also step up efforts to streamline its cumbersome process for pushing out Android security patches, says Mahaffey. "Many Android handsets are not patched against the latest security flaws." Google spokesman Randall Sarafa declined to comment.

Apple, by comparison, keeps tight control over its App Store. "Apple performs its work quietly and without discussion," says Baumgartner. "But malicious apps have appeared and are pulled as well, so their process of vetting is not perfect."

Another Apple shortcoming: To get security patches, iPhone users must sync handsets to iTunes on a Mac or PC.

"It's only a matter of time before iPhones and iPads become more of a target," predicts Pironti.

Apple also declined to comment.

Thursday, June 02, 2011

Google Mail Hack Blamed on China

Wall Street Journal
June 2, 2011

Google Inc. said Chinese hackers targeted the email accounts of senior U.S. officials and hundreds of other prominent people in a fresh computer attack certain to intensify growing concern about the security of the Internet.

The victims, including government and military personnel, Asian officials, Chinese activists and journalists, were tricked into sharing their Gmail passwords with "bad actors" based in China, Google said in an unusual blog post. The attack's goal was to read and forward the victims' email.

Google Mail Hack Blamed on China

The company, which in 2010 blamed China for an attack on its computer networks, said it recently discovered the Gmail campaign, which "appears to originate from Jinan, China," and targeted specific individuals.

In Washington, the Federal Bureau of Investigation and Department of Homeland Security said they were working with Google to investigate the attacks. "We have no reason to believe that any official U.S. government email accounts were accessed," said Caitlin Hayden, a spokeswoman for the National Security Council.

Jinan, a large city about 250 miles south of Beijing, is home to one of the People's Liberation Army's technical reconnaissance bureaus, which serve as arms of China's equivalent of the National Security Agency, according to a 2009 report from a committee created by Congress to study China.

The goal of the latest hijacking campaign "seems to have been to monitor the contents of the these users' emails" wrote Eric Grosse, an engineering director on Google's security team, in Wednesday's blog post. He said Google's system wasn't hacked, rather users were duped. He said the company notified victims of the hijackings, secured their accounts and "notified relevant government authorities."

Google, which claims more than 200 million users for its free, Web-based Gmail email service, declined to comment on the identities of the affected individuals, how it traced the attacks to Jinan or who may be behind the incident.

The latest attack continues a troubling wave of incidents involving corporate and government computer networks, which have exposed private information of millions users and raised fears about the safety of government secrets. Last week, defense contractor Lockheed Martin Corp. said it had detected a significant attack against its computer networks.

A Microsoft Corp. spokesman said the company wasn't aware of any similar attacks targeting the customers of its Hotmail email service, but added "phishing attacks are a persistent industry challenge." A Yahoo Inc. spokeswoman declined to comment on whether Yahoo users were similarly targeted but said "we take security very seriously and we would take appropriate action in the event of any kind of breach."

Google's latest disclosure didn't mention the possibility of involvement by the government of China. Google's systems have been repeatedly targeted by Chinese hackers since the successful attack in December 2009, said a person familiar with the matter. Chinese officials have denied any connection to attacks on Google or other companies.

By disclosing the latest attacks originated in Jinan and targeted U.S. officials, Chinese human-rights activists and other people "who would only be of interest to the Chinese government," it appears "Google is pointing their finger at them," said Alex Stamos, chief technology officer at security firm iSEC Partners.

Jinan is also home to the Shandong Jinan Lanxiang Vestibule School, a vocational school that teaches computer training. The school has been a source of past attempts to launch targeted email attacks on a defense contractor, said James Mulvenon, a cybersecurity specialist who focuses on China.

The school at one point held the Guinness world record for having the largest number of people online, Mr. Mulvenon noted. "If I were looking for a place to use as cover [for an attack], this would be a good place," he said.

A woman who answered the phone in the administrative office of the school said the issue had nothing to do with the school.

In response to the 2009 attack, Google in 2010 moved its mainland Chinese search service to Hong Kong and stopped obeying the Chinese government's requirement to censor results, which Google had been following since 2006. China's own Internet filters now censor Google's searches for users in China.

Eric Schmidt, Google's chairman, said Tuesday the company has made improvements to its security systems since the 2009 attack. "Google is massively more protected than we were a year ago," he said, during an interview at the The Wall Street Journal's "D9: All Things Digital" conference.

Mr. Schmidt said Google had discovered "lots of other companies were attacked in similar ways," suggesting many firms don't report such incidents. "It is better to be transparent about these things," he said.

Google's latest blog post said that to uncover the phishing campaign, the company partly relied on a public blog post by an independent researcher, Mila Parkour, who wrote in February that Gmail users were being targeted and posted examples.

In a post on Feb. 17 on her website, called Contagio Malware Dump, Ms. Parkour wrote that the attack "is far from being new or sophisticated" but she wanted to post information about it "due to the particularly invasive approach."

Victims of the attack received "spoof" emails from what appeared to be their trusted contacts or employees of the U.S. State Department or Defense Department, she said. The emails had links to a fake Gmail login page that the scammers used to collect the users' passwords once they tried to log in again.

The targeted recipients were "government and non government employees working on questions of defense, political affairs, national security, defense/military personnel," she said, adding the campaign began more than a year ago.

Phishing attacks account for about 20% to 30% of email hijackings, estimated Mr. Stamos. "Spear phishing," which targets specific individuals, is harder for companies to detect, he added. He expects Gmail's new security upgrades, which help prevent such attacks by letting Google recognize the user's primary mobile device or computer that is used to access the account, will become a standard among online email providers.

Chinese e-commerce giant opens furniture showroom

Associated Press
May 29, 2011

BEIJING (AP) - China's e-commerce giant is stepping up its heated rivalry with bricks-and-mortar retailers with the launch of a five-story home furnishings showroom in Beijing.

Alibaba Group's Taobao, an Internet platform through which an estimated 3 percent of all retail sales in China pass, opened the showroom Friday for customers to try out sofas, tables and other big-ticket items before placing an order online with one of its merchants.

Chinese e-commerce giant opens furniture showroom

The mall is a new intrusion into the territory of China's real-world retailers by e-commerce rivals that are growing so fast some suggest they could become the country's leading retail force - its version of Wal Mart.

"The dominant retailer in China someday may be an online retailer," said Morgan Stanley analyst Richard Ji.

Taobao says its Beijing mall is aimed at overcoming a hurdle hampering the growth of China's Internet commerce even though online retailers offer significantly lower prices: Customers don't like to buy furniture and other major items without examining them in person.

"It's hard for people to shop for home furnishings if they haven't seen them," said Justine Chao, an Alibaba spokeswoman.

Alibaba Group also includes, a giant business-to-business Internet commerce platform. The company, in which Yahoo Inc. owns a 43 percent stake, operates Yahoo's China arm.

Global e-commerce outfits have struggled to gain a foothold in China in the face of aggressive local competition. eBay Inc. entered China by acquiring a local company but handed over control to Chinese managers. operates through a local partner, Joyo.

The Chinese industry has produced success stories including bookseller Dangdang Inc., traded on the New York Stock Exchange, consumer electronics retailer and, a clothing outlet.

Industry analysts expect China's online commerce to grow at explosive annual rates of 30 to 40 percent in coming years, defying early fears it might be hurt by low rates of credit card use and rudimentary delivery services.

A key part of e-commerce's appeal is lower prices in a society where many families get by on a few thousand dollars a year. With no need for an expensive chain of storefronts, Web merchants charge 30 to 50 percent less than traditional retailers.

Sales through Taobao alone totaled an estimated 400 billion yuan ($60 billion) last year, according to analysts. Taobao does not disclose its revenues from fees charged to retailers and other income.

Its platform has led to the emergence of a cottage industry of small retailers, many of them lone traders working from home, who sell clothes, shoes, toys, costume jewelry and other goods to a nationwide market.

Taobao says its 25,000-square-meter (250,000-square-foot) Beijing mall will display 22,000 items from some 300 suppliers. Orders and payment will only take place online. Taobao says it plans to open similar showrooms in other major Chinese cities.

Other Internet retailers such as jewelry seller also have opened showrooms to encourage customers to buy higher-priced items online.

Such outlets could help e-commerce sites compete even more aggressively with traditional retailers by boosting consumer confidence in a market where online sellers have an uneven reputation for quality, said Ji.

"By having a display room, it clearly will help raise the seller's credibility," he said.

On opening day Friday, shoppers at the Taobao Mall on the Chinese capital's east side were test-sitting sofas and flipping through channels on big-screen TVs.

"Compared with photos on the Web, I can really touch the things, so I can put more trust in them," said Yu Jingyuan, an engineer for a computer company who was looking at a stall displaying kitchenwares. "I can trust the sellers online."

China has by far the world's biggest population of Web users, with 457 million people online as of Dec. 31. But just 10 percent of them shop online, compared with the U.S. level of about 70 percent, leaving online merchants room to expand.

In contrast to the United States, Europe and other developed markets, China's online merchants enjoy the unusual advantage that they face no entrenched retail giants with decades of market dominance and strong brand names.

After decades of poverty and communist central planning, modern retailing began to replace drab, poorly stocked Chinese stores only in the 1990s. But that was followed just a few years later by the launch of online commerce.

Bricks-and-mortar retailing is fragmented, leaving competitors without the financial might of counterparts abroad. The top 20 account for less than 10 percent of China's annual sales, a far cry from the 50 percent market share of the U.S. top 20.

Alibaba and other companies have developed online payment systems to serve customers without credit cards. In response to concerns about product quality, some release the money only after the buyer is satisfied.

In big cities, delivery services that draw on China's abundant supply of low-cost labor can get purchases from local sellers to buyers the same day.

Taobao says it has no plans to open showrooms to display other goods, but the manager of its new Beijing mall had a warning for rivals.

"In the online world," said Ye Peng, "nothing is impossible."

Facebook calls NY lawsuit 'fraud on the court'

Associated Press
by Carolyn Thompson
May 27, 2011

BUFFALO, N.Y. -- Attorneys for Facebook are calling a New York man's federal lawsuit claiming part ownership of the Palo Alto company "a fraud on the court."

In their latest legal response, Facebook attorneys accuse Paul Ceglia of doctoring a 2003 contract that he says proves he bought into Facebook founder Mark Zuckerberg's idea for the site when Zuckerberg was a Harvard University freshman.

Facebook calls NY lawsuit 'fraud on the court'

Ceglia "has now come out of the woodwork seeking billions in damages," the response filed Thursday in U.S. District Court in Buffalo said.

Ceglia's lawsuit, first brought in 2010 and refiled last month, relies largely on a two-page "work for hire" contract bearing the names of both men. Ceglia says he and Zuckerberg signed the contract after Zuckerberg responded to his Craigslist help-wanted ad for work on a street-mapping database he was creating.

According to the lawsuit, Ceglia paid Zuckerberg $1,000 to develop software for the street-mapping project and gave him another $1,000 after Zuckerberg told him about his Facebook idea, with the condition Ceglia would get half if it took off.

Facebook's response said the document is a fake.

"At no time did Zuckerberg enter into any agreement, written or otherwise, with (Ceglia) or anyone affiliated with (Ceglia) concerning Facebook or any similar social networking service or website," the filing said. "To be clear, Zuckerberg did not sign the purported agreement ... which is a 'cut-and-paste' job fraudulently manufactured by plaintiff for this lawsuit."

A message seeking comment was left Friday for Ceglia's lawyer, Dennis Vacco.

"The lawsuit is a brazen and outrageous fraud on the court," the Facebook response said.

Ceglia seeks a 50 percent share of Zuckerberg's interest in the company, which has more than 500 million users worldwide. In March, Forbes magazine estimated Zuckerberg's net worth at $13.5 billion.

Ceglia also has submitted emails he said he exchanged with Zuckerberg about the launch of the website.

EBay and PayPal sue Google over trade secrets

by Yinka Adegoke
May 26, 2011

NEW YORK (Reuters) – EBay and its online payment unit, PayPal Inc, on Thursday sued Google Inc and two executives for stealing trade secrets related to mobile payment systems.

The two executives, Osama Bedier and Stephanie Tilenius, were formerly with PayPal and led the launch on Thursday of Google's own mobile payment system in partnership with MasterCard, Citigroup and phone company Sprint.

EBay and PayPal sue Google over trade secrets

The suit highlights the growing battle by a wide range of companies from traditional finance to Silicon Valley trying to take a major stake in what has been described as a $1 trillion opportunity in mobile payments. The mobile phone is seen as the digital personal wallet of the future.

The eBay suit said Bedier worked for nine years at PayPal, most recently serving as vice president of platform, mobile and new ventures. He joined Google on January 24 this year.

Tilenius was at eBay from 2001 to October 2009 and served as a consultant to the company until March 2010. The suit says Tilenius joined Google in February 2010 as vice president of e-commerce.

Bedier is accused in the suit of having "misappropriated PayPal trade secrets by disclosing them within Google and to major retailers."

The suit accused Tilenius of recruiting Bedier, thereby breaking a contractual agreement with eBay. It also claims Bedier attempted to recruit former colleagues still at PayPal.

Ebay said PayPal and Google worked closely together for three years until this year on developing a commercial deal where PayPal would serve as a payment option for mobile application purchases on Google's Android phones.

It said Bedier was the senior PayPal executive leading and finalizing negotiations with Google on Android during this period.

It also claimed Bedier transferred up-to-date versions of documents outlining PayPal's mobile payment strategies to his non-PayPal computer just days before leaving PayPal for Google.

"By hiring Bedier, with his trade secret knowledge of PayPal's plans and understanding of Google's weaknesses as viewed by the industry leader (PayPal), Google bought the most comprehensive and sophisticated critique of its own problems available," the suit said.

Google spokesman Aaron Zamost said the company had not yet received a copy of the complaint would not be able to comment until it has had a chance to review it.

Google and PayPal have done battle in the recent past in online payments via computers with the launch of Google Checkout in 2006, but Checkout has had a minimal impact on PayPal's market dominance.

The suit was filed at Superior Court of the State of California, county of Santa Clara, Case No: CV20l863.

Yahoo CEO vows to clean up Alibaba mess in China

Associated Press
May 25, 2011

SAN FRANCISCO – Yahoo Inc. CEO Carol Bartz found herself in a familiar position Wednesday: assuring stock market analysts that she will clean up a mess damaging the long-slumping Internet company's market value.

The latest challenge to confront Bartz in her nearly 2 1/2 year-tenure emerged two weeks ago. That's when Yahoo jarred investors by informing them of an abrupt change affecting the value of its 43 percent stake in Alibaba Group, one of the leaders in China's rapidly growing Internet market.

Yahoo CEO vows to clean up Alibaba mess in China

Alibaba had spun off a potential jewel — its online payment service Alipay — into a separate company controlled by its CEO, Jack Ma, without giving Yahoo anything in return.

Yahoo's stock price has plunged by 13 percent since the May 10 revelation, leaving Bartz little choice but to place the issue at the top of the agenda for a meeting that Yahoo had scheduled to provide an update on its turnaround strategy. The Associated Press monitored the San Jose, Calif. meeting through a webcast because Yahoo wouldn't allow reporters to attend.

Although she provided few specifics, Bartz spent most of the first hour trying to reassure analysts that Yahoo will be "appropriately compensated" for the loss of Alipay from its investment portfolio.

Bartz made her points flanked by Yahoo's chief financial officer, Tim Morse, and company co-founder, Jerry Yang, who also is a member of Alibaba's board of directors. Both men flew to Asia last week to discuss the Alipay matter with Alibaba's major shareholders, who include Ma and Japan's Softbank Corp. Bartz said all the key shareholders have committed to negotiating a fair payment for the Alipay spinoff and preserving the value of another Alibaba asset, online auction site Taobao.

"This is a very complex situation," Bartz said. "We have approached this thoughtfully and methodically. We think this is the right path to protect shareholder interests."

Bartz wouldn't predict when the Alipay issue would be resolved.

Yang, who spent 19 months as Yahoo's CEO before being replaced by Bartz in January 2009, said the Alipay spin-off was necessary to ensure Chinese regulators license the service. The licensing wouldn't have been possible if Alipay wasn't wholly owned by Chinese citizens, Yang said.

Yahoo said Alibaba notified it about the change in Alipay's ownership on March 31. None of the executives explained why Yahoo waited nearly six weeks to disclose it.

"We believe our disclosure was timely and appropriate," Bartz said.

Later in the day, Morse said Yahoo is still exploring ways to enable shareholders to get their money out of another closely watched Asia investment, Yahoo Japan Corp. As has been the case since last year, Yahoo is still considering spinning off its 35 percent stake in Yahoo Japan or transferring the holdings into a tracking stock.

"We are pursuing some attractive alternatives, but it's not a quick and easy process," Morse said of the Yahoo Japan situation.

Investors seemed largely unmoved by what they heard Wednesday. Yahoo shares added a penny to close at $16.15.

Bartz, 62, and her top lieutenants spent most the meeting trying to show Yahoo is finally headed in the right direction after years of misguided decisions and aimless execution.

The bumbling has undercut Yahoo's revenue and stock price at a time when other major Internet companies like Google Inc., Inc. and Facebook are thriving.

"We have rolled up our sleeves and we have done the hard work that Yahoo needed to do to be positioned as a premier digital media company," Bartz said Wednesday.

Yahoo remains one of the Internet's top destinations with more than 600 million users, an audience that Bartz boasted would be the envy of once-powerful media barons such as newspaper publisher William Randolph Hearst.

But Yahoo's popularity hasn't carried over to the stock market, largely because the company has been stuck in a financial malaise for most of the past five years. During that time, Yahoo has lost nearly half of its market value under three different CEOs — Bartz, Yang and former movie studio boss Terry Semel.

Although Bartz has been able to boost Yahoo's earnings by trimming about $2.1 billion in costs, the company isn't keeping pace with the growth in the Internet ad market that generates most of its revenue.

Yahoo's net revenue — a number that reflects the money that Yahoo keeps after paying ad commissions — has dropped from the previous year in all nine quarters completed so far during Bartz's reign.

Part of the trouble stems from a disappointing start to Yahoo's Internet search partnership with Microsoft Corp. To save money, Yahoo is relying on Microsoft's technology to power the search results and accompanying ads on its website.

But Microsoft so far hasn't delivered the search advertising revenue that Yahoo envisioned, prompting the companies to delay expanding the 10-year partnership outside of the U.S. and Canada until the financial performance improves. Bartz is confident that will happen by early next year.

If Yahoo doesn't rebound soon, BGC Financial analyst Colin Gillis said he thinks Bartz might be replaced before her four-year contract expires in January 2013. He said he believes Yahoo brought in a potential successor when it named David Kenny to its board last month.

Kenny, 49, is an online advertising veteran and currently president of Internet networking services provider Akamai Technologies Inc.

Bartz has the "unequivocal support" of Yahoo's board and any speculation about her job being in jeopardy is false, according to a person familiar with the board's thinking. The person asked not to be identified because the board has chosen not to publicly discuss its feelings about Bartz's performance.

Bartz still hasn't been able to reach the goals that the board set for Yahoo's stock price when she was hired. Her contract awarded her 5 million stock options that won't vest unless Yahoo shares close at average prices ranging from $17.60 to $35.19 for at least 20 consecutive days.

It looked like Yahoo's stock might hit the first vesting threshold until the disclosure about the Alipay spinoff wiped out roughly $3 billion in shareholder wealth in two weeks.