The FCC has taken a sudden interest in the astronomical price of digital cable television services.

"Over the last decade, average cable rates have more than doubled. And now cable companies are charging consumers more but consumers are receiving less," FCC spokeswoman Mary Diamond told the Associated Press, referring to the transition from analog to digital television services. "This is an unfortunate trend for families facing increasingly difficult economic times."

The comments come on the heels of plans for rate hikes among all the major cable operators, including Comcast, Time Warner Cable, Cablevision and Cox.

See Also:

• Comcast Jacks Prices; TV Gets More Expensive
• Broadband Service Available Worldwide, But Few Can Afford It
• U.S. Broadband Speeds Too Darn Slow; Adoption Hits 7-Year Low
• The Dawn of Free Internet Access?
• Broadband Boom May Be Over 
• DSL Not Dead Yet

There wasn't much evidence of a global financial crisis or an economic downturn in Comcast's third-quarter results. The company posted earnings of $771 million, or 26 cents per share, 4 cents  per share ahead of Wall Street's forecast for 22 cents per share. Comcast's profit shot up 38 percent from $560 million, or 18 cents per share, last year. If consumer spending has stalled, Comcast isn't feeling the effects yet.

"I want to begin the call by stepping back and just commenting on the obviously unique and challenging economic time that we are all living through in the United States. Is cable a good business? Is Comcast ready? I think absolutely yes," said Comcast CEO Brian Roberts on the quarterly conference call.

Roberts also swore up and down that the company wouldn't have to tap the capital markets for the "foreseeable future."

So why did the stock fall close to 10 percent in Wednesday's trading session? Competition from the telcos -- specifically from AT&T -- may be keeping some investors on the sidelines.

"We are actually seeing more competition from AT&T than Verizon right now and that was the exact opposite a year ago . . . AT&T has so much broader a footprint that we actually think they are having a greater effect on our business than Verizon," said COO Stephen Burke on Wednesday's conference call.

Microsoft's roll out of Windows Genuine Advantage (WGA), an application that sniffs out pirated copies of Windows, isn't winning the company a whole lot of love in China. In fact, it has inspired a lawsuit and seems to have generated nothing but backlash from potential customers. And government officials.

"Microsoft has no right to judge whether the installed software is pirated or not. It has no right to penalize users by intruding on their computers," Liu, a man one man who is suing Microsoft, told the Xinhua News Agency.

At issue is a WGA feature that turns screens black for users who are running pirated copies of Windows. The user also receives repeated and constant messages that their software is pirated. The black-screen hasn't only infuriated Chinese computer users -- Chinese officials have been equally critical of Microsoft's approach. According to Reuters:

"National Copyright Administration (NCA) Vice-Director Yan Xiaohong said his agency supported "the rights-safeguarding move taken by institutions including Microsoft," Xinhua news agency quoted him as saying in a report late on Monday.

But companies should "pay attention to the methods," Yan said. "Whether the 'black-out' method should be adopted is open to question. Measures for safeguarding rights also need to be appropriate," Yan said.

We don't really get it. Anyone who receives the nagging notices from Microsoft must have signed up for it -- the notices are distributed to people who opted to receive the updates through Windows or through Microsoft Update. And before any automatic updates are installed on a machine, the owner has to agree to the licensing terms for the update service and WGA.

Photo: Flickr/Ikhlasul Amal

See Also:

• Microsoft Peeves Chinese With Anti-Piracy Tactics
• Microsoft Fights Piracy With Price Cuts
• You Can't Pay People to Use Microsoft Search
• CNBC Does Not Appreciate Microsoft's Porn-like Web Ads

The so-called "nuclear winter" that entrepreneur Marc Andreessen predicted back in April has arrived. And nobody in the Valley -- neither venture capitalists nor entrepreneurs -- know when the market will bottom much less when it will recover.

"There's something going on here other than subprime mortgages," said venture capitalist John Doerr, while speaking at a VentureBeat-sponsored roundtable discussion on the downturn, in Menlo Park, Calif. "We've not only got a debt crisis but a crisis of confidence . . . With the current level of uncertainty, it's really hard to forecast what's going to happen going forward," concluded Doerr, who held his head in his hand for much of the panel discussion.

Angel investor Ron Conway (above) thinks it could be at least two years before "the storm" ends, in which case any company with fewer than 6 months worth of cash, needs to either sell out, get a bridge loan, or "prepare for an orderly shutdown."

Continue reading "VC Warns Cash-Strapped Startups to Prepare for 'Orderly Shutdown'" »

By Kevin Maney, for Portfolio.com

Marc Andreessen would rather blog from home in his underwear than give an interview to a journalist, especially in front of an audience. That’s what he wrote in his blog earlier this year. Thankfully, this one time, Andreessen got dressed and stepped onstage.

At 37, Andreessen is a legend in Silicon Valley. He created, with Eric Bina, the first graphical browser while at the University of Illinois, then co-founded Netscape Communications with überentrepreneur Jim Clark in the early 1990s.

Netscape’s browser brought the internet to the masses, set off the dotcom boom, and so angered Microsoft at the time that Steve Ballmer, now the software giant’s C.E.O., led employees in “Kill Netscape!” chants. By bundling its Internet Explorer browser into Windows, Microsoft eventually drove Netscape into the arms of a suitor: AOL bought Netscape in 1999 for $4.2 billion.

Andreessen hasn’t had a success of that magnitude since. But he did create another billion-dollar company, Loudcloud, a tech-services outfit that later changed its name to Opsware and was sold to Hewlett-Packard for $1.6 billion. More recently, Andreessen started Ning, a website that lets anyone create a mini social network. Its most prominent customer: 50 Cent.

Andreessen joined Face­book’s board this year, invested in Twitter, and generally manages to show up on the front end of new technology trends. His blog, Blog.pmarca.com, has been a tech-industry must-read, in part because he’s willing to be brutally outspoken. In February, Andreessen ignited emotions when he blogged that he was starting a “New York Times Deathwatch.” ( Watch an exclusive video of Andreessen talking about the future of newspapers.)

Condé Nast Portfolio’s Kevin Maney interviewed Andreessen at a gathering of Silicon Valley’s Churchill Club in Palo Alto, California. The following is an edited transcript.

Continue reading "Marc of the Valley" »

Gannett announced a new round of layoffs yesterday, saying it will cut about 10 percent of staff at its 85 local U.S. publications, not including USA Today.

The 10 percent is “significantly less” than the 3,000 positions estimate that has been floating around, said Tara Connell, VP of corporate communication.

Each publication has been asked to submit a proposal explaining how it will achieve its target cut by November 14, and the layoffs will be implemented sometime in December.

“As all of you are painfully aware, the fiscal crisis is deepening and the economy is getting worse. Gannett’s revenues continue to be severely impacted by this downturn, and our local operations are suffering,” wrote Robert J. Dickey, President, Gannett U.S. Community Publishing, in a memo to staff.

Gannett’s profits fell 32 percent in the third-quarter, which it announced on Friday.  This past August it announced job cuts of around 1000 positions, with about 600 of those implemented through layoffs.

See Also:

• Gannett’s Q3 Profits Plunge 32 Percent
• Gannett Takes Majority Stake in CareerBuilder
• Media Death Watch: Classifieds are Gannett’s Biggest Loser
• Gannett: Thanks and Farewell

Social networks may be having trouble monetizing, but its not because their users are scared of advertising, according to a new Razorfish study released today.

"FEED: The Razorfish Consumer Experience Report" found that social network surfers are buying products based on advertising and recommendations found on social networks.

76 percent of the 1,006 people surveyed said they didn't mind seeing ads when they logged-in to Facebook, MySpace or the other social media sites they frequent. 49 percent of respondents said that they have made a purchase based on a recommendation found on a social networking site, while 40 percent have made a purchase based on advertising found on social networking sites.

The report warns against depending solely on advertising to turn a profit and urges advertisers and publishers to think about "social experiences" that could include fan pages, games, widgets, or videos. Social networks will challenge advertisers to give them useful products, says the report, even if they "have no immediate monetization models."

Razorfish is aware that the road to profitibality will be bumpy, but thinks that blurring the lines between advertising and content will help facilitate it. "Content, in our view, will become advertising," the agency says.

Yahoo’s market share in U.S. Internet searches increased to 20.2 percent in September, up from 19.6 percent in August, reports ComScore.

Microsoft saw a small loss, however, falling to 8.5 percent from 8.9 percent.

Total searches were up to 11.8 billion from 11.7 in August.

Yahoo Gains Internet Search Share; Microsoft Loses [Bloomberg]

See Also:

• When Will Microsoft Go in for the Kill?
• Yahoo's Yang: We've Got Enough Cash To Make it Through the Downturn
• Key Congressman and Consumer Group Oppose Google-Yahoo Partnership

At this point, it just seems mean spirited to start attacking Google and Yahoo's beleagured search deal, but a top congressman on the House Energy and Commerce Committee and a consumer advocacy group have come out against the deal.

Yesterday, Texas Republican Joe Barton expressed frustration at Google and Yahoo's responses to questions about their potential search deal in a letter that recommended the Justice Department "thoroughly investigate" their search partnership. Also,  a consumer group called U.S. Public Interest Group sent a letter last week to the U.S. Attorney General saying that the partnership would negatively effect consumer privacy.

The non-exclusive deal has been held up by a Justice investigation since June. The proposed plan would allow Google to serve search ads alongside underperforming Yahoo key words, but has been mired in monopoly accusations, as Google and Yahoo are the top two search advertising sellers. Google and Yahoo originally thought the DoJ investigation would be completed in early October, but as the month comes to a close, a settlement that will be beneficial to the business interests of either company is looking increasingly unlikely.

Continue reading "Key Congressman and Consumer Group Oppose Google-Yahoo Partnership" »

Microsoft has moved from paying $3 million for a spokesman to getting its advertising for free. The next phase of its "I'm a PC" campaign has made the switch to user generated content.

The campaign began with Jerry Seinfeld and Bill Gates trying on shoes, then left it to Pharrell Williams, Deepak Chopra and other everyday users of PCs to discuss their affinity for Microsoft products. Now Microsoft is going straight to the people.

Starting Monday, Microsoft began airing user generated advertising in line with it's "I'm a PC" campaign. Now PC users can upload themselves stating the campaign's "I'm a PC" tagline and some other information about themselves on Microsoft's I'm A PC website. Together with ad agency Crispin Bogusky, Microsoft will choose which of the ads will run on television. 

Says the site:

"If you're a PC, now's your chance to stand up and be recognized. Raise your mouse-hand high and show us what kind of PC you are. You could become the face the world see in online advertising, on this site and even on TV."

Continue reading "Microsoft Asks You To Make Its Next 'I'm a PC' Ads" »

The professional social network LinkedIn has opened up its OpenSocial-based application platform for developers, and the initial launch includes nine apps designed for businesses.

Google has developed a Presentation app to upload power points to your profile, LinkedIn has one that monitors Twitter to see what people are saying about your company, and WordPress has created an app to integrate your blog posts.

Developers can charge for usage, and the applications that appear in the store will have to go through an approval process to see if they are deemed “professional.”

"What you're looking at here is really collaboration infrastructure for companies," Patrick Crane, LinkedIn's vice president of marketing, told Reuters.

Last week LinkedIn announced another $22.7 million in funding, and its user base has been expanding significantly over the past few months in light of the economy.

See Also:

• LinkedIn Flourishes as Economy Tanks
• LinkedIn Reels in Another $22.7M in Funding
• LinkedIn's New Survey Based Revenue Stream

Hulu is celebrating its first anniversary today, and perhaps the most surprising thing about this milestone is the fact that people actually like the site.

Before Hulu's launch, the network television portal was almost universally dismissed as an ill-conceived, tardy entrant to the online video ecosphere. A year into business, Hulu may not be profitable, but the site is well-regarded and most importantly, popular.

Television viewers are increasingly going online to see premium content.  Hulu aired 142 million streams to 6.3 million unique viewers in September, according to Nielsen Online. More impressive is the fact that Hulu's favorability ratings remain exceptionally high. A survey commissioned by Hulu and conducted by Insight Express found that almost 80 percent of respondents who used Hulu in the last 30 days rated the experience to be Excellent/Very Good.

Even more surprising, viewers like their advertising content.

Continue reading "Hulu Celebrates First Anniversary, Gains Popularity By Serving Fewer Ads" »

EarthLink is still kicking. The company, once one of the largest IPS in the country after AOL, swung to a third-quarter profit, up from a loss last year.

Its prospects aren't the prettiest, though -- the company is holding on for dear life to a dwindling customer base. The total number of subscribers -- including broadband and dial-up -- decreased to 2.9 million in the third quarter from 3.9 million last year.

Still, with $485 million in cash and securities, you have to wonder how long it will be before the company gets acquired.

The European market may explode with Blu-ray goodness in 2009, according to market research firm Futuresource (via VideoBusiness.com). The group thinks sales of Blu-ray disc players in five of the largest Western European markets will triple next year to 1.8 million units.

By contrast, a U.S.-based market research firm projects that sales of Blu-ray players in the U.S. will hit 12 million in 2009. Although we suspect that estimate, published in September, didn't really bake in recent economic developments

See Also:

• Target Pushes Cheap DVD Players
• Blu-ray Is Winning Over the Ladies
• Blu-ray Sales Will Seriously Grow Over the Next Four Years
• Netflix CFO Doesn't Expect Much From Blu-ray
• Blu-ray Sales Drift
• Can Blu-ray Save Blockbuster?

Time Inc. will undergo a major structural overhaul in light of the current financial crisis effective Wednesday, chairman and CEO Ann S. Moore announced in a memo to staff on Tuesday.

"After much careful study and consultation with many of you who run our businesses, I have concluded that it is no longer possible to operate our company with the same decentralized management structure that served us so well during our many years of sustained growth," Moore wrote.

The biggest change is that the company's 24 magazines and websites will be regrouped into three business units, each reporting to a senior corporate executive:

News: the  existing print and digital properties in the TIME group, the Fortune|Money  group, and the Sports Illustrated group, as well as Life.com and GEE. John  Squires, EVP Time Inc. will manage the News Business Unit.

Style and  Entertainment: the existing print and digital  properties in the PEOPLE group,  InStyle, Entertainment Weekly, and Essence. I will act as the EVP for this  group so the Style and Entertainment Business Unit will report to me.

Lifestyle: the existing print and digital properties of Real Simple, This Old House, All You, Southern Living, Cooking  Light, Sunset, Health, Cottage Living, Coastal Living, and Southern Accents, along with  MyRecipes.com and MyHomeIdeas.com. Sylvia Auton, EVP Time Inc. will manage the  Lifestyle Business Unit, while also retaining responsibility for IPC  Media.

Senior Management and the new Business Unit leaders are expected to announce more changes in the coming weeks. 

The NYT is reporting job cuts of about 600 employees, or 6 percent of the staff, but Time Warner declined to comment on the layoffs.

Read the full memo from Ann Moore after the jump.

Continue reading "Time Inc. Announces Major Reorganization Plans" »

Google's settlement of a three-year old lawsuit challenging its Book Search program, which scans books and make portions available online, creates a new revenue stream for authors and publishers (and itself) — but the financial benefits are dwarfed by the clear field the company now has to complete an ambitious program to create a global digital library.

Google agreed to pay $125 million to settle lawsuits by authors and publishers who sued to stop the company from digitizing out-of-print — but copyright — material. Under Book Search, it has already scanned some 7 million books and estimates there are 20 million more that would qualify, BusinessWeek reports.

A finding against Google could have subjected them to significant infringement penalties — $700 to as much as $150,000 per book, according to Pillsbury Winthrop Shaw Pittman copyright attorney Cydney A. Tune. "If you look at the number of copyrighted works that were involved in the case and multiplied it by the number of statutory damages for each work," said Tune, "that's a huge amount of potential damages."

But, more to the point, a court ruling against Google would have had a chilling effect on a program whose purpose is not to make any money per se but to preserve the knowledge in libraries the world over, and make it more widely available.

At present, only Google has the will — and probably the wherewithal — to tilt at such a windmill. Only Microsoft has attempted anything similar — and it abandoned its Live Search Books initiative earlier this year.

Continue reading "Google Settles Book-Scan Lawsuit, Everybody Wins" »

Downloaded video content got a monetization boost today, with blip.tv's announcement that it will begin streaming dynamic ads to iTunes' videos.

While online video can stream a variety of ads, downloaded podcasts are often a loss leader for publishers, who sacrifice income for popularity. Free downloads are obviously more popular than paid downloads, but getting effective ads into that content has proved difficult until now.

Today at the Beet.TV Online Video Summit, blip.tv announced that their new ad format will replace static ads with DoubleClick's DART fully support click-through tracking system. Now advertisers will be able to gauge the effectiveness of prerolls, postrolls and overlays for downloaded podcasts in real time.

"For the first time," says Mike Hudack, CEO of blip.tv, "advertisers who purchase ads in Quicktime can track their effectiveness at the time the impressions are served."

Continue reading "Blip.tv Slips QuickTime Ads Into iTunes Videos" »

That giant cracking sound you hear is whiplash on Wall Street, where the Dow Jones Industrial Average surged nearly 900 points on no news in particular after tumbling about 500 points over the last two sessions.

That was enough to make the last Tuesday in October (not generally a good month for stocks) the second biggest gain in points, and seventh by percentage.

Analysts were trying to make sense of it all:

Analysts said some investors were buying in anticipation that the Federal Reserve will cut its fed funds rate by half a point to 1 percent on Wednesday. Others said the market had just fallen too far, with the Dow having dropped more than 500 points, the previous two trading days.

Among the biggest gainers in tech were Amazon, Dell, Google, HP, Intel, Oracle, Rimm and Time Warner, which all had double-digit gains. Apple was nearly above above $100 again, and Yahoo above $12.

Continue reading "Another Day, Another 900 points (Up -- This Time)" »

The Christian Science Monitor is giving up on print, for the most part: the century-old publication plans to halt publication of its Monday through Friday newspaper in favor of daily web content. They are also creating a weekly magazine that will run on Sundays.

"This was in the works for almost two years," says Bob Hanna, Advertising Director at the Monitor. "We started with the challenge of what are we as a newspaper going to do without any preconceived notions, and this is where we ended up."

The Monitor is a non-profit news organization subsidized by the First Church of Christ, Scientist. Despite a small circulation size, The Monitor has acquired a devoted following and accolades, including seven Pulitzer Prizes.

Susan Hackney, Communications Director for The Monitor, says that the move to a web-based model will enable the publication to keep its foreign offices open while lowering costs. "We will be able to apply more resources to the web, where the future is going. For that reason we will be more competitive."

Continue reading "Christian Science Monitor Goes All in on the Web" »

Credit counselors have some advice for debt-ridden Americans: Cut the cable.

"We live in a time when cellphones and cable TV are considered necessities," he said. "But they really aren't," Jeff Wise, president of Consumer Credit Counseling Service of Southern West Virginia, told NBC affiliate WBOY.

The Denver Post similarly advised readers that if they want to avoid bankruptcy, they need to "eliminate ... luxuries that we pretend are necessities" such as "visits to the spa ...  and cable television."

But it's not clear Americans can or will do it. Television is as much of a staple in the American diet as oil and apple pie.

"What we have historically seen is that cable operators fare pretty well during recession periods like in 2000 and 2001," says Thomas Egan, an analyst with Collins Stewart. "The current economic malaise could be deeper or last longer, but customers tend to cut spending on other entertainment areas, like going out to dinner or the theater, rather than cut cable."

Continue reading "Americans Can't Live Without Their Cable TV" »