Monthly Archives: April 2009

Chris Nuttall

After the hype, a supremely negative take on the prospects of the eagerly awaited Palm Pre smartphone and the company itself from Collins Stewart analyst Ashok Kumar today.

Mr Kumar says his supply-chain checks indicate that “due to multiple hardware and software issues, Palm has dramatically reduced its production orders” with its manufacturing partner. Read more

  • Time Warner moved closer to spinning off AOL, while at the same time reporting a 14 per cent decline in quarterly net profit due to a drop in online and print advertising. Disposing of AOL would untangle what many consider one of the worst mergers in US corporate history, one that has lost shareholders more than $100bn.
  • Google lost its fourth high-profile executive since March, with the departure of display ad chief David Rosenblatt, the former chief executive of DoubleClick, which Google acquired last year. Mr Rosenblatt reportedly doesn’t have another job lined up yet, but is aiming to leave Silicon Valley and move to New York.

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Richard Waters

When I caught up with Bill Hambrecht on Wednesday, he certainly wasn’t overflowing with sympathy for venture capitalists (the NVCA just launched a campaign to counter what it claims are structural obstacles that discourage young companies from seeking a listing on Wall Street, hurting VC returns.)

Asked why there weren’t more IPOs even before the financial crisis took hold, the veteran Silicon Valley financier had this to say: “I think what the [venture capitalists] really don’t like are the valuations.” Read more

Chris Nuttall

Sony opened its online kingdom Free Realms on Wednesday – its response to the success of the browser-based role-playing game, Runescape.

Britain’s Jagex has found a lucrative market among pre-teen boys and girls for Runescape, which has similarities to the world’s most successful online role-playing game World of Warcraft. Read more

  • Sun Microsystems, which last week agreed to be purchased by Oracle for $7.4bn, reported sharp losses in the opening months of this year, highlighting the impact of the recession on the computer systems company. In a departure from protocol, Sun did not host the usual conference call with investors and analysts following results.
  • IBM responded to the collapse of its own takeover offer for Sun this month with an announcement that it would return more cash to its shareholders instead in the form of a higher dividend and increased stock buy-back plan.

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Paul Taylor

Software engineers and device manufacturers continue to push up against the limits of human physiology in the search for the ultimate interface for mobile phones and other handheld mobile devices.

Thumb-operated mini-Qwerty keyboards, virtual keypads and  touch interfaces may all have their place, but perhaps the most logical interface for the mobile phone is voice?

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Chris Nuttall

Intel, which believes in investing during a downturn to the tune of spending $7bn on new manufacturing facilities over the next two years, is trying to persuade its customers to think the same way.

It released a survey and statistics on Tuesday that suggested investing in upgrading three or four-year-old computers will quickly pay for itself. Read more

David Gelles

The incessant media focus on Twitter (we’re guilty, too), coupled with a parade of celebrity endorsers (from Oprah to Lance) has excited enormous public interest in the micro-blogging service.

Eager to see what all the fuss is about, millions of people around the world are signing up to send their first “tweets.” Unique users of Twitter grew by more than 100 per cent in March, and are now estimated at 14m.

But it turns out most of those users are determining that the fuss isn’t about all that much, after all. A full 60 per cent of new Twitter users fail to tweet again the following month, according to Nielsen vice president of primary research David Martin. Read more

Maija Palmer

Phorm logoFor a little while it looked like things were looking up for Phorm, the internet advertising technology company. There had been a year of controversy about the company’s technology which monitors internet users web surfing behaviour at the ISP level – a technique known as “deep packet inspection”, which has raised accusations of spying with some privacy activists.

But at the beginning of the year, things went quiet.  There were a few positive statements about targeted advertising from UK officials like Stephen Carter, and the company launched a trial with KT, the Korean broadband provider.

Now, suddenly, the controversy is raging again. Read more

  • Verizon Communications has held talks with Apple about selling versions of either the iPhone or other Apple devices in the US. Currently AT&T is the exclusive distributor of the iPhone in the US, and the company was reportedly trying to extend that deal for another year. A lucrative deal with Apple would be a coup for Verizon, which reported strong quarterly profits from its growing mobile business.
  • Qualcomm, the world’s biggest maker of chips for mobile phones, put an end to legal wrangling by settling a four-year patent dispute with rival Broadcom. Qualcomm has agreed to pay Broadcom $891m over four years in exchange for the dismissal of all court cases and Broadcom withdrawing its complaints about Qualcomm’s business practices.

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Chris Nuttall

Travelzoo’s revenues grew 12 per cent in the first quarter and shares of the online travel deal company rose by almost the same amount on Monday’s consensus-beating earnings.

Its Fly.com meta search engine, launched in beta in February, made a negligible contribution, but management sees major synergies from matching an engine that finds users the best flights with some of the hotel and holiday bargains its site and weekly newsletter offers to 15m subscribers. Read more

David Gelles

Facebook was accused of imitating Twitter when it redesigned its homepage last month, making the news feed, or stream, more “real time,” and encouraging users to update their status more often. Today Facebook followed another one of Twitter’s footsteps.

With the Open Stream API, Facebook will allow third-party developers to create external applications that let users interact with their stream. This means users will be able to enjoy much of the Facebook experience without ever visiting Facebook.com itself. Read more

Joseph Menn

The major movie studios told a US federal judge in San Francisco today that new software from RealNetworks threatens serious harm to the DVD sales that are a major source of their profits.

The $30 RealDVD program allows users to make backup copies of commercial DVDs and store them on their hard drives, which on the surface is the type of activity that courts have determined to be “fair use.” Read more

Richard Waters

Why don’t businesses let their customers vote on their key decisions more often?

That’s the question to bear in mind when you consider Facebook’s experiment with “democracy.” The company is today heralding the outcome of its decision to give customers a vote on its privacy policies (this is our earlier coverage of the issue.)

But the fact that a company feels it needs to hold a vote among its customers raises troubling questions. Read more

  • The economic slump brought another unwelcome first for the tech industry: Microsoft reported the first year-on-year revenue decline in its 34-year history. The news came a week after Google disclosed its first-ever sequential quarterly revenue decline, itself an important turning point for a company whose stellar growth overshadowed internet rivals for much of this decade. At least Apple has managed to avoid joining this unenviable list: the iPod dodged a widely-expected sales decline, the first in its eight-year history, thanks to strong demand for the touch.
  • Time to bury another relic of the dotcom boom: Yahoo said it was closing GeoCities (though it didn’t explain why putting paid to the struggling web hosting service had required what it described as “careful consideration”.) It paid $3bn for the faded star a decade ago.

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Richard Waters

Wouldn’t you love to be a fly on the wall next time Oracle gets round to negotiating Java licences with IBM and Nokia?

Sun’s aim of countering Microsoft by getting the programming language and development tools widely adopted was a knock-out success, but its business model (make the profits on hardware) failed utterly. Oracle has been pretty clear that it won’t make that mistake.

But will Java licensees be willing to pay up to justify Larry Ellison’s claim that this is “the single most important software asset we have ever acquired”? Read more

Chris Nuttall

It’s an ears race rather than an arms race, but the contest for the coolest and quietest Bluetooth headset has just been stepped up another notch with new releases by Aliph and Plantronics.

San Francisco-based Aliph brought forward the launch of its Jawbone Prime to today, apparently to coincide with the release of the Plantronics Voyager Pro. Read more

  • MySpace CEO and co-founder Chris DeWolfe is stepping down, News Corp said. The move came as MySpace continues to lose ground to Facebook and prompted a wave of speculation about what the next CEO could – or should – do to put things right (like this blog post from the voluble Jason Calacanis.)
  • Tech’s impressive stock market rally looked like it should stay intact after the latest round of earnings news on Wednesday. Apple and eBay each posted surprisingly resilient numbers. VMWare was the outlier: shares in the maker of virtualisation software slumped in after-market trading as it issued a cautious outlook.

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Richard Waters

For a symbol of the new, diminished expectations of the once swaggering US “greentech” industry, look no further than Ausra.

With blue-chip backers like Khosla Ventures and Kleiner Perkins, Ausra was one of those Silicon Valley companies that thought on a grand scale. Using a variety of techniques that included low-cost ways of producing and installing vast arrays of mirrors, it dreamt of building and operating utility-scale solar thermal power plants.

As we reported early on in the financial crisis (and the company went on to confirm earlier this year), Ausra changed course and decided its future lay in selling its technology to established utilities rather than becoming a power producer itself. As the project finance markets seized up, only a company with the balance sheet of a utility could hope to fund such ambitious projects, though Ausra said its decision reflected over strategic priorities as well. Read more

  • Carol Bartz took a sharper knife than expected to Yahoo’ s staffing levels as the biggest online display advertising company struggled to maintain its profit margins in the face of declining sales. As many as 700 more will join the ranks of the unemployed. However, Ms Bartz said she was not shying away from investing more in Yahoo’s most promising businesses.
  • The music business continues to shrink. The growth in digital sales last year once again failed to make up for declining sales of traditional formats, according to music industry trade group IFPI. Global sales of physical formats dropped by nearly $2.5bn to $13.8bn, while digital purchases rose only $750m to $3.78bn.

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