Monthly Archives: May 2009

New York media correspondent Kenneth Li reports:

So persuasive a deal maker was Joanna Shields, who talked Time Warner’s AOL into paying close to $1bn to buy out the UK-based social network, AllThingsD’s Kara Swisher once joked that Ms Shields could sell Obama’s stimulus package to the Republicans.

But the astronomical figure for a web property perceived to be hot among British teenagers, although lagging behind Facebook and MySpace in the US drew enough criticism internally that even Jeff Bewkes, Time Warner chief executive, admitted last year it may have overpaid. Read more

Richard Waters

Mark Zuckerberg was doing his best today to disclaim any interest in the $10bn headline valuation that Russian investment group DST has just put on his company. But the headline numbers have certainly been of great interest to Facebook over the years, and this one is too: it appears in the first line of the news release announcing the deal.

What exactly does that $10bn figure mean, though? One thing’s clear: it isn’t the valuation Facebook employees or other early investors will see when they get a chance to sell some of their stock this summer. Read more

Tim Bradshaw

Nokia’s response to Apple’s mobile applications marketplace has finally launched in a blaze of publicity – but hardly the kind the Finnish device maker can have hoped for.

Nokia announced the Ovi store in Barcelona in February, although its Ovi internet services brand has been around since August 2007. Clearly it has built up more anticipation than it could handle, as the “extraordinarily high spikes of traffic” caused the site to crash soon after opening. Even after downloading the Ovi software, some users reported seeing a limited selection of applications available in the store. Read more

Jonathan Miller has had a busy couple of months. First, the former AOL chief executive was appointed to run digital operations at News Corp, effectively becoming Rupert Murdoch’s most trusted lieutenant when it comes to the internet.

While Mr Miller fine tunes News Corp’s online strategy and plots a new future for its MySpace social network – one that does not include recently departed chief executive Chris DeWolfe – he has also been busy with a couple of personal projects.

Chief among these is OpenX, an online ad server for web publishers. Mr Miller is the company’s non-executive chairman and recently contributed to a third round fund-raising which generated a total of $10m. Read more

John Gapper, the FT’s chief business commentator, says that Wolfram Alpha’s structured database poses long-term questions about the usefulness of internet search:

If all the data on the internet are simply too messy to be analysed and structured, Google will be unable to produce a service rivalling Wolfram Alpha in clarity and reliability. Read more

The FT’s Lex column says that it was high time Lenovo’s optimistic investors were brought back to earth, and that fixing the PC company’s struggling international operations will not be easy:

Founder Liu Chuanzhi, who returned as chairman in February, started by axing 2,500 overseas jobs in a bid to shave about 15 per cent from annual operating costs. But that’s the easy bit.

  • In a peaceful transfer of power, Xerox on Thursday said Ursula Burns would replace Anne Mulcahy as chief executive, becoming the only female African-American chief executive among the Fortune 500’s top 150 companies. Ms Mulcahy, 56, who turned the printing company round after the dotcom bubble burst, will retire on July 1 but remain as chairman. Ms Burns, 50, currently president, is her closest lieutenant.
  • Perhaps it will be Government 2.0, after all. The Obama White House took an important step forward in its promise to use internet technology to make government more open and accountable, a move that helped to ease some of the criticism that has welled up during the administration’s early months. The new initiatives include a website,, through which all types of government data will be released in machine-readable form, and an experimental open blog to shape the White House’s thinking on how the internet can be used more extensively in government.

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Richard Waters

OpenTable’s debut was always going to be the real test of Wall Street’s reawakening interest in tech IPOs. In the event, it’s gone off like a rocket.

Other newcomers – like SolarWinds yesterday – were looking to raise much larger amounts and had stronger track records. Would Wall Street really be interested in a $40m deal from an internet company with only $56m in revenues last year and no profits?

The answer is a resounding “yes”. The shares were priced at $20, compared to an indicated price range last week of $12-14 , and are trading above $27 on their first day today. (Update: by the end of Thursday the shares had soared to $33.55, a first-day pop of more than 70 per cent. That really is reminiscent of the Dotcom years.) Read more

Richard Waters

It is going to take hundreds of millions of euros (or dollars) to build and maintain a Web platform to support the wide range of internet services that will come to rely on a user’s location, or the location of other objects. Ultimately, probably only Google and Nokia are going to have the staying power to make that investment.

That was the contention of Michael Halbherr, who runs Nokia’s maps platform, when I caught up with him in California for the O’Reilly Where 2.0 conference this week.

Yahoo! and Microsoft, among others, might have something to say about that, and in a key area like geo-data its hard to see the Web ending up with only two platform providers. But to judge by the scale of Nokia’s own investment, Halbherr might at least be directionally right. Read more

  • Google is one of those companies that we generally refer to as a frenemy,” New York Times executive editor Bill Keller said recently. Perhaps, but today Google proved it will be no saviour to the newspaper business, either. Google chief executive Eric Schmidt told the Financial Times that the company had previously considered buying a newspaper or using its charitable arm to support news businesses seeking non-profit status, but is now unlikely to pursue either option.
  • Craigslist is on the offensive. The US-based classified-advertising website has taken legal action against the attorney-general of South Carolina, who had attacked the site over its erotic services category. The company, which came under pressure from law enforcement officials to take down the section, then did so, is seeking declaratory relief and a restraining order against Henry McMaster, who has repeatedly threatened the company and its executives with criminal charges unless it complied with the requests.

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As traditional publishers falter, print-on-demand has been one of the few bright spots in the otherwise slumping book industry, writes Joe Menn:

The first serious bid for a print-on-demand bestseller began publishing on Wednesday, as Rick Smolan launched The Obama Time Capsule, as a customisable book which will be printed only after it is ordered. Read more

Richard Waters

OK, so it’s not much to write home about. But with SolarWinds opening moderately well today and OpenTable set to price imminently, there are at least some signs that things are improving. Changyou, Rosetta Stone and Digital Globe all closed up on their first trading days recently, which is the sort of performance that brings IPO investors out of hiding.

So who will be next? Read more

Maija Palmer

Google logoGoogle’s European Zeitgeist event this year has been nicknamed “the Royal one” as it was attended not only by the usual business heavyweights like Vivendi’s Jean-Bernard Lévy and Richard Branson but by Prince Charles of the UK, Crown Prince Haakon of Norway and Prince Philip of Spain.

The presence of royalty is not as strange as it might initially seem. Much of Zeitgeist revolves around discussions on how to save the planet, and this is a project that many otherwise under-employed European royals have embraced.

Perhaps these aristocrats also see a kindred spirit in Google, the king of the internet. Oh if only it weren’t for those tedious elected governments, those dull regulations, how much easier it would be to make the world work better. Read more

The FT’s editorial page turns its eye towards internet law and finds that “just as the law should be no looser or tighter on the internet, the enforcement of the law should be no less transparent, open and accountable.”

The world wide web is not the world’s wild west. Internet law is incomplete and faces practical hurdles which it will take time and thought to overcome. Lord Mandelson, the UK business secretary, was right to be wary this week about clumsy government proposals to impose age ratings on websites. But jurists must not give up on the rule of law on the internet. Read more

  • Speculation about Facebook‘s finances has once again been swirling, but chief executive Mark Zuckerberg at least provided a bit of clarity. Over the weekend VentureBeat said Facebook was about to close a $150m round to buy out shares from hundreds of employees. Then TechCrunch chimed in with a report that the company turned down a $200m term sheet that valued the company at $8bn because the investors wanted a board seat. Facebook is notoriously tight-lipped, but today Mr Zuckerberg said that his company is in no immediate need of capital, and that he does hope to take Facebook public, but not for a couple of years.
  • Could the worst be over? Hewlett-Packard said that stronger than expected Chinese and US consumer markets helped it beat Wall Street profit projections for the second quarter, and the world’s leading personal computer company by revenue struck a note of cautious optimism on the economy as a whole.

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For the FT’s Business Life page, David Gelles looks at the opportunities and challenges for foreign-born entrepreneurs in Silicon Valley.

Today, Silicon Valley – perhaps more than any other region in America – is a magnet for educated immigrants. With its intellectual capital, high-tech resources and rich coffers, the region is uniquely suited to produce important, profitable companies. “Silicon Valley is an environment that allows people to act on their entrepreneurial instincts with much more success than other parts of the world,” says AnnaLee Saxenian, dean of UC Berkeley’s School of Information and the author of Silicon Valley’s New Immigrant Entrepreneurs. “There is a whole infrastructure for entrepreneurship.” Read more

Richard Waters

The beginning of June is shaping up to be the big moment in this year’s smartphone calendar.

Palm and Sprint just announced a launch date for the much-anticipated Pre: Saturday 6th June. We got pretty excited about the device ourselves when it was first shown off at the start of the year, though a veiled threat of a lawsuit from Apple and a warning that early sales will fall well short of the hype are a reminder that this remains a high-risk proposition for the struggling Palm.

Perhaps not coincidentally, the launch has been set for two days before an Apple event at which the latest iteration of its iPhone is expected to be introduced – and, possibly, a larger touchscreen device that pushes the boundaries of this new category. Read more

David Gelles

When Dow Jones executives last week came out with guidelines describing how employees of The Wall Street Journal and other publications should use social media, they were lambasted for putting forward an approach that many saw as out of touch. Among the new rules were restrictions against promoting one’s own work and becoming Facebook friends with confidential sources.

But Dow Jones should be commended for even trying. Social media can catch businesses off guard if they are unprepared — witness Motrin’s belated attempt to make amends with offended mommy bloggers — yet most companies have not formalised their policies around it. While a limited number of savvy corporations are developing social media guidelines, most are still unsure what to make of conversational technologies such as Facebook and Twitter. Read more

  • Look out Amazon. Scribd, a digital document sharing service, is launching an online retail market for books and documents, betting that a surge in interest in reading online will help it transform into an Ebay or an of text. The two-year-old Silicon Valley start-up, whose doubling of audience size every six months has been compared to YouTube’s explosive growth, will let some 60m readers of its service begin charging each other for the rights to access just about anything uploaded to the service.
  • Facebook became a relying party for OpenID, the universal web login standard that is trying to gain traction. That means, for example, that Facebook users with an associated Gmail account will be able to browse Facebook without having to login if they are coming from Gmail. But Google, an issuing party, is not likely to become a relying party anytime soon. Doing so would mean surrendering some control of access to their proprietary accounts.

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Chris Nuttall

Flock, the social web browser that fell victim to Web 2.0 hype in 2005, appears to be finally taking flight four years later, with a new release that swoops on the surge in social media usage.

Flock 2.5, released today, amounts to the popular Firefox browser on social-media steroids. “This is our biggest release since the commercial deployment of 1.0 [in 2007],” Shawn Hardin, chief executive, told me during a demo of the product. Read more