As media owners find advertising revenue alone will not sustain their businesses, they face a battle to convince freeloading consumers to pay, writes Andrew Edgecliffe-Johnson:

For well over a decade, the prevailing orthodoxy of the internet has been that information wants to be free. Publishers, broadcasters and games developers alike are beginning to discover, however, that advertising alone is not providing the sustainable digital business model they expected for their expensively produced content. Read more

In the FT’s New Technology Policy Forum, Columbia University professor Eli Noam considers the merits of breaking up large telecommunications companies:

Separation is a tool, not a goal. There are other tools to achieve the same legitimate objectives, and they would be simpler and cheaper. The simpler way is to seek non-discrimination directly rather than through fiddling with a company’s structure. This could be done through regulation and legislation, but a more effective way might be through contractual arrangements that are specific to a company. Read more

  • A seven-year battle between the US Federal Trade Commission and Rambus, the memory-chip specialist, has ended in defeat for the FTC. The regulator had  ruled that Rambus plotted to get secretly patented technology it developed included in industry standards, but an appeal court had thrown out its ruling and, on Thursday, the FTC dropped the rest of its case.
  • Nintendo was the big winner in April in the US video game market. According to the NPD research firm’s monthly figures, it sold 1.08m units of its dual-screen handheld console following the introduction of the new DSi model on April 5. That was nearly double unit sales of 563,000 in March.

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The FT’s Lex column suggests that for Sony, cost cutting alone may not be enough to get the company in the black. Despite the company’s rosy projections, sales of PS3 consoles are likely to remain challenged. And while movies should perform better this year than last, the film unit represents only 10 per cent of revenues.

The Japanese consumer electronics and entertainment group thinks it may break even at the operating level this year. That is a brave call as the company was losing $1bn a month in the last quarter of the year ending in March. Read more

  • IBM chief executive Sam Palmisano told invited analysts and investors Wednesday that the tech powerhouse was still on track for 2009 earnings of $9.20 a share and that it intends to keep spending on acquisitions, developing-world markets and research through the downturn. He singled out risk analysis and other analytics as a major growth opportunity, saying it would be “as big as” enterprise resource planning software in five years.
  • Facing mounting pressure from law enforcement agencies around the country, Craigslist said it would remove the “erotic services” section of its massive classified advertising website. In its place will be a new “adult services” section, where ads will be vetted by a Craigslist employee before being posted.

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The FT’s Lex column suggests that while the European Commission may have levied a record fine against Intel, the penalty will not affect Intel’s dominance, or give AMD a new lease on life.

With about 70 per cent of the market for microprocessors – the central engine of every computer – Intel benefits from a self-reinforcing scale advantage that allows it to outspend AMD on research and development by more than four to one. Read more

  • Pirates of all sorts seem to be in the cross-hairs these days. France is set to introduce the world’s most draconian laws against internet piracy, with parliamentarians voting to give the government powers to cut off offenders’ internet access. The controversial draft law would create an agency to police illegal downloading of copyright material. The bill still has to be voted on by the Senate but is widely expected to be approved in a final vote on Wednesday.
  • Meanwhile, new findings suggest the new French laws might be better suited for the US. While the US has the lowest PC software piracy rate in the world, at 20 per cent, it has the largest dollar losses from piracy, at $9.1bn, because it is by far the world’s largest software market, according to the sixth annual BSA-IDC Global Software Piracy Study. Worldwide, “the PC software piracy rate rose for the second year in a row, from 38 per cent to 41 per cent, because PC shipments grew fastest in high-piracy countries such as China and India.”

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  • The Obama administration’s top antitrust enforcer on Monday declared an end to Bush-era policies that made regulatory action against the biggest companies a rarity. The Justice Department’s Christine Varney said that dominant companies need not collude with their rivals to violate the law, and Silicon Valley attorneys said Google, Microsoft and Oracle would be well advised to tread more carefully.
  • Microsoft confirmed what everyone expected, announcing that Windows 7 would be released in time for the holidays. Missing the crucial holiday shopping season, when many consumers buy new PCs, would have dealt a blow to PC makers who depend on strong holiday sales.

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The FT’s Lex column suggests that in the hyper-competitive, low-margin PC market, consolidation is not the route to future success. Instead, PC makers should focus on offering a better range of products, such as netbooks, and penetrating new markets:

The conclusion for manufacturers is remarkably simple: sell everywhere, as efficiently as possible. Dell should deal with more retailers. HP should increasingly go direct to companies. Investors should scorn attempts to do anything more pyrotechnic than that. Read more

In today’s Daily View video segment on FT.com, Lex columnist Dan McCrum ponders Microsoft’s decision to borrow in the bond markets for the first time, even though it has $25bn of cash on hand (news story here.)

His conclusion: like the cost-cutting announced earlier this year, this is another sign that the software giant is thinking harder about deploying its assets more efficiently – in this case, its powerful balance sheet. But for long-suffering shareholders such moves are of only marginal interest.

The FT’s Lex column examines why the Kindle is no panacea for newspapers.

Newspaper executives increasingly believe gadgets such as the Kindle, Amazon’s sleek e-book reader, might fix their industry’s malfunctioning business model. This week, the New York Times, Boston Globe and Washington Post announced plans to subsidise the cost of new Kindles to win electronic subscribers in certain markets. Even Rupert Murdoch, chief executive of News Corp, is making noises about handheld gadgets. If enough people bought them, the NYT, for example, could theoretically save up to 35 per cent of its flagship paper’s operating costs if it sold only paperless subscriptions. Read more

Gadget Guru Paul Taylor reviews the best automated back-up products:

Simplicity. Leonardo da Vinci described it as “the ultimate sophistication”, while Albert Einstein said “everything should be made as simple as possible, but no simpler”. More recently, we have been urged to adopt the “kiss” principle – “keep it simple, stupid”. Read more

The FT’s Lex column examines the plight of one of China’s internet market leaders:

Investors generally know better than to expect a coherent long-term strategy from executives in the internet business. But when a $7bn company tears up its entire business model within a year of going public, it can be accused of pushing its luck. Read more

Gadget Guru Paul Taylor has been covering the launch of Amazon.com’s new Kindle DX. Today he takes a historical view of the product, arguing that Amazon is in fact a latecomer to the e-book game.

Based on the buzz around Amazon’s latest Kindle wireless electronic book reader – the big screen Kindle DX, which will cost $489 – it would be easy to think that the US online book and electronics retailer invented the e-book reader category. Read more

  • Google executives mounted a concerted public defence of how the search company wields its wide-ranging power on the internet amid signs of growing regulatory concern. The comments came as a Google lawyer confirmed for the first time that US regulators had shown their interest in possible competition issues raised by chief executive Eric Schmidt’s position as a director on Apple’s board.
  • Hulu, the US online video service owned by NBC Universal, Fox and Walt Disney, has signed its first batch of content deals with international television producers, the first step towards a full global launch of the service. The company was set up 18 months ago by the media companies as a viable alternative to YouTube for professionally produced content.

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  • Amazon launched the Kindle DX, expanding its dominance in the e-reader market while offering a more attractive platform for publishers of textbooks and newspapers. The Kindle DX received complimentary reviews from many critics, who appreciated its large display and enhanced capabilities. Others however, were unconvinced that the DX was a big breakthrough.
  • Microsoft has stirred up fresh complaints of anti-competitive behaviour with its release this week of a late-stage trial version of the next Windows PC operating system. The complaints, from some of the leading makers of web browsers, look set to intensify the software company’s regulatory headaches just as it is seeking to head off swingeing anti-trust action from the European Commission over a related issue.

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  • Memo to PC users: the post-Vista era has just arrived, at least unofficially. Days after releasing the first (and probably only) “release candidate” of Windows 7 to professional developers, Microsoft made the software freely available for anyone to download over the Web. Assuming no last-minute changes, this is the version of the new operating system that will eventually be shipped on new PCs. The trial software will be operative until next March, after which users will have to pay up for a full licence.
  • Microsoft certainly didn’t waste time with the unprecedented 5,000 job cuts it announced earlier this year. Originally scheduled to take 18 months, the round of cuts was effectively completed on Tuesday as the company sent out another big wave of notifications. Steve Ballmer promised to keep a close eye on costs and did not rule out further cuts.

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  • The US Federal Trade Commission is looking into the close ties between the boards of Apple and Google, according to the New York Times. The regulators are looking at whether the fact that Apple and Google share two directors, Google chief executive Eric Schmidt and former Genentech chief executive Arthur Levinson, while also competing in several areas, falls foul of anti-trust laws, the New York Times said.
  • Amazon is on Wednesday expected to announce a large-format device similar to the Kindle that is optimised for reading textbooks, newspapers and magazines. Amazon has taken the lead in the rapidly emerging market for e-book readers with its Kindle and Kindle 2.

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  • Sales may have plunged by nearly 30 per cent in the first quarter and the cash outflow may have soared, but don’t worry: things will get better later this year. So said the CEOs of both Eastman Kodak and Motorola on Thursday as they struggled to convince Wall Street that the bleeding would soon stop. Investors were not convinced: Motorola’s shares dropped 7 per cent and Kodak slumped a further 16 per cent.
  • Europe’s leading chip companies claimed to have seen the first green shoots of a recovery, though they held out little hope for an early rebound as they reported dismal first quarter results. Sales at ST Microelectronics plunged 33 per cent, while Infineon’s sales were 10 per cent lower.

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  • 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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