February 19, 2009
Facebook Change of Terms Analysis
A more thoughtful analysis on what happened with Facebook's change of terms from the Washington Post. My take, Facebook is just trying to reserve rights to better monetize its user base. What's the point to exist otherwise? Facebook is not a public service.
Google's Lawsuit Problem
Google, as ever, is the lawsuit magnet based on its supremacy in the search and advertising markets. Sometimes it wins a few, and sometimes it just sits there as a juicy target for (self) righteous individuals who want to take it down a notch. One of Google's wins came with the dismissal of a privacy suit brought by a Pennsylvania couple who claimed that Google ignored private property and private road signs to photograph their house for inclusion in Street Views. Google has provisions for removing such images on request, which was not generated by Aaron and Christine Boring. They just upped and sued.
Google argued that complete privacy does not exist, a view that might trouble some individuals, although pragmatically its true. Other photos of the house are available from the Allegheny County assessor's web site. How private is that Mr. and Mrs. Boring? Ironically, filing the suit has probably lessened the Boring's privacy since their names and location are now plastered over the web. It will not likely disappear similar to most information of its kind. Oh, and the Borings ultimately did resort to Google's opt-out procedure. So, what was the point of all that besides trying to extort money from a company? Oh yeah, the principle of the thing. Since there is no easy way to indicate derisive laughter in text, you'll just have to assume it appears at the end of the last sentence.
Now on to Google as a target. TradeComet, a B2B search engine that buys advertising through Google has sued the company for antitrust violations. TradeComet resold ads they bought from Google, which was fine until Google raised the rates. TradeComet claims that Google saw it as a threat and used predatory means to end that threat. What? Anyone ever hear of TradeComet before this suit was filed? Anyone? Bueller? Anyone? If anyone has a claim against Google it might be, oh, maybe a larger search engine who can't make any headway in the search advertising market. Microsoft? Yahoo? Any others.
That's not the worst of it for Google, if in fact this suit is even bad. The Obama administration has nominated Christine A. Varney as the DOJ antitrust chief. Varney publicly stated that she sees Google as a monopoly, albeit a natural one. If confirmed she would likely have the resources of the Justice Department watching Google's every move. Looks as if being a heavy contributor to the Democratic party doesn't get you much these days.
More on this one in the Washington Post.
February 17, 2009
Sirius XM Slow Death Extended by Liberty Media
Liberty Media, whose assets include DirecTV, have saved Sirius XM from going bankrupt today with a $530 million loan. The economics of satellite radio and the terms of this deal suggest that Sirius XM will ultimately be absorbed by Liberty and DirecTV. Expect the service to turn a profit when customers pay more for less. More from CNN Money.
NAB and SoundExchange Come to Agreement
The National Association of Broadcasters and SoundExchange have reached an agreement over royalties paid by radio stations who simulcast their broadcasts over the Internet. The rates will have the stations pay $1.50 for every song heard per 1,000 listeners in 2009, and jumping to $2.50 per song per 1,000 listeners in 2015. This deal overrides the rates set by the Copyright Royalty Board in 2007. More from Fox News.
February 16, 2009
Microsoft Stores, What A Concept
Microsoft has decided to open retail stores to compete with Apple and to better position its products. I can't for the life of me imagine what they expect to accomplish beyond extending their media advertising campaign to physical locations. Apple is a hardware and software company with both tied extremely close to each other. Apple also has a habit of designing computers and media players in a form factor that most people consider "cool" if not merely overpriced. Microsoft has, what, mice, keyboards, the Xbox and the Zune. The Xbox is probably the single piece of discretionary hardware manufactured by Microsoft that the public has embraced. The rest are utilitarian devices or stuff that simply hasn't caught on. The Windows mobile market is developing, but these have traditionally moved through the distribution chain run by the handset manufacturers.
Other notable store endeavors include Sony, which reduced the number of stores it maintains in favor of those in outlet malls selling refurbished items. Gateway tried the same strategy and failed, though Gateway had the built in limitation of using their stores merely as a showroom. Customers had to order online and wait for their computers. By the time the company changed the policy and placed standard configuration items in the store, it was too late.
Perhaps Microsoft has a different strategy in mind, using the stores as a place to hold conferences or product roll-outs. Price per product is also an issue. Apple is notorious for not discounting its products (see over priced again), Microsoft has its hardware and software in any number of competing distribution channels. Inexpensive versions of Microsoft products are in stores such as Costco, Office Max/Depot, Best Buy, and others. The educational market is covered by various plans that offer deep discounts to faculty and students. Assuming Microsoft sells products in their stores, they need to be prepared to compete with themselves.
Given Microsoft's typical lack of imagination in product design, it will be interesting to see if they pull off the store concept. I'm skeptical pending further details. [MG]