FTC Approves Google/DoubleClick Deal

Kelli

The Federal Trade Commission has ruled that the merger between Google and DoubleClick does not violate anti-trust laws, giving it the go-ahead from the American side.  Across the pond, however, the European Commission has yet to make its ruling.

The FTC ruling states that the merger “is unlikely to substantially lessen competition” in the online ad industry (Ars Technica).  The commission ruled that there were “numerous competitors, several of which have been bolstered by recent acquisitions,” citing Microsoft’s acquisition of aQuantive, Time Warner’s AOL acquisition of Tacoda, and Yahoo’s acquisition of Right Media (Wired).

Opponents of the deal (including Microsoft and AT&T) say that it gives the combined companies an unfair advantage in two aspects of the ad market.  Some privacy groups have also expressed concern over “access to a huge amount of data on individual Web-surfing habits” that the merged companies would have.  In response to those concerns, the FTC issued a set of “behavioral advertising privacy principles.”  However, to quote a pirate, “they’re more what you’d call guidelines than actual rules.”

The European Commission is expected to take a tougher stance on the merger.  However, Rebecca Arbogast, an analyst at Stifel Nicolaus, believes that Microsoft’s privacy woes with the EU could give Google an advantage, though it could face restrictions such as not being able to share user information between divisions or being forced to sell off some assets (Wired).

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Live Gamer Inc. Launches

Kelli

Live Gamer Inc. is a start-up intended to provide a “publisher-supported, secure platform for real money trading of virtual property” (see the press release here).  In the world of massively multiplayer online games (World of Warcraft, Everquest) and virtual worlds (Second Life), buying virtual property with real money has become a nearly $2 billion a year business (WSJ).

Unfortunately, that business is mostly underground and not very secure.  In this industry a practice known as “gold mining” or “gold farming” has created unpleasant experiences for many users, who often complain to the game developers, who had nothing to do with it and receive no profit from it.  Gold farming involves individuals or organizations (often from underdeveloped nations) who “aggressively gather items of value within a game for solely commercial purposes, often through sweatshops of underpaid workers and/or automated methods that distort the in-world experience for other players” (Live Gamer press release).  Gold farming also frequently results in gamers not receiving the virtual property they paid for.

Live Gamer’s goal is to establish a secure online marketplace for virtual property (e.g. characters, items, skills) sanctioned by game developers.  Among Live Gamer’s partners are Sony Online Entertainment and Acclaim.  The company was co-founded by Mitch Davis and Andrew Schneider.  Davis was a pioneer of in-game advertizing with Massive Incorporated, while Schneider has held executive positions at Sony Pictures Digital, NBC, and Wind-Up Records.  According to the press release, the Live Gamer team is made up of “a mix of talent that combines Wall Street’s best practices with in-depth knowledge of the gaming community.”

The Wall Street Journal reports that gamers can expect to keep 90% of the revenue from property they sell, with the remaining 10% being split by Live Gamer and the game developer, and that Live Gamer will aim to prevent gold farmers from participating in the market.  It also reports that the people at Sony “said there is a need for an independently operated marketplace for virtual goods.”

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Google Knols Best

Kelli

Yesterday Google announced that it intends to launch a new service called Knols, which Techcrunch has dubbed a “user-generated authoritative online knowledgebase of everything.”

The basis behind Knols (which stands for “unit of knowledge”) is sort of a combination of Wikipedia and Squidoo – users will create and manage their own articles (knolls) on various topics. Other users will be able to submit feedback, but it’s each author’s responsibility to edit the content. This could raise the question of the accuracy of information, but more than one user can create a knol on any given topic, so the idea is that the best articles will rise in popularity and drown out the rest. Oh, yeah, and the authors can choose whether or not to get paid. If an author opts to have advertising appear on his/her page, he/she gets a portion of the ad revenues.

It sounds like a smart idea, but not everyone is excited about this move. Word around the blogosphere is that Google may be overstepping its bounds. Google started out as a simple, loveable, relevant search engine. But its latest moves have been leaving some wondering where the company is going. Ars technica asks, “What possible reason does the company have for moving beyond indexing and into the hosting and control of this sort of content?”

The question for this particular project is one of pure conflict of interest. If Google has a Wikipedia-like know-it-all service, paid for with Ads by Google, what incentive does it have to keep its search results objective? Techcrunch also points out Google’s latest move regarding video search. The dots connect like this: Google owns YouTube. Google use to offer video search on the front of its search page. It moved video search to the “more” option. Then, it added YouTube to the “more” option. But when you click on YouTube it doesn’t return search results from YouTube, it just takes you to the YouTube home page, so then you have to search for the video again. What’s the point of this? Most of the regular video search results turn up YouTube videos anyway.

The blogosphere can be quick to paranoia at times, but these moves do at least beg questions of conflict of interest.

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Music Labels Strike a Deal with Imeem

Kelli

If you spend any amount of time on the Internet, and especially if you read Techdirt, you’re probably aware of the ongoing battle between music labels and consumers over where to draw the line between fair use and copyright infringement.  Major labels and the RIAA have been pushing hard to bring down any and all means of downloading music for free (or for not getting their “proper share,” as was the case for allofmp3.com).  Consumers and tech-savvy entrepreneurs have been arguing that the industry is going way too far.

But now it is being reported that some major record labels (including EMI, Warner, Universal, and Sony-BMG) have signed a deal with Imeem, a service that allows users to stream music for free.  You can also set up a user profile, build playlists, etc.  The site is funded by ad revenues, and the labels will now start receiving a cut of the proceeds.  But Techdirt points out that, while the “Imeem website doesn’t provide a ‘download’ button… there’s no DRM involved, and it’s quite easy to download music files from Imeem using third-party tools. And because Imeem’s site doesn’t use DRM, Imeem downloading tools are probably legal under the DMCA.”

Techdirt also points out that the music industry’s buzz phrase has been that sharing music without paying for it is stealing.  Apparently that doesn’t matter anymore if they’re getting ad revenue to make up for it.

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Update on News Corp, LinkedIn

Kelli

A while back Techcrunch UK suggested that News Corporation might be looking into acquiring LinkedIn.  However, Reuters is now reporting that this is not the case: “Rupert Murdoch’s News Corp is not holding takeover discussions with LinkedIn, a fast-growing online social network for professionals, a source familiar with the matter said on Monday.”

The Reuters report did say, though, that News Corp and LinkedIn were discussing possible future partnerships.  Techcrunch’s Duncan Riley suggests that “with the Dow Jones (Wall Street Journal) acquisition being finalized a partnership between News Corp and LinkedIn would make a lot of sense; the premium business sites from Dow Jones provide a high-wealth business focused demographic that would sit well with LinkedIn’s business networking product.”

Mike Masnick, of Techdirt, has a different view on the occurrence, however.  He suggests that LinkedIn may be employing the “Skype Hype Strategy,” which goes like this: get some publicity for your site by leaking rumors of an acquisition, deny that there’s any such acquisition in progress, then get one of your execs to say something like, “We couldn’t possibly sell for less than $1 billion,” enter buyout offers.  He then parallels this strategy with what LinkedIn has been doing: last week the rumor mill was working the story that News Corp wanted to buy LinkedIn, and then LinkedIn denies the claim while the CEO announces that any such deal would have to be “a lot more than a billion dollars.”  Is Masnick right?  Is this just a move by LinkedIn to build up hype and get a killer buyout offer?

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Beacon Causing Trouble for Facebook

Kelli

Recent claims that Facebook’s ad program, Beacon, is more intrusive than many expected is causing problems for the social network.  PCWorld reports that it “goes much further than anyone has imagined in tracking people’s Web activities outside the popular social networking site.  Beacon will report back to Facebook on members’ activities on third-party sites that participate in Beacon even if the users are logged off from Facebook and have declined having their activities broadcast to their Facebook friends.”  This is the finding of Stefan Berteau, a senior research engineer at CA’s Threat Research Group.

Criticism from MoveOn.org, which put up a petition in an effort to force Facebook to make Beacon strictly opt-in, succeeded in forcing the network’s hand.  The petition states, “Sites like Facebook must respect my privacy. They should not tell my friends what I buy on other sites–or let companies use my name to endorse their products–without my explicit permission.”

Techcrunch has reported that Overstock.com and Coca-cola backed out of their Beacon deals, and that Travelocity is “having doubts.”  Carol Kruse, Coke’s vice president of global interactive marketing  told the New York Times, “We have adopted a bit of a ‘wait and see’ as far as what we are going to do with Beacon because we are not sure how consumers are going to respond.”  She also stated, ““I, like you, certainly understood that it would be opt-in. That’s what I heard before as well as what I heard on the 6th.”

Facebook relented on some issues, agreeing to make the news feeds opt-in.  However, the remaining problem is that many are not comfortable with the amount of information Facebook collects, not just that it’s no longer including it in your friends’ news feeds without permission.  Duncan Riley of Techcrunch claims that “advertisers will still be able to tap into Beacon for purchasing preferences and other details based on activity on Facebook so the privacy option is really only skin deep.”

Similarly, Erick Schonfeld writes, “Facebook has addressed most of the initial concerns by wisely forcing people to deliberately and repeatedly choose to participate. But there are still some serious issues with the way the whole system works technologically.  According to one security engineer’s analysis , Beacon partners transmit data to Facebook in bulk about members who visit their site. This is true even for those who opt out of Beacon by clicking on “No Thanks” when asked if the data can be shared with Facebook. The data is sent anyway. Facebook clarifies  that it does not do anything with this opted-out data, and in fact deletes it from its servers. But the deletion occurs on Facebook’s servers, not the advertisers’.”

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NBC Universal Cuts Ties with iTunes

Kelli

Go check out the iTunes Store.  Under “TV Shows  Networks” look for NBC, CNBC, NBC News, NBC Sports, USA, Sci Fi, Sleuth, Bravo, and Telemundo.  If you can’t find them, don’t worry, it’s not just you.  This week NBC Universal’s contract with Apple expired, and they have decided not to renew it.  Instead, NBC will be offering its shows for download through its own service, NBC Direct, as well as on the yet-to-be-launched Hulu.

Tuaw.com (The Unofficial Apple Blog) is none too pleased with NBC’s decision, especially since NBC Direct is not supported on Macs: “NBC Direct’s video playback and security (Digital Rights Management) are built for the Microsoft Windows™ operating system. They don’t currently run on other systems, such as Apple Macintosh™ or Linux™. However, if your Apple computer runs on an Intel Core Duo™ processor, you can set up Apple’s™ “Boot Camp” software to install and run Microsoft Windows XP™ on your computer along with Mac OS X™” (NBC Video FAQ).  It’s also only compatible with Internet Explorer, not available outside the U.S., videos can’t be uploaded to portable devices, and you lose the video after 7 days (unless you start renewing the license for it every 48 hours).  NBC says that some of these problems will be fixed in the near future (including Firefox support and upload to portable devices.  Mac compatibility is supposed to be available sometime in 2008).  Tuaw.com and Techcrunch aren’t impressed, though.  Erick Schonfeld ends his article with the question, “Who thinks NBC will bring its toys back to iTunes within a year?”

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