Thứ Ba, 29 tháng 11, 2011
Thứ Tư, 23 tháng 11, 2011
Thứ Hai, 21 tháng 11, 2011
Thứ Tư, 16 tháng 11, 2011
Google opens online music store and free storage locker
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Google's Jamie Rosenberg announces the Google Music store and locker in Los Angeles.
(CNN) -- Google opened an online music store and a free Web storage locker on Wednesday for listening to tracks from computers, tablets and phones, the company announced at a news conference in Los Angeles.
The music store sells songs and albums for prices comparable to iTunes and Amazon MP3, but Google's catalog is smaller. The storefront can be found in the Android Market, an application and website where Google smartphone users can download apps.
Songs purchased from the store are automatically uploaded to Google Music, a locker that can be accessed from an app coming to recent Android phones and tablets in the next few days, or from a website. They allow users to stream songs from their various devices.
The Google locker service launched to a small group in May, and it opened to everyone in the United States on Wednesday. Google Music is free for storing as many as 20,000 songs.
More than half of all smartphones sold worldwide in the last quarter run Google's Android software, according to market research firm Gartner. Google said more than 200 million devices have been activated.
But in the music download market, Apple is king, selling more than half of all U.S. downloads through its iTunes Store, analysts say.
Apple took steps to broaden its offering with the belated launch of iTunes Match on Monday. ITunes Match is similar to Google Music in that it allows customers to store their music catalogs, up to 25,000 songs, on Apple's servers and access them from their computers, iPhones and iPads. Match costs $25 per year.
Google executives announce the Google Music store and locker at a news conference in Los Angeles.
"At Google, digital music has become fundamental to many things we care very much about," Jamie Rosenberg, Google's director of content for Android, said onstage at the news conference. "Other cloud music services think you have to pay to listen to the music you own. We don't."
ITunes Match has a technological leg up on Google because subscribers can upload their libraries much more quickly. That's thanks to Apple's deals with the music labels that allow it to provide customers with access to the high-quality versions of songs that iTunes sells. With Google Music or Amazon.com's Cloud Drive, users with a lot of music may have to wait several days for their entire catalogs to upload.
The iTunes Store has about 20 million songs, whereas Google has 8 million. Google has signed deals with three of the big four record labels. Warner Music Group, the third largest, whose musicians include Death Cab for Cutie, the Grateful Dead, Muse and T-Pain, is a holdout. Even without Warner, Google said it will add 5 million songs over the next several months.
Customers of T-Mobile USA's cellular network will be able to charge songs to their phone bills rather than setting up a Google account with a credit card.
After buying a song through Google Music, customers can share the track on the Google+ social network. Not surprisingly, Google Music will not integrate with Facebook Music, the aggregation service that launched recently from Google's social-network rival.
Google touted that, unlike other music stores, people who find songs through Google+ will be able to listen to each one in full for free one time before they buy. ITunes only provides 90-second previews. Google has also secured exclusive access to live records from popular bands including Coldplay and the Rolling Stones. Apple is still the only music-download store that has the Beatles.
Tech giants say SOPA piracy bill is 'draconian'
Tech companies say Congress' anti-piracy bills are 'draconian' and 'deeply flawed.'
NEW YORK (CNNMoney) -- A proposed new bill intended to combat online piracy has sparked a giant backlash from big tech companies, including Google and Facebook, who say the proposals are far too strict and rife with unintended consequences.
The Stop Online Piracy Act (SOPA), which was introduced in the House of Representatives in late October, aims to crack down on copyright and trademark issues. Its targets include "rogue" foreign sites like torrent hub The Pirate Bay.
Protecting content is a worthy goal, but here's the flip side: Opponents say SOPA -- and a similar bill called the Protect IP Act that is making its way through the Senate -- effectively promotes censorship.
If SOPA passes, copyright holders would be able to complain to law enforcement officials and get websites shut down. The law would also force intermediaries like search engines and payment processors to withhold their services from targeted websites.
That would be quite a change from the 1998 Digital Millennium Copyright Act, which mandates that companies "act in good faith" to remove content that infringes on copyrights and other intellectual property laws.
Google (GOOG, Fortune 500) executive chairman Eric Schmidt called the bill "draconian" during a speech in Boston on Tuesday.
Google and other tech behemoths -- AOL (AOL), eBay (EBAY, Fortune 500), Facebook, LinkedIn (LNKD), Mozilla, Twitter, Yahoo (YHOO, Fortune 500) and Zynga -- also lodged a formal complaint on Tuesday in the form of a letter sent to key Senate and House lawmakers.
"We support the bills' stated goals," the letter reads. "Unfortunately, the bills as drafted would expose law-abiding U.S. Internet and technology companies to new uncertain liabilities [and] mandates that would require monitoring of web sites."
The companies are asking Congress to "consider more targeted ways to combat foreign 'rogue' websites."
SOPA's critics -- some of the Internet's most heavily trafficked sites -- launched an awareness campaign on Wednesday. Hundreds of sites adopted black "STOP CENSORSHIP" logos, including BoingBoing, Reddit and the Electronic Frontier Foundation.
One site tried to annoy consumers into action. Blogging site Tumblr blacked out words in its content feeds, and a message at the top of users' dashboards read: "Stop The Law That Will Censor The Internet!"
"Congress is holding hearings today and will soon pass a bill empowering corporations to censor the Internet unless you tell them no," Tumblr wrote in a post Wednesday, calling the bills "well-intentioned but deeply flawed."
Meanwhile, SOPA has drawn support from groups including the Motion Picture Association of America and the Recording Industry Association of America, which say that online piracy leads to job loss.
Proponents of the bill dismiss accusations of censorship.
The legislation would "[prevent] those who engage in criminal behavior from reaching directly into the U.S. market," Judiciary Committee Chairman Lamar Smith, who introduced the bill, said in a statement Wednesday. "We cannot continue a system that allows criminals to disregard our laws." 
The re-appearing Gmail app for Apple iOS
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Google says it "messed up" by releasing a Gmail app for iOS that barely functioned.
(CNN) -- Two weeks ago, Google published its much-anticipated Gmail app in the Apple app store.
It didn't work. So the company had to yank the app.
And now it's back again.
On Wednesday the Mountain View, California, company said it had "fixed the bug and notifications are now working, and the app is back in the App Store."
Google offered no new apology for the screw-up, and said the app would continue to improve:
"We're just getting started with the Gmail app for iOS and will be iterating rapidly to bring you more features, including all the ones listed above plus many more," Matthew Izatt, a product manager, wrote on Google's Gmail blog. "Based on your comments we have already improved our handling of image HTML messages - they are now sized to fit to the screen and you can pinch to zoom in. "
The company added:
"In the short time the app was public we received a lot of helpful feedback and feature requests."
On November 2, the company offered an apology to users, who complained the app didn't work.
"The iOS app we launched today contained a bug with notifications," the company wrote on Twitter. "We have pulled the app to fix the problem. Sorry we messed up."
The whole ordeal led at least one tech writer to lose his faith in the company's innovative potential.
"They release something, and I no longer have any faith that it's going to be any good," MG Siegler wrote on his personal Tumblr blog. "It's hard to get excited about a company like that. It's the same reason why it's hard to get excited when Microsoft and Yahoo release new things. The track record just isn't there any more. The faith is gone."
At least some initial feedback about the re-released app was positive.
"I really like it, the UI is great - don't know what all these people are complaining about," one person wrote on the app's page in iTunes Preview.
Overall, the app had a three-of-five-star rating on that page.
Technology and concerts: What not to do
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Andrea Bartz and Brenna Ehrlich say that when you're at a concert, talking on the phone is not OK.
Editor's note: Brenna Ehrlich and Andrea Bartz are the sarcastic brains behind humor blog and book "Stuff Hipsters Hate." Got a question about etiquette in the digital world? Contact them at netiquette@cnn.com.
(CNN) -- Going to see live music has always been wrought with frustrations -- and now, along with the ogre who appears in front of you as soon as the band takes the stage, mosh pits and the dreaded "all ages" show -- you've got smartphones. Yup, it's society's technological crack pipe, without which we'd all be fiending freaks, tapping vaguely at the air in agonizing fits of withdrawal.
Mobile phones can add flavor to a show when a band has gotten hip to technology -- for instance, jam band Umphrey's McGee regularly holds a "UMBowl" live show during which fans can do things such as text requests for songs. And bands such as Data Romance have started giving away free tunes via Bluetooth. But for the most part, a phone is about as welcome during a live show as this poor woman's failed Beyonce singalong.
Here are three instances in which you should put your smartphone on hold.
The unofficial photographer
Remember when folks used to raise their lighters aloft to show appreciation for the band busting their hearts to shreds up there on the hallowed stage? Well, now said lighters have been replaced by cell phones (and, in some horrifying cases, iPads.)
We understand the urge to take a quick snap of a show to prove that you were there -- all those "likes" and comments on Instagram are like the crack in the aforementioned crack pipe -- but must you hold your iPhone above your head the entire show, blindly shooting into the ether?
Unless you're super close to the lip of the stage (in which case you're blinding the poor theremin player with your insistent flash), those shots you keep pumping out can't be that good. And, more importantly, you're likely blocking someone's view. Even worse is if you're taking video rather than photos, steadily shooting for the entire 30-minute set. (And, really, when are you ever going to watch that tinny, bottom-of-a-well video?)
If you're so down to document your concert-going experience, might we suggest downloading video-sharing app Viddy rather than using your phone's native camera? Viddy only allows you to shoot for 15 seconds, which is just about the cut-off point where posterity-making becoming perturbing.
Bonus: A lot of bands use the platform and some, such as Panic! At The Disco, have held contests where they crowdsourced concert footage for music videos. Participate in one of those, and you can knock that "un" off of "official."
The ringer
We reaaaally shouldn't have to say this at this point, but when you're at a show, talking on the phone is not OK. Yeah, most concerts are so eardrum-bursting that you'll likely wreck your voice from all that singing along (or guttural screaming upon seeing your favorite musician gyrate his hips), but somehow that dude next to you yelling, "What?! Where are you? I'm to the left of the guy in the Easter hat who smells strongly of pot. To the LEFT!" cuts through all the clutter.
Instead of using the phone portion of your mobile (who does that, anyway?), just do what the teens do and stick to texting. There's tons of group-texting apps that allow you to chat with all of your concert-going friends at the same time -- Fast Society for Android and iOS was created for this very purpose. Go ahead and download FS so that no wo/man will be left behind -- or stuck behind the dude in the Easter hat. Sidenote: Take off hats at shows, especially if you are the aforementioned ogre.
The multitasker
Look at you there, checking your e-mail, reading your tweets, playing that next sick move on Words With Friends. Bam! You just answered a message on OkCupid. Zip! You just checked in on Foursquare! Boom! Yelped you some dinner plans. Um, did you fail to notice the band pouring their guts onto that there stage? Do they not amuse you?
Yeah, it's fine to whip out your smartphone on the elevator to avoid the oh-so-awkward glances of your fellow office drones, but you paid money to see a show and shouldn't you be watching ... well ... the show?
Seriously, cell phone junkies should be ejected from concert venues with the same savagery as that guy who reached out and tried to molest the drummer's head during soundcheck.
If you're looking for a more passive social music listening experience, why not save the $30 bucks you shelled out to see your favorite K-Pop band and stay home with Myxer Social Radio, a new Web platform/iOS app that merges Turntable.fm with Pandora. It's basically a musical chatroom that allows you to passively listen to a stream of music dictated by your tastes.
Oh, and while you're at, can we have that extra concert ticket?
Energy Secretary Chu defends Solyndra loan
Steven Chu will appear before the House Energy Committee on Thursday to discuss the Solyndra scandal.
NEW YORK (CNNMoney) -- Energy secretary Steven Chu is hitting back at criticism of a government loan program for renewable energy in the wake of the Solyndra scandal, saying the U.S. must "compete or accept defeat" in the clean tech race.
In remarks prepared for delivery before a Congressional committee on Thursday, Chu said the government should not waver in its support for clean energy despite potentially being on the hook for more than $500 million after Solyndra's bankruptcy.
"While we are disappointed in the outcome of this particular loan, we support Congress' mandate to finance the deployment of innovative technologies, and believe that our portfolio of loans does so responsibly," Chu said.
"In the coming decades, the clean energy sector is expected to grow by hundreds of billions of dollars. We are in a fierce global race to capture this market."
Solyndra was a California solar panel manufacturer that had received $535 million in federal loan guarantees before it was forced to halt operations and file for bankruptcy at the end of August, putting more than 1,000 employees out of work.
Solyndra failure shows rift over taxpayer role
Before its failure, the company had been touted as an example of the benefits of creating green jobs by the Obama administration. But since then, it has become the center of congressional criticism and a probe by the FBI.
House Republicans are now investigating whether Solyndra received preferential treatment because one of its key investors was a fundraiser for President Barack Obama. Staff from the Department of Energy, Chu said, have "consistently cooperated" with this investigation, participating in interviews and providing thousands of pages of documents.
"As this extensive record has made clear, the loan guarantee to Solyndra was subject to proper, rigorous scrutiny and healthy debate during every phase of the process," Chu said.
Former Solyndra CEO Brian Harrison and fellow executive W.G. Stover were called before the House Subcommittee on Oversight and Investigations in September to testify on the case, maintaining that no wrongdoing took place at the company but repeatedly invoking their 5th amendment right not to answer questions.
What went wrong at Solyndra
Some American solar manufacturers have alleged that Chinese firms including Suntech (STP) and Yingli (YGE) are unfairly "dumping" their products at below market value, making it impossible for U.S. companies to compete. The Commerce Department said last week that it would launch an investigation of the issue.
Meanwhile, the December futures contract for West Texas Intermediate oil was up more then $3 a barrel to $102.53 in afternoon trading Wednesday. The last time oil broke the $100 mark was on July 26.
Netflix subscribers offered class-action payout from Wal-Mart
NEW YORK (CNNMoney) -- Millions of current and former Netflix customers woke up Wednesday to an e-mail about a class-action lawsuit involving the price of online DVD rentals.
It's legit, and it's the latest twist in a legal saga that started two years ago.
In May 2005, Wal-Mart and Netflix struck a pact: Wal-Mart would scrap its struggling DVDs-by-mail subscription service and instead encourage its customers to sign on with Netflix. In return, Netflix agreed to promote Wal-Mart's DVD sales business.
But in 2009, a group of Netflix subscribers banded together and filed a lawsuit charging the two companies with collusion. The gist of their complaint is that the two companies agreed to carve up the market and stay off each others' turf: DVD rentals for Netflix and DVD sales for Wal-Mart. The deal helped Netflix entrench itself as the market's dominant player and raise its subscription prices, the lawsuit alleges.
Last year, a California judge certified the lawsuit as a class action, bringing Netflix's entire subscriber base into the lawsuit. He has not yet ruled on the merits of the case.
Wal-Mart (WMT, Fortune 500) decided to take its chips off the table. It agreed earlier this year to settle the case, without admitting any fault. Netflix (NFLX) is continuing to fight and remains in litigation.
"We believe the lawsuit has no merit and we will continue to aggressively defend it," Netflix spokesman Steve Swasey told CNNMoney.
The Wal-Mart settlement class includes anyone in the U.S. or Puerto Rico who paid a Netflix subscription fee for DVD rentals from May 19, 2005, through September 2, 2011. More details on the lawsuit are available at www.OnlineDVDclass.com
Under the terms of the proposed settlement, Wal-Mart will pay $27.25 million in cash and gift cards -- but a good chunk of that money will go to the lawyers. Subscribers could take home mere pennies.
The legal team that brought the lawsuit is asking the court to award attorneys' fees of up to 25% of the settlement cash, totaling $6.8 million, plus other costs estimated at $1.7 million. The suit's lead plaintiffs -- the Netflix subscribers who brought the complaint -- would receive a proposed $5,000 each. The remaining money would be split up among those who fill out a claim form and put in for their share of the settlement.
That leaves an estimated $18 million or so to be divvied up over a class that could include millions of people. Netflix had nearly 24 million U.S. subscribers as of Sept. 30, the company said in its third-quarter earnings report. If even half of them were to file claims, each claimant would receive a payment of around $1.50.
Netflix subscribers have until Feb. 14 to file a claim if they wish to be included in the settlement. The judge overseeing the case will hold a hearing in March about the settlement's proposed terms, and will decide whether to uphold or reject the deal.
In an ironic twist, Netflix and Wal-Mart aren't so buddy-buddy these days. Last year, Wal-Mart launched a streaming movie service that takes direct aim at its former partner.
Thứ Năm, 10 tháng 11, 2011
Chủ Nhật, 6 tháng 11, 2011
Groupon spikes 31% in IPO
NEW YORK (CNNMoney) -- Shares of daily deals site Groupon closed at $26.11, roughly 31% above their initial offering price in the public debut of the stock on Friday.
Groupon (GRPN) had priced its initial public offering at $20 a share late Thursday, the last step on a rocky journey to its debut. Under the ticker GRPN, Groupon began trading Friday at about 10:45 a.m. ET on the Nasdaq stock exchange, and opened at $28, 40% above the target.
Raising $700 million for the company, Groupon's IPO was the second-biggest tech IPO in history, behind the $1.7 billion Google raised in 2004.
The stock ticked up as high as $31.14 before falling back to around $28 later in the morning. In mid-afternoon trading it remained in that range, at $28.29, and then slipped a bit just before the close.
Groupon ended the day with a valuation of more than $16 billion. At that price, the pioneering coupon company is worth more than many traditional retailers, including Whole Foods (WFM), Best Buy (BBY, Fortune 500) and Bed, Bath & Beyond (BBBY, Fortune 500).
Because of Groupon's recognizable name and cachet, some stock analysts had expected an even bigger rise at the open, particularly because a miniscule number of shares were being offered. At the last minute, Groupon's underwriters threw in an additional 5 million shares to make the offering 35 million shares.
That's still only around 6% of the company's outstanding shares -- a very small amount, given the public's interest in the company.
"I think 'highly disappointed' is the operative phrase," said David Menlow, president of IPOfinancial. "With such a limited number of shares offered in what could have been unlimited demand, I thought thought the markets should have responded better. Now that it didn't happen, it's causing people to take a second look at the company's fundamentals."
Those fundamentals aren't pretty: Since the moment Groupon filed its paperwork, it's been hit with criticism for unorthodox accounting measures, which led to several downward revisions of its financials.
Groupon's initial filing in June drew heavy scrutiny for the company's reliance on a nonstandard metric called "adjusted consolidated segment operating income." The unwieldy "ACSOI" stripped out Groupon's steep costs for marketing and acquiring new subscribers.
Under pressure from regulators, Groupon re-filed in August to instead use only standard accounting procedures. As a result, the operating profits that Groupon cited in its first filing became operating losses.
Then, in late September, Groupon revised its reported revenue to "correct for an error" -- namely, including in its revenue the cash it has to hand back to merchants for their share of the coupons Groupon sells. That effectively whacked Groupon's sales in half, to $688 million for the first half of 2011, down from the $1.5 billion it claimed previously.
Tech IPOs this year: Several other online companies have gone public in 2011 -- and while they've generally done well on their first trading days, their longer term performance is mixed.
In an ominous sign for Groupon, professional networking site LinkedIn's (LNKD) announced late Thursday that it would offer another $100 million in stock to raise even more money for the company following its May IPO.
Shares more than doubled after LinkedIn's IPO, even though the company turned only slight profits in 2010 and 2006, and has otherwise has been in the red every year since its 2003 inception. The stock is still trading well above its IPO price, but shares fell 7% Friday after it announced a $1.6 million loss for the third quarter.
Other tech IPOs posted gains on their first day and then fizzled. Internet radio service Pandora (P) performed well in its IPO, even though the unprofitable company had warned investors that it expected to continue losing money "through at least fiscal 2012." But shares are down more than 15% since its debut, and they're trading below the IPO price.
Shares of Demand Media (DMD), an online content creator that faced its own accounting smackdown, closed 33% higher on its first day. Those shares are now trading below $8, compared with the IPO price of $17.
Groupon's IPO could set the stage for Zynga -- the gaming company filed in June and is rumored to start trading this month -- and serve as an indicator of the overall IPO market.
Review: Sharp, witty 'Uncharted 3' succeeds in hero's latest quest
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From a vast desert to historical chateaus, the scenes in "Uncharted 3" are beautifully rendered.
(CNN) -- With lessons learned from previous titles and a sense of finality to the franchise, "Uncharted 3: Drake's Deception" exceeds expectations with a wonderful storyline, dynamic action and witty dialogue from its characters.
The latest in the franchise from Naughty Dog, "Uncharted 3" returns to follow hero Nathan Drake on yet another historical adventure that promises fortune and glory but invariably involves a lot of danger. As in games past, Nathan is a treasure hunter who follows clues to find lost riches in far-off lands and gets help from other characters in his missions.
The game's storyline follows the path of "Seven Pillars of Wisdom," the T.E. Lawrence book that inspired the epic movie "Lawrence of Arabia." Amy Henning, the writer for the "Uncharted" series, pulls elements from Lawrence's book and weaves them into a stunning narrative about Nathan's search for a lost city called Iram of the Pillars.
Video game review: "Uncharted 3"
Available now for the Play Station 3 consolePrice: $59.99
Rating: T, meaning its content may be suitable for ages 13 and older
Keith Guerrette, lead visual effects artist from Naughty Dog, said Henning really opened up the characters in the game and delves deeply into Nathan's past as well as his connections to his companions. While some of the story is told in flashbacks, it never feels disjointed or out of place and flows with the action in the game.
The pace, for the most part, is quick and occurs over several different types of environments. From a vast desert to historical chateaus, the scenes are beautifully rendered and help deepen the moment. There were a couple of missions that bogged down the story in places, but those were few and far between.
Many times, I felt like I was in an "Indiana Jones" movie. There were moments when the gameplay was very similar to what I've seen on the big screen. For example, one mission had me chasing after a caravan transporting my longtime friend, Victor Sullivan, through a narrow cavern in a scene that was reminiscent of "Raiders of the Lost Ark."
Like Dr. Jones, Nathan has to solve puzzles and use his journal to reference solutions. The puzzles were not extremely challenging once the clues in the journal were deciphered. There are other little touches that are Jones-esque, but they add to the story rather than taking away from it. The action is high adventure with a twist of humor and whimsy along the way.
The dialogue helps keep the mood light as character banter flows naturally and feels like what it is -- conversations between people who don't take themselves too seriously but have experienced life-changing events. There is humor, caring, concern and sarcasm that one would expect from longtime friends. It feels natural and gets the player emotionally involved.
"We've been building up to this one," Guerrette said. "We went in thinking, 'How can we take our tech and art and make them even better?' "
There are subtle effects in the environment, like shadows from a fire, ripples in water and disappearing footprints in sand. But the most dynamic action fills the screen during intense missions in which Nathan takes on his enemies while the background moves.
Much of Nathan's movement occurs along the sides and rooftops of buildings, like the "Assassin's Creed" games. That motion becomes more challenging when floors and walls are also moving around.
The game's combat has been fine-tuned but still seemed uneven at times. Guerrette said the development team worked hard to eliminate some of the cover problems that were evident in previous titles. Melee was improved (I enjoyed getting up close and personal with my enemies) and moving while firing is nearly mandatory.
Stealth has become a more effective tool in some missions. There was one mission, however, where I used stealth to eliminate all the bad guys and avoid raising the alarm -- only to discover two bandits guarding a door that I could not stealth kill. It was a little bit frustrating to work so hard on being stealthy when there was no way to avoid having to be obvious to advance.
Targeting specific areas on enemies also didn't seem to matter. There were times when I shot an enemy multiple times in the head before he would fall down. Yet it would take the same number of shots to an enemy's arm to get him to collapse.
Nathan can also throw back grenades that are tossed his way. The audio is funny, but the effects are devastating.
A split-screen co-op version (a fan request) offers a unique story with the chance to unlock multiplayer bonuses and skills. This version can be played either on or offline.
The multiplayer version also features improved cinematic techniques, boosters and the ability to upload great (or not-so-great) gameplay moments into social media platforms. A buddy system can be used for cooperative play in multiplayer mode, or you can go it alone during competitive play.
"Uncharted 3" is an outstanding adventure game that gives you a feature-film feeling. The environments are open and interactive. The story is unique and fresh. And the characters are portrayed in ways that make them feel real and emotional.
While developers wouldn't say if this was the final act for Nathan Drake, there are moments in the game that answer lingering questions from previous games. Those are the "aha" moments that put an extra shine on a wonderful game.
If this is the end, "Uncharted 3" provides a fitting conclusion with an immersive game that keeps players invested until the final treasure is obtained. Popcorn not included.
Black (and Blue) Berry: What's next for RIM?
Shares of Ontario-based Research in Motion have plunged as investors worry about weak sales of BlackBerry phones and PlayBook tablets.
NEW YORK (CNNMoney) -- You don't win anything for fourth place. In the world of smartphones and tablets, investors seem increasingly nervous that BlackBerry maker Research in Motion will not make it to the medals podium.
Competition in the mobile device industry is brutal. Apple (AAPL, Fortune 500) and companies running on Google's (GOOG, Fortune 500) Android are winning the biggest raves from consumers and investors. Then there's Microsoft (MSFT, Fortune 500), which has hitched its operating system wagon to Nokia (NOK) on the hardware side.
That leaves RIM (RIMM) in an unenviable position. Its stock has plunged more than 67% this year. Notable missteps -- including a lengthy global service outage and delays with its newest PlayBook tablet -- are only making things worse.
But has the company been punished enough? At $19 a share, the stock is now trading around book value, which is what a company is worth when you subtract its liabilities from its assets. In theory, it's what a company is worth if it were to be liquidated.
Things aren't going great at RIM. But they're not that bad, right?
Well, let's just say that the RIM bears do have a strong case.
Analysts expect the company's per-share earnings to fall nearly 25% in the fiscal year ending this coming February and to be flat in fiscal 2013. Based on momentum, it won't be a surprise if analysts eventually trim their forecasts further and predict a profit decline for fiscal 2013.
BlackBerry PlayBook price drops to $299
Simply put, RIM needs a device or devices that can excite consumers. It can't just rely on its core "enterprise" market of big businesses. Yes, it still has an impressive list of about 70 million subscribers, but it is losing market share.
According to research and estimates from Canaccord Genuity analyst Michael Walkley in Minneapolis, RIM was second in global smartphone market share in 2008. With 16.2% of the customer base, RIM's piece of the pie was behind only Nokia's.
But by the end of next year, Walkley predicts that RIM's market share will have been nearly cut in half, falling to just 8.4%. That would leave RIM trailing new industry leader Samsung, as well as Apple, Nokia and HTC.
That's what scares investors. Even though RIM has actually been adding subscribers over the past few years, because the overall smartphone market has gotten bigger, it is losing share.
Tech stocks are valued on their growth versus their competitors. Treading water -- or worse -- against your rivals won't cut it.
"Tech stocks with poor fundamentals could stay cheap forever. It's hard for us to see how RIM can stay competitive against Apple and Android," Walkley said.
Shaw Wu, an analyst with Sterne, Agee and Leach in San Francisco, agreed. He pointed out that investors are looking at RIM's current troubles and are pricing in an increasingly bleak future.
Wu said the recent BlackBerry e-mail glitch may have been the last straw for some investors -- even though there is the promise of new phones coming soon, running on BBX, a combination of the BlackBerry operating system and the widely hyped QNX operating system.
"It's pretty sad what's happened. RIM still has a shot to turn it around," Wu said. "But the service outage did not help. It's unacceptable and they have nobody to blame but themselves."
So even though RIM still has much in its favor and is not on the precipice of imminent financial disaster, Wu said investors can't help wondering if RIM is even capable of regaining its former leadership role.
"RIM is not going to be losing money anytime soon, but people fear that may happen down the road. It's like what happened with Nokia. People once thought it could never lose money, and then it did," Wu said.
Sales and profits plunge at RIM
Still, RIM may have little downside left at this point. Alkesh Shah, an analyst with Evercore Partners in New York, said that the stock has probably bottomed in the near-term.
Shah maintains that RIM's $1.4 billion in cash and more than 10,000 patents should serve as a floor for the stock. That last point is key. Tech giants are engaging in a patent war and many once struggling companies have become attractive because of their intellectual property.
Google bought Motorola Mobility largely as a patent play. And on Thursday, mobile software company Openwave Systems announced a deal to license patents to Microsoft. Shares of Openwave (OPWV) rose nearly 10% Friday.
"Openwave is another reminder of the value of intellectual property," Shah said. On the flip side, he thinks that the patents merely protect RIM from further share declines.
"RIM still has significant challenges," he said. "It won't bounce anytime soon, since there is no catalyst until the phones on the next operating system comes out sometime in 2012."
Reader comment of the week .. and run, Mrs. Buzz, run! Lots of tweets this week about the craziness in Europe. Stocks moved up and down on the latest rumors, which were flying fast and furious from across the pond
My favorite comment came from a Twitter follower who goes by the name of @sharkridingbear on Twitter. He doesn't give his real name either, as he is signed up as "lloyd pancakes." And he has a link to a blog called Guynance.
I think I am developing a bit of a man crush on Ottawa native "lloyd," since his Twitter bio is hilarious too: "Just a guy with a crown that's riding a shark that's concurrently riding a bear explaining finance and talking Jays and Sens." The icon is a cartoon depicting this.
Anyway, he tweeted that "This market is like a craps table. It needs a big 'RISK ON' button that lets you win until Europe rolls a 7."
Nice one. I am a sucker for a good gambling analogy. But I think that Europe has crapped out several times already, and I'd be betting the "don't pass" line when it comes to Greece.
Finally, I'm off all next week. Mrs. Buzz is running the NYC Marathon Sunday. (Go Beth! So proud of you!) I figured next week would be a great time for a staycation as she recovers from the grueling 26.2 miles. The Buzz column (and tweets) will return on November 14.
I hope Greece and Italy are still around when I return.
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
When the iPhone's Siri takes the day off
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Siri, the voice-enabled "personal assistant" on the iPhone 4S, usually listens and talks back on a range of issues.
(CNN) -- Apple's voice assistant took an extended coffee break on Thursday.
Asked by the blog VentureBeat what she'd been doing during an apparent service outage, Siri, the voice-controlled "assistant" that's the standout feature of the new iPhone 4S, replied in a way that would raise any employer's eyebrows:
She just listed the names of a bunch of day spas.
"Siri where have you been all day?" the blogger asked. Her response: "I found 12 places matching 'All Day' ... 11 of them are not far from you."
Siri: Apple's new voice recognition Siri: Apple's new voice recognition 
Introducing Apple's iPhone 4S Well, at least she responded. For much of Thursday -- five hours, according to CNN's partner site Fortune -- Apple's voice-controlled assistant wasn't functioning at all for some people, apparently because of a server outage.
Siri needs to communicate with computers that are in the cloud to understand and process voice commands, leading observers to believe something went wrong with that system. Apple hasn't commented on the outage and did not immediately respond to CNN's request for information.
Many iPhone 4S users, when they asked Siri questions Thursday, reported being greeted with this: "Sorry, I'm having trouble connecting to the network."
That message came even when phones were connected to Wi-Fi or 3G networks, according to the reports, which surfaced on tech blogs and Twitter.
Some Siri users felt kind of lost without their personal assistant. That's pretty amazing when you consider that Siri is definitely a new hire. The iPhone 4S went on sale October 14. But some people already have come to depend on her in those three weeks.
"(I)t was awful. I had to use the annoying google app to find a jamba juice!!" the Twitter user @The_Beer_Baron_ wrote in response to a question from CNN about the outage.
"She's usually pretty reliable although sassy," that user said.
Tech writers debated which management style might be best for this errant helper.
Sarah Perez at TechCrunch thought it might be best to cut her some slack. Or maybe not.
"Granted, Siri is still a beta product -- and this is what happens to beta products -- but when Apple promotes Siri as one of the best and OMG-gotta-have-it new features of its latest device through its cloying new TV ads, it's worth noticing when the service doesn't quite deliver as promised," she wrote.
Others see her responsibilities -- namely answering her owner's questions, finding directions, calling people and looking up songs to play -- as unrealistic given Siri's job qualifications.
Maybe it's too much to think the servers that run Siri -- a complicated and fairly new technology that's been tried and failed before -- would always be up and running.
"Not only is AI still in its infancy -- a condition it's been in for more than half a century -- but it relies in its current incarnation on networks and servers whose unreliability you can bank on," Philip Elmer-DeWitt wrote on Fortune's Apple 2.0 blog.
"Good thing the iPhone still has a touchscreen."
Things may turn out OK though. So far, no one seems to want to fire Siri just yet.
Well, except maybe this Furby.
Tech Check: All Fails, All the time
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On Tech Check, Doug Gross, John Sutter and Stephanie Goldberg hand out "fails" like Halloween candy.
(CNN) -- This week on the Tech Check podcast, Doug Gross, John Sutter and Stephanie Goldberg are surlier than usual, expanding the Tech Fail of the Week feature to engulf not one ... not two ... but three tech industry stalwarts.
We lead off with Apple and the battery-drain issue on the iPhone 4S (which, it turns out, is because of Apple's new operating system. To be sure, the phone is doing gangbuster sales and has plenty of fans. But this is the second time in a row early adopters of a new iPhone have had a glitch to deal with. "Death grip," anyone?
Google doesn't get off the hook either. We look at the long-awaited Gmail app for Apple mobile devices. It finally arrived, for an hour or so, then was promptly pulled because of a ton of bugs that made it essentially impossible to use. That was on the heels of Google changes, including a Reader redesign, that fell flat with some users.
Stephanie provides the week;s lone bright spot with our Reader Comments of the Week, reacting to news that your next phone might be as flexible as Laffy Taffy.
And holding down the traditional Tech Fail of the Week spot are the surprisingly large number of parents who, according to a recent survey, are helping their pre-teen kids lie to get onto Facebook.
To listen to Tech Check, click on the audio box to the left. To subscribe, you can add Tech Check to your RSS feed here. You can also listen, or subscribe, on iTunes. Roku owners can also find us in the CNN widget on the NewsCaster channel.
Groupon IPO prices at $20 a share
NEW YORK (CNNMoney) -- Daily deals site Groupon priced its initial public offering at $20 a share late Thursday, the last step on a rocky journey to its debut.
The move values Groupon at $13 billion, and will net the company around $700 million of much-needed working capital.
Groupon will start trading Friday on the Nasdaq, under the ticker GRPN.
Groupon's underwriters hiked its offering price at the last minute, selling the shares for more than the $16 to $18 target range they set earlier in the week. They also threw in another 5 million shares, up from the previous offering estimate of 30 million shares.
That flurry of interest from buyers was the latest twist in the roller-coaster-like IPO process that has enveloped one of the tech industry's most controversial ventures.
Since the moment Groupon filed its paperwork, it's been hit with criticism for unorthodox accounting measures, which led to several downward revisions of its financials.
Groupon's initial filing in June drew heavy scrutiny for the company's reliance on a nonstandard metric called "adjusted consolidated segment operating income." The unwieldy "ACSOI" stripped out Groupon's steep costs for marketing and acquiring new subscribers.
Under pressure from regulators, Groupon re-filed in August to instead use only standard accounting procedures. As a result, the operating profits that Groupon cited in its first filing became operating losses.
Then, in late September, Groupon revised its reported revenue to "correct for an error" -- namely, including in its revenue the cash it has to hand back to merchants for their share of the coupons Groupon sells. That effectively whacked Groupon's sales in half, to $688 million for the first half of 2011 from the $1.5 billion it claimed previously.
Tech IPOs this year: Several other online companies have gone public in 2011 -- and while they've generally done well on their first trading days, their longer term performance is mixed.
Professional networking site LinkedIn's (LNKD) shares more than doubled in its May IPO, even though the company turned only slight profits in 2010 and 2006, and has otherwise has been in the red every year since its 2003 inception. The stock is still trading well above its IPO price.
In August, LinkedIn announced it turned a profit on its first quarter as a public company. After the bell Thursday, the company reported third-quarter earnings of 6 cents a share, beating analyst estimates of breakeven.
Other tech IPOs posted gains on their first day and then fizzled. Internet radio service Pandora (P) performed well in its IPO, even though the unprofitable company had warned investors that it expected to continue losing money "through at least fiscal 2012." But shares are down more than 15% since its debut, and they're trading below the IPO price.
Shares of Demand Media (DMD), an online content creator that faced its own accounting smackdown, closed 33% higher on its first day. Those shares are now trading below $8, compared with the IPO price of $17.
Groupon's IPO could set the stage for Zynga -- the gaming company filed in June and is rumored to start trading this month -- and serve as an indicator of the overall IPO market.
How the 8th-largest cell carrier beat T-Mobile to the iPhone
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C Spire, a small regional cell carrier, will begin selling the iPhone on November 11.
San Francisco (CNN) -- The three largest U.S. cellular carriers by subscribers sell the latest iPhone, and next week, eighth-place C Spire Wireless will join the group.
Some people were taken aback this week when C Spire, which only has stores in Mississippi, Southwest Alabama and Southwest Tennessee, announced that it will begin carrying the iPhone 4 and 4S on November 11.
Among those grumbling over the news were some of T-Mobile USA's 33.6 million subscribers. How, they asked, could a regional carrier get the coveted product before one of the big four?
C Spire's infrastructure is based on a cell standard used by Verizon Wireless and Sprint Nextel, which now both have the iPhone, but it is not common in other countries. C Spire, formerly Cellular South, has a deal with Verizon so that customers who travel outside of its Mississippi home base can still make calls.
Since C Spire's network uses the same underpinnings and antenna bands as Verizon, Apple did not have to make modifications to its phones beyond what it already did for Verizon when it launched there in February. An Apple spokeswoman confirmed that C Spire would begin selling the phone next week, but she did not respond to a question about whether the company needed to modify the hardware.
The iPhone 4S, Apple's newest gadget, uses a special antenna receiver from Qualcomm that works on typically incompatible networks. "IPhone 4S is now a world phone, so both GSM and CDMA customers can roam worldwide on GSM networks," Bob Mansfield, Apple's head of hardware engineering, says in a promotional video.
T-Mobile's network runs on the global standard called GSM. AT&T Mobility also uses GSM. That's what makes T-Mobile an attractive takeover target for AT&T, which plans to bolster its own network using T-Mobile cell towers, as long as the merger is approved. (C Spire, along with Sprint, are suing to block the acquisition, saying it will reduce competition.)
While AT&T and T-Mobile use the same basic network infrastructure, their cell signals operate on different antenna bands. That prevents T-Mobile from easily making iPhones run on its network.
When asked why C Spire got the iPhone before T-Mobile, Brad Duea, a T-Mobile senior vice-president, smiled, having likely fielded the question before.
"The iPhone already works with their bands," he said in an interview on Wednesday. "They didn't have to change anything."
Since the original iPhone came out in 2007, owners have been able to take the devices to T-Mobile, swap out a SIM card and use them on the network. But as Apple has added 3G and faster data speeds for AT&T, the unofficial T-Mobile iPhones -- more than a million in all, T-Mobile has said -- have not been able to exceed 2G speeds. AT&T's and T-Mobile's 3G and so-called 4G networks operate on different bands.
Another T-Mobile executive, Cole Brodman, recently addressed the issue publicly at a conference and in a letter to customers, though not in great deal. Executives say that, while they'd like to have the iPhone, Android is a fine alternative to the iPhone.
iPhone battery fix coming 'in a few weeks'
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Apple has admitted a problem with battery life on the iPhone 4S, saying a software fix is coming.
(CNN) -- Apple has acknowledged a problem with battery life on the iPhone 4S and other devices running its new operating system. The company says a software update coming "in a few weeks" will address the problem.
The company previously had not publicly acknowledged complaints about battery life on the phone, which surfaced soon after it was released October 14 and continued to grow in the weeks since.
"A small number of customers have reported lower than expected battery life on iOS 5 devices," Apple said in a statement to AllThingsD, a part of the Wall Street Journal network. "We have found a few bugs that are affecting battery life and we will release a software update to address those in a few weeks."
Comments on a thread started October 15 in Apple's support forums to complain about battery life had grown to 217 pages by Thursday morning.
Introducing Apple's iPhone 4S Siri: Apple's new voice recognition Apple has declined to comment beyond its basic statement. Messages from CNN requesting information about the complaints were not returned.
The poorer-than-expected battery life has largely been attributed to location-based apps and other power-draining features of the iOS 5 system. Some users have reported improvements when they disable time-zone and GPS features, while others have said the improvements were minimal.
The apparent glitch is the second time in a row that a popular iPhone has experienced a highly publicized problem in its early days. And the responses, so far, have been similar.
The iPhone 4 suffered from what some called the death grip, causing users who held the phone in a certain way to lose phone calls. Apple denied that there was a problem before eventually saying that it did, in fact, affect a small number of customers.
The company eventually offered free cases, which improved the phone's reception.
Neither time has the problem affected sales in a major way. The iPhone 4 is the most popular smartphone in the world, and the 4S is on track to perform just as well, starting with a reported 4 million sales in its first three days on the market.
Steve Jobs biography is top-selling book in the U.S.
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"Steve Jobs" by Walter Isaacson has been a huge seller since it hit stores October 24.
(CNN) -- In its first week on sale, Walter Isaacson's biography of Apple co-founder Steve Jobs sold 379,000 copies in the U.S., making it by far the top-selling book in the country.
The book, titled simply "Steve Jobs," also achieved the biggest week of sales for any book in the U.S. for almost a year.
That's according to data from Nielsen's BookScan service, as reported by TheBookseller.com.
Published by Simon & Schuster on October 24, the book outsold the next bestselling book of the week, John Grisham's "The Litigators," by more than three to one. After only six days of sales, the Jobs biography is already the 18th-bestselling book of the year, according to BookScan's figures.
Simon & Schuster's decision to move up the book's publication by a month after Jobs' death October 5 appears to have paid off. Fueled by intense interest in the late tech visionary's life and career, the biography arrived on a wave of publicity, including appearances by Isaacson on CBS's "60 Minutes" and CNN's "Piers Morgan Tonight."
The 656-page book traces Jobs' 55 years of life, from his hippie youth and co-founding of Apple in his parents' Silicon Valley garage to his ouster from the company, triumphant return 11 years later and remarkable successes in the past decade with the iPod, iPhone and iPad.
The book has already produced plenty of headlines, including how Jobs regretted waiting too long after his cancer diagnosis to get surgery that might have saved him.
It retails for $35, although many sellers are pricing it closer to $20.
Internet Explorer's share of web traffic drops below 50%
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Internet Explorer still claims 52.63% of desktop traffic, according to Netmarketshare.com.
(Mashable) -- Internet Explorer can no longer claim more than half of the web's traffic, as of October, ending more than a decade of the default Microsoft browser's reign.
Safari's hold on 62.17% of mobile traffic has reduced IE's overall share of web browsing, despite still claiming 52.63% of desktop traffic, according to Netmarketshare.com.
The Microsoft browser's diminishing share (49.6%) reflects its near absence from the realms of mobile and tablet, which now make up 6% of web traffic. However, chances are, you gave up on IE long enough ago that this milestone makes you more curious as to who actually still uses the browser.
As of October, Firefox is the second most popular web browser, accounting for 21.20% of traffic, followed by Google Chrome and Safari, which account for 16.60% and 8.72% respectively.
Chrome, which recently celebrated its third birthday, experienced the most expansion in October, increasing its share of the desktop market 1.42%.
Safari, the default browser in Apple's iPhone and iPad, continues to increase its dominance over the mobile web, gaining 6.58% of the market. Safari's share is increasing faster than the iPhone's, probably due to how much mobile traffic is now driven by iPads.
As IE loses its edge on the competition, we're curious to know which browser our readers prefer. Tell us in the comments below.
Groupon IPO: Not the best daily deal?
NEW YORK (CNNMoney) -- Groupon is poised to start trading publicly, but the road to an initial public offering for the popular daily deals site has been rocky -- and one that skeptics say is reminiscent of the dot-com bubble.
Groupon is slated to price its IPO late Thursday and begin trading on Friday morning, according to several news reports. It will trade on Nasdaq under the ticker symbol GRPN.
Demand for the stock is expected to be strong, but Groupon has been tarnished by questions surrounding unorthodox accounting measures, revisions of sales figures and scaled-back expectations of how much money Groupon will raise.
"It's a flashback to the late '90s. We've seen this game before and we know how it's going to end," said Tony Catanach, accounting professor at Villanova University.
Groupon's IPO has been controversial since it first filed the paperwork in early June. The company drew a barrage of criticism for its reliance on a nonstandard metric that stripped out Groupon's steep costs for marketing and acquiring new subscribers.
SecondMarket raises $15 million
Under pressure from regulators, Groupon re-filed in August to instead use only standard accounting procedures. As a result, the operating profits that Groupon cited in its first filing became operating losses.
Then, in late September, Groupon revised its reported revenue to "correct for an error" -- namely, including in its revenue the cash it has to hand back to merchants for their share of the coupons Groupon sells. That effectively whacked Groupon's sales in half, to $688 million for the first half of 2011 from the $1.5 billion it claimed previously.
"All of these amendments and changes are going to make intelligent investors a little skittish," Catanach said.
Late last month, Groupon dialed back how much it hopes to raise in its IPO by 28% to $540 million. The company is putting 30 million shares up for sale, hoping they'll receive between $16 and $18 apiece. It had originally filed to raise $750 million.
Several other online companies have gone public this year -- and while they've generally done well on their first trading days, longer term performance is mixed.
Professional networking site LinkedIn's (LNKD) shares more than doubled in its May IPO, even though the company turned only slight profits in 2010 and 2006, and has otherwise has been in the red every year since its 2003 inception.
The stock is still trading well above its IPO price of $45, but it is below its first day closing price of $94.25.
In August, LinkedIn announced it turned a profit on its first quarter as a public company. Analysts were expecting a loss. LinkedIn will report its latest earnings on Thursday after the bell, and analysts are once again expecting a loss.
Other tech IPOs did well on their first day but then quickly fizzled. Internet radio service Pandora (P) surged more than 60%within the first few minutes of trading, even though the unprofitable company had warned investors that it expected to continue losing money "through at least fiscal 2012." But shares are now trading below the offering price of $16..
And shares of Demand Media (DMD), an online content creator that faced its own accounting smackdown, closed 33% higher on its first day. But shares are now trading below $8, compared with the offering price of $17.
The performance of Groupon's IPO will give an indication of how willing investors are to buy risky companies. Next up is Zynga. The social gaming company filed in June and is expected to start trading later this month.
Catanach said investors need to be wary of any of Groupon, Zynga or any other new offerings from Internet companies if their stocks surge on the first day.
"In the 90s we saw these [accounting] concerns put to the side," he said. "There were countless people saying this doesn't make sense, but investors still bought. And look what happened."
Facebook vs. Google: The battle for the future of the Web
FORTUNE -- Paul Adams is one of Silicon Valley's most wanted. He's an intellectually minded product designer with square-framed glasses, a thick Irish accent, and a cult following of passionate techies. As one of Google's lead social researchers, he helped dream up the big idea behind the company's new social network, Google+: those flexible circles that let you group friends easily under monikers like "real friends" or "college buddies." He never got to help bring his concept to consumers, though. In a master talent grab last December, Facebook lured him 10 miles east to Palo Alto to help design social advertisements. On his blog, Adams explained, "Google values technology, not social science."
In the long history of tech rivalries, rarely has there been a battle as competitive as the raging war between the web's wonder twins. They will stop at nothing to win over whip-smart folks like Adams, amass eyeballs, and land ad dollars. There's no public trash talking à la the Oracle (ORCL, Fortune 500) vs. HP (HPQ, Fortune 500) smackdown, nor are the battle lines drawn as clearly as they were when Microsoft (MSFT, Fortune 500) took on Netscape, but the stakes are immense. These companies are fighting to see which of them will determine the future of the web -- and the outcome will affect the way we get information, communicate, and buy and sell.
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| Facebook and Google: Head-to-Head - Click on the picture for more. |
In one corner is Facebook, the reigning champion of the social web, trying to cement its position as the owner of everyone's online identity. In the other is Google (GOOG, Fortune 500), the company that organized the world's information and showed us how to find it, fighting to remain relevant as the Internet of hyperlinks gives way to an Internet of people.
Although Larry Page, Google's co-founder and its CEO since April, was born just 11 years before Mark Zuckerberg, his counterpart at Facebook, the two belong to different Internet generations with different worldviews. In Page's web, everything starts with a search. You search for news or for a pair of shoes or to keep up with your favorite celebrity. If you want to learn about a medical condition or decide which television to buy, you search. In that world, Google's algorithms, honed over more than a decade, respond almost perfectly. But in recent years the web has tilted gradually, and perhaps inexorably, toward Zuckerberg's world. There, rather than search for a news article, you wait for your friends to tell you what to read. They tell you what movies they enjoyed, what brands they like, and where to eat sushi.
Facebook is squarely at the center of this new universe, and much of what people do online these days starts there. But Facebook's masterstroke has been to spread itself across the web and allow others to tap your network of friends. As a result, thousands of websites and apps have essentially become satellites that orbit around Facebook. You can now go to Yelp to find out what your Facebook friends say about the new coffeehouse down the street, visit Spotify to let them pick music playlists for you, or play Zynga games with them. To make matters worse for Page, much of this social activity can't be seen by Google's web-trolling algorithms, so every day they (and by extension, Google) become a little bit less accurate and relevant.
This shift to a more social web changes everything for businesses and consumers alike. Among the first industries to be rocked: advertising. Google may capture 41% of today's $31 billion U.S. online advertising market, including the lion's share of the search-ad market. But growth in search advertising is slowing, and advertisers are putting more of their limited dollars into Facebook, with its 800 million users, many of whom spend more time on Facebook than on any other site. (See chart at the bottom of the page) Facebook's display-ad revenue is expected to grow 81% this year, while Google's display-ad dollars will rise an estimated 34%. Google and Facebook would have you believe there is room for each to drive forward with unlimited success, but don't be fooled. As Stifel Nicolaus analyst Jordan Rohan explains, "It's highly unlikely that either Google or Facebook could grow by the billions that investors expect in the display market without engaging directly and stealing market share from the other."
Like Bill Gates a decade or so earlier, Page is seeing his company's grip on the tech world loosening. So he's fighting back with a mammoth effort to grab a piece of the social web. His first substantial act as Google's new CEO was to amp up the considerable financial and engineering mojo the company had aimed at Facebook's turf by releasing Google+. It's not Google's first social initiative, but it's the one that folks aren't laughing at, and Google says 40 million people have signed up in only four months. Across town Zuckerberg knows Google+ is the first credible threat Facebook has faced since it sailed past MySpace to become the world's No. 1 social network. (For Facebook there are more than bragging rights at stake: Anything that tarnishes its halo could impact its long-awaited initial public offering with a valuation that is expected to top $80 billion.) Not surprisingly, shortly after Google+ made its debut, Zuckerberg flipped on a pink neon sign at headquarters with the word lockdown, signaling that employees were on notice to work around the clock on, among other things, replicating some of the most praised Google+ features.
But defensive moves are not Zuckerberg's style, and in September, at the company's F8 developers event, he unleashed a sea of new features that alter the current service radically. And it's expected the company will launch an ad network eventually that will harness all those social actions to help advertisers target consumers better across the web. Smartly deployed, it could further threaten Google's position as the king of online advertising.
So while most of us spend our days casually toggling back and forth between our Gmail accounts and our Facebook newsfeeds, down in the heart of the San Francisco Peninsula it's war. Zuckerberg served free food this summer to willing workers on the weekends. Page is pushing his team to add features to Google+ at a furious pace: more than 100 in the first 90 days. The decisions that are being made right now -- product launches, advertising plays -- will determine which company prevails.
Larry Page was not pleased. It was a weekend day last spring, and Page, 38, was playing around with an early prototype of Google+ on his Android phone. He found it too cumbersome to post photos he had just taken. He called Vic Gundotra, Google's social czar, to complain. Gundotra tried to push back, explaining why the Google+ team decided on the approach it had taken. Page insisted that photos be uploaded with one click. At Google, what Page asks for, he gets. Gundotra ordered his team to rebuild the photo-uploading feature, and Page now gushes about the technology. "It is a totally magical experience," he said recently, as he described how easy it is to post photos from Android to Google+.
In many ways, Google+ is Larry Page's social network. Early work on Google+ predated Page's ascent to the top post, but he has been intimately involved with the project from the start. In the initial months, Page dropped by every Friday at 11 a.m. for the group's weekly product reviews. To keep close tabs, Page moved his office and much of the executive suite to the building where the Google+ team was sequestered. He blessed the project with massive resources, making it one of the largest engineering endeavors Google has undertaken in its 13-year history, and he elevated Gundotra to the post of senior vice president, reporting directly to him. Page also tied a portion of the bonuses of thousands of Googlers to how well the company did in social.
Google+ is also the first test of Page's plan to transform Google into the nimbler, more accountable company it once was, and in the process avoid the Innovators' Dilemma, the paralysis that grips so many successful companies. In the Google+ project, the company's freewheeling and sometimes chaotic approach to innovation was cast aside -- replaced with a more top-down style. Allowing a thousand flowers to bloom may still be important at Google, says Sergey Brin, the other co-founder, but "once they do bloom, you want to put together a coherent bouquet."
Maybe some discipline is what Google's social ambitions needed. Google's previous attacks on Facebook's turf were an embarrassment. Orkut, Google's first social network, was born alongside Facebook in 2004 but is largely irrelevant outside of Brazil. Open Social, a Google-led effort in 2007 to rally MySpace and other social networks into an alliance to balance the clout of Facebook, flopped. Two years later Google introduced Wave, only to kill it after a few months, and Buzz, a 2010 attempt to shoehorn Gmail users into a social network, quickly turned into Google's biggest social faux pas: Buzz exposed people's Gmail contacts to others, triggering a Federal Trade Commission investigation that forced Google to revamp its privacy policies and accept government monitoring for 20 years.
The Buzz fiasco was a wake-up call at Google. Some of its most high-profile engineers started making the case that the social web posed a vital threat to Google. As the web was being rebuilt around people -- and, in particular, around Facebook's graph of human relationships -- Google could end up on the sidelines, its relevance eroding by the day. The message rattled Google's top brass, and an ambitious project -- called Emerald Sea -- not only to create a credible rival to Facebook but also to transform Google's existing products around social media, quickly took shape. (Gundotra picked the name Emerald Sea to suggest both new horizons and stormy waters.)
After more than a year of gestation, Google finally introduced Google+ in June. The result? A social network that cloned much of what people like about Facebook and eliminated much of what they hate about Facebook. You'll find familiar home and profile pages, tabs for photos and games, and of course the endless updates from friends. Google's +1 button works much like Facebook's Like. But where Facebook is perpetually accused of running roughshod over people's privacy preferences, Google+ made it very easy to decide who can see what users post on the site. Facebook lacked a good way to separate workmates from classmates from real friends, so Google+ was built around Circles, an intuitive way to group people in buckets. Facebook takes 30% of the revenue that app developers like Zynga make on its platform, so Google+ said it would take only 5% for now. Since the launch, Google has rolled out more than 100 new features, and Page says there is much more to come. In Silicon Valley, where everyone had given up on the idea that Google could compete with Facebook, Google+ caught everyone -- including Facebook loyalists -- by surprise. "Google+ was impressive," says Joe Green, one of Zuckerberg's Harvard roommates and the founder of Causes, an application built to run on Facebook.
Until recently, the most popular person on Google+, with 598,000 followers and counting, was Mark Zuckerberg. But he has yet to make a public post, and indeed he'd prefer not to discuss Google+ at all. When pressed at a July event, he called it only a "validation as to how the next five years are going to play out." (Translation: Uh, they're copying us.)
However, inside the Palo Alto office where more than 750 engineers regularly pass by the small glass conference room in which Zuckerberg, 27, holds court, Facebook employees put in some serious overtime during the summer lockdown. This had happened only once before in recent years at Facebook: After word leaked that Google was starting work on a "Facebook killer" in summer 2010, Zuckerberg called on engineers to work nights and weekends for 60 days to revamp key social features like photos, groups, and events. Just as it did then, the cafeteria opened up on evenings and weekends this summer, and children dropped in for dinners and good-night hugs before their parents logged back on for late nights. By September, Facebook had released a slew of new features like better grouping tools to mirror those Google+ circles. Says one member of the product and engineering team: "[Google] can throw all the money in the world, including hundreds of people, at this. So people were, like, This is serious, and we should take it seriously."
That anxiety wasn't simply channeled into building a better product. In May, Facebook secretly hired public relations firm Burson-Marsteller to plant anti-Google stories in papers and blogs, a ham-fisted move that backfired when journalists discovered Facebook was Burson's client. The company defended its concerns about Google's privacy violations but took the flak for bad judgment.
The irony, of course, is that Facebook and Google both are in a constant struggle to respect users' privacy while mining as much personal information as possible for the companies' advertisers. All that social information we plug into Facebook when we "like" a pair of shoes on Zappos or update our status about future wedding plans helps the company serve us up ads for things we're more likely to want. This has made Facebook into the go-to advertising platform for big marketers hoping to do brand advertising at scale on the web. As a result, even though Facebook's revenue is minuscule compared with Google's, it is growing at a much faster rate. It is expected to surge to $4.3 billion this year, or more than double the $2 billion it had last year, according to eMarketer. In contrast, analysts predict that Google's revenue will grow just 30%, to $38 billion.
Zuckerberg is obsessed with figuring out how to amass more data by getting more people to spend more time sharing more things with their Facebook friends. At the F8 event in September, he unveiled something called a timeline to replace Facebook's aging profile pages. "Imagine expressing the story of your life," Zuckerberg explained. To demonstrate, he popped up his own Facebook timeline, where a vertical line scrolled backward through his personal history, curating all the posts he'd ever made on the site to bring to the surface the most important items and encouraging him to add posts and photos going all the way back to the May 14, 1984, post: Born, Dobbs Ferry, New York. In effect, Zuckerberg plans to coax us into making Facebook our living digital scrapbooks. Imagine the hours users may log uploading photos and labeling events from the lost decades B.F. (Before Facebook).
But the boldest move at F8 was not Zuckerberg's flashy redesign but rather deeper social integration with other services like Netflix (NFLX) and Spotify. To register for Spotify, newcomers must now use their Facebook credentials. The upside is that you can find and listen to your friends' playlists on Spotify or on Facebook directly. The downside is your musical tastes are revealed to the world (i.e., Sean Parker is listening to Florence + the Machine). This new stream of social data could prove invaluable over time. Until now, although many web publishers offered users the option to publish their actions -- articles they read, shoes they buy -- on Facebook, most people took a pass. In the new model, sharing becomes opt-out rather than opt-in, and Facebook could become the sudden recipient of a good deal more information about what we do online. Eventually, the company could use the data to sell even more targeted ads both on and off the site. If Google's AdWords and AdSense are the de facto tools for helping advertisers reach large numbers of people who know what they're looking for, social ads will be the tool for helping people discover new things.
The war
One day in late October, tech blogs started buzzing about the latest bit of news on the social web: Zuckerberg had lost his place as the most followed Google+ user. Who edged him out? None other than Larry Page. Trivial, perhaps, but it's hard not to think that the news lit up smiles across the Googleplex. Neither Google nor Facebook likes to talk about competing with each other (and neither company would make their CEOs available for this story), but battles are raging on multiple fronts, and both sides celebrate even the smallest victory.
Nowhere is keeping score easier than in the battle for talent, where every engineer or executive who defects from one company or the other is easily tabulated. On that front the battle has been a lopsided affair. Look through the ranks of Facebook, from upper management to lowly interns, and you'll bump into ex-Googlers like Adams, the social researcher, at every turn. Four of Facebook's 11 top executives hail from Google, including COO Sheryl Sandberg and David Fischer, the advertising and operations chief.
These numbers, however, don't tell the full story of a battle that began as far back as 2007 and has only intensified since. Facebook's weapons of choice? Its cachet as the hottest Valley company -- and its potential to mint millionaires when it finally goes public. Google has fought back with money, lots of it. In some cases Google offered top engineers or execs more than $10 million in equity and cash if they stayed, said an executive directly involved in the talent wars. Word spread quickly, and many Googlers did what rational people would do: They got an offer from Facebook just so they could get a big raise at Google. "It created an un-Googley environment," says a senior manager who left Google recently. "They like to be merit-based." So in January, Google tried a different approach: It lavished a giant 10% raise on its entire workforce. It also shifted a large chunk of employee bonuses into base pay. As a result, many people saw their paychecks increase by 15% or even 20%.
But if Google is playing defense on the talent war, it is clearly playing offense in the battle for eyeballs. Its most powerful weapon is its status as the dominant Internet company. In September, for example, when it opened up Google+ to everyone, following a 90-day trial period, it unleashed the kind of promotion that even the biggest brands would envy: A large blue arrow on its homepage pointed the tens of millions who visit it daily to a Google+ tab. Traffic on the site spiked immediately. In addition to Google.com, Google plans to promote Google+, day in and day out, to the hundreds of millions of people who use services like Gmail, Maps, and YouTube; and to weave it into millions of Android handsets. Says Dick Costolo, the chief executive of Twitter: "There is no doubt they are going to be able to pull in massive numbers of users."
Naturally, it's Google's power to pull in those users that worries Facebook the most. For years executives there have said that they are confident they can beat Google on a level playing field. But they fear that, like Microsoft in an earlier era, Google will use its power to peddle Google+, and not always fairly. Some tactics, like promotions on Google.com, are effective and uncontroversial. Others, like Google's ability to use its search engine to promote Google+ ahead of other social services, could prove more problematic. Google has not yet done so with Google+, but it has done just that with other services, like its maps, prompting rivals to cry foul. Google may think twice before engaging in such tactics, as it is already under a government antitrust investigation. Yet with mobile as the next battleground, Google may also find ways to build many Google+ features right into Android phones and tablets, making it harder for rivals to compete.
That last point is not lost on Zuckerberg. It has prompted him to seek closer ties with Google's biggest rival in mobile: Apple (AAPL, Fortune 500). The two companies have held multiple rounds of discussions, according to people with knowledge of the talks. But they have yet to find a compelling way to collaborate, perhaps because their courtship got off to a rocky start. Last year Facebook rebuffed Apple's attempt to connect Ping, a new social network built around iTunes, with Facebook, purportedly for technical reasons. It was a rare public rebuke for Apple, and Steve Jobs personally called some reporters to voice his displeasure. That Apple chose to bake Twitter, not Facebook, into the most recent version of its mobile operating system has not helped. Still, the two companies continue to talk, knowing full well that an alliance could help them fend off a common enemy.
We know what you're probably thinking: If this is a war, who's going to win? The answer is not straightforward. Google has two goals with social media: One is to slow the momentum of Facebook; the other is to use data from Google+ to improve things like search, maps, and ads. Both Gundotra and Page say the latter goal is the more important one. "We can make search better," Gundotra says. "We can make YouTube and Gmail better. We can make our ads more relevant." He later adds: "Google+ will touch every aspect of Google."
To meet its goals, Google doesn't need to best Facebook, but it needs to become a credible No. 2. Think Avis to Facebook's Hertz. That's a ways off. "At this point, it's more like Thrifty Car Rental," says Danny Sullivan, the editor of Search Engine Land. To get there, Google needs to drink even more of the social Kool-Aid than it has. Consider this: In October a tech blog reported that several top Google officials, including Eric Schmidt, the executive chairman, had not even set up their own accounts on Google+. A few days later Schmidt's account quietly appeared on the site. Google also needs something else: a value proposition that is different from Facebook's and that compels users to switch in large numbers -- or at least to be active on both sites. At this point, it is not clear how many of the 40 million people with Google+ accounts actually use the site. Google won't say. And when asked why anyone should switch to Google+, executives there say again and again that online sharing is broken (tell that to Facebook's 800 million members) and that with Circles, Google+ users can share as they do in the real world (never mind that Facebook has matched that capability).
For Facebook, the early successes of Google+ mean Zuckerberg can no longer afford to screw up. In the past, Facebook's frequent product missteps and privacy snafus were by and large forgiven or forgotten. From now on, Google+ will stand at the ready, more than happy to welcome any disgruntled Facebook users -- not to mention their friends. In other words, as he soldiers on, Zuckerberg must now keep an eye on Page and his troops. Yes, Zuckerberg may feel good about Facebook's gaping lead in users and about having poached dozens of Google's prized brainiacs. But Page has had no problem replenishing Google's ranks. In the most recent quarter, Google added nearly 2,600 employees. That's almost as many people as work at Facebook, and they have a clear mandate: to turn Google into a superpower of the social web.
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