OK, lots of excitement today surrounding online VOD provider Akimbo’s deal with AT&T. AT&T will offer Akimbo’s video fare (so far not much there) via a special set-top box that will also deliver AT&T co-branded Dish Network satellite service, Internet content access and PVR capability.
AT&T will offer this “converged” set-top box to its HomeZone customers who also purchase the company’s DSL offering. HomeZone is the telco’s answer to IPTV in areas where AT&T won’t be rolling out its Project Lightspeed DSL-delivered multichannel video offering.
Although AT&T had originally planned to roll out HomeZone in Q2 05, the schedule now calls for deployment late this summer. The inclusion of Akimbo in AT&T’s HomeZone service isn’t really a big deal — Akimbo still offers relatively obscure and ultra-niche content.
But AT&T’s “converged” set-top box is quite interesting, with its ability to pull Internet content to the TV set. Akimbo comes out the winner in the deal by jettisoning, at least in AT&T areas, the requirement that customers purchase an extra set-top box to watch its VOD content. As Rafat points out
As for the viability of HomeZone, as with any other set-top box based service, it will be a tough play, but at least an integrated service has a better chance at it than say the standalone foolishness of Moviebeam.Posted by Cynthia Brumfield at 7:33 PM | Print | Comments (0)
Online destination leader Yahoo! Inc. issued its Q1 06 earnings report this afternoon showing strong growth across the board — including steep rises in stock option and tax expenses. But for the latter two developments, Yahoo! would have also posted steady growth in profits. (More later on Yahoo!’s Q1 06 financial performance.)
The company offered less-than-usual commentary on its business or growth strategies; CEO Terry Semel advised investors during Yahoo!’s earnings call to stay tuned for more explanations during Yahoo!’s analyst day slated for May 17th. He did offer a sneak-peak into the company’s upcoming new search marketing product, which Semel claims will be rolled out in three phases: foundation and core data platform construction (already completed), new management application for advertisers and market-based public web design.
On the video front, user-generated video continues to play an increasingly important role in the company’s plans. “We continue to spend more and more of our energies, and you’ll see a lot more of it coming upfront, in user-generated video,” Semel said.
That’s not to say that Yahoo! will steer clear of traditional video suppliers. Semel said that he hopes that companies, such as ABC, which are streaming their own video over their own web sites also include Yahoo into their plans. “There’s no doubt in my mind that when [broadcast networks are] monetizing their own TV shows they have an awfully small audience relevant to the Internet. If they want to make it available to their own screens exclusively, that would not be a good business,” he said.
In terms of Q1 06 financial results, Yahoo! reported revenues of $1.57 bil., up 34% year-over-year and 4% sequentially. However, a new accounting requirement regarding the expensing of stock options drove Yahoo!’s operating expenses up by 50% year-over-year. Morever, an accounting change affecting tax treatment, plus a shift in international revenues that had the effect of raising overall tax percentages, further raised costs for Yahoo!.
The impact of these two changes drove Yahoo!’s net income down by 22% year-over-year and 77% sequentially to $159.9 mil. in Q1 06.
Growth in traffic and users, however, remained strong, surprisingly so given how big Yahoo already is, with a particularly strong growth surge in the premium customer category.
| Yahoo Customer Metrics | |||
| Q105 | Q405 | Q1 06 | |
| Unique Users (mil.) | 372 | 365 | 402 |
| Active Registered Users (mil.) | 176 | 193 | 208 |
| Premium Users (mil.) | 8.9 | 12.6 | 13.3 |
| Ending Daily Avg. Page Views (bil.) | 3.2 | 3.3 | 3.8 |
| Revenue ex-TAC per Average Unique User Per Month | $ 0.88 | $ 0.99 | $ 0.95 |
The number of unique users grew 8% year-over-year and 10% sequentially to end Q1 06 at 402 million. Semel said during the earnings call that Yahoo! now reaches around 500 million unique users, or about one of every two Internet users in the world.
The number of premium users soared 49% year-over-year and 6% sequentially to reach 13.3 million by the end of Q1 06 (a lot of this growth presumably flowed from the rising DSL subscriptions at AT&T, Verizon and BellSouth, all of which have co-branded portal deals with Yahoo!). Average daily page views jumped 19% year-over-year and 15% sequentially to 3.8 billion.
However, revenue per average unique user (exclusive of traffic acquisition costs - TAC) dropped by 4% to $.95 from Q4 05 to Q1 06 due to adjustments that Yahoo! had to make with Yahoo! Japan. Year-over-year, however, revenue per user without TAC rose 8%.
Posted by Cynthia Brumfield at 6:16 PM | Print | Comments (0)
Santa Rosa, CA-based audio and video content transmission tech company Burst.com filed a counter-claim in a California Federal court yesterday accusing Apple Computer Inc. of infringing upon its patents by using Burst’s technology in its iPod/iTunes products. In its filing, Burst claims that its patents, which speed the transmission of video and audio material, stretch back to the late-80s and through the 1990s and that Apple was aware of these patents as early as 2000.
Burst first requested that Apple pay royalties on the patents in 2004, following a $60 million settlement that Burst received from Microsoft after Burst filed a patent infringement suit against the Redmond software titan. But this go-around, Apple actually started the litigation by filing suit against Burst in January, seeking a declaratory ruling that its technology, which Apple first made availabe in 2002, doesn’t infringe Burst’s patents.
And therein lies a probable strategic mistake by Apple. Courtesy of The Cult of Mac, Robert X. Cringely said it best when Apple first brought on this legal problem.
But since Apple sued Burst, Burst shares have gone UP by 30 percent. The market is rarely wrong. Suing Burst was an enormous mistake for Apple, casting a pall on their video strategy and potentially costing the company strategic alliances with networks and movie studios. Apple realizes this now and is struggling internally to find a way to change course and put a positive spin on the course correction. Apple will lose and Burst will win, and Apple won’t be able to afford to wait for the courts to decide anything, since time is critical in staking out Internet video turf. I predict that Apple will eventually take a license from Burst, that is UNLESS SOME OTHER COMPANY (Google? Real? Yahoo?) doesn’t snatch up Burst first.
Why Apple, no stranger to the twists and turns of litigation, would actually invite a counter-suit by Burst is a mystery. Perhaps Apple’s attorneys thought that Burst wouldn’t take a chance in having a court or jury invalidate its lucrative patents. Or perhaps Apple banked on Burst running out of funds before the suit could get very far.
Either way, Burst has a lot to gain and Apple has a lot to lose from this litigation. Cringely is probably right — Apple will cave rather than deal with investor uncertainty.
Posted by Cynthia Brumfield at 3:42 PM | Print | Comments (0)
China is a vast market for American Internet, technology and information companies, a major but troubling economic opportunity for companies such as AOL, which announced yesterday a deal with China’s number two media company, Shanghai Media Group, to produce a Chinese language version of AOL.
While the new AOL service will be aimed at Chinese language speakers in the U.S., no doubt AOL is eyeing the vast and lucrative market in China. Both companies say the partnership is just a beginning.
That’s the good news. The bad news is that the Chinese government isn’t relenting at all in its persecution of journalists, bloggers and online commenters deemed to be violating the country’s strict censorship laws.
The New York Times’ Jim Yardley reports today that Chinese authorities may revive a case against a jailed researcher for the Times. Zhao Yan has been jailed for 19 months on charges of revealing state secrets to the New York Times, which both Mr. Zhao and the Times disavow.
In March, prosecutors dropped the charges against Mr. Zhao, but he remains in jail nonetheless. Now, word comes that prosecutors are beginning a new investigation against the researcher.
Instead, Mr. Zhao, an employee of the Beijing office of The Times, remained in jail even though there no longer were any charges against him. Now, one question is whether prosecutors used the withdrawal as a procedural maneuver to delay a trial, which had been scheduled for late March. Legal experts say Mr. Zhao should have been released after the withdrawal, regardless of any intention to reopen the case. “This is a man who has been held for a long time after the indictment was withdrawn,” said John Kamm, a human rights campaigner, whose Dui Hua Foundation, based in San Francisco, works to free political prisoners in China. “I think it is a terrible black eye for the Chinese justice system. It’s a terrible black eye because there is no transparency, there is no accountability.”
Another Chinese journalist, Shi Tao, was charged with leaking state secrets and has been imprisoned for ten years. A documentary filmmaker named Hao Wu is also in jail, and hasn’t been charged, for filming a Christian group that is not recognized by the Chinese government.
Let’s hope that AOL doesn’t push into the Chinese market under the same rationalization that Google, Yahoo and Microsoft have offered — namely, that China’s censorship policies are merely a price to pay for tapping into the booming market and that it’s better to be there under those conditions than not be there at all.
Correction: An earlier version of this post incorrectly stated that blogger Zhao Jing was imprisoned. In fact, Mr. Zhao’s blog was shut-down through the action of MSN, but he was not imprisoned.
Posted by Cynthia Brumfield at 8:11 AM | Print | Comments (1)
Salon’s Farhad Manjoo has this in-depth examination of the network neutrality issue (note: you have to watch an ad to read the piece). Manjoo covers all bases and is pretty even-handed in presenting both sides of the issue, although for folks who keep up with the debate there’s nothing really new here.
One possible exception: the article takes note of how expensive it might be to inject intelligence into the network under a two-tiered Internet scheme.
Despite Cisco’s position, there is fractious division among network engineers on whether prioritizing certain time-sensitive traffic would actually improve network performance. Introducing intelligence into the Internet also introduces complexity, and that can reduce how well the network works. Indeed, one of the main reasons scientists first espoused the end-to-end principle is to make networks efficient; it seemed obvious that analyzing each packet that passes over the Internet would add some computational demands to the system.Posted by Cynthia Brumfield at 7:48 AM | Print | Comments (0)
San Digeo, CA-based web video publishing start-up Veoh is grabbing headlines today because former Disney CEO Michael Eisner is coming out from under wraps with his acknowledged investment in the company. Veoh raised $12.5 million en toto from a group of investors that include Eisner, Todd Dagres, Managing Partner of Spark Capital and Time Warner. To date, Veoh has raised $14.75 million.
As Om points out, the timing is good for Veoh with the funding coming on the heels of a blogging community uproar over Veoh’s unauthorized publishing of videos.
What’s interesting is that Eisner, the prototype for an old media grandee, is clearly looking at IP video ventures as the future.
“Anybody, now, can have their own network,” Mr. Eisner said. “There are no borders. No gatekeepers. No restrictions on creativity of any kind.”Posted by Cynthia Brumfield at 7:05 AM | Print | Comments (0)
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