The Wall Street Journal reported last week that Sprint-Nextel was on the hunt for a new CEO and USA Today's Leslie Cauley reported this morning that an imminent announcement would confirm that Sprint's ambitious CEO Gary Forsee would be stepping down. It's all true.
Sprint-Nextel announced this afternoon that Forsee is stepping down as the company's chairman, president and chief executive officer effective immediately. Forsee's duties will be temporarily taken over by board member James Hance, who is now non-executive Chairman of the Board, and Paul Saleh, formerly CFO but now interim CEO.
Despite Forsee's efforts to reposition the old Sprint into a high-growth modern-era mobile carrier through the acquisition of Nextel, the company is a distant third in the U.S. mobile market. Worse, it is losing customers and slipping financially.
Sprint also announced today it expects to report a loss of 337,000 customers for Q3 07 (compared to a paltry gain of 373,000 customers for Q2 07), along with lower-than-expected revenue and cash flow performance for the full year. Sprint had projected revenue of $41 to $42 billion, and cash flow, or adjusted OIBDA (operating income before depreciation and amortization) of $11.0 to $11.5 billion.
Whomever replaces Forsee, one thing's for sure: the company controversial, costly and unproven WiMax initiative, a pet project of Forsee, is surely about to be, if not shelved, then radically downgraded.
Posted by Cynthia Brumfield at 4:57 PM | Print | Comments (0)A creepy mapping website has launched called RottenNeighbor.com that allows users to type in zip codes to find out where the rotten neighbors are. Type in 20814, for example, and a Google Map appears that shows "markers of rotten neighbors nearby," site founder Brant Walker said.
I did type in my zip code and found the following entry for some poor guy (or, as the "neighbors" describe him, a real bastard):
P--- C----- [ed. name is blanked out] is a drunk wife beater. Drinking and beating his wife until the police come is only the start of the story. Once while shoveling the snow he had a heart attack. One of the neighbors called the ambulance and saved his life. The next year P---sued the neighbor to force them to move a perfectly nice shed in their yard. Ungrateful bastard. His latest move was to secretly move the property line on his elderly neighbor's yard. Fortunately he was caught and now the older neighbors daughter is making P--- tear down his deck which is over the property line. It's called Karma, P---!
This rotten neighbor description is signed by "the whole neighborhood." Unbelievably, the guy's full name is given as well as his general street location, although out of a sense of fairness, I've blanked out his name in reproducing the quote.
I'm not 100% sure what the law has to say about RottenNeighbor.com's liability when it comes to defamatory statements. Although other sites are generally not held accountable for the random libelous statements of its third-party posters, particularly if the site's owners respond to take-down requests, RottenNeighbor.com exists for no other reason than to make derogatory statements about neighbors.
The mischief-making potential for this site is just so vast. Do you have a cranky neighbor who hates your dog? You might be a "rotten neighbor." Does your ex-girlfriend still hold a grudge? You might end up with a description that rivals that of P--- C----- above.
(Once again, thanks Gary!)
Posted by Cynthia Brumfield at 2:39 PM | Print | Comments (0)Multichannel News' Steve Donohue has this fun report today about Bob Garfield, a media columnist for Ad Age, launching a blog called "Comcast Must Die." An outgrowth of a column of the same name that Garfield recently wrote, the blog is intended to serve as a place for Comcast customers to vent their spleens.
Garfield amusingly writes:
Actually, I have no deathwish for Comcast or any other gigantic, blundering, greedy, arrogant corporate monstrosity, What I do have is the earnest desire for such companies to change their ways. This site offers an opportunity -- for you to vent your grievances (civilly, please) and for Comcast to pay close attention.
Garfield's original column was written from "Hell on Earth, Md.," namely Montgomery County, MD. He experienced the usual nightmare that cable installations foster.
The blog should (but probably won't) shake up Comcast and every other cable company to the raging enmity that bad customer service engenders (the industry has long known how upsetting to consumers its customer service practices are). Here are the emotions that Garfield, a rational, calm person otherwise, felt following his bad experience:
They have ruined two weekends and screwed up half of my telecom services. I will shake them down for as much free service as I can get, then drop them at the first opportunity. And they deserve it. They deserve much worse.
Well, the "much worse" part is clearly the Comcast Must Die blog.
It's no surprise to me that Garfield's bad experience occurred in Montgomery County, which is where I live. For some reason, the antipathy toward Comcast is particularly strong in this community, with folks (including journalists) I know here sending me emails, asking me to blog about how "greedy" or "evil" Comcast is.
My own experience with Comcast hasn't been noticeably good or noticeably bad, although I did note a while back that the company said it wouldn't stop billing me for cable modem service until I took 90 minutes out of my day to personally hand-deliver a crappy, old and totally useless Motorola Surfboard modem to its customer service center.
Comcast, to its great credit, isn't dissing the blog nor besmirching Garfield. Spokeswoman Genni Moyer is quoted in Donohue's piece as saying "With respect to the Web site, we recognize that it shouldn't take a public event for people to get customer service."
Posted by Cynthia Brumfield at 12:06 PM | Print | Comments (0)
Finally, a ray of good news for embattled but pugnacious VoIP provider Vonage: the Holmdel, NJ-based voice provider announced this morning it has settled its patent dispute with Sprint by entering into a licensing deal under which it will get to use Sprint's VoIP patent portfolio.
In late-September, a jury found that Vonage had infringed upon Sprint's patents and ordered Vonage to pay Sprint $69.5 million in damages plus 5% royalty on future revenue. The settlement is valued at $80 million, according to the companies, with Vonage paying $35 million for past use of license, $40 million for a fully paid future license, and $5 million in prepayment for services.
Although Vonage is seemingly paying a bigger price tag than what the jury verdict required, it's getting out from under the dark cloud of costly, protracted litigation and may be saving some dough by agreeing to a lump sum payment instead of 5% of ongoing revenues. Sprint-Nextel, not in a solid financial position itself, is getting an infusion of cash and saving on costly, protracted litigation under the deal.
Investors like the news. Vonage's bottom-scraping stock soared 43% (which is only a $.50 hike) after the announcement.
But, Vonage is still operating under the dark cloud of dealing with Verizon, which won a big victory over the VoIP upstart earlier this year when a jury found that Vonage had infringed upon Verizon's VoIP patents and ordered the company to pay $58 million in damages and 5.5% royalty payment mandate. Although an appeals court recently upheld that verdict, it did remand the case back to a lower court regarding one of the patents in question, so that lawsuit carries on.
Posted by Cynthia Brumfield at 10:39 AM | Print | Comments (0)MSNBC.com, a joint venture between Microsoft and NBC-Universal, has purchased a scrappy website, Newsvine.com, which offers its own take on "participatory journalism." Newsvine, which launced in March 2006 and is run by a handful of founders, offers visitors a continuous feed of AP stories plus a selection of "seeded" articles, blog posts and originally written news items, all of which are up for votes and comments by a rapidly expanding pool of loyal readers and contributors, around one million per month.
The more votes each news item receives, the higher its appearance on the various Newsvine pages. As Newsvine notes, the news "adjusts" based on what users find important.
Newsvine shares revenues with readers who set up personal pages and contribute original content -- 90% of ad revenue generated from the content goes to the contributor, which explains, in part, the loyalty generated by the site. (Newsvine co-founder Calvin Tang, however, warns that compensation level could change under the new owners.)
MSNBC.com towers over Newsvine, with 29 million visitors per month. Despite (or because of) its far bigger size, MSNBC.com generates little loyalty or passion among its readers. Which is precisely why MSNBC.com wants Newsvine. Charlie Tillinghast, president of MSNBC Interactive News and publisher of MSNBC.com, said "Msnbc isn't as strong in community as it needs to be."
Newsvine, for its part, gets a deep-pocketed, nearby (both companies are located in Seattle) partner that can foot the high infrastructure costs of growing the site and can pony up some cash for extra staff. Newsvine CEO Mike Davidson said "Newsvine has made do with an efficient hardware footprint and no full- time operations staff," a fact that has prompted slow-downs and outages and complaints from users.
This deal, the first in MSNBC.com's 11-year history, came cheaply for the established Internet company. MSNBC reporter Alex Johnson, who presumably got some inside information, noted that
deals for other social media sites have ranged as high as the $75 million that eBay was reported to have spent for StumbleUpon.com, which claims about 3½ times the number of users as Newsvine
Using that bit of guidance, MSNBC.com paid around $21.4 million for the site in the all-cash deal. Rafat Ali, who may have his own inside information, guesses that the price is far lower than that, around $5 million to $7 million. My own sense is that Newsvine's investors, Second Avenue Partners, which invested $1.5 million in Newsvine early on, would not have sold for as low as $7 million.
Even if the price tag is closer to $20 million, it's still a bargain for MSNBC.com, which would undoubtedly have spent that much or more in creating the traffic, buzz, utility and, most importantly, loyalty that Newsvine generates. It's good for Newsvine too. It's doubtful that the site could have grown much larger without raising more money. Even with the fattened coffers, Newsvine would have faced an uphill fight in competing with Digg.com or Reddit or the slicker, faster but more shallow "social media" giants.
Still, it's kind of a bummer to see an anti-establishment site such as Newsvine sell out. Social media, user-generated news, blogging, all of this new exciting stuff, rose to "stick it to the man," and now, of course, the "man" is writing checks to become part of the excitement. As a consequence, that loyal Newsvine community will probably want its fair share of the money for helping Newsvine "maintain the illusion" that it is "an antidote to old media," as Jeremy Wagstaff has noted.
The moral of the story is that money can't buy you love, but in the new world of Web 2.0 acquisitions, it might be able to buy you loyalty...at least for some period of time.
Posted by Cynthia Brumfield at 7:31 AM | Print | Comments (0)
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