Goodbye, Moto?

IDC's numbers for the largest mobile phone global suppliers by volume for the third quarter of 2008 are out, and Motorola has slipped to fourth place, down almost 32% from the same quarter last year. Nokia remains #1, Samsung is #2, and Sony Ericsson, which was once all but given up for dead, has passed Motorola to be #3. LG Electronics is #5 and could pass Motorola soon, and Apple is #6 in shipments and #3 in revenues.

At the same time, Motorola announced that it lost $397 million on $7.5 billion in revenue in the third quarter, and has postponed its plans to spin off its mobile phone business until some time after 2009. They're undoubtedly facing the reality that they won't be able to get any reasonable price for their mobile phone division until the current recession lifts. The only question is whether or not they'll have a viable business to spin off by that time.

Brightcove positioning itself as a survivor?

Not too long ago, I wrote about which Web 2.0 startups would survive this recession, and one of the danger areas I pointed out was video services. The fallout is already happening, but one of the companies that's likely to survive is Brightcove. In the last few days, both The New York Times and AOL have shifted their video services to Brightcove. Like most video ventures, Brightcove started with a consumer focus, but it shut down its consumer services fairly quickly to focus on being a supplier of services to larger media companies, including Discovery Communications, 20th Century Fox, Showtime and The Wall Street Journal. It recently launched its third-generation platform. While YouTube dominates consumer video, Brightcove has become the arms dealer of choice for video infrastructure. There are other major players out there that are also doing fine, such as Comcast's thePlatform, but the outlook is bleak for consumer-oriented video sites that hope to switch to a business focus in order to ride out the recession.

Netflix "Watch Anytime" to be available on TiVo

According to the New York Times, Netflix's "Watch Anywhere" service will be available on TiVo's HD-capable PVRs starting in December. To use the service, consumers will have to have a TiVo HD ($299.99) and subscribe both to TiVo's service ($12.99/month, less per month with an annual or lifetime plan) and one of Netflix's unlimited subscription plans, which start at $8.99/month. The cost of the two services together, almost $22/month, is as much or more than basic cable in many parts of the country, so this isn't the solution for cost-sensitive consumers. However, it helps TiVo to improve its value proposition against cable set-top boxes that include PVRs.

It's a shame that TiVo couldn't offer Netflix on its Series 2 SD PVRs as well; there are millions more Series 2 boxes in the fields than HD models. It's unlikely that this announcement will spur sales of many TiVo HDs, but it will certainly add utility for people who already have a TiVo HD or are considering purchasing one for other reasons.

Wal-Mart to discount T-Mobile G1--is the target Apple?

Thomson Reuters reported today that Wal-Mart is going to discount the T-Mobile G1, the first commercially-available Android phone, for $148.88 on a two-year plan, a $30 discount from the $179 price in T-Mobile stores. The top-line news is simple: If you want a G1, go buy it at Wal-Mart, but the real target of this price cut may be Apple. Apple and Wal-Mart are direct competitors in music and video sales, and the iPhone has become Apple's revenue growth engine. If Wal-Mart can impact iPhone sales, it can put Apple in a world of hurt. Also, Apple's and Wal-Mart's stores address very different markets, so the G1 in Wal-Mart could become the iPhone for the rest of us. I'd certainly expect to see the Wal-Mart music store on the G1, and possibly a Wal-Mart shopping application.

Don't underestimate the impact of getting the world's biggest retailer behind Android. Yes, it could be completely opportunistic on Wal-Mart's part, but I think that there's some serious strategic thought behind this move.

Circuit City and Tweeter nearing the deadpool?

A cover article in this week's TWICE (This Week in Consumer Electronics) Magazine examines the impact of possible store closings or even bankruptcy by Circuit City and Tweeter. Together, the two companies represented around $11 billion of consumer electronics sales in the U.S. in 2007. Circuit City is by far the bigger of the two, and is by far the bigger issue. The TWICE article quotes a Wall Street Journal article that speculated that "Circuit City might be forced to close more than 20 percent of its stores and liquidate $350 million in inventory to keep the company afloat through Christmas...".

For consumers, the two companies' problems could be a holiday bonanza, with competitive retailers such as Best Buy and Wal-Mart forced to match Circuit City's and Tweeter's prices in order to sell their own inventories. For competitors, however, a massive restructuring or bankruptcy of either company could turn what's already likely to be a bad Christmas season into a disastrous one. Consumer Electronics manufacturers and distributors are also suffering, since many retailers are cutting back on inventories and even dropping entire product lines. Seasonal employment will also suffer--Circuit City and Tweeter are unlikely to do much seasonal hiring if they're on the brink of bankruptcy.

So, if you're looking for a big-screen TV, iPod or PC, stand by to stock up on bargains that are likely to continue throughout the entire Christmas buying season. If you're in the Consumer Electronics business, stand by to stock up on Maalox.

The Christian Science Monitor to cease daily publication

In what's likely to be the first of a wave of fundamental restructurings in the newspaper industry, The Christian Science Monitor announced today that it will cease publication of its daily newspaper by April of next year. According to Online Media Daily, the newspaper will shift to a weekly print edition, along with a continuously updated version of its website, CSMonitor.com, and a daily electronic subscription product. There's been an ongoing debate within the Christian Science church over whether or not to keep the newspaper alive, and this strategy appears to be a compromise that will keep the Christian Science Monitor in business by shifting daily coverage to the web and dramatically decreasing costs.

Weekly newspapers are about the only bright spot in the newspaper industry, and moving from a daily to a weekly will help the Christian Science Monitor capitalize on this trend. I think that this is likely the model that many newspapers will follow--daily coverage on the web and a weekly print version. Whether that will save enough money to keep hundreds of newspapers from failing is anyone's guess, however, especially with advertisers pulling back across the board, including online.

It seems likely to me that in many markets, the job of providing daily local coverage will fall to the websites of television stations, not newspapers. The local newspapers in those markets will either have to survive as weekly lifestyle-oriented publications, or not survive at all. The strategy pursued by The Christian Science Monitor will work best for the national or quasi-national newspapers, such as The Wall Street Journal, New York Times or Washington Post.

In any case, we're witnessing the start of the final transition of print newspapers to electronic distribution, or to history.

Update: According to Advertising Age, only two of the top 25 U.S. newspapers gained circulation in statistics from the Audit Bureau of Circulation for a year-to-year six month period ending September 30th. Those two are USA Today and The Wall Street Journal, and the gains were 0.01% in both cases. Some of the other changes were The New York Times down 3.6%, the Los Angeles Times down 5.2%, The New York Post down 6.3%, the New York Daily News down 7.2%, the Chicago Tribune down 7.8% and the Houston Chronicle down 11.7%. Overall, daily circulation declined 4.64%, and Sunday circulation dropped 4.85%. In both cases, the overall rate of decline increased from the year-ago rate, which was 2.6% for dailies and 3.5% for Sunday. Not an encouraging trend.

A big win for Silverlight--from the last place you'd expect

Microsoft's Silverlight has played a poor runner-up to Adobe's Flash in terms of player installation and usage ever since it was introduced, even with Silverlight powering NBC's Olympics video last summer. Today, however, Silverlight got another big win, and it's not something that will last for only two weeks. According to Engadget, Netflix just announced that it will finally bring its "Watch Instantly" streaming video service to the Mac, using Silverlight. One reason that Netflix went for Silverlight over Flash is Microsoft's Digital Rights Management platform, called Play Ready. I suspect that another reason is that Microsoft doesn't charge for players or servers, while Adobe still charges quite a bit of money for servers. Having Microsoft software as the preferred streaming platform for Macs is a bit of a shocker, but it apparently makes both business and technical sense for Netflix.

Vibratory conveying experience required

As I've mentioned previously, I'm looking for a new job. Like many jobseekers, I've created profiles on just about every job search site (Monster, CareerBuilder, LinkedIn, HotJobs, etc., etc.,) and those profiles generate daily lists of jobs that might fit what I'm looking for. I found an opening for a Product Marketing Manager that looked great, until I came to the following line: "Vibratory conveying experience required." Statistics show that one out of every three people have some vibratory conveying experience, but I'm not one of them. Then there were the next three lines: "This position is in Walla Walla, Washington. Key Technology will cover all relocation expenses and provide a handsome relocation allowance. Are you willing to relocate to Walla Walla, Washington?" I would be, if they didn't require vibratory conveying experience.

Is Sun finally setting?

According to the New York Times, Southeastern Asset Management, a private equity firm, now owns 21 percent of Sun Microsystems, up from 16.5 percent in August. Southeastern is putting pressure on Sun's management to, as they say, "maximize the value of the company." Sun's been losing revenues and market share for a long time, but it's still profitable. At the time of this writing, the amount of cash that Sun has on hand (nearly $3.5 billion) exceeds its market capitalization ($3.26 billion.) Some of that cash could be used for a stock buyback, which would raise the stock price, or for acquisitions that would have the potential of reigniting Sun's growth. It's clear that Sun, as currently constituted, is a cash cow whose best days are well behind it. Sun's management can't remain in a holding pattern; its investors won't let them.

First X-ray vision, now X-ray tape

According to R&D Magazine, researchers at UCLA have discovered that peeling Scotch Tape generates X-rays. Apparently, quite a lot of X-rays, if you're doing the peeling in a vacuum. The scientists built a device that peels Scotch tape from a roll in a vacuum chamber at the rate of 1.2 inches per second, which generates short bursts of X-rays (about a billionth of a second long each) from where the tape is being peeled. Electrons jump from the roll to the sticky underside of the tape that's been peeled away; when they hit the sticky side they slow down and generate X-rays. UCLA has filed for a patent on this technique, which could be used by paramedics to generate X-rays in the field.

Using your office tape dispenser is safe, according to these researchers, but I wouldn't stand too close if I were you.

Camera Category Confusion Continued

A few posts ago, I wrote about how digital SLRs are taking over from prosumer camcorders, camera phones are replacing point-and-shoot cameras, and under-$200 video cameras are crushing the competition. Now Casio brings us extreme slo-mo video capabilities that cost thousands of dollars just a few months ago, in a--get this--still camera, the EX-FH20. According to Engadget, the EX-FH20 is an awfully good digital still camera that just happens to do slow motion video up to 1000 frames per second, all for $600. It's just one more example of category confusion--still cameras that do video, video cameras that are cheaper than still cameras, and phones that are good replacements for still cameras. It's getting harder for consumers to decide what to buy, but the choices, and the price/performance, are getting better all the time.

Red flags in the distance for Apple?

Apple beat analysts' estimates for revenues and profits in the company's fourth quarter, but there are some red flags on the horizon. Sales of Macs fell below analysts' expectations, only by 100 to 150 thousand units, but enough to question whether the recent MacBook and MacBook Pro refreshes will be enough to get the company's momentum back. Of more concern is good news that could turn out to be bad news. Sales of 3G iPhones smashed analysts' expectations, with 6.89 million sold vs. 5 million forecast by analysts. The potential problem is that Apple records the sales when the phones are shipped to its service provider customers, not when those operators sell them to subscribers. The original iPhone was rolled out slowly to service providers worldwide, but the 3G iPhone went out to mobile phone operators in almost 50 countries at the same time. Operators could have "stuffed" their warehouses with iPhones in anticipation of heavy demand that may not have materialized.

The proof will be in the next quarter, where Apple is already projecting sales considerably lower than analysts' estimates. It may be that Apple's simply managing expectations, or it may be a sign of real problems ahead.

Oh Lord, we're in trouble

Fresh from Gizmodo, here's what we have to look forward to at digital conversion time next February. Multiply by a million.

Blu-Ray can't get a break

First it was the Blu-Ray/HD DVD war, then it was overpriced players and software that didn't support all of Blu-Ray's interactive feature. Now, the economy is tanking. Blu-Ray player Christmas sales probably won't hit even the conservative estimates from a few months back, and the Playstation 3, which has been the primary driver of Blu-Ray adoption, remains locked in third place. Last month, despite still having constrained supplies, the Nintendo Wii sold almost three times as many units as the Playstation 3 in the U.S.

More than ever, I believe that Blu-Ray will be a transitional technology, the last physical consumer medium before VOD and downloads take over. Blu-Ray won't knock out DVDs, even with dropping player and software prices. The party is just about over. If you want a Playstation 3 or need to replace your DVD player and can get a good Blu-Ray deal, then by all means buy one, but otherwise, save your money.

Update, October 20, 2008: According to Punchjump, over the weekend, Best Buy cut the price of its least-expensive store-brand Blu-Ray player to $199.99. Target's cheapest Blu-Ray player is $229.99. Neither of these players are Profile 2.0, which means that they don't have all the interactive and Internet features of more recent models, but I'm coming to believe that those features don't really matter. If you want an Internet connection, buy a Playstation 3. However, Blu-Ray player prices have further to drop, especially given the recession. It's not out of the question to see a Blu-Ray player priced at under $100 before the end of the Christmas season; that's the time to buy.

Nvidia accelerates Adobe CS4 applications

There's been a lot of talk about using the GPUs (Graphics Processing Units) on graphics cards to accelerate applications, not just display, and Nvidia has finally done it. According to InformationWeek, the new Quadro CX not only supports dual displays up to 2560 x 1600 resolution, it can dramatically accelerate Photoshop, Premiere Pro and After Effects CS4 rendering. It can also cut H.264 video encoding time in Premiere Pro by half. Nvidia supplies plug-ins for the applications that execute the processor-intensive code on the GPU rather than the host CPU.

The Quadro CX lists for $1,999, so it's not something that casual users are likely to be interested in, but for serious CS4 users, the productivity gains could pay for the card in a fairly short amount of time. Given that AMD/ATI is now back in the thick of the graphics performance battle, Nvidia's rendering and encoding acceleration could tip the balance in its favor.

Sirius XM: Load gun, shoot self in foot

Word got out over the last few days that Sirius XM has begun layoffs in XM's Washington, D.C. facilities, covering both off-air and on-air staff. Sirius has long had better talk channels than XM, and XM has had the better music channels. The thinking, when the merger between Sirius and XM was first announced, was that Sirius' talk and XM's music channels would be combined, by and large, into the new service. That's not what appears to be happening. It now looks like the plan is to shut down XM's Washington facility and keep most of Sirius's program structure in place.

That's fine if you're already a Sirius subscriber, but not so great if you prefer XM's music. That in itself should cause a significant drop-off in subscribers once the carnage at XM is complete. Add in the dramatic fall-off in new car sales, combined with hesitancy on the part of informed buyers to install any new satellite radio receiver until models that can support the combined services are available, and you've set the stage for significant net subscriber losses.

Everyone knew that the merged companies had to eliminate duplication and decrease operating costs, but it's beginning to look like the merger of Sirius and XM is going to result in Sirius. There were a lot of reasons why people chose to subscribe to XM rather than Sirius; it was much more than which satellite receiver came with their new cars. Many of those subscribers are going to have to look elsewhere for audio entertainment.

Ballmer still has Yahoo! envy

At today's Gartner ITExpo in Orlando, Microsoft's Steve Ballmer said "I still think it [an acquisition of Yahoo! by Microsoft] would make sense economically for their shareholders and ours." He also stated that Microsoft wasn't pursuing a deal, and that he thought that Yahoo's shareholders probably still believed that the company was worth $33 a share. Nevertheless, Yahoo's share price spiked on the non-news, closing up 10.55% and another 3.7% in after-hours trading, to $13.47 as of when I'm writing this entry.

It's clear that Ballmer still wants Yahoo!, and could probably get it for $20 a share. The question is whether he'll actually do something, or as Bill Griffith put it on CNBC today, "keep pining for it like an old high school sweetheart." Steve, please put up or shut up, once and for all. Otherwise, people will keep believing that you've got a crush on Yahoo! that just won't give up.

Wanna buy TV Guide for $1?

Wanna buy TV Guide for $1? Not a copy of the magazine at the newsstand, the ENTIRE MAGAZINE? According to Multichannel News, that's what OpenGate Capital just did, and Macrovision, the company that owned the magazine, gave OpenGate a $9.5 million loan at 3% interest to take it off its hands. Macrovision got the magazine when it purchased Gemstar-TV Guide International earlier this year for around $2.8 billion, and it's no secret that they've been shopping the magazine to buyers ever since. Circulation has dropped from around 20 million in the 1970s to 3.2 million today, and the magazine is bleeding cash--it's expected to lose from $20 to $23 million this year, and lost at least than much for the last two years.

Even with the losses, I find it hard to believe that another publisher couldn't have integrated TV Guide with its operations and saved a lot of money. The problem could have been TV Guide's publishing model, where they do a unique edition for every television market, combined with national editorial content. Unfortunately, this is probably the beginning of the end of the magazine.

Apple: Good news, bad news and no news

Apple announced its updated MacBooks and MacBook Pros yesterday. Here's my take on the announcements:

• No news: With very few exceptions, everything that Apple announced yesterday had already been leaked in detail. There was a time when Apple could keep secrets. No more.
  
  
• Bad news: Even with the LED backlit displays, multitouch-enabled touchpads without mouse buttons and cases carved out of a single block of aluminum, there was little in yesterday's announcement to generate excitement. Despite switching to Nvidia chip sets and graphics controllers, the performance of the MacBooks and MacBook Pros still lags behind that of comparably priced notebooks from other manufacturers.
   
• Good news: Steve Jobs shared the stage with COO Tim Cook and head of design Jonathan Ive. As I wrote about earlier this month, one way for Apple to avoid manipulation of its stock price through rumors about Steve Jobs's health is to demonstrate that it has a strong management team. The company is starting to do that.

One has to be concerned about the direction that Apple's new product development is taking. There's a real sense of incremental improvement in the iPhone, iPods and now the MacBooks. The last earth-shaking announcement was the original iPhone, which feels like it occurred decades ago. I hope that we'll see something really new, not just improved, soon.

Identifying the survivors

With the recession in full force, and warnings from multiple venture capitalists to their investments to "batten down the hatches," it's probably time to start think about which Internet companies will survive and which won't. The dot-com collapse left us with a few world-class survivors: Amazon.com, eBay, Google and Yahoo! (I'm focusing on U.S. companies, but there obviously are others, such as Baidu in China.) In the worst case, who would emerge as leaders after a Web 2.0 collapse?

Right now, there are only two that I'd be willing to put good money on: Facebook and MySpace (MySpace is of course part of News Corporation, but I'm looking at them as an independent entity in this case.) Some of the specialty social media networks, such as LinkedIn, are likely to survive through acquisition. The online video space is already turning into a boulevard of broken dreams, as it did in the original bubble. Sites that are already affiliated with an "old media" company will probably make it through, because they have strong capital bases for support, but most standalone sites are dead meat. The costs of streaming bandwidth compared to available advertising revenues are simply too high. Some of the independent blog networks will also make it, because they've always made do with limited capital, and their costs are so low. In short, anything not named Google that's dependent on advertising revenues and isn't already profitable or at least cash-flow positive will be hanging on by its fingernails, if it hangs on at all.

There will also be the e-commerce segment leaders, such as Zappos, that will probably make it, but they're going to have to survive in a market with consumers who spend less and have less credit. There are lots and lots of infrastructure services out there--far too many for the market to support, and most of them will go away.

I'll stop at this point--any suggestions on sites that I missed?

I'm looking for work!

You may have noticed an increase in the frequency of my blog posts recently. That's because I'm looking for work. The jobs that I have many years of experience in are:

• Product Management
• Product Marketing
• Market Research/Industry Analysis
• Writing and Editing

Full-time, part-time, permanent or contract are all fine with me.  I'm located in Silicon Valley, so jobs there are preferred (especially if they're part-time and/or contract). I'd relocate for the right full-time permanent position.

If you've got a job, if you know someone who has a job, or if your last name is Job (or Jobs), let me know! Email me at lfeldman@feldmanfile.com. You can see my LinkedIn profile at http://www.linkedin.com/in/lenfeldman, and download my full resume at http://tinyurl.com/5wa3pd.

Spam free, as free as the wind blows...

Those of you who visited my other blog "Feldman Off Topic" last week may have noticed a warning from Google: "Danger Will Robinson! Hormel canned meat products ahead! Proceed at your own risk!". Well, an actual human being read the blog and decided that it's spam-free, so it's back in all of its poorly-written glory.

WiMax: A little too late?

Sprint officially launched its WiMax high-speed wireless service on October 8th, and now the notebooks with built-in WiMax are streaming out from Acer and Toshiba. WiMax is significantly faster than 3G networks, but for now, it's only available in Baltimore, and Sprint plans to roll it out in seven more cities in the next six months. The problem is that Sprint is bleeding money, and even though Intel, Google, Comcast, Time Warner Cable and Bright House Networks have committed to invest $3.2 billion in the business to be created by the merger of Sprint's XOHM WiMax business with Clearwire, those companies may not go through with their investments given the state of the U.S. economy.

WiMax, with real-world download speeds of 2 to 4Mb/second, is only an appetizer on the way to true 4G service, which will provide speeds upwards of 100Mb/second. Those 4G services will probably not start rolling out until 2012 at the earliest. However, if the current recession delays widespread deployment of WiMax to 2010 or later, WiMax may prove to be only a transitional technology, much as Sprint's earlier wireless broadband service couldn't survive once cable and telephone companies built out their networks.

Eyespot joins the deadpool

I received the following email this afternoon:

We deeply regret to inform you that Eyespot Corporation will no longer be able to continue serving you.

For our users at eyespot.com, we're no longer allowing you to upload new videos. You can retrieve your uploaded video and mixes by going to your mymedia gallery and clicking the download link below the video thumbnail. 

For our business customers in the eyespot video network, your site will continue operate unaffected for a limited period of time. We encourage you to migrate your video solution to one of our competing providers in the video mixing (e.g. http://corp.kaltura.com/) and video publishing space (e.g. http://www.fliqz.com/) immediately. We'll soon be providing you with the means of downloading your community videos from within your dashboard at http://eyespot.com/partnerDashboard].

We have spent three years providing over a hundred thousand of you with a unique video experience. We believed that by putting creative tools and rights-cleared media into the hands of influencers and connectors, Eyespot would enable social media and participation culture like no other company. 

After playing over two hundred million of your video creations, we have to stop. After assembling possibly the most potent team in digital media ever, we're now moving on.

Thank you all for being apart of our community over the past three years.

Jim Kaskade 
President & CEO

Eyespot.com followed the tried-and-true path of first targeting consumers, and when that didn't work, shifting focus to businesses. That didn't work either, so now they're going out of business, and I fear that many others will follow. It's overwhelmingly hard to monetize video on the Internet, and only a handful of sites have the traffic necessary to attract advertisers. In Eyespot's case, according to their email, they claimed just over 100,000 unique users over three years--not enough to make the business attractive to either advertisers or investors.

I hate to see any business fail, and I wish the management and employees of Eyespot well. This is a terrible time to be out of work. I'm afraid that many, many others are going to follow them into unemployment.

UPDATE, October 12, 2008: According to an email that I received last night, Eyespot's service will shut down for good at midnight on October 15th. According to the email, users must retrieve any content that they've uploaded to Eyespot's servers before then, or it will be lost.

Where have all the subscribers gone?

Cable operators in the U.S. have been experiencing subscriber losses for the past year or so--nothing terrible, but enough to raise eyebrows. Satellite providers haven't done much better: Dish is losing subscribers, and DirecTV is barely holding even. Verizon and AT&T entered the market about two years ago with FiOS and U-Verse respectively, but their gains don't completely explain the losses from other service providers. And, as I discussed in a previous post, AT&T is literally giving away money to get people to try U-Verse, so its rate of market growth must have tapered down to almost nothing. So, what's really happening?

I've got to admit that I don't know; all I can do is speculate. Television viewing in general is declining, as people find more and more things to do with their time. The increase of video content on the Internet can substitute for programming available on television. DVDs provide an evening of entertainment for as little as a dollar. Video services in the U.S. are relatively expensive relative to many other countries, including most of Europe and Asia. For cash-strapped families, premium packages are simply too expensive for the value they offer.

With all of the other options available, are the video services becoming luxury items rather than necessities? I think that they're becoming just that for many people. The switch to digital broadcasting might actually accelerate the change, if broadcasters aggressively program their subchannels and insure a good signal throughout their coverage areas. I expect to see cable, satellite and IPTV operators all lower their prices significantly, although it might require subscribers to call in order to find out about the better deals. In fact, it could start looking like the long distance telephone market several years ago, when subscribers played one company against the other in order to get the best rates.

Eric Schmidt: The Internet is a "cesspool"

Image by Eric Schmidt / Google
via CrunchBaseAccording to this article from Advertising Age, at a meeting with magazine executives yesterday at the Googleplex, "The internet is fast becoming a "cesspool" where false information thrives, Google CEO Eric Schmidt said yesterday." Schmidt's solution is to bring more magazines and other old media sources onto the Internet, where their trusted editors can make the decisions on what is right and wrong, and on what information Internet users are entitled to get.

Schmidt's words might have gone down well with the magazine publishers in the audience, but it runs counter to the Internet serving as a forum for the expression of information and ideas, and it trivializes the ability of Internet users to tell fact from fiction. (And, as anyone who followed the false Steve Jobs heart attack story last week knows, it was CNN that gave the story legs and helped it to do so much damage.)

It is, in fact, this "cesspool" that makes so much money for Google. It's the blogs, websites and email that Google places its AdSense text, banner and video ads on. It's the millions of videos uploaded to YouTube that Google sells advertising against. So what, exactly, is Eric Schmidt saying?

If he wants to put his money where his mouth is, here's what he should do:

• Drop all AdSense ads from Blogger (the posts there might be incorrect.)
• Screen all websites getting AdSense or DoubleClick ads on a regular basis for accuracy, and drop those whose content is deemed to be insufficient of Mr. Schmidt's standards.
• Screen all YouTube postings for accuracy, good taste, and whatever Mr. Schmidt seems to feel is wrong, and delete those found wanting. Better yet, why not save money and shut down Blogger and YouTube altogether?
• Stop putting ads in Gmail (the contents of the mail might be inaccurate or offensive.)

Schmidt can't do these things because his advertising revenue would drop by half overnight. Google makes most of its money by selling search ads against, hosting and delivering the contents of that cesspool.

AT&T's latest tactic for U-Verse: Free money!

AT&T is willing to buy U-Verse subscribers, at $200 a pop. Here's the deal, according to xchange Magazine: Sign up for a mid- or high-tier IPTV service package (starting at $59/month), keep it for at least a month, and get back $200. The most expensive of the three packages starts at $119/month, and in all three packages covered by this plan, subscribers get three set-top boxes, including one DVR, and additional set-top boxes are $5/month. Subscribers don't need to commit to any long-term contracts, or to bundles with phone or high-speed Internet. The program ends on January 31, 2009.

In other words, if you sign up for the lowest tier of service covered under this plan, you get a month of free service and $140 in your wallet. I don't think that AT&T expects everyone to throw out their current cable or satellite service in order to get the $200, but at least for a significant number of users, the $200 will cover their cable or satellite bills while they try AT&T's U-Verse service. Their hope is that a lot of those users will be sold on U-Verse, and will then drop their incumbent video service.

Given my suspicious nature, I've got to wonder why AT&T is offering this fairly incredible deal. I don't track subscriber counts anymore, but AT&T's subscriber growth must be slowing down dramatically. This plan will be an excellent way to boost the company's subscriber count by the end of the year. How many of those new subscribers will stick around after their first month is anyone's guess.

I can't see any of the major cable or satellite providers matching AT&T's deal, and I'm not sure that they have to. Comcast has for some time been running an unpublicized "hold at any cost" program to keep its subscribers from defecting to competitors, offering no-cost upgrades and free service. In the markets where Comcast and AT&T compete, I'd expect them to offer free service to those customers who ask to cancel in the face of AT&T's deal--"Keep your Comcast service for the next two months for free, and compare it with your AT&T service; we think that you'll prefer Comcast." Other operators are likely to do the same thing. The result will be lots of double-counted subscribers, but no one will really know how effective AT&T's promotion will be until well into next year, when we see how many of the subscribers bought by AT&T stay with them when the money runs out.

Stupidity through obscurity

Yes, I'm angry that Google has decided to block "Feldman Off Topic" by declaring it a "spam blog", when it's no such thing. I'm also angry that Google will neither explain why a blog has been categorized as spam, nor explain what to do to keep a blog from being so characterized. It's a lot like Google's vaunted PageRank algorithm: "We won't tell you how it works, in order to keep people from gaming the system, but trust us."

There's a term, "security through obscurity", that means that something is deemed to be secure either because its algorithms are themselves secret, or the product is so unpopular that no one would even bother breaking it. When these "obscure" security techniques do get exposed to critical examination, it's often found that they're not secure at all, and the primary purpose of "obscuring" them was to keep people from finding out just how badly they had been designed. I have a suspicion that Google's "spam blog" detector falls into this category.

Google seems to like open source and transparency when it suits them, and is all for obscurity when it doesn't.

Google has blocked my new blog

I've been notified that Google has blocked my new blog, "Feldman Off Topic", because its computers think that it's a spam blog. Regular readers of this blog will remember that Google also flagged this blog as spam, even though it had been in operation for more than three years and had been approved for AdSense long ago. It took three tries and more than two months to get Google to even review this blog manually, which they eventually did, and concluded that it contains no spam.

Now, Google has upped the stakes. They have locked Feldman Off Topic from public viewing, and I'm unable to post anything to the blog, even for future viewing when (or if) a human actually reads it. The company claims that it's their systems, using "fuzzy" logic (not the real fuzzy logic, just unexplainable rules) that make the decisions. Any traffic that might have been coming to that blog is shot, and possibly lost for good.

It would make much more sense for the company to make the initial process of creating a blog more rigorous, and to put more of an upfront review process in place, than to let people create blogs and then block them, willy-nilly, for no reason that the company can (or is willing to) explain. The only reason that it makes sense to have blogs in Blogger at this point is that it gets their postings better rankings in Google Search. Google denies that as well, but the results speak for themselves. Blogger's features and capabilities have long been trailing those of WordPress, Movable Type, TypePad and other platforms.

So, I stick with Blogger simply to get more eyeballs. That's a very big reason, but not the only reason, to use a blogging platform. When will someone at Google figure out that its blog spam detection algorithms suck?

Kindle, Meet Kindle 2

Image via CrunchBaseThe Boy Genius Report strikes again, and comes up with a trove of photos of Amazon's still-unannounced Kindle 2. I'll let you go over to their report for the details, but it certainly has a cleaner design than the original model. The basic functionality of the original Kindle appears to be intact (it still has an EV-DO modem), but the SD card slot for expansion memory is gone.

I continue to have a number of problems with the current generation of e-readers, the new Kindle 2 included. First, it's essential that they be open to as many document formats as possible, so that as many publishers as possible can access them. Second, they've got to support many different methods for loading content, including USB, WiFi and Bluetooth at a minimum. 2G and 3G wireless modems are fine, but they should be an add-on, and support for multiple carriers should be available. With Bluetooth compatibility, most modern mobile phones can serve as a wireless modem for the e-reader.

There are two other things that I'd really like to see, but that await future technology. The first is a full 8 1/2" by 11" or A4 display, and the second is full color. The fundamental premise of most e-readers is that books are the only things that people want to read, hence a large screen size and color are unnecessary. I would love to have an e-reader that can show me a full, readable magazine page at a time. I'd be willing to compromise color for size. The Plastic Logic e-reader addresses most of my concerns (except color), but I'm withholding judgment until it goes into production.

Is Best Buy becoming the place to get mobile phones?

In mid-August, Best Buy and Apple announced that Best Buy would sell the 3G iPhone, starting September 7th. Now, The Boy Genius Report says that Best Buy will also get the Palm Treo Pro, RIM BlackBerry Pearl Flip 8220 and T-Mobile G1. Last May, Best Buy invested more than $2 billion to buy 50% of the Carphone Warehouse, the biggest seller of mobile phones in Europe. Go to any High Street (shopping area) in the UK, and you'll see one or more Carphone Warehouse stores there. They compete successfully with mobile operator-owned stores across Europe. Best Buy is tapping into the merchandising knowledge of Carphone Warehouse (with which it has had a joint marketing venture since 2006) to expand its mobile presence in the U.S., and it seems to be succeeding in its goal to become the place to go for hot new phones.

Another ridiculous Apple rumor, and how to stop them

Today, someone spread a rumor that Steve Jobs had a heart attack, and the price of Apple's stock briefly tanked until the company made a statement that Jobs is fine. Spreading false rumors is a time-tested way for short-sellers to drop the price of a stock without actually selling it. I don't know if Apple is on the "no short sales" list, but if it is, this may have been someone's way to get around the SEC rule.

The problem is the belief that if anything happens to Jobs, Apple is doomed. That's silly, of course--Apple has thousands of very talented people, and the product design, development and marketing process will continue. However, what Apple doesn't have in place is a visible line of succession, which makes the company vulnerable to rumors and manipulation. To squelch these rumors, Apple needs either to appoint a President as a clear successor to Steve Jobs, or to make Tim Cook, Apple's COO, a lot more visible. I don't know Cook, but from his background, he's an operations guy (which is what makes him a good COO). It would help Apple to make him more visible, or to promote someone from inside the organization to the President position. The key is to make it clear that Apple's design, engineering and marketing, as well as its future product planning, is in safe hands.

The one thing that's going to be very difficult to replace under any circumstances is Steve Jobs's ability to present, and sell, his products. There is virtually no one on the planet who is as good as him at making a presentation. (The ones who are couldn't run a major corporation.) Whether it's Tim Cook or a new President, they need to share stage time with Jobs at new product introductions, to show that they share his vision and have his confidence.

Any CEO can get hit by a bus--s**t happens. One of GE's great strengths over the years has been its ability to develop managers and deal with succession. When Jack Welch was preparing to retire, he had several highly-qualified and highly-visible candidates to replace him. (The highly-visible part can be a drawback; after Welch chose Jeff Immelt to replace him, most of the other candidates left GE to run other companies.) I think that it's time for Apple to deal with these recurring rumors by making its line of succession clear and visible.

A new blog

As you may know, I've been writing this blog since 2005. Recently, I began posting some articles related to the economy and politics, and my readership sank. When I went back to technology topics, my readership rebounded. Clearly, you want me to stay on topic. However, there's so much going on in the world that frustrates and alarms me that I can't keep my mouth shut. Hence, I've created a new blog, called "Feldman Off Topic", for the things that I can't write about in The Feldman File. I hope that you enjoy it, or at least find some interesting ideas.