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Just as Microsoft is re-branding its IPTV software, and touting the newly named Media Room, the company has bought itself a small sandbox for experimenting further with TV integration.  Microsoft has agreed to buy approximately 1% of Chinese TV and appliance maker Sichuan Chanhong Electric Co. 

At a reported price of only about $12m, the investment is pennies in a wishing well and not even a blip on radar tracking Microsoft expenditures.  (Microsoft’s 2006 Research and Development expenses exceeded $6.5b and that number doesn’t include equity investments that may provide R&D contributions).   Still, even a one percent stake in a state-backed business in China is significant.  Further, the investment provides Microsoft with more tools to explore linking consumer appliances to the PC with a manufacturing partner, and that is notable. 

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In a move largely anticipated since John Riccitiello’s return to Electronic Arts with a promise to bring change, the world’s largest game publisher (by sales) has announced plans to reorganize itself to streamline operation operations and speed to market.

The company, which previously ran game development through a large number of semi-autonomous studio units, will be divided into four distinct publishing labels; each of which will be tasked with focusing on one particular genre of gaming.   The gaming labels will be:

• EA Games – which will be home to a broad assembly of multi-platform games.  It will be led Frank Gribeau.  Its titles include Medal of Honor, the Simpson’s and others.
• EA Sports – arguably the flagship, Sports will be home to EA’s leading interactive franchises from Madden NFL Football to Tiger Woods Golf to FIFA Soccer. The group will initially be led by current EVP Joel Linzer who will act as interim group president until a permanent head is chosen.

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With breaking news, details tend to trickle out well after the headlines are first published. Yesterday, Terry Semel stepped down as the CEO of Yahoo to be replaced by founder, Jerry Yang (and with Sue Decker, the long expected successor taking on the role of President).

In the wake of the first news bulletins, major outlets have begun printing the letter Mr. Semel sent to Yahoo’s board of directors. Here, we reprint that letter too:

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In breaking news, Yahoo CEO Terry Semel is stepping down from the helm of the Internet giant.  He will stay on as a non-executive chairman but otherwise be replaced by Yahoo founder, and former internet wunderkind, Jerry Yang.

Semel’s six years began with high hopes that the former Warner Brothers chairman, and his Hollywood connections,  would be the man to guide  Yahoo through the transition from Internet to Major media.  Throughout his tenure, however, Yahoo has failed to live up to the expectations and its potential. The company has been criticized for losing it’s innovative edge and failing to keep pace with Google in search.(Currently, Yahoo’s 26% of the US Search market trails well behind Google’s 49%).

While the development of Yahoo’s Panama ad-platform, and its recent acquisition of Right Media, have buoyed hopes somewhat, the companies financial performance has been lackluster so far in 2007.

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Cambridge, Ma based Internet TV and syndication service Brightcove announced it has signed a definitive agreement to become the video platform for Fox Entertainment Group’s internet TV efforts.

Under the terms of the deal Fox broadcasting, FX and its other channels will begun running programming and hosting ad-supported channels on Brightcove’s technology platform. Additionally, Brightcove’s services will allow FEG properties to manage the syndication of their programming to website affiliates and promotion their content with social media features.

While Brightcove also has a limited relationship with CBS, the New York Times, MTV Networks, and other media properties, this will be the first deal where they will act as the sole network provider for a major network.

The deal is a significant milestone for Brightcove, and arguably the company’s most significant news to date, besting even its nearly $60m private placement in January.

Kodak, a company built on a foundation of innovations for photography and film, has struggled somewhat as the world’s transitioned toward a more digital environment.  Some product lines have thrived while others have been restructured.  The company has made large bets on technology, particularly efforts to push into ink-jet printing and now, a possible new breakthrough for digital photography.

Late last week  Kodak unveiled a technology it claims will improve the images of digital camera’s by a factor of 2x to 4x without requiring an increase in the size of the camera’s image sensor.  If the technology is as promised, is cost effective to produce, and becomes widely adopted, Kodak could be in a position to generate substantial licensing revenue.  The breakthrough could,  even potentially, be big enough to redirect the course of the entire digital camera marketplace.

To understand the technology at stake requires a basic understanding of how digital cameras work.  So in basic terms: digital camera’s use a grid like array of sensors to simulate film and capture an image.  The grid (which is a semi-conductor technology)  is composed of thousands of small light sensitive sensors (called Pixels). Each Pixel recognizes a dot of light (like grain in film) as bright or dark.  The computer-brain of the camera then converts that information into its memory.   Repeating the pattern of dark and light dots of lights like a mosaic recreates the picture.   The more pixels on the grid, the more information the camera can record; and the more information stored, the better the picture.  (The same is true in film, larger format negatives captures more detailed pictures by storing more information in the form of more data about the pattern of light). 

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The NPD Group released its monthly hardware sales data for May late this past week. Sales for both consoles and software were strong. As has been regularly the case for the past few months, Nintendo dominated both full–size and portable hardware categories. Overall, hardware sales accounted for $319m in revenue for the month.

Home consoles accounted for $221m, an increase of 79% over the same period last year. The Nintendo Wii led with 338k units sold. The Sony Playstation 2 and Microsoft’s Xbox 360 finished second and third with 188k and 155k units respectively. The PlayStation 3 continued to struggle relative to the competition with only 82k units sold.

In the Portables category, revenue was up 45% over the same month for last year with approximately $98m in sales. The Nintendo DS sold an impressive 423k units following a strong showing in April when they sold 471k units. 221k units of Sony’s PlayStation Portable were sold.

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