Advertising dollars are the fuel of the Internet but in some segments like online videos, the process of attracting it seems like something from Frankenstein’s lab.  Nobody yet knows the exact chemistry it will take to balance audience acceptance (or tolerance) for advertising against advertiser required metrics for measurement of return on investment.  By best guess, the answer could be a combination of existing tools, or even a business model not yet invented. It’s a crapshoot. Tea Leaves and gambles.

Google with its huge share of search and video traffic (YouTube) has a vested interest in figuring out the how to make it work.  Unlike all but a few companies, Google also has the kind of cash and technical expertise to take on the science project without limitation.  They can afford to fail, repeatedly, than try again until they get it right. 

The latest experiment from Mountain View (more…)

It takes money to make money sometimes.  Will $50 million be enough to steal some cash and market share from Apple’s dominant iTunes digital content store?  That is a question digital music service Rhapsody is hoping to answer.

Under a new strategy revealed Monday, Rhapsody will begin selling a la carte, single-song MP3 downloads without restriction.   All of the music will be offered at a variable bit rate of 256kb and it will have no digital rights management encryption (DRM).  Accordingly, it will be playable on any device, including iPods and iPhones. 

Music bought over an internet connection will be priced at 99cents a song, or $9.99 an album.  Music bought through a Verizon mobile phone via vCast will cost $1.99. The higher mobile premium will include one direct download and a second “master copy” sent to a home computer.

The changes break from what had long been Rhapsody’s approach to music sales. (more…)

A week ago, at Sony’s annual meeting, Howard Stringer said the company’s top priority was “to restore profitability in [the] television and game businesses;” both of which lost money during the last fiscal year.  Thursday, Sony began to publicly outline their blueprint for making that happen.  At the center of it, a keystone they say, will be networking – connected entertainment appliances.

Sony is planning to spend $16.7b (1.8 trillion Yen) over three years (through March 2011).  The aim will be to become “the leading global provider of networking consumer electronics,” Stringer says.  By the end of the process 90% of Sony’s product categories will have networking and wireless capabilities. 

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Calling it a “realignment to support core strategies” Yahoo officially announced(release) the seating chart from their game of executive musical chairs. 

The reorganization will create three organizational units that  report to President Sue Decker.

The first group, named the Audience Products Division, will be lead by Ash Patel.  He was previously responsible for Platforms and Infrastructure.  He’ll oversee the management of existing and future product lines.

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Wednesday, after the market’s close, Blackberry maker Research in Motion (NASDAQ: RIMM) released earnings that narrowly missed guidance for both revenues and earnings per share (EPS).  Having never come up short before, and consistently out performed, Wall Street expected more from RIM.  The stock traded down heavily after hours.  Thursday, the market showed no mercy.   Sometimes though, bad news is actually good news.  Perspective is everything.

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At times during the past couple years Internet video sites have seemed like the fad du jour, like another bubble of inflated expectations waiting to burst.  Every few weeks there seemed to be another monstrous financing.  $10m invested here.  $20m gambled there.  Even a pledged $30+ million from time to time.  Super Deluxe. 60 Frames. Joost. Veoh.  Metacafe. Crackle. Revver. Daily Motion. Funny or Die. Hulu. This Just In. Deca.TV – Every week a new company name to add to the lexicon and the watch list. It was all part of the “next new thing.” The big gamble.

Like any new market, especially one with big opportunity, a certain amount of this speculation is understandable.  With billion dollar market opportunity, there is invariably going to be a lot of competition chasing the same trophy.  And unequivocally, all these sites were, and are, chasing just that same predictable future – the migration of television and video programming to a time-shifted, place-shifted, long-tail-wagging world of Internet distribution.

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In January, Bill Gates took the stage at the Las Vegas Consumer Electronics Show and for the last time mused on the future of computing.   One of three things he predicted was an eventual change in user interfaces.  There will be more touch.  More motion.  More gestures.   In the future, he said, we’ll migrate away from our dependence on keyboards mice and trackballs; we’ll have more natural interfaces.

In the gaming world, that future is already here.  It began a decade ago with the introduction of a range of Japanese arcade games – virtual skiing machines and dance pads.  These new peripherals then jumped to video game consoles.  Now they’ve been carried in a new direction and lifted to new heights with Nintendo’s motion control systems in the Wii and the introduction of rhythm games like Guitar Hero (Activision) and Rock Band (EA/MTV).

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