Intel kicked off the technology earnings season with positive surprises earlier this week but Thursday, the keg seemed to run dry early at the party and things turned grim.  Google and Microsoft both released earnings and neither company satisfied the appetites of a nervous market.   The initial reaction was to buckle the seat belt and grab on, the ride looked like it was about to get rough; and in fact it did.  Google’s news led to a more than 10% sell off in after-hours trading.  The bright side: Google’s news wasn’t really bad.  The selloff, or at least the rationale for it, appears to have been premature.

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Everyone’s doing it.  It’s the new, old thing.  There’s Apple and Microsoft, Netflix and Amazon, there’s TiVo, Roku, Sony, Sezmi (formerly Building B), Vudu and more.    They’re all bringing some form of video on-demand services over the Internet; rentals and purchases, some even free.  It’s the promise of TV and movies as you like it, when you like it.  Thursday, Amazon became the latest entry into the crowded market.  Technically, though, it’s a re-entry.  

Since 2006, Amazon has offered a video on demand service called Unbox. (more…)

Midway into the month, the July award for best corporate use of the media has been locked up. In a rare tie, the trophy goes jointly to Microsoft and Carl Icahn.   Together, working with press releases, public letters and carefully worded position statements, the two have effectively served their dual purpose of destabilizing Yahoo and advancing their efforts to acquire the company (or its assets) against the wishes of its management.

Looking at the Award Winning Performances:
It wasn’t too long ago that Microsoft CEO Steve Ballmer had said Microsoft’s pursuit was over; that they had “moved on.”   At the end of June, in an interview with Tom Brokaw to discuss his retirement, Bill Gates confirmed he didn’t think a Microsoft-Yahoo combination would happen either.

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When Netflix first revealed their strategy to bring their streamed video service software to consumer electronics by licensing their software, they promised the licensing partnerships would be broad reaching.  When the next earnings conference calls comes around, executives at the company will be able to say they have kept their word.  After first announcing a deal with LG to tie into consumer electronics (DVD players and Set-Top boxes), then offering a standalone player in partnership with Roku, Netflix is now tackling gaming hardware.

Monday, using the E3 gaming convention in LA as a forum, Netflix revealed a plan to bring their Watch Now on-demand video service to Xbox 360 owners.

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The iPhone is here and Apple is making headlines around the world.  From the Applevine, there is more going on than just the debut of the anticipated phone. Thursday, it became apparent that the company is off the hook for any backdating of stock options.  Also, the iPhone 3G was cracked open and the App store went live.

Backdating Investigation Closed
While spokespeople for Apple and the San Francisco U.S. Attorney’s office have not commented, after two years, it appears the Justice Department has ended its criminal investigation of stock options back dating at Apple. They decided no charges will be filed.  Sources close to the case told the Wall Street Journal the inquiry is over.

At issue were practices dating back to the period between 1997 and 2001.

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Looking back through centuries of history only a short list of communication technologies have fundamentally changed the way people and societies share information; things like written language, the printing press, the telegraph, the radio, and television.  Each, over years of evolution, utterly disrupted existing practices, pushing aside the antiquated and expanding the depth of possibilities.  Each, in developmental years, had critics predicting there’d be little long term value.    Each also has had champions who eagerly predicted the innovations would drastically reshape the world.

The Internet falls in to the same exclusive club but its functionality and contribution are still evolving.  It will take decades before the breadth of its impact and transformative power are fully understood.  Still, that won’t stop many  from predicting where things will go or how the Internet will continue to shape our world along the way.

Monday, Lehman Brothers took a stab at such a prediction.  Citing the disruptive power of the Internet, and its likelihood of changing business economics in the entertainment industry, they downgraded stock ratings on several companies.  The recent history of the music industry was cited as one partial justification.

The view seemed extreme.  This METUE review takes an in-depth closer look.

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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…)