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New Owners Of Philly Papers Send Letter On Layoffs (Philly.com)
A week after the Inquirer, the Philadelphia Daily News, and Philly.com were sold at auction, employees are receiving a letter warning of possible layoffs, though the new owners say that it is a federally required technicality and that no job cuts are planned. The new company "will continue as the employer of all employees," says the letter mailed to union employees or their representatives Friday. It adds that the letter also serves as "notification" if the federal Worker Adjustment and Retraining Notification Act applies to any future company action.

Women's Service Mags Far Sexier Online Than in Print (Mediaweek)
The traditional women's service magazines are known for their content reflecting family values, aimed at married women with children. Yet online, it's at times a different story. Readers might be surprised to find frank sex tips tucked among the pie recipes and crafts. On the sites of titles like Ladies' Home Journal and Good Housekeeping, most of the Content Deals with jumpstarting marital sex ("Be the aggressor, sometimes").

Felix Dennis Shares Caribbean Hideaway With Dennis Publishing Staff (MediaWeek.uk)
Dennis Publishing chairman Felix Dennis surely runs the best staff incentive scheme in the media business: a week's free holiday at Mandalay. Dennis employees who have worked at the firm for more than a year are eligible to enter the Employee of the Year contest, with the winning four members of staff announced at the magazine publisher's Christmas party.

More Newsfeed here...

New Career Opportunities Daily: The best jobs in media.

Apple (NSDQ: AAPL) has sold “hundreds of thousands of iPads” on pre-order, reports the WSJ, which quotes people familiar to the matter.

The vague figure could be in-line with analysts’ estimates, which guessed that first-day sales may have hit 120,000 units and that Apple sold about 152,000 over the weekend. However, with iPads still not available until the April 3 release date, it’s not clear what people are buying. The WSJ raises concerns that Apple is facing some push-back from content owners and is still frantically working on securing deals for the tablet with just weeks to go.

Just as one of his last moves at NBC—moving Jay Leno to prime time—starts to publicly unravel, Ben Silverman has the first deal for his new venture with IAC (NSDQ: IACI), Electus: a strategic partnership with Yahoo (NSDQ: YHOO) to develop and produce exclusive original content. So far, sounds like some other high-profile ex-network Content Deals but the Yahoo deal highlights providing that content for the media company’s advertising partners.

According to a report by Business Week's Spencer E. Ante, Twitter's search deals with Google and Microsoft made the company about $25 million - enough to turn Twitter into a profitable business in 2009. According to these reports - which Twitter did not comment on - the deal with Google made Twitter about $15 million this year and a similar deal with Microsoft generated about $10 million in revenue.

Sponsor

The idea that Twitter made a profit from these deals is based on the assumption that the company's annual operating costs are roughly $25 million. Twitter, of course, doesn't release any information about its operating costs or the revenue it made from these deals, so we have to take this estimate with a grain of salt.

Bringing Costs Down

Business Week's Spencer E. Ante also argues that Twitter was able to reduce operating expenses by renegotiating its deals with the telecom carriers that support the service's text message system. Until this year, the cost of supporting the SMS system represented Twitter's largest expense, though according to one source quoted by Bloomberg, "now people are the biggest line item."

Generating More Income

Earlier this year, Twitter also announced that it plans to create a revenue-sharing scheme that would allows Twitter to share in the profits generated by third-party applications and vice versa. The details of this plan are still under wraps, however, though at LeWeb, Ryan Sarver, Twitter's Director of Platform, announced that the company would announce details about this plan early next year.

Chances are that Twitter is still looking into creating revenue from advertising as well. If the company really managed to be profitable based on the search Content Deals with Microsoft and Google, however, then Twitter will at least have a longer runway before it has to open up this revenue channel, which is likely to alienate quite a few users.

Look for more sponsored content to come to Yahoo (NSDQ: YHOO). The company is partnering with WPP’s GroupM Entertainment to “help marketers creatively incorporate their brands into original online programming” across Yahoo properties. GroupM is already behind two big (and successful) sponsored Content Deals on Yahoo sites: The TechTicker investing program is backed by Scottrade—and features Scottrade ads and logos throughout, while sports show Sports Minute was developed for Dunkin’ Donuts—and plays up that company’s branding.

Streaming music service Grooveshark has signed a licensing agreement with EMI, six months after being sued by the music label, AllThingsD reports. In June, EMI sued Grooveshark, which offers free ad-supported streaming and claims one million registered users. Grooveshark countered at the time by saying that the two parties had been negotiating a licensing deal and and that EMI was using the suit as a “negotiating tool” and “intimidation tactic.”

As part of the agreement, Grooveshark now has the green light to access EMI content. In a statement, an EMI executive says, “We think services like Grooveshark offer great music discovery options for fans. In turn, Grooveshark offers a new revenue stream for our artists and will help us learn more about how we can better connect different types of fans with artists.” EMI has been notoriously litigious, although it has reached Content Deals with other startups it has sued, including social network Project Playlist.

Browser-based streaming media service Boxee has raised $6 million in a second round of funding. General Catalyst Partners led the round—managing director Neil Sequeira is joining the board—with previous backers Union Square Ventures and Spark Capital also participating. Boxee has raised $10 million in funding since its soft launch last year; its first round, worth $4 million, came in November.

I asked CEO Avner Ronen whether the startup had already burned through all of that cash; he said no—and that Boxee took the new money to help ramp up both tech and business development. Ronen said General Catalyst’s experience with other new media startups made the VC firm’s investment offer more attractive: He’s hoping that Sequeira’s influence will help Boxee broker better Content Deals with media companies in advance, so that it can avoid the rights restriction issues that forced Hulu to pull all its content from the service.

AP reported. Next year, newspaper and broadcaster members will see their fees drop a collective $45 million. (In April, the AP said it was going to reduce fees by $35 million this year.) The moves come a year after a small group of members gave their two-year cancellation notice, citing the changes in fee structure. (That controversial member pricing plan divided services into core and premium; some members’ costs would have been reduced but others would have increased.) With newspaper revenues showing no signs of hitting bottom, AP is now trying to ease the financial burden on those members.

The pending Xbox Live integration with Last.fm, Facebook and BSkyB shows that Microsoft has been busy making new Content Deals ever since the launch of last year's very successful Netflix partnership. And Xbox Live's GM Marc Whitten said that there were more coming down the pike—including deals that would increase the amount of live TV available for streaming. He also explained why Microsoft (NSDQ: MSFT) chose Facebook over MySpace, whether people can rent movies on a Zune and then watch them on the console, and why the company isn't likely to launch a successor the the Xbox 360 any time soon:

So you're bringing the Xbox video marketplace under the Zune brand. Does that mean you can share content from the Zune player with the console, and vice versa?

Not right now. We really think of the world in terms of three screens [PC, TV and mobile], so you watch a movie or TV show on the device you rented it on. It's not a download and sync thing yet; we're talking mostly about instant access, but you'll be hearing more about syncing in the future.

At first glance, the Xbox Live library has much more video content available than Zune's—did you have to renegotiate your deals with companies like ABC and MTV to make all the shows and movies available in one place?

We don't release a ton of details about the licensing and rights negotiations, but it's definitely been a complex process. We're constantly trying to get permission to do new things with their content—whether that's something like the Xbox Live party that lets people create a co-viewing experience, or sharing videos across a single account.

The BSkyB deal is great for Xbox owners in the U.K., but when will people in the U.S. get their live TV?

It's funny—we got that same question from the international community when we first launched Netflix (NSDQ: NFLX) in the U.S. We're going to continue to broker deals, including for live TV; it's just a matter of getting the terms right.

What makes Facebook and Twitter better social media partners for Xbox Live than MySpace?

We started by asking what kinds of social media experiences would work best in the living room. Facebook is really focused around photos, for example; we know people sometimes crowd around a laptop to check out pictures, so we thought that would be a good feature to bring to the big screen. Twitter is a match because its about real-time, instant communication—just like playing with your friends on Xbox Live.

The Xbox 360 is four years old. You've already relaunched the online network once, and now you're seeding it with more content. But at what point do you think, 'it's time for a new console?'

In four years, the concept of what a console can do has changed radically. The 360 is already pretty powerful, so we're focused on fostering a rich service like the New Xbox Experience that can reinvent itself—not specifically a new console.

Related

• @ E3: More Proof Microsoft Wants To Own Your Living Room: Last.fm, Twitter And Facebook Come To Xbox
• Leaked Documents Shed Light On Microsoft's Xbox Live's Revenues
• Consoles Make Their Mark In The Latest Push To Control The Living Room

Microsoft (NSDQ: MSFT), which is trying to position Windows Media Center as the central place to watch TV shows—from the internet and from broadcast TV—on the PC, has landed its biggest content partner yet: Netflix (NSDQ: NFLX). Starting Wednesday, Windows Vista Home Premium and Windows Vista Ultimate users will be able to watch Netflix movies and TV shows instantly from within Windows Media Center as long as they are also Netflix subscribers. The Netflix deal follows others Microsoft has reached this year to bring sports content from CBSSports.com, Fox Sports and MSNBC.com to Windows Media Center.

Why not just watch Netflix content (or other online content for that matter) in the browser, like so many are already doing? Ben Reed, the senior product marketing manager for Windows Media Center, told paidContent that there continued to be a demand for one standard user experience: "The use of familiar controls, of pause, fast forward, rewind. That's one of the pain-points we hear from consumers about the myriad ways you can consume TV shows and movies online. Each one has a different search and discovery experience; each one has a different player; some work great full screen; some don't." Microsoft is also adding some new features, including an improved way to search through Netflix movies and TV shows.

Reed would not provide details about the structure of the Netflix-Windows Media Center deal, but Microsoft and Netflix already have deep ties. Netflix CEO Reed Hastings is a Microsoft board member. Netflix also uses Microsoft's Silverlight media player to power its in-browser player, and Netflix movies and TV shows have been available since last fall via Xbox Live. Microsoft said in February that one million Xbox owners had activated Netflix streaming on their consoles. "There is an agreement in place around referrals of members to Netflix in the same way ... it works with Xbox," Reed said.

Windows Media Center is also getting a new look in the next version of Microsoft's operating system, Windows 7. Reed said that coupled with those changes, new Content Deals would make Windows Media Center more attractive to the "masses." He said that there were now 13 million unique monthly Windows Media Center users, up from the 10 million Microsoft announced it had in January. As for newer services like Boxee, which also provide a central place to watch Internet videos as well as other content on the computer, Reed noted Boxee's on-again, off-again relationship with Hulu. "Those are the things that I think are going to be a challenge for services like that."

Related

• Microsoft Plans To Release Windows 7 By Holidays
• @ CES: Microsoft's Bach: Xbox Live Subs Up 70 Percent; 3 Million Added In Last Q Of '08
• Microsoft Unveils Second-Gen Zunes: Flash Models, Better WiFi, MediaCenter Video Integration

We've gotten hints about Twitter's business model from its founders, its backers and random speculators—but Kevin Thau, Twitter's director of mobile business development, gave EconSM attendees a more tangible picture of the startup's plans for a three-pronged revenue stream: It's about search, carriers and content.

Thau joined Twitter in mid-January, since then, he said the company has brokered about a dozen business deals with partners like mobile service providers, handset makers and even media companies. MarketWatch's EIC David Callaway grilled him on the details:

—Search: Twitter's real-time search capabilities have been well-documented (so much so, that even Google has stepped up its real-time search features); Thau said the startup will monetize its search traffic "in some way"—though he didn't elaborate.

—Carriers: Much of Twitter's traffic comes from mobile: both through data plans and via SMS. Thau said getting some sort of a cut of the carriers' data business wouldn't be a huge source of revenue—but definitely a portion. Twitter's also working on handset deals that would "integrate the service" into certain devices right out of the box. 

—Content: MTV is sharing ad revs from an upcoming show with Twitter, so will we see an influx of similar Content Deals? Thau said yes—which is partly why they hired a new exec to focus on the media/entertainment business. "The media industry is looking for ways to stay fresh and interactive; you're already seeing CNN and ABC Nightline using it, and we think more media companies will start using Twitter as a utility."

Related

• Twitter's New Competition For Real-Time Search

Google (NSDQ: GOOG) has been battered by the recession along with everyone else, but an analyst note from Bernstein Research's Jeff Lindsay says that could be about to change. He sees the company reversing the dismal revenue-per-click performance that have impacted all search ads by walking away from "unfavorable" AdSense for Search and AdSense for Content Deals. Specifically, Google is not expected to maintain the current revenue guarantees and what Lindsay said was "exceptionally high"  rates it pays to partners such as AOL (NYSE: TWX) and MySpace for traffic acquisition. In turn, Microsoft (NSDQ: MSFT) will likely pick up some more business as Google casts off more and more deals. Lindsay anticipates some negative press for the search giant as a result along the lines of "Microsoft snatches XYZ deal from Google." On the other hand, Google will also be able to avoid more news like the write-down of $726 million tied to the "strategic investment"  involving the AOL AdSense for Search deal.

—YouTube revs poised to grow 81 percent (next year): Separately, Lindsay is bullish on YouTube, but acknowledges that strong growth is still a long way off and depends mostly on the recession ending. The Google-owned video site's revenues are likely remain very small through the end of this year: around $123 million. But YouTube's ad coverage is growing and that should make it better positioned when CPMs recover in 2010.  At that point, YouTube's revenue is expected to surge 81 percent to a $222 million—still a long way off toward making up the $1.6 billion Google paid for it.

Pity the poor venture capitalist. Times were... well, so cushy. Money was flowing, deals were being done in record time, monetization was something one worried about later, and Silicon Valley was bursting at the seams. The sweet smell of wealth creation was everywhere. But suddenly, money got tight and the portfolio companies of many VC firms went on life support. So let's hear from a couple of well-known early-stage investors, each with close to a decade under his belt, who we learned are largely undaunted by the current melancholia.

Sponsor

We spoke with Jeff Clavier, founder and managing partner of SoftTech VC, Palo Alto, CA, and Dave Hornik, a partner at August Capital, Menlo Park, CA. Both have enviable records of successful investments, and both still find new startups worthy of their funds (though they agree the pace has slowed). We conducted the interviews by email after chatting with both gentlemen at the recent DEMO '09 conference. (The questions for each are identical, though the interviews were conducted separately.)

Question: How would you describe the current state of early-stage VC in general?

Clavier: Early-stage technology investments have traditionally been made by a mix of business angels, which invest their own money, and venture capital firms, which invest from funds they raise. Over the past four years, a few seed-stage firms have become prominent players in early-stage investing: First Round Capital, Maples Investments, Baseline Ventures, True Ventures, Alsop Louie, KPG Ventures, and my firm, SoftTech VC. In the current environment, all of these firms are actively investing and so are "professional" business angels. More casual angels have disappeared from the market since October 2008, when the public markets started unraveling.

Hornik: I think it is a very tough time for venture capital in general. The public markets are closed up tight as a drum. But more importantly, the financing environment is very tough. It is particularly hard to assume that a company you finance today will be able to remain financed in the future. So venture capitalists are being very careful about what companies they fund, with a particularly careful eye on capital efficiency.

Question: What would you say about the state of VC investing specifically in the digital content or digital content technology space? Do VCs look on this space favorably right now?

Clavier: VCs continue to invest broadly in digital content, technology, services, etc. The bar has just gone much higher on what companies have to demonstrate to show themselves worthy of an investment: traction, revenues, market potential, etc.

Hornik: There is no question a number of exciting companies in the digital media space will have no problem getting financed. But many others will not be able to find backers. There is a general sense that online advertising is slowing down. Because a large number of the digital media opportunities are monetized with advertising, many of the companies coming up for funding will face a fairly skeptical venture community and have a tough time getting funded.

Question: What have been your most notable deals in this space since you started investing?

Clavier: I started investing in the consumer Internet space five years ago, at the very beginning of Web 2.0, and since then have closed more than 50 deals. Five of them got acquired: Truveo, Userplane, MyBlogLog, Kaboodle, and Maya's Mom. In my angel portfolio, I have companies like Mint, Kongregate, and Buzznet. More recently, I invested in Tapulous, maker of the #1 game on the iPhone, as well as Circle of Moms, GetSatisfaction, and SocialMedia. All of these companies have millions of users, but it is still the beginning for them.

Hornik: The partners at August Capital were the earliest investors in such companies as Microsoft, Sun, Compaq, Intuit, Symantec, Seagate, Skype, and many others. I have had the good fortune to invest in such exciting digital media companies as Evite, Tickle, Six Apart, VideoEgg, etc.

Question: Have you done any digital Content Deals in the past six months?

Clavier: I typically don't talk about recent deals. Funding announcements are most often done when companies launch. In the past six months, I have invested in Outright, Foodzie, and TextDigger, and I am also about to close two deals in digital content infrastructure.

Hornik: We have invested in a couple but, unfortunately, we aren't talking about either publicly. Stay tuned.

Question: Is now a good time to be a VC investor?

Clavier: I personally consider the current environment a great time for investing. Opportunities I see tend to be stronger; there are stronger talent pools around companies; and the general focus is on building sustainable businesses, with revenues being part of the short-term plan, as opposed to an afterthought.

Hornik: I think it is a great time to be a VC at August Capital. We have had the good fortune to invest successfully in a number of really interesting companies in past down economies. We believe that great entrepreneurs are undaunted by the challenging economy. And a number of things make it easy to build a company in these difficult times: plentiful talent, cheaper rents, less competition, etc.

Question: What is the mindset of your investing partners right now, including other VC firms you often invest with? What percentage of them are positive?

Clavier: We are all busy looking at deals and investing right now. It is, however, fair to say that the pace has slowed down a little bit compared to last year.

Hornik: I certainly think that plenty of venture investors feel quite daunted by the market conditions. Not only is it harder to raise money for their portfolio companies, it is harder for them to raise money for their own firms. But plenty of folks out there have seen these up-and-down cycles before and remain enthusiastic about venture investing. I personally remain quite optimistic about the future of venture investing; so long as there is technical innovation, there will be great opportunities in venture capital.

Question: Is VC investing more difficult in the current environment?

Clavier: I would not say it is more or less difficult than it was in the past. The big question for us is, what type of companies are likely to be successful in these challenging times. There is a flight to quality in terms of management teams and a bigger focus on short-term revenue. But otherwise, it is pretty much the same.

Hornik: It is definitely more difficult. If capital is the lubricant of markets, then we are facing some pretty serious challenges. But there will be opportunity to succeed despite the markets. And those firms that have a long history of success will be able to weather the storm far more easily.

Question: What types of digital content solutions or tools are you interested in funding? What's on your wish list?

Clavier: I don't maintain a wish-list of tools or companies, to be honest. My investment strategy is sector-based, within the realm of consumer Internet. That includes social media, gaming, search and discovery, monetization and ad networks, and consumer and cloud infrastructure. I am currently looking at mobile deals as well, on new platforms like the iPhone and Android.

Hornik: I don't really have a wish list. I'm always looking for smart, talented entrepreneurs who can tell me what is interesting. The entrepreneurs know way more than the venture community, so I have always followed their lead.

Question: Has deal flow slowed down for first-round financing? And can we assume that requests for follow-on financings are way up? On which are you spending most of your time these days?

Clavier: Deal flow has slowed down a little bit, but I find what comes my way is of higher quality. I have closed six follow-on rounds in the portfolio in the last six months: companies I had seed-funded that received capital from new investors in a subsequent round, and I see that as very positive. It was a lot of hard work; it took more time than in the past; and valuations were in line with market realities. But these deals got done. I have allocated 75% of my time to my existing portfolio, and 25% to looking at new deals.

Question: Any further thoughts on the subject?

Clavier: We're in the most challenging economic and financing environment of the last decade. I have been an investor for nine years, but I'm certain that we'll see fantastic companies emerge from these difficult times. And I am excited to be involved in the early-stage community that will help build them.

Hornik: I joined the venture business in June of 2000, which was a challenging time in its own right. But I found some very interesting companies to invest in then. And I'm sure I will find some interesting companies to invest in over the next couple of years as well. I'm looking forward to it.

Graeme Thickins is an independent writer, consultant, and blogger based in Minneapolis, MN, and San Clemente, CA. His main blog is www.Tech-Surf-Blog.com, where he recently posted some 23 interviews he conducted at the DEMO '09 conference in early March.

Looks like Mel Karmazin may be about to bite the bullet at Sirius XM (NSDQ: SIRI) Satellite Radio: The New York Times cites sources close to the company who say the company could file for Chapter 11 bankruptcy within days. The sources tell the NYT that Sirius XM has been working with restructuring expert Joseph A. Bondi of Alvarez & Marsal and bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to prepare the filing. 

The filing—or just the threat of one—actually could bring Ergen more sharply into the picture. As has been reported over the past week, Ergen's EchoStar (NSDQ: SATS) has been buying Sirius XM debt—apparently after trying to take control of the company and being rebuffed. Now EchoStar holds a $175 million tranche scheduled to mature Feb. 17—and the company doesn't have enough to pay the bonds. That amount literally is a drop in the bucket compared to Sirius XM's total debt of around $3.25 billion but it could cause a tidal wave response. 

As the WSJ reported earlier, Karmazin, CEO of the recently merged satellite radio company, told investors his options were to file for bankruptcy—wiping out the equity for him and other shareholders—or to make a deal with Ergen. Adding to the problem, a change of control would make hundreds of millions in debt due immediately. The NYT suggests the filing preparation may be intended as pressure to get Ergen to make a formal offer to convert his debt at a higher price.

Chapter 11, of course, is for restructuring, not the nuclear option that liquidates the company. The debtor continues to run the company but under the bankruptcy court's jurisdiction and with input from creditors. Contracts can be renegotiated, which could put some of the hefty Content Deals at risk—including the one with Howard Stern. Sirius XM is a Delaware corporation so it would be filed there.

Related

• Echostar Offered Sirius Cash Infusion Late Last Year, Was Rebuffed
• Confirmed: Echostar Is Buying Sirius' Bank Debt, Not Convertible Debt; Aiming For Control?
• Sirius Shareholders Approve Reverse Stock Split To Ease Debt
• Earnings: Sirius XM Loss Balloons On $4.8 Billion Impairment Charge; Revs Grow 16 Percent

During the Keynote Q&A at our EconMusic conference, everyone asked MySpace Music President Courtney Holt the same question in different ways:

How is the much-hyped music portal going to be profitable when it has to compete with free services like Pandora, illegal file-sharing sites and torrents, and of course, the nasty economy?

—A number of strategies: Holt named display ads and sponsorships, of course, but also revenues from the Secret Shows, affiliate sales (from sites like Amazon) and eventually merchandising deals. And despite the fact that parent company News Corp. swung to a loss in Q4, Holt said he was "optimistic" that MySpace Music would deliver revenue. "I'm being very sober about how we're going to get there, but my goal is to run a profitable business," he said.

—Why MySpace Music and not Facebook? Analysts expect advertisers to slash social media spending this year, but Holt said MySpace Music will fare better than pure-play social nets because the opportunities it offers brands—like the Secret Shows, the offline ticket sales, and even possible Content Deals on MySpace Video—"aren't subject to social network CPMs." For example, a recent promo that plugged overlay ads into a My Chemical Romance video netted click-through-rates that topped 1.2 percent; the links sent viewers to the band's site and Amazon.com, driving traffic and sales (though Holt wouldn't disclose financials). 

—Money in the data: Holt also said the site has a data goldmine that brands, artists and the labels all want access to: "We know whether someone has friended an artist, whether they listened to them on the band page, or their friend's page, whether their friends are listening—and artists that engage will get access to that data." He added that MySpace Music would share some of the data with users too, as part of efforts to streamline music search and site navigation.

—Coming soon: Holt said the site was enhancing user playlists: letting users display 100+ songs on their profiles, making the playlists public, and SEO-friendly; he also said collaborative playlists were on the horizon.

The rest of our coverage is at our EconMusic channel

Zune, Microsoft's big portable music and video hope, has added an original content production unit that will produce a series of free ad-supported short videos for its users. The first project is a comedy series called "Cinemash" that it has created with arts and entertainment mag Mean. It will launch in May as an eight-episode series, in three- to five-minute installments, and will feature celebs playing the roles in movies they wish they'd landed, according to Variety. The company plans to tie up with others in Hollywood to create more series for Zune, though it is unlikely to make any dent in moving the devices any faster…

MSFT execs have been making the rounds of talent agencies and production companies here in Hollywood since last year, trying to drum up these exclusive Content Deals.

This comes even as Zune platform revenues decreased $100 million (54 percent) in Q408, according to a 10-Q filed late last month, picked up by us here.  More details in release.

Chris Stephenson, GM of global marketing for Microsoft's entertainment business and the exec who helped launch Zune, will be joining us for EconMusic in LA tomorrow

Related

• Microsoft's Zune: $100 Million Sales Drop Plus Layoffs Equals Questions

AT&T (NYSE: T) has secured a deal with Viacom's MTV Networks (NYSE: VIA) and BET to run content across a number of its platforms, including TV and wireless. The announcement continues a trend in which carriers look to leverage existing content relationships to create reasons for subscribers to sign up for new services and is a vote of confidence from the content companies that they are willing to play along. The agreement includes adding high-definition channels to U-verse, including MTV, VH1, CMT, BET and Nickelodeon; adding international channels, like MTV India; renewing existing channels, advertising expenditures, and securing content for its in-car service CruiseCast. The CruiseCast service, which uses satellites, will include five MTV and BET channels when it launches in the spring. Release.

Related

• AT&T's VideoCrawler: Part Of A Bigger, Three-Screen Content Distribution Plan
• AT&T Overhauls U-Verse DVR; Still Playing Catch-Up To Verizon FiOS, Cable
• NBC Opens Up Multi-Platform Olympics Coverage To Verizon And AT&T

Barrons.com is making a few changes at the top of its masthead, saying it wants to better focus its operations. Randall Forsyth is being promoted to editor-in-chief of Barrons.com, from editor of the site. He'll still write his two columns, Up and Down Wall Street Daily and the weekly Current Yield, which appears in the print edition. In his place as editor, Yahoo (NSDQ: YHOO) Finance's Greg Bartalos is returning to the company. Bartalos was most recently assistant managing editor of Yahoo Finance. He left Barrons.com about three years ago, after serving as senior editor of the Dow Jones-owned financial news site. In addition to overseeing the site's editorial content, Bartalos will also work on building Barrons.com's community features. He is also charged with striking Content Deals with other sites. John Kimelman, managing editor of Barrons.com, has been promoted to executive editor, and will report to Bartalos. A Barrons rep said there were no layoffs resulting from these staffing changes. Release

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Blockbuster's so-called plans have been changing in real time these days, it seems, as the world changes in real time as well: We pointed out yesterday Blockbuster's continuing vaporware plans for online and mobile video. What was lost in the shuffle was the fact that the rental chain has dropped the technology behind Movielink, the online video service it bought in 2007 for a firesale price of $6.6 million (after $148 million was invested in it over the years), and will now go with one-time rival Cinemanow's technology for its new online movie service, to be launched in Q2 this year. It had been integrating the Movielink service with Blockbuster.com for a few months now, but after testing it out in closed beta, it is now dumping the tech part, even though the Content Deals remain in place, as Variety points out.

Cinemanow itself was bought for an even-more firesale price of $3 million in November by Sonic Solutions, the digital media software company.

This comes after BB recently changed its mind on a set-top box as well, first planning to launch it during the holiday season and then abandoning that idea.

Related

• Blockbuster Changes Tack, Decides To Roll Out Set-Top Box For Holiday Rush
• Interview: Blockbuster CEO: Skeptics Aside, Confident Of Physical's Digital Future

Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page

—Petsky Prunier: Former IAC VP Bob Ennis has joined Petsky Prunier to head up the investment bank's digital media practice. Ennis most recently served as founder and president of Tensor Advisors, a strategic consultancy and banking firm focused on new media.

—Google: Delicious founder Joshua Schacter, who left Yahoo (NSDQ: YHOO) mid-2008, has resurfaced at Google (NSDQ: GOOG), according to TechCrunch. No word on Schacter's new title; his LinkedIn profile calls him a "member of technical staff at Google." Schacter made enough money from the sale of Delicious to Yahoo in 2005 to invest in other startups like Dogster and traveling site Dopplr.

—Motricity: A batch of changes: Motricity has appointed Jim Smith President and COO; Richard Leigh, SVP and general counsel; Deepak Dhawan as SVP, solutions and services; and Abe Danzinger, VP of sales and engineering. Smith is replacing former president and COO Steve Elfman, whose departure to work at Sprint Nextel spurred a lawsuit between the two companies. Full details on our sister site mocoNews.net...

—Discovery Communications: Rebecca Glashow has been promoted to SVP, digital media distribution at Discovery, from VP. She will be responsible for brokering VOD, interactive TV, broadband and mobile Content Deals for Discovery's roster of U.S. cable networks. Glashow will report to Bill Goodwyn, Discovery's president of domestic distribution and enterprises.

Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page

YouTube is driving more than traffic to music labels like Universal Music Group. Rio Caraeff, EVP of UMG's eLabs, told CNET that YouTube is adding "tens of millions of dollars" to the recording company's bottom line: "(YouTube) is not like radio, where it's just promotional ... It's a revenue stream, a commercial business."

The video site shares revenue with record companies like UMG from ads appearing with their music videos, as well as user-generated clips featuring their artists' tracks. UMG's eLabs division has brokered such deals with YouTube and others, including MySpace Music, over the past three years, and has made about $100 million dollars off its music videos as a result. By Caraeff's account, YouTube has been responsible for a large chunk of that (which should make UMG doubly happy, since it, like some other labels, took a small stake in YouTube as part of the content-sharing deal). And while that's great for the labels, what about Google?

The company doesn't break out YouTube revenue, but the consensus among analysts and shareholders is that the site will still only contribute about one percent worth of Google's estimated $20 billion worth of revenue this year. But Caraeff says this may one of the first signs that YouTube's plethora of monetization strategies—from keyword, post-roll and local video ads, to Content Deals, live shows and even an orchestra competition—are starting to gel. "They have finally turned their spotlight on 'How do we turn this into a business?'" That they are having a hard time at it, is well, reality that they are finally at least facing head on…

Image: Universal Music Group artists The Killers.

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• UMG, SONY BMG, WMG Have Small Stakes In YouTube: Report
• YouTube Founders Got $650 Million in Shares; Sequoia Got $442 Million; Nothing For Music Labels?

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Sling Media, the place- and time-shifting device company that is now owned by Echostar (NSDQ: SATS), is launching something that seems counter-intuitive on the face of it: a free, ad-supported online video portal aggregating video from various professional sources like TV networks, studios and other independents. Sling.com will launch as a video portal on Nov 24. Anyone can use the site—they don't have to be a Slingbox user/subscriber, though if they do have it, they can plug that into Sling.com site, and watch live TV through their own TV boxes (like they do now through their online accounts, only in this case it is all integrated).

I spoke to Jason Hirschhorn, the president of its entertainment division, and he explained to me the rationale for the site. The site had been in works even before the company was bought by Echostar, and had been delayed for a bit while the Content Deals were coming in place.

Content wise: it has a lot, but the glaring omission is *Viacom/MTV Networks*, which means Comedy Central's popular shows like The Daily Show and the Colbert Report are not available. Hirschhorn said the company is working on a Viacom (NYSE: VIA) deal and hopes to have something to announce soon. And Sling has the Hulu deal, which means it has everything from there except, well, Viacom content. It has also done separate deals with Warner, MGM, Sony (NYSE: SNE) Pictures, CBS, and others, and is working on doing more. On the movie side, it only has 125 of them, but is working on more. Unlike some of the others, it is also aggregating video news content from AP, Reuters and others. Since most of the media companies don't do exclusive content-distribution deals, it will get all of those deals anyway, and be competitive on content library, the company hopes.

More details after the jump

Functionality/design: more cluttered than Hulu, but then so is every other video site, compared with Hulu's minimalism. It has good IPG and search capabilities, more editorial curation and blogs from editors. Sling.com has tried to build in a lot more social functionalities, like a news feed of your friends, a la Facebook, profiles, sharing, etc. It is also building connections into other social sites, and working on building widgets and apps for those as well.

Challenges: Huge. Tons of competition from everyone and their mother in law. But Hirschhorn thinks it is still early in the game and no one has won the online video battle. Also, with Echostar behind them, and Charlie Ergen's support, they are in it for the long haul. Also, online is just one part of the full spectrum for them: with Slingbox, users can watch home TV and DVR online; with doing the same on mobile with SlingPlayer Mobile, with its SlingCatcher service, users could do the reverse: bring online video onto their TVs. Sling.com is another in that spectrum. The convergence hope, in other words. The company also recognizes that the Slingbox is an intermediary product, and that it will soon be integrated with Echostar's boxes itself. Echostar is the number-two satellite player, so Sling's distribution will be through those channels in the long term. Conceivably, it could also white label its video portal for cable and satellite providers. But if it could pull this convergence thing off, it would be in competition with the likes of Apple and Comcast, not the online video players

The big internal challenges would be: how long does Echostar keep supporting it; how long before the main entrepreneurs within Sling, the founder Krikorian brothers and Hirschhorn stay with the company; where do they get the big online traffic funnel, being a company with little online consumer presence; and how do they build up monetization and a sales team, not something the company has been known for till now. And then, that economy thing…

More screenshots of the service here.

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Looking at how the recession will impact Netflix (NSDQ: NFLX) Reed Hastings, Netflix's chairman and CEO, opened the companies earnings call by ticking off all the various deals that it hopes will insulate the company from a drastic slide in growth. He touched on the $99 Roku movie player to Content Deals with cable nets like Starz and Disney (NYSE: DIS) Channel, as well as distribution arrangements with Microsoft (NSDQ: MSFT), via Xbox. The company also plans to increase investment in streaming video rentals. In particular, Netflix is prepping an update of the "laptop-oriented viewing service" for Windows and Intel-based macs later this year. But given the pullback in consumer confidence, Hastings said that his July stance that the company would be immune to an economic downturn has been reversed, but his view is not completely dark. Hastings: "The recession means continued subscriber growth, but at a much slower rate. Q4 will be between 60 percent below what it was a year ago, to 6 percent above on the high end. The company also expects a small boost to revenues from subscribers who elect to choose Blu-Ray discs that adds a $1 surcharge to their membership.

Release (PDF) | Webcast (5:00 pm EDT) | Transcript (via Seeking Alpha)

-- On Display and subscriber growth: Hastings: No softening of display ad rates yet. But hoping that lower prices will ease the company's financial burdens. Another analyst, pointing to retailers like eBay seeing a drop-off in business, Hastings said the company's growth is trending 30 percent below, a significant slowdown.

-- Online vs. DVD: Growing adoption of Watch Instantly online feature. There is no easy way tell whether people watching online is leading those customers to reduce their DVD rentals. "The kind of person who is more likely to watch online is a different kind of person from those who prefer physical rentals. But it's hard to tell."

-- Stop the panic: Later on, Hastings asked investors "not to push to the panic button yet" and insisted that the business overall was still healthy. As for whether consumers will be willing to pay more for Blu-Ray and streaming—there's no surcharge on the latter yet, as Netflix wants to wait until that business can attract more users—Hastings said that the platform expansion and the content expansion will ultimately make the difference.

-- Olympics impact: Looking back at what else, besides the general economic pressures, affected Netflix, Hastings noted that the Olympics broadcast tended to depress the amount of product coming from the studios. The Olympics also resulted in less rentals, as viewers were glued to coverage on NBC and its dedicated site, NBCOlympics.com.

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Reliance ADA, the scary-big Indian telecom/media/energy giant which is already making strides in Hollywood through its Dreamworks deal, has been looking for mobile Content Deals in U.S. for some time now, and WSJ helps with the scouting with a longish story on its ambitions. It is looking at mobile game publishers and other kinds of mobile entertainment firms, with the intent to "exploit its expertise in telecom and get exposure to a segment of the cellphone industry that promises high growth, the story says. NO specific deals have been lined up yet, though one could expect companies like Glu Mobile (NSDQ: GLUU), Digital Chocolate (has been on the block for a long time now), and Hands-On Mobile (which has been disposing of international units to focus on U.S.) as targets. The deals are being explored Jump Games, Reliance's mobile gaming unit.

Besides these middlemen-type deals, the company is also looking to license content directly from major brands, which it can then distribute through its huge base in India, the reasoning goes. Will its experience be any better than the doomed Japanese and Korean mobile content forays into U.S. market starting five years ago? Index, For-Side and Cybird tried, and bought a slew of companies, only to end up selling them off or closing them a few years later. Reasons then were lack of common language and work culture, complexities of working with the walled-garden operators then, and the lack of consumer adoption with slower networks. Now, some of those issues have gone away....

Here's a wilder thought, though: What about looking at bigger online deals in U.S.? Reliance has the money and the capability to raise a lot more...how about making a run at Yahoo? Better than Disney buying Yahoo (NSDQ: YHOO). Wait, you haven't heard about Dubai Government looking to buy Google? Settle down, just speculatin'..

Check out the best business jobs in digital media. Go here for paidContent.org Job Board.

Microsoft (NSDQ: MSFT) is hoping to add original and exclusive content to Zune, in an attempt to get some traction in the portable media player market, and make a dent, if any, in iPod's dominance. Andrew reports that MSFT execs have been making the round of talent agencies and production companies here in Hollywood, trying to drum up these Content Deals. Zune, which recently announced crossing the 2 million players mark, does have some TV content. But it is hoping to add Zune "nontraditional programming" that can capitalize on the device's social networking platform, according to Richard Winn, director of entertainment development at Zune, quoted in the story. So it is still trying to hawk its Zune Social startegy, when the numbers--to enable network effect--aren't in its favor.

And while that's an admirable pursuit, it won't move the needle. Exclusive Content Deals do generate PR, but no proof yet on it having a big impact on sales, XM-Sirius (NSDQ: SIRI) notwithstanding (well, in the latter case, you spend crazy money to get these rights, and merge in an effort to survive with those costs).

Meanwhile, an ironically funny story in tomorrow Sunday NYT magazine, about the kind of people who buy Zune. "The most salient feature of the Zune seems to be that it's not an iPod." That about says it for the minority who own it…

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• Zune Still Exists; Adds TV Shows From Viacom, NBCU

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After announcing some fresh Content Deals this morning, DVR maker TiVo (NSDQ: TIVO) has announced Q1 revenue of $60.8 million, up slightly from $60.4 million in the year-ago quarter. The company dramatically scaled back their customer acquisition costs compared to that last quarter, bringing net income to $3.6 million ($.04 per share) from $835,000 ($.01 per share) in the year-ago quarter. While most of the company's expenses were up during the quarter, sales and marketing costs were dialed back to $1.5 million from $5.8 million, and that was the key difference between the two quarters.

Service revenue fell in the quarter to $48.1 million from $54.1, though gains in service and technology revenue made up for this drip. TiVo-owned ARPU fell in the quarter to $8.20 from $9.06.

Release | Webcast (5:00 PM ET)

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Since last Spring when I first heard about it, I've been patiently waiting to get my hands on Livestation, a streaming television service from UK-based Skinkers, which is based on technology from Microsoft (who took an equity stake in the company in exchange for rights to the technology). Our digital lifestyle blog last100 previewed Livestation, which uses peer-to-peer technology similar to Joost, last July. Today, Livestation started granting beta access to people on the waiting list.

Livestation is a streaming television service that is most comparable to Zattoo (previous coverage). In fact, though I no longer have access to my Zattoo account (as it is not available in the US yet), Livestation seemed like a first cousin. Both offer high quality streaming video that doesn't buffer or load in a very simple package that doesn't muck things up with extras -- it's all about the TV with these products.

The beta version of Livestation, which is built on the back of Microsoft's Flash competitor SilverLight, is PC-only, though the company promises a Mac version before the full release. NewTeeVee reports that Livestation signed Content Deals with a number of providers, but not everyone will see all of them. "European Livestation users will have access to the BBC, Bloomberg, Al Jazeera, France 24 in French and English, Euronews, Canal+, Sky News and two BBC Radio stations with the new beta test unveiled today. US users will just get Al Jazeera, France 24 and BBC Radio for now," according to NewTeeVee's Janko Roettgers.

Because the technology is so similar -- at least to the end user -- Livestation will likely have to compete on content. Right now, it definitely lags behind Zattoo in that respect. But Zattoo isn't available in the US, so maybe it's a wash.

Last July, Erick Schonfeld, then with Business 2.0, wondered if live TV was worth it on the Internet. "On the Internet, does live TV even matter any more? ... The Internet is the ultimate on-demand television system, where the choices of what to watch and when have no practical limits. The concept of live TV almost makes no sense in that context," he wrote.

Livestation, and competitor Zattoo, are mainly focusing on news (and potentially sports) -- things that happen live. There is certainly a market for live streaming coverage. Though Schonfeld was right to suggest that the services would be far tastier if they also stored streams for later viewing like a DVR, there is definitely a market for live TV news over the Internet.

What do you think? Is live TV silly on the Internet? Or will products like Livestation and Zattoo find a market? Is this the killer app for Silverlight? Let us know in the comments.

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Katalyst Films, the production company run by Kutcher and Jason Goldberg, and creators of "Punk'd", among other TV shows and movies, has raised about $10 million in venture funding, reports PEHub. The lead investor is Prime Capital. Katalyst has an existing deal with AOL (NYSE: TWX) dating back to Feb 2006, to develop five series of minisodes (though not sure if that ever came to fruition). Also not known: what will the money be used for.

For a profile of Kucther's company and projects it is working on, see this NYT story from last April.

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• AOL Content Deals: Kutcher's Katalyst Films Will Produce Exclusive Comedy Series For AOL, AIM; AOL,http://www.pehub.com/article/articledetail.php?articlepostid=10040

One of the highlights of CES (Consumer Electronics Show) each year is Bill Gates' keynote speech, available here as a webcast. Every year ReadWriteWeb analyzes Gates' keynote, highlighting the main themes and trends that he discusses. This year there were a slew of products and partnerships announced. It was less futuristic vision and more beta products and what's coming in 2008. In other words, it was much less about Internet-connected fridges, and more about what you can do now on your Xbox 360.

By now everybody is familiar with Microsoft's strengths: Windows, devices, 'rich' user interfaces, partnerships with big media and electronics companies. Over the past few years we've seen Microsoft morph into a 'Services' company too, where services are delivered over the Internet. Although the branding as Windows Live has been clumsy and confusing, Microsoft has still been able to slot its Services vision into the Windows and devices foundation. Hence Gates' talk of "Services-connected devices running on the Web" and the "huge amounts of storage" that Microsoft is able to provide.

Products, Products, Products

Let's take a closer look at exactly what was announced...

This year Gates' keynote mentioned the following products:

• Vista - according to Gates, Microsoft has sold more than 100 million Windows Vista licenses to date.
• IPTV (Internet TV) - British Telecom, TNT and CNN have developed apps for Microsoft Mediaroom Internet Protocol Television (IPTV) platform; e.g. TNT has enabled users "to view NASCAR Sprint Cup Series races from the driver’s vantage point by choosing from a series of in-car cameras". CNN is also doing an app for the US presidential elections. Microsoft says Mediaroom is running on 1 million set-top boxes worldwide. It also announced a new offering called DVR Anywhere, allowing users to watch their recorded programs on multiple TVs in the home, and a partnership with Samsung for HD content streaming from TV to PC.
• XBox (see below)
• Zune - since the November launch of Zune Social, currently in beta, Microsoft says that "more than 1.5 million people have joined the music-focused social network", which it says is proof that "Zune is tapping into consumers’ desire to share their musical passions with their broader community." However, Zune is clearly well below sales of the iPod - so probably not too much can be read into this. It is though encouraging to see Microsoft trying to extend online music experience past the 'closed shop' of iTunes; that may compel Apple to open up their iTunes platform a little more (we can only hope!).
• a new GPS-powered version of Tellme, Microsoft’s "voice-and-visual mobile service" that enables people to use voice commands on their phone as input, then receive output back visually on their phone screen. The example given was that "a person can “call” the Web on a mobile phone and say “movies” and the software will recognize where the person is located and send to that mobile phone’s screen a list of the theaters closest to that location."
• the Surface touch-screen computer; it's UI was Gates' main focus, but he also showed how Surface can send images directly to its social network product, Windows Live Spaces. Gates told the BBC that "in five years we'll have many tens of million of people sitting browsing their photos, browsing their music, organising their lives using this type of touch interface."
• Voice-activated technology for the car; including Sync, an "in-car communications and infotainment system for mobile phones and digital music players that has been available in select Ford models since September."
• 3D mapping - according to Webware "Gates predicts 3D environments will go with you: In the store, on the street, and so on. Devices will, of course, know your location."
• Windows Live users: 420 million worldwide

Digital dream becomes reality: Gates and Robbie Bach jam with Slash; photo by jidnet

Partnerships: NBC, ABC, Disney, MGM

As is now customary with Microsoft, there were a lot of partnerships announced with big media and electronics companies.

The most notable is a deal with NBC on an Olympics '08 website built with Silverlight technology - Microsoft's cross-browser, cross-platform plug-in for delivering online video. The site will host more than 3,000 hours of live and on-demand video of Olympic events. It will be ad-supported, with Microsoft and NBC sharing revenue. The site will be at NBCOlympics.com on MSN; and it's being touted as "the official U.S. online home of the 2008 Summer Olympics in Beijing." Users will be able to get custom feeds of just the events they're interested in.

Another big partnership was with ABC and Disney Channel, for their programs to appear on Xbox Live Video. In other 'big media' action, Microsoft partnered with MGM to bring the latter's movies to Xbox LIVE. Both of these partnerships aim to bolster Microsoft's Internet TV ambitions for Xbox 360. Already Microsoft claims more than 10 million Xbox LIVE members, so the Content Deals will undoubtedly make the Xbox 360 platform more attractive - especially as they are high-definition. The company boasted that it will have twice the on-demand content than any cable or satellite provider. Clearly Microsoft is targeting Apple TV, although Xbox 360 is also fighting a double front - with Sony in gaming. Xbox 360 registered 17.7 million consoles this holiday season, more than Microsoft expected.

Conclusion

Mary Jo Foley from ZDNet remarked that this year's Gates keynote was less futuristic. I actually see that as a good thing, because it means we're seeing more actual products and services. Sure, we heard the usual talk about Windows software "connecting people", enabling rich UIs, device integration, and so on. But the number of real living products on display, and the equally impressive roster of big company partnerships, shows that Microsoft is delivering circa 2008. Although you could also fairly argue that Vista is still far from a success story and Zune is the poor cousin of the iPod still. Not to mention the Windows Live branding debacle.

Overall though, Microsoft's attack on the Internet front is paying off - particularly with Xbox 360 and its various Internet TV initiatives. Mobile is starting to look stronger too, with leaked info about Windows Mobile 7 showing support for an iPhone-like gesture interface. And Gates said in his keynote that Windows Mobile got "over 10 million new users last year, and we'll double that next year."

Microsoft is talking the talk, after years of the futuristic fridge taking center stage. Now, a Web-enabled fridge that plays Xbox games while sharing music with the Zune - that would be something...

Top photo: Joakim Baage

"Consumer apps" is a rather broad topic to tackle, so rather than try to recount everything that has happened across the entire cosmos of consumer web applications in the past year, we'll focus on two areas that have had perhaps the most impact overall in the way we conduct our day-to-day lives: social networking and personal publishing.

Each of those spaces has been led the past year by an innovative, game changing company. In social networking, it was Facebook, in personal publishing, it was Twitter. Indeed, no two companies have impacted the consumer apps space as profoundly this past year as Facebook and Twitter. That's a large reason why ReadWriteWeb named them this year's "Best Web BigCo" and "Best Web LittleCo," respectively.

Social Networking

Social networking has been making headlines for the past few years. In 2005, News Corporation made a huge splash in the social networking market when its Fox Interactive Media division purchased MySpace for a cool $580 million. However, though MySpace remains by far the largest social network on the web, it has been new kid on the block Facebook that has been stealing all the headlines since fall of last year when it opened up beyond the college audience that had been its bread and butter. 2007 was an especially good year for Facebook and the company has made a number of moves that pushed the entire social networking market.

According to Compete, MySpace actually saw traffic fall this year, while Facebook enjoyed a 111% up tick in monthly unique visitors (in the "people count" metric, Facebook showed similar growth). Facebook nearly caught up with its rival in search volume, and overtook MySpace in press mentions by the end of the year.

To what does Facebook owe their amazing growth? In part, perhaps, because of the launch of their platform in May. The platform allowed outside companies to hook into Facebook's massive user base. Almost immediately we began to hear the success stories, such as iLike, whose application was added by 10,000 users in the first 10 hours of the platform's existence and by nearly 5 million in the first two months.

Facebook now has over 100,000 application developers working on platform apps, and over 85% of their users have added at least one app to their profile. The success of Facebook's platform initiative compelled other social networks to consider their own platform strategies. The rumors started to fly. First LinkedIn was getting a platform (which they have finally made good on). Then it was MySpace's turn. Finally, and most impressively, the world's second most valuable technology company announced their plans to compete with the Facebook platform.

Google's OpenSocial arrived in November with some of Facebook's biggest competitors as launch partners: Ning, LinkedIn, Hi5, Friendster, orkut, bebo, and the big daddy of the them all, MySpace. However, many of those companies have continued to build out their own platforms and Google's initiative has so far failed to deliver anything very concrete. Facebook may have had the last laugh when it announced last week that it was opening up its platform architecture. Facebook's first partner? bebo, an OpenSocial participant.

So influential has Facebook been on the Internet in 2007, that Microsoft agreed to invest $240 million in the company for what amounts to about a 2% stake. This deal shot Facebook's paper valuation into the stratosphere and gave it the cash it needs to take on competitors like Google and MySpace.

But not everything is rosy for Facebook. Following the launch a controversial new advertising system last month, Facebook faced a backlash from the media and consumer advocacy group MoveOn.org. Even though it appears that Facebook put the issue to rest with an apology and policy change, as Danah Boyd notes, this is the third time in the past couple of years that Facebook has pushed the envelope on privacy issues. They are practicing a form of "slippery slope" software development, she says, and users may not continue to stand for it.

Look for social networking to continue to play a major role in our lives in 2008 as the platform war brewing between Facebook and Google (and the others?) heats up.

Personal Publishing

The other area in the vast consumer application space that was extremely influential this year was that of personal publishing. No one company has been more disruptive than our top LittleCo, Twitter.

A pioneer in the area of "microblogging," Twitter is, as Alex Iskold recently wrote, a natural evolution of personal publishing that fills the gap between blogging and social networking. Twitter really picked up steam at the SXSW conference last March and has since become something of a phenomenon. In fact, people are even talking about "Twitterdiction" to describe how passionately some users feel about the service.

As we wrote when naming Twitter our best LittleCo of the year, the company truly "stands out as being something that has captured the imagination and become a new hybrid of chat, social networking and blogging." But perhaps one of the most interesting things that has come out of Twitter, is how it has pushed the creation of an entirely new type of personal publishing.

Probably the second-most talked about microblogging app after Twitter (which some might not really classify as a microblogging app at all -- but lets leave semantics aside for now), is Tumblr. Tumblr takes the traditional blog form, and strips it down to a sort of stream of consciousness inspired state in which posts are meant to be short and to the point: a single photo, video, quote, link, or thought. Tumblr certainly wasn't based on Twitter (it was based on "tumblelogs" like projectionist or Anarchaia), but Twitter's success really opened the door for more microblogging apps to be developed.

These tools are important because they are highly accessible. Microblogging apps like Tumblr and Twitter are pushing personal publishing into the mainstream in ways that probably hasn't been done in the past. Though disputed, Forrester Research reported that 6% of US adults use Twitter regularly. That's remarkable for such a young service (and one that actually has something of a learning curve to really "get").

Just how important is this new form of personal publishing? Important enough for Google to purchase Twitter rival Jaiku in October for an undisclosed sum.

Other

Facebook and Twitter weren't the only things to happen in consumer apps this year, just the most disruptive and influential.

IPTV: Another of the most anticipated and talked about startups of the year was Joost. Founded by Janus Friis and Niklas Zennstrom (you know, the Kazaa and Skype guys), Joost is an IPTV service that delivers streaming, on demand television over the Internet using P2P technology. Though they have signed a number of major Content Deals, including Adult Swim, Warner Bros. Records, the National Basketball Association, and CNN, Joost has yet to really capture the attention of the mainstream. See our full review of Joost, which compares the service to competitors Babelgum and Zattoo and be sure to check out last100's 2007 Internet TV review.

Politics: Also in 2007, web 2.0 began to play a big role in US presidential politics. Following the trail that Howard Dean blazed in 2004 with his innovative use of blogs and Meetup.com to mobilize grassroots support, this year saw candidates utilizing social web apps as never before. Having a profile on top social networking sites became almost mandatory -- almost every major party candidate had a presence on MySpace and Facebook, and some also utilized LinkedIn, Twitter, and others. YouTube held candidate debates with CNN and MySpace got in on the act with their Candidate Dialogues. Some candidates even began broadcasting live on UStream (like Dennis Kucinich or Chris Dodd, for example). The use of consumer web apps in politics is only likely to heat up in 2008 as applications continue to reach more mainstream Americans and the presidential races progress in the United States.

Web Office: Another hot area in the consumer apps space in 2007 was the web office. Because Richard MacManus already wrote a detailed year end wrap-up of that entire market, I'll be brief in my comments. With the continued maturation of online office suites, especially Google Apps and Zoho, and with Microsoft finally starting to show its online office hand, web office is a very hot sector. And while enterprise customers are who the real battle will be fought over, many of the current crop of offerings are mature enough for home use. Consumers already have access to fairly reliable, fairly complete online word processing, spreadsheet, presentation, and email applications. Be sure to check out Richard's write up for a more detailed overview of what went down in the web office this past year.

iPhone: Finally, I will take a moment to mention the Apple iPhone. No other product launched this year has captured the imagination of the press and the public like the iPhone, and with good reason. The iPhone has the potential to be a truly game changing gadget that forces other mobile device manufacturers to make a quantum leap in cell phone functionality. One of the areas that the iPhone can make the largest impact is in the adoption of the mobile web via its ability to so elegantly bring the entire Internet to your pocket. Be sure to read Alex Iskold's list of reasons he loves his iPhone as well as his follow up wish list for the device.

Your Turn

What do you feel were the most impactful consumer apps of 2007? What service or product did we leave off of our wrap up (and there were many!) that you think we really should have paid more attention to? What do you think will be the big trends of 2008? Let us know in the comments below.

About two years into its splashy CES 2006 debut, Intel (NSDQ: INTC) is scaling back on its digital living room brand Viiv. This was Intel's attempt at branding entertainment/multimedia-heavy computers, with Content Deals with major content providers to stream in content onto these PCs. It included Intel-developed media software and joint work with content companies to certify that movies and other video fare delivered over the Internet worked well with a remote control and looked good on a TV screen.

We reported a year ago that Viiv had struggled to gain traction with consumers despite the heavy marketing. One of the major reasons was that the explosion in online multimedia means people haven't needed Viiv to get content the way it was envisioned at first.

Now WSJ reports that at a briefing in San Francisco to discuss plans for this year's CES show, Intel said it will drop the idea of promoting the Viiv brand on Internet video programming and living-room devices that connect to TV sets. Instead, it will become a lot more boring: They will be labeled Intel Core 2 with Viiv technology, for the dual-core chip. Viiv's history, in links, below.

Instead, at this year's CES, it is banking on the creation of "MIDs", for mobile Internet devices....those slightly larger than today's cellphones, which it thinks doesn't come close to the full multimedia experience that can be delivered to portable devices. The company hopes to promote slightly larger gadgets, using its chips, that fit in a jacket pocket but deliver a full Web experience. Has been tried before, by the likes of Nokia (NYSE: NOK) with its N800.

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• Intel's Viiv Fails To Spark Consumer Interest; Company Banks On New Content Deals, Devices
• AMD's Content-Heavy PC Platform Launches; Live vs Viiv
• @ CES 2006: Keynote: Paul Otellini, President & CEO, Intel: Content Deals With DirecTV, AOL, MTV, ES
• Intel's Plans With Content and Hollywood; Clickstar's Windowless Release
• Intel In Deal For Content To Its ViiV PCs
• Another Chorus Of Intel Wants To Own The Living Room

Fox Interactive announced today that it has a deal with Sprint to offer one-click access to the new MySpace Mobile portal when it launches early next year. Sprint and Fox have had a mobile relationship since before mobile meant much, in fact. This could be a sneeze turned into a press release, but it's also a good opportunity to examine carrier-based mobile Content Deals vs. open social networking on mobile.

Early press on the deal says Sprint will be first but it does not say that it will be an exclusive deal. It was around this same time last year that MySpace announced a deal with Cingular that would let that carrier's customers use a Java app for MySpace for $3 per month. Helio, a high-profile handset that operates on the Sprint network, has allowed access to MySpace since last year as well. This week Helio launched a mobile YouTube interface that the company says is the first to allow YouTube users access to their accounts and social features.

The primary question this raises, though, is this: why not just open a free, universally accessible mobile MySpace like Facebook offers? Facebook Mobile is excellent and would provide as good a model for MySpace as the Facebook Newsfeed did for the new MySpace friend feed. (See our coverage of MySpace vs. Facebook in general.) Just add some adds and superfluous pageviews and you've got MySpace Mobile. Perhaps MySpace felt it was not capable of monetizing mobile access except through carrier deals. That would be interesting news for the rest of the industry.

Mobile access could be a key step in MySpace regaining growth momentum, but that seems more likely if the company were to open mobile access to all. It's an interesting trade-off and I wish I was a fly on the wall at the meetings where these decisions were being made.

Tracking the Mobile Content World

Thanks to Forrester's Jeremiah Owyang, who called attention to the news first in my world, on Twitter. We're looking to increase our coverage of mobile news and issues here at ReadWriteWeb. If you're interested in this space as well, you can download an OPML file (a bundle of RSS feeds for importing into your feed reader) that contains some of my favorite mobile content sources and mobile news from our blogs ReadWriteWeb and Last100, filtered via FeedRinse: RWWMobileFeeds.opml. Save the file behind that link, import it into your feed reader and you'll be up to date on the fast emerging world of mobile content. You can preview the live contents of this collection below, using Grazr.

TiVo's (NSDQ: TIVO) has had an eventful seven days: signing NBCU and its TV properties as its first major network ad/data partner; the U.S. Patent and Trademark Office ruling on behalf of its "Time Warp" patent scoring a victory against EchoStar; even narrowing its losses for Q3. I caught up with TiVo CEO Tom Rogers following his presentation at the UBS Global Media & Communications conference Monday, the company's CEO. Some highlights after the jump:

-- The future of advertising: "Currently, this is a situation where you're taking someone away from the key reason they came to the television set to begin with. Last week was a major breakthrough for us on changing that. The media world has been highly resistant to what this involves, because it means advertising is going to be consumed differently and the current model isn't going to stay the way it is. Last week, NBC stepped up on behalf of its local stations and its cable stations and [agreed] to sell our ad solutions to their advertisers. That will begin to go a long way in terms of establishing what TiVo does in the area as the standard." He naturally believes this will pave the way for the other three networks to take TiVo's proposition more seriously.

-- Broadband TV: Rogers said he plans to ramp up marketing of TiVo's broadband content offerings. "A year ago, a lot of people were highly skeptical of this notion about broadband television, saying the good stuff isn't going to be on broadband. But now that's all changed, every bit of content, every movie, every TV show, user-generated to the most premium content is available via broadband. But then people said, even if it is there, people aren't going to connect their PC to their TV. It's an unnatural act, it's just not going to be something they do. Between 700,000 and 800,000 of our users, are already connected to broadband without even marketing to them in a significant way. About 70 percent of new TiVo users right out of the box connect wirelessly to their broadband." He also said that while TiVo has extensive Content Deals, the one holdout is Disney (NYSE: DIS) and he expects that an arrangement will be worked out.

-- Not just a DVR: Part of getting more consideration for its different services entails opening up the definition about what a DVR stands for. "We've got to get people to start thinking of DVR not as a digital video recorder, but as a receiver or retriever, at least in TiVo terms, that goes out and finds whatever's out there and brings it to your TV set. Beyond the deal that we have with Amazon. which has about 15,000 titles, and encodes about 1,000 titles a month, or the deal with Rhapsody, has about 4 million songs and is really appealing to people with HD sets and great audio."

-- Google's (NSDQ: GOOG) good: With Google getting more attention for its recent audience measurement solutions with EchoStar and the Nielsen Company, it would be hard to blame TiVo for feeling that the internet giant is encroaching on terrain it had staked out a while ago. But Rogers instead offered a more sanguine view: "Anyone that has the money and muscle of Google that's helping move the TV marketplace in a way that our ad solutions and data are intended to benefit from, that's fine. We have no notion that we're going to be the only one to sell ad solutions or data. We sell a particular set of ad solutions and data that we think is quite compatible with the direction that Google is taking." Given his friendly views of Google's project, would that mean that a mutually beneficial deal could occur between the two? "I don't comment on those things."

Nokia (NYSE: NOK) and Universal are upping the stakes in the music download market, teaming together to offer free 12-month access to music from Universal's artists to buyer's of Nokia's music phones. The kicker: people will be able to keep the songs once the free-offer period expires. Consumers will have to buy a Nokia handset that supports the service, which isn't available yet. A unique PIN number will let users into the music store, where they can then download songs to their phone. Nokia wants to get other labels to sign up to the "Comes With Music" product, which it hopes to launch early next year.

In an interview with Reuters, Rob Wells, SVP for digital operations at Universal, said that the deal with Nokia represented the way consumers would want to get music in the future.  Wells: "This is a step towards where this business we believe will be moving to in two to three years time. ... We are moving into an access world. Consumers will have access to all the recorded music available through the price of the device, or the price of service, or the price of broadband."

No word on the financial terms of the deal—Wells merely said: "Unless there was enough money for the world's biggest record company we would have not agreed to the deal." No word either on what happens to the business deal at the end of the free-offer period.

Music downloads are dominated by Apple's (NSDQ: AAPL) iTunes store, and Nokia and Universal's move is expected to put pressure on Apple. Whether it puts a dent in illegal downloads is another matter. Nokia has had its own share of problems trying to get music content on to its handset. It opened an online music store in the UK in November, but shortly after its launch, Warner Music said it would not participate citing piracy concerns. The deal is also a chip at mobile operators who have tried desperately to control consumer access to content. Nokia has been moving into mobile content with a number of purchases and Content Deals, such as its recent purchase of electronic mapping firm Navteq. The mobile phone maker maintains that content will help grow the handset market.

Related

• Nokia Expects 25 Percent Of Content Consumed To Be Peer Produced By 2012; Looks For Role
• Warner Keeps Music From Nokia Music Store Over Piracy Spat
• Nokia Puts GyPSii Location Based Social Networking On GPS Handsets
• Nokia Aims For Pedestrian Navigation, Not Vehicle Navigation

I used to write a blog about ebooks - some of you may remember eBook Culture (alas I let the domain name slip and so it was gobbled up by a squatter). Anyway, as a lover of both books and the Web, the vision of an Internet-connected eBook Reader has been one of my obsessions over the years. And now it looks like Amazon has, finally, taken the always-nascent eBook industry to the next level. This week, wrote Steve Levy in a rapturous article in Newsweek, Amazon will release the Kindle - an e-reader that uses E Ink and will have Internet connectivity. The latter point is what will differentiate the Kindle from its chief competitor currently, the Sony eReader that was launched in 2006.

Kindle image via Engadget

Levy wrote in Newsweek that the Kindle " will change the way readers read, writers write and publishers publish." He unleashes other doozies of hyperbole too: "the iPod of reading" and "the first 'always-on' book".

The Kindle will cost USD399, which is $100 more than the Sony eReader. But the wireless Internet connectivity easily makes the increased price worth it. The wireless is via a system called Whispernet - which according to Newsweek is based on the EVDO broadband service offered by cell-phone carriers, allowing it to work anywhere and not just Wi-Fi hotspots. Here's Levy's description of what the device looks and feels like:

"It weighs but 10.3 ounces, and unlike a laptop computer it does not run hot or make intrusive beeps. A reading device must be sharp and durable, Bezos says, and with the use of E Ink, a breakthrough technology of several years ago that mimes the clarity of a printed book, the Kindle's six-inch screen posts readable pages. The battery has to last for a while, he adds, since there's nothing sadder than a book you can't read because of electile dysfunction. (The Kindle gets as many as 30 hours of reading on a charge, and recharges in two hours.)"

The Kindle will be able to hold 200 books, with new releases being offered for just $9.99. Also, apparently blogs will be part of the service - at a cost of either 99 cents or $1.99 a month per blog. Matthew Ingram was appalled that he'd have to pay. I'm awaiting details on this, because it sounds like premium Content Deals have been made with the likes of paidcontent.org. Either that or Amazon will try to make money from bundling feeds. It may be attractive to mainstream people who haven't gotten into RSS Readers yet, we'll have to wait and see. Like Matthew, I wouldn't pay unless there is a 'premium' offering (in which case I would certainly consider paying).

Issues: 'Ugliness", DRM, Pricing

There is some debate about whether the Kindle is as beautiful as an ipod. David Rothman, who has been blogging about eBooks for much longer than me, says it's ugly. And judging from the picture above, it doesn't look like something you'd cuddle up with in bed!

David also notes the DRM issues - but then you'd have to say that Steve Jobs managed to circumvent that easily enough with the iPod. Amazon has, according to Newsweek, already gotten all the major book publishers on board. As with the iPod, there are mutterings from publishers about the low pricing. But long term I would expect Amazon to do exactly as Apple did and use their market muscle to easily push forward with the low pricing and DRM.

Another issue that David Rothman brings up could be the one that Amazon gets unstuck on: formats. This is a hobby horse of David, as he is a fierce advocate for an open ebook standard. He asks:

"Will Amazon’s Kindle work in the future with .epub files, or will Amazon thumb its nose at the IDPF, publishers and us e-book readers who are sick, sick, sick of eBabel—all those clashing e-book formats."

That's an as yet unanswered question that we'll track.

Books as a Service

What is most interesting though is how Jeff Bezos, Amazon founder and CEO, is positioning Kindle in relation to the e-commerce bohemoth. Yet again we hear the word "service" being conjured up: "This isn't a device, it's a service", Bezos said in Newsweek. The Kindle is being seen as "an extension of the familiar Amazon store". In other words, the Kindle is shaping up as a highly strategic move by Amazon. Probably much more important to its future business than the Web Services stack that has gotten so much (deserved) hype over the past year. Because the Kindle is literally going to change Amazon's core business model. This will take years to play out, but it all comes down to the dream that eBook fans have held for years: that books delivered electronically can offer much more flexibility, richness, search, communities, etc etc. But it all depends on having a suitable eReader device, which Amazon now claims it has created.

When I wrote my 'goodbye' post for the blog eBook Culture in November 2004 (yikes, is it 3 years since then already!), I noted my key themes in the eBook world: eBooks as a practice, not an object; eBooks and social networking; Remix culture (of textual content, in this case); and finding out what the various "jobs" of eBooks are in different contexts.

eBook Culture logo, circa 2004

I can't wait to get the Amazon Kindle, which must be a good sign that Amazon is on the right track! ;-) I think Amazon will overcome the issues that David Rothman and others have raised - they have to, because the eBook industry needs an iPod-like device and the support of a heavyweight like Amazon to finally get traction. It has to happen with the Kindle, surely. Then we can get to exploring new business models and read/write methods of book-writing.

Roo Teams With Fox TV, Agence France-Presse and Chat the Planet: The online video aggregator ROO Group (OTCBB: RGRP) has signed a list of new content partnerships with Fox Television Stations, Agence France-Presse and Chat the Planet, a provider of web video featuring global issues. The company has been trying to build a collection of news content available for syndication on the web. Specifically, with FTS, ROO users will have access to daily local and regional news from 24 Fox owned-and-operated affiliates, including New York, Los Angeles, Chicago and DC. For AFP, ROO will start an International channel that includes both English and German news video.  Separately, ROO will also run a series from youth-aimed social net Chat the Planet called "Hometown Baghdad," which focuses on three young Iraqis struggling to survive the war. Release

CW Promotes Shows With Free iTunes Downloads: The CW hopes to draw more viewers to its fall TV lineup by offering free downloads of its shows on iTunes. Some of the new shows getting the full episode treatment on iTunes include Life is Wild and Aliens in America. Season premieres of returning programs also available for the free iTunes downloads include Everybody Hates Chris, Supernatural and Girlfriends. All those shows will be free for a week after they've aired, then the price goes to the usual $1.99 each.

CBS (NYSE: CBS) Interactive Debuts Original Horror Series: A spoof of mock-training films created by CBS Interactive, How to Survive a Horror Movie: All the Skills to Dodge the Kills is streaming 6 new episodes per week for three weeks for free on www.DodgeTheKills.com, as well as on CBS.com and syndicated through the CBS Audience Network.

Gemstar-TV Guide Debuts Online Video Index: Now that all the major TV networks are offering their fall primetime lineups online, Gemstar-TV Guide's is bringing its online video guide out of beta. The online video guide, which also comes with a newsletter, covers independent and professionally made video content from roughly 55 broadcast, cable network and other major entertainment-focused sites. Release

Atlas Media Forms Interactive Programming Division: Independent reality TV producer Atlas Media has created Atlas Digital & Emerging Media to create original content for mobile and online platforms. Next week, the company will introduce a dedicated channel on YouTube called Stounder, which will run its series, Things You Have to See to Believe and advice show Dr. Strange Sex. Atlas is also bringing Route 666: America's Scariest Home Haunts to FEARnet. The company also has Content Deals with Comcast (NSDQ: CMCSA), for its VOD and broadband channel, as well as Sony (NYSE: SNE) and Lionsgate. Lastly, Atlas Media also is working on a project for Discovery Mobile and a web series for Fuse, TV Week reported.

In TiVo's (NSDQ: TIVO) latest attempt to differentiate itself from the commodity DVR box makers, the company is partnering with Rhapsody to let subscribers directly access the subscription music service for a $12.99 monthly fee. As with the normal Rhapsody service, customers will have the option of trying it for free before committing, while Rhapsody subscribers who already have the necessary equipment will get the service at no extra charge. Financial terms of the agreement were undisclosed. Release.

For a long time, TiVo has had higher aspirations than simply being a premium DVR vendor, as it wants its boxes to be gateways to a digital living room or "internet hubs." But while its piecemeal assemblage of third-party content services (Amazon's (NSDQ: AMZN) UnBox, Fandango, Yahoo (NSDQ: YHOO) Weather, etc.) is popular with some users, it hasn't translated into financial success. It still hasn't regularly turned a profit in the industry it spawned, nor is it expected to do so anytime soon. The company's stock is up on the year, although that's partly due to the company's successful patent suits against satellite operators.

It's hard to see this latest partnership moving the needle much. Consumers remain skeptical about subscription music, and the fact that such a service can now be accessed through a set-top box isn't likely to change that. NYT's Brad Stone does a good job explaining just how unappealing this offering is for him, as a consumer: "I'm a former TiVo subscriber. But Content Deals like the partnership with RealNetworks (NSDQ: RNWK) are not likely to lure me back to the TiVo fold. To enjoy the fruits of TiVo's deals with Real and Amazon, I'd have to buy a new TiVo box, string a DSL cable through two rooms to my TV set and get Comcast (NSDQ: CMCSA) to give me a cable card, which would allow the TiVo to get cable service. Then I'd be paying an extra $8 a month for TiVo along with my already exorbitant monthly cable bill." Though he adds, "If Comcast ever delivers on its aging promise to offer a TiVo box to its subscribers, I would probably jump at it."

For Rhapsody, the deal could mean modest bump in subscriber numbers, as it brings more exposure and flexibility in how the service can be consumed. Previously, consumers wanting to stream music away from the computer had to buy a specialized device, such as one from Sonos.

Related

• How Did Apple Get iTV So Wrong?
• Earnings: TiVo Q2 Net Loss Expands, As Revenues Gain 5.1 Percent