WEEKLY RECAP

Choosers Can Be Beggars; Bloodied Hands Applaud Amazon

Yahoo was quite the chooser last spring when Microsoft offered to buy it — the Yahoo board held out for a higher price. Now it’s looking more and more like the beggar. Its relationship with Google is pretty much finished before it even had a chance to begin, and it appears Yahoo is reaching the end of its rope.

Used to be that Google was all hard-headed about going through with an ad revenue sharing partnership with Yahoo, regardless of what the Department of Justice had to say about it. Then everyone came to their senses and realized that butting heads with the DoJ wasn’t very smart, so they held up on finalizing the partnership.

Well, the more the feds looked at the proposed deal from an antitrust perspective, the less they liked it. So Google and Yahoo offered to massively reduce the scale of the proposed partnership — the duration would go from 10 years down to two, and Yahoo would be limited to taking in no more than 25 percent of its search advertising revenue through the Google deal. That was a major concession — the original deal had no cap.


Listen to the podcast (13:54 minutes).


Not So Fast

But even after those limitations were offered, the DOJ indicated it still thought a Google/Yahoo marriage — or even a close friendship where all they did was hold hands for a quarter of the time — would just be too incestuous for the market to bear.

And after the department made it clear it would try to block the deal in court, Google decided that Yahoo just wasn’t worth the trouble and, well, it broke up.

Yahoo made it clear it was the one dumped, and a statement issued by the company said it still believed in the benefits of the agreement. Last I heard, Yahoo was still riding its bike past Google’s house and calling its number and hanging up. And it still hadn’t gotten rid of that shoe box full of movie ticket stubs and handwritten notes.

Crawling Back

So where shall Yahoo go and what shall it do? Same thing anyone with a bad case of heartbreak would do — look up a former flame.

A day after Google ditched his company, CEO Jerry Yang commented at a Web 2.0 conference in San Francisco, “To this day, I have to say that the best thing for Microsoft to do is buy Yahoo.” That’s right, Yahoo longs for the embrace of Steve Ballmer’s big sweaty bear hug after all. Wonder how much he’ll ask for this time?

Quoting further: “At the right price, whatever the price is, we are willing to sell the company.” Now I don’t have a business degree, but what he just said there sounds an awful lot to me like “for sale, best offer.” Maybe he can put Yahoo on eBay.

Luckily, someone who knows about these things spelled it out for us. David C. Logan of USC’s Marshall School of Business told us: “When you make comments like that, essentially it says, ‘We don’t know who we are, we don’t know where we’re going, and so partnering up with somebody big would be easier than answering the questions that we seem to have no answer for.’ We’re just watching the slow decline of what was once a great company. It’s really sad to see.”

Wrap Rage Solution

If you’ve ever been pierced, slashed or impaled while simply trying to open the packaging of something you’ve bought, raise your bloodied hand. You’re not alone. In fact, Amazon.com thinks there are so many of us who are fed up with excessive packaging that it’s starting an initiative to reduce the amount of stuff it sends along with the products it sells.

Amazon is working with just a handful of vendors, but they’re big ones — Microsoft, Fisher-Price and Mattel. The plan, which Amazon is calling “frustration-free packaging,” has three main purposes.

First, it’s environmentally friendly, eliminating the use of tons of materials. Second, it addresses so-called wrap rage, that feeling you get when you once again slice your finger open on that impossibly strong clear molded plastic stuff. And certainly not least for Amazon: It will save Amazon money. For every ounce of packaging material it doesn’t send to your recycling bin, it gets another few pennies on the bottom line. And those pennies can add up, especially if you happen to be the world’s largest Internet retailer.

Between the Lines

If you’ve never heard of white spaces, you just missed a hell of a fight. You know TV broadcasts are all switching to digital in a couple of months, right? Well, both analog and digital broadcasts travel on airwaves, or spectrum, but digital broadcasts are so much more efficient, they take up a lot less space. So, when the changeover is complete, there’s going to be a lot of unused spectrum — known as white spaces. What can you do with white spaces?

A whole lot, apparently. Like blanket the entire U.S. with high-speed wireless Internet access, for example. Google, for one, has been champing at the bit for the opportunity to use those white spaces, but the existing broadcasters have been saying not so fast.

They claimed there wasn’t enough elbow room on their bands of airwave to accommodate a bunch of newbies, and warned they would cause all kinds of interference with our TV entertainment.

Even Dolly Parton got into the act, arguing that the white spaces needed to stay white or the wireless microphones at her concerts might not function properly — and Dolly’s audiences definitely don’t want to miss a single warble.

The Federal Communications Commission heard an earful on both sides of the issue and reviewed more than 400 pages of data on the interference question, and then took their sweet time before coming to a vote. The arguments sizzled, as rumors flew that yes, no and maybe the FCC was about to reach a decision.

Finally, on election day 2008, anyone who wasn’t glued to their TV screens watching Senator Obama become President-Elect Obama got news of the vote, and the winner is — drumroll, please — white spaces for all.

That means a lot of new wireless services for you and me, just as soon as the proponents figure out how to develop devices to tap into the spectrum treasure trove. Say about five years from now.

For the Challenge

A group of modders has found a clever little workaround to gain root access to the T-Mobile G1, the first phone running Google’s Android mobile operating system.

But Android is an open source software stack, so why bother cracking it? Same reason you climb a mountain — because it’s there.

OK, there are other reasons as well. Even with Android being as open as it is, like any mobile device, it’s built with restrictions on how you can use it or where you can store files. Generally, this is a good idea, since the compartmentalization prevents malware from crossing over between applications and making its way onto the cellular network.

The reaction on the part of Google and T-Mobile and the Open Handset Alliance has been decidedly muted — vastly different from the way Apple responded when the iPhone was first cracked. Maybe that’s the open source mentality at work. Still, Google will probably issue a patch that closes the hole, but I betcha it won’t turn everyone’s Gphone into a brick.

Tough Lesson

You’d think Sony would have learned by now. After being stung by an episode in 2006 when it had to recall nearly 10 million laptop batteries, it has done it again.

The company issued a recall for about 100,000 laptop batteries sold from 2004 to 2006.

And the recalled batteries aren’t just in Sony laptops. They’re also in models made by HP, Toshiba and Dell. One analyst told us the problems are related to a change in manufacturing process that Sony made several years ago. Clearly it didn’t go well.

Consumers can check Sony’s Web site to see if their unit is affected. Or they can check to see if flames are shooting out of their fan opening. That’s always a sure sign there’s a problem.

Tug-of-War

It’s pretty ironic that a guy named “Papermaster” would be a world-class whiz at hardware design, but what’s even more ironic is that former IBM PowerPC and blade server guru Mark Papermaster is now in charge of iPods at Apple.

iPods? Really? Papermaster is so valuable to IBM that he’s the subject of a lawsuit alleging violation of his non-compete clause.

Apple is likely to argue that he’s in charge of iPods, so how is that competing with IBM? Speculation is that the iPod job is just a place-holder so that after Papermaster’s non-compete clause expires in a year, we’ll suddenly find he’s been put in charge of something a little more up his alley.

You know, Apple recently bought its own semiconductor company, P.A. Semi. Coincidence? Hmm, probably not.

Help Me, Obi Wan Blitzer

What do you get when you combine CNN reporter Jessica Yellin and 35-plus HD cameras? A lame approximation of Princess Leia and a much lighter wallet.

CNN pulled out all the stops on election night, setting up a tent at Chicago’s Grant Park, where Yellin stood while anchor Wolf Blitzer interviewed her remotely.

The much-hyped concept was to project Yellin’s image into the CNN studio in Atlanta holographically, although the future tech experts we talked to told us that was no hologram. Camera trickery? Sure. Hologram? Not exactly.

Wolf didn’t see what TV viewers saw — there was no ghostly purple-auraed Yellin looking him in the eyes. He was probably looking at a screen — like us. Still, the gimmickry — I mean, technology — did attract a lot of viewers, as did CNN’s other efforts at serving up eye candy to keep us watching on election night, just in case we weren’t that interested in the actual voting.

We wonder how many disappointed viewers switched to another channel right after Jessica signed off, though.

CTO of the USA

Now that the campaign is over, everyone’s got advice for President-Elect Obama on choosing up his team.

In the tech world, interest is running high over who’s going to become America’s first Chief Technology Officer. What about Sun cofounder Bill Joy? Kleiner Perkins venture capitalist John Doerr thinks he’s the right man for the job.

And Tim Bajarin, president of Creative Strategies, says Joy would encompass the best of both the entrepreneurial and applied technology worlds. Another possibility is Google CEO Eric Schmidt — that is, unless the White House is too small for his ambitions. Roger Kay, president and founder of Endpoint Technologies Associates, likes Schmidt for the job.

Kay said, “he’s a good spokesman and he kind of appeals to me. He’s not wild like Steve Jobs. He’s kind of civilized and that would go over well in Washington.”

We can’t be absolutely sure, but we believe Kay had a straight face when he put “civilized” and “Washington” in the same sentence.

Whoever gets the job — like everyone in the Obama administration — is going to have plenty of tough challenges ahead. The CTO of the U.S. is going to have to be bold enough to propel the country ahead of the innovation curve, steadfast enough to maintain strict budgetary discipline, wonky enough to get inside the brains of the people who created the mess we’re now in, and smart enough to untangle it.

Also in this week’s episode: Study finds iPhone appeals to lower income people; Circuit City becomes a ghost town; Salesforce.com heads for the cloud.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by ECT News Staff
More in Deals

CRM Buyer Channels