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Just How Hard Is It To Get And Use A 3D Printer?

Christina Ortiz — Mon, 15 Oct 2012 03:30:00 -0700

3D printing seems to be everywhere these days, used to create everything from handguns to headphones. But what does it really take to get started: How much does it cost, how difficult is it to use, and how do you actually get your hands on a 3D printer?

Last week, a law student from the University of Texas in Austin leased a printer made by Stratasys, the uPrint SE 3D. He wanted it to create a prototype of a 3D-printable handgun. Turns out Stratasys didn't much like that idea, so it took back the printer, saying the student's lack of a firearms manufacturer's license made what he wanted to do illegal. (For more on this topic, see John Paul Titlow's story on How 3D Printing Is Inflaming The Gun Control Debate.)

A Reuters story , meanwhile, found that the European Union is asking member countries to invest in 3D printing technology to speed up and raise manufacturing output.

So just how hard is it for an average person get access to one and actually start making things?

Why would you want a 3D printer, anyway? Because you can make just about anything with one. From utensils to iPhone cases and apparently weaponry, 3D printers can create just about anything your imagination (and a quality computer-aided drafting and design - CADD - software) can create. It's like an Easy Bake Oven for computer geeks.

How Much Do 3D Printers Cost?

Until fairly recently, 3D printers were available only to major industries to create prototypes or cheap and functional products. Now, anyone can get do-it-yourself 3D printing kits from sites like MakerBot for about $1,500.

If you want a more sophisticated machine, though, you'll probably have to deal with a sales rep. That's how Stratasys, the company currently embattled with the law student, sell its machines. The company offers leasing programs for its printers that range from $185/month to $299/month. If you wanted to buy one flat out with no leasing, you'd have to pony up about $10,000. Just this year, CNET reviewed three different types of consumer-available 3D printers that you can log on and buy, no sales rep needed, with prices ranging from $500 to $2,000.

If you don't have a printer of your own, you can still get 3D models printed out through a service, kind of like a 3D version of FedEx Kinkos. Shapeways, a startup in New York, offers this service: just upload your model idea to the site, choose your materials, and Shapeways will give you a pricing estimate. Within a few weeks, the company will print it out and ship it to you. For particularly creative users who are good with software, the company offers product ideas that you can custom design and build.

How Do They Work?

The process these printers create models is fairly simple. Using a design from a CADD program, they turn 3D images into a series of thin, horizontal, virtual layers until a virtual version of what is to eventually be printed is modeled on screen. These CADD designs can be found online, or created by scanning a physical object. Designing complex objects from scratch requires a certain amount of skill and training.

Depending on the machine and the project, different materials can be used to construct the model. For the cheaper machines, plastic or resin is commonly used, while more industrial projects can employ powered metals, alloys or polycarbonate materials. There are even food-grade printers that use chocolate and sugar to create edible models.

Layer by layer, the machine lays the image out on to a heated platform. 3D systems at home printer Cube includes a platform glue that keeps the base of the project steady during printer and washes off with water. Once it's printed and cooled, you'll have a tactile version of something that used to just occupy space in your head.

If you are itching to print something, but are not particularly creative, a site from Makerbot, Thingiverse can offer up a few ideas. The open-source community has instructions on how to print your own products (like these functional headphones that made tech bloggers drool a few days ago) and provides an overall glimpse into the world of 3D printing and creativity.

Want Microsoft Office For Christmas? Sorry, Only Developers Likely To Get It

Mark Hachman — Fri, 12 Oct 2012 08:11:00 -0700

Microsoft said Thursday that its latest Office suite has been released to manufacturing, although consumers won't find it under their Christmas tree.

In fact, the timing of the Office release will be spread out over at least two months, which Microsoft said was necessary to allow various market segments to enjoy the best experience.

Specifically, customers who purchase a Windows RT tablet Oct. 26 will receive a free preview version of Office, with only the core apps -- Word, PowerPoint, Excel and the oft-overlooked OneNote.

In mid-November, volume-licensing customers with Software Assurance will be able to download the Office 2013 applications as well as Office products including SharePoint 2013, Lync 2013 and Exchange 2013.

That’s also when IT professionals and developers will be able to download the final version via TechNet or MSDN subscriptions, and when the new features will be available Office 365 subscribers.

But consumers? Microsoft isn’t saying with any precision. A standalone download of Office will have to wait until the first quarter of 2013.

Microsoft indicated the staggered rollout is deliberate.

“Microsoft's bringing their technologies to market through a wide variety of channels for organizations, IT pros, developers, and consumers and as on-premises products as well as cloud services available in retail, online and from partners,” a company representative said in an emailed statement. “The company is taking time to make sure that the experience customers get through each of these channels is excellent.”

Still, the company has traditionally released its software early to developers via MSDN and TechNet; Microsoft released Windows 8 via MSDN and TechNet Aug. 15 -- 69 days before the scheduled launch Oct. 25. Adding 69 days to Oct. 25 would put the Office launch on or about Jan. 2, just in time for the Consumer Electronics Show -- except that Microsoft has said it won't participate in CSE anymore.

“This is the most ambitious release of Office we've ever done," wrote Kirk Koenigsbauer, corporate vice president of the Office division, in a blog post. "It spans the full family of Office applications, servers and cloud services. The new Office has a fresh, touch friendly design that works beautifully on Windows 8 and unlocks modern scenarios in social, reading, note-taking, meetings and communications. We are proud to achieve this milestone and are eager to deliver this exciting release to our customers.”

The Office Versions

Microsoft will sell three versions of the traditional Office suite: Home & Student ($139.99), Home & Business ($219.99), and Professional ($399.99). The first two versions will be licensed forever for either one Mac or PC, except for the Professional version, which is PC-only.

Office 365 will be sold in two versions: Home Premium ($99.99 per household per year) and Small Business Premium ($149.99 per person per year). Each household that buys Office 365 Home Premium can install it on some combination of five Macs and PCs. Small businesses pay by employee - that's just under $300 per year for two, and up from there. (Check out our earlier post on exactly what each Office version offers for what price, as well as our advice on what version to buy.)

Koenigsbauer said there are more launch details to come. In the meantime, consumers can continue to try out the consumer preview before the launch, whenever it is.

All Eyes Turn To Boomers And How They Use The Internet

Brian Proffitt — Wed, 10 Oct 2012 08:20:00 -0700

If your image of a computer geek is a scruffy, awkward kid in T-shirt and jeans, you may want to think again. The biggest technology adopters may well be the affluent over-50 powerhouse known as the Baby Boomer.

The Economic Juggernaut

Eighty million Boomers live, work and spend in the United States, nearly a third of the population. If you add the previous generation, the number of 50-plus Americans is 98 million, a segment of the population that's expected to grow 34% between now and 2030, when nearly half of the nation will be aged 50 or over, according to a recent study from The Nielsen Company.

That is a huge economic force, one that has been shaping the U.S. private sector for a long time. But unlike previous generations, where the members "age out" of active spending and societal influence, the sheer size of the Boomer generation means that it will continue to be a force for a long time to come. By the middle of the 21st century, Nielsen reckons, there could be around 161 million 50-plus citizens in the country.

Already, this is a generation heavily influencing technology, just from it's buying power. 41% of Apple customers are Boomers, the Nielsen report states.

"From a practical standpoint, new technology helps them stay socially and intellectually connected with their contemporary world. Psychologically, it helps them to validate their self-image of being experiential, progressive and perpetually youthful," the report stated.

Techno-Boomers' Online Landscape

It's not a good idea to plug all Boomers in as ultra-savvy in all things tech. Like their children and grandchildren, they are selective in which elements of technology they like to use. Nielsen paints a picture of "techno-Boomers" -- a subset of the senior crowd who are far more likely to own an electronic reader or an iPhone than the rest of their generation, who tend to gravitate toward desktops and laptops.

These techno-Boomers, like their kids in Generation X, are 40% more likely to own an iPhone. Curiously, they are much less likely to have a movie download subscription, something unpopular throughout the entire Boomer generation. (Generation X and Millenials are apparently more apt to plunk down for movies online.)

But Boomers as a whole are online. A lot. Boomers represent a third of all online and social media users. Another third of the generation, 29 million according to Nielsen, are heavy Internet users with 8 million of them spending over 20 hours a week online.

"Internet users over the age of 50 are driving the growth of social networking as their usage of the social net has nearly doubled to 42% in the past year. 53% of Boomers are on Facebook," Nielsen reported.

Just after the iPad tablet was released in 2010, wave after wave of anecdotes came out about how fast seniors were adopting the new platform so readily. While the iOS interface was designed and built for the smaller iPhone device, it is probably no accident on the part of Apple's design team to come up with an interface that requires such a small learning curve to operate, making it very marketable for the over-50 crowd.

Just as it has always done, the Boomer generation again represents something new in the U.S. economy. Rather than declining in spending and population as has other generations, Boomers will only continue to grow as Generation X starts to join them in 2015 when the oldest GenXer turns 50.

And right now, even before this growth, Boomers alone are expected to account for nearly $230 billion in sales of consumer packaged goods, or 49% of total sales, this year This buying power indicates the out-sized influence that Boomers will have on consumer-facing technology.

Image Courtesy of Shutterstock

SQL Injection Hacker Attacks Are On The Rise. Here's How To Defend Your Servers

Dan Rowinski — Wed, 10 Oct 2012 04:30:00 -0700

Last week, a hacker group claimed that it breached computer systems at 100 major universities. Team GhostShell gained access to servers at Stanford, Harvard, and the University of Michigan, among others. The technique used, SQL injection, is not new or complex, but reportedly it's becoming increasingly common. Here's a quick guide to defending your servers.

Basic Basics

We asked researchers at security firm Sophos to explain what an SQL injection is and how it can be stopped. Before launching into that, though, for laymen, here are a couple things you need to know about an SQL injection before learning how to stop one.

SQL stands for Structured Query Language. It is an international standard for interacting with databases.
Statements in SQL can retrieve, insert, create and otherwise change data in a database.
Code injection is a technique used by hackers to exploit vulnerabilities in a website.

“SQL injection is an old, well established method of attacking systems," said Sophos threat researcher Fraser Howard. "It consists of inserting malicious SQL statements into an application to cause it to perform some undesirable function.”

Mechanics Of An Attack

Undesirable action sounds nasty. What does it mean exactly? Here are a few examples:

Dump table (i.e., return a dump of the entire contents of a database table). This is a great way to steal data. Could be used to gain access to a system (dump admin password, then access the system etc.)
Drop table (delete table contents). Destructive. Attackers do not necessarily gain access to the data, but they can break the system. Data may be irretrievably lost.
Modify table. Insert additional data into the database table.

Basically, once a SQL injection has its hooks in your database, it can do whatever the heck the malicious hacker behind it wants. Steal your data (most commonly), delete your data, change your data.

“Imagine a website where page contents are stored in a database,” Howard wrote. “When you browse the site, the database is queried, and the page shows you whatever information is relevant. For example, a shopping site. You search for carrots, it queries the database and gets the price. The page you view displays this price.” A malicious hacker using SQL injection could download the store's entire stock list, wipe it out, and/or change all the prices (or any other category of information).

One further problem with SQL injection not related to theft: Hackers can change the query instructions for a Web application. So instead of the application querying its own server and obtaining information, the query can be sent to a server of the hacker’s choice. This can lead to malware infecting a user’s computer.

Scary stuff, huh?

How To Defend Your Servers

According to Howard, defense against this type of attack is all about the Web application that is the door to the server. Protect that application and you protect the server. In theory, at least. Most organizations likely will remain vulnerable to a dedicated, sophisticated hacker no matter what they do.

Not all hackers are so single-minded, so it makes sense to be prepared. Here are the steps Howard recommends to defend against SQL injection attacks:

Secure programming. Design applications securely from the start. SQL injection is not new, and there are many books and online resources to help developers build applications that are secure against this attack. The most common vulnerability is an application that doesn't sanity-check user input such as data entered into Web forms. If the input is not checked, an attacker can use such forms to inject malicious instructions.
Firewalling. This does not replace secure programming. However, it can add a layer of defense in front of your Web server. Web application firewalls can help to block most attacks.

Many organizations are vulnerable to SQL injections because they outsource their Web application development, rush production, test poorly and take little regard for security. “Recipe for disaster,” Howard said. “Lots of easy targets out there.”

In security, the guidelines are usually pretty simple: Take your time, factor security into everything you do, and use common sense. Security might seem like the boring part of what you do, but if you do not pay attention to it, there is a hacker just waiting to break into your databases and steal, destroy, or alter your data.

Fake Reviews Shadow Brands Selling Online

Antone Gonsalves — Tue, 02 Oct 2012 06:55:00 -0700

Buying positive product reviews is unethical and sometimes illegal, but always sleazy. Yet the practice flourishes on popular sites like Yelp, TripAdvisor, Google Places and Amazon, according to research firm Gartner.

Online reviews, especially those posted at marketplaces like Amazon, are more popular purchasing tools than is word of mouth, according to a survey by Econsultancy. And bloggers remain a popular target for trading positive critiques for cash, coupons and promotions.

But just as attractive are social networks, which are where more than half of the Internet gathers. With so many potential customers in one place, companies are desperate to build follower groups and gather more praise than competitors.

The Rise In Bogus Reviews

Having watched the online reputations of some brands rise quickly, many execs are ready to pay for even dishonest praise to catch up. A study by Cornell University found that from 2% to 6% of reviews on Expedia, Hotels.com, Orbitz, Priceline, TripAdvisor and Yelp were bogus, and that total is rising.

Companies are paying for Facebook "likes" and Google+ "+1s," along with hits on YouTube videos. The practice is found among media, entertainment, consumer goods, retail and consumer electronics vendors, Gartner says.

By 2014, Gartner believes 10% to 15% of all social-media reviews and ratings will be “bought” and at least two Fortune 500 companies will face litigation from federal regulators for trying to deceive consumers.

Who Sells Buzz?

Roughly 50 companies sell buzz on social networks. One example is Social Jump, which charges $75 for 1,000 Facebook likes. For an extra $10, clients get geo-targeted likes, Gartner said in a recent report, "The Consequences of Fake Fans, 'Likes' and Reviews on Social Networks." The Facebook thumbs-ups comes from real people, not spam bots. Social Jump also sells "+1s" on Google+, followers on Twitter and thousands of views on YouTube videos.

Other companies operating in the same market include MyFBfans, SocialKik.com and Fan Bullet. Along with these companies are a number of reputation-management organizations paying people to write good reviews for clients.

When Fake Reviews Are Illegal

Paying a blogger or anyone else to write a glowing review is not illegal, as long as it is disclosed to the reader. Of course, doing so would gut the article's effectiveness, so a lot of times that detail is missing. In 2009, The Federal Trade Commission published guidelines for such disclosures on blogs and other new media and has been ramping up enforcement ever since.

For the first 18 months, the FTC handed what amounted to a slap to companies who had too cozy a relationship to bloggers. By mid-2011, the FTC meant business, fining Legacy Learning Systems $250,000 for hiring marketers to get good reviews on sites for one of the company's educational DVD series.

Building Consumer Confidence

More hefty fines and media exposure of companies paying for positive ratings and reviews is key to building consumer confidence, said Jenny Sussin, a Gartner analyst and co-author of the report. "We actually think that's going to increase consumer trust."

In August, Facebook announced that it would start cracking down on likes that didn't come from real fans.

In an indication that the purge has begun, PageData reported last month a big drop in likes for popular pages, including Zynga's Texas HoldEm Poker and FarmVille, as well as those of pop singers Rihanna, Lady GaGa and Justin Bieber.

Separating The Good From The Bad

Despite efforts to stem illicit reviews, consumers will have to be on guard to spot fakes.

Sussin recommended reading multiple reviews and watching for details, such as comments about a hotel’s good service but small rooms. Credible reviews typically point out good and bad features.

Reviews that are over the top in criticism or praise should be suspect. "If something is too inflammatory, you can't trust it," Sussin said. While companies plant good reviews of their own products, they also hire people to badmouth competitors.

Paid reviews ultimately bring only short-term benefits. The company may get some new customers initially, but a poor product can't withstand the test of time. Such short-sightedness is not new in business, and has driven misleading marketing in the offline world for a long time, keeping regulators busy. The Web won't make their jobs any easier.

The Flipside Of BitTorrent - Why Many Musicians Still Hate It

Brian Proffitt — Fri, 28 Sep 2012 05:00:00 -0700

Last week, I wrote a popular post on the continuing popularity of BitTorrent, and how some artists are now choosing to embrace it as a marketing tool to expose their music to a wider audience. But many activist musicians disagree with the notions that BitTorrent is anything more than outright theft. Singer-songwriter David Lowery of the band Camper Van Beethoven is a good example.

For this group of musicians, BitTorrent and other channels for often-illegal file downloads continues to represent a real and present threat to their livelihoods. The only debate in their minds is how to best squash the problem of BitTorrent.

Why BitTorrent Doesn't Work

You can tell the week probably won't go well when the first email you get on Monday morning comes from a pissed-off rock star, and he's none too happy with you. But that was my start to the week, as Lowery dropped me a line to bust my balls in a humorous way, as he put it, about BitTorrent Downloads Booming - And Benefitting Musicians.

Lowery, whose skills go far beyond music and into mathematics and business - he's a lecturer in the University of Georgia's music business program - disputed the very idea that anyone could successfully make a go of using BitTorrent as a way of increasing exposure for musicians.

"In particular for the last 18 months I have studied in detail BitTorrent activity for my critically acclaimed cult band Camper Van Beethoven. I also have reams of data on file sharing and searches at Cyberlocker sites. You really think there are no lost sales in BitTorrent activity?" Lowery wrote. "Can I have some of what you are smoking? Why would you search for a song called 'Take the Skinheads Bowling' unless you heard the song? There are no current magazine articles on Camper Van Beethoven, TV shows, or mentions on squidbillies. They heard it and they wanted it. Occam's Razor, dude."

It's All About The Middle Class

In particular, Lowery is very concerned about the "middle class" of artists who are getting the worst hit by illegal file sharing. Big name artists, he argued, can weather lost sales, and smaller artists are busy trying to do anything to catch a break. But the non-superstar successes are getting squeezed hard by file sharing.

"You should hang out in a town like Athens, Georgia… where I teach. There are at least 60 small national/regional touring acts, The middle class of the music business. I've not met one that is honestly cool with people sharing files instead of buying them," Lowery stated.

So what about artists like Ed Sheeran in the UK, who recently said in a BBC interview, "You can live off your sales and you can allow people to illegally download it and come to your gigs. My gig tickets are £18 and my album is £8, so it's all relative." How does this position fit with Lowery's point of view?

"Ed Sheeran clearly has never looked at his own show settlement sheet, if he thinks he's making 18 pounds a show. He and his touring party is lucky to gross 9 pounds minus management and agent fees (15% and 20% in UK - much higher than US) Then he pays touring expenses. I bet he nets the same or less per fan live than he would from a decent record deal per fan. And of course most artists are lucky if they manage to play for twenty percent of those who bought/"shared" their CD that year," Lowery replied. "Still he's in the top tier, so I bet he makes a decent amount of money. For now.

"There are no major stars with significant sales that have used BitTorrent. Counting Crows did this year for an EP and then mysteriously pulled out after a couple weeks. No announcement. Totally scrubbed from BitTorrent site. Smells bad," he added.

Creative Conundrum

Lowery's experience in the music industry has led him to a pretty pragmatic insight demonstrating that BitTorrent doesn't really work.

"Most artists and labels are not creative thinkers. They follow the latest trend or style cause that's where the money is. When college radio or Grey's Anatomy is successful for one artist/label. Everybody tries the exact same thing," he explained. "If BitTorrent is really is a way for artists/labels to increase revenue they will be on it like a flash mob. That flash mob should have happened by now."

Lowery is certainly not alone in his disapproval of BitTorrent, but he's no ally of the Recording Industry Association of America (RIAA). Lowery's concern is mostly with that of the musicians like himself. He does, however, get frustrated with what he sees as straw man arguments that paint RIAA as an evil business monstrosity that somehow justifies the practice of illegal downloads.

It's Not Just An RIAA Issue

Lowery's concerns are mostly shared by Casey Rae, co-director of the Future of Music Coalition. But their preferred solutions are pretty different.

For Lowery, the solution is advocating and creating the environment for an ethical Internet. For Rae and the rest of the FMC, it's more about creating much easier access to music - so easy, in fact, that the desire to use illegal file sharing will be greatly reduced.

"We believe artists should be paid for their work," Rae explained, and that's the environment his organization is trying to set up.

It's not particularly easy. The major record labels in the US are still living in the past and their licensing process reflects that. Negotiating digital sales or streaming rights for a music catalog can take up to two years, and labels often want their cash up front.

The problem is so acute, Rae added, that when Spotify finally came to the U.S., the Swedish company had to give up some of its own equity to the three major record labels to get them onboard. "The music and motion picture industry are still working under a scarcity model," Rae lamented. "Unfortunately the Internet doesn't recognize scarcity."

And Rae does not care for the RIAA's tactics of litigation and legislation. "We need to wallpaper the Internet with available content."

That available content will probably be streaming content, if Rae's predictions hold. Even the "traditional" paid download services lie Amazon, Apple and Google are shifting to the cloud model, where local downloads become the backup for the user's music collection in the cloud.

If licensing music can become a more streamlined process, Rae envisions a world where illegal downloads will be pointless, since songs can be easily found and played on demand. Artists and their labels will receive equitable payment, and the wave of illegal piracy should start to subside.

The technology is already there. Now it's a matter for the business processes to catch up.

Lead image Courtesy of Shutterstock.

Camper Van Beethoven image originally posted to Flickr by Clinton Steeds. It is licensed under the Creative Commons Attribution 2.0 Generic license.

Small Business Owners Renew Pay-For-Play Allegations Against Yelp

Dave Copeland — Thu, 27 Sep 2012 05:30:00 -0700

Yelp, the leading website for online reviews of restaurants, hotels and other service-based businesses, has long denied ongoing allegations of pay-for-play. But small business owners continue to insist their good reviews are being held hostage until they agree to buy advertising.

Go to the Yelp page for TraxNYC, a Manhattan jeweler, and you see the dreaded one star, based on just one review. An employee of the jeweler responded to the review and even said the company would consider issuing a refund.

Still, that one-star review stings, and it means TraxNYC sinks to the bottom of search results when people search Yelp (or even Google, which gives added heft to Yelp pages) for jeweler recommendations

The problem, according to Jen Lim of TraxNYC, is that single review is not the jeweler’s only review on Yelp. If you click on the barely noticeable “filtered reviews” button and then go through a reCAPTCHA protocol to prove “you’re not a robot,” you’ll see 10 additional reviews, nine of which rate the company five stars.

Lim, and a dozen other small business owners interviewed by ReadWriteWeb, are all crying foul over the situaton, saying the good reviews were filtered only after they refused to buy or canceled advertising on Yelp.

“We chose not to advertise with Yelp and since then, all our good reviews get filtered,” Lim said. “It's predatory at its best and I am sure our business suffers for it.”

Pay-For-Play Or Overzealous Algorithm?

It’s not the first time Yelp has faced pay-for-play charges, and, as it has for other media inquiries on the issue, the company denied the allegations, saying the automated review filter keeps “content as useful and trustworthy as possible.”

Darnell Holloway, Yelp’s manager of local business outreach, denied that Yelp’s filtering algorithm gives preferential treatment to advertisers or punishes non-advertisers.

“Let me be perfectly clear: the review filter applies the same set of rules to everybody, and we do not have a pay-for-play system,” Holloway said. “We take a very serious stance when it comes to review quality on site.”

Holloway said a small business owner will begin paying attention to their Yelp page after they are contacted by one of the company’s sales reps. Some may start soliciting reveiws from family and friends, which the filter weeds out, and that may be fueling the appearance that Yelp is punishing advertisers.

“If those solicited reviews get picked up by the filter, the business owner may develop a correlation between the sales person’s call and the filtered reviews,” he said.

Yelp claims it is trying to curtail the paid review sites that promises small businesses good reviews for a fee. It also says its filter protects small businesses from reviews left by competitors or disgruntled employees.

Todd William, founder of Reputation Rhino, an online reputation management company, said he has one client with 19 published reviews and 365 additional reviews caught in the filter. Still, William takes Yelp’s claims at face value and thinks the problem is with the algorithm that filters messages.

“While I am sure a ‘hard sell’ by certain Yelp representatives may suggest otherwise, the problem for Yelp is an inadequate and ineffective filter system,” William said. “The Yelp filter system favors active Yelp members comments and reviews. New Yelp members are almost always relegated to the filter to prevent fraud, but this unfortunately penalizes well-meaning customers who merely want to show their appreciation for a positive experience with a company and do not have the time or inclination to complete a profile, comment actively on others' businesses, socialize with other Yelp members or otherwise engage the Yelp community.”

Advertisers Get Some Preferential Treatment

But the same small businesses Yelp says it is trying to protect from phony reviews aren’t so sure the company is being forthright in its explanations.

Jon Katz, CEO of Katz Moving, said he has been hit by negative Yelp reviews since first refusing an offer to advertise on Yelp in 2008.

“I was getting about three to four phone calls a day about advertising with them,” Katz said. “After about 45 days they started to ‘filter’ our reviews... And then all of a sudden we went from having eight 5-star and one 4-star reviews to having three, then two reviews stay on our page.”

Katz said he has spent the past several years trying to work around negative reviews. During that time he has paid close attention to competitors that do pay to advertise on Yelp and has noticed that once a company advertises:

Yelp filters more negative reviews
Yelp mixes in older good reviews while pushing newer, low-rating reviews lower on the page.
Yelp allows advertisers to choose whether they want their ad displayed on a non-advertising competitor’s Yelp page.

Holloway denied Kat's first two allegations, but did concede advertisers can purchase packages that remove competitors ads from their Yelp results as well as search placement ads that would allow their ad to be displayed on a competitor's Website.

The whole truth about exactly what's happening here may never be entirely clear. But it's a safe bet that concerns about these issues won't go away as long as Yelp reviews have an effect on retailers' bottom line.

Sorry, Google: Why Yahoo Remains Stuck With Microsoft's Bing

Mark Hachman — Thu, 27 Sep 2012 04:00:00 -0700

It all makes sense: prominent ex-Googler Marissa Mayer takes over Yahoo, which uses Microsoft's Bing as its search provider. But Microsoft has failed to live up to its contract with Yahoo, leaving Yahoo free to sign a search deal with Google, right? Wrong.

In fact, the Department of Justice blocked a similar arrangement in 2008. And according to one lawyer who served in the DOJ’s Antitrust Division for more than a decade, the DOJ would be fully prepared to do it again. Unfortunately for Yahoo, that means that Microsoft's failure to provide high-value search results won't let it off the hook.

In other words, Yahoo could be legally prevented from turning away from a search technology provider - Microsoft, and its search service, Bing - that has consistently failed to meet its contractual expectations. It would likely not be free to choose a new partner - Google - instead. Talk about a bad date that won't end.

An Opportunity Knocks?

Google chairman Eric Schmidt met with reporters early Tuesday morning in Tokyo, where he was on hand to launch the company's Nexus 7 tablet in Japan. Schmidt took Apple to task for choosing to develop its own spotty Maps application, and also reportedly expressed interest in replacing Bing as Yahoo’s search provider.

Forbes’ Eric Jackson confirmed with Dow Jones reporter Kenneth Maxwell that Schmidt at least expressed an interest in working with Yahoo. “Yes, I can confirm, Eric Schmidt definitely said they’d be interested in working with Yahoo U.S.,” Maxwell told Jackson. “He also said nothing doing for the time being, but they would be interested.”

Representatives for Google could not be reached for comment.

Bing Is Not Doing The Job

Why would Yahoo like to sever ties with Microsoft? Because, to be frank, Bing hasn't delivered.

Under the agreement approved in 2010, Microsoft's Bing powers Yahoo's own search engine on Yahoo's sites, while Microsoft gets an exclusive 10-year license to Yahoo's search technology. Yahoo receives 88% of all the revenues from search ads on its site for the first five years of the agreement - and it handles the sales for Microsoft's and Yahoo's premium search advertising inventory. Yahoo’s role was to surround the search results with its own rich content, selling ads to high-volume advertisers; Microsoft represented smaller, self-service clients.

The key, though, was a metric that wasn’t in the original press release: a Revenue Per Search (RPS) guarantee that protected Yahoo. If Microsoft could truly provide a better experience than Yahoo’s own search technology, fine. But if Microsoft failed to hit that undisclosed number, Microsoft would be forced to pay Yahoo an also undisclosed penalty.

But Microsoft hasn’t hit its numbers. Not once. As Search Engine Land extensively documented in July, Yahoo first began complaining about the problem in April 2011, citing an undisclosed gap between the actual RPS figure and what Microsoft was obligated to provide. In July and October, Microsoft reduced the gap by 20% and 10%, respectively. But since then, Microsoft’s progress has tailed off: improving between 5% and 9% in January, and nothing in April and July.

The wrinkle, however, is that the RPS agreement has a fixed lifespan; it was originally supposed to expire sometime this year. But last October, Yahoo interim chief executive Tim Morse extended the RPS agreement until March 2013.

So what can Microsoft do to improve? For now, company representatives aren’t saying. But Microsoft is also keeping its chin up. “We continue to work closely with Yahoo and have seen improved RPS performance,” Tom Phillips, senior director of Microsoft Advertising, said in an email statement to ReadWriteWeb. “It is a long road, but we’re making progress and are confident we’ll get there together.”

The Google Option

As far as search technology is concerned, U.S. companies really have only two options: Google and Microsoft’s Bing. Within the U.S., Google’s network of sites commanded 66.8% of all queries in July, ComScore said, followed by Bing at 15.7%. Yahoo’s own Bing-powered sites ranked third, at 13.0%. The market then drops into the dregs: Ask.com at 3.1%, and AOL at 1.5%.

China’s Baidu could be considered a third choice, although its market strength in China is as much a testament to Google’s decision to back out of search in China in 2010 as to its own expertise. Apple attached Baidu’s search to an upgrade of its iPhones and iPads in China in June.

Yahoo’s new chief executive, Marissa Mayer, clearly understands the value that Google brings to the search table. She undoubtedly knows exactly how much a typical display ad sells for on Google, and knows that developing a composite user profile from a Google user’s email, calendar, location and other sources of information makes him or her more valuable than someone who is not logged in.

According to Business Insider, Mayer’s priorities include “user growth, ad sales, improving ad tools, and attracting better talent,” based upon an all-hands meeting she held this week.

So, if Bing isn't cutting it, ex-Googler Mayer can strike a search deal with her old employer, right?

Wrong.

Why Google Is Not An Option

In 2008, Google and Yahoo struck a proposed advertising deal that would have done just that. But the Department of Justice’s Antitrust Division was preparing a formal investigation of the arrangement, according to the Washington Post. The deal also attracted the attention of Sen. Herb Kohl, D-Wisc., chairman of the Senate Antitrust Subcommittee, who promised to hold hearings about this issue on Capitol Hill.

Allen P. Grunes, a shareholder at Washington D.C. law firm of Brownstein Hyatt Farber Schreck, who worked in the DOJ’s Antitrust Division from 1995 until 2007, said that the same antitrust triggers that attracted the DOJ’s attention four years ago would fire again. He also confirmed the Post’s report.

“I meant that if it [Yahoo] tried to resurrect the agreement, it would be investigated again,” Grunes said in an email. “And since the market conditions haven't changed much if at all, the outcome would likely be the same. In other words, if Yahoo went over to Google, it would be an invitation for a lawsuit.”

Grunes also noted that Google is battling its own antitrust investigation by the Federal Trade Commission, which Jon Leibowitz, the chairman of the commission, said it would like to settle by year’s end. Google already agreed to pay a record $22.5 million civil penalty to settle charges that it misrepresented to users of Apple’s Safari Internet browser that it would not place tracking “cookies” or serve targeted ads to those users, violating an earlier privacy settlement. And Google and Yahoo might attempt to wait out the FTC’s investigation until next year, when the RPS agreement expires.

According to Grunes, Google should instead choose to keep a low profile. “Google would be nuts to sign a deal with Yahoo in the middle of the FTC investigation,” he said. “But stranger things have happened. They usually do not end well, however.”

How "Big-Data-as-a-Service" Can Help Smaller Companies Compete

Brian Proffitt — Wed, 26 Sep 2012 05:30:00 -0700

The common perception of how big data is used centers around giant multi-national enterprises spending millions trying to fine tune their business strategies to eke out every last penny from their customers. But in reality, big data is worming its way into businesses large and small, often as a service instead of on-premises software.

The Evolution Of The Comment Card

Visit a bustling diner in a small town and you may see them tucked in among the bottles of ketchup and sugar packets on the linoleum counter: 3 X 5 comment cards. How was your meal? How was your service? Fill it out and tuck it in the little wooden box by the cash register, please.

Regulars might make their concerns known directly to the staff, but diners such as this - like nearly every other business in the world - need to attract and keep new customers in order to grow. That's the point behind comment cards: get as much feedback as you can so you to improve what needs fixing and keep doing what's working well.

Moving the comment card into the 21st Century is essentially what big data is all about.

The most common form of big data in busines today was created as a technological response to tracking all of the data that was generated by commercial websites. Once marketers and other business execs saw that they could monitor an online customer's responses all the way down to the mouse click, software engineers started figuring out a way to keep that data and mine it for ever more useful information.

The combination of speed and volume needed to catch all of this information is what makes big data tools and technology really necessary. But for the vast majority of businesses that do not have big ecommerce sites, is big data even worth the attempt?

It turns out, yes.

Big Data Tools Work For Small Data, Too

One of the easier ways smaller businesses are taking on big data is seeing the general value of data analytics no matter how big or small the data set is. That message is practically a non-brainer: business owners are scanning the headlines every day and getting excited about applying data to their decision-making process.

Social media is one quick way to implement big data within a smaller business. Used and analyzed properly, the information from social media can give any business instant feedback that's far more robust and immediate than those old-fashioned comment cards.

"Every time we perform a search, tweet, send an email, post a blog, comment on one, use a cell phone, shop online, update our profile on a social networking site, use a credit card, or even go to the gym, we leave behind a mountain of data, a digital footprint, that provides a treasure trove of information about our lifestyles, financial activities, health habits, social interactions, and much more," wrote former Tivoli CEO Frank Moss in his 2011 book The Sorcerers and Their Apprentices.

Big-Data-as-a-Service (BDaaS)

Using big data can go beyond mining social media as a juiced-up form of the comment card. Big data can also be integrated with existing business practices to improve and expand day-to-day operations.

It's becoming pretty well-known that big data and fast data analysis are being used by large hotels and chains to improve their yield management processes. This kind of infrastructure is typically beyond the reach of smaller hotels, inns and bed and breakfasts. It's probably overkill anyway: while a big hotel near Orlando, Fla., area might see 75 room pricing changes per day, a small independent lodging in a less-volatile market might only see a couple of price moves daily.

But that doesn't make the need for a smaller inn to adjust to local market changes any less important, says Erik Hovanec, CEO of LeisureLink, which specializes in providing yield-management as a service to smaller hospitality locations.

One of LeisureLink's clients is a 120-room property outside Myrtle Beach, SC, that "is great at hospitality, not necessarily at IT." Hovanec described. Using his company's service, the property is able to tap into information about local Myrtle Beach hotels and see real-time pricing information on other properties and make adjustments accordingly.

This is exactly what the larger hotels and chains have been doing for a while. But now this service is available to smaller, mid-market establishments. Typically, a large hotel or chain might invest $30-$40 million just to increase their yield management from 90% to 95%. Hovanec boasts that since LeisureLink's service is often the first real step into automated yield management for smaller hotels, their efficiency in yield management can rocket from 20% to 80%.

Can Big Data Work For Every Business?

At some point, any company considering a big-data approach needs to consider the one basic question: is there information out there that will help improve the business? If there's a yes in there, then a search for a big data solution might be worth the effort.

It's not that we really need another another "as-a-Service" acronym, but thanks to the use of Internet-based Big-Data-as-a-Service (BDaaS), you don't have to be a giant enteprise to play any more. These days, there's a good chance that someone out there will have the information you need or can help you find it.

Image Courtesy of Shutterstock

Do You Really Want to Subscribe to Microsoft Office? Yes, You Might

Mark Hachman — Mon, 24 Sep 2012 04:30:00 -0700

For the first time this fall, consumers will have the choice between subscribing to Microsoft Office as a service - Office 365 - or buying a traditional license for the productivity software. The decision isn't simple: you'll pay less upfront for a subscription, but you may be allowing Microsoft's hand in your pocket for the rest of your days.

Consumers who want to upgrade their Microsoft Office software this fall have to ask themselves a hard question: "Do I want to subscribe to Office like I would a magazine - or continue to buy it like a book?"

If you want to subscribe, Microsoft is more than willing to help you out. For the first time, consumers will be able to buy an Office 365 subscription, paying for either a home or small business edition of Office for a one-time annual fee that covers five PCs or Macs. And you could end up paying just $1.66 per device per month for a continually updated piece of software.

If at any point down the road you decide not to pay anymore, however, Office goes away. And for the customer who’s not all that convinced that Microsoft offers compelling reasons to upgrade from generation to generation of Office, that might be the best bet. Instead, you can buy the traditional “packaged” copy of Office, trading a higher up-front price for a perpetual license.

And, this time around, there’s a third aoption: if you buy a Windows RT tablet, Microsoft will throw in the core Office apps - Word, PowerPoint, Excel and the oft-overlooked OneNote - for free.

It’s a decision that consumers should start thinking about, with the launch of Windows 8 due in a month’s time. Microsoft hasn’t said when the final version Office will be available, but users can download the preview version from Microsoft’s website.

The Pricing Puzzle

Microsoft is offering three versions of the traditional Office suite: Home & Student ($139.99), Home & Business ($219.99), and Professional ($399.99). Each version can be licensed by either one Mac or PC, forever, except for the Professional version. That’s PC-only.

On Office 365, Microsoft is offering two versions: Home Premium ($99.99 per household per year) and Small Business Premium ($149.99 per user per year). Note the italicized terms, as they’re significant. Each household that buys Office 365 Home Premium can install it on some combination of 5 Macs and PCs - that’s where the $1.66 per month per device figure is taken from. Small businesses pay by user - that's just under $300 per year for two, and on up from there.

The average consumer, then, will probably choose between either Office Home & Student, Office Home & Business and the Office 365 Home Premium subscription.

To Wes Miller, who covers Office for Directions on Microsoft, consumers will have to ask themselves three questions:

How often do you upgrade your version of Office?
How many machines will you buy it on?
And will you buy a Windows RT machine?

For enterprises, these aren’t trivial questions; Directions holds a two-day “boot camp” on Microsoft’s Software Assurance, which provides many of the same benefits as Office 365, including automatic, free version upgrades and multiple languages.

For a single user with a single PC, the answer is pretty simple: unless you want that quick-and-easy upgrade path that Office 365 offers, choosing between Office Home & Student and Home & Business is the only decision necessary. Basically, the difference is Outlook: Home & Business has it, Home & Student doesn’t. If Outlook is worth an additional $80, you’re done.

Adding more devices to the mix, plus Office 365, complicates things. On the other end of the spectrum, a household with five Macs and PCs (and that needs Office on all of them) will pay about a total of $700 for Office Home & Student installed on all five devices. That’s $200 more than a five-year Office 365 Home Premium license, which covers those five PCs. Here, Office 365 is probably the way to go, from a financial sense.

If you’re somewhat in the middle - with three devices, say - features may help sway your decision. Three office Home & Student licenses will cost about $420, a little more than a four-year Office Premium license. Three Office Home & Business installations will cost you $660.

And why is that $660 figure important? Because Office 365 gives you Outlook and Publisher and Access for free. Microsoft is so eager to push you toward subscriptions that it is pricing them more cheaply than the Home and Business version, and tossing in the two extra applications on top of that. Again, that’s Microsoft pushing you toward the subscription model.

Office 365 also offers a number of conveniences, including “Office on Demand,” or the ability to stream a virtual version of Office to a PC you’re borrowing or don’t actually own. And documents are automatically saved to Microsoft’s cloud storage, SkyDrive, which you can also access on virtually any Internet-connected device, including mobile phones. For that matter, Office 365 will eventually land on mobile devices as well, although Microsoft hasn’t said when.

What Do Subscriptions Mean for Microsoft?

Why is Microsoft pushing subscriptions? Wall Street.

“We’re seeing all signs pointing toward Microsoft’s subscriptions not only trying to look but be more appealing outright to consumers than buying an outright software package,” Directions on Microsoft’s Miller said.

Instead of the spike-then-decline, spike-then-decline buying patterns that accompany new product launches, a recurring revenue model offers Microsoft a more consistent revenue stream. More importantly, it also gently reinforces the notion of paying for Office as a service, Miller said, rather than as a product, ingraining the habit among consumers.

“It makes for nice, flat-to-gaining revenue year over year, recurring, and it makes the business run more efficiently,” Miller said. “It’s definitely in Microsoft’s best interest.”

That's different of course, from the question of whether it's in your best interest.

For Microsoft though, its critical to find out how many people will sign on to the new Office 365 model, and how many will still want the comfort of a perpetual license to avoid having to keep shelling out for Office - albeit with the latest upgrades - for the rest of their lives. A user who may have been turned off by the new “ribbon” design, for example, may prefer to hold on to his older copy of Office and just use that. According to Miller, Office 2013 is one of the more compelling upgrades, with integrated SkyDrive backups as one of the killer features of the software.

In fact, look to the number of Office 365 subscriptions being one of the questions that will interest Wall Street most in the quarters following the product's launch. For along with magazine subscriptions, cell phone contracts, antimalware licenses and hosted storage, more and more companies are trying to convince you to pay them regularly, and forever for all kinds of software. Microsoft just wants in on the gravy train.

Pharma Goes Farmville: PR Through Social Gaming

Christina Ortiz — Wed, 19 Sep 2012 09:50:00 -0700

If you've ever dreamed of running your own pharmaceutical company without the gargantuan research costs and pesky lawsuits, have we got a game for you. German drug maker Boehringer Ingelheim is betting that social gaming will raise its profile and brighten its prospects.

Boehringer Ingelheim launched a beta version of the social networking game called Syrum last week. It's the industry's first social game, the company says.

John Pugh, Director of Digital for Boehringer Ingelheim told PSFK that the social media game, developed over two years by a team of researchers, futurists and branding experts, aims to "promoting science and innovation to the digital community in a fun and engaging way." Or maybe it's a way to make people feel friendlier toward an industry in crisis as patents expire for blockbuster drugs, FDA approval costs stifle innovation, and popular drugs get pulled from the market due to harmful side effects.

Similar to Zynga's Farmville, Syrum lets users build and run their own pharmaceutical company. They can explore their virtual lab to create and discover new medicines and distribute them to ailing patients. Instead of trading crops or cattle, players can trade molecular compounds with others to find cures for certain diseases.

In each chapter, players are given a disease or pandemic to cure. The medicine will hit shelves when the finished product is ready, taking players through the phases of discovery to testing and clinical trial. Players can share their progress with Facebook friends and invite others to play. The can even poach their friends' researchers and then send a gift to make up for it.

It looks as though the game will include incessant news feed updates and requests, among Farmville's most irritating features. Still, an engaging game about how the pharmaceutical industry works is bound to play out in positive PR.

BitTorrent Downloads Booming - And Benefitting Musicians

Brian Proffitt — Tue, 18 Sep 2012 11:00:00 -0700

A new report from UK analytics firm Musicmetric has pegged the U.S. as the world's leading downloader of music via BitTorrent. It's the stuff of Recording Industry Association of America nightmares: Despite industry efforts to shut down BitTorrent tracker sites, the frenzy of file sharing continues. And - surprise! - recording artists are embracing illegal downloads as just another way to do business.

Musicmetric's Digital Music Index also reveals that, while BitTorrent is used to download a huge amount of music in the U.S. - about 96.7 million files in the first half of 2012 - it's not all illegal.

The World's Mix Tape

First, let's run down the list of the BitTorrent downloading nations. Coming in at number two on the list is the UK with 43.3 million downloads. That's followed by Italy's 33.2 million downloads, Canada's 24.0 million, and Brazil's 19.7 million files pulled in from BitTorrent. The top five countries pulled down around 217 million files in the first half of 2012, over half of the nearly 405 million files tracked by Musicmetric for the top 20 downloading nations.

The song choices for each of these five nations varied significantly, too.

US: Drake, "The Motto," Single
UK: Ed Sheeran, "Plus," Album
Italy: Laura Pausini, "Inedito," Single
Canada: Kanye West, "Watch the Throne," Album
Brazil: Billy Van, "The Cardigan," EP

Billy Van's download success in Brazil is particularly notable… especially when you consider that "success" is meant without irony. Van's position on the BitTorrent chart is a big win. He released "The Cardigan" solely as a BitTorrent download in March. Globally, Van's dubstep album has been downloaded just over 1 million times in the first part of the year, which gives him major international exposure.

This is the Part Where the RIAA Freaks Out

If the RIAA wants to factor in Van's recordings as lost revenue, it will need to rethink its calculations. And what might those calculations show? Figuring an average price of US$1.29 for the singles and $7.99 for the albums for each of the 20 nations' most-downloaded files (not counting Van's album), that's roughly US $32.5 million of music that might otherwise have been purchased.

Of course, there's a lot of supposition in that kind of thinking, number one being that consumers would have bought those songs had the public been completely prevented from downloading them via BitTorrent or other means.

And there's increasing evidence that freely shared music isn't such a bad thing for artists.

How Piracy Drives Revenue

Ed Sheeran, the UK artist who currently holds the distinction of having the most BitTorrented song in that country, is sanguine about pirated songs.

"I sell a lot of tickets. I've sold 1.2 million albums and there's eight million downloads as well, illegally," Sheeran told BBC's Newsbeat earlier this week. "So nine million people have my record in England, which is quite a nice feeling. You get people who actually want to listen to your songs and come to an event like this in London, who wouldn't necessarily buy the album.

"You can live off your sales and you can allow people to illegally download it and come to your gigs. My gig tickets are £18 and my album is £8, so it's all relative," Sheeran added.

Sheeran is not alone. As recording revenue falls, artists have been making up for the loss by increasing concert performances. A 2010 report from the National Bureau of Economic Research demonstrated that "file-sharing reduces album sales but increases live performance revenues for small artists, perhaps through increased awareness. The impact on live performance revenues for large, well known artists is negligible."

This all fits within the theory that "piracy is the new radio," a statement made by musician Neil Young back in January.

"Piracy is the new radio. That's how music gets around… That's the radio. If you really want to hear it, let's make it available, let them hear it, let them hear the 95 percent of it," Young said.

Here are the top 20 downloading nations according to Musicmetric's Digital Music Index:

United States 96,868,398
United Kingdom 43,314,568
Italy 33,226,258
Canada 23,953,053
Brazil 19,677,596
Australia 19,104,047
Spain 10,306,829
India 8,965,271
France 8,400,869
Philippines 8,351,260
Mexico 7,522,865
Netherlands 6,671,428
Portugal 5,597,198
Poland 5,059,204
Greece 4,919,567
Hungary 4,470,948
Chile 4,210,641
Romania 4,152,252
Sweden 4,074,594
Belgium 3,880,900

Image Courtesy of Shutterstock

HP's Turnaround Effort Fails To Plug Leaks

Kevin Kelleher — Fri, 14 Sep 2012 10:04:00 -0700

Has it been only one year since Meg Whitman took the reins at HP? The latest in a daisy chain of top executives, Whitman was charged with turning the company around after years of stagnation. More and more, her efforts look like someone tirelessly bailing water out of a leaky boat. Only the ship keeps taking more water.

HP's stock price is down 29% this year while the Nasdaq has rallied 21% and its rivals IBM and Oracle are up 12% and 27%, respectively. The company's decline has persisted as earnings report after earnings report showed that turning things around would be much harder than most investors – and perhaps Ms. Whitman - expected.

The challenges facing HP are in several areas. The IT services that the company has been looking to for high growth is suffering through a hard year thanks to the weak economy in Europe. As we've noted, the printer business is slowing dramatically as people store photos on their smartphones. And revenue at its PC business – an albatross around the company's neck since it bought Compaq – is plummeting 9% a year, while operating earnings in the division are down 21%.

On top of that, HP had to take a $8 billion writedown related to its $13.9 billion acquisition of EDS. The financial charge caused HP to swing to a net loss of $8.8 billion from a profit of $2.5 billion a year earlier. Meanwhile, HP was having mixed results integrating another big acquisition - the $11.7 bllion paid for UK software firm Autonomy a year ago – into its operations.

Since then, the bad news has only continued. One Wall Street analyst said he was bracing for the worst July-December period in the history of the PC industry, thanks to confusion over the release of Windows 8. HP had been looking for a boost to its high-end desktop PCs with the Spectre One, but initial raves by some gadget blogs were derailed by charges that the Spectre One copied the look of Apple's iMacs.

More serious for HP's future was news that GM will hire 10,000 IT workers in an effort to bring its operations in-house. GM, a longtime client of EDS, had signed with HP a $600 million-a-year contract that now seems in jeopardy. On Monday, HP noted in a filing to the SEC it would cut 2,000 more jobs than the 27,000 it announced in May.

Investors bearish on HP have long charged that the company masked slow growth with a series of high-profile and high-priced acquisitions starting with Compaq in 2001 and through Autonomy last year. Whitman's effort to turn around HP has been complicated by a decade of M&A deals that saddled the company with a declining business (Compaq), a huge writedown (EDS) and a clumsy integration process (Autonomy).

Once she works through those problems, Whitman may have a IT giant capable of competing with Oracle, IBM and others for large corporate contracts. HP's turnaround would have been tough under the best of circumstances. But with so many big competitors in a sluggish global economy, HP's rotten week is a stark reminder that it's swimming against the tide.

HP's stock traded at $22 a share in June, but last month fell to $16 a share – its lowest level in 8 years. News of the layoffs has lifted its stock since that low, but HP's market value of $36 billion is still a fraction of Oracle's $160 billion and IBM's $235 billion. Turning around tech giants can take years. At this rate, HP won't have that long.

Digitally Integrated Burberry Flagship Store Opens in London

Christina Ortiz — Fri, 14 Sep 2012 08:39:36 -0700

Burberry's London flagship store recently underwent a renovation that turned the 192-year old building into a digitally integrated showroom for the luxury fashion brand.

Last weekend, American Public Media's radio show, Marketplace Money, aired a feature about how some luxury brands are starting to hurt in the long-suffering economy even as inexpensive brands are thriving. One of the companies that saw a slide in earnings was Burberry.

Perhaps coincidentally, the company best known for its plaids and classic trenches wants to boost its status through digital interactivity. This week, after two years of renovation, the brand open the doors of its digitally integrated store, Burberry Regent Street, in London.

Burberry executives say they're "blurring" the line between the physical and digital, mimicking the online shopping experience in Burberry Regent Street. Many features on the site have a physical counterpart, from the live customer-service chats to interactive outfit suggestions.

Interactive signage greets shoppers as they walk in and displays key points in the building. Associates carry iPads with customer information, including past purchases and preferences. On the floor, certain articles of clothing and accessories carry RFID chips. These chips interact with store mirrors to show videos on craftsmanship or examples of what the items can be paired with.

At the end of the shopping trip, customers can check out through a mobile system a la an Apple Store, or go to a regular cashier.

Occasionally taking center stage in the store, quite literally, are "disruptive digital takeovers." At set times, thunder claps from all 500 store speakers, and on all 100 mirrors/screens, including those in fitting rooms, appears an iconic London downpour. (If you're a skittish shopper, may we suggest calling ahead to make sure you avoid these displays?) The rest of the time, models are shown walking from screen to screen, promoting the company's most recent line.

And, just in case you were wondering, the store does have WiFi.

eBook Settlement Big Win For Amazon & Consumers

Brian Proffitt — Fri, 07 Sep 2012 13:55:05 -0700

Consumers should soon be getting a more of a price break on electronic books following approval of a settlement between the US Department of Justice and three publishers who, along with Apple, stand accused of price-fixing eBooks to compete with Amazon.com.

The publishers had agreed to the settlement in April. When the court publicized the terms for a required period of public commentary, they drew a large negative response from many industry players. Critics argued that the settlement would give Amazon too much market power by removing agency pricing from the publishers' arsenals.

Agency pricing allows a publisher set the prices of an e-book, with the retailer getting a cut of the price as a commission. This differs from the wholesale model, where a book’s price is suggested and retailers can discount it to their heart’s content. Amazon used the wholesale model until Apple came along with a plan of its own.

According to the DoJ’s suit, the publishers entered into agency agreements with Apple, contrary to Amazon’s way of doing things. In response, Amazon blocked Macmillan’s books from being sold on its site. Amazon eventually backed down, and the agency model became the norm across all ecommerce retailers. Another major publisher in the US, Random House, switched to agency pricing on its own in 2011.

Agency pricing isn't necessarily a problem - it's a perfectly legitimate way of doing things. The DoJ's issue is that Apple allegedly colluded with the five publishers to get them to all jump to agency pricing at the same time. If true, this would be a highly anti-competitive act.

Under the terms of the settlement approved by U.S. District Judge Denise Cote yesterday, the three settling publishers, Hachette Book Group, HarperCollins, and Simon & Schuster, will be required to end their agency agreements with Apple seven days after the settlement’s final approval. The publishers can then sign new contracts but are forbidden for two years from using clauses that limit retailers' rights to discount.

Apple and two other publishers accused in the suit, Macmillan and Penguin, have not agreed to the settlement and are continuing to fight the suit in court, which is due to go to trial in June of 2013.

The American Booksellers Association was one of the vast majority of commenting parties that were opposed to the settlement.

"We believe that elimination of the Agency Model will radically change the current e-book distribution system, will significantly discourage new entry, and will lead to the departure from the market of a sizable number of the independent bookstores that are currently selling e-books," the ABA wrote to the court in June.

The Authors Guild fired off an amicus (friend of the court) brief saying that "of all possible remedies to the alleged collusion, requiring three large publishers to allow Amazon to sell ebooks at a loss is among the most destructive of competition that one could imagine."

Judge Cote acknowledged the opposition to the settlement, but at the end of the day, could not let the issue of collusion go unpunished.

"Even if Amazon was engaged in predatory pricing, this is no excuse for price-fixing," Cote wrote in her order.

The rest of the case will now have to go through the trial itself, but almost immediately the benefits of this settlement should be felt outside the insular world of publishing.

At yesterday's Kindle launch event hosted by Amazon, executives lauded the settlement approval and predicted lower prices for works from those publishers soon, according to Reuters.

Ultimately, this what consumers ultimately care about: lower prices. Amazon's pricing model is clearly a threat to publishers and booksellers, as the demise of Borders chain illustrates quite well. But how is Amazon's model a different threat than, say, that of the big-box bookseller chains like Barnes & Noble, Books-a-Million, or Borders to the smaller independent booksellers they cheerfully pushed out of the market?

If Apple did indeed participate in price-fixing activity, the consequences go beyond just sticking it to Amazon. Consumers were the ones who who got stuck - with higher costs at checkout time. Paraphrasing the DoJ in its response to the Author's Guild this week, Amazon's model scares the beejeezus out of the publishing world, but that's no reason to break the law.

Image Courtesy of Shutterstock

How Online Payment Upstart WePay Aims to Undercut PayPal

Brian Proffitt — Wed, 29 Aug 2012 10:30:00 -0700

PayPal is recognized as the dominant player in the online payments sector, but upstart WePay is attempting to beat PayPal on two key fronts that make a big difference to small businesses.

WePay is counting on ease-of-use and lower costs to draw the interest of smaller merchants who may be strapped for cash and Web expertise.

Part one of the new strategy is the launch of embeddable payment buttons for retailers' websites. The code for the buttons is generated by WePay after the retailer enters all the pertinent information about the product to be sold. The WePay service then generates an embed code that can then be cut and pasted directly into the merchant’s website.

Simplicity is what WePay is going for here, according to COO and co-founder Rich Aberman. “If you can embed YouTube videos, you can embed these buttons,” Aberman quipped.

PayPal, for instance, offers a similar service with its Buy Now and Donate buttons, but the instruction manual for incorporating these tools and other PayPal services into a website is 464 pages long - 92 pages of which cover just the Buy Now and Donate button steps.

Don't Leave Me!

Another key difference - according to Aberman - is that PayPal redirects ecommerce customers to the PayPal site to complete the transaction before returning them to the merchant’s site.

WePay’s system keeps the customer right on the merchant’s site, using a JavaScript modal popup window that overlays the screen to complete the transaction. The payment form within the popup is contained in an iframe, which means PCI security that’s required for online transactions will be present as well.

The WePay code will also enable “add-to-cart” and “shopping cart” functionality within the on-site pop-up, so users won’t have to purchase individual items one at a time, as some early payment systems forced buyers to do.

Keeping customers on the merchant’s site is an important feature in Aberman’s view. “You don’t want them to leave your site. It looks unprofessional, and you run the risk of abandonment [of shopping carts],” he said.

WePay's 1% Solution

PayPal does this redirect not because it isn’t technically incapable of creating an easier-to-use system, Aberman believes, but because the redirect is an important part of its revenue model.

PayPal, Aberman explained, makes profit on the arbitrage between what it charges merchants for every transaction (currently 2.9% plus $0.30) and what it costs for PayPal to debit money from PayPal user’s bank accounts - which is cheaper than paying credit card interchange rates.

Merchants who use PayPal will pay the 2.9%-plus fee no matter how the customer pays. But in the redirect screen, PayPal can encourage online buyers to sign up for a PayPal account. Once signed on, PayPal users are encouraged to connect their bank accounts to PayPal for direct transactions. If the customer uses the bank account, PayPal’s transaction expense is lower, and it pockets the difference.

WePay’s other piece of ammo against PayPal announced today: variable pricing for transactions, based on how the customer pays. Merchant fees for credit-card transactions will match PayPal’s fees, but if a WePay customer uses their bank account to pay, the merchant fee drops to 1% plus $0.30.

Aberman hopes these features will make WePay compelling for small businesses who need online payments but don’t have the technical expertise to manage a complicated system or are willing to pay more. Thus far, that’s a sector of the market that PayPal has not given much attention, and WePay’s new tools may make that glaringly apparent.

Lead image courtesy of Shutterstock.

How eBay Turned Around a Dying Business (Secret Word: Mobile)

Kevin Kelleher — Tue, 21 Aug 2012 09:30:00 -0700

As Yahoo plots a new course under CEO Marissa Mayer, it may want to study what's happened with eBay in recent years. After a long and dicey effort, the online retailer has pulled off a rarity in the Internet industry: It turned around a business that many critics has written off as dying. Here's how a combination of bold product redesign and mobile innovation did the trick.

eBay used to be among the Internet's walking wounded. The company's stock, having soared to $59 a share in 2004, fell to $26 in early 2008, when CEO John Donahoe replaced Meg Whitman. Since then, Donahoe has pursued a turnaround of eBay's marketplace business that involved shifting from auctions to fixed-price sales and focusing on top sellers, even at the cost of marginalizing many smaller sellers.

At first, the turnaround seemed not to be working. One year into Donahoe's tenure, the stock price had slipped below $10 and Donahoe was on the defensive with disenchanted investors. But he stuck to his guns. After all, turning around a business can take years, even on the Web. And four years of effort to revive eBay's marketplace, signs of success began to emerge.

Now it's like the company has awakened from a bad dream. As of Friday, eBay's stock is up 55% this year, three times the Nasdaq's 18% rise and better than Amazon's 39% gain. The stock at its highest since January 2006, pushing its market cap above $60 billion. By contrast, Facebook's market cap is $46 billion (or $52 billion, using a more generous calculation).

That comparison is significant. In a little more than three years, eBay has managed to grow from a company worth $16 billion to one worth $60 billion – and it did so in the Web 2.0 era, one that was dominated by younger companies like Facebook and Zynga. While those companies face their challenges, eBay has overcome its own. And it's doing so in the same arena where Facebook is stumbling: the mobile Web.

eBay is forecasting that $10 billion worth of transactions will happen through mobile phones this year, double the figure last year. That's equal to one sixth of the $60 billion in gross merchandise value eBay reported in 2011. In a recent call with analysts, Donahoe, noting that mobile shoppers spend three to four times as much as people who shop only on the Web, called that growth “a stunning surge in purchases and payments on devices that did not even exist just a few short years ago.”

PayPal, which has seen a similar surge in mobile payments, is also expected to handle $10 billion in mobile transactions this year. But the recovery in eBay's core marketplace business is all the more impressive given that its growth rates had stalled in recent years.

eBay's marketplace generated 15% growth in the most recent quarter, excluding the impact of foreign-exchange rates, the fastest growth since 2006. The bulk of that growth is coming from the fixed-price items that Donahoe redesigned eBay's site around several years ago. After sluggish growth in 2009 and 2010, eBay drew criticism for abandoning the auction model that made the company a success to begin with, and for adopting too late a model that closely resembled one long used, with great success, by Amazon.

But in the second quarter, fixed-price sales accounted for two thirds of the company's transactions, up from 53% in 2009. Fixed-price sales grew 20% in the quarter, compared with a 4% growth rate for auctions.

eBay also saw early on an opportunity in mobile and designed an app that appealed to mobile shoppers with features like one-click shopping, offering it an early lead that it still holds. The company bought Critical Path Software, whose developers helped design a simple yet intuitive eBay app.

Of the 45 million people who used a shopping app on a smartphone in June, 13.2 million used eBay's, placing it ahead of Amazon (12.1 million) and Groupon (12 million). And people spent much more time on eBay's app, 64 minutes on average, compared with 19 minutes for Amazon and 21 minutes for Groupon.

eBay continues to improve its marketplace, tweaking the design and search to improve the user experience and building online storefronts for big retailers like Toys “R” Us, Aeropostale and Nieman Marcus. And the company announced a plan to offer same-day delivery in San Francisco, working again with top retailers like Macy's and Target.

The years of rapid growth are behind it, but eBay is showing that its future is more than a one-time auction giant that is morphing into an e-payments outfit. The company is proving that, in the age of the mobile Web, it can find a new role for itself in e-commerce. Turnarounds like that are as rare as gold in the Internet industry.

Amazon Pursues Growth at the Risk of Brand Identity

Kevin Kelleher — Wed, 15 Aug 2012 04:30:00 -0700

It's a fundamental law of tech business: Grow or die. Few online companies are better examples of that maxim than Amazon, which has made a habit of venturing boldly into new markets. But the online retailer's recent initiatives have brought challenges, including eroding profit margins and entry into markets where it lacks leadership. Has Amazon's incessant growth become a liability?

For years, Amazon was known as, first, the premier online bookseller and eventually a realiable, low-cost and easy place to buy everything from MP3s to electronics to groceries. The company expanded in a careful, considered way that led to years of slow, steady growth.

Even as Amazon dominated those early markets, it moved into new areas. At first, these expansions met with similar success. The company began offering startups access to its formidable tech infrastructure through Amazon Web Services, a business that contributed $1.1 billion to revenue in the first six months of this year.

The company moved into hardware with the Kindle ereader. It introduced the device just as smartphones and tablets were gaining popularity. But Kindles sold well, driving sales of Amazon's Kindle books as well.

The past year or so has seen Amazon expand into even more markets, putting it face-to-face with entrenched competitors. It began offering streaming video to its Prime subscribers, taking on Netflix and Hulu. It introduced the Kindle Fire tablet, jumping into a cuthroat market dominated by Apple's iPad and populated with myriad Android tablet makers. In recent months, it has started offering social games through its recently launched Amazon Game Studios. It's looking into producing TV shows. It's setting up storage lockers in 7-Eleven stores to speed deliveries. It may be pushing into mobile advertising to help cover the costs of making Kindles. Most audacious, it seems ready to introduce its own smartphone.

Amazon typically doesn't expand haphazardly. Even when it moves in an unexpected direction, the action is usually related to technology it has already developed. Amazon Web Services opened computing and storage capacity to the public that Amazon had built for its own use. The Kindle was the low-cost platform Amazon created to take advantage of its ebooks.

But to position the Kindle Fire as a low-end tablet, priced at $199, Amazon had to eat a lot of the manufacturing costs. That helped push its operating margins down to 0.8 percent last quarter, from 2 percent a year earlier.

Indeed, analysts are bracing for Amazon's first net loss in over nine years. What's more, the early surge in Kindle Fire sales is slowing significantly this year. And it may taper further now that Google's Nexus 7, starting at $199, is gaining in popularity. Revenue growth slowed to 29% in the second quarter, compared with 51% a year earlier. And Amazon is bracing for the inauguration of online sales taxes in many states.

Yet, Amazon is expanding aggressively in the face of these challenges. Capital spending rose 70% from the first quarter, mostly a result of building infrastructure to support Amazon Web Services.

As Amazon expands, it also faces challenges that are less financially measurable but still important. For most of its 17 years, it has led markets that it sometimes created. But the markets it's pushing into now – streaming video, cloud computing, tablets, games – are established. Here, Amazon's relentless focus on cost gives it an advantage, but probably not the decisive clout that it enjoys in online retail. Some segments of its business, notably smartphones and tablets, are littered with well-designed and well-financed products that couldn't compete with leaders like Apple.

If Amazon comes to be perceived as an also-ran in many markets, its brand could be affected. The company once known as the world's premier online retailer could become a tech company with its fingers in too many pots. Tech companies that set agendas, like Facebook and Google, have clear missions and identities.

Amazon once had a clear identity. But the more it grows, the more it's starting to look like its mission is just that: to expand where it can.

Helping Microbusiness Take On Megabusiness

Brian Proffitt — Wed, 25 Jul 2012 12:47:46 -0700

A new Israeli startup hopes to upend the dominance of mega-companies like Amazon and Wal-Mart over local businesses. The idea has been to give small organizations free, consumer-grade tools to manage themselves and connect with each other. Starting Wednesday, SohoOS' new App Store will bring third-party paid apps to the mix as well.

At first glance, SohoOS may seem like yet-another Software-as-a-Service (SaaS) startup offering business management and collaboration web applications to small businesses. Yawn.

But this is more than just a few editing and CRM apps packaged together on a pretty website: SohoOS is a highly automated system aimed at the microbusiness segment, a channel that doesn’t always get the attention it deserves. And with the new App Store, it’s also a marketplace for additional small business services.

Targeting Microbusinesses

SohoOS’s mission is aimed right at that small business sector, delivering business management tools to try to automate as much as possible for busy small business owners and entrepreneurs. And SohoOS means small: businesses with maybe one or two computers, rather than the typical SMB (small and medium business) model of 10-50 machines.

Why target the really little guys?

SohoOS founder and CEO Ron Daniel argues that micro-businesses often don’t have the luxury to relegate business management tasks to one specific employee.

“It can be someone like a single mom, running a designer business out of her home,” Daniel explains. “She needs to be a designer, not taking up her time managing the business.”

To address this problem, SohoOS provides the prerequisite business management tools: document management, contact management, collaborative tools and the like. But then it goes a step further, automating the basic steps that happen during certain events.

Create an invoice for a new customer, for example, and the customer’s information is added to the contact system and any items on the invoice are automatically removed from the business inventory. “We are trying to consumerize the management platform,” Daniel said.

SohoOS' model has had some traction: the Tel Aviv-based vendor has almost 850,000 customers signed up since it started in December 2011. Daniel expects that number to top a million soon.

A New App Store

To expand the platform’s appeal, Wednesday the company announced the addition of a new app store designed to let users buy add ons to SohoOS, as well as tap into subscriptions to business-oriented sites and services tailored for micro-businesses.

Apps available at launch time include personalized data backup controls; a leads widget to push leads to users; and additional document, invoice and Web themes.

Differentiating between “free” and “paid” was a critical distinction for SohoOS, and was the vendor’s primary reason for moving to the App Store model. The company did consider affiliations and similar models with partner vendors, but ultimately opted away from those plans because they worried those approaches could lead to fewer choices for its customers.

“We wanted customers to have the widest available options, and be able to cherry pick what they needed from that selection,” Daniel explained.

Creating a Community

Ultimately, SohoOS hopes to turn the SohoOS customer base into a community resource, allowing participating businesses to share information, expertise and resources to create powerful B2B connections.

For example, “small yoga shops could sell combined discounts for customers who travel,” Daniel said. Or a retail store could help sell another company’s excess inventory. combine expertise, resources. These scenarios would give independent owners more leverage against larger brands, Daniel said.

Dear Marissa Mayer: Don't Change Yahoo

Julieanne Smolinski — Thu, 19 Jul 2012 13:30:00 -0700

I don't get the big deal about Yahoo's new CEO, Marissa Mayer. Sure, she's a woman. Yes, she's coming to a struggling tech giant from Google. OK, she's pretty and young. I guess it's a big deal that she's pregnant, but to me, pregnancy is like a brief, treatable illness with annoying long-term side effects. My only concern is that Marissa keeps Yahoo exactly the same.

I'm dead serious here. Of course, I have a Gmail account and my own domain name, but I still have a Yahoo email address, mostly because it had the swiftest setup for burner accounts for things like trolling Craigslist missed connections and gaming food delivery sites for "Refer a Friend" discounts. I used one exclusively for deal-of-the-day websites and to aggregate notifications from social networks, my bank and utility companies.

My Yahoo account is, in a way, my broccoli rubber band, matchbook and loose IKEA screw junk drawer. It has its purpose, but it is, at the end of the day, only a place I go when I'm looking for a lost phone bill or when I have a chunk of popcorn stuck in my teeth.

I visit Yahoo's homepage every day, mostly to check my "junk" email, but also for pranks and fodder for my Tumblr.

I realize that some people would say that being a 29-year-old girl who uses Yahoo Answers to upset strangers is probably a little antisocial, but to these people, I would say: I was born in Akron. Let's all calm down and be glad that it's not meth dealer or serial murder.

Honestly, I know that all companies who aren't Google have been in a bit of an RC Cola holding pattern for some time now. I know that bringing in new leadership from the juggernaut isn't always a winning play for tech companies, and that it might not actually do much to bring around a gilded age for a spunky little provider of frontpage content like, "Bobcat breaks into Washington prison."

Yahoo is the dive bar of the Internet, the kind run by an old woman with a good heart, a rheumy body and an eye on the old-fashioned cash register. The portal itself is an unself-aware cloaca of clickbait, a Times Square T-shirt shop of SEO, peopled by feeble-minded ferret owners and teens who haven't figured out that you can't get pregnant from playing in a Burger King ball pit that someone has ejaculated in.

I know that most people think many of these old-guard Web companies will die along with their core demographic of confused old people. But I know many of the people who work at them - they're smart and funny and doing the best they possibly can. Some of them are happy there, because working in a Web services company can be very nice. Some of them work there like it's PF Chang's and they're just home from Brown for the summer. Either way: I pray that the sharpest editorial minds and wittiest business strategists are stymied. I cannot have Yahoo in the hands of capable management.

I love Yahoo Answers, that primordium of "How is babby formed." Sure, it's an excellent place to lose your faith in the ability of most of the planet to read and reason, but it's also a beacon of hope in a way - an intangible temple to samaritanism. While trolls exist (I'm certainly among them), there are faceless empaths who really do want to help clueless marinara shoppers find their brand, to help lazy bloggers figure out if there are any popular songs that make mention of 80s action stars, or to reassure neurotic herbal drugs users that they probably aren't going to die from salvia.

As a news portal, its sweet attempt to marry hard news, gossip, human interest stories and old-racist-rage-bait is performance art worthy of the San Francisco it emulates. I realize that I work for a website that runs heds like "It Happened to Me: I Lied About Having Armpit Crabs, Except That I Didn't," but at least we're self-aware, right?

The fact that Mayer's been credited with the success of products like Gmail and was Google's 20th employee only worry me. She seems... capable. I just am not sure whether I want my local dive bar under excellent new management.

What if she actually brings about the turnaround she's been hired on to induct? Where will I get my Yahoofreude?

In conclusion: I think hiring this enormously talented woman who's amassed a net worth of $300 million was the right choice. But, please: Don't let her do a good job.

Article courtesy of xojane.com. For more writing by Julieanne Smolinski, check out her xojane.com author page.