Google and Microsoft go head to head Long awaited announcement this week confirms that Google is making its play for the operating system market. Summer 2010 it's going to launch Chrome as an OS for notebooks. This is the first major challenge for the MS operating system since Symbian and Sun, but there's a massive task ahead for the search giant. When Windows 7 launches this October there will be beefed up functionality and we reckon a serious defence strategy around search, with Bing integrated into the MS office packages as well as the browser.

BBC.co.uk

Really sorry to hear from Davina today that NetImperative.com was winding up. It’s a final farewell to an old friend. When it launched in 2000 the edgy start-up looked set to rival New Media Age for the inside news on the UK digital sector. Ten years on they’re another casualty of the advertising sector collapse. Wishing Davina Lines well for her events projects, but missing the NetImperative brand already.

Michael Jackson's death triggered surges to the web that slowed Google, crashed Twitter and saw millions of tracks downloaded in days. The horrors in Iran drove people online both inside and outside the country, and the single actions of Iranians with cameras and web connections revealed the truth to the world.

The web has given everyone a voice and it's at times like these the scale of change is clearest. We've been tracking the rise of social media for five years and there are more examples here: www.DigitalTrainingAcademy.com/socialmedia.

Meanwhile in the advertising industry the switch to the web remains unfaltering - even though growth appears to be stalling in the US, brands in every country continue switching budgets online because pressured marketers are looking for accountability. This is something we've seen first hand in auditing the effectiveness of brands' marketing spends.

This month we've also included links and comment about the UK's 'Digital Britain' report and the framework for developing our own digital economy.

Digital Intelligence: June 2009
http://www.digitalstrategyconsulting.com/intelligence/

HTC and Adobe have announced that the Flash content format that drives much of the high impact visuals on the web will soon be available on  Android, writes CrunchGear. It's another small step towards achieving complete adoption of key content tools and much needed if the web experience is to be effectively reproduced on mobile devices.

http://www.crunchgear.com/2009/06/24/flash-comes-to-android/

When Chinese authorities temporarily blocked Google.com last night, it felt like an unavoidable next step in the escalating unease between the world's largest country and the world's largest information service. The fact Google did not comply with requests for Google.cn to restrict access to overseas sites is no surprise, but what I'm struggling with is whether the same rules are being applied to Baidu and other national providers. Much more to come for sure.

More on http://www.ft.com/cms/s/0/8e4ccdce-60cf-11de-aa12-00144feabdc0.html

European regulators unveiled long anticipated plans this week for guidelines about how social networks such as Facebook and MySpace should handle European privacy rules, writes the Wall Street Journal. Regulation in a young and fast changing space is always risky, and many will argue lacks necessity because of the existing data protection directive. However the guidelines appear to have been set very low, simply reconfirming what would be common knowledge even for novice internet users.

The WSJ confirms that key elements include…

• Sites should offer privacy-friendly default settings.
• Users should be advised that pictures should only be uploaded with the individual's consent.
• Sites must set maximum periods to retain data on inactive users. Abandoned accounts must be deleted.
• Users should be allowed to adopt a pseudonym.
• The reason why this matters is that global players such as Facebook are based outside the EU’s jurisdiction and citizens from the 27 European nations would have different types (usually weaker) privacy frameworks on these global sites to the national equivalents. The recommendations also include getting social network owners to place default security settings at a high level and allow users to limit data disclosed to third parties. Sensitive information, such as race, religion or political views are also covered, along with behaviourally targeted advertising.

More in the Wall Street Journal

The Habitat furniture store is among many brands to have misunderstood Twitter, blundering in to a private social space with typically offline approach. This week’s clumsy attempt to use Twitter’s # tags was another ill thought through way to get their messaging seen by larger numbers of people. Given that somebody inside the firm made the decision, it’s staggering that this was never questioned. The feed from HabitatUK effectively spammed thousands of people by trying to hijack key trending topics. Hash tags help people track conversations in Twitter, and the retailer decided in June to align itself to topics such as Apple’s iphone and the Iranian elections – at best irrelevant to the brand, but more likely just damaging. How did it happen? Three sequential failures in the marketing strategy: failing to read the landscape and the way people use the tools, failing to create a digitally native strategy, and failing to have (any) management checks and controls in place to identify poor practice. Coaching the marcomms team in digital marketing would have prevented this, and a clear social media policy would ensure it never happens again – but undoing the brand damage, well that will cost a lot more than the whole Twitter feed did in the first place.

More details on the Neoco blog that broke the story | Social media best practice | Social media case studies

New toolkits released from Yahoo this month apply the ease of search engine advertising creation to graphical ads. It’s another significant step in the restructuring of the advertising sector, changing the role of small ad agencies as well as creating a more efficient structure for taking messages to market. Look out for more extensive toolkits from MSN, and widespread adoption by online publishers from the print and broadcast sectors.

Yahoo.co.uk

Neda Soltani's murder in Iran gets caught on a camera phone and posted to YouTube, Facebook and thousands of blogs. A death that 10 years ago would have been anonymous and lost in the noise of civil chaos gets recorded forever, and the lies of the regime who killed her are exposed to anyone with a browser.

Footage of Neda Soltani's shooting and other action against protesters (this video contains graphic images)

Guardian live news blog  |  Guardian.co.uk summary of coverage of Iran

A big shakeup to site indexing practices from Google announces Matt Cutts, head of Google's Web Spam team, The ‘nofollow’ attribute for links is nolonger being recognized by Google. Since 2005 it had evolved as a way to fight blogspam to a power SEO tool – but not any more.

More on SearchEngineWatch... http://www.searchenginewatch.com/3633972

Possibly one of the fastest downloads in history. Mozilla's new Firefox 3.1.11 browser clocked up a staggering 150m downloads in its first 24 hours, writes VNU. Apple's Safari is logging a more sedate 11m for Safari 4 (over the first four days).

http://www.vnunet.com/vnunet/news/2244094/firefox-reaches-150-million

Food manufacturing giant Nestle has come up with an innovative use for Twitter that combines together a mix of digital channels. Their latest advertising campaign for JuicyJuice includes a Twitter feed within the advertising creative. This social media campaign lets people post their own tweets within the advertising that appears online. At the time of writing, the brand is testing it on US sites CafeMom and BabyCenter. Here’s how it works: there are questions inside the advertising space that relate to parenting (How do you stimulate your child's mind? How important are vitamin-enhanced foods to you?). People can write their message or tweet inside the advertising.

Nestle marketers are using the # tag to boost discovery by helping Twitterers recognize it as a keywords. And to prove how integrated and digitally centric the campaign is, there’s a YouTube channel that opens on click through – more food related content, this time about feed preparation and health.
What’s new in this campaign is the way consumers can take part without leaving the website they’re on. By extending Twitter’s reach to anywhere Nestle runs an advert, they’re changing the nature of Twitter.

In the maelstrom of the dotcom days a lot of heady deals were done in time periods too short, surrounded by too much hype and too little strategy. The result was corporate debris with globally presented brands that were disjointed behind the scenes. Yahoo, NBC, AOL all paid the price, while companies like Google, Amazon and eBay kept clean globalized corporate structures. The thing is that competitive advantage in the digital networked economy is all about massive economies of scale. The firms that didn’t get this always had their hands tied. That’s why this week’s takeover of Lycos (Europe) – by Lycos – is long, long overdue. The collapsed European entity struggled painfully against the might of the consolidated global apps of its competitors. One chapter finally closed, but the next chapter is the toughest nut to crack: in a post social media landscape, where do you position another portal?

Shocking report from Epitro this week found the average UK mobile broadband download speed only 0.9megs: that's a quarter of the 3.6megs most suppliers claim. And from a quick straw poll of fellow broadband sufferers it sounds just about right. In any doubt? Watch your loading speeds for content the next time you stall through a video stream on a wireless connection.

http://news.zdnet.co.uk/communications/0,1000000085,39662051,00.htm

Some of this stuff nobody could make up, unreal.

Just finished collating an analysis of the Indian internet market and the growth of internet use in India. Fascinating snapshot of a divided nation: access is saturating among the professional classes but still reaches only 5% of the population.

www.DigitalStrategyConsulting.com/india

It’s been a dismal week for the British Government. The European elections will see a the tide turn against the ruling Labour party, and as the newswires saturate with talk of cabinet coups, party lines being broken and the parliamentary party in disarray, one minister chose to resign – through Twitter. Tom Watson, minister for digital engagement released the news of his resignation to ‘followers’ on Twitter. It’s a fitting channel for the government’s digital strategist who wrote online "I promised, Twitter friends, you'd get it first”

Follow Tom Watson: http://twitter.com/tom_watson

This weekend the UK’s Channel 4 television network announced 10,000 archived shows are being put online – and for free. Media guardian reported that over 4,000 hours of content on the way, and all viewable through the 4oD catch-up service. The implications are that pressure will grow to release the BBC’s content archives which currently only run to 7 days. Great news for the web and internet users, good news for advertisers who have a new high volume channel for TV commercials, but in a world of television on-demand will there be any role for the linear broadcast schedule?

More in Media Guardian

It’s voting day today here in the UK. As part of Europe’s election, millions of us are weaving our way to community halls, churches and local government buildings, taking part in democracy. In my ward in Kensington there are even a dozen campaigners at the tube stations urging people to take part - and with the background of economic collapse, a ceaseless expenses scandal haunting MPs, and the ugly resurgence of the right wing BNP, there’s quite a buzz. It’s a sunny day, hopefully turnout will be good. But whatever your politics, chew on this. The polling station in my ward covers a dozen streets. Inside there are 2 observers, one supervising officer and about 5 other volunteers. This is repeated in thousands of buildings across hundreds of towns and villages. That means tens of thousands are involved in the administration, and still our turnout won’t top 1/3 of the electorate. One day it will become digital, one day turnout will be higher, one day voting will be effortless – but why isn’t that day already here?

Are marketers putting their budgets in the right place? That's the question we're asking after collating May's research tracking the growth in web audiences. The average Brit spends over 22 hrs online each month, and many social groups spend much more.

45% of this time is taken by top 10 sites in the UK, leaving the next 7,600 sites collectively fighting for the remaining audience minutes (excluding the myriad tiny sites deep in the long tail).

The implication? There are massive opportunities for smarter media planning but marketers are easily out of touch with their customers. Look at where a firm's marketing energy is focussed, and there's often disproportionate time and money in classic media, direct mail and below-the-line activity. Our tip: audit the cost-per-customer for each impact in each channel. Not only could you be in for a real surprise, but when marketing budgets are tight that can be your roadmap for where to make the cuts.

Digital Intelligence: May 2009
http://www.digitalstrategyconsulting.com/intelligence/

This Friday, Austria plays host to one of Europe’s largest internet marketing conferences. If you’re coming to the Digital Congress in Graz, then join us in Channel 3: the special session on digital media and digital brand management. Here’s more…

There are have 6 great speakers, but what would you ask them? Here are a few of the questions already being sent in…

• How much of my marketing budget should be online?
• Should I switch from TV to the web now the audiences have grown?
• Which online advertising formats give the most impact?
• How do I persuade consumers to buy if I don’t sell online?

To help get the most from our discussion, if you’re attending then why not email me your question today? Send it to Danny@DigitalStrategyConsulting.com and put ‘Digital Congress’ in the subject line. And if there’s a particular speaker you want to ask then include their details.

With so many people coming to Graz, it will be a big day for the digital marketing industry. As a conference chairman I want to get the answers that matter to each participant – and if we run out of time then I’ll take then next 20 questions and write answers for each participant. Here’s a reminder of the talks, and the leading experts sharing their ideas with you…

• Talk 1: Digital Branding, Andreas Teigeler (Interone)
• Talk 2: 3x3 cm. New Space for Creativity., Amir Tavakolian, Michael Ksela (scoop and spoon)
• Talk 3: Control over our brands in a digital world?, Martin Sternsberger (Brand Club Austria)
• Talk 4: Transfer of traditional print brand into digital universe, Marjan Jurleka (Večernji list)
• Talk 5: Strategic use of brands in times of digital media, Michael Brandtner (FH CAMPUS 02)
• Talk 6: Social Media Brand management, Nika Mohar (interactive.agency)

With this much internet marketing expertise in one place, let’s be sure to get the right answers to the right questions.

See you in Graz!

Iran has blocked access to Facebook. In a move to curb the popularity of the reformist presidential candidate Mir Hossein Moussavi, the entire site is now blocked after he gained too much popularity.

It’s been a long time coming, but the trickle of mobile announcements has grown into a torrent, and in the last few days the UK’s network ITV unveiled big plans for boosting their mobile content. They’re relaunching after appointing Kilrush to sort out the structure, and the promise is for news on popular shows such as Coronation Street and the new smash hit Britain's Got Talent. This bolsters an existing mobile stable including Emmerdale, Primeval and Loose Women. Mobile in the UK is now feeling like the mobile sector in Singapore about four years ago. Entertainment is starting to be streamed, the static content is in place, and the links with social media is firmly fixed. 2009 is the year mobile content and apps go mainstream in the UK and after a decade of expectation, the anytime-anyplace-anywhere mobile entertainment culture is finally here.

A funky look behind the scenes at what the laptop went through before it reached your desk. Nice way of building personality in to electronic from the brand that brought you glow in the dark dancing sheep.

The presses will stop rolling in Philadelphia, writes The Observer newspaper in the UK. Philadelphia looks set to become the first US city without a local newspaper as both The Daily News and The Inquirer file for bankruptcy. The average US newspaper share price collapsed by 83% in 2008. Local journalism professor Jack Lule concluded: "The old model is not coming back." At Digital we've been forecasting at least 10% of European newspapers will face bankruptcy or stop printing by the end of 2010, with more going online-only.

Newspapers and navigating The Perfect Storm | The Observer

The thing that always ached me about the MillionDollarHomePage.com project was that it was all about the teenager who invented it, and not about the customers who were using it. Okay, so he was a smart, charismatic guy and it was just a simple novelty that earned him a buck or million. But there have been ceaseless get-rich-quick schemes that did nothing for the small firms that poured money in. And apoundapage.com is another. When the email “yourpage@apoundapage.com” dropped through my spam filter this morning, it rattled me because the chances of the business actually generating customers for people is, well, probably close to one in a million. The fact there are no ‘restaurant’ or ‘plumber’ listings for London suggests they’re starting from a painfully low base, just when the winners and losers in the directory market have settled down, the fact there isn’t a multi-million pound marketing campaign ready to launch the brand confirms it doesn’t stand a chance, and the fact they compare themselves to Yell for pricing suggests there’s some sort of resemblance in terms of benefit a firm would get. Am happy to be proved wrong, but version 1.0 looks a million miles away – and isn’t FaceBook now offering this for free? (So given that there are a staggering web listings for this massive new directory, (all but one of which come from their own sites I ought to mention APoundAPage.com a few times more just to help Google spot an intruder. So here’s another one APoundAPage.com. And yep, I’m still a tad concerned about whether APoundAPage.com will give any benefit back. [Footnote: I was relieved to hear that they “communicate to as many UK businesses as possible, within the boundaries of British Law and our own ethics’ but am still puzzled about how they acquired my private email address – any similar experiences? Please share].

Overstretched British office workers are now working 2-6 hours every week in bed, explains Credant Technologies in their latest research. A quarter of UK workers are now using mobile devices (laptops, Blackberrys and mobile phones) in bed each night. Their research found that over half (57%) did this for 2 and 6 hours every week. 8% of people claimed they spent more time on mobile devices in the evenings than talking to their partners, and although the research was based on only 300 London office workers, a fifth of people using wireless networks at home did not have security in place.

More at http://www.credant.com/resources/videos/laptop-use-in-bed.html

The funky microblogging social app could be close to unlocking a massive revenue stream thanks to mobile operators, writes Reuters. Twitter's co-founder Biz Stone this week confirmed they are not introducing advertising, but instead are evaluating revenue-share deals with mobile carriers. The Twitter app allows live updates to be sent from and to mobile phones through SMS, giving a ready-made pathway for micropayments. The model has already been copied by Facebook and our take is that LinkedIn, MySpace and Bebo will all follow whichever approach Twitter settles on. As mobile operators look for new ways to charge data, this model is sure to find powerful allies.

http://www.reuters.com/article/technologyNews/idUSTRE54H5CP20090518

Blogs, online communities, social media and then social networks: they may have permanently changed online marketing, and be the must have for every marketer, but the experience for most brands has been pretty uncomfortable. That’s why I spent the last couple of months digging through hundreds of case studies to map out best practice for marketers looking to get it right. In this new landscape brands are in a constant dialogue with customers who increasingly play critical roles in advocacy and recommendation. Brands are only one guest among millions and the challenge for marketers is that while the rewards may be great, the risks are greater. Some of our insights we collated into a short paper called “The Ten Golden Rules of social media marketing” that you can download from Digital Strategy’s website.

Download best practice social media marketing

The latest change to Google’s editorial policy on trademarks is guaranteed to raise a few challenges. Their decision to allow advertisers to use trademarked name in search ads (even when they don’t own the mark) will have retailers bidding against manufacturers for the same name. It’s a logical move for Google, and one that moves the burden of trademark protection back to the brands themselves. This should be a private issue between manufacturers and retailers, but so many have come to rely on Google to make up for the short comings in their own license agreements that it’s bound to cause a storm of bidding wars.

Astonishing data from Nielsen Online shows Facebook accounting for 13% of all time online in the UK last month. It’s based on their rigorous methodology, so digital analysts can take some comfort in the accuracy of the findings. The social network accounted for 6.2bn minutes with Windows Live in second place on 4.5bn and Google on 2.6bn.

www.nielsen-online.com

The first survey of UK mobile advertising revenue is now published, and the magic number weighed in at £28.6m. It may feel like a drop in the ocean compared to web ad revenues, but the growth should be north of 50% year-on-year from now on. While the use of mobiles has been at saturation levels for a decade in the UK, mobile advertising has consistently failed to get off the ground. Mobile marketing exploded with SMS and couponing, but beyond ringtones and wallpaper, the restrictions of the channel proved too much for most brands. Finally that’s changing, but as the web converges with mobile, the distinction between mobile web and just ‘the web’ may prove impossible to maintain. The mobile handset is a place for utility, cool apps and things people need for their lives on the move; the notion of buying advertising time in the heart of this most intimate and engaging experience feels like the wrong mindset, at least most of the time. Sure, Google’s search results, sponsored maps and branded content all have a place, but brands anchored to the classic advertising model should think again.

www.BrandRepublic.com

The centre of gravity for web access is shifting. Mobile internet use began with a trickle of email and Google searches, then it started gaining momentum with video clips. When Twitter and Facebook updates arrived the link between the web and social media began, and now we’re seeing a torrent of use with the explosive growth of apps. While the iPhone trail-blazed the culture change of getting consumers valuing apps on mobiles (and seeing them as core to the value proposition of the device), Nokia’s announcement this week is raising the bar. Apple launched with a tiny number of apps, but Nokia and its Symbian platform has been a win with developers. There’s a vast amount of content for the launch of their ‘Ovi’ Store: a staggering 20,000 apps according to StrategyWire and the Forbes interview with Niklas Savander (EVP of services at the mobile phone pioneer). There’s also a smarter process too with real focus on quality: they’re getting each apps developer registered so there’s better control over the consumer experience. And for the developers, chew on this: a reported 30-70 revenue split in favor of developers :-)   After 10 years of the promise of a powerful mobile web, this is the year it finally starts delivering.

Share on Ovi http://share.ovi.com/mobile/ | How sharing works http://share.ovi.com/tour

In the marketing of mobile networks the role of the internet as the carrier - rather than the cellular system – has been a contentious issue since Skype first launched. Does this latest initiative from 3 here in the UK suggests the answer’s now decided? And if signal carriage moves to the internet, what next for the revenue models for network providers? One day we will pay almost nothing for mobile connectivity – that day is a step closer.

Like every media group, business publishing specialist Informa is having its fair share of challenges - but the solution is interesting. The rights issue announcement for 240m is coupled by plans to leave the UK tax system. While the rights issue is liked to their acquisition of debt-loaded DataMonitor, the taxations plans are not. In a economic system where the frictional effect of national boundaries has melted away, this could prove the model for many more media groups.

The Guardian is, arguably, the most webcentric of UK newspaper groups. So when editor-in-chief Alan Rusbridger told a conference in Germany that quality journalism is now a ‘broken model’, it resonates more strongly because of where the voice comes from. In characteristic style Rusbridger didn’t mince his words: ”bad things are going to happen where newspapers are going to die”. This is a bad thing for everyone: strong independent journalism remains a critical counterbalance in liberal democratic frameworks. Chew on this: the waves from the collapse in the economics of news media will reach much wider than their tumbling stock prices.

We just finished collating a monthly digest of online sector research and it’s fascinating to see the polarizing effect in the digital media and marketing sectors: firms with good business models, strong products and great people are weathering the storm, but those without are seeing sustained revenue falls as customers shift. Okay, so this shouldn’t be a surprise, but the recession is accelerating structural change, forcing brands to find new ways to connect with customers and improve their supply chains and value chains. This is across retail, media and marketing services and is unlocking new disruptive business models. What emerges after the storm has passed will be an advertising and media industry with a fundamentally different structure. Advertisers are boosting their online spend, while heavily cutting classic media. Social networks continue to leap forward - with Facebook putting on 50m new customers since January to cross the 200m mark – and the race to own the mobile space has never been faster. It’s not simply a recession, it’s a transformation.

When I helped manage the digital division of a national newspaper, I worked with a talented sales guys – one of the first to really understand the web. And it was through the web I found out he’d passed away this weekend. My blog’s been a scrapbook of personal moments in the journey towards a digital networked society over the years, so when I found out about his death through an RSS feed, I realised it was the first time this happened. The networks have always been agnostic to the data they pass around, but I can’t help miss how this was something you learned through friends and less anonymous connections. As the Facebook generation ages, it will become the norm rather than the exception. I’m just not sure how I feel about that just now.

Yahoo's decision to cut another 600-700 jobs today may have been a logical response to the dire Q1 figures (a 78% y-o-y collapse in profits at a time when Google is riding the storm well), but is it the right decision? The portals, apps and social media firms that flourish after recession will be those that invest in product development now. Most media groups seem to be forgetting the lessons of 2001-3 when the dotcom crash wiped out confidence and blocked (most) investment. Yet for firms like Google, CNET and flickr that stuck true to their product development plans, their leads kept swelling and the position after became unassailable.

Thanks to Igor and XKCD for this

As a kid I remember tuning in to pirate radio in the UK. There was something edgy about the two music stations that broadcast from international waters. This week's legal verdict in Sweden about Pirate Bay (the file-sharing site hounded over copyright violations) feels like an echo of the troubled waters in the Irish Sea 30 years back. But anyone with nostalgia should ditch the rose tinted specs: this is an enabler of grand scale piracy.

The decision is part of a pattern of new legal frameworks that are emerging. Kazaa and Grokster have been through a similar process and collectively these will trigger waves of new actions. The fact that 4 directors were jailed for a year will change the markets' and entrepreneurs attitudes to filesharing for sure. Warner, Sony and EMI were among those pushing for the verdict, on the same week they were working with YouTube on a new framework for rights protection at one of the largest content sharing platforms in the world.

The problem comes from the ease of the tech framework for piracy, the marginal cost of each copy being zero and the lack of data trails that show where a copy came from.

The models of Creative Commons and CopyLeft may have suggested new long term models, but the death of copyright has been greatly exaggerated. If copyright falls then part of the software industry falls with, personal data control could follow and an underfunded entertainment industry would see at least part of the media sector implode.

The court's view is telling: this was for "providing a website with ... sophisticated search functions, simple download and storage capabilities, and through the tracker linked to the website." This copyright battle may be won, but the war is far from over and the shape of the post-war settlement opaque at best.

When confidence is down and budgets are tight, marketers focus on what they know works. It's a way of editing the media plan and rebuilding the strategy, and the greater the challenge ahead, the greater the shift. So today's financial results for the Google's first quarter (ending March 31, 09) should be no surprise. While print ad volumes were down 26% quarter on quarter, Google saw only slight decline, with like for like year-on-year revenues enjoying modest growth at 6%. It was "a good quarter given the depth of the recession, underlining both the resilience of our business model and the ongoing potential of the web as users and advertisers shift online," said a confident Schmidt. And in a sector where it's all about the product, their focus forwards is both perfectly smart and a depressing contrast to most of the media and apps industries: "our priority remains investing for the long term to drive future growth in our core and emerging businesses."

Q1 Financials

• Revenues of $5.51 billion for the quarter ended March 31, 2009
• Increase of 6% compared to the first quarter of 2008 and a decrease of 3% compared to the fourth quarter of 2008
• Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC).
• First quarter TAC totaled $1.44 billion, or 27% of advertising revenues.
• Operating income, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis announced GAAP operating income for the first quarter of 2009 was $1.88 billion, or 34% of revenues. This compares to GAAP operating income of $1.86 billion, or 33% of revenues, in the fourth quarter of 2008. Non- GAAP operating income in the first quarter of 2009 was $2.16 billion, or 39% of revenues. This compares to non-GAAP operating income of $2.15 billion, or 38% of revenues, in the fourth quarter of 2008. * GAAP net income for the first quarter of 2009 was $1.42 billion as compared to $382 million in the fourth quarter of 2008.
• Non-GAAP net income in the first quarter of 2009 was $1.64 billion, compared to $1.62 billion in the fourth quarter of 2008. * GAAP EPS for the first quarter of 2009 was $4.49 on 317 million diluted shares outstanding, compared to $1.21 for the fourth quarter of 2008 on 317 million diluted shares outstanding.
• Non-GAAP EPS in the first quarter of 2009 was $5.16, compared to $5.10 in the fourth quarter of 2008.
• Non-GAAP operating income and non-GAAP operating margin exclude the expenses related to stock-based compensation (SBC). Non-GAAP net income and non-GAAP EPS exclude the expenses related to SBC, the non- cash impairment charges primarily related to our investments in AOL and Clearwire, and related tax benefits. In the first quarter of 2009, the charge related to SBC was $277 million as compared to $286 million in the fourth quarter of 2008. Also, in the fourth quarter of 2008, we recognized $1.09 billion in asset impairment charges related primarily to our investments in AOL and Clearwire. The tax benefit related to SBC was $64 million in the first quarter of 2009 and $65 million in the fourth quarter of 2008. The tax benefit related to the impairment charges was $82 million in the fourth quarter of 2008. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release.

Q1 Financial Highlights

Revenues – Google reported revenues of $5.51 billion in the first quarter of 2009, representing a 6% increase over first quarter 2008 revenues of $5.19 billion and a 3% decrease from fourth quarter 2008 revenues of $5.70 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.

Google Sites Revenues – Google-owned sites generated revenues of $3.70 billion, or 67% of total revenues, in the first quarter of 2009. This represents a 9% increase over first quarter 2008 revenues of $3.40 billion and a 3% decrease from fourth quarter 2008 revenues of $3.81 billion.

Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $1.64 billion, or 30% of total revenues, in the first quarter of 2009. This represents a 3% decrease from first quarter 2008 network revenues of $1.69 billion and a 3% decrease from fourth quarter 2008 network revenues of $1.69 billion.

International Revenues – Revenues from outside of the United States totaled $2.88 billion, representing 52% of total revenues in the first quarter of 2009, compared to 51% in the first quarter of 2008 and 50% in the fourth quarter of 2008. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2008 through the first quarter of 2009, our revenues in the first quarter of 2009 would have been $120 million higher.

The nature of the privacy debate needs to broaden. The centre of gravity of crime has shifted to personal data, and as the centre of gravity of communications consolidates on digital platforms we need to complete the legal framework. There needs to be a clear legal age of consent – for publishing personal data. The static web, sms and email have been joined by the richness of social networking, and the democratisation of access to data provided by social media. But there’s a subtle and critical paradox in law. The rigidity of the data protection act, the oversight of RIPA (the UK's Regulation of Investigatory Powers Act) and the fallback / legacy of Data Retention are part of what remains a young legal framework. But this framework is missing one critical link - clarification on what data people post about themselves and when they are legally responsible for what they publish. When I worked on RIPA at the time of launch, and the EU data protection directive at the time of revision (for incorporating sound and image), social media was not clearly mainstream and Facebook not yet an idea. As consumer culture evolves to entrench openness more deeply, both the risks of data publishing and the burden of responsibility need to be clearer.

In the UK the Information Commissioner’s Office has the unenviable task of charting a course through the unknowable. To support them there needs to be a wide and educative debate about what the legal age of data consent should be and what this means. The ICO has a rare opportunity to lead an issue of massive national and moral focus. Whether responsibility eventually settles at 7, 9, 11, 13 or more, once you drop the stone in the pond nobody can be sure how far the ripples spread.

Since the birth of the digital networked society, Britain has been a laboratory for how digital communications affect individuals and nations. Our government is in a unique position for thought leadership - we should embrace the nettle, however painful.

Actually it's more a 'Photoshop-me-baby-one-more-time' day: Britney belts back up the gossip charts with a did she or didn't she have Photoshop surgery story. But heres the beef: should we ever trust an image we see? With lightweight photo tools on pretty much every PC on the planet, a few billion web images a click away on Google, and Copy & Paste now on the primary school syllabus, shouldn't those of us over 30 just accept that the camera-never-lies is about as true as Snow White? Meanwhile, if you really have to find out the latest buzz on Brit then it's below.

Britney's digital enhancements: http://www.adrants.com/2009/04/yawn-debate-rages-over-britney-spears.php

When Wilmington, publishers of the iconic 'Press Gazette' announced today they were stopping printing it underscored the scale of shift to the web. Like so many business journals, there's a website that continues more content tools planned, but the print edition's life is over. More on pressgazette.co.uk

Latest moves from the Federal Trade Commission in the US suggest the long awaited change in culture for social marketing online is near to arrival writes the Financial Times. But interesting that this looks set to target models where there is payment in cash or kind to people who recommend. Some consumer groups will want much more, but maybe the model reflects a fair compromise – after all, isn’t this simply a web centric distinction between advertising and editorial. Read more in the FT… http://www.ft.com/cms/s/0/9a58f44c-1fae-11de-a1df-00144feabdc0.html?nclick_check=1

Latest in the dozens of magazines that are stopping their presses. Dennis Publishing lads’ mag Maxim is a flagship title, confirming that if they can't get the economics to stack up then most of the sector will head online-only. Here's the pattern: tech and directory titles shifted first, then those catering to early adopters and younger audiences, next it's the recruitment and property press that switch entirely. Gradually the business press move - in spite the protection by higher ad revenues - and many of the motoring, travel and lifestyle stables of magazines thin out dramatically.  The recession is simply accelerating the switch.

In a year that will see the print editions of many newspapers fold, you could be forgiven for thinking that the switch to web was complete. Not so. Latest data on the US market shows a massive 84% leap in year on year traffic growth with free-to-post CraigsList now taking a whopping 97 of the 100 top sites. If audiences are still doubling year on year then the switch from print to web is still in the middle of its tipping point - and that's in the world's largest and most web advanced classified market. The real shifts are yet to be felt, which means across Europe the newspaper and magazine industry is yet to see the majority of listings and eyeballs move online. Ouch.