Google defends new privacy policy to Congress

Google has been facing a barrage of questions about changes it plans to make to its privacy policy that affects how it handles the voluminous data it collects from hundreds of millions of people around the globe. 

Some of those questions have come from members of Congress who question if Google is sacrificing its users to boost its online advertising business as it pushes into new areas such as social networking and mobile devices.

The Internet search giant responded Tuesday in a letter, saying its new privacy policy helps users and is similar to those used by other Internet companies.

Google said it was just making its privacy policy easier to understand and said it was already sharing information about its users across services.

It also said the new privacy policy benefits users by helping them find the information they are looking for more quickly.

For example, Google says currently when someone signs into Google and searches for recipes, it can't recommend cooking videos on YouTube. That will change with the new privacy policy that takes effect March 1. That also means Google can show users even more finely targeted online ads.

Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas) on Friday asked the U.S. Federal Trade Commission to probe whether the changes violate Google's settlement last year over its now defunct Google Buzz social network. People have different options to evade this kind of tracking. They can open Google accounts not associated with their real names. Or they can just not log in.

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-- Jessica Guynn

Photo: A sign for Google is displayed behind the Google android robot, at the National Retail Federation, in New York on Jan. 17, 2012. Credit: Mark Lennihan/AP Photo

Facebook builds lead in display ads as its IPO approaches

With the filing for its initial public offering expected any day now, Facebook Inc. is extending its lead in online display advertising, which makes up the bulk of its revenue.

The social networking giant’s share of the U.S. online display advertising market grew to nearly 28% for 2011, up from 21% a year earlier, according to research firm ComScore Inc.

Facebook has stayed ahead of Yahoo Inc., which has 11% of the display ad market — and far ahead of Google Inc. and Microsoft Corp.,  each of which has less than 5%, according to ComScore.

Facebook surpassed Yahoo for the first time in 2009, said Andrew Lipsman, ComScore’s vice president of marketing and industry analysis.

The new numbers show that Facebook is persuading Madison Avenue to funnel ad dollars into social media, he said. That success can be credited to Facebook Chief Operating Officer Sheryl Sandberg, a former Google executive who has been instrumental in convincing advertisers that ads on Facebook are far more persuasive because they come via a friend.

Facebook — which has more than 800 million users — also can target ads using personal information that people volunteer on their user profiles and information Facebook gathers on how people spend their time on the site. In addition, brands can form connections with consumers for free through fan pages they create on the service.

Lipsman said the ComScore research puts into perspective how Facebook has come to dominate display advertising.

“If we think back a couple of years, large brands were hesitant to use social media channels. Fast forward to today, and that has really reversed itself,” Lipsman said. “Almost 3 out of every 10 ads or so are on Facebook.”

That’s the kind of message Facebook wants to send to Wall Street as it prepares to file papers this week with the Securities and Exchange Commission for an initial public offering. The company is looking to raise as much as $10 billion in an offering that could make Facebook worth as much as $100 billion.

Facebook also collects revenue from its virtual payment system called Facebook credit.  And the company takes a 30% cut of revenue generated by game developers on its site.Facebook’s total revenue in 2011 was about $4.3 billion, according to estimates from research firm EMarketer.

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-- Jessica Guynn

Photo: Sheryl Sandberg, Facebook’s chief operating officer, is credited with driving the company’s online advertising business. Credit: Chris Ratcliffe / Bloomberg

Advertising spending online expected to surpass print this year

U.S. online advertising spending is expected to grow 23.3% to $39.5 billion this year, pushing it ahead of total advertising spending in print newspapers and magazines, according to an eMarketer report.

Meanwhile, print advertising spending is expected to fall to $33.8 billion in 2012 from $36 billion last year, the market research company said.

"Advertisers' comfort level with integrated marketing is greater than ever, and this is helping more advertisers -- and more large brands -- put a greater share of dollars online," said David Hallerman, eMarketer's principal analyst.

The 2012 estimates come after a robust year for U.S. advertising in 2011. eMarketer said online ad spending grew 23% to $32.03 billion last year while total ad spending rose 3.4% to $158.9 billion.  

The market research company said firms are funneling more advertising money online because of the growing amount of time that consumers spend with digital platforms and advertisers' view of the Internet as a more measurable medium, especially as the soft economy "forces businesses to be more accountable with their ad dollars."

Overall, total media ad spending in the U.S. is expected to grow an estimated 6.7% to $169.48 billion this year, boosted by the elections and summer Olympics in London, eMarketer said.

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-- Andrea Chang

Twitter.com/byandreachang

Image: Print versus online advertising spending. Credit: eMarketer

VW's Super Bowl teaser video 'The Bark Side' goes viral

This post has been updated. See the note below for details.

A Volkswagen teaser that features dogs dressed as "Star Wars" characters barking out the "Imperial March" theme song associated with the evil Darth Vader has gone viral, generating more than 3 million views on YouTube since Wednesday night.

VW created the teaser, called "The Bark Side," in advance of a commercial it plans to air during the third quarter of the Super Bowl, scheduled for Feb. 5.

The teaser aired during Wednesday's episode of "The Middle" on ABC. It was also posted to YouTube that evening.

Volkswagen gained both critical acclaim and sales publicity during last year's Super Bowl, when it aired "The Force."

That commercial also used the "Imperial March" music from "Star Wars" and showed a child in a Darth Vader costume attempting unsuccessfully to use the movies' legendary "force" on a variety of household appliances and other objects. To his surprise, he's able to use the force to start a Passat -– with a little unobserved help from his father.

[Updated at 12:31 p.m., Jan. 19: Mike Sheldon, chief executive of Deutsch LA, the Marina del Rey firm that does the creative work for Volkswagen, told The Times' Meg James that "The Bark" was the firm's way of trying to stay "one step ahead" of the competition. He added that the teaser was trending "faster than 'The Force did, and this isn't even a Super Bowl ad."]

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Sens. Herb Kohl and Mike Lee call for Google antitrust probe

The chairman and top Republican on the Senate antitrust subcommittee have asked regulators to investigate Google Inc.'s search practices, saying they were concerned the company was biasing results to favor its own products.

The senators -- panel Chairman Herb Kohl (D-Wis.) and Mike Lee (R-Utah) -- sent a letter Monday to the Federal Trade Commission, which already is conducting a broad antitrust investigation into Google's business practices, including search and advertising.

Kohl and Lee questioned Google Chairman Eric Schmidt at a contentious hearing in September. Schmidt's answers, along with testimony from two Google competitors, raised questions that should be explored by regulators, the senators said in their letter to FTC Chairman Jonathan Leibowitz.

"We believe these allegations regarding Google's search engine practices raise important competition issues," wrote Kohl and Lee, whose committee has been conducting its own review of Google. "We are committed to ensuring that consumers benefit from robust competition in online search and that the Internet remains the source of much free-market innovation."

At the hearing, senators heard complaints from the chief executives of local review site Yelp and online product comparison site Nextag that Google abuses its search engine dominance at the expense of smaller competitors.

Asked by Lee during the hearing whether Google "cooked" its search results on three product-comparison websites to favor Google Shopping results, Schmidt responded, "Senator … I can assure you we have not cooked anything."

Schmidt strongly denied the accusations. But Kohl and Lee said Monday that there were enough questions to warrant an FTC review.

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Photo: Google Inc. Chairman Eric Schmidt takes the oath at a Senate antitrust subcommittee hearing in September. Credit: Associated Press.

Saudi prince invests $300 million in Twitter

Saudi Arabia's Prince Alwaleed bin Talal has scooped up a substantial stake in Twitter.

The multibillionaire has made a $300-million investment in the popular social media site that activists used during the Arab Spring uprisings. That's roughly a 3% stake in the San Francisco company.

Twitter confirmed the investment,  which was announced in a press release from Kingdom Holding Co. that touted Alwaleed's desire to invest in "promising, high-growth businesses with global impact."

A nephew of Saudi King Abdullah, Alwaleed owns 95% of Kingdom Holding, which has stakes in Apple, Citigroup and General Motors. He is one of the richest people in the world, with a net worth of nearly $20 billion, according to Forbes magazine. For more on him, check out this Charlie Rose interview from last year.

Fortune is reporting that he bought his stake in Twitter from insiders, not the company. Twitter spokesman Matt Graves declined to provide any further details. The prince's investment in Twitter has been rumored since October.

The San Francisco company's worth was pegged at $8.4 billion in a funding round led by Digital Sky Technologies in October.

Twitter says it has 100 million active users who send 250 million tweets per day. 

One of an elite group of privately held social media companies sporting multibillion valuations, Twitter is taking its time before going public. Facebook, which has more than 800 million users, is planning a $10-billion initial public offering. Twitter is also seen as a major player in social media because of its popularity. The company is still working on its fledgling advertising business.

Twitter's advertising business is expected to generate about $140 million this year, up from $45 million last year, according to EMarketer. Twitter may generate $260 million in ad revenue in 2012, the research firm said. Twitter now has more than 700 employees.

 “We believe that social media will fundamentally change the media industry landscape in the coming years. Twitter will capture and monetize this positive trend,” Ahmed Reda Halawani, Kingdom Holdings executive director of private equity and international investments, said in a statement.

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Photo: Square and Twitter co-founder Jack Dorsey in June at D9. Credit: Asa Mathat / All Things Digital

Enjoy a virtual holiday meal hosted by Wieden + Kennedy

Instead of sending out a traditional Christmas card, advertising agency Wieden + Kennedy's Amsterdam office has invited its friends, family, clients, and now the public to a super weird virtual holiday meal with humanoid robot dolls.

Here's how it works: You reserve 30 minutes of table time at virtualholidaydinner.com and at the appointed time you and four friends or co-workers or family members, or strangers -- all call into the dinner via Skype where your heads will appear on flat screens that sit on top the robot doll bodies. The company, known for its work with Nike, has employed facial tracking software so that if you turn your head at home, your virtual robot doll also turns his or her head. The room that the dolls are sitting in has been elaborately decorated to add to the holiday spirit.

This is the second year that the agency's Amsterdam office has hosted the virtual holiday meal, but this year it added three scripts to the mix -- so while you are sitting at the virtual table you can figure out something to say. The lines to the script appear on participants computer screens karaoke style, so you know what to say and when.

Here's a sample from the "Business as Usual" dinner script:

CLIENT TWO: Perhaps, since we are all here, you’d like to try to sell us a digital idea that you know is not possible to make unless we quadruple the budget.

AGENCY MD: That would be incredibly irresponsible of us. Shall we begin?

CLIENT ONE: Before you start let me just say that our ambition for this project is to make a world first idea that connects all living people on the planet in a purposeful way.

AGENCY WRITER: That’s it?

We spoke with someone who had done several of these dinners already and asked if the whole experience was as awkward as it looked like it could be.

"It's totally awkward," she said. "It's funny, but it's also super awkward. First of all you are on a robot doll, so it is kind of weird, but I think once you get started with the script it's hilarious and then once it's over it's super awkward again."

That's kind of exactly how we'd imagine it would be.

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Image: A picture of the virtual holiday meal in action. Credit: Wieden + Kennedy

 

'All-American Muslim': Kayak calls show terrible, apologizes to customers

The controversy over the reality TV show "All-American Muslim" continues, with Kayak.com apologizing to customers Wednesday for deciding not to advertise on the TLC show next year. But an executive at the travel site said the network "was not upfront with us about the nature of this show" and added that "mostly, I just thought the show sucked."

In a letter posted on its website titled "We handled this poorly," Kayak's Chief Marketing Officer Robert Birge apologizes to "anyone who was offended" by how the travel site handled its decision not to continue advertising on the show when it returns in January. 

"We decided to advertise on it in the first place because we adamantly support tolerance and diversity," the letter said. "Our 150-person team includes people from all over the world, and from all walks of life.…We get what America is about."

However, Birge noted that the company understood the decision "comes across as bending to bigotry" and said employees at the company were "very unhappy with how I handled this."

In explaining the decision, he said Kayak's approach to advertising is to place ads based on who watches a program, and not its political leaning. Birge said the company deemed the show a worthy topic at first, but looked into the program more carefully after receiving angry emails over its decision to advertise.

"The first thing I discovered was that TLC was not upfront with us about the nature of this show. As I said, it's a worthy topic, but any reasonable person would know that this topic is a particular lightning rod," he said. "We believe TLC went out of their way to pick a fight on this, and they didn't let us know their intentions. That's not a business practice that generally gets repeat business from us... Sadly, TLC is now enjoying the attention from this controversy."

At the end of the letter, Birge wrote: "Lastly, I watched the first two episodes. Mostly, I just thought the show sucked. Based on our dealings with TLC and the simple assessment of the show, I decided we should put our money elsewhere. Apologies again."

"All-American Muslim," which premiered last month, follows the day-to-day lives of five Muslim American families in Dearborn, Mich., a suburb of Detroit with a large Muslim population. Cast members talk about how their faith affects their actions and choices.

Other companies, including Lowe's Cos., have also come under heavy criticism from activists, some politicians and customers after pulling its ads from a reality-TV show featuring Muslim Americans.

The North Carolina-based home improvement giant decided to stop advertising on the show after complaints by the Florida Family Assn., a conservative Christian group that lobbies companies to promote "traditional, biblical values."

The association praised the move but the decision sparked an immediate backlash. State Sen. Ted Lieu (D-Torrance) called the move "bigoted, shameful, and un-American." A petition on SignOn.org that calls on companies to keep advertising on the show has gathered thousands of signatures. Activist and actress Mia Farrow joined the battle in a Twitter post and urged a boycott of Lowe's.

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-- Andrea Chang

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Photo: Suehaila Amen is featured in "All-American Muslim." Credit: Adam Rose / TLC

Google+ airs sharing-focused TV spot during Packers vs. Lions game [Video]

Google's social networking effort, Google+, is looking for users and took to the commercial break of the Thanksgiving Day NFL matchup of the Green Bay Packers and Detroit Lions to entice turkey lovers.

The TV spot, which can be seen below, ran for 90 seconds and focused on the theme of sharing. Makes sense for a social network, right?

Google+'s most prominent sharing feature is, of course, Circles, which allows users to share photos, links, video or anything else to specific groups (er...Circles) of friends they've selected.

Hangouts, Google+'s video chatting feature, also is shown off in the ad, and together the two pillars of Google+ allow users to share online "but like real life," the ad proclaims.

How can a website and phone app (Android and iOS only for now) allow you to share online as you would in the real, tangible-not-digital world? Again, because you can share with whomever you want -- everyone, a Circle of co-workers, close friends or friends back home, etc.

So what do you think? After watching the ad, are you going to use Google+ more? Or even sign up for those who haven't yet given Google+ a shot? Sound off in the comments below.

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Image: A screen shot of the first TV ad for Google+'. Credit: Google via YouTube

Feds charge ring with 'click-jacking' scheme that hit 4 million PCs

In the latest lesson on Internet safety -- or the lack thereof -- federal authorities have charged seven men with infecting millions of computers with a virus-like program that tricked users' Web browsers into navigating to phony pages stocked with ads, earning the defendents as much as $14 million.

In a type of online fraud known as click-jacking, the malicious software waited for users to click on links to popular sites like Apple's iTunes or Netflix.com, and then quietly redirected their browsers to similar-looking sites larded with online ads -- ads that allegedly earned the defendents cash each time they were displayed.

“These defendants gave new meaning to the term, ‘false advertising’" Preet Bharara, the U.S. attorney for Manhattan, said in a statment. "The international cyber threat is perhaps the most significant challenge faced by law enforcement and national security agencies today, and this case is just perhaps the tip of the Internet iceberg."

According to the indictment filed by Bharara's office, six Estonian nationals now in custody and one Russian national still at large engaged in the sophisticated scheme that infected millions of computers in more than 100 countries, and even reached computers controlled by NASA, which worked with investigators to unravel the alleged scam.

In this case, the click-jacking was achieved by software that burrowed into users' computers and changed the way they accessed the Web, authorities alleged.

The Internet has a kind of built-in phone book called the Domain Name Server (DNS) system.  When a computer needs to find a website like Yahoo or Wikipedia, it reaches out to the DNS to find a numerical address called the IP address, which might be something like 127.0.0.1. 

But in this scheme, the nasty program changed the IP address of the phone book itself, so that when a computer needed to find a website, it was given an incorrect address that sent it to a phony site controlled by the defendents, according to the indictment.

The group has been charged with seven felony counts, including wire fraud, computer intrusion and money laundering.  Some of the counts carry a maximum penalty of 30 years in prison. 

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Illustration: "Malware remote access."  Credit: Sophos Germany / Flickr