Murdoch says journalism's future is 'more promising than ever,' but rails against Web 'theft'

Murdoch speaking at the FTC event. Credit: FTC Web site.

News Corp. Chairman Rupert Murdoch continued his campaign today to style the digital news media according to his for-pay vision, declaring he was optimistic about journalism's future, but added that in that future, consumers would no longer have free access to expensive news content.

"The future of journalism is more promising than ever, limited only by editors and producers unwilling to fight for their readers and viewers, or government using its heavy hand either to over-regulate or to subsidize," Murdoch said at a meeting at the Federal Trade Commission.

But, he said, "we need to do a better job of persuading consumers that high-quality, reliable news and information do not come free.  Good journalism is an expensive commodity."

One of many newspapers executives and industry observer's to speak at the FTC today, Murdoch used his speech to outline a three-part mandate for newspapers wishing to survive: deliver content to consumers via every possible medium, digital and physical; get them used to the idea that they'll have to pay; and continue agitating for media deregulation.

But the question of whether newspapers should charge online readers has continued to be the most controversial.  For decades, newspapers have made fat profits from print advertisers eager to reach a daily audience.  The problem, said Murdoch, is that "the old business model, based on advertising only, is dead."

"The reason is simple arithmetic: Though online advertising is increasing, the increase is only a fraction of what is being lost from print advertising. That is not going to change, even in a boom."

That's because the in-print classified advertising market upon which newspapers relied has been "decimated" by Web competitors such as Craigslist and Monster.com, Murdoch said.

But Murdoch saved his strongest words for the companies that aggregate news -- Google Inc. among them -- in a now-familiar accusation.

"There are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production.  Some rewrite -- at times without attribution -- the news stories of expensive and distinguished journalists who invested days, weeks, or even months on their stories -- all under the tattered veil of fair use." 

"Their almost wholesale misappropriation of our stories is not fair use -- to be impolite, it's theft."

-- David Sarno

10 favorite gadgets of 2009

If you're still looking for a gift, the Times' Technology staff has compiled a list of our 10 favorite gadgets of 2009. Check out the full list, with details.

In Los Angeles, it's the attack of the Twittering food trucks!

The Kogi BBQ truck started the Twitterin' truck trend. Credit: joshuaheller / flickr.

Take a walk down Main Street during one of downtown L.A.'s Art Walk nights (the second Thursday of every month), and you will see an element that does not at first blend in with all the paintings, sculptures, high heels and hipsters.

Lining the curbs from 4th Street on down are a caravan of parked food trucks, part of L.A.'s growing army of Twitterized mobile eateries, originated by the now-famous Kogi Korean BBQ truck.

But now the roving bands have expanded to such variously named rolling restaurants as Nom Nom Truck, Let's Be Frank, and the upcoming FrySmith, a "truck with fries that eat as a meal." 

There are sushi trucks, ice cream and shave ice trucks, Indian food trucks, Philadelphia cheese steak trucks (couldn't find the Twitter address but I saw it with my own eyes), coffee and sweets trucks, and even a food truck for vegans!

No doubt I have omitted a few trucks from this list, but the L.A. Metblog listed more of them a few months ago, and there's even a page that tracks tweetin' trucks.

-- David Sarno

Google bets big on mobile advertising in $750-million acquisition of AdMob

Google Inc. has shown which way it believes the winds are blowing by forking over $750 million for mobile advertising firm AdMob, one of the Web giant's largest acquisitions to date. 

As AdMob itself has described, the volume and effectiveness of mobile advertising has been skyrocketing over the last several years as more advanced smartphones have caught on, making it easier to deliver more kinds of graphical and text-based advertising to phone-toting consumers.

In a recent report, AdMob said that the number of mobile ads it served had increased nearly 540% from September 2007, to 10.2 billion per month from 1.6 billion.  

As mobile phones morph further into pocket Internet devices, and consumers grow accustomed to performing online functions like search, gaming and instant messaging on their handsets, opportunities for advertising companies like Google will grow rapidly, analysts expect. 

Google says the number of searches performed by smartphone users has increased by a factor of five over the last two years, led primarily by iPhone users and owners of Google Android phones. At least a dozen new Google-powered phones, such as last week's launch of Verizon's Droid, are expected to be released in the coming year.  

Google also says that marketer spending on mobile advertising is growing at 30% annually.

AdMob was founded in 2006 by Omar Hamoui, a Web entrepreneur looking to generate traffic for his mobile-based website. The company has taken funding from venture firms such as Sequoia Capital, Accel Partners and Northgate, and the company's clients have included Ford, Coca-Cola, Electronic Arts and Paramount Pictures.

Google, which already owns a major stake in mobile advertising with its DoubleClick Mobile unit, said it expects regulatory scrutiny of the AdMob deal but hopes the pact will be approved within a matter a months.

-- David Sarno

Google's 'Dashboard' allows users some insight into which data the company stores

Google has unveiled its 'Google Dashboard' service, a page where users can get a sense of the data the company stores about them in any of 23 different Google-run services. 

As questions about how the company uses consumer data continue to mount, Google has tried to answer those concerns by allowing users a clearer view into how their data is stored and used by programs like Gmail, YouTube and Google Docs.

"We think of this as a great step towards giving people transparency and control over their data, and we hope this helps shape the way the industry thinks about these issues," Alma Whitten, a Google  engineer who works on Privacy and Security, said in a statement.

The Dashboard is essentially a page listing each service that stores data, along with which types of data it stores. Rather than allowing users to control and edit their data directly from the page, however, Dashboard refers users to other pre-existing settings pages. In that sense, the Dashboard is a consolidation of existing functions, not a new set of tools by which users can control their data.

And though much of the concern about Google's data storage revolves around precisely how and what the company does to analyze and profit from user information, the Dashboard offers little insight into those domains. It does not specify which services keep user data, or for how long. Neither does it alert users that, for instance, their Web search histories and e-mails are constantly scanned for the purposes of selling products to them and others.

But users should expect that most or all of their data could be used for advertising, Google said. "To most folks, I think that there is a general expectation that even when we launch a product that doesn't have a clear business model associated with it, there's a possibility that advertising could be associated in some way," said Shuman Ghosemajumder, Google's business product manager for Trust & Safety.

Google said it would continue to add features to the Dashboard, and that services that were not included in the first iteration -- Analytics, AdWords, AdSense, and Book Search among others -- would be added in later versions.

-- David Sarno

New York attorney general files antitrust lawsuit against Intel

An Indian model holds an Intel Xeon processor 7400 series product in 2008. Credit: NV Jagadeesh/EPA.

New York Atty. Gen. Andrew Cuomo today filed an antitrust lawsuit against Intel Corp., the world's largest chip maker, alleging that the company engaged in "a worldwide, systematic campaign of illegal conduct" to further its business and stifle competitors.

“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,”  Cuomo said in a statement. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers, who were robbed of better products and lower prices."

Cuomo's office maintained that Intel paid or threatened some of the world's leading computer makers -- Dell, Hewlett-Packard and IBM among them -- to prevent the companies from doing business with Intel's main rival, Advanced Micro Devices Inc.  The payments, the complaint alleges, came in the form of high-dollar "rebates" to the computer makers, though Cuomo's office dismissed the rebates as "payoffs" that Intel made to hide their true nature.

The case is assembled in part from internal e-mails collected from Intel's business partners and from within the company itself, according to the filing.

“'I understand the point about the accounts wanting a full AMD portfolio,'" wrote an IBM executive in 2005, according to a statement from Cuomo's office. "'The question is, can we afford to accept the wrath of Intel …?'”

Intel could not immediately be reached for comment.

The lawsuit is a result of a nearly two-year investigation by Cuomo's office, in which investigators say they evaluated millions of pages of documents and e-mails and interviewed dozens of witnesses.

The suit was filed in federal court in Delaware and aimed to bar Intel from what it called "further anti-competitive acts," and recover damages to New York consumers and government entities.

In May, the European Commission fined Intel nearly $1.5 billion over similar charges of anti-competitive practices, saying the results harmed millions of European consumers.  Intel disagreed with those charges and vowed to appeal the decision.

-- David Sarno

Microsoft partners with Pasadena's OpenX to share online advertising technology

Microsoft Corp. and OpenX Technologies Inc., a Pasadena-based Web advertising firm, have brokered a deal to mutually promote their ad-selling technologies and share customers.

Under the deal, OpenX will offer some of Microsoft's online advertising products to its own customer base of more than 150,000 websites, which collectively serve 300 billion ads per month.  Microsoft will also refer individual business customers to OpenX, which designs custom advertising products for paying clients.

Most of the software offered by 3-year-old OpenX is based on open source technology and has become an attractive option to smaller websites, which can install the OpenX advertising platform for free and begin to make revenue from selling ad space.

Microsoft touted the partnership as an early step into a more diverse and flexible online advertising market.

"Partnering with OpenX for us is emblematic of a desire to accelerate an open ecosystem," said Maggie Finch, manager of Microsoft's business publishing group.  "We want to provide multiple choices and options for publishers of all sizes."

OpenX's technologies allow website owners to efficiently find advertising targeted to their readers. The company's competitors include Google's DoubleClick and Microsoft's aQuantive division, now called Microsoft Advertising.

The companies did not disclose the specific financial terms of the multi-year deal, stressing that it was primarily a way to cross-promote advertising products. Microsoft, however, said there would be no revenue shared as part of the agreement.

"It's the beginning of a partnership," said OpenX chief executive Tim Cadogan, a former advertising executive at Yahoo Inc., with which Microsoft signed a major search advertising deal earlier this year.  "I think it's a good legitimization of what we're doing and hopefully kicks us up to another level in terms of industry awareness."

Corrected, 3:00 p.m.: An earlier version of this post said the OpenX plaftorm served 3 billion ads per month.  The actual number is 300 billion.

-- David Sarno

Los Angeles adopts Google e-mail system for 30,000 city employees

The Los Angeles City Council voted unanimously today to outsource its e-mail system to Google Inc., making it the largest city in the nation to make the move and handing the Web search giant a major victory in its quest to become a software provider to the world's cities and businesses.

After more than two hours of debate, council members voted 12-0 to approve the $7.25-million contract that would move all 30,000 city employees to Google's so-called cloud over the coming year.

"The City of Los Angeles, the second largest city in the nation, made a world-class decision today to support a state-of-the art e-mail system," said Councilman Tony Cardenas, who made the motion to approve the Google system.

Before the vote, several council members had voiced objections to the contract, including whether the city would see any real cost savings, as Google had contended, and when the new system would be ready to store data from law enforcement, where security standards are more rigorous.

Because Los Angeles will be among the earliest adopters of the Google system, council members expressed concern that the city might be signing on before Google's cloud system was fully proven.

"It's unclear if this is cutting edge, or the edge of a cliff and we're about to step off," said Councilman Paul Koretz.

The contract was approved pending an amendment that would require Google to compensate the city in the event that the Google system was breached and city data exposed or stolen. No such clause existed in the contract.

The vote today ended a nearly year-long process during which Google competed furiously with other software vendors, including rival Microsoft Corp., to secure the city's valuable stamp of approval. Parties on all sides believe that if smaller cities see Los Angeles successfully transition to Google's cloud system, they may be more likely to follow suit.

It is that type of cascade effect that Microsoft lobbied hard to prevent, sending executives and paid advocates to Los Angeles to make the case against Google.

The city plans to complete implementation of the Google system by June and will begin with a pilot period during which a limited number of employees will test the system. City law enforcement agencies including the Los Angeles Police Department will migrate to the new system once they are satisfied with the security and functioning of the system.

Update:  Several readers have asked about the $7.25 million cost of the contract.  That price covers five years of e-mail for the city.

-- David Sarno [follow]

City committee declines to recommend Google e-mail contract

Budget and Finance Committee Chairman Bernard C. Parks.
Credit: David Sarno / Los Angeles Times.

The Los Angeles City Council's Budget and Finance Committee agreed Monday evening to abstain from voting on a proposed contract with Google Inc. to replace the city's e-mail system, passing the decision on to the full City Council amid unresolved concerns about the cost and necessity of the contract.

The budget committee, chaired by Councilman Bernard C. Parks, adjourned after nearly two hours of testimony in which the merits of upgrading the current system were hotly debated by an array of city officials, as well as Google, Microsoft Corp, Novell Inc. and consumer advocates.

The full council is tentatively scheduled to vote on the contract Oct. 27.

At the heart of the deliberations is whether the city should go to the expense of replacing its longstanding e-mail system -- considered slow and clunky by many employees -- with a system wholly owned and operated by Google.

The Mountain View, Calif., Web giant would use its own far-flung network of computer servers to store and secure e-mail for many of the city's 30,000 employees.  That would likely include city law enforcement agencies, such as the Los Angeles Police Department, where sensitive data is often exchanged over e-mail.

Though critics of the $7.25-million contract have pointed to security concerns of Google's storing city data in its so-called cloud of servers, the main focus of attention Monday was the extent to which the agreement with Google would deliver budgetary savings to the city.

Indeed, Google's main selling point for its e-mail and document software is that it is a "dramatically lower cost solution," as a Google executive recently described it to The Times.  Officials in the city's Information Technology Agency, which selected Google's bid from among 15 submitted to the city (seven of them were from Microsoft), have also said that the Google system would save the city millions of dollars.

But a recent city analysis found that, instead of offering clear budgetary savings, installing and  running Google Apps would actually exceed the cost of the current Novell system by $1.5 million over the five-year life of the contract. 

"It didn't give me a warm feeling in my stomach that we should jump off this cliff together," Parks said of the disputed savings.  "It looks like we're going on a promise -- and it just doesn't look like, substantively, it's being supported."

Google argues that if the city were to hire the company to handle all of its email, L.A. technology officials could free up many resources now tied to the operation and upkeep of their current system.  Moreover, moving to a next-generation cloud system could offer a variety of other benefits, including the ability to more quickly rebound from a disaster, and stronger security than the city's current offering.

Even so, Parks said with a clear note of skepticism, "the urgency case hasn't been made."

Council members Jose Huizar and Bill Rosendahl agreed to abstain from voting on the contract, saying that more due diligence needed to be performed on the costs and risks involved.

When asked whether he thought the committee's decision to skip voting on the issue was a good or bad sign for the contract, Dave Girouard, the President of Google's Enterprise division, said, "I really don't know -- I've never been in a process like that."

According to the terms of the contract negotiation, the City Council has until Dec. 1 to approve or reject the plan.  If no action is taken by that date, the contract is automatically approved.

-- David Sarno

Google beats analysts' expectations, sending stock up in after-hours trading

Google Inc. reported a 27% increase in profits during the third quarter, signaling renewed strength for the Internet search giant and increasing hopes that the online technology sector might be trending toward recovery.

The company's gross revenue increased 7% to $5.94 billion from $5.54 billion during the same period last year.

Following the announcement of the quarterly performance, which beat analysts' expectations, the company's stock rose as much as $15 a share -- or almost 3% -- in after-hours trading

“Google had a strong quarter,” Google Chief Executive Eric Schmidt said in a statement. “While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.”

Schmidt praised his executive staff, saying the relative health of the company through the nation's recession "has proven the worth of this team," which focused on cost-cutting measures while the company waited for the economy to improve.

Google said it had resumed hiring, after paring its payroll last quarter -- a rarity for the fast-growing company.

-- David Sarno