The business and culture of our digital lives,
from the L.A. Times

Category: Web Scout

Judge sets November deadline for revised Google book deal

A New York judge overseeing the long-running case in which a group of authors and publishers sued Google over the company's attempt to obtain digital rights to millions of books ruled that the parties must submit a revised settlement agreement to the court by Nov. 9.

The previous agreement was scuttled last month when federal regulators notified the court that the pact may have been vulnerable to antitrust and copyright concerns. The Department of Justice filed an amicus brief after a wave of critics -- including authors, libraries and watchdog groups -- complained that the agreement was unfair.

A plaintiffs lawyer said the sides had been working "around the clock," and that the amended agreement would address the issues raised by the Justice Department, according to the Associated Press.

-- David Sarno

Google teams with Verizon and promises a family of Android mobile devices

Google CEO Eric Schmidt, left, and Verizon CEO Lowell McAdam. Credit: Verizon
In the face of the iPhone's popularity, Verizon Wireless and Google Inc. said they are forming a partnership to create new smart phones using Google's Android operating system and the Internet firm's applications.

Verizon said it expects to unveil two new Google phones this month, but said those initial entries would be just the first part of a "multiyear roadmap."

The partnership of the two technology heavyweights -- the nation's largest wireless network and the online search leader -- comes as the fight for dominance in the mobile smart phone market grows increasingly contentious.

A spat between Google and technology rival Apple Inc. has escalated in recent weeks over Apple's refusal to allow customers to use Google Voice, the company's telephone application, on the popular iPhone. Google told the Federal Communications Commission that Apple rejected the app for competitive reasons, but Apple denied that, saying it is still studying Google's application.

AT&T, the sole wireless carrier for the iPhone, added fuel to the fire last month when it complained to the FCC that Google Voice blocked calls to certain areas, raising the possibility that Google could be in violation of FCC rules.

Verizon Wireless Chief Executive Lowell McAdam told analysts today that the company would support Google Voice. "You either have an open device or not, and this will be open," he said, adding that Google Voice would be available when Verizon's first Google devices come out.

Google Chief Executive Eric Schmidt gave plaudits to Verizon for its willingness to adopt Android, which, unlike Apple's system, is an open development platform over which Verizon would have less control. That decision, Schmidt said, was "enormously surprising given the history and the old-line nature of telcos.

"At Verizon, somehow the leadership has decided to embrace a different philosophy which works very well with the Internet," he said.

-- David Sarno

CNN's new iPhone app takes mobile news to the next level


An exception among the generally innovation-averse old-media crowd, CNN has often shown that it is not afraid to embrace new technologies or, when necessary, to invent some its own.

Continuing that trend, the network and its market-leading website,, have released a new iPhone app, a kind of fully loaded Swiss Army knife for news. 

The app's features include old-school written articles, live streaming video, localized traffic and weather, and -- coolest -- the ability for users to upload cellphone photos or video to iReport, the network's online haven for amateur reporting.


That will be the first time CNN has created a direct uplink from a mobile device to its iReport platform, an enhancement that could make it easier for users to transmit the kind of on-the-ground citizen reports that have grown common during high-profile events.

CNN says its video upload and download features will work fine on the open cellular network, where video features are typically pokey.

The application, available for $1.99 and initially hosting in-app advertising from Chevron and Lexus, is definitely testing the bounds of app simplicity, nearly mimicking a full website with the number of features and multimedia options. 

But CNN, with rather unabashed bravado, believes that its users want all that heavy firepower.  The new app "is one of the best user experiences around," said Louis Gump, vice president of CNN Mobile, in a statement, "and will quickly become an essential daily news source for many iPhone and iPod Touch users."

Some of that confidence is earned, of course. is still the highest-trafficked news site, and it also owns one of the most followed Twitter accounts

The current king of iPhone news apps is, arguably, NPR, which gives unfettered access to archived content from a huge list of radio stations. But CNN's bold move, bringing TV news to the iPhone, could mean a duel for media app dominance is afoot.

-- David Sarno

iPhone screen shots: CNN

Twitter said to be near a deal for $100 million in venture funding


Twitter may be close to locking up a deal for $100 million in new venture funding, a sum that would nearly triple the total venture capital poured into the 3-year-old messaging start-up.

The new investment round, which would include investment firm T. Rowe Price and Insight Venture Partners, according to a report in the Wall Street Journal, would value Twitter at close to $1 billion. 

Twitter did not immediately respond to requests for comment.

Among the most familiar refrains in the social media business is that companies do best to build value and audiences before they focus too heavily on generating revenue. Twitter co-founder Biz Stone reinforced the features-first, money-later approach this week when he said "it'll be awhile" before users see any advertising on Twitter.

Twitter has also said that it will support what it calls "commercial accounts" for businesses, which would offer paying customers more tools for analyzing their Twitter traffic. That feature may arrive by the end of the year.

Twitter's last round of funding came in mid-February, when it collected $35 million from the likes of Institutional Venture Partners and Benchmark Capital. Spark Capital and CEO Jeff Bezos's Bezos Expeditions participated in the round before that

In recent days, Twitter has been adding to the slate of sites and services that are allowing users to tweet, including MySpace and AOL's Lifestream platform.

-- David Sarno

Timberlake signs on to co-star in Facebook movie, "The Social Network"


Justin Timberlake. Credit: Chris Pizzello / AP

Did Facebook just get somewhat cooler?   

Variety is reporting that the latest addition to "The Social Network," the early-stage Hollywood movie project that will tell Facebook's origin story, has signed Justin Timberlake to play a principal character.

The actor-singer-Emmy winner is slated to play Sean Parker, a co-founder of Napster (not to be confused with Sean Fanning, the music site's creator) and Facebook's first president. Timberlake will play alongside Jesse Eisenberg ("Adventureland", "The Squid and the Whale"), who will portray Facebook's founding father Mark Zuckerberg, who was 19 when he famously created "The Facebook" in his Harvard dorm room.

The film will apparently concentrate on the vicissitudes of fame and fortune encountered by the young founders, whose meteoric ascent into wealth and pop culture was not always without its hitches. 

The script was written by Aaron Sorkin, a specialist in spinning drama out of often prosaic reality. Facebook's origin story comes with its share of Hollywood's classic elements involved -- money, power, and even betrayal -- but Sorkin and director David Fincher may have to take some liberties with the sex.

-- David Sarno

Google News goes down; company working to fix

Google has acknowledged an outage of Google News, its highly popular news aggregation site. The company said the following about the outage:

Today, starting at about 12:45 p.m. PDT, many users began experiencing difficulties accessing Google News. We are aware of the issue and working to fix it. We know how important Google News is to our users, and we take issues like this very seriously.

The outage comes on the heels of another Google outage earlier this month, when Gmail went down for more than an hour after a system upgrade went awry. The Internet search company operates almost completely via the Web, so down time of any sort creates immediate problems for it because clients and consumers are unable to access affected Google sites and services.

Google News aggregates headlines from hundreds of online news sources, and the company says it said its drives huge numbers of viewers back to those sites. An outage, then, means a major artery to online news sites has been temporarily clogged.

Updated, 2:28 p.m.:  The site is back up. The outage appears to have lasted around 30 minutes or less.

Updated, 3:20 p.m.: Google said the issue has been resolved. According to the company, the outage  lasted a little less than two hours, beginning at 12:25 p.m. and ending at 2:20 p.m. PDT.

-- David Sarno

Facebook retires once-embarrassing Beacon advertising system

Facebook is closing the book on Beacon, an early advertising experiment that got the upstart social network in big trouble with users in 2007. 


Back then, Facebook quietly launched the service, which recorded user activities on non-Facebook sites and then reported them to users' friends. 

In the most famous instance, a Facebook user complained that he had ordered a diamond ring for his wife from and that Facebook had ruined the surprise by reporting the purchase to all his friends -- and his wife, too.

The endeavor quickly turned into what "60 Minutes" called "a full-blown PR disaster ... including petitions and bloggers writing obituaries" for the company. 

In that same "60 Minutes" segment from early 2008, CEO Mark Zuckerberg said that Beacon and the company's advertising plans "might take some work for us to get this exactly right" and that "this is something we think is going to be a really good thing."

But the company is no longer maintaining that position. Beacon, it says, will be shut down as part of a class-action settlement. The suit was filed against Blockbuster and Facebook last year, accusing the video rental company of violating user privacy by disseminating customer rental information to users' Facebook friends -- via Beacon.

In addition to decommissioning Beacon, Facebook will also donate $9.5 million to establish a foundation that will focus on online privacy and safety concerns.

-- David Sarno

Netflix awards $1-million prize to recommendation wizards, announces 2nd contest

It took three years and 40,000 teams from 186 countries, but the $1-million Netflix prize has finally been awarded. 

The competition, first launched in October 2006, asked engineers and scientists around the world to solve what might have seemed like a simple problem: improve Netflix's ability to predict what movies users would like by a modest 10%.


Credit: Paul Sakuma / Associated Press

As it turned out, it took an international brain trust led by a pair of AT&T Labs researchers nearly 36 months to reach that milestone.  The team -- called "BellKor's Pragmatic Chaos" and made up of researchers and computer scientists from the United States, Austria, Canada and Israel -- turned in the winning algorithm less than 30 minutes before the contest's deadline in July. The submission improved Netflix's existing system by 10.06%, just enough to secure the prize.

An explanation of the algorithm by AT&T said their researchers had won the contest by making advances in two technical fields of taste prediction. With "neighborhood modeling," the scientists, including Robert Bell and Chris Volinsky, improved methods for finding films that share certain characteristics. For example, the neighbors of "X2", (The sequel to "X-Men") might be "Spiderman 2" -- another comic book sequel -- or "Wolverine," which also starred Hugh Jackman; or even "Valkyrie," the latest feature film from "X2" director Bryan Singer.

The team's second approach dealt with what the researchers called "latent factors."  These are movie characteristics that are identified mathematically rather than by human evaluation.  In an article in IEEE Spectrum magazine explaining their entry, the team described latent factors this way:

Because the factors are determined automatically by algorithms, they may correspond to hard-to-describe concepts such as quirkiness, or they may not be interpretable by humans at all. ... The model may use 20 to 40 such factors to locate each movie and viewer in a multidimensional space. It then predicts a viewer’s rating of a movie according to the movie’s score on the dimensions that person cares about most.

The capacity to guess user preferences has been a major theme of both artificial intelligence and online retailing for most of this decade. In addition to Netflix, sites such as, and the music site Pandora feature oft-used "recommendation engines," and heaps of other sites are in the taste-guessing business as well.

“Right now, we’re driving the Model T version of what is possible," in recommendations, said Netflix Chief Executive Reed Hastings in 2006, when the prize was launched. "We want to build a Ferrari and establishing the Netflix Prize is a first step.”

Knowing that it would take more than a 10% improvement to make a Model T into a Ferrari, Netflix  has already launched a second contest. This time entrants have been asked to predict the tastes of customers who have not taken the time to actually rate movies. Instead, the predictions will be based on demographic information -- age, gender, ZIP Code -- as well as the movies users have rented in the past.  Netflix will award $500,000 to the team that has built the best algorithm after six months, and another $500,000 after 18 months.

-- David Sarno

Facebook hits 300 million users, says it's cash-flow positive

Photo: Palo Alto., Calif.-based Facebook is the nation's and the world's No. 1 social networking website. Credit: Tony Avelar / Bloomberg.

It took Facebook five years to get to 150 million active users, a lightning-fast growth rate by any measure. But like track phenom Usain Bolt, the world's No. 1 social networking website atomized its own speed record this year by going from 150 million users to 300 million users in a little over nine months

CEO Mark Zuckerberg also said today that the company had become cash-flow positive ahead of schedule (he had originally guessed "sometime in 2010") and called the milestone important "because it sets Facebook up to be a strong independent service for the long term."

Facebook makes its money from sponsored advertising as well as from an auction system in which marketers and small businesses pay to target their ads to users of a certain age or geographic region. The private Palo Alto, Calif., company does not disclose its revenues.

Facebook has had a tumultuous childhood, frequently getting in hot water over the way it shares, stores and uses the private information of its large user base. Last month, the company said it was starting a year-long project to clarify and tighten its privacy controls after a Canadian government agency complained about the site's policies.

But Facebook's growth is perhaps the best evidence of its utility and its general appeal to users worldwide. The company says its fastest-growing demographic is now people 35 and older, and in the U.S., the site's nearly 90 million visitors made it the fourth most-trafficked Web property in July. Facebook had 70 million U.S. visitors when it surpassed rival MySpace in May to become the nation's most popular social network.

The company was valued at $10 billion in a transaction earlier this year in which the Russian venture firm Digital Sky Technologies bought $200 million worth of stock in the company. Facebook, which now has close to 1,000 employees, has taken about $600 million in financing.

-- David Sarno

AOL taps Garlinghouse for revamp of mobile and e-mail segments

Brad Garlinghouse. Credit: AOL.

As AOL prepares to blast off from parent company Time Warner Inc. in the coming months, the Internet company and its chief executive, Tim Armstrong, are working to fill up the tanks with rocket fuel. 

Late Monday, AOL announced it had hired former Yahoo Inc. executive Brad Garlinghouse as president of Internet and Mobile Communications -- a position that will oversee  some of AOL's best-known properties, including its instant messaging software and its e-mail system ("You've Got Mail"), as the company tries to set a course towards prosperity in an overcrowded digital cosmos. 

At Yahoo, Garlinghouse made headlines when he demonstrated a quality that AOL sorely needs -- a disdain for corporate complacency. In a memo circulated to Yahoo employees in 2006, later known as the "Peanut Butter Manifesto," Garlinghouse called the company's management out in dramatic terms, recommending that Yahoo undergo a "radical reorganization," "blow up the matrix" and "kill redundancies." 

Aggressive thinking is the order of the day for AOL, which has suffered brand and user attrition since its days as a dial-up service, and which is now reinventing itself as a social communications hub. 

"There's no doubt there are challenges ahead," Garlinghouse said by phone Monday.  But that's "one of the reasons I'm excited about it." 

Though Garlinghouse and Armstrong -- also on the call -- spoke mostly in the abstract about what AOL might look like in 2010, the general idea is for AOL to focus and monetize the many communications streams people are now using.

"When you think about the future of messaging -- where you have phone, text, e-mail -- content floats on those same surfaces," said Armstrong, a former senior advertising executive at Google.

And where users and content commingle, advertising wants to follow. "There's a tremendous amount of information and data that gets kicked off of our products and services which allow us to make all of our systems smarter,"  Armstrong added.

Garlinghouse will also be the West Coast point man for AOL Ventures, the company's business incubation arm that will be increasingly looking to acquire start-ups that would fit AOL's growth strategy.

"I think with Tim's heritage at Google and my heritage at Yahoo, we both see tremendous networks of people and companies to tap into," Garlinghouse said.

-- David Sarno


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