September 26, 2011

Feds weighing new rules for 'e-waste'

WASHINGTON - How the federal government dumps half a million worn-out computers and countless other electronic devices every year may help expand the $5 billion electronics-recycling industry.

The Environmental Protection Agency and General Services Administration are considering new rules for contract recyclers as it starts requiring agencies to dispose of old computers, monitors and other "e-waste."

The agencies said they will decide next year on which third-party certification it will apply to its electronics recyclers under the National Strategy for Electronics Stewardship unveiled this summer.

Green recyclers and traditional scrap haulers are at odds over the certification standards, one of which would ban exporting computer trash along with other restrictions. Both sides agree that the federal agency mandate could transform the industry.

"By some estimates, the federal government goes through 10,000 computers a week," GSA Administrator Martha Johnson said in an Aug. 9 statement. "Requiring that each of those machines end their useful lives at a certified recycler could mean big business."

The EPA/GSA strategy could have indirect consequences for how the electronics-recycling industry is structured if it picks one certification over another for its vendors, said David Daoud, personal-computing analyst for International Data Corp. in Framingham, Mass.

The U.S. electronics-recycling industry employs 30,000 people and accounts for $5 billion in annual revenue, Daoud said. That amount could double if consumers follow the lead of federal agencies and companies, he said.

Kenny Gravitt, chief executive officer at Global Environmental Services, an e-waste recycler in Georgetown, Ky., that reclaims copper and aluminum from circuit boards and other components, says the entire U.S. economy would benefit from the export ban.

"I would like to see an edict come out that there will be no more exporting of electronic waste," he said. "When that happens and the GSA opens up the playing field to qualified and serious recyclers, it'll create jobs."

Gravitt's three-year old company has added 100 employees to process electronics for companies including Japan's Canon Inc. and Konica Minolta Holdings Inc., attracting GSA's Johnson for a visit last month, he said. The company plans to pursue a GSA multiple-award schedule contract for environmental services.

by Nishad Majmudar Bloomberg News Sept. 26, 2011 12:00 AM

Feds weighing new rules for 'e-waste'

September 18, 2011

RIM shares drop as sales and profit plunge - Sep. 16, 2011

NEW YORK (CNNMoney) -- Research in Motion was once the king of the smartphone market. Now, it's looking like the next Palm -- a pioneer that fell hopelessly behind in a market it invented. RIM (RIMM)'s shares fell 20% in morning trading Friday, a day after the company announced grim second-quarter results that fell far short of Wall Street's sales and earnings forecasts. RIM shipped 10.6 million BlackBerry smartphones to retailers last quarter, below the 11 million to 12.5 million it had expected to ship. Its entry in the tablet wars, the BlackBerry PlayBook, shipped just 200,000 units -- a significant drop-off from the 500,000 RIM shipped in the prior quarter. The PlayBook went on sale in April. RIM's iconic but aging BlackBerry is struggling to keep up with the industry's innovators: Apple's (AAPL,Fortune 500) iPhone and Google's (GOOG, Fortune 500) Android platform. The problem could be temporary. This quarter was a transitional one, as RIM readies QNX, the next-generation operating system powering the PlayBook and an upcoming line of smartphones. RIM hasn't set a release timeframe yet for its QNX phones, but it plans to show off its progress at next month's DevCon event in San Francisco. RIM has a lot riding on QNX. But will it be enough to catch up to Apple, Google, and even Microsoft, whose Windows Phone 7 will get a big boost from upcoming Nokia devices? "While RIM management remains bullish on its prospects for the PlayBook and new Blackberry 7 smartphones, we maintain our more cautious view," Canaccord Genuity analyst Michael Walkley wrote Friday in a research note. "We believe RIM is underestimating the increasingly competitive smartphone environment." In a conference call with analysts late Thursday following the earnings release, RIM's co-CEOs struck a defiantly optimistic tone. PlayBook sales are "well below where we would like it to be," co-CEO Mike Laziridis conceded, but RIM expects its upcoming "PlayBook 2.0" software overhaul to goose sales. That update, which will be demonstrated at RIM's DevCon and released soon after, will bring oft-requested features including built-in native e-mail, calendar and contact-management tools. But analysts aren't sold on RIM's argument that its problems are a temporary part of a turnaround master plan. "You appear quite confident about BlackBerry 7," RBC Capital Markets analyst Mike Abramsky said on the call, referring to the new operating system RIM rolled out last month. "I'm just wondering why you feel that confidence, given that sell-through is obviously coming in below what you expect." Laziridis said RIM is "thrilled" with its BB7 launch, and expects sales to pick up in coming quarters as momentum builds. However, some see big obstacles ahead. "Although management implied RIMM's transition challenges were behind them with the release of BB7 smartphones, we are skeptical," analysts Alkesh Shah and Preeti Doshi of Evercore Partners wrote in a research note. "Challenges remaining include low-end competition from Android smartphones, high-end competition from the upcoming iPhone 5, persuading Android developers to port to BB7 and QNX, and increased Android tablet competition from multiple vendors," they wrote. RIM's first all-touch phone, the BlackBerry Torch 9850, went on sale Thursday for Verizon (VZ, Fortune 500) Wireless customers -- to generally negative reviews. "If for some reason I was forced to either use RIM's BlackBerry Torch 9850 or the first-generation 2007 iPhone as my daily phone, there's no question what I would choose: the iPhone," BGR's Jonathan S. Geller wrote in his analysis of the phone. Can RIM be saved? RIM still has a few big assets, including an entrenched corporate customer base and carriers with a vested interest in keeping the BlackBerry flames flickering. "We believe RIMM benefits from carrier desire to support a viable No. 3 platform to fend off Google and Apple," Sterne Agee analyst Shaw Wu wrote this week in a note to clients. But RIM's long-term survival will hinge on the success of QNX. RIM plans to pitch QNX phones to the high end of the market, taking on the iPhone and Android flagships, while selling BB7 devices at cheaper price points. "I would say that we have two very strong platforms, and they're targeted at two different markets," RIM co-CEO Jim Balsillie said. "I expect both of them to have a very strong long-term co-existence." RIM said it expects its BlackBerry shipments to rebound next quarter to a range of 13.5 million to 14.5 million units -- a pickup of around 30% from this quarter. The company's forecast for sales is for at least $5.3 billion. RIM earned $329 million in the quarter that ended Aug. 27, less than half of its profit a year ago. RIM booked a one-time charge of $118 million for costs associated with a reorganization announced in July. As part of that plan, RIM said it was slashing 2,000 jobs, or 10% of its workforce. Excluding the charge, RIM reported earnings of 80 cents per share, below the 88 cents per share that analysts had expected. by Stacy Cowley CNNMoney Sept 16, 2011

Google quietly launches section for airline-ticket searches

SAN FRANCISCO - Google Inc.'s search results for airline tickets are finally getting a lift from a key piece of technology that it bought earlier this year.

The Internet search leader's revised approach to airfare queries appeared Tuesday in a newly opened "flights" section of

The new look at arrived with little hoopla. The low-key debut might have reflected Google's desire to avoid attracting too much attention to the service, which has raised fears that the Internet's most powerful company will trample the competition in online travel - one of the biggest markets in electronic commerce.

It's the first time Google has extensively deployed the tools it picked up from its $676 million purchase of leading airline-fare tracker ITA Software.

The deal faced fierce opposition from other online travel services that argued Google would be able to combine its dominance of Internet search with ITA Software's technology to gain an unfair advantage.

After a lengthy investigation, the Justice Department approved the acquisition in April. But the department imposed a series of conditions that included an agreement requiring Google to license ITA Software's technology to other companies until 2016.

Kayak, among the travel search engines trying to block the ITA acquisition, says it's ready to answer the challenge.

"We're confident in our ability to compete, and we believe our flight-search technology is superior," said Robert Birge, Kayak's chief marketing officer.

Associated Press Sept. 14, 2011 12:00 AM

Google quietly launches section for airline-ticket searches

Hackers attract increased scrutiny

SAN FRANCISCO - Anonymous is not so anonymous anymore.

The computer hackers, chat-room denizens and young people who comprise the loosely affiliated Internet collective have increasingly turned to questionable tactics, drawing the attention of the FBI, the Department of Homeland Security and other federal investigators.

What was once a small group of pranksters has become a potential national-security threat, federal officials say.

The FBI has carried out more than 75 raids and arrested 16 people this year in connection with illegal hacking jobs claimed by Anonymous.

Since June, the Department of Homeland Security has issued three "bulletins" warning cybersecurity professionals of hacking successes and threats by Anonymous and related groups, including a call to physically occupy Manhattan's Wall Street on Sept. 17 in protest of various U.S. government policies.

San Francisco police arrested more than 40 protesters last month during a rowdy demonstration organized by Anonymous that disrupted the evening commute. The group called for the demonstration after the Bay Area Rapid Transit system shut off its cell service in San Francisco stations to quell a planned protest over a police shooting.

Some members of the group have called for shutting down Facebook in November over privacy issues, although other Anonymous followers are disavowing such an attack - underscoring just how loosely organized the group is and how problematic it is to police.

"Anonymous insist they have no centralized operational leadership, which has been a significant hurdle for government and law enforcement entities attempting to curb their actions," an Aug. 1 Homeland Security bulletin noted. "With that being said, we assess with high confidence that Anonymous and associated groups will continue to exploit vulnerable publicly available Web servers, websites, computer networks, and other digital information mediums for the foreseeable future."

by Paul Elias Associated Press - Sept. 12, 2011 12:00 AM

Hackers attract increased scrutiny

September 11, 2011

Green Dot's Steven Streit: The prepaid card king - Fortune Management

Steve Streit, CEO and founder of Green Dot, in Monrovia, Calif.

FORTUNE - Not many fledgling entrepreneurs could survive the discovery that their brainchild was a flop. But Steven W. Streit, 49, had a eureka moment that turned his fortunes around. In 1999, Streit, a former adult-contemporary radio programmer, started a business called iGen in the bedroom of his Monrovia, Calif., apartment. The goal: to give teenagers a debit card loaded with prepaid cash so that they could shop online.

When the card was rolled out, kids didn't show much interest but adults who couldn't get checking accounts or credit bought the cards in droves, using them for such prosaic tasks as paying household bills. "I thought, 'We have the right product, just the wrong target market,' so we retooled," Streit recalls.

Streit rechristened the company Green Dot (GDOT), got backing from Silicon Valley venture firm Sequoia Capital, and now is the largest provider of prepaid debit cards to the "underbanked" in America, a class estimated at 73 million people. Green Dot went public in 2010: Sequoia's original $5.8 million stake is now worth around $270 million.

Its breakthrough came in 2005 when Wal-Mart (WMT) partnered with it for the Walmart MoneyCard, which customers load with money when they cash a paycheck or tax refund at a Wal-Mart. The retailer now accounts for 60% of Green Dot's revenue, which hit $117 million in 2011's first quarter, up 26% over 2010. With 4.3 million cards outstanding, it is far ahead of its closest rival, netSpend (NTSP), with 2.3 million. Wal-Mart was so impressed that it bought 9% of the company last year. Even the U.S. Treasury has started a pilot program to issue tax refunds on Green Dot cards.

Yet Green Dot is facing some strong headwinds. Competition is heating up: American Express (AXP) is introducing its own prepaid card and commercial banks are hinting they will join the fray. Although the AmEx card appears aimed at a niche market a way for people with normal checking accounts to give money to college kids, for example it is charging minimal fees. That could mean trouble for Green Dot, which charges to buy the cards and reload them, then adds a monthly maintenance fee. Now Florida's attorney general is investigating prepaid firms to see whether they fully disclose their charges. Green Dot insists it does.

Legislative changes are another uncertainty. The Durbin Amendment tucked into the Dodd-Frank Act specifically excluded prepaid cards from its limits on how much banks can charge for processing debit card transactions, because they serve the low-income market. That could change if prepaid cards become more widely accepted.

All those doubts have had a dampening effect on Green Dot's stock, which is selling at $27, about 24% below its IPO price of $36. That's down from $65 just a few months ago. "There is a lot of controversy over the stock because of doubts about future growth," says Tien-tsin Huang, a banking analyst at J.P. Morgan, who nonetheless has an overweight on the company. Streit says he welcomes new competitors because he believes they will expand the category. But the pressure may force him to conjure up yet another eureka moment.

by Charles P. Wallace Fortune Magazine Sept 2, 2011

Green Dot's Steven Streit: The prepaid card king - Fortune Management

Google gobbles up restaurant reviewer Zagat

Image: Zagat

Emmanuel Dunand AFP Getty Images Zagat New York City restaurant guides are shown on sale at a book store in New York.

Google said Thursday it has purchased Zagat, the popular dining recommendations and ratings authority, jumping into a niche Web market alongside the likes of OpenTable, Yelp and Yahoo.

The 32-year-old Zagat, which polls consumers and compiles reviews about restaurants around the world, will become a cornerstone of Google's "local offering" and work in tandem with its mapping services and core search engine, the Internet search and advertising leader said.

"This underscores Google's local and mobile initiatives," said Brian Fitz, an analyst at UBS, who expected the acquisition to provide a boost to Google Maps as customers look for restaurants. Last year, Google moved Marissa Mayer, a top search executive, to head its local initiatives.

Google needs reviews and other content for its "Google Places" websites, in part to fend off criticism. It has been accused of using comments from review sites such as Yelp, essentially siphoning off their readers and, more importantly, their clicks. Google has toned down its borrowing of comments recently, Fitz said.

The Federal Trade Commission has been looking into the issue as part of a broad antitrust investigation, a source familiar with the probe has said.

The Zagat move raises the question of whether the search giant will start its own restaurant reservation service, building on existing ties with restaurants that advertise on it.

Fitz said expanding into reservations would require extra steps such as building out reservation software and getting restaurants to install it, as well as building different relationships with the restaurants.

"It's apples and oranges," he said.

While much of Zagat's content is free and available to anyone, some content remains behind a paywall and it was unclear if Google would remove it.

Shares of restaurant-booking service OpenTable tumbled on the news. The company is already reeling from financial results that have disappointed investors this year and the departure in May of CEO Jeffrey Jordan, who joined venture-capital firm Andreessen Horowitz. Jordan remains chairman.

Founded by Tim and Nina Zagat, the eponymous service provides the familiar burgundy pocket-sized guides to restaurants in more than 100 cities. It may be one of the earliest forms of user-generated content, Google Vice President Marissa Mayer said in a blog post on Thursday.

Zagat gave Google a tongue-in-cheek rating on its home page on Thursday, awarding the Internet company a maximum 30-point rating for its "local, social, mobile and usefulness" categories. Industry analysts regard the local, social and mobile markets as some of the fastest-growing areas of the technology sector.

"We are thrilled to see our baby placed in such good hands and to start today as official 'Googlers,"' the founders said in a joint statement.

Zagat enlisted Goldman Sachs to explore a sale as early as 2008, although no buyers emerged in the middle of a recession. The company might fetch as much as $200 million, it was reported at the time.

In late 2009 Google was in talks to acquire Yelp for at least $500 million, according to news reports at the time. But the deal fell apart.

Google declined to offer any transaction details about the Zagat transaction.

by Sept 8, 2011

Google gobbles up restaurant reviewer Zagat

Yahoo's challenge: Regaining online foothold

SAN FRANCISCO - Yahoo Inc. has gone through three different CEOs in five years. Whoever takes the helm now will face the same challenge: Solve one of the Internet's most perplexing puzzles.

Why is a company that owns some of the world's most widely used online services unable to gain traction among Web surfers, advertisers and investors? Can the company that rode the Internet boom ever again be where the cool kids go?

Unless Yahoo's next regime can figure it out, the company is in danger of becoming an Internet anachronism that might have to be broken up to be salvaged.

The challenge confounded Silicon Valley veteran Carol Bartz, who spent more than 2 1/2 years retooling Yahoo before being fired over the phone late Tuesday. It also befuddled Yahoo Chairman Roy Bostock, who embraced Bartz as the "exact combination" of experience and savvy the company needed when she was hired in January 2009.

As a stopgap measure, Yahoo appointed its chief financial officer, Tim Morse, to be interim leader until the company's board can hire a permanent replacement. Morse, 42, met with Yahoo's employees at the company's Sunnyvale, Calif., headquarters Wednesday.

The board hasn't set a timetable for finding the next CEO. The directors took two months to hire Bartz after co-founder Jerry Yang decided he wanted to end a 1 1/2-year stint as CEO in 2008.

Yahoo rode the Internet boom of the 1990s and weathered the dot-com bust that followed. In the past decade, says Forrester Research analyst Shar VanBoskirk, the company has spent too much time clinging to its early success in the 1990s, instead of adapting to the trends that have reshaped the Internet.

Two companies that helped drive the changes, Internet search leader Google Inc. and social network Facebook, are now the places where the cool kids hang out and, more importantly to investors, where advertisers increasingly spend their money.

"Yahoo has become a business stuck in its glory days," VanBoskirk says. "They became so focused on what they used to be that they can't seem to focus on what they should become. They just keep refining all the stuff that they have been doing since the 1990s."

Those legacy services can still draw a crowd. Yahoo's e-mail as well as sections devoted to general news, sports, finance and entertainment attract the most online U.S. traffic in each of their categories, according to the most recent data from the research company comScore Inc.

But the people using those services aren't sticking around as long as they once did, a pattern that has caused advertisers to seek marketing alternatives. That in turn has caused Yahoo's revenue to sag even as the overall Internet ad market has been growing at a rate of more than 20 percent annually.

The net result: Many investors have concluded Yahoo's stock is no longer worth owning - even though the company's brand remains among the best known in the world.

Between the time Bartz arrived and left, Yahoo's stock price gained just 81 cents while Google's shares surged by more than $200. Over the same period, the average time U.S. consumers spent on Yahoo's website each month fell 33 percent while the time spent on Facebook more than doubled, according to comScore.

Yahoo fell so far behind Google in search-driven advertising, the Internet's most lucrative market, that Bartz joined forces with Microsoft to save money and free up engineers to work on other projects.

That partnership, which calls on Yahoo to rely on Microsoft's search technology, was introduced late last year and hasn't been generating as much revenue as the companies hoped.

Even more troubling: Yahoo has been weakening in its stronghold - the visual marketing campaigns known as "display advertising." Yahoo's website had been considered the best spot for display advertising for the past decade, but no more.

By the end of this year, Facebook is expected to hold a nearly 18 percent share of the Internet display market in the U.S., followed by Yahoo at 13 percent and Google at 9 percent, according to the research company eMarketer Inc.

Two years ago, Yahoo commanded a 16 percent of the display ad market with Facebook at 7 percent and Google at less than 5 percent.

Bartz, 63, tried to revive Yahoo by cutting costs, an effort that included shutting down or selling some services that had become a drain on the company's resources.

It wasn't enough to rid Yahoo of a paralyzing identity crisis, according to analysts.

"We think the challenges . . . are likely beyond any one person's ability to perform some magic and reinvigorate growth in the company," Wedge Partners analyst Martin Pyykkonen wrote in a Wednesday research note.

Pyykkonen says Yahoo's next move most likely will be to sell all or part of its stakes in two Asian investments, Yahoo Japan and the Alibaba Group.

Neither Bartz nor Morse was convinced Yahoo would be better off if it sold those holdings. The board says it is undergoing a "comprehensive strategic review" but hasn't shared any details about what's under consideration.

The company remains in such disarray after years of recurring reorganization that VanBoskirk is convinced an opportunistic bidder will emerge to take over Yahoo and then sell its services in pieces. Speculation that buyout companies would mount a takeover attempt surfaced several times while Bartz was CEO, too.

"Yahoo hasn't been able to demonstrate that it can create any value from the sum of all its parts," VanBoskirk says.

Investors, for now, appear to be pleased the Bartz era is over. The company's shares rose 70 cents, or more than 5 percent, to close at $13.61 Wednesday.

by Michael Liedtke Associated Press Sept. 8, 2011 12:00 AM

Yahoo's challenge: Regaining online foothold

September 3, 2011

Mobile shopping: More buzz than buy so far

Phones that can be used to pay for things, much like credit cards or gas-station key fobs, have been a dream of the wireless industry for years.

AP Photo/Manu Fernandez Phones that can be used to pay for things, much like credit cards or gas-station key fobs, have been a dream of the wireless industry for years.

NEW YORK - When it comes to mobile shopping, so far, there's more buzz than buy.

As the number of people who use iPhones and other smartphones grows, companies selling everything from hardware to high fashion are touting all the new applications they're rolling out that enable shoppers to do anything from check a store's inventory while in the dressing room to order prescriptions.

Retailers are betting that selling their wares on a device that people carry around all day can encourage Americans to spend money during an economic downturn in which they're making fewer impulse buys in their brick-and-mortar stores. But so far, consumers mostly are using their phones to look up locations and compare prices and stopping short of tapping the "buy" button. Why? In part because they find it hard to shop on the tiny screens and they don't quite think it's safe to input their credit-card information into their phone.

To be sure, mobile purchases are growing faster than online sales, which are increasing at around 10 percent a year.

But mobile commerce is expected to account for $6 billion, or just 2 percent, of overall e-commerce sales this year, according to Forrester Research. By 2016, that figure could rise to $31 billion - still a sliver of electronic sales.

"The transactions aren't anywhere close to a big number," says Siva Kumar, whose company, TheFind, offers mobile price-checking applications. "But the first stage of any revolution is that people start using the new tool."

The use of smartphones is indeed growing. There are 82 million smartphones in circulation today in the U.S. - one in every three people 13 and older owns one - and that figure is expected to double by 2015.

And smartphone users are increasingly using mobile applications: The average user spends 81 minutes a day using mobile apps, more time than is spent Web browsing on a computer or other device, according to mobile-analytics firm Flurry.

But smartphone users are spending most of their time playing games, checking social networks, taking video, accessing maps and getting sports scores, according to digital-research company comScore. Shopping, meanwhile, ranks at No. 13, with less than 7 percent of mobile users accessing online retail stores through their phones.

Retailers are partly to blame for shoppers' apathy.

Less than a third of retailers polled by the National Retail Federation in May said they have a fully implemented mobile strategy, which might include an application available for download by iPhone, Droid and Blackberry users. It's far less pleasurable to hunt down a new pair of boots when it requires zooming in and out of a website that's not oriented to the mobile screen, shoppers say.

For instance, Sara Margulis, who runs an online wedding-gift registry in Sonoma County, Calif., uses her iPhone to buy books and diapers on Amazon but sticks to her home computer for the majority of her electronic purchases, in part because she likes the larger screen.

"If I know what I want, and it's on Amazon, I'll do it on my phone," she says. "But not if it requires a lot of research."

Another big impediment is the payment process. Typing billing information into a phone can be tedious and time-consuming, and many shoppers aren't convinced that mobile sites are safe.

In one Forrester poll, 44 percent of shoppers said they would use the mobile Web to make purchases if the payment services were more secure.

Sucharita Mulpuru, a Forrester Research analyst, says mobile payments are generally safe and this is a "perception issue" stemming from fear of the unknown.

Overall, Mulpuru says, it will take some time for Americans to fully embrace mobile shopping - just as they did with online shopping. After all, people were playing games of solitaire on their computers before they were willing to shop on websites.

"You have to walk before you run," she says. "You have to do things that are easy that don't require you to give up your money first."

A few retailers are far ahead in mobile shopping.

Although she hasn't tested a lot of sites on her iPhone because her AT&T cellphone plan caps the amount of data she can use each month, Nancy Pelaia, who works at a Christian college in Beaver Falls, Pa., said she likes shopping on the app from QVC, which is more cutting-edge than many other retailers' mobile apps. It syncs up with the sales-pitch TV network, showing shoppers the item currently being sold on-air. Additionally, users' payment info is stored, so they need only enter a four-digit passcode to complete the purchase.

"I usually have my phone sitting right there, and they make it very easy," Pelaia says.

The most successful mobile-shopping sites are eBay and Amazon, which together account for four out of every five mobile-shopping transactions.

Both companies were early to invest in mobile, but just as important, they've been able to smooth the checkout process by accepting PayPal or storing payment information in users' accounts.

They've also worked to make searching simpler. With Amazon's price-checking app, for instance, you can speak the name of an item and it will show the lowest price in its marketplace. And with eBay, customers can receive a notification when they've been outbid or the bidding is ending for a particular item.

"You can be in a meeting and you can bid then and there," said eBay spokeswoman Katherine Chui.

Their strategies seem to be working.

In July, Amazon capped off a 12-month period of mobile sales exceeding $1 billion. And eBay, which said its iPhone app has been downloaded 18 million times, reported nearly $2 billion in mobile sales last year - more than tripling its 2009 total - and it expects to reach $4 billion this year.

But other companies say even if consumers aren't overwhelmingly using their apps to make purchases on their phones, the devices still are driving in-store purchases.

Target, Best Buy, American Eagle Outfitters and others are boosting sales with a third-party mobile application called Shopkick that gives customers special offers anytime they step into their stores. And inside Home Depot, a shopper can launch the store's app and get more information about a lawn mower or other item without having to ask a salesperson.

Hal Lawton, Home Depot's president of online, says "that gives us opportunities to keep shoppers in our stores longer" even if the impact on the bottom line is hard to quantify.

by Ellen Gibson Associated Press Sept. 2, 2011 02:55 PM

Mobile shopping: More buzz than buy so far

Preparing for the Netflix price increase

SAN FRANCISCO - The toughest choice most Netflix customers usually face is figuring out which movie to put at the top of their queues.

But millions of Netflix subscribers will be wrestling with a new dilemma as they decide how to respond to price changes that will hit the service's existing customers beginning today.

The new system will impose substantially higher rates on customers who want to keep renting DVDs through the mail and enjoying the more immediate gratification of streaming video over high-speed Internet connections.

A small number of Netflix Inc.'s nearly 25 million U.S. subscribers will be unaffected because they had already limited their usage to Internet-video streaming. Others will have to pay as much as 60 percent more unless they are prepared to wean themselves from one of Netflix's entertainment options or just close their services entirely.

Here are a few factors for Netflix subscribers to consider:

- Find out which day of the month Netflix bills you.

Click "Your Account & Help" on the top right, then look for the next billing date in the center. That is when the new rates take effect.

For example, if Netflix doesn't charge you until the 22nd of each month, you still have another three weeks before being charged more to have both DVD rentals and Internet video. If you usually get billed on the second day of each month, you will need to make a change promptly to avoid being charged more.

- Know the new prices.

For the first time since it introduced Internet streaming in 2007, Netflix is offering DVD-only plans.

For $8 per month, customers can rent an unlimited number of DVDs per month, with a maximum of one disc out per time. DVD-only plans allowing two discs out at a time will cost $12 per month, and three DVDs at a time will go for $16 per month.

The cheapest package that combines Internet video and DVD rentals (one disc at a time) will cost $16 per month - up from $10 per month under the old system.

The price for an Internet-streaming-only plan remains $8 per month.

- If you're among the customers who want to keep just one of Netflix's entertainment options, assess what you like to watch on the service and how you watch it.

Internet streaming is more convenient because there's no waiting for video to be delivered by the U.S. postal system. It also enables viewing on personal computers, tablet computers and phones, besides television sets.

The negatives: It requires high-speed Internet access, which isn't cheap, and Netflix's streaming library is about one-fifth the size of the 100,000 selections in the DVD section.

DVDs remain the best way to see the latest movies after they have ended their run in theaters. In some cases, Netflix must wait four weeks after DVDs go on sale in stores before they can mail them to customers, but that's far better than Internet streaming, in which the wait can last years.

Internet streaming is better for watching documentaries, catching up on past seasons of TV shows and enjoying older movies.

If you like to watch series such as "The Wire" and "Curb Your Enthusiasm," stick with DVDs because those titles have never shown up in Netflix's streaming library.

- Before abandoning Internet streaming, remember that it is probably going to keep getting better because it is Netflix's top priority. Netflix has left no doubt that it intends to spend big bucks to make its streaming library more compelling.

The company already has secured the exclusive rights to a series starring Academy Award-winning actor Kevin Spacey. That series, "House of Cards," initially will be available late next year only for Netflix's streaming customers.

- Keep some perspective. A 60 percent increase sounds outrageous, but it's only $6 more per month to have your DVDs and Internet video, too.

by Michael Liedtke Associated Press Sept. 1, 2011 12:00 AM

Preparing for the Netflix price increase

Redbox's golden opportunity: Higher Netflix prices


Associated Press - Gary Cohen, senior vice president of marketing and customer experience at Redbox, poses by at a working kiosk at the company's offices in Oakbrook Terrace, Ill.

SAN FRANCISCO - Netflix is giving Redbox a golden opportunity to gain some ground.

Beginning today, Netflix, the largest video-subscription service in the U.S., will hit its nearly 25 million subscribers with rate increases of as much as 60 percent. The sticker shock is expected to make Redbox, which rents DVDs for $1 per day through kiosks, even more enticing to movie lovers.

"We are very cognizant of the value of the dollar," said Gary Cohen, Redbox's senior vice president of marketing and consumer experience. "Redbox is all about simplicity, convenience and value."

Netflix Inc.'s higher prices will drive business to video-rental chain Blockbuster and other home-entertainment rivals, too, but none is better positioned to take advantage of the disruption than Redbox, according to Michael Pachter, a Wedbush Securities analyst.

That's because millions of people are expected to keep paying for a Netflix service that streams video over high-speed Internet connections but will look for other places to rent DVDs at a low price.

Most people won't have to go far before coming across a Redbox kiosk. Two-thirds of the U.S. population now lives within a five-minute drive of one of the company's red vending machines, which are largely stationed in Walmarts, drugstores, supermarkets and convenience stores.

Netflix, which is based in Los Gatos, Calif., has given its subscribers little reason to stray until now. Its service emerged as a household staple during the past few years while bundling rented DVDs through the mail with unlimited Internet-video streaming for as little as $10 per month.

Keeping both of those options will cost $16 per month under Netflix's new pricing system. Netflix predicts about 10 million customers will avoid the higher prices by limiting their subscriptions to an $8-per-month streaming plan that doesn't include the latest theatrical releases available on DVD and pay-per-view.

Pachter believes 2 million to 3 million customers will simply close their Netflix accounts and abandon the service entirely to protest the higher prices.

Without providing specifics, a Netflix forecast issued in July acknowledged its higher prices will result in an unusually high cancellation rate. During the past year, Netflix averaged 2.8 million cancellations per quarter. That compared with an average of 5.2 million new subscribers every three months during the same period.

Netflix isn't certain it will attract enough new customers to offset the cancellations in the three months ending in September.

If the projections pan out, a large audience of DVD renters will be up for grabs during the next few months.

The Netflix backlash is expected to be a boon for Redbox mainly because its in-store kiosks have become almost as ubiquitous as the red envelopes that Netflix uses to deliver DVDs.

In the past two years, Redbox owner Coinstar Inc. has more than doubled the number of DVD-rental kiosks to 33,300. Compare that with Blockbuster, which is down to 1,500 stores in the U.S. after a bankruptcy filing last year led to its $234 million sale to Dish Network Corp. earlier this year.

Redbox also offers something Netflix doesn't: video-game rentals for $2 per day. It also plans to begin selling an Internet-streaming service before the end of the year but hasn't provided many details about it yet.

Higher prices may be looming at Redbox, too. In June, Redbox began testing DVD rentals at prices ranging from $1.10 to $1.20 in six markets: Phoenix; Kansas City, Mo.; Charlotte, N.C.; Portland, Ore.; Pittsburgh; and Austin. Redbox, based in Oakbrook Terrace, Ill., says it doesn't plan to raise its prices permanently.

Netflix CEO Reed Hastings viewed Redbox as his company's biggest competitive threat two years ago, but he no longer sees it that way. Hastings now says he is more worried about the Internet-streaming options that supplement pay-TV services, such as those offered by Comcast Corp. and Time Warner Inc.'s HBO.

Neither of those rivals, though, will fill the DVD-rental void if more households decide to stop getting their discs from Netflix. Hastings expects Netflix to be delivering DVDs to about 15 million subscribers at the end of this month, including about 3 million customers who drop their Internet-streaming plans and rent discs exclusively.

Fears of a mass customer defection have contributed to nearly 20 percent drop in Netflix's stock price since the company announced its higher prices in July.

Coinstar's shares have fallen by about 18 percent during the same period; one analyst said the drop is driven by investors who believe DVD rentals are a dying business.

Associated Press Sept. 1, 2011 12:00 AM

Redbox's golden opportunity: Higher Netflix prices

U.S. targets AT&T, T-Mobile merger

WASHINGTON - The Department of Justice took the unusual step Wednesday of trying to block AT&T's $39 billion purchase of T-Mobile USA, arguing that the proposed merger would lead to higher wireless prices, less innovation and fewer choices for consumers.

Now, AT&T, the nation's No. 2 wireless carrier, and No. 4 T-Mobile are plotting a legal response to challenge federal regulators.

In its civil antitrust lawsuit, the Justice Department said the merger would stifle competition in the wireless industry. The deal, which is still under review at the Federal Communications Commission, would catapult AT&T past Verizon Wireless to become the nation's largest wireless carrier, leaving Sprint Nextel as a distant third-place player and certain to struggle.

AT&T quickly signaled that it won't abandon the transaction, leading to expectations of a fierce court battle.

AT&T has several incentives to take up a legal fight with regulators. In court, the burden is on the Justice Department - not AT&T - to show that the combination would harm competition. If the deal doesn't go through, the company will be forced to pay T-Mobile a $3 billion break-up fee and give it some wireless-spectrum rights.

AT&T said it will ask for an expedited court hearing "so the enormous benefits of this merger can be fully reviewed."

In a statement, T-Mobile's owner, the German company Deutsche Telekom, said it is disappointed by the Justice Department's action and "will join AT&T in defending the contemplated merger."

The companies could wage a strong defense in court.

Morgan Reed, executive director of the trade group Association for Competitive Technology, said AT&T has at least one key fact on its side: Deutsche Telekom has said it does not plan to continue to invest in upgrading the T-Mobile network to deliver faster wireless. That means "T-Mobile is not a competitor anymore," Reed said.

"T-Mobile has already stepped away from the table," Reed said. "We're at three nationwide wireless carriers no matter what."

The association, which represents more than 3,000 small and independent application developers, said the merger would benefit the wireless broadband industry.

The Justice Department lawsuit portrays T-Mobile as having been a strong competitor in the past, but merger analysis is forward looking, said Washington attorney Robert Bell, who has represented clients in mergers for more than 25 years.

"To the extent AT&T can show there's good reason to believe that T-Mobile is going to be a very different kind of competitor in the future - for example, weaker financially, less innovative - then the lawsuit becomes quite a bit different," Bell said.

University of Notre Dame law professor Joseph Bauer said he was "pleasantly surprised" by the Justice Department's challenge of the deal because it has become so rare for the antitrust regulators to block major mergers during the past decade.

During a news conference, U.S Deputy Attorney General James Cole said the merger would result in "tens of millions of consumers all across the United States facing higher prices, fewer choices and lower-quality products for mobile wireless services."

T-Mobile has been an important source of competition, including through innovation and quality enhancements such as the roll-out of the first nationwide high-speed data network, said Sharis Pozen, acting chief of the Justice Department's antitrust division.

AT&T and T-Mobile compete nationwide in 97 of the largest 100 cellular marketing areas, according to the suit filed in U.S. District Court in Washington. They also vie for business and government customers.

The lawsuit said the acquisition would eliminate a company that has boosted competition with low pricing and innovation.

T-Mobile had the first handset using the Android operating system, BlackBerry wireless e-mail, the Sidekick smartphone, national Wi-Fi "hot-spot" access and a variety of unlimited service plans.

In a statement, Sprint said the Justice Department's lawsuit "delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T's proposed takeover of T-Mobile, the DOJ has put consumers' interests first."

Federal Communications Commission Chairman Julius Genachowski said the record before his agency "raises serious concerns about the impact of the proposed transaction on competition."

Although the FCC's separate review of the proposed merger is still ongoing, the agency has never approved a significant merger that is being challenged by the Justice Department.

Commissioner Michael Copps, a Democrat and a staunch opponent of industry consolidation, said he shares "the concerns about competition and have numerous other concerns about the public-interest effects of the proposed transaction, including consumer choice and innovation."

Democratic Sen. Herb Kohl of Wisconsin, who heads the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, said the suit was an effort to protect consumers "in a powerful and growing industry that reaches virtually every American."

The lawsuit used some of T-Mobile's own documents describing its role in the market to explain why the merger shouldn't take place. In those documents, the company calls itself "the No. 1 challenger of the established big guys in the market and as well positioned in a consolidated 4-player national market."

T-Mobile said its strategy is to attack other companies and find innovative ways to overcome the fact that it is a smaller company.

T-Mobile "will be faster, more agile and scrappy, with diligence on decisions and costs both big and small," one company document said. "Our approach to market will not be conventional, and we will push to the boundaries where possible."

Since AT&T first announced the deal in March, it has insisted that consumers would have a choice of multiple wireless providers in many markets even if the deal is approved. The Justice Department rejected that claim.

Associated Press Sept. 1, 2011 12:00 AM

U.S. targets AT&T, T-Mobile merger

September 1, 2011

How Many Bytes Are In A....

1 kilobyte (KB) is 1,024 bytes

1 megabyte (MB) is 1,024 kilobytes

1 gigabyte (GB) is 1,024MB, or 1,073,741,824 (1024x1024x1024) bytes

1 terabyte (TB) is 1,024GB. 1TB is about the same amount of information as all of the books in a large library, or roughly 1,610 CDs worth of data

1 petabyte (PB) is 1,024TB. Indiana University is now building storage systems capable of holding petabytes of data

1 exabyte (EB) is 1,024PB

1 zettabyte (ZB) is 1,024EB

1 yottabyte (YB) 1,024ZB


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