Tag: aol

Verizon buys Yahoo

marissa_new4Verizon has announced it is buying most of what people think is Yahoo for $5 billion.

The deal will end months of uncertainty about Yahoo’s future after the company announced plans to review strategic alternatives in February. Bloomberg first reported the deal would be announced on Monday for $4.8 billion which was pretty close.

The transaction would boost Verizon’s AOL internet business, which the company acquired last year for $4.4 billion, by giving it access to Yahoo’s advertising technology tools, as well as other assets such as search, mail, messenger and real estate.

It would also mark the end of Yahoo as an operating company, leaving it only as the owner of a 35.5 percent stake in Yahoo Japan, as well as its 15 percent interest in Chinese e-commerce company Alibaba.

Started in 1994 by Stanford graduate students Jerry Yang and David Filo, Yahoo in its early years was the destination of choice for many making their first forays onto the World Wide Web.

By 2008, Yahoo was fending off a contentious takeover bid from Microsoft and struggling to define its mission.

In December, Yahoo scrapped plans to spin off its Alibaba stake after investors fretted over whether that transaction could have been carried out on a tax-free basis. It instead decided to explore a sale of its core assets, spurred on by activist hedge fund Starboard Value LP.

More details are expected to be announced today.

Buffet wants a Yahoo smorgasbord

WarrenBuffett1Berkshire Hathaway Chairman Warren Buffett is backing a consortium vying for Yahoo internet assets.

While there is no certainty that the consortium succeed, the fact that Buffett is interested is a much needed boost for the troubled Internet company.  It is also bad news for the US telecommunications carrier Verizon Communications which is the current favourite. Verizon already owns AOL.

The consortium is in the second round of bidding in the auction for Yahoo’s assets, the people said. Buffett is helping finance the offer, one of the people added.

Reuters reported last month that Yahoo had shortlisted close to 10 bidders in the auction for its assets, with most offers coming from private equity firms.

Last month Buffett admitted that Berkshire had been slow to adapt to new technology as far as its investments were concerned.  He is a long term investor in IBM so knows all about lost causes. He said that Yahoo’s business had deteriorated significantly and that “something has to change there.” At the time he did not say he was doing anything about it.

Verizon thinking of buying Yahoo

marissa_new4The dark satanic rumour mill has manufactured a hell on earth yarn claiming that the US telco Verizon is thinking of buying the very troubled search outfit Yahoo.

Verizon wrote a cheque for the supplier of beer mats during the 90s AOL last year and according to Bloomberg, the wireless telecom giant has tasked AOL CEO Tim Armstrong with figuring out how to buy Yahoo.

Yahoo is currently working out how to spin off its core businesses and keep the original company as a holding entity for the Alibaba shares. The company explained that the tax climate for spinning off Alibaba holdings was simply unfavourable for investors.

CEO Marissa Mayer also noted that the move would give more “transparency” to the operations of Yahoo’s core businesses, and analysts believed that implied Yahoo would be selling itself off bit by bit.

Verizon’s huge user base and mobile video ads would likely bring in quite a lot of revenue if it bought the company. It also needs to get its feet under the table of the online video scene.

Microsoft gets out of display advertising and mapping

riskSoftware giant Microsoft has decided that it has had enough of the display advertising business and is giving it to AOL to sort out.

Instead Microsoft will focus on its growing search advertising business based around its Bing search engine.

Microsoft, which employs hundreds of people in its display ad business around the world, said those employees would be offered the chance to transfer to AOL and that it was not making any layoffs.

Microsoft’s MSN web portal and Bing, have lost more than $10 billion over the past five years. Chief Executive Satya Nadella has said Bing will turn a profit next fiscal year.

“Today’s news is evidence of Microsoft’s increased focus on our strengths: in this case, search and search advertising and building great content and consumer services,” said Microsoft in a statement.

Under a 10 year deal struck with AOL, the outfit will sell display ads on MSN, Outlook.com, Xbox, Skype and in some apps in major countries. As part of the deal, Bing will become the search engine behind web searches on AOL starting next year.

Microsoft also struck a multi-year extension to its existing deal with AppNexus, which provides the tech platform for buyers to purchase online ads.

Redmond has also signed over part of its mapping unit to Uber which will see the taxi company take over the part of Microsoft’s mapping unit that works on imagery acquisition and map data processing. Uber will offer jobs to the 100 or so Microsoft employees working in that area.

Uber uses a combination of map services from Google, Apple and Baidu already and apparently has no plans to stop this.

Microsoft will no longer collect mapping imagery itself, but it will continue to work with imagery providers for underlying data on its own maps. Microsoft already gets much of its map data from Finland’s Nokia.

Oi Obama, hands off our encryption!

obama-funny-face-grr-growl-640x397US tech companies have rallied around to ask US President Barrack Obama, in the strongest possible terms, to give up on attempts to weaken sophisticated encryption systems designed to protect consumers’ privacy.

Two industry associations representing major software and hardware companies said: “We are opposed to any policy actions or measures that would undermine encryption as an available and effective tool.”

The Information Technology Industry Council and the Software and Information Industry Association, representing tech giants, including Apple, Google, Facebook, IBM and Microsoft are essentially fighting to keep the government out of smart phones and other digital devices.

Obama administration officials have pushed the companies to find ways to let law enforcement bypass encryption to investigate illegal activities including terrorism threats, but not weaken it in a way that would let criminals and computer hackers penetrate the security wall.

So far no one has actually said how this technology miracle is to be managed, but apparently in the face of all evidence Obama has said “yes we can.”

Last week White House press secretary Josh Earnest dubbed this a “thorny policy challenge.” Particularly as both parties are wanting large sums of money from the tech companies to fund their presidential campaigns.

Earnest said that the companies “would not want to be in a position in which their technology is being deployed to aid and abet somebody who’s planning to carry out an act of violence.”

While this might be true, and if the US government had a policy of targeting the one or two people who might be terrorists there would be no problem. The fact that the government has swept every phone and every device in the country in the random off-chance of picking up terrorists is causing everyone to worry.

Days earlier, the United States enacted legislation that will curtail the government’s ability to scoop up huge volumes of data related to records of Americans’ telephone calls, although few believe that it will stop the US spooks.

The government surveillance was an outgrowth of the Sept. 11, 2001, attacks on the United States and was exposed by former National Security Agency contractor Edward Snowden.

The industry groups noted that online commerce has flourished in part because consumers believed their payment information would be secure.

“Consumer trust in digital products and services is an essential component enabling continued economic growth of the online marketplace,” the industry wrote.

“Accordingly, we urge you not to pursue any policy or proposal that would require or encourage companies to weaken these technologies, including the weakening of encryption or creating encryption ‘work-around’.”

AOL disappears into Verizon’s maw

Verizon CEO Lowell McAdamVerizon said today it has bought AOL for $4.4 billion.

AOL is to become a wholly owned subsidiary of Verizon when the deal closes and that poses questions about the different properties it owns.

Verizon owns media titles including the Huffington Post, TechCrunch and Engadget and also has a significant presence in the advertising space.

The CEO of Verizon, Lowell McAdam, said that his company has a vision. That vision, he claimed, was to provide people with a “premium digital experience based on a global multiscreen network platform”. Figure that one out, if you can.

The CEO of AOL, Tim Armstrong, also has a vision. He said the visions of Verizon and AOL are shared.

Verizon will pay for AOL using cash and “commercial paper”.

AOL’s profit slumps

Media company AOL said that it turned in revenues of $583.3 million for its financial first quarter.

But profits fell by 64 percent compared to the same period last year, with share prices showing a marked drop yesterday. AOL turned in a profit of $9.3 million, down from $25.9 million in the quarter last year.

AOL is trying to re-engineer itself as a compamy specialising in advertising technology but that’s a risky strategy, given the competitive nature of that sector.

The company claimed that investments in new technology accounted for the large drop in profits.

AOL Boss in PR own goal

AOL is facing the fact that its CEO has a PR image that makes Genghis Khan look like a wet liberal.

Tim Armstrong has to make many unpopular decisions if he is going to turn the outfit around however he is not the sort of person who appears to be good at getting employees to follow him by rallying around his ideas.

Recently Armstrong tried to save his company cash by cutting its pension contributions. While that is never going to be popular, he managed to turn it into a PR disaster by trying to blame two employees’ “distressed babies” because AOL had to pay a million dollars in benefits.

Armstrong singled out two unidentified employees who had babies with health problems in 2012 and their impact on AOL health costs, which he said had also increased because of “Obamacare” health reforms, which he said added $7.1 million in expenses to the company.

So, in other words, not only was he going to make employees suffer, he was going to beat up on two employees with sick kids and try and use a GOP “talking points” document to blame the president for being the bastard who cut AOL pensions.

Like many terminally wealthy people in the US, Armstrong clearly did not understand those who were poorer than him, nor why these people might be upset that their pensions are being cut with such a blatantly stupid bit of spin.

His use of the term “distressed babies” also implied that he had to cut pensions because of the heathcare costs of two babies with a touch of the snuffles was never going to fly. All it took was some hack to find one of the babies, which happened over the weekend. Of course writer Deanna Fei did not have far to look to find the mother — it was her. Her husband was an AOL editor.

Someone who is more of a “people person” might have considered that before he decided to leak confidential information on two staff members and blame them for the cutting of pensions, he might like to check that one of them was not going to go public and talk to the press. Since AOL is a media organisation, the chances of one of the people he was slagging off being a journalist was high so again Armstrong made another cock-up.

Sure enough, writing in Slate, Fei managed to show Armstrong in an extremely poor light. She said that her baby was not just “distressed” it was disabled and nearly died during childbirth.

“She weighed 1 pound, 9 ounces. Her skin was reddish-purple, bloody and bruised all over. One doctor, visibly shaken, described it as “gelatinous”. I couldn’t hold my daughter or nurse her or hear her cries, which were silenced by the ventilator. Without it, she couldn’t breathe,” the mother explained.

She had a one third chance of dying before the parents could bring her home. She might not survive one month or one week or one day. She also had at least a one third chance of being severely disabled, unable to lead an independent life.

“Our daughter has already overcome more setbacks than most of us have endured in the span of our lives. Having her very existence used as a scapegoat for cutting corporate benefits was one indignity too many,” Fei wrote.

It was the second time that Armstrong found himself on the defensive after making spontaneous comments during company meetings. In August, Armstrong issued an apology after publicly firing a Patch creative director in front of a thousand employees.

Of course, AOL would never dream of firing Armstrong for making Scrooge look like a nice bloke. His comments came on the same day that the company reported better-than-expected results and its best year of growth in a decade. AOL reported $36 million in net income during the fourth quarter on $679 million in revenue. 

So while he is making money for his shareholders and of course getting huge bonuses for himself, why should the board think he is doing anything wrong? 

Winamp and Shoutcast get new life

After nearly dying a terrible death, Winamp software is now officially with a new owner.

Digital radio business Radionomy bought the media player and radio platform from AOL. The cash and share deal is supposed to be about $5 million to $10 million, depending on who you talk to.AOL taking a 12 percent stake of Radionomy in the process.

This is much lower than the $80 million AOL paid for Nullsoft, owner of Winamp and Shoutcast, in 1999.

AOL originally intended to shut them both down by December 20, 2013 so it is a good result in some ways. There were rumours of different buyers including Microsoft, which never went through.

Both Winamp and Shoutcast will continue as going concerns. Adding Shoutcast to Radionomy’s existing assets will make the company one of the biggest players in the radio streaming business, hosting some 60,000 radio stations, or roughly half the online radio stations on the market today.

Radionomy intends to offer Winamp’s media player just as it is today — with access to those 60,000 stations, but also playback ability for 60 audio and video formats; 6,000 add-ons like skins and plug-ins; and availability in 16 languages.

There is also some talk about revamping the aging software, which is getting on a bit. AOL did not do much to it and indeed some people saw that as an indication that the software was doomed.

IT multinationals put in political oar

The world+dog knows that the following big companies lobby US politicians all the time and quite shamelessly push their own agenda irrespective of the views of individual people like the world+dog.

AOL, Facebook, Google, Linkedin, Microsoft, Yahoo, Twitter and Apple all spend unknown sums wooing politicos to their own points of view.

But now they have signed a letter to a man called Barak Obama are asking for laws to be reformed because following the Edward Snowden revelations, it’s clear to them that Big Brother is watching you.

Omissions from the list of the multinationals are Cisco and Intel, but let’s not get our knickers in a twist about this. The companies that have signed to the letter claim there are five principles that should be the pillars of “good practice”.

They are limiting governments’ authority to collect users’ information; oversight and accountability; transparency about government demands; respect for the free flow of information and the enactment of worldwide treaties to avoid conflicts between countries.

Principles?   You can find the “principles” here.

We have already seen that several of these multinational companies that have signed this note to Obama don’t give a toss about the rights of individual human beings.

Nick Pickles, director of British watchdog Big Brother Watch, said in a note this morning: “Governments should not need to be told by private businesses that it is wrong to collect data on every citizen, through secret processes subject to little or no oversight.”

They should certainly take anything these eight multinationals have to say about privacy and politics with an extremely large pinch of salt. We don’t really want to see eight big monolithic organisations dictate any kind of political agenda.