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The Twitter-Facebook deal that wasn't to be

By Kenneth Corbin   |    November 25, 2008

So it turned out to be more than a rumor after all.

Kara Swisher at the AllThingsD blog offers us the story of the deal talks between two of the hottest properties on the social Web: Facebook and Twitter.

Various iterations of the deal would have seen Facebook acquiring the microblogging site for $500 million in stock (raising the very important question of what privately held Facebook is actually worth) or up to $100 million in cash.

Apparently the companies couldn't agree on price, and Twitter ultimately decided it was better off on its own.

The post-mortems around the Web have followed some predictable lines: How much would Twitter improve Facebook? What's Twitter really worth? How compatible are their business models?

Business models? Right -- neither company is exactly swimming in the black these days. Twitter makes no money -- it's looking ahead to an enterprise play where companies would pay a fee for some type of corporate service. Down the road, Facebook may have designs on the enterprise as well, but for the time being it's sticking with ads and e-commerce, and it's not setting the world on fire in those areas.

What both sites have going for them is an extremely dedicated user base that is growing by leaps and bounds. More eyeballs than dollars.

So would mashing them up make sense? Hard to say. As an inveterate skeptic of pure-play social media as a sustainable business model, I'll happily recuse myself from that question.

Facebook and Twitter are both phenomenal for their respective successes. Each has tapped into a main nerve in the ranks of youthful Internet users who share the insatiable desire to express themselves and keep tabs on their digital acquaintances.

Fair enough. But for one company that hasn't cracked the monetization riddle to acquire another that hasn't really begun to think about it seems problematic.

Wouldn't it make more sense for Microsoft to step in with one of its trademark sky-high valuations and bolt another piece onto its rather shapeless Internet division? Or Google? Or why not News Corp as it continues to expand its media empire? Or, better still, how about fold it into those ceaseless Frankenstein deal talks between AOL and Yahoo?

Er, maybe not that last one.

Fort Knox transition team

By Kenneth Corbin   |    November 14, 2008

It was with a tinge of irony and considerable professional disappointment that I learned the official policy of the Obama-Biden transition team: cut the press out of the loop.

The candidate who campaigned on a bottom-up, bring-the-government-to-the-people platform rode to victory on a groundswell of support from legions of supporters who praised his historic candidacy for its promises of inclusion and openness.

And to be sure, his operation is one of the most effective political apparatuses we have seen in recent times. Part of the key to its success: discipline.

The Obama campaign was one of few leaks, and the transition team promises to keep the same mold.

Thanks to the [Washington Post](http://voices.washingtonpost.com/the-trail/2008/11/07/obama_aide_instructs_policy_ad.html) for reminding us, with its reposting of this memo circulated among the transition team Thursday:

*From: Larry Strickling*

*Date: November 6, 2008 6:58:14 PM EST*

*To: itw-policygroups*

*Cc: Priya Singh*

*Subject: . . . Rerminder--Decline All Reporter Interviews and Speaking Requests*

*This is a reminder that our communications department has directed all of you, as policy committee members, to decline all requests from reporters and all speaking invitations regarding the transition, the Administration's priorities and related issues. If you are contacted by a reporter to discuss these matters, please refer the reporter to Priya Singh at* [redacted, for courtesy's sake]. *If you receive an invitation to speak on these issues at a conference or meeting, please decline the request. At this point in time, there is no one to whom to refer the request and do not offer to do so on behalf of the organization extending you the invitation. We realize these requirements may appear Draconian but so soon after the election, with the transition effort just being organized, it is important that no one who was involved with the campaign and the policy committees be speculating in public on these sensitive matters.*

MGM bringing full-length movies to YouTube

By Kenneth Corbin   |    November 10, 2008

YouTube may still be in the dog house with some nervous Hollywood studio executives, but not MGM.

MGM today announced a partnership with Google's popular video-sharing site that will bring long-format movies and television content to several branded channels.

The first, called "[Impact](http://www.youtube.com/impact)," will feature action programming in the form of clips from MGM movies and television shows, as well as full-length clips. Impact began as a video-on-demand venture MGM launched with Comcast.

The second, [American Gladiators](http://www.youtube.com/americangladiators), and will feature highlights and full episodes from the show's run in the 1980s and 1990s.

But those are just the first of several, according to Jim Packer, co-president of MGM Worldwide Television.

"Our agreement with YouTube opens the door to a number of themed broadband channels that will both serve the consumers' growing appetite for entertainment media consumption in the digital space and 'on-demand' space," Packer said in a statement.

For Google, the announcement is significant on two fronts. Bringing premium content to YouTube is often seen as the key to monetizing the wildly popular, but financially disappointing site. Google will place ads alongside MGM's content, with the two companies sharing the revenue. YouTube has been a tough sell for many advertisers, who are reluctant to place their branded messages alongside a mixed bag of amateur content.

Perhaps more significantly, the agreement confers a new legitimacy on YouTube as a viable showcase for their vaulted content.

"We're looking to mine the breadth and depth of the MGM library to build out and promote branded, multiplatform opportunities on demand, online and wherever viewers consume their entertainment," Packer said.

That's a stark contrast from Viacom, the entertainment conglomerate embroiled in a $1 billion lawsuit against YouTube for showing unlicensed content.

With Yahoo-Google deal nixed, DoJ antitrust chief resigns

By Kenneth Corbin   |    November 07, 2008

It looks like presiding over the death of the Yahoo-Google ad deal will be one of the final acts of Thomas Barnett, the Assistant Attorney General who headed the Justice Department's Antitrust Division since June 2005.

Barnett announced his resignation today, effective Nov. 19.

He earned high praised from Attorney General Michael Mukasey, who commended Barnett for the vigorous enforcement of antirust law that netted $1.8 billion in criminal fines and racked up a record-high 31-month average prison sentence for offenders.

But Barnett didn't always take such a full-throated approach in antitrust enforcement. After all, it was his division that greenlighted the merger satellite-radio companies XM and Sirius over strenuous opposition from numerous groups who argued that a union of the only two companies operating in a market sector was pretty close to the definition of a monopoly.

Another controversial merger between two close competitors that cleared under Barnett's watch was that of Maytag and Whirlpool.

Yet with Google and Yahoo, which were not merging, he took a different approach. In that review, he held the view that it would be deleterious to the market if Yahoo were to eventually exit the search-advertising business. One source with knowledge of the talks took issue with that "speculative" market analysis, given that Yahoo went to great lengths to convince regulators that it fully intended to continue to compete in search.

Of course, Barnett will hardly be the only Republican appointee hanging up his spikes as the Obama administration begins to take shape. The countdown to an administration transition is "like rats off a ship," a Washington tech-policy analyst once told me. Indeed.

Meantime, Standard & Poor's analyst Scott Kessler, looking ahead to the regulatory climate of the next administration, anticipates "better enforcement of antitrust laws [that] probably means less M&A, which on a net basis is probably not so good for larger firms and neutral for small companies that would be more accounted for, but less likely to receive takeover offers."

There was no immediate word on plans for Barnett's replacement.

The interminable countdown to the white spaces vote

By Kenneth Corbin   |    November 04, 2008

It seems vaguely fitting that here on Election Day in Washington, I find myself in a lengthy holding pattern awaiting the returns from a historic vote.

Right -- we'll learn who wins the White House later tonight. In the meantime, we're tracking white spaces at the Federal Communications Commission, and we're not getting any closer.

The meeting was scheduled to begin at 11:00. It is now 1:04, and we've just been informed that we are adjourned until 1:45.

The press corps is getting restless. Many have left for lunch. Others are taking bets on whether the commissioners will appear by 1:45.

So far we've seen Chairman Kevin Martin, who chatted with the press and took a few shots at his fellow commissioners for failing to make up their minds about reforms to the Universal Service Fund and intercarrier compensation, or what to do about auctioning off the AWS-3 spectrum, as well as for their tardiness for today's meeting.

Yes, the move to unlock the great, untapped potential of the wireless spectrum that resides between analog TV channels will have to wait just a little longer as the commissioners debate roaming conditions that should be attached to the expected approval of the Verizon-Alltel merger, another item on today's agenda.

So we wait.