Google Inc said it would shut down its three-dimensional virtual experience website by year end to focus more on its core search, advertisements and applications business.
The company said in its blog it supports experimentation but added: "We've also always accepted that when you take these kinds of risks not every bet is going to pay off."
Lively, which features real-time virtual world characters known as avatars and three-dimensional graphics to congregate in virtual rooms, was launched in July to match Linden Lab's popular Second Life.
"Between now and the end of the year we encourage you to capture all your hard work by taking videos and screenshots of your rooms," the blog said.
Saturday, November 22, 2008
Thursday, November 20, 2008
Google CEO Schmidt lays out US energy ideas
The United States should use part of any future economic stimulus package to connect wind turbines and solar energy to the nation's electricity grid, said Google Inc Chief Executive Eric Schmidt, an advisor to President-elect Barack Obama.
In a wide-ranging speech, Schmidt, who has been mentioned as a candidate to become Obama's chief technology officer, argued on Tuesday that the United States should begin investing heavily in bringing wind and solar power into the mainstream.
"There is no grid where the wind and the solar is. The people are in the cities. So the simplest thing that we have to do is we have to address the grid problem," said Schmidt, a member of president-elect Obama's economic advisory transition team, although not speaking in that role.
"You have a command and control (power) grid designed in the 1960s," Schmidt told a New America Foundation event.
Schmidt also said slowing the growth of energy consumption was important, and called for a plan to give matching funds to state utilities working to improve energy efficiency, and differential tax treatment for more efficient cars.
Senate Democrats have proposed a $100 billion economic stimulus package, although hopes are fading that it will passed during a short legislative session this week.
The bill, which Obama supports, would include $13.5 billion for road, bridge, mass transit and other construction projects and nearly $38 billion to help states pay Medicaid health-care costs for the poor.
Obama, who will be sworn in as president on Jan. 20, has said if Congress does not pass such a measure this year, it would be at the top of his agenda once he becomes president.
Through its philanthropic arm, Google.org, the company is backing start-ups designing wind, solar and geothermal technologies, which it hopes will eventually be cheaper than coal-based electricity. Google invested $45 million in such companies this year.
Schmidt pointed to the role that government grants to universities played in creating the Internet. "Why don't we do the same thing with the energy grid?" he asked.
"If you're going to spur economic growth you've got to focus on infrastructure research and development and energy," he said. "These are jobs programs."
And that grid should also power America's cars, he said. "Our dependence on imported oil is a huge drain. How many wars has oil created?" he said.
He said federal money for basic science has dwindled in recent years and that the private sector cannot do everything.
He called for a balanced approach to regulation, as opposed to the "extreme version of the free-market approach" of recent years.
In a wide-ranging speech, Schmidt, who has been mentioned as a candidate to become Obama's chief technology officer, argued on Tuesday that the United States should begin investing heavily in bringing wind and solar power into the mainstream.
"There is no grid where the wind and the solar is. The people are in the cities. So the simplest thing that we have to do is we have to address the grid problem," said Schmidt, a member of president-elect Obama's economic advisory transition team, although not speaking in that role.
"You have a command and control (power) grid designed in the 1960s," Schmidt told a New America Foundation event.
Schmidt also said slowing the growth of energy consumption was important, and called for a plan to give matching funds to state utilities working to improve energy efficiency, and differential tax treatment for more efficient cars.
Senate Democrats have proposed a $100 billion economic stimulus package, although hopes are fading that it will passed during a short legislative session this week.
The bill, which Obama supports, would include $13.5 billion for road, bridge, mass transit and other construction projects and nearly $38 billion to help states pay Medicaid health-care costs for the poor.
Obama, who will be sworn in as president on Jan. 20, has said if Congress does not pass such a measure this year, it would be at the top of his agenda once he becomes president.
Through its philanthropic arm, Google.org, the company is backing start-ups designing wind, solar and geothermal technologies, which it hopes will eventually be cheaper than coal-based electricity. Google invested $45 million in such companies this year.
Schmidt pointed to the role that government grants to universities played in creating the Internet. "Why don't we do the same thing with the energy grid?" he asked.
"If you're going to spur economic growth you've got to focus on infrastructure research and development and energy," he said. "These are jobs programs."
And that grid should also power America's cars, he said. "Our dependence on imported oil is a huge drain. How many wars has oil created?" he said.
He said federal money for basic science has dwindled in recent years and that the private sector cannot do everything.
He called for a balanced approach to regulation, as opposed to the "extreme version of the free-market approach" of recent years.
Microsoft to offer free security software
Microsoft Corp said Wednesday it will discontinue sales of its subscription PC security service and instead offer free software to help protect computers from viruses, spyware and other threats.
With the move, the software giant appears to be taking aim at McAfee Inc and Symantec Corp, its chief rivals in the PC security market.
Microsoft plans to halt sales of its Windows Live OneCare service on June 30. The service being discontinued costs $49.95 a year and covers up to three PCs.
The new security program, which the company has code-named "Morro," will be available as a free download in the second half of next year.
Morro is designed to work with smaller, less powerful computers, the company said, which should make it appeal to a wide group of consumers.
However, McAfee said the move is a sign of capitulation on the part of Microsoft. McAfee said OneCare managed to capture less than 2 percent of the market in the two years it has been out.
"Microsoft is giving up," a McAfee spokesman said. "They are now defaulting to a dressed-down free model that doesn't meet consumer security needs."
Microsoft has a history of butting heads with its competitors in the PC security space. In 2006 and 2007, Symantec and McAfee raised concerns that Microsoft had designed Windows Vista to deny them access to to the heart of the operating system, which they needed to protect it from certain kinds of malicious software.
After negotiations, and some prodding from antitrust regulators in Brussels, Microsoft said it would provide the information needed.
Shares of Redmond, Wash.-based Microsoft closed up 43 cents, or 2.2 percent, at $19.62. Shares of Cupertino, Calif.-based Symantec finished at $12.40, up 24 cents, or 2 percent, while shares of Santa Clara, Calif.-based McAfee closed up 28 cents at $28.57.
With the move, the software giant appears to be taking aim at McAfee Inc and Symantec Corp, its chief rivals in the PC security market.
Microsoft plans to halt sales of its Windows Live OneCare service on June 30. The service being discontinued costs $49.95 a year and covers up to three PCs.
The new security program, which the company has code-named "Morro," will be available as a free download in the second half of next year.
Morro is designed to work with smaller, less powerful computers, the company said, which should make it appeal to a wide group of consumers.
However, McAfee said the move is a sign of capitulation on the part of Microsoft. McAfee said OneCare managed to capture less than 2 percent of the market in the two years it has been out.
"Microsoft is giving up," a McAfee spokesman said. "They are now defaulting to a dressed-down free model that doesn't meet consumer security needs."
Microsoft has a history of butting heads with its competitors in the PC security space. In 2006 and 2007, Symantec and McAfee raised concerns that Microsoft had designed Windows Vista to deny them access to to the heart of the operating system, which they needed to protect it from certain kinds of malicious software.
After negotiations, and some prodding from antitrust regulators in Brussels, Microsoft said it would provide the information needed.
Shares of Redmond, Wash.-based Microsoft closed up 43 cents, or 2.2 percent, at $19.62. Shares of Cupertino, Calif.-based Symantec finished at $12.40, up 24 cents, or 2 percent, while shares of Santa Clara, Calif.-based McAfee closed up 28 cents at $28.57.
New Yahoo CEO must be willing to do Microsoft deal
To impress shareholders, Yahoo Inc's next chief executive needs just one qualification: the willingness to do a deal with Microsoft Corp.
That's because this remains Yahoo's best option, short of a dramatic turnaround plan, analysts said.
But if Microsoft does eventually buy Yahoo, shareholders should brace themselves for a price far lower than the $47.5 billion the software behemoth offered earlier this year.
Wall Street analysts estimate that Microsoft would not offer more than $17-$20 per share for Yahoo, whose stock has fallen below $12 from a high of $30.25 in February.
Online display advertising, a core Yahoo business, has also shrunk as corporate advertisers scale back on Web marketing promotions amid a global economic slump.
Under Chief Executive Jerry Yang, who on Monday agreed to step down from his role once the board finds a replacement, Yahoo searched for alternatives to being bought, exploring partnerships with Google Inc and Time Warner Inc's AOL unit.
But Google, which struck a search advertising deal with Yahoo in June only to abandon it as regulatory concerns grew, is unlikely to come back for more.
Meanwhile, Yahoo's months-long discussions with Time Warner about combining its AOL unit, have not led to a deal so far.
And Microsoft, for all its proclamations to the contrary, still needs Yahoo's assets to bolster its presence in online search and advertising, analysts said.
But the scales will be tipped in Microsoft's favor if and when the new Yahoo CEO does reach out to negotiate a new deal.
"It's not going to be Microsoft calling Yahoo saying, 'We're making a bid for $17 a share'," Needham & Co analyst Mark May said.
"Microsoft is done negotiating with Yahoo. If Yahoo wants to do a deal, its board needs to have full agreement" on the price they want to sell the company for, May added.
Microsoft offered to buy Yahoo for $44.6 billion on Jan. 31, which Yahoo rejected. It sweetened its cash-and-stock bid to $47.5 billion, but withdrew it after talks fell apart on price.
Microsoft later came back with a proposal to buy Yahoo's search assets, but Yahoo turned it down as well, choosing to team up with archrival Google instead.
Yahoo and Time Warner also began talking about a deal under which Yahoo would fold AOL's online content and advertising assets into its operations, with Time Warner taking a stake in the combined company, sources have told Reuters.
Despite advanced talks, a deal hasn't happened because of challenges to valuing the businesses given the weak advertising market and Yahoo's falling stock price, as well as concerns over integrating the platforms, the sources have said.
Analysts have been skeptical about such a deal because they don't believe it would dramatically improve Yahoo's earnings.
"Yahoo-AOL? What would that bring to the table? There's no point in having a marriage of convenience. It's not going to last," said Mukul Krishna, global digital media director at Frost & Sullivan, a research and consulting firm.
Krishna said Yahoo's shareholders are looking for something more tangible to offset the stock's losses.
Yahoo needs either a substantial turnaround plan, complete with cost-cutting and a "roadmap to profitability," or an acquisition by Microsoft to satisfy investors, Krishna said.
"Microsoft will be only too happy to restart the conversation, but it will be calling the shots," he said.
Activist investor Carl Icahn's presence on Yahoo's board may help bring Microsoft to the table, analysts said.
Icahn, a major Yahoo shareholder, has publicly reiterated hopes of a Yahoo-Microsoft deal several times. He did not return calls seeking comment.
Analysts said they expect Microsoft to eventually come back because it needs Yahoo nearly as much as Yahoo needs it.
"Microsoft wants Yahoo's search audience, the traffic, the clicks," Needham's May said. "They want to have as much as Google does. So it's important for Microsoft to have a big presence in search and display."
But Cowen & Co analyst Jim Friedland said Microsoft is unlikely to want to rush into talks with Yahoo even with a new CEO knocking on its door.
Both companies are seeing declines in their Web businesses due to the global economic downturn, and as Yahoo's "only potential buyer," Microsoft can take its time, he said.
That's because this remains Yahoo's best option, short of a dramatic turnaround plan, analysts said.
But if Microsoft does eventually buy Yahoo, shareholders should brace themselves for a price far lower than the $47.5 billion the software behemoth offered earlier this year.
Wall Street analysts estimate that Microsoft would not offer more than $17-$20 per share for Yahoo, whose stock has fallen below $12 from a high of $30.25 in February.
Online display advertising, a core Yahoo business, has also shrunk as corporate advertisers scale back on Web marketing promotions amid a global economic slump.
Under Chief Executive Jerry Yang, who on Monday agreed to step down from his role once the board finds a replacement, Yahoo searched for alternatives to being bought, exploring partnerships with Google Inc and Time Warner Inc's AOL unit.
But Google, which struck a search advertising deal with Yahoo in June only to abandon it as regulatory concerns grew, is unlikely to come back for more.
Meanwhile, Yahoo's months-long discussions with Time Warner about combining its AOL unit, have not led to a deal so far.
And Microsoft, for all its proclamations to the contrary, still needs Yahoo's assets to bolster its presence in online search and advertising, analysts said.
But the scales will be tipped in Microsoft's favor if and when the new Yahoo CEO does reach out to negotiate a new deal.
"It's not going to be Microsoft calling Yahoo saying, 'We're making a bid for $17 a share'," Needham & Co analyst Mark May said.
"Microsoft is done negotiating with Yahoo. If Yahoo wants to do a deal, its board needs to have full agreement" on the price they want to sell the company for, May added.
Microsoft offered to buy Yahoo for $44.6 billion on Jan. 31, which Yahoo rejected. It sweetened its cash-and-stock bid to $47.5 billion, but withdrew it after talks fell apart on price.
Microsoft later came back with a proposal to buy Yahoo's search assets, but Yahoo turned it down as well, choosing to team up with archrival Google instead.
Yahoo and Time Warner also began talking about a deal under which Yahoo would fold AOL's online content and advertising assets into its operations, with Time Warner taking a stake in the combined company, sources have told Reuters.
Despite advanced talks, a deal hasn't happened because of challenges to valuing the businesses given the weak advertising market and Yahoo's falling stock price, as well as concerns over integrating the platforms, the sources have said.
Analysts have been skeptical about such a deal because they don't believe it would dramatically improve Yahoo's earnings.
"Yahoo-AOL? What would that bring to the table? There's no point in having a marriage of convenience. It's not going to last," said Mukul Krishna, global digital media director at Frost & Sullivan, a research and consulting firm.
Krishna said Yahoo's shareholders are looking for something more tangible to offset the stock's losses.
Yahoo needs either a substantial turnaround plan, complete with cost-cutting and a "roadmap to profitability," or an acquisition by Microsoft to satisfy investors, Krishna said.
"Microsoft will be only too happy to restart the conversation, but it will be calling the shots," he said.
Activist investor Carl Icahn's presence on Yahoo's board may help bring Microsoft to the table, analysts said.
Icahn, a major Yahoo shareholder, has publicly reiterated hopes of a Yahoo-Microsoft deal several times. He did not return calls seeking comment.
Analysts said they expect Microsoft to eventually come back because it needs Yahoo nearly as much as Yahoo needs it.
"Microsoft wants Yahoo's search audience, the traffic, the clicks," Needham's May said. "They want to have as much as Google does. So it's important for Microsoft to have a big presence in search and display."
But Cowen & Co analyst Jim Friedland said Microsoft is unlikely to want to rush into talks with Yahoo even with a new CEO knocking on its door.
Both companies are seeing declines in their Web businesses due to the global economic downturn, and as Yahoo's "only potential buyer," Microsoft can take its time, he said.
Tuesday, November 18, 2008
MySpace Japan bets on world demand for J-Pop
Banking on the global appeal of Japanese pop and video games, social networking site MySpace said it would more than double the number of artists on its Japanese pages to get more clicks internationally.
The growth of new sign-ups and page views is slowing in Japan for rival networking services such as mixi Inc, but Myspace, which launched its Japanese site two years ago, aims to buck the trend by expanding the range of sales artists can make on its site.
This, allied with growing interest in J-Pop music and Japanese video games in other parts of the world, will help the site grow rapidly, said the Japanese head of MySpace, which is owned by Rupert Murdoch's News Corp.
"Until now, Japanese artists catered primarily to the home market, but the home market is no longer big enough," MySpace Japan CEO Atsushi Taira said in an interview with Reuters. "Demand for Japanese music and games is strong abroad, and we are now uniquely positioned to clear barriers posed by language."
The number of artists that have registered with the Japanese version of MySpace has doubled in the last six months to a little under 90,000 people, Taira said.
"I think we can easily double that in a year's time," as more artists use MySpace to sell their music and T-shirts next year, he said. "Once we have a large group of artists using MySpace, the content will win more fans and other users."
MySpace recently went into business with music labels such as Sony BMG Music, Universal Music Group and Warner Music Group that allows users of the website to stream and download music, grab ringtones and buy concert tickets.
The service will be available in Japanese next year.
Popularity of social networking sites is waning in Japan, where they are often used to reinforce existing friendships, rather than to expand networks, according to market research firm Synovate, which conducted a poll in October that found 55 percent of Japanese users saying they were losing interest.
The growth of new sign-ups and page views is slowing in Japan for rival networking services such as mixi Inc, but Myspace, which launched its Japanese site two years ago, aims to buck the trend by expanding the range of sales artists can make on its site.
This, allied with growing interest in J-Pop music and Japanese video games in other parts of the world, will help the site grow rapidly, said the Japanese head of MySpace, which is owned by Rupert Murdoch's News Corp.
"Until now, Japanese artists catered primarily to the home market, but the home market is no longer big enough," MySpace Japan CEO Atsushi Taira said in an interview with Reuters. "Demand for Japanese music and games is strong abroad, and we are now uniquely positioned to clear barriers posed by language."
The number of artists that have registered with the Japanese version of MySpace has doubled in the last six months to a little under 90,000 people, Taira said.
"I think we can easily double that in a year's time," as more artists use MySpace to sell their music and T-shirts next year, he said. "Once we have a large group of artists using MySpace, the content will win more fans and other users."
MySpace recently went into business with music labels such as Sony BMG Music, Universal Music Group and Warner Music Group that allows users of the website to stream and download music, grab ringtones and buy concert tickets.
The service will be available in Japanese next year.
Popularity of social networking sites is waning in Japan, where they are often used to reinforce existing friendships, rather than to expand networks, according to market research firm Synovate, which conducted a poll in October that found 55 percent of Japanese users saying they were losing interest.
Nokia sees world cellphone market falling in 2009
The world's top cellphone maker Nokia Oyj said the mobile phone market would be weaker than it expected in the fourth quarter due to the economic slowdown, and was set to fall further in 2009.
It forecast 1.24 billion phones being sold worldwide this year, down from its previous estimate of 1.26 billion.
"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," Nokia said in a statement.
"Industry mobile phone volumes will be lower in the fourth quarter 2008 than previously expected. We now estimate fourth-quarter 2008 industry mobile device volumes will be approximately 330 million."
Nokia also said it estimated that handset volumes will be down in 2009 compared with 2008.
The phone maker said it expected its market share in the fourth quarter to be at the same level or slightly up from the third quarter but that sales and profitability in key devices and services would be hurt.
It forecast 1.24 billion phones being sold worldwide this year, down from its previous estimate of 1.26 billion.
"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," Nokia said in a statement.
"Industry mobile phone volumes will be lower in the fourth quarter 2008 than previously expected. We now estimate fourth-quarter 2008 industry mobile device volumes will be approximately 330 million."
Nokia also said it estimated that handset volumes will be down in 2009 compared with 2008.
The phone maker said it expected its market share in the fourth quarter to be at the same level or slightly up from the third quarter but that sales and profitability in key devices and services would be hurt.
Microsoft's new Windows Live aims to be hub for Web
Microsoft Corp said on Wednesday its next release of Windows Live online services will integrate e-mail, instant messaging, photos and Web applications from other companies into a single platform.
Microsoft aims to position Windows Live with its widely-used e-mail and messaging services as the hub for a growing number of Internet applications and incorporate new features similar to those found on popular social networks.
The strategy puts Microsoft into competition with social networking sites Facebook and News Corp's MySpace, which started to open their fast-growing websites to outside software developers last year.
The new Windows Live service plans to feature a main profile page that updates users to their friends' activities within Windows Live and on more than 50 outside Web services including Yahoo Inc's Flickr photo site and career-oriented social networking site LinkedIn.
"It's a race to see who will work better and faster with everyone else," said Charlene Li, founder of consulting company Altimeter Group. "It's the recognition that you can't be an island of yourself."
Microsoft said Web users are overrun with accounts at multiple Internet sites, each requiring a password and each with a different set of friends. Its goal is to simplify the Web lives of its users who go to Microsoft's Windows Live e-mail or instant messaging accounts.
The company's Windows Live strategy is also central to its plans to wrestle away online advertising revenue from Google Inc, which has used its dominant search engine to expand into e-mail, online word processing and other businesses that compete directly with Microsoft.
Microsoft plans to roll out the new Windows Live services, which will include a revamped e-mail, calendar and a new photo application, in the United States over the coming weeks and then make it available in 54 countries early next year.
FILL IN THE SEAMS
In this third major release of Microsoft's Windows Live services, Microsoft said it aims to fill in the seams between its different Web services to create a unified experience.
Brian Hall, general manager of Windows Live, pointed to Microsoft's Outlook application, which brought together e-mail, calendar and contacts programs into a single integrated software suite, as a model for how it wanted to tie together a loose network of Web services.
He also noted that the latest Windows Live release is focused on creating a more polished user experience, which, in the past, may have been sacrificed in order to get new programs out quicker.
Other new services include an online movie maker program, a "groups" service that allows a group of users to create a joint calendar, share photos and documents or chat together online. Microsoft also plans to increase the size of its free storage service to 25 gigabytes from 20 GB.
Microsoft boasts more than 460 million Windows Live users and analysts said the goal for the company is to keep that audience in front of the company's websites for as long as possible and to prevent defection to other Web destinations.
"I don't think Microsoft is going to steal a whole lot of eyeballs from Facebook or MySpace," said David Card, research director at Forrester.
Facebook has 120 million active users and many of those rely on its mail and chat applications to communicate with friends instead of traditional e-mail and messaging services offered by Microsoft and Yahoo.
Microsoft and Facebook are pursuing the same strategy, according to analysts, albeit from different sides and areas of strengths. Last year, Microsoft paid $240 million for a 1.6 percent stake in privately-held Facebook.
Microsoft aims to position Windows Live with its widely-used e-mail and messaging services as the hub for a growing number of Internet applications and incorporate new features similar to those found on popular social networks.
The strategy puts Microsoft into competition with social networking sites Facebook and News Corp's MySpace, which started to open their fast-growing websites to outside software developers last year.
The new Windows Live service plans to feature a main profile page that updates users to their friends' activities within Windows Live and on more than 50 outside Web services including Yahoo Inc's Flickr photo site and career-oriented social networking site LinkedIn.
"It's a race to see who will work better and faster with everyone else," said Charlene Li, founder of consulting company Altimeter Group. "It's the recognition that you can't be an island of yourself."
Microsoft said Web users are overrun with accounts at multiple Internet sites, each requiring a password and each with a different set of friends. Its goal is to simplify the Web lives of its users who go to Microsoft's Windows Live e-mail or instant messaging accounts.
The company's Windows Live strategy is also central to its plans to wrestle away online advertising revenue from Google Inc, which has used its dominant search engine to expand into e-mail, online word processing and other businesses that compete directly with Microsoft.
Microsoft plans to roll out the new Windows Live services, which will include a revamped e-mail, calendar and a new photo application, in the United States over the coming weeks and then make it available in 54 countries early next year.
FILL IN THE SEAMS
In this third major release of Microsoft's Windows Live services, Microsoft said it aims to fill in the seams between its different Web services to create a unified experience.
Brian Hall, general manager of Windows Live, pointed to Microsoft's Outlook application, which brought together e-mail, calendar and contacts programs into a single integrated software suite, as a model for how it wanted to tie together a loose network of Web services.
He also noted that the latest Windows Live release is focused on creating a more polished user experience, which, in the past, may have been sacrificed in order to get new programs out quicker.
Other new services include an online movie maker program, a "groups" service that allows a group of users to create a joint calendar, share photos and documents or chat together online. Microsoft also plans to increase the size of its free storage service to 25 gigabytes from 20 GB.
Microsoft boasts more than 460 million Windows Live users and analysts said the goal for the company is to keep that audience in front of the company's websites for as long as possible and to prevent defection to other Web destinations.
"I don't think Microsoft is going to steal a whole lot of eyeballs from Facebook or MySpace," said David Card, research director at Forrester.
Facebook has 120 million active users and many of those rely on its mail and chat applications to communicate with friends instead of traditional e-mail and messaging services offered by Microsoft and Yahoo.
Microsoft and Facebook are pursuing the same strategy, according to analysts, albeit from different sides and areas of strengths. Last year, Microsoft paid $240 million for a 1.6 percent stake in privately-held Facebook.
Cell phone shopping makes wallets redundant in Japan
Japanese office worker Satoshi Tada pays for shopping, wins free food and gets store discounts all by waving his cell phone.
"I use it pretty much every day," the 25-year-old said. "You can charge money on it right there if needed, and you don't have to run around trying to find an ATM. You can even get points because it's linked to credit cards."
The world's top firms such as Visa Inc and Nokia are still mostly testing phone use for payments, but in Japan, more than 50 million, or about half of all cell phone users, already carry phones capable of serving as wallets.
Japan has pioneered not just the technology but also the business models that will pave the way for wallet phones to become a standard payment method in the future. Some 700 million people worldwide are expected to own such phones by 2013.
"You can't deny that having such applications on a phone is convenient, and that will likely be the way that mobile phones are going worldwide," said JPMorgan Securities analyst Hironobu Sawake in Tokyo.
"People always carry cell phones on them, and they would find it useful to have a financial function there."
Success in Japan and in trials abroad have shown that the technology is ready for cell phones to replace credit cards, cash as well as serve as transportation and movie tickets and electronic keys for homes and offices.
But there are other hurdles; from breaking the psychological barrier for consumers skeptical about using phones as credit cards, to working out new business models as the lines blur between banks, financial institutions and cell phone companies.
Japan is leading the way in this regard.
KDDI, for example, is a Japanese telecom operator that has recently set up a bank along with Mitsubishi UFJ Financial Group. NTT DoCoMo, Japan's biggest wireless carrier, offers credit cards and lending services as part of a tie up with Sumitomo Mitsui Financial Group, Japan's third-largest bank.
Outside Japan, telecom industry and financial players are still in the midst of working out how the wallet phone payment business would operate, who would get a cut and when.
"Traditional financial industry met telcos by going mobile. Now telecom operators want to play a part in that chain. These talks are well under way," said Gerhard Romen, Director for Strategic Alliances & Partnering at Nokia.
The world's biggest payment card company, Mastercard, said last month it was in talks over commercial launches of phone wallets with several banks, and during the next two years it expects to see substantial activity from retail-focused banks.
"Now banks say: I have no doubt in the technology. We need to solve the business model between mobile and payments industries. It's not a trivial task," said James Anderson, a Vice President at Mastercard's mobile business.
"There is a very strong consumer pull for this service," Anderson added.
COUPONS
Tada, the Tokyo office worker, rarely pulls out his leather wallet these days as his cell phone does the job instead.
"For shopping, I use it everywhere I can ... and I also use coupons such as Gourmet Navigator Touch wherever possible," Tada said, citing services at some restaurants that offer coupons and free gifts when customers wave their phones at reader terminals.
NTT DoCoMo began the so-called "wallet phone" service in 2004 and rivals KDDI Corp and Softbank Corp have followed suit. Overseas, Nokia also has such phones on the market.
Nevertheless, despite Japan's relative success with payment phones, still only one-third of wallet phone holders use their cells for purchases.
Consumers in their 20s and 30s are the main users of wallet phone services. Research shows that once they start using, they tend to use frequently and repeatedly, making it a useful tool for companies to track their customers and shopping habits.
"For young people the phone is more important than the card when they leave home," said Nokia's Romen.
McDonald's Japan and 7-Eleven convenience stores have been testing mobile discount coupons, and FeliCa Networks, a joint venture of Sony and DoCoMo, have launched a mobile platform for retailers to offer such services.
"With many cell phones around and most of them being wallet phones, we cannot ignore them as marketing tools," McDonald's Japan spokesman Kazuyuki Hagiwara said. McDonald's plans to widen its mobile discount coupon offering nationwide next year.
EXTRA CHIP
The world's top cell phone maker Nokia has started selling wallet phones, though growth is hampered by costs stemming from an extra chip needed in phones for data security. As a result, Nokia's near field communications (NFC) version of devices costs far more than regular phones.
Near field communications (NFC) enables contactless data transmission at high speed and enables many functions at once such as various electronic money services, keys and coupons.
In contrast to Nokia, Japanese makers install Sony Corp's FeliCa chips in new mobile phones by default, and prices are competitive with other cell phones.
Globally, research firm Juniper Research says there will be 700 million NFC-capable phones by 2013, from some 50 million in Japan now, offering major growth for the phone payment industry and the companies that provide the hardware and software.
Credit card network Visa is developing an application to allow in-store contactless payments by cell phone for Google Inc's Android operating system, and UK mobile operator O2 is also testing wallet phones.
Security concerns are high among potential users but DoCoMo says a remote-lock system will protect it from being used by other people in case of emergencies.
One of the remaining hurdles to attract more wallet phone users is to expand the system network.
"It would be so useful if we can use it everywhere. For now we don't know where we can use it and we have to carry both a phone and a wallet," UBS Securities analyst Makio Inui said. "If we can spend a day with just with a phone, that would be big."
"I use it pretty much every day," the 25-year-old said. "You can charge money on it right there if needed, and you don't have to run around trying to find an ATM. You can even get points because it's linked to credit cards."
The world's top firms such as Visa Inc and Nokia are still mostly testing phone use for payments, but in Japan, more than 50 million, or about half of all cell phone users, already carry phones capable of serving as wallets.
Japan has pioneered not just the technology but also the business models that will pave the way for wallet phones to become a standard payment method in the future. Some 700 million people worldwide are expected to own such phones by 2013.
"You can't deny that having such applications on a phone is convenient, and that will likely be the way that mobile phones are going worldwide," said JPMorgan Securities analyst Hironobu Sawake in Tokyo.
"People always carry cell phones on them, and they would find it useful to have a financial function there."
Success in Japan and in trials abroad have shown that the technology is ready for cell phones to replace credit cards, cash as well as serve as transportation and movie tickets and electronic keys for homes and offices.
But there are other hurdles; from breaking the psychological barrier for consumers skeptical about using phones as credit cards, to working out new business models as the lines blur between banks, financial institutions and cell phone companies.
Japan is leading the way in this regard.
KDDI, for example, is a Japanese telecom operator that has recently set up a bank along with Mitsubishi UFJ Financial Group. NTT DoCoMo, Japan's biggest wireless carrier, offers credit cards and lending services as part of a tie up with Sumitomo Mitsui Financial Group, Japan's third-largest bank.
Outside Japan, telecom industry and financial players are still in the midst of working out how the wallet phone payment business would operate, who would get a cut and when.
"Traditional financial industry met telcos by going mobile. Now telecom operators want to play a part in that chain. These talks are well under way," said Gerhard Romen, Director for Strategic Alliances & Partnering at Nokia.
The world's biggest payment card company, Mastercard, said last month it was in talks over commercial launches of phone wallets with several banks, and during the next two years it expects to see substantial activity from retail-focused banks.
"Now banks say: I have no doubt in the technology. We need to solve the business model between mobile and payments industries. It's not a trivial task," said James Anderson, a Vice President at Mastercard's mobile business.
"There is a very strong consumer pull for this service," Anderson added.
COUPONS
Tada, the Tokyo office worker, rarely pulls out his leather wallet these days as his cell phone does the job instead.
"For shopping, I use it everywhere I can ... and I also use coupons such as Gourmet Navigator Touch wherever possible," Tada said, citing services at some restaurants that offer coupons and free gifts when customers wave their phones at reader terminals.
NTT DoCoMo began the so-called "wallet phone" service in 2004 and rivals KDDI Corp and Softbank Corp have followed suit. Overseas, Nokia also has such phones on the market.
Nevertheless, despite Japan's relative success with payment phones, still only one-third of wallet phone holders use their cells for purchases.
Consumers in their 20s and 30s are the main users of wallet phone services. Research shows that once they start using, they tend to use frequently and repeatedly, making it a useful tool for companies to track their customers and shopping habits.
"For young people the phone is more important than the card when they leave home," said Nokia's Romen.
McDonald's Japan and 7-Eleven convenience stores have been testing mobile discount coupons, and FeliCa Networks, a joint venture of Sony and DoCoMo, have launched a mobile platform for retailers to offer such services.
"With many cell phones around and most of them being wallet phones, we cannot ignore them as marketing tools," McDonald's Japan spokesman Kazuyuki Hagiwara said. McDonald's plans to widen its mobile discount coupon offering nationwide next year.
EXTRA CHIP
The world's top cell phone maker Nokia has started selling wallet phones, though growth is hampered by costs stemming from an extra chip needed in phones for data security. As a result, Nokia's near field communications (NFC) version of devices costs far more than regular phones.
Near field communications (NFC) enables contactless data transmission at high speed and enables many functions at once such as various electronic money services, keys and coupons.
In contrast to Nokia, Japanese makers install Sony Corp's FeliCa chips in new mobile phones by default, and prices are competitive with other cell phones.
Globally, research firm Juniper Research says there will be 700 million NFC-capable phones by 2013, from some 50 million in Japan now, offering major growth for the phone payment industry and the companies that provide the hardware and software.
Credit card network Visa is developing an application to allow in-store contactless payments by cell phone for Google Inc's Android operating system, and UK mobile operator O2 is also testing wallet phones.
Security concerns are high among potential users but DoCoMo says a remote-lock system will protect it from being used by other people in case of emergencies.
One of the remaining hurdles to attract more wallet phone users is to expand the system network.
"It would be so useful if we can use it everywhere. For now we don't know where we can use it and we have to carry both a phone and a wallet," UBS Securities analyst Makio Inui said. "If we can spend a day with just with a phone, that would be big."
Dell quells rumors about music player
Dell Inc, struggling to recharge its lineup of consumer product offerings, indicated Monday that a digital music player is not in the computer maker's near-term plans despite speculation that such a product is in the works.
Although Dell declined to comment specifically, the company said in a blog posting that its digital entertainment strategy "has never been about a music player."
The Wall Street Journal, citing sources, reported earlier Monday that Dell has decided to postpone the launch of a music player.
"As we said a few months ago, our strategy focuses on content offerings and delivery platforms that mix Zing software, remote access and pre-configured media bundles across all of our devices, including licensing agreements with entertainment distributors," the blog posting said.
In 2007 Dell acquired Zing, whose software allows handheld devices to receive streaming audio and video feeds wirelessly. The acquisition spurred speculation that the company was set to have another go at the music player market, which it abandoned in 2006 after failing to find any success against Apple Inc and its iPod family.
There were other hints that Dell was interested in relaunching a music player. The company has been increasing its presence at rock festivals, seeking to promote its brand among music-lovers and the consumer public in general.
Dell and much of the personal computer industry is confronting the prospect of a bleak holiday season. Last month, the company said it was seeing soft demand for PCs as the global economy slows.
Dell is the world's second largest computer company by units shipped, although third-ranked Acer Inc is gaining ground fast on the strength of its netbook offerings. which Dell has been slower to embrace.
The Round Rock, Texas-based company has been retooling its operations to confront slower demand. In August Dell said it had slashed 8,500 jobs out of a planned 8,900 headcount reduction.
Shares of Dell closed down 69 cents, or 5.5 percent, at $11.86 on Nasdaq.
Although Dell declined to comment specifically, the company said in a blog posting that its digital entertainment strategy "has never been about a music player."
The Wall Street Journal, citing sources, reported earlier Monday that Dell has decided to postpone the launch of a music player.
"As we said a few months ago, our strategy focuses on content offerings and delivery platforms that mix Zing software, remote access and pre-configured media bundles across all of our devices, including licensing agreements with entertainment distributors," the blog posting said.
In 2007 Dell acquired Zing, whose software allows handheld devices to receive streaming audio and video feeds wirelessly. The acquisition spurred speculation that the company was set to have another go at the music player market, which it abandoned in 2006 after failing to find any success against Apple Inc and its iPod family.
There were other hints that Dell was interested in relaunching a music player. The company has been increasing its presence at rock festivals, seeking to promote its brand among music-lovers and the consumer public in general.
Dell and much of the personal computer industry is confronting the prospect of a bleak holiday season. Last month, the company said it was seeing soft demand for PCs as the global economy slows.
Dell is the world's second largest computer company by units shipped, although third-ranked Acer Inc is gaining ground fast on the strength of its netbook offerings. which Dell has been slower to embrace.
The Round Rock, Texas-based company has been retooling its operations to confront slower demand. In August Dell said it had slashed 8,500 jobs out of a planned 8,900 headcount reduction.
Shares of Dell closed down 69 cents, or 5.5 percent, at $11.86 on Nasdaq.
Microsoft CEO pours cold water on Yahoo interest
Software giant Microsoft Corp dismissed speculation it might still be interested in a takeover of Internet firm Yahoo Inc.
"We made an offer, we made another offer ... We moved on," Microsoft Chief Executive Steve Ballmer told a business luncheon in Sydney on Friday when asked for the firm's plans after a partnership between Yahoo and Google Inc fell through this week.
"We tried at one point to do a partnership around search ... and that didn't work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don't know why they would be either, frankly," Ballmer said.
He added that he thought there were still opportunities for some kind of partnership around search.
Ballmer's comments came two days after Yahoo's shares surged on a rumour posted on a blog that said Yahoo and Microsoft were in advanced talks to sell Yahoo for between $17 and $19 a share. The blog also reported that Yahoo's chief executive, Jerry Yang, would step down.
Yahoo officials later said the report was untrue.
Microsoft abandoned an unsolicited $47.5 billion bid for Yahoo in May. The software company had been looking to fill a hole in its repertoire by acquiring an Internet search engine as it battles with market leader Google.
In June, Google and Yahoo, Nos. 1 and 2 in the Internet search market respectively, announced their planned partnership, which Yahoo had struck as a way of fending off Microsoft.
The two delayed implementation to allow the Justice Department to review it but Google later said it pulled out of the deal rather than face a protracted legal fight after regulators had concerns.
Yang told the Web 2.0 Summit in San Francisco on Wednesday that he believed a deal between Microsoft and Yahoo was still the best option for Microsoft.
Yahoo shares ended Thursday at $13.96, far below the $31 a share Microsoft originally offered, and Yahoo has come under severe criticism from investors for turning down the offer.
Microsoft posted stronger-than-expected quarterly results last month and cut its outlook by less than investors had feared amid the economic slump.
Pity the Bluetooth headset this holiday season
So what's the least desired electronic gadget this holiday season?
Well, flat-screen TVs and mobile phones are still in, but cash-strapped shoppers are likely to shun anything closely linked to entertainment in the home or car because such electronics are seen as dispensable in an economic crisis.
That includes audio speakers and desktop computers and even GPS navigation systems made by companies such as TomTom NV and Garmin Ltd.
A popular item as recently as last year, GPS may fall by the wayside, since they can be pricey and not viewed as essential, according to Stephen Baker, an analyst for research firm NPD.
"GPS may have some demand issues," he said. "If you are looking at necessity versus discretionary, that is a category that is not very well-penetrated, which is in its favor. But the negative part is people saying: 'Do I really need this'?
A recent national survey says the dubious distinction of least desirable holiday gift belongs to Bluetooth Headsets, those thumb-sized devices beloved by some for their convenience and ridiculed by others as odd looking.
The online survey conducted last month on behalf of auction site eBay Inc also found that only 5 percent of those who wanted personal electronics desired a Blu-ray disc player. Even so-called "retro video game" systems and one game in particular -- "Dance Dance Revolution Hottest Party II" -- got the thumbs-down.
Digital picture frames, the sleek devices that can scroll dozens of pictures and even update remotely via an Internet link, may feel the pinch if shoppers' budgets force them to decide on one electronic product or another, Baker says.
"A lot of people think of frames as a neat thing to do, but may end up saying: 'I probably really need a new digital camera.'"
STORES OFFERS CLUES OF LOSERS
Electronics stores are already gearing up for the holiday rush, hoping consumers snap up deeply discounted devices. But there are clues to how some stores -- who give hot items premium placing and downplay the laggards -- feel about certain products.
On a recent visit to a suburban New York Circuit City, this reporter crossed through the threshold and saw four products placed prominently: flat TVs on the left, digital audio players on the right and straight ahead, mobile phones and -- oddly enough -- high-end Dyson vacuum cleaners.
Scanning the huge big-box store, it was hard to locate home audio speakers, car radios and cordless phones, which were either hundreds of feet away from the front door, beyond eyeshot, or on shelves below eye-level.
At a Best Buy store on Manhattan's Fifth Avenue, the rear of the lower level, far from the bustle, is where you will find Logitech International's $149 Harmony programmable remote controls, not far from Bose's $329 bookshelf speakers and Sony Corp's $399 770-watt home theater receiver and a host of computer printers.
Tim Herbert, an analyst for the Consumer Electronics Association, suggests the rapidly changing -- and cost-saving -- nature of consumers' use of certain products is also affecting shopping habits.
"For example, in the category of cordless phones and answering machines, in years past that was always a very hot category, but more and more people are moving toward a cell phone-only model of communication," he said. "Or the answering machine capabilities are built into a service that you get with your carrier or phone service."
But that will not stop shoppers from spending freely on a great deal. For example, Wal-Mart says its holiday sales include a basic Compaq laptop for $298 and a Sanyo 46-inch LCD high-definition television for $898.
"Consumers are going to be more mindful of their budgets," said Herbert. "It's a tough question to say morally whether it is right to spend on the holidays this year when they may be feeling economic strain, but historically, its somewhat in our nature."
Well, flat-screen TVs and mobile phones are still in, but cash-strapped shoppers are likely to shun anything closely linked to entertainment in the home or car because such electronics are seen as dispensable in an economic crisis.
That includes audio speakers and desktop computers and even GPS navigation systems made by companies such as TomTom NV and Garmin Ltd.
A popular item as recently as last year, GPS may fall by the wayside, since they can be pricey and not viewed as essential, according to Stephen Baker, an analyst for research firm NPD.
"GPS may have some demand issues," he said. "If you are looking at necessity versus discretionary, that is a category that is not very well-penetrated, which is in its favor. But the negative part is people saying: 'Do I really need this'?
A recent national survey says the dubious distinction of least desirable holiday gift belongs to Bluetooth Headsets, those thumb-sized devices beloved by some for their convenience and ridiculed by others as odd looking.
The online survey conducted last month on behalf of auction site eBay Inc also found that only 5 percent of those who wanted personal electronics desired a Blu-ray disc player. Even so-called "retro video game" systems and one game in particular -- "Dance Dance Revolution Hottest Party II" -- got the thumbs-down.
Digital picture frames, the sleek devices that can scroll dozens of pictures and even update remotely via an Internet link, may feel the pinch if shoppers' budgets force them to decide on one electronic product or another, Baker says.
"A lot of people think of frames as a neat thing to do, but may end up saying: 'I probably really need a new digital camera.'"
STORES OFFERS CLUES OF LOSERS
Electronics stores are already gearing up for the holiday rush, hoping consumers snap up deeply discounted devices. But there are clues to how some stores -- who give hot items premium placing and downplay the laggards -- feel about certain products.
On a recent visit to a suburban New York Circuit City, this reporter crossed through the threshold and saw four products placed prominently: flat TVs on the left, digital audio players on the right and straight ahead, mobile phones and -- oddly enough -- high-end Dyson vacuum cleaners.
Scanning the huge big-box store, it was hard to locate home audio speakers, car radios and cordless phones, which were either hundreds of feet away from the front door, beyond eyeshot, or on shelves below eye-level.
At a Best Buy store on Manhattan's Fifth Avenue, the rear of the lower level, far from the bustle, is where you will find Logitech International's $149 Harmony programmable remote controls, not far from Bose's $329 bookshelf speakers and Sony Corp's $399 770-watt home theater receiver and a host of computer printers.
Tim Herbert, an analyst for the Consumer Electronics Association, suggests the rapidly changing -- and cost-saving -- nature of consumers' use of certain products is also affecting shopping habits.
"For example, in the category of cordless phones and answering machines, in years past that was always a very hot category, but more and more people are moving toward a cell phone-only model of communication," he said. "Or the answering machine capabilities are built into a service that you get with your carrier or phone service."
But that will not stop shoppers from spending freely on a great deal. For example, Wal-Mart says its holiday sales include a basic Compaq laptop for $298 and a Sanyo 46-inch LCD high-definition television for $898.
"Consumers are going to be more mindful of their budgets," said Herbert. "It's a tough question to say morally whether it is right to spend on the holidays this year when they may be feeling economic strain, but historically, its somewhat in our nature."
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