Digital Media

After three quarters of losses, Lenovo has turned a profit again. The computer maker announced Thursday that its fiscal second-quarter earnings more than doubled to $53 million versus $23 million a year ago.

Profit for the quarter ended September blew way past estimates of only $24 million from analysts surveyed by Bloomberg.

Despite a 5.2 percent sales decline to $4.1 billion from $4.3 billion in the year-ago quarter, Lenovo achieved its profits through extensive cost cuts and a record leap in market share.

(Credit: Lenovo)

The company had previously kick-started a major restructuring program designed to trim expenses and streamline business operations. As a result, Lenovo was forced to lay off a sizable number of employees and take a one-time restructuring charge of $3 million in the second quarter. But the company now expects to save around $300 million annually.

During the quarter, Lenovo says it also saw its worldwide PC shipments surge 17 percent over the prior year, dramatically outpacing the industry average of only 2.3 percent.

"In the last quarter, our share in the global market climbed to a historic high and we returned to profit," said Lenovo CEO Yang Yuanqing in a statement. "At the same time, our expenses-to-revenue ratio improved notably, reaching the best level since the acquisition of IBM's PC division. These achievements bear witness to the clear strategies we set at the beginning of the year and our effective execution of those strategies."

Lenovo's quarterly results were powered by its notebooks, which contributed 63 percent to overall revenue. Though notebook sales dipped 1 percent from the prior year, shipments shot up 37 percent, compared with an industry average of 16 percent.

During the quarter, the company unveiled a few new products, including the IdeaPad U450p, a thin and light consumer laptop, and SimpleTap, an application to help users navigate the touchscreens on Windows 7-enabled machines like the ThinkPad X200 Tablet and ThinkPad T400s.

Desktop sales, however, fell 13 percent from the prior year's quarter, kicking in only 35 percent to Lenovo's overall revenue. Desktop shipments fell 2 percent, but outpaced the industry average of a 12 percent decline. The company said it has reacted to the PC market shift from desktops to laptops by introducing new entry-level low-cost desktops and revamping its product line for small and medium-sized businesses.

Lenovo enjoyed a stellar second quarter in its home base of China where sales jumped 9 percent to $2 billion. Shipments in the country jumped 28 percent compared with the average of only 0.1 percent. Already the leading PC vendor in China, the company boosted its market share there to 29.4 percent.

Earlier this year, Lenovo said that it would refocus its efforts on China and other emerging markets, a strategy that appears to have paid off.

"Our results are moving in the right direction and we are particularly pleased with our performance in China and in the transactional business model," said Lenovo Chairman Liu Chuanzhi in a statement.

The year had been a volatile one for Lenovo. The company was hit a string of quarterly losses, leading to the resignation of President and CEO William Amelio in February. Job cuts and the restructuring also took their toll.

But based on its second quarter, Lenovo is optimistic about the near term.

"In the coming quarters, we will continue to reinforce our leadership in China, improve the sustainability and profitability of mature markets, seize growth opportunities in emerging markets and our transactional business, continue to strengthen cost structure, and innovate with raising efficiency and customers' needs in mind," said Chuanzhi.

The Seattle area is going to get another jobless jolt Thursday, with RealNetworks planning to lay off 4 percent of its workforce, sources said.

That's a small number--just about 70 people out of its 1,700-person staff--but the move comes on the heels of layoffs of another 800 employees at nearby Microsoft on Wednesday. The software giant has cut thousands of jobs over the last year, part of a move to eliminate 5,000 positions by mid-2010.

While the dismissals--which are likely to be announced to affected RealNetworks employees sometime Thursday morning by managers--will be global, both RealNetworks and Microsoft are tech leaders with headquarters in the Pacific Northwest.

According to sources, the reasons for the layoffs at RealNetworks are, as was the case at Microsoft, to realign the work force after the recent economic downturn and to control costs.

But RealNetworks could also hire back some of the laid-off employees, as other parts of the company are expanding.

The company had signaled the possibility of staff cuts previously, but had not been specific.

The last staff cuts at the company, which makes digital media software and tools, were larger, with about 130 employees sacked about a year ago.

RealNetworks announced better-than-expected third-quarter earnings last week, barely returning to profitability by cutting costs to make up for weaker revenue.

(Digital Daily's John Paczkowski contributed to this report.)

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Twitter announced late Wednesday that it is starting a limited test of a new feature that displays the number of new tweets in your timeline since you last refreshed. This works in much the same way as the new tweet notification on the search page for a term. When you click the notification, the new tweets slide out in the same fashion as the search page.

While this functionality was probably not too difficult to implement, since it was already built for the search feature, it is a welcome addition and something that just makes sense. In fact, it would make a lot of sense for Twitter to build out a notification system for @replies, re-tweets, and direct messages, like Facebook has for Wall posts and other actions. Getting updates without having to manually reload the page is one of the big advantages of Facebook's current functionality, so I would not be surprised to see Twitter to follow suit.

While this feature is still in limited testing, Twitter says it hopes to roll it out to everyone as soon as it can. I, along with many others, am not in the test group yet, so please share your thoughts on the feature in the comments if you are.

(Credit: The Beatles)

No, the digitally remastered Beatles catalog hasn't come to Apple's iTunes. But it has come to an apple-shaped USB device.

Retailing for $279.99, the collection will be released December 8 in North America, three months after the September 9 release of the remastered set of the band's albums (as well as The Beatles: Rock Band video game). The apple shape is in reference to Apple Corps, the Beatles music publisher--which in the past, you may recall, sued tech giant Apple in a trademark dispute.

(Credit: The Official Beatles Shop)

When the release of the remastered Beatles catalog and Rock Band game were announced for September 9, 2009 (the band has a song called "Revolution 9"), speculation arose that a concurrently scheduled Apple Inc. announcement might bring the catalog, still unavailable for digital download on the Web, to iTunes. That didn't happen. But with the release of the USB collection, the albums are available in non-CD digital form for the first time.

In addition to MP3 and FLAC versions of 14 stereo titles, according to a release, the 16GB device contains "all of the remastered CDs' visual elements, including 13 mini-documentary films about the studio albums, replicated original UK album art, rare photos and expanded liner notes."

Correction 10:45 a.m. PST: This story initially misstated the release date. It is December 8 in North America. Also, the type of lawsuit Apple Corps filed against Apple Inc. has been corrected. It was a trademark dispute.

Amazon Twitter integration

(Credit: Screenshot-Dave Rosenberg)

Amazon Associates is the partner program the company uses as part of its affiliate advertising programs, allowing customers to make money advertising Amazon products.

Associates can now simply click a link in the toolbar to send a link (replete with sales-y text) to Twitter as part of their shopping and selling experience. Amazon gets a sale, Twitter gets traffic, and the associate gets revenue share. What could possibly go wrong?

Linking to Amazon or other online retailers is obviously nothing new, though Amazon has been particularly successful in using its link networks for both sales and to garner higher Google rankings for organic advertising.

This new program does introduce an issue related to link fraud, where spammers and scammers leverage URL-shortening services for spam links. Currently there is no way to verify that the link you click actually goes to Amazon. It's a bit surprising that it decided to use an URL-shortener that it doesn't own, though I suppose the network effect of the URLs helps perpetuate the life of the links.

There is also a risk of nondisclosure wherein in Twitter users attempt to push products that offer some kind of gain to them that they don't clearly state to you. While I understand the argument for disclosure on blogs and media in general, Twitter remains a playground for people to post whatever they want. I highly doubt all the celebrities with accounts would bother wasting their precious time if they weren't posting for their own gain.

Interestingly, there is no mention of whether Twitter is an Amazon Associate, suggesting that Twitter won't see any of the revenue share. I'd like to think that they cut a deal that gives them a piece of the pie, but to date we haven't seen Twitter monetize itself too effectively.

Twitter is quickly becoming the flash news vehicle for everything from news alerts to product placement. And based on a very quick review of my Bitly account, Twitter users just love to click on links. But, I still have to wonder if Twitter will ever get beyond its current role as a marketing tool?

Helped by cost cuts and by growth in Internet and phone subscribers, Comcast on Wednesday reported a 22 percent jump in earnings for its third quarter.

The cable provider saw net income of $944 million, or 33 cents per share, for the quarter ended Sept. 30, compared with $771 million (26 cents per share) in the year-ago quarter. Sales also rose, hitting $8.8 billion, up from $8.5 billion in 2008's third quarter, though revenue was slightly below analysts' estimates.

Comcast's third-quarter sales

(Credit: Comcast)

For the quarter, the number of TV subscribers dropped 2.7 percent to 23.7 million from 24.4 million a year ago. But the loss was more than offset by gains in Internet and voice, two services that Comcast has marketed heavily, especially as part of its Triple-Play service.

The number of Internet subscribers rose 6.4 percent to 15.6 million, while Comcast phone customers jumped 20 percent to 7.3 million. Overall, the company saw a quarterly increase in customers of 3.4 percent to 46.8 million. Subscriber growth helped boost third-quarter sales for the cable segment by 2.8 percent to $8.4 billion.

Comcast Internet and voice customers grow.

(Credit: Comcast)

With a focus on trimming costs, capital expenses declined 6.1 percent to $1.2 billion, due in large part to lower spending at the company's cable divison.

"The strength and resilience of our businesses combined with our continued emphasis on expenses and prudent capital management helped us achieve healthy operating and financial results in the third quarter," Brian Roberts, chairman and chief executive officer, said in a statement.

Comcast revealed no new details over its intent to acquire a leading stake in GE-owned NBC Universal. Early last month, reports surfaced that the company wanted to buy a 51 percent chunk of NBCU, with GE owning the rest, to create a new joint venture. If it goes through, the deal could transform Comcast into a major media powerhouse, with control of NBC as well as variety of TV networks and cable stations.

Time Warner reported on Wednesday lower sales and earnings for its third quarter, with a drop in revenue across virtually all segments, including AOL.

Sales for the quarter dropped 6 percent to $7.1 billion from $7.5 billion in the year-ago quarter. Earnings fell to $661 million, or 55 cents a share, compared with $1.1 billion a year ago. Adjusted earnings per share was 61 cents, compared with analyst expectations of 53 cents, according to Thomson Reuters.

Time Warner also increased its full-year earnings per share outlook to at least $2.05. Previously, Reuters reported, the company had said the full-year figure would be similar to last year's $1.98 a share.

The company saw growth in its Networks unit, which includes Turner Broadcasting and HBO, with revenue climbing 5 percent to $2.9 billion. But sales fell in all other segments.

Lower movie ticket sales brought down revenue by 4 percent in the Filmed Entertainment division, while a decline in magazine subscriptions cut revenue by 18 percent in the Publishing segment.

Results were also weak at struggling AOL. The number of subscribers fleeing the service increased, while ad revenue decreased, contributing to a 23 percent drop in quarterly sales.

Time Warner sales fall in the third quarter. The figures above are in millions of dollars.

(Credit: Time Warner)

Back in May, Time Warner announced that it would jettison AOL by the end of the year, a goal that Time Warner CEO Jeff Bewkes reiterated Wednesday. AOL will spin off into a separate company led by former Google ad exec Tim Armstrong, who was appointed AOL's CEO in March.

The 2001 union between Time Warner and AOL never quite coalesced. AOL was supposed to be the high-tech jolt that would transform Time Warner. But almost from the start, AOL underperformed, running into financial setbacks less than a year after the merger.

As the Internet continued to take off, subscribers realized they didn't need AOL to hop onto the information superhighway. By the end of 2003, losses had mounted, many of the key players in the deal had left, and Time Warner had dropped AOL from its name.

Though Time Warner has been dragged down by most of its underperforming segments, especially its publishing division, the company is still hoping for a brighter future without AOL.

The always-impressive Boy Genius Report has gotten its hands on a copy of Verizon and Google's newest commercial for the Droid. The commercial's called Stealth, and it's rather amazing, even though it doesn't tell us much about the Motorola handset that's set to drop Friday.

Mysterious and well-shot, the commercial should start running on TV this week, according to BGR. We're guessing you'll see it first during Tuesday night's premiere of "V" on ABC, or maybe during the World Series. With something this high budget you'd expect Verizon to put it in front of as many eyes as possible. We'll be watching the skies on 11/6.

Networking giant Cisco Systems announced another acquisition this week. This time the company said it will buy the set-top division of a Chinese digital cable technology company.

Late Monday, Cisco said it would pay a total of about $44.5 million for the set-top unit of DVN. It will pay $17.5 million upfront, and the remaining $27 million will be paid over four years, based on the unit achieving sales milestones.

The deal is expected to close in the first half of next year, and it is subject to the approval of regulators and DVN shareholders.

Cisco is also partnering with the rest of DVN to provide joint customers with expanded services.

The DVN unit being acquired makes products that connect digital signals to televisions. Cisco already makes and sells set-top boxes for customers around the world through its Scientific Atlanta division.

Cisco sees a big opportunity in the Chinese cable market, which it says is the largest in the world with 160 million subscribers and with an additional 200 million subscribers expected to become customers in the next few years.

China is in the process of moving its cable subscribers to digital. The government has mandated that all cable be digital by 2015, Cisco said. Today only about a third of Chinese cable customers are using digital cable.

This is the fourth acquisition that Cisco has announced since the beginning of October. The company has spent about $6.2 billion in total during this shopping spree.