Digital Media

How did you spend Christmas? Hitwise says it knows: the Internet traffic tracker says you spent at least part of the holiday visiting Facebook, making the social network the most popular U.S. site on the Web.

That's the first time Mark Zuckerberg and company have earned that designation--at the expense of Google--but it is in no way surprising. Facebook saw traffic spike last Christmas, too, and that's when it had a mere 140 million users. The user count is now up to 350 million.

So even if tens of millions of them leave the site in a huff over Facebook's privacy changes (and there's no evidence that's happening), it's going to be blowing by traffic records on a regular basis.

Really safe bet: you're going to see a similar story after New Year's.

(Via ReadWriteWeb)

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

Those nice people at Google, engineers at heart rather than craven, money-grabbing business people, seem to have suffered a sudden attack of commercialism.

The folks at the Silicon Alley Insider alerted me to this startlingly commercial ad on the Google home page. It can't be, I thought. So I went to Google.com myself and there it still was: a dry little thing in the right-hand corner suggesting that I should download Google Chrome.

(Credit: Business Insider)

You might be wondering why Google might have taken this sudden, almost alarming step into advertising's dark hole.

You might consider that it comes soon after Google's extremely engaging Chrome campaign, the one that comes over all Picasso.

You might wonder whether the company has had enough of browser war talk and decided to enact browser war mayhem.

You might also wonder whether, following the rumors of a Google phone, the company has decided that it has had enough of its nice-guy persona. Like a priest who's renounced his vows in order to play the field, Google is going to make a grab for every last dollar in the technological space.

Whatever the reason, it all seems rather sweet. Which is just how Google wants it to seem.

Yesterday, I compiled my list of the five most welcome products for digital audio that came out in 2009. Today, I'm following it up with my list of the year's five biggest digital audio duds.

An image from the infamous online commercial for Songsmith, Microsoft's reverse-karaoke software.

(Credit: Microsoft)

Zookz. The breathless pitch got me interested: a mysterious online service was getting ready to compete against subscription-based download service eMusic. But where eMusic limits users to a set number of downloads, this mystery service would offer unlimited music and movie downloads. How could this be? Wouldn't users just download all the material they wanted then cancel their subscriptions? How could content owners let this happen?

The trick: Zookz was based in Antigua, and according to the company, this meant it wasn't subject to those silly little things known as U.S. copyright laws and royalty rates. Unfortunately, the country of Antigua didn't agree, and days after the public beta launched, Zookz disappeared into the digital ether with a promise to refund subscribers' money.

Jango Artist Airplay. I liked Jango's online radio service back when it launched in 2007. This year, in what looked like a desperate bid for new revenue, the company launched a service called Artist Airplay, in which bands could pay for placement on appropriate Jango stations. While Jango's CEO tried to tell me this was a reasonable new marketing opportunity, I saw it as a new form of the old pay-for-play deal that beginning bands often fall for.

With regular marketing, everybody pays more or less the same amount for the same class of services and the music sinks or swims on its own merits. With pay-for-play, artists buy exposure. There's only one problem: the resulting conflict of interest drives discerning listeners--including people who might actually pay you for your music--away. Jango Artist Direct may not be as stark as those pay-to-play "showcases" and "band battles" where all the audience members are other bands and their friends, but I believe it's better for beginning artists never to start down this slippery slope. Then again, I thought users would never be ignorant enough to click on search advertisements in massive numbers, which is one reason why Sergey Brin and Larry Page are multibillionaires and I'm not.

Vevo. As long as we're talking about Google, let's talk about YouTube, which the search company owns. It's a great source for music videos, and its APIs have formed the basis for music-finding apps like Muziic and TubeRadio. Users love it. Unfortunately, the companies and artists who own the copyrights to many of those music videos don't love it--the videos are expensive to produce, and the ad revenues from YouTube and other online video sites are scanty to nonexistent. Google is also lukewarm about music videos on YouTube, finding that the cost of policing copyright and complying with take-down notices is more than the money they can earn from selling ads.

In December, two record companies--Sony and Universal--joined together with Google in a new joint venture, Vevo, to address the problem. This was supposed to be a back-end business-to-business kind of deal, where YouTube users wouldn't know (or care) that certain videos were actually being provided exclusively by Vevo, which would sell short video advertisements to run before them. Unfortunately, the glittery launch party drew undue attention to Vevo's own site, causing its servers to buckle under the load. The entire episode left music fans scratching their heads.

Songsmith. The idea wasn't all that bad. Karaoke is fun. Making music on computers is fun. So why not, reasoned some Microsoft researchers, create a program that fills in audio accompaniment as users sing. Unfortunately, the $29.95 price and unbelievably mockable promotional video turned Songsmith into an Internet laughingstock. Later videos featuring Songsmith's accompaniment to the vocal tracks of songs like Queen's "We Will Rock You" and Van Halen's "Running With the Devil" highlighted the silliness.

CMX. In August, reports broke that the four major record labels were considering a new type of "digital album" format that would include album art, lyrics, and extra content. There was just one problem: Apple was already building its own competing format, code-named Cocktail and eventually released as iTunes LP. I think the entire concept of a digital album is weird anyway: I'm not convinced that lack of album art is a big reason why users are buying singles instead of albums. (The real reason is the Chumbawamba factor, or the fact that a lot of albums contain only one or two good songs.) And iTunes LP doesn't exactly seem to be taking off, although some of the extras--outtakes and videos--are actually quite valuable. But creating a competing format that wouldn't be supported by Apple? That's just plain dumb. To be fair, we haven't heard anything about CMX since iTunes LP launched. Here's hoping this product is killed before it's ever born.

Concert footage and other music videos from Brit band Muse were available at Hulu on Tuesday.

(Credit: Screenshot by Greg Sandoval/CNET)

Hulu's foray into music videos took another small step on Tuesday, when it struck a deal to offer some video content from Warner Music Group, one of the four largest recording companies.

The partnership calls for Hulu to offer concert footage and music videos from a handful of Warner acts, including Jason Mraz, the rock band Paramore, and alternative group Muse. CNET reported seeing Muse's content at Hulu earlier Tuesday.

To be sure, even with the addition of Warner's acts, Hulu's music video library is modest, at best. In addition to Muse, Hulu cut a deal last month with EMI to access select concert footage and music videos of some of the label's artists. That agreement was believed to be Hulu's first label deal.

YouTube is supposed to be the digital era's version of MTV. The Google video site has penned agreements with Universal Music Group, Sony Music Entertainment, Warner, and EMI, but that doesn't appear to be stopping Hulu from striking deals with some of the labels.

Warner is a likely candidate to test the waters with a new music video outlet. The company has always said it seeks wide distribution of content and doesn't want any one distributor to have exclusive access. Now throw in a nine-month feud between Warner and Google over the terms of their music-licensing agreement, and what you have is an open door, however small, into which Hulu could squiggle.

Clips from a handful of bands aren't enough to make Hulu a power in music videos, which, incidentally, are the most-watched fare at YouTube. But at the very least, the labels do appear to be looking for more control of their content.

Earlier this month, Universal and Sony launched Vevo, a standalone music video site technologically backed by Google.

Warner is also exploring its own online video-advertising strategy. Certainly, for the labels, competition between YouTube and Hulu is good.

Updated at 1:32 p.m. PT to reference the official announcement of a Warner Music-Hulu partnership.

Please see this disclosure related to me and Google.

According to sources close to the situation, along with its pending bid for Yelp, Google has been in on-again, off-again acquisition talks with Trulia, the real-estate search engine.

It is unclear what price Google would pay, but sources estimate that Trulia's valuation ranges between $150 million and $200 million, although there could be a big premium on that.

Rumors about Google's interest in the real-estate search market--and specifically in Trulia--have been rebounding around Silicon Valley for the last year.

But Google has pulled the trigger on a number of acquisitions of innovative start-ups recently and, sources said, will continue to do so.

Trulia--which is based in San Francisco and allows people to search for a range of data about homes for sale in particular ZIP codes or cities nationwide--is one of the more obvious candidates for the search giant's local and mobile efforts.

Its business and that of its competitors--which is largely based on advertising and lead-generation--has been growing quickly, despite the economic downturn in housing.

More interestingly, Trulia is deeply integrated into Google Maps, an arena the company recently targeted for growth with a series of announcements about new search features.

Trulia has raised about $33 million since 2005, with investors that include high-profile Silicon Valley venture firms Accel Partners and Sequoia Capital.

Interestingly, Accel and Sequoia recently made bank when Google bought AdMob for $750 million.

Trulia's clearest competitor is the larger Zillow, located in the Seattle area. But, sources said, Google is more interested in Trulia, given its location in the Bay Area and lower valuation.

Zillow has raised about $87 million from Benchmark Capital, Technology Crossover Ventures, PAR Capital Management, and Legg Mason.

Redfin, another Seattle-based rival, has raised about $31 million from its own well-known collection of VCs.

This week, Google's interest in Yelp, the local review site, also became public, in a deal that could cost upward of $600 million.

It is all part of a buying spree that Google has engaged in of late, with six acquisitions costing $1 billion so far.

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

Google said Friday that a Paris court has ruled against it in a lengthy copyright infringement case filed by a French publisher.

The court has ordered the search giant to pay 300,000 euros ($430,000) in damages and interest to French company La Martiniere, which runs the Editions du Seuil publishing firm. The lawsuit charged that Google was infringing on the copyrights of the publisher's books by scanning excerpts to include in its Google Book search results. La Martiniere's argument was that Google should compensate authors and publishers if the company is going to scan and publish their work on its site.

As part of the ruling, Google must also pay 10,000 euros each day until it removes the extracts. Unhappy with the verdict, Google said it plans to appeal, according to Bloomberg.

"French readers now face the threat of losing access to a significant body of knowledge and falling behind the rest of Internet users," said Philippe Colombet, director of development for Google Books in France, in a statement e-mailed to Bloomberg. "We believe that displaying a limited number of short extracts from books complies with copyright legislation both in France and the U.S.--and improves access to books."

The suit was originally filed in May 2006 by La Martiniere and later joined by the French Publishers Association and French authors group SGDL, which had initially asked the court to fine Google as much as 15 million euros, according to Reuters.

This suit is just one of several filed by publishers and authors upset with Google posting excerpts of their books online without fairly compensating them. In 2008, Google lost a lawsuit filed by the Authors Guild and was ordered to pay authors and publishers $125 million as compensation. An amended agreement in November clarified certain changes and updates to the settlement.

But objections to Google's book digitizing projects have been especially strident in Europe, forcing the company to make concessions to European publishers over which books it will and will not scan and publish online.

Google is reportedly in talks to buy Yelp for $500 million. Sure, buyouts are a fine exit strategy for start-ups, but does Google (insert any other Web giant here too) have to buy everything that someday could be a threat?

TechCrunch first reported the Google-Yelp talks and The New York Times is confirming them.

Now let's play this out. Google buys Yelp, a big review site for local businesses. It gets access to local listings and reviews. Google then connects it all to Google Maps and its trendy bar code scanning toy and lines up local keyword ads. Through the purchase of AdMob it gets all mobile on you and sends you coupons to your phone (an Android-powered device of course).

Read more of "Google covets Yelp; Here comes the Borg of local content" at ZDNet's Between the Lines.

Google ventured into new territory on Monday with the launch of a new URL-shortening service it's calling Goo.gl.

Unlike some existing and high-profile shorteners such as TinyURL and Bit.ly, Goo.gl is not a general-purpose link shrinker that users can access by going to a standalone site. Instead, it's been built into Google products, beginning with Google's browser toolbar and its Feedburner RSS service. Both of those services can now create shortened Goo.gl URLs that link to the source content while using fewer characters. This is especially important for sharing on places like Twitter, where there are size limits.

The feature goes hand in hand with the launch of a share button for the Google toolbar that lets users share whatever page they're on with a number of social services. As for its integration with FeedBurner, Google now provides feed owners with a way to automatically publish certain posts directly to Twitter, which will again help keep the number of characters to a minimum.

Google says the shortening service is both fast and stable. The company has also placed the same security measures that go into its search index to block pages that may contain malware or phishing schemes.

In an introductory post on its official blog, Google said that it may eventually roll out the service as a standalone site, but that for now it's being built into Google products. Such a feature would likely allow third party sites to build Goo.gl link shortening into their own products. In the meantime, other Google properties that could certainly benefit from having link shortening built-in include YouTube, Maps, Reader, and Blogger--many of which have integrated sharing features.

Update 2 p.m. PST: As we should have mentioned before, .gl is the top-level domain for Greenland. Also, Google's launch comes on the heels of Facebook having quietly launched its own URL-shortening service called FB.me. Heading there in your browser simply takes you to Facebook's home page, whereas sharing links through Facebook's mobile site will shorten them for you using a shortened FB.me URL. More on that as soon as Facebook publicly acknowledges its existence.

Visitors of Goo.gl get this page, which tells them what the service does, although will not let just anyone create shortened URLs. Instead, Google is allowing use of its service through its own products.

(Credit: CNET)

Apple was engaged in a bidding war with Google when it acquired music service Lala, The Wall Street Journal (subscription required) reported on Friday. That helps to explain why Apple agreed to pay $85 million, a sum that I (and others) believed was far too much for a down-on-its-luck start-up.

What has surprised some in the music sector, however, is that Apple is considering a plan to create some kind of streaming-music service and is turning to Lala's managers to help oversee the new offering. Sources in the music industry I interviewed Thursday gave varying descriptions of what position Bill Nguyen, Lala's chairman and founder, will occupy at iTunes. But virtually all of them said he and his staff will have plenty of influence over the service should Apple decide to go ahead with the plans.

One of the technology sector's most unlikely rags-to-riches stories may be unfolding before our very eyes.

Consider that Apple--the undaunted music powerhouse that altered the way people buy and listen to music and that will likely generate $2 billion in iTunes sales this year--is now seeking help from a group that cast about the digital-music sector for years, swapped out business models multiple times (without ever finding a profitable one), and basically did little to distinguish themselves.

If you're just looking at Lala's performance in the music sector, this is like the New York Yankees' taking advice from the minor leagues' Lehigh Valley IronPigs.

The big question is what can Lala possibly teach Apple about digital music?

From car sales to tech riches
Apple and Lala representatives aren't talking, but here's the first thing you should know about the deal: Nothing is set in stone yet. The Journal reported that the plans are in the earliest stages and may get altered. My music sources said that Apple has not spoken to any of the four major labels about changing their licensing agreement, which Apple would need to do before launching any new service.

To understand what Google and Apple may see in Lala, one must start with Nguyen, the company's jovial founder.

The son of Vietnamese immigrants, Nguyen (pronounced "win") is charming, wild about surfing and is well known as one of Silicon Valley's smoothest communicators. A so-so student who attended but did not graduate from Houston Baptist University, Nguyen started out selling cars but cashed in big in 1999 when he sold Onebox, an e-mail technology company, for $850 million.

Since then, he has started several other companies in addition to Lala, including Seven, a Wi-Fi software firm.

Eric Schmidt's Google charges were trying to get their hands on Lala, but Apple got the company instead.

(Credit: Greg Sandoval/CNET )

He is very close to Eddy Cue, the revered Apple exec who runs iTunes. What may be most important about Nguyen is that he has long had plans to take down the MP3 format. (In Apple's case, the company uses the unprotected AAC format) He has often said that MP3, the digital audio format embraced by so many music fans, is on its way out. He believes downloads have outlived their usefullness and that in the future, consumers will store their music in the cloud instead of on their hard drives.

"Will you ever (in the future) use an electronic device if it's not connected or doesn't have a browser?" Nguyen asked me a year ago. "You've got to face it, there's nothing you don't do in a browser."

Palo Alto, Calif.-based Lala started as an online marketplace where users arranged to swap CDs with each other. Lala then began streaming music to Web-enabled devices. The company would scan a users' computer hard drive and then enable the person to access the same songs--provided Lala had the rights--via the Web.

According to a report in The New York Times, Lala had concluded that it wouldn't reach profitability anytime soon and approached Apple in the hopes of making a deal.

The end of iTunes downloads?
The natural conclusion to make here is that by acquiring Lala, Apple may be laying the groundwork for a move away from the traditional song download. If this is correct, it would be stunning in that Apple has built a retail empire by selling downloads.

If Apple is preparing such a plan, that would suit the music industry just fine. Plenty of people at the top four labels have long been uncomfortable with unprotected music files. The major recording companies favor formats that protect music from being copied and shared. Label executives have also said that selling individual songs isn't a good business as the profit margins are small and it's a not a model that can't grow. Nguyen's ideas appealed to many at the music labels, particularly those at Warner Music Group, which invested $20 million into the company.

In May, Warner announced that it had to write down about $11 million of the Lala investment.

Some of the music execs I've talked to say they see a world where music buyers will leap at the chance to buy a song for life. In a world where music is stored on the servers of big companies, a consumer never has to worry about losing a song library to a broken hard drive or lost music player.

Of course, consumers would likely pay a premium for this life-time ownership and cloud-based service, but many in the industry feel that the public is ready for that kind of offer.

By all appearances, Nguyen could be the architect of this vision at iTunes.

Regardless of Lala's shortcomings, the company created something good enough to lure Google and Apple, two of technology's most successful companies. That alone isn't a bad resume.

And when you look at the $85 million purchase price, Nguyen engineered by far the best exit in the the battered digital music sector in at least a year.

There's something else to keep in mind about Nguyen; he recovers from spills quickly, usually in time to catch the next big wave. Hang 10, Bill.