Digital Media

(Credit: Apple Corp.)

Sky News, the 24-hour British news operation, apparently posted a story that cited Yoko One as saying the Beatles' catalog was coming to iTunes.

The story disappeared not long after, but not before someone took a screen shot of the headline and a tease, which said: "The whole of the Beatles back catalog will be made available to buy on iTunes, Yoko Ono has told Sky News." Sky News officials would not comment and has yet to issue a correction.

This is the kind of juicy what-if situation that Apple fans live for and the speculation that the Fab Four's music could finally arrive at iTunes hit overdrive Tuesday evening. But the problem is it's simply not true. The Beatles' catalog is not coming to iTunes, at least if one is to believe EMI officials and other music industry insiders with knowledge of the Beatles-iTunes negotiations.

EMI owns the Beatles' sound recordings, while Sony/ATV owns the publishing rights. Ernesto Schmitt, EMI's global catalog president, told The Financial Times that that the catalog would not be part of Apple's press event on Wednesday.

I checked with my music industry sources, some of whom have direct knowledge of the talks between EMI and Apple Corp., the company that represents the Beatles, and they also said the negotiations have not yielded an agreement. All Things Digital reported the same earlier.

How about this? If Sky News did nail this kind of whopper scoop, the organization would most certainly be ballyhooing its sweet piece of journalism, not hiding it. But as of 5 p.m. PDT Tuesday, that's exactly what what was happening. The story was nowhere to be found on the site.

What's far more likely at this point is that something went wrong at Sky News.

Anyone who has followed iTunes news has seen these rumors come and go. In the past, regardless of how delicious they've sounded, they've all been debunked.

News Corp.-owned MySpace is "close to acquiring" social music service iLike, according to TechCrunch.

The price tag is rumored to be in the neighborhood of $20 million. Representatives from iLike were not immediately available for comment.

The report comes within days of iLike launching a music download store--a development first reported by CNET News--with MP3s available from all four major record labels.

The deal, if confirmed as accurate, highlights the often complicated connections in digital media's elite ranks.

iLike, for example, rose to fame through its close ties to Facebook. The iLike application, since re-branded to simply Music, was one of the first big applications to launch on Facebook's platform at its debut. Its ad-supported streaming music service has become one of the most prominent in a packed field--it now has about 50 million users and just launched a suite of iPhone apps. But the streaming music niche has proven difficult to monetize and has left some players in the space reportedly hunting for an exit.

MySpace, meanwhile, has seen stagnant growth as the once-far-smaller Facebook has rapidly overtaken it in the social-networking race, thanks in part to the proliferation of third-party apps like iLike on Facebook's groundbreaking developer platform. As part of an executive restructuring earlier this year, MySpace installed former Facebook chief operating officer Owen Van Natta as its CEO, replacing co-founder Chris DeWolfe.

Attempting to refocus and return to its roots as a hub for music and pop culture, MySpace launched its own streaming music service, called MySpace Music, and hired MTV veteran Courtney Holt to run the division. MySpace Music, a joint venture with the record labels, does not operate its own download store but instead directs users to Amazon MP3 downloads through affiliate links. But MySpace Music hasn't received thoroughly positive reviews from the record labels hoping to profit from it.

Disclosure: CNET News is part of CBS Interactive, which also publishes Last.fm, a competitor to iLike.

Updated at 7:38 a.m. PDT with additional details and background.

(Credit: Doubleday)

David Fincher is in "advanced talks" to direct the Columbia Pictures movie about the origins of Facebook, according to Variety.

The movie, based on Ben Mezrich's upcoming "The Accidental Billionaires," was written by "The West Wing" creator Aaron Sorkin. It's being produced, Variety reported Tuesday, by Scott Rudin and Michael De Luca along with Dana Brunetti and actor Kevin Spacey. Variety said the movie is called "The Social Network." We hear this is a very preliminary working title. (It, obviously, could also be called "Accidental Billionaires.")

Fincher's past directorial work includes "Fight Club," "The Curious Case of Benjamin Button," and "Panic Room."

An entertainment industry source tells CNET News that early casting searches are under way and that the list of young actors being eyeballed to play Facebook founder Mark Zuckerberg includes both Michael Cera ("Superbad," "Arrested Development") and Shia LaBeouf ("Transformers"). They aren't the only ones, and it's not clear whether either of those two in-demand actors would want to take a turn away from comedies (Cera) or action movies (LaBeouf) to play Zuckerberg.

Cera is, according to the source, a top choice because audiences find him particularly likable. Rumors about the plot of the book "Accidental Billionaires" hint that Zuckerberg is going to be portrayed rather unfavorably--basically, as an obnoxious nerd--and obnoxious nerds are not the world's biggest box-office sell. Cera could make the part a little bit more sympathetic.

But in LaBeouf's favor, I saw "Transformers: Revenge of the Fallen" last night, and the guy really does sound a lot like Zuckerberg.

Meanwhile, Facebook itself reportedly isn't thrilled. The social network consistently hasn't commented publicly about "Accidental Billionaires" and is said to have warned employees not to talk to anyone affiliated with the movie.

There's been chatter on the Web (and Wall Street) for years now about whether Time Warner should spin off its AOL subsidiary. Now, according to a report in The Wall Street Journal, it looks as though Time Warner's management is looking to tweak the requirements that prevent it from unloading AOL. So it finally might happen.

On the other hand, AOL's slow drift away from its parent company has been at about the speed of plate tectonics; these "fresh start for AOL" moves are nothing new. It was way back in 2003 that Time Warner reverted to its old name from AOL Time Warner, changing its stock symbol back to TWX from AOL. The company relocated its corporate headquarters to New York in 2007, conspicuously not moving into Time Warner's own headquarters.

AOL has also been aligning itself into three quasi-standalone businesses: advertising (Platform-A, amassed out of a number of digital-ad acquisitions), social networking (the "People Networks" division anchored by AOL's $850 million acquisition of Bebo), and content (the "MediaGlow" network of blogs and editorial sites).

But it wasn't until the second half of last year, particularly amid the Microsoft-Yahoo acquisition fiasco (in which AOL was highlighted as an acquisition target for both companies) that AOL's post-Time Warner fate started to look more evident. CEO Jeffrey Bewkes confirmed in August that the AOL dial-up access division would be spun off in a further attempt to focus on advertising. It's been almost a year, for that matter, since Time Warner announced that it would be spinning off its Time Warner Cable division. So it's not like the company doesn't have a recent track record of slimming down.

Now, with former Google advertising executive Tim Armstrong about to assume the CEO role, AOL could indeed be shaping up to spin off for good.

The latest move, detailed in the Journal, would relieve AOL of $12.3 billion worth of debt, effectively lifting a weight from the business and enabling it to move off on its own. Bondholders have until the end of the day on April 15 to provide consent. An analyst told the WSJ that an initial public offering is unlikely--ad revenues are still falling, and the overall market climate is obviously not ideal.

But as we've seen, these things just don't happen overnight.

So should News Corp. buy Twitter? That's what Vanity Fair columnist and pundit Michael Wolff speculated this week in an article on Newser.com, the aggregation site he founded.

"There may not be anything less than Twitter that can distract Wall Street from News Corp.'s stubborn and, at this point, unnatural newspaper fetish," Wolff wrote, "and, as well, convince it, for one last hurrah, that (CEO Rupert Murdoch) isn't...well, gone."

The catalyst for Wolff's recommendation was the recent hire of former AOL chief Jon Miller as head of News Corp.'s digital projects. Miller's venture capital experience would make him an ideal candidate to spearhead an aggressive M&A strategy, and there's no more buzzworthy company than Twitter these days. On the flip side, there really isn't an obvious fit for it within the company, and Twitter still has yet to produce a viable strategy for long-term profits.

Wolff, who wrote this year's Murdoch biography "The Man Who Owns The News," got a whole lot of tech blog attention for insisting in an interview that "MySpace is for f***ing cretins" and predicted a swift doom for the social network. In Monday's brief Newser piece, he called Murdoch "the world's least savvy Internet guy" and said that News Corp. has "run (MySpace) into the ground" since acquiring its parent company Intermix Media for $580 million in 2005.

There are some holes in his argument, to say the least. With the help of News Corp.'s big-media muscle, MySpace was able to launch its MySpace Music joint venture last year, and while it certainly made a few missteps that led to Facebook eclipsing it in worldwide traffic, it's not quite time to stick a fork in it. User engagement is better than Facebook's, ComScore found, and it's had better luck with advertising than Facebook has.

But Wolff may have added motives to want to rip into News Corp.'s digital strategy and suggest that the long-shot possibility that it would buy Twitter is its only clear path to dot-com salvation. His beef with News Corp. has turned into a full-out feud, and the Page Six gossip section of the Murdoch-owned New York Post has recently been making a big deal of his personal life--always getting in a jab about his lack of hair. Ouch.

Yelp Chief Executive Jeremy Stoppelman

(Credit: Yelp)

NEW YORK--"They have that saying, 'don't shoot the messenger,' but the reason they say that is because the messenger gets shot," Yelp CEO Jeremy Stoppelman told me over coffee on Tuesday morning. "So I have to take my shots."

He was talking, of course, about the PR fiasco that ensued when the Emeryville, Calif.-based East Bay Express newspaper published a lengthy expose on the business reviews site, alleging that it strong-armed businesses into paying to remove negative reviews. As a fairly regular Yelp user, I was repulsed by the possibility that its corporate practices were so sketchy. But Stoppelman, visiting from the company's home base of San Francisco, claims there's no truth to the allegations.

"There are business owners out there who don't think consumer reviews are good," said Stoppelman, who called the expose's accusations a "conspiracy theory" and likened them to similar tiffs that have arisen over Google's advertising program. "(They're) looking for confirmation that Yelp is this bad entity."

He wrote last week in a lengthy post on the official Yelp blog that the activity called out as "extortion" and likened to the Mafia in the East Bay Express can be attributed in part to the algorithm that Yelp developed to weed out suspicious reviews.

"When we set out to built Yelp, we said we didn't want to be this anonymous reviews site," Stoppelman said to CNET News on Tuesday. "When you go to Yelp and you search for a business, (because of the algorithm) you're seeing reviews that are reasonably trustworthy." Yelp will, for example, flag reviews that appear to be spam, may be overly positive reviews coming from a business itself or overly negative ones coming from its competitors, or are coming from new users with no track record or profile data.

The fallout wasn't quite as bad as it could have been, Stoppelman explained. Inquiries and complaints in the wake of the East Bay Express story were primarily restricted to the San Francisco Bay Area. His visit to New York was routine and already on the books, rather than a face-saving measure.

Stoppelman also said he didn't think the allegations could be connected to, say, a rogue Yelp employee independently engaged in shady tactics. "This doesn't come up, because we have all these processes in place," he said. "It would be caught in the account manager hand-off."

But he did admit to some error on Yelp's part in not explaining its technologies and practices thoroughly enough--from the review-filtering algorithm to the sponsored-listing offerings.

"We haven't made it obvious enough about what systems are in place for our users, especially business users," he acknowledged. "As these stories have sort of come out, we've been focusing on making sure that the messaging is very, very clear and tight."

Given the Web's gradual shift toward a culture of "transparency," any site with a behind-closed-doors algorithm is going to be eyed with suspicion. The spotlight has fallen on the technology that powers social news site Digg, especially when people learned how to game it. And last spring, Facebook pulled a little-known friend-search feature when tech gossip blogs called it a "stalker list."

And the Yelp algorithm does pull down some legitimate reviews, something that was pointed out in the East Bay Express story and which Stoppelman said will invariably happen given Yelp's system. "We're not going to get it right, and it's not perfect, because you're going to lose some legitimate content as you try to get rid of the spammy content." Reviews that are taken down through the algorithm aren't deleted, he said; they're not displayed on a business' review page but still appear on the reviewer's profile.

Yelp nevertheless welcomes feedback, Stoppelman said. It's possible, for example, to review Yelp on Yelp. Over 1,500 people have reviewed it, and he said he tries to respond to as many of the reviewers as possible.

MySpace Music has offered its vacant CEO position to Courtney Holt, MTV Networks' executive vice president of digital music and media, according to a music industry source with knowledge of the negotiations.

The source said that Holt, previously an executive at Interscope Records, may be close to agreeing to the deal but that there are several sticking points.

The News Corp.-owned MySpace launched its music service last month, featuring streaming-music deals from all four major record labels and a retail affiliate partnership with the Amazon MP3 store.

In September, shortly before MySpace Music launched, reports indicated that the CEO choice had been narrowed to two: former Facebook executive Owen Van Natta and music industry mainstay Andy Schuon. Earlier that month, the New York Post published a longer "short list" that included those two as well as Holt.

Holt's departure from MTV Networks would come at a time of upheaval at parent company Viacom. Impending layoffs at the media conglomerate, perhaps staged in phases to avoid publicity or shock, have been well documented. And a source within Viacom said that there has been talk of some "reorganization" within Holt's digital-media division.

Holt, who is currently based in New York, could not be immediately reached for comment. A MySpace representative declined to comment.

CNET News' Caroline McCarthy co-wrote this report.

"Unedited. Unfiltered. News."

That's the slogan CNN chose for its user-generated news site, iReport.com, a place designed to tap into the citizen journalism craze. At iReport, any member of the public is allowed to post stories, ostensibly as part of the cable network's news operation, simply by providing an e-mail address. CNN and citizen journalism are being criticized after someone used the site on Friday to spread the false report that Apple CEO Steve Jobs had suffered a serious heart attack.

Apple CEO Steve Jobs

(Credit: James Martin/CNET News)

The bogus story sparked a minor panic on Wall Street before Apple had a chance to deny the rumor. Trading in Apple's stock skyrocketed, and the share price briefly fell about 10 percent before rebounding later in the day.

How is it possible that a single fraudulent Internet report can wipe away millions or even billions of dollars of market value from one of the world's most powerful technology companies? That's the big question if you're one of Apple's investors. If you're an investigator for the Securities and Exchange Commission you're interested in who did it and why. According to CNN, SEC investigators are looking for the person who posted the fictional story to iReport.

Some of the other questions being asked are why mainstream news services didn't discredit the report before any damage was done? And who was minding the store for CNN? Surely, one of the country's most trusted news sources wouldn't allow just anyone to post a story under its banner without vetting it.

Also at the center of the controversy is Silicon Alley Insider, a New York-based technology and financial news blog that has earned enormous respect and popularity in a brief amount of time. SAI and CNN could see their reputations tarnished if they're found to be at fault, but I venture to say that in the wake of the controversy, everyone involved in online journalism is doing some self reflection.

This is a time of intense competition in tech journalism. A decade ago, newspapers used to write today's news for tomorrow's paper. Not anymore. Reporters are increasingly under pressure to publish news to the Web minutes after events occur. People who have been in the business for a while know what's often lost with this need-for-speed mentality is thoughtful writing and careful reporting. Following the phony Jobs story, many pundits placed the blame at the feet of CNN and citizen journalism. But the facts of the case raise questions about whether professional journalists behaved responsibly in their handling of the story.

"Severe chest pains"
The incident began when someone posted a report on CNN's iReport shortly before 4 a.m. PDT. "Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack,"the post at iReport read. "I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable."

What hasn't been widely circulated yet is that iReport was not the first place the fake story was sent. Arnold Kim, who operates the blog, MacRumors.com, wrote Friday that someone submitted the same rumor to his site using an anonymous IP address. Kim did some research on the rumor and decided it was a fake. Later, he tracked the report and found it being circulated by members of online message board 4chan. Kim also discovered the item was circulating on Digg, a popular news aggregation site. Digg users, however, voted the story down, meaning they also were skeptical.

The next place Kim saw the rumor was at SAI.

At about 6:25 a.m. PDT, SAI published this headline: "Apple's Steve Jobs Rushed To ER After Heart Attack, Says CNN Citizen Journalist." Within the blog, SAI informed readers that the report hadn't been substantiated but reporters were checking it out. To that point, no other mainstream media outlet had published anything about Jobs' health, according to Henry Blodget, SAI's founder and a former well-known tech analyst.

Blodget told CNET News that his staff tried to contact Apple and CNN representatives to confirm the story prior to publishing but were unable to reach them. SAI decided to post the item--with all the disclosures about it being unconfirmed--anyway.

At 6:41 a.m. PDT, Apple's stock price began to plummet.

At 6:52 a.m. PDT, SAI updated its story to report that an Apple representative had denied the iReport story, Blodget said. A few minutes after that, Apple's stock began to recover.

Blodget defends his site's story
Kim from MacRumors argues that it was SAI's post that gave the rumor credibility and spooked Wall Street. "The (iReport) story has been picked up by numerous sites as a failure of citizen journalism," Kim wrote. "It's nothing of the sort. The real reason it gained traction is the reporting of it on mainstream blog sites."

I asked Blodget whether SAI should have waited to confirm the information before posting. After all, the blog was dealing with a potential life-and-death report about one of technology's most influential leaders. Blodget said he has no regrets about going with the story when he did.

"The Steve Jobs report was the lead story on a site operated by CNN," Blodget said by e-mail. "It was highly relevant to anyone who cares about Steve or Apple...It was already getting notice when we heard about it. We never know how long it will take to confirm or reject information like that, and we knew our readers would want to evaluate it themselves. So we described exactly what the report was, said we didn't know whether it was true or not, and said we were investigating. Twenty minutes later we broke the news that the report was false."

CNN responded to this by saying that while iReport is relatively new, the company has been involved in user-generated content since August 2006 and this is the first time that any mainstream news site has mistaken some of its user-generated content for CNN-vetted material. Jennifer Martin, a CNN spokeswoman, said that though CNN owns and operates iReport, it is very clear that the information on the site is, like the slogan says, unedited and unfiltered. In iReport's "About" section is written this statement: "CNN makes no guarantees about the content or the coverage on iReport.com."

That may be true but a visit to iReport reveals there is little to distinguish user-generated reports from those filed by professionals. CNN often does fact-check some of the user-generated stories. If they're accurate, the network will use them on TV broadcasts or CNN-branded Web sites. Martin said these vetted reports are clearly identified with the label "Now on CNN."

What are the lessons?
As for Silicon Alley Insider's part in this mess, Blodget suggests that CNN's ownership of iReport gave credibility to the false Jobs story. But some Apple investors might say the same thing about SAI's report. The former analyst was once a Wall Street insider and his staff has been loaded with seasoned reporters from publications such as Forbes and Variety. Even if SAI prominently noted that the iReport story was unconfirmed, the fact that SAI had written about it and was checking it out may have given the report some credibility.

This isn't the first time that a respected blog has found itself answering questions about why it reported on a bogus tip. In May 2007, Engadget received what appeared to be an internal Apple memo that indicated the launch of the iPhone was going to be delayed. The memo was a fake and after the gadget blog reported the false rumor, Apple's market cap lost $4 billion. Engadget, like SAI, did not confirm the story first with Apple before publishing.

There's no doubt that both CNN and SAI will move forward and continue to produce important and accurate news stories. Maybe CNN will take a closer look at how it displays its user-generated reports. As for journalists, citizen and professional, maybe the takeaway for us is to slow down just long enough to make one more phone call, talk to one more source.

The public is less interested in us getting the story first as it is in us getting the story right.

See update below that dashes some cold water on the report.

Google is on the brink of buying noted video game maker Valve Software, according to a report in The Inquirer that cites "well-placed sources."

Bellevue, Wash.-based Valve rose to prominence through games such as its Half Life series, but The Inquirer's Charlie Demerjian speculates the reason Google would be most interested in the company is its Steam Powered technology, a multipurpose online hub with throngs of users.

Activity on Valve's Steam Powered service currently crests with about 1.2 million users. (Click to enlarge.)

(Credit: Valve Software)

That rationale makes some sense to me as well, in part because getting into the video game business in and of itself doesn't sound terribly well aligned with Google's mission "to organize the world's information and make it universally accessible and useful." Steam is an online foundation for selling and distributing games, updating patches, enabling multiplayer online chat, and using digital rights management to control who has permission to use elements like game versions or game terrain.

While a lot of that is specific to games today, I see no reason why it might not apply more broadly. Google, of course, likes to be the clearinghouse for online activity, and this could add some expertise.

Steam Powered shows 448 games available now, and in February, Valve said Steam had 15 million account holders. But this is the more telling statistic: During peak hours, online activity crests at about 1.2 million users every day. That's clearly a lot of activity.

"We do not comment on market rumor or speculation," Google said in a statement. Valve didn't immediately respond to a request for comment.

Update 9:40 a.m. PDT: Gaming site Kotaku threw some cold water on the report after speaking to Doug Lombardi, Valve's director of marketing. The site said Lombardi called the Google acquisition report "purely a rumor, a bit of fiction." Though that wasn't a direct quote, and there's some wiggle room in the wording, Kotaku also concluded that Google is "out of the picture."