Video game developer Electronic Arts announced on Monday that it has acquired social-gaming company Playfish, paying $275 million in cash and $25 million in "equity-retention arrangements." Playfish also is entitled to up to $100 million if it meets performance milestones by December 31, 2011.
EA also announced later Monday that it planned to eliminate 1,500 jobs, or about 17 percent of its workforce, as part of a plan to reduce annual costs by about $100 million.
The acquisition of Playfish falls in line with EA's desire to be more than just a developer for traditional gaming platforms, like consoles and the PC. The company said in a statement that the acquisition "strengthens its focus on the transition to digital and social gaming."
Thanks to the explosive growth of social networks and games made for those platforms, Playfish is enjoying strong performance in the social-gaming space. The company has more than 150 million games installed on several platforms, including Facebook, MySpace, the iPhone, and Android-based devices. According to Playfish, more than 60 million active players per month are playing titles. Its Facebook titles include Pet Society, Restaurant City, and Country Story--all three are among the most-popular games on the social network.
The EA Interactive division, which Playfish will join, has done a fine job of capitalizing on the trend of online and mobile gaming. That division includes Pogo, one of the top casual-gaming sites on the Web. The Mobile side of EA Interactive has captured 34 percent market share in the U.S. with the help of Madden NFL 10, The Sims, and Tetris.
Updated at 10:20 p.m. with details of job cuts.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
The organization responsible for managing the assignment of domain names and IP addresses has approved a new plan to allow non-Latin characters in Web extensions.
Known as Internationalized Domain Names (IDNs), the system is designed to globalize the Net so regions around the world can use their own local alphabet characters to surf in cyberspace, the Internet Corporation for Assigned Names and Numbers, or ICANN, said Friday.
Calling IDNs the "biggest technical change" to the Internet since its birth 40 years ago, ICANN unanimously approved the plan on the final day of its six-day conference in Seoul.
IDNs will allow domain names to be to be written in native character sets, such as Chinese, Arabic, and Greek. In charge of managing domain names, ICANN has argued that IDNs are necessary to expand use of the Web in regions where people don't understand English. Since its inception, the Internet has been limited to the Latin character set used by the U.S. and many other nations.
"The coming introduction of non-Latin characters represents the biggest technical change to the Internet since it was created four decades ago," said ICANN chairman Peter Dengate Thrush in a statement. "Right now Internet address endings are limited to Latin characters--A to Z. But the Fast Track Process is the first step in bringing the 100,000 characters of the languages of the world online for domain names."
To expedite the new plan, ICANN will launch a Fast Track process on November 16. At that time, the organization will begin accepting applications from countries for new top level domains, or Internet extensions, based on each nation's character set.
Initially, the change will apply only to local country codes, such as .kr for Korea and .ru for Russia. Major top level domains (TLDs) such as .com, .net., and .org won't see non-Latin editions just yet. But ICANN is pushing to make progress on these major TLDs and hopes to include them in the IDN system before long.
ICANN had discussed and debated IDNs for years, during which time much testing, development, and global cooperation were needed to jump start the new system.
"This is a culmination of years of work, tests, study and discussion by the ICANN community," said Thrush. "To see this finally start to unfold is to see the beginning of an historic change in the Internet and who uses it."
A simple phrase and pin code may be all you need the next time you pay for that book or CD at Amazon.
The online retailer on Thursday debuted a new feature called Amazon PayPhrase, designed to let busy shoppers store their name, address, and payment information in a single phrase and pin code. Instead of entering all that data at the online checkout counter, you type your phrase and pin number when it's time to cough up the cash.
PayPhrase doesn't just work at Amazon--it can be used at any online retailer that lets you pay via Amazon Payments. That covers a range of cyberstores, including Buy.com, J&R Electronics, DKNY, and Car Toys.
PayPhrase also omits the need for a user name and password to store your personal info on every shopping site that uses Amazon Payments. However, you will need an Amazon.com account to set up and maintain your phrase.
Amazon sees PayPhrase as a benefit to consumers trying to juggle different accounts at different retail sites.
"PayPhrase solves the headache of trying to keep track of all the different user names and passwords people use to shop on various sites across the Web," said Matt Williams, general manager of Amazon PayPhrase, in a statement. "With PayPhrase all you need is one phrase and one PIN to pay online."
Here's how the process works:
- You first set up your PayPhrase. The phrase can be two or more words, and the entire phrase must be at least four characters but no more than 100. Amazon provides a list of suggested phrases, or you can create your own. (With Amazon's suggested phrases of "Unusually Obese," "Contraceptive Cream," and "Bush's Education Department," you might want to create your own.) Since everyone's PayPhrase must be unique, Amazon will tell you whether or not your phrase is taken.
- You set up your four-digit pin number.
- You enter your Amazon.com user name and password.
- You either confirm or enter your mailing address and credit card information.
- After your PayPhrase is set up, you'll receive an e-mail from Amazon confirming the details.
- The next time you check out to buy an item on Amazon or an Amazon Payment retailer, a field for PayPhrase Express Checkout will appear. You enter your phrase. You then review your order details and total cost and finally enter your pin number to submit the purchase.
Of course, a feature like this always shouts out one question: Is it secure? Amazon naturally believes so.
Though Amazon stores your credit card information, the company points out that your payment information is not shared with other online retailers. And to modify your PayPhrase settings, you have to log in to the PayPhrase site with your Amazon.com username and password.
You can establish monthly cash limits on your account ranging from $10 to $500. Finally, you can opt to receive an approval request by e-mail or cell phone for all orders that are placed.
Check out Amazon's promo video page for a brief tour of PayPhrase.
You wouldn't know there's been a slowdown in consumer spending by looking at Amazon.com and Netflix.
Both companies have continued to grab customers at a record pace, leading to higher earnings and sales for their third quarters.
Net income for Amazon jumped 68 percent to $199 million, or 45 cents a share, in the quarter that ended September 30, compared with $118 million, or 27 cents a share, in the prior year's quarter.
Sales rose 28 percent to $5.45 billion versus $4.26 billion in 2008's third quarter, the company said Thursday.
Amazon's stock shot up $23.75, or 25 percent, to $117.29 in Friday trading.
Amazon's two-year stock chart.
(Credit: Yahoo Finance)Amazon attributed its earnings to several key factors.
Chief Financial Officer Tom Szkutak said Thursday in a conference call with reporters that consumers continue to spend at Amazon because of its low prices and large selection. The company noted that it had 98 million customer accounts by the end of the third quarter, 17 percent higher than a year ago.
Worldwide sales from books, CDs, DVDs, and other media grew 17 percent to $2.93 billion, while revenue for electronics and other general merchandise soared 44 percent to $2.36 billion.
Another solid driver for growth was the Amazon e-book reader, Kindle.
"Kindle has become the No. 1 bestselling item by both unit sales and dollars--not just in our electronics store but across all product categories on Amazon.com," Amazon CEO Jeff Bezos said in a statement. The company did not release specific sales figures for the Kindle.
Amazon managed to clobber analysts' expectations. J.P. Morgan had forecast earnings per share of 31 cents on sales of $5 billion. Broadpoint.Gleacher analyst Ben Schachter had been eyeing earnings per share of 33 cents and said that sales were 7 percent higher than he expected.
In a report, J.P. Morgan said Amazon's strong sales growth shows that the company is grabbing significant market share from other e-commerce players, such as eBay.
In his report, Schachter called the results "phenomenal." He noted that Amazon was able to keep its costs in check while gaining market share in virtually every product category. The analyst also said he was "shocked" to hear Bezos' statement that the Kindle has become the company's top-selling item.
For the current quarter, Amazon is looking for sales of $8.13 billion to $9.13 billion, 21 to 36 percent higher than last year's fourth quarter, and racing past analysts' estimates of $8.11 billion.
Collins Stewart analyst Sandeep Aggarwal said in a report that improving e-commerce trends and continued growth for the Kindle, among other factors, could make Amazon the fastest growing large-cap Internet stock.
Another beneficiary of solid customer growth, Netflix also surpassed analysts' expectations for the third quarter.
The company's earnings jumped 48 percent to $30.1 million, or 52 cents a share, versus $20.4 million, or 33 cents a share in the prior year's quarter. Sales grew 24 percent to $423.1 million, compared with $341.3 million in 2008's third quarter.
Overall, analysts had been expecting earnings of 46 cents per share on sales of $420 million.
Growth in subscribers was the key driver for Netflix in the third quarter. The company ended the quarter with around 11.11 million subscribers, a 28 percent jump from the 8.67 million subscribers at the end of 2008's third quarter. Of the current total, 98 percent, or 10.84 million, were paid subscribers, while the remaining 2 percent were free subscribers.
"Our business momentum is strong and our third quarter performance keeps us solidly on course for a record 2009," Netflix co-founder and Chief Executive Officer Reed Hastings, said in a statement.
Though most Netflix customers still prefer to get their movies by conventional mail, Internet streaming has gradually taken off. In the third quarter, 42 percent of Netflix subscribers streamed at least 15 minutes of video, compared with only 22 percent in the prior year's quarter.
Customers can stream their Netflix picks not just through the PC but via gadgets like Microsoft's Xbox 360, which has helped attract new customers.
Now Netflix has reportedly struck a deal to add streaming to another device, which Hastings said is already in people's homes. Though the company has been mum about details, analysts believe it may be a video game console made by either Sony or Nintendo.
Netflix shares were up $4.58, or 9 percent, to $54.22 on Friday.
For the fourth quarter, the company believes customer growth and sales will be higher than anticipated three months ago. Netflix now expects to end the current quarter with 12 million to 12.3 million subscribers, up from the prior estimate of 11.6 million to 12 million. That would represent an additional 900,000 to 1.2 million customers.
Fourth-quarter sales are likely to reach $440 million to $446 million, up from the previous estimate of $431 million to $445 million.
However, the company forecasts a downturn in earnings from the third quarter, eyeing fourth-quarter net income of $21 million to $26 million, or 38 cents to 47 cents a share.
Expenses may be one factor affecting current earnings. Hastings said the company expects to spend more on marketing and licensing fees for Internet streaming. Netflix also believes its postal costs will continue to grow, surpassing $600 million next year and $700 million in 2011.
URL shorteners may be handy for your tweets on Twitter. But they're also known security holes since they don't display the actual address of your destination. A free tool from security vendor AVG may provide a solution.
AVG has updated its free LinkScanner tool to detect malicious pages hiding behind shortened URLs. The company said the tool checks the actual destination of each URL link to make sure the page is legitimate.
More than a dozen URL-shortening services abound on the Net, including TinyURL and Bitly. With its 140-character limit, Twitter automatically shortens URLs in each tweet via Bitly. Other services like WordPress also include a built-in URL shortener.
But Web browsers don't display the true address of a shortened URL, so you have no idea whether or not the destination page is safe. Hackers have easily been able to use the obscure nature of shortened URLs to conceal hazardous Web pages behind them.
"The problem with shortened links is that they usually don't bear any resemblance to the original URLs, which means that users don't always know what they're clicking," said Roger Thompson, chief research officer at AVG Technologies. "People click with the intention of going to a specific site, but the link can be easily hacked to send people to a site containing Trojans, spyware, rootkits, and other malware instead."
AVG, formerly known as Grisoft, bought LinkScanner in late 2007 as part of a larger acquisition. The tool has already proven helpful to Web surfers by analyzing Web pages behind each link that is either clicked on or typed into the browser.
Other solutions do exist to reveal the truth behind a short URL. The Web site LongURL can display the long version of a short URL. A Firefox plug-in called LongURL Mobile Expander can also translate from short to long.
But according to AVG, LinkScanner is now the only security tool on the market that can find poisoned Web pages behind a short URL. The company says it does not rely on blacklists and instead checks each link in real time.
Social networking is on the rise, both on and off the job, leaving companies uncertain how to monitor their use by employees, reports new survey.
More than 50 percent of companies questioned said they have no policy to address the use of social networking by employees outside the workplace, according to a survey released Wednesday by the Society of Corporate Compliance and Ethics and the Health Care Compliance Association.
Typically, companies shy away from restricting an employee's actions off the job. But businesses are concerned about employees who use social networking and reveal private details or post inappropriate pictures that could embarrass the company.
Some organizations, such as the U.S. Marines, have already banned their recruits from using Facebook and Twitter. But the survey found that many businesses aren't sure what to do to restrict or monitor such usage.
Of the companies questioned in the survey, 34 percent said they have a general employee policy that addresses all online activity, including the use of social networking, both on and off the job. Only 10 percent said they have a policy specifically geared toward social networks.
More than half of the individuals said their company has no active system to monitor employees using social-networking sites. Around 32 percent said their company acts only when an issue is discovered.
Of all those surveyed, 24 percent said an employee in their company had been disciplined for inappropriate behavior on a social network, while 37 percent did not know. The percentage was higher in the nonprofit sector, noted the survey, with 33 percent reporting an employee incident versus only 13 percent in the for-profit sector.
"Business clearly hasn't caught up with what its employees are doing online," said Roy Snell, CEO of the Society of Corporate Compliance and Ethics. "The risks are twofold. First there remains the business risk of employees doing things online that may reflect badly on the company. The second is that, as business develops policies and procedures in this area, there are going to be a lot of people finding that what they have long done is no longer acceptable at work. During the adjustment period there is likely to be a great deal of friction created."
To conduct the survey in late August, the Society of Corporate Compliance and Ethics and the Health Care Compliance compiled responses from 798 people in both profit and nonprofit organizations, as well as government agencies.
Omniture and ComScore, two Web-tracking powerhouses, are combining forces to launch a new system for measuring online audiences, the companies said Monday.
Teasing out online traffic figures has been a constant challenge for both advertisers and publishers. The two companies' goal is better analyze online audiences by teaming Omniture's reliance on Web site analytics with ComScore's approach of following patterns of Internet users.
Web sites tend to rely on either analytics or audience measurement to determine traffic patterns, which can often lead to conflicting results. By merging the two methods, Omniture and ComScore hope to give customers a more unified and more accurate view.
"Since the rise of digital advertising, advertisers and publishers alike have sought ways to reconcile their Web analytics and panel-based measurement data to establish a unified measure of online audiences," Omniture CEO Josh James said in a statement. "With this relationship, Omniture and ComScore will enable publishers who have rich, highly targeted audience segments to reliably demonstrate their value to advertisers and also help advertisers find these attractive consumer segments."
ComScore's new Media Metrix 360 system will play a leading role in the service. Launched in June, Media Metrix 360 already uses a hybrid approach, supplementing audience measurement with Web site analytics. The company had been criticized in the past for relying on too small a segment of the online audience to provide accurate data on traffic patterns.
Through this partnership, ComScore will also be working with Adobe Systems, which last week signed an agreement to acquire Omniture for $1.8 billion.
One of the coolest features for Spore gamers is the ability to create their own creatures. Now, anyone can assemble aliens through a new site set up by Electronic Arts.
Spore Creature Creator 2-D, released Wednesday, lets you conjure up and animate your own creatures using an assortment of eyes, arms, feet, horns, and various unidentifiable body parts.
Produced by EA's Maxis studio, the Flash-based game starts with a large egg cracking open to reveal a simple alien body that you mold online like a lump of clay. Thin, fat, long, or short--you devise your creature's basic shape. Then it's time to build your baby with the right parts.
Choosing from such categories as mouths, limbs, and graspers, just drag your favorite body parts onto your creature to evolve it from a formless blob into a fully-functioning whatever. The game helps you along, directing you to drop the parts in all the right places. You can bend and resize many of the parts, giving your creature big eyes and a small mouth or long legs and stubby feet. You can also add a splash of paint by choosing from a wide palette of colors.
As you develop your creation, it takes on life by showing off its animated parts, such as a mouth that opens and closes, eyes that blink, and graspers that try to grasp. If you're in a hostile mood, you can even add weapons, like the Problem-Solvent that sprays solvent, the Hockitlauncher that spits out water, or the Phlegmthrower that shoots, uh, well, you get the idea.
If you need a helping hand, you don't have to build your creature from scratch. Spore Creature Creator 2-D lets you tap into the Sporepedia, an online gallery of creatures designed by Maxis developers and other Spore gamers. Simply load one of the pre-existing creatures and then tweak it to assemble a totally new organism.
Once you're done, it's time to name and describe your creature. You can then take it for a workout in the Creature Trainer arena, where you move it around the screen to catch bouncing balls with its mouth, hands, or other parts.
If you're proud of your new creation, you can e-mail a postcard image of it to a friend or save it as a PNG file for your own picture gallery or Web site.
A variety of Spore masterpieces are viewable at the Sporepedia Web site. And for all you budding Spore artists, Maxis is offering a Creature Creator challenge. Recreate one of your favorite Spore creatures using Creature Creator 2-D for a chance to be featured on Spore.com.
Caryl Shaw, a senior producer at Maxis who helped bring Spore Creature Creator 2-D to life, told me the game came about because Maxis wanted to make Spore more accessible and let anyone with a Web browser experience the same creativity that Spore gamers enjoy. As one of the most popular features of Spore, the Creature Creator seemed a natural.
... Read moreMicrosoft is bringing the DVD experience to downloadable movies--at least in the U.K.
Teaming up with U.K. retail giant Tesco, Microsoft announced Wednesday a new service to offer consumers downloadable videos with the same interactivity, special features, and high quality found on physical DVDs.
Based on Microsoft's Silverlight technology, the "virtual DVD" service will start sometime this fall. It will allow Tesco customers who buy certain movies to also download digital copies of the flicks for their Windows or Mac computers. Besides providing high-quality video, the digital versions will include bonus content, related MP3 files and ringtones, and networked games. Tesco said it is working with "broad range of major movie studios" as part of the deal.
"For the first time, consumers will be able to enjoy a DVD equivalent experience with digital movies, which paves the way for more advanced viewing experiences enabled through Silverlight, Rob Salter, category director for Entertainment at Tesco, said in a statement. "In the future we expect to offer our customers innovative digital solutions that far exceed the DVD experience and deliver exclusive content, Web events, and services wherever and whenever they want them."
Tesco, a grocery chain, has taken advantage of technology to create new business ventures. The company has expanded its reach in recent years to create software and offer a Skype-like VoIP service.
Though the virtual DVD service initially will be available only in the U.K., Microsoft said it expects to branch out to additional markets.
AOL announced Tuesday that it has appointed former Yahoo executive Brad Garlinghouse, famed for his "Peanut Butter Manifesto" at that company, as the new president of its Internet and Mobile Communications segment.
Garlinghouse also will run AOL's Silicon Valley operations from its Mountain View, Calif., headquarters and serve as the West Coast lead for AOL Ventures, the company's venture capital arm. He will report directly to AOL Chairman and CEO Tim Armstrong, who was named to those posts in April.
Garlinghouse's most recent position was as an in-house senior adviser for Silver Lake Partners.
"In addition to leading our efforts to grow our communications products, Brad will be bringing his global leadership and business experience as a key member of our company's executive leadership team," said Armstrong. "He will also be a major force for AOL in Silicon Valley, working to expand our presence there and in the tech community in general."
A former Google executive, Armstrong faces the daunting task of reviving AOL, a company once nearly synonymous with the Internet for many people but which, in recent years, has strugged with fleeing subscribers and declining sales. AOL's blockbuster marriage with Time Warner never worked out, leading inexorably to the announcement in May that AOL would once again become a separate company.
At his recent 100-days-at-AOL strategy summit, Armstrong identified communications as one of AOL's five key focus areas.
Garlinghouse knows all too well what a lack of focus can to do a business. In his Peanut Butter Manifesto in late 2006, he complained of Yahoo--which has gone through its own series of troubles and reorganizations: "We want to do everything and be everything--to everyone...The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular."
Starting in 2003 as vice president of communication products for Yahoo, Garlinghouse climbed the ladder to become a senior vice president for two other communications segments. He has also overseen the company's Flickr photo-sharing service and Yahoo Groups.
Garlinghouse left Yahoo in June 2008, at a time when the company was shedding executives at a rapid rate.
