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July 8, 2008 1:15 PM PDT

Daily Debrief: For Microsoft, one step forward, two steps back

by Kara Tsuboi
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Tuesday brought a mixed bag of Microsoft news. On the Daily Debrief, I sit down with CNET News senior writer Ina Fried to discuss the good, the bad, and the downright embarrassing.

Let's start with the good. The company announced the pricing of the new, pay-as-you-go business apps for the Web. The whole suite of business tools, which includes a variety of office communication tools, will run you $15 a month. Individually, the apps will go for $3 a pop. Ina suspects these tools will be very handy for professionals on the go or for companies who choose not to employ IT support.

The bad and embarrassing news is all wrapped into one. On Tuesday, the company launched the Vista Compatibility Center. Yes, you read that right. We're still talking about Vista, the operating system that Microsoft released 18 months ago. The need for the Center speaks volumes about consumers' slow adoption of the OS. Ina makes the point that if this were Apple, the company would have already moved on to a new cat. Oh, and to add insult to injury, the online Center was down and unavailable for most of the morning.

June 30, 2008 11:30 PM PDT

Adobe to help reveal 'invisible' Flash Web content

by Steven Musil
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Adobe Systems is helping Google and Yahoo to uncover Web content that was previously "invisible" to Web searches.

Both companies have been given optimized Adobe Flash Player technology to help them better index dynamic Web content and rich Internet applications that include the Flash file format, or Shockwave Flash, Adobe said in a statement. Search engines already index static text and links within Shockwave Flash files, but rich Internet applications and dynamic Web content are elusive to search engines because of their changing states, Adobe noted.

Adobe's technology means that millions of pre-existing RIAs that use Flash technology, including content that loads at runtime, are immediately searchable without alteration by companies or developers, Adobe said. Google has already added the optimized Flash Player to its search engine, while Yahoo plans to add the technology to a future update of Yahoo Search.

"Designers and Web developers have long been frustrated that search engines couldn't better access the information within their content created with Flash technology. It's great to see Adobe and the search engines working directly together to improve the situation," Danny Sullivan, editor in chief of SearchEngineLand.com, said in a statement. "The changes should help unlock information that's previously been 'invisible' and will likely result in a better experience for searchers."

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June 29, 2008 8:22 AM PDT

Two steps forward, one step back: NBC's online Olympic coverage

by Harrison Hoffman
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Ever since NBC announced their very ambitious plans for online coverage of the 2008 Beijing Olympics, I have been very excited to see how well they execute it. Promising 3,500 hours of online video, with 2,200 hours of live streams, full event replays, and highlights, for free, how could they go wrong? It has recently come to light that the online coverage may not be as complete as we were hoping.



NBC will not be offering live online feeds of any events that will be broadcast on TV. The ones broadcast on TV will, of course, include the most popular events and the ones that people are most likely to tune into. The video of the events will be on NBC's site only after the events have been completed. With this in mind, it is clear that NBC views its online offering as a supplement to their TV broadcast and not as any sort of a replacement.

Many have been really quick to heavily criticize this move by NBC, but I'm not jumping on that bandwagon just yet. I am usually not one to defend old media (see my post on Why Broadcast TV Sucks), but I have some sympathy for NBC here. I applaud NBC for taking this major leap into the online distribution of this major event in the first place. It's an unfamiliar road and a departure from a model that has worked for NBC for a very long time.

Of course, we would love to see every live stream available to us, with videos and highlights that we could embed on other sites, but this may be too radical of a first step for NBC. Think of this year's Olympic webcast as testing the waters. If NBC's web offerings prove to be profitable this year, then maybe they will expand their offerings in years to come. The Olympics only happen every two years (the more popular Summer version every four) and I can understand NBC not wanting to gamble too much on this very costly venture.

An online feed of an event like the Olympics (or any sporting event for that matter) can offer all sorts of rich functionality, including realtime statistics, scores, and leaderboards. There is no doubt in my mind that rich functionality will eventually win out, whether it is viewed on your computer or through a new interface on your TV. If it doesn't look like they get it now, NBC and the other networks will eventually see the light, but these big companies may just need a little more time to make the switch at their own pace.

To view NBC's online Olympic offering, you must install Microsoft's Silverlight plug-in.

Amidst all of this, let's not forget who the potential big winner is with this year's Olympics. No, it's not all of the athletes competing for Olympic glory, it's Microsoft's Silverlight. Microsoft scored the exclusive deal with NBC for Silverlight to power all of their Olympic web offerings. Not having caught on that well yet, this will prove to be a good way to expose a lot of new people to Silverlight and get their plug-in installed on a lot more computers. While it may not be the gamebreaker, it will certainly give them a shot in the arm in their fight against Flash.



Don't believe the haters, NBC's online offering of the Olympics is a step in the right direction, just not two steps as a lot had hoped.

Click here for more stories on tech and the Beijing Olympics.

Originally posted at The Web Services Report
Harrison Hoffman is a tech enthusiast and co-founder of LiveSide.net, a blog about Windows Live. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure.
June 24, 2008 10:00 PM PDT

Charter drops controversial customer tracking plan

by Steven Musil
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Internet service provider Charter Communications announced Tuesday that it was indefinitely suspending the use of a controversial tool to track its customers' movement on the Web.

Charter, the fourth-largest cable operator in the U.S., announced in May that it would use technology from a company called NebuAd to monitor some of its broadband customers' Internet habits to provide advertisers with information to target online ads to individual customers. Privacy advocates had likened the service to Internet wiretapping.

"Our customers are always our first priority," Charter said a statement. "As such, we are not moving forward with the pilots at this time. We will continue to take a thoughtful, deliberate approach with the goal to ultimately structure an advertising service that enhances the Internet experience for our customers and addresses questions and concerns they've raised."

Charter's plans had also raised the attention of prominent members of Congress, including Massachusetts Democrat Edward J. Markey, who chairs the House Subcommittee on Telecommunications and the Internet. Shortly after Charter's announcement, Markey released a statement praising the decision to suspend the program but questioning whether it violated the law:

Given the serious privacy concerns raised by the sophisticated ad-serving technology Charter Communications planned to test market, I am pleased to hear that the company has decided to delay implementation of this program, which electronically profiled individual consumer Web usage. I urge other broadband companies considering similar user profiling programs to similarly hold off on implementation while these important privacy concerns can be addressed.

The move comes as targeted Web advertising efforts ramp up. Earlier Tuesday, Google announced a tool called Ad Planner that lets advertisers find Web sites whose visitors match various demographic attributes. The tool, which competes with market leaders ComScore and Nielsen Online, also can show in detail how many people visit a particular Web site.

June 18, 2008 5:05 PM PDT

That's no DDoS attack, it's just Tiger

by Greg Sandoval
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Tiger Woods' playoff performance at the U.S. Open drew traffic big enough to look like a massive denial-of-service attack to Internet service providers.

According to Internet security company Arbor Networks, the playoff between Woods and Rocco Mediate "generated one of the larger Internet-wide flash crowds this year." The country's golf fans who were at work, turned to Web video to watch the duel at Torrey Pines.

The security firm reported that several ISP's saw between 15 and 25 percent spikes in traffic. One ISP reported that traffic nearly doubled. Engineers at the ISPs stopped worrying when they saw the ballooning Internet usage wasn't directed at any individual customer.

"Traffic dipped and peaked corresponding to Tiger's initial misses and subsequent spectacular comeback as millions of office-bound fans tuned in to the live NBC and ESPN coverage," Arbor Networks wrote.

NBC said that Monday's playoff drew the biggest audience the Web site has ever seen, with 2 million users generating 9 million page views. The United States Golf Association and ESPN also covered the game but their numbers weren't available.

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June 17, 2008 4:00 AM PDT

Firefox 3: New front in the browser war

by Stephen Shankland
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Update 12:23 p.m. PDT: The official Firefox 3 download site is live; the record-setting attempt began at 11:16 a.m. PDT. Update 10:53 a.m PDT: See this separate blog post on the Mozilla download site troubles. Update 10:02 a.m. PDT: Mozilla is having some technical issues with the site but expects the download to be available shortly. Update 6:43 a.m. PDT: I added the scheduled launch time, 10 a.m. PDT.

Mozilla plans to release Firefox 3 on Tuesday, and the open-source project is opening a new front in the browser wars.

As the Web transforms from a static repository of content into a foundation for applications such as word processors and graphics editors, browsers are growing up from mere gateways into the tool that makes those applications possible. In this new era, it's Firefox--the heir to the Netscape legacy--that's going up against the victor of the last era, Internet Explorer.

"It gives you the horsepower you need to experience rich Internet apps as they should be from a performance standpoint," said Damon Sicore, Mozilla's director of platform engineering, mentioning Gmail and Google Maps specifically as applications where users don't want to wait. "As these apps get bigger and more complicated, faster browsers are going to become more critical."

The Firefox 3 'awesome bar' can give faster access to Web addresses.

The Firefox 3 'awesome bar' can give faster access to Web addresses.

Specifically, it takes 60 milliseconds to change Gmail from showing one message to another with Firefox 3, Sicore said, compared with 413 milliseconds for IE 7 and 227 for Firefox 2.

Microsoft is toiling away on IE8, though, with a first beta released and a second scheduled to emerge in August. The program has been reworked to improve performance, said Dean Hachamovitch, Microsoft's general manager in charge of IE. With no prompting, he mentioned Gmail as one area where the company has received favorable feedback, and he clearly welcomes the competition.

"IE is the browser of choice for more people on the Web than anything else," Hachamovitch said. "There's an all-around quality, whether in ease of use, reliability, the security we stand by, that makes it a better choice."

Vying for share
Mozilla is a force to be reckoned with, with 18 percent market share to 74 for IE, according to Net Applications statistics. That's enough to ensure that major Web sites have to support Firefox.

Apple's Safari--now available for Windows, too, is in third place with 6 percent share. The next contender, Opera, has less than 1 percent, but it's scrappy: "The browser is the single most important piece of software made today, so innovation is incredibly important if you want to extend the reach of the Web," the company said in a statement.

Firefox is the second-ranked browser in market share.

Firefox is the second-ranked browser in market share for May 2008.

(Credit: Net Applications)

Microsoft knows the stakes are high, with a richer Web coming into being. "It is a particularly fertile period. A bunch of pieces started lining up magically in the last couple years to get some innovation going here," Hachamovitch said

Firefox isn't shying away from competition either. To try to heighten its profile, Mozilla hopes to set a 24-hour download record with Firefox 3, which has been code-named Gran Paradiso. The download period is scheduled to begin at 10 a.m. PDT.

Perhaps a more fruitful alternative to whipping fans into a lather through, though, would be to court business users.

"Mozilla needs to show corporations some love," said Forrester analyst Thomas Mendel in a recent report. "Large-scale, companywide deployments are not yet typical. Mozilla continues to expend little energy on wooing IT managers to formally adopt Firefox," for example by offering paid support services, he said.

Firefox 3 features
Faster performance is one Firefox 3 improvement Sicore points to. Two others are better memory handling and what's known as the "awesome bar."

To test memory use, Firefox programmers load 500 pages from top sites on the Web then closes and opens them thousands of times. Through that process, Mozilla stamped out many memory "leaks" under which Firefox 2 wouldn't relinquish memory once it was no longer needed, Sicore said. The company also reduced the amount of memory the browser requires overall.

But memory is hidden under the covers. Front and center is awesome bar, officially called the Smart Location Bar, which lets users type real words rather than sometimes abstruse URL addresses to call up Web sites.

For example, typing "maps" into the bar on my computer retrieves a list of some recent stories I've written involving maps as well as recent maps I've requested off the Internet. That's handy for retrieving recently visited Web sites quickly. Another example of how the feature worked well: I was trying to relocate a Web site I used to monitor Amazon.com's Web site performance, and typing "Amazon" into the bar showed the site--GrabPerf--as one of the options.

Mozilla uses its own formula to determine what results pop up in the list, weighting by factors such as how recently and how frequently you visited various sites. Typing "n" gets me to News.com in no time flat, but your own results will vary according to your browsing habits.

Firefox 3 has been steadily climbing in usage through its testing period.

Firefox 3 has been steadily climbing in usage through its testing period.

(Credit: Net Applications)

The awesome bar has its detractors who'd like the feature to be optional. (Tweakers can disable the awesome bar by editing their Firefox configuration.)

Among other features in Firefox 3:

• A prominent warning when a user tries to open a page that has been shown to host malware such as viruses or spyware or that's involved in phishing--the attempt to fool people into entering personal information into a counterfeit Web site.

•  Offline data access, a feature that can make Web applications usable even when the network is unavailable. That's a potential boon for Web apps, but future versions of IE 8 and Safari also support the technology.

Web-based protocol handlers, which lets the browser launch a Web application rather than a PC program for certain actions such as a Web site "mailto" link that otherwise would create an e-mail in software such as Outlook.

• The Cairo graphics engine that lays the foundation for better direct integration with a computer's video hardware. "Video inside the browser is coming," Sicore said.

• animated PNG (Portable Network Graphics), another nail in the coffin of the GIF (Graphics Interchange Format) image type.

• A better full-page zoom feature that devotes maximum screen real estate to the browser. Moving the mouse pointer over a thin strip across the top of the screen temporarily pulls down the browser controls.

• A star button to quickly add bookmarks; double-clicking opens a dialog box that lets users describe bookmarks with tags.

• Support for Windows Vista's parental controls.

• And better support for Mac OS X. For example, it has a Mac-native appearance and has been re-plumbed internally to use Apple's Cocoa technology, a necessary step on the road toward 64-bit support.

Plug-in problems
One of Firefox's claims to fame is the wide collection of add-ons that are available. It's been a bumpy ride coaxing coders to support the new browser, though.

Some major add-ons now have arrived, including Yahoo's Delicious and the Firebug tool for Web site developers.

However, not everybody made the leap. One is Google Browser Sync, which synchronizes bookmarks, passwords, and other settings across multiple installations of Firefox 2. "Phasing out Google Browser Sync was a tough call, but we have decided to focus our efforts on other products, like Toolbar and Gears, that also extend the capability of multiple browsers," Google said of the Labs project in a statement. Happily, there are other alternatives--I like Foxmarks.

Of the top add-ons, "the majority have upgraded 3.0," Sicore said. The laggards will have a grace period "on the order of months" before Firefox 2.0 versions will automatically suggest installing the upgrade.

June 16, 2008 10:13 PM PDT

Big ideas, smaller audiences, and too many (or the wrong) metrics

by Tim Leberecht
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Insights from the Conversational Marketing Summit

John Battelle's Conversational Marketing Summit, which debuted last fall with much acclaim in a more intimate setting in San Francisco, faced a challenging task with its second edition last week in New York.

For starters, the speaker lineup was impressive, but two of the most important players of the social media Web were noticeably absent: Facebook (which, to be fair, took part last year) and Twitter. Yes, where was Twitter, the epitome of online conversations? Or at least another micro-blogging service?

Additionally, and more crucially, the program had to deal with what business lingo calls a "good problem:" the summit last fall had done such an excellent job establishing and exhaustively addressing the topic that it was hard for the NY program to offer new insights. Sure, the trend toward and the need for conversational media have continued and amplified. So has the emergence of the distributed Internet, or in Battelle's words: "To keep building our brands, we have to go to where the audience has gone." And the audience has gone to conversational media, as traffic data suggests, according to Nielsen/NetRatings.

The most successful new online brands are indeed conversational: Blogging service Wordpress, for example, experienced a whopping 202 percent traffic growth since last year, YouTube is up by 80 percent, Wikipedia by 28 percent, Facebook by 72 percent, and Flickr by nearly 86 percent. Sites with tools, services, and platforms that enable conversations to thrive are thriving themselves while the traffic to traditional properties (aka portals) stagnates or shrinks.

"Too many advertisers buy impressions instead of making impressions," Matt Freeman of GoFish remarked. Despite all the momentum that conversational media enjoys, as far as marketers' best practices and tools are concerned, not so much has actually changed since the last CM Summit. And some of the panels seemed to artificially prolong a conversation that had already ended last fall.

B2B = B2C²
Yet it was still an excellent program that Battelle and team put together. Focusing on the role of conversational media in building brands, the summit set out to find the "online analogs to the executions we so love in magazines and television."

Beth Comstock, chief marketing officer of General Electric, was well-suited to provide answers, for she represents an old, venerable brand (the "Hillary Clinton of brands," as someone in the audience framed it) that is successfully adapting to the new branding paradigms on the web. Overseeing a $1 billion budget, she can afford to experiment. But it's not only the money, it's the latitude: "GE is a brand with the permission to do a lot of things," Battelle described it.

Comstock spoke about the importance of "visual storytelling" and GE's continued foray into social media and conversational marketing. She said that the company should--and will--be more aggressive in embracing online conversations, further enhancing the use of embedded video ads and engaging audiences through multimedia content in all of its online channels: "The media plan is becoming the distribution channel." Comstock also made an interesting point about GE's investment in consumer marketing: in her eyes, it elevates the overall brand because it provides a strong umbrella for all of GE's B2B marketing. She's on top of an emerging trend: at the end of the day, enterprise clients are consumers and have the same emotional needs (or as the saying goes, "B2B customers are consumers who have the luxury of having a company pay for what they desire"). On the engagement level, conversational media seem to increasingly force B2B marketers to think like consumer marketers and develop programs that connect directly with the customer--through narratives rather than benefit statements and feature lists.

Will standardized metrics stifle innovation?
The most interesting debates throughout the two-day program centered on the elephant in the room: measurement. Most people in the industry would probably agree that the "end of the click" is near. CPM (cost-per-thousand impressions) and CTR (click-through-rate) do not suffice anymore as go-to metrics for the effectiveness of brand-building display advertising campaigns.

A recent report from Starcom MediaVest suggests that the majority of clicks being purchased are being consumed by unemployed, twenty-something, gambling, shopaholic, Internet addicts: "Heavy clickers represent just 6 percent of the online population yet account for 50 percent of all display ad clicks. While many online media companies use click-through rate as an ad negotiation currency, (...) heavy clickers are not representative of the general public. In fact, heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage. Heavy clickers are also relatively more likely to visit auctions, gambling, and career services sites--a markedly different surfing pattern than non-clickers."

Therefore the cry for new types of brand engagement metrics is getting louder: "There is more and more emphasis by advertisers for greater return-on-objectives in campaigns, particularly in the digital space where the accountability data is so readily available," said Grant Prentice, Starcom USA's director of connections research and analytics. "'Natural Born Clickers' shows us that we can't count on click-through rate as our primary success metric for display ads; Starcom is more reliant on shifts in brand attitude metrics and analytics tying online exposure to sales as the true measures of online advertising efficacy." Added Battelle: "The success of online advertising can no longer be defined only by direct response metrics. Today's brand marketers are focusing on an entirely different set of parameters."

However, at present, there exists a plethora of metrics but no standardized set of measurements that lets conversational marketers prove the impact of their programs.

"One of the greatest barriers that we've seen for marketers in social media has been a general lack of standards and tools for campaign measurement and reporting," said Debra Aho Williamson, analyst at eMarketer. "There are, of course, vendors who supply disconnected data points, but it has so far been up to the marketer to wade through this sea of data themselves. What is needed is a single device or methodology that aggregates relevant data in an easily digestible form." Several companies and industry alliances have developed dashboard models seeking to fill that gap.

Federated Media, the summit organizer, introduced its own product: the Conversational Measurement Toolbox, an open suite of campaign measurement, planning, and reporting tools across the three dimensions--"engagement-amplification-equity"--offering marketers greater control and insight into their conversational marketing efforts.

Not everyone working on the creative side of the business is buying into the quest for a standardization of metrics. George Bennett, founder and CEO of branded entertainment firm Magic Bullet Media, contends that viral marketing campaigns are by nature unmeasurable, at least by standardized measures.

In his eyes, viral content, by definition, spreads through paths that are outside of the marketer's domain and are therefore difficult to track--and that's exactly how it should be. Well, probably not much longer. Video analytics firm Visible Measures announced Monday that it is launching a service that enables advertisers and agencies to measure the viral reach and audience engagement of video campaigns. Visible Measures' technology monitors user engagement in a given video stream, and its Viral Reach Database tracks video performance over 80 million unique videos across 150 of the Web's most popular video-sharing sites.

Let 100 flowers bloom
Amid the fixation on engagement metrics, Rich Silverstein, co-chairman and partner of advertising agency Goodby, Silverstein & Partners, brought back the idea of the good old big idea: "If it's good, it will work. Nice ideas that are big and deep will go a long way." And they even become a broader conversation, a cultural phenomenon, as proven by the recent Clinton vs. Obama Saturday Night Live spot (and a Time cover), both of which were inspired by a Silberstein NBA commercial.

Maybe a standardization of metrics would indeed stifle innovation and social media marketers' appetite for experiments. In the unregulated, fragmented social media space that we're in right now, anything goes, which may very well be a major factor for its vibrancy. Failure is always an option. Andy Markowitz from Kraft Foods quoted Guy Kawasaki: "Let 100 flowers boom."

However, Steve Rubel, senior vice president and director of insights for Edelman Digital, slammed the industry.

"We've gone backwards. There's no standard. The TV screen has a number. A dollar is a dollar. Having a standard makes transactions work. IAB has been moving slowly, fearing, justifiably, that if they come down from Mt. Sinai with two tablets offering a Ten Commandments of metrics, they worry that things could change in six months and render any standard useless," said Rubel, who also writes the Micro Persuasion blog. "Because there are no standards, all agencies are speaking different languages and no one has an answer."

Yet he reminded the audience that the "social Web is made of people" and demanded additional qualitative metrics that measure the impact of conversational marketing on the other side of the equation--the consumer. Social media, at its core, is about collaboration, he argued, and attempts to simply apply the old, quantitative templates of tracking marketing programs would fall short of capturing the essence of online conversations. They are no longer one-way streets: "Consumers are tired of being treated like cattle." They know they are marketed to and expect substantial value in return for their permission, said Rubel.

Consequently, metrics failing to measure the value of marketing programs for consumers would be one-sided and skewed. He also suggested rebranding "conversational marketing" as "collaborative marketing."

"Conversations are just a means to an end," he said, and he finds them valueless if they don't have a positive impact on consumers' lives. That's a somewhat radical proposition, seemingly far ahead of its time. What would truly consumer-focused, impact-driven conversational marketing metrics look like? A good question for the next CM Summit, this fall, in San Francisco.

Originally posted at Matter/Anti-Matter
Tim Leberecht is frog design's vice president of marketing and communications and has worked in the media, entertainment, and high-tech industries. He is a member of the CNET Blog Network, and is not an employee of CNET.
June 15, 2008 1:00 PM PDT

Survey: Record number of Americans following election via Web

by Holly Jackson
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Once Barack Obama started Twittering, John McCain created a MySpace page, and Hillary Clinton joined Facebook, it became apparent that the 2008 presidential election was relying heavily on social media. But now, a Pew survey has the numbers to prove it, concluding that 46 percent of Americans have used the Internet for politics so far this election season, with topics like Obama and online videos taking a front seat.

The poll, conducted by Pew Internet and American Life Project, was based on information provided by Princeton Survey Research Associates.

Earlier this spring, the surveyors contacted 2,251 Americans to find out how they are using the Web to investigate and communicate about the election. The survey results found that almost half are turning to the Web to get information about the presidential race. That's a significant jump from the spring of the 2004 election, when only one-third of adults said they looked online for election news.

Several of the conclusions show numbers doubling or tripling from the last presidential election season. One of these was in the area of online political videos. In 2004, only 13 percent of adults said they watched online videos concerning the election, but this year, already 35 percent use sites like YouTube for partisan information. And people aren't just watching campaign ads, but seeking out primary sources like recorded speeches.

Young Democrats and Obama supporters reportedly lead the wave of political blogging and researching, with 74 percent of Internet-using Obama supporters logging on to follow the campaign, compared with Clinton's 57 percent and McCain's 56 percent.

And young voters are using the Web in different ways than other generations. The study found that young voters are consuming more political online video than older adults, while creating their own political commentary with posts, e-mails, text messages, and social-networking sites. One-third of all 18- to 29-year-old adults used a social-networking site for political activities like adding candidates as their friends.

Despite the statistics on increasing Internet usage, the Pew study concluded 74 percent of users said they would be just as involved in the campaign without using the Internet, a result that was also highlighted in a Pew report this January.

June 13, 2008 2:17 PM PDT

Web video pioneer returns with checkbook in hand

by Greg Sandoval
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Tom McInerney, the Web video-sharing pioneer who left the sector 18 months ago, is making a comeback.

Guba co-founder Tom McInerney

(Credit: Greg Sandoval/CNET News.com)

This time, however, the co-founder of video site Guba is an investor. He's one of the backers of Shopflick, a company trying to become the Web equivalent of the Home Shopping Network. The site enables apparel merchants to showcase the clothing they offer by uploading video clips. Many sellers use the opportunity to channel their inner Francis Ford Coppola.

For example, the style mavens at designer Ric Rac shot a scene of two women wearing nearly identical versions of the company's $145 Kangaroo Dress meeting on the street. The audience hears the trash talking going on in each woman's head.

McInerney, who spoke at the OnHollywood conference on Wednesday, said Shopflick's founders got the idea for the site by meeting a woman who had made jewelry and had appeared on the cable show the Home Shopping Network.

The three-minute appearance brought the woman more sales than in the prior seven years, according to McInerney. Shopflick's executives want to bring that same magic to the Web.

Helping merchants sell clothes online is a practical use for Web video, McInerney said. He added that enabling people to share homemade videos online may not be as practical--unless, of course, you're YouTube.

McInerney stepped down as Guba's CEO in December 2006. By then YouTube had already amassed a huge audience and lead in video sharing. Three months earlier, Google had acquired YouTube for $1.65 billion.

"I think we can all acknowledge that YouTube has won the big prize," McInerney said then. "The billion-dollar opportunity has kind of passed."

Before that, Guba was among the first video-sharing companies to sign licensing deals with Hollywood studios. McInerney said that Guba was too small to compete against some of the bigger players that entered not long after, such as Amazon.com and Apple. Guba no longer offers feature films for download.

"We pretty much lined up every studio," McInerney said. "Later, we couldn't justify paying the guarantees that all the studios asked for...frankly, movie downloads on the Web haven't really taken off."

McInerney predicted that consumers will one day soon watch movies downloaded from the Web and that a handful of distributors will prevail over the sector. But he doesn't plan to give it another try.

"I like being an investor," he said. "You can still be involved by just writing a check, but you don't have to work 22 hours a day."

Shopflick: Get this! | Get your own Store!

June 11, 2008 12:45 PM PDT

Study: Display ad growth dips in the first quarter

by Stefanie Olsen
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The growth of Internet display advertising slowed in the first quarter of 2008 because of a weakened economy, according to a study released Wednesday.

Sales of Internet display ads rose 8.5 percent to an estimated $2.9 billion in the first three months of 2008, according to research firm TNS Media Intelligence. In contrast, sales of Web ads were $2.7 billion in the first quarter of 2007, up 16.7 percent from the comparable period of the previous year.

(TNS Media only estimates sales of display ads, excluding other forms of marketing such as paid search ads or sponsorships.)

Despite the slowing growth, Web ad sales are holding their own against the overall ad market expenditures and other traditional media such as cable TV (up 4.1 percent) and outdoor advertising (up 2.5 percent). Newspaper advertising sales were down 5.2 percent year over year. Overall, in the first quarter, total advertising sales rose only 0.6 percent over the estimated $35 billion in ad sales in the first quarter of 2007.

The news could foreshadow more bad news for the year, too. Jon Swallen, senior vice president of research at TNS media intelligence, said early figures from the second quarter show little improvement in the core ad economy.

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