Securities and Exchange Commission regulators on Monday filed civil fraud charges against eight former AOL Time Warner executives over allegations they overstated the Internet company's advertising revenue in excess of $1 billion.
The lawsuits, filed in U.S. District Court for the Southern District of New York, allege John Michael Kelly, former CFO of AOL Time Warner; Steven E. Rindner, a former Business Affairs unit senior executive; Joseph A. Ripp, former CFO of the AOL division; and Mark Wovsaniker, former Accounting and Policy head, created a fraudulent scheme where AOL Time Warner funded its own advertising revenue by giving purchasers funding to buy their own online advertising. That, in turn, allegedly created fraudulent transactions at the media titan between the mid-2000 and mid-2002 period, according to the SEC statement.
The SEC also filed a lawsuit against David M. Colburn, former head of AOL Time Warner's Business Affairs unit; Eric L. Keller and Jay B. Rappaport, former senior managers in the same unit as Colburn; and James F. MacGuidwin, former controller, over allegations the group artificially inflated the company's reported online advertising revenue. These four executives, however, reached a settlement with the SEC.
Under the settlement, all four will pay disgorgement and pre-judgment interest, as well as civil penalties. The total fines and penalties these four executives will pay will reach nearly $8.1 million.
The lawsuits come more than three years after Time Warner agreed to pay a $300 million civil penalty, stemming out of a similar SEC investigation. That agreement called for the company to restate $500 million in advertising revenue for the two-year period ending mid-2002.
Rupert Murdoch is admitting that the U.S. economy's pressure on advertising budgets is putting the squeeze on News Corp.
News Corp. Chairman and CEO Rupert Murdoch is optimisitic about Fox Interactive Media's revenue outlook in fiscal 2009.
(Credit: Dan Farber/CNET News.com)News Corp.'s Fox Interactive Media, which oversees all News Corp. Internet business, including MySpace.com, is expected to fall $100 million short of its ambitious $1 billion annual revenue goal, according to a Reuters report. While on News Corp.'s fiscal third-quarter earnings conference call, however, the News Corp chairman and chief executive reportedly called FIM's business "very healthy" and promised "well over" $1 billion in revenue in fiscal 2009.
"There's no doubt the consumer economy is stressed," Reuters quoted Murdoch as saying. "You're seeing it affected in advertising, more short-term planning, and booking."
In addition to MySpace, other FIM networks include Photobucket, IGN Entertainment, and Fox Sports.
News Corp. reported that its net profit rose to $2.7 billion, or 91 cents per share, in the quarter ended March 31, from $871 million, or 27 cents per share, in the year-ago period, according to Reuters.
Last month, FIM announced a restructuring that included the creation of an "Audience Network" unit that, according to a company statement, "will be to optimize monetization across FIM's content network and for third-party publishers," leveraging the company's ad technology that can target ads based on interests. The new unit combined advertising technology, ad operations, and performance sales efforts into one unit.
Here is the first third of CIOZone.com's list of the top 60 fastest-growing, public software companies with revenue of at least $150 million.
(Credit: CIOZone.com)CIOZone.com has ranked the top-60 fastest-growing (public) software companies of at least $150 million in revenue, with VMware leading the pack and Red Hat claiming 12th place with a 33.6 percent growth rate. Not bad for a company that gives away its software for free.
But then, perhaps it's not surprising since Google, ranked second on the list, largely does the same.
What's most impressive in the list, however, is the growth rate being sustained by Oracle and Microsoft, because they're growing from a much larger base. It's fantastic that Red Hat is growing at 33 percent on a ~$500 million base. But Microsoft is growing by 25.7 percent on a $57 billion base, and Oracle is rising 24.9 percent on a $20 billion base.
That's amazing.
For smaller companies (more than $50 million in sales and less than $150 million), Omniture (Utah-based - hurray!) leads the pack with a 79.5 percent growth rate on a $143 million base. Not too shabby.
While the list is predominately comprised of proprietary-software companies, CIOZone points out that these vendors are succeeding precisely because they, too, are changing the game from a proprietary license model to a subscription model:
Software that increases the efficiency of corporate data centers, or that runs as an Internet-delivered service, is on a roll. Most of the fastest-growing software companies are doing one or the other....
While it was a good year for many software vendors, it was particularly good for companies that have discarded the older paradigm of install-and-maintain and are making their products available as online subscriptions.
This bodes well for open-source companies, for two reasons. One, many SaaS companies depend on open source (and will pay for it) to run their businesses.especially as an increasing number operate with a dual-mode model wherein they make their software available as an open-source download, with a pay-for-SaaS model to complement that. Kaltura, Loopfuse, and others are adopting this model, and I think it promises to be a highly profitable model for those that can pull it off.
Revver, a video-sharing site trudging along in YouTube's shadow, announced Wednesday that the company paid $1 million to videographers over the past year.
Los Angeles-based Revver, among the first Web sites to share advertising revenue with video creators, paid the money to 25,000 people, the company said in a press release.
Because Revver splits ad money with creators, 50-50, Nick Gonzalez at TechCrunch figured that the company makes around $2 million to $2.5 million from advertisers.
He also suggested that the figure could be lower if Revver pays more to high-end video makers.
Dell released preliminary earnings Thursday showing positive signs in its servers unit, but announced it would lay off 10 percent of its workforce over the coming year.
Net income for the quarter ended May 4 totaled $759 million, or 34 cents per share, a slight dip from the same quarter last year, which came in at $762 million and 33 cents per share. The numbers still surpassed Wall Street's expectations of 26 cents per share.
Gross margins grew to $2.8 billion, up from $2.4 billion a year ago, and operating income was down slightly to $947 million from $949 million, which Dell attributed to higher average selling prices and a better mix of products and services. Revenue for the first quarter of Dell's fiscal year was $14.6 billion.
With a current worldwide workforce of 88,000, approximately 8,800 employees will be let go over the next year as Dell tries to trim costs. The staff reductions will "vary across regions, segments and functions," according to Dell spokesman David Frank.
A bright spot was Dell's server segment, which topped all of the company's businesses with 19 percent growth from a year ago. Notebook revenues were up 7 percent and desktops declined 6 percent.
Dell has been attempting to turn itself around in the last year after losing its lead as the world's largest PC maker to Hewlett-Packard in 2006. It's seen heavy turnover in leadership, including the return of founder Michael Dell as chief executive, replacing Kevin Rollins.
The company's traditional direct sales model will also be tweaked slightly to compete better with HP and others. Last week, the PC maker announced that it will sell two of its desktop models at Wal-Mart.
Dell is also in the middle of an SEC investigation into its accounting practices. In its earnings announcement, Dell said it has incurred $46 million in costs related to the federal probe. The investigation is ongoing, preventing the company from filing anything more than preliminary reports for the previous three fiscal quarters. For the same reason, Dell has declined to hold the traditional earnings call with analysts and the media.
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