Archive for April, 2009

What do Authors and Readers Think About the Google Book Settlement?

April 30, 2009

I am still mulling over this Google Book settlement deal.

Yesteday, a few readers on BusinessWeek TechBeat blog posted some comments in response to Rob Hof’s post. Admittedly, it is a very small sample (only four people) but most of the readers are in favor of the settlement.

Steve writes that it “seems to me like a no-brainer. So Google can profit from something they did. If the agreement says other companies can also scan books and profit from those scans, more power to them. No need for Justice to get their panties so much in a bunch.”

Chuck Gaffney says Google should of course get authors’ consent to license books but he compares publishers to the hidebound music industry and says they “are trying too hard to be conservative in fears of losing their already very, very deep pockets.”

I do think Google Books is sort of like a public service, which may one day turn into a profit stream for Google, but that still doesn’t mean Google should be given exclusive right over these orphan books that are out of print. That is a key issue that needs to be clarified. Other entities need to be able to access these texts at no cost.

Google argues that it has structured the deal so that it’s not exclusive to the company—that is, other groups could choose to scan books as well. But we need an independent arbiter to confirm and codify that principle. I know Google does no evil but let’s just get a judge to corroborate that before signing on.

Check out the other posts here.

Letter: Read the Terms of the Google Book Settlement Agreement

April 29, 2009

Today, the New York Times published a story reporting that the U.S. Justice Department has begun an inquiry into the antitrust implications of Google’s settlement with authors and publishers over its Google Book Search service.

The settlement, announced in October, gives Google the right to display the books online and to profit from them by selling access to texts and selling subscriptions to its entire collection to libraries and other institutions. Revenue would be split among Google, authors and publishers. But critics say that Google alone would have a license that covers millions of “orphan books,” whose authors cannot be found or whose rights holders are unknown.

The news gives me the perfect opportunity to weigh in on this issue from the perspective of an author. I am inclined to participate in the program, thereby forgoing my right to sue Google. The main reason is that listing your book in the Google index would make its existence known to lots of people, which would presumably boost sales. But I still have a few concerns.

Among them:
1. How much money could Google Books bring an author? That is one big unknown here. And it makes it hard to come to a decision without knowing the potential return on on a Google Books licensing deal.

2. Authors need more time to figure out the deal and its implications. On that note, I was happy to hear that this Tuesday Judge Denny Chin of Federal District Court in New York, who is overseeing the settlement, postponed by four months the May 5 deadline for authors to opt out of the settlement and for other parties to oppose it or file briefs. The decision follows requests by groups of authors and their heirs, who argued that authors needed more time to review the settlement. My colleague Rob Hof wrote on TechBeat that he expects Chin to take a month deciding whether the settlement should go forward.

3. Is there any way to make the program easier to understand and practice? I write about these issues for a living and I am having a hard time getting my head around all the structure and mechanics of the program. Apparently, authors need to create a user account in order to dictate what licenses they grant to Google. Yet I still have no idea where I would go to create that account or how that process works.

I look forward to hearing comments on this post, especially from other authors. I haven’t found a water cooler yet where authors are debating these issues. Perhaps my blog can serve as one little forum.

Here’s the copy of an email I got from my agent detailing the terms of the Google Book Settlement:

In response to the formation of Google’s Library Program, involving copyright-infringing activity, the Authors Guild has taken a class action against Google, resulting in a settlement and the intended creation of the Book Rights Registry, a subsidiary organization that will represent the interests of authors and publishers and will enforce the decisions of the Google Book Settlement and audit Google as necessary.

Google’s Library Program will contain books that are out-of-print (unless rights-holders say otherwise), not books that are currently in-print (unless rights-holders offer their inclusion), and with the exception of children’s/picture books, there will be no pictures included.

For out of print books that are included in the program, rights-holders may grant any of the following licenses if they choose to stay included in the program:

1. Public Access License – free online portal to view database of
out-of-print books, such as at a public library. However, it is a “see only” policy here, and if the pages are to be printed, there will be a per-page fee.
2. Preview License – (comparable to Amazon’s “Search Inside the Book”
feature) online preview of selected pages of the book (but is non-printable).
3. Outline Editions – not a pdf, download, or ebook – this is an
online-only edition that charges a price between $1.99 – $29.99 with a median price of $5.99. The book can only be viewed after purchase, and can be printed as well.
4. Institutional Subscriptions – Google can license institutions the
entire database for a flat fee/annual subscription. This is where they expect their greatest monetary results.

As the author, you will be entitled to receive $60 for each copyright infringement by making a claim to your work. Not all work has been infringed upon, but making a claim regardless of whether that’s the case or not, ensures that you will have credit in the Book Registry and will further protect your rights. As your agent, we will be able to make these claims on your behalf, but each client is encouraged to create an account in order to dictate which licenses to grant Google per each book or insert or inclusion in an anthology. Clients can change their elections at any point after making claims and activating their account. Clients can make the claims themselves or agents can make claims on behalf of their clients. The client will have to make the specific licensing elections if he/she decides to remain a part of the program, but the agent can file the claim on their behalf while still allowing the client to create an individual account on the Book Rights Registry online system to have control over their licensing elections (which are changeable at any point after setting up an account).

Please note that as clients, you also have the option to opt out of the settlement, retaining the right to sue Google separately. Please also note that in order for books to be covered in this settlement, they must have been published and copyrighted before January 5, 2009.

The money flow for books in the Google Library Program will be as follows:

- Out of-print, Reverted Rights = 100% to Author
- Out-of-print, No Reversion of Rights = 50/50 to Author/Publisher
- Out-of-print, No Reversion of Rights, Contract Pre-1987 = 65/35 to
Author/ Publisher
- In-Print, Chosen to License = Almost all cases, $ to Pub, Pub pays
Author per contract terms (can be exceptions, but for most part, split as decided in contract)
- Institutional Subscription = Google collects $, keeps 37% and passes
63% to the Registry. The Registry keeps 10-20% of the 63% (exact %
TBD) and the remainder is passed to the rights-holder.

Please let us know if you would like to participate in the program before April 10, 2009. If we do not receive a response from you by April 10, we will assume that your wish is inclusion in the program.

You will still be responsible for making your individual accessibility elections and maintaining your active online account with the Book Registry. If you would like to file the claim yourself and set up your account simultaneously, this must be completed before January 5, 2010.
Once you do this, you will have the freedom to change your elections and even to withdraw your book(s) from the program up until January 2011.

Should you have any questions about the settlement or the process outlined above, please visit http://books.google.com/booksrightsholders/ for further explanation, details, and directions.

[End]

Apple and Verizon in Talks Over New Devices

April 28, 2009

This morning, USA Today wrote a story reporting that Verizon was in talks with Apple about the “possible development of an iPhone for Verizon.”

That story attracted a lot of attention but I think the reporter, whom I respect, got the story wrong.

Here’s my take on what is going on between the two companies. Verizon and Apple are talking but not so much about the existing iPhone. Rather, talks are heating up about Verizon potentially distributing two new Apple devices under development. Here’s the top of the BusinessWeek story that we published around 7pm EST:

Apple, Verizon Wireless Discuss Devices
By Spencer E. Ante and Arik Hesseldahl

Verizon Wireless is warming to the idea of an Apple partnership. Verizon Wireless is in talks with Apple to distribute two new iPhone-like devices, BusinessWeek has learned. Apple has created prototypes of the devices, and discussions reaching back a half-year have involved Apple CEO Steve Jobs, according to two people familiar with the matter.

One device is a smaller, less expensive calling device described by a person who has seen it as an “iPhone lite.” The other is a media pad that would let users listen to music, view photos, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection. One of these devices may be introduced as early as this summer, one person says.

Click here to read the rest of the story.

Is Print Dead? Come See My TiE Panel

April 27, 2009

Good news: I am moderating a panel at the TiEcon 2009 conference in Silicon Valley on May 15. For those who don’t know, TiE is the world’s largest organization dedicated to entrepreneurship with membership spread across 48 chapters in 11 countries. TiE’s premier annual event is the largest convention in the world dedicated to entrepreneurs. Thousands of folks will be in attendance.

This year, the theme of the conference couldn’t be more timely: The BOLD Entrepreneur. So the event is all about looking for ways to build a business during tough times–a theme I’ve been wring about frequently the last few months.

See my panel info below:

PARALLEL SESSIONS -
Consumer Web – Is Print Dead?

Friday, May 15, 2009
10: 30 AM – 11:45 AM

Massive layoffs and bankruptcies. Reduced publishing and shifted web-print balance. Clustering, consolidations, and outright closings. All in 2008, the future of our greatest news sources is in flux. Are these brilliant opportunities disguised as insoluble problems? Our panelists will discuss and debate an issue that effects you at home and at work: what, if anything, can save the print industry?

TiE Host(s):
Suneel Gupta

Moderator:
Spencer E. Ante, Business Week

Panelist(s):
Sab Kanaujia, NBC Universal
Sumant Mandal, Clearstone Venture Partners
Alan Mutter
Robert Rosenthal, Center for Investigative Reporting
Mike Smith, Media Management Center – Kellogg

It’s Official: Owen Van Natta Named MySpace CEO

April 24, 2009

Notice how Jonathan Miller stressed that Van Natta will “guide MySpace through its next phase of growth.”

Seems to jive with previous post suggesting that MySpace may be shifting its strategy to emphasize growth over profit.

Here’s the release:

News Corporation Names Owen Van Natta Chief Executive Officer of MySpace
______________________

Los Angeles, CA, April 24, 2009 – News Corporation today announced the appointment of Owen Van Natta to the role of MySpace Chief Executive Officer effective immediately. Mr. Van Natta will be based in Los Angeles and report directly to Jonathan Miller, News Corporation’s CEO of Digital Media and Chief Digital Officer.

A highly-regarded digital executive, Mr. Van Natta, 39, previously served as Chief Revenue Officer and Vice President of Operations for Facebook, where he helped negotiate Facebook’s $240 million investment from Microsoft. Earlier, he served as Vice President of Worldwide Business and Corporate Development for Amazon.com. Most recently, he was the CEO of Playlist, Inc., an online music company.

“Owen combines a deep understanding of social networking, a keen business sense and the operational experience to guide MySpace through its next phase of growth. I’m confident his leadership will be an invaluable asset,” said Mr. Miller. “I plan to work closely with Owen to shape our long-term vision around this vibrant community that already attracts more than 130 million users worldwide.”

“I’m thrilled to have the privilege to pilot MySpace in what is sure to be an incredibly exciting and rewarding next chapter for the business,” said Mr. Van Natta. “I feel honored to build upon the immeasurable achievements of the MySpace founders and look forward to working with Jon and the MySpace team to meet the challenges and make the most of the opportunities before us.”

While serving as Vice President of Operations and Chief Revenue Officer for Facebook, Van Natta focused on revenue operations, business development, strategic partnerships and technical operations. As Vice President of Worldwide Business and Corporate Development at Amazon.com, he managed global marketing programs and strategic partnerships. He was also part of the founding team of A9.com, the Amazon.com search company, and was responsible for site operations and sponsored-link advertising. Owen earned a B.A. from the University of California at Santa Cruz.

No Silver Bullets @ MySpace: Sacking Chris & Tom Was Easy; Now What?

April 23, 2009

So the new surprising news is out that MySpace founders Chris DeWolfe and Tom Anderson are leaving the helm of the pioneering social network.

The two big questions here are: Why did DeWolfe and Anderson get pushed out of their executive roles? And what does this mean for the future of MySpace?

I don’t know for sure what prompted their departures but I suspect it had much to do with the April 1 appointment of Jonathan Miller as Chairman and Chief Executive Officer, Digital Media Group and Chief Digital Officer for News Corporation, reporting directly to Rupert Murdoch. Until Miller’s appointment, the buzz in tech and media circles was that News Corp probably wanted to retain DeWolfe and Anderson. After all, the two founders built up the site from nothing, creating the world’s largest social network in terms of revenue. Then Miller took charge and gave the two founders the boot.

Miller is clearly under pressure to pull some big and bold moves to help get MySpace back on a sustainable growth path. Sacking DeWolfe and Anderson is an easy first move, though I am not sure it is the wisest. In his new job, Miller was given control of Fox Interactive Media, including its primary asset MySpace, and News Corp’s interest in the Hulu online video site. He will also collaborate with operational heads and digital executives through all lines of business around the globe to develop and refine digital efforts.

Reports have said that Miller hadn’t been planning on getting rid of DeWolfe in the near future until TechCrunch reported this week that the company had hired a headhunting firm to look for possible replacements. But clearly Miller was not gung-ho on keeping the founding team in charge or he would have locked up that deal as soon as he took charge.

And now the bigger question: What is the future of MySpace? Getting rid of DeWolfe and Anderson is not going to solve its problems–and it may make them worse in the near term by sapping morale and spurring an exodus of managers who remained loyal to Chris & Tom.

The key issue for MySpace is strategic. Until now, MySpace had positioned itself as the anti-Facebook. While Facebook’s strategy is all based on maximizing user growth and rolling out translations of the site in every imaginable language, MySpace, as part of a publicly traded company, has been pursuing a more conservative tack of dialing back on growth to maximize profits.
Last November, MySpace head of international operations Travis Katz told me that the horse race wasn’t that important. Since about 85% of the world’s online ad spending is concentrated in five markets—the U.S., Britain, Japan, Germany, and France—Katz said we are “not worried about rolling out in every single country.”

If Miller does bring in former Facebook Owen Van Natta to head up MySpace, it suggests that the company may be shifting course and turning up the dial on growth. The risk, of course, is that by pursuing growth, the units profits and margins get crushed.

If Miller & Co. do not go for growth, then they will surely need to overhaul the company’s business model. The company’s hyper-targeting program for advertisers has helped but MySpace needs to find ways to generate sources of revenue other than advertising. Making matters more challenging, is the impending end of MySpace’s $900 million advertising deal with Google in the second quarter of 2010. If that deal is renewed, which is not a guarantee given Google’s disparaging comments about monetizing social networks, it is sure to be at a much lower rate.

So any way you look at it, it seems like it’s going to be another tough year for MySpace. The company is facing some hard decisions during a deep recession, and it just lost its two visionary anchors.

Can Oracle Make a Success of Sun?

April 21, 2009

I don’t know about you but I was pretty surprised when Oracle announced its intention to buy Sun Microsystems. It’s not just the thought that Sun’s business has been suffering from a slow and steady decline. It’s also the fact that Oracle has NEVER been in the hardware business. It’s a fairly radical move for a stand-alone software company to make a big bet on hardware. Most tech companies are moving in the opposite direction, dumping hardware assets and bulking up in software and services, a la IBM and Hewlett Packard.

But the more I think about it, the more this deal could actually make sense. For one, Sun is a software company, and many of its most valuable assets are in software. Namely, the Java programming language and the Solaris operating system. Moreover, by buying Sun, Oracle scoops up the number one rival in its core database business–open source database provider MySQL. This shrewd counter-attack alone may justify the price of the deal. Lastly, with Java under its wing, Oracle gets more leverage over IBM, which over the years has made a big investment in Java to counter Microsoft, and can offer more integrated technology solutions to its customers.

Still, Oracle has to overcome three main challenges to make this deal a success, as my colleague Aaron Ricadela noted in his story today. One, Oracle has got to find a way to wring more money out of Java without alienating its customer base. Two, Oracle needs to prove it can run a hardware business. Three, it has to do some pretty nifty financial engineering, including a massive layoff of more than 10,000 people, to make the numbers work over the long term.

As one top tech CEO told us recently, Sun will be an accretive deal for the first 18 to 24 months, thanks to the cost cuts that can be made. But the real challenge will come after when those gains run out, and the server business continues to decline.

Slightly Down is the New Up: My CNBC Power Lunch Appearance on Tech Earnings

April 20, 2009

Check out a video of my appearance on Power Lunch today. And see one of the funniest plugs ever of my book, courtesy of CNBC anchor Bill Griffeth, who also just published a paperback version of his own book By Faith Alone. Congrats Bill!

Click here to see the video. Sadly, WordPress does not support flash-based video players. So I can not embed the video on my blog.

Silicon Valley Rallies Behind Obama’s CTO Pick

April 20, 2009

Over the weekend I did some more reporting about the new U.S. chief technology officer Aneesh Chopra. Here’s my revised story showing that Silicon Valley is rallying behind this Easy Coast outsider.

Silicon Valley Rallies Behind Obama’s CTO Pick
As secretary of technology, Aneesh Chopra expanded Virginia’s high-speed Internet. He now stands to become U.S. Chief Technology Officer

By Spencer E. Ante

For all of its attributes as the world’s epicenter of innovation, Silicon Valley remains an insular region in some ways. But that hasn’t stopped many technology leaders from rallying behind President Barack Obama’s surprising choice for the nation’s first Chief Technology Officer: Virginia Secretary of Technology Aneesh Chopra.

Chopra was educated on the East Coast and has never worked for a California tech stalwart or startup. But giants such as Google, industry trade groups such as TechNet, and top Valley luminaries such as Intel Chairman Craig Barrett and prominent blogger Tim O’Reilly are applauding the 37-year-old Indian-American as a superb choice for the nation’s top technology czar. Chopra has the chops, say Valley veterans, to have an impact.

“Aneesh Chopra is one of technology’s leading lights and we are lucky to have him as our nation’s Chief Technology Officer,” said Intel’s Barrett in a written statement. “Aneesh demonstrated outstanding leadership as Virginia’s secretary of technology and believes to his core that innovation and technology are the backbone of our economy.”

Click here to read the rest of the story.

Aneesh Chopra: A Smart if Unlikely Choice for U.S. CTO

April 18, 2009

Here’s the top of the post wrote for BusinessWeek’s TechBeat blog:

On Saturday morning President Barack Obama announced a surprising choice for the new position of U.S. chief technology officer: Virginia Secretary of Technology Aneesh Chopra. “In this role, Aneesh will promote technological innovation to help achieve our most urgent priorities – from creating jobs and reducing health care costs to keeping our nation secure,” said President Obama in his radio address.

I have never met Chopra in person but I did interview the 37-year-old Indian American at length recently for a story I co-wrote reporting that states such as Virginia are going to aggressively seek federal broadband stimulus funds. And I have to say that he impressed me as a thoughtful and smart public servant who knew what he was talking about and was making things happen. I know the tech cognoscenti was hoping that the President would tap a high-profile person from Silicon Valley. But Chopra may very well have the chops to get the job done.

Click here to read the rest of the post.


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