Google co-founder Sergey Brin participates in a panel discussion in Mountain View, California February 9, 2010.

Credit: Reuters/Robert Galbraith

SAN FRANCISCO (Reuters) - Google Inc said on Friday it was the target of an investigation by the Texas Attorney General’s office into the fairness of its search engine rankings.

The world No. 1 search engine company said the probe is the first by a U.S. legal authority into the fairness of its rankings, which can make or break commercial websites.

Google faces a similar probe by the European Commission, prompted by complaints from some small websites that felt they were unfairly hurt by low Google search rankings.

Texas Attorney General Greg Abbott has asked for information about complaints from a number of companies, Google said on its website. Google specifically mentioned websites operated by Foundem, TradeComet and myTriggers as challenging its results, saying they competed with the search giant.

A spokeswoman for the Texas Attorney General confirmed the probe, but would give no further details. Google said it looks forward to answering questions from the Texas attorney general.

"We recognize that as Google grows, we’re going to face more questions about how our business works," Deputy General Counsel Don Harrison said in a blog post. Harrison was not available for further comment.

In its statement on Friday, Google pointed out that two of the companies are represented by attorneys who also work for Microsoft Corp, which has publicly encouraged companies to challenge Google’s business practices. Microsoft did not immediately respond to a request for comment.

TradeComet CEO Dan Savage said in an email that Google is trying to "distract from its own antitrust problems by pointing to others and their lawyers."

A myTriggers spokesperson added that its concern "is just the harm to myTriggers done by Google’s anti-competitive conduct and bullying tactics."

Foundem did not respond to a request for comment.

PRIVACY SUIT SETTLED

Separately, Google has settled a federal lawsuit accusing it of privacy violations in connection with its Buzz social networking service, according to a court document filed on Friday.

To settle the lawsuit brought by a Gmail user, Google will set aside $8.5 million for attorneys fees and donations to organizations focused on Internet privacy, according to the court filing.

In addition, "the settlement requires that Google undertake wider public education about the privacy aspects of Buzz," the filing said.

Launched in February, Buzz initially used an individual’s email contacts from Google Gmail to build a social network of contacts that the rest of the world could see, which led to privacy concerns. Google then changed the settings so that contacts were kept private by default.

The settlement filing comes as Google also said it would simplify and update its privacy policies, according to Associate General Counsel Mike Yang on the company’s website (here).

The case is: In Re Google Buzz User Privacy Litigation, 10-cv-00672, U.S. District Court, Northern District of California, San Francisco.

(Reporting by Dan Levine; Editing by Matthew Lewis, Leslie Gevirtz and Richard Chang)

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Apple’s big reveal

Wed, Sep 1 2010

• Apple’s serious move into TV

1 / 23

Apple’s new iPod Shuffle (top to bottom), iPod Nano and iPod Touch, are displayed at Apple’s music-themed September media event in San Francisco, California September 1, 2010.

Credit: Reuters/Robert Galbraith

SAN FRANCISCO (Reuters) - Apple Inc unveiled a smaller, cheaper version of its Web-to-TV device on Wednesday, stepping up a battle with Google Inc and Microsoft Corp for control of the digital living room.

Apple co-founder Steve Jobs also rolled out a completely overhauled lineup of iPod media players and the latest version of iTunes, with a new logo that does away with the outdated image of a CD.

The new Apple TV device, which accesses content from the Internet and plays it on a TV, will sell for $99. It is a quarter the size of the original, which cost $229.

The 4-inch-square device allows users to rent TV shows for 99 cents and first-run films for $4.99. Earlier models, which allowed users to only buy shows, failed to find a major audience.

"Consumers are already terrified of hooking anything up to their televisions, so unless you can make it crystal clear why they should and make it super easy for them to do so, you’re limiting yourself to a niche market," said Avi Greengart, research director for consumer devices at Current Analysis.

The biggest shift to iTunes is the introduction of a social networking feature called Ping, which allows users to recommend songs to followers or their chosen circle of friends.

"It’s Facebook and Twitter meets iTunes. It’s a social network all about music," Jobs said at a presentation to unveil the products on Wednesday.

But the centerpiece of the event for reporters and investors was Apple TV, which the company introduced in 2006 but which never became a big hit.

Jobs once referred to Apple TV as a hobby, but made clear that the company is now ready to seriously focus on marrying the Web to TV, a combination that is also in the sights of some of the world’s most creative and deep-pocketed companies, including Google, Microsoft and Amazon.com Inc.

"They’re beginning to shift the paradigm for a very entrenched behavior," said Altimeter analyst Michael Gartenberg, who attended the event. "TV viewing hasn’t changed that much in 50 years. They’re trying to shift that behavior the way they shifted phone behavior."

Alongside renting TV shows and movies, Apple TV users will be able to stream content from video rental site Netflix Inc. Netflix shares closed 7.5 percent higher on Nasdaq.

Analysts were lukewarm toward the device, though some saw it as only a small, initial step in a much more ambitious plan.

Apple’s shares rose almost 3 percent, roughly in line with a broadly higher Nasdaq composite index.

"What they showed was an improvement from what they had before, but it’s not as far reaching as it could have been," said analyst Daniel Ernst of Hudson Square Research.

Others doubted whether users would pay to rent TV shows on top of their cable bill, and suggested TV networks would be wary of allying with Apple5.

"The content companies have to be careful not to destroy any of the value to their ecosystem because the cable bundle is really valuable and breaking apart content into individual pieces is risky," said Laura Martin, analyst Needham & Co.

Apple said it has struck rental deals with Walt Disney Co’s ABC and News Corp’s Fox. "We think the rest of the studios will see the light and get on board pretty fast," Jobs said.

Rival Google is taking a slightly different path with its latest offering of Google TV, which allows viewers to search and watch programs, DVR recordings and the Internet in one fell swoop.

Some new TVs will come Google TV-ready, though plans are in the works to market a separate stand-alone device in the fall. Google is working with the cable and satellite distributors.

Jobs spent most of his presentation on a snazzier line of its iPod, which dominates the music- and media-player market with 275 million units sold, but has suffered moderating sales in recent years. Jobs has turned his attention toward the iPhone and more recently the iPad, which became an immediate success when it was launched in April.

The company has revamped its product line ahead of the key holiday sales season. Jobs called it the "biggest change in the iPod lineup ever."

But Rodman & Renshaw LLC analyst Ashok Kumar said the new products wouldn’t stop his expectations for iPod sales to stop growing after this year as they will be cannibalized by sales of devices such as iPad and iPhone.

"We think this year the iPod category will peak and then start to decline," Kumar said.

The revised iPod shuffle has been updated to include playlists and buttons to navigate the volume, and is smaller than the previous model. Jobs said it would play 15 hours of music, and would come in five different colors at a price of $49.

The nano, the next model up, now includes FM radio and can hold 24 hours of music. It will be priced at $149 for the 8-gigabyte version or $179 for the 16-gigabyte model, Jobs said.

A third revised iPod model, the touch, will include a front camera and is thinner than the current model. It will be priced from $229 to $399 depending on storage, and will be available next week.

Apple stressed the FaceTime video chat function on the touch, and its ability to play games with advanced graphics, a move which puts the device in competition with existing mobile gaming devices such as Sony Corp’s PSP, Nintendo Co’s DS, and the soon-to-be released Microsoft-powered phones that will run some Xbox games.

(Writing by Paul Thomasch; Additional reporting by Jennifer Saba, Yinka Adegoke, Sinead Carew in New York, Alex Dobuzinskis in Los Angeles, Poornima Gupta in San Francisco; Editing by Richard Chang)

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A box from Amazon.com is pictured on the porch of a house in Golden, Colorado July 23, 2008.

Credit: Reuters/Rick Wilking

NEW YORK/LOS ANGELES (Reuters) - Amazon.com Inc has approached media companies with a proposal for a subscription service that gives users unlimited access to some television shows and movies over the Internet in a bid to rival Netflix Inc, two people familiar with the talks said on Tuesday.

The Seattle-based online retailer has approached media companies including Time Warner Inc, CBS Corp and Viacom Inc, these people say.

It is still not clear if the media companies would agree to Amazon’s proposals which are still at an early stage, according to one person familiar with the talks.

Amazon’s website already features a range of TV shows and movies in its video-on-demand section that are generally available for sale individually from $1.99.

But an Amazon subscription service would likely be similar to Netflix’s online streaming service which works in tandem with its DVD rental business.

Like Netflix most of the TV shows and movies available for streaming would be older because the media companies are wary of devaluing their content, said the same person familiar with the talks.

News of the Amazon proposal was first reported by the Wall Street Journal which said General Electric Co’s NBC Universal was also approached.

Amazon did not return calls seeking comment. CBS, Viacom Time Warner and NBC Universal declined to comment.

The Journal reported that in at least one version of Amazon’s proposal, subscriptions could be bundled with its existing Amazon Prime service immediately, giving the service a large number of built-in subscribers.

Prime is a service that offers members free 2-day shipping on most Amazon purchases for $79 a year.

The news comes as more companies try to boost their online TV businesses.

Hollywood studios and media companies are vying to boost their online businesses, in part to stem online piracy of their content and also because of the higher margins they receive on digital sales.

Apple Inc is expected to unveil the latest version of its Apple TV product on Wednesday. The new service is expected to offer TV shows for rent at 99 cents each. Bloomberg said the new service will feature Netflix’s online service. Netflix declined to comment.

Google Inc has also been eyeing a TV or movie subscription service for its YouTube website. It has had ongoing conversations with several studios in the last year as well.

At the same time, studios have reacted with some unease to the shift in distribution of movies and TV shows to the Web, given that they have lucrative deals with cable providers to air that content.

Last year, online sales and streaming of movies amounted to $300 million in the United States, and $340 million for TV shows, according to Adams Media Research.

NBC Universal, News Corp’s Fox Broadcasting and Walt Disney Co’s ABC network have collaborated to offer online streaming of shows at Hulu.com, but one of the fastest areas of digital distribution of Hollywood content has been Netflix’s online streaming service.

(Reporting by Dhanya Skariachan, Jennifer Saba and Yinka Adegoke; and Alex Dobuzinskis in Los Angeles; Editing by Ilaina Jonas, Matthew Lewis and Richard Chang)

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RIM avoids BlackBerry India blackout

Mon, Aug 30 2010

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BlackBerry Torch

A man tries to hold on to his umbrella as he walks past a Blackberry advertisement billboard in Mumbai August 30, 2010. Officials meet on Monday to decide whether to ban some of Research In Motion’s BlackBerry services, a day before the deadline runs out for the firm to give security agencies access to its secure data.

Credit: Reuters/Danish Siddiqui

NEW DELHI (Reuters) - Research In Motion will give India access to secure BlackBerry data beginning September 1, a government source said on Monday, leading New Delhi to put off a decision on whether to shut down the smartphone.

Concerned about militants using the BlackBerry or Internet to plan attacks, India is also pushing RIM, Google and Skype to set up local servers to allow full monitoring of their services.

Shares of Canadian-based RIM rose after the Indian Interior Ministry said the company had offered several ways to allow authorities to monitor BlackBerry communications. The government said it would check their feasibility over the next 60 days.

New Delhi had threatened to shut down BlackBerry email services by Tuesday unless RIM provided a workable way for the government to monitor the data. India has said it wants the means to fully track and read BlackBerry communications.

Indian officials have also expressed concerns over security threats from Internet-based messaging and other services from providers such as Google and Skype.

The Indian government had set a August 31 deadline for RIM to come up with a method to allow email monitoring and avoid a shutdown in the world’s fastest-growing mobile phone market. On Monday, a source said RIM provided an interim solution.

"They have given some access, which we will operationalize from September 1," said the government source, referring to RIM.

"They will have to provide full access to all communications that go through India. They will have to set up a server in India," the source said on condition of anonymity as he was not authorized to speak to the media.

A RIM spokesman based in India said the company had no immediate comment, while a spokeswoman at Google said the company was unable to comment as it had had no communication from the government.

Skype said it had also not received any directive from authorities in India.

BLACKBERRY’S REPUTATION

BlackBerry’s reputation is built on its system security and a compromise under pressure from governments could damage the device’s popularity with business professionals and politicians.

Apple Inc and Nokia, RIM’s two biggest smartphone rivals, may have the most to gain if India blocks BlackBerry services. Nokia said on Monday it will host an email server in India from November 5.

India is keen to retain its position as one of the world’s fastest-growing information-technology nations, and a BlackBerry ban would jeopardize its status. A shutdown would also limit the efficiency and productivity of Indian businesses that rely on the smartphone.

"It is a huge hassle, not only for the government itself, which uses the RIM service," said Avian Securities analyst Matthew Thornton.

"It’s not easy to take out all of your servers, put in new servers, take out all the different devices you have in the field, put in new devices. It’s a big hassle and a cost," he said.

RIM uses powerful codes to encrypt email messages as they travel between a BlackBerry and a computer known as a BlackBerry Enterprise Server (BES) that is designed to secure those emails.

RIM has said BlackBerry security is based on a system where the customers create their own key and the company neither has a master key nor any "back door" to allow RIM or any third party to gain access to crucial corporate data.

In addition to India, several other countries, most of them in the Middle East, have raised concerns that the BlackBerry could be used to aid terrorism or peddle pornography.

Saudi Arabia, fretful over services such as online pornography, has reached a deal with RIM on access to the BlackBerry Messenger instant messaging service, a consumer product that operates outside of the secure corporate domain. India has also reached a deal until November on Messenger service, according to government sources.

Kuwait and the United Arab Emirates have raised similar concerns, with the UAE setting an October 11 deadline for RIM.

Analysts see no easy fix to the standoff as RIM says it has no way of intercepting the data that countries want to access. RIM has denied media reports that say it provided unique wireless services or access to any one country.

A shutdown would affect about 1 million users in India out of a total 41 million BlackBerry users worldwide, allowing them to use the devices only for calls and Internet browsing.

RIM’s stock was up 54 cents, or 1.2 percent, at $46.53 on Nasdaq, and up 80 Canadian cents, or 1.8 percent, at C$49.15 on the Toronto Stock Exchange on Monday afternoon.

(Writing by Krittivas Mukherjee and Frank McGurty; additional reporting by Nicole Mordant in Vancouver; editing by Surojit Gupta, Jui Chakravorty, Michael Roddy, Peter Galloway and Rob Wilson)

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