Yahoo revenue hit by management shuffle

Yahoo's second-quarter revenue slumped as the company coped with higher-than-expected numbers of its sales staff bolting after a reorganization in the division.
The company shifted leaders in its U.S. sales staff, which also triggered changes in its field sales organization. Yahoo Chief Executive Carol Bartz said that those changes led to departures within the division, leaving the company understaffed toward the end of the quarter.

"We underestimated how much the changes would increase turnover," Bartz told analysts today during a conference call after the earnings were released.
With diminished sales staff, Yahoo simply didn't have enough workers selling premium display ads to its biggest customers. Instead Yahoo sold lower-priced ads on its most trafficked sites that didn't generate as much revenue as the company could have.
"We didn't have enough salespeople in front of big clients," Bartz said.
The Web giant posted second-quarter revenue excluding traffic acquisition costs of $1.08 billion. That was a bit below analyst expectations of $1.11 billion. It's also a 5 percent decrease from the second quarter of 2010.
Chief Financial Officer Tim Morse said that the sales force change led Yahoo's sales of display ads to come in $40 million below expectations. For the quarter, Yahoo display revenue excluding traffic acquisition costs climbed just 5 percent to $467 million.
And Morse noted that Yahoo had the inventory to sell the premium ads. The company said the royal wedding in April set one-day traffic records with more than 400 million page views, making Yahoo the Web's top royal-wedding site. News of the death of Osama bin Laden also meant huge business for Yahoo, generating nearly 900 million page views on Yahoo News, 50 million video streams, and 500 million photos viewed in the first week after the military assault.
"By and large, ad supply wasn't an issue," Morse said. "We had ad inventory to sell at premium rates."
Yahoo also continues to struggle with Microsoft's adCenter technology, the system for buying and delivering online ads. In the quarter, Yahoo search revenue excluding traffic acquisition costs fell 15 percent to $371 million. The agreement with Microsoft also led Yahoo to post revenue per search below expectations in the first quarter.
Bartz pointed to "technology limitations" in adCenter. She said the companies continue to work to improve the system, but that they have only closed one fifth of the gap in revenue per search from the amount Yahoo's previous ad platform generated to the amount adCenter is producing for Yahoo today. Yahoo is protected some by revenue guarantees from Microsoft. But those are set to expire next year. Bartz said the company expects to close the rest of the gap before the guarantees go away.
Yahoo fared better at its bottom line. Net earnings for the quarter hit $237 million, up 11 percent from the year-ago period. And earnings per share came in exactly at consensus analyst expectations--18 cents a share, up 18 percent.
Bartz also addressed the ongoing soap opera related to the spinoff of one of the jewels in its portfolio, the Chinese online payments group, Alipay. Shareholders have been concerned that Yahoo--which owns 43 percent of former Alipay parent, the Alibaba Group--might not be getting fairly compensated for the spinoff.
Bartz said the negotiations are complex. Yahoo lawyers are poring over multiple agreements that run several hundred pages.
"We've been working on this agreement continuously, in fact, daily," Bartz said.
Today's earnings release came after the markets closed, and Yahoo shares fell almost 2 percent to $14.32 in after-hours trading.

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Google's Schmidt vows to defend HTC

Google Executive Chairman Eric Schmidt says his company will support key Android partner HTC in its patent fight with Apple.

Google Executive Chairman Eric Schmidt

(Credit: Stephen Shankland/CNET)

Schmidt, speaking at a Google mobile conference in Tokyo today, expressed confidence that HTC will ultimately prevail over Apple, ZDNet Asia reports.
"We have seen an explosion of Android devices entering the market and, because of our successes, competitors are responding with lawsuits as they cannot respond through innovations," he said. "I'm not too worried about this."
When asked about potentially providing financial support should HTC lose, Schmidt said: "We will make sure they don't lose, then."
Schmidt declined to provide details on how Google will aid the Taiwanese smartphone maker. But Schmidt's support provides some reassurance following an initial legal victory for Apple against HTC and, by extension, all other Android OS smartphone partners.
On Friday, a U.S. International Trade Commission administrative law judge issued an initial ruling that HTC violated two key patents owned by Apple. The decision was a blow to HTC, dragging its stock to a six-month low in Taiwan trading yesterday and raising uncertainty about the company.
If the ITC's full panel makes a final decision that goes against HTC, the company could face a ban on importing its smartphones. The bans rarely take effect; the companies typically come to a settlement before any action is taken.
More importantly, the two patents are seen as crucial to Android and could potentially affect other handset manufacturers. Samsung Electronics is already in a patent fight against Apple.
HTC has said it plans to appeal the initial judgment, although legal experts say overturning an administrative law judge's ruling is rare. The company also plans to make an appeal to the six-person panel that will make the final ruling.
The company has also taken steps to defend itself, spending $300 million to buy S3 Graphics and its collection of patents. Apple is in violation of patents owned by S3, according to a separate initial ruling from the ITC.
In cases where both companies own valuable intellectual property, a cross-licensing agreement is typically reached. In the past, legal adversaries Qualcomm and Broadcom struck deals after the ITC decision forced their hands.

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Facebook bans Google+ ad

ngenuity is surely something to be admired. Commercial ingenuity is something to be revered.
Sometimes, though, it seems that certain tech companies only revere their own ingenuity. That seems to be the case with Facebook, which, as reported by TechCrunch's Erick Schonfeld, has removed a piece of fine commercial ingenuity from its site.
App developer Michael Lee Johnson, conscious of the need to be big on Google+ or be nobody, wondered what the best way to levitate his Google+ circles might be. He hit upon a fine idea: he placed an ad on Facebook. It was a simple thing that was headlined: "Add Michael to Google+."
The copy read: "If you're lucky enough to have a Google+ account, add Michael Lee Johnson, Internet Geek, App Developer, Technological Virtuoso."
If those words weren't enough to persuade Facebook users that Johnson was a must for their Google+, he added a fine picture of himself wearing a jaunty cap.

The offending ad

(Credit: Screenshot: Chris Matyszczyk/CNET)

You're not guessing what happened with the ad, are you? You know what happened, don't you? Facebook didn't, according to Johnson, merely erase this heinous horse of Troy from its pages. It reportedly banned all his other campaigns too.
The message he received read as follows: "Your account has been disabled. All of your adverts have been stopped and should not be run again on the site under any circumstances. Generally, we disable an account if too many of its adverts violate our Terms of Use or Advertising guidelines. Unfortunately we cannot provide you with the specific violations that have been deemed abusive. Please review our Terms of Use and Advertising guidelines if you have any further questions."
Because my life's purpose is to be helpful, I scanned Facebook's Terms of Use and Advertising just to see what specific clause might have been besmirched by Johnson's chutzpah.
Perhaps it was Clause 11 in the "Special Provisions Applicable to Advertisers" section: "You will not issue any press release or make public statements about your relationship with Facebook without written permission." Johnson had shamefully declared on Google+ that he was placing the ad.
Perhaps it was Clause 4d of Facebook's Advertising Guidelines: "Ads cannot insult, harass, or threaten a user." He was, some might say, harrassing and insulting Facebook loyalists by his mere suggestion that there might be another place to socially network.
Or perhaps Facebook, its nose feeling tweaked, merely decided to reach for 6a of the same Advertising Guidelines: "We may refuse ads at any time for any reason, including our determination that they promote competing products or services or negatively affect our business or relationship with our users."
Still, ejecting all of Johnson's campaigns seems a touch cruel. Perhaps Johnson will consider an action against Facebook for emotional distress and, well, damage to his reputation.
This he will have to place, so Facebook's Statement of Rights and Responsibilities tells me, in a court in Santa Clara County. For now, Johnson's only public statements have been: "LOL." Oh, and "Facebook. You Suck."
1,460 people currently have Johnson in their Google+ circles. I cannot find Google+'s No. 1 personality, Facebook CEO Mark Zuckerberg, among them.
(Facebook did not respond to a request for comment by publication time.)

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Hackers target Murdoch newspaper Web site

The LulzSec hacker group has turned its sights on Rupert Murdoch's U.K. newspaper The Sun, hacking the site to direct visitors to a fake article claiming the media mogul had died and releasing information on journalists.
The group announced on Twitter that "The Sun's homepage now redirects to the Murdoch death story on the recently-owned New Times website. Can you spell success, gentlemen?"
The New Times site was inaccessible this afternoon, but screenshots captured before it was taken off line show a headline that says "Media Moguls Body Discovered" and a story that said Murdoch had taken a large quantity of palladium, a metal that resembles platinum.
"Officers on the scene report a broken glass, a box of vintage wine, and what seems to be a family album strewn across the floor, containing images from days gone by; some containing handpainted portraits of Murdoch in his early days, donning a top hat and monocle," the fake news article said in an obvious reference to the LulzSec mascot.

Meanwhile, The Sun site later redirected to LulzSec's Twitter feed.
LulzSec also tweeted the name and phone number of a Sun online editor and two others associated with the company and encouraged followers to call them. And a LulzSec associate, Sabu, posted in a tweet what looks like an old e-mail address and password for Rebekah Brooks, former Sun editor and ex-chief executive of News International, which published News of the World before it shut down earlier this month over the allegations. Brooks resigned from News International last week and was arrested over the weekend. She was an editor at News of the World when mobile phone voice mail hacking allegedly occurred.
News International had released a statement earlier in the day, but the page redirected to LulzSec's Twitter feed, at least temporarily before being inaccessible. "So News International released this AMAZING statement on The Sun: http://newsintco.uk/statement_regarding_the_sun.html/ We improved it for them though!" the hackers said in a tweet, followed by: "Oh, we forgot to mention that we sailed over to News International and wrecked them too. Nearing 300,000 followers...full steam ahead!" The News International site was indeed inaccessible this afternoon.
Murdoch's media empire is embroiled in a scandal in which journalists and others working for the now-defunct News of the World allegedly hacked into mobile phone systems to listen to voice mails of news subjects, including celebrities, members of the royal family, murder victims, soldiers killed in Iraq and Afghanistan, and people who died in the September 11, 2001, terrorist attacks.
Spokespeople for News Corp., parent company of The Sun and News International, did not immediately respond to phone messages and e-mails seeking comment.
Earlier today news came out that a former News of the World journalist turned whistleblower had been found dead of unknown causes. The Guardian reported that Sean Hoare, who had been dismissed from News of the World, had been found dead in his home last night.
Hoare had told The New York Times last September that Andy Coulson, an editor at News of the World, had not only known about the phone hacking but had encouraged it. Hoare also had told told The New York Times that the newspaper paid police to help locate people by using location-tracking technology in their mobile phones that communicates with cell phone towers. Coulson, who denied the allegations at the time, resigned from the newspaper after a journalist there and a private investigator hired by the paper were convicted of phone hacking and went on to become the communications director for British Prime Minister David Cameron. Coulson resigned in January amid renewed media coverage of the scandal.

LulzSec boasted about their hack on Murdoch newspaper The Sun in a tweet.

Public outcry has intensified since The Guardian reported two weeks ago that the private investigator who served time in jail for an earlier hacking case involving the News of the World may have interfered with a police investigation of a missing 13-year-old girl by breaking into her cell phone and deleting voice mail messages before she was found dead in 2002. The allegations have widened to include phones belonging to the families of two other child murder victims and a "handful" of the 52 families who lost loved ones in the 2005 London bombings, among others. The News of the World also is accused of bribing police to divulge classified information about Queen Elizabeth II, Prince Charles, and other members of the royal family, and of voice mail and bank account of former British Prime Minister Gordon Brown and medical records of his son, a charge newspaper executives have denied.
News Corp. is considering promoting Chief Operating Officer Chase Carey to replace Murdoch, Bloomberg reported today. Meanwhile, Murdoch, Brooks, and Murdoch's son, James, who is deputy chief operating officer of News Corp., are scheduled to appear before a Parliamentary hearing on Tuesday to answer questions about the matter.
The news of Hoare's death and other News Corp. scandal headlines may have lured LulzSec out of pseudo-retirement. The group had announced it was calling it quits June 25 but has been working with another loosely organized group of activists, Anonymous, on various attacks on corporate and government Web sites under the AntiSec banner. (Those hacking attacks are included in this chart.)
"Thank you for the love tonight," LulzSec tweeted. "I know we quit, but we couldn't sit by with our wine watching this walnut-faced Murdoch clowning around."
Earlier, the hackers tweeted this taunt: "Arrest us. We dare you. We are the unstoppable hacking generation and you are a wasted old sack of shit, Murdoch. ROW ROW FIGHT THE POWER!"
Updated 6:18 p.m. PT with more details and background on the phone hacking scandal and repercussions and late LulzSec tweets, and reports of release of Sun employee data.

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Firefox world loses Web dev guru to Chrome

For years, an extension called Firebug has been a powerful tool that kept Web programmers loyal to Firefox.
But now, as browser makers add their own tools geared to attract those who build Web sites and applications, the lead Firebug programmer has taken a job with Chrome, CNET has learned.

"Monday, I start work on next-gen Web dev tools at Google on the Chrome browser team. Consequently I will no longer be contributing routinely to the development and maintenance of Firebug for Firefox," John J. Barton told members of a Firebug mailing list yesterday.
The change reflects the new rules of the browser market in which Firefox no longer holds such a central location.
Firebug was dominant in the days when Mozilla's Firefox was the dominant challenger of Microsoft's Internet Explorer, but now the browser market is as competitive as it's ever been. Chrome is steadily gaining usage share at Firefox's expense. On top of that, the use of mobile browsers is exploding, and the scope of what people do with a browser has expanded tremendously.
Web programming is a hot area as the era of static Web pages gives way to the era of dynamic Web applications with animated elements, interactive user interfaces, and heavy-duty software written in the JavaScript language. That makes the task of creating developer tools harder.
Barton had been an IBM employee. IBM made Firefox its default browser a year ago, a major endorsement for the open-source browser, but evidently IBM's priorities don't extend as far as Firefox these days.
"I think our current drive to re-architect Firebug is on the right track, but I could not obtain another year of support from IBM to contribute to that work," Barton said.
Web developer tools in browsers are under rapid development as browser makers court Web programmers. Chrome has its suite of developer tools. Apple's Safari has its Web Inspector and other tools. IE has the F12 developer tools. Firefox has a developer tools group, too.
Firebug is an elaborate extension for Firefox. But it's been a lot of work at times to keep Firebug updated as new versions of Firefox arrived. That was the case two years ago when Mozilla was trying to turn the new-version crank faster, and it's even more the case now that Firefox is fully engaged in Mozilla's new rapid-release program for Firefox.
Thus, Barton described Firebug's present challenges:

Working on Firebug with this great group of contributors was fun and I believe we had a tremendous impact on the Web over the years when Firebug was the only decent Web debugger
Now all of the browsers have (or will soon have) their own debuggers. Basing next gen work on Firebug is not practical. The pace of change in browsers is too fast for our team size. Firebug hasn't really been able to keep up with Firefox, let alone compete with other tools. Moreover, the shift from desktop to mobile and from one high-tech browser (Firefox) to three or more requires additional development effort."

Dion Almaer, who had worked on developer tools at Mozilla earlier in his career, noted the significance of Barton's new job in a blog post today.
"Firebug used to be the way you debugged your sites, but that is changed," Almaer said. "It is too early to claim that Firebug is zombied, but all eyes will be on that...especially as we see other browser tools continue to blossom."

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