News - Digital Media

A link to Amazon.com's MP3 store appears for the song used as the soundtrack for the latest "Where the hell is Matt?" video. Click image for a larger version.

(Credit: YouTube; Jennifer Guevin/CNET News)

Love that song in the latest "Where the hell is Matt?" video but have no idea what the hell it is? Wonder no more. Now YouTube will make it easier to identify songs and buy them instantly.

Google, which owns the video-sharing site, is adding "click to buy" links to thousands of video pages of YouTube partners, the company announced on its corporate blog Tuesday afternoon.

The idea is to make it easy for people to buy an MP3 or video game with the click of a mouse. The links appear just below the toolbox underneath a video, and link directly to the Amazon MP3 page or iTunes Store where people can buy the song. For video game trailers, YouTube will add links to buy the game from Amazon.

For those not interested in buying, the links will at least allow people to find out the name of an artist and title of a song playing as the soundtrack of a video they're watching.

For now, the service is only available to people in the U.S. And the only music company specifically mentioned in the announcement was EMI. But Google said this is just the beginning of a much larger project that will likely expand to include many more content partners and serve an international audience.

SAN FRANCISCO--RealNetworks on Tuesday failed to convince a district judge to lift a restraining order and allow the company to start selling RealDVD again until she learns from experts, including the court's, how the software functions.

That means RealDVD, which enables users to copy a DVD and store it on their hard drive, is unlikely to reappear in the marketplace for at least another month and perhaps longer. U.S. District Judge Marilyn Patel indicated she wouldn't be available for another hearing until after Nov. 17.

"I am extending the temporary restraining order because I'm not satisfied in the fact that this technology is not in violation," Patel said following the three-hour hearing. "There are serious questions about copyright violations. There are questions about violations of the (Digital Millennium Copyright Act), and violations of these companies' agreement."

Things haven't gone well for RealNetworks' efforts to launch RealDVD. Last week, an hour after RealDVD hit the market, the company filed a preemptive lawsuit against the top motion picture studios. RealNetworks wanted the courts to rule that the software didn't violate any laws.

The Motion Picture Association of America (MPAA) filed its own suit a few hours later and on Friday obtained a restraining order. Hollywood claims RealDVD violates the DMCA by circumventing the anti-copy protections on DVDs to enable consumers to copy movies. The software also violates RealNetworks' agreement with the DVD Copy Control Association (DVDCCA), the group responsible for protecting DVDs against piracy, according to lawyers for the MPAA.

The RealDVD Web site showed the service was unavailable on Sunday.

(Credit: RealNetworks; Jennifer Guevin/CNET News)

James DiBoise, RealNetworks' attorney appeared to get the better of the movie industry early on in the hearing. He told Patel that RealDVD enables consumers to copy a film, store it on a hard drive and does so without cracking any of the copy protections found on a DVD. There isn't anything in the company's agreement with the DVDCCA that prohibited what RealDVD does, he argued.

"There is nothing in the agreement that says a physical disc has to be playing in a physical drive," DiBoise said. "That's not our fault. You have to make certain that you go through the authentication process."

The MPAA's attorneys acknowledged that there isn't anything specifically written against what RealDVD does, but they argued that the law requires RealNetworks to stay within the parameters of what the contract authorizes. And what RealDVD does isn't authorized. Bart Williams, the attorney representing the MPAA attacked RealNetworks' claim that the software didn't remove some of the copy-protections.

The MPAA appeared to score points with Patel by pointing out RealDVD enabled consumers to make copies of movies they didn't own. Patel asked DiBoise whether people could make movies they owned and he said yes and it was legal under Fair Use. She asked whether the software allowed people who just rented a film to create and keep a copy. DiBoise responded: "Yes, but to watch it and not do anything else with it."

DiBoise implored the judge to lift the restraining order. He said RealNetworks anticipated that half the revenue RealDVD would generate would come between now and the holidays and that the order was causing serious financial harm to the company. On the other hand, sales of RealDVD wouldn't cause any significant hardship to the movie industry. He pointed out that there were lots of products available on the market that enabled people to rip movies.

Williams disputed this. He told Patel that not only would buyers of RealDVD have the ability to make unauthorized copies of the films they rented but the public would get the impression that this kind of software was legal.

In denying DiBoise's request to lift the restraining order, Patel chided RealNetworks for "rushing to market" before deciding the issues in court first, as the MPAA had suggested they do.

MySpace is partnering with HP to offer the ability for people to print directly from their MySpace profiles, the companies announced on Tuesday.

The integration, which will roll out in November, will allow members of the social network to click on an HP-branded "click to print" icon to print out their photos, blog entries, comments, and messages.

Eventually, MySpace members will be able to create personalized merchandise using the photos. There are about 4 billion images on the site, according to MySpace.

HP also has made Web-to-print partnerships with Facebook, Flickr and Windows Live Spaces.

MySpace is integrating HP technology into its Web site so members can print out text and images from their profile pages.

(Credit: HP/MySpace)

Despite an economic turndown, online advertising--and search in particular--is managing to keep its market intact, according to reports on Tuesday by an industry trade group and Wall Street analyst.

According to the Interactive Advertising Bureau, Internet advertising revenues rose 15.2 percent, to $11.5 billion during the first six months of the year, compared with the same period last year. And search advertising grabbed a larger piece of the share, accounting for 44 percent of the market--up 3 percentage points.

Search advertising generated nearly $5.1 billion during the first half of the year, up 24 percent from a year ago. Display advertising, meanwhile, also grew at a double-digit pace of 19 percent to $3.8 billion over the course of the first half of the year.

Here's how Internet ad revenues broke down by advertising format for the first six months of 2008. See below for additional charts.

(Credit: Interactive Advertising Bureau)

But what about the third quarter and the market meltdown during the early days of the fourth quarter?

Two players in online advertising say conditions are remaining stable, according to a Tuesday report by JPMorgan analyst Imran Khan.

Search engine marketing (SEM) companies such as Didit and Reprise Media report that third-quarter search budgets were up, mainly due to a shift from more traditional marketing to search advertising.

Didit.com, which manages 100 accounts, with an annual advertising budget of $150 million to $200 million, and Reprise Media, which has 80 clients, with a minimum ad spend of $100,000, report that their respective customer bases increased their search advertising budgets by anywhere from 3 percent to 7 percent in the third quarter, compared to the previous quarter.

And these advertising companies noted that one of the contributors was the emergence of new categories for search advertising, such as pharmaceuticals and entertainment.

Khan, in his research report, noted:

We feel comfortable with our U.S. search-advertising revenue estimates. As we are seeing our thesis of increased performance-based online ad spend play out, we are comfortable with our 2008 U.S. search-advertising revenue growth estimate of 27 percent year over year. We also feel that our (third quarter) estimate for low-single-digit sequential U.S. revenue growth at Google is achievable.

Additional charts from the Interactive Advertising Bureau

This chart shows how second-quarter Internet ad revenue has grown (or not) over the last decade.

(Credit: Interactive Advertising Bureau)

Here's a look at how Internet ad revenue has grown over 20 of the last 23 quarters.

(Credit: Interactive Advertising Bureau)

This chart breaks down Internet ad revenues by major industry category for the first half of 2008 (light blue), compared with the first half of 2007.

(Credit: Interactive Advertising Bureau)

Shares of SAP and Google continued their downward trek, as Wall Street weighed in Tuesday with earnings cuts.

Google's shares dropped as low as 5.6 percent in intra-day trading to $350.26 a share, following a 2008 and 2009 estimated earnings cut and lowered price target offered by Stifel Nicolaus analysts. And SAP, which saw its shares pummeled Monday after issuing a warning its third quarter was not shaping up as anticipated, suffered a further decline as analysts cut their earnings estimates.

SAP, an enterprise software behemoth, had its price target reduced to $35 a share from $45 a share by Patrick Walravens, a JMP Securities analyst. He also reduced his SAP earnings estimates to 1.81 euros ($2.47) per share from 1.90 euros ($2.59) per share for 2008, and his 2009 forecast to 2.14 euros ($2.92) from 2.18 euros ($2.97) per share.

Walravens noted in his SAP research note:

While the valuation is getting interesting, we still have several concerns. First, one industry source suggested to us that 4Q could see "a big drop" in orders compared to prior fourth quarters. We think it is important to get a read on how the 4Q business is building and how 2009 might look. Second, our due diligence suggests that 2Q and 3Q may have each included license revenue in the tens of millions from a deal with a major food company--possibly setting up a more difficult sequential comp in 4Q. Third, as we discussed last week, another industry source suggested that one of SAP's customers may have stalled a deal as it saw its own customers beginning to delay payments. This behavior may well intensify in 4Q. Last, we note that it may be more difficult for SAP to reduce expenses than might be the case for Oracle given the high concentration of SAP employees in German and Europe.

On the Google front, analyst George Askew and Reed Meyer of Stifel Nicolaus lowered their Google price target to $525 a share from $600 a share, as well as cut the earnings estimates for 2008 and 2009.

The analysts cut Google's earnings estimates to $19.37 a share from $20.20 a share for 2008, while also trimming back 2009 to $23.51 a share from $26.01 a share.

Askew and Meyer noted in their research note:

We are reducing our financial projections for Google to reflect a more cautious global economic outlook. Our belief is based on 1) the apparent sharp slowdown in business activity late in 3Q08 for companies globally as the ongoing credit crisis depressed business and consumer confidence, and 2) the negative revenue impact of foreign currency moves relative to the stronger U.S. dollar. We conservatively project the economic slowdown to continue through 2009.

Google is scheduled to report its third quarter financial results on October 16, while SAP is scheduled to report its earnings on October 28.

Update at 5:55 a.m. PDT: Additional TV stations airing the debate live have been added.

This is Hulu's new election hub.

(Credit: Hulu)

Last year, it was all about "remixing" debate footage. But this year, it's about seeing it live.

Video content hub Hulu has secured the rights to stream the remaining two presidential debates live on the Web. The next debate is set for Tuesday night.

The news was first reported by PaidContent that Hulu has launched Election '08 hub for the live debate, as well as past election-related footage. That includes footage from political satire talk shows The Daily Show and The Colbert Report, the only two MTV Networks shows currently on Hulu.

This is the first-ever live broadcast for Hulu, a joint venture between NBC Universal and News Corp.

Cable channel Current, co-founded by former Vice President Al Gore, is streaming all presidential debates live on the Web as part of its "Hack the Debate" partnership with Twitter.

Most major television broadcasters and news channels are airing the debate live, of course, including ABC, CBS, CNBC, CNN, Fox, Fox News, MSNBC, NBC, PBS, and Telemundo.

Hulu will also, according to PaidContent, also be the venue for the debut of Crawford, a documentary about the town best known for President Bush's ranch.

Joost, the video content site that everyone thought would be a runaway success, began offering live TV for the first time this past spring, starting with the NCAA "March Madness" basketball tournament.

Just a quick post to mention a silly (or is it?) experiment that Google has released to the public: Mail Goggles. This feature is designed to prevent you from sending stupid e-mails in the small hours, when you're most likely to be inebriated and at risk of making a complete idiot of yourself.

Don't drink and e-mail.

When enabled, Mail Goggles kicks in at the time you specify (default is between 10 p.m. and 4 a.m. on Friday and Saturday), and throws five math problems up on the screen when you press "send." You have a limited period of time to solve them. If you can answer the questions, presumably you're of mind sound enough to tell off your boss, or pour your heart out to your ex-lover.

If you can solve simple math problems even when under the table, there's an option to ramp up the difficulty of the questions, but sadly they remain in the arithmetic realm and don't drift into interesting algebra or calculus.

To activate Mail Goggles, go into Gmail's settings, and turn on Mail Goggles in the "Labs" tab. Then adjust how and when it works in the "General" tab.

Seriously? I'm hoping this feature shows up on blogging products.

With only a week into the fourth quarter, the number of companies that have already rejiggered their financial forecasts--even before they've reported their third-quarter results--has gone up two-fold, according to a company that tracks earnings estimates.

SAP and Netflix are two of the latest examples of companies that have retooled Wall Street's expectations for how to perceive their fourth quarter financial performance, even though they have yet to announce their third quarter results that ended on September 30.

To date, 43 companies have issued preliminary guidance for the fourth quarter, and while the aggregate numbers are low, it nonetheless is twice the level that has been seen in the previous three quarters in the days that followed the end of the quarter, said David Dropsey, senior research analyst for Thomson Reuters.

"In this kind of economic climate, it could be the start of a trend to offer (financial) guidance more often and earlier," Dropsey said.

Typically, companies usually wait until they report their quarterly results and at that time offer up a forecast of how they think they'll do for the coming quarter and year. That guidance will often send Wall Street analysts scrambling to retool their earnings estimates and projections--figures that investors will use as a tool when assessing whether to plunk down money on a particular stock.

In the case of SAP and Netflix, which both indicated the next three months will be rougher than they previously thought, investors got spooked big time.

SAP's shares plummeted 17.6 percent in intraday trading before closing at $39.68 a share, down 13 percent, during the regular trading day. Netflix, meanwhile, took a 13 percent hit in intraday trading before regaining some of that lost ground to close at $26.49 a share, down 8.56 percent.

And although the number of companies making preliminary warnings has doubled in comparison with previous quarters, those warnings aren't always bad news.

Historically, for every two companies issuing negative preliminary quarterly results, there is one company issuing a preliminary warning that its quarter will be better than Wall Street's forecast.

That same 2-to-1 ratio remained true in this latest quarter, as well, Dropsey said.

"For the most part, tech and consumer companies that sell discretionary items tend to give the most guidance," Dropsey said. "In this environment, where there is a lot of negative views on companies that sell discretionary items, those companies may want to say, 'we're not doing so bad.'"

A Yahoo acquisition of AOL could happen as early as this month, TechCrunch reported Monday, citing sources close to the negotiations.

"It's rumors and speculation, which we don't comment on," Yahoo spokesman Brad Williams said. Update 2:30 p.m. PDT: AOL also declined to comment.

According to the report, Yahoo would buy AOL's content business, but not its dial-up subscription business. Time Warner had separated the two, and given Yahoo's online-publishing and advertising interests, it would be no surprise to see Yahoo pass over that dwindling asset.

The possibility grew out of Microsoft's unwelcome attempt to acquire Yahoo, but some would be surprised to see any deal at all. In a note on Monday, Sanford C. Bernstein analysts said the deal is unlikely for three reasons:

• Stock transactions over $3.4 billion are dilutive to Yahoo. We think Time Warner was hoping for $6 billion to $8 billion, which is only possible with synergies.

• The primary source of synergies is staff reductions, where Yahoo has (an) unimpressive track record. Other benefits, such as pricing power in display and combining Advertising.com with Right Media Exchange, will not drive short-term incremental revenues.

• Regulators might not allow the AOL-Google paid-search deal to pass to Yahoo, which would wipe out the other synergies--creating a large risk for both sides.

Google has begun showing ads next to image search results. (Click to enlarge.)

(Credit: CNET News)

As it promised to do, Google has begun testing ads shown next to image search results.

Google Blogoscoped and TechCrunch carried screen shots from readers showing the new tests, and Search Engine Land added a shot of a banner ad as well. Now I'm seeing the image ads too.

Google's cash cow is its ability to display small text ads next to search results, but the new examples include pictures as well. That could be more distracting or more useful, depending on how you see it, but Google insists that it'll place the ads only in a way that adds to the user experience, one measurement of which is that people search more often.