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Can Apple Recover From Stock Crash?

posted Saturday Mar 2, 2013 by Scott Ertz

Can Apple Recover From Stock Crash?

We all remember the news from last year: Apple had become the most over-valued stock on the market. With a stock price of $705.07, it was clear that Apple had the market covering its back, but for how long? Ever since the resignation of Steve Jobs as CEO before his death and the decision to appoint Tim Cook to the role, the belief was it would happen sooner than later.

With its market share shifting to Samsung, issues with handset quality, camera color and map accuracy issues, it has been clearer that the valley was coming. Over the past few weeks, we have seen it come to fruition. From its peak to this week's new low of $430.21, the company's stock has dropped a whopping 40% in just 2 quarters.

For those who are not intimately familiar with the way stock process work, they show investor confidence in a company and its products or services. A 40% drop in price indicates a massive shift away from confidence in Apple's management to maintain the relevance of their product line. I tend to agree with the market's analysis. Steve Jobs was the reason the company had the success it had; without him, people seem to not care.

There is a saying within the industry: every time Tim Cook speaks, Apple's stock drops. That is a lot different from the days where any time Jobs spoke, the stock would go through the roof. Product announcements are no longer spectacles that are talked about for week afterwards, product launches are no longer covered live by the press; those spots seem to have been taken over by Samsung and Microsoft. The Galaxy Note 8 has had a bigger reception in the press than the iPad Mini did; The Surface RT and Surface Pro have had more coverage than the recent version of the iPad.

Unless Apple can do something amazing and announce it in a way that isn't boring, Samsung, Google and Microsoft will have the opportunity to end the run of Apple. If I were a stockholder, which I am not, I would be demanding Tim Cook's resignation - like Groupon - tomorrow with the hopes that someone with the passion of Steve Jobs could take the reigns and bring back the excitement of the company.

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Spotify Sets Up Talks with Major Record Labels to Lower Rates, Bring Free to Mobile

posted Sunday Feb 24, 2013 by Nicholas DiMeo

Spotify Sets Up Talks with Major Record Labels to Lower Rates, Bring Free to Mobile

Spotify, the service I've been following since the beginning, has a couple of key meetings lined up for the next couple of weeks. This could partially be due to their next round of funding coming up, but they also have a bigger picture in mind. Spotify will be talking with the major record labels to renew the licensing agreements in place. Even bigger, they will be looking to ask those record labels for some pretty big price cuts, and will also see if they will be on board to bring free streaming to mobile devices.

Spotify is already speaking with Warner Music on these topics, but will be dealing with Sony and Universal within the next month, according to sources close to the situation. These talks are crucial for the music-streaming service, as the music's big three will either make or break Spotify moving forward. If everything goes well, Spotify could be propelled past several competitors and could really go up against Apple in terms of market share. Currently, Spotify has 5 million paid and 20 million total users across the globe.

As far as the financials, Spotify pays 70% of its revenue towards music-licensing fees and another 20% goes into acquiring new customers. The remaining 10% is left for other costs, like upgrading the platform. This leaves almost nothing for Spotify to really profit from after everything is said and done, which is why the price breaks from the record labels would be very useful. If Spotify can prove increased market share and exposure, the labels might play ball on terms on quantity instead of price.

Another key for the negotiations is going to be the previously mentioned shift to bring the free tier to mobile for more than just a 30-day trial. We've already shown that Spotify users buy more music than those who don't use Spotify, so perhaps there is really something to be said about the power behind the platform. I think that Spotify also has some negotiating power to push both of their objectives with their ability to convert almost 20% of its customers into paid subscribers. We'll have to see if the labels agree, and I will be sure to report back to you either way. Now if only the company would allow you to purchase music as well through their platform.

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EA Lays Off Employees, Transitions its Focus, Drops Suit with Zynga

posted Sunday Feb 24, 2013 by Nicholas DiMeo

EA Lays Off Employees, Transitions its Focus, Drops Suit with Zynga

Electronic Arts is slowly transitioning to a more digital and social development studio, as we suspected. This week, EA has laid off a bunch of employees in their Los Angeles and Montreal studios as the company makes the shift to mobile gaming and next-gen. Frank Gibeau, president of EA Labels, said in this blog post that it is because EA has made strong investments and moves towards mobile and new console technology. He also added that thousands of current EA employees, instead of being let go, were reassigned work that was in line with their new visions. He said,

Console transitions are a complex and challenging experience. I've helped navigate several and agree with an old saying we have at EA: Transition is our friend.

No word yet on how many employees were terminated or what positions they were holding. We wish the best for the laid off employees' future endeavors.

In other EA news, does anyone remember when Zynga launched The Ville and made it look exactly like Sims Social? EA sued the company, claiming copyright infringements, employee poaching and just sheer laziness (off the record). It appears that after months of squabbling, EA has dropped the legal suit against Zynga and all claims and counterclaims regarding the case have been dismissed.

We have not received comment from Zynga nor EA about the suit, but instead discovered this information via a filing with the US District Court for the Northern District of California. This suit drop comes at a very interesting time for Zynga, as the company has recently undergone a drastic cut of properties that were bleeding money, largely in part due to the work from COO David Ko at the helm. Earlier this month, Zynga even posted a small profit because of the cuts. Perhaps this might be a small turnaround point for them, as EA looks to restructure as well.

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FilmOn and Aero Sue Aereo for Copyright Infringement, Calls Kettle Black

posted Sunday Feb 24, 2013 by Nicholas DiMeo

FilmOn and Aero Sue Aereo for Copyright Infringement, Calls Kettle Black

Remember Aereo, the rebel company that chose to go the route of streaming over-the-air broadcasts to out-of-market customers for a monthly rate? Yes, we appreciate the gusto and courage it takes to go head-to-head against all of the broadcast companies at once. So when we heard that Aereo was in another lawsuit, we asked, "who is it now?" Needless to say we were surprised to find out that it actually wasn't a broadcast company trying to sue them this week.

Instead, FilmOn, a company who does the exact same thing as Aereo, is suing the company for copyright infringement. FilmOn says that Aereo allegedly violated FilmOn trademarks and has taken on a style that is too similar to that of FilmOn, who claims rights to "Aero," which is the name of their service. You may know of a device called the WinTV-Aero-m, which is made by Hauppauge Computer Works, but the difference is that device has permission to use the "Aero" phrase from FilmOn. The lawsuit says that Aereo was "seeking to unfairly capitalize on the success of WinTV-Aero-m and the name 'Aero,' Defendant Aereo devised a scheme to start a competing business."

You can hit the source link below to check out the full complaint. For now, it just seems like this is simply a bitter, back-and-forth type of lawsuit. In the end, it may be found that both of these companies are doing illegal things in the eyes of the courts, so why go at each other? Doesn't all of this seem a bit strange? If two companies, who do the same thing, and are being sued by the same broadcast companies, would work together instead of sue each other, perhaps we'd have a stronger rebel force to go against the Empire.*

*"Empire" and "Rebel" are trademarks or registered trademarks of Lucas Arts/Disney in the United States and other countries. Lucas Arts/Disney and other parties may also have trademark rights in other terms used herein.

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Oracle Gets High-Power Assistance in Android Case [Editorial]

posted Saturday Feb 23, 2013 by Scott Ertz

Oracle Gets High-Power Assistance in Android Case [Editorial]

The battle between Oracle and Google is becoming legendary. When the suit first started, I predicted this could become a rallying cry for the software industry. While I hate to get behind Oracle and Java, I seem to have picked the right side.

While Oracle lost the case, the appeal is becoming the symbol of developer intellectual property versus open development. Obviously Oracle is on the side of developer rights, while Google is on the side of "we want other people's code." On the side of Oracle are Microsoft, EMC, NetApp, the Business Software Alliance and many others. These companies and groups all filed amicus curiae briefs in support of Oracle, suggesting that the industry disagrees with the court's initial decision.

While not on the record, as the deadline expired February 19th, I count myself as a supporter of Oracle here. As a developer myself, I find it personally offensive that Google feels they can use code written by Oracle's brand Sun Microsystems without so much as a hat tip, let alone royalties for the usage. This court case has been a turning point for me as a developer and a person. I have always known that Google was an evil company, but I still used some of their services, sporadically. After this case, I started walking away from Google's services one at a time.

At this time, I have eliminated Google from my life, with the exception of a Gmail account that I use for receiving spam garbage, as many of us used to use Yahoo in the past. My real email is through the company, of course, but I do also have a personal account that I access through Windows Mail or Outlook. My instant messaging is all done through Skype, on the computer and phones. I use a Palm Pre 2 (syncing with my Live account) and an HTC 8X Windows Phone (obviously syncing with the Live account). I do all of my development through Visual Studio and Web Matrix using Internet Explorer to test. My search engine of choice is Bing, both because of the case and Google's lack of relevant results. I have even abandoned Google Reader for an RSS reader on my Windows 8 machines.

I have actively done all of this, spurred on by this case over the last few years. I hate the idea that Google feels that, if my software is what they are looking for, they are willing to steal it from me. I put a lot of time and energy into my software and I would never give it to anyone without a license, let alone one of the most over-valued Ponzi schemes ever conceived. If you are a developer as well, I urge you to take the same stand I have and tell Google that you don't like their theft of code. If you are not, you too should abandon Google merely because of their lack of respect for privacy.

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Facebook Reports Inaccurate Numbers for Insights

posted Saturday Feb 23, 2013 by Scott Ertz

Facebook Reports Inaccurate Numbers for Insights

One of the things that Facebook does very well for brands and companies is gather and present data about the people who are affected by the Facebook page. From finding out how many total friends your fans have to how many people saw your individual posts, there is a lot of information that can be learned about who is interested in your product or service. This week, however, the site admitted that the information they have been reporting has had incorrect numbers for some of their metrics.

Fortunately the data is not affected, but merely the reporting, for impressions (how many times the post has been loaded, regardless of duplicates) and audience reach (unique number of people who have seen the post). Since the data is intact, that means Facebook can patch the system to restore proper data. They are in the process of rolling out the new code, with completion hoped for the end of the weekend. As of writing, the numbers for our fan pages have not been changed.

So, how did Facebook discover the issue? It happened during a comprehensive audit of their system and its data. They noticed a discrepancy in reported versus stored data and set off to work looking for the issue. Luckily they seem to have found and fixed the issue (or so they have reported).

If you are a brand manager, you should start looking at your data on Monday to see if your numbers have changed. My guess is that everyone will see some fluctuations, but larger pages are much more likely to see bigger swings. At least this means you could be doing better than you thought! This goes to show that even with thousands of developers, you can still make a mistake.

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