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[Commentary] In the aftermath of the Federal Trade Commission's settlement with Google, too many reporters fell for the line that Google used some fancy combination of executive charm and lobbying prowess to beat the federal government at its own game. You'd easily believe, from reading what has become the conventional wisdom, that Google managed to avoid any sanctions by meeting with John Kerry or paying off think tanks. What's lost completely is the real story: the merits of the Federal Trade Commission's decision.
The law-enforcing agencies of the federal government are powerful, and unlike a football team, aren’t supposed to try to win at any cost; they are supposed to do what is right for the country. The Commission was right to investigate Google, right to stop the practices it did, and also right to settle the case instead of beating the firm into submission. In the end, as corporate defendants go, Google was pretty clean. What saved the company weren't the millions Google wasted lobbying Senators or paying Republicans to be its friends. It was its engineers, who designed its services in a way that maximized effectiveness while avoiding rampant illegality. The American system tolerates an information monopolist, at least until the point at which it turns to evil. Legally this translates to the maxim that it is not a crime to be a monopolist; it is a crime to abuse your monopoly power. And so the real lesson of the Google case is this: The best way to avoid an ruinous antitrust lawsuit is not hiring lobbyists, but obeying the law.
Why Does Everyone Think Google Beat the FTC?
One of the more surprising conclusions drawn by the Federal Trade Commission when it dropped its nearly two-year antitrust investigation into Google last week was that Google, far from harming consumers, had actually helped them. But some critics of the inquiry now contend that the commission found no harm in Google’s actions because it was looking at the wrong thing. Instead of considering harm to people who come to Google to search for information, Google’s competitors and their supporters say that the government should have been looking at whether Google’s actions harmed its real customers — the companies that pay billions of dollars each year to advertise on Google’s site.
Critics of Google Antitrust Ruling Fault the Focus
While the focus of the agreement between the Federal Trade Commission and Google was search, the deal's restrictions on how Google uses its patents could have a broader impact on the technology industry.
Google is also now limited in when it can seek injunctions against products from rival companies that use certain of its patents. Throughout recent smartphone wars and other major patent litigation, holders of so-called standard essential patents have been accused of using them to bully competitors into paying high licensing rates or as leverage in patent disputes. The FTC's deal with Google clarifies the uncertainty over how standard essential patents can be used, said Colleen Chien, a professor specializing in patent law at Santa Clara University School of Law in California. The deal set out a process by which technology makers can avoid injunctions and patent holders know they are going to get compensated, Chien said. "The FTC has deflated the power of the injunction and also the incentives to not pay that have existed."
Google pact with FTC could affect other patent disputes
Liberty Media waged a long and public battle to take control of Sirius XM Radio for most of last year. The final takeover, though, looks likely to take place with much less fanfare.
Liberty was cleared by the Federal Communications Commission to acquire the satellite-radio operator. That sets the scene for Liberty to raise its stake, now a fraction below 50%, to more than 50.1%, giving it absolute control of Sirius. Liberty has said it would do so within 60 days. At that point, Liberty can take control of the board by electing new directors, a process that could be handled through a mail-in vote. Liberty isn't planning drastic changes in the board's makeup. The biggest move Liberty plans to make is appointing a new chief executive to succeed Mel Karmazin, who stepped down from Sirius last month. Liberty Chief Executive Greg Maffei is heading the search committee. Meanwhile, Sirius has appointed its sales and operations president, James Meyer, as interim CEO.
Liberty Close to Taking Control of Sirius
[Commentary] Everyone knows that traditional media companies are dead in the water, overwhelmed by ad skipping, cord cutting and audience flight. We know that because Chicken Littles have been saying it for years. Eventually we may be right — the sky will fall and the business will collapse — but for the time being, the sky over traditional media is blue and it’s raining green.
In the last year, the Standard & Poor’s 500-stock index was up 13.4 percent, which was a significant advance, but legacy media giants like Comcast, News Corporation and Time Warner absolutely surpassed it in terms of share price. What is making these dinosaurs dance? I called some media analysts and a few things quickly became apparent. To begin with, the companies collectively did not make dumb choices — consider the past acquisitions of AOL and The Wall Street Journal — and they made plenty of smart moves, including long-term deals that locked up content and a steady stream of fees.
Old Media’s Stalwarts Persevered in 2012
There are two kinds of cable channels in the United States: those operated by major media companies that have dozens of other channels, and those that are on their own. The outlets in the second group, the independent channels, are feeling threatened these days.
Some of the distributors they depend on — Time Warner Cable, DirecTV, Verizon FiOS — are talking about dropping underperforming channels from their lineups, or at least paying them less. Distributors have talked for years about belt-tightening, but two things are different now: potential Web competitors are creeping up and programming costs are soaring, particularly for sports channels and broadcasters.
Cable Companies Squeeze More Obscure Channels
Dan Hesse has been Sprint Nextel’s chief executive for five tumultuous years during which he admits the company’s very survival has sometimes been in doubt. Now, after slashing costs, rebuilding a brand that had become synonymous with bad customer service, fending off the threat posed by AT&T’s abortive bid for T-Mobile USA and negotiating a much needed cash infusion from Japan’s SoftBank, Hesse says the future has begun to look brighter.
Hesse puts Sprint back among frontrunners
In less than a year, Coursera has attracted $22 million in venture capital and has created so much buzz that some universities sound a bit defensive about not leaping onto the bandwagon. Coursera has grown at warp speed to emerge as the current leader of the pack, striving to support its business by creating revenue streams through licensing, certification fees and recruitment data provided to employers, among other efforts. But there is no guarantee that it will keep its position in the exploding education technology marketplace.
Students Rush to Web Classes, but Profits May Be Much Later
Turmoil at one of China’s leading newspapers is posing an early challenge to the measured political program of the new Chinese leader Xi Jinping, pitting a pent-up popular demand for change against the Communist Party’s desire to maintain a firm grip.
The unrest at the influential newspaper Southern Weekend began last week when censors appeared to have toned down the paper’s New Year’s letter to readers — traditionally a call for progress in the new year. That caused journalists and their supporters — including students at nearby Sun Yat-sen University — to issue open letters expressing their outrage. By Jan 6, the protests had transformed into a real-time melee in the blogosphere — a remarkable development in a country where protests of all kinds are tightly controlled and the media largely know the boundaries of permissible debate. In this case, the newspaper’s economics and environmental news staffs appeared to declare that they were on strike, while editors loyal to the government shut down or took control of the paper’s official microblogs. One widely distributed staff declaration with 90 signatures said the publication’s microblogs were no longer authentic.
Test for New Leaders as Chinese Paper Takes On Censors Media censorship sparks protests in China (Financial Times)
Xavier Niel, the French technology entrepreneur, has made a career of disrupting the status quo. Now, he has dared to take on Google and other online advertisers in a battle that puts the Web companies under pressure to use the wealth generated by the ads to help pay for the network pipelines that deliver the content.
Niel’s telecommunications company, Free, which has an estimated 5.2 million Internet-access users in France, began last week to enable its customers to block Web advertising. The company is updating users’ software with an ad-blocking feature as the default setting. That move has raised alarm among companies that, like Google, have based their entire business models on providing free content to consumers by festooning Web pages with paid advertisements. Although Google so far has kept largely silent about Free’s challenge, the reaction from the small Web operators who live and die by online ads has been vociferous.
Ad Blocking Raises Alarm Among Firms Like Google