Wednesday, September 26, 2007
  • Tanya Gazdik Irwin, September 26, 2007, 10:46 AM
  • The shift by The New York Times to abandon its subscription Web site may now influence a broad change across the entire newspaper industry. The Times officially walked away from its subscription model last week, deciding it could make more money by making its content free online -- including its vast digital archive that users have paid to access in the past.

    As that decision was made, News Corp. chairman Rupert Murdoch mused about doing the same with The Wall Street Journal. Though he has yet to close the purchase of the well-known financial broadsheet, moving entirely to free content online already "looks like the way we are going," he told analysts.

    This has the newspaper industry watching closely. Though major papers like the Los Angeles Times have been scrapping their subscription models, these latest moves are seen as the potential death-knell for the online subscription model. Internet advertising has become too powerful and too lucrative to block non-subscribers from your site, executives across the newspaper industry have told analysts and investors. Read the whole story...
  • AOL co-founder Steve Case's investment company Revolution LLC has launched an Internet-based payment system which would slash merchants' costs for accepting credit cards by some 75%. Revolution Money's first two products will be an online money-transfer service and a credit card with "significantly lower interchange fees" for companies that accept it, Revolution said.

    Revolution Money's proprietary operating system uses the Internet to circumvent the traditional interchange system, providing a drastically reduced fee structure that could create billions of dollars of merchant and consumer savings -- essentially flipping the industry on its head. The company will be chaired by Ted Leonsis, who was chairman of GratisCard and, like Case, a former AOL executive.

    One of the new products, Revolution MoneyExchange, is billed as "the first online payments platform for social and instant messaging networks, allowing consumers to safely transfer funds via the Internet to anyone, even merchants, for free." The program was launched in invitation-only beta form Tuesday and is intended to be available to everyone by year's end. Read the whole story...
  • Discount online retailer Amazon.com jumped into the digital music download business Tuesday by offering 2.3 million songs that can play on any portable device -- including the popular Apple iPod. More than 1 million of the tracks are being sold at 89 cents -- a dime less than tracks at Apple's iTunes store.

    Amazon's offering is about one-third of Apple's catalog, which has more than 6 million songs. ITunes was the largest online music store in 2006, with 70% of the market, according to research firm NPD Group. Amazon's music download service, called Amazon MP3, includes more than 180,000 artists from 20,000-plus labels, and the music is being sold without digital rights management, or DRM, software. That allows consumers to listen to downloads on any device they choose. Music is downloaded through Amazon MP3 software, which then transfers the music to a buyer's iTunes or Windows Media Player library. Songs also can be burned to compact discs.

    Major music labels Universal Music Group and EMI Music have signed on to sell their tracks on Amazon, as have thousands of independent labels. But Warner Music Group Corp. and Sony BMG Music Entertainment have not agreed to sell music on Amazon MP3. Read the whole story...
  • Rumors are swirling that Time Warner Inc.'s AOL LLC business is considering buying ValueClick Inc. to boost its online advertising properties.

    The company is one of few publicly traded companies in its sector that hasn't yet been gobbled up by a major technology company. In the past year, Google Inc., Yahoo Inc., Microsoft Corp. and WPP PLC -- among others -- have acquired a variety of public and private companies in the space. The company's units include an affiliate marketing business, which could be of interest to AOL since AOL has shown interest in buying such companies.

    In January, AOL offered to pay about $900 million for Swedish online marketing company TradeDoubler AB. The bid failed to get the requisite amount of shareholder support, though, and AOL withdrew it in March. But even if AOL is interested in ValueClick, the online advertising company's varied business has some overlaps with AOL's current online advertising properties: Advertising.com and Tacoda Inc. Read the whole story...
  • Microsoft is taking solid aim at a business outside its core competence: advertising. And it is deliberately facing off against a specialist: Google. Chief combatant Brian McAndrews joined Microsoft last month and knows the Internet ad business well, having run aQuantive, the advertising company that Microsoft acquired for $6 billion last month.

    McAndrews' long-term strategy boils down to divorcing online advertising from Internet searches. The two have been viewed as a couple, because so many people use portals and search engines as their home base on the Web, but McAndrews says that model shortchanges advertisers and Web publishers. He contends that search engines, which long have claimed credit for sending people to companies' Web sites, do not deserve it all. Microsoft soon will be able to provide advertisers with a log of where people see ads on the Internet before going to the advertisers' Web sites.

    Microsoft today will announce a more modest advance: Changes to the MSN Video site that are supposed to make the ads there less intrusive and more ubiquitous. This development is a response to Google's announcement in August that its YouTube site would overlay advertisements on the bottom of some online videos. Read the whole story...