Market Talk

Slew of documents don't reveal much.

The long-running legal battle between Viacom (VIA) and Google (GOOG) over copyright infringement at YouTube reached a new level yesterday. From WSJ:

Viacom Inc. and Google Inc. broke their silence Thursday in their legal battle, as Viacom claimed that Google’s YouTube unit had sought to exploit copyrighted works for profit, while Google argued that Viacom itself had secretly uploaded copyrighted clips it later demanded YouTube remove.

The claims are among the many divulged as a federal judge and the parties to the case released a slew of documents. The release is part of a closely watched, three-year court battle between the two media giants over alleged infringements of Viacom’s copyrights by YouTube both before and after it was acquired by Google in 2006.

Viacom essentially argues YouTube knew there was content on its site that wasn’t supposed to be there, but didn’t do a good enough job of removing  it in a timely fashion. On the flip side, Google says it’s protected by the Digital Millennium Copyright Act, while adding it does its best to police YouTube.

The published documents surrounding the legal battle are interesting, they don’t reveal much about the case.

“If you’re trying to handicap the way the copyright lawsuit pans out, [the] document dump won’t do much to help you,” MediaMemo blogger Peter Kafka says. “There are revelations here, but they’re of the minor and historical variety…No smoking gun, though. Just a lot of chest-beating and desk-thumping as both sides talk past each other.”

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To say the blogosphere is buzzing about the iPad is certainly an understatement. It seems like everyone has something to say about Apple’s (AAPL) new device.

From your typical tech blogs, to twitter, to even Paul Krugman, folks everywhere are weighing in on the new tablet. Some positive thoughts, fair amount of skepticism, but for the most part people seem excited to get their hands on the device and test it out.

And for Apple, this is all unfolding exactly according to plan. And if it seems like it’s a plan that’s been implemented before, well, it has. Seems like Apple’s got a blueprint for how they do this stuff, doesn’t it?

Phase one of a typical Apple product announcement is now complete as months of hype and speculation gave way to the iPad’s actual unveiling, David Pogue chronicles on his NYT blog.

Now phase two – blogger bashing and criticizing of the yet-to-be released product – is beginning and will continue over the next few months until the iPad actually goes on sale, he says.

“Then phase three will begin: positive reviews, people lining up to buy the thing, best-sellerdom, and the mysterious disappearance of the basher-bloggers,” Pogue notes.

So what’s the takeaway? IPad has vast potential, but “it’s too early to draw any conclusions,” he says. “And anyone who claims to know what will happen will wind up looking like a fool.”
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Amazon (AMZN) announces it’s doubling its royalty rate it pays authors and publishers to 70%, as long as they keep e-book prices low.

The 70% rate, which is a far higher per-copy royalty than most authors receive on physical book sales, is seen as a clear bet on enticing authors away from traditional publishers. NYT’s Media Decoder blog points out publishers typically offer authors a royalty rate of 15% on hardcovers, while digital books typically get a 25% rate.

But Amazon’s main purpose in offering a much higher royalty than the competition is to keep e-book prices low, which will help it sell more Kindles as well as overall e-books. This is important because Kindle owners “tend to be price-sensitive types who flock to low-cost and no-cost titles,” MediaMemo blogger Peter Kafka says.

To be sure, there are strings attached to this plan, which Henry Blodget describes at Silicon Alley Insider:

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Apple (AAPL) shares getting a nice boost today after word circulates that it will hold a press conference next week to, presumably, introduce its much-hyped tablet device.

Apple, living up to its reputation, was light on details with its event invitation, only saying “Come see our latest creation.” The event’s scheduled for Jan. 27 in San Francisco.

Apple shares were recently up 4% at $214.02, and are closing in on their 52-week high, which certainly raises the question: How much more tablet-driven run for AAPL shares is left?

Certainly there’s “more room to go,” Kaufman Bros. analyst Shaw Wu says. “I don’t think tablet sales are all baked in yet.” How much higher is a matter of opinion. Wu has a $253 price target on Apple.

But now that the invitations have been sent and it seems almost likely that some sort of tablet will be unveiled at the end of January, MediaMemo blogger Peter Kafka embarks on the next round of speculation: who will jump on Apple’s tablet train?

He compiles a list of media companies that could potentially partner with Apple for its latest device. He believes New York Times (NYT) is “a good bet,” but doesn’t expect much from the big music labels.

Word also comes from WSJ that News Corp.’s (NWS NWSA) HarperCollins is already negotiating with Apple to bring some titles to the tablet. “Presumably other publishers – all of whom are eager for viable Kingle competitors – want in, too,” Kafka says.

As for video, Kafka says Disney (DIS) and its affiliates would be obvious partners.

“In part because (Apple CEO Steve) Jobs is both the company’s largest individual shareholder and a board member,” Kafka says. “But also because Disney CEO Bob Iger has made a point of trying out new digital distribution strategies.”

Back in the fall, Google (GOOG) CEO Eric Schmidt said his company would get back into M&A.

He wasn’t kidding.

Google’s reportedly in talks to purchase local review site Yelp for about $500 million. NY Times says talks have been on going for a few years, but entered a more serious stage about two months ago.

“If the deal does go through, then Google will have snapped up seven companies since August, for what I estimate is a total of $1.5 billion,” MediaMemo blogger Peter Kafka says.

Yelp’s known for its community of users who’ve produced about eight million reviews in 30 different cities. “Those reviews help draw local advertisers, and that’s a market that Google, along with everyone else on the Web, has been trying to crack for years, with limited success,” Kafka says.

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Revenue? Overrated. Profits? Fuggedaboutit.

These are small potatoes for Twitter – the microblogging sensation which reportedly is close to raising about $50 million that will value the hot start-up at $1 billion, according to TechCrunch. Twitter raised $35 million earlier this year, led by Benchmark Capital and Institutional Venture Partners.

Pretty remarkable, especially considering the company still doesn’t generate any meaningful revenue, MediaMemo blogger Peter Kafka says.

“Feel free to debate the merits of Twitter’s growth prospects,” he says. But given Twitter’s apparent course, the funding seems obvious.

Twitter’s repeatedly insisted it wants to build a strong independent company instead of selling out to Google (GOOG), Microsoft (MSFT), Facebook or any other prospective suitors.

“If they weren’t going to sell, raising yet more money to give the company time and resources to build out a real business is the logical choice,” Kafka says.

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Microsoft and Google keep throwing jabs.

Not only is Google’s (GOOG) decision to launch an operating system a bold move against Microsoft (MSFT), it’s the perfect counterattack to MSFT investing billions in beefing up Bing.

Google, which announced the news in a blog post late yesterday, says the software will be available in the second half of 2010 and initially only target netbooks. Google directly competing with MSFT franchises isn’t new – its email and office software, mobile operating system and browser are directly aimed at MSFT, MediaMemo blogger Peter Kafka says.

But all of them have succeeded just by existing: The chief aim here is to force Microsoft to defend its existing business, which makes it even harder for the company to attack Google’s search franchise. Now comes a full-fledged OS, the core of Redmond’s business.

And with MSFT prepping its Windows 7 launch later this year, not only must it deal with the “ghost of Vista, but the spectre of an OS that doesn’t even exist yet,” he says.

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NY Times (NYT) already failed once trying to charge for online content. Now it looks like it’s going to try the same mistake again.

NY Observer has the details, but the Times is essentially considering two strategies: one is similar to the Financial Times in which a certain amount of content is free and everything after that limit requires a paid subscription. The second option leaves Web content free, but paid “members” are given access to merchandise, Times events and other goodies. From the Observer:

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Twitter’s exponential growth has received a ton of press lately. But a new study shows many of those folks experimenting with the site don’t actually come back.

The microblogging service’s website generates 6M unique viewers a month. But Nielsen Online says 60% of Twitter.com’s users leave the site the following month, meaning Twitter retains less than half of its new users.

“Twitter has enjoyed a nice ride over the last few months,” says David Martin, the VP of primary research at Nielsen Online. “But it will not be able to sustain its meteoric rise without establishing a higher level of user loyalty.”

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Conde Nast folding Portfolio isn’t a good indicator for the future of new magazines, and current ones shouldn’t be boasting either.

As magazines fold because of the recession and deteriorating ad market, it’ll become even riskier to start new publications, Jeff Jarvis, author of “What Would Google Do,” writes at BuzzMachine.

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