Articles of the Day


Yahoo Not Only Shutting Music Store, But Orphaning DRM Buyers — We knew Yahoo Music was shutting down but not that it was planning to take down its DRM servers at the same time. Ars Technica reports that Yahoo has notified customers the license servers will shut down Sept. 30. Yahoo had already said its music subscribers would be migrated to Rhapsody. Microsoft eventually took another approach when it stopped MSN Music, promising after a fuss that the DRM-protected music will work through 2011. What does this mean? Unlike subscription music users, who are leasing music and have no reason to expect it will be available after a service closes, buyers of DRM-protected music think they have acquired the rights in perpetuity.

NBCU Unscathed (So Far) In GE Slimdown — NBC Universal will be one of four “segments” in the slimmed-down General Electric announced today after the market closed today. CEO Jeff Immelt, under fire for the company’s poor stock performance during his tenure, is downsizing from six to four “core” segments, creating “infrastructure” businesses for technology and energy and consolidating all financial services into GE Capital. GE already had announced a possible Consumer & Industrial spin-off. As for NBCU, it puts the “media” in Immelt’s definition of GE as “a global infrastructure, finance and media company.” From the release: “Led by Jeff Zucker this segment is unchanged and will continue to focus on its strategic evolution through globalization and diversification.”

Netflix Q2 Revs Up 11 Percent; Beats On EPS; Ups FY Guidance; Stock Jumps — Netflix reported Q2 revenue of $337.6 million, an 11 percent increase from $303.7 million a year ago. Net income was up just 3 percent to $26.6 million. A significant reduction in shares outstanding, however, meant that EPS rose 13.5 percent to $.42 per share from $.37 per share. That surpassed analyst estimates of $.40 per share, and the company raised its full year outlook slightly. Total subscribers now stand at 8.4 million, a 25 percent year-over-year gain. Net subscriber adds for the quarter were 168,000, compared to a decline of 55,000 a year ago.

Clear Channel And Katz Launch Big Online Network — Clear Channel Radio and Katz Media Group are launching what they say is the largest online radio advertising network ever, the companies revealed today. The new Katz Online Network will combine over 1,200 Clear Channel stations and Katz affiliates with a number of independent online radio stations, with a total unique audience of about 5 million listeners per week.

Ex-Google Execs Debut ‘Cuil’ Search Engine — Several ex-Google engineers will unveil a new search engine today, according to The Associated Press. Cuil, pronounced “cool,” is backed by $33 million in venture capital and is the brainchild of Anna Patterson, her husband, Tom Costello, and two other former Google engineers: Russell Power and Louis Monier. Cuil’s search index spans 120 billion Web pages.

Wayward Microsoft — Let’s not underestimate the significance of the botched Microhoo deal on the future of Microsoft’s business, says Ars Technica contributor Don Reisinger. Microsoft thinks its future is online, but without Yahoo, the software giant has very little to stand on, on the Web. It’s a pitiful third in search advertising, with just a 9% share, and its overall online business operated at a deficit of $1.2 billion this year. Now, how can Microsoft move forward when it’s back to square one? Still, CEO Steve Ballmer pipes on: “There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity,” he told analysts and shareholders last week, adding that the company would now invest another $500 million in the company’s online business.

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