2011-08-29 Steve Jobs steps down as Apple CEO
 

Intelligence Report - 08/29/2011
By Mark Glaser

NEWS

RESEARCH

News

Steve Jobs steps down as Apple CEO

The master motivator, marketer and technology visionary, Steve Jobs, announced he was stepping down as CEO of Apple, saying “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.” Immediately, the media went into overdrive explaining the vast influence Jobs has had on so many areas of technology and media use -- from user-friendly computing to the iPod and iPhone to the iPad and beyond. "Most people are lucky if they can change the world in one important way, but Jobs, in multiple stages of his business career, changed global technology, media and lifestyles in multiple ways on multiple occasions," wrote AllThingsD's Walt Mossberg. While all of his marketing efforts weren't blowout successes (see: iAds), Jobs had an uncanny knack for coming up with the right spin or concept at the right time. "You can’t deny that Jobs was also a master marketer," wrote Robert Hof at Forbes. "Both in his not-to-be-missed appearances introducing Apple products at Macworld conferences and other events and in the advertising he helped create, he managed over 30-plus years to prove again and again how lame just about every other technology company is at telling customers why they should buy their products."  So what comes next in the post-PC, post-Jobs era at Apple? Longtime COO and interim CEO Tim Cook now becomes the official CEO while Jobs moves into a new chairman role. While no one believes that Cook has the flair or salesmanship of Jobs, he has had a steady hand on the company the past six months during Jobs' leave of absence for health issues. GigaOm's Erica Ogg pointed out that as temporary CEO, Cook had the following accomplishments: Apple temporarily became the highest valued company in the world; they introduced the iPad 2, which dominated the tablet world; added more retail stores, including in China; launched OS X Lion. The problem is what Cook will do when it comes to Apple moving into new territory, like rumors around a re-invented smart TV. "Where Jobs’ position in the driver’s seat of the company will be missed most is anticipating the gadgets consumers will want," Ogg wrote. "It’s not clear that Cook possesses that same intrinsic ability. Keeping products moving through the pipeline and managing the day-to-day operations running a $350 billion dollar company, yes. Spending time pondering the 'intersection of liberal arts and technology'? Probably not."

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Google-Motorola and what it means for Android

Google stunned the mobile world with the recent news of its hefty $12.5 billion payout for Motorola Mobility, a move that will give the search giant an arsenal of patents to protect itself in a tangled patent system. But is it all about the patents? A lot of it is, said AllThingsD's Kara Swisher. But it's also a "declaration that mobile is more important to it than the skein of alliances it has built for Android with phone makers worldwide," she said. Slate's Farhad Manjoo noted that the price tag accounts for nearly two years' worth of Google's profits. "No company -- not even Google -- can throw around that kind of cash without envisioning a direct return on its investment," Manjoo said. He thinks the deal will mean a turning point in the way that Google operates Android, and several other industry watchers agree. paidContent's Tom Krazit called it a "new era" for Android, noting that it took just three years from the launch of the G1 to the present for Android to become the world’s most widely used mobile OS. "If the Motorola-Google deal crosses the finish line, the dynamics that allowed Android to reach that point will have permanently shifted," he said. Although some analysts think Google has little interest in Motorola's hardware portfolio, others are speculating that the company won't be able to hold itself back. It's "undeniable that Google’s new chief executive, Larry Page, has long had a hankering for the mobile phone business, and this acquisition may be the culmination of his ambitions," explained the New York Times' Andrew Ross Sorkin. "Mr. Page, after all, was the executive who personally pursued the acquisition of Android and has been its biggest proponent." But could Google's hardware ambitions and its new relationship with Motorola drive a wedge between Google and its hardware partners? As Swisher noted, the "large mobile manufacturers who have placed their trust in Google -- especially Samsung or HTC -- have to be wondering what to do now." Wired's Mike Isaac agreed, saying the deal "won't win it any points among its hardware manufacturing partners, and it could provide an opening to competing platform owners like Microsoft." Others say the move takes direct aim at Apple. "Apple has commandeered a major share of the smartphone market -- and the vast majority of the industry's profits -- by selling integrated hardware/software devices," noted Business Insider's Henry Blodgett. "Meanwhile, (Android) has been fragmented and customized by many hardware providers, none of whom have managed to produce a product as beloved as the iPhone, iPad or even Apple TV."

HP killing TouchPad, webOS devices

While Google was pushing deeper into mobile, Hewlett-Packard was stepping away from it. Just a month after Hewlett-Packard launched its TouchPad tablet, and two years after it coughed up $1.2 billion to acquire Palm and its webOS software, HP dropped a bomb during its earnings call: It's saying goodbye to the tablet and smartphone world. HP has said webOS will live on in PCs and printers, but it will no longer make webOS devices such as the TouchPad tablet and the Pre 3 and Veer smartphones. The company is also considering spinning off its PC business. Engadget's Lydia Leavitt said the move brings to mind one phrase: "buyer's remorse." After shelling out big bucks for Palm and taking over webOS last year, it's "already regretting the choice, wishing it had opted for a more profitable gamble," she said. But the "old fail-fast mentality" may serve HP well in this case, Time Techland's Doug Aamoth argued. "In a market sector with such low margins and such little room for error -- and with one fruit-themed company executing its tablet and smartphone lines so successfully just as consumers are shying away from buying full-fledged PCs -- it's almost certain that HP saw the writing on the wall and decided to get out before things got worse," he said. In other words, with Apple's tight grip on the market -- and no end of its dominance in sight -- HP needed to get out while it could. Does this mark the beginning of a post-PC era? InformationWeek's Kurt Marko said that's still up for debate, but it's obvious that the "new, new HP, the (CEO) Leo Apotheker edition, wants nothing to do with consumer products." HP's statements during its earnings call highlighted that fact. “Consumers are changing the use of their PC,” Apotheker said. “The tablet effect is real and sales of the TouchPad are not meeting our expectations. The velocity of change in the personal device marketplace continues to increase as the competitive landscape is growing increasingly more complex especially around the personal computing arena.” TechCrunch's MG Siegler pointed out that while HP is the worldwide leader in PC sales, the company's actual profit from those sales has already been far surpassed by Apple. And while overall PC growth continues to decline, Apple’s Mac sales keep growing and are outpacing the rest of the PC industry. "The big picture item of today remains what HP is no longer doing: making post-PC devices or even PCs themselves," Siegler wrote. "In less than the span of a year, the biggest PC maker in the world realized not only that they couldn’t be Apple, but that they couldn’t even compete with Apple."

Facebook's big privacy changes a nod to Google+?

Ever since Google+ debuted in June to much fanfare, Google and Facebook have been trying to one-up each other in the social-networking arena: Facebook announced a partnership with Skype for video chat in response to Google Hangouts; Google made its +1 button similar to Facebook's Like button; and a day after Google launched online games, Facebook made changes to its own gaming platform. But the competition has been a boon for consumers, with the latest example being Facebook's recent changes to its privacy controls. After years of criticism about its privacy practices, Facebook is finally angling to make its controls more like those on Google+. Facebook says the changes will make it easier for users to understand who -- whether it be friends, everyone on the Internet, or a customized group -- will be able to view status updates, photos, videos and other content they post on the site. Icons will replace a more complicated menu, and what was called "everyone" in those settings will instead be called "public." As the New York Times' Somini Sengupta explained, "With mounting competition from other social networking sites, namely Google+, which emphasizes more compartmentalized communications to different sets of friends and acquaintances, Facebook is also keen to keep its customers' trust." Privacy advocates and security experts have given Facebook a preliminary thumbs-up on the changes, according to PCWorld's Juan Carlos Perez. "It seems to reflect some of what people have been asking for," Marian Merritt, Internet safety advocate with Symantec's Norton unit, told Perez. "The issues of privacy and of control over your data are a growing concern and consumers are paying more attention to them." Facebook has said that eventually the new features will be expanded to allow for custom sharing settings and the ability to share with Groups or lists, also à la Google+. But GigaOm's Matthew Ingram wonders what effect that will have on the social network as a whole. "Are people really going to spend the time it takes to create groups or lists or Circles and then choose from a pull-down menu every time they want to share a piece of content? I don’t think so," he said. "My fear is that people will share less as a result, or will turn away from these networks in confusion, or because the settings are too cumbersome."

StumbleUpon becoming a force for referrals?

StumbleUpon, the social discovery service, recently launched a feature called the Explore Box, which lets people explore, or "stumble" upon, a stream of recommended content related to keywords or phrases, rather than via specific web searches. Those who use the Firefox toolbar may be familiar with the option to search by interest, but this new service "takes it to another level, introducing thousands of new interests and millions of new websites," wrote SearchEngineWatch's Rob Young. Is it a search engine? Not exactly, Young said, but it does compete with one niche among search sites: browsing for random information on a certain topic of interest. StumbleUpon CEO Garrett Camp told GigaOm's Colleen Taylor that the site also has begun to bring in certain RSS feeds to boost the "amount of long-tail content it offers through the Explore Box as well as its flagship product." But the news that followed, and overshadowed, the debut of Explore Box, was Camp's claim that the company generates more referrals than Facebook, Twitter, Reddit and Digg all put together. "StumbleUpon now drives over 50% of all social referral traffic to U.S. websites!" he announced in a tweet. A study from StatCounter showed that for the first 18 days of August, StumbleUpon accounted for 50.27 percent of all referral traffic from the top 10 social sites. Facebook was second with a 38.9 percent market share, while Reddit, YouTube and Twitter each garnered less than 4 percent. But that had several industry watchers raising eyebrows, because the referrals were limited to sites that used StatCounter (not Google Analytics or Omniture). StumbleUpon "has about 15 million users," wrote Forbes' Jeff Bercovici. "Is it possible it could be directing more traffic to outside websites than Facebook, which has more than 700 million?" Bercovici ran the numbers past Hitwise, a web tracking service, which found that Facebook accounts for 6 percent of the referrals to those sites versus less than 1 percent for Twitter, and 0.0099 percent for StumbleUpon. "The claim that tiny StumbleUpon is a more important source of traffic than mighty Facebook needs to be taken with a substantial grain of salt," he concluded.

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Research

iPad users spend the most time with news apps

Media companies looking to the iPad as the next big thing may be looking in the right direction after all. iPad users spend most of their time reading news, listening to music, or accessing health and fitness apps, according to a recent survey from Localytics, a mobile applications company. The survey showed that users spent 250 percent more time engaged with news apps compared with the average time spent on other applications. Music was close behind, with 228 percent of the average, followed by health and fitness apps with 210 percent, and reference apps at 162 percent. Games ranked much further down the list, with users spending only about 75 percent of the average session length playing. While that seems paltry in comparison to news, game apps received the largest number of user interactions per month, suggesting that game-playing is popular, but not for long periods of times. Entertainment apps were last of all categories measured, with around 20 percent. The results are good news for developers of news app and publishers hoping to convert app downloads into lucrative contracts with advertisers and marketers, wrote GigaOm's Darrell Etherington, but it could also indicate that consumers have yet to be impressed with any currently available app offerings in other areas.

Consumers becoming more aware of online tracking, behavioral ads

It's hard to ignore behavioral advertising when an ad for that Caribbean cruise you were thinking about suddenly pops up while you're reading the news online. And when it comes to being aware of online tracking, you're not alone, a recent study from Harris Interactive has shown. Over the past three years, U.S. web users have become more and more cognizant of online display ad relevancy, and accordingly, behavioral advertising. Consumers are also becoming more educated about it. While just 30 percent of web users knew the meaning of the phrase “do not track,” the majority (84 percent) were aware of the term "Internet cookies," the study revealed. Users were also aware of the terms "interest-based advertising" (66 percent) and "online tracking" (65 percent), revealing that a fairly significant percentage of the U.S. Internet population recognizes they could be tracked and targeted, according to eMarketer. Meanwhile, a separate study from Parks Associates has shown that U.S. online behavioral advertising revenue will reach $4.9 billion by December 2011, and increase to $7.1 billion by 2015. It also revealed that web users are increasingly accepting of targeted advertising. More than a third of U.S. households with broadband will offer up personal information such as age, gender, income, and product preferences to receive relevant Internet ads, the study showed. MediaPost's Laurie Sullivan believes that regardless of how aware of tracking we are, soon it might be out of our hands completely. "I'm noticing more often companies turn away browsers that do not accept cookies," she wrote. "Regardless of the 'do not track' initiative, soon consumers won't have a choice."

Of Note

Brightcove’s Old School IPO (AllThingsD)
Compared to some of its peers, Brightcove is a throwback: The company has a clearly defined business, straightforward accounting and a minimum of insider selling in the run-up to its IPO.

Facebook Seeks Acquisitions to Fend Off Google Competition (Bloomberg)
The company hopes the acquisitions will improve its site design and advance mobile features to stave off competition from Google and Twitter.

Twitter Founders Back a New Start-Up (NY Times)
Lift, an app for achieving goals through positive reinforcement, is the first product of Obvious, Evan Williams and Biz Stone's secretive new company.

Nook Newsstand adds Time, People, Fortune (CNET News)
Owners of Barnes & Noble's Nook Color have even more reading material to choose from, with more than 200 interactive magazines now available through the Newsstand.

The Twitter effect: We are all members of the media now (GigaOm)
Twitter has accelerated the news cycle to the point where news breaks every minute of every hour, and a tweet is almost as good as a page-one scoop. Not only that, but anyone can do it.

AOL Growth Comes at a Cost (WSJ)
Following its acquisition binge, the Internet company faces fierce competition for ad dollars.

Twitter Just Got the Respect it Deserves (The Next Web)
If you check your analytics, you may have noticed a sharp increase in referrals from "t.co" domains. The tiny change is making Twitter an influential source of traffic.

 

openquoteFor the average American citizen, the notion of privacy is extinct. Any information you put out into cyberspace could come back to bite you in the ass.closequote

Larry Flynt, in a Huffington Post editorial about the lack of privacy in corporate America

Privacy Revisited (Huffington Post)

 

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