Google should submit proposals to compensate Chinese authors whose works it included without approval and immediately stop the practice, the association said in November. The operator of the worlds biggest Internet search engine has boosted Chinese content, including to its Google Books digital library, as it seeks to catch Baidu in a market with more Internet users than the U.S. population.

“Google doesnt want to be pulled into litigations over this matter, and is trying to resolve this situation as fast as possible so that its business in China isnt impeded,” said He Fang, a lawyer at Rouse & Co. International in Shanghai. “The company and the association will be trying to reach an agreement that is commercially beneficial.”

China Writers Association will consult its members before providing further comment on Googles statement, Lu Jie, an official at the group, said from Beijing today. Founded in 1949, the association liaises between the nations authors and the ruling Chinese Communist Party. It has more than 8,000 members, according to its Web site.

Copyright Infringement

Google removed content of author Mian Mian from its site after it was accused by the writer of copyright infringement, her lawyer said on Dec. 30. A court in Beijing heard her case against the company on Dec. 29. The matter is still before the courts and no date has been set for the hearings resumption.

“We have a long-standing policy of honoring authors wishes, and authors or publishers who wish to exclude their book may do so at any time,” Google said in a statement today. “Google Books is fully compliant with U.S. and Chinese law.”

The lawsuit in China came after Google was ordered by a court in France on Dec. 18 to stop scanning French works, after the company was ruled to have violated copyrights of some local publishers and authors. Google said it will appeal the decision.

Criticism by the industry and governments in Europe forced Google to limit its accord to establish a Book Rights Registry to works published in the U.S., U.K., Australia and Canada.

The U.S. Internet company says its online library helps the book industry by making more publications available and facilitating purchases of copyrighted works by only displaying excerpts and linking to vendors for readers who want the full text. Google Books partners with more than 30,000 publishers globally, the company said.

China had 338 million Internet users at the end of June, after adding 40 million in the first half, according to government data.

Source

“I expect a significant boom in online luxury sales during the Christmas period,” said Alessandro Perego, a professor in charge of research on e-commerce at Milan Politecnicos School of Management. “In the past year the number of Web sites has increased substantially. I expect growth rates in 2010 to match or beat this years.”

Younger, more Internet-savvy consumers and “luxury shame” thats causing customers to shun boutiques are contributing to a boom in online fashion sales. Web sales of Italian luxury goods are expected to soar 42 percent to 335 million euros ($500 million) this year, according to a study by Politecnico. That beats a 6 percent decline to 3.48 billion euros for the overall industry in a survey by fashion consultant Carlo Pambianco.

Feeling Guilty

“People feel guilty about going shopping,” Paola Durante, Bank of America Merrill Lynch director of investment banking and head of corporate broking for Italy, said in an interview in Milan. She said some people may feel more comfortable shopping from home or the office over the Internet.

Luxury brands have been available online in the U.S. for at least four years through department stores including The Neiman Marcus Group Inc. Nordstrom started sales of Giorgio Armani merchandise in 2006, adding to its range of designers such as Burberry Group Plc and Dolce & Gabbana SpA.

About 14 percent of Italians will do their holiday shopping online, according to Deloittes 2009 Christmas Survey. Greater choice, avoiding crowded stores and having little time to shop were cited as reasons to buy on the Web. Being unable to touch or directly see the items is described as the main shortfall of the net, according to the research.

Books are still the most desired Internet items on Italian wish lists, followed by clothes and shoes, Deloitte said.

“The cost of making a Web Site is not that big. Thats encouraging fashion houses,” said Stefano Sassi, chief executive officer of Milan-based Valentino, which opened its Web shop six months ago. “Theres a very interesting margin on e- commerce.”

Smart Phones

On Nov. 25, Armani introduced a mobile application for Apple Inc.s iPhone, Research in Motion Ltd.s BlackBerry and other so-called smart phones for shopping at its online store. Users will be able to buy goods “anywhere and anytime,” the Milan-based company said in a statement.

Ferragamo, whose shoes have been worn by Marilyn Monroe and Condoleeza Rice, last month unveiled its online shop, predicting the site will be one of its “top stores” starting next year.

“Some people are far away from stores, others love to buy online even if they have an outlet in the same city,” CEO Michele Norsa said in an interview.

Remote Customers

Gruppo Cavallis online shop was introduced this month in 46 countries, giving the Florence-based company access to customers in areas where it doesnt have shops.

“The Internet has revolutionized consumer behavior, also for luxury consumers, and will help our online shop to become one of our top stores at a global level,” Cavalli CEO Gianluca Brozzetti said.

Men, in particular, are turning to the Internet to avoid crowded shops and save time when selecting gifts, Perego said.

“If women are the main clients at our outlets, a significant slice of online shopping is done by men,” said Paolo Fontanelli, CEO of leather-goods maker Furla SpA. “This is the first year for our e-commerce and its already generating sales comparable to an actual store.”

Source

McLaughlins departure highlights the connections between Google, the most popular Internet search engine, and the Obama administration. Google Chief Executive Officer Eric Schmidt is part of the presidents council of advisers on science and technology. Schmidt also campaigned for the governments economic stimulus package, which was passed earlier this year.

“We wish Andrew the best of luck and thank him for everything hes done for Google during his time here,” Google said yesterday in an e-mailed statement. The White Houses press department didnt have an immediate comment.

McLaughlin is also an emeritus fellow at the Berkman Center for Internet & Society at Harvard Law School, where he worked on regulation of the Internet and telecommunications networks. He also has worked on projects to expand Internet use in developing countries in Africa and the Middle East, according to a biography on Harvards Web site.

From 1999 to 2002, McLaughlin helped start the Internet Corporation for Assigned Names and Numbers, which coordinates Internet domain names and computer addresses.

Aneesh Chopra

Obama named Aneesh Chopra, Virginias secretary of technology, as his chief technology officer in April. Obama said at the time that Chopra would “help the country meet its goals, from job creation, to reducing health care costs, to protecting the homeland.”

Google has sometimes found itself in conflict with the administration. The U.S. Federal Trade Commission is examining whether Apple Inc. and Google are breaking antitrust law by sharing board members, a person familiar with the investigation said on May 5. The Justice Department also has looked into Googles settlement with publishers over its book-scanning project.

McLaughlins move was reported yesterday by the New York Times.

Google rose $6.83 to $417.23 yesterday in Nasdaq Stock Market trading. The shares have advanced 36 percent this year.

Source

Quarterly sales dipped 3.7 percent to 690.8 billion yen as an ongoing recession cut into handset sales.

Softbank has been more successful than its rivals, NTT DoCoMo and KDDI Corp., in wooing people to its cell phone services for 23 straight months through March with discounts and by being the exclusive local carrier for eye-catching handsets like Apple Inc.s iPhone.

But it has yet to translate its aggressive marketing campaigns, such as the TV ads featuring a popular talking white dog, into solid profit gains.

But Chief Executive Masayoshi Son said his company was doing well in its core business, racking up the fourth straight record operating profit in the fiscal year through March. Softbank is now moving into a stage of delivering solid profits after a decade of shaky profitability caused by aggressive investments into emerging Internet businesses.

“We believed we had to plant big seeds for the business model in Japan, the U.S. and Asia,” he told a news conference carried live on the Internet.

Softbank, now with about 20.6 million subscribers, controls about 19.2 percent of the nations market, up 1.1 percentage points from the previous fiscal year. But average sales per user declined for voice calls, while they were up for data transmission.

Losses on investments from the market downturn dragged on its earnings, according to Softbank, which bought British cellular giant Vodafone Group PLCs struggling Japanese operations in 2006.

A major one-time loss related to payments for bonds for its mobile unit as well as a write-off for its optical fiber Internet services, also hurt results, it said.

One business area that performed better than last year was its Internet-related “cultural” businesses such as advertising, Internet shopping and auctions, Softbank said.

Softbank also introduced attractive mobile content such as video of comedy acts popular in Japan called “S-1 Battle,” and easy-to-use applications called “mobile widget.”

For the fiscal year ending March 31, Softbanks profit dropped 60.3 percent to 43.2 billion yen, on 2.67 trillion yen in sales, down 3.7 percent on year.

Defections from rivals to Softbank accelerated since Japan adopted “number portability” late 2007, which allows people to switch carriers without changing phone numbers.

But all carriers have been forced to lower their fees amid intense competition. Some discounts being offered require people to use the same handset for some time, and that has discouraged machine upgrades.

Softbank shares gained 3.4 percent to 1,550 yen in Tokyo. Earnings were released after trading ended on the Tokyo Stock Exchange.

Source

“You all know that I would like to figure out how to pool somehow Microsoft and Yahoo,” Ballmer said. “Im hoping thats a reasonable conversation to have with new management at Yahoo.”

Ballmers comments gave investors more hope for a deal after Yahoo rejected Microsofts $47.5 billion hostile takeover offer last year, said Sachin Shah, an analyst with ICAP in Jersey City, New Jersey. Yahoo CEO Carol Bartz, who took over from Jerry Yang last month, is working to reverse three straight years of profit declines.

Ballmer is saying, “Wed like to do a deal sooner rather than later, and, guys, were trying to call you,” said Shah, who recommends buying Yahoo shares. “The winds may have shifted toward Yahoo.”

Both Ballmer and Bartz are under pressure to shore up their Internet search engines and online advertising businesses, which even when combined generated less than half of Googles revenue in the fourth quarter. Google controls the Internet-search market in the U.S. with 63 percent of queries, according to ComScore Inc. of Reston, Virginia.

Jerry Yang

Ballmer, who has invested billions of dollars in Microsofts online advertising business, said its important not to ignore shareholder concerns about generating a return on Microsofts Internet investments.

“I dont want to wind up being known as the Jerry Yang of this market,” said Ballmer, 52. “That whole episode left me understanding how shareholders can get frustrated with managements who arent serious about performance.”

Ballmer said that he doesnt know if a deal will happen with Yahoo. Yahoo spokeswoman Kim Rubey declined to comment on Ballmers presentation.

Yahoo, based in Sunnyvale, California, rose 78 cents, or 6.5 percent, to $12.75 yesterday in Nasdaq Stock Market trading. The shares have climbed 4.5 percent this year. Microsoft, down 12 percent this year, fell 4 cents to $17.17.

Ballmer didnt specify which engineers he has hired from Yahoo, except for Qi Lu, who was named president of Microsofts online-services group in December. Microsoft hired Internet- search executive Sean Suchter as general manager of its Silicon Valley Search Technology Center the month before. Two weeks ago, Microsoft hired Larry Heck, who oversaw a Yahoo lab that developed search and advertising algorithms.

Ballmer is more open to negotiating with Bartz than with Yang, increasing the chances that a deal gets done, said Sandeep Aggarwal, an analyst with Collins Stewart LLC in San Francisco.

In her first earnings conference call, Bartz said she would consider offers to buy the companys assets, while adding that she didnt come to Yahoo with the intention of selling it.

“She knows they need to do a deal,” Shah said. “Right now, shes still trying to understand the situation.”

Microsoft, which has less than 10 percent of the U.S. Internet search market, could combine with Yahoo to claim 30 percent share, according to ComScore.

“Some people say to me, Why dont you just give up?” Ballmer said. “This is a huge market. You give up, you cant get back in the game.”

Source

It gave Microsoft eight weeks to respond, adding that the company can defend its position in a hearing if it finds that useful.

Microsoft issued a statement saying, “We are committed to conducting our business in full compliance with European law.”

The commissions investigation into Microsofts Web-surfing software began a year ago, after the Norwegian browser-maker Opera Software ASA filed a complaint. Opera argued that Microsoft hurt competitors not only by bundling the software, in effect giving away the browser, but also by not following accepted Web standards.

That meant programmers who built Web pages would have to tweak their codes for different browsers. In many cases, they simply designed pages that worked with market-leading Internet Explorer but showed up garbled on competing browsers.

At the time of the complaint, Opera said it was asking EU regulators to either force Microsoft to market a version of Windows without the browser, or to include other browsers with Windows.

The European Commission upheld Operas complaint, adding that a yearlong probe led it “to believe that the tying of Internet Explorer with Windows - which makes Internet Explorer available on 90 percent of the worlds PCs - distorts competition.”

It said Microsoft markets Internet Explorer “with an artificial distribution advantage which other web browsers are unable to match.”

It added that Internet Explorers disproportionate market share leaves content providers and software developers no option but to “design Web sites or software primarily for Internet Explorer.”

Fridays announcement by the European Commission means Microsoft must alter its marketing practices in Europe and risks a large fine.

Microsoft has touted its forthcoming browser, Internet Explorer 8, as being fully compliant with Web standards.

It fined it more than $600 million and ordered it to offer a version of Windows in Europe without the Media Player software and to share communications code with rivals.

Microsoft lost an appeal of that ruling Sept. 17, 2007.

Although Microsoft is an American company, it must meet EU antitrust rules if it wants to do business in the European Union. EU antitrust rules prohibit companies from abusing a dominant market position.

—

Associated Press Writer Jessica Mintz in Seattle contributed to this report.

Source: ripaw

The Federal Trade Commission received more than 3 million complaints about the spam and related Web sites, illustrating the scale of the operation, officials said.

The sites, including one called “Canadian Healthcare,” were difficult to distinguish from legitimate online pharmacies - making the pitches more persuasive, said Steve Baker, the FTC’s Midwest Region director.

“These sites are really professionally constructed,” he said. “Some years ago you used to be able to tell the bogus things because they looked cheesy and had misspellings. Anymore, I don’t think that’s true.”

The operation violated the federal CAN-SPAM Act of 2003, meant to restrict commercial spam, by using false header information to hide the origin of messages, not offering an opt-out link and failing to list a postal address, the FTC said.

As part of their inquiry, FTC staff made undercover purchases from the sites. No one asked the clandestine buyers to provide verification of a prescription and the shipped drugs did not include doctors’ instructions or dosage information, officials said.

A federal judge in Chicago issued a temporary injunction to halt the operation and also froze its assets. The Federal Bureau of Investigation is investigating and those involved could also face criminal charges, Baker said.

Those spearheading the enterprise, known as “Affking” on the Internet, included a U.S. and a New Zealand citizen, according to court documents.

Servers in China hosted the Web sites and the drugs were shipped from India, while operatives in Cyprus and the former Soviet republic of Georgia processed credit card information, Baker said.

Source: AP

The sphere of influence generated by this corporation grows every year. It could have something to do with the fact that they treat their employees well and know how to run a business.

While advertisers of home and auto loans cut back, makers of apparel and appliances kept spending, Chief Financial Officer Patrick Pichette said. Consumers continue to shop online, he said, with clicks on ads climbing 18 percent, near the previous quarter’s 19 percent growth.

The results, combined with better-than-anticipated reports from International Business Machines Corp. and Advanced Micro Devices Inc., cheered investors after a decline in technology shares this month. Google showed resilience in a weakening economy, said Mark May, an analyst at Needham & Co. in New York.

“This really shows we need to give them the benefit of the doubt,” said May, who recommends buying the shares. “They should be able to weather the storm fairly well.”

Google’s third-quarter net income rose 26 percent to $1.35 billion, or $4.24 a share, from $1.07 billion, or $3.38, a year earlier. Leaving out costs such as stock-based compensation, profit was $4.92 a share, beating the $4.75 average estimate of analysts in a Bloomberg survey.

Google, based in Mountain View, California, rose $19.52, or 5.5 percent, to $372.54 on the Nasdaq Stock Market at 4 p.m. New York time, after earlier reaching $378.97. The shares have dropped 46 percent this year.

Advertising Shift

Advertisers are cutting back on TV and print media spending in favor of ads that run alongside search listings. The Internet will account for 8.7 percent of the $284 billion in U.S. ad spending this year, up from 7.2 percent in 2007, according to Barclays Capital.

Excluding revenue passed on to partner sites, Google’s sales expanded to $4.04 billion last quarter. Total revenue climbed 31 percent to $5.54 billion.

At least eight analysts had reduced their estimates for Google’s third quarter this month after the global credit crisis erupted. That made it easier for the company to beat the average profit estimates yesterday.

“This was exactly the kind of shot in the arm that investors need,” said Jeff Lindsay, an analyst with Sanford C. Bernstein & Co. in New York. “People lost a lot of faith in the Internet, but this is exactly what the doctor ordered.”

New Contracts

IBM, based in Armonk, New York, said yesterday it signed $12.7 billion in contracts last quarter, topping the estimate of as much as $11 billion from Cowen & Co. analyst Louis Miscioscia. Winning contracts with the Royal Dutch Navy and Bristol-Myers Squibb Co. boosted the total.

AMD reported a narrower third-quarter loss of $67 million, or 11 cents a share, compared with $396 million, or 71 cents, a year earlier as demand grew for graphics chips. The Sunnyvale, California-based company said revenue this quarter will probably be little changed from the previous period.

AMD rose 36 cents, or 8.7 percent, to $4.48 on the New York Stock Exchange. IBM dropped 58 cents to $90.94 after gaining yesterday in late trading.

“Tech is going to continue to be challenged for a period of time,” Miscioscia, who has a neutral rating on IBM shares, said in an interview. “To put this in perspective, IBM is up $2 after market, not $10, after falling about $20 since Oct. 1.”

Google handled 63 percent of U.S. online searches in August, double the market share of Yahoo! Inc. and Microsoft Corp. combined. That dominance has helped the company command higher prices for ads, according to Yahoo, which is awaiting government approval of an agreement to let Google sell some ads on its sites.

Cutting Back

Still, Google has reduced expenses by slowing its hiring rate and spending less on travel and events, said co-founder Sergey Brin.

“We don’t know exactly what the future holds. We’ve taken a conservative approach,” Brin said in an interview. “We view this as an opportunity to refine our company and sharpen it.”

Capital expenditures fell to $452 million, down 18 percent from a year earlier, as Google made more efficient use of its computing centers, Brin said. He said he couldn’t forecast whether the costs would continue to fall.

The credit crisis may cost the Internet ad market $6.7 billion in lost sales through 2010, according to Collins Stewart Plc. Big and small businesses, from General Motors Corp. to Simplexity LLC, are reducing ad spending plans, while some financial companies, such as Wachovia Corp., have disappeared.

Slower Growth?

The reductions will push down growth in U.S. Internet ad spending to less than 20 percent next year for the first time since 2002, said Sandeep Aggarwal, a Collins Stewart analyst in San Francisco. Advertisers will scale back spending on newspapers and broadcast TV networks, his firm said this month.

“Advertisers stay with the Internet because it’s the way to reach the key younger demographic and that’s what advertisers are really after,” Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC, said in an interview from Bedford Hills, New York.

Google, which gets almost all its revenue from Internet searches, is developing ways to advertise with images and video. The company struck a deal this month to show full-length programs from CBS Corp. on its YouTube site, splitting ad revenue with the network.

“The economic situation is so fluid that we’re all sort of in uncharted territory,” Chief Executive Officer Eric Schmidt said yesterday on a conference call. “We’ve always been in this for the long term, and we believe that’s even more important today than ever.”

Source: Bloomberg

Unlike the movie and TV industries, the Chinese Internet business is open to foreign investment. China has the world’s largest online population, with more than 250 million using the Net; many of them are students or people in their 20s, prime users of MySpace in other countries. Murdoch’s wife, Wendi, was born and grew up in China and took an active role in launching a local version of News Corp,’s social networking service (SNS), MySpace.cn, (BusinessWeek, 6/26/07) in the country in April 2007.

Murdoch’s bad China luck isn’t changing, though. MySpace China, a joint venture among News Corp., venture capital firm IDG-Accel (a partnership between Boston-based IDG and Accel Partners from Silicon Valley), and local investment firm China Broadband Capital Partners, doesn’t have much to show for its effort. “MySpace.cn has not become a Tier 1 SNS site in China,” said Beijing-based market researcher BDA China in an August report. The company is an also-ran in the Chinese SNS scene, dominated by local names such as Qzone, Xiaonei, and 51.com, and was hit last month by reports in the local and international media of a management shakeup, including the departure of Luo Chuan, who had left Microsoft (MSFT) China to be MySpace China’s CEO.
Rethinking the Business Model

While denying Luo has departed, an executive at one of MySpace China’s shareholders confirms that some major changes are in store. Zhou Quan, managing director and general partner at IDG Accel, which owns 10% of MySpace China, says executives are in the midst of rethinking the business model. Luo, he says, continues to work at MySpace China “almost full-time” and is taking an active role in discussions regarding the company’s future direction. “There will be a total plan, not just a change in CEO,” says Zhou. “They will come up with a new strategy.”

Other people involved with MySpace China declined to comment. China Broadband did not respond to requests for an interview. A U.S.-based spokesman for MySpace referred questions from BusinessWeek to the China operation. “We are not in a position to comment on the reports regarding our CEO,” said MySpace China spokesman Yitian Zou in an e-mail. “The company and business are doing well.”

There’s certainly a big gap between MySpace China and its Chinese rivals, though. According to BDA, MySpace China hopes to have 10 million registered users by the end of the year. In contrast, market leader Qzone, owned by Shenzhen-based instant-messaging giant Tencent Holdings, already has 105 million registered users.

Source: Businessweek

The measure, which was sponsored by Rep. Jay Inslee, D-Wash., and now heads to the president, would green-light an anticipated deal between Webcasters and SoundExchange, a nonprofit that collects royalties for recording copyright owners from Internet radio stations and other digital radio services.

The two sides have been negotiating new royalty rates following a March 2007 ruling by the federal Copyright Royalty Board that dramatically increased the rates that Internet radio stations must pay artists and record labels. Internet radio stations say the new rates - which most but not all are paying - could effectively put them out of business.

Unless something is done, copyright royalties could eventually eat up as much as 70 percent of Internet radio industry revenue, by some estimates.

After months of talks, SoundExchange has announced an agreement in principle with National Public Radio and has recently moved closer to a deal with big Webcasters, including those represented by the Digital Media Association (DiMA), a trade group made up of companies that operate online audio and video services.

Still, the negotiations with DiMA and other Webcasters are ongoing and the two sides were running out of time. Because Internet radio companies operate under a government license, any final agreement needs congressional authorization. And with Congress preparing to adjourn at least until after the elections - and possibly until next year - lawmakers probably will not be around to provide approval when an accord is reached.

So Inslee’s legislation enables the two sides to continue talking through Feb. 15 and makes any deal struck while lawmakers are in recess legally binding. The bill provides congressional approval for any agreements that SoundExchange reaches with DiMA and other types of Webcasters, such as college or religious Webcasters.

Tim Westergren, founder of popular Internet radio company Pandora Media, said Wednesday that the measure removes a major hurdle to a final agreement on copyright royalty rates. “This is a substantial milestone for people who love music and musicians,” he said.

Pandora, which is based in Oakland, Calif., has threatened to shut down if the rates set by the Copyright Royalty Board are not lowered.

The Digital Media Association’s executive director, Jonathan Potter, said in a statement that he is optimistic Webcasters and SoundExchange will soon reach an agreement that will create “long-term stability that will re-energize the Internet radio business.” DiMA members include Pandora as well as Yahoo Inc., RealNetworks Inc., Microsoft Corp. and Amazon.com Inc.

SoundExchange sounded a more cautious tone, noting that while there has been progress in the talks, there is still no deal. “We are hopeful, but we’ve been close at other times during the past 18 months,” SoundExchange executive director John Simson said in a statement.

Traditional AM and FM broadcasters are currently exempt from copyright royalty rates for over-the-air radio play since - under the logic of the current law - that airplay is thought to provide free promotion for artists and labels. But the broadcasters are subject to the new rates for any songs streamed over radio station Web sites.

The National Association of Broadcasters, which represents those traditional stations, said it looks forward to sitting down with SoundExchange “to craft equitable streaming rates that enhance the online music experience and expose more artists to our listeners.”

Source: AP