All Things Digital

After months of agonizing self-introspection, it appears Yahoo President Sue Decker has finally gotten in touch with her true feelings about Carl Icahn. In an interview with CNBC Wednesday, Decker welcomed Yahoo’s billionaire back-seat drive to Yahoo’s board of directors with a big, wet PR kiss. “I’m totally looking forward to meeting [Carl],” she said. “I’d love for him to learn about our business and I’d love to get his advice. So there are absolutely no hard feelings of any sort. I think the best thing I can say is that we’re moving forward and we’ll have the distractions behind us, and I want that for our employees and I want that for our company.”

Hug it out, Sue. Hug it out.

Looks like Blogger is a more popular blogging platform than Wordpress and Moveable Type, after all — in some circles, anyway. Internet security outfit Sophos says it detects just over 16,000 malicious Web pages each day, and nearly 2 % of them are hosted on Blogger. “The number one host for malware on the web is Blogger (Blogspot.com), which allows computer users to make their own websites easily at no charge,” Sophos said in its 2008 Security Threat Report (PDF), noting that between malicious blogs and malicious comments posted to otherwise benign blogs, Blogspot.com accounts for 2 percent of all of the world’s malware hosted on the Web.

And Google is serving up ads on it.

To be fair, though it’s no easy task for the search giant to keep Blogger malware-free. So in some sense, the fact that the service hosts 2% of all malware and not 20% is an achievement, as Sophos’s Graham Cluley notes. “If you think about it, Blogger/Blogspot’s position is probably not surprising - it’s a phenomenally popular platform for people to create their own webpages (blogs), and gives internet users the ability to comment on other people’s blogs,” Cluley said in a post to his blog. “Inevitably, there are ne’er-do-wells out there who will try and abuse a great service like that, and try and plant malware and malicious links. For its part, Google - the company who own Blogspot - takes security seriously, and works hard to shut down webpages serving up malware.”

Differences of opinion are what make the financial markets go round. And it would appear that we have some strong ones among the proxy services advising Yahoo shareholders on how to vote at the upcoming election of Yahoo’s board members. This week Egan-Jones Proxy Services threw its support behind all eight board members up for re-election at Yahoo’s Aug. 1 shareholder meeting, arguing that all are qualified for the job.

Glass Lewis & Co., however, does not share that opinion. In a report issued Wednesday, the proxy advisory firm recommended getting rid of three Yahoo (YHOO) directors: Chairman Roy Bostock and directors Ron Burkle and Arthur Kern. All three sit on the company’s compensation committee, of which Glass Lewis seems to take a very dim view. From the Glass Lewis report:

Nominees BOSTOCK, BURKLE and KERN all served as members of the compensation committee in fiscal year 2007, during which time the Company paid more compensation to its top executives but performed worse than its peers. The members of the compensation committee have the responsibility of reviewing all aspects of the compensation program for the Company’s executive officers. It appears to us that members of this committee have not effectively served shareholders in this regard. Further, we are concerned that the committee approved the adoption of the Change in Control Severance Plans with potential brobdingnagian payouts, potentially discouraging a takeover.

Additionally, Mr. Bostock serves as chairman of the nominating and corporate governance committee. At last year’s annual meeting, Messrs. Bostock, Burkle and Kern each received over a 31 percent vote against their re-election. In our 2007 Proxy Paper, we recommended voting against each of these directors due to the Company’s excessive compensation practices. We believe this raises concerns about whether the nominating and corporate governance committee is fulfilling its duty to shareholders, considering that all three directors remain on the board. Moreover, we find it disconcerting that Messrs. Bostock and Kern continue to serve on the committee charged with overseeing governance issues for the Company.”

It’s worth noting, as well, that Glass Lewis was not without concerns about Carl Icahn. In its report, the advisory service noted:

Carl Icahn, chairman of Icahn Enterprises G.P. and CEO of Icahn Capital LP, currently serves on a total of seven public company boards. His total number of directorships will expand to eight once he is appointed to Yahoo’s board. We believe that the time commitment required by this number of board memberships may preclude Mr. Icahn from fulfilling his responsibilities to this Company’s shareholders. We believe shareholders should monitor Mr. Icahn’s ability to devote sufficient time and attention to the Company.”

Well, I guess the check finally cleared… . After a nearly 18-month review, the Federal Communications Commission has finally reached an agreement to approve the merger of XM Satellite Radio Holdings and Sirius Satellite Radio . Though an official announcement is yet to be made, some outstanding enforcement matters have been resolved, and the stage is set for formal Commission approval. “I think it’s fair to say an agreement in principle has been reached,” FCC Chairman Kevin Martin told The Wall Street Journal. “We’re still trying to work out the language.”

But once the Commission’s done that, XM (XM) and Sirius (SIRI)–the only two satellite radio players in the market–can finally join to create the pay-radio monopoly they’ve long planned. “I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, greater choices among innovative devices and real competition with digital radio,” said
Jonathan S. Adelstein, an FCC commissioner who’s opposed the merger on the grounds that it’s against the public interest to let the only two companies in a particular business combine. “Instead, it appears they’re going to get a monopoly with window dressing.”

According to popular legend, Facebook founder Mark Zuckerberg once kept two versions of his business card in his wallet–-one with the title CEO, the other with “I’M CEO . . . BITCH.” Seems that before Facebook became the de facto platform of the attention economy, it was a platform for the attention-starved.

Well, there was no shortage of attention for the social-networking phenom Wednesday as it kicked off its second F8 conference in San Francisco. In a 90-minute keynote address, Zuckerberg — a spitting image of Judge Reinhold in Fast Times at Ridgemont High — offered up new details on Facebook’s new Great Apps program, the expansion of its Translation effort, and Facebook Connect, a service that will essentially transform a user’s Facebook profile into a portable Internet identity that can be extended to other Web sites. Also discussed: the company’s new mission statement and the first fruits of the fbFund, the $10 million reserve established last year to help finance new Facebook applications.

QOTD

I wish I knew.”

–Facebook CEO Mark Zuckerberg on when we’ll see a Facebook payments platform

During the TechCrunch 40 conference last year, Facebook CEO Mark Zuckerberg announced the FB Fund, a $10 million fund he established with folks like Jim Breyer of Accel Partners and LinkedIn’s Reid Hoffman to issue grants to Facebook developers. Today the company announced the first developers to win grants. They are:

• ConnectedWeddings – Interactive wedding planning
• GoalCamp – Group goal-setting, training, and tracking application
• CourseFeed by Classtop – Application for social classroom learning
• MyListo – Social shopping app that allows users to share and receive advice/deals
• LuckyCal – Uses your contacts, interests, and calendars to create interest matches
• Zimride Carpool – Connecting people looking to carpool
• J2Play – Social gaming platform for PC, mobile, and web game developers
• HotBerry –Frameworks and mechanics let users generate casual games
• Podclass - Enables college students to access courses from within Facebook
• Trazzler – Application that helps you decided where to travel

Facebook plans to award another $10 million in $25,000 to $250,000 non-recourse grants to 25 developers this fall. Winners will be announced on September 22.

Looks like Facebook has finally gotten around to addressing the issue of the intrusive third-party applications so prevalent in its ecosystem. “We haven’t done enough to reward Facebook’s good citizens,” Facebook CEO Mark Zuckerberg said during his f8 keynote address Wednesday. “And we haven’t punished those that have abused the Facebook ecosystem.”

With that in mind, the company is incentivizing developers to create useful applications with its new Great Apps program. Great Apps, Ben Ling, head of Facebook Platform Product Marketing says, recognizes applications that are meaningful, trustworthy and well-designed. Apps that hew to Facebook’s “Guiding Principles for Great Applications” (see image below)–they must be “social, useful, engaging, expressive, secure, respectful, transparent, clean, fast and robust”–will be given greater visibility across the site and early access to new features. The first apps to be awarded that status: iLike and Causes.

Facebook, it should be noted, plans to aggressively police its site for apps that abuse user trust and will take “enforcement actions” if necessary.

“The majority of good applications will soon come from outside Facebook, not within it.” This according to Facebook CEO Mark Zuckerberg, who announced the social network’s new “Connect” service at the company’s f8 conference today. Connect essentially allows Facebook users to authenticate into third-party Web sites using their Facebook accounts. So, for example, users could log onto a site like Digg with their Facebook identity without ever creating a new profile on Digg. “From the largest online destinations to the most obscure blog, Digg surfaces the best content as voted on by its community of 26 million,” said Digg founder Kevin Rose. “Facebook Connect will help us promote more conversations on Digg by giving Facebook’s 90 million users an opportunity to sign in to Digg with their Facebook accounts and become part of the active Digg community. This allows both Facebook and Digg users to more easily share the content they care about with the people they care about.”

Developer keys for Facebook Connect are available today. Apps should be rolling out soon.

Facebook said this afternoon that it is opening its Translation Application to any developer using Facebook Platform. Beginning today, all Facebook developers can make their applications available in any of the 20 languages currently available on Facebook. The company expects to add 69 more languages in the months ahead.

At precisely 1:35 p.m. Pacific time, Facebook CEO Mark Zuckerberg, the guy “Rolling Stone” once described as a “Nietzschean superdork,” takes the stage and begins his address with a simple, unassuming “hey, guys.” He moves quickly on to the “Facebook Movement” and the company’s mission, which he defined while on his recent worldwide vision quest. According to Zuckerberg, Facebook’s mission is to “give people the power to share and make the world more open and connected.”

Apparently, we’ve refined things a bit since D6 and that “Facebook is about helping people to share information and share themselves” episode.

“We want to define human presence and extend it,” Zuckerberg says. “We’re working to make the world a more open place. We’re working to make people have a more open connection with each other and the world around them … We’re making the world more transparent.”

Zuckerberg says Facebook’s goal is to highlight the good in people, cultivate it, and expose the bad. “Facebook is all about transparency,” he says. “It’s good for people to be good to each other.”

“It’s good for people to be good to each other.” Sort of like Google’s (GOOG) informal “Don’t be evil” motto, but sillier.

Given the speed at which consumers are abandoning their traditional landlines, AT&T and its shareholders should be quite pleased with the company’s latest earnings. AT&T (T) said Wednesday that second-quarter profit rose 30 percent as it gained a net 1.3 million wireless customers. Revenue rose 4.7 percent to $30.87 billion from $29.48 billion, with a nearly 16 percent increase in wireless sales more than making up for a 8.3 percent drop in AT&T’s traditional voice-calling business.

And wireless sales will undoubtedly increase again in the months ahead thanks to Apple’s (AAPL) new iPhone 3G. AT&T reports that sales of the device in the first 12 days doubled those of the original iPhone last year, despite supply issues. “In the days following our exclusive U.S. launch of this new device, powered by the nation’s fastest 3G wireless network, customer response has been everything we had anticipated and more,” Randall Stephenson, AT&T chief executive, said in a statement. “This strengthens our wireless business, and it reinforces our positive view of the opportunities ahead for AT&T and the industry.”

Apple reported the best June quarter in the company’s history, for both revenue and earnings, Monday. So why the sudden plunge in share price? Seems concerns about cancer-survivor Steve Jobs’s gaunt appearance at Apple’s World Wide Developers Conference in June have not subsided; nor are they likely to any time soon given the company’s response to them. Asked about Jobs’s health during Apple’s earnings call Monday, Apple CFO Peter Oppenheimer said it “was a private matter.” Predictably, that not-exactly-reassuring remark inspired all sorts of speculation about Jobs’s well-being, which, like it or not, is tied very closely to Apple’s company fortunes. “They have a longstanding policy to not comment on that matter,” explained American Technology Research analyst Shaw Wu. “They didn’t say anything new. But the answer didn’t give anybody confidence. And saying it was a ‘private matter’ didn’t help.”

Clearly.

That said, Apple (AAPL) seems to have recognized its misstep and is working to temper concerns over Jobs’s health. The New York Times reports that Jobs has been telling colleagues that he is cancer-free and that his gaunt appearance lately is due to nutritional issues arising from his cancer surgery. Finally, Apple does indeed have a succession strategy in place should Jobs step away from his current duties. Of course, that strategy is confidential, like pretty much every other aspect of Apple’s business.

The Department of Justice has failed a third time to resuscitate the Child Online Protection Act, or COPA, a federal law designed to protect children from the vast reams of smut upon which it believes the Internet to be built. The Third Circuit Court of Appeals struck the law down again today, ruling that it would criminalize a category of speech that, while inappropriate for minors and the DOJ, is constitutionally protected for adults.

Apparently, COPA is not just an unsettling attempt of the few to define the values of the many, but an unconstitutional one as well.

“It is apparent that COPA, like the Communications Decency Act before it, ‘effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another,’ Reno, 521 U.S. at 874, 117 S.Ct. at 2346, and thus is overbroad,” the court wrote. “For this reason, COPA violates the First Amendment. These burdens would chill protected speech.”

That would seem to be the consensus. After all, this isn’t the first time this 1998 law has been ruled unconstitutional. Sadly, the DOJ is unconvinced. “We are disappointed that the Third Circuit Court of Appeals struck down a Congressional statute designed to protect our children from exposure to sexually explicit material on the internet,” a DOJ representative said in a statement, indicating that it will likely appeal the decision.

Fourth time’s a charm, I guess.

It was supposed to be Yahoo’s big turnaround day, but like so much in the company’s recent history, it fell woefully short. After market close Tuesday, Yahoo posted second-quarter earnings that fell shy of already lowered estimates.

Analysts hadn’t been expecting much, and Yahoo (YHOO) gave them even less. It underpromised and underdelivered.

Net income for the quarter fell to $131 million, or nine cents a share, from $161 million, or 11 cents a share. Analysts had predicted earnings of 10 cents a share, and $1.38 billion in net revenue. “Yahoo!’s transformation gained momentum in the second quarter as we announced new product initiatives and partnerships along with solid financial results,” said Yahoo president Sue Decker, presumably with a straight face. ” … We remain confident that our efforts will lead to a
stronger and more profitable Yahoo!. Notwithstanding a more difficult economic environment than anticipated, and substantial external swirl related to Microsoft, we are on track with our expectations for 2008, both financially and with respect to our customer offerings and product pipeline, which we expect to combine to drive shareholder return in 2009 and 2010.”

Substantial external swirl?

You can almost hear Carl Icahn rubbing his hands together, can’t you?