The company today announced plans to reduce its newsroom staff by eight percent by the end of 2009. Cuts will be made by buyout, but the company will resort to layoffs should its hand be forced.

“As before, if we do not reach 100 positions through buyouts, we will be forced to go to layoffs,” New York Times Executive Editor Bill Keller wrote in a note to employees. I hope that won’t happen, but it might. I won’t pretend that these staff cuts will not add to the burdens of journalists whose responsibilities have grown faster than their compensation. Like you, I yearn for the day when we can do our jobs without looking over our shoulders for economic thunderstorms.”

Sad, sad news for a storied newspaper and an imperiled industry.

Keller’s memo in full, below:

Colleagues,

I had planned to invite you to the newsroom and break this news in person today, but I’ve been hit by something that seems to be the flu. Though I strongly believe in delivering bad news in person, I don’t want to add insult to injury by spreading infection.

Let me cut to the chase: We have been told to reduce the newsroom by 100 positions between now and the end of the year.

We hope to accomplish this by offering voluntary buyouts. On Thursday, the Company will be sending buyout offers to everyone in the newsroom. Getting a buyout package does NOT mean we want you to leave. It is simply easier to send the envelopes to everyone. If you think a buyout may be right for you, you have up to 45 days to decide whether you will accept it or not.

As before, if we do not reach 100 positions through buyouts, we will be forced to go to layoffs. I hope that won’t happen, but it might.

Our colleagues in editorial and op-ed, and on the business side, also face another round of budget cuts.

In recent years, we’ve managed to avoid the disabling cutbacks that have hit other newsrooms. The Company has chosen to protect the journalism by cutting production and other business-side costs, and the newsroom itself has managed its resources frugally. These latest cuts will still leave us with the largest, strongest and most ambitious editorial staff of any newsroom in the country, if not the world.

I won’t pretend that these staff cuts will not add to the burdens of journalists whose responsibilities have grown faster than their compensation. But we’ve been looking hard at ways to minimize the impact–in part, by re-engineering some of our copy flow. I won’t promise this will be easy or painless, but I believe we can weather these cuts without seriously compromising our commitment to coverage of the region, the country and the world. We will remain the single best news organization on earth.

I doubt that anyone is shocked by the fact of this, but it is happening sooner than anyone anticipated. When we took our 5 percent pay cuts, it was in the hope that this would fend off the need for more staff cuts this year. But I accept that if it’s going to happen, it should be done quickly. We will get through this and move on.

In my absence, Bill Schmidt and John and Jill have volunteered to take your questions this afternoon. Feel free to bring additional questions to me as soon as I’m back, or check with Bill Schmidt or John or Jill privately, or save them for the next Throw Stuff at Bill session, which is in a couple of weeks.

We often–and rightly–voice our gratitude that we work for a company and a family that prize quality journalism above all. I hope you know that the company and the family, and I, feel an equal debt of gratitude to all of you whose sacrifice and loyalty have kept us strong.

Like you, I yearn for the day when we can do our jobs without looking over our shoulders for economic thunderstorms.

Bill

But perhaps those restrictions were better left in place. Because on Thursday, the DOJ opened a preliminary investigation into IBM’s business practices, seeking to determine if the company has abused its monopoly position in the mainframe market. The inquiry stems from a complaint filed by the Computer and Communications Industry Association that claims IBM (IBM) has undermined sales of competing mainframe hardware products by refusing to license its mainframe operating system and certain other intellectual property.

“IBM has used its power to resurrect and create a formidable set of barriers in the mainframe market by their misuse of intellectual property,” CCIA CEO Edward J. Black, told the New York Times. “Once IBM walls are taken down by the government enforcing the law, there will be a rush of people looking to get part of this marketplace.”

Perhaps. Certainly that’s not really the case now. As the CCIA and T3 Technologies–which filed an antitrust complaint against IBM in Europe earlier this year for similar reasons–would argue, IBM has essentially left the industry with a single mainframe vendor: itself. And if that sounds like an exaggeration, consider this: A few years back, a company called Platform Solutions attempted to license IBM’s mainframe software. IBM refused and then sued Platform, accusing it of a raft of IP-related violations. Platform countersued. And then, in 2008, IBM acquired the company and promptly shut down its operations.

“For decades, IBM licensed its system software and intellectual property to other computer manufacturers,” T3 president Steven Friedman said earlier this year. “However, for no reason other than to remove all competition from the mainframe market, IBM eliminated programs to allow customers to buy its mainframe software for use on non-IBM mainframe solutions….[Now] only IBM…offers IBM- compatible mainframes and, based on IDC reports, controls over 99% of all existing IBM-compatible mainframes in use today.”

Geekfighting may never become its own UFC event, but following tech news this week seemed, in places, like a view to a big, well-funded cage match. Things got so rowdy that Kara Swisher could hear them all the way across “The Pond.”

Before heading off on her tour of Euro-BoomTown this week, Kara set off for Carlsbad, Calif. to visit with Warren Buffet and the ladies of Fortune. Après Buffet, readers were treated to an exclusive interview, Kara-style, with Loïc Le Meur, Seesmic founder and namesake of the Web’s cutest logo. Kara wasn’t just visiting Europe for some cute overload, though. She wired back a report on the Oxford Social Media Convention, where she spoke on social media’s effect on business. Kara rounded out her week with rowdiness and the legal tantrums of Skype founders Zennström and Friis.

Closer to home, Digital Daily covered the media battle between Apple (AAPL) and Google (GOOG), which recalls a shoving match between the prom king and the captain of the football team. Apple continued to insist that it was still “studying” the proposed Google Voice app for iPhone, while Google insisted that it had already been rejected. It’s tough being the popular kids.

Between the smartphone scuffles, Palm CEO Jon Rubinstein was urging everyone to play nice, even as Palm still may have to fight for survival.

The Silicon Valley malevolence even spread to Gotham early in the week. MediaMemo got the backstory on how the New York Times was hacked into spreading malware to its Web visitors. The explanation: It sold an ad to hackers, who posed as mild-mannered VOIP client Vonage (VG) to make the purchase. Meanwhile in a related–or not–story, Microsoft is seeking and suing some mystery malvertisers who perpetrated a similar scheme with ads sold by the software giant. Whether it is a growing trend or a few overachieving hackers, it was a tough week in ad land.

Amid all the kneecapping and eye-gouging, all things Mossberg was a helpful calm in the storm. Walt liked the new features in iTunes 9 and found it uncluttered, easier to use and more intelligent than its predecessor. Also among the hits were upgraded management and improved content-sharing.

Mossberg’s Mailbox was stuffed full of sage advice about online backup as the kids go of to college, compression and the vinyl vs. digital dilemma, and some on-target advice for the family genealogist making the switch from PC to Mac.

The Mossberg Solution delved deeper into email mastery with some unmissable tips and tricks for Microsoft Outlook users. Katie made an industry standard better, and even gave readers a peek into some coming attractions for Outlook 2010.

Tune in next week. We’ll keep bringing you the blow by blow ’til the final bell.

Overall, I believe Snow Leopard will help keep the Mac an appealing choice for computer buyers, and I can recommend it to existing Mac owners seeking more speed and disk space, or wanting to more easily use Exchange. But I don’t consider Snow Leopard a must-have upgrade for average consumers. It’s more of a nice-to-have upgrade. If you’re happy with Leopard, there’s no reason to rush out and get Snow Leopard.

– Walt Mossberg, The Wall Street Journal

The changes here are modest, and the performance gains look promising but beyond the built in apps, just a promise. If you’re looking for more bells and whistles, you can hold off on this upgrade for at least awhile. But my thought is that Snow Leopard’s biggest feature is that it doesn’t have any new features, but that what is already there has been refined, one step closer to perfection. They just better roll out some new features next time, because the invisible refinement upgrade only works once every few decades.

– Brian Lam, Gizmodo

Here’s the thing about Snow Leopard, the single inescapable fact that hung over our heads as we ran our tests and took our screenshots and made our graphs: it’s $30. $30! If you’re a Leopard user you have virtually no reason to skip over 10.6, unless you’ve somehow built a mission-critical production workflow around an InputManager hack (in which case, well, have fun with 10.5 for the rest of your life). Sure, maybe wait a few weeks for things like Growl and MenuMeters to be updated, and if your livelihood depends on QuickTime you might want to hold off, but for everyone else the sheer amount of little tweaks and added functionality in 10.6 more than justifies skipping that last round of drinks at the bar–hell, we’re guessing Exchange support alone has made the sale for a lot of people.

– Joshua Topolsky, Engadget

Snow Leopard is Apple’s lowest-priced OS update in eight years. Granted, it’s a collection of feature tweaks and upgrades, as well as under-the-hood modifications that might not pay off for users immediately. But the price of upgrading is so low that I’ve really got to recommend it for all but the most casual, low-impact Mac users. If you’ve got a 32-bit Intel Mac (that is, one powered by a Core Solo or Core Duo processor), the benefit of this upgrade will be a little less. But for most Mac users, especially the kind of person who reads a Web site devoted to the subject, the assorted benefits of Snow Leopard outweigh the price tag. I’d pay $30 just for the improved volume ejection, the ability to create services with Automator, and the improvements to the Dock and Exposé–though I admit I’d pay slightly more to not have the misguided QuickTime Player X as a part of the package. If you’re a user who connects to an Exchange server every day, upgrading to Snow Leopard really is a no-brainer. For everyone else, maybe it’s not quite a no-brainer-but it’s awfully close. Snow Leopard is a great value, and any serious Mac user should upgrade now.

– Jason Snell, Macworld

Impressive and important, it’s an update that will revitalize your existing Mac even though you’ll be stumped for a quick five-minute demo that convinces the people around you that much of anything has changed at all.

– Andy Ihnatko, Chicago Sun Times

In my experience, Mac OS X was already a superior operating system to Windows. With Exchange and other technologies, Snow Leopard adds bite, especially for business. But as upgrades go, this one is relatively tame.

– Ed Baig, USA Today

If you’re already running Leopard, paying the $30 for Snow Leopard is a no-brainer. You’ll feel the leap forward in speed polish, and you’ll keep experiencing those ‘oh, that’s nice’ moments for weeks to come. If you’re running something earlier, the decision isn’t as clear cut; you’ll have to pay $170 and get Snow Leopard with Apple’s creative-software suites–whether you want them or not. Either way, the big story here isn’t really Snow Leopard. It’s the radical concept of a software update that’s smaller, faster and better–instead of bigger, slower and more bloated. May the rest of the industry take the hint.

– David Pogue, New York Times

In August 2007, just after former Apple exec Jon Rubinstein joined Palm, Apple CEO Steve Jobs warned Palm CEO Ed Colligan against poaching his company’s employees. “We must do whatever we can to stop this,” he said, according to communications reviewed by Bloomberg. Colligan declined. “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” he told the Apple CEO, noting–ironically–that Cupertino had hired away some two percent of Palm’s workforce as it began developing the iPhone.

And that’s proven a wise move. Today, the U.S. Department of Justice is investigating just such gentleman’s agreements as a collusive restraint on trade. And Palm (PALM) and Apple (AAPL) are sparring over intellectual property and the Pre handset, which Apple claims “falsely pretends to be an iPod.” How convenient for Palm that these communications should emerge now when its Cupertino rival is giving it such a hard time. And such a distraction for Apple legal….

Of course, Jobs was right to worry. Within a year of his warning to Colligan, Palm hired away Mike Bell and Lynn Fox, Apple VP of CPU software in the Macintosh hardware division and head of Mac PR respectively, among others hired later. And within two years, Palm debuted a new handset that some consider a worthy rival to the Apple iPhone.

That said, even at this reduced price, the Amazon Kindle still costs $299 more than Kindle for Apple’s iPhone, which I’ve found to be a compelling way to read books. After six or so novels, I have no complaints about eye strain, screen size or glare. And honestly, I think I’m reading more now than I ever did before simply because I always have the book I’m currently reading in my pocket.

Anyway…

Today’s price cut makes you wonder if this presages a similar reduction for the Kindle DX, which at $489 could really use one. A bit too early, I suppose, since Amazon (AMZN) hasn’t yet announced pricing for subscriptions to the Washington Post (WPO) and New York Times (NYT). We’ll see, I guess.

Ancient history, I suppose. But perhaps worth thinking about in light of OpenTable’s rather astonishing IPO last week. Originally priced at between $12 and $14, shares in the company were instead listed at $20. They opened at $24.50 and then spiked to $33 before closing at $31.81. A 59 percent surge on the first day of trading. For a company whose business is built on the recession-brutalized fine-dining industry? Impressive. Must have made for quite a windfall for OpenTable’s’s larger investors. Especially those who took the opportunity to dump their stakes in the company. Charles Schwab (SCHW), Pacific Asset Partners, W Capital Partners, Venture Frogs, Zagat and a number of small private investors sold off all their OpenTable shares as part of the company’s IPO (click on chart below), according to the SEC filing.

Interesting, yeah? Seems at least some of the company’s investors had been hoping for an exit. And they fled for it in unison, pockets full, when one was offered. Perhaps they’d lost their appetite for risk after reading through the Risk Factors section of Open Tables IPO filing, which grimly noted that “a significant majority of our restaurant customers are fine-dining restaurants which have been particularly affected by economic downturns such as the one we are currently experiencing.”

Or perhaps, like Scott Sweet, a senior managing partner at I.P.O. Boutique, they remember Foodline and the last dot-com bubble and bust. “People don’t truly know the story here about this company. It’s a one-trick pony company,” Sweet told the New York Times. “Pricier restaurants in San Francisco, Tampa, New York are not that hard to get in right now. In fact, one can do it themselves if they choose, with 15 minutes notice.”

“If we were any more successful, we’d be bankrupt.”

– Sony CEO Howard Stringer on the company’s LCD business, May 28, 2008

About the best thing to be said for Sony’s grotesque financial results is that they came in smaller than expected. The company’s 98.9 billion yen ($1 billion) loss for the fiscal year ended March–its first net loss in 14 years–wasn’t nearly as bad as the 150.0 billion yen ($1.57 billion) figure it had predicted in January or even close to the 173.8 billion yen ($1.8 billion) analysts polled by Thomson Reuters had been forecasting. And the same is true for Sony’s fourth quarter, as well. The net loss of 165.1 billion yen ($1.7 billion) it reported was far better than the 228.7 billion yen ($2.39 billion) forecast.

Still ugly as hell, though. And according to the company’s leadership, its next fiscal year will be little different. Sony is forecasting a loss of 120 billion yen ($1.2 billion). Given that unfortunate outlook, Sony (SNE) is closing three factories in Japan, part of an ongoing effort to shore up a business ravaged by the worst recession in decades. But cost-cutting measures like that can only do so much.

As analysts note, what Sony really needs is a killer product. It is no longer the force it once was in consumer electronics, having ceded its dominance in portable music players to Apple (AAPL) and its leads in the television and videogame console markets to Samsung Electronics and Nintendo. “Their outlook gave me the impression that their business is heading for a gradual recovery,” Fujio Ando, senior managing director at Chibagin Asset Management, told Reuters. “But it would all depend on whether they would be able to start producing popular products, because right now they have no ‘Number One’ products. I see Sony’s branding power weakening.”

And that’s something of which Sony is painfully aware.

“We have two distinct challenges facing us,” Sony CEO Howard Stringer recently told the New York Times. “The first is the global slowdown, which forces us to make significant adjustments. The second challenge is the evolution of our competitive environment. New competitors [are] springing out everywhere.”

Indeed. And while Sony seems to be meeting the first challenge, albeit slowly, it hasn’t yet begun to make headway toward meeting the second. And at this point, one wonders if the company is even capable anymore. As Japanese Economy, Trade and Industry Minister and former Sony employee Akira Amari asked back in October 2006, “What has become of the Sony known for its technology?”

“Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors. Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead.”

–Apple CEO Steve Jobs, Aug. 2006

“Apple is one of the companies in the world that I most admire. I’m really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing.”

–Google CEO Eric Schmidt, Aug. 2006

He had a good run of it, but Google CEO Eric Schmidt’s stint as an Apple director may be coming to an end.

Now that the Federal Trade Commission is investigating whether the close ties between Apple’s and Google’s boards of directors violate antitrust laws, Schmidt’s seat on the former’s board, which he has held since August 2006, seems more trouble than its worth.

People briefed on the matter tell the New York Times that the FTC is concerned that Schmidt’s presence on Apple’s board–as well as that of Google director Arthur Levinson and Google advisers Bill Campbell and Al Gore–might lead to the conflicts of interest or unfair business practices. And that seems a reasonable concern; certainly those sorts of things sometimes occur when a coterie of people hold influence over several major firms simultaneously.

While Google (GOOG) and Apple (AAPL) compete in a number of areas–browsers and mobile operating systems–the two have also worked together closely to bring a number of Google services to the iPhone. They also share a common enemy in Microsoft (MSFT).

So it’s not surprising to hear that the FTC is raising an eyebrow over the cozy relationship between the companies–especially, given its previous interest in Google and the opinions of U.S. antitrust chief Christine Varney, who recently described the company as a monopolist.

Nor will it be surprising when Schmidt resigns from Apple’s board, if this inquiry goes further. That’s typically what happens in these situations when things start heading toward a longer investigation.

So, given the amount of antitrust scrutiny currently leveled at Google, it’s almost certainly what will happen here.

At issue here are two Elan patents. The first–the company’s so called ’352 or “multi-finger” patent–describes a “multiple fingers contact sensing method for emulating mouse buttons and mouse operations on a touch sensor pad.” The second, or ’353 patent, describes a a “capacitive touchpad integrated with key and handwriting functions.”

“The ’352 patent is a fundamental patent to the detection of multiple fingers on a touchpad or touch-sensitive input device to enable the detection and use of a multi-finger gestures in various applications,” Elan claims in its suit. “Apple has been on notice of its infringement of the ’352 patent since early 2007 and has continued to utilize the ’352 patent invention without authorization. In addition, the Apple iPhone and iPod Touch also permit users to switch the capacitive touchscreen between keyboard and handwriting modes, and thus falls under the scope of the ’353 patent.”

Interesting claims. Especially since Elan issued a statement back in February dismissing the idea that there might be some overlap between its multi-finger patent and Apple’s 949 “multi-touch” patent. From that statement:

Some market experts have expressed that the issue of Apple’s multi-touch patent might adversely affect ELAN’s competitiveness in the multi-touch market in some way. ELAN … feels that the market has over estimated Apple’s 949 patent. The content of the 949 patent is quite broad and widespread as it might seem like an iPhone user’s manual. However, the final scope of claim granted is mainly based on an angle of initial movement of a finger contact with respect to the touch screen display to determined one or two dimensional command. Although the patent comprises of 20 items covering software, firmware, and memory storage, its scope is actually limited within the establishment of the one and two-dimensional commands mechanism. Simply speaking, it emphasizes more on one or two-dimensional commands finger gesture recognition rather than about multi-touch technology. Hence, to make things unmistakably clear, having a multi-touch feature can not be interpreted as an infringement of the 949 patent. 

As to the ongoing reports that Apple’s 949 patent will have an unfavorable blow to ELAN’s competitiveness, ELAN explains that there is actually no conflict between the multi-touch technologies used by ELAN and Apple. None of ELAN’s current customers are using or plan to adopt the patent claim in the future. Therefore, the approval of the 949 patent will have no adverse effect on ELAN’s expanding Multi-Finger™ market. As to the 949 patent’s market value, ELAN feels that the general consumers, as viewed by the major players in the handset industry, are not enthusiastic or feel the need of operating their mobile phones with the “one and two-dimensional” commands.

An odd thing to say two months before filing suit against the company with which you purportedly have no conflict, don’t you think? I wonder what changed…

“Lately Silicon Graphics Inc. has had the kind of upward momentum associated with the hit movies produced with its whizzy high-powered work stations, like ‘Terminator 2: Judgment Day’ and ‘Jurassic Park.’ After the company outperformed Wall Street’s earnings estimates last week and the stock jumped 15 percent, analysts scrambled to upgrade ratings and future earnings forecasts.”

– Silicon Graphics’ Hot Run Goes On, New York Times, 1994

Time was, there was a Silicon Graphics (SGIC) workstation on every desk in computationally-intense industries like chemistry and film production. No longer. Cheap Linux boxes have rendered them obsolete and SGI, the company, along with them. This morning, SGI, which recently endured a brace of layoffs, filed for bankruptcy protection for a second time and sold itself to Rackable Systems, which makes server and storage products for midsize and large data centers, for $25 million in cash.

“We have been working very hard to strengthen our company, and today, we’ve taken another big step in that direction,” SGI CEO Robert Ewald said in a statement that would make even the most exuberant of SGI-optimists wince. “This transaction represents a compelling opportunity for Silicon Graphics’ customers, partners and employees, who can all benefit from the emerging stronger company with better technologies, products and markets [sic] reach.”

A sad ending for SGI, which really reinvented computer graphics and made quite a name for itself in the high-performance computing space back in the day.

The deal is an interesting one, and for a number of reasons. Unlike Brooks–or The Eagles or Journey, who have similar pacts with Wal-mart–AC/DC is still under contract to Sony (SNE) BMG’s Columbia Records. By inking such a deal, Columbia almost certainly risks alienating other retailers, who can’t be happy to see AC/DC’s first album of all-new material in eight years become a Wal-Mart exclusive. Among those retailers: Apple’s (AAPL) iTunes Music Store, where AC/DC has so far refused to distribute its music.

The deal also comes at a time when Wal-Mart and other big retailers are reducing their CD shelf space. It’s been estimated that Wal-Mart, Circuit City (CC) and Target (TGT) have cut between 5 percent and 23 percent of their CD inventory in the last two years. Which means that retail exposure, which was once a given for many bands, is becoming increasingly dear. So much so that it’s a negotiating point, and–in Wal-Mart’s case–enough of one for big-name acts to justify allowing the retailer to sell their new releases on an exclusive basis.

“Shelf space has shrunk so much over the last five years that for anyone to give you shelf space and exposure is a big deal,” Terry McBride, chief executive of Nettwerk Music Group, recently told the New York Times. “Should the labels be worried? There’s been a move away from the labels for a number of years now. And it’s not necessarily their fault. The shelf space to have those records sell just isn’t there. That’s the market reality.”

Ah, one-click cinema. Seems that Amazon’s finally realized that there simply aren’t enough media junkies to support the download model it embraced with Unbox. “The people who pay to download video are extreme media-philes,” Forrester (FORR) analyst James McQuivey told Variety last year. “They are not the tip of an iceberg. They may grow their own spending, but there aren’t many people like that left. In the video space, iTunes (AAPL) is just a temporary flash while consumers wait for better ways to get video. They’re already coming.”