Indefinite Hiatus

Readers,
Due to professional responsibilities and ethics concerns, I am suspending posts until further notice.  I appreciate your support and if there are any questions, please email me.

EBay Files Lawsuit Against Craigslist Over Ownership Rights

April 30 - EBay filed a lawsuit against Craigslist seeking to settle disputes over eBay’s ownership rights of Craigslist stock. The Delaware lawsuit only recently went public, disclosing the complaint and heated battle between the two companies. EBay names Craigslist founder Craig Newmark and Chief Executive Jim Buckmaster in the complaint. The subject of the dispute appears to revolve around eBay’s launching of their free classified website Kijiji.com.

One year ago, EBay bought 28 percent of Craigslist stock in 2005 on the condition that if EBay entered into the online classified ad market, the companies would lose the right of first refusal to buy shares of each other’s company. In 2005, eBay launched Kijiji.com, a site with similar services as Craigslist, internationally. Recently, eBay launched the site in the United States.

Craigslist notified eBay of its competitive practices and the loss of the right of first refusal in buying Craigslist stock. In January 2008, Craigslist entered a restructuring deal and issued one “reorganization share” for every share of common stock. This move diluted the value of each Craigslist share, dropping eBay’s ownership from 28 percent to just under 25 percent. According to Craigslist’s bylaws, this drop in ownership removed eBay’s right to elect a director on the company’s board.

EBay claimed that Newmark, Buckmaster, and other controlling shareholders are breaching fiduciary duties of “care, loyalty, and good faith by implementing certain self-dealing transactions.” EBay claims that they have made efforts to separate Kijiji services so as to remain in a different market from Craigslist. EBay also publicly announced that it would be completely open to a complete acquisition of Craigslist, which likely would solve the problem. The only apparent roadblock seems to be Newmark and other controlling shareholders refusal to hand over the company to eBay.

EBay must have a creative argument in its arsenal to claim that Kijiji US somehow does not engage in similar business services as Craigslist. The site provides an almost identical organization of geographic classifieds, broken down by items for sale, jobs, free stuff, and services. The sites tag line is even “Free local classifieds.” In all other circumstances, this ad would appear to be a typical competitor. If the terms of the agreement between ebay and Craigslist prohibit eBay from entering the local classified market, eBay will need creative lawyering to justify its claims against Newmark and Buckmaster. See below for a screen shot of Kijijij.com.

A copy of the complaint is available here (.pdf format).

The New York Times reports here.

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Evite Becoming Outdated, Needs Serious Overhaul

April 20 - Evite.com, the online invite website is in dire need of a comprehensive overhaul. The online site with more than 15 million users claims to be a tool for hosting and attending the better party. Planning tools include directions, carpooling options, ecards, invitation flair, budget calculators, uncounted themed planning pages, recipes and more. Though Evite has added features over the years since its 1998 inception, the site needs a forceful push to achieve more modern functionality. (Google, take note: just buy Evite and integrate it into Gmail. That would do wonders.)

The biggest fault with Evite is the potential it either refuses to bring to fruition or a completely uncreative engineering staff that cannot see outside the current design box. Some of the following suggestions are in place already. Evite either needs to step it up to advertise their availabilty or implement new ideas. Here are a few things Evite should do to move beyond the 1998-style design and functionality:

1. Lose the obtrusive ads and make the invitation the focus of the page: Depending heavily on multiple banner ads with many moving parts is a thing of the past. Product placement integration into the online invitations would do wonders in making the evite be the object of attention, rather than everything else on the site.

2. Integrate “Yes” responses with users’ calendars & join 21st-century technology: When a person responds in the affirmative to an invitation, the site should prompt users if they want to update any and all calendar programs on their computer – Google Calendar, Outlook, iCal, etc. People who constantly sync PDA’s with these programs want to know when their work AND social events are. Evite is in the perfect situation to make this happen, but for some reason this potential is wasting away by not affirmatively asking people to sync their calendars.

3. Put a comment board on the actual invitation: Many times, people want to add more than the comment they provided when responding “Yes,” “No,” or “Maybe.” Often times, users want to respond to subsequent responses or comments. Allow for follow-up dialog among the invitees. Obviously, for more formal occasions, the host can limit or remove comments or this function altogether to prohibit possible abuses.

4. Send and email requesting pictures to all attendees, not just the host: After parties, attendees have pictures splattered over many photo-hosting websites – Picasa, Flickr, Facebook, etc. Evite should send an email to all people who attended the parties (not just the host) and make it very easy for other members to view, share, order, and print photographs. This does not just mean having photo sharing as an available feature, but making actual use of it. The current photo sharing option consists of only photos from Shutterfly and is so hidden, many users hardly know it exists.

Get them any way the website can. Offer free printouts for the first person to upload, offer raffles for most pictures of the party, prizes for “best picture” as voted by attendees. If people become more involved in sharing memories, all of the photos are in one location and people can return to the online invitation as their “hub” for social events.

5. Convince users to remain attached to the site via follow-ups: How would Evite do this? First, it could send follow-up emails to users asking questions like, “How was this party?” “Was it easy to get to?” “Comment on your favorite thing about the party.” People get the evite and have very little reasons to return after the party is over. Surely people will use the service to know when the party is, but evite has an untapped market of people to find out how the party was. A great party’s recap is always priceless; greater consistent traffic for a website is even better.

6. Allow for the user to be creative: As of late, creating a “personal” Evite really consists of choosing one picture, font colors, and customizing the “Yes/No/Maybe” boxes. Create different templates that can allow for more pictures, different fonts, and customized text boxes. As the site stands, the creativity options are too constrictive.

Evite does find strength in not requiring users to register with the site if they only want to respond to the invitation. Many people do not want to jump through the extra hoops of signing up. Additionally, the reminders and party-wide messages from the host help keep people up to date before the big event. In short, their strengths are apparent, just not prevalent.

Despite the number of improvements needed, which could be fixed within a matter of days, Evite remains the only option for online invitations. Perhaps the market for a more modern and intuitive online invitation system does not exist. In any case, Evite is in desperate need of an overhaul if it has any intentions to remain the leader of the pack.

As previously mentioned, here is an easier solution: Have Google buy Evite and integrate it into their email and calendar programs. Every time Google buys a program or software, it seems to improve for the better.

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Congress Faults Google for Spectrum Auction Problems

April 18 - Fred Upton (Mi.-R) and other members of the House telecommunications subcommittee have publicly alleged that Google “duped” the Federal Communications Commission into adopting various open network and open access requirements for spectrum licensees in the 700-megahertz auction. Google requested the FCC to mandate certain requirements for cell phone companies. In exchange Google would commit bid a certain number of billion dollars to the auction. The subcommittee essentially claims that Google never intended to win the spectrum, and instead used capital as leverage to force the FCC to comply with its requests. The FCC did comply, and Verizon now won the largest block of the spectrum auction and must comply with FCC open network requirements.

The Breakdown: Traditionally, cellular companies use spectrum space to initiate and transmit cellular calls. The cell companies must have a spectrum use license, which the FCC issues for a period of time (which is usually renewed). Recently, Federal legislation freed up portions of spectrum space. The FCC decided to auction of certain portions in various blocks to regional and national cellular companies. The C-Block was the most sought after portion for, among other reasons, the ability to build next-generation wireless internet.

Often times, the FCC requires licensees to comply with certain regulations to maintain their status and operate under that spectrum space legally. For example, cell phones now must comply with what is called “E-911″ (short for enhanced 911). This means that, for a cellular company to use spectrum and operate legally, all phones must have the technology for 911 operators to locate a caller within approximately six meters should they call 911. This is a public policy decision that the FCC implemented for faster response from emergency service personnel.

Also important for background is understanding how cellular phone companies control applications and software on their network phones. In the United States, cell companies generally have phones “locked” so as to only work on their networks. This keeps customers using their networks when purchasing specific phones. Cellular companies also lock out certain programs and applications from being installed. For example, many Verizon Wireless phones have “Get it Now,” a mock Internet data transfer platform developed by Verizon Wireless. Companies do this to ensure revenue on programs and applications they create. It also allows for companies to create exclusive contracts with developers. Verizon has since agreed voluntarily to move to an open-network business model.

When Google learned that the FCC planned to auction new spectrum space, Google wanted the FCC to take one step further in the license requirements. Google asked for several things:

• Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
• Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
• Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
• Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network

In exchange, Google offered a pledge of $4.6 billion to the auction. Google justified this action as improvements for the consumer. More options and better choice in the cell phone market would improve innovation and consumer choice.

The FCC appreciated this gesture because it guaranteed, or at least made a strong promise that the auction would raise the reserve price amount for at least one portion of the auction licenses (the C-Block). Though the Commission did not adopt all of Google’s requests, it did agree (.pdf format) to most:

• The licensees must provide a platform that is more open to devices and applications. This would allow consumers to use the handset of their choice and download and use the applications of their choice in this spectrum block, subject to certain reasonable network management conditions that allow the licensee to protect the network from harm.
• C Block licensee have to publish device standards as soon as they are made to preferred vendors.
• They must provide potential customers notice of customers right to request attachment of device to network and notice of licensee’s process to make such request including network criteria.
• They must provide reasonable process for expeditiously reviewing request to put devices, consumers and applications to be on the network.

Also important: Within the last nine months, Google has announced the development of “Android,” an “open-network” operating system for cell phones. Google basically has created an open platform for software engineers to put on phones and then create programs of infinite varieties for customers to download and install. There is speculation as to what Google intends. There is certainty, however, that Google needed companies to have open-networks so people could freely take advantage of Android.

Enter the auction: Google bid the pledged $4.6 billion for the spectrum, but did not end up winning the C-Block license. The House telecommunications subcommittee is accusing the Internet giant of “playing fast and loose” with the FCC in asking for the Commission to mandate these open-access requirements. The comments fall short of saying that the request was self-serving, rather than for the public benefit as Google has contended all along. They further claim that Google’s “did a horrible thing by bidding” and cost the taxpayers billions in lost revenue that the auction would have yielded absent these requirements. (Less restrictions on a license makes it more desirable because companies have less with which to comply and more freedom to develop the spectrum under their own business model.) The FCC testified before the subcommittee this week. FCC Commissioner Kevin J. Martin stated that he had not “been duped” and that his goal “was to make sure that whoever won the C-Block had an open platform.”

First, Congressman Upton and other critics seem to have a warped sense of how much the auction would yield absent these open-access requirements. The FCC set the reserve price before Google requested open-access requirements. Google bid at or above the reserve price as per its agreement. Any guess that auction participants would have gone exponentially above the reserve is speculation at best. If the price had gone up much higher, there is nothing to suggest it would have reigned in statistically significant amounts more. The total auction went for around $20 billion; the C-Block went for $4.7 billion. Even if it went for $1 billion more, that is less than 5 percent increase in the total cost of the entire auction.

Second, Google’s track record, as a general matter, does not support these allegations. Google has worked to promote the public interest in innovation, access to information, and supporting revolutions in the Internet software-developing world. To suggest that they did a horrible thing or even imply that their efforts were self-serving is absurd.

Congress is playing the hindsight game and failing miserably. After several pieces of the auction failed (though many were unrelated to the C-Block), Congress is looking for someone to blame. They refuse to make the bed they slept in when they gave the FCC the authority to create the rules for this auction with such liberal constraints.

In the interest of transparency, portfolio.com reports that AT&T is the top career campaign contributor for each of the lawmakers on the telecommunications subcommittee. It has donated more than $200,000 to the candidates during their tenures in office. Verizon, BellSouth, and the National Cable and Telecommunications Association were other major campaign contributors. Information is available at www.openssecrets.org. Chairman Upton states that these contributions are not influencing his criticism of Google. Though the intent of this post is not to suggest any improper influence, it is always interesting to see who bankrolls the policy makers.

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Facebook Hit With Lawsuit No. 2 Over Origin

April 16 - Facebook and creator Mark Zuckerberg were hit with another lawsuit over the origin of the social networking website.  The lawsuit seeks, among other things, to take back legal rights to the name “Facebook.” Aaron Greenspan, a Harvard classmate of Zuckerberg around the 2004 launch of Facebook, filed the lawsuit with the United States Patent and Trademark Office on Tuesday.

Greenspan claims that his online dating and social networking site houseSYSTEM debuted months before thefacebook.com, now Facebook. Greenspan also provided substantive evidence, including a campus-wide email discussing the next phase of houseSYSTEM called “the Face Book,” to support his infringement claims. Months later in 2004, according to Greenspan, Zuckerberg created the second largest social networking site with the same name that now has over 30 million users worldwide.

It is unclear whether Facebook will go forward with this lawsuit or settle out of court. Should it follow recent trends, the company likely will settle out of court, as it did with creators of the social networking site ConnectU. The company settled within the last few weeks over claims of unfair business practices and stealing ConnectU’s business model from the two founders, also Zuckerberg classmates.

Chritic.com reported here of possible evidence of infringement claims here.

The New York Times reports here.

Blockbuster Threatens Hostile Takeover of Circuit City, Puzzles Industry (Updated)

April 14 – Blockbuster offered an aggressive $1.1-1.3 billion to buy the nation’s second largest electronic retailer, Circuit City. Blockbuster made the offer directly to shareholders, citing numerous attempts to contact Circuit City’s board of directors to negotiate a deal with no response over the last two months. The price works out to $6.00-$8.00 a share, a 54% premium over Circuit City shares that closed at $3.90 on Friday. Circuit City stock closed at on $4.97/share on Monday, April 14.

Blockbuster publicly announced plans to develop, what it hopes to be, a nearly $18 billion retail enterprise that will capture the growing market that converges entertainment and electronics technology. This announcement came among rumors that Blockbuster is developing a television set-top box similar to Apple TV that will allow for direct downloads of video programming for high definition televisions. Originally, comments suggested this was a “train wreck in slow motion” because Blockbuster did not have the infrastructure to develop such a product. The acquisition of Circuit City might help provide the instant market presence to make that product viable.

This move signals a drastic shift in Blockbusters attempt to regain its reputation in the media entertainment industry after companies such as Netflix chopped away Blockbuster’s in-store rental business model. This move, however, seems to be a drastic swing of the pendulum. Perhaps Blockbuster plans on adopting the Apple model of self-branded retail stores, which helped revitalize Apple’s presence in the technology market starting eight years ago.

Blockbuster Chief Executive Jeffrey Keyes stated that this move would result in “a game-changing retail concept with a sustainable competitive advantage.” It is unclear what advantage Blockbuster would bring to the table. When Apple opened retail stores several years ago, they had products with which to fill their stores. Should Microsoft, remored to have plans of opening stores to promote its portfolio of hardware and software do the same, it has a variety of software and hardware products immediately available to enhance the brand. How much could a movie rental company and an electronics store overhaul an industry?

Blockbuster must have a comprehensive plan to integrate its product and add value to Circuit City’s business model to confirm Keyes’ statements. This should include more than a television set-top box. If this is the single piece of equipment on which Blockbuster relies, why not establish an exclusive contract with either Circuit City or Best Buy to sell their set-top box? This plan would be much cheaper than a full on acquisition? For Blockbuster’s sake, there must be more in the works. Absent a full plan of integration, the end result may simply be Circuit City with a few Blockbuster products littered throughout the store. This hardly would be a “game-changing concept.” Add this to the hostile nature of the takeover, rather than a cooperative negotiation of both companies’ strengths, and the Keyes’ vision of a “sustainable competitive advantage” seems baseless at best.

Circuit City confirmed the offer here.

Update: Blockbuster shares fell just over 10 percent ($0.32/share) on Monday after the announcement. Industry analysts felt uncomfortable with the offer and felt like it was more of a financial diversion than a legitimate effort to revive the company’s performance and reputation.

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Boeing, SES Clash in Effort to Salvage Satellite

April 11 - SES Americom, a subsidiary of the commercial satellite manufacturer SES, will abandon attempts to salvage a recently launched AMC-14 geostationary satellite for unorthodox reasons. The March 15 launch was a partial failure, which caused the satellite not to reach its final geostationary orbit at 22,600 miles from Earth. An anomaly during the second burn of the fourth stage of the rocket launch cause the failure. In an attempt to salvage the operation, SES engineers figured a way to perform a specific orbit and lunar flyby that would bring the satellite to its proper geostationary orbit.

The only problem? Boeing somehow patented the exact maneuver that SES plans to use, despite being an operation based on the laws of physics. This patent likely will not hold water in court, but SES decided to play by the rules and contacted Boeing to license the patent to perform the maneuver. Unfortunately, the two companies are currently involved in another $50 million legal battle over an unrelated matter. Armed with this predicament, Boeing held the patent hostage and told SES that it could purchase the patent license only if SES agreed to drop the lawsuit. SES seems like it will abandon the lunar flyby, rather than the $50 million suit, because it fully insured the failed launch. The company called the loss “a disappointment.”

Further reading is available here.

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Time Warner Ad Misleads, Verizon Hammers Back with Lawsuit

April 11 – Time Warner Cable released a commercial advertisement recently that Verizon claims materially misleads the public about its new fiber optic service, FiOS. Verizon filed suit to stop Time Warner from continuing to air the ad. The most legally offensive portion of the ad claims that customers must have a satellite dish to obtain FiOS. Though Verizon customers can get service via satellite where FiOS is not yet available, the ad makes it seem as though it is the only way to get it. The ad also portrays a Verizon door-to-door salesman as an overeager technology expert (read: geek) that is trying to sell a product that is behind the times. Time Warner represents that their network is fiber optic and has been for ten years.

Recent commentary suggests that this is an over-aggressive move on Verizon’s part. Comments include calling it “fierce stupidity” and that Verizon is complaining about nothing. Though Verizon, too, has a history of misleading in the advertising realm, Verizon should not hesitate to force an aggressive campaign over Time Warner to set a precedent. The Cable companies have the market cornered with respect to premium broadcast channels, not only in terms of infrastructure, competition, and customer base, but also with the opportunity to portray new market entrants in a negative light.

Verizon does have the money to counter this advertising campaign, but companies like Time Warner should not be given the opportunity to make false representations of competitors. Cable companies traditionally have some of the worst reviews in terms of customer service dependability in programing. Customers are left with little choice because of monopolies on multi-dwelling units (recently changed by FCC order), already established neighborhood cable networks, and few companies that actually offer competitive prices and programming. Their grip on the industry is nearly to the choking point. Verizon FiOS, along with satellite television companies, present a very realistic and necessary threat to the lethargy of the Cable companies. If cable companies feel the squeeze of competition, they should not be able to use their monopolistic platform to shut out the competition with misleading information.

In addition to the misleading information regarding the need for satellite service to use Verizon FiOS, Time Warner claims that the company has used fiber optics for nearly a decade. Verizon looks as though it is joining the fiber optic game a little late. While it is true that cable companies and FiOS uses fiber optic cables, the more important aspect of Verizon’s new infrastructure is that it provides a viable competitor to the market. It appears as though cable companies are trying to refocus the debate to whether or not this is anything new in an effort to shadow Verizon’s potential to actually have customers satisfied with their cable television services. Further reading on how fiber optics works rather than traditional copper cable transmission is available here.

On a personal level, FiOS TV unquestionably beats out cable. The price is better in every respect for more channels in better quality. HD broadcasting is almost flawless nearly all of the time. Cable companies such as RCN HD broadcasting is grainy, freezes, and is often not dependable.

Verizon’s PolicyBlog has officially commented on this issue here.

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All Out Media War? Yahoo! and AOL vs. Microsoft and News Corp.

April 9 – Despite many impressions that Microsoft’s offer to buy Yahoo! for $31 a share was dying down and potentially would go away, all sides of the transaction are shifting strategies. On April 5, Microsoft gave the Yahoo! board until April 26th to make a deal or face a hostile takeover, which would include offers directly to shareholders with the potential for a lower bid. The Yahoo! board continues to formally reject Microsoft’s offer. With Yahoo! stock generally stagnant over the last 52 weeks (about $6 in either direction of the current close of $27.77 on 4/9/08), shareholders are much more likely to let money talk than are rich, ego-driven board members that want Yahoo! to remain independent.

New developments are in the air: The New York Times reports that Microsoft is in talks with News Corporation, the media acquisition leviathan, to make a joint bid for Yahoo! (Yahoo! Finance acknowledges this possibility here). Additionally, Yahoo! and AOL are said to be close to a deal themselves: Time Warner will agree to fold AOL into Yahoo!, while Time Warner would invest cash into 20 percent of the combined entity (giving AOL a $10 billion value). Should these be true, it could pin two very highly-bankrolled operations against each other with no room for error. So, what is all the fighting about?

It is likely that Yahoo! is fighting for its independent life, or at least wants to choose its own destiny, to prove it still has what a website needs to remain in the environment of Internet companies that matter. In the last several weeks, Yahoo! has had several major announcements in the last few weeks in an attempt to prove just that. Yahoo! launched “Buzz,” a news and Internet traffic aggregating website similar to Digg, Del.icio.us, Newsvine, and Stumbleupon. Yahoo!’s Flickr recently launched a video service, hoping to be the first realistic competition for Google’s Youtube. Yahoo! announced the acquisition of IndexTools’ Analytics Business in an effort to expand online marketing efforts. It also recently disclosed plans to use Google’s ad search engine, a revolutionary team-up between rival search engine companies. Essentially, the two companies agreed that Yahoo! could test Google’s search-based advertising in an effort to fend off Microsoft (think: enemy of my enemy is my friend).

Absent these recent efforts, Yahoo! would have little reason to give shareholder that it is in their best interest to wait this process out and have faith in the Yahoo! board. Though the leadership of the company cruised in neutral while companies such as Google flew by, they have woken up and realize they have work to do in re-establishing Yahoo!’s name. These three developments may just be enough to show shareholders that the company is working overtime and handing over the reigns to another company would thwart any efforts in keeping Yahoo! competitive.

If this is the board’s strategy, they too should make sure they are moving full speed ahead. If these recent developments at Yahoo! do not prove to shareholders that selling is a bad idea, the victor of this acquisition war will enjoy quite the spoils.

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Facebook to Settle Lawsuit Over Origin, Air Out Dirty Laundry

April 7 - Facebook announced today it agreed to settle a lawsuit with Cameron and Tyler Winklevoss, creators of ConnectU over origins of the idea of the social networking site. One year ago, the ConnectU creators filed a suit in a district court in Boston against Mark Zuckerberg, founder of Facebook, alleging that Zuckerberg stole the website social network concept from them in 2003. Facebook did not voluntarily acknowledge its agreement on its press page and would not comment on legal issues. Both parties acknowledged that motions to dismiss the lawsuit would be filed in the next few weeks.

One year ago, Zuckerberg and ConnectU creators battled back and forth in the courtroom over the merits to this lawsuit. The Winklevoss brothers provided the New York Times, 02138 magazine, and eventually with court with documents describing discussions and even Zuckerberg’s online journal describing the development of Facebook. The settlement remains disclosed from the public record. Many speculate that Facebook is attempting to discard and challenges to its independent existence prior to a possible initial public offering (IPO) sometime next year.

This is not the first of claims that Zuckerberg stole the online social network website idea. According to a chronological account, which Zuckerberg does not deny, Aaron J. Greenspan started a website called “houseSYSTEM,” a campus dating and social networking program several months before Facebook and ConnectU went online. Zuckerberg was one of the early participants. One email, which Greenspan circulated widely to fellow Harvard students, introduced houseSYSTEM’s newest feature, called “the Face Book.” It served as a quick way for students to locate each other online. This site had many similar features, including birthday reminders, event calendars, RSVP’s, photo albums, and “how you know a friend” features.

Zuckerberg certainly deserves credit for the work he has completed. The determination to move to Palo Alto, raise capital, and grow the company to have over 37 million users is something Internet pioneers dream of and a handful may come close to achieving. Derivative concepts happen all of the time in business and many people become incredibly successful at adapting ideas and then marketing them.

The main issue with this lawsuit is, and it may be due to the immaturity of Zuckerberg in giving credit where credit is due, there is very clear evidence that many of these ideas are not just derivative but exact copies. It seems less like Facebook and Zuckerberg are willing to give overdue credit by settling and more like, “What can we do to get rid of this?” In isolation, this does not seem like a major issue. Companies live and die by public relations problems.

Where does this fit in the bigger picture? Facebook has had enough blunders to put their public reputation in question. Their frequency and magnitude make them look less like isolated incidents and more like a company that needs to focus on its mission, on its reputation, and on its users.

Mini-feed: When the “mini-feed” function first came out in 2006, it took all users by complete surprise. It broadcast often personal information including new friends, events attended, pictures, and name changes. At first, users did not even know how to turn off (or if they could) this function. An enormous backlash from users forced the creators to quickly revamp privacy settings to minimize the amount of information Facebook published.

Beacon: The integrated advertising program that broadcast what products users were buying on the mini-feed without many people knowing. Sure it was in the user agreement’s fine print; in reality, few people paid attention and had spending habits quickly plastered over hundred’s of users’ “home” pages on facebook. This blunder was so great, Moveon.org launched a nationwide petition to change Facebook’s position, which it originally refused to do. It since has removed this feature.

Searchability: Facebook opened up user profiles for searching on search engines such as Google and Yahoo. The default at the outset was for searchability to remain open, where the user had to affirmatively change privacy settings and make their profile hidden to search engines. Had users not made this affirmative step, anyone searching could find their name and realize they had a Facebook account.

Deleting Accounts: Recently users realized that if they wanted to remove themselves and their personal information from Facebook, it was not possible. The site instead “deactivated accounts” for users to retrieve if they later wanted to rejoin. Facebook now allows for users to permanently remove themselves from the site servers.

Applications: The third party developer applications started initially as a way to personalize the Facebook profile. Now, every conceivable interest has a group with the option to invite entire lists of Facebook friends at one time. Without thinking, users email hundreds of people, flooding inboxes without considering inconveniences.

Facebook recently has tightened privacy controls and given the user more control over the information on their profile. The site also has many useful functions in connecting professional and social contacts. On a larger scale, what the company lacks is foresight in protecting the interests of its users in an attempt to expand and maintain an image of professionalism in a business world. The company many times has had to apologize to its user base and save face for the sake of PR.

How many times will users give Facebook a pass? Have other companies had similar missteps and equal attempts to self-correct?

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FCC Rejects Skype’s Petition to Mandate VOIP Access on Cell Phones

April 3 – FCC Commissioner Kevin Martin announced (.pdf) recently that the Commission would not adopt Skype’s (an ebay company) request for open access requirements on 700-megahertz C block spectrum licenses. The C block licenses will be used primarily for next-generation wireless services.

Traditionally, certain cellular companies are permitted to block programs from being downloaded and used on their network’s phones. For example, T-Mobile generally does not allow customers to use an independent music downloading device or a third party web browser on certain phones, despite the phone having the capability to handle the application. Companies want users to have to use their download products, which increases the cellular company’s revenue. Essentially, Skype wanted the FCC to mandate that any cell phone companies using the C Block spectrum would be prohibited from excluding services, such as Skype’s voice over internet protocol (VOIP) technologies, on all of their mobile devices. Mobile users could place phone calls using Skype over the Internet rather than the cell company’s voice network technology.

Skype claimed that such a requirement would further the competition in the mobile industry for voice phone call technologies. The FCC denied this claim, based on the already existing open-access requirements on the C Block licenses.

First, in the Summer of 2007, the FCC required that certain C Block licenses allow for open network functions: licensees cannot charge extra for applications from third party developers (including ring tones and mp3 playback) and cannot deny use of applications solely because they require more bandwidth, such as Google Maps and likely Skype (list not exclusive). Second, Verizon Wireless voluntarily agreed in November to open up network access by the end of 2008. Third, Sprint and Google’s open handset alliance demonstrated efforts that mobile phone companies are making efforts to open up network access, rather than discriminate against third party applications and services.

Various critics wondered whether this petition was in the public interest or completely self-serving. Skype knew when filing the petition that these commitments to open network access were publicly made and would be available within the near future. Undoubtedly, promoting competition would be better than not. But, when the expense of this competition is more government regulation in the face of such redundancy, it might be worth it to save the petition and the company’s credibility.

Skype should have waited to see if the open access commitments failed to work out properly. For example, recent reports have surfaced that Verizon’s petition for open network access may not be as “open” as they originally let the public believe. If complications arise in the future with this petition, Skype could point to this failure of the market moving towards open access and as further justification for its petition. This evidence would give Skype much more leverage with the FCC that their request is legitimate. Skype’s premature action, however, may have burned a bridge before even crossing it.

The New York Times reports here.

Skype’s request for public support is here.

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Sprint to Launch iPhone Competitor (That Can Actually Compete)

April 1 (Not an April Fool’s joke for Sprint, fortunately) - Sprint Communications recently announced at CTIA Wireless 2008 the newest release of a touch screen smart phone, rivaling Apple’s iPhone released in June of 2007. The Samsung SPH-M800, dubbed the “Samsung Instinct,” will be available in June 2008. The company noted their focus during the CTIA trade show: create a smart phone with a great user interface.

Similarities – i.e., where Sprint’s creativity team conceded: The Instinct has a large touch screen with nine “home” buttons that launch applications, similar to the iPhone. The Instinct also has a full web browser that zooms in and out with the touch of the finger. The overall build and dimensions seem to mirror the iPhone as closely as possible without triggering patent infringements. Sprint promises to provide its own media and music store on the phone for users to download music. Both devices have a built-in 2-megapixel camera.

Where it picks up votes: The Instinct will use the power of Sprint’s 3G EVDO network, one of the fastest next-generation wireless networks available. The iPhone launched last year on AT&T’s slower, 2.5G wireless network, EDGE. (Click here for discussions of a 3G iPhone due in June 2008). The Instinct also will have access to Sprint’s live TV broadcast reception capabilities. Until now, few people wanted to watch television on such small screens. This seems to be a viable solution. Additionally, the Instinct boasts Microsoft Exchange email program, which has been cited as the iPhone’s weakness. (Apple announced plans to rectify this problem). It will have the capabilities of other traditional Sprint phones, including the “Push to Talk,” complete with chirping (an asset or a liability, depending on who is asking).

The Instinct will also cost “less than the iPhone,” according to Sprint’s announcement. This likely will make the product more competitive with the now-stable $399 lowest iPhone price. Sprint failed to mention whether this phone would be able to access the $99/month “Simply Everything” Plan with unlimited voice, data, and texting. Should this be the case, it would also provide a competitive edge over AT&T, where a comparable unlimited plan starts at $120 or more.

Sprint agreed that the most important thing for this product was the user interface. It is unclear what took so long for people to realize that Apple pretty much had the market cornered on best user interface and to give their methods a real try. What is surprising is how they hired Icon Mobile, a design firm, to come up with the best and most creative user interface. They either robbed Sprint of the money it paid for a creative design or just agreed at the table they would transcribe the iPhone and try and make it better.

Most important about this release is that this phone has better features that the iPhone, and where the Instinct leaves off, it certainly supplements the smart phone experience with other applications. Verizon made a failed attempt with the Voyager to introduce a touchscreen smart phone, which hardly made a blip on the market radar. It turned out to be nothing more than the “EnV,” a phone that opened with a full keyboard and mediocre applications. Though it had web browsing capabilities, it offered little more than traditional Verizon phones. The Instinct has the potential to surpass what the iPhone started. How great the potential is, and who takes advantage of it, will be up to the consumer.

Dimensions:

2.17-inch-by-4.57-inch-by-0.49-inch

4.4-oz Instinct using its 3.1-inch

240-by-432 touch screen.

PC Magazine Reports here.

MSNBC reports here.

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