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9/21/2006
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Is Time Warner Finally 'Getting' The Internet?

In This Issue:
1. Editor's Note: Is Time Warner Finally 'Getting' The Internet?
2. Today's Top Story
    - How To Defend Against IE's VML Bug
3. Breaking News
    - Big Media Touts Internet Plans Even As Yahoo Slips
    - Turning Data Chaos Into Business Gold
    - Lonelygirl15 Creators Rely On Open Source
    - YouTube Launches Best Band Contest
    - Report: Broadband Finally Passes Dial-Up
    - Zillow Lets Real Estate Owners Add To Its Listings
    - Amazon Launches Order-Fulfillment Service For SMBs
    - Google Unveils New Version of Search Appliance
    - Oracle Off To Fast Start In Fiscal 2007; Revenues, Profits Up
    - HP Executives To Testify To U.S. House Panel
    - New Non-Profit Organization Will Fund IT Education, Research Projects
    - ID Theft Task Force Makes Small Step In The Right Direction
4. Grab Bag
    - California PC Thief Takes Court Computers (AP)
    - Linus Torvalds Talks Like A Pirate (ZDnet.com)
    - Companies Wake Up To Blogs' Barking (Guardian)
5. In Depth: Web apps
    - Review: Microsoft Office Live Basics Vs. Google Apps For Your Domain
    - Review: Is Google Still The Ajax King?
    - Google, Microsoft Blogging Services Driving Web Site Growth
    - Web Apps Come Under Attack In Perverse Coming Of Age
    - Google, Microsoft Online Apps Raise Security Questions
6. Voice Of Authority
    - Spinach Woes Portend Repercussions Of Cyberattack
7. White Papers
    - Putting The Customer Back In Customer Service
8. Get More Out Of InformationWeek
9. Manage Your Newsletter Subscription

Quote of the day:
"The best strategy in life is diligence." -- Chinese proverb


1. Editor's Note: Is Time Warner Finally 'Getting' The Internet?

Time Warner seems to be finally putting its six-year-old AOL merger debacle behind it, thanks to recent aggressive moves to promote a new Web strategy.

The recent decision to move to an advertising-supported model for AOL, and to offer for free services previously available only to paid members, was a decided step in the right direction, according to preliminary results revealed by Jeffrey Bewkes, president and chief operating officer of Time Warner, in a presentation to the Goldman Sachs' Communacopia conference this week.

The most positive news: The strategy is successfully wooing new visitors to the site—visitors who have never been paying customers. According to Bewkes, more than 40% of new users of its expanding portfolio of services are neither existing nor former subscribers. Calling advertising sales "robust"—albeit without giving any specific numbers—Bewkes emphasized that the advertising model will result in lower operating costs and therefore higher profits in the long term. However, he admitted that the loss of subscription revenue will outpace increases in advertising revenue for at least another 12 months.

Still, Bewkes said, "People weren't leaving AOL because they didn't like it; they were leaving because they wanted to go to broadband." He stressed that the company's estimates of the potential for online advertising revenue for other Time Warner brands such as CNN and People was substantial.

Among other announcements made just this week that bode well for Time Warner's online prospects, according to analysts:

  • AOL on Monday opened its video search platform to third-party developers and content owners. Through the program, AOL has made application-programming interfaces available for content owners to submit feeds to the AOL Video Search index. The purpose: to build as large an index as possible for AOL users looking for video content throughout the Web.
  • Stepping up its aggressive strategy to deliver video on demand, AOL announced that it would give users the capability to watch movies, TV shows, music videos, concerts, and other AOL Video content on a TV attached to a Viiv computer.
  • Finally, Warner Music Group—a sister company of AOL—signed a deal with YouTube to legally put videos and music on the popular video-sharing site. The arrangement allows millions of people who upload their homemade videos to YouTube to license an array of Warner Music's songs, including music from Paul Simon, Madonna, and Red Hot Chili Peppers. The pact also helps the music label distribute videos, behind-the-scenes footage, artist interviews, and original programming, and allows them to share the ad revenue derived from ads placed next to Warner content.
  • Investors believe Time Warner is moving in the right direction. For the last eight months, Time Warner shares have experienced larger and faster growth than new media powerhouses such as Google, eBay, and Amazon, as Douglas McIntyre reports on his blog. Although AOL has experienced deteriorating sales and operating profits, investors are obviously being patient that Time Warner is finally making some right decisions.

    And by any account, early signs of a turnaround have come none too soon. Nielsen NetRatings released numbers this month that showed the media company's largest online brands actually declined over the past 12 months. A case in point: AOL's total unique audience for August 2006 was 74.5 million; this was down slightly from the 75.7 million measured in August 2005. Included in these figures were AIM and Moviefone, which also have failed to achieve any increase in visitors over the past year. CNN, however, managed to hold its own, tallying up 23.5 million unique visitors in both August 2005 and August 2006.

    It's too soon to tell how recent online strategizing will affect these numbers. Indeed, the big question that analysts are asking is whether the firm is being as aggressive as it needs to be. Bold as recent moves have been, Time Warner has a lot of catching up to do when it comes to increasing traffic at rates comparable with those being seen by the other major portals. More deals are necessary, particularly with further sharing of revenues by allowing online distribution of content.

    What do you think? Is Time Warner finally on the right track? Is it doing enough? Weigh in by responding to my blog entry.

    Alice LaPlante
    Alice.laplante@gmail.com
    www.informationweek.com


    2. Today's Top Story

    How To Defend Against IE's VML Bug
    There's a potentially dangerous, unpatched flaw in Internet Explorer lurking in the wild, but users who want to protect themselves do have some options. Here's a quick guide to some of them.


    3. Breaking News

    Big Media Touts Internet Plans Even As Yahoo Slips
    Top executives from Walt Disney, Viacom, and Time Warner declared at a conference commitments to exploit the Internet to serve viewers anywhere, on any device, even as Yahoo warned this week about an advertising shortfall.

    Turning Data Chaos Into Business Gold
    CIOs shouldn't simply extract information, they should instead derive intelligence about customers, the supply chain, and competitors and then explore new applications that can put it to use for the business.

    Lonelygirl15 Creators Rely On Open Source
    The inventors plan to take the video-saga experiment in social networking much further by building a Web-site community around the show, which could offer an active forum, an interface allowing users to link video streams, and a wiki to create an encyclopedia to track characters.

    YouTube Launches Best Band Contest
    The promotion, in conjunction with Cingular Wireless and ABC TV, is the latest example of YouTube's quest to align itself with mainstream media players, while maintaining its maverick status as a pioneer social network for video sharing.

    Report: Broadband Finally Passes Dial-Up
    Even though high-speed Internet access is significantly more expensive than dial-up, it's officially become more popular, according to a report by J. D. Power and Associates.

    Zillow Lets Real Estate Owners Add To Its Listings
    Disagree with what the online real-estate informations service says about the value and description of your home? Zillow lets you post your own estimate and description, which will be published side-by-side with its own record.

    Amazon Launches Order-Fulfillment Service For SMBs
    Amazon will store, pack, and ship merchandise, handle returns and refunds, and offer merchants the same shipping promotions that Amazon makes available to its own customers.

    Google Unveils New Version Of Search Appliance
    The new hardware for medium and large businesses offers increased search capacity of up to 30 million documents, as well as new search functions and administrative support for 16 languages.

    Oracle Off To Fast Start In Fiscal 2007; Revenue, Profits Up 29%
    Sales of licenses for applications grew by 80%, but the company still gets most of its revenue from databases and middleware.

    HP Executives To Testify To U.S. House Panel
    Chairman Patricia Dunn, General Counsel Ann Baskin, and outside legal counsel Larry Sonsini are expected to testify at a Sept. 28 hearing about the company's media leak investigation.

    New Non-Profit Organization Will Fund IT Education, Research Projects
    SIM Foundation to study and fund programs that address IT leadership development and the declining enrollment of students in tech fields.

    ID Theft Task Force Makes Small Step In The Right Direction
    ID theft victims should be allowed to sue defendants—that's one of seven recommendations issued by the federal Identity Theft Task Force.

    All Our Latest News


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    4. Grab Bag

    California PC Thief Takes Court Computers (AP)
    While on trial for computer theft, an accused man stole PCs from the courthouse where his case was being heard.

    Linus Torvalds Talks Like A Pirate (ZDnet.com)
    Linux creator Linus Torvalds announced an update to the Linux kernel using pirate-speak inspired by the annual "Talk Like a Pirate Day."

    Companies Wake Up To Blogs' Barking (Guardian)
    Although frequently mean-spirited and prone to obsess over trivial matters, blogs are influencing the ways that major commercial firms interact with their customers.


    5. In Depth: Web apps

    Review: Microsoft Office Live Basics Vs. Google Apps For Your Domain
    The race is on, as Microsoft and Google vie for the attention of small businesses looking for free management applications online. Who's ahead?

    Review: Is Google Still The Ajax King?
    Google has taken a decisive lead in creative Ajax-based applications, but challengers abound. We review 20 other online apps to see how they stack up against Google's offerings.

    Google, Microsoft Blogging Services Driving Web Site Growth
    Free hosting services and a variety of blogging software choices are pushing up the numbers of Web sites.

    Web Apps Come Under Attack In Perverse Coming Of Age
    The growth in hosted software, plus attacks on AT&T's site and others, has IT managers worried about the vulnerability of Web applications.

    Google, Microsoft Online Apps Raise Security Questions
    While the trend toward Web-based apps could send the traditional desktop computing model packing its bags, IT managers are just beginning to ponder how the security landscape might change.


    6. Voice Of Authority

    Spinach Woes Portend Repercussions Of Cyberattack
    Eric Chabrow uses the recent furor over contaminated spinach to ponder what the aftereffects of a terrorist attack on the Internet would look like.


    7. White Papers

    Putting The Customer Back In Customer Service
    Despite decades of investment, the customer service departments of Global 2000 companies aren't aligned with the needs of their customers. Here are three principles of customer-centricity that will help you better match customers' expectations with corporate objectives.


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