WEEKLY RECAP

Consoles Sell Like Hotcakes, Yahoo Cuts a Deal, Sysadmin Caves

As much as I love zombie movies, I really don’t care to count how many times I’ve been invited to BECOME a zombie on Facebook. Yeah, you know the one I’m talking about. That’s what you get when you open your platform to developers with all sorts of agendas — you get a handful of good stuff, and you get oceans of crap — spammy, garbagey applications — the software equivalent of Cracker Jack prizes. So at Facebook’s F8 developer’s conference, the company announced what it calls the “Great App” program.

It’s a distinction reserved for strong Facebook applications that someone might actually put toward productive use. This isn’t necessarily the end of the craplets, but at least it will identify apps that someone at Facebook considers social, useful, engaging, expressive, secure, respectful, transparent, clean, fast and robust. The platform also announced Facebook Connect, which will let you port some of your user data between Facebook and other sites like Digg and Twitter.


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The desktop is quickly becoming the root cellar of the computing world. Living on the desktop is kind of like living in the basement — afraid to come out and play in the Internet sunshine with all the cool kids. Now some computer makers are coming out with hardware that does nothing but Net. The new, tiny US$250 CherryPal C100, for instance, goes straight from log-on to Firefox. It runs a version of Debian Linux behind the scenes, but users never really get to see it — for all intents and purposes, the browser is the operating system. Even storage is done online — CherryPal owners get 50 GB of free online space. And it sips energy, running on just 2 watts of power.

Staying Home

The weak dollar and high cost of energy have a lot of economic sectors tearing their collective hair out. But one industry that still looks to be holding strong is the video game market. Year-over-year, console sales surged 54 percent in June, according to the NPD Group, with Nintendo’s Wii and Sony’s PlayStation 3 leading the way.

I suppose it makes sense — you could either take a real trip to New York and spend thousands of dollars doing things average New Yorkers can do all the time, or you could spend $50 for a trip to “Grand Theft Auto IV’s” Liberty City, where you can steal cars, burn buildings, brandish assault rifles, loot stores — also things some New Yorkers do all the time, I guess, but at least you don’t have to get off the couch. It’s called a “staycation.” Yes, I feel just as lame saying it as you feel hearing it, but when gas sells at four-fifty a gallon, it’s often the only affordable way to spend a few days off.

The money one does have to spend on leisure has to go a long way these days, and video games can fill that niche. JupiterResearch’s Michael Gartenberg told us, “We’re getting a lot for our money in what’s out there, and that’s good news for an industry at a time when consumers are faced with increasing prices for many goods and services and are looking for ways to cut back.”

Although Google released a respectable second quarter earnings report last week, the market had been expecting the search engine giant to deliver a stronger performance and promptly punished its stock for the shortfall. Google’s woes may be entirely of its own making, though, as it doesn’t provide analysts with guidance, leaving them to their own forecasting devices. The company’s revenue grew 39 percent to $5.37 billion in the quarter, and its net income grew 35 percent to $1.25 billion — but clicks on search ads declined by a percent, which the company blamed on the general economic malaise. Google CEO Eric Schmidt said a more challenging economic environment is one of the company’s issues right now, but he nevertheless characterized the quarter as robust, pointing to strong international growth and sustained traffic increases.

Cutting Deals, Beating Expectations

Apparently, neither Yahoo nor activist investor Carl Icahn was completely confident of winning the hearts and minds of investors in a proxy battle for control of the company. The two sides have cut a deal, agreeing to keep most of the current Yahoo board of directors on the ballot for re-election while creating three new board positions for Icahn and two of his cronies. The decision came less than two weeks before Yahoo’s shareholder meeting, which was shaping up to be a spectacle, with Icahn maneuvering to kick out the entire board and replace it with his hand-picked team. Now, the two sides will have to figure out a way to work together, and presumably they’ll do it without writing each other nasty letters.

Apple had a banner third quarter. The company beat Wall Street’s expectations, posting revenue of $7.46 billion — a 38 percent increase compared with last year. Its net quarterly profit, $1.07 billion, was 31 percent higher than in 2007. However, Apple’s cautious guidance worried investors, and its stock dropped about 10 percent following the report. Apple is expecting $7.8 billion in revenue and earnings of about $1 per share, while analysts had been looking for $8.32 billion and $1.24 per share.

Still, the company’s third quarter sales were brisk: It shipped nearly 2.5 million Mac computers during the quarter , up 41 percent from the same period last year. It also sold more than 11 million iPods and moved 717,000 iPhones — way up from just 270,000 in the year-ago period.

Consumers Consuming

Advertisers hate TiVo, but TiVo doesn’t necessarily hate advertisers. It’s just trying to sell its services, and the viewers can choose to skip over whatever parts of programs they choose. Hey, maybe some people even prefer the commercials, and they like to skip over the shows — anything’s possible. In fact, TiVo itself has now become an advertiser in a new deal with its old friend Amazon. It’s an interactive system that will let viewers buy products featured on TV shows.

Say you’re watching “Oprah,” for example — and I know so many listeners of ECT’s podcast are wild Oprah fans. If she’s interviewing an author, that author’s book might appear on the screen at the end of the show. The viewer can direct the remote to the product and buy it instantly through Amazon. Shine up those credit cards, people.

Americans’ obsession with gas prices means money in the pocket for Amazon. Consumers still want to buy — they just don’t want to drive anywhere to do it. The e-tail giant posted stellar second-quarter results that gave its investors very little to complain about. Its net income increased a whopping 102 percent to $158 million, and its revenue jumped 41 percent to top $4 billion for the period.

Of course, Amazon also benefited from a favorable foreign exchange rate, but even excluding that impact, its revenue grew by 35 percent over last year. International sales from its UK, German, Japanese, French and Chinese sites were also strong — up 47 percent from the year-ago quarter. Amazon is forecasting net sales growth between 29 percent and 36 percent for Q3, and sales are expected to grow between 30 percent and 35 percent for the year.

The City of San Francisco finally regained access to its own IT network now that sysadmin Terry Childs has finally decided to give up the passwords that had been tying it up. The aptly named Childs, who’s been in jail since July 13, was willing to divulge the password only to Mayor Gavin Newsom himself, and he won a personal audience with his honor in his cell. Childs was apparently upset over the damages that cutbacks and layoffs were causing to the city’s Department of Telecommunications and Information Services, where he’d worked for five years. I guess he sure showed them.

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