The Web Week in Review


Google earnings up despite weakening economy

Google came through for battered shareholders who probably knew that if the company didn't, GOOG $300 would be a day away.

The company reported third-quarter revenue of $5.54b and net profits of $1.35bn, handily beating analyst forecasts.

The company's stock rose nearly 10% in after-hours trading on the news.

Eric Schmidt, however, subdued some of the confidence that Google exhibited earlier in the year about Google's position in the economy. He stated:


Translation: we're confident long-term but in the short-term, everyone is going to be impacted.

Two interesting statistics:

  • 30% of Google's revenue came from clicks on the websites of AdSense partners, up from 15% during the same period last year.
  • 51% of Google's revenue came from abroad.

Next up for Google: continuing not to disappoint and making sure its deal with Yahoo goes through.

Ballmer says Yahoo deal would "make sense economically"

And Google might want to get that deal wrapped up as soon as possible. Steve Ballmer could be on the prowl again.

He told the audience at the Gartner ITXpo that a Yahoo deal would "make sense economically" for shareholders of both companies.

He even went so far as to state that Microsoft "probably thinks its still worth as least as much today," referring to the $33 per share offer he made for Yahoo.

So is Microsoft-Yahoo still in play? Yahoo shares spiked on the news but it remains to be seen whether Ballmer is ready to pull the trigger.

There's little sign that Yahoo is well on its way to reversing its fortunes and given the macroeconomic climate, betting that Yahoo's stock price will decline even further is probably not a bad one.

Interestingly, given Yahoo's woes, one analyst said Ballmer "might be the luckiest guy in the software industry."

$33 per share looks mighty expensive now and had Ballmer found an eager partner in Jerry Yang, the Yahoo acquisition may have required a write-down that Bloomberg notes "could have rivaled the industry's most vilified deals."

From that perspective, an acquisition of Yahoo may have been Microsoft's biggest and most painful mistake ever. Too bad Yang didn't realize that the best way to hurt a company he reportedly doesn't like was to accept billions of dollars from them.

Radiohead's In Rainbows Outsold Previous Albums Despite Giveaway

The CD sales numbers for Radiohead's last album, In Rainbows, have been released - 1.75 million.

The news, of course, is notable because Radiohead initially gave away In Rainbows and asked fans to pay whatever they wanted.

Despite this, In Rainbows has become the band's best-selling album ever.

Wired's Eliot Van Buskirk writes:

"As for the pricing-optional digital version of the album, it generated more money from digital sales than all of its other albums combined. Although Radiohead didn't allow any of those albums to be sold through iTunes until June of 2008, that revelation should silence those who criticized Radiohead's business acumen for allowing fans to pay whatever they wanted to download the album."

It's worth noting that Radiohead took advantage of "an innovative license that circumvented MCPS-PRS, Britain's royalty collection society," which "allowed Radiohead's managers to track how much fans were paying and pull the plug after the average price paid declined past a certain point."

But beyond that, those who cheer Radiohead's experiment as proof that artists and labels can make money offering music for free conveniently ignore a simple fact - Radiohead has been a popular band for years.

Who does Radiohead have to thank for that? Itself (as Van Buskirk notes, "quality tunes" are not optional) and the record labels who undoubtedly invested millions upon millions promoting Radiohead before it was a known quantity.

And herein lies the rub - a band like Radiohead can succeed with an experiment like this because there will always be fans ready to pay money for their music. But what about all of the bands trying to break through? How can they (and their backers) survive when the ROI outlook is hazy? I also wonder what would happen if every major artist tried the Radiohead experiment.

Food for thought. I'm sure we'll see more "experiments" like this.

Adobe Releases Flash Player 10

Adobe's Flash Player, the ubiquitous application that is usually responsible for all of those rich media thingamajigs and interactive "applications" that distract us on the web, just got an upgrade.

According to Adobe, Flash Player 10 "delivers enhancements and new features such as new support for custom filters and effects, native 3-D transformation and animation, advanced audio processing, and GPU hardware acceleration."

The release of Flash Player 10 coincides with Adobe's release of the new Creative Suite 4. Tim Barber, a partner and creative director at Odopod, provided eWeek with a testimonial:


But Microsoft has its sights set on being even awesomer. It just announced the release of Silverlight 2, which Microsoft hopes will give Adobe a run for its money in the rich media application space.

While Flash has been around for far longer than Silverlight and therefore has a significant lead in adoption and usage, Microsoft has made inroads with Silverlight. NBC, for instance, used it during the 2008 Olympics to deliver NBC's online Olympic video.

Will consumers ever come to know Silverlight in the same way they've come to know Flash? That remains to be seen but it's clear that both Adobe and Microsoft are serious about this space.

Computers crack jokes in unusual artificial intelligence test

In an annual test of artificial intelligence, AI "bots" programmed to fool judges into thinking that they were human were put to the test.

One of them, Elbot, even had an artificial sense of humor. Ian Andrews, a judge of the contest, stated:


Inevitably, no bot won the gold or silver prizes, which require the bot to pass a series of tests based on mathematician Alan Turing's theories.

I'm sure Elbot was sad, but a program like Elbot might win a bigger prize. I would gladly pay a million pounds if a program like Elbot could be uploaded into the brains of some of the people who comment on blogs, use Twitter, etc. Far too many of these individuals have no sense of humor.

Anyone fully capable of demonstrating a program of this nature should contact me as soon as possible. Get busy building this weekend and I look forward to receiving your emails on Monday. The million pounds should be ready - the money was in my account at IndyMac and I'm just waiting for my FDIC check.

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