It has only been a few months since Apple lost a patent suit to VirnetX, a publicly traded IP company. Apple's loss had to do with a very broad patent that the court decided covered FaceTime, Apple's Skype service. Apple's loss cost them $368 million. VirnetX was not so lucky this week, as they lost their case against Cisco, which would have earned them $258 million in damages.
After a hung jury and the judge encouraging continued deliberation, the jury decided against VirnetX and their equally broad Virtual Private Networking patent. Their stock price has fallen massively on the heels of the loss, dropping 40 percent, seemingly all at once. While patent trolling can be incredibly lucrative business, it requires confidence to continue suing and hoping for settlements.
Microsoft settled with VirnetX in 2010, becoming the company's first official licensee. Patent trolls always hope that a company will not fight and will, instead, settle and agree to royalty payments for the technology in question. While Intellectual Property is an important aspect of engineering, patent trolls like VirnetX rely on early, incredibly vague patents, usually involving Internet or communication patents, like the ones in question here and with Apple.
If the patent is vague enough, it can theoretically cover anything. For example, Yahoo's patent case against Facebook included a patent which read "Control for enabling a user to preview display of selected content based on another user's authorization level." It would certainly appear that Yahoo has a patent for the Web, based on that text.
The other side of vagueness is that it is easy for a patent to be dismissed. That is, likely, what will end up being the case for VirnetX in this case. Any licensing they have received may have to be returned, and no future licensing can take place if there is no valid patent. Obviously, having the patent invalidated would be a huge hit to the company, explaining the MASSIVE stock price drop.
With time, most of these vague patents will get closed up, but it certainly makes the current legal landscape a bit of a minefield.
There has been a perception among computer users that Microsoft's software is insecure. Most of that has come from Apple, who has had a campaign against Microsoft and Windows in particular, claiming that MacOS is more secure. Obviously, the only reason that "Macs don't get viruses" was because no one owned a Mac and, therefore, writing malicious code for them would have been a waste.
Well, the world has changed a little in the last few years. It's not that people own Macs now, which they don't, but that Apple now writes software for Windows. Some other players have gained some power in the Windows world, including Google and Mozilla, both of which had almost zero market three years ago. As it turns out, Microsoft is possibly the least of the culprits as far as security is concerned.
In fact, the idea that Apple writes secure software turns out to be complete garbage: between last week's AppStore security vulnerability and this week's Secunia annual review, Apple might is one of the LEAST secure software developers. Let's get to the numbers: Google Chrome is the worst software package on Windows with a massive 291 vulnerabilities; Mozilla Firefox is second with 257; Apple iTunes is third with 243.
Of all of the numbers, available through the source link below, Microsoft's total count across all products is less than any of the top three, all considered to be the harbingers of security. Oops. In fact, Windows 7, with 50, and Internet Explorer with 41, doesn't even hit the triple digits, whereas iTunes is over a quarter thousand on its own, and it is not Apple's only software product on the list.
Hopefully this information will become public, possibly with my help here, and perception and reality at least get closer to in sync.
Lucy Bradshaw, General Manager of Maxis, has been talking a lot since the disaster that has been SimCity's launch; possibly too much. She has been very open about the failure that was the server preparation, claiming they simply did not have enough servers in place to be prepared for the initial roll-out. This week she is being candid about another topic near and dear to my heart: the decision to not offer offline play.
Maxis has been very clear about the reasons since they announced it a year ago: the entire world, single player or multi-player, would revolve around calculations performed by the server. One of the major changes to the new game is the free market concept implemented for resources. Clearly, when playing multi-player, you would need the ability to calculate global resource pricing and availability. However, in single player mode, there is no world, so no need for universal calculations, or so I have maintained since the beginning.
Well, Bradshaw confirmed my suspicions this week. In fact, her comments are in response to the fact that a few minor tweaks to the game from some crafty hacker/developers has fully enabled offline play for single player mode. Her comments, however, are not fully in alignment with the facts at hand. She said,
So, could we have built a subset offline mode? Yes. But we rejected that idea because it didn't fit with our vision. We did not focus on the "single city in isolation" that we have delivered in past SimCities. We recognize that there are fans - people who love the original SimCity - who want that. But we're also hearing from thousands of people who are playing across regions, trading, communicating and loving the Always-Connected functionality. The SimCity we delivered captures the magic of its heritage but catches up with ever-improving technology.
The problem with this statement is they DID build a single-city isolation mode, they just required it to be played with an Internet connection. That is, by definition, always-on DRM and not server-based rendering or calculations. Bradshaw has maintained, time and again, that to enable the ability for offline play would require "significant engineering." However, a single individual has enabled it for himself and claims the tweaks are "very minor and easy."
Any developer worth anything could have told you this a year ago, but it is nice to have my suspicions about DRM requirements confirmed so readily.
The Digital Millennium Copyright Act, enacted in 1998, helps protects a lot of online companies from legal suits for content not produced with their permission. For example, if you were to upload a protected video to YouTube, such as an episode of The Daily Show, Google is not liable for any loss claims from Viacom, assuming they comply with any takedown notices from Viacom on the affected content. Instead, the user who uploaded the content is liable, assuming the person can be identified, and Viacom is interested in pursuing.
Now, clearly, a lot of large content creators do not like this law. For example, Viacom has never been happy about Google's protection for YouTube under the law, filing more than a billion dollar suit and causing Google to implement content filtering to help prevent further legal action. Because of this, companies have tried to undermine the law through court cases, one of the most important being between UMG Recordings and Veoh, a video site, filed in 2007.
Over the past 6 years, the courts have been listening to and considering the arguments in the case. This past Thursday, a ruling was handed down by the United States Court of Appeals for the Ninth Circuit, and it was a massive victory for Veoh, with an almost entire dismissal of all of UMG's key arguments. UMG's argument was that, by having a music section on their site, they encouraged the illegal uploading of copyrighted music. The court disagreed, saying,
Merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one's services could be used to share infringing material, is insufficient to meet the actual knowledge requirement under §512(c)(1)(A)(i).
This is not just a win for Veoh, but a win for the entire Internet. Let me explain. We are probably all familiar with SoundCloud, a service designed to allow artists to upload their own music to share to their fans. Of course, the ability to upload audio files opens up the ability to upload copyrighted music. If this ruling had gone the other way, SoundCloud's entire business model becomes illegal, despite the fact that the company is entirely legitimate and encourages their users to be legitimate as well. Sites like YouTube, Video and even Facebook and Twitter would also immediately become infringing because they give the ability to upload videos, which could allow for illegal uploads.
Clearly, the entire Internet as it stands today would be at risk. Social engagement is the lifeblood of the Web, and spells success or failure for new tech products. One of the biggest announcements of the week surrounded Google shutting down a social engagement product, and it could turn into a Netflix-level PR disaster. If that doesn't show the power of social engagement, I don't know what does. Social engagement is surrounded in a world of image, video and audio sharing, all at risk if this ruling had gone the other way.
Ever since former Google exec Marissa Mayer took over Yahoo in October, the entire company has been turned upside down. From refusing to let employees work from home, to making new partnerships with her old stomping grounds, it looks like Yahoo might be on the track to relevancy again. This week, more changes are on the horizon as Mayer took another page out of Google's playbook and shut down any unnecessary and unprofitable projects. Sounds a lot like Zynga, right?
Executive VP of Platforms, Jay Rossiter, announced the closures in a blog post this week, saying that,
At Yahoo!, we're focused on making your daily habits more inspiring and entertaining. This means that we're constantly reviewing and iterating on our products and experiences...after much thought and deliberation, we decide to shut down some products... The most critical question we ask is whether the experience is truly a daily habit that still resonates for all of you today.
So, what's shutting down? On the docket, we have,
Effective April 1, 2013, we will no longer support Yahoo! Avatars across our properties. If you like your existing avatar and want to keep it, please go to the Avatars download page, pick a picture size and format, and click the appropriate download button. Similarly, if you want to edit your avatar, you can download the image and then use a photo editing service of your preference. Additionally effective April 1, we will no longer support the Avatars YQL table.
Yahoo! app for BlackBerry
Effective April 1, 2013, the Yahoo! app for BlackBerry will no longer be available for download. For those of you who have already downloaded the app, you can continue to use it but it will no longer be actively supported.
Yahoo! Clues (beta)
Effective April 1, 2013, Yahoo! Clues (beta) will shut down.
Yahoo! App Search
Effective April 1, 2013, Yahoo! App Search will shut down.
Yahoo! Sports IQ
Effective April 1, 2013, Yahoo! Sports IQ will shut down. Your final lifetime Sports IQ score and rank will be automatically transferred to and preserved within your Yahoo! Fantasy Profile.
Yahoo! Message Boards website
Effective April 1, 2013, the Yahoo! Message Boards website will shut down. Our message boards on individual properties (like Yahoo! Finance and Yahoo! Fantasy Sports) will remain active. We also encourage you to ask and answer questions on Yahoo! Answers, and discuss issues in the comments section on Yahoo! News.
Yahoo! Updates API
As of April 16, 2013, we will no longer support the Yahoo! Updates API.
Oddly enough, none of this is an April Fool's joke. It's surprising that their message boards are shutting down, but who is going onto Yahoo specifically to talk about whatever topic could be found on a more popular forum? In the end though, did anyone really use these services anyway? I had no clue some of them even (still) existed. If Mayer is able to trim the fat, and decides to stop ignoring the rules of the web, perhaps Yahoo will be able to stick around a bit longer.
Are you saddened by any of these closures? Do you think Yahoo still has a chance to be relevant? Do you like the new, revamped Yahoo homepage? Let it all go in the comments section below.
Remember last week when I said Pandora has been stuck in some sort of crazy reality of their own and chose to limit the amount of listening done on mobile platforms for free? Well, in a related story, the CEO of Pandora, Joe Kennedy, has stepped down from his position despite the company reporting strong numbers in 2012. Kennedy has run the company since 2004.
In his statement, he said,
As I near the start of my tenth year at the helm of Pandora, I am incredibly proud of the team and what we have accomplished in redefining radio. As part of our Board discussions of the road that lies ahead, I reached the conclusion and advised the Board that the time is right to begin a process to identify my successor. There is a tremendous market opportunity ahead and I look forward to continuing to work with all the great people at Pandora to keep driving the business forward.
Until said successor is found, the CEO will remain in position. This comes as a bit of a surprise, however, as the music-streaming service reported Q4 revenues of $125 million, which is a 54 percent hike against 2011's fourth quarter numbers. For those keeping score at home, $109 million of that revenue came from ads.
In the eight years Joe Kennedy was with Pandora, he was able to get the company to reach very remarkable achievements. Pandora currently has over 67 million monthly active listeners, owns over eight percent of total US radio listening, and for their last fiscal year, was able to bring in $427 million, with $255 million coming from mobile. As I've said, however, their refusal to adapt and change with the times, including killing off their failed use of the music genome project, has led them to play catch up with up-and-comers like Spotify. With rumors spreading of Apple trying to enter the streaming game, on top of Spotify looking to cut cheaper rates with the music labels, perhaps this was the right time to look for a new leader.
So there you have it. If you liked this article and cherish the news you read each day, please do not like, +1 or share it. You may end up filling your timelines and feeds with articles about CEOs from other companies you don't care about. This was an article about Pandora, after all.