The UpStream (Page 234)

Dell has officially announced its plans to take the company private once again. Originally founded as PCs Limited in 1984 by Michael Dell, the company changed its name in 1988 when it went public at $8.50 per share. The stock has had its ups and downs in the decades that followed, and has had trouble maintaining cohesion on its board of directors, causing a focusing problem.

Through the years Dell Inc. has picked up a number of companies to add to its portfolio, but has never been able to figure out exactly how to integrate them into the company proper. Michael Dell and investment partner Silver Lake believe that going back to the setup from Dell's roots, namely owned and operated by Michael Dell personally, will give the flexibility for a single decision maker to right the ship.

Michael Dell said of the announcement,

I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.

Not everyone is happy about the decision, however. Hit the break to find out why current investors, customers and employees aren't exactly thrilled.

Over the past year several suits have been filed against publishers and distributors of eBooks about price fixing. Amazon ended up refunding money, while several publishers have settled with the Department of Justice to end the suit.

The Department of Justice case involved Amazon, though not directly. The DoJ filed suit against Apple and five publishers because, due to Amazon's policy of selling new releases at $9.99, the companies all thought they were losing money. This caused the companies to gang up and raise the wholesale cost of the books to Amazon, causing the price to go up, level with that of Apple's book store. As soon as the suit was filed, three companies settled, with another settling in December. That left only two, until this week.

Macmillan has officially settled their dispute with the DoJ "because the potential penalties became too high to risk even the possibility of an unfavorable outcome." That is certainly a reasonable reaction, though it seems to be a little late to have come to the realization. Other than Apple, the only remaining defendant in the DoJ case, everyone settled their disputes almost immediately. What caused Macmillan to wait so long, yet finally settle?

It would appear that the two years of forced wholesale discounts finally got to be a lower number than the inevitable judgement cost, plus the mounting legal fees. Apple has not commented on the matter, but does say they will not settle because they have done nothing wrong.

It has not been easy to be Yahoo over the past few years. They have seen their marketshare decline rapidly, attempted lawsuits to pay the bills and let's not forget a revolving door on the CEO's office. The most recent of five CEOs, Marissa Mayer, came to the company from Google with the intent of leaving her mark on this company the way she did on Google. Unfortunately for her, and possibly Yahoo, the legacy she leaves at Google will forever be remembered as her final position in charge of the disaster known as Google's local services.

While small businesses and users might not be too happy with the way local happened, Google seems to have very few hard feelings. In fact, they are teaming up with their former employee #20 to provide advertising services to the once-giant Internet portal. Google will provide contextual advertising programs to Yahoo and Yahoo, will, of course, receive part of the revenue generated.

Contextual ads from Google might seem like a partnership made in heaven for Yahoo; Microsoft has other ideas. Entirely unrelated to the announcement, but impressively timed, Microsoft has fired up its anti-Google policy program, Scroogled, once again. In the past the program has gone after Gmail's policy of reading your email so it can sell context data to advertisers, promoted by their "Gmail man" videos. The site has expanded to include Google Shopping, but maintains its focus on Gmail and how Outlook.com is a better, safer and more private service.

This is bad timing for Yahoo, as they are hoping that the public's trust in Google, which is one that begins to wane, will help them financially. Personally I attempt to avoid all interactions with the company, sticking to services like Yahoo, but I, and all Internet users, will have to examine that position as they begin their descent into Google partnerships. This could turn out to be a successful partnership for Yahoo, but it is going to turn away some users. No big decision comes without big risks, and Yahoo has not succeeded in big risks lately.

Remember the Virtual Console for the Wii that allowed you to play all of the old NES and SNES games that you loved so much? Well, good news for Wii U owners: you're getting another upgrade and it's the Virtual Console! After dropping the ball at launch but quickly recovering within the first month Nintendo has been throwing everything it can at their next-gen console in order to make sure it has all the offerings of the other two big boys, and then some. Satoru Iwata announced this week via Nintendo Direct that the Virtual Console will be available to the Wii U this spring.

By also offering GameBoy Advance titles to the platform for the first time, this is sure to please many of the Nintendo fans that were on the fence about purchasing the new console instead of just holding onto their Wii. However, before the Virtual Console can make its way to the Wii U, Iwata said that two big software updates will hit the systems that will address some performance issues.

The good news is that Nintendo will also be sticking to its model of pricing their games to be as attractive as possible and appreciating the loyalty of its customer base, in hopes that consumers will do business in quantity. So, if you've bought a game on the VC in the past and wish to buy it again on the Wii U, you won't have to pay full price. $4.99-$5.99 NES games will only cost you a buck and $7.99-$8.99 SNES titles will run you $1.50.

Also, to celebrate the launch of the VC and Famicom's 30th anniversary, Nintendo will be serving up a trial campaign that will offer select games for 30 cents each over a 30 day period. From January through July, users can demo one of these titles per month from the eShop: Balloon Fight, F-Zero, Punch-Out featuring Mr. Dream, Kirby's Adventure, Super Metroid, Yoshi and Donkey Kong. These games will only be available during the month they're offered, hopefully convincing you to pay the full price for the title when the Virtual Console finally makes its way to the Wii U. New games are also on the horizon by the means of an HD remake of The Legend of Zelda: The Wind Walker, coming out in the fall, as well as a 3D Mario and Mario Kart title, which we'll hear more about at E3.

Lastly, Iwata wanted to apologize for not launching any new Wii U titles in January or February but said that with Nintendo, it's more about quality than quantity. Strangely, I've always known Nintendo to be the platform that had any time of game imaginable, but perhaps the company is turning over a new leaf.

Nintendo takes seriously its responsibility to offer a steady stream of new titles in the very early days of a new platform to establish a good lineup of software. On the other hand, we also firmly believe we have to offer quality experiences when we release new titles. Based on our software development schedules at the end of last year, we concluded we should spend a little more time to satisfy to our Nintendo standard of quality.

At any rate, we'll let you know when the Virtual Console officially hits your Wii U consoles, but until then, enjoy the offerings from Nintendo and let us know in the comments below if this news changes your mind on purchasing a Wii U, if you haven't already done so.

This one is sure to ruffle a few feathers in Apple HQ. Amazon has just made it easier for iPhone, iPad and iPod Touch users to buy music on their devices and they don't have to use iTunes to do it. Instead, Amazon has launched a special iEdition of their music store, with HTML5, that is specifically tailored to the mentioned products that will allow consumers to buy music from Amazon and then access the music from anywhere they'd like.

By visiting www.amazon.com/mp3, iProduct users can, for the first time, have a specific mobile version of the Amazon site for them to make purchases directly, with songs starting at just 69 cents.

Steve Boom, VP for Amazon Music, said,

Since the launch of the Amazon Cloud Player app for iPhone and iPod Touch, a top request from customers has been the ability to buy music from Amazon right from their devices. For the first time ever, iOS users have a way do that-now they can access Amazon's huge catalog of music, features like personalized recommendations....They can buy their music once and use it everywhere.

Music purchased is now automatically added to Amazon's Cloud Player library and can be accessed from the PC via Web browser, iPhone, iPod Touch, iPad, Kindle Fire, Android phone, Android tablet, Roku or even Sonos wireless players. Amazon's MP3 store also has recently been upgraded to bring the catalog to 22 million songs that are available for US users.

This definitely brings the Amazon Cloud Player into consideration for people who are fed up with iTunes or for those just entering the digital music market. Only time will tell if the company can take a significant chunk out of Apple's business, though.

Netflix never ceases to impress us. The company has been rolling in a stream of success for a while now, even after upsetting its customers with a strange attempt at a brand split and price hike. In fact, over a third of the 800,000 customers that left because of the change came back in less than a year, proving Netflix' success with their offerings. This week, we're a little surprised to hear that the company has posted yet another profitable quarter, even after their problems this year, and remains one of the top dogs when it comes to connected TV owners.

Most recently, we learned that the PS3 was the number one player for Netflix streaming. Now we're also finding out, via NPD, that Q4 was another success for Netflix. NPD reports that about 40 percent of all the households that had an Internet-connected TV were streaming Netflix directly from that TV during the holiday quarter, with 21 percent jumping ship from over-the-top video services on the computer. More specifically, if we dive into the 18-24 demographic that number jumps beyond 50 percent, further proving that young adults are driving innovation and acceptance of these newer technologies. Staying with that demo, 25 percent stream Netflix from a laptop or PC, 16 percent stream from a tablet and 13 percent are using Netflix on their smartphones.

For more on Netflix, including the numbers from their very successful fourth quarter, join us after the break.