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Marking a comeback against a longtime rival, IBM has lapped Microsoft in market value for the first time since 1996.

IBM Eclipses Microsoft

Big Blue had a market cap of $214 billion on the close of the market on Thursday compared to $213.2 billion for Microsoft.

The news comes after IBM’s stock has been on a steady climb since a nadir in late 2008. 

IBM Eclipses Microsoft in Value

Meanwhile, Microsoft’s stock price rose after a low point that same period, but it has retreated from a high in late 2009. 

IBM Eclipses Microsoft in Value for the First Time

This year, IBM’s stock price has gained 22% while Microsoft’s is down 8.8%. Apple, now the most valuable firm in the world, surpassed Microsoft  in value in 2010. According to Bloomberg, IBM is now the fourth-largest company by market value and the second most-valuable tech firm. 

Last year, Google filed a lawsuit against the US Department of the Interior, on allegations that the government unfairly awarded a $59 million cloud computing contract to Microsoft without conducting a sufficiently competitive auction. Big G won an injunction against the department in January, effectively putting the contract on hold, and it looked as if the company would prevail, with Judge Susan Braden recently declaring that there was a “justifiable basis” for dispute. 

Google drops cloud computing lawsuit

Last week, however, Google decided to drop the suit altogether, after filing a motion in the US Court of Federal Claims. “Based on the defendant’s agreement to update its market research and then conduct a procurement in a manner that will not preclude plaintiffs from fairly competing, plaintiffs respectfully move for dismissal of this action without prejudice,” the company’s attorney wrote in the motion, filed on Thursday.

Federal lawyers, however, responded by claiming that the two sides have not reached an agreement, while confirming that it had no problem with Google’s decision to cease litigation. It remains to be seen whether the two sides have truly reached an agreement, or whether the litigation may wear on, but we’ll keep you abreast of any future developments.

AOL, Yahoo and Microsoft are teaming up to sell ads on each other’s sites, according to a report. The three companies are reasoning that there’s strength in numbers and perhaps hoping to gain some ground against Google.
AOL, Yahoo & Microsoft Team Up to Sell Ads
Executives from the three companies told top web publishers and ad buyers about the plan Tuesday night in New York, reports All Things D.

Under the plan, each of the companies will sell each other’s “Class 2 display” inventory — leftover banner ads the companies can’t sell on their own. Usually such inventory would go to ad networks. The new plan is set to roll out later this year. Reps from the companies could not be reached for comment.

Google is relatively new to the banner ad business and still relies on search advertising for the bulk of its revenues. However, Google’s ad business is growing much faster, overall, than Yahoo’s or AOL’s. Still, Microsoft’s is growing faster than Google’s, according to eMarketer. The report also comes after AOL was said to consider the idea of a merger with Yahoo.

Microsoft has announced that Windows 7, its flagship OS, has sold 450 million copies worldwide.

Microsoft’s Steven Sinofsky, the president of Microsoft’s Windows division, also announced that Windows 7 is now (finally) being used by more people than Windows XP. Sinofsky made these announcements at the Microsoft Build conference in Anaheim, Calif. Tuesday.

In addition to announcing 450 million copies of Windows 7 sold, Sinofsky also boasted that 542 million people are now using Windows Live.

While the growth of Windows 7 must be pleasing to Microsoft executives, the big show today is the unveiling of Windows 8. Stay tuned for more on Microsoft’s next-generation operating system.

Reports have surfaced that AOL and Yahoo are once again discussing combining the two languishing Internet companies.

AOL Eyes Merger With YahooAccording to Bloomberg, AOL CEO Tim Armstrong is discussing the possibility with Yahoo advisers. This development follows the firing of Yahoo CEO Carol Bartz earlier this week.

However, CNBC has since reported that a “source close to Yahoo says no interest in a deal with AOL,” so this rumor may be nothing but wishful thinking on AOL’s part.

This isn’t the first time AOL and Yahoo have been linked. Yahoo was said to be considering a deal with AOL following its rejection of Microsoft’s unsolicited buyout offer in 2008. Last year, rumors again surfaced, focusing on a combination that would see AOL split its content and dialup subscription business (yes, it still exists), and merging the former with Yahoo.

While no deal has come to fruition, both companies have continued to face their share of struggles and seen their valuations shrink. Yahoo’s now worth less than half of what Microsoft offered to acquire the company, and AOL has been on a similar trajectory since being spun off from Time Warner as an independent company.

And while AOL finds itself in the midst of integrating The Huffington Post and dealing with fallout surrounding another acquisition, Yahoo is currently being run by committee as it looks to hire Bartz’s replacement.

In other words, the conditions at both companies seem far from perfect when it comes to executing what would be a complicated merger. But given the desperate situation both are in, perhaps it’s finally time to see if two is better than one.

In e-mail, exec who was to turn around company says she was fired by chairman

Yahoo fired CEO Carol Bartz

Yahoo Inc. fired Carol Bartz as CEO Tuesday after more than 2½ years of financial lethargy that had convinced investors that she wouldn’t be able to steer the Internet company to a long-promised turnaround.

Yahoo’s shares soared more than 7 percent Wednesday morning after the opening bell.

To fill the void, Yahoo’s board named Tim Morse, its chief financial officer (CFO), as interim CEO. Bartz lured Morse away from computer chip maker Altera Corp. two years ago to help her cuts costs. Yahoo, based in Sunnyvale, Calif., said it is looking for a permanent replacement.

The shake-up was initially reported by the All Things D technology blog.

Bartz’s austerity campaign has helped boost Yahoo’s earnings, but the company didn’t increase its revenue under her leadership at a time when the Internet ad market has been growing.

Bartz’s inability to snap Yahoo’s financial funk, along with recent setbacks in an online search partnership with Microsoft Corp. and an investment in Chinese Internet giant Alibaba Group, proved to be her downfall.

Yahoo has now replaced three CEOs in a little over four years. During that time, Yahoo has been losing ground in the Internet ad race to online search leader Google Inc. and Facebook even though its website remains among the world’s most popular. Her ouster comes with 16 months left on a four-year contract that she signed in January 2009.

Known for her no-nonsense leadership and sometimes gruff language, Bartz arrived at Yahoo as a respected Silicon Valley executive who had won praise for turning around business software maker Autodesk Inc. But she had no previous experience in Internet advertising, the main way that Yahoo makes money.

That void on her resume immediately raised questions whether she was qualified for the job, and those doubts only escalated as Yahoo’s revenue continued to sag.

At first, Bartz blamed bad timing; she started the job during some of the bleakest months of the Great Recession. Later, she would say that she inherited such as mess from her two predecessors, Yahoo co-founder Jerry Yang and former movie studio boss Terry Semel, that it would take time to get Yahoo back on the right track.

At one point, she even compared her challenge to those that faced Steve Jobs when he returned to Apple Inc. as CEO in 1997. Unlike Jobs, Bartz, 63, never was able to articulate a strategy to win over investors. “She focused on plugging holes in the ship instead of turning it around,” said Gartner Inc. analyst Ray Valdes.

The disappointing performance was reflected in Yahoo’s stock price, which closed at $12.91. That’s 81 cents, or 7 percent, higher than where Yahoo shares stood when Bartz was hired as CEO. During the same period, Google’s stock price has risen by more than $200, or 66 percent.

Bartz never hit any of the price targets that the board set for her when she was hired, a shortfall that meant none of the 5 million stock options that she received upon signing her contract ever vested. Investors seemed happy to see Bartz go. Yahoo shares gained 81 cents, or more than 6 percent, in extended trading late Tuesday.

Although Bartz’s exit as CEO came suddenly, her departure isn’t a shock. The pressure to replace her grew earlier this year after Bartz acknowledged Yahoo’s search partnership with Microsoft wasn’t’ producing as much revenue as the companies anticipated. Then, in May, Yahoo stunned investors by disclosing that Alibaba had spun off an online payment service in a move that threatened to diminish the value of Yahoo’s investment in the Chinese company.

Alipay in July agreed to a complex settlement that could eventually be worth more than $1 billion to Yahoo, but there were too many uncertainties in the deal to placate shareholders.

Yahoo Chairman Roy Bostock had steadfastly stood behind Bartz whenever she was attacked by investors or analysts. In a Tuesday statement, Bostock thanked Bartz for “her service to Yahoo during a critical time of transition in the company’s history” without providing an explanation for why the board decided to replace her.

BGC partners analyst Colin Gillis said Yahoo’s board “has got to look in the mirror here.” 

"Swapping the CEO without swapping the (board) chair doesn’t solve your problem," he said. "The person that hired Carol to begin with deserves to share the culpability."

With its stock sagging and its management in limbo, Yahoo could be more vulnerable to a takeover attempt by a private equity group or another opportunistic bidder attracted to what remains one of the Internet’s best-known brands. Microsoft offered to buy Yahoo for $47.5 billion, or $33 per share, in 2008 only to be rebuffed.


Investors welcomed news of Yahoo CEO Carol Bartz’s firing enthusiastically in after-hours trading on Tuesday evening, with shares of the company finishing the session up more than 6% to $13.72 per share.

As we noted earlier today, Bartz’s tenure ended abruptly this afternoon when Yahoo Chairman Roy Bostock informed her (via phone) that she was being terminated, a move that Bartz was able to share with the entire company via an email sent from her iPad.

Yahoo has named its CFO Tim Morse as interim CEO and appointed an “executive leadership council” to help fill the void as the company searches for a permanent leader.

The jump in Yahoo shares on Tuesday is nearly equal to the small gain the company has eked out since Bartz took over in January 2009.

More than four months after hackers brought down its PlayStation Network, accessing the personal information of more than 100 million users, Sony has hired a veteran of the U.S. Department of Homeland Security as its security chief.

Philip Reitinger, the former deputy under secretary at the U.S. Department of Homeland Security, has been named senior vice president and chief information security officer at Sony, the company announced Tuesday. Reitinger will oversee information security, privacy and Internet safety across the company. In addition to serving at the Department of Homeland Security, Reitinger also worked at Microsoft, the U.S. Department of Defense and the U.S. Department of Justice.

Sony’s stock has fallen about 45% since the April hacker attacks. Meanwhile, the company just kicked off a new ad campaign for PlayStation featuring fictional Sony executive Kevin Butler.

* Bill Gates' testimony in antitrust trial turned public opinion against him, Matt Rosoff says

* Rosoff says Larry Page of Google is close to being in a similar situation

* Page is stretching company from online video to social networking to mobile phones, he says

Larry Page Google

When Bill Gates testified via videotape in Microsoft's antitrust trial in 1998, he was combative and defensive, as if he couldn't believe how stupid the entire procedure was.

He didn’t expect the tape to be shown in court. It was, and it was a disaster. Public opinion turned — instead of a billionaire genius who had built Microsoft into the most valuable tech company in the world, he was a condescending monopolist who didn’t have time for the legal system.

Amazingly, Gates didn’t see it coming. As Microsoft co-founder Paul Allen relates in his recent autobiography, the anti-Microsoft sentiment “cut Bill to the core.” Gates told the media that government attorney David Boies was “really out to destroy Microsoft.”

In his rational engineer’s mind, Microsoft was simply a winner. It had beaten its competitors by being smarter and working harder. It seemed deeply unfair for the government to build a case based on the complaints of those competitors and undo everything that Gates had worked so hard for.

Flash forward a decade.

Google is the new Microsoft. It dominates its industry so completely that a few slight tweaks to its search engine can throw other companies into turmoil by burying them in search results. It’s using the incredible cash generated by that business to expand in a million different directions at once, from online video to social networking to mobile phones.

The man running Google, co-founder Larry Page, has a lot in common with Gates.

Like Gates, Page is often described in otherworldly terms, a near-genius with autistic tendencies like counting the seconds out loud while you’re explaining something too slowly to him. Like Gates, he has run his own company for his entire adult life and has had uninterrupted success. Like Gates, he has an engineer’s soul and is obsessive about cutting waste — one of his first acts after taking over as CEO in April was to send an all-hands e-mail describing how to run meetings more efficiently.

Like Gates, he is hugely ambitious — he once suggested that Google hire a million engineers and told early investors that he saw Google as a $100 billion company. That’s $100 billion in annual revenue, not just stock value. (It’s about one-third of the way there.)

And like Gates, Page may have a blind spot about the intersection of business and the Beltway. For instance, when Google paid $3.2 billion to buy display ad firm DoubleClick in 2007, it got a search-engine marketing firm called Performics as part of the deal. Obviously, Google would have to let Performics go — federal regulators would never let the dominant search company own a search marketing company.

Except Page wanted to keep it, just to see how it worked. (Google sold Performics to advertising conglomerate Publicis Groupe in 2008.)

Back then, Page had a tempering force in Eric Schmidt, who was the company’s CEO and was originally brought in by its investors to provide “adult supervision.”

But since Page reclaimed the CEO title, the brakes are off. In his first five months, Page has reorganized the company to his liking, cut a bunch of marginal projects like Google Health and mobile app maker Slide, launched a social network to compete with Facebook and bid $12.5 billion to buy Motorola’s mobile phone business.

Now, antitrust investigators are circling Google — just like they did with Microsoft. Europe has already launched a formal investigation, and the U.S. Federal Trade Commission is taking a close look as well.

As Google keeps expanding with big, bold moves, Page will find himself thrust into the spotlight like he’s never been before. For Google's sake, here's hoping he handles it with more grace than Gates.

Long since gone are the days of sitting at the breakfast table, drinking a cup of coffee and sharing the Sunday paper… or are they? The New York Time’s R&D Lab is developing a “kitchen table” based-on Microsoft Surface touchscreen technology, designed to take individuals that are normally face down in their iPads, back to the table for a more social way to consume and share content. 

Microsoft Surface touchscreen

The display gives multiple readers the opportunity to sit at the table and interact, with options to share across the surface by swiveling and enlarging images or articles. The Times envisions that it will also be a mode of discovery, where users could get more information on a certain product by placing it on the table to find prices and related NYT articles, which could also an interesting method for advertising — just be careful where you put that Starbucks cup. 


According to ComScore, out of the 82.2 million people in the US with a smartphone (up ten percent from last quarter), Android came in first as the biggest platform yet again, capturing a whopping 41.8 percent of the market like a boss. In a not-so-close second, Apple was able to snag 27 percent, followed by RIM in the third place spot with 21.7 percent — down 4 percentage points from last quarter.

comScore Android Apple RIM Blackberry

Pulling up the rear is Microsoft with 5.7 percent, and lastly Symbian with a grim 1.9 percent — both down when compared to the previous three months. As far as US hardware manufacturers goes, Samsung is still on top with 25.5 percent of the market, while LG got 20.9 percent and finally Motorola with 14.1 percent, down 1.5 percentage points from before. Apple was able to snag some standing in the OEM space with a 9.5 percent share, while BlackBerry-maker RIM only captured 7.6 percent.

As the battle wages on, looks like Androids, iPhones, and BlackBerrys (oh my) are still on top — at least for this quarter. Check out the PR after the break for the full scorecard.

RESTON, VA, August 30, 2011 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released data from the comScore MobiLens service, reporting key trends in the U.S. mobile phone industry during the three month average period ending July 2011. The study surveyed more than 30,000 U.S. mobile subscribers and found Samsung to be the top handset manufacturer overall with 25.5 percent market share. Google Android continued to gain ground in the smartphone market reaching 41.8 percent market share.

OEM Market Share
For the three month average period ending in July, 234 million Americans ages 13 and older used mobile devices. Device manufacturer Samsung ranked as the top OEM with 25.5 percent of U.S. mobile subscribers (up 1.0 percentage points), followed by LG with 20.9 percent share and Motorola with 14.1 percent share. Apple strengthened its position at #4 with 9.5 percent share of mobile subscribers (up 1.2 percentage points), while RIM rounded out the top five with 7.6 percent share.

Smartphone Platform Market Share
82.2 million people in the U.S. owned smartphones during the three months ending in July 2011, up 10 percent from the preceding three month period. Google Android ranked as the top smartphone platform with 41.8 percent market share, up 5.4 percentage points. Apple strengthened its #2 position with 27.0 percent of the smartphone market, up 1.0 percentage points from the prior reporting period. RIM ranked third with 21.7 percent share, followed by Microsoft (5.7 percent) and Symbian (1.9 percent).

Mobile Content Usage
In July, 70 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.2 percentage points. Browsers were used by 41.1 percent of subscribers (up 2.0 percentage points), while downloaded applications were used by 40.6 percent (up 2.8 percentage points). Accessing of social networking sites or blogs increased 2.1 percentage points to 30.1 percent of mobile subscribers. Game-playing was done by 27.8 percent of the mobile audience (up 1.6 percentage points), while 20.3 percent listened to music on their phones (up 2.3 percentage points).