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Marissa Explains It All

Marissa Explains It All

Yahoo's latest search for yet another CEO ended with the hiring of Marissa Mayer, formerly a top executive at Google. Mayer has been with the search leader almost since the beginning, taking a lead role in the creation of some of Google's most widely used products. But can she revive an ailing giant? Meanwhile, RIM devs lost faith, Microsoft landed in hot water with the EC, and AT&T made new plans.

By Paul Hartsock
07/21/12 5:00 AM PT

Given its lousy financial performance, periodic bouts of layoffs, questionable patent litigation strategy and security lapses, Yahoo appears to be adrift, listing, off course, capsizing. Name any unfavorable nautical condition, and it probably applies to Yahoo.

A large part of the blame for that lies with the people in charge of hiring the captain. Yahoo's board of directors has discarded three CEOs over the last four years. It squeezed a company cofounder out of the position, fired his replacement via a phone call, and then sent the next guy packing after just a matter of months when it was revealed he'd fed them a puffed-up resume.

With its latest hire, though, it's trying something different. Instead of taking up with another itinerant executive with experience leading a couple of low- to medium-profile tech companies, Yahoo has hired a Silicon Valley celebrity: Marissa Mayer.

By many accounts, Yahoo is lucky to have landed her. Mayer has been with Google since before Google was a verb. She was its 20th employee, and during her career she's played key roles in some of the company's most successful products: Maps, News, Books, Images, Gmail, not to mention good old Search. She is not in the habit of working quietly behind the scenes. Between the public appearances, magazine covers and interviews, hers is probably Google's third-most recognizable face behind cofounders Larry Page and Sergey Brin.

Now she's the youngest CEO of a Fortune 500 company, freshly scooped up from a top spot at arguably the world's most powerful Internet outfit. And she has her work cut out for her. Just after she took the job, Yahoo announced its second-quarter numbers, and they were a typical shade of glum: declining overall revenue, stagnant display ad revenue, and continuing feeble results from its Microsoft partnership.

Soon we'll get to see if Mayer is the one who can finally rekindle Yahoo's spirit. The company hasn't stood tall as an innovator in years, and at this point fresh ideas for new products and services sound a lot more exciting than fresh ideas about how to cut back costs, eliminate more people and shrink down to a smaller yet profitable company -- though the latter still might have to be part of the plan as well. At Google, Mayer was at the forefront of several projects that locked in the company's identity as an innovation leader over the last decade.

Mayer has her doubters too, though. She proved to be a razor-sharp top executive at Google, but serving as the head of an entire company is a different matter. Her talents with engineering and design might not be exactly what Yahoo needs to pull off a revival. And there's the fact that Yahoo just isn't in nearly as good shape as Google.

Yahoo is saddled with activist shareholders, a board that just underwent an awkward reshuffle, and overall low morale. Google has its problems too, but its issues are minor compared to Yahoo's. On balance, Google's a winner. It doesn't leak top executives like a sieve -- Mayer herself notwithstanding, of course -- and you never hear much about boardroom drama. Mayer will now have to show how she handles a somewhat gloomier place.


Listen to the podcast (12:24 minutes).

Dev Defection

RIM's status as both schlemiel and schlimazel of the smartphone world seems to be more thoroughly reenforced with each passing week. The bad news just keeps coming for Research In Motion, and recently it took two more notable blows to the chin.

First, Baird Equity Research poured a hot bowl of bad news all over RIM's lap with a report detailing developers' attitudes toward various platforms. For a mobile OS proprietor like RIM, developers are the ecosystem's workforce. They bring the apps, the apps bring the users, the users bring the money.

But according to Baird's research, developers are bolting from BlackBerry. Asked by Baird to rate their long-term outlook for various platforms on a scale of one to 10, developers rated RIM's present OS, BlackBerry 7, at just 2.8. That's less than the long-delayed BB10 platform, which won't even be out for about half a year. That one scored 3.8. Both ratings were down sharply from a quarter ago, when BB7 stood at 3.8 and BB10 was rated a 4.6.

Some context: Android scored 8.7 and iOS got a 9.3.

But RIM called the findings bunk. A company official noted that the vendor base for its BlackBerry App World has grown 157 percent over the past year. The store has added 15,000 new apps since the beginning of 2012. And he said RIM's 23-stop BlackBerry 10 Jam World Tour is selling out. Yes, RIM still gets groupies.

Still, those numbers from Baird paint the picture of a platform beginning to putrefy. Even webOS scored a 2.1.

Developers may find it difficult to keep a torch burning for RIM due to the waiting the company's been putting them through. BB10 won't arrive until January, and even then, there may not be much of RIM left to save by that time. RIM can throw all the betas and SDKs in the world at developers, but if those devs are guaranteed not to sell anything until 2013 -- and even then only to the customers who've also managed to keep the faith so long -- then it's still asking quite a lot.

That wasn't the only indignity RIM suffered, though. It also got slapped with a (US)$147 million judgement by a California court. The case involved Mformation Technologies, which sued RIM for infringing its patents with its BlackBerry Enterprise Server. The bill came to $8 for each of the 18.4 million units RIM sold.

That's more than chump change for just about any business, but for RIM it's particularly painful. The company's already deep in austerity mode as it is. It's laid off thousands of workers and even sold off one of its corporate jets in a recent push to shave about $1 billion from its balance sheet.

$9 Billion Browser Bumble

Have you had a bad day at work recently? If so, my sympathies. But to put things in perspective, no matter how badly you screwed up, at least the mistake you made didn't end up causing your company to be fined $9 billion. I'm assuming.

That's the trouble Microsoft could be looking at after it basically forgot to include a part in the copies of Windows it's been selling in Europe. The copies went out without a government-mandated feature, and now Microsoft could be on the hook for billions if the European Commission decides it needs to be strict in how it handles the matter.

A few years ago, the EC began examining the relationship between Windows and Microsoft's Internet Explorer Web browser. Normally, Windows comes with IE pre-installed, and it's set as the OS' default browser. Of course anyone can download and install any other Windows-compatible browser they want, and lately more and more people do exactly that. But the EC decided that even pre-installing only IE and setting it as default was too still too pushy. As far as the commission was concerned, that put Microsoft on the wrong side of the antitrust line.

So a compromise was reached. Instead of bundling IE with Windows and letting users figure out alternate browsers themselves, copies of the OS sold in Europe would have to feature a wide selection of alternate browsers -- sort of a browser buffet. The "Browser Choice Screen," or BCS, is what it's officially called.

When setting up Windows, users are shown not just IE, but also Opera, Firefox, Chrome, etc. The user picks one, and that browser is installed. It doesn't actually provide users with any more options than what they'd be able to get with a small amount of Web hunting; it just obligates them to take an active role in deciding which one to use.

The problem is, versions of Windows 7 SP1 were distributed in Europe without the BCS. As many as 28 million customers were reportedly affected. Their PCs work fine; they just weren't confronted with that browser choice. And according to the terms of Microsoft's agreement with the EC, that could be grounds for $8.9 billion in fines.

Microsoft is doing what it can to avoid that. It said the missing BCS feature was due to a technical error, and that it didn't intentionally shirk its agreement. And as much as the company hopes it won't get hammered with such an enormous penalty, it isn't angling to be let off scot free either. It's proposed alternative punishments, like extending the duration of the BCS requirement 15 months past its 2014 expiration date. It's also suggested an independent investigation into what happened to cause the feature to be left out. And, of course, it's proposed to push out an update that will add the BCS to all affected European systems.

And what does this mean for the average European user? Probably that the next time they start up Windows, they'll be bugged by an annoying pop-up panel asking a question they answered long ago when they installed Firefox or Chrome or Opera on their own accord.

Data Pooling

AT&T followed along like a good little No. 2 and emulated market leader Verizon's example of replacing its existing set of wireless data offerings with a build-it-yourself shared data model.

Recall that a few weeks ago, Verizon decided to push new customers -- and even longtime customers who want to upgrade their handsets -- into a different set of plans. These plans require them to select how much data they want to buy in a given month, tack on additional fees for adding smartphones to the pool of devices allowed to share that data, and then decide if they'd like to buy access for other devices too, like tablets and USB dongles -- all for more monthly fees, of course.

Well, AT&T has followed suit with a very similar system. Start by picking out how much data you're going to use in a given month, either by yourself if you don't want to share a plan with others or as a group if you're looking for a family plan. You can choose an allowance of anywhere from 1 GB to 15 per month. If you have no idea how many gigs of data you might use, well, take your best guess, I suppose.

That takes care of data. Now you need to decide how many cellphones will be able to access that pool of data. You'll pay anywhere from $30 to $45 per month per phone, depending on how bit a data pool you're buying.

Finally, you can tack on additional devices, like netbooks and tablets, for another $10 to $30 per month.

Voice and text? That's where things finally get simple. It's all unlimited, regardless of your plan.

Whether you end up paying more or less with this new set of plans will depend on whether you share a plan and how many mobile devices you use. Might be a better deal for families with lots of devices; not so much for singletons.

And while AT&T's schematics for the plan resemble's Verizon's, they're not identical. There are various differences in access prices and gigabyte allowances. It makes general comparisons more difficult. Deciding which offers the better deal may come down to your own personal habits and desires.

The real difference comes down to how pushy the carriers have decided to be. For now, at least, existing AT&T customers won't be forced into choosing a shared plan when they upgrade their phones. That probably won't last forever though -- you might want to check again right before the next iPhone comes out.




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