SiliconBeat

Cisco launched a new media advertising campaign this week, and this one doesn’t feature the quirky, indie actress Ellen Page.

Instead, the networking giant is using stories about some of its customers, in business and industry, and how they’re using Cisco technology to boost their operations.

That’s in keeping with Cisco’s s new focus, after CEO John Chambers took the company through a much-publicized reorganization last year. He pulled the plug on some ill-fated forays into consumer tech, including Cisco’s attempts to sell handheld Flip cameras and a home video-conferencing system that Page had demonstrated in some jokey television spots last year.

After acknowledging that Cisco had spread itself too thin with those efforts, among other things, Chambers is now vowing to stay focused on a shorter list of commercial tech priorities - where his company is competing with the likes of IBM, HP and Oracle.

The new ads don’t specifically mention Cisco’s internal overhaul, but the campaign “is a reflection of what we’re doing from a corporate strategy perspective,” Cisco Chief Marketing Officer Blair Christie told me last week. She added, “We’re a B to B company.”

The ads still use the “human network” catch-phrase that Cisco first began promoting in 2006. The company won’t say how much the campaign will cost, but Christie said the effort will extend to US and overseas markets and will include a sizeable online component - including “homepage takeovers” on several news sites and a LinkedIn blast to 140,000 C-level executives at companies with which Cisco hopes to do business.

The ads will appear in places where business leaders are likely to be tuning in, which means a heavy roster of televised sports events and finance-oriented sites like CNBC or the Wall Street Journal.

Facebook has topped Google’s Orkut to become the top social network in Brazil, the world’s fifth largest country and Internet market, comScore will announce later today. That’s a huge win for Facebook, because Brazil for years has been a stronghold of Google’s Orkut social network.

The switch reflects Facebook’s rapid growth in much of the developing world, particularly in South America and Asia, countries that are now providing the lion’s share of Facebook’s growth, with membership approaching the saturation point in countries like the U.S. and Britain.

Here’s my story on that topic:  http://www.mercurynews.com/business/ci_19723521

comScores said that in December 2011, Facebook.com attracted 36.1 million visitors, a 192 percent jump in traffic over the previous  twelve months, meaning it passed Orkut, even though  – to surpass Orkut as the leading social networking destination in the market.

In an early view of the release later today, comScore said:

“Facebook’s rapid ascent in the Brazilian market has certainly been one of the most interesting stories to develop during the course of 2011,” said Alex Banks, comScore managing director for Brazil. “Brazil has always been a particularly social market and currently owns the fifth largest social networking population in the world. But despite the cultural affinity for social media, Facebook adoption had traditionally lagged in the market. That has all changed in the past year, during which the site has tripled in audience size as engagement has grown sevenfold to assume the leadership position in the market.”

- Mike Swift

Twitter clearly views Google’s new social search features, which highlights postings by the searcher’s Google+ friend connections, as a direct threat to its bread and butter - - serving as the default place on the Web where people go to learn about breaking news, whether it comes from an individual or a news organization.

Tuesday, within hours after Google announced its new “Search - Plus your World” service, Twitter complained in a written statement released to the media that:

Search example from Twitter general counsel, Alex Macgillivray

Macgillivary’s Tweet linked to an example of a Google search. He is saying, essentially, is that a person searching  Google for “@wwe”, the Twitter account of the professional wrestling organization, will instead now be steered to Google+ content.  The Twitter account result was there, but it was well down the page.

It will be interesting to see watch whether Twitter takes things to the next level and files a formal complaint with the FTC. Twitter spokesman Matt Graves declined to comment Wednesday afternoon.

Zynga released its latest quarterly earnings number in an updated prospectus. Dean Takahashi at VentureBeat has a good overview of the numbers:

“Zynga reported net income of $12.5 million in the third quarter ended Sept. 30, down 54 percent from $27 million a year ago, according to anupdated S1 filing with the Securities and Exchange Commission. The performance isn’t stellar, but it’s not so bad as to suggest Zynga’s planned initial public offering is in trouble.

Revenue was $307 million in the quarter, up 80 percent from $170.6 million a year ago. In other words, Zynga is working harder for the profits it gets by generating a lot more revenue compared to the past.

In the second quarter, Zynga reported only $1.4 million in profits on $280 million in revenue, so the third quarter report is an improvement on a quarter-to-quarter basis.”

What’s interesting are the user metrics. From the filing:

“According to AppData, as of September 30, 2011, we had the largest player audience on Facebook, with more MAUs on Facebook than the next eight social game developers combined.”

In the previous filing, Zynga had as many users as the next 15 developers combined as of June 30.

Also:

“Our players are also more engaged, with our games being played by more than 58 million average daily active users, or DAUs, worldwide as of September 30, 2011.”

That’s down from 60 million at the end of June. And the quarter included the release of two new games: Empires & Allies and Adventure World. Also, monthly average users fell from 232 million to 230 million in the quarter.

Finally:

“According to AppData, as of September 30, 2011, our games were played by more DAUs than the next 14 social game developers combined.”

That number is down from 30 at the end of June.

So, as Takahashi notes:

“Zynga is working harder for the profits it gets by generating a lot more revenue compared to the past.”

The good news, as Zynga prepare for an IPO in the next few weeks, is that it’s coaxing more revenue out of fewer players. And Zynga has a big pipeline of games coming. That includes CastleVille, which will launch in the next couple of weeks.

The CastleVille release is the latest in Zynga’s “Ville” franchise that includes FarmVille and CityVille.

“This is really built on the shoulders of the games that came before it,” said Bill Jackson, the Zynga creative director who led a team based in Dallas that built the game.  ”It’s built on the shoulders of giants.”

Jackson was giving me a preview of the games a few days ago. And the quality is indeed impressive.

CastleVille is set in Medieval times and has many elements that will be familiar to Zynga players. In this case, the goal is to build the castle of your dreams by engaging in a series of quests. A preview of the game demonstrated how Zynga continues to push the edge in terms of graphics as well as music, which includes the use of a full symphony to create the soundtrack.

Where the game pushes into new territory is in its expanded use of narrative. There is a story at the heart of it that players can choose how they follow, rather than having quests or goals dictated to them as in previous games.

At its heart, CastleVille remains a social game, but it also shows how Zynga is moving toward creating massively multiplayer experiences. The question now is whether the rising production values and the evolving game experience will draw new players as well as longtime Zynga fans.

Motorola Atrix

I reviewed Motorola’s Atrix smartphone in this week’s Tech Files column. What intrigued me about the Atrix are its accessories: one optional dock allows the device to turn into a quasi-laptop; another allows it to turn into a pseudo desktop PC or even an Internet-connected set-top box.

As I wrote in the review, I liked the Atrix and thought the idea of a dockable smartphone had a lot of potential. But I found the docks themselves expensive, underwhelming and their potential largely unrealized.

Since I wrote my column, a reader alerted me to another reason to dislike the docks.

One of the advantages of the docks is that with them, you can use a full version of Mozilla’s Firefox browser to surf the Web and pull up Web apps in much the same way you would on a standard PC. What I didn’t realize was that in order to use the full Firefox browser on AT&T’s data network, AT&T requires users to pay its extra $20 a month tethering fee. (H/T here to blog site These Are the Droids.)

Read the rest of this entry »

On the New York Times DealBook blog this week my latest column about the questions still unanswered in the Hewlett-Packard scandal was roundly criticized by Jeffrey Sonnenfeld, senior associate dean for executive programs at the Yale School of Management. I posted my response in the comments section below his post. But I thought I’d also share them here:

Jeffrey:

I find your conclusions in this instance puzzling, and can only guess that you haven’t been following the story closely and read through my column on the matter a bit too hastily. Otherwise, you wouldn’t have portrayed the column as focusing on the personal details in this matter. Here’s what I wrote:

“There are certainly other questions we’d love to know the answers to (”Did they have sex?” “Did Hurd harass her?”), but aside from their salacious value, I don’t think they would add to our understanding of this scandal.”

So you and I agree on that. But you muddled this by mashing the first half of that sentence with the first of five questions I asked:

“What was the nature of Hurd’s relationship with Fisher? The other supposed misdeeds stem from this one key issue. All sides say there was no sex and no affair. And yet HP said Hurd’s relationship with Fisher crossed a line into territory that required him to disclose it to the company. It remains unclear where the company drew that line.”

The point of my column was that the basic circumstances of what occurred remain largely unknown. That remains true a week after I wrote it. As such, I find it impossible to imagine how anyone could conclude that the board handled things “just right” or applaud them for “noteworthy courage.” Perhaps they did. But in the end, we don’t know.

If the matter was so clear cut, why was the board negotiating a new contract for Mr. Hurd after an investigation concluded there was no sexual harassment? Why was the company leaking stories to the Wall Street Journal about being surprised by his settlement with Ms. Fisher, which supposedly cut short the investigation?

Surely the decision to oust Mr. Hurd was not out of sudden fit of conscience. After all, this is the board that had endorsed the firing of more than 100,000 employees under two CEOs over the past decade. This was the board the showered Mr. Hurd with increasingly absurd amounts of pay and perks even as layoffs accelerated. Shoving the latest CEO out the door with parting gifts worth more than $40 million isn’t likely to turn around the rank and file view of the board, which by all accounts is quite dim.

And in fact, it’s likely to cloud the arrival of whoever becomes the new CEO, since the board’s judgment in such matters remains in doubt. Those doubts will not be eased when the new CEO gets a nice starting bonus north of $20 million when he or she joins. And that’s not counting the need to hire a president and new board chair since Mr. Hurd filled all three roles. This will be a hiring spree bound to cost shareholders serious money. I’m not sure how you feel HP’s strong earnings during Mr. Hurd’s final quarter factor into whether we should be pushing for more answers.

I’m glad you know all the HP executives well enough to buy HP’s spin about their “strong executive bench.” Yet good governance would also seem to dictate that any major corporation have a succession plan in place. Where was HP’s in this case? Why wasn’t a member of this solid bench ready to step into the CEO role on a permanent basis?

Given the millions that will be spent on hiring bonuses and severance, this is a matter in which shareholders deserve straightforward answers. I’m surprised you would not only endorse the vague stories that have been given, but suggest we stop asking questions already.

Despite, Mr. Hurd’s hazy quote on the matter, it is important to note that he has not admitted to any of things which HP has accused him of doing. His other statements included in the first-day press release indicate that he was not leaving HP of his own accord. Sources close to him who have spoken to me have indicated he did not endorse the board’s view of events, has never been told how his relationship with Ms. Fisher violated HP standards, and only learned of the additional accusations about expense reports and false payments the day his departure was announced. These sources indicated he was never shown the evidence or given a chance to refute it.

Is Mr. Hurd’s camp right? Or is the board correct? I’m not sure how you judged the differences in their stories in this case.

Clearly, with a $40 million severance package on the line, Mr. Hurd felt compelled to say something. But nowhere does his statement endorse the board’s view of events.

You ask: “What then is the moral outrage or the vital material information denied investors?” To which I would answer: If Mr. Hurd did violate policy, why pay him his severance package? If there were misdeeds, true moral courage would seem to dictate the board take a stand by firing him for cause, and withholding that money. If, that is, there was really cause. Forcing him out, and then rewarding him with millions of dollars hardly strikes me as “noteworthy courage.” It feels like the board was hoping Mr. Hurd would quietly go away, and that the ensuing PR storm would pass quickly.

HP gadget guru Phil McKinney is among those who believe everyone will eventually own at least two or three computing devices, choosing according to individual needs from among PCs, smartphones and everything in between. Right now, though, it’s that sweet spot in between that companies like Hewlett-Packard are racing to fill, with new products that try to strike the balance between mobility and user experience.

That’s where HP’s recent acquisition of Palm and its webOS software comes in. McKinney, the chief technology officer for HP’s personal systems group, was careful not to reveal plans for specific products during a talk at the MobileBeat 2010 conference Monday. (And he managed to get through a 30-minute presentation without once mentioning Apple or its iPad by name.) But he reiterated that HP plans to use webOS for what most people are calling tablets — HP calls them “slate” devices — as well as for phones and printers.

While giving no sign that HP would dump Microsoft as the operating system provider for most of its PC business, McKinney’s comments were probably no comfort to Microsoft’s mobile software folks. “We see Windows having its segments of the market,” McKinney said. But when it comes to mobile devices, he added, rather than relying on third-party software, HP believes that success lies with providing its own “end-to-end experience.”

McKinney also repeated his recruiting pitch for independent app developers, who are crucial to HP’s plans for building popular adoption of webOS. Echoing comments he made in a video recently posted on Palm’s website, McKinney suggested developers should consider building apps for webOS because HP has the scale and resources to sell “tens or hundreds of millions” of webOS devices, to both businesses and consumers around the world.

I wrote on Monday about a problem with the camera system on Apple’s new iPhone 4 that was affecting users’ ability to not only take pictures but use FaceTime, the new video chat feature. My colleague Maria Avila helped me put together the video below that illustrates the issue. (H/t to another colleague, Greg Young, who helped me illustrate the FaceTime issue.)

FaceTime when the iPhone's camera doesn't work

You’ve heard about the yellow screen splotches and the wonky antenna that requires you to hold the new iPhone just right.

But now a new issue is coming to light: a faulty camera system that not only affects your ability to take pictures, it can foil your attempts to use FaceTime, the video chat feature that is the iPhone 4’s top talking point.

I ran into this issue over the weekend. Apple kindly sent me two iPhone 4s to test out. I’ve been trying to convince my wife that we need to upgrade our iPhone 3G’s to the new model, so I thought I’d show her how FaceTime works, figuring she’d be as wowed as I was when I tested it on a friend’s phone in the office.

But it didn’t work. While the phone I was using received my wife’s image, the small box that was supposed to display my image wasn’t showing anything. Meanwhile, on the phone my wife was using, she could only see her own image in the small box on her screen; she didn’t get any images from my phone. Read the rest of this entry »

Larry Ellison doesn’t do a lot of interviews. But in a recent confab with the Reuters news service, the Oracle CEO offered up some typically unvarnished opinions about prior management at Sun Microsystems, the once-great computer-maker that had fallen on hard times when Oracle bought it for $7.4 billion earlier this year.

Though much of the interview covered familiar ground, it offered some interesting tidbits as Ellison described some of the inner workings of Sun’s operation – including what’s characterized as outdated manufacturing and distribution systems, inefficient sales commissions, wasteful spending and bad management at the very top levels.

“The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn’t succeed,” Ellison said.

Ellison offered what appeared to be a sharp dig at Jonathan Schwartz, the pony-tailed CEO who ran Sun before the sale to Oracle and who was known for diligently blogging about the company’s strategy and products.

“Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software,” Ellison said. “Lots and lots of blogs does not replace lots and lots of sales.”

Ellison also gave some hints about future acquisitions as he attempts to transform his hugely successful software company into a full-service purveyor of integrated data center systems. Short summary: Oracle may be looking to buy more hardware companies. “We’ll buy in all areas of our business,” Ellison said.