Apple Wins Ground in Fight Over Flash

The punches that Apple Inc. is throwing in its fight against Adobe Systems Inc. are beginning to land, prompting some companies to shift away from Adobe’s video and animation technology and forcing Web designers to work with competing standards.
Programmers and Web designers say clients increasingly are asking that their websites or applications be compatible with Apple’s iPhone and iPad. Those sites can’t be built with Adobe’s Flash technology, which is used widely for online video and animation but which Apple has banned from its devices.
“Since the iPad came out we’ve had a lot of clients say that they just don’t want Flash on their sites,” said Chantelle Simoes, vice president at Ninth Degree Inc., a design firm in Dana Point, Calif., which has built websites for Sanyo and the National Aeronautics and Space Administration. If current trends continue, Ms. Simoes said, her 10-person firm will need to hire people familiar with Apple’s development tools.

[ADBOE_jobs] Getty Images

Apple CEO Steve Jobs, seen at an event last month, has banned Adobe’s Flash online-video technology from the iPad and iPod.

Choices made by Ms. Simoes and other Web developers, who are the biggest users of Flash, have implications for Apple and Adobe. The two companies are embroiled in a war over the future of online video. Apple has shut out Flash from its mobile devices and instead promoted its own tools and HTML 5, a rival technology to Flash that is under development.
On Wednesday, Sports Illustrated, whose website uses Flash extensively, unveiled a Web app built with HTML 5. “We’re going forward on more than one front,” said Terry McDonnell, editor of Sports Illustrated Group, a unit of Time Warner Inc. “The last thing that we want to do is make some decision that we’re not sure about.”
While that means having to maintain multiple versions of its properties, Mr. McDonnell said it doesn’t make sense to settle on one technology because Sports Illustrated needs to be able to reach readers no matter what device they use.
It’s a hassle for developers to build apps and Web sites for Apple’s devices separately. But Zach Williams, director at Venveo LLC, a Web-design shop in Blacksburg, Va., says he has little choice because the iPhone is so popular with clients.
Carnival Corp., which remade the home page for its cruise line without Flash a year ago because of the iPhone, is unlikely to continue using Flash on other parts of its website or for its online videos. “The iPhone and iPad have made us take a look at alternatives” to publishing in Flash, said Jordan Corredera, director and general manager of Carnival’s online business.
Flash still has a commanding share of the market, with about 75% of online video using the format. Online video site Hulu, which doesn’t have an iPad app, said this month it wouldn’t make its videos available in HTML 5. Among the reasons for the decision is that HTML 5 doesn’t have all the ancillary features of Flash, such as the ability to secure and track videos. Hulu is jointly owned by several media companies, including News Corp., which also publishes The Wall Street Journal.
The problem for some companies is that HTML 5 is immature and still years away from broad adoption, said Jeffrey Hammond, an analyst at Forrester Research. It also isn’t supported yet by the most widely used Web browsers, such as Microsoft Corp.’s Internet Explorer.
In the last few weeks, the bickering between Apple and Adobe has escalated. Steve Jobs, Apple’s chief executive, published an essay listing technical reasons why Flash wasn’t a good fit for his company’s devices. Adobe CEO Shantanu Narayenpublicly hit back and last week, the company took out full-page ads in several newspapers to express its displeasure with Apple’s no-Flash policy.
While analysts estimate that only about 5% of Adobe’s revenue is directly tied to Flash, the technology is incorporated in many of the company’s products. The bulk of Adobe’s revenue comes from software like Photoshop and Dreamweaver that are used for designing websites. Developers say they still plan to use these products. In the long term, however, the battle with Apple could create an opening for rivals to Adobe’s design software.
Meanwhile, Apple wants to protect the competitive advantage the iPhone has over rivals, specifically the vast number of apps that aren’t for other devices. Letting Flash on the iPhone would allow developers to simultaneously create apps for the iPhone and other devices that use Flash.
An Apple spokeswoman said the company believes in open standards like HTML 5 and called Flash a proprietary Adobe product.
Adobe on Wednesday added tools to its Web design software that support HTML 5. “Whenever technologies come out that people want to use we will support those,” said Kevin Lynch, Adobe’s chief technology officer. While the proportional amount of Flash development may be shrinking, Mr. Lynch notes that the overall amount is climbing and that the number of Flash developers grew 59% in 2009 to 3.5 million.
Apple’s decision to ban from its devices apps created with Adobe’s tools has forced some companies to go back to the drawing board.
Condé Nast Publications in February demonstrated an app for Wired magazine built with Flash but it was never released. The publisher is working with Adobe on a new Wired app for the iPad that “will be compliant with Apple’s new guidelines,” a spokeswoman said. But it is continuing with plans to develop apps for its other publications without Adobe’s technology.
Write to Ben Worthen at ben.worthen@wsj.com

With 75 Million Users, Shazam’s Well On Its Way To An IPO

Shazam mobile iPhone appOne by one, the mobile song identifier just keeps hitting its targets – now it ranks as one of the most successful mobile content companies out there, and is thought likely to attempt a public offering at the end of 2010 or early 2011.
Shazam CEO Andrew Fisher last year told me his strategy was to hit 50 million users by 2009’s end (he did) and 100 million by the close of 2010. With this year not even half-way through, the company today announced it’s reached 75 million. (TechCrunch broke the embargo).
Next up? In October, Fisher told me: “Before now, I’d have said it’s not appropriate for a company the size of Shazam (to float). But for us now, given the size we’re at and the opportunity we see in front of us, once you exceed 100 million users, you are significant.” Also: “As we look to the future we absolutely think we have the size and the scale to launch a public offering.”
In its 2008/09 fiscal year, Shazam Entertainment Ltd made a £89,943 post-tax loss and a £133,462 operating loss on turnover of £7.3 million, thanks to £886,903 costs and £6.5 million expenses.
Shazam took an initial £11.5 million investment from Acacia Capital and DN Capital and a later round of an undisclosed size from Kleiner Perkins Caulfield and Byers.
It’s made a surprisingly good fist of limiting its free mobile app whilst introducing a paid-for app that has become the core product. It’s also adding more affiliate partnerships to the app and in January claimed to be referring a whopping 260,000 paying song customers every day to retail affiliates like iTunes Store.
Those targets…
—Shazam bobbled along for about eight years as a dial-up service.
—But an iPhone app helped it double its user base to 35 million in just seven months between September 2008 and May 2009.
—December 2009: Hit 50 million target.
—May 2010: Hit 75 million target.
—December 2010: Next stop: 100 million? IPO?
May 18, 2010 8:14 AM ET
Photo: ryoichitanaka

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Apple Upsets the Google Search Cart

NEW YORK (TheStreet) — Google(GOOG) has built a bridge from desktop empire to the mobile search frontier, but phone application developers are trying to detour the traffic.

pple(AAPL), the biggest mobile application operator, has issued a challenge to Google for control of the nascent mobile advertising industry.

Google Search

Last month during an Apple iPhone OS 4.0 speech, Apple chief Steve Jobs declared it was open season on search.
“People aren’t searching on a mobile device like they do on desktops. What’s happening is that they are spending all their time in apps,” Jobs said during his speech on April 8. “They are using apps to get to data on the Internet rather than a generalized search.”
While that may not even be true for Jobs or his company, the point was clear — mobile search is a new arena and Apple intends to capitalize.
“Apps are very hyper-specialized search engines. It gives you hundreds of little tools versus one big tool,” said Danny Sullivan of SearchEngineLand, a search industry journal.
Pick an interest, and there’s probably an app for it. Gardening, nightlife, dining, birding, cooking; fans can download an app and get access to very specific information that can be further filtered to show what is near your location or within your favorite parameters.
In his speech to introduce iAds (ads that will run inside applications), Jobs sharpened his point against Google, adding that using apps like Yelp to find restaurants nearby “is where the opportunity is to deliver advertising.”
And there it is, the holy grail of the Net search business: ad sales.

As noted in the chart above, Google controls the traditional search engine market by a wide berth. (comScore doesn’t yet track mobile search data.) More than 97% of Google’s revenue comes from search ads, and with computing and search going increasingly mobile, Google has been eager to make itself indispensible in the mobile market, also. Contrary to Job’s assertion, for the vast majority of smartphone owners, Google search is by far the leading search service.
Mobile ads will bring in an estimated $500 million in revenue for Google this year, according to Caris and Co. analyst Sandeep Aggarwal. That is “perhaps the fastest growing revenue line” for Google, Aggarwal wrote in a research note Monday.
Aggarwal also adds that there are a couple challenges along the mobile road for Google. For one, Google’s dominance of search means that each mobile search is — cannibalistically-speaking — one less desktop search. Second, apps on phones bypass Google search.

U.S. Online Ad Market Grows in Q1

Published: May 13, 2010

Online advertising spending grew 7.5 percent in the U.S. in the first quarter, a clear sign that the digital media industry is recovering from a rough 2009, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Revenue hit US$5.9 billion, the highest-ever total for a first quarter, as an improving economy fosters confidence among companies and results in increased marketing spending in areas like online advertising.
While a level of uncertainty still hovers over the recovery process, it’s encouraging to kick off 2010 with a strong quarter, the IAB said in a statement Thursday.
This wasn’t the case in 2009, when U.S. online ad spending shrunk 5 percent to $5.5 billion in the first quarter, year on year. That was the first year-on-year quarterly drop since 2002 and broke a string of 24 consecutive year-on-year quarterly increases. For the entire 2009, spending ended up dropping 3.4 percent compared with 2008.
Separately, comScore reported on Thursday that impressions of display ads rose 15 percent in the first quarter, year on year, to a record $1.1 trillion. Spending on this ad format totaled $2.7 billion, or $2.48 per thousand impressions (CPM), comScore said.

Copyright 2010 IDG. All Rights Reserved.

Mobile Ad Budgets On The Rise, Clients Find Branded Apps Most Exciting


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stacked money/phone
Spurred by interest in formats like branded apps and mobile video, 82% of brands, agencies and other companies plan to boost mobile ad budgets in the next 12 months, according to a new study by MediaPost’s Center For Media Research and digital research firm InsightExpress.
Four in 10 plan to increase spending by up to 30% and three in 10 by 31% or more in the next year. Fifteen percent expect no change, and another 3% plan to cut mobile ad spend. Half of mobile ad dollars currently come from online budgets, 35% from cross-platform buys, 27% from funds specifically earmarked for mobile and 8% from TV budgets.
The study projected that 43% of mobile spending in the future will come from designated mobile budgets as the sector matures.
Given the enthusiasm for mobile advertising unleashed by the iPhone and the accompanying App Store, it’s not surprising that branded apps are what clients find most intriguing about the emerging ad category, according to survey respondents spanning agencies, brands, publishers, technology vendors, retailers and other types of organizations.
Following closely behind apps, cited by 47% as what clients find most exciting in mobile, were mobile video (44%) and mobile coupons (39%). A separate study released last week by TubeMogul and Brightcove found that more than half of media companies plan to roll out ad-supported mobile video in the next six to 12 months.
When it came to rating return on investment, however, the less glamorous formats won out. More than a third (36%) cited mobile coupons as the most effective form of mobile advertising, followed by lowly text links and banners, at 26% each.
Among the 53% of those surveyed who have not been involved in mobile campaigns, 59% expect to do so in the next year and 30 in the next six months.
In a section focused on agencies, the MediaPost study found that more than half (57%) had been involved in mobile campaigns, 44% none, and 17% in four or more. The majority of agencies needed three or more weeks to develop and execute a mobile campaign, with 37% taking more than four weeks. Twenty-one percent took only two weeks.
Internal departments most heavily involved in mobile efforts include creative (78%), account services (69%), media services (67%) and strategy (67%). Least involved were operations (19%) and sales (21%).
Agencies typically looked for outside help in areas including technology (52%), mobile expertise (23%) and production (21%). Two-thirds of ad firms developed completely new creative, while half have also repurposed existing online creative for mobile projects.
Of agencies that have not run a mobile campaign, the majority (71%) expect to do so in the next 12 months, and 22% in the next three months. But 29% don’t see mobile becoming part of their business for the forseeable future.
The study, conducted with MediaPost’s subscriber base, took place from from April 19 to April 20, 2010, with 550 people completing the survey. Of that total, 352 had planning, buying, or approving responsibility at their companies.

Apple iPad Sales Pass 1 Million Mark; iBooks Not Flying Off Shelves

Apple (NSDQ: AAPL) CEO Steve Jobs is crowing this morning about breaking the one million mark with iPad in 28 days—less than half the time it took for the iPhone to achieve the same feat. At the same time, the company announces some usage stats as of April 30: 1.5 million iBooks downloaded (no mention of actual iBook Store sales) and more than 12 million apps downloaded (again, no mention of actual sales.) Apple says more than 5,000 new apps have been developed for iPad; it’s not clear whether that number includes iPhone apps that have been optimized to take advantage of the iPad’s larger screen and more vivid graphics.
The iBook number seems impressive at first glance: more than 1.5 million. A couple of points to consider, though:
—Apple reported 250,000 downloads the first day, when 300,000 iPads were delivered. On April 8, the company reported 600,000 downloads and 450,000 iPads. The number of downloads more than doubled in the first week. It took the next three weeks to add 900,000 downloads, still on a triple-digit pace but the increases are pacing with device sales. We have no sense of how much the iBook is catching for repeat downloads or sales. (We also don’t know if it is adding sales or replacing them but that’s more of an e-book marketplace issue than an Apple one for now.) Then again, at least Apple is providing something beyond the number of titles available—the only stat Amazon (NSDQ: AMZN) routinely proivides about the Kindle.
—That’s an average of roughly 1.5 book downloads per device, better than the first day but not as dramatic as 1.5 million sounds overall. It’s not clear how many books that is per iBooks download; the app doesn’t come pre-installed, although Apple has said the figure doesn’t include the free Winnie-the-Pooh download offered with the app.
Milestone unit: The milestone unit was sold Friday, the day Apple released the 3G+WiFi version of its new tablet; including weekend sales, the number should be past one million. That doesn’t mean that many iPads are in circulation; the company doesn’t say whether the figure takes returns into account not does it give any number for returns.