Digital Media

Correction: An earlier version of this story misstated that technology from the Five Across acquisition was the foundation for the new Eos service. It is not.

LAS VEGAS --Two years after it first started courting big media companies, Cisco Systems will finally launch a new product to help these companies harness the power of social networking and connect their brands to fans.

On Wednesday, Cisco will kick off the Consumer Electronics Show here by announcing Eos, a hosted software platform that allows media and entertainment companies to create, manage and grow online communities. Through Eos Cisco has compiled technology tools and slapped on an easy to use interface to make building and customizing Web sites easy. But most importantly, it's bundled into the software, technology that will allow media companies to build interactive Web sites so that fans can connect with musicians, TV shows, movies, or whatever brand a media company wants to promote.

Cisco first began looking for ways to help big media companies late in 2006, when it created the Media Solutions business unit. The idea was to develop and market products to digital media content owners. In February last year, the company bought a startup called Five Across, which developed social networking software.

Dan Scheinman, the Cisco executive behind Eos, believes that the new software platform addresses one of the biggest problems that media companies face today.

"The reality is that media is so disrupted by digital technology," he said. "Fans are looking for ways to connect to their favorite artists or TV shows and they are seeking out communities, but the media companies have been slow to provide this for them. Eos is centered around community and allows fans to participate."

The service provides tools that allow media companies to create blogs, live chats, message boards, rating and ranking systems.

Scheinman believes that social networking is the most important way for marketers and big media companies to reach consumers. Consumers are using sites such as YouTube and Facebook to share media, like videos, music and pictures. He also believes that media companies can combat piracy by offering fans an interactive experience through their own branded Web sites.

"In many ways digital destroys the value proposition for media," Scheinman said. "Other people can rip off the content and monetize it, aggregate it, and take pennies for it."

One True Media, the parent company of an online video ad creator called SpotMixer, has announced a fresh $9 million in Series B venture funding. The round was led by DAG Ventures, with contributions from NTT Finance and existing investor Kleiner Perkins Caufield & Byers.

Amid widespread financial difficulties (to say the least) in the media business, SpotMixer and its new investors are pitching it as a cost-cutting option for small companies.

"While the market opportunity for video advertising remains well-defined, smaller businesses are more concerned than ever about how to most cost-effectively spend their limited advertising dollars," said DAG managing director Young Chung, who has joined One True Media's board of directors. "SpotMixer has quickly established itself as one of the most innovative and thoughtful solutions that will enable accelerated growth around this major advertising trend."

In conjunction, SpotMixer announced that it has been appointed the first official "authorized reseller" of Google's AdWords service for videos. This means that SpotMixer clients will be able to directly distribute their ads using Google's ad platform in addition to creating them online.

SpotMixer charges clients a minimum of $49 per month for access to its online tools, which are effectively a souped-up version of the many Web-based video "mixing" services out there. Then they can shoot them out across the Web with video embed codes or ad campaigns on the Web or cable TV.

Making the advertising process cheaper and easier is certainly a good pitch during a recession, but there's a flip side, too: Small companies with tightening budgets could easily opt to nix video ads altogether, sticking with the more familiar territory of text or display advertising. SpotMixer, on the other hand, maintains that video ads are more effective

Christopher Norberg, defendant in a lawsuit accusing him of libel for a negative review he posted on Yelp.

(Credit: Christopher Norberg)

San Franciscan Christopher Norberg went to a chiropractor after being injured in a car accident in 2006. After a disagreement with the chiropractor over billing, he posted a negative review of the business on Yelp suggesting that the doctor was dishonest. Now he is facing a defamation lawsuit that could chill self-expression on the popular gripe Web site.

"If Christopher loses then anyone on Yelp who writes a negative review better be careful," said Michael Blacksburg, an attorney representing Norberg. "This strikes at the heart of Yelp's business model and other Web sites that provide a bulletin board for people to state what they think of businesses in their community."

"This is clearly Christopher Norberg's version of conversations with the doctor relating to a billing dispute and his opinion of how the doctor was behaving," Blacksburg said on Tuesday. "This is clear opinion that falls squarely within constitutionally protected speech."

Eric Nordskog, the attorney for chiropractor Steven Biegel, said the case comes down to whether Norberg's comments are considered statements of fact or opinions.

"Dr. Biegel has no problem with people expressing their views and opinions about his service," Nordskog said. "But there is a line where if someone, even on Yelp or on the Internet, publishes a false statement of fact as opposed to an opinion, then that person can and should be held responsible for their words."

Norberg, a 26-year-old custom-furniture builder, was advised not to discuss the case publicly, but has a Web site with related information. Biegel did not return a call seeking comment.

The two sides are scheduled to sit down for court-required mediation on Friday, but Norberg said he isn't optimistic that the case will be resolved then. A March 2 trial date is on the San Francisco Superior Court calendar.

The lawsuit, filed February 25, 2008, alleges that Biegel has suffered loss of reputation and business as a result of the review and seeks punitive damages. According to the lawsuit, the review allegedly contained false statements and inaccuracies that suggested Biegel was dishonest and accused him of fraudulent billing practices.

Billing dispute at center
Norberg was treated twice by Biegel before a friend of his told him he had had billing problems with Biegel's office, he wrote in his review. Norberg, who said he did not have medical insurance, was not asked to pay for the visits because Biegel's office said it would try to bill his auto insurance company instead, the review said. Even though the insurance company refused to pay, Norberg did not initially receive a bill from Biegel, he said.

In the meantime, Norberg began getting treatment from another chiropractor who suggested he sue the driver of the car that hit him, Norberg's review said. Norberg eventually settled the case, the review said.

After learning that Biegel's bill to the auto insurer was $550 instead of $125, which was the amount quoted for two visits, Norberg called Biegel, his Yelp review said. Norberg said that Biegel demanded he pay $550 during that phone call, but then said he would waive the fee entirely, according to the review. Biegel later called Norberg and explained that his office bills insurers at a higher rate than patients who pay for service directly because of the higher office costs in dealing with the paperwork and delays in receiving payment, court documents said.

Biegel's office then made a call to Norberg's auto insurance company and learned about the settlement and then called Norberg and demanded he pay $125, the lawyers said. Norberg paid the bill and posted a review of Biegel with a one-star rating on Yelp on November 16, 2007.

"I didn't feel comfortable with their tactics," Norberg wrote in his review after earlier writing that the office had been aggressive in trying to get him to come back for treatment before the billing dispute. Biegel "couldn't give me a straight answer as to why the jump in price...He called me back to cover his ass...(and says) he runs a business and would stick it to insurance companies," the review said.

"I don't think good business means charging people whatever you feel like hoping they'll pay without a fuss. Especially considering that I found a much better, honest chiropractor," Norberg wrote at the end of his review.

In a letter sent to Norberg dated December 7, 2007, Biegel asked Norberg to remove the review, saying it "unjustly characterizes me as unethical and dishonest" and attributed the dispute to a misunderstanding of his office procedures.

"I did not do anything unethical or illegal in our entire dealings," Biegel wrote. "It has never been my policy or intention to take advantage of an individual or insurance company."

On January 8, Norberg got a letter from Biegel's lawyer threatening him with a lawsuit over the review and two days later Norberg removed the review and rating from the site. The following month, Biegel sued.

Biegel, who was a "sponsored" advertiser on Yelp and encouraged customers to write reviews on the site, received about as many referrals per month from Yelp while the review was up as before, but fewer after the lawsuit was filed, Blacksburg said, citing Yelp documents.

A Yelp spokeswoman said she did not know of any other cases in which a business sued a Yelp user over a negative review.

"We won't comment on specific litigation, but in general, lawsuits like this are pretty uncommon," Yelp spokeswoman Stephanie Ichinose wrote in an e-mail.

"Most businesses engage constructively with customers who haven't had a good experience," she wrote. "When that doesn't work, they recognize that they can't always make one hundred percent of their customers happy one hundred percent of the time, and don't risk the huge expense and potential negative publicity that comes with suing one of their customers."

Accusing a business owner of unethical conduct would constitute defamation unless it is true, said Aaron Morris, an Internet defamation attorney in Santa Ana, Calif. However, if the defendant can successfully prove that posting the statement was a matter of public good then the plaintiff would have to show malice and that the defendant knew the statement was false or had reason to believe it was false, he added.

"You can have something that would normally constitute defamation but if it's a matter of public interest it is entitled to protected status," Morris said. "Some courts will say that if you are posting it in a forum where people would be interested, they are going to Yelp specifically to find out about the doctor...then it enjoys a heightened level of privilege."

Not much legal precedent has been set on Internet defamation involving consumer review Web sites. Two similar cases decided in August in California had conflicting outcomes. In European Spa v. Kerber, the First District Court of Appeal ruled that negative reviews of a spa posted on Yelp and Yahoo did not meet the public interest element to merit special status in a defamation lawsuit, Morris wrote in an entry on his blog. In a separate case, European Spa v. Kerber, the Second District Court of Appeal granted an anti-SLAPP (strategic lawsuit against public participation) motion filed by someone who had posted a negative review of a dentist on Citysearch.

"If enough of the cases come back where individual posters are being sued, that could chill the desire of people to go on and post their opinion," Morris said. "But all they have to do to protect themselves is to make sure there is some truth to what they are saying."

Updated 1:40 a.m. PST Jan. 7 with background on other cases.

It's time for our aperiodic wrap-up of Google items. We'll start off with the most unusual, in my opinion: wacky ASCII art.

These three ASCII characters appear to represent the 9/11 attacks on the World Trade Center.

(Credit: Google)

• September 11 obviously made quite an impression on people, and its effects continue to reverberate. The latest example: Google Trends, which monitors hot search terms at the company, has picked up on what appears to be a symbolic representation rendered in ASCII text characters. It consists of an airplane and two vertical bars.(Via Search Engine Land.)

• Google shed a little light on the popularity of its blog posts from 2008. The top item: the premature announcement of the Chrome Web browser. The post had 1,735,093 unique visitors, 12 percent of the total visitors to the official Google blog. That implies there were a total of about 12.5 million unique visitors for the blog overall--not bad for an official corporate blog.

• Google China won a trademark infringement lawsuit brought by a company called Beijing Guge Science and Technology, according to Bloomberg. Google named its subsidiary "Gu Ge, which means "harvesting song" in Chinese, but a court ruled that Beijing Guge must stop using the name.

• Including graphics for Google's online payment system, Google Checkout, helps improve the performance of search advertisements, according to Google. The company said on its site that people click on ads with a Google Checkout icon about 10 percent more than those without, though the company didn't offer specific methodology for its conclusion. (Via Google Blogoscoped.)

• Google is canceling a project called Google Research Datasets, also called Palimpsests, that housed data for researchers. "It has been a difficult decision, but we have decided not to continue work on Google Research Datasets, but to instead focus our efforts on other activities such as Google Scholar, our Research Programs, and publishing papers about research here at Google. The Google Research Datasets service will remain active until the end of January 2009 during which time any datasets may be downloaded. For those datasets that are impractical to download, we will also happily provide interested users with a copy via hard drive shipment," the company told astrophysicist Alberto Conti, who posted the note on his blog. (Via Google Blogoscoped.)

Updated at 4:30 p.m. PST with details on the file formats Apple is using.

Apple and the three largest music labels didn't take any half steps in walking away from copy-protection software at Macworld 2009 Tuesday.

Apple could have announced, as expected, simply that the iTunes Store would begin offering songs stripped of digital rights management from now on. Instead, the country's largest music retailer secured licenses that will enable users to upgrade their existing DRM-wrapped music and strip it of the controversial software--but it's going to cost them.

An Apple spokesman offered more details: Users of iTunes can now upgrade their music libraries with a click of a button. For an additional 30 cents per song, a user can receive a DRM-free version of their existing tracks at a 256-kbps bit rate.

The iTunes files will still be in Apple's preferred AAC format, not the more widely supported MP3. But as Matt Rosoff points out, a lot of recent digital music products do support the AAC file format, including Sony's newer Walkman players and Microsoft's Zune and its next version of Windows Media Player.

Starting Tuesday, Apple will offer 8 million DRM-free songs and will add another 2 million by April. The hold-up for the remaining songs is due to licensing issues, according to my sources.

Photos: Jobs fill-in touts media, MacBook updates

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I'm not going to gripe about that. Those kinds of details work themselves out, and it's impressive that Apple and the major labels--Universal, Sony BMG, and Warner--worked out a deal for the 8 million.

With the move, Apple's iTunes is also making its strongest foray into interoperability. From now on, iTunes' music should play on any digital player, meaning iTunes users don't have to worry about their music libraries being locked out of some future digital music player.

Apple had already offered DRM-free music from EMI, the fourth-largest music label, at a higher bit rate for a premium price.

Click here for more Macworld Expo coverage from CNET News.

Updated at 10:00 AM Pacific.

Six months after announcing its intention to bring SlingPlayer to the iPhone 3G, Sling Media has another announcement to make--just not the one you're wishing for.

SlingPlayer Mobile for iPhone isn't ready yet, Sling said on Tuesday, but it is on its way.

Like SlingPlayer Mobile for Windows Mobile, Palm, Symbian, UIQ, and BlackBerry (beta) platforms, this iPhone version will let you access one or more Slingboxes from your mobile device, and watch your TV stations on-the-go. It will also be compatible with the iPod Touch.

You'll also be able to manage your DVR from the iPhone, and can synchronously add and remove favorite channels directly from the phone's interface--a first for the SlingPlayer Mobile line.

In our demo, the client streamed live, high-quality video of stations like MTV and TBS on both Wi-Fi and the iPhone's 3G network. Swiping the screen horizontally advances you through favorite stations, and flicking up and down rotates through all your home channels.

Sling Media says it will submit the file to the iTunes AppStore by the end of the first fiscal quarter. While Sling Media shared no firm price tag, it could mirror the $29.99 lifetime fee of SlingPlayer Mobile on other platforms.

Before getting too excited, just remember that Apple has been known to kill promising apps, ostensibly for the crime of a large data transfers. SlingPlayer Mobile for iPhone could suffer the same fate. Assuming it doesn't, the client still faces competition from Orb, whose full version, OrbLive, delivers live TV and media stored on your PC for $10.

Americans appear to be getting more comfortable watching videos online--and Google is the clear winner.

Internet users in the U.S. watched 12.7 billion online videos in November, an increase of 34 percent versus a year ago, according to numbers released Monday by market researcher ComScore.

Thanks to YouTube, Google Sites retained the crown as the top U.S. video property with nearly 5.1 billion videos viewed--or about 40 percent of all videos viewed online--with the video-sharing site accounting for more than 98 percent of Google's traffic. Fox Interactive Media was a distant second with 439 million videos watched (or 3.5 percent), followed by Viacom Digital with 325 million videos watched (2.6 percent).

The data also showed that 77 percent of all U.S. Internet users had viewed online videos in 2008, and that the average online video viewer watched 273 minutes of video.

That's all good news for sites like YouTube and Hulu that are trying to build an online ad market around video. One analyst firm expects the market for video ads to grow 45 percent to $850 million this year.

An eMarketer study released in December forecast more growth in years to come: $1.25 billion in 2010; $1.85 billion in 2011; $3 billion in 2012; and $4.6 billion in 2013.

(Credit: ComScore)

Editor's note: This article was written Monday, before Apple made any announcements about changes to iTunes. You can read the story that followed the company's formal announcement at Macworld 2009 here.

Apple has cut deals that will finally enable iTunes to offer songs free of copy protection software from the three largest music labels, according to two sources close to the negotiations. In exchange, Apple has agreed to become more flexible on pricing, the sources said.

Under the terms of the deal, song prices will be broken down into three categories--older songs from the catalog, midline songs (newer songs that aren't big hits), and current hits--said one of the sources. Apple has offered songs free of digital rights management protections from EMI for more than a year. But EMI accounts for less than 10 percent of music sold in the U.S.; these new deals will expand iTunes' DRM-free library to include songs from the other three major labels (Sony BMG, Universal, and Warner Music).

Apple and the music labels have also apparently come to terms on over-the-air downloads, according to a source. That would allow iPhone owners to download songs to their mobile devices via cell networks and without the aid of Wi-Fi. Apple, which closed the deals last week, could announce the agreements as early as Tuesday at the Macworld Conference and Expo in San Francisco.

Apple did not respond to requests for comment.

DRM-free songs are something that many iTunes users have requested for some time. However, the celebration over their appearance at the country's largest music retailer may be overshadowed by increased prices on some hit songs, which might be seen by some as an Apple surrender on pricing. Apple fans have long applauded the company for holding the line on pricing despite loud complaints from the major music labels.

The good news is that the price of catalog music is falling to 79 cents per song. The labels will get an opportunity to price some hit songs for more than 99 cents but eventually those songs will drop to 79 cents, according to one source.

Before iTunes users get too worked up, they should remember that song prices at iTunes haven't increased in five years. According to the Consumer Price Index, a 99-cent song in 2002 would be worth $1.17 today.

Not only will new music downloads be free of copy-protection software, but Apple and the labels will begin removing DRM from music already available in the iTunes Store, the source said. However, it's unclear what will happen to songs that have already been purchased.

Click here for more Macworld Expo coverage from CNET News.

Searches at Microsoft's Windows Live Search site dropped again in November from a year ago while Google's continued to rise, according to Nielsen Online figures released on Monday.

Searches at Windows Live Search fell 16.7 percent year-over-year, giving Microsoft 9.1 percent market share in the U.S. in November.

Google's searches rose 21.7 percent, for 64.1 percent market share, and Yahoo's searches dropped 1.4 percent from November 2007, for 16.1 percent share.

Total searches for the month exceeded 8 billion, up 9.6 percent from a year earlier.

In October, Google's searches rose 8.1 percent, giving it 61.2 percent share, while Yahoo's searches declined 12 percent and Microsoft's fell 19 percent year-over-year.

Top 10 search providers for November 2008, ranked by searches (U.S.)

(Credit: Nielsen Online)