Archive for July 9th, 2012

Yahoo! sets up Grid Computing Lab at IIT Madras

NEW DELHI: Yahoo! India R&D in partnership with the Indian Institute of Technology Madras (IIT- Madras) today announced the launch of Yahoo! Grid Computing Lab at the IIT- Madras campus. This cluster of high-end servers at the lab will allow researchers to access web-scale data and conduct research on big data and cloud computing systems.

Cloud services empower companies to dramatically improve agility and innovation at web scale. As more companies are moving their services to the cloud, it has emerged as an important area of research to explore new approaches in the field. The partnership will support researchers at IIT- Madras to process and analyze huge volumes of structured and unstructured data which, to date, has been limited due to significant cost barriers in getting large computing systems operational.

Hari Vasudev, VP, connections, Yahoo! Inc said, “At Yahoo! we believe that open and collaborative research is the best way towards building the next generation of the Web. By partnering with premier institutes like IIT-Madras, we hope to spur research in big data problems in areas such as search, personalization and digital advertising.”

“We are excited to partner with Yahoo! to advance cloud computing research in India as it opens up a new arena of exciting opportunities for our students. We are hopeful such partnerships will allow students to conduct truly breakthrough work on cloud computing and data storage systems, ultimately leading to web innovations coming to the marketplace,” s aid Prof. D Janakiram, Department of Computer Science, IIT-Madras

Yahoo!, the digital media company, has been an early investor in cloud and big data, founding Hadoop – an open source technology at the epicentre of big data and cloud computing, enabling organizations to get insights from the massive amounts of data being created and collected every day. The company operates one of the world’s largest private cloud infrastructures handling 11 billion page visits per month and 100 billion events a day (200 petabytes of data) from its 700 million users. Yahoo! India R&D had previously established a similar lab at the IIT Bombay campus, which conducts research in data management and natural language processing.

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Nokia-born startup to launch MeeGo smartphone

HELSINKI: A Finnish startup, formed by former Nokia employees and using technology ditched by the handset maker, plans to launch its first smartphone later this year, entering an already crowded market.

The startup, Jolla Ltd, will use MeeGo software, created by Nokia and Intel in 2010-2011, for its products.

Linux-based MeeGo has found use in netbooks and car infotainment systems, but so far has been deployed in just one smartphone model, the Nokia N9.

Finland’s Nokia last year swapped its own software platforms, MeeGo and Symbian, for Microsoft’s untried Windows Phone – a move that has hit its sales and sent its share price crashing. It has yet to disclose N9 sales figures.

“The Jolla team is formed by directors and core professionals from Nokia’s MeeGo N9 organisation, together with some of the best minds working on MeeGo in the communities,” the startup said in a statement.

Jolla said it would focus on designing, developing and selling new MeeGo-based smartphones and unveil the first model later this year, together with international private investors and partners.

Analysts said the new company would struggle to break into the highly competitive smartphone market, which is dominated by Google and Apple.

“The art is not to create one cool phone, the challenge is to create a sustainable business. And when you have got all that in place you have to bring your product to the market,” said John Strand, founder of Danish telecoms consultancy Strand Consult.

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Microsoft loss reflects Web display ad world’s woes

SAN FRANCISCO: Microsoft Corp shelled out a record $6.3 billion for aQuantive i n 2007 a t the height of a race with Google Inc and Yahoo Inc to clinch the top spot in Internet display advertising, betting on what many thought was a red-hot business.

The writedown of almost all of that deal’s value , announced this week, shows how misguided those expectations were, and how brutal the once-thriving business of selling banner ads on websites has become.

The main culprit is an explosion of advertising space offered by Facebook Inc and other websites that is outpacing steady demand. But automated online exchanges, smarter search advertising and a growing skepticism about the effectiveness of jamming ads in people’s faces have also conspired to slash prices and suck profits out of the business.

“The inventory or amount of ad spots grew so fast, it outgrew demand,” said Dave Morgan, an i ndustry veteran and entrepreneur. “That brought pricing down massively. So a lot of display advertising really became a ghetto for bad direct-response advertising.”

Morgan founded Tacoda, an online advertising firm that AOL acquired in 2007 for $275 million. He is now in TV advertising as th e C EO of SimulMedia.

“That’s where the big money and margins are,” he said. Microsoft’s spectacular capitulation is the latest admission of failure on display advertising. Ad industry executives say the software leader might now join Yahoo in re-thinking its approach to Internet advertising, though there’s no simple solution to the fundamental challenges they face.

Marketers today have more choices than ever, as Internet penetration s wells in emerging markets and popular websites like Facebook multiply the amount of available online pages.

Advertisers now question the performance of display ads more as Internet users train themselves to avoid such marketing. A study of Reddit readers by GazeHawk last year found that veterans of the social news site focus on the content they’re interested in, and unconsciously filter out everything else.

“At the end of the day, they don’t work,” said Wine.com CEO Rich Bergsund, of display ads online. “The display ad people are in the business of selling impressions, which may not convert to customers or sales.”

Ad exchanges are also undermining the business by helping marketers reach a bigger target audience more quickly and efficiently, helping them spend less.

BUBBLE, BUBBLE, TOIL AND TROUBLE

Display ad prices have roughly halved since the first dot-com boom.

ValueClick, which has a big display ad business, has lost about half its value since May 2007, when the stock hit a record. Microsoft bought aQuantive that same month – around the same time tha t Go ogle acquired display ad company DoubleClick and Yahoo bought online ad network Right Media.

The average cost to reach 1,000 people with an online display ad fell t o about $11.50 at the end of 2011 from $13.35 in late 2009, ac cording to SQAD Inc, which tracks negotiated ad deals. In July 1998, Yahoo was getting about $25 per thousand, according to The Wall Street Journal.

Yahoo, still among the dominant players, has struggled for years to arrest sliding revenue g rowth. Today it is w orth about half of its May 2007 market value.

“Display isn’t going away, but it’s becoming harder to make money from it,” said David Hallerman of eMarketer, which tracks online advertising.

Google’s $3.1 billion purchase of DoubleClick is one of the few display ad deals that has succeeded, analysts say.

It used its dominant search technology to make DoubleClick’s display ads more relevant and better targeted, while Microsoft failed to use its Bing search engine to improve aQuantive ads in the same way, said Ben Sch achter, an analyst at Macquarie.

Wine.com used to buy a lot of display ads, but now mainly uses Google paid-search, affiliate marketing and comparison shopping engines, Bergsund said.

In 2007, Yahoo launched an initiative similar to Google’s , but Schachter said it did not deliver on its potential.

“The promise of the Internet was always getting the right ad, at the right time, to the right person,” Schachter said. “It’s just not there yet in display ads.”

HOW NOW?

Microsoft remains committed to Internet advertising despite hemorrhaging billions each year from its online services division th at encompassed aQuantive an d includes search business Bing, which has barely dented Google’s market share.

But it may have to reconsider its approach. The aQuantive writedown may presage moves such as giving away display ads for free, according to Gilad de Vries, vice president of brands and agencies at Outbrain, a content rec ommendation startup.

“The value of ad serving has become completely commoditized and the marginal cost of serving a banner ad has gone down to zero,” he said.

If Microsoft gave away what are already high-volume, low-margin display ads, it may be a ” brilliant” move because it would help the company compete better against Google’s DoubleClick, agreed Donnie Williams, chief digital officer of H ori zon Media.

Microsoft is more interested in selling premium online ads, which run on highly trafficked areas such as the MSN home page or are shown on its Xbox 360 video game console. The company could sell a premium display ad to run on the MSN home page, and throw in free banner ad spots that appear in other less popular areas of its websites as part of the same package, he argued.

But for now, the company is not publicly articulating its attack plan.

“We’re just starting to hear a little around Microsoft re-evaluating their ad model altogether,” Williams said.

“Things haven’t panned out the way prognosticators once thought. Five years a go, no o ne understood the impact Facebook was going to have on consumers and advertisers.”

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