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Competition Bureau’s call for search experts likely related to Google Inc probe, experts say

National Post Tech Desk - Tue, 04/21/2015 - 15:07

The Competition Bureau is seeking experts in online search and advertising to assist with an investigation – almost certainly its probe of Google Inc., Internet legal experts said.

According to a letter sent to a number of Canadian firms on Friday and obtained by the Financial Post, the Competition Bureau’s mergers and monopolistic practices branch is looking for people with expertise in certain practices related to search engines and online advertising. “Potential experts should have extensive experience in digital and web-enabled marketing, advertising campaigns that employ search engines and publisher sites across multiple devices, and a thorough understanding of the Canadian market,” the letter said, adding that expertise in contracts related to search engine placement on websites, algorithms that give search engines’ own content priority in search results and restrictions that compel advertisers to purchase advertising on multiple devices would be assets.

The bureau is also looking for experts in digital display advertising services, such as Google’s Display Network that helps advertisers place ads on relevant websites. The letters asked anyone interested to respond by Monday.

David Fewer, director of the Canadian Internet Policy and Public Interest Clinic and an intellectual property and technology lawyer, said the areas where the Competition Bureau is seeking expert comment are similar to the issues raised by the European Union in its own antitrust investigation into Google. On Wednesday, EU Competition Commissioner Margrethe Vestager charged Google with giving its own shopping service premium placement in search results and opened yet another investigation into Google’s Android mobile operating system.

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“It’s echoes of the European Union investigation,” Fewer said. “It may be that the Competition Bureau has decided to widen (its investigation into Google) or expand it, or maybe they decided they didn’t have the evidence they needed and are looking for more.”

Michael Geist, the Canada research chair in Internet and e-commerce law at the University of Ottawa, said the letters suggest the Competition Bureau might be looking to ensure it addresses the issues raised by the EU. “It does raise the question of whether the Bureau is nearing a conclusion… or looking to beef up their analysis before issuing a decision,” Geist said in an email.

In an emailed statement, Competition Bureau spokesman Greg Scott said the agency could not comment on the letter and its investigation into Google is ongoing. Google Canada spokeswoman Leslie Church issued a statement saying “we continue to work cooperatively with the Bureau to answer any questions they may have.”

The Competition Bureau formally launched its probe of Google’s alleged anti-competitive practices in December of 2013. According to documents filed with the Federal Court of Canada, the Competition Commissioner of Canada has reason to believe that Google controls one or more markets related to Internet search and advertising services in Canada, and that the Mountain View, California-based company may have engaged in a number of anti-competitive acts in violation of Canadian law, including deals with hardware and software vendors to make Google the default search engine.

 

Celestica Inc shares rally amid buyback and deal with Honeywell

National Post Tech Desk - Tue, 04/21/2015 - 14:38

Plans of a record buyback and news of a new agreement with the world’s largest manufacturer of aircraft engines pushed shares of Canadian manufacturer Celestica Inc. higher Tuesday despite reporting weak quarterly revenue that contracted for a 14th consecutive time year-over-year.

In the three months ended March 30, the Toronto-based company suffered close to a 30 per cent plunge in adjusted net earnings to US$33 million from US$47.1 million, missing analyst estimates by almost 10 per cent. Revenue was also sluggish, sinking from US$1.31 billion a year ago to US$1.29 billion, an amount that underwhelmed the Street but did fall within the lower end of Celestica’s forecast.

President and chief executive Craig Muhlhauser attributed the results to Celestica’s “major disengagement” from its consumer segment, which has fallen from 29 per cent of annual revenue in 2009 to just 3 per in the latest quarter, amid a strategic shift in product mix. He said its communications and industrial segments slumped “beyond what we were expecting,” as carriers and industrial clients slashed spending.

“The demand environment is very volatile, and the economic situation continues to be challenging,” he said in an interview. “We are weathering that storm. I think we are beginning to show some significant growth.”

Celestica said its top 10 customers – including Cisco Systems and Juniper Networks, according to Bloomberg data – accounted for 64 per cent of first-quarter sales, down five percentage points, a reduction Muhlhauser touted to mitigate risk. “You’d like to keep that to a minimum,” he said, referring to client concentration, adding, “as long as we’re with the winners, it doesn’t really matter.”

Still, shares of Celestica rose 4.26% in Toronto to close at $14.67.

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The company revealed it plans to repurchase and cancel up to US$350 million of its subordinate voting shares, its largest buyback in history, during its current quarter. The buyback will be funded by roughly US$75 million in cash on hand, with Celestica relying on debt in the form of both a credit facility and term loan to finance the rest, chief financial officer Darren Myers told analysts on a conference call.

When asked why he opted to buy back shares as opposed to issue a dividend, Muhlhauser said, “You don’t want to start a dividend if you can’t continue it.” Celestica is transitioning away from an over-reliance on its electronics and communications divisions, which Muhlhauser says account for two-thirds of its current business, in favour of the burgeoning department it calls diversified, which serves a variety of sectors including aerospace, health care and industrial. He’d like to see a 50-50 split between the two groups.

“Over the next three to five years, a dividend is something we would consider. Now is not the right time,” said Muhlhauser. He specifically referenced Nokia Oyj’s recent purchase of French rival Alcatel-Lucent SA as to why it’s critical for technology companies to not put all their eggs in one customer’s basket, as he expects Nokia to consolidate suppliers with Alcatel, which accounts for 2 per cent of Celestica’s sales, the company said during Tuesday’s earnings call.

“As we reduce our concentration, we will become a much more stable revenue business,” Muhlhauser said. “Then, we can commit and deliver continued dividends.”

Further, Celestica said it has been subcontracted by Honeywell Aerospace to manage the assembly and test operations for certain product lines, including electric power, at Honeywell’s facility in Mississauga, Ont., where parts are built for military aircraft and commercial planes for 150 airlines, Muhlhauser said.

The terms of the deal were not disclosed, but Myers said in Tuesday’s call that Celestica is using an estimated US$34 million of cash in the quarter to pay for roughly 330 employees at the leased site.

“It’s a tremendous proof-point not only for Honeywell,” Muhlhauser said, “but for other customers in the aerospace and defense business that we have today and will continue to pursue.”

Yahoo Inc’s revenue misses estimates as CEO’s turnaround sputters

National Post Tech Desk - Tue, 04/21/2015 - 14:28

Yahoo! Inc.’s first-quarter revenue fell short of analysts’ estimates, underlining Chief Executive Officer Marissa Mayer’s challenge in attracting advertisers even as the Web portal adds content and signs new partners.

Sales, excluding revenue shared with partner websites, fell 4 percent to $1.04 billion, missing analysts’ average prediction of $1.06 billion, according to data compiled by Bloomberg. Profit before some costs was 15 cents a share, the company said Tuesday in a statement, compared with projections for 18 cents.

Mayer, who took the helm in 2012, has been focusing on Yahoo’s mobile business, rolling out new online channels and striking exclusive content deals, yet she’s still struggling to add users and boost the company’s slice of Web-advertising budgets. As those dollars go instead to younger rivals such as Google Inc., Facebook Inc. and Twitter Inc., Yahoo’s sales have dwindled to levels first reached in 2005.

“It’s a troubled business,” Colin Gillis, an analyst at BGC Partners in New York, said in an interview on Bloomberg Television. “This company is not growing revenue. In fact, it continues to shrink.”

Shares of Yahoo slipped 1.5 percent in extended trading. The stock, which dropped less than 1 percent to $44.49 at the close in New York, has fallen 12 percent this year.

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While sales declined, the company said revenue from its emerging businesses — a set Yahoo calls Mavens, including mobile, video ads, native ads and its Tumblr blogging platform – – expanded during the quarter. Mavens sales rose 58 percent to $363 million from $230 million a year earlier. Mobile revenue climbed 61 percent to $234 million.

Yahoo’s share of the U.S. online display ad market may slide to 3.5 percent in 2017 from 5.5 percent last year, according to EMarketer Inc. Quarterly revenue growth has come in at less than 4 percent or negative since the end of 2012.
While shares have almost tripled under Mayer’s leadership, much of that added value is tied to Yahoo’s stake in Alibaba Group Holding Ltd., the largest Chinese e-commerce company. In January, Mayer unveiled plans to spin off the shares in a tax- efficient manner, a process that’s slated for the fourth quarter.

Activist investor Starboard Value LP is pushing for more — it’s also seeking a spinoff of Yahoo’s Japanese investment. In March, Starboard said the Internet company could unlock $11.1 billion, or $11.70 a share, of stockholder value, in part with a tax-efficient spinoff of its stake in Yahoo Japan Corp.

For the first quarter, net income attributable to Yahoo was $21.2 million, down from $311.6 million a year earlier. That included items such as stock-based compensation expenses.
Search Agreement

Yahoo, based in Sunnyvale, California, last week said it revamped a search agreement with Microsoft Corp., giving the Web portal more flexibility. Under the revised agreement, which the companies first announced in 2009, Yahoo no longer will have to use Microsoft to serve all the ads or organic results on desktop searches.

Some analysts have speculated that the company could tap Google, the world’s largest Internet-advertising company, to handle a minority of its promotions for search ads. That could help bolster Yahoo’s reach, and its sales, from that business.

Yahoo also has boosted its own lineup of products. In February, it unveiled a suite of development tools for mobile applications that integrate advertising services with features it acquired with analytics startup Flurry Inc. The set of programs is designed to help outside app developers add marketing spots, including those that use search and video, along with native ads, or the promotions that are displayed among other content.

Bloomberg.com

HBO is cracking down on Canadians accessing streaming service HBO Now

National Post Tech Desk - Tue, 04/21/2015 - 12:59

HBO’s new streaming platform, HBO Now, allows U.S. consumers access to its massive library of content, which includes new episodes of popular television shows such as Game of Thrones and Silicon Valley, without the need for a traditional cable television subscription.

The service, which is exclusively available through Apple TV at launch and also online, costs an affordable $14.99, and is an attempt by HBO to drive people away from relying on Torrents and other file-sharing platforms to download HBO content.

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Similar to other popular streaming services, HBO currently doesn’t plan to bring its new HBO Now platform to Canada, but just like the U.S. version of Netflix and other streaming services such as Hulu, many people outside of the United States are accessing HBO Now with the help of VPN and DNS geo-unblocking tools.

VPN services mask a user’s IP address – a 12 digit number identifying an online device – encrypting Internet activity in a secure, untraceable tunnel. This allows people to browse the Internet privately and also virtually move their device to different regions of the world, giving Canadians access to streaming services typically only available in the United States. This can also be accomplished through location-cloaking Domain Name System (DNS) services.

While region jumpers are always paying subscription-based customers, they are still violating HBO’s terms of use. Unlike Netflix, which has consistently maintained a relatively lax approach to dealing with geo-unblocking, HBO is reportedly cracking down on Canadians, as well as people in other regions of the world, who are accessing HBO Now.

“It has come to our attention that you may have signed up for and viewed video content on the HBO NOW streaming service from outside of the authorized service area (the United States, including D.C. and certain US territories),” HBO writes in an email to unauthorized users.

“We would like to take this opportunity to remind you that the HBO NOW streaming service is only available to residents of the United States, for use within the United States. Any other access is prohibited by our Terms of Use.”

Users in various regions, including Canada, U.K, Germany and Australia, have all reportedly received notifications from HBO. More importantly, the emails also state HBO will terminate any account associated with a VPN or DNS service without the option for a refund. HBO is likely flagging a range of IP and DNS addresses it thinks might be associated with geo-unblocking, and is then notifying those users.

#HBONOW is a U.S. service that will not be available in Canada. @HBOCanada and @CraveTVCanada will continue to air HBO's iconic programming.

— HBO Canada (@HBOCanada) March 9, 2015

In Canada Bell Media holds the exclusive online streaming rights for HBO television shows, and the only way to watch HBO content legally via the internet is through the company’s recently launched Netflix competitor, CraveTV. However, CraveTV only gives users access to HBO’s back-catalogue of content and not newer shows such as Game of Thrones.

Additionally, HBO has also targeted specific Torrents hosting the first four leaked episodes of the fifth season of Game of Thrones, sending notice-and-notice copyright violation letters to Canadian Internet service providers. Those notices need to be forwarded to customers due to the new Canadian Copyright Modernization Act.

While receiving a legal document from a production company might be intimidating, according to the notices HBO is still unaware of the identity of the alleged pirate’s identity, leaving little potential for legal ramifications.

However, a 2011 study conducted by Rogers Communications Inc. revealed notice-and-notice systems are effective in deterring piracy. Sixty-seven per cent of those who receive a copyright violation notification do not repeat infringe after receiving one notice and 89 per cent reportedly stop file-sharing after a second notice.

 

Here’s everything you need to know about the new 3DS StreetPass Mii Plaza games and paid Mii Plaza upgrade

National Post Tech Desk - Tue, 04/21/2015 - 10:39

StreetPass Mii Plaza is weirdly addictive.

It’s a 3DS app filled with games and various unlockables that has successfully lured obsessive-compulsive people (like me) to bring their handheld consoles with them pretty much everywhere they’ve gone for the last four years.

Here’s how it works: Whenever you and another 3DS owner pass one another on the street, your consoles wirelessly and quietly trade data about the games you play and – crucially for StreetPass Mii Plaza – swap Miis, those cartoonish little characters that act as our avatars in Nintendo’s virtual world. Each Mii avatar you collect is essentially a ticket to play a Mii Plaza game, so the more you encounter the more times you can play.

When the 3DS first launched there was only one Mii Plaza game – an adventure called Find Mii – plus some picture puzzles. Nintendo added four new games a couple of years ago. And just this past week it added two more – Ultimate Angler and Battleground Z – along with a paid upgrade for the Plaza itself (which is really just a gussied up menu for accessing the StreetPass games and unlockable rewards).

I’ve been lugging my 3DS along everywhere I’ve went the past few days trying to encounter as many Mii avatars as possible so I could give both games a good go.

The first of the new games, Ultimate Angler, is a fishing game akin in concept to the two-year-old Mii Plaza game Flower Town, except instead of growing and tending to a garden of colourful blossoms you’re trying to capture various breeds of fish using bait helpfully provided by each Mii avatar you encounter.

Players progress by using a simple hook-and-reel mechanic to capture an assortment of exotic species, as well as the occasional boot or can. You’ll also earn fishing rods (often found in treasure chests that get caught on your line) that can be combined and upgraded to make the angling a little easier. Plus, you can purchase, maintain, and decorate a variety of tanks in which to keep your favourite aquatic specimens.

Add in a variety of bait types that can be combined to lure bigger and better fish along with a healthy assortment of picturesque fishing locations to choose from and there definitely seems to be some depth here.

Battleground Z, on the other hand, is fun to start but feels like it will have less staying power – much like Mii Force, the previous Mii Plaza game that clearly inspired it.

It casts your Mii in the role of a zombie apocalypse survivor trying to complete objectives in several short undead-infested stages. You’ll be tasked to survive onslaughts, collect tires needed for an escape car, round up survivors, escort people to safe houses, and even engage in the occasional boss battle.

Each Mii avatar you encounter appears as a fellow survivor. They may give you a goofy weapon of some sort – like a camera that blinds zombies, a boom box that blasts lethal music, or a Wii remote that transforms into what appears to be a white shiv – or you can simply have them join you on your journey. The more Mii avatars you bring to a stage, the better your chance of success.

If you plan to buy just one of the two new games – they run a little under $7 each in Canada, though you’ll get a slight discount if you buy them as a bundle – I’d recommend Ultimate Angler. I generally love zombies and hate fishing games, but in this case the latter looks as though it will offer a lot more mileage.

If you’re willing to spend $7 more, you can also upgrade the Mii Plaza itself, But I don’t think it’s worth the expense.

Much of the upgrade is devoted to simple functional enhancements. For example, once installed you’ll be able to choose to skip Mii greetings in order to speed up the process of welcoming new avatars to your plaza; remove games you’re finished with from the plaza and deposit them in a vault for later access; and listen to the music you’ve unlocked in the Mii Plaza Music Player with headphones while your 3DS is shut and in sleep mode.

You’ll also find a couple of new selectable icons in the plaza menu: one labeled VIP Room and another called StreetPass Birthdays.

The VIP Room is simply a means of marking certain Mii avatars as VIPs so you can find them quickly when you want to spend coins to recruit them for a game – kind of nice for folks with hundreds or thousands of Mii in their plaza, but not really essential.

StreetPass Birthdays, meanwhile, is simply a calendar that marks off Mii avatars’ birthdays as you meet them. Once you’ve marked off ten – and at regular milestones thereafter – you’ll earn tickets you can use at the Exchange Booth to buy hats, costumes, and themed speech balloons used by Mii avatars as they greet each other.

These additions are fine, but paying for such basic improvements feels a bit like paying for a system update – an idea we really ought not to encourage.

Plus, the upgrade doesn’t even address some of Mii Plaza’s more annoying ongoing issues.

Such as how many of the countries in the StreetPass Map menu still don’t have their own maps. Countries like Canada, the U.S., U.K., and Japan have black and white maps that break out each region. When you meet someone from a given region it turns red. However, if you meet a Mii from, say, Brazil, you can’t even see a map of the country, much less any of its regions. You just get a message that states no map is available. It smacks of laziness.

And while I understand the need for a limit on the number of Mii avatars you can collect before greeting them and the number of coins (another way to play Mii Plaza games) you can earn walking around via the 3DS pedometer, both remain frustratingly low. I frequently miss opportunities to hook up with my favourite Miis because the maximum 10 avatars are already waiting at the gate. And you can earn the 24-hour limit of 10 pedometer coins in a mere 15-minute walk, which hardly encourages gamers to get more exercise. It’s time Nintendo thought about adjusting these seemingly arbitrary constraints.

Long story short, paying in excess of $20 total for everything mentioned above doesn’t seem quite right to me. Cherry pickers should opt for Ultimate Angler, or maybe the two game bundle if they’re particularly passionate about StreetPass Mii Plaza games.

But I recommend skipping the paid Mii Plaza upgrade altogether. Simple app updates ought not to have a price tag, especially when they fail to address basic issues.

BlackBerry Ltd to buy WatchDox to bolster data security

National Post Tech Desk - Tue, 04/21/2015 - 07:13

TORONTO — BlackBerry Ltd  said on Tuesday it is acquiring privately-held U.S. tech company WatchDox, which makes software that secures files, in a bid to further bolster its security credentials.
Terms of the deal were not disclosed.

The WatchDox software, which is being used by some of the world’s largest federal agencies, private equity firms, and a slew of major Hollywood studios, gives clients full visibility and control over how their files are edited, copied, printed or forwarded. And it gives administrators the ability to lock, or remove access to files compromised in a data breach.

Earlier this year, BlackBerry Chief Executive John Chen said he saw a part of the company’s targeted software revenue growth in the current fiscal year coming from acquisitions of companies that will allow it to sell more value-added services.

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Waterloo, Ontario-based BlackBerry made a couple of strategic acquisitions last year that have allowed it to sell such value-added services.

In July it announced it was buying Secusmart, a privately-held German firm that specializes in voice and data encryption used by the German government and other customers. In September, it acquired Movirtu, a British-based tech start-up whose software allows users to have two phone numbers on the same device with a single SIM card.

The purchases have helped BlackBerry ramp up its portfolio of services that cater to the needs of its core base of clients, such as corporations and government agencies.

© Thomson Reuters 2015

Here comes ‘Mobile-geddon': Google Inc’s updated mobile search algorithm to have big impact on businesses’ web traffic

National Post Tech Desk - Tue, 04/21/2015 - 06:42

Google Inc. is implementing its updated mobile search engine, which could result in businesses big and small seeing their mobile Internet visitors practically disappear overnight.

The new Google mobile search algorithm, which was announced in late February but will see first usage April 21, will prioritize mobile friendly websites on cellphone searches. This includes websites that have bigger text, resize to fit whatever screen they’re viewed on, and place links far enough apart to avoid mistaken selections.

While most website platforms (such as WordPress) offer easy ways to conform to Google’s new mandates, some have dubbed this change “Mobile-geddon” for the massive potential impact this may have on companies.

“At the end of the day if you want to get the traffic you have to be compliant with [Google’s] rules,” said Brock Murray, director of web marketing at seoplus+, a company specializing in search engine optimization. “The important thing is staying on top of it.”

Google’s past changes to their search engine algorithm have had profound effects. eBay lost a third of its Internet visibility and cost the company around 5 percentage points of growth off its gross merchandise volume in July 2014.

Nicole Troster, director of provincial affairs for Ontario from the Canadian Federation of Independent Business, says that those most affected by this change will be small and mid-sized businesses.

“It’s a matter of small businesses not having the resources to invest in mobile friendly sites,” she said. “It seems just when some small businesses are catching up, they change the formula and small businesses can’t seem to catch a break.”

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Troster says that lack of financial resources and awareness are two of the main issues to small business owners adapting their sites to the new mandates.

For Google’s part, they say they are trying to make the user experience more practical and have given ample amounts of time and direction on how to make the switch.

Aaron Brindle, a spokesperson for Google, said via email that they are making available a number of tools to help small businesses know if they’re mobile friendly or not, and how to make the switch.

Brindle also said that if a page with high quality content is not mobile friendly, it could still rank high if it strongly relates to the search query.

Professor of Marketing Avi Goldfarb at the Rotman School of Management, believes the algorithm change isn’t all doom and gloom.

“It has the potential to impact everybody,” he said, “but not all negatively. The people who respond well will benefit and the people who don’t will lose.”

Goldfarb believes changes like this are made mostly in the service of the consumer and are good for the industry.

“Any company that’s not well optimized for mobile today needs to be optimized for mobile,” he said. “As the eyes move to mobile, the dollars will move to mobile.”

The statistics support that. In a study conducted last year by Kleiner, Perkins, Caufield and Byers called Internet Trends Report, the mobile market is growing exponentially. Internet advertising has risen from $62 billion to $116 billion from 2008 to 2014. At least 30 per cent of Internet visits are from mobile phones. Industry experts believe that by 2016 mobile phones will account for at least half of all Internet traffic.

Troster is aware of these changes, and not wholly against them, but sees potential dangers on the horizon for small businesses.

“It’s interesting that they are changing [the Google algorithm],” she said, “[but] I want to see what it’s going to mean for everybody. Hopefully there’s some consideration for small businesses as well.”

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