July, 2011

First read: Valuing Hulu; Roku bets on games; deadline in Google books case

Top of the Morning Bloomberg reports this morning that Microsoft has dropped out of the auction for Hulu, which jibes with what we hear. According to Bloomberg, Microsoft told Hulu execs last week that it would not proceed to the second round of the bidding process.

As noted in previous posts, we believe Hulu will be a tough sell. Our issues are strategic fit and regulatory concerns, but valuation is also likely to be a sticking point. According to Business Insider, Yahoo set a high bar by offering to pay $2 billion for Hulu provided the current owners guarantee four to five years exclusive access to their content. At those prices, even potential suitors that are interested in Hulu’s business could decide simply to wait out Hulu’s current licensing deals and put in their own bids for the rights when they become available.  Read More »

The Facebook OS

Social Networks The addendum to Zynga’s S-1 filed with the SEC yesterday is raising eyebrows for what it reveals about the extent of Zynga’s dependence on the continued goodwill of the social network.  But content creators and publishers should also take note of what it reveals of Facebook’s own ambitions.

Exhibit G to the addendum sets out (partially redacted) terms of the agreement between the two companies for something called the Zynga Platform. Zynga’s precise plans for the platform are not revealed in the document (they may be discussed in redacted portions). But it would appear to be a quasi proprietary game-development platform built by Zynga that would sit on top of the Facebook platform and allow third-party developers to create games that leverage Zynga’s deep integration with Facebook.

At the heart of the Zynga platform will be a “Facebook Zynga SDK: Read More »

First read: Zinging Zynga; Apple earnings; Hulu takes five

Top of the Morning Liz Gannes of AllThingsD has the goods this morning on Zynga’s extensive, albeit heavily redacted addendum to its S-1 filing. Bottom line: Facebook basically owns the social gaming company.  Among other items: Any Zynga game that relies on Facebook integration or Facebook data must be exclusive to Facebook for the duration of the companies’ agreement; Zynga is prohibited from launching games on certain other social network platforms and Zynga must tell Facebook about any new games at least a week before they launch. In exchange, Facebook has committed to helping Zynga meet certain specified monthly unique user targets for its games.

The addendum also confirms that Google is an investor in Zynga.  Read More »

First read: Noodling Netflix; striking out in France

Top of the Morning Netflix’s sudden and dramatic price hike last week continues to fuel outrage among some users and speculation as to Netflix’s motives among pundits. Adam Knight at I Eat Ewoks has the best take I’ve seen so far (h/t Felix Salmon of Reuters):

The Internet’s memory is short so let’s go back a week ago to when Netflix lost the Sony movies and almost lost Starz. Why did that happen? Netflix WI subscribers passed a certain number specified in the contract with Starz and Sony and so they lost the right to stream that content. After some talks they came back online and now, one week later, Netflix is breaking apart their WI subscribers from their DVD subscribers. I find it hard to consider this a coincidence. Read More »

Googling Socrates

Sunday Musings The current issue of Science magazine reports on a pair of recent studies that found that algorithmic search is altering the way humans remember facts.

In one study, subjects were told various bits of trivial information and asked to type notes of what they were told. They were then told their notes would either be stored in one of many different folders, or they would be erased. The researchers found that subjects who were their notes would be stored were better at remembering where the information was stored than they were at remembering the information itself. Those who were told their notes would be erased did better at remembering the information. Read More »