All Things Digital

Salesforce.com (CRM), which is mainly known for software that helps sales executives track and manage customer prospects, today said it paid $31.5 million in cash for Instranet, a 10-year-old company based in Chicago that makes software to improve product support. Salesforce plans to move Instranet’s software, which is usually installed on customers’ computers, onto its hosted computer facilities. Instranet already has some impressive customers using its software, a lot of it in call center operations, including Comcast (CMCSA). The company’s software is used by 350,000 call center agents around the world. When I asked the company if they will be able to sell product support software as distinct from customer relationship management tools, they noted that Salesforce has already been selling form of support software for four years.

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Comcast Corp. rightfully received a smackdown from the Federal Communications Commission last week for not telling customers that it was blocking some of them from using peer-to-peer services to download videos and other content off the Internet.

Web surfers may want to pause before cheering, though, as some are warning that the move could lead the way to Internet metering–under which people would be charged based on their usage levels instead of the traditional flat rate.

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Comcast (CMCSA) is simply crushing its telco competitors.

Consider a few data points. As I noted this morning, Comcast today disclosed that it added 555,000 new phone customers in the June quarter (499,000 when you back out losses in their circuit-switched segment), along with 278,000 high speed Internet customers and 320,000 digital cable customers. (It did lose 138,000 basic cable subs.)

Compare that with AT&T, which lost 993,000 residential primary wirelines in the quarter, or Verizon, which lost 833,000 primary residential lines and another 133,000 DSL lines.

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Comcast (CMCSA) this morning posted Q2 revenue of $8.55 billion and adjusted EPS of 21 cents a share. The Street had expected $8.54 billion and 23 cents.

The company said basic cable subs fell 138,000 in the quarter, but digital subs increased by 320,000. The company added 278,000 high-speed Internet customers, reaching 29 percent penetration of homes passed. The company’s digital voice phone service added 555,000 subscribers in the quarter; Comcast says 12.5 percent of homes passed now take the service. Advertising revenues were down two percent in the quarter, on weakness in the auto and housing categories, offset in part by higher political advertising.

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The Internet was in crisis. Its electronic “pipes” were clogged with new bandwidth-hogging software. Engineers faced a choice: Allow the Net to succumb to fatal gridlock or find a solution. The year was 1987. About 35,000 people, mainly academics and some government employees, used the Internet.

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Brandon Dilbeck, 20, a student at the University of Washington, was complaining recently on his blog, Brandon Notices, about Comcast’s practice of posting ads in its on-screen programming guide.

He assumed he was writing for his own benefit. “It feels like nobody ever really reads my blog,” he said. “Nobody has left a comment in months.”

Shortly afterward, he received an e-mail message from Comcast, thanking him for the feedback and adding that it was working on a new interactive guide that might “illuminate the issues that you are currently experiencing.”

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Daily Candy, the pioneering newsletter start-up owned by Bob Pittman’s Pilot Group Ventures, is perennially supposed to be on the block, but has yet to change hands. The newest rumor: Comcast, the cable giant with a huge appetite for digital mergers and acquisitions, is going to pick it up for $75 million. Update: People familiar with the company suggest that it’s still available, but that Pilot won’t let it go for $75 million. Pilot originally attached a $100+ million price tag to the property in 2006, and we’re told they’ve had offers above that range this year.

Both Comcast and Daily Candy aren’t offering comment on the report, but we’ll keep poking around.

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Plaxo is best known for its fancy address-book software that automatically updates everyone on your contact list whenever you make a change. So why is cable giant Comcast buying the Silicon Valley start-up?

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There was good news for Apple and Comcast, but bad news for Blockbuster, woven into Time Warner’s conference call with investors today. Jeff Bewkes, Time Warner’s chief executive, said that the company’s Warner Brothers studio will now release movies for video-on-demand systems on the same day they are released as DVDs.

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You might’ve already heard about the Twitter account @comcastcares. Run by Comcast employee Frank Eliason, its purpose is to find upset customers before they even know they’re looking for help. I’d heard of Eliason’s project, but had completely forgotten about it when, on Sunday, I found my HD service mysteriously missing and broadcast my frustration to the Twitterverse. Frank’s immediate Twittered response was unexpected and reassuring.

When the next day’s service call proved fruitless, he asked me to email him. Within a few hours I had received phone calls and emails from three different smart and seemingly concerned Comcast employees, and by the evening my problem was solved. I had been prepared to settle in for a weeks-long fight with the cable company. Instead, Frank’s quick intervention left me feeling oddly positive about a company that I had long considered to be more or less the embodiment of malevolent, slothful incompetence.

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Back in the pre-fiber days, cable and phone companies competed for broadband and voice customers. With Verizon and AT&T rolling out fiber networks, competition has come to the television set–and the fight sometimes gets ugly. A source tipped Ars off to the existence of one such battle between Comcast and AT&T that’s set to happen in an Illinois courtroom. Comcast says that AT&T’s U-Verse service is causing problems for its customers and that AT&T is refusing to address the issue.

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I hate to break this to you and risk damaging the relationship of trust and faith that you have with your cable company, but according to FCC Chairman Kevin Martin, Comcast has not been totally forthright in describing its handling of bandwidth-sucking BitTorrent transfers of large media files. Ever since it was caught using surreptitious, hacker-like techniques to interrupt such activity, the cable giant has claimed that it was simply exercising sound network management practices to ensure decent service for all, and that the throttling was applied only in times of high network congestion. Tuesday, Martin told a Senate committee that his agency’s ongoing investigation indicated otherwise.

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Comcast recently announced a deal with BitTorrent that left me dazed and confused. It was basically a roundabout way for the cable company to backtrack from its P2P traffic-blocking gaffe. In describing the deal, Comcast tried to shift the focus away from their so-called “network management” — and by extension, the limitations of their network that prompted them to resort to traffic manipulation in the first place. On Friday, I caught up with Tony Werner, chief technology officer of Comcast Cable, to get the real skinny.

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In an effort to slow Google’s siphoning of advertising dollars away from television, the nation’s six largest cable companies are making plans for a jointly owned company that would allow national advertisers to buy customized ads and interactive ads across the companies’ systems. For the last six months, executives from Comcast, Time Warner Cable, Cablevision, Cox Communications, Charter Communications and Bright House Networks have been meeting monthly, alternating between New York and Philadelphia. Quarterbacking the initiative–code-named Project Canoe to emphasize that the companies must all work together–has been Stephen Burke, president of Comcast, and Landel C. Hobbs, the chief operating officer of Time Warner Cable.

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The race is on to get the last word in on the Comcast/BitTorrent controversy. With 10 days left to file, telcos, trade and advocacy groups are sending the Federal Communications Commission their statements on whether Comcast and other ISPs purposefully degrade peer-to-peer traffic, and if so, what to do about it. Not surprisingly, the debate pits broadband content providers and advocacy groups against the big telcos, cable companies and their trade association backers.

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