All Things Digital

For years, people have been saying that they will watch things in high-definition TV that they would never ordinarily watch. In the 12 years I have been involved in Internet video in one form or another, I have yet to have anyone tell me they will watch something just because it’s on the Internet. That’s not to say people won’t surf the Net and sample something they otherwise would not watch. But one thing is becoming increasingly clear, while more people are “snacking on Internet video,” the real “meal” continues to be TV.

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The Internet is still very young. It was only November 1977 when a group of computer scientists successfully connected three networks around the world, including one at University College London. It took until 1989 for the Internet to become commercially available and about another decade after that for it to achieve widespread household use in Europe and the United States. Only then did we emerge from what I think of as the “Internet comma” days, when its mention in the media was always followed by a comma and a short description.

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Shares of telecom software provider Comverse Technology are plunging today, down over 20 percent, or $3.42, at $13.50, after the company last night filed a form 8-K with the Securities and Exchange Commission that indicates … business is slowing. The company said in its filings that “slower momentum, in particular at Netcentrex, along with some delayed purchasing decisions in the core business … along with the foreign exchange headwinds relating to expenses we have experienced, has put pressure on our business performance.” Comverse bought Paris-based Netcentrex in April 2006 for $164 million in cash. The product is a telephone switch for transmitting phone calls over the Internet.

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You know what would be cool? If you could stream Sirius (SIRI) or XM satellite radio
on your Apple (AAPL) iPhone.

As it happens, Citigroup’s Tony Wible this morning writes in a research note that there are “reports” of a new Internet streaming application that would allow SIRI users to listen on portable devices. Wible says the idea highlights that SIRI’s value “lies in its content and not its hardware or infrastructure.”

Wible notes that as the seller of iPods, Apple is often seen as a competitor to satellite radio. But he says the new streaming application suggests the two companies may complement each other.

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Dan Kaminsky, the security researcher who first sounded the alarm that the entire Internet was in grave danger due to a widespread vulnerability, has revealed in front of a packed audience at the Black Hat security conference the details behind the initial subterfuge–and potential problems that could still pick apart the Web world as we know it.

At the heart of the matter is the Domain Name System (DNS), which handles Internet addresses and routes traffic accordingly. If a DNS server gets compromised, the addresses running through it can be spoofed without an end user even being aware of the problem. It would be like following a car navigation system with turn-by-turn directions to a bank and never realizing that the directions in fact led to a fake building that was only pretending to a be a bank.

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Okay, sky-is-falling fans and network neutrality proponents: We’re about to find out whether the Internet can–or will–break down under the strain of mass consumption of streaming video.

At least that’s the opinion of Brick Eksten, the president and CEO of Digital Rapids, who is pretty well in position to know.

“We’re going to find out whether the Internet is going to melt under the weight of video in a couple days,’” he told Between The Lines this morning.

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Granted, most of the recent TV buzz has been about, rightly, “Mad Men”: Who wouldn’t want to spend summer Sunday nights delving into the deeply misogynistic psychosexual underbelly of a Kennedy-era advertising agency?

But in the big picture, the more interesting effort of the season is an Internet-only offering. “Dr. Horrible’s Sing-Along Blog,” from “Buffy the Vampire Slayer” creator Joss Whedon, is not only hugely entertaining, but it’s another big nudge toward that future where the entertainment screen will be the entertainment screen, and users won’t worry whether it’s called “Internet” or “TV.”

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Telecommunications companies are suing cities around the nation to stop the construction of publicly owned fiber-optic systems to bring high-speed Internet, telephone and cable television to communities far from metropolitan centers. Attorneys for cities say the telecommunications suits, whether brought under state law, the Federal Telecommunications Act or other laws, are veiled attempts to stop construction of competing public systems providing an essential utility in the digital age.

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Corel (CREL) shares are rallying today after the company reported solid results for its fiscal second quarter ended May 31.

For the quarter, the company posted revenue of $67.0 million and non-GAAP EPS of 36 cents; the Street had expected $66.85 million and 35 cents.

For Q3, the company sees revenue of $63 million to $65 million, with non-GAAP profits of 30-36 cents a share; the Street had been expecting $63 million and 32 cents. For the full year ending in November, the company sees revenue of $263 million to $275 million, with profits of $1.50 to $1.70; the Street consensus has been $269.1 million and $1.54.

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There are exchanges where you can buy and sell stocks, futures, pork bellies, wine and even pollution allowances. Why not an exchange for the trading of digital bits and bytes?

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Apple had a solid May for both Mac and iPod sales.

As Lehman analyst Tim Luke points out in a note today, new data from market research firm NPD shows Mac unit sales grew 50% on a year-over-year basis in May, ahead of the 37% Q2 growth Lehman had expected. Sales of iPods in the month were up 11.6% for the month in units, slower growth than the 14.6% gain in April, but well ahead of the 2% year-over-year decline Lehman has been modeling for the quarter. Average iPods pricing in the quarter was down 4%.

Lehman continues to expect the introduction of an updated line of Mac notebooks ahead of the back-to-school season, including redesigned MacBook Pros and more MacBook Airs.

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A whole bunch of folks have sent in the “debate” that was held on the BBC Web site last week, starting with regular columnist Bill Thompson trashing Virgin Media, a U.K.-based broadband provider, for agreeing to send out warning “notices” to folks that the entertainment industry claims are file sharing. Thompson explains that he’s been known to use BitTorrent to get a copy of a TV show he missed on TV and forgot to record on his DVR, wondering why this should be a problem.

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The Associated Press, one of the nation’s largest news organizations, said that it will, for the first time, attempt to define clear standards as to how much of its articles and broadcasts bloggers and Web sites can excerpt without infringing on the AP’s copyright.

The AP’s effort to impose some guidelines on the free-wheeling blogosphere, where extensive quoting and even copying of entire news articles is common, may offer a prominent definition of the important but vague doctrine of “fair use,” which holds that copyright owners cannot ban others from using small bits of their works under some circumstances.

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Steve Jobs, the chief executive of Apple, unveiled a new version of Apple’s iPhone yesterday. Unfortunately, some of the phone’s most effective marketers are not around to sell it because they have been fired. O2, the exclusive network provider for iPhone in the U.K., recently dismissed several employees for buying phones at the staff discount price and selling them over the Internet.

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The best thing with which to mock a company that shouldn’t exist is a company that doesn’t actually exist. And San Francisco’s Internet hipsters won’t just snicker about your start-up behind your back; they’ll do it where your vanity Google Blog Alerts will find it. Plurk is only the latest target–a start-up that lets users post short updates to the Web, as Twitter does, but adds a timeline. Plurk’s faux nemesis: Pheltup, “the first social network that not only tells you WHO is doing WHAT; but also WHY.” When some Twitter “thought leaders”–Pheltup’s target market–fell for the rumor that it had acquired the freshly hatched Plurk, it just showed how easily pranked the neophile cool kids of the Web are. What upped the ante is that Plurk’s real executives are now actually responding to the (fake) buzz about their “crude and unwholesome” would-be owners.

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