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The past year was viewed by many as the ” year of the user” in the tech world. Perhaps in no place was this more true than in online video.

Users shared, downloaded, and discussed videos online in greater numbers than ever before, making video sharing services amongst the most popular sites on the internet.

The explosion of online video in 2006 also, however, brought the familiar subject of copyright infringement back to center stage as studios came in search of royalties from copyrighted videos.

As the studios began to see just how much money was to be made from online video, they began to form new partnerships and launch new services to compete with the already-booming video-sharing sites.

2006 was a banner year for YouTube. The video-sharing site, which was launched in February of 2005, claimed over 40% of the online video market share by May.

By October, YouTube was logging more than 100 million video downloads per day and by the end of the year, the site had become the number six most popular on the internet, according to Alexa Web Search.

The biggest news to concern YouTube, however, had nothing to do site traffic. In October, Google announced that it had agreed to purchase the video-sharing site for $1.65bn in stock. The deal was Google’s largest purchase to date and gave the search giant control of nearly half of all online video-sharing.

While writing about the Google purchase, Forrester Research analyst Charlene Li offered an explanation for the phenomenal success of YouTube.

“YouTube is a gem because it figured out what Google, Yahoo, MSN, AOL and all the other video players in the marketplace could not,” wrote Li.

“It is not about the video, it is about the community around the video.”

Members of the community were some of the biggest stars on YouTube in 2006. The saga of ” Lonelygirl115″ garnered worldwide media attention over the summer. Everyone from 78 year-old pensioners to blender salesmen became cult celebrities through YouTube.

With the building of that community, however, came a slew of legal headaches for YouTube. Users routinely posted videos of copyrighted programs and films, and as YouTube’s success soared, so did interest from the studios whose work was being posted.

YouTube avoided litigation from Universal by signing a licensing deal with the studio just before it filed suit against two other video-sharing sites, and the merger with Google allowed the site to take advantage of Google’s deals with Sony BMG and Warner Music Group.

Youtube, which has a policy of removing any copyrighted material at the request of the owner, was forced to take down tens of thousands of videos in two high-profile claims from Comedy Central and the Japan Society for the Rights of Authors, Composers, and Publishers.

Some companies decided to introduce video-sharing services of their own rather than fight the battle over copyrights. In August, Sony an nounced the purchase of video-sharing site Grouper, and early in December rumors began to surface that four major media networks were discussing the launch of a video-sharing site that some dubbed a “YouTube killer.” Even CurrentTV, a television network that airs user-generated content, attempted to get in on the video-sharing market by launching a joint-venture with Yahoo.

While TV and film studios attempted to make the jump from the TV to the computer, Apple made a move to go the opposite direction.

Staying true to their old tagline, Steve Jobs and co. decided to “Think Different” and the company announced a service that lets users download feature-length movies over their internet connection and watch them on their PC, iPod, or even their TV.

The iTunes Movie Store allows users to download movies for prices ranging from $9.99 to $14.99 and transfer them to their iPods or to a set-top box dubbed the “iTV” that the company plans to release early in 2007.

Following the announcement, Jupiter Research vice president and research director Michael Gartenberg told vnunet.com that “the big news is that Apple wants to be in every room of your home.”

Gartenberg’s sentiments were backed up by Jobs, who outilined a vision of ” itunes in the den, the living room, the car and the pocket.”

Apple appears to not be the only company with this vision heading into 2007. YouTube recently announced a deal to distribute mobile video with wireless carrier Cingular, and in October Microsoft’s Zune portable media player was released, sporting wireless networking capabilities and the ability to play video. While 2006 was the year of user-video, 2007 may become the year of mobile video.

Firefox continued to gain ground on Internet Explorer in September, according to the latest browser usage statistics from Net Applications. What’s more, the firm reports increasing browser fragmentation among users.

Internet Explorer has been the dominant Web browser for many years — and remains king of the hill. However, Microsoft’s (Nasdaq: MSFT) browser has been slipping in usage rankings since Mozilla launched Firefox in November 2004.

Internet Explorer fell to its lowest market share percentage in over two years last month with 82.1 percent, according to Net Applications. Mozilla’s open source browser was in second place, boasting 12.46 percent of the browser market. Apple’s (Nasdaq: AAPL) Safari ranked third with 3.53 percent.

Netscape and Opera, meanwhile, each only served less than 1 percent of the market.

Market Share Shift

Firefox and Safari are enjoying their highest usage numbers of the year at the expense of Internet Explorer. Firefox has seen increased adoption on Linux, Windows and even OS X systems, and is a favorite in the open source camp.

“We’re seeing the strongest Firefox appeal among 18- to 24-year-olds. There’s a couple of reasons for this,” JupiterResearch Analyst Joe Wilcox told TechNewsWorld. “Younger users are probably a bit more tech-savvy. For some, there may even be some philosophical appeal with open source.”

Safari is emerging as a popular choice for Mac users, however, especially since Microsoft decided to quit making IE for Mac and no longer provides support for older versions that work with Apple computers. A year ago, Safari had less than 2 percent of the total browser market share.

Firefox and Safari have been taking advantage of the fact that Internet Explorer users haven’t seen a new browser from Microsoft since Windows XP SP2 was released over two years ago. With Microsoft readying to release a new version of Internet Explorer, though, Mozilla’s impressive browser usage gains could slow.

Bring on IE7

Internet Explorer 7 is scheduled for release later this month. Not only does the new version incorporate security updates that users received with XP Service Pack 2, the upgrade also offers a complete overhaul with a new user interface.

On the security front, IE7 is designed to help protect users against malicious software and keep personal data safe from fraudulent Web sites and online phishing scams.

Microsoft is also adding several other enhancements to its next-generation browser, including an ActiveX Opt-in and a Fix My Settings feature. The company is highlighting a cleaner look and a more streamlined setup that includes tabs for browsing multiple pages in one window.

Some believe Firefox users might come running back to Microsoft when IE7 is released; others aren’t quite so sure there will be any immediate move away from Firefox. Mozilla is preparing to release Firefox version 2.0, and corporate IT departments may need to take some time to test the application.

“The drawback with IE7 is that because the browser is part of the operating system, you are not just installing a browser, you are installing an update that affects other components,” Wilcox noted. “On the one hand, that could offer some benefits. The downside is, in a corporate environment where there may be some fussiness about testing and compatibility, that may not be such a good thing.”

http://www.technewsworld.com/

Sony’s latest effort to capture the hearts, minds and money of teens and twentysomethings is a Web browser, messaging program, wireless phone and digital music player all rolled into a handheld gadget that goes by the name Mylo.

The features can be found on just about any mid-range cellphone these days, but there’s one key difference: The Mylo works on any Wi-Fi wireless Internet connection, so you can surf the Web or chat on campus, at the coffee shop, in the bookstore or wherever there’s an 802.11b hotspot.

Mylo - short for “my life online” - is a bit pricey at $350, but it could be a money-saver if you count how much cellular carriers charge for data services. (Some Wi-Fi hotspot operators charge, though many do not.)

At slightly more than 5 ounces, the Mylo (www.sony.com/mylo) feels like an undersize game controller, with a bright 2- by 11/2 -inch backlit screen that packs 320-by-240 pixels of sharp resolution. A standard thumb keyboard slides out from below, perhaps as a nod to those of us a tad older than the device’s target market.

Once online, it’s easy to contact a friend on Yahoo Messenger, Google Talk or Skype, the voice-over-internet-protocol service. No such luck if your pal is on AOL Instant Messenger, the most popular IM service at home and work in the U.S., or MSN Messenger.

Built-in Skype software is as close as the Mylo gets to being a phone.

Web-surfing through the Mylo’s Opera web browser is functional, but I’ve yet to find a handheld device that makes it easy to view a page designed to look good on a 19-inch monitor.

Navigation was clunky, but I was able to bring up most websites. Pages that rely on Adobe Systems Inc.’s Flash animation software proved troublesome.

The device also has no built-in e-mail software, though you can pull up messages from web-based services offered by Yahoo, Google and Microsoft.

The Mylo’s other main attraction is its multimedia capability, which can be used when no wireless hotspot is available or while you’re chatting and surfing. It has a gigabyte of internal storage for music, photos and MPEG-4 video files. It also provides a slot to add a Memory Stick, but it’s tricky to get open. There’s no built-in support for other memory formats.

The music player can handle MP3, ATRAC as well as secured and unsecured Windows Media Audio files, but not anything purchased at Apple Computer Inc.’s iTunes Music Store.

The Mylo also includes a basic text editor that can be used to create a shopping list or take notes during class. Text files can be transferred to a computer through the USB cable or Memory Stick, or sent over the Internet through e-mail or one of the chat programs.

Sony says the lithium-ion battery provides 3Ѕ hours of Internet call time, about 8 hours of video and up to 45 hours of music playback.

The device also allows users to wirelessly hook up with other nearby Mylo owners to trade messages or stream MP3s.

The Mylo is the latest device looking to blur the lines between phones, computers and media players. It’s a cute gadget that does what it sets out to do, but is it worth investing in a device that’s only fully functional at Wi-Fi hotspots?

Copyright 2006 Associated Press

Microsoft Corporation (NASDAQ:MSFT) has many issues to contend with at the company’s current size and complexity. Among them is the disparity of its growing line of products; the lower profit margins offered by hardware sales in comparison to its traditional high margin software sales; and the increased number of formidable competitors it faces in every direction it looks.

This is the continuation of Monday’s story Micro’soft’ vs Micro’hard’ — Break it up fellas! In the first article I touched upon the scale of Microsoft and their lack of agility. I concluded that even several tremendous successes (swallowing Apple (AAPL) whole was used to exemplify) would only have marginal affect on the share price in the aggregate.

This story is not about whether Microsoft makes worthy products, or is inventive, or can create the next big thing. This is about what Microsoft is, and what it should be as a company going forward. Does Microsoft want to get back to its high-growth days and generate the kind of excitement a Google, Inc. (NASDAQ:GOOG) or MySpace (recently acquired by Newscorp (NYSE:NWS)) does, or do they want to be a large conglomerate. Given the number of new products that are announced weekly, and all the unfinished business the company has started, it is apparent that the die has been cast for the latter; it is a conglomerate.

Conglomerate \Con*glom”er*ate\, n.

Webster’s: That which is heaped together in a mass or compacted from various sources; a mass formed of fragments; collection; accumulation.

OR

A corporation consisting of several companies in different businesses. Such a structure allows for diversification of business risks, but the lack of focus can make managing the diverse businesses more difficult.Three successful conglomerate models:

Berkshire Hathaway Inc. (NYSE:BRK.A): This is an aggregation of many companies, selling basic products in stable industries, acquired by the Buffett / Munger brain trust over a long period of time. It is a holding company that keeps each of its acquisitions intact as a separate operating company, with strong management, good cash flow; each maintaining virtual autonomy. This model is not even a possibility for Microsoft.

General Electric Company (NYSE:GE): This old company has made itself over many times, altering the mix of enterprises as management strives to maintain its first or second ranking in each business according to the plan installed by Jack Welch over two decades ago. Therefore GE no longer makes transistor radios, but it does have a division that makes medical imaging equipment, and another that makes jet engines. The company also makes water filtering equipment and offers services in water resource management and infrastructure. Each division has its own business plan but sticks to the Six Sigma corporate philosophy. Being that each division is semi-autonomous and large in its own right and that most of the divisions have significant barriers to entry, this model is better, but still not a good fit for Microsoft; the biggest control freaks on the West Coast. (…well…maybe tied with Disney)

Johnson & Johnson (NYSE:JNJ): The most respected company in America might be the best model for Microsoft to follow, or anyone else. J&J has an illustrious history, strong management, strong brand recognition, great cash flow, and a diversified portfolio of 2000 products. Owning J&J is almost like owning a high quality mutual fund without all the trading costs and taxes. The company is very “user friendly,” which, at times, Microsoft has not been. Ballmer & gang could learn a lot from J&J about managing a multitude of products and people. This seems more than Microsoft can handle, but who knows, maybe after 100 years.

What’s next? Size alone is not the reason to break up the company. Slower growth should not be the reason either. To me the reason to break up Microsoft is that all the pieces do not complement each other and, in some ways, hinder each other. In addition, breaking up the company does not mean it will “get small”. It might even make very good sense for Microsoft to stay large, but swap out some of the pieces and aggregate some others. It could form, perhaps, several large companies, but each would need to be more distinct, more focused and with clearer vision. This is the direction I am leaning toward as I think through the situation.

Disclosure: I own shares of Berkshire Hathaway (BRK.B), and Johnson and Johnson (JNJ) but have no position in any company mentioned here, long or short.

http://www.aapl.bloggingstocks.com/