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Wednesday, January 26, 2011

Netflix's star shines in 4Q, adds 3.1M subscribers (AP) : Technet

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Netflix's star shines in 4Q, adds 3.1M subscribers (AP) : Technet

Netflix's star shines in 4Q, adds 3.1M subscribers (AP)

Posted: 26 Jan 2011 05:12 PM PST

By MICHAEL LIEDTKE, AP Technology Writer Michael Liedtke, Ap Technology Writer – Wed Jan 26, 8:12 pm ET

SAN FRANCISCO – Netflix Inc.'s video subscription service topped 20 million customers during the fourth quarter to help push its earnings beyond analyst expectations and burnish its reputation as a stock-market star. Its shares surged 10 percent on the news.

The results announced Wednesday are the latest evidence of Netflix's increasingly important role in the distribution of home and mobile entertainment. As Netflix's influence has risen, so has its stock price. The shares tripled last year to give Netflix a market value of nearly $10 billion — more than some of the studios that supply the content for its DVD-by-mail and Internet video streaming service.

The lofty valuation has intensified the pressure on Netflix to keep attracting subscribers at a rapid pace.

Netflix delivered in the fourth quarter by reeling in 3.1 million subscribers, by far the most during any three-month period since its service launched in 1999. The performance also exceeded the most optimistic predictions of its own management.

The company, based in Los Gatos, said it believes the current quarter could be even better. It expects to gain as many as 3.7 million more subscribers in the U.S. and Canada by the end of March.

Netflix shares soared $18.97 to $202 in Wednesday's extended trading after the results were released. The stock finished the regular session at $183.03, down $3.71.

In a departure from its past practice, Netflix didn't provide a full-year forecast, partly because executives say it's becoming more difficult to accurately forecast the company's rate of growth over such an extended period. For instance, Netflix began 2010 with a projection calling for the addition of 3.6 million subscribers during the full year and wound up picking up 7.7 million.

Another variable clouding the outlook: Netflix unveiled plans to enter its second international market during the second half of this year after expanding into Canada last fall. The company didn't identify which new market it's targeting, but said it anticipates an operating loss of about $50 million on its international operations in the second half of the year.

The Canada service is supposed to start making money during the third quarter.

Netflix earned $47.1 million, or 87 cents per share, during the final three months of last year. That was a 52 percent increase from $30.9 million, or 56 cents per share, last year.

Analysts surveyed by FactSet expected earnings of 71 cents per share.

Revenue rose 34 percent to $596 million from $445 million a year earlier. That figure merely matched analyst estimates.

Netflix has been benefiting from the demise of video rental stores and the widening popularity of its Internet streaming option as it has become available on video game consoles, Blu-ray players and other set-top boxes that easily connect to TVs. A variety of applications also have turned the streaming feature into a more enjoyable experience on TV-like tablets such as Apple Inc.'s iPad and a range of smart phones.

Although DVDs are expected to remain a key part of its service, Netflix is investing heavily to bring more compelling material to its streaming library and pulling financial levers to encourage its subscribers to use the option more frequently to help reduce the company's expenses for mailing discs back and forth.

Netflix spent $174 million on video streaming rights in the fourth quarter, a nearly eight-fold increase from $23 million at the same time in the prior year. It also raised its DVD prices and introduced an $8-per-month plan for U.S. subscribers who only want to stream Internet video. The company said about one-third of its new customers are signing up for the streaming only plan, with most others opting for a $10-a-month plan that includes one DVD rental at a time. Most existing subscribers are sticking with the plans they already had.

The shift means the number of DVDs the Netflix originally mails out annually probably peaked last year, CEO Reed Hastings said in a Wednesday interview. Just last year, Netflix had predicted its DVD shipments would peak in 2012.

As Netflix has prospered, it has turned into a bigger threat to cable TV services, particularly premium channels such as HBO and Showtime. HBO has steadfastly refused to sell its streaming rights to Netflix and Showtime isn't making as much material available as it once did.

Netflix's streaming library includes a lot of recent movies from the Starz channel as part of a licensing deal signed in October 2008, but analysts are worried the company won't be able to get the renewal rights. Netflix said Wednesday the Starz deal expires early next year, and told investors it didn't plan to discuss the negotiations any further.

For all of 2010, Netflix earned $161 million, or $2.96 per share, on revenue of $2.16 billion. That compared with net income of $116 million, or $1.98 per share, on revenue of $1.67 billion in 2009.

Facebook to let advertisers republish user posts (AP)

Posted: 26 Jan 2011 09:02 PM PST

By BARBARA ORTUTAY, AP Technology Writer Barbara Ortutay, Ap Technology Writer – 10 mins ago

NEW YORK – Facebook users who check in to a store or click the "like" button for a brand may soon find those actions retransmitted on their friends' pages as a "Sponsored Story" paid for by advertisers.

Currently there is no way for users to decline this feature.

Facebook says this lets advertisers promote word-of-mouth recommendations that people already made on the site. They play up things people do on the site that might get lost in the mass of links, photos, status updates and other content users share on the world's largest social network.

The new, promoted posts would keep the same privacy setting that the original posting had. So if you limit your check-ins to a specific group of friends, only these same friends would see the "Sponsored Story" version later.

The promoted content will appear on the right side of users' home pages, not in their main news feed. That's where regular ads, friend requests and other content are located.

Involving users in advertisements without their consent has been a thorny issue for Facebook. Marc Rotenberg, executive director of the Electronic Privacy Information Center, said in this case the company is making money off a person's name or likeness without their consent. He calls it "subtle and misleading" and says users should object.

Twitter already offers advertisers something similar, called "promoted tweets." These are Twitter posts paid for by advertisers to show up in search results and on top of popular topic lists on the site. But while Twitter's ads are written by the companies that pay for them, Facebook's sponsored stories are created by users.

Both represent an effort to make advertisements more akin to what people are already experiencing on the site instead of putting up virtual billboards that users might ignore or find tacky.

____

Online:

Video from Facebook: http://www.facebook.com/video/video.php?v10100328087082670

China to step up controversial technology plans (AP)

Posted: 26 Jan 2011 08:24 PM PST

– 47 mins ago

BEIJING – China says it plans to step up efforts this year to develop clean energy and other high-tech industries in a strategy that has strained trade ties with Washington and other governments.

Officials said Thursday that areas targeted by the government this year include energy-saving technologies, new energy cars and next-generation mobile phones.

The communist government is trying to nurture Chinese technology industries with grants and other support. But the strategy has triggered complaints Beijing is violating its free-trade commitments and prompted a U.S. complaint to the World Trade Organization in December over subsidies to Chinese producers of wind and solar equipment.

PlayStation Phone—er, the Xperia Play—gets hands-on treatment (Ben Patterson)

Posted: 26 Jan 2011 09:51 AM PST

By Ben Patterson ben Patterson – Wed Jan 26, 12:51 pm ET

We're barely 12 hours away from what's expected to be the PSP2 unveiling in Tokyo, and now comes a big, juicy video preview of yet another new PlayStation handheld: the long-rumored, Android-powered Xperia Play, a.k.a. the PlayStation phone.

Leaked photos and videos of the Sony Ericsson-built Xperia Play have come in dribs and drabs over the past weeks and months, but now Engadget has a lengthy preview of a prototype device, along with a razor-sharp hands-on video. Given all that, I think it's safe to say that the "rumored" PlayStation phone has pretty much become fact.

But while the Engadget bloggers poked and prodded every nook and cranny of the Xperia Play, their prototype handset lacked a needed application for downloading new PlayStation games, while the included PlayStation Pocket app was disappointingly empty.

In other words, we're still waiting to see what newly designed portable PlayStation games on the Xperia Play will look like (although Engadget did manage to port over some old PS and GameBoy Advance titles to the handheld).

Also still unclear: the exact processor that will be powering the phone, with earlier rumors pointing to a Qualcomm single-core MSM8655 and Adreno 205 GPU combo.

That said, Engadget confirmed that the Xperia Play will be running on Android 2.3 Gingerbread, complete with 512MB of RAM, a microSD memory card slot, and a rear-facing five-megapixel camera (which took "sharp" and "vibrant" pictures).

As we've seen in earlier leaked photos and videos, the phone boasts slide-out gaming controls, including a D-pad, the familiar quartet of PlayStation buttons on the right-hand side, and a pair of touchpads that presumably act as virtual joysticks.

Along the "top" edge of the phone (when you're holding it in a landscape orientation, anyway): dual triggers, similar to a PlayStation DualShock controller—although apparently only one per side rather than two, according to Engadget.

Now that the cat is totally out of the bag, it'll be interesting to see if Sony executives make any mention of the Xperia Play during Thursday's press event; if not, the phone is widely expected to be announced at Mobile World Congress in Barcelona next month.

In the meantime, feast your eyes on Engadget's video preview (and congrats on the scoop, fellas). Update: If the video isn't working for you, just click on through to Engadget.

Related:
Exclusive: Sony Ericsson Xperia Play (PlayStation Phone) preview [Engadget]

— Ben Patterson is a technology writer for Yahoo! News.

Follow me on Twitter!

What’s on your PSP2 wish list? (Ben Patterson)

Posted: 26 Jan 2011 08:34 AM PST

By Ben Patterson ben Patterson – Wed Jan 26, 11:34 am ET

In just a few hours—and barring any unwelcome surprises—we should be getting our first glimpse at a spiffy new PlayStation Portable. What are you hoping to see in the next-generation PSP?

The widely-rumored PSP2 is expected to be unveiled early Thursday at a Sony press event in Tokyo. For the record, Sony hasn't officially confirmed the new PSP, but company execs have been coyly hinting about it for months now, and several game developers have openly admitted to seeing the revamped handheld console in action.

The new PSP isn't to be confused with the also-rumored PlayStation Phone, a.k.a. the Xperia Play, an Android-powered handset from Sony Ericsson that most believe will make its debut at Mobile World Congress in Barcelona next month.

While the PSP2 probably won't make traditional voice calls (although I'm sure it will handle Skype voice chat, a feature already available on the existing PSP 3000 and PSP Go), the new console is said to boast wireless 3G support, as well as an eye-popping OLED screen and—finally—dual analog sticks.

Kotaku has a handy rundown of the current and past PSP2 chatter, including recent rumors that the handset will have a rear touchpad, a larger display than existing PSPs, and—like 2009's PSP Go—no more physical UMD drive, meaning that all new PSP games will be downloadable.

Another hot rumor about the PSP2 is that it will have 1GB of RAM (twice that of the Xbox 360) and a souped-up processor that's "as powerful as the Playstation 3"—a boast that's probably more hyperbole than reality, but we'll hopefully learn the truth soon enough.

Among the many other question marks about the (as-yet unconfirmed) PSP2: whether it'll have the PSP Go's slide-out controls or go for the standard PSP design, the exact size and resolution of the (rumored) OLED display, and whether the main screen will be touch-sensitive.

Also: will the PSP2 be backward-compatibile with PSP games? (This assumes, of course, that the PSP2 is a true, next-generation handheld platform, and not just a gussied-up version of the existing PSP.)

Then there's the matter of when the PSP2 will arrive, and how much it'll cost. My guess is that if Sony does reveal the PSP2 at Wednesday's event, it will give us a vague release window (most likely "in time for the holidays"), with exact pricing and release dates to be announced at the E3 gaming confab in June.

Personally, I'm pretty jazzed about seeing a new PSP—particularly one with dual analog sticks. The original PSP, of course, only has a single analog nub, which makes for awkward gameplay when it comes to first-person shooters.

And yes, a larger display (four inches, maybe?) with a bleeding-edge GPU behind it would also be a welcome change—especially compared to those glitchy, artifact-ridden displays on early PSP 3000 handsets (one of which I own, by the way).

The possibility of always-on 3G connectivity on the new PSP is also intriguing—although I wonder, would there be a monthly fee for 3G, or could it be gratis a la the Kindle? (Granted, super-sized game and video downloads take up quite a bit more bandwidth than e-books.)

Finally, what about the price tag? Well, the soon-to-be-released Nintendo 3DS will sell for $250 here in the U.S., so I'm guessing the PSP2 will go for at least that much, given its (rumored) pumped-up processing power and (rumored) OLED display … so we might be talking $299 here. Yes, that's as much as a PS3 or an Xbox 360, but don't forget that it's also cheaper than an unsubsidized Android phone.

So, all that's left is to get the facts (we hope) from Sony, which is slated to hold its press event at 1 a.m. ET Thursday. (Rather than post the news in the middle of the night, I'll write up my impressions in the morningâ€"or later in the morning, I should say.)

Before the curtain rises, though, let's hear from you. What's on your PSP2 wish list? What feature are you dying to see—and which could you live without? Finally, how much would you be willing to pay?

Correction: In my original post, I wrote the wrong day of the week for Sony's press conference; it's Thursday, not Wednesday (which is, of course, today). Sorry about that.

What We Think We Know About The PSP2 [Kotaku]

— Ben Patterson is a technology writer for Yahoo! News.

Follow me on Twitter!

Speck CandyShell Wrap iPad case folks, serves as stand (Digital Trends)

Posted: 26 Jan 2011 11:12 AM PST

Geoff Duncan Geoff Duncan – Wed Jan 26, 2:12 pm ET

Speck just got back from showing off iPhone cases and covers at CES, and now the company has debuted its CandyShell Wrap case for the Apple iPad, just in time for this week's Macworld Expo in San Francisco. In addition to protecting an iPad from bumps, scratches, and dirt, the CandyShell Wrap case features a removable cover that can fold up to serve as a viewing and/or typing stand.

"Our goal was to narrow the function of the CandyShell Wrap case for iPad to the most useful: viewing and typing," said Speck's director of design Bryan Hynecek, in a statement. "CandyShell Wrap is the first of our new generation of functional iPad case designs for mobile devices to hit the market."

The CandyShell Wrap features a glossy, hard-shell exterior with a rubberized interior designed to protect the iPad from everyday bumps, knocks, and scrapes. The case's front cover flips open and closed, and can be folded back to serve as a stand for viewing or typing, and the case has a flip-back panel that enables users to dock their iPads without removing th case.

The CandyShell Wrap case for iPad is available now in black for a suggested price of $59.99.

Panasonic stacks new Lumix cams with 1080p, 3D, social networking features (Digital Trends)

Posted: 24 Jan 2011 09:01 PM PST

Molly McHugh Molly Mchugh – Tue Jan 25, 12:01 am ET

Panasonic may have just dropped a slew of new cams just weeks ago at CES 2011, but it wasn't the entire payload. On Tuesday, Panasonic offered a little more variety with expansions to its point-and-shoot series.

Lumix FX78

FX78Like its predecessors, it's an incredibly slim camera with an intuitive touchscreen, but will upgrade to a 3.5-inch LCD display. The FX78 will also feature a 24mm ultra-wide angle lens with 5x optical zoom and f 2.5 aperture, meaning poor lighting conditions shouldn't be an issue.

The point-and-shoot also has what are becoming standard built-ins with touchscreens: smart touch for auto focus, scene selection, subject tracking, and of course, easy finger flipping and dragging to browse through photos. The enlarged touchscreen is one of the camera's most attractive upgrades, but it also comes equipped with in-camera editing (including Art and Beauty Retouch) and an improved 12.1-megapixel CCD sensor, and 1080p HD video recording.

Just to save you a potential future purchase, the FX78 also includes 3D capability. Panasonic's 3D technology works by taking 20 consecutive photos and then stitching the two "best" together for a 3D image.

While the camera does include a sharing option, it isn't as immediate as some upload-enabled point and shoots we've seen recently. Instead of social networking functionality built into the device, the camera allows users to checkmark photos that will later be uploaded, and upon connecting the FX78 via USB or SD card to a computer, upload to the designated site. A few more steps, but still fairly simple.

The FX78 will launch in March, and pricing will be available 30 days prior to.

Lumix TS3

TS3Panasonic is also adding to its tough cams. Generally, it looks like the TS3 has been given a new design and made more everything-proof, but it now includes a GPS function, as well as a compass, altimeter, and barometer. For travelers who utilize touch cams, the GPS allows the TS3 to automatically to adjust to local time, a welcome upgrade.

Here's a quick rundown of note how the digital camera has been toughened up since the TS2: It's now waterproof up to roughly 40 feet, shockproof up to roughly six feet, freeze-proof up to 14 degrees F, and (still) dustproof.

The 3D and social media sharing modes of the FX78 are also included, and it more importantly now has a 12.1-megapixel Hi-Speed CCD sensor as well as 1080p HD video recording. It still sports a 2.7-inch LCD screen, which may disappoint users who like the camera but wish it offered a more encompassing view. Expect it in March in red, orange, silver, and blue.

Lumix ZS-series

ZS10With the ZS10, Panasonic is putting its various upgrades into one, very capable package. The ZS10 is extremely similar to its predecessors of the ZS-series, but it will include a 3-inch touchscreen.  Now, photographers can tap for auto zoom, auto focus, shutter, playback and browsing, as well as using it for auto-tracking. GPS capabilities are also now built-in, and allow users to "geotag" subjects as well as visual and share maps pinpointing image locations. To round it out, 3D mode and the "sharing" feature is incorporated. While we're not sold on the ease of this auto-upload, it's assumedly quicker than labeling and uploading individual files yourself. That, and it sounds like a pretty painless process. The auto mode includes a host of editors and scene selectors as well for those who want a break from manual.

Aside from its less technical features, the ZS10 has upgraded to a 14.1-megapixel CMOS sensor and 1080p HD video recording, as well as an improved 16x optical zoom. Not to mention that it's faster – way faster. Panasonic claims its auto focus is nearly 50-percent faster than the ZS7.

ZS8Panasonic is also introducing the ZS8, which also boasts a 24mm ultra-wide angle lens and 16x optical zoom. While it has the standard built-in features and 3-inch LCD screen, it isn't touch-enabled, nor does it include 3D mode, GPS, or heightened HD video recording. Basically, it's a stripped down ZS10 that will function as a quality point and shoot with manual settings. Both cameras will be available in March.

Kindle Singles debuts pithy digital works (AFP)

Posted: 26 Jan 2011 07:02 PM PST

– 2 hrs 10 mins ago

SAN FRANCISCO (AFP) – Amazon has released the first of a new line of short digital books pitched as quick, captivating works for its popular Kindle electronic readers.

The launch of Kindle Singles included the debut of TED Books, written versions of inspirational 18-minute talks that are a trademark of renowned TED gatherings dedicated to cultivating "ideas worth spreading."

"This first set of Singles was selected by our team of editors, and includes works by Rich Cohen, Darin Strauss, Ian Ayres, and the first-ever books published by TED," said Kindle content vice president Russ Grandinetti.

"We think customers will be riveted by these stories that can take them to a Swedish bank heist or to the Mexican border town of Juarez, or to consider a new way to think about happiness."

Amazon said that three months ago it began enlisting writers, thinkers, scientists, publishers and others to express "a single killer idea" in 5,000 to 30,000 words.

The first set of works became available online at amazon.com/kindlesingles on Wednesday.

"TED Books are to books as TED Talks are to lectures," said TED curator Chris Anderson. "They're short, pithy, riveting. They're designed to express a single big idea in a way that can be absorbed in a single sitting."

Amazon allows Kindle digital works to be read on a host of gadgets including iPads, smartphones, and personal computers.

"We think this Platform has the potential to create a new type of media unit designed for modern lifestyles," Anderson said. "Many people are hungry to learn, but have limited time to read full-length books."

Inaugural TED titles included "The Happiness Manifesto" by Nic Marks and Gever Tulley's "Beware Dangerism! Why we worry about the wrong things, and what it's doing to our kids."

Other Kindle Singles were "The Dead Women of Juarez" by Robert Andrew Powell and "Pakistan and the Mumbai Attacks" by Sebastian Rotella

Prices for works ranged from a dollar to a few dollars.

Facebook Launches Group-Buying Prototype (Mashable)

Posted: 26 Jan 2011 11:28 AM PST

Lauren Indvik Lauren Indvik – Wed Jan 26, 2:28 pm ET

Facebook is currently testing a new feature called "Buy With Friends," which allows users to get discounts on virtual goods purchased by their friends.

Here's how it works: A user makes an in-app purchase using Facebook's currency, Facebook Credits, and shares it in his or her newsfeed. A friend sees the purchase and can then buy the same item at a discount directly in the newsfeed.

Currently, the feature only works for certain in-game purchases of virtual goods. Developers determine the items and terms of the promotion.

Speaking at the Inside Social Apps Conference in San Francisco Tuesday, Facebook's head of commerce product marketing Deb Liu said that during early tests, more than half of users chose to share their purchases with friends, Forbes reports.

Although Buy With Friends is currently restricted to virtual goods, we can easily envision how this feature could be expanded to include physical goods as well, especially as more and more retailers set up shop on Facebook. The prototype could be Facebook's way to participate in the kinds of group-buying offers recently popularized by the likes of Groupon and LivingSocial.

Image courtesy of iStockphoto, pavlen

PlayStation Phone analyzed on U.S. soil (Appolicious)

Posted: 26 Jan 2011 02:05 PM PST

LightSquared Wins FCC OK for LTE-satellite Network (PC World)

Posted: 26 Jan 2011 06:10 PM PST

Stephen Lawson Stephen Lawson – Wed Jan 26, 9:10 pm ET

LightSquared said Wednesday it has received approval from the U.S. Federal Communications Commission to build its planned satellite-LTE network for nationwide mobile service.

The company, which plans to launch its service commercially in the second half of this year, will offer both a satellite and a land-based LTE (Long-Term Evolution) network. Working with Qualcomm, it also plans to make sure that single handsets to use both networks are available. With the satellite coverage included, LightSquared said it will offer universal broadband anywhere in the U.S.

The dual-mode strategy allowed LightSquared to earn a license from the FCC to operate the service under its Ancillary Terrestrial Component rule for integrated services. The company plans to run its network strictly on a wholesale basis, allowing other service providers such as mobile carriers and cable operators to resell access to the network. Because those third parties could offer either satellite or terrestrial service without the other mode, LightSquared needed a waiver from the FCC. LightSquared also had to address concerns about potential interference with GPS (Global Positioning System) devices.

On Wednesday, the FCC granted the waiver. In its order, the agency said LightSquared had agreed to work with the FCC, the National Telecommunications and Information Administration and the affected parties to prevent interference with GPS devices. The company also committed to making sure that dual-mode satellite-cellular datacards are on the market by the end of September 2011 and dual-mode handsets are available by the end of June 2012.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Will Facebook battle Skype, Google Voice with VoIP calling? (Digital Trends)

Posted: 26 Jan 2011 06:00 PM PST

Molly McHugh Molly Mchugh – Wed Jan 26, 9:00 pm ET

Facebook has remained mum on the subject of the alleged Facebook phone, but a photo has surfaced revealing the website's interest in other areas of communication. Multiple sources have spotted what looks like a calling function on the site.

Various users saw a "call" icon appear on their screens, and while it didn't connect, it would explain Facebook's interest in VoIP. Earlier this year, Skype integrated Facebook into its upgrade, and there was an incident last year where various references to the popular VoIP popped up in Facebook code. But Facebook has yet to feature Skype or any other voice chat client on its site, and that could be because it plans to do it in-house. Further possible evidence suggesting Facebook is doing this without Skype's involvement? InsideFacebook points out that a job posting for a "Network Engineer – Voice" for the company has been removed. Still, that could be anything from a developer for the hypothetical phone software, to an in-office IT position.

Google's own VoIP has been extremely popular, and as the two are generally pitted against each other, it would be one more arena that Facebook would compete in. It's swiftly becoming a large-scale communication system, and will start introducing its Messages feature to more and more users in the near future. Facebook has time and time again denied the title of "e-mail killer," but it at least should start owning up to its position as verifiable opponent – especially if (really, when) it introduces voice calling.

Netflix profit up, adds subscribers, shares jump (Reuters)

Posted: 26 Jan 2011 03:16 PM PST

By Paul Thomasch Paul Thomasch – Wed Jan 26, 6:16 pm ET

NEW YORK (Reuters) – Movie rental service Netflix reported better-than-expected quarterly profit, fueled by rapid subscriber growth that shows no sign of letting up this year.

Shares of Netflix rose 7 percent after its quarterly results, marking yet another big jump for a company whose stock has nearly quadrupled in the past year as it shakes up Hollywood's traditional business models.

Netflix's results on Wednesday showed -- once again -- that a company traditionally associated with delivering its customers movies and TV shows through the mail in bright red envelopes is having little trouble keeping up with changing media tastes.

Fourth-quarter profit soared past expectations and it added roughly 500,000 more subscribers than analysts on average had expected.

Netflix's total subscriber base now stands at 20 million, making it the third largest U.S. video subscription service behind only Comcast and DirecTV.

It said it should end the first quarter with between 21.9 million and 22.8 million domestic subscribers, adding that it expects the addition "to continue to grow in 2011." It also offered first-quarter profit and revenue forecasts ahead of analyst estimates.

Overall, it posted fourth-quarter earnings of $47.1 million, or 87 cents a share -- up from $30.9 million, or 56 cents a share, a year ago. Revenue rose to 34 percent to $596 million.

"We would say that our huge subscriber growth, fueled by the excitement of watching instantly, impressed even us," Chief Executive Officer Reed Hastings said in a letter to shareholders on Wednesday.

CONSTERNATION IS NATURAL

The Los Gatos, California-based company started in the United States as a mail-in DVD service, but Netflix now says the vast majority of its U.S. subscribers stream content on a range of devices. Recently, it launched a streaming-only subscription plan in the United States, a move that could eventually help it phase out the mail side of its business.

Justin Patterson, analyst at Morgan, Keegan & Co, said that the growth of Netflix's streaming business has resulted in a decline in the costs associated with winning new customers. Netflix spent about 10 percent less in the fourth quarter on marketing than a year ago.

"As their streaming business has grown it's become more about word of mouth and it costs a lot less to market this service because it's built into all these various consumer devices like video consoles and connected TVs," Patterson said.

But concerns abound about the rising cost of paying studios for content -- particularly content that can be streamed. At the moment, its streaming library is tiny compared to its DVD by-mail library.

Netflix already has pricey partnerships with EPIX pay TV, a deal estimated to be worth $1 billion, and NBC Universal.

It has a Starz deal due to expire in 2012 and analysts believe the pricing on that deal may have to at least double. The current deal is thought to be worth around $50 million.

Hastings said in his investor letter that Starz "is one of our most important deals" and that the two sides would be working together to "explore renewal options."

Netflix is also facing an increasingly crowded playing field, with heavy-duty competitors Google Inc and Amazon.com Inc trying to make headway in offering streaming TV shows and movies over the Web.

Its headstart has sounded alarm bells from some media executives, including Time Warner Chief Executive Jeffrey Bewkes. The media veteran has been a vocal critic of Netflix's business plan, at one point comparing the company to a 200 pound chimp rather than an 800 pound gorilla.

Hastings said in his letter on Wednesday that "some of the consternation about Netflix success is natural," comparing the reaction to that of the broadcast TV industry when an up-and-coming Fox started churning out big hits 20 years ago.

He added, however, that "the evidence is pretty clear that content that is also licensed to Netflix generates more money to its owners that content that is withheld from Netflix."

Netflix shares rose 9 percent to $199.50 after the earnings report. They ended at $183.03 in the Nasdaq session.

(Additional reporting by Yinka Adegoke; Editing by Gary Hill)

Motorola smartphones disappoint, iPhone already weighs (Reuters)

Posted: 26 Jan 2011 06:01 PM PST

By Sinead Carew Sinead Carew – Wed Jan 26, 9:01 pm ET

NEW YORK (Reuters) – Motorola Mobility Holdings Inc is already feeling pressure from the next Apple Inc iPhone and forecast a steeper than usual drop in sales this quarter as a result, sending its shares down 6.8 percent.

In the roughly two weeks since Motorola's biggest customer Verizon Wireless unveiled plans to start selling an iPhone in February, Motorola has already noticed a decline in smartphone sales, Chief Executive Sanjay Jha said on Wednesday.

Motorola first-quarter phone sales typically fall 7 percent to 10 percent from the fourth quarter shopping season.

"I would anticipate it would be larger than 7 percent to 10 percent," this time Jha told analysts on the company's first earnings call since it became an independent entity.

Verizon has been marketing Motorola smartphones heavily for more than a year to help it compete against AT&T Inc, which was the exclusive U.S. iPhone provider for three years.

Now that Verizon likely has another champion in iPhone, Motorola has to work hard to lessen its dependence on the No. 1 U.S. mobile provider. It has already unveiled plans for a new high-powered phone including one destined for AT&T, but this won't appear until later in the quarter.

"The issue is timing," Jha told Reuters, adding that the handset business would improve sequentially in the second quarter. He sees Motorola shipping up to 23 million devices this year including smartphones and tablets.

The phone maker had already told investors in December that the first quarter would be difficult. But the company disappointed again on Wednesday when it announced that it had sold fewer than expected phones in the fourth quarter.

Motorola shipped 4.9 million smartphones in the quarter compared with expectations for 5.2 million from six analysts contacted by Reuters.

"The quarter as a whole was a solid quarter but smartphone shipments were disappointing," said Evercore analyst Alkesh Shah, who said Motorola is still a good company to invest in as it is the only phone maker to focus solely on Google Inc's popular Android phone software.

The lower than expected sales were due to slower than expected demand for cheaper smartphones, according to Jha who said that U.S. consumers prefer to buy higher-end phones.

The company said its phone unit would post operating profit margins in the mid-single digit range for 2011, a significant improvement from losses reported in 2010.

TOUGH FIRST QUARTER

Motorola Mobility, which sells television set-top boxes, as well as handsets, forecast a first-quarter net loss per share of between 9 cents and 21 cents, but excluding nonoperating unusual items it expects to break even.

Avian Securities analyst Matthew Thornton said the report and outlook was not good enough to reassure investors who had pushed the shares up 5 percent since trading started January 4.

"The stock has had a good run so people are going to take it out back and beat it up a little unless they say something good on the call about full year guidance," Thornton said.

Motorola Mobility turned profit of $80 million, or 27 cents per share for the fourth quarter after a loss of $204 million, or 69 cents per share in the year-ago quarter.

Before unusual items, Motorola said earnings would have been 37 cents per share, slightly ahead of analyst expectations of 36 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $3.4 billion from $2.8 billion in the year ago quarter, in line with analyst expectations. About $2.4 billion revenue came from the handsets, Motorola said.

Including smartphones and less advanced phones, Motorola shipped 11.3 million phones in the quarter, which compared well with analyst expectations for 10.7 million.

But investors are more anxious about its success with smartphones because they bring in more profits than regular phones and have been key to the company's resurgence last year after years of losing ground to rivals like Apple.

The company's shares fell to $32.45 in late trading after closing at $34.83 on the New York Stock Exchange.

Motorola Inc split in two in January to form Motorola Mobility and Motorola Solutions Inc. Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc

(Reporting by Sinead Carew; editing by Andre Grenon, Bernard Orr)

Microsoft sells 2 million phone software units (Reuters)

Posted: 26 Jan 2011 01:15 PM PST

– Wed Jan 26, 4:15 pm ET

SEATTLE (Reuters) – Microsoft Corp sold more than 2 million units of its new Windows Phone 7 software to handset makers last quarter, a strong start for the new software launched in October, but still far behind Apple Inc's iPhone and Google Inc's Android system.

The world's largest software maker, which licenses the technology to handset makers such as Samsung Electronics Co Ltd, LG Electronics Inc and HTC Corp, also said there were now more than 6,500 apps for download by users from its online marketplace.

"The numbers show pretty good momentum on the sales of the platform," said Al Hilwa, an analyst at tech research firm IDC. "Anecdotally almost everyone who has seen the phone has commented on the style and fluidity of the interface. The apps numbers are excellent for this early stage of the lifecycle."

Despite the strong start, Microsoft still lags its main rivals in the smartphone market.

Apple said last week 16.2 million iPhones were sold in the last quarter. Research in Motion Ltd said in December it sold 14.2 million of its BlackBerry smartphones in the quarter ended November 27.

Google, which gives away its Android system to phone makers for free, says 300,000 Android devices are sold daily, which suggest more than 9 million are sold a month.

Microsoft is set to report quarterly earnings on Thursday. Its shares closed up 33 cents, or 1.2 percent, to $28.78 on Nasdaq.

(Reporting by Bill Rigby, editing by Gerald E. McCormick and Carol Bishopric)

IBM to Build Asia's Largest Cloud Computing Center (PC World)

Posted: 26 Jan 2011 12:00 AM PST

Michael Kan Michael Kan – Wed Jan 26, 3:00 am ET

IBM and the China-based Range Technology will build a cloud computing data center near Beijing that the companies claim will be Asia's largest by floor space.

The 620,000 square meter facility, which is to be owned by Range Technology, is expected to be completed in 2016, the companies announced on Tuesday. The data center aims to mainly serve government departments from China's capital and across the country, but will also be open to banks and private enterprises.

The cloud computing center will be built in Langfang, a city between Beijing and Tianjin, in northern China. The data center is meant to support the development of a new information technology hub being built in the area, said IBM spokeswoman Harriet Ip.

IBM, the vendor for the project, did not disclose the cost of the data center. But the company said Range Technology is spending about US$1.49 billion on the building of the Langfang Range International Information Hub, of which the data center will be a part.

IBM says there has been growing demand for data centers and cloud computing in China. The company's data-center business in China has tripled in the last four years. In 2010, China overtook Japan as IBM's second largest data center market, with the U.S. as the company's number one market.

Range Technology could not be reached for comment. But the company said in a statement, "This initiative plays a critical role in the economic development of China in light of the pressing demand for managed hosting in the areas of cloud computing and mobile devices," according to its chairman Zhou Chaonan.

Range Technology, an Internet data center services provider, was founded in 2009. Earlier this month, the company and IBM formed a strategic partnership on cloud computing and software services.
at 9:38 PM

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