YouTube and Universal to launch premium music site

NEW YORK (Reuters) – Google's YouTube and Universal Music Group, the world's largest music company, said on Thursday they will launch a premium music video website as they bid to increase revenue from YouTube's huge usage.

The new advertiser-supported site, featuring professional videos, will be called Vevo and is expected to launch in coming months, the companies said.

The deal is a boost for YouTube, which has been under increasing pressure from music labels and publishers who are frustrated that the popular site has been unable to pay higher fees for rights to use their music and videos.

Talks broke down late last year between YouTube and the No.3 music company Warner Music Group. Last month YouTube was forced to block all music videos in the UK and last week it had to do the same in Germany in a similar dispute with song publishers over money.

Vevo is an attempt to address this disparity between YouTube's popularity, it has 100 million users in the U.S. alone according to comScore, and its relatively low advertising rate or CPMs (cost per thousand page views) as it is called.

The new site will be a music video hub wholly owned by Universal, a unit of French media group Vivendi.

It will feature higher-quality videos, as opposed to the typical grainy and often user-generated videos on YouTube.

The idea is for Vevo to attract big-name advertisers and other content-owner partners.

"The rationale is to help make Vevo a place that brands feel more comfortable," said Rio Caraeff, executive vice president of Universal's eLabs.

"Ultimately we think it will increase in effect the CPMs and drive more revenue to YouTube and more revenue to the music business than they can have today," said Caraeff.

YouTube and Universal Music will share advertising revenue generated by the site. Both sides are betting that building a premium site will help increase advertising rates. Many big brand owners have avoided advertising alongside YouTube's ad hoc mix of user-generated videos.

David Eun, Google's vice president of strategic partnerships, said the higher quality professional content would appeal to advertisers.

"As we continue to work more closely with advertisers and potential sponsors we have a good sense of the type of content that they're attracted to," said Eun.

Industry watchers will likely compare Vevo with Hulu, a high quality online video service jointly owned by NBC Universal and News Corp with about a third of the number of users of YouTube.

Hulu which features popular TV shows and some movies, has been more successful at selling advertising inventory to big brand owners than YouTube.

Vevo will also serve as a syndication platform called the Vevo Music Network which will power music videos on partner sites.

Universal Chief Executive Doug Morris is said to be in talks on bringing other music companies on board to give fans a comprehensive music site. Talks with EMI Group and Sony Music, which renewed its YouTube deal in February, will likely be more straightforward than talks with Warner Music. But Universal is hoping to have all four majors and others on board before launch.

"The feedback from the fan and advertiser is that ultimately they want all of the premium music content and not just Universal Music Group," said Caraeff.

Caraeff declined to comment on whether the other music companies could negotiate for a stake in Vevo. The music companies jointly own stakes in other ventures including MySpace Music.

Plans for Vevo come in addition to the renewal and extension of YouTube's existing recordings and publishing rights deal to feature video content from Universal artists such as U2, 50 Cent and Kanye West.

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Tech Mahindra Buys India's Scandal Tainted Information Technology Company

India's scandal-tainted Information Technology company, Satyam Computer Services, has been bought by a telecommunication firm, Tech Mahindra. The sale is expected to restore confidence in India's I-T services sector.

Three months after Satyam Computer Services was hit by a massive accounting fraud, Tech Mahindra won an auction for a controlling stake in the high tech giant.

On Monday, Tech Mahindra agreed to buy a 31 percent stake in Satyam for $351 million, edging out other bidders. The bid has to be approved by the government.

In January, Satyam's founder, B. Ramalinga Raju, shocked investors by admitting the company's profits had been overstated by more than $1 billion. The fraud had been going on for years, and it raised doubts about the survival of the I.T. giant, at that time India's fourth largest outsourcing company.

The country was rocked by its biggest corporate scandal, and the government moved quickly to protect the image of its booming Information Technology sector. It sacked the board of directors and appointed a new one, which set out to find a customer for the company.

Satyam Chairman, Kiran Karnik says the sale signals a new stage, and will restore customer confidence in the outsourcing company.

"We are very pleased," he said. "We think it is a very valuable company, we view this as a very successful event today."

The Satyam scandal has also raised questions whether accounting standards and corporate governance are adequate in India.

After Satyam's sale was announced, Indian Prime Minister Manmohan Singh gave assurances that a similar scandal will not be repeated.

"I am confident that our regulatory system has the resilience and the strength to ensure that no such "Satyam" will ever take place," he said.

Satyam has about 53,000 employees and operates in nearly 70 countries. Its clients include some of the world's largest corporations like U.S.-based General Electric. Satyam is listed on the New York Stock Exchange, and faces several lawsuits in the United States.

In recent months, India's I.T. sector has been reassuring customers that Satyam represents a "stand-alone" case. The $50 billion I.T. industry has grown massively in the last two decades.

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Google in talks to take over Twitter

WASHINGTON: US Internet giant Google is in negotiations to acquire micro-blogging sensation Twitter for over 250 million dollars, technology blog TechCrunch reported on Friday.

Citing two sources familiar with the matter, TechCrunch said Google would be making an offer below the $500 million Facebook proposed to Twitter a few months ago, and would pay in cash or publicly valued stock.

"Why would Google want Twitter? We've been arguing for some time that Twitter's real value is in search," said the blog's Michael Harrington.

"It holds the keys to the best real time database and search engine on the Internet, and Google doesn't even have a horse in the game."

But a third source told TechCrunch, which is a partner of the Washington Post's website, that the acquisition discussions were still at an early stage and both companies were mulling working together on a Google real time search engine.

Twitter, which allows users to pepper one another with messages of 140 characters or less, has seen a dizzying surge in popularity since it was launched in August 2006, but has been unable so far to generate revenue.

But Twitter co-founder Biz Stone said last week that he expected finding ways to pump cash in the fast-growing free service, including possibly charging fees for commercial accounts used by businesses.

Stone said that Twitter remains focused on growth. The California-based company claims to have more than six million users and a "phenomenal growth rate" of 900 percent in the past year.

Harrington noted that if the deal goes through, it would be the second sale by Twitter's founders to Google. Five years ago, the micro-blogging site had sold the blog-making website "Blogger" to the search engine.

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Chinese mobiles to be useless by month-end

NEW DELHI: Around 30 million mobile phones - or about 8% of all mobiles in the country - will become useless by the end of this month. These are
unbranded Chinese mobiles that do not have IMEI (International Mobile Equipment Identity) numbers and pose a serious security risk.

All mobile phone service users have been directed by the Department of Telecom (DoT) to disconnect these phones. In fact, two deadlines - January 6 and March 31 - have already been missed by the companies. Now they have undertaken to acquire the necessary equipment to track these phones by April 15 and discontinue their services thereafter - a process that is expected to take another 15 days, that is, by April 30.

Under law, all GSM phones are required to have a unique IMEI number that gets reflected at cell phone towers with which, if required, the location of a mobile phone user can be tracked. These Chinese phones, however, show up as a series of zeroes at cell towers or by their cloned IMEI number. Either way, they can’t be tracked.

The CBI first pointed out the risk to the Union home ministry which took up the issue with DoT. In turn, DoT has instructed service providers to disconnect all phones without IMEI numbers. The service providers, according to DoT sources, have dragged their feet "despite the obvious security risk to the country."

Service providers told TOI they needed to equip themselves with Equipment Identity Registers which would allow them to check if calls are from legal or fake phones. EIRs, they said, would be with all by April 15. The weeding-out will then begin.

8 lakh Chinese cells enter India every month

The security risk from unbranded Chinese mobiles, to be phased out by the end of this month, can be guaged from the fact that a number of bombs have been triggered by terrorists by these phones. Mobile phones are part of terrorists’ essential equipment, for getting instructions from their handlers or for passing on information. If they use legal phones, their location can be found by IMEI numbers.

To give an example, after the Mehrauli blast the terrorists melted away without a trace. However, assuming that they had mobile phones, it should have been possible to track them down by zeroing in on all the phones that started to move away from the blast site immediately after the bomb went off. Instead of blindly putting roadblocks across the city, the security forces could have pinpointed all suspicious post-blast movements and caught the terrorists.

Security forces believe that, as it appears in the Mehrauli case, terrorists have taken to these unbranded Chinese phones to mask their movements. Currently, about 7-8 lakh Chinese phones come into the country every month. This figure was much higher before the talk of their ban started - in September 2008, 1.5 million of these phones came into India.

Naturally, not all of them are used by terrorists (only their easy availability makes them readily available). These phones are popular with consumers because of their low cost, often less than half the price of branded phones. That’s why service providers are seeking time to inform these users to change their handsets.

Sources in the home ministry, which first took up the issue with DoT in August last year, said "the problem of combination of IMEI numbers" has forced DoT to recognise the security risk and order a blanket ban on them.

"Combination of IMEI numbers", or many phones with the same IMEI number, happen because the number is cloned in lots of 100, 1,000 or 5,000 phones by makers of unbranded Chinese mobile phones. This makes it impossible to trace a call or to locate a particular phone.

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